Title: Clean Energy for America Act
Policy area: Taxation

Summary:
Clean Energy for America Act
This bill modifies,extends, or terminates several existing energy-related tax incentives to provide consolidated tax deductions and credits for the production of or investment in clean electricity, the production of clean transportation fuels, and energy efficient homes and commercial buildings.
The new tax incentives are technology-neutral and the amounts of the credits or deductions vary based on the levels of carbon emissions for the incentives for electricity and fuels or energy efficiency in the case of the incentives for energy efficient homes and commercial buildings.
The bill also establishes tax credits for certain bonds issued by a governmental body, a public power provider, or a cooperative electric company for facilities producing clean electricity or clean transportation fuels.
The bill phases out the new tax incentives when annual greenhouse gas emissions in the United States have been reduced by specified percentages.
In order to provide for a transition period for the new tax incentives, the bill temporarily extends several existing energy-related tax provisions.
With respect to the existing qualifying advanced energy project credit, the Department of the Treasury must establish an additional qualifying advanced energy project program to consider and award certifications for qualified investments eligible for credits.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 1288 Introduced in Senate (IS)]

<DOC>






116th CONGRESS
  1st Session
                                S. 1288

 To amend the Internal Revenue Code of 1986 to provide tax incentives 
               for increased investment in clean energy.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              May 2, 2019

 Mr. Wyden (for himself, Mr. Schumer, Ms. Stabenow, Ms. Cantwell, Mr. 
   Menendez, Mr. Carper, Mr. Cardin, Mr. Bennet, Mr. Whitehouse, Ms. 
 Hassan, Ms. Cortez Masto, Mrs. Feinstein, Mr. Durbin, Ms. Klobuchar, 
Mrs. Shaheen, Mrs. Gillibrand, Mr. Blumenthal, Mr. Schatz, Ms. Hirono, 
  Mr. Heinrich, Mr. King, Mr. Kaine, Mr. Booker, Mr. Van Hollen, Ms. 
 Smith, and Mr. Peters) introduced the following bill; which was read 
             twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to provide tax incentives 
               for increased investment in clean energy.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; ETC.

    (a) Short Title.--This Act may be cited as the ``Clean Energy for 
America Act''.
    (b) Amendment of 1986 Code.--Except as otherwise expressly 
provided, whenever in this Act 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 to be made to a section or other 
provision of the Internal Revenue Code of 1986.
    (c) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; etc.
                   TITLE I--CLEAN ENERGY TAX CREDITS

Sec. 101. Clean energy production credit.
Sec. 102. Clean energy investment credit.
Sec. 103. Extensions, modifications, and terminations of various energy 
                            provisions.
                    TITLE II--CLEAN FUEL TAX CREDITS

Sec. 201. Clean fuel production credit.
Sec. 202. Temporary extension of existing fuel and transportation 
                            incentives.
                TITLE III--ENERGY EFFICIENCY INCENTIVES

Sec. 301. Credit for new energy efficient residential buildings.
Sec. 302. Heating and air conditioning replacement credit.
Sec. 303. Energy efficiency credit for existing residential buildings.
Sec. 304. Deduction for new energy efficient commercial buildings.
Sec. 305. Energy efficiency deduction for existing commercial 
                            buildings.
Sec. 306. Temporary extension of existing energy efficiency incentives.
               TITLE IV--CLEAN ELECTRICITY AND FUEL BONDS

Sec. 401. Clean energy bonds.

                   TITLE I--CLEAN ENERGY TAX CREDITS

SEC. 101. CLEAN ENERGY PRODUCTION CREDIT.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
is amended by adding at the end the following new section:

``SEC. 45T. CLEAN ENERGY PRODUCTION CREDIT.

    ``(a) Amount of Credit.--
            ``(1) In general.--For purposes of section 38, the clean 
        energy production credit for any taxable year is an amount 
        equal to the sum of--
                    ``(A) an amount equal to the product of--
                            ``(i) the applicable credit rate (as 
                        determined under paragraph (2)), multiplied by
                            ``(ii) the kilowatt hours of electricity--
                                    ``(I) produced by the taxpayer at a 
                                qualified facility, and
                                    ``(II)(aa) sold by the taxpayer to 
                                an unrelated person during the taxable 
                                year, or
                                    ``(bb) in the case of a qualified 
                                facility which is equipped with a 
                                metering device which is owned and 
                                operated by an unrelated person, sold, 
                                consumed, or stored by the taxpayer 
                                during the taxable year, plus
                    ``(B) the qualified carbon capture and 
                sequestration amount determined under subsection (c).
            ``(2) Applicable credit rate.--
                    ``(A) In general.--
                            ``(i) Maximum credit rate.--Except as 
                        provided in clause (ii), the applicable credit 
                        rate is 1.5 cents.
                            ``(ii) Reduction of credit based on 
                        greenhouse gas emission rate.--The applicable 
                        credit rate shall be reduced (but not below 
                        zero) by an amount which bears the same ratio 
                        to the amount in effect under clause (i) as the 
                        greenhouse gas emissions rate for the qualified 
                        facility bears to 300 grams of CO<INF>2</INF>e 
                        per KWh.
                    ``(B) Rounding.--If any amount determined under 
                subparagraph (A)(ii) is not a multiple of 0.1 cent, 
                such amount shall be rounded to the nearest multiple of 
                0.1 cent.
    ``(b) Greenhouse Gas Emissions Rate.--
            ``(1) In general.--For purposes of this section, the term 
        `greenhouse gas emissions rate' means the amount of greenhouse 
        gases emitted into the atmosphere by a qualified facility in 
        the production of electricity, expressed as grams of 
        CO<INF>2</INF>e per KWh.
            ``(2) Non-fossil fuel combustion and gasification.--In the 
        case of a qualified facility which produces electricity through 
        combustion or gasification of a non-fossil fuel, the greenhouse 
        gas emissions rate for such facility shall be equal to the net 
        rate of greenhouse gases emitted into the atmosphere by such 
        facility (taking into account the amount of lifecycle 
        greenhouse gas emissions, as described in section 211(o)(1)(H) 
        of the Clean Air Act (42 U.S.C. 7545(o)(1)(H))) in the 
        production of electricity, expressed as grams of 
        CO<INF>2</INF>e per KWh.
            ``(3) Establishment of safe harbor for qualified 
        facilities.--
                    ``(A) In general.--The Secretary, in consultation 
                with the Administrator of the Environmental Protection 
                Agency, shall establish safe-harbor greenhouse gas 
                emissions rates for types or categories of qualified 
                facilities, which a taxpayer may elect to use for 
                purposes of this section.
                    ``(B) Rounding.--In establishing the safe-harbor 
                greenhouse gas emissions rates for qualified 
                facilities, the Secretary may round such rates to the 
                nearest multiple of 30 grams of CO<INF>2</INF>e per KWh 
                (or, in the case of a greenhouse gas emissions rate 
                which is less than 15 grams of CO<INF>2</INF>e per KWh, 
                by rounding such rate to zero).
                    ``(C) Publishing safe harbor emissions rates.--The 
                Secretary, in consultation with the Administrator of 
                the Environmental Protection Agency, shall publish a 
                table that sets forth the safe-harbor greenhouse gas 
                emissions rates for similar types or categories of 
                qualified facilities.
            ``(4) Carbon capture and sequestration equipment.--For 
        purposes of this subsection, the amount of greenhouse gases 
        emitted into the atmosphere by a qualified facility in the 
        production of electricity shall not include any qualified 
        carbon dioxide (as defined in section 48D(c)(3)(A)) that is 
        captured by the taxpayer and--
                    ``(A) pursuant to any regulations established under 
                paragraph (2) of section 45Q(f), disposed of by the 
                taxpayer in secure geological storage, or
                    ``(B) utilized by the taxpayer in a manner 
                described in paragraph (5) of such section.
    ``(c) Qualified Carbon Capture and Sequestration Amount.--
            ``(1) In general.--For purposes of subsection (a)(1)(B), 
        the qualified carbon capture and sequestration amount for any 
        taxable year shall be an amount equal to the product of--
                    ``(A) the applicable credit rate (as determined 
                under subsection (a)(2), determined without regard to 
                subparagraph (A)(ii) thereof), multiplied by
                    ``(B) an amount equal to the product of--
                            ``(i) the kilowatt hours of electricity 
                        produced and sold, consumed, or stored (as 
                        determined under clause (ii) of subsection 
                        (a)(1)(A)) for such taxable year by any 
                        facility placed in service before January 1, 
                        2021, multiplied by
                            ``(ii) an amount equal to the quotient of--
                                    ``(I) the metric tons of qualified 
                                carbon dioxide captured by the taxpayer 
                                during such taxable year using 
                                qualified carbon capture and 
                                sequestration equipment installed at 
                                such facility and--
                                            ``(aa) pursuant to any 
                                        regulations established under 
                                        paragraph (2) of section 
                                        45Q(f), disposed of by the 
                                        taxpayer in secure geological 
                                        storage, or
                                            ``(bb) utilized by the 
                                        taxpayer in a manner described 
                                        in paragraph (5) of such 
                                        section, divided by
                                    ``(II) an amount equal to the sum 
                                of--
                                            ``(aa) the amount 
                                        determined under subclause (I), 
                                        plus
                                            ``(bb) the metric tons of 
                                        carbon dioxide emitted into the 
                                        atmosphere by such facility 
                                        during such taxable year.
            ``(2) Definitions.--In this subsection:
                    ``(A) Qualified carbon capture and sequestration 
                equipment.--The term `qualified carbon capture and 
                sequestration equipment' means property described under 
                paragraph (2) of section 48D(c) (without regard to 
                subparagraph (F) of such paragraph) with respect to 
                which no credit has been allowed under section 45Q.
                    ``(B) Qualified carbon dioxide.--The term 
                `qualified carbon dioxide' has the same meaning given 
                such term under paragraph (3) of section 48D(c).
    ``(d) Inflation Adjustment.--
            ``(1) In general.--In the case of a calendar year beginning 
        after 2020, the 1.5 cent amount in clause (i) of subsection 
        (a)(2)(A) shall be adjusted by multiplying such amount by the 
        inflation adjustment factor for the calendar year in which the 
        sale or use of the electricity occurs. If any amount as 
        increased under the preceding sentence is not a multiple of 0.1 
        cent, such amount shall be rounded to the nearest multiple of 
        0.1 cent.
            ``(2) Annual computation.--The Secretary shall, not later 
        than April 1 of each calendar year, determine and publish in 
        the Federal Register the inflation adjustment factor for such 
        calendar year in accordance with this subsection.
            ``(3) Inflation adjustment factor.--The term `inflation 
        adjustment factor' means, with respect to a calendar year, a 
        fraction the numerator of which is the GDP implicit price 
        deflator for the preceding calendar year and the denominator of 
        which is the GDP implicit price deflator for the calendar year 
        1992. The term `GDP implicit price deflator' means the most 
        recent revision of the implicit price deflator for the gross 
        domestic product as computed and published by the Department of 
        Commerce before March 15 of the calendar year.
    ``(e) Credit Phase-Out.--
            ``(1) In general.--If the Secretary, in consultation with 
        the Secretary of Energy and the Administrator of the 
        Environmental Protection Agency, determines that the annual 
        greenhouse gas emissions from electrical production in the 
        United States are equal to or less than 50 percent of the 
        annual greenhouse gas emissions from electrical production in 
        the United States for calendar year 2019, the amount of the 
        clean energy production credit under subsection (a) for any 
        qualified facility placed in service during a calendar year 
        described in paragraph (2) shall be equal to the product of--
                    ``(A) the amount of the credit determined under 
                subsection (a) without regard to this subsection, 
                multiplied by
                    ``(B) the phase-out percentage under paragraph (2).
            ``(2) Phase-out percentage.--The phase-out percentage under 
        this paragraph is equal to--
                    ``(A) for a facility placed in service during the 
                first calendar year following the calendar year in 
                which the determination described in paragraph (1) is 
                made, 75 percent,
                    ``(B) for a facility placed in service during the 
                second calendar year following such determination year, 
                50 percent,
                    ``(C) for a facility placed in service during the 
                third calendar year following such determination year, 
                25 percent, and
                    ``(D) for a facility placed in service during any 
                calendar year subsequent to the year described in 
                subparagraph (C), 0 percent.
    ``(f) Definitions.--In this section:
            ``(1) CO<INF>2</INF>e per KWh.--The term `CO<INF>2</INF>e 
        per KWh' means, with respect to any greenhouse gas, the 
        equivalent carbon dioxide (as determined based on relative 
        global warming potential) per kilowatt hour of electricity 
        produced.
            ``(2) Greenhouse gas.--The term `greenhouse gas' has the 
        same meaning given such term under section 211(o)(1)(G) of the 
        Clean Air Act (42 U.S.C. 7545(o)(1)(G)), as in effect on the 
        date of the enactment of this section.
            ``(3) Qualified facility.--
                    ``(A) In general.--Subject to subparagraphs (B) and 
                (C), the term `qualified facility' means a facility 
                which is--
                            ``(i) used for the generation of 
                        electricity, and
                            ``(ii) originally placed in service after 
                        December 31, 2020.
                    ``(B) 10-year production credit.--For purposes of 
                this section, a facility shall only be treated as a 
                qualified facility during the 10-year period beginning 
                on the date the facility was originally placed in 
                service.
                    ``(C) Expansion of facility; incremental 
                production.--A qualified facility shall include either 
                of the following in connection with a facility 
                described in subparagraph (A)(i) that was placed in 
                service before January 1, 2021, but only to the extent 
                of the increased amount of electricity produced at the 
                facility by reason of the following:
                            ``(i) A new unit placed in service after 
                        December 31, 2020.
                            ``(ii) Any efficiency improvements or 
                        additions of capacity placed in service after 
                        December 31, 2020.
                    ``(D) Coordination with other credits.--The term 
                `qualified facility' shall not include any facility for 
                which--
                            ``(i) a renewable electricity production 
                        credit determined under section 45 is allowed 
                        under section 38 for the taxable year or any 
                        prior taxable year,
                            ``(ii) an advanced nuclear power facility 
                        production credit under section 45J is allowed 
                        under section 38 for the taxable year or any 
                        prior taxable year,
                            ``(iii) an energy credit determined under 
                        section 48 is allowed under section 38 for the 
                        taxable year or any prior taxable year, or
                            ``(iv) a clean energy investment credit 
                        determined under section 48D is allowed under 
                        section 38 for the taxable year or any prior 
                        taxable year.
    ``(g) Final Guidance.--Not later than January 1, 2020, the 
Secretary, in consultation with the Administrator of the Environmental 
Protection Agency, shall issue final guidance regarding implementation 
of this section, including calculation of greenhouse gas emission rates 
for qualified facilities and determination of clean energy production 
credits under this section.
    ``(h) Special Rules.--
            ``(1) Only production in the united states taken into 
        account.--Consumption or sales shall be taken into account 
        under this section only with respect to electricity the 
        production of which is within--
                    ``(A) the United States (within the meaning of 
                section 638(1)), or
                    ``(B) a possession of the United States (within the 
                meaning of section 638(2)).
            ``(2) Combined heat and power system property.--
                    ``(A) In general.--For purposes of subsection 
                (a)(1)(B), the kilowatt hours of electricity produced 
                by a taxpayer at a qualified facility shall include any 
                production in the form of useful thermal energy by any 
                combined heat and power system property within such 
                facility.
                    ``(B) Combined heat and power system property.--For 
                purposes of this paragraph, the term `combined heat and 
                power system property' has the same meaning given such 
                term by section 48(c)(3) (without regard to 
                subparagraphs (A)(iv), (B), and (D) thereof).
                    ``(C) Conversion from btu to kwh.--
                            ``(i) In general.--For purposes of 
                        subparagraph (A), the amount of kilowatt hours 
                        of electricity produced in the form of useful 
                        thermal energy shall be equal to the quotient 
                        of--
                                    ``(I) the total useful thermal 
                                energy produced by the combined heat 
                                and power system property within the 
                                qualified facility, divided by
                                    ``(II) the heat rate for such 
                                facility.
                            ``(ii) Heat rate.--For purposes of this 
                        subparagraph, the term `heat rate' means the 
                        amount of energy used by the qualified facility 
                        to generate 1 kilowatt hour of electricity, 
                        expressed as British thermal units per net 
                        kilowatt hour generated.
            ``(3) Production attributable to the taxpayer.--In the case 
        of a qualified facility in which more than 1 person has an 
        ownership interest, except to the extent provided in 
        regulations prescribed by the Secretary, production from the 
        facility shall be allocated among such persons in proportion to 
        their respective ownership interests in the gross sales from 
        such facility.
            ``(4) Related persons.--Persons shall be treated as related 
        to each other if such persons would be treated as a single 
        employer under the regulations prescribed under section 52(b). 
        In the case of a corporation which is a member of an affiliated 
        group of corporations filing a consolidated return, such 
        corporation shall be treated as selling electricity to an 
        unrelated person if such electricity is sold to such a person 
        by another member of such group.
            ``(5) Pass-thru in the case of estates and trusts.--Under 
        regulations prescribed by the Secretary, rules similar to the 
        rules of subsection (d) of section 52 shall apply.
            ``(6) Allocation of credit to patrons of agricultural 
        cooperative.--
                    ``(A) Election to allocate.--
                            ``(i) In general.--In the case of an 
                        eligible cooperative organization, any portion 
                        of the credit determined under subsection (a) 
                        for the taxable year may, at the election of 
                        the organization, be apportioned among patrons 
                        of the organization on the basis of the amount 
                        of business done by the patrons during the 
                        taxable year.
                            ``(ii) Form and effect of election.--An 
                        election under clause (i) for any taxable year 
                        shall be made on a timely filed return for such 
                        year. Such election, once made, shall be 
                        irrevocable for such taxable year. Such 
                        election shall not take effect unless the 
                        organization designates the apportionment as 
                        such in a written notice mailed to its patrons 
                        during the payment period described in section 
                        1382(d).
                    ``(B) Treatment of organizations and patrons.--The 
                amount of the credit apportioned to any patrons under 
                subparagraph (A)--
                            ``(i) shall not be included in the amount 
                        determined under subsection (a) with respect to 
                        the organization for the taxable year, and
                            ``(ii) shall be included in the amount 
                        determined under subsection (a) for the first 
                        taxable year of each patron ending on or after 
                        the last day of the payment period (as defined 
                        in section 1382(d)) for the taxable year of the 
                        organization or, if earlier, for the taxable 
                        year of each patron ending on or after the date 
                        on which the patron receives notice from the 
                        cooperative of the apportionment.
                    ``(C) Special rules for decrease in credits for 
                taxable year.--If the amount of the credit of a 
                cooperative organization determined under subsection 
                (a) for a taxable year is less than the amount of such 
                credit shown on the return of the cooperative 
                organization for such year, an amount equal to the 
                excess of--
                            ``(i) such reduction, over
                            ``(ii) the amount not apportioned to such 
                        patrons under subparagraph (A) for the taxable 
                        year,
                shall be treated as an increase in tax imposed by this 
                chapter on the organization. Such increase shall not be 
                treated as tax imposed by this chapter for purposes of 
                determining the amount of any credit under this 
                chapter.
                    ``(D) Eligible cooperative defined.--For purposes 
                of this section, the term `eligible cooperative' means 
                a cooperative organization described in section 1381(a) 
                which is owned more than 50 percent by agricultural 
                producers or by entities owned by agricultural 
                producers. For this purpose an entity owned by an 
                agricultural producer is one that is more than 50 
                percent owned by agricultural producers.''.
    (b) Conforming Amendments.--
            (1) Section 38(b) is amended--
                    (A) in paragraph (31), by striking ``plus'' at the 
                end,
                    (B) in paragraph (32), by striking the period at 
                the end and inserting ``, plus'', and
                    (C) by adding at the end the following new 
                paragraph:
            ``(33) the clean energy production credit determined under 
        section 45T(a).''.
            (2) The table of sections for subpart D of part IV of 
        subchapter A of chapter 1 is amended by adding at the end the 
        following new item:

