In the nature of a substitute.

SA 5633. Mr. BAUCUS (for himself, Mr. Grassley, and Mr. Reid)
proposed an amendment to the bill H.R. 6049, to amend the Internal
Revenue Code of 1986 to provide incentives for energy production and
conservation, to extend certain expiring provisions, to provide
individual income tax relief, and for other purposes; as follows:

Strike all after the enacting clause and insert the
following:

SECTION 1. SHORT TITLE, ETC.

(a) Short Title.--This Act may be cited as the ``Energy
Improvement and Extension Act of 2008''.
(b) Reference.--Except as otherwise expressly provided,
whenever in this Act an amendment or repeal is expressed in
terms of an amendment to, or repeal of, a section or other
provision, the reference shall be considered to be made to a
section or other provision of the Internal Revenue Code of
1986.
(c) Table of Contents.--The table of contents for this Act
is as follows:

Sec. 1. Short title, etc.

TITLE I--ENERGY PRODUCTION INCENTIVES

Subtitle A--Renewable Energy Incentives

Sec. 101. Renewable energy credit.
Sec. 102. Production credit for electricity produced from marine
renewables.
Sec. 103. Energy credit.
Sec. 104. Energy credit for small wind property.

[[Page S9286]]

Sec. 105. Energy credit for geothermal heat pump systems.
Sec. 106. Credit for residential energy efficient property.
Sec. 107. New clean renewable energy bonds.
Sec. 108. Credit for steel industry fuel.
Sec. 109. Special rule to implement FERC and State electric
restructuring policy.

Subtitle B--Carbon Mitigation and Coal Provisions

Sec. 111. Expansion and modification of advanced coal project
investment credit.
Sec. 112. Expansion and modification of coal gasification investment
credit.
Sec. 113. Temporary increase in coal excise tax; funding of Black Lung
Disability Trust Fund.
Sec. 114. Special rules for refund of the coal excise tax to certain
coal producers and exporters.
Sec. 115. Tax credit for carbon dioxide sequestration.
Sec. 116. Certain income and gains relating to industrial source carbon
dioxide treated as qualifying income for publicly traded
partnerships.
Sec. 117. Carbon audit of the tax code.

TITLE II--TRANSPORTATION AND DOMESTIC FUEL SECURITY PROVISIONS

Sec. 201. Inclusion of cellulosic biofuel in bonus depreciation for
biomass ethanol plant property.
Sec. 202. Credits for biodiesel and renewable diesel.
Sec. 203. Clarification that credits for fuel are designed to provide
an incentive for United States production.
Sec. 204. Extension and modification of alternative fuel credit.
Sec. 205. Credit for new qualified plug-in electric drive motor
vehicles.
Sec. 206. Exclusion from heavy truck tax for idling reduction units and
advanced insulation.
Sec. 207. Alternative fuel vehicle refueling property credit.
Sec. 208. Certain income and gains relating to alcohol fuels and
mixtures, biodiesel fuels and mixtures, and alternative
fuels and mixtures treated as qualifying income for
publicly traded partnerships.
Sec. 209. Extension and modification of election to expense certain
refineries.
Sec. 210. Extension of suspension of taxable income limit on percentage
depletion for oil and natural gas produced from marginal
properties.
Sec. 211. Transportation fringe benefit to bicycle commuters.

TITLE III--ENERGY CONSERVATION AND EFFICIENCY PROVISIONS

Sec. 301. Qualified energy conservation bonds.
Sec. 302. Credit for nonbusiness energy property.
Sec. 303. Energy efficient commercial buildings deduction.
Sec. 304. New energy efficient home credit.
Sec. 305. Modifications of energy efficient appliance credit for
appliances produced after 2007.
Sec. 306. Accelerated recovery period for depreciation of smart meters
and smart grid systems.
Sec. 307. Qualified green building and sustainable design projects.
Sec. 308. Special depreciation allowance for certain reuse and
recycling property.

TITLE IV--REVENUE PROVISIONS

Sec. 401. Limitation of deduction for income attributable to domestic
production of oil, gas, or primary products thereof.
Sec. 402. Elimination of the different treatment of foreign oil and gas
extraction income and foreign oil related income for
purposes of the foreign tax credit.
Sec. 403. Broker reporting of customer's basis in securities
transactions.
Sec. 404. 0.2 percent FUTA surtax.
Sec. 405. Increase and extension of Oil Spill Liability Trust Fund tax.

TITLE I--ENERGY PRODUCTION INCENTIVES

Subtitle A--Renewable Energy Incentives

SEC. 101. RENEWABLE ENERGY CREDIT.

(a) Extension of Credit.--
(1) 1-year extension for wind and refined coal
facilities.--Paragraphs (1) and (8) of section 45(d) are each
amended by striking ``January 1, 2009'' and inserting
``January 1, 2010''.
(2) 2-year extension for certain other facilities.--Each of
the following provisions of section 45(d) is amended by
striking ``January 1, 2009'' and inserting ``January 1,
2011'':
(A) Clauses (i) and (ii) of paragraph (2)(A).
(B) Clauses (i)(I) and (ii) of paragraph (3)(A).
(C) Paragraph (4).
(D) Paragraph (5).
(E) Paragraph (6).
(F) Paragraph (7).
(G) Subparagraphs (A) and (B) of paragraph (9).
(b) Modification of Refined Coal as a Qualified Energy
Resource.--
(1) Elimination of increased market value test.--Section
45(c)(7)(A)(i) (defining refined coal), as amended by section
108, is amended--
(A) by striking subclause (IV),
(B) by adding ``and'' at the end of subclause (II), and
(C) by striking ``, and'' at the end of subclause (III) and
inserting a period.
(2) Increase in required emission reduction.--Section
45(c)(7)(B) (defining qualified emission reduction) is
amended by inserting ``at least 40 percent of the emissions
of'' after ``nitrogen oxide and''.
(c) Trash Facility Clarification.--Paragraph (7) of section
45(d) is amended--
(1) by striking ``facility which burns'' and inserting
``facility (other than a facility described in paragraph (6))
which uses'', and
(2) by striking ``combustion''.
(d) Expansion of Biomass Facilities.--
(1) Open-loop biomass facilities.--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:
``(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.''.
(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:
``(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.''.
(e) Modification of Rules for Hydropower Production.--
Subparagraph (C) of section 45(c)(8) is amended to read as
follows:
``(C) Nonhydroelectric dam.--For purposes of subparagraph
(A), a facility is described in this subparagraph if--
``(i) the hydroelectric project installed on the
nonhydroelectric dam is licensed by the Federal Energy
Regulatory Commission and meets all other applicable
environmental, licensing, and regulatory requirements,
``(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
``(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.
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.''.
(f) Effective Date.--
(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.
(2) Refined coal.--The amendments made by subsection (b)
shall apply to coal produced and sold from facilities placed
in service after December 31, 2008.
(3) Trash facility clarification.--The amendments made by
subsection (c) shall apply to electricity produced and sold
after the date of the enactment of this Act.
(4) Expansion of biomass facilities.--The amendments made
by subsection (d) shall apply to property placed in service
after the date of the enactment of this Act.

SEC. 102. PRODUCTION CREDIT FOR ELECTRICITY PRODUCED FROM
MARINE RENEWABLES.

(a) In General.--Paragraph (1) of section 45(c) is amended
by striking ``and'' at the end of subparagraph (G), by
striking the period at the end of subparagraph (H) and
inserting ``, and'', and by adding at the end the following
new subparagraph:
``(I) marine and hydrokinetic renewable energy.''.
(b) Marine Renewables.--Subsection (c) of section 45 is
amended by adding at the end the following new paragraph:
``(10) Marine and hydrokinetic renewable energy.--
``(A) In general.--The term `marine and hydrokinetic
renewable energy' means energy derived from--
``(i) waves, tides, and currents in oceans, estuaries, and
tidal areas,
``(ii) free flowing water in rivers, lakes, and streams,
``(iii) free flowing water in an 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
``(iv) differentials in ocean temperature (ocean thermal
energy conversion).
``(B) Exceptions.--Such term shall not include any energy
which is derived from any source which utilizes a dam,
diversionary

[[Page S9287]]

structure (except as provided in subparagraph (A)(iii)), or
impoundment for electric power production purposes.''.
(c) Definition of Facility.--Subsection (d) of section 45
is amended by adding at the end the following new paragraph:
``(11) Marine and hydrokinetic renewable energy
facilities.--In the case of a facility producing electricity
from marine and hydrokinetic renewable energy, the term
`qualified facility' means any facility owned by the
taxpayer--
``(A) which has a nameplate capacity rating of at least 150
kilowatts, and
``(B) which is originally placed in service on or after the
date of the enactment of this paragraph and before January 1,
2012.''.
(d) Credit Rate.--Subparagraph (A) of section 45(b)(4) is
amended by striking ``or (9)'' and inserting ``(9), or
(11)''.
(e) Coordination With Small Irrigation Power.--Paragraph
(5) of section 45(d), as amended by section 101, is amended
by striking ``January 1, 2012'' and inserting ``the date of
the enactment of paragraph (11)''.
(f) Effective Date.--The amendments made by this section
shall apply to electricity produced and sold after the date
of the enactment of this Act, in taxable years ending after
such date.

SEC. 103. ENERGY CREDIT.

(a) Extension of Credit.--
(1) Solar energy property.--Paragraphs (2)(A)(i)(II) and
(3)(A)(ii) of section 48(a) are each amended by striking
``January 1, 2009'' and inserting ``January 1, 2017''.
(2) Fuel cell property.--Subparagraph (E) of section
48(c)(1) is amended by striking ``December 31, 2008'' and
inserting ``December 31, 2016''.
(3) Microturbine property.--Subparagraph (E) of section
48(c)(2) is amended by striking ``December 31, 2008'' and
inserting ``December 31, 2016''.
(b) Allowance of Energy Credit Against Alternative Minimum
Tax.--
(1) In general.--Subparagraph (B) of section 38(c)(4), as
amended by the Housing Assistance Tax Act of 2008, is amended
by redesignating clause (vi) as clause (vi) and (vii),
respectively, and by inserting after clause (iv) the
following new clause:
``(v) the credit determined under section 46 to the extent
that such credit is attributable to the energy credit
determined under section 48,''.
(2) Technical amendment.--Clause (vi) of section
38(c)(4)(B), as redesignated by paragraph (1), is amended by
striking ``section 47 to the extent attributable to'' and
inserting ``section 46 to the extent that such credit is
attributable to the rehabilitation credit under section 47,
but only with respect to''.
(c) Energy Credit for Combined Heat and Power System
Property.--
(1) In general.--Section 48(a)(3)(A) is 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:
``(v) combined heat and power system property,''.
(2) Combined heat and power system property.--Subsection
(c) of section 48 is amended--
(A) by striking ``Qualified Fuel Cell Property; Qualified
Microturbine Property'' in the heading and inserting
``Definitions'', and
(B) by adding at the end the following new paragraph:
``(3) Combined heat and power system property.--
``(A) Combined heat and power system property.--The term
`combined heat and power system property' means property
comprising a system--
``(i) which uses the same energy source for the
simultaneous or sequential 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),
``(ii) which produces--

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

``(iii) the energy efficiency percentage of which exceeds
60 percent, and
``(iv) which is placed in service before January 1, 2017.
``(B) Limitation.--
``(i) 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.
``(ii) Applicable capacity.--For purposes of clause (i),
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.
``(iii) 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.
``(C) Special rules.--
``(i) Energy efficiency percentage.--For purposes of this
paragraph, the energy efficiency percentage of a system is
the fraction--

``(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
``(II) the denominator of which is the lower heating value
of the fuel sources for the system.

``(ii) Determinations made on btu basis.--The energy
efficiency percentage and the percentages under subparagraph
(A)(ii) shall be determined on a Btu basis.
``(iii) 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.
``(D) 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--
``(i) subparagraph (A)(iii) shall not apply, but
``(ii) 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 subparagraph) as the energy efficiency
percentage of such system bears to 60 percent.''.
(3) Conforming amendment.--Section 48(a)(1) is amended by
striking ``paragraphs (1)(B) and (2)(B)'' and inserting
``paragraphs (1)(B), (2)(B), and (3)(B)''.
(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''.
(e) Public Utility Property Taken Into Account.--
(1) In general.--Paragraph (3) of section 48(a) is amended
by striking the second sentence thereof.
(2) Conforming amendments.--
(A) Paragraph (1) of section 48(c) is amended by striking
subparagraph (D) and redesignating subparagraph (E) as
subparagraph (D).
(B) Paragraph (2) of section 48(c) is amended by striking
subparagraph (D) and redesignating subparagraph (E) as
subparagraph (D).
(f) Effective Date.--
(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.
(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.
(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).
(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).

