S.Amdt. 5045

1. Adds TITLE IV--ENERGY TAX INCENTIVES on page 630, line 2

   Adds a title

   Inserted: TITLE IV--ENERGY TAX INCENTIVES

   Inserted: Subtitle A--Energy Production Incentives

   Inserted: PART I--RENEWABLE ENERGY INCENTIVES

   Inserted: SEC. 3101. RENEWABLE ENERGY CREDIT.

   Inserted: (a) Extension of Credit.--

   Inserted: (1) 1-year extension for wind facilities.--Paragraph (1) of section 45(d) is amended by striking "January 1, 2009" and inserting "January 1, 2010".

   Inserted: (2) 3-year extension for certain other facilities.--Each of the following provisions of section 45(d) is amended by striking "January 1, 2009" and inserting "January 1, 2012":

   Inserted: (A) Clauses (i) and (ii) of paragraph (2)(A).

   Inserted: (B) Clauses (i)(I) and (ii) of paragraph (3)(A).

   Inserted: (C) Paragraph (4).

   Inserted: (D) Paragraph (5).

   Inserted: (E) Paragraph (6).

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   Inserted: (F) Paragraph (7).

   Inserted: (G) Subparagraphs (A) and (B) of paragraph (9).

   Inserted: (b) Modification of Credit Phaseout.--

   Inserted: (1) Repeal of phaseout.--Subsection (b) of section 45 is amended--

   Inserted: (A) by striking paragraph (1), and

   Inserted: (B) by striking "the 8 cent amount in paragraph (1)," in paragraph (2) thereof.

   Inserted: (2) Limitation based on investment in facility.--Subsection (b) of section 45 is amended by inserting before paragraph (2) the following new paragraph:

   Inserted: "(1) Limitation based on investment in facility.--

   Inserted: "(A) In general.--In the case of any qualified facility originally placed in service after December 31, 2009, the amount of the credit determined under subsection (a) for any taxable year with respect to electricity produced at such facility shall not exceed the product of--

   Inserted: "(i) the applicable percentage with respect to such facility, multiplied by

   Inserted: "(ii) the eligible basis of such facility.

   Inserted: "(B) Carryforward of unused limitation and excess credit.--

   Inserted: "(i) Unused limitation.--If the limitation imposed under subparagraph (A) with respect to any facility for any taxable year exceeds the prelimitation credit for such facility for such taxable year, the limitation imposed under subparagraph (A) with respect to such facility for the succeeding taxable year shall be increased by the amount of such excess.

   Inserted: "(ii) Excess credit.--If the prelimitation credit with respect to any facility for any taxable year exceeds the limitation imposed under subparagraph (A) with respect to such facility for such taxable year, the credit determined under subsection (a) with respect to such facility for the succeeding taxable year (determined before the application of subparagraph (A) for such succeeding taxable year) shall be increased by the amount of such excess. With respect to any facility, no amount may be carried forward under this clause to any taxable year beginning after the 10-year period described in subsection (a)(2)(A)(ii) with respect to such facility.

   Inserted: "(iii) Prelimitation credit.--The term 'prelimitation credit' with respect to any facility for a taxable year means the credit determined under subsection (a) with respect to such facility for such taxable year, determined without regard to subparagraph (A) and after taking into account any increase for such taxable year under clause (ii).

   Inserted: "(C) Applicable percentage.--For purposes of this paragraph--

   Inserted: "(i) In general.--The term 'applicable percentage' means, with respect to any facility, the appropriate percentage prescribed by the Secretary for the month in which such facility is originally placed in service.

   Inserted: "(ii) Method of prescribing applicable percentages.--The applicable percentages prescribed by the Secretary for any month under clause (i) shall be percentages which yield over a 10-year period amounts of limitation under subparagraph (A) which have a present value equal to 35 percent of the eligible basis of the facility.

   Inserted: "(iii) Method of discounting.--The present value under clause (ii) shall be determined--

   Inserted: "(I) as of the last day of the 1st year of the 10-year period referred to in clause (ii),

   Inserted: "(II) by using a discount rate equal to the greater of 110 percent of the Federal long-term rate as in effect under section 1274(d) for the month preceding the month for which the applicable percentage is being prescribed, or 4.5 percent, and

   Inserted: "(III) by taking into account the limitation under subparagraph (A) for any year on the last day of such year.

   Inserted: "(D) Eligible basis.--For purposes of this paragraph--

   Inserted: "(i) In general.--The term 'eligible basis' means, with respect to any facility, the sum of--

   Inserted: "(I) the basis of such facility determined as of the time that such facility is originally placed in service, and

   Inserted: "(II) the portion of the basis of any shared qualified property which is properly allocable to such facility under clause (ii).

   Inserted: "(ii) Rules for allocation.--For purposes of subclause (II) of clause (i), the basis of shared qualified property shall be allocated among all qualified facilities which are projected to be placed in service and which require utilization of such property in proportion to projected generation from such facilities.

   Inserted: "(iii) Shared qualified property.--For purposes of this paragraph, the term 'shared qualified property' means, with respect to any facility, any property described in section 168(e)(3)(B)(vi)--

   Inserted: "(I) which a qualified facility will require for utilization of such facility, and

   Inserted: "(II) which is not a qualified facility.

   Inserted: "(iv) Special rule relating to geothermal facilities.--In the case of any qualified facility using geothermal energy to produce electricity, the basis of such facility for purposes of this paragraph shall be determined as though intangible drilling and development costs described in section 263(c) were capitalized rather than expensed.

   Inserted: "(E) Special rule for first and last year of credit period.--In the case of any taxable year any portion of which is not within the 10-year period described in subsection (a)(2)(A)(ii) with respect to any facility, the amount of the limitation under subparagraph (A) with respect to such facility shall be reduced by an amount which bears the same ratio to the amount of such limitation (determined without regard to this subparagraph) as such portion of the taxable year which is not within such period bears to the entire taxable year.

   Inserted: "(F) Election to treat all facilities placed in service in a year as 1 facility.--At the election of the taxpayer, all qualified facilities which are part of the same project and which are placed in service during the same calendar year shall be treated for purposes of this section as 1 facility which is placed in service at the mid-point of such year or the first day of the following calendar year.".

   Inserted: (c) Trash Facility Clarification.--Paragraph (7) of section 45(d) is amended--

   Inserted: (1) by striking "facility which burns" and inserting "facility (other than a facility described in paragraph (6)) which uses", and

   Inserted: (2) by striking "combustion".

   Inserted: (d) Expansion of Biomass Facilities.--

   Inserted: (1) Open-loop biomass facilities.--Paragraph (3) of section 45(d) is amended by redesignating subparagraph (B) as subparagraph (C) and by inserting after subparagraph (A) the following new subparagraph:

   Inserted: "(B) Expansion of facility.--Such term shall include a new unit placed in service after the date of the enactment of this subparagraph in connection with a facility described in subparagraph (A), but only to the extent of the increased amount of electricity produced at the facility by reason of such new unit.".

   Inserted: (2) Closed-loop biomass facilities.--Paragraph (2) of section 45(d) is amended by redesignating subparagraph (B) as subparagraph (C) and inserting after subparagraph (A) the following new subparagraph:

   Inserted: "(B) Expansion of facility.--Such term shall include a new unit placed in service after the date of the enactment of this subparagraph in connection with a facility described in subparagraph (A)(i), but only to the extent of the increased amount of electricity produced at the facility by reason of such new unit.".

   Inserted: (e) Sales of Net Electricity to Regulated Public Utilities Treated as Sales to Unrelated Persons.--Paragraph (4) of section 45(e) is amended by adding at the end the following new sentence: "The net amount of electricity sold by any taxpayer to a regulated public utility (as defined in section 7701(a)(33)) shall be treated as sold to an unrelated person.".

   Inserted: (f) Modification of Rules for Hydropower Production.--Subparagraph (C) of section 45(c)(8) is amended to read as follows:

   Inserted: "(C) Nonhydroelectric dam.--For purposes of subparagraph (A), a facility is described in this subparagraph if--

   Inserted: "(i) the hydroelectric project installed on the nonhydroelectric dam is licensed by the Federal Energy Regulatory Commission and meets all other applicable environmental, licensing, and regulatory requirements,

   Inserted: "(ii) the nonhydroelectric dam was placed in service before the date of the enactment of this paragraph and operated for flood control, navigation, or water supply purposes and did not produce hydroelectric power on the date of the enactment of this paragraph, and

   Inserted: "(iii) the hydroelectric project is operated so that the water surface elevation at any given location and time that would have occurred in the absence of the hydroelectric project is maintained, subject to any license requirements imposed under applicable law that change the water surface elevation for the purpose of improving environmental quality of the affected waterway.

   Inserted: The Secretary, in consultation with the Federal Energy Regulatory Commission, shall certify if a hydroelectric project licensed at a nonhydroelectric dam meets the criteria in clause (iii). Nothing in this section shall affect the standards under which the Federal Energy Regulatory Commission issues licenses for and regulates hydropower projects under part I of the Federal Power Act.".

   Inserted: (g) Effective Date.--

   Inserted: (1) In general.--Except as otherwise provided in this subsection, the amendments made by this section shall apply to property originally placed in service after December 31, 2008.

   Inserted: (2) Repeal of credit phaseout.--The amendments made by subsection (b)(1) shall apply to taxable years ending after December 31, 2008.

   Inserted: (3) Limitation based on investment in facility.--The amendment made by subsection (b)(2) shall apply to property originally placed in service after December 31, 2009.

   Inserted: (4) Trash facility clarification; sales to related regulated public utilities.--The amendments made by subsections (c) and (e) shall apply to electricity produced and sold after the date of the enactment of this Act.

   Inserted: (5) Expansion of biomass facilities.--The amendments made by subsection (d) shall apply to property placed in service after the date of the enactment of this Act.

   Inserted: SEC. 3102. PRODUCTION CREDIT FOR ELECTRICITY PRODUCED FROM MARINE RENEWABLES.

   Inserted: (a) In General.--Paragraph (1) of section 45(c) is amended by striking "and" at the end of subparagraph (G), by striking the period at the end of subparagraph (H) and inserting ", and", and by adding at the end the following new subparagraph:

   Inserted: "(I) marine and hydrokinetic renewable energy.".

   Inserted: (b) Marine Renewables.--Subsection (c) of section 45 is amended by adding at the end the following new paragraph:

   Inserted: "(10) Marine and hydrokinetic renewable energy.--

   Inserted: "(A) In general.--The term 'marine and hydrokinetic renewable energy' means energy derived from--

   Inserted: "(i) waves, tides, and currents in oceans, estuaries, and tidal areas,

   Inserted: "(ii) free flowing water in rivers, lakes, and streams,

   Inserted: "(iii) free flowing water in an irrigation system, canal, or other man-made channel, including projects that utilize nonmechanical structures to accelerate the flow of water for electric power production purposes, or

   Inserted: "(iv) differentials in ocean temperature (ocean thermal energy conversion).

   Inserted: "(B) Exceptions.--Such term shall not include any energy which is derived from any source which utilizes a dam, diversionary structure (except as provided in subparagraph (A)(iii)), or impoundment for electric power production purposes.".

   Inserted: (c) Definition of Facility.--Subsection (d) of section 45 is amended by adding at the end the following new paragraph:

   Inserted: "(11) Marine and hydrokinetic renewable energy facilities.--In the case of a facility producing electricity from marine and hydrokinetic renewable energy, the term 'qualified facility' means any facility owned by the taxpayer--

   Inserted: "(A) which has a nameplate capacity rating of at least 150 kilowatts, and

   Inserted: "(B) which is originally placed in service on or after the date of the enactment of this paragraph and before January 1, 2012.".

   Inserted: (d) Credit Rate.--Subparagraph (A) of section 45(b)(4) is amended by striking "or (9)" and inserting "(9), or (11)".

   Inserted: (e) Coordination With Small Irrigation Power.--Paragraph (5) of section 45(d), as amended by section 3101, is amended by striking "January 1, 2012" and inserting "the date of the enactment of paragraph (11)".

   Inserted: (f) Effective Date.--The amendments made by this section shall apply to electricity produced and sold after the date of the enactment of this Act, in taxable years ending after such date.

   Inserted: SEC. 3103. ENERGY CREDIT.

   Inserted: (a) Extension of Credit.--

   Inserted: (1) Solar energy property.--Paragraphs (2)(A)(i)(II) and (3)(A)(ii) of section 48(a) are each amended by striking "January 1, 2009" and inserting "January 1, 2015".

   Inserted: (2) Fuel cell property.--Subparagraph (E) of section 48(c)(1) is amended by striking "December 31, 2008" and inserting "December 31, 2014".