``Sec. 45T. Clean energy production credit.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to facilities placed in service after December 31, 2020.

SEC. 102. CLEAN ENERGY INVESTMENT CREDIT.

    (a) Business Credit.--
            (1) In general.--Subpart E of part IV of subchapter A of 
        chapter 1 is amended by inserting after section 48C the 
        following new section:

``SEC. 48D. CLEAN ENERGY INVESTMENT CREDIT.

    ``(a) Investment Credit for Qualified Property.--
            ``(1) In general.--For purposes of section 46, the clean 
        energy investment credit for any taxable year is an amount 
        equal to the sum of--
                    ``(A) the clean energy percentage of the qualified 
                investment for such taxable year with respect to any 
                qualified facility, plus
                    ``(B) 30 percent of the qualified investment for 
                such taxable year with respect to--
                            ``(i) qualified carbon capture and 
                        sequestration equipment, and
                            ``(ii) energy storage property.
            ``(2) Clean energy percentage.--
                    ``(A) Maximum percentage.--Except as provided in 
                subparagraphs (B) and (C), the clean energy percentage 
                is 30 percent.
                    ``(B) Reduction of percentage based on greenhouse 
                gas emissions rate.--The clean energy percentage shall 
                be reduced (but not below zero) by an amount which 
                bears the same ratio to 30 percent as the anticipated 
                greenhouse gas emissions rate for the qualified 
                facility bears to 300 grams of CO<INF>2</INF>e per KWh.
                    ``(C) Microgrids.--
                            ``(i) In general.--In the case of a 
                        microgrid, the clean energy percentage shall be 
                        the amount, expressed as a percentage, equal to 
                        30 percent of the relative avoided emissions 
                        rate for the microgrid.
                            ``(ii) Relative avoided emissions rate.--
                        For purposes of clause (i), the relative 
                        avoided emissions rate shall be the amount 
                        equal to the quotient of--
                                    ``(I) the amount equal to the non-
                                baseload output emissions rate for the 
                                applicable grid region minus the 
                                greenhouse gas emissions rate for the 
                                microgrid, divided by
                                    ``(II) the non-baseload output 
                                emissions rate for the applicable grid 
                                region.
                            ``(iii) Non-baseload output emissions 
                        rate.--
                                    ``(I) In general.--The term `non-
                                baseload output emissions rate' means 
                                the amount of greenhouse gases emitted 
                                into the atmosphere by the applicable 
                                grid region for the production of 
                                electricity (expressed as grams of 
                                CO<INF>2</INF>e per KWh) above 
                                baseload.
                                    ``(II) Determination.--The non-
                                baseload output emissions rate for any 
                                applicable grid region shall be 
                                determined by the Administrator of the 
                                Environmental Protection Agency, in 
                                consultation with the Secretary.
                            ``(iv) Microgrid.--The term `microgrid' 
                        means an interconnected system of loads and 
                        energy resources (including distributed energy 
                        resources, energy storage, demand response 
                        tools, and other management, forecasting, and 
                        analytical tools) which--
                                    ``(I) is appropriately sized to 
                                meet the needs of its customers,
                                    ``(II) is contained within a 
                                clearly defined electrical boundary and 
                                has the ability to operate as a single 
                                and controllable entity,
                                    ``(III) has the ability to--
                                            ``(aa) connect to, 
                                        disconnect from, or run in 
                                        parallel with the applicable 
                                        grid region, or
                                            ``(bb) be managed and 
                                        isolated from the applicable 
                                        grid region in order to 
                                        withstand larger disturbances 
                                        and maintain the supply of 
                                        electricity to connected 
                                        critical infrastructure, and
                                    ``(IV) has no point of 
                                interconnection to the applicable grid 
                                region with a throughput capacity in 
                                excess of 20 megawatts.
                            ``(v) Applicable grid region.--The term 
                        `applicable grid region' means a set of power 
                        plants and transmission lines which are--
                                    ``(I) under the control of a single 
                                grid operator, and
                                    ``(II) interconnected to the 
                                microgrid.
                    ``(D) Rounding.--If any amount determined under 
                subparagraph (B) or subparagraph (C) is not a multiple 
                of 1 percent, such amount shall be rounded to the 
                nearest multiple of 1 percent.
    ``(b) Qualified Investment With Respect to Any Qualified 
Facility.--
            ``(1) In general.--For purposes of subsection (a)(1)(A), 
        the qualified investment with respect to any qualified facility 
        for any taxable year is the basis of any qualified property 
        placed in service by the taxpayer during such taxable year 
        which is part of a qualified facility.
            ``(2) Qualified property.--The term `qualified property' 
        means property--
                    ``(A) which is--
                            ``(i) tangible personal property, or
                            ``(ii) other tangible property (not 
                        including a building or its structural 
                        components), but only if such property is used 
                        as an integral part of the qualified facility,
                    ``(B) with respect to which depreciation (or 
                amortization in lieu of depreciation) is allowable,
                    ``(C) which is constructed, reconstructed, erected, 
                or acquired by the taxpayer, and
                    ``(D) the original use of which commences with the 
                taxpayer.
            ``(3) Qualified facility.--
                    ``(A) In general.--For purposes of this section, 
                the term `qualified facility' has the same meaning 
                given such term under section 45T(f)(3) (without regard 
                to subparagraphs (B) and (D) thereof).
                    ``(B) Microgrids.--For purposes of this section, 
                the term `qualified facility' shall include any 
                microgrid (as defined in subsection (a)(2)(C)(iv)).
                    ``(C) Exclusion.--The term `qualified facility' 
                shall not include any facility for which a renewable 
                electricity production credit under section 45, an 
                advanced nuclear power facility production credit under 
                section 45J, or an energy credit determined under 
                section 48 is allowed under section 38 for the taxable 
                year or any prior taxable year.
            ``(4) Coordination with rehabilitation credit.--The 
        qualified investment with respect to any qualified facility for 
        any taxable year shall not include that portion of the basis of 
        any property which is attributable to qualified rehabilitation 
        expenditures (as defined in section 47(c)(2)).
    ``(c) Qualified Investment With Respect to Qualified Carbon Capture 
and Sequestration Equipment.--
            ``(1) In general.--For purposes of subsection (a)(1)(B)(i), 
        the qualified investment with respect to qualified carbon 
        capture and sequestration equipment for any taxable year is the 
        basis of any qualified carbon capture and sequestration 
        equipment placed in service by the taxpayer during such taxable 
        year.
            ``(2) Qualified carbon capture and sequestration 
        equipment.--The term `qualified carbon capture and 
        sequestration equipment' means property--
                    ``(A) installed at a facility placed in service 
                before January 1, 2021, which produces electricity,
                    ``(B) which results in at least a 50 percent 
                reduction in the carbon dioxide emissions rate at the 
                facility, as compared to such rate before installation 
                of such equipment, through the capture and disposal or 
                utilization of qualified carbon dioxide (as defined in 
                paragraph (3)(A)),
                    ``(C) with respect to which depreciation is 
                allowable,
                    ``(D) which is constructed, reconstructed, erected, 
                or acquired by the taxpayer,
                    ``(E) the original use of which commences with the 
                taxpayer, and
                    ``(F) with respect to which--
                            ``(i) no credit has been allowed under 
                        section 45Q or section 45T, and
                            ``(ii) the taxpayer makes an irrevocable 
                        election to have this subsection apply.
            ``(3) Qualified carbon dioxide.--The term `qualified carbon 
        dioxide' means carbon dioxide captured from an industrial 
        source which--
                    ``(A) would otherwise be released into the 
                atmosphere as industrial emission of greenhouse gas,
                    ``(B) is measured at the source of capture and 
                verified at the point of disposal or utilization,
                    ``(C)(i) is disposed of by the taxpayer in secure 
                geological storage (as such term is defined under 
                section 45Q(f)(2)), or
                    ``(ii) utilized by the taxpayer in a manner 
                described in section 45Q(f)(5), and
                    ``(D) is captured and disposed or utilized within 
                the United States (within the meaning of section 
                638(1)) or a possession of the United States (within 
                the meaning of section 638(2)).
            ``(4) Coordination with other credits.--No credit shall be 
        allowed under section 45Q or section 45T for any taxable year 
        with respect to any qualified carbon capture and sequestration 
        equipment for which an election described in paragraph 
        (2)(F)(ii) has been made.
    ``(d) Qualified Investment With Respect to Energy Storage 
Property.--
            ``(1) In general.--For purposes of subsection 
        (a)(1)(B)(ii), the qualified investment with respect to energy 
        storage property for any taxable year is the basis of any 
        energy storage property placed in service by the taxpayer 
        during such taxable year.
            ``(2) Energy storage property.--The term `energy storage 
        property' means property--
                    ``(A) which receives, stores, and delivers 
                electricity, or energy for conversion to electricity, 
                provided that such electricity is--
                            ``(i) sold by the taxpayer to an unrelated 
                        person, or
                            ``(ii) in the case of a facility which is 
                        equipped with a metering device which is owned 
                        and operated by an unrelated person, sold or 
                        consumed by the taxpayer,
                    ``(B) with respect to which depreciation is 
                allowable,
                    ``(C) which is constructed, reconstructed, erected, 
                or acquired by the taxpayer,
                    ``(D) the original use of which commences with the 
                taxpayer, and
                    ``(E) which is placed in service after December 31, 
                2020.
    ``(e) Greenhouse Gas Emissions Rate.--
            ``(1) In general.--For purposes of this section, the term 
        `greenhouse gas emissions rate' has the same meaning given such 
        term under subsection (b) of section 45T.
            ``(2) Establishment of safe harbor for qualified 
        property.--
                    ``(A) In general.--The Secretary, in consultation 
                with the Administrator of the Environmental Protection 
                Agency, shall establish safe-harbor greenhouse gas 
                emissions rates for types or categories of qualified 
                property which are part of a qualified facility, which 
                a taxpayer may elect to use for purposes of this 
                section.
                    ``(B) Rounding.--In establishing the safe-harbor 
                greenhouse gas emissions rates for qualified property, 
                the Secretary may round such rates to the nearest 
                multiple of 30 grams of CO<INF>2</INF>e per KWh (or, in 
                the case of a greenhouse gas emissions rate which is 
                less than 15 grams of CO<INF>2</INF>e per KWh, by 
                rounding such rate to zero).
                    ``(C) Publishing safe-harbor emissions rates.--The 
                Secretary, in consultation with the Administrator of 
                the Environmental Protection Agency, shall publish a 
                table that sets forth the safe-harbor greenhouse gas 
                emissions rates for similar types or categories of 
                qualified property.
    ``(f) Certain Progress Expenditure Rules Made Applicable.--Rules 
similar to the rules of subsections (c)(4) and (d) of section 46 (as in 
effect on the day before the date of the enactment of the Revenue 
Reconciliation Act of 1990) shall apply for purposes of subsection (a).
    ``(g) Credit Phase-Out.--
            ``(1) In general.--If the Secretary, in consultation with 
        the Secretary of Energy and the Administrator of the 
        Environmental Protection Agency, determines that the annual 
        greenhouse gas emissions from electrical production in the 
        United States are equal to or less than 50 percent of the 
        annual greenhouse gas emissions from electrical production in 
        the United States for calendar year 2019, the amount of the 
        clean energy investment credit under subsection (a) for any 
        qualified facility, qualified carbon capture and sequestration 
        equipment, or energy storage property placed in service during 
        a calendar year described in paragraph (2) shall be equal to 
        the product of--
                    ``(A) the amount of the credit determined under 
                subsection (a) without regard to this subsection, 
                multiplied by
                    ``(B) the phase-out percentage under paragraph (2).
            ``(2) Phase-out percentage.--The phase-out percentage under 
        this paragraph is equal to--
                    ``(A) for a facility or property placed in service 
                during the first calendar year following the calendar 
                year in which the determination described in paragraph 
                (1) is made, 75 percent,
                    ``(B) for a facility or property placed in service 
                during the second calendar year following such 
                determination year, 50 percent,
                    ``(C) for a facility or property placed in service 
                during the third calendar year following such 
                determination year, 25 percent, and
                    ``(D) for a facility or property placed in service 
                during any calendar year subsequent to the year 
                described in subparagraph (C), 0 percent.
    ``(h) Definitions.--In this section:
            ``(1) CO<INF>2</INF>e per KWh.--The term `CO<INF>2</INF>e 
        per KWh' has the same meaning given such term under section 
        45T(f)(1).
            ``(2) Greenhouse gas.--The term `greenhouse gas' has the 
        same meaning given such term under section 45T(f)(2).
    ``(i) Recapture of Credit.--For purposes of section 50, if the 
Secretary, in consultation with the Administrator of the Environmental 
Protection Agency, determines that--
            ``(1) the greenhouse gas emissions rate for a qualified 
        facility is significantly higher than the anticipated 
        greenhouse gas emissions rate claimed by the taxpayer for 
        purposes of the clean energy investment credit under this 
        section, or
            ``(2) with respect to any qualified carbon capture and 
        sequestration equipment installed in a facility, the carbon 
        dioxide emissions from such facility cease to be captured or 
        disposed of in a manner consistent with the requirements of 
        subsection (c),
the facility or equipment shall cease to be investment credit property 
in the taxable year in which the determination is made.
    ``(j) Final Guidance.--Not later than January 1, 2020, the 
Secretary, in consultation with the Administrator of the Environmental 
Protection Agency, shall issue final guidance regarding implementation 
of this section, including calculation of greenhouse gas emission rates 
for qualified facilities and determination of clean energy investment 
credits under this section.''.
            (2) Conforming amendments.--
                    (A) Section 46 is amended--
                            (i) by striking ``and'' at the end of 
                        paragraph (5),
                            (ii) by striking the period at the end of 
                        paragraph (6) and inserting ``, and'', and
                            (iii) by adding at the end the following 
                        new paragraph:
            ``(7) the clean energy investment credit.''.
                    (B) Section 49(a)(1)(C) is amended--
                            (i) by striking ``and'' at the end of 
                        clause (iv),
                            (ii) by striking the period at the end of 
                        clause (v) and inserting a comma, and
                            (iii) by adding at the end the following 
                        new clauses:
                            ``(vi) the basis of any qualified property 
                        which is part of a qualified facility under 
                        section 48D,
                            ``(vii) the basis of any qualified carbon 
                        capture and sequestration equipment under 
                        section 48D, and
                            ``(viii) the basis of any energy storage 
                        property under section 48D.''.
                    (C) Section 50(a)(2)(E) is amended by striking ``or 
                48C(b)(2)'' and inserting ``48C(b)(2), or 48D(e)''.
                    (D) The table of sections for subpart E of part IV 
                of subchapter A of chapter 1 is amended by inserting 
                after the item relating to section 48C the following 
                new item:

``48D. Clean energy investment credit.''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to property placed in service after December 31, 
        2020, under rules similar to the rules of section 48(m) of the 
        Internal Revenue Code of 1986 (as in effect on the day before 
        the date of the enactment of the Revenue Reconciliation Act of 
        1990).
    (b) Individual Credit.--
            (1) In general.--Section 25D is amended to read as follows:

``SEC. 25D. CLEAN RESIDENTIAL ENERGY CREDIT.

    ``(a) Allowance of Credit.--
            ``(1) In general.--In the case of an individual, 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--
                    ``(A) the clean energy percentage of the 
                expenditures made by the taxpayer for qualified 
                property which is--
                            ``(i) for use in a dwelling unit which is 
                        located in the United States and used as a 
                        residence by the taxpayer, and
                            ``(ii) placed in service during such 
                        taxable year, plus
                    ``(B) 30 percent of the expenditures made by the 
                taxpayer for energy storage property which is--
                            ``(i) for use in a dwelling unit which is 
                        located in the United States and used as a 
                        residence by the taxpayer, and
                            ``(ii) placed in service during such 
                        taxable year.
            ``(2) Clean energy percentage.--
                    ``(A) In general.--
                            ``(i) Maximum percentage.--Except as 
                        provided in clause (ii), the clean energy 
                        percentage is 30 percent.
                            ``(ii) Reduction of percentage based on 
                        greenhouse gas emissions rate.--The clean 
                        energy percentage shall be reduced (but not 
                        below zero) by an amount which bears the same 
                        ratio to 30 percent as the anticipated 
                        greenhouse gas emissions rate for the qualified 
                        property bears to 300 grams of CO<INF>2</INF>e 
                        per KWh.
                    ``(B) Rounding.--If any amount determined under 
                subparagraph (A)(ii) is not a multiple of 1 percent, 
                such amount shall be rounded to the nearest multiple of 
                1 percent.
                    ``(C) Definitions.--For purposes of this section, 
                the terms `greenhouse gas emissions rate' and 
                `CO<INF>2</INF>e per KWh' have the same meanings given 
                such terms under subsections (b) and (f)(1) of section 
                45T, respectively.
            ``(3) Establishment of safe harbor for qualified 
        property.--
                    ``(A) In general.--The Secretary, in consultation 
                with the Administrator of the Environmental Protection 
                Agency, shall establish safe-harbor greenhouse gas 
                emissions rates for types or categories of qualified 
                property which are for use in a dwelling unit, which a 
                taxpayer may elect to use for purposes of this section.
                    ``(B) Rounding.--In establishing the safe-harbor 
                greenhouse gas emissions rates for qualified property, 
                the Secretary may round such rates to the nearest 
                multiple of 30 grams of CO<INF>2</INF>e per KWh (or, in 
                the case of a greenhouse gas emissions rate which is 
                less than 15 grams of CO<INF>2</INF>e per KWh, by 
                rounding such rate to zero).
                    ``(C) Publishing safe-harbor emissions rates.--The 
                Secretary, in consultation with the Administrator of 
                the Environmental Protection Agency, shall publish a 
                table that sets forth the safe-harbor greenhouse gas 
                emissions rates for similar types or categories of 
                qualified property.
    ``(b) Qualified Property.--The term `qualified property' means 
property--
            ``(1) which is tangible personal property,
            ``(2) which is used for the generation of electricity,
            ``(3) which is constructed, reconstructed, erected, or 
        acquired by the taxpayer,
            ``(4) the original use of which commences with the 
        taxpayer, and
            ``(5) which is originally placed in service after December 
        31, 2020.
    ``(c) Energy Storage Property.--The term `energy storage property' 
means property which--
            ``(1) receives, stores, and delivers electricity or energy 
        for conversion to electricity which is consumed or sold by the 
        taxpayer, and
            ``(2) is equipped with a metering device which is owned and 
        operated by an unrelated person.
    ``(d) Carryforward of Unused Credit.--If the credit allowable under 
subsection (a) exceeds the limitation imposed by section 26(a) 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 
subsection (a) for such succeeding taxable year.
    ``(e) Credit Phase-Out.--
            ``(1) In general.--If the Secretary determines that the 
        annual greenhouse gas emissions from electrical production in 
        the United States are equal to or less than the percentage 
        specified in section 48D(g), the amount of the credit allowable 
        under subsection (a) for any qualified property or energy 
        storage property placed in service during a calendar year 
        described in paragraph (2) shall be equal to the product of--
                    ``(A) the amount of the credit determined under 
                subsection (a) without regard to this subsection, 
                multiplied by
                    ``(B) the phase-out percentage under paragraph (2).
            ``(2) Phase-out percentage.--The phase-out percentage under 
        this paragraph is equal to--
                    ``(A) for property placed in service during the 
                first calendar year following the calendar year in 
                which the determination described in paragraph (1) is 
                made, 75 percent,
                    ``(B) for property placed in service during the 
                second calendar year following such determination year, 
                50 percent,
                    ``(C) for property placed in service during the 
                third calendar year following such determination year, 
                25 percent, and
                    ``(D) for property placed in service during any 
                calendar year subsequent to the year described in 
                subparagraph (C), 0 percent.
    ``(f) Special Rules.--For purposes of this section:
            ``(1) Labor costs.--Expenditures for labor costs properly 
        allocable to the onsite preparation, assembly, or original 
        installation of the qualified property or energy storage 
        property and for piping or wiring to interconnect such property 
        to the dwelling unit shall be taken into account for purposes 
        of this section.
            ``(2) Tenant-stockholder in cooperative housing 
        corporation.--In the case of an individual who is a tenant-
        stockholder (as defined in section 216) in a cooperative 
        housing corporation (as defined in such section), such 
        individual shall be treated as having made his tenant-
        stockholder's proportionate share (as defined in section 
        216(b)(3)) of any expenditures of such corporation.
            ``(3) Condominiums.--
                    ``(A) In general.--In the case of an individual who 
                is a member of a condominium management association 
                with respect to a condominium which the individual 
                owns, such individual shall be treated as having made 
                the individual's proportionate share of any 
                expenditures of such association.
                    ``(B) Condominium management association.--For 
                purposes of this paragraph, the term `condominium 
                management association' means an organization which 
                meets the requirements of paragraph (1) of section 
                528(c) (other than subparagraph (E) thereof) with 
                respect to a condominium project substantially all of 
                the units of which are used as residences.
            ``(4) Allocation in certain cases.--If less than 80 percent 
        of the use of a property is for nonbusiness purposes, only that 
        portion of the expenditures for such property which is properly 
        allocable to use for nonbusiness purposes shall be taken into 
        account.
    ``(g) Basis Adjustment.--For purposes of this subtitle, if a credit 
is allowed under this section for any expenditures with respect to any 
property, the increase in the basis of such property which would (but 
for this subsection) result from such expenditures shall be reduced by 
the amount of the credit so allowed.
    ``(h) Final Guidance.--Not later than January 1, 2020, the 
Secretary, in consultation with the Administrator of the Environmental 
Protection Agency, shall issue final guidance regarding implementation 
of this section, including calculation of greenhouse gas emission rates 
for qualified property and determination of residential clean energy 
property credits under this section.''.
            (2) Conforming amendments.--
                    (A) Paragraph (1) of section 45(d) is amended by 
                striking ``Such term'' and all that follows through the 
                period and inserting the following: ``Such term shall 
                not include any facility with respect to which any 
                expenditures for qualified property (as defined in 
                subsection (b) of section 25D) which uses wind to 
                produce electricity is taken into account in 
                determining the credit under such section.''.
                    (B) Paragraph (34) of section 1016(a) is amended by 
                striking ``section 25D(f)'' and inserting ``section 
                25D(h)''.
                    (C) The item relating to section 25D in the table 
                of contents for subpart A of part IV of subchapter A of 
                chapter 1 is amended to read as follows:

``Sec. 25D. Clean residential energy credit.''.
            (3) Effective date.--The amendments made by this section 
        shall apply to property placed in service after December 31, 
        2020.

SEC. 103. EXTENSIONS, MODIFICATIONS, AND TERMINATIONS OF VARIOUS ENERGY 
              PROVISIONS.