SEC. 104. ENERGY CREDIT FOR SMALL WIND PROPERTY.

(a) In General.--Section 48(a)(3)(A), as amended by section
103, is amended by striking ``or'' at the end of clause (iv),
by adding ``or'' at the end of clause (v), and by inserting
after clause (v) the following new clause:
``(vi) qualified small wind energy property,''.
(b) 30 Percent Credit.--Section 48(a)(2)(A)(i) is amended
by striking ``and'' at the end of subclause (II) and by
inserting after subclause (III) the following new subclause:

``(IV) qualified small wind energy property, and''.

(c) Qualified Small Wind Energy Property.--Section 48(c),
as amended by section 103, is amended by adding at the end
the following new paragraph:
``(4) Qualified small wind energy property.--
``(A) In general.--The term `qualified small wind energy
property' means property which uses a qualifying small wind
turbine to generate electricity.
``(B) Limitation.--In the case of qualified small wind
energy property placed in service during the taxable year,
the credit otherwise determined under subsection (a)(1) for
such year with respect to all such property of the taxpayer
shall not exceed $4,000.
``(C) Qualifying small wind turbine.--The term `qualifying
small wind turbine' means a wind turbine which has a
nameplate capacity of not more than 100 kilowatts.
``(D) Termination.--The term `qualified small wind energy
property' shall not include any property for any period after
December 31, 2016.''.
(d) Conforming Amendment.--Section 48(a)(1), as amended by
section 103, is amended by striking ``paragraphs (1)(B),
(2)(B), and

[[Page S9288]]

(3)(B)'' and inserting ``paragraphs (1)(B), (2)(B), (3)(B),
and (4)(B)''.
(e) Effective Date.--The amendments made by this section
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).

SEC. 105. ENERGY CREDIT FOR GEOTHERMAL HEAT PUMP SYSTEMS.

(a) In General.--Subparagraph (A) of section 48(a)(3), as
amended by this Act, is amended by striking ``or'' at the end
of clause (v), by inserting ``or'' at the end of clause (vi),
and by adding at the end the following new clause:
``(vii) equipment which uses the ground or ground water as
a thermal energy source to heat a structure or as a thermal
energy sink to cool a structure, but only with respect to
periods ending before January 1, 2017,''.
(b) Effective Date.--The amendments made by this section
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).

SEC. 106. CREDIT FOR RESIDENTIAL ENERGY EFFICIENT PROPERTY.

(a) Extension.--Section 25D(g) is amended by striking
``December 31, 2008'' and inserting ``December 31, 2016''.
(b) Removal of Limitation for Solar Electric Property.--
(1) In general.--Section 25D(b)(1), as amended by
subsections (c) and (d), is amended--
(A) by striking subparagraph (A), and
(B) by redesignating subparagraphs (B) through (E) as
subparagraphs (A) through and (D), respectively.
(2) Conforming amendment.--Section 25D(e)(4)(A), as amended
by subsections (c) and (d), is amended--
(A) by striking clause (i), and
(B) by redesignating clauses (ii) through (v) as clauses
(i) and (iv), respectively.
(c) Credit for Residential Wind Property.--
(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:
``(4) 30 percent of the qualified small wind energy
property expenditures made by the taxpayer during such
year.''.
(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:
``(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.''.
(3) Qualified small wind energy property expenditures.--
(A) In general.--Section 25D(d) is amended by adding at the
end the following new paragraph:
``(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.''.
(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.''.
(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:
``(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.''.
(d) Credit for Geothermal Heat pump Systems.--
(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:
``(5) 30 percent of the qualified geothermal heat pump
property expenditures made by the taxpayer during such
year.''.
(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:
``(E) $2,000 with respect to any qualified geothermal heat
pump property expenditures.''.
(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:
``(5) Qualified geothermal heat pump property
expenditure.--
``(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.
``(B) Qualified geothermal heat pump property.--The term
`qualified geothermal heat pump property' means any equipment
which--
``(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
``(ii) meets the requirements of the Energy Star program
which are in effect at the time that the expenditure for such
equipment is made.''.
(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:
``(v) $6,667 in the case of any qualified geothermal heat
pump property expenditures.''.
(e) Credit Allowed Against Alternative Minimum Tax.--
(1) In general.--Subsection (c) of section 25D is amended
to read as follows:
``(c) Limitation Based on Amount of Tax; Carryforward of
Unused Credit.--
``(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--
``(A) the sum of the regular tax liability (as defined in
section 26(b)) plus the tax imposed by section 55, over
``(B) the sum of the credits allowable under this subpart
(other than this section) and section 27 for the taxable
year.
``(2) Carryforward of unused credit.--
``(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.
``(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.''.
(2) Conforming amendments.--
(A) Section 23(b)(4)(B) is amended by inserting ``and
section 25D'' after ``this section''.
(B) Section 24(b)(3)(B) is amended by striking ``and 25B''
and inserting ``, 25B, and 25D''.
(C) Section 25B(g)(2) is amended by striking ``section 23''
and inserting ``sections 23 and 25D''.
(D) Section 26(a)(1) is amended by striking ``and 25B'' and
inserting ``25B, and 25D''.
(f) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to taxable years
beginning after December 31, 2007.
(2) Solar electric property limitation.--The amendments
made by subsection (b) shall apply to taxable years beginning
after December 31, 2008.
(3) 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.

SEC. 107. NEW CLEAN RENEWABLE ENERGY BONDS.

(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:

``SEC. 54C. NEW CLEAN RENEWABLE ENERGY BONDS.

``(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--
``(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,
``(2) the bond is issued by a qualified issuer, and
``(3) the issuer designates such bond for purposes of this
section.
``(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.
``(c) Limitation on Amount of Bonds Designated.--
``(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.

[[Page S9289]]

``(2) National limitation on amount of bonds designated.--
There is a national new clean renewable energy bond
limitation of $800,000,000 which shall be allocated by the
Secretary as provided in paragraph (3), except that--
``(A) not more than 33\1/3\ percent thereof may be
allocated to qualified projects of public power providers,
``(B) not more than 33\1/3\ percent thereof may be
allocated to qualified projects of governmental bodies, and
``(C) not more than 33\1/3\ percent thereof may be
allocated to qualified projects of cooperative electric
companies.
``(3) Method of allocation.--
``(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.
``(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.
``(d) Definitions.--For purposes of this section--
``(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.
``(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).
``(3) Governmental body.--The term `governmental body'
means any State or Indian tribal government, or any political
subdivision thereof.
``(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).
``(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.
``(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.''.
(b) Conforming Amendments.--
(1) Paragraph (1) of section 54A(d) is amended to read as
follows:
``(1) Qualified tax credit bond.--The term `qualified tax
credit bond' means--
``(A) a qualified forestry conservation bond, or
``(B) a new clean renewable energy bond,
which is part of an issue that meets requirements of
paragraphs (2), (3), (4), (5), and (6).''.
(2) Subparagraph (C) of section 54A(d)(2) is amended to
read as follows:
``(C) Qualified purpose.--For purposes of this paragraph,
the term `qualified purpose' means--
``(i) in the case of a qualified forestry conservation
bond, a purpose specified in section 54B(e), and
``(ii) in the case of a new clean renewable energy bond, a
purpose specified in section 54C(a)(1).''.
(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:

``Sec. 54C. Qualified clean renewable energy bonds.''.
(c) Extension for Clean Renewable Energy Bonds.--Subsection
(m) of section 54 is amended by striking ``December 31,
2008'' and inserting ``December 31, 2009''.
(d) Effective Date.--The amendments made by this section
shall apply to obligations issued after the date of the
enactment of this Act.

SEC. 108. CREDIT FOR STEEL INDUSTRY FUEL.

(a) Treatment as Refined Coal.--
(1) In general.--Subparagraph (A) of section 45(c)(7) of
the Internal Revenue Code of 1986 (relating to refined coal),
as amended by this Act, is amended to read as follows:
``(A) In general.--The term `refined coal' means a fuel--
``(i) which--

``(I) is a liquid, gaseous, or solid fuel produced from
coal (including lignite) or high carbon fly ash, including
such fuel used as a feedstock,
``(II) is sold by the taxpayer with the reasonable
expectation that it will be used for purpose of producing
steam,
``(III) is certified by the taxpayer as resulting (when
used in the production of steam) in a qualified emission
reduction, and
``(IV) is produced in such a manner as to result in an
increase of at least 50 percent in the market value of the
refined coal (excluding any increase caused by materials
combined or added during the production process), as compared
to the value of the feedstock coal, or

``(ii) which is steel industry fuel.''.
(2) Steel industry fuel defined.--Paragraph (7) of section
45(c) of such Code is amended by adding at the end the
following new subparagraph:
``(C) Steel industry fuel.--
``(i) In general.--The term `steel industry fuel' means a
fuel which--

``(I) is produced through a process of liquifying coal
waste sludge and distributing it on coal, and
``(II) is used as a feedstock for the manufacture of coke.

``(ii) Coal waste sludge.--The term `coal waste sludge'
means the tar decanter sludge and related byproducts of the
coking process, including such materials that have been
stored in ground, in tanks and in lagoons, that have been
treated as hazardous wastes under applicable Federal
environmental rules absent liquefaction and processing with
coal into a feedstock for the manufacture of coke.''.
(b) Credit Amount.--
(1) In general.--Paragraph (8) of section 45(e) of the
Internal Revenue Code of 1986 (relating to refined coal
production facilities) is amended by adding at the end the
following new subparagraph
``(D) Special rule for steel industry fuel.--
``(i) In general.--In the case of a taxpayer who produces
steel industry fuel--

``(I) this paragraph shall be applied separately with
respect to steel industry fuel and other refined coal, and
``(II) in applying this paragraph to steel industry fuel,
the modifications in clause (ii) shall apply.

``(ii) Modifications.--

``(I) Credit amount.--Subparagraph (A) shall be applied by
substituting `$2 per barrel-of-oil equivalent' for `$4.375
per ton'.
``(II) Credit period.--In lieu of the 10-year period
referred to in clauses (i) and (ii)(II) of subparagraph (A),
the credit period shall be the period beginning on the later
of the date such facility was originally placed in service,
the date the modifications described in clause (iii) were
placed in service, or October 1, 2008, and ending on the
later of December 31, 2009, or the date which is 1 year after
the date such facility or the modifications described in
clause (iii) were placed in service.
``(III) No phaseout.--Subparagraph (B) shall not apply.

``(iii) Modifications.--The modifications described in this
clause are modifications to an existing facility which allow
such facility to produce steel industry fuel.
``(iv) Barrel-of-oil equivalent.--For purposes of this
subparagraph, a barrel-of-oil equivalent is the amount of
steel industry fuel that has a Btu content of 5,800,000
Btus.''.
(2) Inflation adjustment.--Paragraph (2) of section 45(b)
of such Code is amended by inserting ``the $3 amount in
subsection (e)(8)(D)(ii)(I),'' after ``subsection
(e)(8)(A),''.
(c) Termination.--Paragraph (8) of section 45(d) of the
Internal Revenue Code of 1986 (relating to refined coal
production facility), as amended by this Act, is amended to
read as follows:
``(8) Refined coal production facility.--In the case of a
facility that produces refined coal, the term `refined coal
production facility' means--
``(A) with respect to a facility producing steel industry
fuel, any facility (or any modification to a facility) which
is placed in service before January 1, 2010, and
``(B) with respect to any other facility producing refined
coal, any facility placed in service after the date of the
enactment of the American Jobs Creation Act of 2004 and
before January 1, 2010.''.
(d) Coordination With Credit for Producing Fuel From a
Nonconventional Source.--
(1) In general.--Subparagraph (B) of section 45(e)(9) of
the Internal Revenue Code of 1986 is amended--
(A) by striking ``The term'' and inserting the following:
``(i) In general.--The term'', and
(B) by adding at the end the following new clause:
``(ii) Exception for steel industry coal.--In the case of a
facility producing steel industry fuel, clause (i) shall not
apply to so much of the refined coal produced at such
facility as is steel industry fuel.''.
(2) No double benefit.--Section 45K(g)(2) of such Code is
amended by adding at the end the following new subparagraph:
``(E) Coordination with section 45.--No credit shall be
allowed with respect to any qualified fuel which is steel
industry fuel (as defined in section 45(c)(7)) if a credit is
allowed to the taxpayer for such fuel under section 45.''.
(e) Effective Date.--The amendments made by this section
shall apply to fuel produced and sold after September 30,
2008.

