II
Calendar No. 1130
110th CONGRESS
2d Session
H. R. 7060
IN THE SENATE OF THE UNITED STATES
September 26 (legislative day, September 17), 2008
Received
December 8 (legislative day, November 20), 2008
Read the first time
December 9, 2008
Read the second time and placed on the calendar
AN ACT
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.
Short title, etc
Short title
This Act may be cited as the
Renewable Energy and Job Creation Tax
Act of 2008
.
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.
Table of contents
The table of contents for this Act is as follows:
Sec. 1. Short title, etc.
Title I—Energy Tax Incentives
Subtitle A—Energy production incentives
Part 1—Renewable energy incentives
Sec. 101. Renewable energy credit.
Sec. 102. Production credit for electricity produced from marine renewables.
Sec. 103. Energy credit.
Sec. 104. Credit for residential energy efficient property.
Sec. 105. Special rule to implement FERC and State electric restructuring policy.
Part 2—Carbon mitigation 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.
Sec. 114. Special rules for refund of the coal excise tax to certain coal producers and exporters.
Sec. 115. Carbon audit of the tax code.
Subtitle B—Transportation and domestic fuel security provisions
Sec. 121. Inclusion of cellulosic biofuel in bonus depreciation for biomass ethanol plant property.
Sec. 122. Credits for biodiesel and renewable diesel.
Sec. 123. Clarification that credits for fuel are designed to provide an incentive for United States production.
Sec. 124. Credit for new qualified plug-in electric drive motor vehicles.
Sec. 125. Exclusion from heavy truck tax for idling reduction units and advanced insulation.
Sec. 126. Transportation fringe benefit to bicycle commuters.
Sec. 127. Alternative fuel vehicle refueling property credit.
Sec. 128. 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.
Subtitle C—Energy conservation and efficiency provisions
Sec. 131. Credit for nonbusiness energy property.
Sec. 132. Energy efficient commercial buildings deduction.
Sec. 133. Modifications of energy efficient appliance credit for appliances produced after 2007.
Sec. 134. Accelerated recovery period for depreciation of smart meters and smart grid systems.
Sec. 135. Qualified green building and sustainable design projects.
Title II—Extension of temporary provisions
Subtitle A—Extensions Primarily Affecting Individuals
Sec. 201. Deduction for State and local sales taxes.
Sec. 202. Deduction of qualified tuition and related expenses.
Sec. 203. Treatment of certain dividends of regulated investment companies.
Sec. 204. Tax-free distributions from individual retirement plans for charitable purposes.
Sec. 205. Deduction for certain expenses of elementary and secondary school teachers.
Sec. 206. Stock in RIC for purposes of determining estates of nonresidents not citizens.
Sec. 207. Qualified investment entities.
Sec. 208. Real property tax standard deduction.
Subtitle B—Extensions Primarily Affecting Businesses
Sec. 221. Research credit.
Sec. 222. Indian employment credit.
Sec. 223. New markets tax credit.
Sec. 224. Railroad track maintenance.
Sec. 225. Fifteen-year straight-line cost recovery for qualified leasehold improvements and qualified restaurant property.
Sec. 226. Seven-year cost recovery period for motorsports racing track facility.
Sec. 227. Accelerated depreciation for business property on Indian reservation.
Sec. 228. Expensing of environmental remediation costs.
Sec. 229. Deduction allowable with respect to income attributable to domestic production activities in Puerto Rico.
Sec. 230. Modification of tax treatment of certain payments to controlling exempt organizations.
Sec. 231. Qualified zone academy bonds.
Sec. 232. Tax incentives for investment in the District of Columbia.
Sec. 233. Economic development credit for American Samoa.
Sec. 234. Enhanced charitable deduction for contributions of food inventory.
Sec. 235. Enhanced charitable deduction for contributions of book inventory to public schools.
Sec. 236. Enhanced deduction for qualified computer contributions.
Sec. 237. Basis adjustment to stock of S corporations making charitable contributions of property.
Sec. 238. Work opportunity tax credit for Hurricane Katrina employees.
Sec. 239. Subpart
F exception for active financing income.Sec. 240. Look-thru rule for related controlled foreign corporations.
Sec. 241. Expensing for certain qualified film and television productions.
Subtitle C—Other Extensions
Sec. 251. Authority to disclose information related to terrorist activities made permanent.
Sec. 252. Authority for undercover operations made permanent.
Sec. 253. Increase in limit on cover over of rum excise tax to Puerto Rico and the Virgin Islands.
Title III—Additional tax relief and other provisions
Sec. 301. Refundable child credit.
Sec. 302. Provisions related to film and television productions.
Sec. 303. Exemption from excise tax for certain arrows designed for use by children.
Sec. 304. Modification of penalty on understatement of taxpayer’s liability by tax return preparer.
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.
Sec. 406. Nonqualified deferred compensation from certain tax indifferent parties.
Sec. 407. Delay in application of worldwide allocation of interest.
Sec. 408. Time for payment of corporate estimated taxes.
Energy Tax Incentives
Energy production incentives
Renewable energy incentives
Renewable energy credit
Extension of credit
Wind facilities
Paragraph (1) of section 45(d) is amended
by striking January 1, 2009
and inserting January 1,
2010
.
Other facilities
Each of the following provisions of section
45(d) is amended by striking January 1, 2009
and inserting
October 1, 2011
:
Clauses (i) and (ii) of paragraph (2)(A).
Clauses (i)(I) and (ii) of paragraph (3)(A).
Paragraph (4).
Paragraph (5).
Paragraph (6).
Paragraph (7).
Subparagraphs (A) and (B) of paragraph (9).
Modification of Credit Phaseout
Repeal of phaseout
Subsection (b) of section 45 is amended—
by striking paragraph (1), and
by striking the 8 cent amount in
paragraph (1),
in paragraph (2) thereof.
Limitation based on investment in facility
Subsection (b) of section 45 is amended by inserting before paragraph (2) the following new paragraph:
Limitation based on investment in facility
In general
In the case of any qualified facility originally placed in service after December 31, 2009, the amount of the credit determined under subsection (a) for any taxable year with respect to electricity produced at such facility shall not exceed the product of—
the applicable percentage with respect to such facility, multiplied by
the eligible basis of such facility.