   Inserted: (3) Microturbine property.--Subparagraph (E) of section 48(c)(2) is amended by striking "December 31, 2008" and inserting "December 31, 2014".

   Inserted: (b) Allowance of Energy Credit Against Alternative Minimum Tax.--Subparagraph (B) of section 38(c)(4) is amended by striking "and" at the end of clause (iii), by redesignating clause (iv) as clause (v), and by inserting after clause (iii) the following new clause:

   Inserted: "(iv) the credit determined under section 46 to the extent that such credit is attributable to the energy credit determined under section 48, and".

   Inserted: (c) Energy Credit for Combined Heat and Power System Property.--

   Inserted: (1) In general.--Section 48(a)(3)(A) (defining energy property) is amended by striking "or" at the end of clause (iii), by inserting "or" at the end of clause (iv), and by adding at the end the following new clause:

   Inserted: "(v) combined heat and power system property,".

   Inserted: (2) Combined heat and power system property.--Section 48 is amended by adding at the end the following new subsection:

   Inserted: "(d) Combined Heat and Power System Property.--For purposes of subsection (a)(3)(A)(v)--

   Inserted: "(1) Combined heat and power system property.--The term 'combined heat and power system property' means property comprising a system--

   Inserted: "(A) which uses the same energy source for the simultaneous or sequential generation of electrical power, mechanical shaft power, or both, in combination with the generation of steam or other forms of useful thermal energy (including heating and cooling applications),

   Inserted: "(B) which produces--

   Inserted: "(i) at least 20 percent of its total useful energy in the form of thermal energy which is not used to produce electrical or mechanical power (or combination thereof), and

   Inserted: "(ii) at least 20 percent of its total useful energy in the form of electrical or mechanical power (or combination thereof),

   Inserted: "(C) the energy efficiency percentage of which exceeds 60 percent, and

   Inserted: "(D) which is placed in service before January 1, 2015.

   Inserted: "(2) Limitation.--

   Inserted: "(A) In general.--In the case of combined heat and power system property with an electrical capacity in excess of the applicable capacity placed in service during the taxable year, the credit under subsection (a)(1) (determined without regard to this paragraph) for such year shall be equal to the amount which bears the same ratio to such credit as the applicable capacity bears to the capacity of such property.

   Inserted: "(B) Applicable capacity.--For purposes of subparagraph (A), the term 'applicable capacity' means 15 megawatts or a mechanical energy capacity of more than 20,000 horsepower or an equivalent combination of electrical and mechanical energy capacities.

   Inserted: "(C) Maximum capacity.--The term 'combined heat and power system property' shall not include any property comprising a system if such system has a capacity in excess of 50 megawatts or a mechanical energy capacity in excess of 67,000 horsepower or an equivalent combination of electrical and mechanical energy capacities.

   Inserted: "(3) Special rules.--

   Inserted: "(A) Energy efficiency percentage.--For purposes of this subsection, the energy efficiency percentage of a system is the fraction--

   Inserted: "(i) the numerator of which is the total useful electrical, thermal, and mechanical power produced by the system at normal operating rates, and expected to be consumed in its normal application, and

   Inserted: "(ii) the denominator of which is the lower heating value of the fuel sources for the system.

   Inserted: "(B) Determinations made on btu basis.--The energy efficiency percentage and the percentages under paragraph (1)(B) shall be determined on a Btu basis.

   Inserted: "(C) Input and output property not included.--The term 'combined heat and power system property' does not include property used to transport the energy source to the facility or to distribute energy produced by the facility.

   Inserted: "(4) Systems using biomass.--If a system is designed to use biomass (within the meaning of paragraphs (2) and (3) of section 45(c) without regard to the last sentence of paragraph (3)(A)) for at least 90 percent of the energy source--

   Inserted: "(A) paragraph (1)(C) shall not apply, but

   Inserted: "(B) the amount of credit determined under subsection (a) with respect to such system shall not exceed the amount which bears the same ratio to such amount of credit (determined without regard to this paragraph) as the energy efficiency percentage of such system bears to 60 percent.".

   Inserted: (d) Increase of Credit Limitation for Fuel Cell Property.--Subparagraph (B) of section 48(c)(1) is amended by striking "$500" and inserting "$1,500".

   Inserted: (e) Public Utility Property Taken Into Account.--

   Inserted: (1) In general.--Paragraph (3) of section 48(a) is amended by striking the second sentence thereof.

   Inserted: (2) Conforming amendments.--

   Inserted: (A) Paragraph (1) of section 48(c) is amended by striking subparagraph (D) and redesignating subparagraph (E) as subparagraph (D).

   Inserted: (B) Paragraph (2) of section 48(c) is amended by striking subparagraph (D) and redesignating subparagraph (E) as subparagraph (D).

   Inserted: (f) Effective Date.--

   Inserted: (1) In general.--Except as otherwise provided in this subsection, the amendments made by this section shall take effect on the date of the enactment of this Act.

   Inserted: (2) Allowance against alternative minimum tax.--The amendments made by subsection (b) shall apply to credits determined under section 46 of the Internal Revenue Code of 1986 in taxable years beginning after the date of the enactment of this Act and to carrybacks of such credits.

   Inserted: (3) Combined heat and power and fuel cell property.--The amendments made by subsections (c) and (d) shall apply to periods after the date of the enactment of this Act, in taxable years ending after such date, 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).

   Inserted: (4) Public utility property.--The amendments made by subsection (e) shall apply to periods after February 13, 2008, in taxable years ending after such date, 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).

   Inserted: SEC. 3104. CREDIT FOR RESIDENTIAL ENERGY EFFICIENT PROPERTY.

   Inserted: (a) Extension.--Section 25D(g) is amended by striking "December 31, 2008" and inserting "December 31, 2014".

   Inserted: (b) Maximum Credit for Solar Electric Property.--

   Inserted: (1) In general.--Section 25D(b)(1)(A) is amended by striking "$2,000" and inserting "$4,000".

   Inserted: (2) Conforming amendment.--Section 25D(e)(4)(A)(i) is amended by striking "$6,667" and inserting "$13,333".

   Inserted: (c) Credit for Residential Wind Property.--

   Inserted: (1) In general.--Section 25D(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:

   Inserted: "(4) 30 percent of the qualified small wind energy property expenditures made by the taxpayer during such year.".

   Inserted: (2) Limitation.--Section 25D(b)(1) is amended by striking "and" at the end of subparagraph (B), by striking the period at the end of subparagraph (C) and inserting ", and", and by adding at the end the following new subparagraph:

   Inserted: "(D) $500 with respect to each half kilowatt of capacity (not to exceed $4,000) of wind turbines for which qualified small wind energy property expenditures are made.".

   Inserted: (3) Qualified small wind energy property expenditures.--

   Inserted: (A) In general.--Section 25D(d) is amended by adding at the end the following new paragraph:

   Inserted: "(4) Qualified small wind energy property expenditure.--The term 'qualified small wind energy property expenditure' means an expenditure for property which uses a wind turbine to generate electricity for use in connection with a dwelling unit located in the United States and used as a residence by the taxpayer.".

   Inserted: (B) No double benefit.--Section 45(d)(1) is amended by adding at the end the following new sentence: "Such term shall not include any facility with respect to which any qualified small wind energy property expenditure (as defined in subsection (d)(4) of section 25D) is taken into account in determining the credit under such section.".

   Inserted: (4) Maximum expenditures in case of joint occupancy.--Section 25D(e)(4)(A) is amended by striking "and" at the end of clause (ii), by striking the period at the end of clause (iii) and inserting ", and", and by adding at the end the following new clause:

   Inserted: "(iv) $1,667 in the case of each half kilowatt of capacity (not to exceed $13,333) of wind turbines for which qualified small wind energy property expenditures are made.".

   Inserted: (d) Credit for Geothermal Heat pump Systems.--

   Inserted: (1) In general.--Section 25D(a), as amended by subsection (c), is amended by striking "and" at the end of paragraph (3), by striking the period at the end of paragraph (4) and inserting ", and", and by adding at the end the following new paragraph:

   Inserted: "(5) 30 percent of the qualified geothermal heat pump property expenditures made by the taxpayer during such year.".

   Inserted: (2) Limitation.--Section 25D(b)(1), as amended by subsection (c), is amended by striking "and" at the end of subparagraph (C), by striking the period at the end of subparagraph (D) and inserting ", and", and by adding at the end the following new subparagraph:

   Inserted: "(E) $2,000 with respect to any qualified geothermal heat pump property expenditures.".

   Inserted: (3) Qualified geothermal heat pump property expenditure.--Section 25D(d), as amended by subsection (c), is amended by adding at the end the following new paragraph:

   Inserted: "(5) Qualified geothermal heat pump property expenditure.--

   Inserted: "(A) In general.--The term 'qualified geothermal heat pump property expenditure' means an expenditure for qualified geothermal heat pump property installed on or in connection with a dwelling unit located in the United States and used as a residence by the taxpayer.

   Inserted: "(B) Qualified geothermal heat pump property.--The term 'qualified geothermal heat pump property' means any equipment which--

   Inserted: "(i) uses the ground or ground water as a thermal energy source to heat the dwelling unit referred to in subparagraph (A) or as a thermal energy sink to cool such dwelling unit, and

   Inserted: "(ii) meets the requirements of the Energy Star program which are in effect at the time that the expenditure for such equipment is made.".

   Inserted: (4) Maximum expenditures in case of joint occupancy.--Section 25D(e)(4)(A), as amended by subsection (c), is amended by striking "and" at the end of clause (iii), by striking the period at the end of clause (iv) and inserting ", and", and by adding at the end the following new clause:

   Inserted: "(v) $6,667 in the case of any qualified geothermal heat pump property expenditures.".

   Inserted: (e) Credit Allowed Against Alternative Minimum Tax.--

   Inserted: (1) In general.--Subsection (c) of section 25D is amended to read as follows:

   Inserted: "(c) Limitation Based on Amount of Tax; Carryforward of Unused Credit.--

   Inserted: "(1) Limitation based on amount of tax.--In the case of a taxable year to which section 26(a)(2) does not apply, the credit allowed under subsection (a) for the taxable year shall not exceed the excess of--

   Inserted: "(A) the sum of the regular tax liability (as defined in section 26(b)) plus the tax imposed by section 55, over

   Inserted: "(B) the sum of the credits allowable under this subpart (other than this section) and section 27 for the taxable year.

   Inserted: "(2) Carryforward of unused credit.--

   Inserted: "(A) Rule for years in which all personal credits allowed against regular and alternative minimum tax.--In the case of a taxable year to which section 26(a)(2) applies, if the credit allowable under subsection (a) exceeds the limitation imposed by section 26(a)(2) 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.

   Inserted: "(B) Rule for other years.--In the case of a taxable year to which section 26(a)(2) does not apply, 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 succeeding taxable year.".

   Inserted: (2) Conforming amendments.--

   Inserted: (A) Section 23(b)(4)(B) is amended by inserting "and section 25D" after "this section".

   Inserted: (B) Section 24(b)(3)(B) is amended by striking "and 25B" and inserting ", 25B, and 25D".

   Inserted: (C) Section 25B(g)(2) is amended by striking "section 23" and inserting "sections 23 and 25D".

   Inserted: (D) Section 26(a)(1) is amended by striking "and 25B" and inserting "25B, and 25D".

   Inserted: (f) Effective Date.--

   Inserted: (1) In general.--The amendments made by this section shall apply to taxable years beginning after December 31, 2007.

   Inserted: (2) Application of egtrra sunset.--The amendments made by subparagraphs (A) and (B) of subsection (e)(2) shall be subject to title IX of the Economic Growth and Tax Relief Reconciliation Act of 2001 in the same manner as the provisions of such Act to which such amendments relate.

   Inserted: SEC. 3105. SPECIAL RULE TO IMPLEMENT FERC AND STATE ELECTRIC RESTRUCTURING POLICY.

   Inserted: (a) Extension for Qualified Electric Utilities.--

   Inserted: (1) In general.--Paragraph (3) of section 451(i) is amended by inserting "(before January 1, 2010, in the case of a qualified electric utility)" after "January 1, 2008".

   Inserted: (2) Qualified electric utility.--Subsection (i) of section 451 is amended by redesignating paragraphs (6) through (10) as paragraphs (7) through (11), respectively, and by inserting after paragraph (5) the following new paragraph:

   Inserted: "(6) Qualified electric utility.--For purposes of this subsection, the term 'qualified electric utility' means a person that, as of the date of the qualifying electric transmission transaction, is vertically integrated, in that it is both--

   Inserted: "(A) a transmitting utility (as defined in section 3(23) of the Federal Power Act (16 U.S.C. 796(23))) with respect to the transmission facilities to which the election under this subsection applies, and

   Inserted: "(B) an electric utility (as defined in section 3(22) of the Federal Power Act (16 U.S.C. 796(22))).".