SEC. 109. SPECIAL RULE TO IMPLEMENT FERC AND STATE ELECTRIC
RESTRUCTURING POLICY.

(a) Extension for Qualified Electric Utilities.--

[[Page S9290]]

(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''.
(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:
``(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--
``(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
``(B) an electric utility (as defined in section 3(22) of
the Federal Power Act (16 U.S.C. 796(22))).''.
(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''.
(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:
``(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.''.
(d) Effective Dates.--
(1) Extension.--The amendments made by subsection (a) shall
apply to transactions after December 31, 2007.
(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.
(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.

Subtitle B--Carbon Mitigation and Coal Provisions

SEC. 111. EXPANSION AND MODIFICATION OF ADVANCED COAL PROJECT
INVESTMENT CREDIT.

(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:
``(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).''.
(b) Expansion of Aggregate Credits.--Section 48A(d)(3)(A)
is amended by striking ``$1,300,000,000'' and inserting
``$2,550,000,000''.
(c) Authorization of Additional Projects.--
(1) In general.--Subparagraph (B) of section 48A(d)(3) is
amended to read as follows:
``(B) Particular projects.--Of the dollar amount in
subparagraph (A), the Secretary is authorized to certify--
``(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),
``(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
``(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).''.
(2) Application period for additional projects.--
Subparagraph (A) of section 48A(d)(2) is amended to read as
follows:
``(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--
``(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
``(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.''.
(3) Capture and sequestration of carbon dioxide emissions
requirement.--
(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:
``(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.''.
(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:
``(C) give highest priority to projects with the greatest
separation and sequestration percentage of total carbon
dioxide emissions.''.
(C) Recapture of credit for failure to sequester.--Section
48A is amended by adding at the end the following new
subsection:
``(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).''.
(4) Additional priority for research partnerships.--Section
48A(e)(3)(B), as amended by paragraph (3)(B), is amended--
(A) by striking ``and'' at the end of clause (ii),
(B) by redesignating clause (iii) as clause (iv), and
(C) by inserting after clause (ii) the following new
clause:
``(iii) applicant participants who have a research
partnership with an eligible educational institution (as
defined in section 529(e)(5)), and''.
(5) Clerical amendment.--Section 48A(e)(3) is amended by
striking ``integrated gasification combined cycle'' in the
heading and inserting ``certain''.
(d) Disclosure of Allocations.--Section 48A(d) is amended
by adding at the end the following new paragraph:
``(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.''.
(e) Effective Dates.--
(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.
(2) Disclosure of allocations.--The amendment made by
subsection (d) shall apply to certifications made after the
date of the enactment of this Act.
(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.

SEC. 112. EXPANSION AND MODIFICATION OF COAL GASIFICATION
INVESTMENT CREDIT.

(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''.
(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--
``(A) $350,000,000, plus
``(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.''.
(c) Recapture of Credit for Failure to Sequester.--Section
48B is amended by adding at the end the following new
subsection:
``(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).''.
(d) Selection Priorities.--Section 48B(d) is amended by
adding at the end the following new paragraph:
``(4) Selection priorities.--In determining which
qualifying gasification projects to certify under this
section, the Secretary shall--
``(A) give highest priority to projects with the greatest
separation and sequestration percentage of total carbon
dioxide emissions, and
``(B) give high priority to applicant participants who have
a research partnership with an eligible educational
institution (as defined in section 529(e)(5)).''.
(e) Eligible Projects Include Transportation Grade Liquid
Fuels.--Section 48B(c)(7) (defining eligible entity) is
amended by striking ``and'' at the end of subparagraph (F),
by striking the period at the end of subparagraph (G) and
inserting ``, and'', and by adding at the end the following
new subparagraph:
``(H) transportation grade liquid fuels.''.
(f) 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.

SEC. 113. TEMPORARY INCREASE IN COAL EXCISE TAX; FUNDING OF
BLACK LUNG DISABILITY TRUST FUND.

(a) Extension of Temporary Increase.--Paragraph (2) of
section 4121(e) is amended--
(1) by striking ``January 1, 2014'' in subparagraph (A) and
inserting ``December 31, 2018'', and
(2) by striking ``January 1 after 1981'' in subparagraph
(B) and inserting ``December 31 after 2007''.
(b) Restructuring of Trust Fund Debt.--
(1) Definitions.--For purposes of this subsection--

[[Page S9291]]

(A) Market value of the outstanding repayable advances,
plus accrued interest.--The term ``market value of the
outstanding repayable advances, plus accrued interest'' means
the present value (determined by the Secretary of the
Treasury as of the refinancing date and using the Treasury
rate as the discount rate) of the stream of principal and
interest payments derived assuming that each repayable
advance that is outstanding on the refinancing date is due on
the 30th anniversary of the end of the fiscal year in which
the advance was made to the Trust Fund, and that all such
principal and interest payments are made on September 30 of
the applicable fiscal year.
(B) Refinancing date.--The term ``refinancing date'' means
the date occurring 2 days after the enactment of this Act.
(C) Repayable advance.--The term ``repayable advance''
means an amount that has been appropriated to the Trust Fund
in order to make benefit payments and other expenditures that
are authorized under section 9501 of the Internal Revenue
Code of 1986 and are required to be repaid when the Secretary
of the Treasury determines that monies are available in the
Trust Fund for such purpose.
(D) Treasury rate.--The term ``Treasury rate'' means a rate
determined by the Secretary of the Treasury, taking into
consideration current market yields on outstanding marketable
obligations of the United States of comparable maturities.
(E) Treasury 1-year rate.--The term ``Treasury 1-year
rate'' means a rate determined by the Secretary of the
Treasury, taking into consideration current market yields on
outstanding marketable obligations of the United States with
remaining periods to maturity of approximately 1 year, to
have been in effect as of the close of business 1 business
day prior to the date on which the Trust Fund issues
obligations to the Secretary of the Treasury under paragraph
(2)(B).
(2) Refinancing of outstanding principal of repayable
advances and unpaid interest on such advances.--
(A) Transfer to general fund.--On the refinancing date, the
Trust Fund shall repay the market value of the outstanding
repayable advances, plus accrued interest, by transferring
into the general fund of the Treasury the following sums:
(i) The proceeds from obligations that the Trust Fund shall
issue to the Secretary of the Treasury in such amounts as the
Secretaries of Labor and the Treasury shall determine and
bearing interest at the Treasury rate, and that shall be in
such forms and denominations and be subject to such other
terms and conditions, including maturity, as the Secretary of
the Treasury shall prescribe.
(ii) All, or that portion, of the appropriation made to the
Trust Fund pursuant to paragraph (3) that is needed to cover
the difference defined in that paragraph.
(B) Repayment of obligations.--In the event that the Trust
Fund is unable to repay the obligations that it has issued to
the Secretary of the Treasury under subparagraph (A)(i) and
this subparagraph, or is unable to make benefit payments and
other authorized expenditures, the Trust Fund shall issue
obligations to the Secretary of the Treasury in such amounts
as may be necessary to make such repayments, payments, and
expenditures, with a maturity of 1 year, and bearing interest
at the Treasury 1-year rate. These obligations shall be in
such forms and denominations and be subject to such other
terms and conditions as the Secretary of the Treasury shall
prescribe.
(C) Authority to issue obligations.--The Trust Fund is
authorized to issue obligations to the Secretary of the
Treasury under subparagraphs (A)(i) and (B). The Secretary of
the Treasury is authorized to purchase such obligations of
the Trust Fund. For the purposes of making such purchases,
the Secretary of the Treasury may use as a public debt
transaction the proceeds from the sale of any securities
issued under chapter 31 of title 31, United States Code, and
the purposes for which securities may be issued under such
chapter are extended to include any purchase of such Trust
Fund obligations under this subparagraph.
(3) One-time appropriation.--There is hereby appropriated
to the Trust Fund an amount sufficient to pay to the general
fund of the Treasury the difference between--
(A) the market value of the outstanding repayable advances,
plus accrued interest; and
(B) the proceeds from the obligations issued by the Trust
Fund to the Secretary of the Treasury under paragraph
(2)(A)(i).
(4) Prepayment of trust fund obligations.--The Trust Fund
is authorized to repay any obligation issued to the Secretary
of the Treasury under subparagraphs (A)(i) and (B) of
paragraph (2) prior to its maturity date by paying a
prepayment price that would, if the obligation being prepaid
(including all unpaid interest accrued thereon through the
date of prepayment) were purchased by a third party and held
to the maturity date of such obligation, produce a yield to
the third-party purchaser for the period from the date of
purchase to the maturity date of such obligation
substantially equal to the Treasury yield on outstanding
marketable obligations of the United States having a
comparable maturity to this period.

SEC. 114. SPECIAL RULES FOR REFUND OF THE COAL EXCISE TAX TO
CERTAIN COAL PRODUCERS AND EXPORTERS.

(a) Refund.--
(1) Coal producers.--
(A) In general.--Notwithstanding subsections (a)(1) and (c)
of section 6416 and section 6511 of the Internal Revenue Code
of 1986, if--
(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),
(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
(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.
(B) Special rules for certain taxpayers.--For purposes of
this section--
(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).
(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).
(iii) Judgment described.--A judgment is described in this
subparagraph if such judgment--

(I) is made by a court of competent jurisdiction within the
United States,
(II) relates to the constitutionality of any tax paid on
exported coal under section 4121 of the Internal Revenue Code
of 1986, and
(III) is in favor of the coal producer or the party related
to the coal producer.

(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--
(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,
(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
(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.
(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.
(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.
(d) Definitions.--For purposes of this section--
(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.
(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--
(A) is indicated in the shipper's export declaration or
other documentation as the exporter of record, or
(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.
(3) Related party.--The term ``a party related to such coal
producer'' means a person who--
(A) is related to such coal producer through any degree of
common management, stock ownership, or voting control,

[[Page S9292]]

(B) is related (within the meaning of section 144(a)(3) of
the Internal Revenue Code of 1986) to such coal producer, or
(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.
(4) Secretary.--The term ``Secretary'' means the Secretary
of Treasury or the Secretary's designee.
(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.
(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.
(g) Denial of Double Benefit.--The payment under subsection
(a) with respect to any coal shall not exceed--
(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
(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.
(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.
(i) Standing Not Conferred.--
(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.
(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.

SEC. 115. TAX CREDIT FOR CARBON DIOXIDE SEQUESTRATION.

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

``SEC. 45Q. CREDIT FOR CARBON DIOXIDE SEQUESTRATION.