    (a) Residential Energy Efficient Property.--
            (1) In general.--Subsection (h) of section 25D is amended 
        by striking ``December 31, 2021'' and inserting ``December 31, 
        2020''.
            (2) Elimination of phaseout.--Section 25D, as amended by 
        paragraph (1), is amended--
                    (A) in subsection (a), by striking ``the applicable 
                percentages'' and inserting ``30 percent'',
                    (B) by striking subsection (g), and
                    (C) by redesignating subsection (h) as subsection 
                (g).
            (3) Effective date.--The amendments made by this subsection 
        shall apply to property placed in service after December 31, 
        2018.
    (b) Electricity Produced From Certain Renewable Resources.--
            (1) In general.--The following provisions of section 45(d) 
        are each amended by striking ``the construction of which begins 
        before January 1, 2018'' each place it appears and inserting 
        ``originally placed in service before January 1, 2021'':
                    (A) Paragraph (2)(A).
                    (B) Paragraph (3)(A).
                    (C) Paragraph (4)(B).
                    (D) Paragraph (6).
                    (E) Paragraph (7).
                    (F) Paragraph (9).
                    (G) Paragraph (11)(B).
            (2) Termination of half-credit rate.--Subparagraph (A) of 
        section 45(b)(4) is amended by inserting ``and before 2019'' 
        after ``after 2003''.
            (3) Effective date.--The amendments made by this subsection 
        shall take effect on January 1, 2019.
    (c) Credit for Production From Advanced Nuclear Power Facilities.--
            (1) In general.--Subparagraph (B) of section 45J(d)(1) is 
        amended by striking ``January 1, 2021'' and inserting ``January 
        1, 2020''.
            (2) Termination of allocation of unutilized limitation.--
        Section 45J(b) is amended by striking paragraph (5).
    (d) Credit for Carbon Dioxide Sequestration.--
            (1) Exclusion of certain facilities that produce 
        electricity.--Section 45Q is amended--
                    (A) in subsection (d), by striking ``For purposes 
                of this section'' and inserting ``Subject to subsection 
                (h), for purposes of this section'',
                    (B) by redesignating subsection (h) as subsection 
                (i), and
                    (C) by inserting after subsection (g) the 
                following:
    ``(h) Exclusion of Certain Facilities That Produce Electricity.--
The term `qualified facility' shall not include any facility which--
            ``(1) is placed in service before January 1, 2021, and
            ``(2) produces electricity.''.
            (2) Effective date.--The amendments made by this subsection 
        shall apply to taxable years beginning after December 31, 2020.
    (e) Modification of Credits for Wind Facilities and Other Energy 
Property.--
            (1) Wind facilities.--
                    (A) Renewable electricity production credit.--
                            (i) In general.--Paragraph (1) of section 
                        45(d) is amended by striking ``January 1, 
                        2020'' and inserting ``January 1, 2021''.
                            (ii) Phaseout.--Subparagraph (C) of section 
                        45(b)(5) is amended by striking ``January 1, 
                        2020'' and inserting ``January 1, 2021''.
                    (B) Qualified investment credit facility.--
                            (i) In general.--Section 48(a)(5)(C)(ii) is 
                        amended by striking ``January 1, 2018'' and all 
                        that follows through ``section 45(d))'' and 
                        inserting ``January 1, 2021''.
                            (ii) Phaseout.--Clause (iii) of section 
                        48(a)(5)(E) is amended by striking ``January 1, 
                        2020'' and inserting ``January 1, 2021''.
                    (C) Effective date.--The amendments made by this 
                paragraph shall take effect on January 1, 2019.
            (2) Other energy property.--
                    (A) Solar energy property.--Subclause (II) of 
                section 48(a)(2)(A)(i) is amended by striking 
                ``property the construction of which begins before 
                January 1, 2022'' and inserting ``periods ending before 
                January 1, 2019''.
                    (B) Phaseouts.--Subsection (a) of section 48 is 
                amended by striking paragraphs (6) and (7).
                    (C) Conforming amendment.--Subparagraph (A) of 
                section 48(a)(2) is amended by striking ``Except as 
                provided in paragraphs (6) and (7), the energy 
                percentage'' and inserting ``The energy percentage''.
                    (D) Effective date.--The amendments made by this 
                paragraph shall take effect on January 1, 2019.
    (f) Energy Credit.--
            (1) Solar energy property.--Section 48(a)(3)(A) is 
        amended--
                    (A) in clause (i), by inserting ``but only with 
                respect to periods ending before January 1, 2021'' 
                after ``swimming pool,'', and
                    (B) in clause (ii), by striking ``property the 
                construction of which begins before January 1, 2022'' 
                and inserting ``periods ending before January 1, 
                2021''.
            (2) Geothermal energy property.--Section 48(a)(3)(A)(iii) 
        is amended by inserting ``with respect to periods ending before 
        January 1, 2021, and'' after ``but only''.
            (3) Thermal energy property.--Section 48(a)(3)(A)(vii) is 
        amended by striking ``property the construction of which begins 
        before January 1, 2022'' and inserting ``periods ending before 
        January 1, 2021''.
            (4) Qualified fuel cell property.--Section 48(c)(1)(D) is 
        amended by striking ``the construction of which does not begin 
        before January 1, 2022'' and inserting ``for any period after 
        December 31, 2020''.
            (5) Qualified microturbine property.--Section 48(c)(2)(D) 
        is amended by striking ``the construction of which does not 
        begin before January 1, 2022'' and inserting ``for any period 
        after December 31, 2020''.
            (6) Combined heat and power system property.--Section 
        48(c)(3)(A)(iv) is amended by striking ``the construction of 
        which begins before January 1, 2022'' and inserting ``which is 
        placed in service before January 1, 2021''.
            (7) Qualified small wind energy property.--Section 
        48(c)(4)(C) is amended by striking ``the construction of which 
        does not begin before January 1, 2022'' and inserting ``for any 
        period after December 31, 2020''.
    (g) Qualifying Advanced Energy Project Credit.--
            (1) In general.--Section 48C is amended--
                    (A) by redesignating subsection (e) as subsection 
                (f), and
                    (B) by inserting after subsection (d) the following 
                new subsection:
    ``(e) Additional Qualifying Advanced Energy Program.--
            ``(1) Establishment.--
                    ``(A) In general.--Not later than 180 days after 
                the date of enactment of this subsection, the 
                Secretary, in consultation with the Secretary of 
                Energy, shall establish an additional qualifying 
                advanced energy project program to consider and award 
                certifications for qualified investments eligible for 
                credits under this section to qualifying advanced 
                energy project sponsors.
                    ``(B) Limitation.--The total amount of credits that 
                may be allocated under the program described in 
                subparagraph (A) shall not exceed $5,000,000,000.
            ``(2) Certification.--
                    ``(A) Application period.--Each applicant for 
                certification under this paragraph shall submit an 
                application containing such information as the 
                Secretary may require during the 2-year period 
                beginning on the date the Secretary establishes the 
                program under paragraph (1).
                    ``(B) Time to meet criteria for certification.--
                Each applicant for certification shall have 1 year from 
                the date of acceptance by the Secretary of the 
                application during which to provide to the Secretary 
                evidence that the requirements of the certification 
                have been met.
                    ``(C) Period of issuance.--An applicant which 
                receives a certification shall have 3 years from the 
                date of issuance of the certification in order to place 
                the project in service and if such project is not 
                placed in service by that time period, then the 
                certification shall no longer be valid.
            ``(3) Selection criteria.--In determining which qualifying 
        advanced energy projects to certify under this section, the 
        Secretary shall consider the same criteria described in 
        subsection (d)(3).
            ``(4) Review and redistribution.--
                    ``(A) Review.--Not later than 4 years after the 
                date of enactment of this subsection, the Secretary 
                shall review the credits allocated pursuant to this 
                subsection as of such date.
                    ``(B) Redistribution.--The Secretary may reallocate 
                credits awarded under this section if the Secretary 
                determines that--
                            ``(i) there is an insufficient quantity of 
                        qualifying applications for certification 
                        pending at the time of the review, or
                            ``(ii) any certification made pursuant to 
                        paragraph (2) has been revoked pursuant to 
                        paragraph (2)(B) because the project subject to 
                        the certification has been delayed as a result 
                        of third-party opposition or litigation to the 
                        proposed project.
                    ``(C) Reallocation.--If the Secretary determines 
                that credits under this section are available for 
                reallocation pursuant to the requirements set forth in 
                paragraph (2), the Secretary is authorized to conduct 
                an additional program for applications for 
                certification.
            ``(5) Disclosure of allocations.--The Secretary shall, upon 
        making a certification under this subsection, publicly disclose 
        the identity of the applicant and the amount of the credit with 
        respect to such applicant.''.
            (2) Effective date.--The amendments made by this subsection 
        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 in effect on the day before 
        the date of the enactment of the Revenue Reconciliation Act of 
        1990).
    (h) Termination of Provisions Relating to Oil, Gas, and Other 
Materials.--
            (1) Amortization of geological and geophysical 
        expenditures.--Section 167(h) is amended by adding at the end 
        the following new paragraph:
            ``(6) Termination.--This subsection shall not apply to any 
        expenses paid or incurred during any taxable year beginning 
        after the date of the enactment of the Clean Energy for America 
        Act.''.
            (2) Alaska natural gas pipelines.--Subparagraph (B) of 
        section 168(i)(16) is amended to read as follows:
                    ``(B) is--
                            ``(i)(I) placed in service after December 
                        31, 2013, or
                            ``(II) treated as placed in service on 
                        January 1, 2014, if the taxpayer who places 
                        such system in service before January 1, 2014, 
                        elects such treatment, and
                            ``(ii) placed in service before the end of 
                        the calendar year in which the Clean Energy for 
                        America Act is enacted.''.
            (3) Natural gas gathering line.--Paragraph (17) of section 
        168(i) is amended--
                    (A) in subparagraph (A), by inserting ``which are 
                placed in service before the end of the calendar year 
                in which the Clean Energy for America Act is enacted 
                and are'' after ``pipe, equipment, and appurtenances'', 
                and
                    (B) in subparagraph (B), by inserting ``which are 
                placed in service before the end of the calendar year 
                in which the Clean Energy for America Act is enacted 
                and are'' after ``pipe, equipment, and appurtenances''.
            (4) Repeal of deduction for tertiary injectants.--
        Subsection (c) of section 193 is amended--
                    (A) in paragraph (1), by striking ``or'' at the 
                end,
                    (B) in paragraph (2), by striking the period at the 
                end and inserting ``, or'', and
                    (C) by inserting at the end the following:
            ``(3) which is paid or incurred during any taxable year 
        beginning after the date of the enactment of the Clean Energy 
        for America Act.''.
            (5) Intangible drilling and development costs.--Subsection 
        (c) of section 263 is amended to read as follows:
    ``(c) Intangible Drilling and Development Costs in the Case of Oil 
and Gas Wells and Geothermal Wells.--
            ``(1) In general.--Notwithstanding subsection (a), and 
        except as provided in subsection (i), regulations shall be 
        prescribed by the Secretary under this subtitle corresponding 
        to the regulations which granted the option to deduct as 
        expenses intangible drilling and development costs in the case 
        of oil and gas wells and which were recognized and approved by 
        the Congress in House Concurrent Resolution 50, Seventy-ninth 
        Congress. Such regulations shall also grant the option to 
        deduct as expenses intangible drilling and development costs in 
        the case of wells drilled for any geothermal deposit (as 
        defined in section 613(e)(2)) to the same extent and in the 
        same manner as such expenses are deductible in the case of oil 
        and gas wells. This subsection shall not apply with respect to 
        any costs to which any deduction is allowed under section 59(e) 
        or 291.
            ``(2) Exclusion.--
                    ``(A) In general.--This subsection shall not apply 
                to amounts paid or incurred by a taxpayer with regard 
                to any oil or gas well in any taxable year beginning 
                after the date of the enactment of the Clean Energy for 
                America Act.
                    ``(B) Amortization of excluded amounts.--The amount 
                not allowable as a deduction for any taxable year by 
                reason of subparagraph (A) shall be allowable as a 
                deduction ratably over the 60-month period beginning 
                with the month in which the costs are paid or incurred. 
                For purposes of section 1254, any deduction under this 
                subparagraph shall be treated as a deduction under this 
                subsection.''.
            (6) Percentage depletion.--
                    (A) Percentage depletion of oil and gas wells, 
                coal, lignite, and oil shale.--Section 613 is amended--
                            (i) in subsection (a), by striking ``(100 
                        percent in the case of oil and gas 
                        properties)'',
                            (ii) in subsection (b)--
                                    (I) by striking paragraph (2) and 
                                inserting the following:
            ``(2) 15 percent.--If from deposits in the United States, 
        gold, silver, copper, and iron ore.'',
                                    (II) in paragraph (4), by striking 
                                ``coal, lignite,'',
                                    (III) in paragraph (5), by 
                                inserting ``(except oil shale)'' after 
                                ``Clay and shale'', and
                                    (IV) in paragraph (6)(A), by 
                                striking ``(except shale described in 
                                paragraph (2)(B) or (5))'' and 
                                inserting ``(except oil shale and shale 
                                described in paragraph (5))'',
                            (iii) in subsection (c)(4)--
                                    (I) by striking subparagraphs (A) 
                                and (H),
                                    (II) by inserting ``and'' at the 
                                end of subparagraph (G),
                                    (III) by redesignating 
                                subparagraphs (B) through (G) as 
                                subparagraphs (A) through (F), 
                                respectively, and
                                    (IV) by redesignating subparagraph 
                                (I) as subparagraph (G),
                            (iv) in subsection (d), by striking 
                        ``Except as provided in section 613A, in the 
                        case of'' and inserting ``In the case of'', and
                            (v) in subsection (e)(2), by striking ``or 
                        section 613A''.
                    (B) Oil and gas wells.--Section 613A is amended by 
                adding at the end the following new subsection:
    ``(f) Termination.--This section shall not apply to any taxable 
year beginning after the date of the enactment of the Clean Energy for 
America Act.''.
                    (C) Effective date.--The amendments made by this 
                section shall apply to taxable years beginning after 
                the date of the enactment of this Act.
            (7) Termination of capital gains treatment for royalties 
        from coal.--
                    (A) In general.--Subsection (c) of section 631 is 
                amended--
                            (i) by striking ``coal (including lignite), 
                        or iron ore'' and inserting ``iron ore'',
                            (ii) by striking ``coal or iron ore'' each 
                        place it appears and inserting ``iron ore'',
                            (iii) by striking ``iron ore or coal'' each 
                        place it appears and inserting ``iron ore'', 
                        and
                            (iv) by striking ``Coal or'' in the 
                        heading.
                    (B) Conforming amendment.--The heading of section 
                631 of the Internal Revenue Code of 1986 is amended by 
                striking ``, coal,''.
                    (C) Effective date.--The amendments made by this 
                paragraph shall apply to taxable years beginning after 
                the date of the enactment of this Act.
            (8) Enhanced oil recovery credit.--
                    (A) In general.--Subpart D of part IV of subchapter 
                A of chapter 1 is amended by striking section 43.
                    (B) Conforming amendments.--
                            (i) Section 38(b) is amended by striking 
                        paragraph (6).
                            (ii) Section 45Q is amended--
                                    (I) by striking ``section 
                                43(b)(3)(B)'' each place it appears and 
                                inserting ``section 43(b)(3)(B) (as in 
                                effect on the day before the date of 
                                the enactment of the Clean Energy for 
                                America Act)'', and
                                    (II) in subsection (e)(2), by 
                                inserting ``(as in effect on the day 
                                before the date of the enactment of the 
                                Clean Energy for America Act)'' after 
                                ``section 43(c)(2)''.
                            (iii) Section 196(c) is amended--
                                    (I) by striking paragraph (5), and
                                    (II) by redesignating paragraphs 
                                (6) through (14) as paragraphs (5) 
                                through (13), respectively.
                    (C) Clerical amendment.--The table of sections for 
                subpart D of part IV of subchapter A of chapter 1 is 
                amended by striking the item relating to section 43.
                    (D) Effective date.--The amendments made by this 
                paragraph shall apply to taxable years beginning after 
                the date of the enactment of this Act.
            (9) Credit for producing oil and gas from marginal wells.--
                    (A) In general.--Subpart D of part IV of subchapter 
                A of chapter 1 is amended by striking section 45I.
                    (B) Conforming amendment.--Section 38(b) is amended 
                by striking paragraph (19).
                    (C) Clerical amendment.--The table of sections for 
                subpart D of part IV of subchapter A of chapter 1 is 
                amended by striking the item relating to section 45I.
                    (D) Effective date.--The amendments made by this 
                paragraph shall apply to taxable years beginning after 
                the date of the enactment of this Act.
            (10) Qualifying advanced coal project credit.--
                    (A) In general.--Subpart E of part IV of subchapter 
                A of chapter 1 is amended by striking section 48A.
                    (B) Conforming amendments.--
                            (i) Section 46, as amended by section 102 
                        of this Act, is amended by striking paragraph 
                        (3) and redesignating paragraphs (4) through 
                        (7) as paragraphs (3) through (6), 
                        respectively.
                            (ii) Section 49(a)(1)(C), as amended by 
                        section 102 of this Act, is amended by striking 
                        clause (iii) and redesignating clauses (iv) 
                        through (viii) as clauses (iii) through (vii), 
                        respectively.
                            (iii) Section 50(a)(2)(E), as amended by 
                        section 102 of this Act, is amended by striking 
                        ``48A(b)(3),''.
                    (C) Clerical amendment.--The table of sections for 
                subpart E of part IV of subchapter A of chapter 1 is 
                amended by striking the item relating to section 48A.
                    (D) Effective date.--The amendments made by this 
                paragraph shall apply to taxable years beginning after 
                the date of the enactment of this Act.
            (11) Qualifying gasification project credit.--
                    (A) In general.--Subpart E of part IV of subchapter 
                A of chapter 1 is amended by striking section 48B.
                    (B) Conforming amendments.--
                            (i) Section 46, as amended by this Act, is 
                        amended by striking paragraph (3) and by 
                        redesignating paragraphs (4), (5), and (6) as 
                        paragraphs (3), (4), and (5), respectively.
                            (ii) Section 49(a)(1)(C), as amended by 
                        this Act, is amended by striking clause (iii) 
                        and redesignating clauses (iv) through (vii) as 
                        clauses (iii) through (vi).
                            (iii) Section 50(a)(2)(E), as amended by 
                        this Act, is amended by striking 
                        ``48B(b)(3),''.
                    (C) Clerical amendment.--The table of sections for 
                subpart E of part IV of subchapter A of chapter 1 is 
                amended by striking the item relating to section 48B.
                    (D) Effective date.--The amendments made by this 
                paragraph shall apply to taxable years beginning after 
                the date of the enactment of this Act.
            (12) Reinstatement of treatment of foreign base company oil 
        related income as foreign base company income.--
                    (A) In general.--Section 954(a) is amended by 
                striking ``and'' at the end of paragraph (2), by 
                striking the period at the end of paragraph (3) and 
                inserting ``, and'', and by adding at the end the 
                following new paragraph:
            ``(4) the foreign base company oil related income for the 
        taxable year (determined under subsection (g) and reduced as 
        provided in subsection (b)(5)).''.
                    (B) Foreign base company oil related income.--
                Section 954 is amended by inserting before subsection 
                (h) the following new subsection:
    ``(g) Foreign Base Company Oil Related Income.--For purposes of 
this section--
            ``(1) In general.--Except as otherwise provided in this 
        subsection, the term `foreign base company oil related income' 
        means foreign oil related income (within the meaning of 
        paragraphs (2) and (3) of section 907(c)) other than income 
        derived from a source within a foreign country in connection 
        with--
                    ``(A) oil or gas which was extracted from an oil or 
                gas well located in such foreign country, or
                    ``(B) oil, gas, or a primary product of oil or gas 
                which is sold by the foreign corporation or a related 
                person for use or consumption within such country or is 
                loaded in such country on a vessel or aircraft as fuel 
                for such vessel or aircraft.
        Such term shall not include any foreign personal holding 
        company income (as defined in subsection (c)).
            ``(2) Paragraph (1) applies only where corporation has 
        produced 1,000 barrels per day or more.--
                    ``(A) In general.--The term `foreign base company 
                oil related income' shall not include any income of a 
                foreign corporation if such corporation is not a large 
                oil producer for the taxable year.
                    ``(B) Large oil producer.--For purposes of 
                subparagraph (A), the term `large oil producer' means 
                any corporation if, for the taxable year or for the 
                preceding taxable year, the average daily production of 
                foreign crude oil and natural gas of the related group 
                which includes such corporation equaled or exceeded 
                1,000 barrels.
                    ``(C) Related group.--The term `related group' 
                means a group consisting of the foreign corporation and 
                any other person who is a related person with respect 
                to such corporation.
                    ``(D) Average daily production of foreign crude oil 
                and natural gas.--For purposes of this paragraph, the 
                average daily production of foreign crude oil or 
                natural gas of any related group for any taxable year 
                (and the conversion of cubic feet of natural gas into 
                barrels) shall be determined under rules similar to the 
                rules of section 613A except that only crude oil or 
                natural gas from a well located outside the United 
                States shall be taken into account.''.
                    (C) Conforming amendments.--
                            (i) Section 952(c)(1)(B)(iii) is amended by 
                        redesignating subclauses (I) through (IV) as 
                        subclauses (II) through (V), respectively, and 
                        by inserting before subclause (II) (as 
                        redesignated) the following new subclause:
                                    ``(I) foreign base company oil 
                                related income,''.
                            (ii) Section 954(b) is amended--
                                    (I) in paragraph (4), by inserting 
                                at the end the following new sentence: 
                                ``The preceding sentence shall not 
                                apply to foreign base company oil-
                                related income described in subsection 
                                (a)(4).'',
                                    (II) in paragraph (5), by striking 
                                ``and the foreign base company services 
                                income'' and inserting ``the foreign 
                                base company services income, and the 
                                foreign base company oil related 
                                income'', and
                                    (III) by adding at the end the 
                                following new paragraph:
            ``(6) Foreign base company oil related income not treated 
        as another kind of base company income.--Income of a 
        corporation which is foreign base company oil related income 
        shall not be considered foreign base company income of such 
        corporation under paragraph (2) or (3) of subsection (a).''.
                    (D) Effective date.--The amendments made by this 
                paragraph shall apply to taxable years of foreign 
                corporations beginning after the date of the enactment 
                of this Act, and to taxable years of United States 
                shareholders with or within which such taxable years of 
                foreign corporations end.
            (13) Inclusion of foreign oil and gas extraction income in 
        tested income for purpose of determining global intangible low-
        taxed income.--
                    (A) In general.--Section 951A(c)(2)(A)(i) is 
                amended by inserting ``and'' at the end of subclause 
                (III), by striking ``and'' at the end of subclause (IV) 
                and inserting ``over'', and by striking subclause (V).
                    (B) Effective date.--The amendments made by this 
                paragraph shall apply to taxable years of foreign 
                corporations beginning after the date of the enactment 
                of this Act, and to taxable years of United States 
                shareholders in which or with which such tax years of 
                foreign corporations end.
            (14) Repeal of corporate income tax exemption for publicly 
        traded partnerships with qualifying income and gains from 
        activities relating to fossil fuels.--
                    (A) In general.--Section 7704(d)(1) is amended--
                            (i) in subparagraph (E), by striking 
                        ``(including pipelines transporting gas, oil, 
                        or products thereof)'', and
                            (ii) in the flush matter at the end, by 
                        inserting ``or any coal, gas, oil, or products 
                        thereof'' before the period.
                    (B) Effective date.--The amendments made by this 
                paragraph shall apply to taxable years beginning after 
                the date of the enactment of this Act.