   Inserted: (b) Extension of Period for Transfer of Operational Control Authorized by FERC.--Clause (ii) of section 451(i)(4)(B) is amended by striking "December 31, 2007" and inserting "the date which is 4 years after the close of the taxable year in which the transaction occurs".

   Inserted: (c) Property Located Outside the United States Not Treated as Exempt Utility Property.--Paragraph (5) of section 451(i) is amended by adding at the end the following new subparagraph:

   Inserted: "(C) Exception for property located outside the united states.--The term 'exempt utility property' shall not include any property which is located outside the United States.".

   Inserted: (d) Effective Dates.--

   Inserted: (1) Extension.--The amendments made by subsection (a) shall apply to transactions after December 31, 2007.

   Inserted: (2) Transfers of operational control.--The amendment made by subsection (b) shall take effect as if included in section 909 of the American Jobs Creation Act of 2004.

   Inserted: (3) Exception for property located outside the united states.--The amendment made by subsection (c) shall apply to transactions after the date of the enactment of this Act.

   Inserted: SEC. 3106. NEW CLEAN RENEWABLE ENERGY BONDS.

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

   Inserted: "SEC. 54C. NEW CLEAN RENEWABLE ENERGY BONDS.

   Inserted: "(a) New Clean Renewable Energy Bond.--For purposes of this subpart, the term 'new clean renewable energy bond' means any bond issued as part of an issue if--

   Inserted: "(1) 100 percent of the available project proceeds of such issue are to be used for capital expenditures incurred by governmental bodies, public power providers, or cooperative electric companies for one or more qualified renewable energy facilities,

   Inserted: "(2) the bond is issued by a qualified issuer, and

   Inserted: "(3) the issuer designates such bond for purposes of this section.

   Inserted: "(b) Reduced Credit Amount.--The annual credit determined under section 54A(b) with respect to any new clean renewable energy bond shall be 70 percent of the amount so determined without regard to this subsection.

   Inserted: "(c) Limitation on Amount of Bonds Designated.--

   Inserted: "(1) In general.--The maximum aggregate face amount of bonds which may be designated under subsection (a) by any issuer shall not exceed the limitation amount allocated under this subsection to such issuer.

   Inserted: "(2) National limitation on amount of bonds designated.--There is a national new clean renewable energy bond limitation of $2,000,000,000 which shall be allocated by the Secretary as provided in paragraph (3), except that--

   Inserted: "(A) not more than 33\1/3\ percent thereof may be allocated to qualified projects of public power providers,

   Inserted: "(B) not more than 33\1/3\ percent thereof may be allocated to qualified projects of governmental bodies, and

   Inserted: "(C) not more than 33\1/3\ percent thereof may be allocated to qualified projects of cooperative electric companies.

   Inserted: "(3) Method of allocation.--

   Inserted: "(A) Allocation among public power providers.--After the Secretary determines the qualified projects of public power providers which are appropriate for receiving an allocation of the national new clean renewable energy bond limitation, the Secretary shall, to the maximum extent practicable, make allocations among such projects in such manner that the amount allocated to each such project bears the same ratio to the cost of such project as the limitation under paragraph (2)(A) bears to the cost of all such projects.

   Inserted: "(B) Allocation among governmental bodies and cooperative electric companies.--The Secretary shall make allocations of the amount of the national new clean renewable energy bond limitation described in paragraphs (2)(B) and (2)(C) among qualified projects of governmental bodies and cooperative electric companies, respectively, in such manner as the Secretary determines appropriate.

   Inserted: "(d) Definitions.--For purposes of this section--

   Inserted: "(1) Qualified renewable energy facility.--The term 'qualified renewable energy facility' means a qualified facility (as determined under section 45(d) without regard to paragraphs (8) and (10) thereof and to any placed in service date) owned by a public power provider, a governmental body, or a cooperative electric company.

   Inserted: "(2) 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).

   Inserted: "(3) Governmental body.--The term 'governmental body' means any State or Indian tribal government, or any political subdivision thereof.

   Inserted: "(4) 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).

   Inserted: "(5) Clean renewable energy bond lender.--The term 'clean renewable energy bond lender' means a lender which is a cooperative which is owned by, or has outstanding loans to, 100 or more cooperative electric companies and is in existence on February 1, 2002, and shall include any affiliated entity which is controlled by such lender.

   Inserted: "(6) Qualified issuer.--The term 'qualified issuer' means a public power provider, a cooperative electric company, a governmental body, a clean renewable energy bond lender, or a not-for-profit electric utility which has received a loan or loan guarantee under the Rural Electrification Act.".

   Inserted: (b) Conforming Amendments.--

   Inserted: (1) Paragraph (1) of section 54A(d) is amended to read as follows:

   Inserted: "(1) Qualified tax credit bond.--The term 'qualified tax credit bond' means--

   Inserted: "(A) a qualified forestry conservation bond, or

   Inserted: "(B) a new clean renewable energy bond, which is part of an issue that meets requirements of paragraphs (2), (3), (4), (5), and (6).".

   Inserted: (2) Subparagraph (C) of section 54A(d)(2) is amended to read as follows:

   Inserted: "(C) Qualified purpose.--For purposes of this paragraph, the term 'qualified purpose' means--

   Inserted: "(i) in the case of a qualified forestry conservation bond, a purpose specified in section 54B(e), and

   Inserted: "(ii) in the case of a new clean renewable energy bond, a purpose specified in section 54C(a)(1).".

   Inserted: (3) The table of sections for subpart I of part IV of subchapter A of chapter 1 is amended by adding at the end the following new item:

   Inserted: "Sec. 54C. Qualified clean renewable energy bonds.".

   Inserted: (c) Effective Date.--The amendments made by this section shall apply to obligations issued after the date of the enactment of this Act.

   Inserted: PART II--CARBON MITIGATION PROVISIONS

   Inserted: SEC. 3111. EXPANSION AND MODIFICATION OF ADVANCED COAL PROJECT INVESTMENT CREDIT.

   Inserted: (a) Modification of Credit Amount.--Section 48A(a) is amended by striking "and" at the end of paragraph (1), by striking the period at the end of paragraph (2) and inserting ", and", and by adding at the end the following new paragraph:

   Inserted: "(3) 30 percent of the qualified investment for such taxable year in the case of projects described in clause (iii) of subsection (d)(3)(B).".

   Inserted: (b) Expansion of Aggregate Credits.--Section 48A(d)(3)(A) is amended by striking "$1,300,000,000" and inserting "$2,550,000,000".

   Inserted: (c) Authorization of Additional Projects.--

   Inserted: (1) In general.--Subparagraph (B) of section 48A(d)(3) is amended to read as follows:

   Inserted: "(B) Particular projects.--Of the dollar amount in subparagraph (A), the Secretary is authorized to certify--

   Inserted: "(i) $800,000,000 for integrated gasification combined cycle projects the application for which is submitted during the period described in paragraph (2)(A)(i),

   Inserted: "(ii) $500,000,000 for projects which use other advanced coal-based generation technologies the application for which is submitted during the period described in paragraph (2)(A)(i), and

   Inserted: "(iii) $1,250,000,000 for advanced coal-based generation technology projects the application for which is submitted during the period described in paragraph (2)(A)(ii).".

   Inserted: (2) Application period for additional projects.--Subparagraph (A) of section 48A(d)(2) is amended to read as follows:

   Inserted: "(A) Application period.--Each applicant for certification under this paragraph shall submit an application meeting the requirements of subparagraph (B). An applicant may only submit an application--

   Inserted: "(i) for an allocation from the dollar amount specified in clause (i) or (ii) of paragraph (3)(B) during the 3-year period beginning on the date the Secretary establishes the program under paragraph (1), and

   Inserted: "(ii) for an allocation from the dollar amount specified in paragraph (3)(B)(iii) during the 3-year period beginning at the earlier of the termination of the period described in clause (i) or the date prescribed by the Secretary.".

   Inserted: (3) Capture and sequestration of carbon dioxide emissions requirement.--

   Inserted: (A) In general.--Section 48A(e)(1) is amended by striking "and" at the end of subparagraph (E), by striking the period at the end of subparagraph (F) and inserting "; and", and by adding at the end the following new subparagraph:

   Inserted: "(G) in the case of any project the application for which is submitted during the period described in subsection (d)(2)(A)(ii), the project includes equipment which separates and sequesters at least 65 percent (70 percent in the case of an application for reallocated credits under subsection (d)(4)) of such project's total carbon dioxide emissions.".

   Inserted: (B) Highest priority for projects which sequester carbon dioxide emissions.--Section 48A(e)(3) is amended by striking "and" at the end of subparagraph (A)(iii), by striking the period at the end of subparagraph (B)(iii) and inserting ", and", and by adding at the end the following new subparagraph:

   Inserted: "(C) give highest priority to projects with the greatest separation and sequestration percentage of total carbon dioxide emissions.".

   Inserted: (C) Recapture of credit for failure to sequester.--Section 48A is amended by adding at the end the following new subsection:

   Inserted: "(i) Recapture of Credit for Failure To Sequester.--The Secretary shall provide for recapturing the benefit of any credit allowable under subsection (a) with respect to any project which fails to attain or maintain the separation and sequestration requirements of subsection (e)(1)(G).".

   Inserted: (4) Additional priority for research partnerships.--Section 48A(e)(3)(B), as amended by paragraph (3)(B), is amended--

   Inserted: (A) by striking "and" at the end of clause (ii),

   Inserted: (B) by redesignating clause (iii) as clause (iv), and

   Inserted: (C) by inserting after clause (ii) the following new clause:

   Inserted: "(iii) applicant participants who have a research partnership with an eligible educational institution (as defined in section 529(e)(5)), and".

   Inserted: (5) Clerical amendment.--Section 48A(e)(3) is amended by striking "integrated gasification combined cycle" in the heading and inserting "certain".

   Inserted: (d) Disclosure of Allocations.--Section 48A(d) is amended by adding at the end the following new paragraph:

   Inserted: "(5) Disclosure of allocations.--The Secretary shall, upon making a certification under this subsection or section 48B(d), publicly disclose the identity of the applicant and the amount of the credit certified with respect to such applicant.".

   Inserted: (e) Effective Dates.--

   Inserted: (1) In general.--Except as otherwise provided in this subsection, the amendments made by this section shall apply to credits the application for which is submitted during the period described in section 48A(d)(2)(A)(ii) of the Internal Revenue Code of 1986 and which are allocated or reallocated after the date of the enactment of this Act.

   Inserted: (2) Disclosure of allocations.--The amendment made by subsection (d) shall apply to certifications made after the date of the enactment of this Act.

   Inserted: (3) Clerical amendment.--The amendment made by subsection (c)(5) shall take effect as if included in the amendment made by section 1307(b) of the Energy Tax Incentives Act of 2005.

   Inserted: SEC. 3112. EXPANSION AND MODIFICATION OF COAL GASIFICATION INVESTMENT CREDIT.

   Inserted: (a) Modification of Credit Amount.--Section 48B(a) is amended by inserting "(30 percent in the case of credits allocated under subsection (d)(1)(B))" after "20 percent".

   Inserted: (b) Expansion of Aggregate Credits.--Section 48B(d)(1) is amended by striking "shall not exceed $350,000,000" and all that follows and inserting "shall not exceed--

   Inserted: "(A) $350,000,000, plus

   Inserted: "(B) $250,000,000 for qualifying gasification projects that include equipment which separates and sequesters at least 75 percent of such project's total carbon dioxide emissions.".

   Inserted: (c) Recapture of Credit for Failure To Sequester.--Section 48B is amended by adding at the end the following new subsection:

   Inserted: "(f) Recapture of Credit for Failure To Sequester.--The Secretary shall provide for recapturing the benefit of any credit allowable under subsection (a) with respect to any project which fails to attain or maintain the separation and sequestration requirements for such project under subsection (d)(1).".

   Inserted: (d) Selection Priorities.--Section 48B(d) is amended by adding at the end the following new paragraph:

   Inserted: "(4) Selection priorities.--In determining which qualifying gasification projects to certify under this section, the Secretary shall--

   Inserted: "(A) give highest priority to projects with the greatest separation and sequestration percentage of total carbon dioxide emissions, and

   Inserted: "(B) give high priority to applicant participants who have a research partnership with an eligible educational institution (as defined in section 529(e)(5)).".

   Inserted: (e) Effective Date.--The amendments made by this section shall apply to credits described in section 48B(d)(1)(B) of the Internal Revenue Code of 1986 which are allocated or reallocated after the date of the enactment of this Act.

   Inserted: SEC. 3113. TEMPORARY INCREASE IN COAL EXCISE TAX.