``(a) General Rule.--For purposes of section 38, the carbon
dioxide sequestration credit for any taxable year is an
amount equal to the sum of--
``(1) $20 per metric ton of qualified carbon dioxide which
is--
``(A) captured by the taxpayer at a qualified facility, and
``(B) disposed of by the taxpayer in secure geological
storage, and
``(2) $10 per metric ton of qualified carbon dioxide which
is--
``(A) captured by the taxpayer at a qualified facility, and
``(B) used by the taxpayer as a tertiary injectant in a
qualified enhanced oil or natural gas recovery project.
``(b) Qualified Carbon Dioxide.--For purposes of this
section--
``(1) In general.--The term `qualified carbon dioxide'
means carbon dioxide captured from an industrial source
which--
``(A) would otherwise be released into the atmosphere as
industrial emission of greenhouse gas, and
``(B) is measured at the source of capture and verified at
the point of disposal or injection.
``(2) Recycled carbon dioxide.--The term `qualified carbon
dioxide' includes the initial deposit of captured carbon
dioxide used as a tertiary injectant. Such term does not
include carbon dioxide that is re-captured, recycled, and re-
injected as part of the enhanced oil and natural gas recovery
process.
``(c) Qualified Facility.--For purposes of this section,
the term `qualified facility' means any industrial facility--
``(1) which is owned by the taxpayer,
``(2) at which carbon capture equipment is placed in
service, and
``(3) which captures not less than 500,000 metric tons of
carbon dioxide during the taxable year.
``(d) Special Rules and Other Definitions.--For purposes of
this section--
``(1) Only carbon dioxide captured and disposed of or used
within the united states taken into account.--The credit
under this section shall apply only with respect to qualified
carbon dioxide the capture and disposal or use of which is
within--
``(A) the United States (within the meaning of section
638(1)), or
``(B) a possession of the United States (within the meaning
of section 638(2)).
``(2) Secure geological storage.--The Secretary, in
consultation with the Administrator of the Environmental
Protection Agency, shall establish regulations for
determining adequate security measures for the geological
storage of carbon dioxide under subsection (a)(1)(B) such
that the carbon dioxide does not escape into the atmosphere.
Such term shall include storage at deep saline formations and
unminable coal seems under such conditions as the Secretary
may determine under such regulations.
``(3) Tertiary injectant.--The term `tertiary injectant'
has the same meaning as when used within section 193(b)(1).
``(4) Qualified enhanced oil or natural gas recovery
project.--The term `qualified enhanced oil or natural gas
recovery project' has the meaning given the term `qualified
enhanced oil recovery project' by section 43(c)(2), by
substituting `crude oil or natural gas' for `crude oil' in
subparagraph (A)(i) thereof.
``(5) Credit attributable to taxpayer.--Any credit under
this section shall be attributable to the person that
captures and physically or contractually ensures the disposal
of or the use as a tertiary injectant of the qualified carbon
dioxide, except to the extent provided in regulations
prescribed by the Secretary.
``(6) Recapture.--The Secretary shall, by regulations,
provide for recapturing the benefit of any credit allowable
under subsection (a) with respect to any qualified carbon
dioxide which ceases to be captured, disposed of, or used as
a tertiary injectant in a manner consistent with the
requirements of this section.
``(7) Inflation adjustment.--In the case of any taxable
year beginning in a calendar year after 2009, there shall be
substituted for each dollar amount contained in subsection
(a) an amount equal to the product of--
``(A) such dollar amount, multiplied by
``(B) the inflation adjustment factor for such calendar
year determined under section 43(b)(3)(B) for such calendar
year, determined by substituting `2008' for `1990'.
``(e) Application of Section.--The credit under this
section shall apply with respect to qualified carbon dioxide
before the end of the calendar year in which the Secretary,
in consultation with the Administrator of the Environmental
Protection Agency, certifies that 75,000,000 metric tons of
qualified carbon dioxide have been captured and disposed of
or used as a tertiary injectant.''.
(b) Conforming Amendment.--Section 38(b) (relating to
general business credit) is amended by striking ``plus'' at
the end of paragraph (32), by striking the period at the end
of paragraph (33) and inserting ``, plus'', and by adding at
the end of following new paragraph:
``(34) the carbon dioxide sequestration credit determined
under section 45Q(a).''.
(c) Clerical Amendment.--The table of sections for subpart
B of part IV of subchapter A of chapter 1 (relating to other
credits) is amended by adding at the end the following new
section:

``Sec. 45Q. Credit for carbon dioxide sequestration.''.

(d) Effective Date.--The amendments made by this section
shall apply to carbon dioxide captured after the date of the
enactment of this Act.

SEC. 116. CERTAIN INCOME AND GAINS RELATING TO INDUSTRIAL
SOURCE CARBON DIOXIDE TREATED AS QUALIFYING
INCOME FOR PUBLICLY TRADED PARTNERSHIPS.

(a) In General.--Subparagraph (E) of section 7704(d)(1)
(defining qualifying income) is amended by inserting ``or
industrial source carbon dioxide'' after ``timber)''.
(b) Effective Date.--The amendment made by this section
shall take effect on the date of the enactment of this Act,
in taxable years ending after such date.

SEC. 117. CARBON AUDIT OF THE TAX CODE.

(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.
(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.
(c) Authorization of Appropriations.--There is authorized
to be appropriated to carry out this section $1,500,000 for
the period of fiscal years 2009 and 2010.

TITLE II--TRANSPORTATION AND DOMESTIC FUEL SECURITY PROVISIONS

SEC. 201. INCLUSION OF CELLULOSIC BIOFUEL IN BONUS
DEPRECIATION FOR BIOMASS ETHANOL PLANT
PROPERTY.

(a) In General.--Paragraph (3) of section 168(l) is amended
to read as follows:
``(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.''.
(b) Conforming Amendments.--Subsection (l) of section 168
is amended--
(1) by striking ``cellulosic biomass ethanol'' each place
it appears and inserting ``cellulosic biofuel'',
(2) by striking ``Cellulosic Biomass Ethanol'' in the
heading of such subsection and inserting ``Cellulosic
Biofuel'', and
(3) by striking ``cellulosic biomass ethanol'' in the
heading of paragraph (2) thereof and inserting ``cellulosic
biofuel''.
(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.

[[Page S9293]]

SEC. 202. CREDITS FOR BIODIESEL AND RENEWABLE DIESEL.

(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''.
(b) Increase in Rate of Credit.--
(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''.
(2) Excise tax credit.--Paragraph (2) of section 6426(c) is
amended to read as follows:
``(2) Applicable amount.--For purposes of this subsection,
the applicable amount is $1.00.''.
(3) Conforming amendments.--
(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.
(B) Paragraph (2) of section 40A(f) is amended to read as
follows:
``(2) Exception.--Subsection (b)(4) shall not apply with
respect to renewable diesel.''.
(C) Paragraphs (2) and (3) of section 40A(e) are each
amended by striking ``subsection (b)(5)(C)'' and inserting
``subsection (b)(4)(C)''.
(D) Clause (ii) of section 40A(d)(3)(C) is amended by
striking ``subsection (b)(5)(B)'' and inserting ``subsection
(b)(4)(B)''.
(c) Uniform Treatment of Diesel Produced From Biomass.--
Paragraph (3) of section 40A(f) is amended--
(1) by striking ``diesel fuel'' and inserting ``liquid
fuel'',
(2) by striking ``using a thermal depolymerization
process'', and
(3) by inserting ``, or other equivalent standard approved
by the Secretary'' after ``D396''.
(d) Coproduction of Renewable Diesel With Petroleum
Feedstock.--
(1) In general.--Paragraph (3) of section 40A(f) is amended
by adding at the end the following new sentences: ``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).''.
(2) Conforming amendment.--Paragraph (3) of section 40A(f)
is amended by striking ``(as defined in section 45K(c)(3))''.
(e) Eligibility of Certain Aviation Fuel.--Subsection (f)
of section 40A (relating to renewable diesel) is amended by
adding at the end the following new paragraph:
``(4) Certain aviation fuel.--
``(A) In general.--Except as provided in the last 3
sentences of paragraph (3), the term `renewable diesel' shall
include 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.
``(B) Application of mixture credits.--In the case of fuel
which is treated as renewable diesel solely by reason of
subparagraph (A), subsection (b)(1) and section 6426(c) shall
be applied with respect to such fuel by treating kerosene as
though it were diesel fuel.''.
(f) Modification Relating to Definition of Agri-
Biodiesel.--Paragraph (2) of section 40A(d) (relating to
agri-biodiesel) is amended by striking ``and mustard seeds''
and inserting ``mustard seeds, and camelina''.
(g) Effective Date.--
(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.
(2) Coproduction of renewable diesel with petroleum
feedstock.--The amendment made by subsection (d) shall apply
to fuel produced, and sold or used, after the date of the
enactment of this Act.

SEC. 203. CLARIFICATION THAT CREDITS FOR FUEL ARE DESIGNED TO
PROVIDE AN INCENTIVE FOR UNITED STATES
PRODUCTION.

(a) Alcohol Fuels Credit.--Subsection (d) of section 40 is
amended by adding at the end the following new paragraph:
``(7) 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.''.
(b) Biodiesel Fuels Credit.--Subsection (d) of section 40A
is amended by adding at the end the following new paragraph:
``(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.''.
(c) Excise Tax Credit.--
(1) In general.--Section 6426 is amended by adding at the
end the following new subsection:
``(i) Limitation to Fuels With Connection to the United
States.--
``(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.
``(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.
For purposes of this subsection, the term `United States'
includes any possession of the United States.''.
(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:
``(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).''.
(d) Effective Date.--The amendments made by this section
shall apply to claims for credit or payment made on or after
May 15, 2008.

SEC. 204. EXTENSION AND MODIFICATION OF ALTERNATIVE FUEL
CREDIT.

(a) Extension.--
(1) Alternative fuel credit.--Paragraph (4) of section
6426(d) (relating to alternative fuel credit) is amended by
striking ``September 30, 2009'' and inserting ``December 31,
2009''.
(2) Alternative fuel mixture credit.--Paragraph (3) of
section 6426(e) (relating to alternative fuel mixture credit)
is amended by striking ``September 30, 2009'' and inserting
``December 31, 2009''.
(3) Payments.--Subparagraph (C) of section 6427(e)(5)
(relating to termination) is amended by striking ``September
30, 2009'' and inserting ``December 31, 2009''.
(b) Modifications.--
(1) Alternative fuel to include compressed or liquified
biomass gas.--Paragraph (2) of section 6426(d) (relating to
alternative fuel credit) is amended by striking ``and'' at
the end of subparagraph (E), by redesignating subparagraph
(F) as subparagraph (G), and by inserting after subparagraph
(E) the following new subparagraph:
``(F) compressed or liquefied gas derived from biomass (as
defined in section 45K(c)(3)), and''.
(2) Credit allowed for aviation use of fuel.--Paragraph (1)
of section 6426(d) is amended by inserting ``sold by the
taxpayer for use as a fuel in aviation,'' after
``motorboat,''.
(c) Carbon Capture Requirement for Certain Fuels.--
(1) In general.--Subsection (d) of section 6426, as amended
by subsection (a), is amended by redesignating paragraph (4)
as paragraph (5) and by inserting after paragraph (3) the
following new paragraph:
``(4) Carbon capture requirement.--
``(A) In general.--The requirements of this paragraph are
met if the fuel is certified, under such procedures as
required by the Secretary, as having been derived from coal
produced at a gasification facility which separates and
sequesters not less than the applicable percentage of such
facility's total carbon dioxide emissions.
``(B) Applicable percentage.--For purposes of subparagraph
(A), the applicable percentage is--
``(i) 50 percent in the case of fuel produced after
September 30, 2009, and on or before December 30, 2009, and
``(ii) 75 percent in the case of fuel produced after
December 30, 2009.''.
(2) Conforming amendment.--Subparagraph (E) of section
6426(d)(2) is amended by inserting ``which meets the
requirements of paragraph (4) and which is'' after ``any
liquid fuel''.
(d) Effective Date.--The amendments made by this section
shall apply to fuel sold or used after the date of the
enactment of this Act.

SEC. 205. CREDIT FOR NEW QUALIFIED PLUG-IN ELECTRIC DRIVE
MOTOR VEHICLES.

(a) Plug-in Electric Drive Motor Vehicle Credit.--Subpart B
of part IV of subchapter A of chapter 1 (relating to other
credits) is amended by adding at the end the following new
section:

``SEC. 30D. NEW QUALIFIED PLUG-IN ELECTRIC DRIVE MOTOR
VEHICLES.