Carryforward of unused limitation and excess credit
Unused limitation
If the limitation imposed under subparagraph (A) with respect to any facility for any taxable year exceeds the prelimitation credit for such facility for such taxable year, the limitation imposed under subparagraph (A) with respect to such facility for the succeeding taxable year shall be increased by the amount of such excess.
Excess credit
If the prelimitation credit with respect to any facility for any taxable year exceeds the limitation imposed under subparagraph (A) with respect to such facility for such taxable year, the credit determined under subsection (a) with respect to such facility for the succeeding taxable year (determined before the application of subparagraph (A) for such succeeding taxable year) shall be increased by the amount of such excess. With respect to any facility, no amount may be carried forward under this clause to any taxable year beginning after the 10-year period described in subsection (a)(2)(A)(ii) with respect to such facility.
Prelimitation credit
The term prelimitation
credit
with respect to any facility for a taxable year means the credit
determined under subsection (a) with respect to such facility for such taxable
year, determined without regard to subparagraph (A) and after taking into
account any increase for such taxable year under clause (ii).
Applicable percentage
For purposes of this paragraph—
In general
The term applicable
percentage
means, with respect to any facility, the appropriate
percentage prescribed by the Secretary for the month in which such facility is
originally placed in service.
Method of prescribing applicable percentage
The applicable percentage prescribed by the Secretary for any month under clause (i) shall be the percentage which yields over a 10-year period amounts of limitation under subparagraph (A) which have a present value equal to 35 percent of the eligible basis of the facility.
Method of discounting
The present value under clause (ii) shall be determined—
as of the last day of the 1st year of the 10-year period referred to in clause (ii),
by using a discount rate equal to the greater of 110 percent of the Federal long-term rate as in effect under section 1274(d) for the month preceding the month for which the applicable percentage is being prescribed, or 4.5 percent, and
by taking into account the limitation under subparagraph (A) for any year on the last day of such year.
Eligible basis
For purposes of this paragraph—
In general
The term eligible basis
means, with respect to any facility, the sum of—
the basis of such facility determined as of the time that such facility is originally placed in service, and
the portion of the basis of any shared qualified property which is properly allocable to such facility under clause (ii).
Rules for allocation
For purposes of subclause (II) of clause (i), the basis of shared qualified property shall be allocated among all qualified facilities which are projected to be placed in service and which require utilization of such property in proportion to projected generation from such facilities.
Shared qualified property
For purposes of this paragraph, the term
shared qualified property
means, with respect to any facility,
any property described in section 168(e)(3)(B)(vi)—
which a qualified facility will require for utilization of such facility, and
which is not a qualified facility.
Special rule relating to geothermal facilities
In the case of any qualified facility using geothermal energy to produce electricity, the basis of such facility for purposes of this paragraph shall be determined as though intangible drilling and development costs described in section 263(c) were capitalized rather than expensed.
Special rule for first and last year of credit period
In the case of any taxable year any portion of which is not within the 10-year period described in subsection (a)(2)(A)(ii) with respect to any facility, the amount of the limitation under subparagraph (A) with respect to such facility shall be reduced by an amount which bears the same ratio to the amount of such limitation (determined without regard to this subparagraph) as such portion of the taxable year which is not within such period bears to the entire taxable year.
Election to treat all facilities placed in service in a year as 1 facility
At the election of the taxpayer, all qualified facilities which are part of the same project and which are originally placed in service during the same calendar year shall be treated for purposes of this section as 1 facility which is originally placed in service at the mid-point of such year or the first day of the following calendar year.
.
Trash facility clarification
Paragraph (7) of section 45(d) is amended—
by striking facility which
burns
and inserting facility (other than a facility described in
paragraph (6)) which uses
, and
by striking combustion
.
Expansion of biomass facilities
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:
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.
.
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:
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.
.
Modification of rules for hydropower production
Subparagraph (C) of section 45(c)(8) is amended to read as follows:
Nonhydroelectric dam
For purposes of subparagraph (A), a facility is described in this subparagraph if—
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,
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
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.
.
Effective date
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.
Repeal of credit phaseout
The amendments made by subsection (b)(1) shall apply to taxable years ending after December 31, 2008.
Limitation based on investment in facility
The amendment made by subsection (b)(2) shall apply to property originally placed in service after December 31, 2009.
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.
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.
Production credit for electricity produced from marine renewables
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:
marine and hydrokinetic renewable energy.
.
Marine renewables
Subsection (c) of section 45 is amended by adding at the end the following new paragraph:
Marine and hydrokinetic renewable energy
In general
The term marine and hydrokinetic renewable energy means energy derived from—
waves, tides, and currents in oceans, estuaries, and tidal areas,
free flowing water in rivers, lakes, and streams,
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
differentials in ocean temperature (ocean thermal energy conversion).
Exceptions
Such term shall not include any energy which is derived from any source which utilizes a dam, diversionary structure (except as provided in subparagraph (A)(iii)), or impoundment for electric power production purposes.
.
Definition of facility
Subsection (d) of section 45 is amended by adding at the end the following new paragraph:
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—
which has a nameplate capacity rating of at least 150 kilowatts, and
which is originally placed in service on or after the date of the enactment of this paragraph and before October 1, 2011.
.
Credit rate
Subparagraph (A) of section 45(b)(4) is
amended by striking or (9)
and inserting (9), or
(11)
.
Coordination with small irrigation power
Paragraph (5) of
section 45(d), as amended by section 101, is amended by striking October
1, 2011
and inserting the date of the enactment of paragraph
(11)
.
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.
Energy credit
Extension of credit
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
.
Fuel cell property
Subparagraph (E) of section 48(c)(1) is
amended by striking December 31, 2008
and inserting
December 31, 2016
.
Microturbine property
Subparagraph (E) of section 48(c)(2) is
amended by striking December 31, 2008
and inserting
December 31, 2016
.
