S.Amdt. 4783

SA 4783. Mr. BINGAMAN (for himself and Ms. Snowe) submitted an
amendment intended to be proposed to amendment SA 4753 proposed by Mr.
Reid (for himself and Mr. McConnell) to the bill H.R. 4853, to amend
the Internal Revenue Code of 1986 to extend the funding and expenditure
authority of the Airport and Airway Trust Fund, to amend title 49,
United States Code, to extend authorizations for the airport
improvement program, and for other purposes; which was ordered to lie
on the table; as follows:

On page 74, after line 6, insert the following:

TITLE IX--ADVANCED ENERGY TAX INCENTIVES ACT OF 2010

SECTION 901. SHORT TITLE.

(a) Short Title.--This Act may be cited as the ``Advanced
Energy Tax Incentives Act of 2010''.

Subtitle A--Industrial and Building Energy Efficiency

PART I--EXPANSION OF BUILDING EFFICIENCY INCENTIVES

SEC. 911. INCREASE IN, AND EXTENSION OF, NEW ENERGY EFFICIENT
HOME CREDIT.

(a) New Tier; Credit Amount for New Tier.--
(1) New tier.--Subsection (c) of section 45L is amended to
read as follows:
``(c) Energy Savings Requirements.--
``(1) In general.--A dwelling unit meets the energy saving
requirements of this subsection if such unit is--
``(A) described in paragraph (2),
``(B) described in paragraph (3),
``(C) a manufactured home described in paragraph (4), or
``(D) a manufactured home described in paragraph (5).
``(2) Dwelling unit described in paragraph (2).--A dwelling
unit is described in this paragraph if such unit is
certified--
``(A) to have a level of annual heating and cooling energy
consumption which is at least 50 percent below the annual
level of heating and cooling energy consumption of a
comparable dwelling unit--
``(i) which is constructed in accordance with the standards
of chapter 4 of the 2003 International Energy Conservation
Code, as such Code (including supplements) is in effect on
the date of the enactment of the Energy Tax Incentives Act of
2005, and
``(ii) for which the heating and cooling equipment
efficiencies correspond to the minimum allowed under the
regulations established by the Department of Energy pursuant
to the National Appliance Energy Conservation Act of 1987 and
in effect at the time of completion of construction, and
``(B) to have building envelope component improvements
account for at least \1/5\ of such 50 percent.

The Secretary, in consultation with the Secretary of Energy
shall provide by regulation for the application of this
paragraph in the case of a dwelling unit in a multifamily
building that is more than 3 stories above grade, or in any
other building that is not within the scope of such chapter
4. If, upon the acquisition of such unit by any person
described in subsection (a)(1)(A)(ii)(I), the amount of the
credit allowed under this section with respect to such unit
shall be disclosed to such person.
``(3) Dwelling unit described in paragraph (3).--A dwelling
unit is described in this paragraph if such unit is
certified--
``(A) to have a level of annual total energy consumption
(including heating, cooling, water heating, lighting, and
appliance energy use) which is at least 50 percent below the
annual level of total energy consumption of a comparable
dwelling unit which is constructed in accordance with the
2004 Supplement of the 2003 International Energy Conservation
Code, and
``(B) to have building envelope component improvements
account for at least \1/5\ of such 50 percent.
``(4) Manufactured home described in paragraph (4).--A
manufactured home is described in this paragraph if such
manufactured home conforms to Federal Manufactured Home
Construction and Safety Standards (part 3280 of title 24,
Code of Federal Regulations) and meets the requirements of a
dwelling unit described in paragraph (2).
``(5) Manufactured home described in paragraph (5).--A
manufactured home is described in this paragraph if such
manufactured home conforms to Federal Manufactured Home
Construction and Safety Standards (part 3280 of title 24,
Code of Federal Regulations) and--
``(A) meets the requirements of--
``(i) a dwelling unit described in paragraph (2), applied
by substituting `30 percent' for `50 percent' both places it
appears therein and by substituting `\1/3\' for `\1/5\' in
subparagraph (B) thereof, or
``(ii) a dwelling unit described in paragraph (3), or
``(B) meets the requirements established by the
Administrator of the Environmental Protection Agency under
the Energy Star Labeled Homes program as in effect on the
date of the enactment of the Advanced Energy Tax Incentives
Act of 2010, or
``(C) meets the requirements under the Energy Star Labeled
Homes program established after the date of the enactment of
the Advanced Energy Tax Incentives Act of 2010.''.
(2) Credit amount for new tier.--Paragraph (2) of section
45L(a) is amended to read as follows:
``(2) Applicable amount.--For purposes of paragraph (1),
the applicable amount is an amount equal to--
``(A) in the case of a dwelling unit described in paragraph
(2) or (4) of subsection (c), $2,000,
``(B) in the case of a dwelling unit described in paragraph
(3) of subsection (c), $5,000,
``(C) in the case of a manufactured home described in
paragraph (5)(A)(i) or (5)(B) of subsection (c), $1,500, and
``(D) in the case of a manufactured home described in
paragraph (5)(A)(ii) or (5)(C) of subsection (c), $2,500.

Nothing in this section shall permit the same dwelling unit
or manufactured home to qualify for more than one applicable
amount.''.
(b) Credit Available for Rental Units, Owner-Builders, and
Qualified Low-Income Buildings; Credit Amount for Qualified
Low-Income Buildings.--
(1) In general.--Paragraph (1) of section 45L(a) is amended
to read as follows:
``(1) In general.--For purposes of section 38--
``(A) in the case of an eligible contractor, the new energy
efficient home credit for the taxable year is the applicable
amount for each qualified new energy efficient home which
is--
``(i) constructed by the eligible contractor, and
``(ii)(I) acquired by a person from such eligible
contractor and used by any person as a residence during the
taxable year, or
``(II) used by such eligible contractor as a residence
during the taxable year, and
``(B) in the case of a taxpayer, the new energy efficient
home credit for the taxable year is the applicable amount for
each qualified new energy efficient home which is in a
qualified low-income building (as defined in section
42(c)(2))--
``(i) placed in service by the taxpayer during the taxable
year, and
``(ii) for which such taxpayer is allowed a credit under
section 42 or a subaward under section 1602(c) of the
American Recovery and Reinvestment Tax Act of 2009.''.
(2) Credit amount.--Paragraph (2) of section 45L(a), as
amended by this section, is amended by adding at the end the
following new flush sentence:

``In the case of a dwelling unit in a qualified low-income
building (as so defined), the applicable dollar amount for
such a dwelling unit described in 1 of the preceding
subparagraphs shall be equal to 150 percent of the dollar
amount otherwise specified in such preceding subparagraph,
except that if the credit under section 42 with respect to
such unit is determined by applying section 42(d)(5)(B), then
the applicable dollar amount shall be 115 percent of such
dollar amount so specified.''.
(3) No basis adjustment.--Section 45L(e) is amended by
inserting ``(other than a qualified low-income building)''
after ``any property''.
(c) Certification Method for High Rise Multifamily and
Mixed Use Buildings.--Section 45L(d)(1) is amended by
inserting ``, and in the case of high rise multifamily and
mixed use buildings, after examining the methods required for
such buildings under section 179D'' after ``the Secretary of
Energy''.
(d) Credit Allowed Against Alternative Minimum Tax.--
Subparagraph (B) of section 38(c)(4) is amended--
(1) by redesignating clauses (vi), (vii), and (viii) as
clauses (vii), (viii), and (ix), respectively, and
(2) by inserting after clause (v) the following new clause:
``(vi) the credit determined under section 45L,''.
(e) Extension.--Subsection (g) of section 45L is amended to
read as follows:
``(g) Termination.--This section shall not apply to the
acquisition of any qualified new energy efficient home--
``(1) described in subsection (a)(2)(A) after December 31,
2012,

[[Page S8876]]

``(2) described in subsection (a)(2)(B) after December 31,
2013,
``(3) described in subsection (a)(2)(C) after December 31,
2010, and
``(4) described in subsection (a)(2)(D) after December 31,
2013.''.
(f) Effective Dates.--
(1) In general.--The amendments made by this section shall
apply to homes constructed and acquired or placed in service
after December 31, 2008.
(2) AMT.--The amendments made by subsection (d) shall apply
to credits determined under section 45L of the Internal
Revenue Code of 1986 in taxable years beginning after
December 31, 2008, and to carrybacks of such credits.

SEC. 912. MODIFICATION OF DEDUCTION FOR ENERGY EFFICIENT
COMMERCIAL BUILDINGS.