``(a) Allowance of Credit.--
``(1) In general.--There shall be allowed as a credit
against the tax imposed by this chapter for the taxable year
an amount equal to the applicable amount with respect to each
new qualified plug-in electric drive motor vehicle placed in
service by the taxpayer during the taxable year.
``(2) Applicable amount.--For purposes of paragraph (1),
the applicable amount is sum of--
``(A) $2,500, plus
``(B) $417 for each kilowatt hour of traction battery
capacity in excess of 4 kilowatt hours.
``(b) Limitations.--
``(1) Limitation based on weight.--The amount of the credit
allowed under subsection (a) by reason of subsection (a)(2)
shall not exceed--
``(A) $7,500, in the case of any new qualified plug-in
electric drive motor vehicle with a gross vehicle weight
rating of not more than 10,000 pounds,
``(B) $10,000, in the case of any new qualified plug-in
electric drive motor vehicle with a gross vehicle weight
rating of more than 10,000 pounds but not more than 14,000
pounds,
``(C) $12,500, in the case of any new qualified plug-in
electric drive motor vehicle with a gross vehicle weight
rating of more than 14,000 pounds but not more than 26,000
pounds, and
``(D) $15,000, in the case of any new qualified plug-in
electric drive motor vehicle with a gross vehicle weight
rating of more than 26,000 pounds.

[[Page S9294]]

``(2) Limitation on number of passenger vehicles and light
trucks eligible for credit.--
``(A) 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.
``(B) 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 total number of such new
qualified plug-in electric drive motor vehicles sold for use
in the United States after December 31, 2008, is at least
250,000.
``(C) Applicable percentage.--For purposes of subparagraph
(A), the applicable percentage is--
``(i) 50 percent for the first 2 calendar quarters of the
phaseout period,
``(ii) 25 percent for the 3d and 4th calendar quarters of
the phaseout period, and
``(iii) 0 percent for each calendar quarter thereafter.
``(D) Controlled groups.--Rules similar to the rules of
section 30B(f)(4) shall apply for purposes of this
subsection.
``(c) New Qualified Plug-in Electric Drive Motor Vehicle.--
For purposes of this section, the term `new qualified plug-in
electric drive motor vehicle' means a motor vehicle--
``(1) which draws propulsion using a traction battery with
at least 4 kilowatt hours of capacity,
``(2) which uses an offboard source of energy to recharge
such battery,
``(3) which, in the case of a passenger vehicle or light
truck which has a gross vehicle weight rating of not more
than 8,500 pounds, has received a certificate of conformity
under the Clean Air Act and meets or exceeds the equivalent
qualifying California low emission vehicle standard under
section 243(e)(2) of the Clean Air Act for that make and
model year, and
``(A) in the case of a vehicle having a gross vehicle
weight rating of 6,000 pounds or less, 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
``(B) in the case of a vehicle having a gross vehicle
weight rating of more than 6,000 pounds but not more than
8,500 pounds, the Bin 8 Tier II emission standard which is so
established,
``(4) the original use of which commences with the
taxpayer,
``(5) which is acquired for use or lease by the taxpayer
and not for resale, and
``(6) which is made by a manufacturer.
``(d) Application With Other Credits.--
``(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)).
``(2) Personal credit.--
``(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.
``(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--
``(i) the sum of the regular tax liability (as defined in
section 26(b)) plus the tax imposed by section 55, over
``(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.
``(e) Other Definitions and Special Rules.--For purposes of
this section--
``(1) Motor vehicle.--The term `motor vehicle' has the
meaning given such term by section 30(c)(2).
``(2) 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.).
``(3) Traction battery capacity.--Traction battery capacity
shall be measured in kilowatt hours from a 100 percent state
of charge to a zero percent state of charge.
``(4) Reduction in basis.--For purposes of this subtitle,
the basis of any property for which a credit is allowable
under subsection (a) shall be reduced by the amount of such
credit so allowed.
``(5) No double benefit.--The amount of any deduction or
other credit allowable under this chapter for a new qualified
plug-in electric drive motor vehicle shall be reduced by the
amount of credit allowed under subsection (a) for such
vehicle for the taxable year.
``(6) Property used by tax-exempt entity.--In the case of a
vehicle the use of which is described in paragraph (3) or (4)
of section 50(b) and which is not subject to a lease, the
person who sold such vehicle to the person or entity using
such vehicle shall be treated as the taxpayer that placed
such vehicle in service, but only if such person clearly
discloses to such person or entity in a document the amount
of any credit allowable under subsection (a) with respect to
such vehicle (determined without regard to subsection
(b)(2)).
``(7) Property used outside united states, etc., not
qualified.--No credit shall be allowable 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.
``(8) 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 (including
recapture in the case of a lease period of less than the
economic life of a vehicle).
``(9) Election to not take credit.--No credit shall be
allowed under subsection (a) for any vehicle if the taxpayer
elects not to have this section apply to such vehicle.
``(10) Interaction with air quality and motor vehicle
safety standards.--Unless otherwise provided in this section,
a motor vehicle shall not be considered eligible for a credit
under this section unless such vehicle is in compliance
with--
``(A) the applicable provisions of the Clean Air Act for
the applicable make and model year of the vehicle (or
applicable air quality provisions of State law in the case of
a State which has adopted such provision under a waiver under
section 209(b) of the Clean Air Act), and
``(B) the motor vehicle safety provisions of sections 30101
through 30169 of title 49, United States Code.
``(f) Regulations.--
``(1) In general.--Except as provided in paragraph (2), the
Secretary shall promulgate such regulations as necessary to
carry out the provisions of this section.
``(2) Coordination in prescription of certain
regulations.--The Secretary of the Treasury, in coordination
with the Secretary of Transportation and the Administrator of
the Environmental Protection Agency, shall prescribe such
regulations as necessary to determine whether a motor vehicle
meets the requirements to be eligible for a credit under this
section.
``(g) Termination.--This section shall not apply to
property purchased after December 31, 2014.''.
(b) Coordination With Alternative Motor Vehicle Credit.--
Section 30B(d)(3) is amended by adding at the end the
following new subparagraph:
``(D) Exclusion of plug-in vehicles.--Any vehicle with
respect to which a credit is allowable under section 30D
(determined without regard to subsection (d) thereof) shall
not be taken into account under this section.''.
(c) Credit Made Part of General Business Credit.--Section
38(b), as amended by this Act, is amended by striking
``plus'' at the end of paragraph (33), by striking the period
at the end of paragraph (34) and inserting ``plus'', and by
adding at the end the following new paragraph:
``(35) the portion of the new qualified plug-in electric
drive motor vehicle credit to which section 30D(d)(1)
applies.''.
(d) Conforming Amendments.--
(1)(A) Section 24(b)(3)(B), as amended by section 106, is
amended by striking ``and 25D'' and inserting ``25D, and
30D''.
(B) Section 25(e)(1)(C)(ii) is amended by inserting
``30D,'' after ``25D,''.
(C) Section 25B(g)(2), as amended by section 106, is
amended by striking ``and 25D'' and inserting ``, 25D, and
30D''.
(D) Section 26(a)(1), as amended by section 106, is amended
by striking ``and 25D'' and inserting ``25D, and 30D''.
(E) Section 1400C(d)(2) is amended by striking ``and 25D''
and inserting ``25D, and 30D''.
(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:
``(37) to the extent provided in section 30D(e)(4).''.
(3) Section 6501(m) is amended by inserting ``30D(e)(9),''
after ``30C(e)(5),''.
(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:

``Sec. 30D. New qualified plug-in electric drive motor vehicles.''.

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

SEC. 206. EXCLUSION FROM HEAVY TRUCK TAX FOR IDLING REDUCTION
UNITS AND ADVANCED INSULATION.

(a) In General.--Section 4053 is amended by adding at the
end the following new paragraphs:
``(9) Idling reduction device.--Any device or system of
devices which--
``(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

[[Page S9295]]

or remains stationary using one or more devices affixed to a
tractor, and
``(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.
``(10) Advanced insulation.--Any insulation that has an R
value of not less than R35 per inch.''.
(b) Effective Date.--The amendment made by this section
shall apply to sales or installations after the date of the
enactment of this Act.

SEC. 207. ALTERNATIVE FUEL VEHICLE REFUELING PROPERTY CREDIT.

(a) Extension of Credit.--Paragraph (2) of section 30C(g)
is amended by striking ``December 31, 2009'' and inserting
``December 31, 2010''.
(b) Inclusion of Electricity as a Clean-Burning Fuel.--
Section 30C(c)(2) is amended by adding at the end the
following new subparagraph:
``(C) Electricity.''.
(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.

SEC. 208. CERTAIN INCOME AND GAINS RELATING TO ALCOHOL FUELS
AND MIXTURES, BIODIESEL FUELS AND MIXTURES, AND
ALTERNATIVE FUELS AND MIXTURES TREATED AS
QUALIFYING INCOME FOR PUBLICLY TRADED
PARTNERSHIPS.

(a) In General.--Subparagraph (E) of section 7704(d)(1), as
amended by this Act, is amended by striking ``or industrial
source carbon dioxide'' and inserting ``, industrial source
carbon dioxide, or the transportation or storage of any fuel
described in subsection (b), (c), (d), or (e) of section
6426, or any alcohol fuel defined in section 6426(b)(4)(A) or
any biodiesel fuel as defined in section 40A(d)(1)'' after
``timber)''.
(b) Effective Date.--The amendment made by this section
shall take effect on the date of the enactment of this Act,
in taxable years ending after such date.

SEC. 209. EXTENSION AND MODIFICATION OF ELECTION TO EXPENSE
CERTAIN REFINERIES.

(a) Extension.--Paragraph (1) of section 179C(c) (relating
to qualified refinery property) is amended--
(1) by striking ``January 1, 2012'' in subparagraph (B) and
inserting ``January 1, 2014'', and
(2) by striking ``January 1, 2008'' each place it appears
in subparagraph (F) and inserting ``January 1, 2010''.
(b) Inclusion of Fuel Derived From Shale and Tar Sands.--
(1) In general.--Subsection (d) of section 179C is amended
by inserting ``, or directly from shale or tar sands'' after
``(as defined in section 45K(c))''.
(2) Conforming amendment.--Paragraph (2) of section 179C(e)
is amended by inserting ``shale, tar sands, or'' before
``qualified fuels''.
(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.

SEC. 210. EXTENSION OF SUSPENSION OF TAXABLE INCOME LIMIT ON
PERCENTAGE DEPLETION FOR OIL AND NATURAL GAS
PRODUCED FROM MARGINAL PROPERTIES.

Subparagraph (H) of section 613A(c)(6) (relating to oil and
gas produced from marginal properties) is amended by striking
``for any taxable year'' and all that follows and inserting
``for any taxable year--
``(i) beginning after December 31, 1997, and before January
1, 2008, or
``(ii) beginning after December 31, 2008, and before
January 1, 2010.''.

SEC. 211. TRANSPORTATION FRINGE BENEFIT TO BICYCLE COMMUTERS.

(a) In General.--Paragraph (1) of section 132(f) is amended
by adding at the end the following:
``(D) Any qualified bicycle commuting reimbursement.''.
(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:
``(C) the applicable annual limitation in the case of any
qualified bicycle commuting reimbursement.''.
(c) Definitions.--Paragraph (5) of section 132(f) is
amended by adding at the end the following:
``(F) Definitions related to bicycle commuting
reimbursement.--
``(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.
``(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.
``(iii) Qualified bicycle commuting month.--The term
`qualified bicycle commuting month' means, with respect to
any employee, any month during which such employee--

``(I) regularly uses the bicycle for a substantial portion
of the travel between the employee's residence and place of
employment, and
``(II) does not receive any benefit described in
subparagraph (A), (B), or (C) of paragraph (1).''.

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

TITLE III--ENERGY CONSERVATION AND EFFICIENCY PROVISIONS

SEC. 301. QUALIFIED ENERGY CONSERVATION BONDS.

(a) In General.--Subpart I of part IV of subchapter A of
chapter 1, as amended by section 107, is amended by adding at
the end the following new section:

``SEC. 54D. QUALIFIED ENERGY CONSERVATION BONDS.