                    TITLE II--CLEAN FUEL TAX CREDITS

SEC. 201. CLEAN FUEL PRODUCTION CREDIT.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1, 
as amended by section 101, is amended by adding at the end the 
following new section:

``SEC. 45U. CLEAN FUEL PRODUCTION CREDIT.

    ``(a) Amount of Credit.--
            ``(1) In general.--For purposes of section 38, the clean 
        fuel production credit for any taxable year is an amount equal 
        to the product of--
                    ``(A) $1.00 per gallon with respect to any 
                transportation fuel which is--
                            ``(i) produced by the taxpayer at a 
                        qualified facility, and
                            ``(ii) sold or used by the taxpayer in a 
                        manner described in paragraph (2), and
                    ``(B) the emissions factor for such fuel (as 
                determined under subsection (b)(2)).
            ``(2) Sale or use.--For purposes of paragraph (1)(A)(ii), 
        the transportation fuel is sold or used in a manner described 
        in this paragraph if such fuel is--
                    ``(A) sold by the taxpayer to an unrelated person--
                            ``(i) for use by such person in the 
                        production of a fuel mixture,
                            ``(ii) for use by such person in a trade or 
                        business, or
                            ``(iii) who sells such fuel at retail to 
                        another person and places such fuel in the fuel 
                        tank of such other person, or
                    ``(B) used or sold by the taxpayer for any purpose 
                described in subparagraph (A).
            ``(3) Rounding.--If any amount determined under paragraph 
        (1) is not a multiple of 0.1 cent, such amount shall be rounded 
        to the nearest multiple of 0.1 cent.
    ``(b) Emissions Factors.--
            ``(1) Emissions factor.--
                    ``(A) In general.--The emissions factor of a 
                transportation fuel shall be an amount equal to the 
                quotient of--
                            ``(i) an amount (not less than zero) equal 
                        to--
                                    ``(I) 75, minus
                                    ``(II) the emissions rate for such 
                                fuel, divided by
                            ``(ii) 75.
                    ``(B) Establishment of safe harbor emissions 
                rate.--The Secretary, in consultation with the 
                Administrator of the Environmental Protection Agency, 
                shall establish the safe harbor emissions rate for 
                similar types and categories of transportation fuels 
                based on the amount of lifecycle greenhouse gas 
                emissions (as described in section 211(o)(1)(H) of the 
                Clean Air Act (42 U.S.C. 7545(o)(1)(H)), as in effect 
                on the date of the enactment of this section) for such 
                fuels, expressed as kilograms of CO<INF>2</INF>e per 
                mmBTU, which a taxpayer may elect to use for purposes 
                of this section.
                    ``(C) Rounding of safe harbor emissions rate.--The 
                Secretary may round the safe harbor emissions rates 
                under subparagraph (B) to the nearest multiple of 7.50 
                kilograms of CO<INF>2</INF>e per mmBTU, except that, in 
                the case of an emissions rate that is less than 3.75 
                kilograms of CO<INF>2</INF>e per mmBTU, the Secretary 
                may round such rate to zero.
                    ``(D) Provisional safe harbor emissions rate.--
                            ``(i) In general.--In the case of any 
                        transportation fuel for which a safe harbor 
                        emissions rate has not been established by the 
                        Secretary, a taxpayer producing such fuel may 
                        file a petition with the Secretary for 
                        determination of the safe harbor emissions rate 
                        with respect to such fuel.
                            ``(ii) Establishment of provisional and 
                        final safe harbor emissions rate.--In the case 
                        of a transportation fuel for which a petition 
                        described in clause (i) has been filed, the 
                        Secretary, in consultation with the 
                        Administrator of the Environmental Protection 
                        Agency, shall--
                                    ``(I) not later than 12 months 
                                after the date on which the petition 
                                was filed, provide a provisional safe 
                                harbor emissions rate for such fuel 
                                which a taxpayer may use for purposes 
                                of this section, and
                                    ``(II) not later than 24 months 
                                after the date on which the petition 
                                was filed, establish the safe harbor 
                                emissions rate for such fuel.
                    ``(E) Rounding.--If any amount determined under 
                subparagraph (A) is not a multiple of 0.1, such amount 
                shall be rounded to the nearest multiple of 0.1.
            ``(2) Publishing safe harbor emissions rate.--The 
        Secretary, in consultation with the Administrator of the 
        Environmental Protection Agency, shall publish a table that 
        sets forth the safe harbor emissions rate (as established 
        pursuant to paragraph (1)) for similar types and categories of 
        transportation fuels.
    ``(c) Inflation Adjustment.--
            ``(1) In general.--In the case of calendar years beginning 
        after 2021, the $1.00 amount in subsection (a)(1)(A) shall be 
        adjusted by multiplying such amount by the inflation adjustment 
        factor for the calendar year in which the sale or use of the 
        transportation fuel occurs. If any amount as increased under 
        the preceding sentence is not a multiple of 1 cent, such amount 
        shall be rounded to the nearest multiple of 1 cent.
            ``(2) Inflation adjustment factor.--For purposes of 
        paragraph (1), the inflation adjustment factor shall be the 
        inflation adjustment factor determined and published by the 
        Secretary pursuant to section 45T(d), determined by 
        substituting `calendar year 2020' for `calendar year 1992' in 
        paragraph (3) thereof.
    ``(d) Credit Phase-Out.--
            ``(1) In general.--If the Secretary, in consultation with 
        the Secretary of Energy and the Administrator of the 
        Environmental Protection Agency, determines that the greenhouse 
        gas emissions from transportation fuel produced and sold at 
        retail annually in the United States are equal to or less than 
        50 percent of the greenhouse gas emissions from transportation 
        fuel produced and sold at retail in the United States during 
        calendar year 2019, the amount of the clean fuel production 
        credit under this section for any qualified facility placed in 
        service during a calendar year described in paragraph (2) shall 
        be equal to the product of--
                    ``(A) the amount of the credit determined under 
                subsection (a) without regard to this subsection, 
                multiplied by
                    ``(B) the phase-out percentage under paragraph (2).
            ``(2) Phase-out percentage.--The phase-out percentage under 
        this paragraph is equal to--
                    ``(A) for a facility placed in service during the 
                first calendar year following the calendar year in 
                which the determination described in paragraph (1) is 
                made, 75 percent,
                    ``(B) for a facility placed in service during the 
                second calendar year following such determination year, 
                50 percent,
                    ``(C) for a facility placed in service during the 
                third calendar year following such determination year, 
                25 percent, and
                    ``(D) for a facility placed in service during any 
                calendar year subsequent to the year described in 
                subparagraph (C), 0 percent.
    ``(e) Definitions.--In this section:
            ``(1) mmBTU.--The term `mmBTU' means 1,000,000 British 
        thermal units.
            ``(2) CO<INF>2</INF>e.--The term `CO<INF>2</INF>e' means, 
        with respect to any greenhouse gas, the equivalent carbon 
        dioxide (as determined based on relative global warming 
        potential).
            ``(3) Greenhouse gas.--The term `greenhouse gas' has the 
        same meaning given that term under section 211(o)(1)(G) of the 
        Clean Air Act (42 U.S.C. 7545(o)(1)(G)), as in effect on the 
        date of the enactment of this section.
            ``(4) Qualified facility.--
                    ``(A) In general.--Subject to subparagraphs (B) and 
                (C), the term `qualified facility' means a facility 
                used for the production of transportation fuels.
                    ``(B) 10-year production credit.--For purposes of 
                this section, a facility shall only qualify as a 
                qualified facility--
                            ``(i) in the case of a facility that is 
                        originally placed in service after December 31, 
                        2020, for the 10-year period beginning on the 
                        date such facility is placed in service, or
                            ``(ii) in the case of a facility that is 
                        originally placed in service before January 1, 
                        2021, for the 10-year period beginning on 
                        January 1, 2021.
            ``(5) Transportation fuel.--The term `transportation fuel' 
        means a fuel which is suitable for use as a fuel in a highway 
        vehicle or aircraft.
    ``(f) Final Guidance.--Not later than January 1, 2020, the 
Secretary, in consultation with the Administrator of the Environmental 
Protection Agency, shall issue final guidance regarding implementation 
of this section, including calculation of emissions factors for 
transportation fuel, the table described in subsection (b)(2), and the 
determination of clean fuel production credits under this section.
    ``(g) Special Rules.--
            ``(1) Only registered production in the united states taken 
        into account.--
                    ``(A) In general.--No clean fuel production credit 
                shall be determined under subsection (a) with respect 
                to any transportation fuel unless--
                            ``(i) the taxpayer is registered as a 
                        producer of clean fuel under section 4101 at 
                        the time of production, and
                            ``(ii) such fuel is produced in the United 
                        States.
                    ``(B) United states.--For purposes of this 
                paragraph, the term `United States' includes any 
                possession of the United States.
            ``(2) Production attributable to the taxpayer.--In the case 
        of a facility in which more than 1 person has an ownership 
        interest, except to the extent provided in regulations 
        prescribed by the Secretary, production from the facility shall 
        be allocated among such persons in proportion to their 
        respective ownership interests in the gross sales from such 
        facility.
            ``(3) Related persons.--Persons shall be treated as related 
        to each other if such persons would be treated as a single 
        employer under the regulations prescribed under section 52(b). 
        In the case of a corporation which is a member of an affiliated 
        group of corporations filing a consolidated return, such 
        corporation shall be treated as selling fuel to an unrelated 
        person if such fuel is sold to such a person by another member 
        of such group.
            ``(4) Pass-thru in the case of estates and trusts.--Under 
        regulations prescribed by the Secretary, rules similar to the 
        rules of subsection (d) of section 52 shall apply.
            ``(5) Allocation of credit to patrons of agricultural 
        cooperative.--
                    ``(A) Election to allocate.--
                            ``(i) In general.--In the case of an 
                        eligible cooperative organization, any portion 
                        of the credit determined under subsection (a) 
                        for the taxable year may, at the election of 
                        the organization, be apportioned among patrons 
                        of the organization on the basis of the amount 
                        of business done by the patrons during the 
                        taxable year.
                            ``(ii) Form and effect of election.--An 
                        election under clause (i) for any taxable year 
                        shall be made on a timely filed return for such 
                        year. Such election, once made, shall be 
                        irrevocable for such taxable year. Such 
                        election shall not take effect unless the 
                        organization designates the apportionment as 
                        such in a written notice mailed to its patrons 
                        during the payment period described in section 
                        1382(d).
                    ``(B) Treatment of organizations and patrons.--The 
                amount of the credit apportioned to any patrons under 
                subparagraph (A)--
                            ``(i) shall not be included in the amount 
                        determined under subsection (a) with respect to 
                        the organization for the taxable year, and
                            ``(ii) shall be included in the amount 
                        determined under subsection (a) for the first 
                        taxable year of each patron ending on or after 
                        the last day of the payment period (as defined 
                        in section 1382(d)) for the taxable year of the 
                        organization or, if earlier, for the taxable 
                        year of each patron ending on or after the date 
                        on which the patron receives notice from the 
                        cooperative of the apportionment.
                    ``(C) Special rules for decrease in credits for 
                taxable year.--If the amount of the credit of a 
                cooperative organization determined under subsection 
                (a) for a taxable year is less than the amount of such 
                credit shown on the return of the cooperative 
                organization for such year, an amount equal to the 
                excess of--
                            ``(i) such reduction, over
                            ``(ii) the amount not apportioned to such 
                        patrons under subparagraph (A) for the taxable 
                        year,
                shall be treated as an increase in tax imposed by this 
                chapter on the organization. Such increase shall not be 
                treated as tax imposed by this chapter for purposes of 
                determining the amount of any credit under this 
                chapter.
                    ``(D) Eligible cooperative defined.--For purposes 
                of this section the term `eligible cooperative' means a 
                cooperative organization described in section 1381(a) 
                which is owned more than 50 percent by agricultural 
                producers or by entities owned by agricultural 
                producers. For this purpose an entity owned by an 
                agricultural producer is one that is more than 50 
                percent owned by agricultural producers.''.
    (b) Conforming Amendments.--
            (1) Section 38(b), as amended by section 101, is amended--
                    (A) in paragraph (32), by striking ``plus'' at the 
                end,
                    (B) in paragraph (33), by striking the period at 
                the end and inserting ``, plus'', and
                    (C) by adding at the end the following new 
                paragraph:
            ``(34) the clean fuel production credit determined under 
        section 45U(a).''.
            (2) The table of sections for subpart D of part IV of 
        subchapter A of chapter 1, as amended by section 101, is 
        amended by adding at the end the following new item:

``Sec. 45U. Clean fuel production credit.''.
            (3) Section 4101(a)(1) is amended by inserting ``every 
        person producing a fuel eligible for the clean fuel production 
        credit (pursuant to section 45U),'' after ``section 
        6426(b)(4)(A)),''.
    (c) Effective Date.--The amendments made by this section shall 
apply to transportation fuel produced after December 31, 2020.

SEC. 202. TEMPORARY EXTENSION OF EXISTING FUEL AND TRANSPORTATION 
              INCENTIVES.