Allowance of energy credit against alternative minimum tax
In general
Subparagraph (B) of section 38(c)(4) is
amended by redesignating clause (vi) as clause (vii), by striking
and
at the end of clause (v), and by inserting after clause (v)
the following new clause:
the credit determined under section 46 to the extent that such credit is attributable to the energy credit determined under section 48, and
.
Technical amendment
Clause (v) of section 38(c)(4)(B) 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
.
Energy credit for combined heat and power system property
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:
combined heat and power system property,
.
Combined Heat and Power System Property
Subsection (c) of section 48 is amended—
by striking Qualified fuel cell property; qualified
microturbine property
in the heading and inserting
Definitions
, and
by adding at the end the following new paragraph:
Combined Heat and Power System Property
Combined heat and power system property
The term combined heat and power system property means property comprising a system—
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),
which produces—
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
at least 20 percent of its total useful energy in the form of electrical or mechanical power (or combination thereof),
the energy efficiency percentage of which exceeds 60 percent, and
which is placed in service before January 1, 2017.
Limitation
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.
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.
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.
Special rules
Energy efficiency percentage
For purposes of this paragraph, the energy efficiency percentage of a system is the fraction—
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
the denominator of which is the lower heating value of the fuel sources for the system.
Determinations made on btu basis
The energy efficiency percentage and the percentages under subparagraph (A)(ii) shall be determined on a Btu basis.
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.
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—
subparagraph (A)(iii) shall not apply, but
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.
.
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)
.
Increase of credit limitation for fuel cell property
Subparagraph (B) of
section 48(c)(1) is amended by striking $500
and inserting
$1,500
.
Public utility property taken into account
In general
Paragraph (3) of section 48(a) is amended by striking the second sentence thereof.
Conforming amendments
Paragraph (1) of section 48(c) is amended by striking subparagraph (D) and redesignating subparagraph (E) as subparagraph (D).
Paragraph (2) of section 48(c) is amended by striking subparagraph (D) and redesignating subparagraph (E) as subparagraph (D).
Effective date
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.
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.
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).
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).
Credit for residential energy efficient property
Extension
Section 25D(g) is amended by striking
December 31, 2008
and inserting December 31,
2016
.
Removal of limitation for solar electric property
In general
Section 25D(b)(1), as amended by subsections (c) and (d), is amended—
by striking subparagraph (A), and
by redesignating subparagraphs (B) through (E) as subparagraphs (A) through and (D), respectively.
Conforming amendment
Section 25D(e)(4)(A), as amended by subsections (c) and (d), is amended—
by striking clause (i), and
by redesignating clauses (ii) through (v) as clauses (i) and (iv), respectively.
Credit for residential wind property
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:
30 percent of the qualified small wind energy property expenditures made by the taxpayer during such year.
.
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:
$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.
.
Qualified small wind energy property expenditures
In general
Section 25D(d) is amended by adding at the end the following new paragraph:
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.
.
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.
.
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:
$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.
.
Credit for geothermal heat pump systems
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:
30 percent of the qualified geothermal heat pump property expenditures made by the taxpayer during such year.
.
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:
$2,000 with respect to any qualified geothermal heat pump property expenditures.
.
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:
Qualified geothermal heat pump property expenditure
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.
Qualified geothermal heat pump property
The term
qualified geothermal heat pump property
means any equipment
which—
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
meets the requirements of the Energy Star program which are in effect at the time that the expenditure for such equipment is made.
.
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:
$6,667 in the case of any qualified geothermal heat pump property expenditures.
.
Credit allowed against alternative minimum tax
In general
Subsection (c) of section 25D is amended to read as follows:
Limitation based on amount of tax; carryforward of unused credit
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—
the sum of the regular tax liability (as defined in section 26(b)) plus the tax imposed by section 55, over
the sum of the credits allowable under this subpart (other than this section) and section 27 for the taxable year.
Carryforward of unused credit
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.
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.
.
Conforming amendments
Section 23(b)(4)(B) is amended by inserting
and section 25D
after this section
.
Section 24(b)(3)(B) is amended by striking
and 25B
and inserting , 25B, and 25D
.
Section 25B(g)(2) is amended by striking
section 23
and inserting sections 23 and
25D
.
Section 26(a)(1) is amended by striking
and 25B
and inserting 25B, and 25D
.
Effective date
In general
Except as provided in paragraph (2), the amendments made by this section shall apply to taxable years beginning after December 31, 2007.
Solar electric property limitation
The amendments made by subsection (b) shall apply to property placed in service after the date of the enactment of this Act, in taxable years ending after such date.
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.
Special rule to implement FERC and State electric restructuring policy
Extension for qualified electric utilities
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
.
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:
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 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
an electric utility (as defined in section 3(22) of the Federal Power Act (16 U.S.C. 796(22))).
.
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
.
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:
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.
.
Effective Dates
Extension
The amendments made by subsection (a) shall apply to transactions after December 31, 2007.
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.
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.
Carbon mitigation provisions
Expansion and modification of advanced coal project investment credit
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:
30 percent of the qualified investment for such taxable year in the case of projects described in clause (iii) of subsection (d)(3)(B).
.
Expansion of aggregate credits
Section 48A(d)(3)(A)
is amended by striking $1,300,000,000
and inserting
$2,250,000,000
.
Authorization of Additional Projects
In general
Subparagraph (B) of section 48A(d)(3) is amended to read as follows:
Particular projects
Of the dollar amount in subparagraph (A), the Secretary is authorized to certify—
$800,000,000 for integrated gasification combined cycle projects the application for which is submitted during the period described in paragraph (2)(A)(i),
$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
$950,000,000 for advanced coal-based generation technology projects the application for which is submitted during the period described in paragraph (2)(A)(ii).
.
Application period for additional projects
Subparagraph (A) of section 48A(d)(2) is amended to read as follows:
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—
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
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.
.
Capture and sequestration of carbon dioxide emissions requirement
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:
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.
.
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:
give highest priority to projects with the greatest separation and sequestration percentage of total carbon dioxide emissions.
.