``(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--
``(1) 100 percent of the available project proceeds of such
issue are to be used for one or more qualified conservation
purposes,
``(2) the bond is issued by a State or local government,
and
``(3) the issuer designates such bond for purposes of this
section.
``(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.
``(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).
``(d) National Limitation on Amount of Bonds Designated.--
There is a national qualified energy conservation bond
limitation of $800,000,000.
``(e) Allocations.--
``(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.
``(2) Allocations to largest local governments.--
``(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.
``(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.
``(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.
``(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.
``(f) Qualified Conservation Purpose.--For purposes of this
section--
``(1) In general.--The term `qualified conservation
purpose' means any of the following:
``(A) Capital expenditures incurred for purposes of--
``(i) reducing energy consumption in publicly-owned
buildings by at least 20 percent,
``(ii) implementing green community programs,
``(iii) rural development involving the production of
electricity from renewable energy resources, or
``(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).
``(B) Expenditures with respect to research facilities, and
research grants, to support research in--
``(i) development of cellulosic ethanol or other nonfossil
fuels,
``(ii) technologies for the capture and sequestration of
carbon dioxide produced through the use of fossil fuels,
``(iii) increasing the efficiency of existing technologies
for producing nonfossil fuels,
``(iv) automobile battery technologies and other
technologies to reduce fossil fuel consumption in
transportation, or
``(v) technologies to reduce energy use in buildings.

[[Page S9296]]

``(C) Mass commuting facilities and related facilities that
reduce the consumption of energy, including expenditures to
reduce pollution from vehicles used for mass commuting.
``(D) Demonstration projects designed to promote the
commercialization of--
``(i) green building technology,
``(ii) conversion of agricultural waste for use in the
production of fuel or otherwise,
``(iii) advanced battery manufacturing technologies,
``(iv) technologies to reduce peak use of electricity, or
``(v) technologies for the capture and sequestration of
carbon dioxide emitted from combusting fossil fuels in order
to produce electricity.
``(E) Public education campaigns to promote energy
efficiency.
``(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.
``(g) Population.--
``(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.
``(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.
``(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--
``(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
``(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.''.
(b) Conforming Amendments.--
(1) Paragraph (1) of section 54A(d), as amended by this
Act, is amended to read as follows:
``(1) Qualified tax credit bond.--The term `qualified tax
credit bond' means--
``(A) a qualified forestry conservation bond,
``(B) a new clean renewable energy bond, or
``(C) a qualified energy conservation bond,
which is part of an issue that meets requirements of
paragraphs (2), (3), (4), (5), and (6).''.
(2) Subparagraph (C) of section 54A(d)(2), as amended by
this Act, is amended to read as follows:
``(C) Qualified purpose.--For purposes of this paragraph,
the term `qualified purpose' means--
``(i) in the case of a qualified forestry conservation
bond, a purpose specified in section 54B(e),
``(ii) in the case of a new clean renewable energy bond, a
purpose specified in section 54C(a)(1), and
``(iii) in the case of a qualified energy conservation
bond, a purpose specified in section 54D(a)(1).''.
(3) The table of sections for subpart I of part IV of
subchapter A of chapter 1, as amended by this Act, is amended
by adding at the end the following new item:

``Sec. 54D. Qualified energy conservation bonds.''.

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

SEC. 302. CREDIT FOR NONBUSINESS ENERGY PROPERTY.

(a) Extension of Credit.--Section 25C(g) is amended by
striking ``placed in service after December 31, 2007'' and
inserting ``placed in service--
``(1) after December 31, 2007, and before January 1, 2009,
or
``(2) after December 31, 2009.''.
(b) Qualified Biomass Fuel Property.--
(1) In general.--Section 25C(d)(3) is amended--
(A) by striking ``and'' at the end of subparagraph (D),
(B) by striking the period at the end of subparagraph (E)
and inserting ``, and'', and
(C) by adding at the end the following new subparagraph:
``(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.''.
(2) Biomass fuel.--Section 25C(d) is amended by adding at
the end the following new paragraph:
``(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.''.
(c) Modification of Water Heater Requirements.--Section
25C(d)(3)(E) is amended by inserting ``or a thermal
efficiency of at least 90 percent'' after ``0.80''.
(d) Coordination With Credit for Qualified Geothermal Heat
pump Property Expenditures.--
(1) In general.--Paragraph (3) of section 25C(d), as
amended by subsections (b) and (c), is amended by striking
subparagraph (C) and by redesignating subparagraphs (D), (E),
and (F) as subparagraphs (C), (D), and (E), respectively.
(2) Conforming amendment.--Subparagraph (C) of section
25C(d)(2) is amended to read as follows:
``(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--
``(i) shall require measurements to be based on published
data which is tested by manufacturers at 95 degrees
Fahrenheit, and
``(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.''.
(e) Modification of Qualified Energy Efficiency
Improvements.--
(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''.
(2) Building envelope component.--Subparagraph (D) of
section 25C(c)(2) is amended--
(A) by inserting ``or asphalt roof'' after ``metal roof'',
and
(B) by inserting ``or cooling granules'' after ``pigmented
coatings''.
(f) Effective Dates.--
(1) In general.--Except as provided in paragraph (2), the
amendments made this section shall apply to expenditures made
after December 31, 2008.
(2) Modification of qualified energy efficiency
improvements.--The amendments made by subsection (e) shall
apply to property placed in service after the date of the
enactment of this Act.

SEC. 303. ENERGY EFFICIENT COMMERCIAL BUILDINGS DEDUCTION.

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

SEC. 304. NEW ENERGY EFFICIENT HOME CREDIT.

Subsection (g) of section 45L (relating to termination) is
amended by striking ``December 31, 2008'' and inserting
``December 31, 2009''.

SEC. 305. MODIFICATIONS OF ENERGY EFFICIENT APPLIANCE CREDIT
FOR APPLIANCES PRODUCED AFTER 2007.

(a) In General.--Subsection (b) of section 45M is amended
to read as follows:
``(b) Applicable Amount.--For purposes of subsection (a)--
``(1) Dishwashers.--The applicable amount is--
``(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
``(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).
``(2) Clothes washers.--The applicable amount is--
``(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,
``(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,
``(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
``(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.
``(3) Refrigerators.--The applicable amount is--
``(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,
``(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,
``(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
``(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.''.
(b) Eligible Production.--

[[Page S9297]]

(1) Similar treatment for all appliances.--Subsection (c)
of section 45M is amended--
(A) by striking paragraph (2),
(B) by striking ``(1) In general'' and all that follows
through ``the eligible'' and inserting ``The eligible'',
(C) by moving the text of such subsection in line with the
subsection heading, and
(D) by redesignating subparagraphs (A) and (B) as
paragraphs (1) and (2), respectively, and by moving such
paragraphs 2 ems to the left.
(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''.
(c) Types of Energy Efficient Appliances.--Subsection (d)
of section 45M is amended to read as follows:
``(d) Types of Energy Efficient Appliance.--For purposes of
this section, the types of energy efficient appliances are--
``(1) dishwashers described in subsection (b)(1),
``(2) clothes washers described in subsection (b)(2), and
``(3) refrigerators described in subsection (b)(3).''.
(d) Aggregate Credit Amount Allowed.--
(1) Increase in limit.--Paragraph (1) of section 45M(e) is
amended to read as follows:
``(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.''.
(2) Exception for certain refrigerator and clothes
washers.--Paragraph (2) of section 45M(e) is amended to read
as follows:
``(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).''.
(e) Qualified Energy Efficient Appliances.--
(1) In general.--Paragraph (1) of section 45M(f) is amended
to read as follows:
``(1) Qualified energy efficient appliance.--The term
`qualified energy efficient appliance' means--
``(A) any dishwasher described in subsection (b)(1),
``(B) any clothes washer described in subsection (b)(2),
and
``(C) any refrigerator described in subsection (b)(3).''.
(2) Clothes washer.--Section 45M(f)(3) is amended by
inserting ``commercial'' before ``residential'' the second
place it appears.
(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:
``(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.''.
(4) Replacement of energy factor.--Section 45M(f)(6), as
redesignated by paragraph (3), is amended to read as follows:
``(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.''.
(5) Gallons per cycle; water consumption factor.--Section
45M(f), as amended by paragraph (3), is amended by adding at
the end the following:
``(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.
``(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.''.
(f) Effective Date.--The amendments made by this section
shall apply to appliances produced after December 31, 2007.

SEC. 306. ACCELERATED RECOVERY PERIOD FOR DEPRECIATION OF
SMART METERS AND SMART GRID SYSTEMS.

(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:
``(iii) any qualified smart electric meter, and
``(iv) any qualified smart electric grid system.''.
(b) Definitions.--Section 168(i) is amended by inserting at
the end the following new paragraph:
``(18) Qualified smart electric meters.--
``(A) In general.--The term `qualified smart electric
meter' means any smart electric meter which--
``(i) is placed in service by a taxpayer who is a supplier
of electric energy or a provider of electric energy services,
and
``(ii) does not have a class life (determined without
regard to subsection (e)) of less than 10 years.
``(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--
``(i) measures and records electricity usage data on a
time-differentiated basis in at least 24 separate time
segments per day,
``(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,
``(iii) provides data to such supplier or provider so that
the supplier or provider can provide energy usage information
to customers electronically, and
``(iv) provides net metering.
``(19) Qualified smart electric grid systems.--
``(A) In general.--The term `qualified smart electric grid
system' means any smart grid property which--
``(i) is 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, and
``(ii) does not have a class life (determined without
regard to subsection (e)) of less than 10 years.
``(B) Smart grid property.--For the purposes of
subparagraph (A), the term `smart grid property' means
electronics and related equipment that is capable of--
``(i) sensing, collecting, and monitoring data of or from
all portions of a utility's electric distribution grid,
``(ii) providing real-time, two-way communications to
monitor or manage such grid, and
``(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.''.
(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:
``(C) any property (other than property described in
paragraph (3)) which is a qualified smart electric meter or
qualified smart electric grid system, or''.
(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.

SEC. 307. QUALIFIED GREEN BUILDING AND SUSTAINABLE DESIGN
PROJECTS.

(a) In General.--Paragraph (8) of section 142(l) is amended
by striking ``September 30, 2009'' and inserting ``September
30, 2012''.
(b) Treatment of Current Refunding Bonds.--Paragraph (9) of
section 142(l) is amended by striking ``October 1, 2009'' and
inserting ``October 1, 2012''.
(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,''.

SEC. 308. SPECIAL DEPRECIATION ALLOWANCE FOR CERTAIN REUSE
AND RECYCLING PROPERTY.

(a) In General.--Section 168 is amended by adding at the
end the following new subsection:
``(m) Special Allowance for Certain Reuse and Recycling
Property.--
``(1) In general.--In the case of any qualified reuse and
recycling property--
``(A) the depreciation deduction provided by section 167(a)
for the taxable year in which such property is placed in
service shall include an allowance equal to 50 percent of the
adjusted basis of the qualified reuse and recycling property,
and
``(B) the adjusted basis of the qualified reuse and
recycling property shall be reduced by the amount of such
deduction before computing the amount otherwise allowable as
a depreciation deduction under this chapter for such taxable
year and any subsequent taxable year.
``(2) Qualified reuse and recycling property.--For purposes
of this subsection--
``(A) In general.--The term `qualified reuse and recycling
property' means any reuse and recycling property--
``(i) to which this section applies,
``(ii) which has a useful life of at least 5 years,
``(iii) the original use of which commences with the
taxpayer after August 31, 2008, and
``(iv) which is--

``(I) acquired by purchase (as defined in section
179(d)(2)) by the taxpayer after August 31, 2008, but only if
no written binding contract for the acquisition was in effect
before September 1, 2008, or
``(II) acquired by the taxpayer pursuant to a written
binding contract which was entered into after August 31,
2008.