(a) Increase in Maximum Amount of Deduction.--
(1) In general.--Subparagraph (A) of section 179D(b)(1) is
amended by striking ``$1.80'' and inserting ``$3.00''.
(2) Partial allowance.--Paragraph (1) of section 179D(d) is
amended to read as follows:
``(1) Partial allowance.--
``(A) In general.--Except as provided in subsection (f),
if--
``(i) the requirement of subsection (c)(1)(D) is not met,
but
``(ii) there is a certification in accordance with
paragraph (6) that--

``(I) any system referred to in subsection (c)(1)(C)
satisfies the energy-savings targets established by the
Secretary under subparagraph (B) with respect to such system,
or
``(II) the systems referred to in subsection (c)(1)(C)(ii)
and subsection (c)(1)(C)(iii) together satisfy the energy-
savings targets established by the Secretary under
subparagraph (B) with respect to such systems,

then the requirement of subsection (c)(1)(D) shall be treated
as met with respect to such system or systems, and the
deduction under subsection (a) shall be allowed with respect
to energy efficient commercial building property installed as
part of such system and as part of a plan to meet such
targets, except that subsection (b) shall be applied to such
property described in clause (ii)(I) by substituting `$1.00'
for `$3.00' and to such property described in clause (ii)(II)
by substituting `$2.20' for `$3.00'.
``(B) Regulations.--
``(i) In general.--The Secretary, after consultation with
the Secretary of Energy, shall establish a target for each
system described in subsection (c)(1)(C) which, if such
targets were met for all such systems, the building would
meet the requirements of subsection (c)(1)(D).
``(ii) Combined systems.--The Secretary, after consultation
with the Secretary of Energy, shall establish not later than
6 months after the date of the enactment of the Advanced
Energy Tax Incentives Act of 2010 a prescriptive partial
compliance pathway for combined envelope and mechanical
system performance that details the appropriate components,
efficiency levels, or other relevant information for which
the required level of combined savings in both categories can
be deemed to have been achieved.''.
(b) Denial of Double Benefit.--Section 179D is amended by
redesignating subsections (g) and (h) as subsections (h) and
(i), respectively, and by inserting after subsection (f) the
following new subsection:
``(g) Coordination With New Energy Efficient Home Credit.--
No deduction shall be allowed under this section with respect
to any building or dwelling unit with respect to which a
credit under section 45L was allowed.''.
(c) Earnings and Profits Conformity for Real Estate
Investment Trusts.--Subparagraph (B) of section 312(k)(3) is
amended--
(1) by striking ``.--For purposes of'' and inserting ``.--
``(1) In general.--Except as provided in paragraph (2), for
purposes of'', and
(2) by adding at the end the following new paragraph:
``(2) Exception.--
``(A) In general.--For purposes of computing the earnings
and profits of a real estate investment trust (other than a
captive real estate investment trust), the entire amount
deductible under section 179D shall be allowed as a deduction
in the taxable year for which such amount is deductible under
section 179D.
``(B) Captive real estate investment trust.--
``(i) In general.--For purposes of subparagraph (A), the
term `captive real estate investment trust' means any real
estate investment trust more than 50 percent of the voting
power or value of the beneficial interests or shares of which
are owned or controlled by a single entity that is treated as
an association taxable as a corporation.
``(ii) Association taxable as a corporation.--For purposes
of clause (i), the term `association taxable as a
corporation' shall not include a real estate investment
trust.
``(iii) Attribution rules.--For purposes of clause (i), the
attribution rules of section 856(d)(5) shall apply in
determining ownership.''.
(d) Effective Date.--The amendments made by this section
shall apply to property placed in service in taxable years
beginning after the date of the enactment of this Act.

SEC. 913. ENERGY RATINGS OF NON-BUSINESS PROPERTY.

(a) In General.--Subpart A of part IV of subchapter A of
chapter 1, as amended by section 915, is amended by inserting
after section 25E the following new section:

``SEC. 25F. ENERGY RATINGS OF NON-BUSINESS PROPERTY.

``(a) In General.--In the case of an individual, there
shall be allowed as a credit against the tax imposed by this
chapter for the taxable year an amount equal to the amount
paid or incurred by the taxpayer for a qualified home energy
rating conducted during such taxable year.
``(b) Limitation.--The amount allowed as a credit under
subsection (a) with respect to any taxpayer for any taxable
year shall not exceed $200.
``(c) Qualified Home Energy Rating.--For purposes of this
section, the term `qualified home energy rating' means a home
energy rating conducted with respect to any residence of the
taxpayer by a home performance auditor certified by a
provider accredited by the Building Performance Institute
(BPI), the Residential Energy Services Network (RESNET), or
equivalent rating system as determined by the Secretary of
Energy.
``(d) Termination.--This section shall not apply with
respect to any rating conducted after December 31, 2011.''.
(b) Clerical Amendment.--The table of sections for subpart
A of part IV of subchapter A chapter 1, as amended by section
915, is amended by inserting after the item relating to
section 25E the following new item:

``Sec. 25F. Energy ratings of non-business property.''.

(c) Effective Date.--The amendments made by this section
shall apply to amounts paid or incurred in taxable years
beginning after the date of the enactment of this Act.

SEC. 914. CREDIT FOR HOME PERFORMANCE AUDITOR CERTIFICATIONS.

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

``SEC. 45S. HOME PERFORMANCE AUDITOR CERTIFICATION CREDIT.

``(a)  In General.--For purposes of section 38, the home
performance auditor certification credit determined under
this section for any taxable year is an amount equal to the
qualified training and certification costs paid or incurred
by the taxpayer which may be taken into account for such
taxable year.
``(b) Qualified Training and Certification Costs.--
``(1) In general.--The term `qualified training and
certification costs' means costs paid or incurred for
training which is required for the taxpayer or employees of
the taxpayer to be certified as home performance auditors for
purposes of providing qualified home energy ratings under
section 25F(c).
``(2) Limitation.--The qualified training and certification
costs taken into account under subsection (a)(1) for the
taxable year with respect to any individual shall not exceed
$500 reduced by the amount of the credit allowed under
subsection (a)(1) to the taxpayer (or any predecessor) with
respect to such individual for all prior taxable years.
``(3) Year costs taken into account.--Qualified training
and certifications costs with respect to any individual shall
not be taken into account under subsection (a)(1) before the
taxable year in which the individual with respect to whom
such costs are paid or incurred has performed 25 qualified
home energy ratings under section 25F(c).
``(c) Special Rules.--
``(1) Aggregation rules.--For purposes of this section, all
persons treated as a single employer under subsections (a)
and (b) of section 52 shall be treated as 1 person.
``(2) Denial of double benefit.--
``(A) In general.--No deduction shall be allowed for that
portion of the expenses otherwise allowable as a deduction
for the taxable year which is equal to the amount taken into
account under subsection (a) for such taxable year.
``(B) Amount previously deducted.--No credit shall be
allowed under subsection (a) with respect to any amount for
which a deduction has been allowed in any preceding taxable
year.''.
(b) Credit Treated as Part of General Business Credit.--
Section 38(b) is amended by striking ``plus'' at the end of
paragraph (35), by striking the period at the end of
paragraph (36) and inserting ``plus'', and by adding at the
end the following new paragraph:
``(37) the home performance auditor certification credit
determined under section 45S(a).''.
(c) Conforming Amendment.--The table of sections for
subpart D of part IV of subchapter A of chapter 1 is amended
by adding at the end the following new item:

``Sec. 45S. Home performance auditor certification credit.''.

(d) Effective Date.--The amendments made by this section
shall apply to amounts paid or incurred after the date of the
enactment of this Act.

SEC. 915. PERFORMANCE BASED ENERGY IMPROVEMENTS FOR NON-
BUSINESS PROPERTY.

(a) In General.--Subpart A of part IV of subchapter A of
chapter 1 is amended by inserting after section 25D the
following new section:

``SEC. 25E. PERFORMANCE BASED ENERGY IMPROVEMENTS.

``(a) In General.--In the case of an individual, there
shall be allowed as a credit against the tax imposed by this
chapter for the taxable year an amount equal to 50 percent of
the amount of qualified home energy efficiency expenditures
paid or incurred by the taxpayer during the taxable year.

[[Page S8877]]

``(b) Limitations.--
``(1) Dollar limitation.--
``(A) In general.--The amount of the credit allowed under
subsection (a) with respect to any individual for any taxable
year shall not exceed the amount determined under
subparagraph (B) with respect to the principal residence of
such individual.
``(B) Amount determined.--
``(i) In general.--Subject to clause (iv), the amount
determined under this subparagraph is the base amount
increased by the amount determined under clause (iii).
``(ii) Base amount.--For purposes of this subparagraph, the
base amount is--

``(I) $3,000, in the case of a residence the construction
of which is completed before January 1, 1940, and
``(II) $2,000, in the case of a residence the construction
of which is completed after December 31, 1939.

``(iii) Increase amount.--The amount determined under this
clause is--

``(I) in the case of a residence described in clause
(ii)(I) which has a rating system score lower than or equal
to the rating system score which corresponds to the IECC
Standard Reference Design for a home of the size and in the
climate zone of such residence, $1,000, and
``(II) in the case of any residence with a rating system
score which is lower than that which corresponds to such IECC
Standard Reference Design by not less than 5 points, $500 for
each 5 points by which the rating system score which
corresponds to such IECC Standard Reference Design exceeds
the rating system score of such residence (in addition to the
amount provided under clause (i), if applicable).

``(iv) Limitation.--In no event shall the amount determined
under this subparagraph exceed $8,000 with respect to any
individual.
``(2) Limitation based on amount of tax.--In the case of
taxable years to which section 26(a)(2) does not apply, the
credit allowed under subsection (a) for any taxable year
shall not exceed the excess of--
``(A) the sum of the regular tax liability (as defined in
section 26(b)) plus the tax imposed by section 55, over
``(B) the sum of the credits allowable under this subpart
(other than this section and sections 23, 24, and 25B) and
section 27 for the taxable year.
``(c) Qualified Home Energy Efficiency Expenditures.--For
purposes of this section--
``(1) In general.--The term `qualified home energy
efficiency expenditures' means any amount paid or incurred
for a qualified whole home energy efficiency retrofit,
including the cost of audit diagnostic procedures, of a
principal residence of the taxpayer which is located in the
United States.
``(2) Qualified whole home energy efficiency retrofit.--
``(A) In general.--The term `qualified whole home energy
efficiency retrofit' means a retrofit of an existing
residence if, after such retrofit, such residence--
``(i) has a rating system score of not greater than--

``(I) 100, determined under the HERS Index, in the case of
a residence the construction of which is completed before
January 1, 1940, and
``(II) the rating system score which corresponds to the
most current IECC Standard Reference Design for a home of the
size and in the climate zone of such residence, in the case
of a residence the construction of which is completed after
December 31, 1939, or

``(ii) achieves an energy efficiency level which is
equivalent to the standard applicable to such residence under
clause (i), as determined by--

``(I) a State-certified equivalent rating network, as
specified by IRS Notice 2008-35, which is also a HERS rating
system required by State law, or
``(II) the Secretary.