Recapture of credit for failure to sequester
Section 48A is amended by adding at the end the following new subsection:
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).
.
Additional priority for research partnerships
Section 48A(e)(3)(B), as amended by paragraph (3)(B), is amended—
by striking and
at the end
of clause (ii),
by redesignating clause (iii) as clause (iv), and
by inserting after clause (ii) the following new clause:
applicant participants who have a research partnership with an eligible educational institution (as defined in section 529(e)(5)), and
.
Clerical amendment
Section 48A(e)(3) is amended by striking
integrated gasification
combined cycle
in the heading and inserting
certain
.
Disclosure of allocations
Section 48A(d) is amended by adding at the end the following new paragraph:
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.
.
Effective dates
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.
Disclosure of allocations
The amendment made by subsection (d) shall apply to certifications made after the date of the enactment of this Act.
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.
Expansion and modification of coal gasification investment credit
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
.
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—
$350,000,000, plus
$150,000,000 for qualifying gasification projects that include equipment which separates and sequesters at least 75 percent of such project’s total carbon dioxide emissions.
.
Recapture of credit for failure To sequester
Section 48B is amended by adding at the end the following new subsection:
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).
.
Selection priorities
Section 48B(d) is amended by adding at the end the following new paragraph:
Selection priorities
In determining which qualifying gasification projects to certify under this section, the Secretary shall—
give highest priority to projects with the greatest separation and sequestration percentage of total carbon dioxide emissions, and
give high priority to applicant participants who have a research partnership with an eligible educational institution (as defined in section 529(e)(5)).
.
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.
Temporary increase in coal excise tax
Paragraph (2) of section 4121(e) is amended—
by striking January 1, 2014
in subparagraph (A) and inserting December 31, 2018
, and
by striking January 1 after
1981
in subparagraph (B) and inserting December 31 after
2007
.
Special rules for refund of the coal excise tax to certain coal producers and exporters
Refund
Coal producers
In general
Notwithstanding subsections (a)(1) and (c) of section 6416 and section 6511 of the Internal Revenue Code of 1986, if—
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),
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
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,
Special rules for certain taxpayers
For purposes of this section—
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).
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).
Judgment described
A judgment is described in this subparagraph if such judgment—
is made by a court of competent jurisdiction within the United States,
relates to the constitutionality of any tax paid on exported coal under section 4121 of the Internal Revenue Code of 1986, and
is in favor of the coal producer or the party related to the coal producer.
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—
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,
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
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,
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.
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.
Definitions
For purposes of this section—
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.
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—
is indicated in the shipper’s export declaration or other documentation as the exporter of record, or
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.
Related party
The term a party related to such coal producer means a person who—
is related to such coal producer through any degree of common management, stock ownership, or voting control,
is related (within the meaning of section 144(a)(3) of the Internal Revenue Code of 1986) to such coal producer, or
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.
Secretary
The term Secretary means the Secretary of Treasury or the Secretary's designee.
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.
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.
Denial of double benefit
The payment under subsection (a) with respect to any coal shall not exceed—
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
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.
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.
Carbon audit of the tax code
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.
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.
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.
Transportation and domestic fuel security provisions
Inclusion of cellulosic biofuel in bonus depreciation for biomass ethanol plant property
In general
Paragraph (3) of section 168(l) is amended to read as follows:
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.
.
Conforming amendments
Subsection (l) of section 168 is amended—
by striking cellulosic biomass
ethanol
each place it appears and inserting cellulosic
biofuel
,
by striking cellulosic biomass
ethanol
in the heading of such subsection and
inserting cellulosic
biofuel
, and
by striking cellulosic biomass
ethanol
in the heading of paragraph (2) thereof and
inserting cellulosic
biofuel
.
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.
Credits for biodiesel and renewable diesel
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
.
Increase in rate of credit
Income tax credit
Paragraphs (1)(A) and (2)(A) of section
40A(b) are each amended by striking 50 cents
and inserting
$1.00
.
Excise tax credit
Paragraph (2) of section 6426(c) is amended to read as follows:
Applicable amount
For purposes of this subsection, the applicable amount is $1.00.
.
Conforming amendments
Subsection (b) of section 40A is amended by striking paragraph (3) and by redesignating paragraphs (4) and (5) as paragraphs (3) and (4), respectively.
Paragraph (2) of section 40A(f) is amended to read as follows:
Exception
Subsection (b)(4) shall not apply with respect to renewable diesel.
.
Paragraphs (2) and (3) of section 40A(e)
are each amended by striking subsection (b)(5)(C)
and inserting
subsection (b)(4)(C)
.
Clause (ii) of section 40A(d)(3)(C) is
amended by striking subsection (b)(5)(B)
and inserting
subsection (b)(4)(B)
.
Uniform treatment of diesel produced from biomass
Paragraph (3) of section 40A(f) is amended—
by striking diesel fuel
and
inserting liquid fuel
,
by striking using a thermal
depolymerization process
, and
by striking or D396
in
subparagraph (B) and inserting , D396, or other equivalent standard
approved by the Secretary
.
Coproduction of renewable diesel with petroleum feedstock
In general
Paragraph (3) of section 40A(f) (defining renewable diesel) is amended by adding at the end the following flush sentence:
Such term does not include any fuel derived from coprocessing biomass with a feedstock which is not biomass. For purposes of this paragraph, the term biomass has the meaning given such term by section 45K(c)(3).
.
Conforming amendment
Paragraph (3) of section 40A(f) is amended
by striking (as defined in section 45K(c)(3))
.
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:
Certain aviation fuel
In general
Except as provided in the last three
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.
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.
.
Effective date
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.
Coproduction of renewable diesel with petroleum feedstock
The amendments made by subsection (c) shall apply to fuel produced, and sold or used, after February 13, 2008.
Clarification that credits for fuel are designed to provide an incentive for United States production
Alcohol fuels credit
Subsection (d) of section 40 is amended by adding at the end the following new paragraph:
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.
.
Biodiesel fuels credit
Subsection (d) of section 40A is amended by adding at the end the following new paragraph:
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.