   Inserted: Paragraph (2) of section 4121(e) is amended--

   Inserted: (1) by striking "January 1, 2014" in subparagraph (A) and inserting "December 31, 2018", and

   Inserted: (2) by striking "January 1 after 1981" in subparagraph (B) and inserting "December 31 after 2007".

   Inserted: SEC. 3114. SPECIAL RULES FOR REFUND OF THE COAL EXCISE TAX TO CERTAIN COAL PRODUCERS AND EXPORTERS.

   Inserted: (a) Refund.--

   Inserted: (1) Coal producers.--

   Inserted: (A) In general.--Notwithstanding subsections (a)(1) and (c) of section 6416 and section 6511 of the Internal Revenue Code of 1986, if--

   Inserted: (i) a coal producer establishes that such coal producer, or a party related to such coal producer, exported coal produced by such coal producer to a foreign country or shipped coal produced by such coal producer to a possession of the United States, or caused such coal to be exported or shipped, the export or shipment of which was other than through an exporter who meets the requirements of paragraph (2),

   Inserted: (ii) such coal producer filed an excise tax return on or after October 1, 1990, and on or before the date of the enactment of this Act, and

   Inserted: (iii) such coal producer files a claim for refund with the Secretary not later than the close of the 30-day period beginning on the date of the enactment of this Act, then the Secretary shall pay to such coal producer an amount equal to the tax paid under section 4121 of such Code on such coal exported or shipped by the coal producer or a party related to such coal producer, or caused by the coal producer or a party related to such coal producer to be exported or shipped.

   Inserted: (B) Special rules for certain taxpayers.--For purposes of this section--

   Inserted: (i) In general.--If a coal producer or a party related to a coal producer has received a judgment described in clause (iii), such coal producer shall be deemed to have established the export of coal to a foreign country or shipment of coal to a possession of the United States under subparagraph (A)(i).

   Inserted: (ii) Amount of payment.--If a taxpayer described in clause (i) is entitled to a payment under subparagraph (A), the amount of such payment shall be reduced by any amount paid pursuant to the judgment described in clause (iii).

   Inserted: (iii) Judgment described.--A judgment is described in this subparagraph if such judgment--

   Inserted: (I) is made by a court of competent jurisdiction within the United States,

   Inserted: (II) relates to the constitutionality of any tax paid on exported coal under section 4121 of the Internal Revenue Code of 1986, and

   Inserted: (III) is in favor of the coal producer or the party related to the coal producer.

   Inserted: (2) Exporters.--Notwithstanding subsections (a)(1) and (c) of section 6416 and section 6511 of the Internal Revenue Code of 1986, and a judgment described in paragraph (1)(B)(iii) of this subsection, if--

   Inserted: (A) an exporter establishes that such exporter exported coal to a foreign country or shipped coal to a possession of the United States, or caused such coal to be so exported or shipped,

   Inserted: (B) such exporter filed a tax return on or after October 1, 1990, and on or before the date of the enactment of this Act, and

   Inserted: (C) such exporter files a claim for refund with the Secretary not later than the close of the 30-day period beginning on the date of the enactment of this Act, then the Secretary shall pay to such exporter an amount equal to $0.825 per ton of such coal exported by the exporter or caused to be exported or shipped, or caused to be exported or shipped, by the exporter.

   Inserted: (b) Limitations.--Subsection (a) shall not apply with respect to exported coal if a settlement with the Federal Government has been made with and accepted by, the coal producer, a party related to such coal producer, or the exporter, of such coal, as of the date that the claim is filed under this section with respect to such exported coal. For purposes of this subsection, the term "settlement with the Federal Government" shall not include any settlement or stipulation entered into as of the date of the enactment of this Act, the terms of which contemplate a judgment concerning which any party has reserved the right to file an appeal, or has filed an appeal.

   Inserted: (c) Subsequent Refund Prohibited.--No refund shall be made under this section to the extent that a credit or refund of such tax on such exported or shipped coal has been paid to any person.

   Inserted: (d) Definitions.--For purposes of this section--

   Inserted: (1) Coal producer.--The term "coal producer" means the person in whom is vested ownership of the coal immediately after the coal is severed from the ground, without regard to the existence of any contractual arrangement for the sale or other disposition of the coal or the payment of any royalties between the producer and third parties. The term includes any person who extracts coal from coal waste refuse piles or from the silt waste product which results from the wet washing (or similar processing) of coal.

   Inserted: (2) Exporter.--The term "exporter" means a person, other than a coal producer, who does not have a contract, fee arrangement, or any other agreement with a producer or seller of such coal to export or ship such coal to a third party on behalf of the producer or seller of such coal and--

   Inserted: (A) is indicated in the shipper's export declaration or other documentation as the exporter of record, or

   Inserted: (B) actually exported such coal to a foreign country or shipped such coal to a possession of the United States, or caused such coal to be so exported or shipped.

   Inserted: (3) Related party.--The term "a party related to such coal producer" means a person who--

   Inserted: (A) is related to such coal producer through any degree of common management, stock ownership, or voting control,

   Inserted: (B) is related (within the meaning of section 144(a)(3) of the Internal Revenue Code of 1986) to such coal producer, or

   Inserted: (C) has a contract, fee arrangement, or any other agreement with such coal producer to sell such coal to a third party on behalf of such coal producer.

   Inserted: (4) Secretary.--The term "Secretary" means the Secretary of Treasury or the Secretary's designee.

   Inserted: (e) Timing of Refund.--With respect to any claim for refund filed pursuant to this section, the Secretary shall determine whether the requirements of this section are met not later than 180 days after such claim is filed. If the Secretary determines that the requirements of this section are met, the claim for refund shall be paid not later than 180 days after the Secretary makes such determination.

   Inserted: (f) Interest.--Any refund paid pursuant to this section shall be paid by the Secretary with interest from the date of overpayment determined by using the overpayment rate and method under section 6621 of the Internal Revenue Code of 1986.

   Inserted: (g) Denial of Double Benefit.--The payment under subsection (a) with respect to any coal shall not exceed--

   Inserted: (1) in the case of a payment to a coal producer, the amount of tax paid under section 4121 of the Internal Revenue Code of 1986 with respect to such coal by such coal producer or a party related to such coal producer, and

   Inserted: (2) in the case of a payment to an exporter, an amount equal to $0.825 per ton with respect to such coal exported by the exporter or caused to be exported by the exporter.

   Inserted: (h) Application of Section.--This section applies only to claims on coal exported or shipped on or after October 1, 1990, through the date of the enactment of this Act.

   Inserted: (i) Standing Not Conferred.--

   Inserted: (1) Exporters.--With respect to exporters, this section shall not confer standing upon an exporter to commence, or intervene in, any judicial or administrative proceeding concerning a claim for refund by a coal producer of any Federal or State tax, fee, or royalty paid by the coal producer.

   Inserted: (2) Coal producers.--With respect to coal producers, this section shall not confer standing upon a coal producer to commence, or intervene in, any judicial or administrative proceeding concerning a claim for refund by an exporter of any Federal or State tax, fee, or royalty paid by the producer and alleged to have been passed on to an exporter.

   Inserted: SEC. 3115. CARBON AUDIT OF THE TAX CODE.

   Inserted: (a) Study.--The Secretary of the Treasury shall enter into an agreement with the National Academy of Sciences to undertake a comprehensive review of the Internal Revenue Code of 1986 to identify the types of and specific tax provisions that have the largest effects on carbon and other greenhouse gas emissions and to estimate the magnitude of those effects.

   Inserted: (b) Report.--Not later than 2 years after the date of enactment of this Act, the National Academy of Sciences shall submit to Congress a report containing the results of study authorized under this section.

   Inserted: (c) Authorization of Appropriations.--There is authorized to be appropriated to carry out this section $1,500,000 for the period of fiscal years 2008 and 2009.

   Inserted: Subtitle B--Transportation and Domestic Fuel Security Provisions SEC. 3121. INCLUSION OF CELLULOSIC BIOFUEL IN BONUS DEPRECIATION FOR BIOMASS ETHANOL PLANT PROPERTY.

   Inserted: (a) In General.--Paragraph (3) of section 168(l) is amended to read as follows:

   Inserted: "(3) Cellulosic biofuel.--The term 'cellulosic biofuel' means any liquid fuel which is produced from any lignocellulosic or hemicellulosic matter that is available on a renewable or recurring basis.".

   Inserted: (b) Conforming Amendments.--Subsection (l) of section 168 is amended--

   Inserted: (1) by striking "cellulosic biomass ethanol" each place it appears and inserting "cellulosic biofuel",

   Inserted: (2) by striking "Cellulosic Biomass Ethanol" in the heading of such subsection and inserting "Cellulosic Biofuel", and

   Inserted: (3) by striking "cellulosic biomass ethanol" in the heading of paragraph (2) thereof and inserting "cellulosic biofuel".

   Inserted: (c) Effective Date.--The amendments made by this section shall apply to property placed in service after the date of the enactment of this Act, in taxable years ending after such date.

   Inserted: SEC. 3122. CREDITS FOR BIODIESEL AND RENEWABLE DIESEL.

   Inserted: (a) In General.--Sections 40A(g), 6426(c)(6), and 6427(e)(5)(B) are each amended by striking "December 31, 2008" and inserting "December 31, 2009".

   Inserted: (b) Increase in Rate of Credit.--

   Inserted: (1) Income tax credit.--Paragraphs (1)(A) and (2)(A) of section 40A(b) are each amended by striking "50 cents" and inserting "$1.00".

   Inserted: (2) Excise tax credit.--Paragraph (2) of section 6426(c) is amended to read as follows:

   Inserted: "(2) Applicable amount.--For purposes of this subsection, the applicable amount is $1.00.".

   Inserted: (3) Conforming amendments.--

   Inserted: (A) Subsection (b) of section 40A is amended by striking paragraph (3) and by redesignating paragraphs (4) and (5) as paragraphs (3) and (4), respectively.

   Inserted: (B) Paragraph (2) of section 40A(f) is amended to read as follows:

   Inserted: "(2) Exception.--Subsection (b)(4) shall not apply with respect to renewable diesel.".

   Inserted: (C) Paragraphs (2) and (3) of section 40A(e) are each amended by striking "subsection (b)(5)(C)" and inserting "subsection (b)(4)(C)".

   Inserted: (D) Clause (ii) of section 40A(d)(3)(C) is amended by striking "subsection (b)(5)(B)" and inserting "subsection (b)(4)(B)".

   Inserted: (c) Uniform Treatment of Diesel Produced From Biomass.--Paragraph (3) of section 40A(f) is amended--

   Inserted: (1) by striking "diesel fuel" and inserting "liquid fuel",

   Inserted: (2) by striking "using a thermal depolymerization process", and

   Inserted: (3) by striking "or D396" in subparagraph (B) and inserting ", D396, or other equivalent standard approved by the Secretary".

   Inserted: (d) Coproduction of Renewable Diesel With Petroleum Feedstock.--

   Inserted: (1) In general.--Paragraph (3) of section 40A(f) (defining renewable diesel) is amended by adding at the end the following new sentence: "Such term does not include any fuel derived from coprocessing biomass with a feedstock which is not biomass. For purposes of this paragraph, the term 'biomass' has the meaning given such term by section 45K(c)(3).".

   Inserted: (2) Conforming amendment.--Paragraph (3) of section 40A(f) is amended by striking "(as defined in section 45K(c)(3))".

   Inserted: (e) Eligibility of Certain Aviation Fuel.--Paragraph (3) of section 40A(f) (defining renewable diesel) is amended by adding at the end the following: "The term 'renewable diesel' also means fuel derived from biomass which meets the requirements of a Department of Defense specification for military jet fuel or an American Society of Testing and Materials specification for aviation turbine fuel.".

   Inserted: (f) Effective Date.--

   Inserted: (1) In general.--Except as otherwise provided in this subsection, the amendments made by this section shall apply to fuel produced, and sold or used, after December 31, 2008.

   Inserted: (2) Coproduction of renewable diesel with petroleum feedstock.--The amendments made by subsection (d) shall apply to fuel produced, and sold or used, after the date of the enactment of this Act.

   Inserted: SEC. 3123. CLARIFICATION THAT CREDITS FOR FUEL ARE DESIGNED TO PROVIDE AN INCENTIVE FOR UNITED STATES PRODUCTION.

   Inserted: (a) Alcohol Fuels Credit.--Paragraph (6) of section 40(d) is amended to read as follows:

   Inserted: "(6) Limitation to alcohol with connection to the united states.--No credit shall be determined under this section with respect to any alcohol which is produced outside the United States for use as a fuel outside the United States. For purposes of this paragraph, the term 'United States' includes any possession of the United States.".