For purposes of the preceding sentence, the HERS Index is the
HERS Index established by the Residential Energy Services
Network, as in effect on January 1, 2011.
``(B) Accreditation rule.--A retrofit shall not be treated
as a qualified whole home energy efficiency retrofit unless
such retrofit is conducted by a company which is accredited
by the Building Performance Institute, or which fulfills an
equivalent standard as determined by the Secretary.
``(C) Determination of rating system score or equivalent.--
``(i) In general.--Subject to clause (ii), the rating
system score of a residence, or the equivalent described in
subparagraph (A)(ii), shall be determined by an auditor or
rater certified by--

``(I) the Residential Energy Services Network,
``(II) the Building Performance Institute, or
``(III) a State-certified equivalent rating network, as
specified by IRS Notice 2008-35, which is also a HERS rating
system required by State law.

``(ii) Secretarial determination.--At the discretion of the
Secretary, the Secretary may, in consultation with the
Secretary of Energy, determine an alternative standard for
certification of an auditor or rater for purposes of
determining the rating system score (or equivalent described
in subparagraph (A)(ii)) of a residence. If the Secretary
establishes such an alternative standard, clause (i) shall
cease to apply unless the Secretary determines otherwise.
``(D) Regulations.--
``(i) Costs.--Not later than December 31, 2011, in
consultation with the Secretary, the Secretary of Energy
shall prescribe regulations which specify the costs with
respect to energy improvements which may be taken into
account under this paragraph as part of a qualified whole
home energy efficiency retrofit.
``(ii) Documentation.--The Secretary of the Treasury may
prescribe regulations directing what specific documentation
is required for claiming the credit under this section, which
may include a certified form completed by the qualified whole
home energy efficiency retrofit and signed by the individual
taxpayer.
``(3) Expansion of building envelope ineligible.--The term
`qualified home energy efficiency expenditures' shall not
include any amount which is paid or incurred in connection
with any expansion of the building envelope of a principal
residence.
``(4) Special rule for expenditures relating to renewable
energy systems.--In the case of any qualified home energy
efficiency expenditures relating to a renewable energy
system, subsection (a) shall be applied with respect to the
expenditures relating to such system by substituting `30
percent' for `50 percent'.
``(5) No double benefit.--
``(A) In general.--No credit shall be allowed under this
section for any taxable year in which the taxpayer elects the
credit under section 25C.
``(B) No double benefit for certain expenditures.--The term
`qualified home energy efficiency expenditures' shall not
include any expenditure for which a deduction or credit is
otherwise allowed to the taxpayer under this chapter for the
taxable year or with respect to which the taxpayer receives
any Federal rebate.
``(6) Principal residence.--The term `principal residence'
has the same meaning as when used in section 121, except
that--
``(A) no ownership requirement shall be imposed, and
``(B) the period for which a building is treated as used as
a principal residence shall also include the 60-day period
ending on the 1st day on which it would (but for this
subparagraph) first be treated as used as a principal
residence.
``(d) Rating System Score.--For purposes of this section--
``(1) In general.--Subject to paragraph (2), the rating
system score shall be the score assigned under--
``(A) the HERS Index established by the Residential Energy
Services Network, or
``(B) an equivalent described in subparagraph (c)(2)(A)(ii)
by a State-certified equivalent rating network, as specified
by IRS Notice 2008-35, which is also a HERS rating system
required by State law.
``(2) Secretarial determination.--At the discretion of the
Secretary, the Secretary may, in consultation with the
Secretary of Energy, determine an alternative rating system
(including an alternative system based on the HERS Index
established by the Residential Energy Services Network). If
the Secretary establishes such an alternative rating system,
the rating system score with respect to any residence shall
be the score assigned under such alternative rating system.
``(e) IECC Standard Reference Design.--
``(1) In general.--The term `IECC Standard Reference
Design' means the Standard Reference Design determined under
the International Energy Conservation Code in effect for the
taxable year in which the credit under this section is
determined.
``(2) Limitation to residences constructed after effective
date of most recent code.--No credit shall be allowed under
this section with respect to a principal residence the
construction of which is completed after the effective date
of the International Energy Conservation Code in effect for
the taxable year for which such credit would otherwise be
determined.
``(f) Special Rules.--For purposes of this section, rules
similar to the rules under paragraphs (4), (5), (6), (7), and
(8) of section 25D(e) and section 25C(e)(2) shall apply.
``(g) Basis Adjustments.--For purposes of this subtitle, if
a credit is allowed under this section with respect to any
expenditure with respect to any property, the increase in the
basis of such property which would (but for this subsection)
result from such expenditure shall be reduced by the amount
of the credit so allowed.
``(h) Election Not To Claim Credit.--This section shall not
apply to a taxpayer for any taxable year if such taxpayer
elects to have this section not apply for such taxable year.
``(i) Termination.--This section shall not apply with
respect to any costs paid or incurred after December 31,
2013.''.
(b) Conforming Amendments.--
(1) Section 26(a)(1) is amended by inserting ``25E,'' after
``25D,''.
(2) Section 1016(a) is amended--
(A) by striking ``and'' at the end of paragraph (36),
(B) by striking the period at the end of paragraph (37) and
inserting ``, and'', and
(C) by adding at the end the following new paragraph:
``(38) to the extent provided in section 25E(g), in the
case of amounts with respect to which a credit has been
allowed under section 25E.''.
(3) Section 6501(m) is amended by inserting ``25E(h),''
after ``section''.
(4) The table of sections for subpart A of part IV of
subchapter A chapter 1 is amended

[[Page S8878]]

by inserting after the item relating to section 25D the
following new item:

``Sec. 25E. Performance based energy improvements.''.

(c) Effective Date.--The amendments made by this section
shall apply to amounts paid or incurred in taxable years
beginning on or after January 1, 2011.

SEC. 916. CREDIT FOR NONBUSINESS ENERGY PROPERTY.

(a) Extension.--
(1) In general.--Section 25C(g)(2) is amended by striking
``2010'' and inserting ``2011''.
(2) Limitation.--Section 25C(b) is amended by striking
``2009 and 2010'' and inserting ``2011''.
(b) Limitation on Expenses Relating to Windows.--Section
25C(c)(2)(B) is amended by inserting ``(but only to the
extent the amount paid or incurred for such windows does not
exceed $500)'' before the comma.
(c) Labor Costs for Insulation Installation.--Section
25C(c)(1) is amended by adding at the end the following flush
text:

``In the case of a building envelope component described in
paragraph (2)(A), the amount taken into account as paid or
incurred for qualified energy efficiency improvements shall
include expenditures for labor costs properly allocable to
the onsite preparation, assembly, or original installation of
such component.''
(d) Effective Date.--The amendments made by this section
shall apply to property placed in service after December 31,
2010.

PART II--EXPANSION OF INDUSTRIAL ENERGY EFFICIENCY INCENTIVES

SEC. 921. QUALIFYING EFFICIENT INDUSTRIAL PROCESS WATER USE
PROJECT CREDIT.

(a) In General.--Section 46 is amended by striking ``and''
at the end of paragraph (5), by striking the period at the
end of paragraph (6), and by adding at the end the following
new paragraph:
``(7) the qualifying efficient industrial process water use
project credit.''.
(b) Amount of Credit.--Subpart E of part IV of subchapter A
of chapter 1 is amended by inserting after section 48D the
following new section:

``SEC. 48E. QUALIFYING EFFICIENT INDUSTRIAL PROCESS WATER USE
PROJECT CREDIT.

``(a) In General.--
``(1) Allowance of credit.--For purposes of section 46, the
qualifying efficient industrial process water use project
credit for any taxable year is an amount equal to the
applicable percentage of the qualified investment for such
taxable year with respect to any qualifying efficient
industrial process water use project of the taxpayer.
``(2) Applicable percentage.--For purposes of subsection
(a), the applicable percentage is--
``(A) 10 percent in the case of a qualifying efficient
industrial process water use project which achieves a net
energy consumption of less than 3,000 kilowatt hours per
million gallons of water, and is placed in service before
January 1, 2013,
``(B) 20 percent in the case of a qualifying efficient
industrial process water use project which achieves a net
energy consumption of less than 2,000 kilowatt hours per
million gallons of water, and
``(C) 30 percent in the case of a qualifying efficient
industrial process water use project which achieves a net
energy consumption of less than 1,000 kilowatt hours per
million gallons of water.
``(b) Qualified Investment.--
``(1) In general.--For purposes of subsection (a), the
qualified investment for any taxable year is the basis of
eligible property placed in service by the taxpayer during
such taxable year which is part of a qualifying efficient
industrial process water use project.
``(2) Exceptions.--Such term shall not include any portion
of the basis related to--
``(A) permitting,
``(B) land acquisition, or
``(C) infrastructure associated with sourcing or water
discharge.
``(3) Certain qualified progress expenditures rules made
applicable.--Rules similar to the rules of subsections (c)(4)
and (d) of section 46 (as in effect on the day before the
enactment of the Revenue Reconciliation Act of 1990) shall
apply for purposes of this section.
``(4) Special rule for subsidized energy financing.--Rules
similar to the rules of section 48(a)(4) (without regard to
subparagraph (D) thereof) shall apply for purposes of this
section.
``(5) Limitation.--The amount which is treated for all
taxable years with respect to any qualifying efficient
industrial process water use project with respect to any site
shall not exceed $10,000,000.
``(c) Definitions.--
``(1) Qualifying efficient industrial process water use
project.--The term `qualifying efficient industrial process
water use project' means, with respect to any site, a
project--
``(A) which replaces or modifies a system for the use of
water or steam in the production of goods in the trade or
business of manufacturing (including any system for the use
of water derived from blow-down from cooling towers and steam
systems in the generation of electric power at a site also
used for the production of goods in the trade or business of
manufacturing), and
``(B) which is designed to achieve--
``(i) a reduction of not less than 20 percent in water
withdrawal and a reduction of not less than 10 percent of
water discharge when compared to the existing water use at
the site, or
``(ii) a reduction of not less than 10 percent in water
withdrawal and a reduction of not less than 20 percent of
water discharge when compared to the existing water use at
the site.
``(2) Eligible property.--The term `eligible property'
means any property--
``(A) which is part of a qualifying efficient industrial
process water use project and which is necessary for the
reduction in withdrawals or discharge described in paragraph
(1)(B),
``(B)(i) the construction, reconstruction, or erection of
which is completed by the taxpayer, or
``(ii) which is acquired by the taxpayer if the original
use of such property commences with the taxpayer, and
``(C) with respect to which depreciation (or amortization
in lieu of depreciation) is allowable.
``(3) Net energy consumption.--The term `net energy
consumption' means the energy consumed, both on-site and off-
site, with respect to the water described in paragraph
(1)(A). Net energy consumption shall be normalized per unit
of industrial output and measured under rules and procedures
established by the Secretary, in consultation with the
Administrator of the Environmental Protection Agency.
``(4) Water discharge.--The term `water discharge' means
all water leaving the site via permitted or unpermitted
surface water discharges, discharges to publicly owned
treatment works, and shallow- or deep-injection (whether on-
site or off-site).
``(5) Water withdrawal.--The term `water withdrawal' means
all water taken for use at the site from on-site ground and
surface water sources together with any water supplied to the
site by a public water system.
``(d) Termination.--This section shall not apply to periods
after December 31, 2014, under rules similar to the rules of
section 48(m) (as in effect on the day before the date of the
enactment of the Revenue Reconciliation Act of 1990).''.
(c) Conforming Amendments.--
(1) Section 49(a)(1)(C) is amended by striking ``and'' at
the end of clause (v), by striking the period at the end of
clause (vi) and inserting ``, and'', and by adding after
clause (vi) the following new clause:
``(vii) the basis of any property which is part of a
qualifying efficient industrial use water project under
section 48E.''.
(2) The table of sections for subpart E of part IV of
subchapter A of chapter 1 is amended by inserting after the
item relating to section 48D the following new item:

``Sec. 48E. Qualifying efficient industrial process water use project
credit.''.

(d) Effective Date.--The amendments made by this section
shall apply to periods after January 1, 2011, 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. 922. MOTOR ENERGY EFFICIENCY IMPROVEMENT TAX CREDIT.

(a) In General.--Subpart D of part IV of subchapter A of
chapter 1, as amended by section 914, is amended by adding at
the end the following new section:

``SEC. 45T. MOTOR ENERGY EFFICIENCY IMPROVEMENT TAX CREDIT.

``(a) In General.--For purposes of section 38, the motor
energy efficiency improvement tax credit determined under
this section for the taxable year is an amount equal to $120
multiplied by the motor horsepower of an appliance, machine,
or equipment--
``(1) manufactured in such taxable year by a manufacturer
which incorporates an advanced motor system into a newly
designed appliance, machine, or equipment or into a
redesigned appliance, machine, or equipment which did not
previously make use of the advanced motor system, or
``(2) placed back into service in such taxable year by an
end user which upgrades an existing appliance, machine, or
equipment with an advanced motor system.

For any advanced motor system with a total horsepower of less
than 10, such motor energy efficiency improvement tax credit
is an amount which bears the same ratio to $120 as such total
horsepower bears to 1 horsepower.
``(b) Advanced Motor System.--For purposes of this section,
the term `advanced motor system' means a motor and any
required associated electronic control which--
``(1) offers variable or multiple speed operation, and
``(2) uses permanent magnet technology, electronically
commutated motor technology, switched reluctance motor
technology, or such other motor systems technologies as
determined by the Secretary of Energy.
``(c) Aggregate Per Taxpayer Limitation.--
``(1) In general.--The amount of the credit determined
under this section for any taxpayer for any taxable year
shall not exceed the excess (if any) of $2,000,000 over the
aggregate credits allowed under this section with respect to
such taxpayer for all prior taxable years.
``(2) Aggregation rules.--For purposes of this section, all
persons treated as a single employer under subsections (a)
and (b) of section 52 shall be treated as 1 taxpayer.
``(d) Special Rules.--

[[Page S8879]]

``(1) Basis reduction.--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.
``(2) No double benefit.--No other credit shall be
allowable under this chapter for property with respect to
which a credit is allowed under this section.
``(3) Property used outside united states not qualified.--
No credit shall be allowable under subsection (a) with
respect to any property referred to in section 50(b)(1).
``(e) Application.--This section shall not apply to
property manufactured or placed back into service before the
date which is 6 months after the date of the enactment of
this section or after December 31, 2013.''.
(b) Conforming Amendments.--
(1) Section 38(b), as amended by section 914, is amended by
striking ``plus'' at the end of paragraph (36), by striking
the period at the end of paragraph (37) and inserting ``,
plus'', and by adding at the end the following new paragraph:
``(38) the motor energy efficiency improvement tax credit
determined under section 45T.''.
(2) Section 1016(a), as amended by section 915, is amended
by striking ``and'' at the end of paragraph (37), by striking
the period at the end of paragraph (38) and inserting ``,
and'', and by adding at the end the following new paragraph:
``(39) to the extent provided in section 45T(d)(1).''.
(3) The table of sections for subpart D of part IV of
subchapter A of chapter 1, as amended by section 914, is
amended by adding at the end the following new item:

``Sec. 45T. Motor energy efficiency improvement tax credit.''.

(c) Effective Date.--The amendments made by this section
shall apply to property manufactured or placed back into
service after the date which is 6 months after the date of
the enactment of this Act.

SEC. 923. CREDIT FOR REPLACEMENT OF CFC REFRIGERANT CHILLER.

(a) In General.--Subpart D of part IV of subchapter A of
chapter 1, as amended by section 922, is amended by adding at
the end the following new section:

``SEC. 45U. CFC CHILLER REPLACEMENT CREDIT.

``(a) In General.--For purposes of section 38, the CFC
chiller replacement credit determined under this section for
the taxable year is an amount equal to--
``(1) $150 multiplied by the tonnage rating of a CFC
chiller replaced with a new efficient chiller that is placed
in service by the taxpayer during the taxable year, plus
``(2) if all chilled water distribution pumps connected to
the new efficient chiller include variable frequency drives,
$100 multiplied by any tonnage downsizing.
``(b) CFC Chiller.--For purposes of this section, the term
`CFC chiller' includes property which--
``(1) was installed after 1980 and before 1993,
``(2) utilizes chlorofluorocarbon refrigerant, and
``(3) until replaced by a new efficient chiller, has
remained in operation and utilized for cooling a commercial
building.
``(c) New Efficient Chiller.--For purposes of this section,
the term `new efficient chiller' includes a water-cooled
chiller which is certified to meet efficiency standards
effective on January 1, 2010, as defined in table 6.8.1c in
Addendum M to Standard 90.1-2007 of the American Society of
Heating, Refrigerating, and Air Conditioning Engineers.
``(d) Tonnage Downsizing.--For purposes of this section,
the term `tonnage downsizing' means the amount by which the
tonnage rating of the CFC chiller exceeds the tonnage rating
of the new efficient chiller.
``(e) Energy Audit.--As a condition of receiving a tax
credit under this section, an energy audit shall be performed
on the building prior to installation of the new efficient
chiller, identifying cost-effective energy-saving measures,
particularly measures that could contribute to chiller
downsizing. The audit shall satisfy criteria that shall be
issued by the Secretary of Energy.
``(f) Property Used by Tax-Exempt Entity.--In the case of a
CFC chiller replaced by a new efficient chiller the use of
which is described in paragraph (3) or (4) of section 50(b),
the person who sold such new efficient chiller to the entity
shall be treated as the taxpayer that placed in service the
new efficient chiller that replaced the CFC chiller, but only
if such person clearly discloses to such entity in a document
the amount of any credit allowable under subsection (a) and
the person certifies to the Secretary that the person reduced
the price the entity paid for such new efficient chiller by
the entire amount of such credit.
``(g) Termination.--This section shall not apply to
replacements made after December 31, 2012.''.
(b) Conforming Amendments.--
(1) Section 38(b), as amended by section 922, is amended by
striking ``plus'' at the end of paragraph (37), by striking
the period at the end of paragraph (38) and inserting ``,
plus'', and by adding at the end the following new paragraph:
``(39) the CFC chiller replacement credit determined under
section 45U.''.
(2) The table of sections for subpart D of part IV of
subchapter A of chapter 1, as amended by section 922, is
amended by adding at the end the following new item:

``Sec. 45U. CFC chiller replacement credit.''.

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

SEC. 924. MODIFICATIONS IN CREDIT FOR COMBINED HEAT AND POWER
SYSTEM PROPERTY.

(a) Modification of Certain Capacity Limitations.--Section
48(c)(3)(B) is amended--
(1) by striking ``15 megawatts'' in clause (ii) and
inserting ``25 megawatts'',
(2) by striking ``20,000 horsepower'' in clause (ii) and
inserting ``34,000 horsepower'', and
(3) by striking clause (iii).
(b) Nonapplication of Certain Rules.--Section 48(c)(3)(C)
is amended by adding at the end the following new clause:
``(iv) Nonapplication of certain rules.--For purposes of
determining if the term `combined heat and power system
property' includes technologies which generate electricity or
mechanical power using back-pressure steam turbines in place
of existing pressure-reducing valves or which make use of
waste heat from industrial processes such as by using organic
rankine, stirling, or kalina heat engine systems,
subparagraph (A) shall be applied without regard to clause
(ii).''.
(c) Effective Date.--The amendments made by this section
shall apply to periods after the date of the enactment of
this Act, under rules similar to the rules of section 48(m)
of the Internal Revenue Code of 1986 (as in effect on the day
before the date of the enactment of the Revenue
Reconciliation Act of 1990).