.
Excise tax credit
In general
Section 6426 is amended by adding at the end the following new subsection:
Limitation to fuels with connection to the United States
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.
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.
.
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:
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).
.
Effective date
The amendments made by this section shall apply to claims for credit or payment made on or after May 15, 2008.
Credit for new qualified plug-in electric drive motor vehicles
In general
Section 30 is amended to read as follows:
New qualified plug-in electric drive motor vehicles
Allowance of credit
There shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the sum of the credit amounts determined under subsection (b) with respect to each new qualified plug-in electric drive motor vehicle placed in service by the taxpayer during the taxable year.
Per vehicle dollar limitation
In general
The amount determined under this subsection with respect to any new qualified plug-in electric drive motor vehicle is the sum of the amounts determined under paragraphs (2) and (3) with respect to such vehicle.
Base amount
The amount determined under this paragraph is $3,000.
Battery capacity
In the case of a vehicle which draws propulsion energy from a battery with not less than 5 kilowatt hours of capacity, the amount determined under this paragraph is $200, plus $200 for each kilowatt hour of capacity in excess of 5 kilowatt hours. The amount determined under this paragraph shall not exceed $2,000.
Application with other credits
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)).
Personal credit
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.
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—
the sum of the regular tax liability (as defined in section 26(b)) plus the tax imposed by section 55, over
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.
New qualified plug-In electric drive motor vehicle
For purposes of this section—
In general
The term new qualified plug-in electric drive motor vehicle means a motor vehicle—
the original use of which commences with the taxpayer,
which is acquired for use or lease by the taxpayer and not for resale,
which is made by a manufacturer,
which has a gross vehicle weight rating of less than 14,000 pounds,
which has received a certificate of conformity under the Clean Air Act and meets or exceeds the Bin 5 Tier II emission standard established in regulations prescribed by the Administrator of the Environmental Protection Agency under section 202(i) of the Clean Air Act for that make and model year vehicle, and
which is propelled to a significant extent by an electric motor which draws electricity from a battery which—
has a capacity of not less than 4 kilowatt hours, and
is capable of being recharged from an external source of electricity.
Exception
The term new qualified plug-in electric drive motor vehicle shall not include any vehicle which is not a passenger automobile or light truck if such vehicle has a gross vehicle weight rating of less than 8,500 pounds.
Motor vehicle
The term motor vehicle
means
any vehicle which is manufactured primarily for use on public streets, roads,
and highways (not including a vehicle operated exclusively on a rail or rails)
and which has at least 4 wheels.
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.).
Battery capacity
The term capacity means, with respect to any battery, the quantity of electricity which the battery is capable of storing, expressed in kilowatt hours, as measured from a 100 percent state of charge to a 0 percent state of charge.
Limitation on number of new qualified plug-In electric drive motor vehicles eligible for credit
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.
Phaseout period
For purposes of this subsection, the phaseout period is the period beginning with the second calendar quarter following the calendar quarter which includes the first date on which the number of new qualified plug-in electric drive motor vehicles manufactured by the manufacturer of the vehicle referred to in paragraph (1) sold for use in the United States after the date of the enactment of this section, is at least 60,000.
Applicable percentage
For purposes of paragraph (1), the applicable percentage is—
50 percent for the first 2 calendar quarters of the phaseout period,
25 percent for the 3d and 4th calendar quarters of the phaseout period, and
0 percent for each calendar quarter thereafter.
Controlled groups
Rules similar to the rules of section 30B(f)(4) shall apply for purposes of this subsection.
Special rules
Basis reduction
The basis of any property for which a credit is allowable under subsection (a) shall be reduced by the amount of such credit (determined without regard to subsection (c)).
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.
Property used outside United States, etc., not qualified
No credit shall be allowed under subsection (a) with respect to any property referred to in section 50(b)(1) or with respect to the portion of the cost of any property taken into account under section 179.
Election not to take credit
No credit shall be allowed under subsection (a) for any vehicle if the taxpayer elects to not have this section apply to such vehicle.
Property used by tax-exempt entity; interaction with air quality and motor vehicle safety standards
Rules similar to the rules of paragraphs (6) and (10) of section 30B(h) shall apply for purposes of this section.
.
Coordination with alternative motor vehicle credit
Section 30B(d)(3) is amended by adding at the end the following new subparagraph:
Exclusion of plug-in vehicles
Any vehicle with respect to which a credit is allowable under section 30 (determined without regard to subsection (c) thereof) shall not be taken into account under this section.
.
Credit made part of general business credit
Section 38(b) 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 the following new paragraph:
the portion of the new qualified plug-in electric drive motor vehicle credit to which section 30(c)(1) applies.
.
Conforming amendments
Section 24(b)(3)(B), as amended by section
104, is amended by striking and 25D
and inserting 25D,
and 30
.
Section 25(e)(1)(C)(ii) is amended by
inserting 30,
after 25D,
.
Section 25B(g)(2), as amended by section
104, is amended by striking and 25D
and inserting , 25D,
and 30
.
Section 26(a)(1), as amended by section
104, is amended by striking and 25D
and inserting 25D,
and 30
.
Section 1400C(d)(2) is amended by striking
and 25D
and inserting 25D, and 30
.
Section 30B(h)(1) is amended by striking
section 30(c)(2)
and inserting section
30(d)(3)
.
Section 53(d)(1)(B) is amended by striking clause (iii) and redesignating clause (iv) as clause (iii).
Subclause (II) of section 53(d)(1)(B)(iii),
as so redesignated, is amended by striking increased in the manner
provided in clause (iii)
.
Section 55(c)(3) is amended by striking
30(b)(3),
.
Section 1016(a)(25) is amended by striking
section 30(d)(1)
and inserting section
30(f)(1)
.
Section 6501(m) is amended by striking
section 30(d)(4)
and inserting section
30(f)(4)
.
The item in the table of sections for subpart B of part IV of subchapter A of chapter 1 is amended to read as follows:
Sec. 30. New qualified plug-in electric drive motor vehicles.
.