    (a) Alternative Motor Vehicle Credit for Fuel Cell Motor 
Vehicles.--
            (1) In general.--Section 30B(k) is amended--
                    (A) by striking paragraph (1), and
                    (B) by redesignating paragraphs (2) through (4) as 
                paragraphs (1) through (3), respectively.
            (2) Phaseout.--Section 30B is amended by adding at the end 
        the following:
    ``(l) Credit Phase-Out for New Qualified Fuel Cell Motor 
Vehicles.--
            ``(1) In general.--Following a determination by the 
        Secretary under section 45U(d)(1) that the greenhouse gas 
        emissions from transportation fuel produced and sold at retail 
        annually in the United States are equal to or less than 50 
        percent of the greenhouse gas emissions from transportation 
        fuel produced and sold at retail in the United States during 
        calendar year 2019, the amount of the new qualified fuel cell 
        motor vehicle credit under this section for any new qualified 
        fuel cell motor vehicle purchased during a calendar year 
        described in paragraph (2) shall be equal to the product of--
                    ``(A) the amount of the credit determined under 
                subsection (b) without regard to this subsection, 
                multiplied by
                    ``(B) the phase-out percentage under paragraph (2).
            ``(2) Phase-out percentage.--The phase-out percentage under 
        this paragraph is equal to--
                    ``(A) for a vehicle purchased during the first 
                calendar year following the calendar year in which the 
                determination described in paragraph (1) is made, 75 
                percent,
                    ``(B) for a vehicle purchased during the second 
                calendar year following such determination year, 50 
                percent,
                    ``(C) for a vehicle purchased during the third 
                calendar year following such determination year, 25 
                percent, and
                    ``(D) for a vehicle purchased during any calendar 
                year subsequent to the year described in subparagraph 
                (C), 0 percent.''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to property purchased after December 31, 2017.
    (b) Alternative Fuel Vehicle Refueling Property Credit.--
            (1) In general.--Paragraph (1) of section 30C(g) is amended 
        by striking ``December 31, 2017'' and inserting ``December 31, 
        2020''.
            (2) Effective date.--The amendments made by this subsection 
        shall apply to property placed in service after December 31, 
        2017.
    (c) New Qualified Plug-In Electric Drive Motor Vehicles.--
            (1) 2- and 3-wheeled plug-in electric vehicles.--
                    (A) In general.--Clause (ii) of section 
                30D(g)(3)(E) is amended by striking ``in the case of a 
                vehicle that has 2 wheels, after December 31, 2014, and 
                before January 1, 2018'' and inserting ``after December 
                31, 2014''.
                    (B) Effective date.--The amendments made by this 
                paragraph shall apply to vehicles acquired after 
                December 31, 2017.
            (2) Elimination on limitation on number of vehicles 
        eligible for credit.--
                    (A) In general.--Section 30D, as amended by 
                paragraph (1), is amended--
                            (i) by striking subsection (e), and
                            (ii) by redesignating subsections (f) and 
                        (g) as subsections (e) and (f), respectively.
                    (B) Conforming amendment.--Paragraph (37) of 
                section 1016(a) is amended by striking ``section 
                30D(f)(1)'' and inserting ``section 30D(e)(1)''.
                    (C) Effective date.--The amendments made by this 
                paragraph shall apply to vehicles sold after the date 
                of the enactment of this Act.
            (3) Phaseout.--Section 30D, as amended by paragraph (2), is 
        amended by adding at the end the following:
    ``(g) Credit Phase-Out for New Qualified Plug-In Electric Drive 
Motor Vehicles.--
            ``(1) In general.--Following a determination by the 
        Secretary under section 45U(d)(1) that the greenhouse gas 
        emissions from transportation fuel produced and sold at retail 
        annually in the United States are equal to or less than 50 
        percent of the greenhouse gas emissions from transportation 
        fuel produced and sold at retail in the United States during 
        calendar year 2019, the amount of the credit allowed under this 
        section for any new qualified plug-in electric drive motor 
        vehicle sold or qualified 2- or 3-wheeled plug-in electric 
        vehicle acquired during a calendar year described in paragraph 
        (2) shall be equal to the product of--
                    ``(A) the amount of the credit determined under 
                subsection (a) without regard to this subsection, 
                multiplied by
                    ``(B) the phase-out percentage under paragraph (2).
            ``(2) Phase-out percentage.--The phase-out percentage under 
        this paragraph is equal to--
                    ``(A) for a vehicle sold or acquired during the 
                first calendar year following the calendar year in 
                which the determination described in paragraph (1) is 
                made, 75 percent,
                    ``(B) for a vehicle sold or acquired during the 
                second calendar year following such determination year, 
                50 percent,
                    ``(C) for a vehicle sold or acquired during the 
                third calendar year following such determination year, 
                25 percent, and
                    ``(D) for a vehicle sold or acquired during any 
                calendar year subsequent to the year described in 
                subparagraph (C), 0 percent.''.
    (d) Second Generation Biofuel Producer Credit.--
            (1) In general.--Section 40(b)(6)(J)(i) is amended by 
        striking ``2018'' and inserting ``2021''.
            (2) Effective date.--The amendments made by this subsection 
        shall apply to qualified second generation biofuel production 
        after December 31, 2017.
    (e) Biodiesel and Renewable Diesel Used as Fuel.--
            (1) In general.--Section 40A(g) is amended by striking 
        ``2017'' and inserting ``2020''.
            (2) Effective date.--The amendments made by this subsection 
        shall apply to fuel sold or used after December 31, 2017.
    (f) Credit for Biodiesel and Alternative Fuel Mixtures.--
            (1) In general.--Section 6426 is amended--
                    (A) in subsection (c)(6), by striking ``2017'' and 
                inserting ``2020'',
                    (B) in subsection (d)--
                            (i) in paragraph (2)(D), by striking 
                        ``liquefied'', and
                            (ii) in paragraph (5), by striking ``2017'' 
                        and inserting ``2020'', and
                    (C) in subsection (e), by amending paragraph (3) to 
                read as follows:
            ``(3) Termination.--This subsection shall not apply to any 
        sale or use for any period after--
                    ``(A) in the case of any alternative fuel mixture 
                sold or used by the taxpayer for the purposes described 
                in subsection (d)(1), December 31, 2020,
                    ``(B) in the case of any sale or use involving 
                hydrogen that is not for the purposes described in 
                subsection (d)(1), December 31, 2020, and
                    ``(C) in the case of any sale or use not described 
                in subparagraph (A) or (B), December 31, 2017.''.
            (2) Clarification of rules regarding alternative fuel 
        mixture credit.--Paragraph (2) of section 6426(e) of the 
        Internal Revenue Code of 1986 is amended by striking ``mixture 
        of alternative fuel'' and inserting ``mixture of alternative 
        fuel (other than a fuel described in subparagraph (A), (C), or 
        (F) of subsection (d)(2))''.
            (3) Effective date.--
                    (A) In general.--The amendments made by paragraph 
                (1) shall apply to fuel sold or used after December 31, 
                2017.
                    (B) Clarification of rules regarding alternative 
                fuel mixture credit.--The amendment made by paragraph 
                (2) shall apply to--
                            (i) fuel sold or used on or after the date 
                        of the enactment of this Act, and
                            (ii) fuel sold or used before such date of 
                        enactment, but only to the extent that credits 
                        and claims of credit under section 6426(e) of 
                        the Internal Revenue Code of 1986 with respect 
                        to such sale or use have not been paid or 
                        allowed as of such date.
            (4) Special rule for certain periods.--Notwithstanding any 
        other provision of law, in the case of--
                    (A) any biodiesel mixture credit properly 
                determined under section 6426(c) of the Internal 
                Revenue Code of 1986 for the periods after December 31, 
                2017, and before the date of the enactment of this Act, 
                and
                    (B) any alternative fuel credit properly determined 
                under section 6426(d) of such Code for such periods,
        such credit shall be allowed, and any refund or payment 
        attributable to such credit (including any payment under 
        section 6427(e) of such Code) shall be made, only in such 
        manner as the Secretary of the Treasury (or the Secretary's 
        delegate) shall provide. Such Secretary shall issue guidance 
        within 30 days after the date of the enactment of this Act 
        providing for a one-time submission of claims covering periods 
        described in the preceding sentence. Such guidance shall 
        provide for a 180-day period for the submission of such claims 
        (in such manner as prescribed by such Secretary) to begin not 
        later than 30 days after such guidance is issued. Such claims 
        shall be paid by such Secretary not later than 60 days after 
        receipt. If such Secretary has not paid pursuant to a claim 
        filed under this subsection within 60 days after the date of 
        the filing of such claim, the claim shall be paid with interest 
        from such date determined by using the overpayment rate and 
        method under section 6621 of such Code.
    (g) Biodiesel, Biodiesel Mixtures, and Alternative Fuels.--
            (1) In general.--Section 6427(e)(6) is amended--
                    (A) in subparagraph (B), by striking ``2017'' and 
                inserting ``2020'', and
                    (B) in subparagraph (C), by striking ``2017'' and 
                inserting ``2020''.
            (2) Effective date.--The amendments made by this subsection 
        shall apply to fuel sold or used after December 31, 2017.

                TITLE III--ENERGY EFFICIENCY INCENTIVES

SEC. 301. CREDIT FOR NEW ENERGY EFFICIENT RESIDENTIAL BUILDINGS.

    (a) In General.--Section 45L is amended to read as follows:

``SEC. 45L. NEW ENERGY EFFICIENT HOME CREDIT.

    ``(a) Allowance of Credit.--For purposes of section 38, in the case 
of an eligible contractor, the new energy efficient home credit for the 
taxable year is the applicable amount for each qualified residence 
which is--
            ``(1) constructed by the eligible contractor, and
            ``(2) acquired by a person from such eligible contractor 
        for use as a residence during the taxable year.
    ``(b) Applicable Amount.--
            ``(1) In general.--For purposes of subsection (a), the 
        applicable amount shall be an amount equal to $1,500 increased 
        (but not above $3,000) by $100 for every 5 percentage points by 
        which the efficiency ratio for the qualified residence is 
        certified to be greater than 25 percent.
            ``(2) Efficiency ratio.--For purposes of this section, the 
        efficiency ratio of a qualified residence shall be equal to the 
        quotient, expressed as a percentage, obtained by dividing--
                    ``(A) an amount equal to the difference between--
                            ``(i) the annual level of energy 
                        consumption of the qualified residence, and
                            ``(ii) the annual level of energy 
                        consumption of the baseline residence, by
                    ``(B) the annual level of energy consumption of the 
                baseline residence.
            ``(3) Baseline residence.--For purposes of this section, 
        the baseline residence shall be a residence which is--
                    ``(A) comparable to the qualified residence, and
                    ``(B) constructed in accordance with the standards 
                of the 2015 International Energy Conservation Code, as 
                such Code (including supplements) is in effect on the 
                date of the enactment of the Clean Energy for America 
                Act.
    ``(c) Definitions.--For purposes of this section:
            ``(1) Eligible contractor.--The term `eligible contractor' 
        means--
                    ``(A) the person who constructed the qualified 
                residence, or
                    ``(B) in the case of a qualified residence which is 
                a manufactured home, the manufactured home producer of 
                such residence.
            ``(2) Qualified residence.--The term `qualified residence' 
        means a dwelling unit--
                    ``(A) located in the United States,
                    ``(B) the construction of which is substantially 
                completed after the date of the enactment of this 
                section, and
                    ``(C) which is certified to have an annual level of 
                energy consumption that is less than the baseline 
                residence and an efficiency ratio of not less than 25 
                percent.
            ``(3) Construction.--The term `construction' does not 
        include substantial reconstruction or rehabilitation.
    ``(d) Certification.--
            ``(1) In general.--
                    ``(A) Accredited third party.--A certification 
                described in this section shall be made by a third 
                party that is accredited by a certification program 
                approved by the Secretary, in consultation with the 
                Secretary of Energy.
                    ``(B) Guidance.--A certification described in this 
                section shall be made in accordance with guidance 
                prescribed by the Secretary, in consultation with the 
                Secretary of Energy. Such guidance shall--
                            ``(i) specify procedures and methods for 
                        calculating annual energy consumption levels, 
                        and
                            ``(ii) include requirements to ensure the 
                        safe operation of energy efficiency 
                        improvements and that all improvements are 
                        installed according to the applicable standards 
                        of such certification program.
            ``(2) Computer software.--
                    ``(A) In general.--Any calculation under paragraph 
                (1)(B)(i) shall be prepared by qualified computer 
                software.
                    ``(B) Qualified computer software.--For purposes of 
                this paragraph, the term `qualified computer software' 
                means software--
                            ``(i) for which the software designer has 
                        certified that the software meets all 
                        procedures and detailed methods for calculating 
                        energy consumption levels as required by the 
                        Secretary, and
                            ``(ii) which provides such forms as 
                        required to be filed by the Secretary in 
                        connection with energy consumption levels and 
                        the credit allowed under this section.
    ``(e) Basis Adjustment.--For purposes of this subtitle, if a credit 
is allowed under this section in connection with any expenditure for 
any property (other than a qualified low-income building, as described 
in section 42(c)(2)), the increase in the basis of such property which 
would (but for this subsection) result from such expenditure shall be 
reduced by the amount of the credit so determined.
    ``(f) Coordination With Investment Credits.--For purposes of this 
section, expenditures taken into account under section 25D or 47 shall 
not be taken into account under this section.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to any qualified residence acquired after December 31, 2020.

SEC. 302. HEATING AND AIR CONDITIONING REPLACEMENT CREDIT.

    (a) In General.--Subpart A of part IV of subchapter A of chapter 1 
is amended by adding at the end the following new section:

``SEC. 25E. HEATING AND AIR CONDITIONING REPLACEMENT CREDIT.

    ``(a) In General.--In the case of an individual, there shall be 
allowed as a credit against the tax imposed by this chapter for the 
taxable year an amount equal to the lesser of--
            ``(1) the sum of the applicable qualified property amounts 
        for any qualified property placed in service by the individual 
        during such taxable year, or
            ``(2) $1,500.
    ``(b) Applicable Qualified Property Amount.--For any qualified 
property, the applicable qualified property amount shall be equal to 
the lesser of--
            ``(1) 50 percent of the amount paid or incurred by the 
        individual for such qualified property, or
            ``(2) $500.
    ``(c) Qualified Property.--The term `qualified property' means a 
furnace, boiler, condensing water heater, central air conditioning 
unit, heat pump, or biomass property which--
            ``(1) meets the requirements of the Energy Star program 
        which are in effect at the time that the property was placed in 
        service,
            ``(2) is installed according to applicable Air Conditioning 
        Contractors of America Quality Installation standards which are 
        in effect at the time that the property was placed in service,
            ``(3) is for use in a dwelling unit which is located in the 
        United States and used as a residence by the individual, and
            ``(4) is reasonably expected to remain in service in such 
        dwelling unit for not less than 5 years.
    ``(d) Biomass Property.--
            ``(1) In general.--For purposes of this section, the term 
        `biomass property' means any property which--
                    ``(A) uses the burning of biomass fuel to heat a 
                dwelling unit or to heat water for use in a dwelling 
                unit, and
                    ``(B) using the higher heating value, has a thermal 
                efficiency of not less than 75 percent.
            ``(2) Biomass fuel.--For purposes of paragraph (1), the 
        term `biomass fuel' means any plant-derived fuel which is 
        available on a renewable or recurring basis, including any such 
        fuel which has been subject to a densification process (such as 
        wood pellets).
    ``(e) Denial of Double Benefit.--No credit shall be allowed under 
subsection (a) for any amounts paid or incurred for which a deduction 
or credit is allowed under any other provision of this chapter.''.
    (b) Clerical Amendment.--The table of sections for subpart A of 
part IV of subchapter A chapter 1 is amended by inserting after the 
item relating to section 25D the following new item:

``25E. Heating and air conditioning replacement credit.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to qualified property placed in service after December 31, 2020.

SEC. 303. ENERGY EFFICIENCY CREDIT FOR EXISTING RESIDENTIAL BUILDINGS.

    (a) In General.--Section 25C is amended to read as follows:

``SEC. 25C. CREDIT FOR ENERGY EFFICIENCY IMPROVEMENTS TO RESIDENTIAL 
              BUILDINGS.