PART III--THERMAL ENERGY EFFICIENCY

SEC. 931. BONUS DEPRECIATION FOR QUALIFYING ENERGY PROPERTY.

(a) In General.--Section 168 is amended by adding at the
end the following new subsection:
``(o) Special Allowance for Qualifying Energy Property.--
``(1) In general.--In the case of any efficient commercial
energy 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 efficient commercial energy property,
and
``(B) the adjusted basis of the efficient commercial energy
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) Efficient commercial energy property.--For purposes
of this subsection--
``(A) In general.--The term `efficient commercial energy
property' means any property placed in service before January
1, 2012, which is used in a qualifying heating conversion.
``(B) Treatment of certain expenditures.--Such term shall
include fuel service connection installation costs
specifically related to fuel service to the qualified energy
property described in clause (ii) of subparagraph (C) used in
such conversion, but does not include expenditures for soil
cleanup.''.
(b) Effective Date.--The amendment made by this section
shall apply to property placed in service after the date of
the enactment of this Act.

SEC. 932. EXTENSION OF REDUCED DEPRECIATION PERIOD FOR
NATURAL GAS DISTRIBUTION FACILITIES.

(a) In General.--Clause (viii) of section 168(e)(3)(E) is
amended to read as follows:
``(viii) any natural gas distribution facility the original
use of which commences with the taxpayer after April 11,
2005, and which is placed in service before January 1, 2013,
and''.
(b) Effective Date.--The amendment made by this section
shall take effect as if included in the amendments made
section 1325(a) of the Energy Tax Incentives Act of 2005.

Subtitle B--Vehicle Efficiency

SEC. 941. IDLING REDUCTION TAX CREDIT.

(a) In General.--Subpart D of part IV of subchapter A of
chapter 1, as amended by section 923, is amended by adding at
the end the following new section:

``SEC. 45V. IDLING REDUCTION CREDIT.

``(a) General Rule.--For purposes of section 38, the idling
reduction tax credit determined under this section for the
taxable year is an amount equal to the applicable percentage
of the amount paid or incurred for each qualifying idling
reduction device placed in service by the taxpayer during the
taxable year.
``(b) Limitation.--The maximum amount allowed as a credit
under subsection (a) for each qualifying idling reduction
device shall not exceed the applicable credit amount for such
device.
``(c) Applicable Percentage; Applicable Credit Amount.--
``(1) Devices with cooling capability.--In the case of any
qualifying idling reduction device with cooling capability
for the vehicle passenger compartment, the applicable
percentage and applicable credit amount shall be determined
in accordance with the following table:

[[Page S8880]]

------------------------------------------------------------------------
``Device consumption of diesel gallon     Applicable      Applicable
equivalent per hour              percentage     credit amount
------------------------------------------------------------------------
Not more than 0.10......................              50          $5,000
More than 0.10 but not more than 0.15...              40          $4,000
More than 0.15 but not more than 0.25...              30          $3,000
More than 0.25..........................               0             $0.
------------------------------------------------------------------------

``(2) Devices with no cooling capability.--In the case of
any qualifying idling reduction device without any cooling
capability, the applicable percentage and applicable credit
amount shall be determined in accordance with the following
table:

------------------------------------------------------------------------
``Device consumption of diesel gallon     Applicable      Applicable
equivalent per hour              percentage     credit amount
------------------------------------------------------------------------
Not more than 0.04......................              50          $1,000
More than 0.04 but not more than 0.06...              50            $800
More than 0.06..........................               0             $0.
------------------------------------------------------------------------

``(3) Modification authority.--The Administrator of the
Environmental Protection Agency, in consultation with the
Secretary, may modify the consumption thresholds categories
specified in the tables under paragraphs (1) and (2) by not
more than 0.05 diesel gallon equivalent per hour, but only if
testing procedures do not prove accurate enough to discern
between such specified categories.
``(d) Qualifying Idling Reduction Device.--For purposes of
this section--
``(1) In general.--The term `qualifying idling reduction
device' means any on-board device or system of devices
which--
``(A) is installed on a heavy-duty diesel-powered on-
highway vehicle in conformance with safety regulations under
section 393 of title 49 of the Code of Federal Regulations,
``(B) is designed to provide to such vehicle those services
(such as heat, air conditioning, or electricity) that would
otherwise require the operation of the main drive engine
while the vehicle is temporarily parked or remains
stationary,
``(C) is capable of providing power continuously for such
services for at least 8 consecutive hours,
``(D) emits fewer oxides of nitrogen (NOx) and particulate
matter (PM) on a cumulative basis than would be emitted by a
2010-compliant engine running for the same amount of time (as
determined under Environmental Protection Agency emission
standards and supplemental requirements for 2007 and later
model year diesel heavy-duty engines and vehicles (40 C.F.R.
86.007-11)),
``(E) the original use of which commences with the
taxpayer,
``(F) is acquired for use by the taxpayer and not for
resale, and
``(G) has had its average hourly fuel consumption in diesel
equivalent gallons verified by the Secretary, in
consultation with the Administrator of the Environmental
Protection Agency.
``(2) Heavy-duty diesel-powered on-highway vehicle.--The
term `heavy-duty diesel-powered on-highway vehicle' means any
diesel-powered commercial motor vehicle with a gross vehicle
registered weight of at least 26,000 pounds (as defined by
the Secretary of Transportation) which is propelled or drawn
by mechanical power and used upon the highways in the
transportation of passengers or property.
``(3) Determination of verification standards.--The
Secretary, in consultation with the Administrator of the
Environmental Protection Agency, shall establish testing
methodology and standards for verifying qualifying idling
reduction devices.
``(e) No Double Benefit.--For purposes of this section--
``(1) Reduction in basis.--If a credit is determined under
this section with respect to any property by reason of
expenditures described in subsection (a), the basis of such
property shall be reduced by the amount of the credit so
determined.
``(2) Other deductions and credits.--No deduction or credit
shall be allowed under any other provision of this chapter
with respect to the amount of the credit determined under
this section.
``(f) Election Not To Claim Credit.--This section shall not
apply to a taxpayer for any taxable year if such taxpayer
elects to have this section not apply for such taxable year.
``(g) Termination.--This section shall not apply to any
device placed in service after December 31, 2014.''.
(b) Credit To Be Part of General Business Credit.--
Subsection (b) of section 38, as amended by section 941, is
amended by striking ``plus'' at the end of paragraph (39), by
striking the period at the end of paragraph (40) and
inserting ``, plus'', and by adding at the end the following
new paragraph:
``(41) the idling reduction tax credit determined under
section 45V(a).''.
(c) Conforming Amendments.--
(1) The table of sections for subpart D of part IV of
subchapter A of chapter 1, as amended by section 923, is
amended by adding at the end the following new item:

``Sec. 45V. Idling reduction credit.''.
(2) Section 1016(a), as amended by section 941, is amended
by striking ``and'' at the end of paragraph (39), by striking
the period at the end of paragraph (40) and inserting ``,
and'', and by adding at the end the following:
``(41) in the case of a facility with respect to which a
credit was allowed under section 45V, to the extent provided
in section 45V(e)(A).''.
(3) Section 6501(m), as amended by section 941, is amended
by inserting ``45V(f)'' after ``45H(g)''.
(d) Effective Date.--The amendments made by this section
shall apply to devices placed in service after the date of
the enactment of this Act.

Subtitle C--Promotion of Domestic Manufacturing

SEC. 951. EXPANSION AND MODIFICATION OF QUALIFYING ADVANCED
ENERGY PROJECT CREDIT.

(a) Credit Rate.--Section 48C(a) is amended by striking
``equal to 30 percent'' and inserting ``the percentage
determined by the Secretary (not to exceed 30 percent)''.
(b) Dollar Limitation.--Section 48C(d)(1)(B) is amended by
striking ``$2,300,000,000'' and inserting ``$4,800,000,000''.
(c) Effective Date.--The amendment made by this section
shall apply to allocations for applications submitted after
December 31, 2009.

SEC. 952. QUALIFYING INDUSTRIAL ENERGY EFFICIENCY PROJECT
CREDIT.

(a) In General.--Section 46 of the Internal Revenue Code of
1986, as amended by section 921, is amended by striking
``and'' at the end of paragraph (6), by striking the period
at the end of paragraph (7), and by adding at the end the
following new paragraph:
``(8) the qualifying industrial energy efficiency project
credit.''.
(b) Amount of Credit.--Subpart E of part IV of subchapter A
of chapter 1, as amended by section 921, is amended by
inserting after section 48E the following new section:

``SEC. 48F. CREDIT FOR INDUSTRIAL ENERGY EFFICIENCY PROJECTS.