Treatment of alternative motor vehicle credit as a personal credit
In general
Paragraph (2) of section 30B(g) is amended to read as follows:
Personal credit
The credit allowed under subsection (a) for any taxable year (after application of paragraph (1)) shall be treated as a credit allowable under subpart A for such taxable year.
.
Conforming amendments
Subparagraph (A) of section 30C(d)(2) is
amended by striking sections 27, 30, and 30B
and inserting
section 27
.
Paragraph (3) of section 55(c) is amended
by striking 30B(g)(2),
.
Effective date
In general
Except as otherwise provided in this subsection, the amendments made by this section shall apply to taxable years beginning after December 31, 2008.
Treatment of alternative motor vehicle credit as personal credit
The amendments made by subsection (e) shall apply to taxable years beginning after December 31, 2007.
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.
Exclusion from heavy truck tax for idling reduction units and advanced insulation
In general
Section 4053 is amended by adding at the end the following new paragraphs:
Idling reduction device
Any device or system of devices which—
is designed to provide to a vehicle those services (such as heat, air conditioning, or electricity) that would otherwise require the operation of the main drive engine while the vehicle is temporarily parked or remains stationary using one or more devices affixed to a tractor or truck, and
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.
Advanced insulation
Any insulation that has an R value of not less than R35 per inch.
.
Effective date
The amendment made by this section shall apply to sales or installations after the date of the enactment of this Act.
Transportation fringe benefit to bicycle commuters
In general
Paragraph (1) of section 132(f) is amended by adding at the end the following:
Any qualified bicycle commuting reimbursement.
.
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:
the applicable annual limitation in the case of any qualified bicycle commuting reimbursement.
.
Definitions
Paragraph (5) of section 132(f) is amended by adding at the end the following:
Definitions related to bicycle commuting reimbursement
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.
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.
Qualified bicycle commuting month
The term qualified bicycle commuting month means, with respect to any employee, any month during which such employee—
regularly uses the bicycle for a substantial portion of the travel between the employee’s residence and place of employment, and
does not receive any benefit described in subparagraph (A), (B), or (C) of paragraph (1).
.
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
.
Effective date
The amendments made by this section shall apply to taxable years beginning after December 31, 2008.
Alternative fuel vehicle refueling property credit
Increase in credit amount
Section 30C is amended—
by striking 30 percent
in
subsection (a) and inserting 50 percent
,
by striking $30,000
in
subsection (b)(1) and inserting $50,000
, and
by striking $1,000
in
subsection (b)(2) and inserting $2,000
.
Extension of credit
Subsection (g) of section 30C is amended to read as follows:
Termination
This section shall not apply to any property placed in service after—
December 31 2017, in the case of property relating to natural gas, compressed natural gas, or liquified natural gas, and which is not of a character subject to an allowance for depreciation,
December 31, 2014, in the case of—
property relating to hydrogen, and
property relating to natural gas, compressed natural gas, or liquified natural gas, and which is of a character subject to an allowance for depreciation, and
December 31, 2010, in any other case.
.
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.
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
In general
Subparagraph (E) of section 7704(d)(1) is
amended by inserting , 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)
.
Effective date
The amendment made by this section shall apply to taxable years beginning after the date of the enactment of this Act.
Energy conservation and efficiency provisions
Credit for nonbusiness energy property
Extension of credit
Section 25C(g) is amended by striking
placed in service after December 31, 2007
and
inserting
placed in service—
after December 31, 2007, and before January 1, 2009, or
after December 31, 2009.
.
Qualified biomass fuel property
In general
Section 25C(d)(3) is amended—
by striking and
at the end
of subparagraph (D),
by striking the period at the end of
subparagraph (E) and inserting , and
, and
by adding at the end the following new subparagraph:
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.
.
Biomass fuel
Section 25C(d) is amended by adding at the end the following new paragraph:
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.
.
Coordination with credit for qualified geothermal heat pump property expenditures
In general
Paragraph (3) of section 25C(d), as amended by subsection (b), is amended by striking subparagraph (C) and by redesignating subparagraphs (D), (E), and (F) as subparagraphs (C), (D), and (E), respectively.
Conforming amendment
Subparagraph (C) of section 25C(d)(2) is amended to read as follows:
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—
shall require measurements to be based on published data which is tested by manufacturers at 95 degrees Fahrenheit, and
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.
.
Effective date
The amendments made by this section shall apply to expenditures made after December 31, 2008.
Energy efficient commercial buildings deduction
Subsection (h) of
section 179D is amended by striking December 31, 2008
and
inserting December 31, 2013
.
Modifications of energy efficient appliance credit for appliances produced after 2007
In general
Subsection (b) of section 45M is amended to read as follows:
Applicable amount
For purposes of subsection (a)—
Dishwashers
The applicable amount is—
$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
$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).
Clothes washers
The applicable amount is—
$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,
$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,
$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
$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.
Refrigerators
The applicable amount is—
$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,
$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,
$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
$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.
.
Eligible production
Similar treatment for all appliances
Subsection (c) of section 45M is amended—
by striking paragraph (2),
by striking (1)
In
general
and all that follows through the
eligible
and inserting The eligible
,
by moving the text of such subsection in line with the subsection heading, and
by redesignating subparagraphs (A) and (B) as paragraphs (1) and (2), respectively, and by moving such paragraphs 2 ems to the left.
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
.
Types of energy efficient appliances
Subsection (d) of section 45M (defining types of energy efficient appliances) is amended to read as follows:
Types of energy efficient appliance
For purposes of this section, the types of energy efficient appliances are—
dishwashers described in subsection (b)(1),
clothes washers described in subsection (b)(2), and
refrigerators described in subsection (b)(3).
.
Aggregate credit amount allowed
Increase in limit
Paragraph (1) of section 45M(e) is amended to read as follows:
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.
.
Exception for certain refrigerator and clothes washers
Paragraph (2) of section 45M(e) is amended to read as follows:
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).
.