    ``(a) Allowance of Credit.--In the case of an individual, there 
shall be allowed as a credit against the tax imposed by this chapter 
for the taxable year an amount equal to the lesser of--
            ``(1) the applicable amount for the qualified residence 
        based on energy efficiency improvements made by the taxpayer 
        and placed in service during such taxable year, or
            ``(2) 30 percent of the amount paid or incurred by the 
        taxpayer for energy efficiency improvements made to the 
        qualified residence that were placed in service during such 
        taxable year.
    ``(b) Applicable Amount.--
            ``(1) In general.--For purposes of subsection (a)(1), the 
        applicable amount shall be an amount equal to $1,750 increased 
        (but not above $6,500) by $300 for every 5 percentage points by 
        which the efficiency ratio for the qualified residence is 
        certified to be greater than 20 percent.
            ``(2) Efficiency ratio.--For purposes of this section, the 
        efficiency ratio of a qualified residence shall be equal to the 
        quotient, expressed as a percentage, obtained by dividing--
                    ``(A) an amount equal to the difference between--
                            ``(i) the projected annual level of energy 
                        consumption of the qualified residence after 
                        the energy efficiency improvements have been 
                        placed in service, and
                            ``(ii) the annual level of energy 
                        consumption of such qualified residence prior 
                        to the energy efficiency improvements being 
                        placed in service, by
                    ``(B) the annual level of energy consumption 
                described in subparagraph (A)(ii).
            ``(3) Coordination with credit for residential energy 
        efficient property.--For purposes of paragraph (2)(A), the 
        determination of the difference in annual levels of energy 
        consumption of the qualified residence shall not include any 
        reduction in net energy consumption related to--
                    ``(A) qualified property or energy storage property 
                for which a credit was allowed under section 25D, or
                    ``(B) qualified property for which a credit was 
                allowed under section 25E.
    ``(c) Definitions.--For purposes of this section:
            ``(1) Qualified residence.--The term `qualified residence' 
        means a dwelling unit--
                    ``(A) located in the United States,
                    ``(B) owned and used by the taxpayer as the 
                taxpayer's principal residence (within the meaning of 
                section 121), and
                    ``(C) which is certified to have--
                            ``(i) a projected annual level of energy 
                        consumption after the energy efficiency 
                        improvements have been placed in service that 
                        is less than the annual level of energy 
                        consumption prior to the energy efficiency 
                        improvements being placed in service, and
                            ``(ii) an efficiency ratio of not less than 
                        20 percent.
            ``(2) Energy efficiency improvements.--
                    ``(A) In general.--The term `energy efficiency 
                improvements' means any property installed on or in a 
                dwelling unit which has been certified to reduce the 
                level of energy consumption for such unit, provided 
                that--
                            ``(i) the original use of such property 
                        commences with the taxpayer, and
                            ``(ii) such property reasonably can be 
                        expected to remain in use for at least 5 years.
                    ``(B) Amounts paid or incurred for energy 
                efficiency improvements.--For purposes of subsection 
                (a)(2), the amount paid or incurred by the taxpayer--
                            ``(i) shall include expenditures for design 
                        and for labor costs properly allocable to the 
                        onsite preparation, assembly, or original 
                        installation of the property, and
                            ``(ii) shall not include any expenditures 
                        related to expansion of the building floor 
                        area.
    ``(d) Special Rules.--For purposes of this section:
            ``(1) Tenant-stockholder in cooperative housing 
        corporation.--In the case of an individual who is a tenant-
        stockholder (as defined in section 216) in a cooperative 
        housing corporation (as defined in such section), such 
        individual shall be treated as having made his tenant-
        stockholder's proportionate share (as defined in section 
        216(b)(3)) of any expenditures for energy efficiency 
        improvements of such corporation.
            ``(2) Condominiums.--
                    ``(A) In general.--In the case of an individual who 
                is a member of a condominium management association 
                with respect to a condominium which the individual 
                owns, such individual shall be treated as having made 
                the individual's proportionate share of any 
                expenditures for energy efficiency improvements of such 
                association.
                    ``(B) Condominium management association.--For 
                purposes of this paragraph, the term `condominium 
                management association' means an organization which 
                meets the requirements of paragraph (1) of section 
                528(c) (other than subparagraph (E) thereof) with 
                respect to a condominium project substantially all of 
                the units of which are used as residences.
            ``(3) Allocation in certain cases.--If less than 80 percent 
        of the use of a property is for nonbusiness purposes, only that 
        portion of the expenditures for energy efficiency improvements 
        for such property which is properly allocable to use for 
        nonbusiness purposes shall be taken into account.
    ``(e) Certification.--
            ``(1) In general.--
                    ``(A) Accredited third party.--A certification 
                described in this section shall be made by a third 
                party that is accredited by a certification program 
                approved by the Secretary, in consultation with the 
                Secretary of Energy.
                    ``(B) Guidance.--A certification described in this 
                section shall be made in accordance with guidance 
                prescribed by the Secretary, in consultation with the 
                Secretary of Energy. Such guidance shall--
                            ``(i) specify procedures and methods for 
                        calculating annual energy consumption levels, 
                        and
                            ``(ii) include requirements to ensure the 
                        safe operation of energy efficiency 
                        improvements and that all improvements are 
                        installed according to the applicable standards 
                        of such certification program.
            ``(2) Computer software.--
                    ``(A) In general.--Any calculation under paragraph 
                (1)(B)(i) shall be prepared by qualified computer 
                software.
                    ``(B) Qualified computer software.--For purposes of 
                this paragraph, the term `qualified computer software' 
                has the same meaning given such term under section 
                45L(d)(2).
    ``(f) Basis Adjustment.--For purposes of this subtitle, if a credit 
is allowed under this section for any expenditures with respect to any 
energy efficiency improvements, the increase in the basis of such 
property which would (but for this subsection) result from such 
expenditures shall be reduced by the amount of the credit so allowed.
    ``(g) Coordination With Investment Credits.--For purposes of this 
section, expenditures taken into account under section 25D or 47 shall 
not be taken into account under this section.''.
    (b) Conforming Amendment.--The table of sections for subpart A of 
part IV of subchapter A of chapter 1 is amended by striking the item 
relating to section 25C and inserting after the item relating to 
section 25B the following item:

``Sec. 25C. Credit for energy efficiency improvements to residential 
                            buildings.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to any energy efficiency improvements placed in service after 
December 31, 2020.

SEC. 304. DEDUCTION FOR NEW ENERGY EFFICIENT COMMERCIAL BUILDINGS.

    (a) In General.--Section 179D is amended to read as follows:

``SEC. 179D. ENERGY EFFICIENT COMMERCIAL BUILDING DEDUCTION.

    ``(a) In General.--There shall be allowed as a deduction an amount 
equal to the applicable amount for each qualified building placed in 
service by the taxpayer during the taxable year.
    ``(b) Applicable Amount.--
            ``(1) In general.--For purposes of subsection (a), the 
        applicable amount shall be an amount equal to the product of--
                    ``(A) the applicable dollar value, and
                    ``(B) the square footage of the qualified building.
            ``(2) Applicable dollar value.--For purposes of paragraph 
        (1)(A), the applicable dollar value shall be an amount equal to 
        $1.00 increased (but not above $4.75) by $0.25 for every 5 
        percentage points by which the efficiency ratio for the 
        qualified building is certified to be greater than 25 percent.
            ``(3) Efficiency ratio.--
                    ``(A) In general.--For purposes of this section, 
                the efficiency ratio of a qualified building shall be 
                equal to the quotient, expressed as a percentage, 
                obtained by dividing--
                            ``(i) an amount equal to the difference 
                        between--
                                    ``(I) the annual level of energy 
                                consumption of the qualified building, 
                                and
                                    ``(II) the annual level of energy 
                                consumption of the baseline building, 
                                by
                            ``(ii) the annual level of energy 
                        consumption of the baseline building.
                    ``(B) Exclusion of plug loads.--For purposes of 
                determining the annual level of energy consumption of 
                the qualified and baseline buildings under this 
                paragraph, any energy consumption attributable to plug 
                loads shall be excluded.
            ``(4) Baseline building.--For purposes of this section, the 
        baseline building shall be a building which--
                    ``(A) is comparable to the qualified building, and
                    ``(B) meets the minimum requirements of Standard 
                90.1-2016 of the American Society of Heating, 
                Refrigerating and Air-Conditioning Engineers and the 
                Illuminating Engineering Society of North America (as 
                in effect on the date of the enactment of the Clean 
                Energy for America Act).
    ``(c) Qualified Building.--The term `qualified building' means a 
building--
            ``(1) located in the United States,
            ``(2) which is owned by the taxpayer, and
            ``(3) which is certified to have an annual level of energy 
        consumption that is less than the baseline building and an 
        efficiency ratio of not less than 25 percent.
    ``(d) Allocation of Deduction.--
            ``(1) In general.--In the case of a qualified building 
        owned by an eligible entity, the Secretary shall promulgate 
        regulations to allow the allocation of the deduction to the 
        person primarily responsible for designing the property in lieu 
        of the owner of such property, with such person to be treated 
        as the taxpayer for purposes of this section.
            ``(2) Eligible entity.--For purposes of this subsection, 
        the term `eligible entity' means--
                    ``(A) a Federal, State, or local government or a 
                political subdivision thereof,
                    ``(B) an Indian tribe (as defined in section 
                45A(c)(6)), or
                    ``(C) an organization described in section 501(c) 
                and exempt from tax under section 501(a).
    ``(e) Basis Adjustment.--For purposes of this subtitle, if a 
deduction is allowed under this section with respect to any qualified 
building, the basis of such property shall be reduced by the amount of 
the deduction so allowed.
    ``(f) Certification.--
            ``(1) In general.--
                    ``(A) Accredited third party.--A certification 
                described in this section shall be made by a third 
                party that is accredited by a certification program 
                approved by the Secretary, in consultation with the 
                Secretary of Energy.
                    ``(B) Guidance.--A certification described in this 
                section shall be made in accordance with guidance 
                prescribed by the Secretary, in consultation with the 
                Secretary of Energy. Such guidance shall--
                            ``(i) specify procedures and methods for 
                        calculating annual energy consumption levels, 
                        and
                            ``(ii) include requirements to ensure the 
                        safe operation of energy efficiency 
                        improvements and that all improvements are 
                        installed according to the applicable standards 
                        of such certification program.
            ``(2) Computer software.--
                    ``(A) In general.--Any calculation under paragraph 
                (1)(B)(i) shall be prepared by qualified computer 
                software.
                    ``(B) Qualified computer software.--For purposes of 
                this paragraph, the term `qualified computer software' 
                means software--
                            ``(i) for which the software designer has 
                        certified that the software meets all 
                        procedures and detailed methods for calculating 
                        energy consumption levels as required by the 
                        Secretary, and
                            ``(ii) which provides such forms as 
                        required to be filed by the Secretary in 
                        connection with energy consumption levels and 
                        the deduction allowed under this section.''.
    (b) Conforming Amendment.--The table of sections for part VI of 
subchapter B of chapter 1 is amended by striking the item relating to 
section 179D and inserting after the item relating to section 179C the 
following item:

``Sec. 179D. Energy efficient commercial building deduction.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to any qualified building placed in service after December 31, 
2020.

SEC. 305. ENERGY EFFICIENCY DEDUCTION FOR EXISTING COMMERCIAL 
              BUILDINGS.

    (a) In General.--Part VI of subchapter B of chapter 1 is amended by 
inserting after section 179E the following new section:

``SEC. 179F. DEDUCTION FOR ENERGY EFFICIENCY IMPROVEMENTS TO COMMERCIAL 
              BUILDINGS.

    ``(a) In General.--There shall be allowed as a deduction an amount 
equal to the lesser of--
            ``(1) the applicable amount for the qualified building 
        based on energy efficiency improvements made by the taxpayer 
        and placed in service during the taxable year, or
            ``(2) the amount paid or incurred by the taxpayer for 
        energy efficiency improvements made to the qualified building 
        which were placed in service during the taxable year.
    ``(b) Applicable Amount.--
            ``(1) In general.--For purposes of subsection (a), the 
        applicable amount shall be an amount equal to the product of--
                    ``(A) the applicable dollar value, and
                    ``(B) the square footage of the qualified building.
            ``(2) Applicable dollar value.--For purposes of paragraph 
        (1), the applicable dollar value shall be an amount equal to 
        $1.25 increased (but not above $9.25) by $0.50 for every 5 
        percentage points by which the efficiency ratio for the 
        qualified building is certified to be greater than 20 percent.
            ``(3) Efficiency ratio.--
                    ``(A) In general.--For purposes of this section, 
                the efficiency ratio of a qualified building shall be 
                equal to the quotient, expressed as a percentage, 
                obtained by dividing--
                            ``(i) an amount equal to the difference 
                        between--
                                    ``(I) the projected annual level of 
                                energy consumption of the qualified 
                                building after the energy efficiency 
                                improvements have been placed in 
                                service, and
                                    ``(II) the annual level of energy 
                                consumption of such qualified building 
                                prior to the energy efficiency 
                                improvements being placed in service, 
                                by
                            ``(ii) the annual level of energy 
                        consumption described in clause (i)(II).
                    ``(B) Exclusion of plug loads.--For purposes of 
                determining the annual level of energy consumption of 
                the qualified building under this paragraph, any energy 
                consumption attributable to plug loads shall be 
                excluded.
            ``(4) Coordination with clean energy investment credit.--
        For purposes of paragraph (3)(A)(i), the determination of the 
        difference in annual levels of energy consumption of the 
        qualified building shall not include any reduction in net 
        energy consumption related to qualified property or energy 
        storage property for which a credit was allowed under section 
        48D.
    ``(c) Definitions.--
            ``(1) Qualified building.--The term `qualified building' 
        means a building--
                    ``(A) located in the United States,
                    ``(B) which is owned by the taxpayer, and
                    ``(C) which is certified to have--
                            ``(i) a projected annual level of energy 
                        consumption after the energy efficiency 
                        improvements have been placed in service that 
                        is less than the annual level of energy 
                        consumption prior to the energy efficiency 
                        improvements being placed in service, and
                            ``(ii) an efficiency ratio of not less than 
                        20 percent.
            ``(2) Energy efficiency improvements.--
                    ``(A) In general.--The term `energy efficiency 
                improvements' means any property installed on or in a 
                qualified building which has been certified to reduce 
                the level of energy consumption for such building, 
                provided that depreciation (or amortization in lieu of 
                depreciation) is allowable with respect to such 
                property.
                    ``(B) Amounts paid or incurred for energy 
                efficiency improvements.--For purposes of subsection 
                (a)(2), the amount paid or incurred by the taxpayer--
                            ``(i) shall include expenditures for design 
                        and for labor costs properly allocable to the 
                        onsite preparation, assembly, or original 
                        installation of the property, and
                            ``(ii) shall not include any expenditures 
                        related to expansion of the building floor 
                        area.
    ``(d) Certification.--
            ``(1) In general.--
                    ``(A) Accredited third party.--A certification 
                described in this section shall be made by a third 
                party that is accredited by a certification program 
                approved by the Secretary, in consultation with the 
                Secretary of Energy.
                    ``(B) Guidance.--A certification described in this 
                section shall be made in accordance with guidance 
                prescribed by the Secretary, in consultation with the 
                Secretary of Energy. Such guidance shall--
                            ``(i) specify procedures and methods for 
                        calculating annual energy consumption levels, 
                        and
                            ``(ii) include requirements to ensure the 
                        safe operation of energy efficiency 
                        improvements and that all improvements are 
                        installed according to the applicable standards 
                        of such certification program.
            ``(2) Computer software.--
                    ``(A) In general.--Any calculation under paragraph 
                (1)(B)(i) shall be prepared by qualified computer 
                software.
                    ``(B) Qualified computer software.--For purposes of 
                this paragraph, the term `qualified computer software' 
                has the same meaning given such term under section 
                179D(f)(2).
    ``(e) Allocation of Deduction.--
            ``(1) In general.--In the case of a qualified building 
        owned by an eligible entity, the Secretary shall promulgate 
        regulations to allow the allocation of the deduction to the 
        person primarily responsible for designing the energy 
        efficiency improvements in lieu of the owner of such property, 
        with such person to be treated as the taxpayer for purposes of 
        this section.
            ``(2) Eligible entity.--For purposes of this subsection, 
        the term `eligible entity' has the same meaning given such term 
        under section 179D(d)(2).
    ``(f) Basis Reduction.--For purposes of this subtitle, if a 
deduction is allowed under this section with respect to any energy 
efficiency improvements, the basis of such property shall be reduced by 
the amount of the deduction so allowed.
    ``(g) Coordination With Other Credits.--For purposes of this 
section, expenditures taken into account under section 47 or 48D shall 
not be taken into account under this section.''.
    (b) Conforming Amendments.--
            (1) Section 263(a) is amended--
                    (A) in subparagraph (J), by striking ``or'' at the 
                end,
                    (B) in subparagraph (K), by striking the period and 
                inserting ``, or'', and
                    (C) by inserting at the end the following new 
                subparagraph:
                    ``(L) expenditures for which a deduction is allowed 
                under section 179F.''.
            (2) Section 312(k)(3)(B) is amended--
                    (A) in the heading, by striking ``or 179e'' and 
                inserting ``179e, or 179f'', and
                    (B) by striking ``or 179E'' each place it appears 
                and inserting ``179E, or 179F''.
            (3) Section 1016(a) is amended--
                    (A) in paragraph (37), by striking ``and'' at the 
                end,
                    (B) in paragraph (38), by striking the period at 
                the end and inserting ``, and'', and
                    (C) by inserting at the end the following new 
                paragraph:
            ``(39) to the extent provided in section 179D(f).''.
            (4) Section 1245(a) is amended--
                    (A) in paragraph (2)(C), by inserting ``179F,'' 
                after ``179E,'', and
                    (B) in paragraph (3)(C), by inserting ``179F,'' 
                after ``179E,''.
            (5) The table of sections for part VI of subchapter B of 
        chapter 1 is amended by inserting after the item relating to 
        section 179E the following new item:

``Sec. 179F. Deduction for energy efficiency improvements to commercial 
                            buildings.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to any energy efficiency improvements placed in service after 
December 31, 2020.