   Inserted: (b) Biodiesel Fuels Credit.--Subsection (d) of section 40A is amended by adding at the end the following new paragraph:

   Inserted: "(5) Limitation to biodiesel with connection to the united states.--No credit shall be determined under this section with respect to any biodiesel which is produced outside the United States for use as a fuel outside the United States. For purposes of this paragraph, the term 'United States' includes any possession of the United States.".

   Inserted: (c) Excise Tax Credit.--

   Inserted: (1) In general.--Section 6426 is amended by adding at the end the following new subsection:

   Inserted: "(i) Limitation to Fuels With Connection to the United States.--

   Inserted: "(1) Alcohol.--No credit shall be determined under this section with respect to any alcohol which is produced outside the United States for use as a fuel outside the United States.

   Inserted: "(2) Biodiesel and alternative fuels.--No credit shall be determined under this section with respect to any biodiesel or alternative fuel which is produced outside the United States for use as a fuel outside the United States.

   Inserted: For purposes of this subsection, the term 'United States' includes any possession of the United States.".

   Inserted: (2) Conforming amendment.--Subsection (e) of section 6427 is amended by redesignating paragraph (5) as paragraph (6) and by inserting after paragraph (4) the following new paragraph:

   Inserted: "(5) Limitation to fuels with connection to the united states.--No amount shall be payable under paragraph (1) or (2) with respect to any mixture or alternative fuel if credit is not allowed with respect to such mixture or alternative fuel by reason of section 6426(i).".

   Inserted: (d) Effective Date.--The amendments made by this section shall apply to claims for credit or payment made on or after May 15, 2008.

   Inserted: SEC. 3124. CREDIT FOR NEW QUALIFIED PLUG-IN ELECTRIC DRIVE MOTOR VEHICLES.

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

   Inserted: "SEC. 30D. NEW QUALIFIED PLUG-IN ELECTRIC DRIVE MOTOR VEHICLES.

   Inserted: "(a) Allowance of Credit.--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 credit amounts determined under subsection (b) with respect to each new qualified plug-in electric drive motor vehicle placed in service by the taxpayer during the taxable year.

   Inserted: "(b) Per Vehicle Dollar Limitation.--

   Inserted: "(1) In general.--The amount determined under this subsection with respect to any new qualified plug-in electric drive motor vehicle is the sum of the amounts determined under paragraphs (2) and (3) with respect to such vehicle.

   Inserted: "(2) Base amount.--The amount determined under this paragraph is $3,000.

   Inserted: "(3) Battery capacity.--In the case of a vehicle which draws propulsion energy from a battery with not less than 5 kilowatt hours of capacity, the amount determined under this paragraph is $200, plus $200 for each kilowatt hour of capacity in excess of 5 kilowatt hours. The amount determined under this paragraph shall not exceed $2,000.

   Inserted: "(c) Application With Other Credits.--

   Inserted: "(1) Business credit treated as part of general business credit.--So much of the credit which would be allowed under subsection (a) for any taxable year (determined without regard to this subsection) that is attributable to property of a character subject to an allowance for depreciation shall be treated as a credit listed in section 38(b) for such taxable year (and not allowed under subsection (a)).

   Inserted: "(2) Personal credit.--

   Inserted: "(A) In general.--For purposes of this title, the credit allowed under subsection (a) for any taxable year (determined after application of paragraph (1)) shall be treated as a credit allowable under subpart A for such taxable year.

   Inserted: "(B) Limitation based on amount of tax.--In the case of a taxable year to which section 26(a)(2) does not apply, the credit allowed under subsection (a) for any taxable year (determined after application of paragraph (1)) shall not exceed the excess of--

   Inserted: "(i) the sum of the regular tax liability (as defined in section 26(b)) plus the tax imposed by section 55, over

   Inserted: "(ii) the sum of the credits allowable under subpart A (other than this section and sections 23 and 25D) and section 27 for the taxable year.

   Inserted: "(d) New Qualified Plug-In Electric Drive Motor Vehicle.--For purposes of this section--

   Inserted: "(1) In general.--The term 'new qualified plug-in electric drive motor vehicle' means a motor vehicle (as defined in section 30(c)(2))--

   Inserted: "(A) the original use of which commences with the taxpayer,

   Inserted: "(B) which is acquired for use or lease by the taxpayer and not for resale,

   Inserted: "(C) which is made by a manufacturer,

   Inserted: "(D) which has a gross vehicle weight rating of less than 14,000 pounds,

   Inserted: "(E) which has received a certificate of conformity under the Clean Air Act and meets or exceeds the Bin 5 Tier II emission standard established in regulations prescribed by the Administrator of the Environmental Protection Agency under section 202(i) of the Clean Air Act for that make and model year vehicle, and

   Inserted: "(F) which is propelled to a significant extent by an electric motor which draws electricity from a battery which--

   Inserted: "(i) has a capacity of not less than 4 kilowatt hours, and

   Inserted: "(ii) is capable of being recharged from an external source of electricity.

   Inserted: "(2) Exception.--The term 'new qualified plug-in electric drive motor vehicle' shall not include any vehicle which is not a passenger automobile or light truck if such vehicle has a gross vehicle weight rating of less than 8,500 pounds.

   Inserted: "(3) Other terms.--The terms 'passenger automobile', 'light truck', and 'manufacturer' have the meanings given such terms in regulations prescribed by the Administrator of the Environmental Protection Agency for purposes of the administration of title II of the Clean Air Act (42 U.S.C. 7521 et seq.).

   Inserted: "(4) Battery capacity.--The term 'capacity' means, with respect to any battery, the quantity of electricity which the battery is capable of storing, expressed in kilowatt hours, as measured from a 100 percent state of charge to a 0 percent state of charge.

   Inserted: "(e) Limitation on Number of New Qualified Plug-In Electric Drive Motor Vehicles Eligible for Credit.--

   Inserted: "(1) In general.--In the case of a new qualified plug-in electric drive motor vehicle sold during the phaseout period, only the applicable percentage of the credit otherwise allowable under subsection (a) shall be allowed.

   Inserted: "(2) Phaseout period.--For purposes of this subsection, the phaseout period is the period beginning with the second calendar quarter following the calendar quarter which includes the first date on which the number of new qualified plug-in electric drive motor vehicles manufactured by the manufacturer of the vehicle referred to in paragraph (1) sold for use in the United States after the date of the enactment of this section, is at least 60,000.

   Inserted: "(3) Applicable percentage.--For purposes of paragraph (1), the applicable percentage is--

   Inserted: "(A) 50 percent for the first 2 calendar quarters of the phaseout period,

   Inserted: "(B) 25 percent for the 3d and 4th calendar quarters of the phaseout period, and

   Inserted: "(C) 0 percent for each calendar quarter thereafter.

   Inserted: "(4) Controlled groups.--Rules similar to the rules of section 30B(f)(4) shall apply for purposes of this subsection.

   Inserted: "(f) Special Rules.--

   Inserted: "(1) Basis reduction.--The basis of any property for which a credit is allowable under subsection (a) shall be reduced by the amount of such credit (determined without regard to subsection (c)).

   Inserted: "(2) Recapture.--The Secretary shall, by regulations, provide for recapturing the benefit of any credit allowable under subsection (a) with respect to any property which ceases to be property eligible for such credit.

   Inserted: "(3) Property used outside united states, etc., not qualified.--No credit shall be allowed under subsection (a) with respect to any property referred to in section 50(b)(1) or with respect to the portion of the cost of any property taken into account under section 179.

   Inserted: "(4) Election not to take credit.--No credit shall be allowed under subsection (a) for any vehicle if the taxpayer elects to not have this section apply to such vehicle.

   Inserted: "(5) Property used by tax-exempt entity; interaction with air quality and motor vehicle safety standards.--Rules similar to the rules of paragraphs (6) and (10) of section 30B(h) shall apply for purposes of this section.".

   Inserted: (b) Coordination With Alternative Motor Vehicle Credit.--Section 30B(d)(3) is amended by adding at the end the following new subparagraph:

   Inserted: "(D) Exclusion of plug-in vehicles.--Any vehicle with respect to which a credit is allowable under section 30D (determined without regard to subsection (c) thereof) shall not be taken into account under this section.".

   Inserted: (c) Credit Made Part of General Business Credit.--Section 38(b) is amended--

   Inserted: (1) by striking "and" each place it appears at the end of any paragraph,

   Inserted: (2) by striking "plus" each place it appears at the end of any paragraph,

   Inserted: (3) by striking the period at the end of paragraph (32) and inserting ", plus", and

   Inserted: (4) by adding at the end the following new paragraph:

   Inserted: "(33) the portion of the new qualified plug-in electric drive motor vehicle credit to which section 30D(c)(1) applies.".

   Inserted: (d) Conforming Amendments.--

   Inserted: (1)(A) Section 24(b)(3)(B), as amended by section 104, is amended by striking "and 25D" and inserting "25D, and 30D".

   Inserted: (B) Section 25(e)(1)(C)(ii) is amended by inserting "30D," after "25D,".

   Inserted: (C) Section 25B(g)(2), as amended by section 104, is amended by striking "and 25D" and inserting ", 25D, and 30D".

   Inserted: (D) Section 26(a)(1), as amended by section 104, is amended by striking "and 25D" and inserting "25D, and 30D".

   Inserted: (E) Section 1400C(d)(2) is amended by striking "and 25D" and inserting "25D, and 30D".

   Inserted: (2) Section 1016(a) is amended by striking "and" at the end of paragraph (35), by striking the period at the end of paragraph (36) and inserting ", and", and by adding at the end the following new paragraph:

   Inserted: "(37) to the extent provided in section 30D(f)(1).".

   Inserted: (3) Section 6501(m) is amended by inserting "30D(f)(4)," after "30C(e)(5),".

   Inserted: (4) The table of sections for subpart B of part IV of subchapter A of chapter 1 is amended by adding at the end the following new item:

   Inserted: "Sec. 30D. New qualified plug-in electric drive motor vehicles.".

   Inserted: (e) Treatment of Alternative Motor Vehicle Credit as a Personal Credit.--

   Inserted: (1) In general.--Paragraph (2) of section 30B(g) is amended to read as follows:

   Inserted: "(2) Personal credit.--The credit allowed under subsection (a) for any taxable year (after application of paragraph (1)) shall be treated as a credit allowable under subpart A for such taxable year.".

   Inserted: (2) Conforming amendments.--

   Inserted: (A) Subparagraph (A) of section 30C(d)(2) is amended by striking "sections 27, 30, and 30B" and inserting "sections 27 and 30".

   Inserted: (B) Paragraph (3) of section 55(c) is amended by striking "30B(g)(2),".

   Inserted: (f) Effective Date.--

   Inserted: (1) In general.--Except as otherwise provided in this subsection, the amendments made by this section shall apply to taxable years beginning after December 31, 2008.

   Inserted: (2) Treatment of alternative motor vehicle credit as personal credit.--The amendments made by subsection (e) shall apply to taxable years beginning after December 31, 2007.

   Inserted: (g) Application of EGTRRA Sunset.--The amendment made by subsection (d)(1)(A) shall be subject to title IX of the Economic Growth and Tax Relief Reconciliation Act of 2001 in the same manner as the provision of such Act to which such amendment relates.

   Inserted: SEC. 3125. EXCLUSION FROM HEAVY TRUCK TAX FOR IDLING REDUCTION UNITS AND ADVANCED INSULATION.

   Inserted: (a) In General.--Section 4053 is amended by adding at the end the following new paragraphs:

   Inserted: "(9) Idling reduction device.--Any device or system of devices which--

   Inserted: "(A) is designed to provide to a vehicle those services (such as heat, air conditioning, or electricity) that would otherwise require the operation of the main drive engine while the vehicle is temporarily parked or remains stationary using one or more devices affixed to a tractor, and

   Inserted: "(B) is determined by the Administrator of the Environmental Protection Agency, in consultation with the Secretary of Energy and the Secretary of Transportation, to reduce idling of such vehicle at a motor vehicle rest stop or other location where such vehicles are temporarily parked or remain stationary.

   Inserted: "(10) Advanced insulation.--Any insulation that has an R value of not less than R35 per inch.".

   Inserted: (b) Effective Date.--The amendment made by this section shall apply to sales or installations after the date of the enactment of this Act.

   Inserted: SEC. 3126. RESTRUCTURING OF NEW YORK LIBERTY ZONE TAX CREDITS.

   Inserted: (a) In General.--Part I of subchapter Y of chapter 1 is amended by redesignating section 1400L as section 1400K and by adding at the end the following new section:

   Inserted: "SEC. 1400L. NEW YORK LIBERTY ZONE TAX CREDITS.