Qualified energy efficient appliances
In general
Paragraph (1) of section 45M(f) (defining qualified energy efficient appliance) is amended to read as follows:
Qualified energy efficient appliance
The term qualified energy efficient appliance means—
any dishwasher described in subsection (b)(1),
any clothes washer described in subsection (b)(2), and
any refrigerator described in subsection (b)(3).
.
Clothes washer
Section 45M(f)(3) is
amended by inserting commercial
before
residential
the second place it appears.
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:
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.
.
Replacement of energy factor
Section 45M(f)(6), as redesignated by paragraph (3), is amended to read as follows:
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.
.
Gallons per cycle; water consumption factor
Section 45M(f), as amended by paragraph (3), is amended by adding at the end the following:
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.
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.
.
Effective date
The amendments made by this section shall apply to appliances produced after December 31, 2007.
Accelerated recovery period for depreciation of smart meters and smart grid systems
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:
any qualified smart electric meter, and
any qualified smart electric grid system.
.
Definitions
Section 168(i) is amended by inserting at the end the following new paragraph:
Qualified smart electric meters
In general
The term qualified smart electric meter means any smart electric meter which is placed in service by a taxpayer who is a supplier of electric energy or a provider of electric energy services.
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—
measures and records electricity usage data on a time-differentiated basis in at least 24 separate time segments per day,
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,
provides data to such supplier or provider so that the supplier or provider can provide energy usage information to customers electronically, and
provides net metering.
Qualified smart electric grid systems
In general
The term qualified smart electric
grid system
means any smart grid property used as part of a system for
electric distribution grid communications, monitoring, and management placed in
service by a taxpayer who is a supplier of electric energy or a provider of
electric energy services.
Smart grid property
For the purposes of subparagraph (A), the
term smart grid property
means electronics and related equipment
that is capable of—
sensing, collecting, and monitoring data of or from all portions of a utility’s electric distribution grid,
providing real-time, two-way communications to monitor or manage such grid, and
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.
.
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:
any property (other than property described in paragraph (3)) which is a qualified smart electric meter or qualified smart electric grid system, or
.
Effective date
The amendments made by this section shall apply to property placed in service after the date of the enactment of this Act.
Qualified green building and sustainable design projects
In general
Paragraph (8) of section 142(l) is amended
by striking September 30, 2009
and inserting September
30, 2012
.
Treatment of current refunding bonds
Paragraph (9) of
section 142(l) is amended by striking October 1, 2009
and
inserting October 1, 2012
.
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,
.
Extension of temporary provisions
Extensions Primarily Affecting Individuals
Deduction for State and local sales taxes
In general
Subparagraph (I) of section 164(b)(5) is
amended by striking January 1, 2008
and inserting January
1, 2010
.
Effective date
The amendment made by this section shall apply to taxable years beginning after December 31, 2007.
Deduction of qualified tuition and related expenses
In general
Subsection (e) of section 222 is amended by
striking December 31, 2007
and inserting December 31,
2009
.
Effective date
The amendment made by this section shall apply to taxable years beginning after December 31, 2007.
Temporary coordination with Hope and Lifetime learning credit
In the case of any taxpayer for any taxable year beginning in 2008 or 2009, no deduction shall be allowed under section 222 of the Internal Revenue Code of 1986 if—
the taxpayer’s net Federal income tax reduction which would be attributable to such deduction for such taxable year, is less than
the credit which would be allowed to the taxpayer for such taxable year under section 25A of such Code (determined without regard to sections 25A(e) and 26 of such Code).
Treatment of certain dividends of regulated investment companies
Interest-related dividends
Subparagraph (C) of section 871(k)(1)
(defining interest-related dividend) is amended by striking December 31,
2007
and inserting December 31, 2009
.
Short-term capital gain dividends
Subparagraph (C) of
section 871(k)(2) (defining short-term capital gain dividend) is amended by
striking December 31, 2007
and inserting December 31,
2009
.
Effective date
The amendments made by this section shall apply to dividends with respect to taxable years of regulated investment companies beginning after December 31, 2007.
Tax-free distributions from individual retirement plans for charitable purposes
In general
Subparagraph (F) of section 408(d)(8) is
amended by striking December 31, 2007
and inserting
December 31, 2009
.
Effective date
The amendment made by this section shall apply to distributions made in taxable years beginning after December 31, 2007.
Deduction for certain expenses of elementary and secondary school teachers
In general
Subparagraph (D) of section 62(a)(2) is
amended by striking or 2007
and inserting 2007, 2008, or
2009
.
Effective date
The amendment made by subsection (a) shall apply to taxable years beginning after December 31, 2007.
Stock in RIC for purposes of determining estates of nonresidents not citizens
In general
Paragraph (3) of section 2105(d) is amended
by striking December 31, 2007
and inserting December 31,
2009
.
Effective date
The amendment made by this section shall apply to decedents dying after December 31, 2007.
Qualified investment entities
In general
Clause (ii) of section 897(h)(4)(A) is
amended by striking December 31, 2007
and inserting
December 31, 2009
.
Effective date
The amendment made by subsection (a) shall take effect on January 1, 2008, except that such amendment shall not apply to the application of withholding requirements with respect to any payment made on or before the date of the enactment of this Act.
Real property tax standard deduction
In general
Subparagraph (C) of section 63(c)(1) is
amended by inserting or 2009
after 2008
.
Effective date
The amendment made by this section shall apply to taxable years beginning after December 31, 2008.
Extensions Primarily Affecting Businesses
Research credit
In general
Subparagraph (B) of section 41(h)(1) is
amended by striking December 31, 2007
and inserting
December 31, 2009
.
Computation of credit for taxable year in which credit terminates
Paragraph (2) of section 41(h) is amended to read as follows:
Computation of credit for taxable year in which credit terminates
In general
In the case of any taxable year with respect to which this section applies to a number of days which is less than the total number of days in such taxable year, the applicable base amount with respect to such taxable year shall be the amount which bears the same ratio to such applicable amount (determined without regard to this paragraph) as the number of days in such taxable year to which this section applies bears to the total number of days in such taxable year.