``(a) In General.--For purposes of section 46, the
qualifying industrial energy efficiency project credit for
any taxable year is an amount equal to 30 percent of the
qualified investment for such taxable year with respect to
any qualifying industrial energy efficiency project of an
eligible taxpayer.
``(b) Eligible Taxpayer.--For purposes of this section--
``(1) In general.--The term `eligible taxpayer' means, with
respect to any taxable year, any taxpayer which is an
industrial source.
``(2) Industrial source.--The term `industrial source'
means any stationary source which--
``(A) is not primarily an electricity source, and
``(B) is in--
``(i) the manufacturing sector (as defined in North
American Industrial Classification System codes 31, 32, and
33), or
``(ii) the natural gas processing or natural gas pipeline
transportation sector (as defined in North American
Industrial Classification System code 211112 or 486210).
``(c) Qualified Investment.--
``(1) In general.--For purposes of subsection (a), the
qualified investment for any taxable year is the basis of
eligible property placed in service by the taxpayer during
such taxable year which is part of a qualifying industrial
energy efficiency project.
``(2) Certain qualified progress expenditures rules made
applicable.--Rules similar to the rules of subsections (c)(4)
and (d) of section 46 (as in effect on the day before the
enactment of the Revenue Reconciliation Act of 1990) shall
apply for purposes of this section.
``(3) Limitation.--The amount which is treated for all
taxable years with respect to any qualifying industrial
energy efficiency project shall not exceed the amount
designated by the Secretary as eligible for the credit under
this section.
``(d) Definitions.--
``(1) Qualifying industrial energy efficiency project.--The
term `qualifying industrial energy efficiency project' means
a

[[Page S8881]]

project which reduces energy inputs for a given level of
production by capital expenditures.
``(2) Eligible property.--The term `eligible property'
means any property--
``(A) which is necessary for the energy efficiency
improvement described in paragraph (1),
``(B) which is--
``(i) tangible personal property, or
``(ii) other tangible property (not including a building or
its structural components), but only if such property is used
as an integral part of the qualifying industrial energy
efficiency project, and
``(C) with respect to which depreciation (or amortization
in lieu of depreciation) is allowable.
``(e) Qualifying Credit for Industrial Energy Efficiency
Program.--
``(1) Establishment.--
``(A) In general.--Not later than 180 days after the date
of the enactment of this section, the Secretary, in
consultation with the Secretary of Energy, shall establish a
qualifying credit for industrial energy efficiency program to
consider and award certifications for qualified investments
eligible for credits under this section to qualifying
industrial energy efficiency project sponsors.
``(B) Limitation.--The total amount of credits that may be
allocated under the program shall not exceed $1,000,000,000.
``(2) Certification.--
``(A) Application period.--Each applicant for certification
under this paragraph shall submit an application containing
such information as the Secretary may require during the 2-
year period beginning on the date the Secretary establishes
the program under paragraph (1).
``(B) Time to meet criteria for certification.--Each
applicant for certification shall have 1 year from the date
of acceptance by the Secretary of the application during
which to provide to the Secretary evidence that the
requirements of the certification have been met.
``(C) Period of issuance.--An applicant which receives a
certification shall have 3 years from the date of issuance of
the certification in order to place the project in service
and if such project is not placed in service by that time
period, then the certification shall no longer be valid.
``(3) Selection criteria.--In determining which qualifying
industrial energy efficiency projects to certify under this
section, the Secretary--
``(A) shall take into consideration which projects--
``(i) will provide the greatest domestic job retention and
creation (both direct and indirect) during the credit period,
``(ii) will provide the greatest net impact in avoiding or
reducing greenhouse gas emissions, and
``(iii) will provide the greatest net reduction of
pollutants.
``(4) Review and redistribution.--
``(A) Review.--Not later than 4 years after the date of the
enactment of this section, the Secretary shall review the
credits allocated under this section as of such date.
``(B) Redistribution.--The Secretary may reallocate credits
awarded under this section if the Secretary determines that--
``(i) there is an insufficient quantity of qualifying
applications for certification pending at the time of the
review, or
``(ii) any certification made pursuant to paragraph (2) has
been revoked pursuant to paragraph (2)(B) because the project
subject to the certification has been delayed as a result of
third party opposition or litigation to the proposed project.
``(C) Reallocation.--If the Secretary determines that
credits under this section are available for reallocation
pursuant to the requirements set forth in paragraph (2), the
Secretary is authorized to conduct an additional program for
applications for certification.
``(5) Disclosure of allocations.--The Secretary shall, upon
making a certification under this subsection, publicly
disclose the identity of the applicant, the location of the
project which is the subject of the application, and the
amount of the credit with respect to such applicant.
``(f) Denial of Double Benefit.--A credit shall not be
allowed under this section for any qualified investment for
which a credit is allowed under section 48, 48A, 48B, or
48C.''.
(c) Conforming Amendments.--
(1) Section 49(a)(1)(C), as amended by section 921, is
amended--
(A) by striking ``and'' at the end of clause (vi),
(B) by striking the period at the end of clause (vii) and
inserting ``, and''; and
(C) by adding after clause (vii) the following new clause:
``(viii) the basis of any property which is part of a
qualifying industrial energy efficiency project under section
48F.''.
(2) The table of sections for subpart E of part IV of
subchapter A of chapter 1, as amended by section 921, is
amended by inserting after the item relating to section 48E
the following new item:

``48F. Credit for industrial energy efficiency projects.''.
(d) Effective Date.--The amendments made by this section
shall apply to periods after the date of the enactment of
this Act, under rules similar to the rules of section 48(m)
of the Internal Revenue Code of 1986 (as in effect on the day
before the date of the enactment of the Revenue
Reconciliation Act of 1990).

Subtitle D--Grid Efficiency and Reliability

SEC. 961. ENERGY INVESTMENT CREDIT FOR ENERGY STORAGE
PROPERTY CONNECTED TO THE GRID.

(a) Up to 20 Percent Credit Allowed.--Subparagraph (A) of
section 48(a)(2) is amended--
(1) by striking ``and'' at the end of subclause (IV) of
clause (i),
(2) by striking ``clause (i)'' in clause (ii) and inserting
``clause (i) or (ii)'',
(3) by redesignating clause (ii) as clause (iii), and
(4) by inserting after clause (i) the following new clause:
``(ii) as provided in subsection (c)(5)(D), the percentage
determined by the Secretary (not to excced 20 percent) in the
case of qualified energy storage property, and''.
(b) Qualified Energy Storage Property.--Subsection (c) of
section 48 is amended by adding at the end the following new
paragraph:
``(5) Qualified energy storage property.--
``(A) In general.--The term `qualified energy storage
property' means property--
``(i) which is directly connected to the electrical grid,
and
``(ii) which is designed to receive electrical energy, to
store such energy, and--

``(I) to convert such energy to electricity and deliver
such electricity for sale, or
``(II) to use such energy to provide improved reliability
or economic benefits to the grid.

Such term may include hydroelectric pumped storage and
compressed air energy storage, regenerative fuel cells,
batteries, superconducting magnetic energy storage,
flywheels, thermal energy storage systems, and hydrogen
storage, or combination thereof, or any other technologies as
the Secretary, in consultation with the Secretary of Energy,
shall determine.
``(B) Minimum capacity.--The term `qualified energy storage
property' shall not include any property unless such property
in aggregate has the ability to sustain a power rating of at
least 1 megawatt for a minimum of 1 hour.
``(C) Electrical grid.--The term `electrical grid' means
the system of generators, transmission lines, and
distribution facilities which--
``(i) are under the jurisdiction of the Federal Energy
Regulatory Commission or State public utility commissions, or
``(ii) are owned by--

``(I) the Federal government,
``(II) a State or any political subdivision of a State,
``(III) an electric cooperative that receives financing
under the Rural Electrification Act of 1936 (7 U.S.C. 901 et
seq.) or that sells less than 4,000,000 megawatt hours of
electricity per year, or
``(IV) any agency, authority, or instrumentality of any one
or more of the entities described in subclause (I) or (II),
or any corporation which is wholly owned, directly or
indirectly, by any one or more of such entities.

``(D) Allocation of credits.--
``(i) In general.--In the case of qualified energy storage
property placed in service during the taxable year, the
credit otherwise determined under subsection (a) for such
year with respect to such property shall not exceed the
amount allocated to such project under clause (ii).
``(ii) National limitation and allocation.--There is a
qualified energy storage property investment credit
limitation of $1,500,000,000. Such limitation shall be
allocated by the Secretary among qualified energy storage
property projects selected by the Secretary, in consultation
with the Secretary of Energy, for taxable years beginning
after the date of the enactment of the Advanced Energy Tax
Incentives Act of 2010, except that not more than $30,000,000
shall be allocated to any project for all such taxable years.
``(iii) Selection criteria.--In making allocations under
clause (ii), the Secretary, in consultation with the
Secretary of Energy, shall select only those projects which
have a reasonable expectation of commercial viability, select
projects representing a variety of technologies,
applications, and project sizes, and give priority to
projects which--

``(I) provide the greatest increase in reliability or the
greatest economic benefit,
``(II) enable the greatest improvement in integration of
renewable resources into the grid, or
``(III) enable the greatest increase in efficiency in
operation of the grid.

``(iv) Deadlines.--

``(I) In general.--If a project which receives an
allocation under clause (ii) is not placed in service within
2 years after the date of such allocation, such allocation
shall be invalid.
``(II) Special rule for hydroelectric pumped storage.--
Notwithstanding subclause (I), in the case of a hydroelectric
pumped storage project, if such project has not received such
permits or licenses as are determined necessary by the
Secretary, in consultation with the Secretary of Energy,
within 3 years after the date of such allocation, begun
construction within 5 years after the date of such
allocation, and been placed in service within 8 years after
the date of such allocation, such allocation shall be
invalid.

[[Page S8882]]

``(III) Special rule for compressed air energy storage.--
Notwithstanding subclause (I), in the case of a compressed
air energy storage project, if such project has not begun
construction within 3 years after the date of the allocation
and been placed in service within 5 years after the date of
such allocation, such allocation shall be invalid.
``(IV) Exceptions.--The Secretary may extend the 2-year
period in subclause (I) or the periods described in
subclauses (II) and (III) on a project-by-project basis if
the Secretary, in consultation with the Secretary of Energy,
determines that there has been a good faith effort to begin
construction or to place the project in service, whichever is
applicable, and that any delay is caused by factors not in
the taxpayer's control.

``(E) Review and redistribution.--
``(i) Review.--Not later than 4 years after the date of the
enactment of the Advanced Energy Tax Incentives Act of 2010,
the Secretary shall review the credits allocated under
subparagraph (D) as of the date of such review.
``(ii) Redistribution.--Upon the review described in clause
(i), the Secretary may reallocate credits allocated under
subparagraph (D) if the Secretary determines that--

``(I) there is an insufficient quantity of qualifying
applications for certification pending at the time of the
review, or
``(II) any allocation made under subparagraph (D)(ii) has
been revoked pursuant to subparagraph (D)(iv) because the
project subject to such allocation has been delayed.