   Inserted: "(a) In General.--In the case of a New York Liberty Zone governmental unit, there shall be allowed as a credit against any taxes imposed for any payroll period by section 3402 for which such governmental unit is liable under section 3403 an amount equal to so much of the portion of the qualifying project expenditure amount allocated under subsection (b)(3) to such governmental unit for the calendar year as is allocated by such governmental unit to such period under subsection (b)(4).

   Inserted: "(b) Qualifying Project Expenditure Amount.--For purposes of this section--

   Inserted: "(1) In general.--The term 'qualifying project expenditure amount' means, with respect to any calendar year, the sum of--

   Inserted: "(A) the total expenditures paid or incurred during such calendar year by all New York Liberty Zone governmental units and the Port Authority of New York and New Jersey for any portion of qualifying projects located wholly within the City of New York, New York, and

   Inserted: "(B) any such expenditures--

   Inserted: "(i) paid or incurred in any preceding calendar year which begins after the date of enactment of this section, and

   Inserted: "(ii) not previously allocated under paragraph (3).

   Inserted: "(2) Qualifying project.--The term 'qualifying project' means any transportation infrastructure project, including highways, mass transit systems, railroads, airports, ports, and waterways, in or connecting with the New York Liberty Zone (as defined in section 1400K(h)), which is designated as a qualifying project under this section jointly by the Governor of the State of New York and the Mayor of the City of New York, New York.

   Inserted: "(3) General allocation.--

   Inserted: "(A) In general.--The Governor of the State of New York and the Mayor of the City of New York, New York, shall jointly allocate to each New York Liberty Zone governmental unit the portion of the qualifying project expenditure amount which may be taken into account by such governmental unit under subsection (a) for any calendar year in the credit period.

   Inserted: "(B) Aggregate limit.--The aggregate amount which may be allocated under subparagraph (A) for all calendar years in the credit period shall not exceed $2,000,000,000.

   Inserted: "(C) Annual limit.--The aggregate amount which may be allocated under subparagraph (A) for any calendar year in the credit period shall not exceed the sum of--

   Inserted: "(i) $115,000,000 ($425,000,000 in the case of the last 2 years in the credit period), plus

   Inserted: "(ii) the aggregate amount authorized to be allocated under this paragraph for all preceding calendar years in the credit period which was not so allocated.

   Inserted: "(D) Unallocated amounts at end of credit period.--If, as of the close of the credit period, the amount under subparagraph (B) exceeds the aggregate amount allocated under subparagraph (A) for all calendar years in the credit period, the Governor of the State of New York and the Mayor of the City of New York, New York, may jointly allocate to New York Liberty Zone governmental units for any calendar year in the 5-year period following the credit period an amount equal to--

   Inserted: "(i) the lesser of--

   Inserted: "(I) such excess, or

   Inserted: "(II) the qualifying project expenditure amount for such calendar year, reduced by

   Inserted: "(ii) the aggregate amount allocated under this subparagraph for all preceding calendar years.

   Inserted: "(4) Allocation to payroll periods.--Each New York Liberty Zone governmental unit which has been allocated a portion of the qualifying project expenditure amount under paragraph (3) for a calendar year may allocate such portion to payroll periods beginning in such calendar year as such governmental unit determines appropriate.

   Inserted: "(c) Carryover of Unused Allocations.--

   Inserted: "(1) In general.--Except as provided in paragraph (2), if the amount allocated under subsection (b)(3) to a New York Liberty Zone governmental unit for any calendar year exceeds the aggregate taxes imposed by section 3402 for which such governmental unit is liable under section 3403 for periods beginning in such year, such excess shall be carried to the succeeding calendar year and added to the allocation of such governmental unit for such succeeding calendar year.

   Inserted: "(2) Reallocation.--If a New York Liberty Zone governmental unit does not use an amount allocated to it under subsection (b)(3) within the time prescribed by the Governor of the State of New York and the Mayor of the City of New York, New York, then such amount shall after such time be treated for purposes of subsection (b)(3) in the same manner as if it had never been allocated.

   Inserted: "(d) Definitions and Special Rules.--For purposes of this section--

   Inserted: "(1) Credit period.--The term 'credit period' means the 12-year period beginning on January 1, 2009.

   Inserted: "(2) New york liberty zone governmental unit.--The term 'New York Liberty Zone governmental unit' means--

   Inserted: "(A) the State of New York,

   Inserted: "(B) the City of New York, New York, and

   Inserted: "(C) any agency or instrumentality of such State or City.

   Inserted: "(3) Treatment of funds.--Any expenditure for a qualifying project taken into account for purposes of the credit under this section shall be considered State and local funds for the purpose of any Federal program.

   Inserted: "(4) Treatment of credit amounts for purposes of withholding taxes.--For purposes of this title, a New York Liberty Zone governmental unit shall be treated as having paid to the Secretary, on the day on which wages are paid to employees, an amount equal to the amount of the credit allowed to such entity under subsection (a) with respect to such wages, but only if such governmental unit deducts and withholds wages for such payroll period under section 3401 (relating to wage withholding).

   Inserted: "(e) Reporting.--The Governor of the State of New York and the Mayor of the City of New York, New York, shall jointly submit to the Secretary an annual report--

   Inserted: "(1) which certifies--

   Inserted: "(A) the qualifying project expenditure amount for the calendar year, and

   Inserted: "(B) the amount allocated to each New York Liberty Zone governmental unit under subsection (b)(3) for the calendar year, and

   Inserted: "(2) includes such other information as the Secretary may require to carry out this section.

   Inserted: "(f) Guidance.--The Secretary may prescribe such guidance as may be necessary or appropriate to ensure compliance with the purposes of this section.".

   Inserted: (b) Termination of Special Allowance and Expensing.--Subparagraph (A) of section 1400K(b)(2), as redesignated by subsection (a), is amended by striking the parenthetical therein and inserting "(in the case of nonresidential real property and residential rental property, the date of the enactment of the Federal Housing Finance Regulatory Reform Act of 2008 or, if acquired pursuant to a binding contract in effect on such enactment date, December 31, 2009)".

   Inserted: (c) Conforming Amendments.--

   Inserted: (1) Section 38(c)(3)(B) is amended by striking "section 1400L(a)" and inserting "section 1400K(a)".

   Inserted: (2) Section 168(k)(2)(D)(ii) is amended by striking "section 1400L(c)(2)" and inserting "section 1400K(c)(2)".

   Inserted: (3) The table of sections for part I of subchapter Y of chapter 1 is amended by redesignating the item relating to section 1400L as an item relating to section 1400K and by inserting after such item the following new item:

   Inserted: "Sec. 1400L. New York Liberty Zone tax credits.".

   Inserted: (d) Effective Date.--The amendments made by this section shall take effect on the date of the enactment of this Act.

   Inserted: SEC. 3127. TRANSPORTATION FRINGE BENEFIT TO BICYCLE COMMUTERS.

   Inserted: (a) In General.--Paragraph (1) of section 132(f) is amended by adding at the end the following:

   Inserted: "(D) Any qualified bicycle commuting reimbursement.".

   Inserted: (b) Limitation on Exclusion.--Paragraph (2) of section 132(f) is amended by striking "and" at the end of subparagraph (A), by striking the period at the end of subparagraph (B) and inserting ", and", and by adding at the end the following new subparagraph:

   Inserted: "(C) the applicable annual limitation in the case of any qualified bicycle commuting reimbursement.".

   Inserted: (c) Definitions.--Paragraph (5) of section 132(f) is amended by adding at the end the following:

   Inserted: "(F) Definitions related to bicycle commuting reimbursement.--

   Inserted: "(i) Qualified bicycle commuting reimbursement.--The term 'qualified bicycle commuting reimbursement' means, with respect to any calendar year, any employer reimbursement during the 15-month period beginning with the first day of such calendar year for reasonable expenses incurred by the employee during such calendar year for the purchase of a bicycle and bicycle improvements, repair, and storage, if such bicycle is regularly used for travel between the employee's residence and place of employment.

   Inserted: "(ii) Applicable annual limitation.--The term 'applicable annual limitation' means, with respect to any employee for any calendar year, the product of $20 multiplied by the number of qualified bicycle commuting months during such year.

   Inserted: "(iii) Qualified bicycle commuting month.--The term 'qualified bicycle commuting month' means, with respect to any employee, any month during which such employee--

   Inserted: "(I) regularly uses the bicycle for a substantial portion of the travel between the employee's residence and place of employment, and

   Inserted: "(II) does not receive any benefit described in subparagraph (A), (B), or (C) of paragraph (1).".

   Inserted: (d) Constructive Receipt of Benefit.--Paragraph (4) of section 132(f) is amended by inserting "(other than a qualified bicycle commuting reimbursement)" after "qualified transportation fringe".

   Inserted: (e) Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 2008.

   Inserted: SEC. 3128. ALTERNATIVE FUEL VEHICLE REFUELING PROPERTY CREDIT.

   Inserted: (a) Increase in Credit Amount.--Section 30C is amended--

   Inserted: (1) by striking "30 percent" in subsection (a) and inserting "50 percent", and

   Inserted: (2) by striking "$30,000" in subsection (b)(1) and inserting "$50,000".

   Inserted: (b) Extension of Credit.--Paragraph (2) of section 30C(g) is amended by striking "December 31, 2009" and inserting "December 31, 2010".

   Inserted: (c) Effective Date.--The amendments made by this section shall apply to property placed in service after the date of the enactment of this Act, in taxable years ending after such date.

   Inserted: Subtitle C--Energy Conservation and Efficiency Provisions SEC. 3141. QUALIFIED ENERGY CONSERVATION BONDS.

   Inserted: (a) In General.--Subpart I of part IV of subchapter A of chapter 1, as amended by section 3106, is amended by adding at the end the following new section:

   Inserted: "SEC. 54D. QUALIFIED ENERGY CONSERVATION BONDS.

   Inserted: "(a) Qualified Energy Conservation Bond.--For purposes of this subchapter, the term 'qualified energy conservation bond' means any bond issued as part of an issue if--

   Inserted: "(1) 100 percent of the available project proceeds of such issue are to be used for one or more qualified conservation purposes,

   Inserted: "(2) the bond is issued by a State or local government, and

   Inserted: "(3) the issuer designates such bond for purposes of this section.

   Inserted: "(b) Reduced Credit Amount.--The annual credit determined under section 54A(b) with respect to any qualified energy conservation bond shall be 70 percent of the amount so determined without regard to this subsection.

   Inserted: "(c) Limitation on Amount of Bonds Designated.--The maximum aggregate face amount of bonds which may be designated under subsection (a) by any issuer shall not exceed the limitation amount allocated to such issuer under subsection (e).

   Inserted: "(d) National Limitation on Amount of Bonds Designated.--There is a national qualified energy conservation bond limitation of $3,000,000,000.

   Inserted: "(e) Allocations.--

   Inserted: "(1) In general.--The limitation applicable under subsection (d) shall be allocated by the Secretary among the States in proportion to the population of the States.

   Inserted: "(2) Allocations to largest local governments.--

   Inserted: "(A) In general.--In the case of any State in which there is a large local government, each such local government shall be allocated a portion of such State's allocation which bears the same ratio to the State's allocation (determined without regard to this subparagraph) as the population of such large local government bears to the population of such State.

   Inserted: "(B) Allocation of unused limitation to state.--The amount allocated under this subsection to a large local government may be reallocated by such local government to the State in which such local government is located.

   Inserted: "(C) Large local government.--For purposes of this section, the term 'large local government' means any municipality or county if such municipality or county has a population of 100,000 or more.

   Inserted: "(3) Allocation to issuers; restriction on private activity bonds.--Any allocation under this subsection to a State or large local government shall be allocated by such State or large local government to issuers within the State in a manner that results in not less than 70 percent of the allocation to such State or large local government being used to designate bonds which are not private activity bonds.

   Inserted: "(f) Qualified Conservation Purpose.--For purposes of this section--

   Inserted: "(1) In general.--The term 'qualified conservation purpose' means any of the following:

   Inserted: "(A) Capital expenditures incurred for purposes of--

   Inserted: "(i) reducing energy consumption in publicly-owned buildings by at least 20 percent,

   Inserted: "(ii) implementing green community programs,

   Inserted: "(iii) rural development involving the production of electricity from renewable energy resources, or

   Inserted: "(iv) any qualified facility (as determined under section 45(d) without regard to paragraphs (8) and (10) thereof and without regard to any placed in service date).

   Inserted: "(B) Expenditures with respect to research facilities, and research grants, to support research in--

   Inserted: "(i) development of cellulosic ethanol or other nonfossil fuels,

   Inserted: "(ii) technologies for the capture and sequestration of carbon dioxide produced through the use of fossil fuels,

   Inserted: "(iii) increasing the efficiency of existing technologies for producing nonfossil fuels,

   Inserted: "(iv) automobile battery technologies and other technologies to reduce fossil fuel consumption in transportation, or

   Inserted: "(v) technologies to reduce energy use in buildings.