``(B) Exceptions.--
``(i) Bonus depreciation property under subsection (k).--
The term `qualified reuse and recycling property' shall not
include any property to which section 168(k) applies.
``(ii) Alternative depreciation property.--The term
`qualified reuse and recycling property' shall not include
any property to which the alternative depreciation system
under subsection (g) applies, determined without regard to
paragraph (7) of subsection (g) (relating to election to have
system apply).
``(iii) Election out.--If a taxpayer makes an election
under this clause with respect to

[[Page S9298]]

any class of property for any taxable year, this subsection
shall not apply to all property in such class placed in
service during such taxable year.
``(C) Special rule for self-constructed property.--In the
case of a taxpayer manufacturing, constructing, or producing
property for the taxpayer's own use, the requirements of
clause (iv) of subparagraph (A) shall be treated as met if
the taxpayer begins manufacturing, constructing, or producing
the property after August 31, 2008.
``(D) Deduction allowed in computing minimum tax.--For
purposes of determining alternative minimum taxable income
under section 55, the deduction under subsection (a) for
qualified reuse and recycling property shall be determined
under this section without regard to any adjustment under
section 56.
``(3) Definitions.--For purposes of this subsection--
``(A) Reuse and recycling property.--
``(i) In general.--The term `reuse and recycling property'
means any machinery and equipment (not including buildings or
real estate), along with all appurtenances thereto, including
software necessary to operate such equipment, which is used
exclusively to collect, distribute, or recycle qualified
reuse and recyclable materials.
``(ii) Exclusion.--Such term does not include rolling stock
or other equipment used to transport reuse and recyclable
materials.
``(B) Qualified reuse and recyclable materials.--
``(i) In general.--The term `qualified reuse and recyclable
materials' means scrap plastic, scrap glass, scrap textiles,
scrap rubber, scrap packaging, recovered fiber, scrap ferrous
and nonferrous metals, or electronic scrap generated by an
individual or business.
``(ii) Electronic scrap.--For purposes of clause (i), the
term `electronic scrap' means--

``(I) any cathode ray tube, flat panel screen, or similar
video display device with a screen size greater than 4 inches
measured diagonally, or
``(II) any central processing unit.

``(C) Recycling or recycle.--The term `recycling' or
`recycle' means that process (including sorting) by which
worn or superfluous materials are manufactured or processed
into specification grade commodities that are suitable for
use as a replacement or substitute for virgin materials in
manufacturing tangible consumer and commercial products,
including packaging.''.
(b) Effective Date.--The amendment made by this section
shall apply to property placed in service after August 31,
2008.

TITLE IV--REVENUE PROVISIONS

SEC. 401. LIMITATION OF DEDUCTION FOR INCOME ATTRIBUTABLE TO
DOMESTIC PRODUCTION OF OIL, GAS, OR PRIMARY
PRODUCTS THEREOF.

(a) In General.--Section 199(d) is amended by redesignating
paragraph (9) as paragraph (10) and by inserting after
paragraph (8) the following new paragraph:
``(9) Special rule for taxpayers with oil related qualified
production activities income.--
``(A) In general.--If a taxpayer has oil related qualified
production activities income for any taxable year beginning
after 2009, the amount otherwise allowable as a deduction
under subsection (a) shall be reduced by 3 percent of the
least of--
``(i) the oil related qualified production activities
income of the taxpayer for the taxable year,
``(ii) the qualified production activities income of the
taxpayer for the taxable year, or
``(iii) taxable income (determined without regard to this
section).
``(B) Oil related qualified production activities income.--
For purposes of this paragraph, the term `oil related
qualified production activities income' means for any taxable
year the qualified production activities income which is
attributable to the production, refining, processing,
transportation, or distribution of oil, gas, or any primary
product thereof during such taxable year.
``(C) Primary product.--For purposes of this paragraph, the
term `primary product' has the same meaning as when used in
section 927(a)(2)(C), as in effect before its repeal.''.
(b) Conforming Amendment.--Section 199(d)(2) (relating to
application to individuals) is amended by striking
``subsection (a)(1)(B)'' and inserting ``subsections
(a)(1)(B) and (d)(9)(A)(iii)''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2008.

SEC. 402. ELIMINATION OF THE DIFFERENT TREATMENT OF FOREIGN
OIL AND GAS EXTRACTION INCOME AND FOREIGN OIL
RELATED INCOME FOR PURPOSES OF THE FOREIGN TAX
CREDIT.

(a) In General.--Subsections (a) and (b) of section 907
(relating to special rules in case of foreign oil and gas
income) are amended to read as follows:
``(a) Reduction in Amount Allowed as Foreign Tax Under
Section 901.--In applying section 901, the amount of any
foreign oil and gas taxes paid or accrued (or deemed to have
been paid) during the taxable year which would (but for this
subsection) be taken into account for purposes of section 901
shall be reduced by the amount (if any) by which the amount
of such taxes exceeds the product of--
``(1) the amount of the combined foreign oil and gas income
for the taxable year,
``(2) multiplied by--
``(A) in the case of a corporation, the percentage which is
equal to the highest rate of tax specified under section
11(b), or
``(B) in the case of an individual, a fraction the
numerator of which is the tax against which the credit under
section 901(a) is taken and the denominator of which is the
taxpayer's entire taxable income.
``(b) Combined Foreign Oil and Gas Income; Foreign Oil and
Gas Taxes.--For purposes of this section--
``(1) Combined foreign oil and gas income.--The term
`combined foreign oil and gas income' means, with respect to
any taxable year, the sum of--
``(A) foreign oil and gas extraction income, and
``(B) foreign oil related income.
``(2) Foreign oil and gas taxes.--The term `foreign oil and
gas taxes' means, with respect to any taxable year, the sum
of--
``(A) oil and gas extraction taxes, and
``(B) any income, war profits, and excess profits taxes
paid or accrued (or deemed to have been paid or accrued under
section 902 or 960) during the taxable year with respect to
foreign oil related income (determined without regard to
subsection (c)(4)) or loss which would be taken into account
for purposes of section 901 without regard to this
section.''.
(b) Recapture of Foreign Oil and Gas Losses.--Paragraph (4)
of section 907(c) (relating to recapture of foreign oil and
gas extraction losses by recharacterizing later extraction
income) is amended to read as follows:
``(4) Recapture of foreign oil and gas losses by
recharacterizing later combined foreign oil and gas income.--
``(A) In general.--The combined foreign oil and gas income
of a taxpayer for a taxable year (determined without regard
to this paragraph) shall be reduced--
``(i) first by the amount determined under subparagraph
(B), and
``(ii) then by the amount determined under subparagraph
(C).
The aggregate amount of such reductions shall be treated as
income (from sources without the United States) which is not
combined foreign oil and gas income.
``(B) Reduction for pre-2009 foreign oil extraction
losses.--The reduction under this paragraph shall be equal to
the lesser of--
``(i) the foreign oil and gas extraction income of the
taxpayer for the taxable year (determined without regard to
this paragraph), or
``(ii) the excess of--

``(I) the aggregate amount of foreign oil extraction losses
for preceding taxable years beginning after December 31,
1982, and before January 1, 2009, over
``(II) so much of such aggregate amount as was
recharacterized under this paragraph (as in effect before and
after the date of the enactment of the Energy Improvement and
Extension Act of 2008) for preceding taxable years beginning
after December 31, 1982.

``(C) Reduction for post-2008 foreign oil and gas losses.--
The reduction under this paragraph shall be equal to the
lesser of--
``(i) the combined foreign oil and gas income of the
taxpayer for the taxable year (determined without regard to
this paragraph), reduced by an amount equal to the reduction
under subparagraph (A) for the taxable year, or
``(ii) the excess of--

``(I) the aggregate amount of foreign oil and gas losses
for preceding taxable years beginning after December 31,
2008, over
``(II) so much of such aggregate amount as was
recharacterized under this paragraph for preceding taxable
years beginning after December 31, 2008.

``(D) Foreign oil and gas loss defined.--
``(i) In general.--For purposes of this paragraph, the term
`foreign oil and gas loss' means the amount by which--

``(I) the gross income for the taxable year from sources
without the United States and its possessions (whether or not
the taxpayer chooses the benefits of this subpart for such
taxable year) taken into account in determining the combined
foreign oil and gas income for such year, is exceeded by
``(II) the sum of the deductions properly apportioned or
allocated thereto.

``(ii) Net operating loss deduction not taken into
account.--For purposes of clause (i), the net operating loss
deduction allowable for the taxable year under section 172(a)
shall not be taken into account.
``(iii) Expropriation and casualty losses not taken into
account.--For purposes of clause (i), there shall not be
taken into account--

``(I) any foreign expropriation loss (as defined in section
172(h) (as in effect on the day before the date of the
enactment of the Revenue Reconciliation Act of 1990)) for the
taxable year, or
``(II) any loss for the taxable year which arises from
fire, storm, shipwreck, or other casualty, or from theft,

to the extent such loss is not compensated for by insurance
or otherwise.
``(iv) Foreign oil extraction loss.--For purposes of
subparagraph (B)(ii)(I), foreign oil extraction losses shall
be determined under this paragraph as in effect on the day
before the date of the enactment of the Energy Improvement
and Extension Act of 2008.''.
(c) Carryback and Carryover of Disallowed Credits.--Section
907(f) (relating to carryback and carryover of disallowed
credits) is amended--

[[Page S9299]]

(1) by striking ``oil and gas extraction taxes'' each place
it appears and inserting ``foreign oil and gas taxes'', and
(2) by adding at the end the following new paragraph:
``(4) Transition rules for pre-2009 and 2009 disallowed
credits.--
``(A) Pre-2009 credits.--In the case of any unused credit
year beginning before January 1, 2009, this subsection shall
be applied to any unused oil and gas extraction taxes carried
from such unused credit year to a year beginning after
December 31, 2008--
``(i) by substituting `oil and gas extraction taxes' for
`foreign oil and gas taxes' each place it appears in
paragraphs (1), (2), and (3), and
``(ii) by computing, for purposes of paragraph (2)(A), the
limitation under subparagraph (A) for the year to which such
taxes are carried by substituting `foreign oil and gas
extraction income' for `foreign oil and gas income' in
subsection (a).
``(B) 2009 credits.--In the case of any unused credit year
beginning in 2009, the amendments made to this subsection by
the Energy Improvement and Extension Act of 2008 shall be
treated as being in effect for any preceding year beginning
before January 1, 2009, solely for purposes of determining
how much of the unused foreign oil and gas taxes for such
unused credit year may be deemed paid or accrued in such
preceding year.''.
(d) Conforming Amendment.--Section 6501(i) is amended by
striking ``oil and gas extraction taxes'' and inserting
``foreign oil and gas taxes''.
(e) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2008.

SEC. 403. BROKER REPORTING OF CUSTOMER'S BASIS IN SECURITIES
TRANSACTIONS.

(a) In General.--
(1) Broker reporting for securities transactions.--Section
6045 is amended by adding at the end the following new
subsection:
``(g) Additional Information Required in the Case of
Securities Transactions, etc.--
``(1) In general.--If a broker is otherwise required to
make a return under subsection (a) with respect to the gross
proceeds of the sale of a covered security, the broker shall
include in such return the information described in paragraph
(2).
``(2) Additional information required.--
``(A) In general.--The information required under paragraph
(1) to be shown on a return with respect to a covered
security of a customer shall include the customer's adjusted
basis in such security and whether any gain or loss with
respect to such security is long-term or short-term (within
the meaning of section 1222).
``(B) Determination of adjusted basis.--For purposes of
subparagraph (A)--
``(i) In general.--The customer's adjusted basis shall be
determined--

``(I) in the case of any security (other than any stock for
which an average basis method is permissible under section
1012), in accordance with the first-in first-out method
unless the customer notifies the broker by means of making an
adequate identification of the stock sold or transferred, and
``(II) in the case of any stock for which an average basis
method is permissible under section 1012, in accordance with
the broker's default method unless the customer notifies the
broker that he elects another acceptable method under section
1012 with respect to the account in which such stock is held.