``(F) Disclosure of allocations.--The Secretary shall, upon
making an allocation under subparagraph (D)(ii), publicly
disclose the identity of the applicant, the location of the
project, and the amount of the credit with respect to such
applicant.
``(G) Termination.--No credit shall be allocated under
subparagraph (D) for any period ending after December 31,
2020.''.
(c) Effective Date.--The amendments made by this section
shall apply to periods after the date of the enactment of
this Act, under rules similar to the rules of section 48(m)
of the Internal Revenue Code of 1986 (as in effect on the day
before the date of the enactment of the Revenue
Reconciliation Act of 1990).

SEC. 962. ENERGY STORAGE PROPERTY CONNECTED TO THE GRID
ELIGIBLE FOR NEW CLEAN RENEWABLE ENERGY BONDS.

(a) In General.--Paragraph (1) of section 54C(d) is amended
to read as follows:
``(1) Qualified renewable energy facility.--The term
`qualified renewable energy facility' means a facility which
is--
``(A)(i) a qualified facility (as determined under section
45(d) without regard to paragraphs (8) and (10) thereof and
to any placed in service date), or
``(ii) a qualified energy storage property (as defined in
section 48(c)(5)), and
``(B) owned by a public power provider, a governmental
body, or a cooperative electric company.''.
(b) Effective Date.--The amendment made by this section
shall apply to obligations issued after the date of the
enactment of this Act.

SEC. 963. ENERGY INVESTMENT CREDIT FOR ONSITE ENERGY STORAGE.

(a) Credit Allowed.--Clause (i) of section 48(a)(2)(A), as
amended by section 961, is amended--
(1) by striking ``and'' at the end of subclause (III),
(2) by inserting ``and'' at the end of subclause (IV), and
(3) by adding at the end the following new subclause:

``(V) qualified onsite energy storage property,''.

(b) Qualified Onsite Energy Storage Property.--Subsection
(c) of section 48, as amended by section 961, is amended by
adding at the end the following new paragraph:
``(6) Qualified onsite energy storage property.--
``(A) In general.--The term `qualified onsite energy
storage property' means property which--
``(i) provides supplemental energy to reduce peak energy
requirements primarily on the same site where the storage is
located, or
``(ii) is designed and used primarily to receive and store
intermittent renewable energy generated onsite and to deliver
such energy primarily for onsite consumption.

Such term may include thermal energy storage systems and
property used to charge plug-in and hybrid electric vehicles
if such property or vehicles are equipped with smart grid
services which control time-of-day charging and discharging
of such vehicles. Such term shall not include any property
for which any other credit is allowed under this chapter.
``(B) Minimum capacity.--The term `qualified onsite energy
storage property' shall not include any property unless such
property in aggregate--
``(i) has the ability to store the energy equivalent of at
least 20 kilowatt hours of energy,
``(ii) has the ability to have an output of the energy
equivalent of 5 kilowatts of electricity for a period of 4
hours, and
``(iii) has a roundtrip energy storage efficiency of not
less than 70 percent.
``(C) Limitation.--In the case of qualified onsite energy
storage property placed in service during the taxable year,
the credit otherwise determined under subsection (a) for such
year with respect to such property shall not exceed
$1,000,000.''.
(c) Effective Date.--The amendments made by this section
shall apply to periods after the date of the enactment of
this Act, under rules similar to the rules of section 48(m)
of the Internal Revenue Code of 1986 (as in effect on the day
before the date of the enactment of the Revenue
Reconciliation Act of 1990).

SEC. 964. CREDIT FOR RESIDENTIAL ENERGY STORAGE EQUIPMENT.

(a) Credit Allowed.--Subsection (a) of section 25C is
amended--
(1) by redesignating paragraphs (2) and (3) as paragraphs
(3) and (4), respectively, and
(2) by inserting after paragraph (1) the following new
paragraph:
``(2) 30 percent of the amount paid or incurred by the
taxpayer for qualified residential energy storage equipment
installed during such taxable year,''.
(b) Qualified Residential Energy Storage Equipment.--
(1) In general.--Section 25C, as amended by section 916, is
amended--
(A) by redesignating subsections (e), (f), and (g)
subsections (f), (g), and (h), respectively, and
(B) by inserting after subsection (d) the following new
subsection:
``(d) Qualified Residential Energy Storage Equipment.--For
purposes of this section, the term `qualified residential
energy storage equipment' means property--
``(1) which is installed in or on a dwelling unit located
in the United States and owned and used by the taxpayer as
the taxpayer's principal residence (within the meaning of
section 121), or on property owned by the taxpayer on which
such a dwelling unit is located,
``(2) which--
``(A) provides supplemental energy to reduce peak energy
requirements primarily on the same site where the storage is
located, or
``(B) is designed and used primarily to receive and store
intermittent renewable energy generated onsite and to deliver
such energy primarily for onsite consumption,
``(3) which has a roundtrip energy storage efficiency of
not less than 70 percent, and
``(4) which--
``(A) has the ability to store the energy equivalent of at
least 2 kilowatt hours of energy, and
``(B) has the ability to have an output of the energy
equivalent of 500 watts of electricity for a period of 4
hours.

Such term may include thermal energy storage systems and
property used to charge plug-in and hybrid electric vehicles
if such property or vehicles are equipped with smart grid
services which control time-of-day charging and discharging
of such vehicles. Such term shall not include any property
for which any other credit is allowed under this chapter.''.
(2) Conforming amendment.--Section 1016(a)(33) is amended
by striking ``section 25C(f)'' and inserting ``section
25C(g)''.
(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. 965. CLARIFICATION OF TYPES OF ENERGY CONSERVATION
SUBSIDIES PROVIDED BY PUBLIC UTILITIES ELIGIBLE
FOR INCOME EXCLUSION.

(a) In General.--Section 136 is amended by redesignating
subsection (d) as subsection (e) and by inserting after
subsection (c) the following new subsection:
``(d) Net Metering or Net Billing Programs; Renewable
Energy Credits.--
``(1) In general.--For purposes of this section, the term
`subsidy' includes amounts received by a customer from a
public utility--
``(A) to pay for electricity generated from an energy
conservation measure under a net metering or net billing
program, or
``(B) to pay for renewable energy credits attributable to
an energy conservation measure.
``(2) Limitation.--The amount treated as a subsidy for any
taxable year by reason of paragraph (1)(B) shall not exceed
an amount equal to--
``(A) $2,000, multiplied by
``(B) the whole number of years worth of renewable energy
credits that are sold by the customer.
``(3) No basis reduction.--Subsection (b) shall not apply
with respect to property any portion of the basis of which is
attributable to an amount described in paragraph (1).''.
(b) Effective Date.--The amendments made by this section
shall apply to amounts received after the date of the
enactment of this Act.

SEC. 966. EXTENSION OF CREDITS RELATED TO THE PRODUCTION OF
ELECTRICITY FROM OFFSHORE WIND.

(a) Extension for Production Credit.--
(1) In general.--Paragraph (1) of section 45(d) is amended
by inserting ``(January 1, 2016, in the case of any offshore
facility)'' after ``and before January 1, 2013''.
(2) Offshore facility.--Section 45(e) is amended by adding
at the end the following new paragraph:
``(12) Offshore facility.--The term `offshore facility'
means any facility located in the inland navigable waters of
the United States, including the Great Lakes, or in the
coastal waters of the United States, including the
territorial seas of the United States, the exclusive economic
zone of the United States, and the outer Continental Shelf of
the United States.''.
(b) Extension for Investment Credit.--Clause (i) of section
48(a)(5)(C) is amended--
(1) by striking ``is placed in service in'' and inserting
``is--

[[Page S8883]]

``(I) except as provided in subclause (II), placed in
service in'',

(2) by striking the period at the end and inserting ``,
and'', and
(3) by adding at the end the following new subclause:

``(II) in the case of an offshore facility (as defined in
section 45(e)(12)), such facility is placed in service after
2008 and before 2016.''.

(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.

Subtitle E--Carbon Capture and Sequestration

SEC. 971. IMPROVED AVAILABILITY OF THE CREDIT FOR CARBON
DIOXIDE SEQUESTRATION.

(a) Increase in Total Credit Available.--Section 45Q(e) is
amended by striking ``75,000,000 metric tons'' and inserting
``100,000,000 metric tons''.
(b) Amount of Credit Per Project.--Section 45Q(a) is
amended by adding at the end the following new flush
sentence:

``The amount which is treated as a carbon dioxide
sequestration credit for all taxable years with respect to
any qualified facility shall not exceed the amount designated
by the Secretary, in consultation with the Secretary of
Energy, as eligible for the credit under this section, but in
no event shall such designated credit result in more than
10,000,000 metric tons of qualified carbon dioxide being
taken into account under this subsection.''.
(c) Increase in Credit Amount for Permanent
Sequestration.--Section 45Q(a)(1) is amended by striking
``$20'' and inserting ``$35''.
(d) Modification of Qualified Facility Eligibility.--
Section 45Q(c) 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) with respect to which such taxpayer shows contractual
intent to inject and permanently sequester the full amount of
captured carbon dioxide.''.
(e) Credit Allocation Program.--Section 45Q is amended by
adding at the end the following new subsection:
``(f) Carbon Dioxide Sequestration Program.--
``(1) Establishment.--Not later than 180 days after the
date of enactment of this section, the Secretary, in
consultation with the Secretary of Energy, shall establish a
carbon dioxide sequestration program to consider and award
certifications for carbon dioxide sequestration credits under
this section to qualified facility sponsors.
``(2) Certification.--
``(A) Application period.--Each applicant for certification
under this paragraph shall submit an application containing
such information as the Secretary, in consultation with the
Secretary of Energy, may require during 1 or more application
periods. Each application period shall be announced at least
6 months in advance of the application due dates, along with
the evaluation criteria that will be used to assess
applications.
``(B) Scope and review of applications.--Applicants may
apply to the Secretary for an allocation of tax credits under
this section for a period of 10 years based on expected
carbon dioxide injection rates once the sponsor of the
qualified facility has received air permits necessary to
commence construction under the Clean Air Act. The Secretary,
in consultation with the Secretary of Energy, shall notify
each qualified applicant for such credits that the applicant
has met the requirements for an allocation of the anticipated
metric tons of carbon dioxide injected from the qualified
facility within 180 days of receipt of an application.
``(C) Contents of application.--Each application shall
include the following:
``(i) Identification of facility, location, and ownership.
``(ii) Status and outlook for any State or Federal
regulatory approvals required.
``(iii) The total amount of metric tons of carbon dioxide
requested for a tax credit under this section.
``(iv) The total dollar value of the requested tax credit
under this section.
``(D) Period of issuance; reallocation.--An applicant which
receives a certification shall have 18 months from the date
of issuance of the certification in order to commence
construction of the qualified facility within the meaning of
the Clean Air Act. If such construction is not begun within
such time period, or if the sponsor fails as determined by
the Secretary, in consultation with the Secretary of Energy,
to commence operation within the meaning of the Clean Air Act
or establish carbon dioxide injection of at least 50 percent
of the annualized pre-certified carbon dioxide injection
metric tons for such facility within 72 months of such
issuance, the certification shall no longer be valid and the
credits shall be forfeited and reallocated by the Secretary,
in consultation with the Secretary of Energy.
``(3) Selection criteria.--
``(A) In general.--In determining which facilities to
certify under this section, the Secretary, in consultation
with the Secretary of Energy, shall take into consideration--
``(i) which facilities--

``(I) participate in a public-private partnership,
``(II) achieve commercial scale and a reasonable
expectation of economic viability, and
``(III) achieve the highest percentage of carbon dioxide
captured and sequestered from the facility's nameplate
capacity, and

``(ii) to the extent that it does not compromise facility
quality or environmental benefits of the total program,
awarding credits to facilities in a variety of geographic
locations and geologic sequestration formations.
``(B) Public-private partnership.--For purposes of
subparagraph (A)(i)(I), the term `public-private partnership'
means a contract between a public sector authority and a
private party, in which the private party provides a public
service or facility and assumes substantial financial,
technical, and operational risk in the facility. The public
sector authority may also bear financial, technical, or
operational risk in the form of grants, loans, or tax
incentives.
``(4) Disclosure of allocations.--The Secretary shall, upon
making a certification under this subsection, publicly
disclose the identity of the applicant, the location of the
relevant project, and the amount of the credit with respect
to such applicant.''.
(f) Effective Date.--The amendments made by this section
shall apply to allocations after the date of the enactment of
this Act.

Subtitle F--Promotion of Clean Domestic Fuels

SEC. 981. ALGAE TREATED AS A QUALIFIED FEEDSTOCK FOR PURPOSES
OF THE CELLULOSIC BIOFUEL PRODUCER CREDIT, ETC.

(a) In General.--Subclause (I) of section 40(b)(6)(E)(i) is
amended to read as follows:

``(I) is derived solely from qualified feedstocks, and''.

(b) Qualified Feedstock; Special Rules for Algae.--
Paragraph (6) of section 40(b) is amended by redesignating
subparagraphs (F), (G), and (H) as subparagraphs (H), (I),
and (J), respectively, and by inserting after subparagraph
(E) the following new subparagraphs:
``(F) Qualified feedstock.--For purposes of this paragraph,
the term `qualified feedstock' means--
``(i) any lignocellulosic or hemicellulosic matter that is
available on a renewable or recurring basis, or
``(ii) any cultivated algae, cyanobacteria, or lemna.
``(G) Special rules for algae.--In the case of fuel which
is derived from feedstock described in subparagraph (F)(ii)
and which is sold by the taxpayer to another person for
refining by such other person into a fuel which meets the
requirements of subparagraph (E)(i)(II)--
``(i) such sale shall be treated as described in
subparagraph (C)(i),
``(ii) such fuel shall be treated as meeting the
requirements of subparagraph (E)(i)(II) in the hands of such
taxpayer, and
``(iii) except as provided in this subparagraph, such fuel
(and any fuel derived from such fuel) shall not be taken into
account under subparagraph (C) with respect to the taxpayer
or any other person.''.
(c) Algae Treated as a Qualified Feedstock for Purposes of
Bonus Depreciation for Biofuel Plant Property.--
(1) In general.--Subparagraph (A) of section 168(l)(2) is
amended by striking ``solely to produce cellulosic biofuel''
and inserting ``solely to produce second generation biofuel
(as defined in section 40(b)(6)(E))''.
(2) Conforming amendments.--Subsection (l) of section 168
is amended--
(A) by striking ``cellulosic biofuel'' each place it
appears in the text thereof and inserting ``second generation
biofuel'',
(B) by striking paragraph (3) and redesignating paragraphs
(4) through (8) as paragraphs (3) through (7), respectively,
(C) by striking ``Cellulosic'' in the heading of such
subsection and inserting ``Second Generation'', and
(D) by striking ``cellulosic'' in the heading of paragraph
(2) and inserting ``second generation''.
(d) Conforming Amendments.--
(1) Section 40, as amended by subsection (b), is amended--
(A) by striking ``cellulosic biofuel'' each place it
appears in the text thereof and inserting ``second generation
biofuel'',
(B) by striking ``Cellulosic'' in the headings of
subsections (b)(6), (b)(6)(E), and (d)(3)(D) and inserting
``Second generation'', and
(C) by striking ``cellulosic'' in the headings of
subsections (b)(6)(C), (b)(6)(D), (b)(6)(H), (d)(6), and
(e)(3) and inserting ``second generation''.
(2) Clause (ii) of section 40(b)(6)(E) is amended by
striking ``Such term shall not'' and inserting ``The term
`second generation biofuel' shall not''.
(3) Paragraph (1) of section 4101(a) is amended by striking
``cellulosic biofuel'' and inserting ``second generation
biofuel''.
(e) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to fuels sold or
used after the date of the enactment of this Act.
(2) Application to bonus depreciation.--The amendments made
by subsection (c) shall apply to property placed in service
after the date of the enactment of this Act.

SEC. 982. EXTENSION OF PROVISIONS RELATED TO ALCOHOL USED AS
FUEL.

(a) Extension of Income Tax Credit for Alcohol Used as
Fuel.--
(1) In general.--Paragraph (1) of section 40(e) is
amended--

[[Page S8884]]

(A) by striking ``December 31, 2010'' in subparagraph (A)
and inserting ``December 31, 2011'', and
(B) by striking ``January 1, 2011'' in subparagraph (B) and
inserting ``January 1, 2012''.
(2) Reduced amount for ethanol blenders.--Subsection (h) of
section 40 is amended--
(A) by striking ``2010'' in paragraph (1) and inserting
``2011'', and
(B) by striking the period at the end of the table
contained in paragraph (2) and adding the following new item:

------------------------------------------------------------------------

------------------------------------------------------------------------
``2011..............................   36 cents  26.66 cents.''.
------------------------------------------------------------------------

(3) Reduced rate for small ethanol producers.--Section
40(b)(4)(A) is amended by striking ``10 cents'' and inserting
``8 cents''.
(4) Effective date.--
(A) In general.--Except as provided in subparagraph (B),
the amendments made by this subsection shall apply to periods
after December 31, 2010.
(B) Rate for small ethanol producers.--The amendment made
by paragraph (3) shall apply to the sale or use of alcohol
after December 31, 2010.
(b) Extension of Excise Tax Credit for Alcohol Used as
Fuel.--
(1) In general.--Paragraph (6) of section 6426(b) is
amended by striking ``December 31, 2010'' and inserting
``December 31, 2011''.
(2) Reduced applicable amount for ethanol.--Subparagraph
(A) of section 6426(b)(2) is amended--
(A) by striking ``and'' at the end of clause (i),
(B) in clause (ii)--
(i) by inserting ``and before 2011'' after ``after 2008'',
and
(ii) by striking the period and inserting ``, and'', and
(C) by adding at the end the following new clause:
``(iii) in the case of calendar years beginning after 2010,
36 cents.''.
(3) Effective date.--The amendments made by this subsection
shall apply to periods after December 31, 2010.
(c) Extension of Payment for Alcohol Fuel Mixture.--
(1) In general.--Subparagraph (A) of section 6427(e)(6) is
amended by striking ``December 31, 2010'' and inserting
``December 31, 2011''.
(2) Effective date.--The amendment made by this subsection
shall apply to sales and uses after December 31, 2010.
(d) Extension of Additional Duties on Ethanol.--
(1) In general.--Headings 9901.00.50 and 9901.00.52 of the
Harmonized Tariff Schedule of the United States are each
amended in the effective period column by striking ``1/1/
2011'' and inserting ``1/1/2012''.
(2) Ethanol tax parity.--Not later than 30 days after the
date of the enactment of this Act, and semiannually
thereafter, the President shall reduce the temporary duty
imposed on ethanol under subheading 9901.00.50 of the
Harmonized Tariff Schedule of the United States by an amount
equal to the reduction in any Federal income or excise tax
credit under section 40(h), 6426(b), or 6427(e)(1) of the
Internal Revenue Code of 1986 and take any other action
necessary to ensure that the combined temporary duty imposed
on ethanol under such subheading 9901.00.50 and any other
duty imposed under the Harmonized Tariff Schedule of the
United States is equal to, or lower than, any Federal income
or excise tax credit applicable to ethanol under the Internal
Revenue Code of 1986.
(3) Effective date.--The amendments made by this subsection
shall take effect on January 1, 2011.

Subtitle G--Applicability of Sections

SEC. 991. APPLICABILITY OF SECTIONS.

The provisions of, and amendments made by, sections 703 and
710 of this Act are hereby deemed null, void, and of no
effect.
______