   Inserted: "(C) Mass commuting facilities and related facilities that reduce the consumption of energy, including expenditures to reduce pollution from vehicles used for mass commuting.

   Inserted: "(D) Demonstration projects designed to promote the commercialization of--

   Inserted: "(i) green building technology,

   Inserted: "(ii) conversion of agricultural waste for use in the production of fuel or otherwise,

   Inserted: "(iii) advanced battery manufacturing technologies,

   Inserted: "(iv) technologies to reduce peak use of electricity, or

   Inserted: "(v) technologies for the capture and sequestration of carbon dioxide emitted from combusting fossil fuels in order to produce electricity.

   Inserted: "(E) Public education campaigns to promote energy efficiency.

   Inserted: "(2) Special rules for private activity bonds.--For purposes of this section, in the case of any private activity bond, the term 'qualified conservation purposes' shall not include any expenditure which is not a capital expenditure.

   Inserted: "(g) Population.--

   Inserted: "(1) In general.--The population of any State or local government shall be determined for purposes of this section as provided in section 146(j) for the calendar year which includes the date of the enactment of this section.

   Inserted: "(2) Special rule for counties.--In determining the population of any county for purposes of this section, any population of such county which is taken into account in determining the population of any municipality which is a large local government shall not be taken into account in determining the population of such county.

   Inserted: "(h) Application to Indian Tribal Governments.--An Indian tribal government shall be treated for purposes of this section in the same manner as a large local government, except that--

   Inserted: "(1) an Indian tribal government shall be treated for purposes of subsection (e) as located within a State to the extent of so much of the population of such government as resides within such State, and

   Inserted: "(2) any bond issued by an Indian tribal government shall be treated as a qualified energy conservation bond only if issued as part of an issue the available project proceeds of which are used for purposes for which such Indian tribal government could issue bonds to which section 103(a) applies.".

   Inserted: (b) Conforming Amendments.--

   Inserted: (1) Paragraph (1) of section 54A(d), as amended by section 3106, is amended to read as follows:

   Inserted: "(1) Qualified tax credit bond.--The term 'qualified tax credit bond' means--

   Inserted: "(A) a qualified forestry conservation bond,

   Inserted: "(B) a new clean renewable energy bond, or

   Inserted: "(C) a qualified energy conservation bond, which is part of an issue that meets requirements of paragraphs (2), (3), (4), (5), and (6).".

   Inserted: (2) Subparagraph (C) of section 54A(d)(2), as amended by section 3106, is amended to read as follows:

   Inserted: "(C) Qualified purpose.--For purposes of this paragraph, the term 'qualified purpose' means--

   Inserted: "(i) in the case of a qualified forestry conservation bond, a purpose specified in section 54B(e),

   Inserted: "(ii) in the case of a new clean renewable energy bond, a purpose specified in section 54C(a)(1), and

   Inserted: "(iii) in the case of a qualified energy conservation bond, a purpose specified in section 54D(a)(1).".

   Inserted: (3) The table of sections for subpart I of part IV of subchapter A of chapter 1 is amended by adding at the end the following new item:

   Inserted: "Sec. 54D. Qualified energy conservation bonds.".

   Inserted: (c) Effective Date.--The amendments made by this section shall apply to obligations issued after the date of the enactment of this Act.

   Inserted: SEC. 3142. CREDIT FOR NONBUSINESS ENERGY PROPERTY.

   Inserted: (a) Extension of Credit.--Section 25C(g) is amended by striking "December 31, 2007" and inserting "December 31, 2008".

   Inserted: (b) Qualified Biomass Fuel Property.--

   Inserted: (1) In general.--Section 25C(d)(3) is amended--

   Inserted: (A) by striking "and" at the end of subparagraph (D),

   Inserted: (B) by striking the period at the end of subparagraph (E) and inserting ", and", and

   Inserted: (C) by adding at the end the following new subparagraph:

   Inserted: "(F) a stove which uses the burning of biomass fuel to heat a dwelling unit located in the United States and used as a residence by the taxpayer, or to heat water for use in such a dwelling unit, and which has a thermal efficiency rating of at least 75 percent.".

   Inserted: (2) Biomass fuel.--Section 25C(d) is amended by adding at the end the following new paragraph:

   Inserted: "(6) Biomass fuel.--The term 'biomass fuel' means any plant-derived fuel available on a renewable or recurring basis, including agricultural crops and trees, wood and wood waste and residues (including wood pellets), plants (including aquatic plants), grasses, residues, and fibers.".

   Inserted: (c) Coordination With Credit for Qualified Geothermal Heat Pump Property Expenditures.--

   Inserted: (1) In general.--Paragraph (3) of section 25C(d), as amended by subsection (b), is amended by striking subparagraph (C) and by redesignating subparagraphs (D), (E), and (F) as subparagraphs (C), (D), and (E), respectively.

   Inserted: (2) Conforming amendment.--Subparagraph (C) of section 25C(d)(2) is amended to read as follows:

   Inserted: "(C) Requirements and standards for air conditioners and heat pumps.--The standards and requirements prescribed by the Secretary under subparagraph (B) with respect to the energy efficiency ratio (EER) for central air conditioners and electric heat pumps--

   Inserted: "(i) shall require measurements to be based on published data which is tested by manufacturers at 95 degrees Fahrenheit, and

   Inserted: "(ii) may be based on the certified data of the Air Conditioning and Refrigeration Institute that are prepared in partnership with the Consortium for Energy Efficiency.".

   Inserted: (d) Modification of Qualified Energy Efficiency Improvements.--

   Inserted: (1) In general.--Paragraph (1) of section 25C(c) is amended by inserting ", or an asphalt roof with appropriate cooling granules," before "which meet the Energy Star program requirements".

   Inserted: (2) Building envelope component.--Subparagraph (D) of section 25C(c)(2) is amended--

   Inserted: (A) by inserting "or asphalt roof" after "metal roof", and

   Inserted: (B) by inserting "or cooling granules" after "pigmented coatings".

   Inserted: (e) Effective Dates.--

   Inserted: (1) In general.--Except as provided in paragraph (2), the amendments made this section shall apply to expenditures made after December 31, 2007.

   Inserted: (2) Modification of qualified energy efficiency improvements.--The amendments made by subsection (d) shall apply to property placed in service after the date of the enactment of this Act.

   Inserted: SEC. 3143. ENERGY EFFICIENT COMMERCIAL BUILDINGS DEDUCTION.

   Inserted: Subsection (h) of section 179D is amended by striking "December 31, 2008" and inserting "December 31, 2013".

   Inserted: SEC. 3144. MODIFICATIONS OF ENERGY EFFICIENT APPLIANCE CREDIT FOR APPLIANCES PRODUCED AFTER 2007.

   Inserted: (a) In General.--Subsection (b) of section 45M is amended to read as follows:

   Inserted: "(b) Applicable Amount.--For purposes of subsection (a)--

   Inserted: "(1) Dishwashers.--The applicable amount is--

   Inserted: "(A) $45 in the case of a dishwasher which is manufactured in calendar year 2008 or 2009 and which uses no more than 324 kilowatt hours per year and 5.8 gallons per cycle, and

   Inserted: "(B) $75 in the case of a dishwasher which is manufactured in calendar year 2008, 2009, or 2010 and which uses no more than 307 kilowatt hours per year and 5.0 gallons per cycle (5.5 gallons per cycle for dishwashers designed for greater than 12 place settings).

   Inserted: "(2) Clothes washers.--The applicable amount is--

   Inserted: "(A) $75 in the case of a residential top-loading clothes washer manufactured in calendar year 2008 which meets or exceeds a 1.72 modified energy factor and does not exceed a 8.0 water consumption factor,

   Inserted: "(B) $125 in the case of a residential top-loading clothes washer manufactured in calendar year 2008 or 2009 which meets or exceeds a 1.8 modified energy factor and does not exceed a 7.5 water consumption factor,

   Inserted: "(C) $150 in the case of a residential or commercial clothes washer manufactured in calendar year 2008, 2009, or 2010 which meets or exceeds 2.0 modified energy factor and does not exceed a 6.0 water consumption factor, and

   Inserted: "(D) $250 in the case of a residential or commercial clothes washer manufactured in calendar year 2008, 2009, or 2010 which meets or exceeds 2.2 modified energy factor and does not exceed a 4.5 water consumption factor.

   Inserted: "(3) Refrigerators.--The applicable amount is--

   Inserted: "(A) $50 in the case of a refrigerator which is manufactured in calendar year 2008, and consumes at least 20 percent but not more than 22.9 percent less kilowatt hours per year than the 2001 energy conservation standards,

   Inserted: "(B) $75 in the case of a refrigerator which is manufactured in calendar year 2008 or 2009, and consumes at least 23 percent but no more than 24.9 percent less kilowatt hours per year than the 2001 energy conservation standards,

   Inserted: "(C) $100 in the case of a refrigerator which is manufactured in calendar year 2008, 2009, or 2010, and consumes at least 25 percent but not more than 29.9 percent less kilowatt hours per year than the 2001 energy conservation standards, and

   Inserted: "(D) $200 in the case of a refrigerator manufactured in calendar year 2008, 2009, or 2010 and which consumes at least 30 percent less energy than the 2001 energy conservation standards.".

   Inserted: (b) Eligible Production.--

   Inserted: (1) Similar treatment for all appliances.--Subsection (c) of section 45M is amended--

   Inserted: (A) by striking paragraph (2),

   Inserted: (B) by striking "(1) In general" and all that follows through "the eligible" and inserting "The eligible",

   Inserted: (C) by moving the text of such subsection in line with the subsection heading, and

   Inserted: (D) by redesignating subparagraphs (A) and (B) as paragraphs (1) and (2), respectively, and by moving such paragraphs 2 ems to the left.

   Inserted: (2) Modification of base period.--Paragraph (2) of section 45M(c), as amended by paragraph (1), is amended by striking "3-calendar year" and inserting "2-calendar year".

   Inserted: (c) Types of Energy Efficient Appliances.--Subsection (d) of section 45M (defining types of energy efficient appliances) is amended to read as follows:

   Inserted: "(d) Types of Energy Efficient Appliance.--For purposes of this section, the types of energy efficient appliances are--

   Inserted: "(1) dishwashers described in subsection (b)(1),

   Inserted: "(2) clothes washers described in subsection (b)(2), and

   Inserted: "(3) refrigerators described in subsection (b)(3).".

   Inserted: (d) Aggregate Credit Amount Allowed.--

   Inserted: (1) Increase in limit.--Paragraph (1) of section 45M(e) is amended to read as follows:

   Inserted: "(1) Aggregate credit amount allowed.--The aggregate amount of credit allowed under subsection (a) with respect to a taxpayer for any taxable year shall not exceed $75,000,000 reduced by the amount of the credit allowed under subsection (a) to the taxpayer (or any predecessor) for all prior taxable years beginning after December 31, 2007.".

   Inserted: (2) Exception for certain refrigerator and clothes washers.--Paragraph (2) of section 45M(e) is amended to read as follows:

   Inserted: "(2) Amount allowed for certain refrigerators and clothes washers.--Refrigerators described in subsection (b)(3)(D) and clothes washers described in subsection (b)(2)(D) shall not be taken into account under paragraph (1).".

   Inserted: (e) Qualified Energy Efficient Appliances.--

   Inserted: (1) In general.--Paragraph (1) of section 45M(f) (defining qualified energy efficient appliance) is amended to read as follows:

   Inserted: "(1) Qualified energy efficient appliance.--The term 'qualified energy efficient appliance' means--

   Inserted: "(A) any dishwasher described in subsection (b)(1),

   Inserted: "(B) any clothes washer described in subsection (b)(2), and

   Inserted: "(C) any refrigerator described in subsection (b)(3).".

   Inserted: (2) Clothes washer.--Section 45M(f)(3) is amended by inserting "commercial" before "residential" the second place it appears.

   Inserted: (3) Top-loading clothes washer.--Subsection (f) of section 45M is amended by redesignating paragraphs (4), (5), (6), and (7) as paragraphs (5), (6), (7), and (8), respectively, and by inserting after paragraph (3) the following new paragraph:

   Inserted: "(4) Top-loading clothes washer.--The term 'top-loading clothes washer' means a clothes washer which has the clothes container compartment access located on the top of the machine and which operates on a vertical axis.".

   Inserted: (4) Replacement of energy factor.--Section 45M(f)(6), as redesignated by paragraph (3), is amended to read as follows:

   Inserted: "(6) Modified energy factor.--The term 'modified energy factor' means the modified energy factor established by the Department of Energy for compliance with the Federal energy conservation standard.".