``(ii) Exception for wash sales.--Except as otherwise
provided by the Secretary, the customer's adjusted basis
shall be determined without regard to section 1091 (relating
to loss from wash sales of stock or securities) unless the
transactions occur in the same account with respect to
identical securities.
``(3) Covered security.--For purposes of this subsection--
``(A) In general.--The term `covered security' means any
specified security acquired on or after the applicable date
if such security--
``(i) was acquired through a transaction in the account in
which such security is held, or
``(ii) was transferred to such account from an account in
which such security was a covered security, but only if the
broker received a statement under section 6045A with respect
to the transfer.
``(B) Specified security.--The term `specified security'
means--
``(i) any share of stock in a corporation,
``(ii) any note, bond, debenture, or other evidence of
indebtedness,
``(iii) any commodity, or contract or derivative with
respect to such commodity, if the Secretary determines that
adjusted basis reporting is appropriate for purposes of this
subsection, and
``(iv) any other financial instrument with respect to which
the Secretary determines that adjusted basis reporting is
appropriate for purposes of this subsection.
``(C) Applicable date.--The term `applicable date' means--
``(i) January 1, 2011, in the case of any specified
security which is stock in a corporation (other than any
stock described in clause (ii)),
``(ii) January 1, 2012, in the case of any stock for which
an average basis method is permissible under section 1012,
and
``(iii) January 1, 2013, or such later date determined by
the Secretary in the case of any other specified security.
``(4) Treatment of s corporations.--In the case of the sale
of a covered security acquired by an S corporation (other
than a financial institution) after December 31, 2011, such S
corporation shall be treated in the same manner as a
partnership for purposes of this section.
``(5) Special rules for short sales.--In the case of a
short sale, reporting under this section shall be made for
the year in which such sale is closed.''.
(2) Broker information required with respect to options.--
Section 6045, as amended by subsection (a), is amended by
adding at the end the following new subsection:
``(h) Application to Options on Securities.--
``(1) Exercise of option.--For purposes of this section, if
a covered security is acquired or disposed of pursuant to the
exercise of an option that was granted or acquired in the
same account as the covered security, the amount received
with respect to the grant or paid with respect to the
acquisition of such option shall be treated as an adjustment
to gross proceeds or as an adjustment to basis, as the case
may be.
``(2) Lapse or closing transaction.--In the case of the
lapse (or closing transaction (as defined in section
1234(b)(2)(A))) of an option on a specified security or the
exercise of a cash-settled option on a specified security,
reporting under subsections (a) and (g) with respect to such
option shall be made for the calendar year which includes the
date of such lapse, closing transaction, or exercise.
``(3) Prospective application.--Paragraphs (1) and (2)
shall not apply to any option which is granted or acquired
before January 1, 2013.
``(4) Definitions.--For purposes of this subsection, the
terms `covered security' and `specified security' shall have
the meanings given such terms in subsection (g)(3).''.
(3) Extension of period for statements sent to customers.--
(A) In general.--Subsection (b) of section 6045 is amended
by striking ``January 31'' and inserting ``February 15''.
(B) Statements related to substitute payments.--Subsection
(d) of section 6045 is amended--
(i) by striking ``at such time and'', and
(ii) by inserting after ``other item.'' the following new
sentence: ``The written statement required under the
preceding sentence shall be furnished on or before February
15 of the year following the calendar year in which the
payment was made.''.
(C) Other statements.--Subsection (b) of section 6045 is
amended by adding at the end the following: ``In the case of
a consolidated reporting statement (as defined in
regulations) with respect to any customer, any statement
which would otherwise be required to be furnished on or
before January 31 of a calendar year with respect to any item
reportable to the taxpayer shall instead be required to be
furnished on or before February 15 of such calendar year if
furnished with such consolidated reporting statement.''.
(b) Determination of Basis of Certain Securities on Account
by Account or Average Basis Method.--Section 1012 is
amended--
(1) by striking ``The basis of property'' and inserting the
following:
``(a) In General.--The basis of property'',
(2) by striking ``The cost of real property'' and inserting
the following:
``(b) Special Rule for Apportioned Real Estate Taxes.--The
cost of real property'', and
(3) by adding at the end the following new subsections:
``(c) Determinations by Account.--
``(1) In general.--In the case of the sale, exchange, or
other disposition of a specified security on or after the
applicable date, the conventions prescribed by regulations
under this section shall be applied on an account by account
basis.
``(2) Application to certain funds.--
``(A) In general.--Except as provided in subparagraph (B),
any stock for which an average basis method is permissible
under section 1012 which is acquired before January 1, 2012,
shall be treated as a separate account from any such stock
acquired on or after such date.
``(B) Election fund for treatment as single account.--If a
fund described in subparagraph (A) elects to have this
subparagraph apply with respect to one or more of its
stockholders--
``(i) subparagraph (A) shall not apply with respect to any
stock in such fund held by such stockholders, and
``(ii) all stock in such fund which is held by such
stockholders shall be treated as covered securities described
in section 6045(g)(3) without regard to the date of the
acquisition of such stock.
A rule similar to the rule of the preceding sentence shall
apply with respect to a broker holding such stock as a
nominee.
``(3) Definitions.--For purposes of this section, the terms
`specified security' and `applicable date' shall have the
meaning given such terms in section 6045(g).
``(d) Average Basis for Stock Acquired Pursuant to a
Dividend Reinvestment Plan.--
``(1) In general.--In the case of any stock acquired after
December 31, 2010, in connection with a dividend reinvestment
plan, the basis of such stock while held as part of such plan
shall be determined using one of the

[[Page S9300]]

methods which may be used for determining the basis of stock
in an open-end fund.
``(2) Treatment after transfer.--In the case of the
transfer to another account of stock to which paragraph (1)
applies, such stock shall have a cost basis in such other
account equal to its basis in the dividend reinvestment plan
immediately before such transfer (properly adjusted for any
fees or other charges taken into account in connection with
such transfer).
``(3) Separate accounts; election for treatment as single
account.--Rules similar to the rules of subsection (c)(2)
shall apply for purposes of this subsection.
``(4) Dividend reinvestment plan.--For purposes of this
subsection--
``(A) In general.--The term `dividend reinvestment plan'
means any arrangement under which dividends on any stock are
reinvested in stock identical to the stock with respect to
which the dividends are paid.
``(B) Initial stock acquisition treated as acquired in
connection with plan.--Stock shall be treated as acquired in
connection with a dividend reinvestment plan if such stock is
acquired pursuant to such plan or if the dividends paid on
such stock are subject to such plan.''.
(c) Information by Transferors To Aid Brokers.--
(1) In general.--Subpart B of part III of subchapter A of
chapter 61 is amended by inserting after section 6045 the
following new section:

``SEC. 6045A. INFORMATION REQUIRED IN CONNECTION WITH
TRANSFERS OF COVERED SECURITIES TO BROKERS.

``(a) Furnishing of Information.--Every applicable person
which transfers to a broker (as defined in section
6045(c)(1)) a security which is a covered security (as
defined in section 6045(g)(3)) in the hands of such
applicable person shall furnish to such broker a written
statement in such manner and setting forth such information
as the Secretary may by regulations prescribe for purposes of
enabling such broker to meet the requirements of section
6045(g).
``(b) Applicable Person.--For purposes of subsection (a),
the term `applicable person' means--
``(1) any broker (as defined in section 6045(c)(1)), and
``(2) any other person as provided by the Secretary in
regulations.
``(c) Time for Furnishing Statement.--Except as otherwise
provided by the Secretary, any statement required by
subsection (a) shall be furnished not later than 15 days
after the date of the transfer described in such
subsection.''.
(2) Assessable penalties.--Paragraph (2) of section
6724(d), as amended by the Housing Assistance Tax Act of
2008, is amended by redesignating subparagraphs (I) through
(DD) as subparagraphs (J) through (EE), respectively, and by
inserting after subparagraph (H) the following new
subparagraph:
``(I) section 6045A (relating to information required in
connection with transfers of covered securities to
brokers),''.
(3) Clerical amendment.--The table of sections for subpart
B of part III of subchapter A of chapter 61 is amended by
inserting after the item relating to section 6045 the
following new item:

``Sec. 6045A. Information required in connection with transfers of
covered securities to brokers.''.

(d) Additional Issuer Information To Aid Brokers.--
(1) In general.--Subpart B of part III of subchapter A of
chapter 61, as amended by subsection (b), is amended by
inserting after section 6045A the following new section:

``SEC. 6045B. RETURNS RELATING TO ACTIONS AFFECTING BASIS OF
SPECIFIED SECURITIES.

``(a) In General.--According to the forms or regulations
prescribed by the Secretary, any issuer of a specified
security shall make a return setting forth--
``(1) a description of any organizational action which
affects the basis of such specified security of such issuer,
``(2) the quantitative effect on the basis of such
specified security resulting from such action, and
``(3) such other information as the Secretary may
prescribe.
``(b) Time for Filing Return.--Any return required by
subsection (a) shall be filed not later than the earlier of--
``(1) 45 days after the date of the action described in
subsection (a), or
``(2) January 15 of the year following the calendar year
during which such action occurred.
``(c) Statements To Be Furnished to Holders of Specified
Securities or Their Nominees.--According to the forms or
regulations prescribed by the Secretary, every person
required to make a return under subsection (a) with respect
to a specified security shall furnish to the nominee with
respect to the specified security (or certificate holder if
there is no nominee) a written statement showing--
``(1) the name, address, and phone number of the
information contact of the person required to make such
return,
``(2) the information required to be shown on such return
with respect to such security, and
``(3) such other information as the Secretary may
prescribe.
The written statement required under the preceding sentence
shall be furnished to the holder on or before January 15 of
the year following the calendar year during which the action
described in subsection (a) occurred.
``(d) Specified Security.--For purposes of this section,
the term `specified security' has the meaning given such term
by section 6045(g)(3)(B). No return shall be required under
this section with respect to actions described in subsection
(a) with respect to a specified security which occur before
the applicable date (as defined in section 6045(g)(3)(C))
with respect to such security.
``(e) Public Reporting in Lieu of Return.--The Secretary
may waive the requirements under subsections (a) and (c) with
respect to a specified security, if the person required to
make the return under subsection (a) makes publicly
available, in such form and manner as the Secretary
determines necessary to carry out the purposes of this
section--
``(1) the name, address, phone number, and email address of
the information contact of such person, and
``(2) the information described in paragraphs (1), (2), and
(3) of subsection (a).''.
(2) Assessable penalties.--
(A) Subparagraph (B) of section 6724(d)(1), as amended by
the Housing Assistance Tax Act of 2008, is amended by
redesignating clause (iv) and each of the clauses which
follow as clauses (v) through (xxiii), respectively, and by
inserting after clause (iii) the following new clause:
``(iv) section 6045B(a) (relating to returns relating to
actions affecting basis of specified securities),''.
(B) Paragraph (2) of section 6724(d), as amended by the
Housing Assistance Tax Act of 2008 and by subsection (c)(2),
is amended by redesignating subparagraphs (J) through (EE) as
subparagraphs (K) through (FF), respectively, and by
inserting after subparagraph (I) the following new
subparagraph:
``(J) subsections (c) and (e) of section 6045B (relating to
returns relating to actions affecting basis of specified
securities),''.
(3) Clerical amendment.--The table of sections for subpart
B of part III of subchapter A of chapter 61, as amended by
subsection (b)(3), is amended by inserting after the item
relating to section 6045A the following new item:

``Sec. 6045B. Returns relating to actions affecting basis of specified
securities.''.

(e) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall take
effect on January 1, 2011.
(2) Extension of period for statements sent to customers.--
The amendments made by subsection (a)(3) shall apply to
statements required to be furnished after December 31, 2008.

SEC. 404. 0.2 PERCENT FUTA SURTAX.

(a) In General.--Section 3301 (relating to rate of tax) is
amended--
(1) by striking ``through 2008'' in paragraph (1) and
inserting ``through 2009'', and
(2) by striking ``calendar year 2009'' in paragraph (2) and
inserting ``calendar year 2010''.
(b) Effective Date.--The amendments made by this section
shall apply to wages paid after December 31, 2008.

SEC. 405. INCREASE AND EXTENSION OF OIL SPILL LIABILITY TRUST
FUND TAX.

(a) Increase in Rate.--
(1) In general.--Section 4611(c)(2)(B) (relating to rates)
is amended by striking ``is 5 cents a barrel.'' and inserting
``is--
``(i) in the case of crude oil received or petroleum
products entered before January 1, 2017, 8 cents a barrel,
and
``(ii) in the case of crude oil received or petroleum
products entered after December 31, 2016, 9 cents a
barrel.''.
(2) Effective date.--The amendment made by this subsection
shall apply on and after the first day of the first calendar
quarter beginning more than 60 days after the date of the
enactment of this Act.
(b) Extension.--
(1) In general.--Section 4611(f) (relating to application
of Oil Spill Liability Trust Fund financing rate) is amended
by striking paragraphs (2) and (3) and inserting the
following new paragraph:
``(2) Termination.--The Oil Spill Liability Trust Fund
financing rate shall not apply after December 31, 2017.''.
(2) Conforming amendment.--Section 4611(f)(1) is amended by
striking ``paragraphs (2) and (3)'' and inserting ``paragraph
(2)''.
(3) Effective date.--The amendments made by this subsection
shall take effect on the date of the enactment of this Act.
______