SEC. 306. TEMPORARY EXTENSION OF EXISTING ENERGY EFFICIENCY INCENTIVES.

    (a) Nonbusiness Energy Property.--
            (1) In general.--Paragraph (2) of section 25C(g) is amended 
        by striking ``December 31, 2017'' and inserting ``December 31, 
        2020''.
            (2) Effective date.--The amendments made by this subsection 
        shall apply to property placed in service after December 31, 
        2017.
    (b) New Energy Efficient Home Credit.--
            (1) In general.--Subsection (g) of section 45L is amended 
        by striking ``December 31, 2017'' and inserting ``December 31, 
        2020''.
            (2) Effective date.--The amendments made by this subsection 
        shall apply to any qualified new energy efficient home acquired 
        after December 31, 2017.
    (c) Energy Efficient Commercial Buildings Deduction.--
            (1) In general.--Subsection (h) of section 179D is amended 
        by striking ``December 31, 2017'' and inserting ``December 31, 
        2020''.
            (2) Effective date.--The amendments made by this section 
        shall apply to property placed in service after December 31, 
        2017.

               TITLE IV--CLEAN ELECTRICITY AND FUEL BONDS

SEC. 401. CLEAN ENERGY BONDS.

    (a) In General.--Part IV of subchapter A of chapter 1 is amended by 
inserting after subpart G the following new subpart:

                    ``Subpart H--Clean Energy Bonds

``Sec. 54. Clean energy bonds.

``SEC. 54. CLEAN ENERGY BONDS.

    ``(a) In General.--If a taxpayer holds a clean energy bond on one 
or more interest payment dates of the bond during any taxable year, 
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 the credits 
determined under subsection (b) with respect to such dates.
    ``(b) Amount of Credit.--
            ``(1) In general.--The amount of the credit determined 
        under this subsection with respect to any interest payment date 
        for a clean energy bond is the applicable percentage (as 
        determined under paragraph (2)) of the amount of interest 
        payable by the issuer with respect to such date.
            ``(2) Applicable percentage.--
                    ``(A) In general.--
                            ``(i) Maximum percentage.--Except as 
                        provided in clause (ii), the applicable 
                        percentage is 70 percent.
                            ``(ii) Reduction of credit based on 
                        greenhouse gas emission rate.--The applicable 
                        percentage shall be reduced (but not below 
                        zero) by an amount which bears the same ratio 
                        to the percentage in effect under clause (i) 
                        as--
                                    ``(I) in the case of a qualified 
                                facility described in subsection (f)(3) 
                                of section 45T, the greenhouse gas 
                                emissions rate for the facility bears 
                                to 300 grams of CO<INF>2</INF>e per KWh 
                                (as such terms are defined in 
                                subsections (b)(1) and (e)(1) of such 
                                section), or
                                    ``(II) in the case of a qualified 
                                facility described in subsection (e)(4) 
                                of section 45U, the average emissions 
                                rate for all transportation fuel 
                                produced by such facility bears to 75 
                                kilograms of CO<INF>2</INF>e per mmBTU 
                                (as such terms are defined in 
                                subsections (b) and (e) of such 
                                section).
                    ``(B) Rounding.--If any applicable percentage 
                determined under subparagraph (A) is not a whole 
                percentage point, such percentage shall be rounded to 
                the nearest whole percentage point.
                    ``(C) Safe harbor rules.--Rules similar to the 
                rules of sections 45T(b)(3) and 45U(b) shall apply for 
                purposes of this section.
    ``(c) Limitation Based on Amount of Tax.--
            ``(1) In general.--The credit allowed under subsection (a) 
        for any 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 imposed by 
                section 55, over
                    ``(B) the sum of the credits allowable under this 
                part (other than subpart C and this subpart).
            ``(2) Carryover of unused credit.--If the credit allowable 
        under subsection (a) exceeds the limitation imposed by 
        paragraph (1) for such taxable year, such excess shall be 
        carried to the succeeding taxable year and added to the credit 
        allowable under subsection (a) for such taxable year 
        (determined before the application of paragraph (1) for such 
        succeeding taxable year).
    ``(d) Clean Energy Bond.--
            ``(1) In general.--For purposes of this section, the term 
        `clean energy bond' means any bond issued as part of an issue 
        if--
                    ``(A) 100 percent of the excess of the available 
                project proceeds of such issue over the amounts in a 
                reasonably required reserve (within the meaning of 
                section 150(a)(3)) with respect to such issue are to be 
                used for capital expenditures incurred by an entity 
                described in subparagraph (B) for--
                            ``(i) 1 or more qualified facilities,
                            ``(ii) qualified carbon capture and 
                        sequestration equipment (as defined in 
                        subsection (c)(2) of section 48D), or
                            ``(iii) energy storage property (as defined 
                        in subsection (d)(2) of such section),
                    ``(B) the bond is issued by--
                            ``(i) a governmental body,
                            ``(ii) a public power provider, or
                            ``(iii) a cooperative electric company, and
                    ``(C) the issuer makes an irrevocable election to 
                have this section apply.
            ``(2) Applicable rules.--For purposes of applying paragraph 
        (1)--
                    ``(A) for purposes of section 149(b), a clean 
                energy bond shall not be treated as federally 
                guaranteed by reason of the credit allowed under 
                subsection (a) or section 6431,
                    ``(B) for purposes of section 148, the yield on a 
                clean energy bond shall be determined without regard to 
                the credit allowed under subsection (a), and
                    ``(C) a bond shall not be treated as a clean energy 
                bond if the issue price has more than a de minimis 
                amount (determined under rules similar to the rules of 
                section 1273(a)(3)) of premium over the stated 
                principal amount of the bond.
    ``(e) Definitions.--In this section:
            ``(1) Available project proceeds.--The term `available 
        project proceeds' means--
                    ``(A) the excess of--
                            ``(i) the proceeds from the sale of an 
                        issue, over
                            ``(ii) the issuance costs financed by the 
                        issue (to the extent that such costs do not 
                        exceed 2 percent of such proceeds), and
                    ``(B) the proceeds from any investment of the 
                excess described in subparagraph (A).
            ``(2) Cooperative electric company.--The term `cooperative 
        electric company' means a mutual or cooperative electric 
        company described in section 501(c)(12) or section 
        1381(a)(2)(C).
            ``(3) Governmental body.--The term `governmental body' 
        means any State or Indian tribal government, or any political 
        subdivision thereof.
            ``(4) Interest payment date.--The term `interest payment 
        date' means any date on which the holder of record of the clean 
        energy bond is entitled to a payment of interest under such 
        bond.
            ``(5) Qualified facility.--The term `qualified facility' 
        means a facility--
                    ``(A) which is described in section 45T(f)(3), or
                    ``(B) which is described in section 45U(e)(4) and 
                only produces transportation fuel which has an 
                emissions rate of less than 75 kilograms of 
                CO<INF>2</INF>e per mmBTU (as such terms are defined in 
                subsections (b) and (e) of such section).
            ``(6) Public power provider.--The term `public power 
        provider' means a State utility with a service obligation, as 
        such terms are defined in section 217 of the Federal Power Act 
        (as in effect on the date of the enactment of this paragraph).
    ``(f) Credit Phase-Out.--
            ``(1) Electrical production, carbon capture and 
        sequestration equipment, and energy storage property.--In the 
        case of a clean energy bond for which the proceeds are used for 
        capital expenditures incurred by an entity for a qualified 
        facility described in subsection (e)(5)(A) or any property 
        described in clause (ii) or (iii) of subsection (d)(1)(A), if 
        the Secretary, in consultation with the Secretary of Energy and 
        the Administrator of the Environmental Protection Agency, 
        determines that the annual greenhouse gas emissions from 
        electrical production in the United States are equal to or less 
        than the percentage specified in section 45T(e)(1), the amount 
        of the credit determined under subsection (b) with respect to 
        any clean energy bond issued during a calendar year described 
        in paragraph (3) shall be equal to the product of--
                    ``(A) the amount determined under subsection (b) 
                without regard to this subsection, multiplied by
                    ``(B) the phase-out percentage under paragraph (3).
            ``(2) Fuel production.--In the case of a clean energy bond 
        for which the proceeds are used for capital expenditures 
        incurred by an entity for a qualified facility described in 
        subsection (e)(5)(B), if the Secretary, in consultation with 
        the Secretary of Energy and the Administrator of the 
        Environmental Protection Agency, determines that the annual 
        greenhouse gas emissions from transportation fuel produced and 
        sold at retail annually in the United States are equal to or 
        less than the percentage specified in section 45U(d)(1), the 
        amount of the credit determined under subsection (b) with 
        respect to any clean energy bond issued during a calendar year 
        described in paragraph (3) shall be equal to the product of--
                    ``(A) the amount determined under subsection (b) 
                without regard to this subsection, multiplied by
                    ``(B) the phase-out percentage under paragraph (3).
            ``(3) Phase-out percentage.--The phase-out percentage under 
        this paragraph is equal to--
                    ``(A) for any bond issued during the first calendar 
                year following the calendar year in which the 
                determination described in paragraph (1) or (2) is 
                made, 75 percent,
                    ``(B) for any bond issued during the second 
                calendar year following such determination year, 50 
                percent,
                    ``(C) for any bond issued during the third calendar 
                year following such determination year, 25 percent, and
                    ``(D) for any bond issued during any calendar year 
                subsequent to the year described in subparagraph (C), 0 
                percent.
    ``(g) Special Rules.--
            ``(1) Interest on clean energy bonds includible in gross 
        income for federal income tax purposes.--For purposes of this 
        title, interest on any clean energy bond shall be includible in 
        gross income.
            ``(2) S corporations and partnerships.--In the case of a 
        clean energy bond held by an S corporation or partnership, the 
        allocation of the credit allowed by this section to the 
        shareholders of such corporation or partners of such 
        partnership shall be treated as a distribution.
            ``(3) Bonds held by real estate investment trusts.--If any 
        clean energy bond is held by a real estate investment trust, 
        the credit determined under subsection (a) shall be allowed to 
        beneficiaries of such trust (and any gross income included 
        under paragraph (1) with respect to such credit shall be 
        distributed to such beneficiaries) under procedures prescribed 
        by the Secretary.
            ``(4) Credits may be stripped.--Under regulations 
        prescribed by the Secretary--
                    ``(A) In general.--There may be a separation 
                (including at issuance) of the ownership of a clean 
                energy bond and the entitlement to the credit under 
                this section with respect to such bond. In case of any 
                such separation, the credit under this section shall be 
                allowed to the person who on the credit allowance date 
                holds the instrument evidencing the entitlement to the 
                credit and not to the holder of the bond.
                    ``(B) Certain rules to apply.--In the case of a 
                separation described in subparagraph (A), the rules of 
                section 1286 shall apply to the clean energy bond as if 
                it were a stripped bond and to the credit under this 
                section as if it were a stripped coupon.
    ``(h) Regulations.--The Secretary may prescribe such regulations 
and other guidance as may be necessary or appropriate to carry out this 
section and section 6431.''.
    (b) Credit for Qualified Clean Energy Bonds Allowed to Issuer.--
Subchapter B of chapter 65 of subtitle F is amended by adding at the 
end the following new section:

``SEC. 6431. CREDIT FOR QUALIFIED CLEAN ENERGY BONDS ALLOWED TO ISSUER.

    ``(a) In General.--The issuer of a qualified clean energy bond 
shall be allowed a credit with respect to each interest payment under 
such bond which shall be payable by the Secretary as provided in 
subsection (b).
    ``(b) Payment of Credit.--
            ``(1) In general.--The Secretary shall pay 
        (contemporaneously with each interest payment date under such 
        bond) to the issuer of such bond (or to any person who makes 
        such interest payments on behalf of the issuer) the applicable 
        percentage (as determined under subsection (b) of section 54) 
        of the interest payable under such bond on such date.
            ``(2) Interest payment date.--For purposes of this 
        subsection, the term `interest payment date' means each date on 
        which interest is payable by the issuer under the terms of the 
        bond.
    ``(c) Application of Arbitrage Rules.--For purposes of section 148, 
the yield on a qualified clean energy bond shall be reduced by the 
credit allowed under this section.
    ``(d) Qualified Clean Energy Bond.--For purposes of this section, 
the term `qualified clean energy bond' means a clean energy bond (as 
defined in section 54(d)) issued as part of an issue if the issuer, in 
lieu of any credit allowed under section 54(a) with respect to such 
bond, makes an irrevocable election to have this section apply.''.
    (c) Conforming Amendments.--
            (1) The table of subparts for part IV of subchapter A of 
        chapter 1 is amended by inserting after the item relating to 
        subpart G the following:

                   ``subpart h--clean energy bonds''.

            (2) The table of sections for subchapter B of chapter 65 of 
        subtitle F is amended by adding at the end the following new 
        item:

``Sec. 6431. Credit for qualified clean energy bonds allowed to 
                            issuer.''.
            (3) Subparagraph (A) of section 6211(b)(4) is amended by 
        striking ``and 36B, 168(k)(4)'' and inserting ``36B, and 
        6431''.
    (d) Gross-Up of Payment to Issuers in Case of Sequestration.--
            (1) In general.--In the case of any payment under 
        subsection (b) of section 6431 of the Internal Revenue Code of 
        1986 (as added by this Act) made after the date of the 
        enactment of this Act to which sequestration applies, the 
        amount of such payment shall be increased to an amount equal 
        to--
                    (A) such payment (determined before such 
                sequestration), multiplied by
                    (B) the quotient obtained by dividing 1 by the 
                amount by which 1 exceeds the percentage reduction in 
                such payment pursuant to such sequestration.
            (2) Sequestration.--For purposes of this subsection, the 
        term ``sequestration'' means any reduction in direct spending 
        ordered by the President under the Balanced Budget and 
        Emergency Deficit Control Act of 1985 or the Statutory Pay-As-
        You-Go Act of 2010.
    (e) Effective Date.--The amendments made by this section shall 
apply to obligations issued after the date of the enactment of this 
Act.
                                 <all>