   Inserted: (5) Gallons per cycle; water consumption factor.--Section 45M(f), as amended by paragraph (3), is amended by adding at the end the following:

   Inserted: "(9) Gallons per cycle.--The term 'gallons per cycle' means, with respect to a dishwasher, the amount of water, expressed in gallons, required to complete a normal cycle of a dishwasher.

   Inserted: "(10) Water consumption factor.--The term 'water consumption factor' means, with respect to a clothes washer, the quotient of the total weighted per-cycle water consumption divided by the cubic foot (or liter) capacity of the clothes washer.".

   Inserted: (f) Effective Date.--The amendments made by this section shall apply to appliances produced after December 31, 2007.

   Inserted: SEC. 3145. ACCELERATED RECOVERY PERIOD FOR DEPRECIATION OF SMART METERS AND SMART GRID SYSTEMS.

   Inserted: (a) In General.--Section 168(e)(3)(D) is amended by striking "and" at the end of clause (i), by striking the period at the end of clause (ii) and inserting a comma, and by inserting after clause (ii) the following new clauses:

   Inserted: "(iii) any qualified smart electric meter, and

   Inserted: "(iv) any qualified smart electric grid system.".

   Inserted: (b) Definitions.--Section 168(i) is amended by inserting at the end the following new paragraph:

   Inserted: "(18) Qualified smart electric meters.--

   Inserted: "(A) In general.--The term 'qualified smart electric meter' means any smart electric meter which is placed in service by a taxpayer who is a supplier of electric energy or a provider of electric energy services.

   Inserted: "(B) Smart electric meter.--For purposes of subparagraph (A), the term 'smart electric meter' means any time-based meter and related communication equipment which is capable of being used by the taxpayer as part of a system that--

   Inserted: "(i) measures and records electricity usage data on a time-differentiated basis in at least 24 separate time segments per day,

   Inserted: "(ii) provides for the exchange of information between supplier or provider and the customer's electric meter in support of time-based rates or other forms of demand response,

   Inserted: "(iii) provides data to such supplier or provider so that the supplier or provider can provide energy usage information to customers electronically, and

   Inserted: "(iv) provides net metering.

   Inserted: "(19) Qualified smart electric grid systems.--

   Inserted: "(A) In general.--The term 'qualified smart electric grid system' means any smart grid property used as part of a system for electric distribution grid communications, monitoring, and management placed in service by a taxpayer who is a supplier of electric energy or a provider of electric energy services.

   Inserted: "(B) Smart grid property.--For the purposes of subparagraph (A), the term 'smart grid property' means electronics and related equipment that is capable of--

   Inserted: "(i) sensing, collecting, and monitoring data of or from all portions of a utility's electric distribution grid,

   Inserted: "(ii) providing real-time, two-way communications to monitor or manage such grid, and

   Inserted: "(iii) providing real time analysis of and event prediction based upon collected data that can be used to improve electric distribution system reliability, quality, and performance.".

   Inserted: (c) Continued Application of 150 Percent Declining Balance Method.--Paragraph (2) of section 168(b) is amended by striking "or" at the end of subparagraph (B), by redesignating subparagraph (C) as subparagraph (D), and by inserting after subparagraph (B) the following new subparagraph:

   Inserted: "(C) any property (other than property described in paragraph (3)) which is a qualified smart electric meter or qualified smart electric grid system, or".

   Inserted: (d) Effective Date.--The amendments made by this section shall apply to property placed in service after the date of the enactment of this Act.

   Inserted: SEC. 3146. QUALIFIED GREEN BUILDING AND SUSTAINABLE DESIGN PROJECTS.

   Inserted: (a) In General.--Paragraph (8) of section 142(l) is amended by striking "September 30, 2009" and inserting "September 30, 2012".

   Inserted: (b) Treatment of Current Refunding Bonds.--Paragraph (9) of section 142(l) is amended by striking "October 1, 2009" and inserting "October 1, 2012".

   Inserted: (c) Accountability.--The second sentence of section 701(d) of the American Jobs Creation Act of 2004 is amended by striking "issuance," and inserting "issuance of the last issue with respect to such project,".

   Inserted: Subtitle D--Revenue Provisions SEC. 3151. NONQUALIFIED DEFERRED COMPENSATION FROM CERTAIN TAX INDIFFERENT PARTIES.

   Inserted: (a) In General.--Subpart B of part II of subchapter E of chapter 1 is amended by inserting after section 457 the following new section:

   Inserted: "SEC. 457A. NONQUALIFIED DEFERRED COMPENSATION FROM CERTAIN TAX INDIFFERENT PARTIES.

   Inserted: "(a) In General.--Any compensation which is deferred under a nonqualified deferred compensation plan of a nonqualified entity shall be includible in gross income when there is no substantial risk of forfeiture of the rights to such compensation.

   Inserted: "(b) Nonqualified Entity.--For purposes of this section, the term 'nonqualified entity' means--

   Inserted: "(1) any foreign corporation unless substantially all of its income is--

   Inserted: "(A) effectively connected with the conduct of a trade or business in the United States, or

   Inserted: "(B) subject to a comprehensive foreign income tax, and

   Inserted: "(2) any partnership unless substantially all of its income is allocated to persons other than--

   Inserted: "(A) foreign persons with respect to whom such income is not subject to a comprehensive foreign income tax, and

   Inserted: "(B) organizations which are exempt from tax under this title.

   Inserted: "(c) Determinability of Amounts of Compensation.--

   Inserted: "(1) In general.--If the amount of any compensation is not determinable at the time that such compensation is otherwise includible in gross income under subsection (a)--

   Inserted: "(A) such amount shall be so includible in gross income when determinable, and

   Inserted: "(B) the tax imposed under this chapter for the taxable year in which such compensation is includible in gross income shall be increased by the sum of--

   Inserted: "(i) the amount of interest determined under paragraph (2), and

   Inserted: "(ii) an amount equal to 20 percent of the amount of such compensation.

   Inserted: "(2) Interest.--For purposes of paragraph (1)(B)(i), the interest determined under this paragraph for any taxable year is the amount of interest at the underpayment rate under section 6621 plus 1 percentage point on the underpayments that would have occurred had the deferred compensation been includible in gross income for the taxable year in which first deferred or, if later, the first taxable year in which such deferred compensation is not subject to a substantial risk of forfeiture.

   Inserted: "(d) Other Definitions and Special Rules.--For purposes of this section--

   Inserted: "(1) Substantial risk of forfeiture.--

   Inserted: "(A) In general.--The rights of a person to compensation shall be treated as subject to a substantial risk of forfeiture only if such person's rights to such compensation are conditioned upon the future performance of substantial services by any individual.

   Inserted: "(B) Exception for compensation based on gain recognized on an investment asset.--

   Inserted: "(i) In general.--To the extent provided in regulations prescribed by the Secretary, if compensation is determined solely by reference to the amount of gain recognized on the disposition of an investment asset, such compensation shall be treated as subject to a substantial risk of forfeiture until the date of such disposition.

   Inserted: "(ii) Investment asset.--For purposes of clause (i), the term 'investment asset' means any single asset (other than an investment fund or similar entity)--

   Inserted: "(I) acquired directly by an investment fund or similar entity,

   Inserted: "(II) with respect to which such entity does not (nor does any person related to such entity) participate in the active management of such asset (or if such asset is an interest in an entity, in the active management of the activities of such entity), and

   Inserted: "(III) substantially all of any gain on the disposition of which (other than such deferred compensation) is allocated to investors in such entity.

   Inserted: "(iii) Coordination with special rule.--Paragraph (3)(B) shall not apply to any compensation to which clause (i) applies.

   Inserted: "(2) Comprehensive foreign income tax.--The term 'comprehensive foreign income tax' means, with respect to any foreign person, the income tax of a foreign country if--

   Inserted: "(A) such person is eligible for the benefits of a comprehensive income tax treaty between such foreign country and the United States, or

   Inserted: "(B) such person demonstrates to the satisfaction of the Secretary that such foreign country has a comprehensive income tax.

   Inserted: "(3) Nonqualified deferred compensation plan.--

   Inserted: "(A) In general.--The term 'nonqualified deferred compensation plan' has the meaning given such term under section 409A(d), except that such term shall include any plan that provides a right to compensation based on the appreciation in value of a specified number of equity units of the service recipient.

   Inserted: "(B) Exception.--Compensation shall not be treated as deferred for purposes of this section if the service provider receives payment of such compensation not later than 12 months after the end of the taxable year of the service recipient during which the right to the payment of such compensation is no longer subject to a substantial risk of forfeiture.

   Inserted: "(4) Exception for certain compensation with respect to effectively connected income.--In the case a foreign corporation with income which is taxable under section 882, this section shall not apply to compensation which, had such compensation had been paid in cash on the date that such compensation ceased to be subject to a substantial risk of forfeiture, would have been deductible by such foreign corporation against such income.

   Inserted: "(5) Application of rules.--Rules similar to the rules of paragraphs (5) and (6) of section 409A(d) shall apply.

   Inserted: "(e) Regulations.--The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section, including regulations disregarding a substantial risk of forfeiture in cases where necessary to carry out the purposes of this section.".

   Inserted: (b) Conforming Amendment.--Section 26(b)(2), as amended by section 3011, is amended by striking "and" at the end of subparagraph (V), by striking the period at the end of subparagraph (W) and inserting ", and", and by adding at the end the following new subparagraph:

   Inserted: "(X) section 457A(c)(1)(B) (relating to determinability of amounts of compensation).".

   Inserted: (c) Clerical Amendment.--The table of sections of subpart B of part II of subchapter E of chapter 1 is amended by inserting after the item relating to section 457 the following new item:

   Inserted: "Sec. 457A. Nonqualified deferred compensation from certain tax indifferent parties.".

   Inserted: (d) Effective Date.--

   Inserted: (1) In general.--Except as otherwise provided in this subsection, the amendments made by this section shall apply to amounts deferred which are attributable to services performed after December 31, 2008.

   Inserted: (2) Application to existing deferrals.--In the case of any amount deferred to which the amendments made by this section do not apply solely by reason of the fact that the amount is attributable to services performed before January 1, 2009, to the extent such amount is not includible in gross income in a taxable year beginning before 2018, such amounts shall be includible in gross income in the later of--

   Inserted: (A) the last taxable year beginning before 2018, or

   Inserted: (B) the taxable year in which there is no substantial risk of forfeiture of the rights to such compensation (determined in the same manner as determined for purposes of section 457A of the Internal Revenue Code of 1986, as added by this section).

   Inserted: (3) Charitable contributions of existing deferrals permitted.--

   Inserted: (A) In general.--Subsection (b) of section 170 of the Internal Revenue Code of 1986 shall not apply to (and subsections (b) and (d) of such section shall be applied without regard to) so much of the taxpayer's qualified contributions made during the taxpayer's last taxable year beginning before 2018 as does not exceed the taxpayer's qualified inclusion amount. For purposes of subsection (b) of section 170 of such Code, the taxpayer's contribution base for such last taxable year shall be reduced by the amount of the taxpayer's qualified contributions to which such subsection does not apply by reason the preceding sentence.

   Inserted: (B) Qualified contributions.--For purposes of this paragraph, the term "qualified contributions" means the aggregate charitable contributions (as defined in section 170(c) of such Code) paid in cash by the taxpayer to organizations described in section 170(b)(1)(A) of such Code (other than any organization described in section 509(a)(3) of such Code or any fund or account described in section 4966(d)(2) of such Code).

   Inserted: (C) Qualified inclusion amount.--For purposes of this paragraph, the term "qualified inclusion amount" means the amount includible in the taxpayer's gross income for the last taxable year beginning before 2018 by reason of paragraph (2).

   Inserted: (4) Accelerated payments.--No later than 120 days after the date of the enactment of this Act, the Secretary shall issue guidance providing a limited period of time during which a nonqualified deferred compensation arrangement attributable to services performed on or before December 31, 2008, may, without violating the requirements of section 409A(a) of the Internal Revenue Code of 1986, be amended to conform the date of distribution to the date the amounts are required to be included in income.

   Inserted: (5) Certain back-to-back arrangements.--If the taxpayer is also a service recipient and maintains one or more nonqualified deferred compensation arrangements for its service providers under which any amount is attributable to services performed on or before December 31, 2008, the guidance issued under paragraph (4) shall permit such arrangements to be amended to conform the dates of distribution under such arrangement to the date amounts are required to be included in the income of such taxpayer under this subsection.

   Inserted: (6) Accelerated payment not treated as material modification.--Any amendment to a nonqualified deferred compensation arrangement made pursuant to paragraph (4) or (5) shall not be treated as a material modification of the arrangement for purposes of section 409A of the Internal Revenue Code of 1986.

   Original wording

   On page 630, after line 2, insert the following:

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As printed