Applicable base amount
For purposes of subparagraph (A), the term
applicable base amount
means, with respect to any taxable
year—
except as otherwise provided in this subparagraph, the base amount for the taxable year,
in the case of a taxable year with respect to which an election under subsection (c)(4) (relating to election of alternative incremental credit) is in effect, the average described in subsection (c)(1)(B) for the taxable year, and
in the case of a taxable year with respect to which an election under subsection (c)(5) (relating to election of alternative simplified credit) is in effect, the average qualified research expenses for the 3 taxable years preceding the taxable year.
.
Conforming amendment
Subparagraph (D) of section 45C(b)(1) is
amended by striking December 31, 2007
and inserting
December 31, 2009
.
Effective date
In general
Except as provided in paragraph (2), the amendments made by this section shall apply to amounts paid or incurred after December 31, 2007.
Computation of credit for taxable year in which credit begins
The amendment made by subsection (b) shall apply to taxable years beginning after December 31, 2007.
Indian employment credit
In general
Subsection (f) of section 45A is amended by
striking December 31, 2007
and inserting December 31,
2009
.
Effective date
The amendment made by this section shall apply to taxable years beginning after December 31, 2007.
New markets tax credit
Subparagraph (D) of section 45D(f)(1) is
amended by striking and 2008
and inserting 2008, and
2009
.
Railroad track maintenance
In general
Subsection (f) of section 45G is amended by
striking January 1, 2008
and inserting January 1,
2010
.
Effective date
The amendment made by this section shall apply to expenditures paid or incurred during taxable years beginning after December 31, 2007.
Fifteen-year straight-line cost recovery for qualified leasehold improvements and qualified restaurant property
In general
Clauses (iv) and (v) of section
168(e)(3)(E) are each amended by striking January 1, 2008
and
inserting January 1, 2010
.
Effective date
The amendments made by this section shall apply to property placed in service after December 31, 2007.
Seven-year cost recovery period for motorsports racing track facility
In general
Subparagraph (D) of section 168(i)(15) is
amended by striking December 31, 2007
and inserting
December 31, 2009
.
Effective date
The amendment made by this section shall apply to property placed in service after December 31, 2007.
Accelerated depreciation for business property on Indian reservation
In general
Paragraph (8) of section 168(j) is amended
by striking December 31, 2007
and inserting December 31,
2009
.
Effective date
The amendment made by this section shall apply to property placed in service after December 31, 2007.
Expensing of environmental remediation costs
In general
Subsection (h) of section 198 is amended by
striking December 31, 2007
and inserting December 31,
2009
.
Effective date
The amendment made by this section shall apply to expenditures paid or incurred after December 31, 2007.
Deduction allowable with respect to income attributable to domestic production activities in Puerto Rico
In general
Subparagraph (C) of section 199(d)(8) is amended—
by striking first 2 taxable
years
and inserting first 4 taxable years
, and
by striking January 1, 2008
and inserting January 1, 2010
.
Effective date
The amendments made by this section shall apply to taxable years beginning after December 31, 2007.
Modification of tax treatment of certain payments to controlling exempt organizations
In general
Clause (iv) of section 512(b)(13)(E) is
amended by striking December 31, 2007
and inserting
December 31, 2009
.
Effective date
The amendment made by this section shall apply to payments received or accrued after December 31, 2007.
Qualified zone academy bonds
In general
Subpart I of part IV of subchapter A of chapter 1 is amended by adding at the end the following new section:
Qualified zone academy bonds
Qualified zone academy bonds
For purposes of this subchapter, the term qualified zone academy bond means any bond issued as part of an issue if—
100 percent of the available project proceeds of such issue are to be used for a qualified purpose with respect to a qualified zone academy established by an eligible local education agency,
the bond is issued by a State or local government within the jurisdiction of which such academy is located, and
the issuer—
designates such bond for purposes of this section,
certifies that it has written assurances that the private business contribution requirement of subsection (b) will be met with respect to such academy, and
certifies that it has the written approval of the eligible local education agency for such bond issuance.
Private business contribution requirement
For purposes of subsection (a), the private business contribution requirement of this subsection is met with respect to any issue if the eligible local education agency that established the qualified zone academy has written commitments from private entities to make qualified contributions having a present value (as of the date of issuance of the issue) of not less than 10 percent of the proceeds of the issue.
Limitation on amount of bonds designated
National limitation
There is a national zone academy bond limitation for each calendar year. Such limitation is $400,000,000 for 2008 and 2009, and, except as provided in paragraph (4), zero thereafter.
Allocation of limitation
The national zone academy bond limitation for a calendar year shall be allocated by the Secretary among the States on the basis of their respective populations of individuals below the poverty line (as defined by the Office of Management and Budget). The limitation amount allocated to a State under the preceding sentence shall be allocated by the State education agency to qualified zone academies within such State.
Designation subject to limitation amount
The maximum aggregate face amount of bonds issued during any calendar year which may be designated under subsection (a) with respect to any qualified zone academy shall not exceed the limitation amount allocated to such academy under paragraph (2) for such calendar year.
Carryover of unused limitation
In general
If for any calendar year—
the limitation amount for any State, exceeds
the amount of bonds issued during such year which are designated under subsection (a) with respect to qualified zone academies within such State,
Limitation on carryover
Any carryforward of a limitation amount may be carried only to the first 2 years following the unused limitation year. For purposes of the preceding sentence, a limitation amount shall be treated as used on a first-in first-out basis.
Coordination with section 1397E
Any carryover determined under section 1397E(e)(4) (relating to carryover of unused limitation) with respect to any State to calendar year 2008 shall be treated for purposes of this section as a carryover with respect to such State for such calendar year under subparagraph (A), and the limitation of subparagraph (B) shall apply to such carryover taking into account the calendar years to which such carryover relates.
Definitions
For purposes of this section—
Qualified zone academy
The term qualified zone
academy
means any public school (or academic program within a public
school) which is established by and operated under the supervision of an
eligible local education agency to provide education or training below the
postsecondary level if—
such public school or program (as the case may be) is designed in cooperation with business to enhance the academic curriculum, increase graduation and employment rates, and better prepare students for the rigors of college and the increasingly complex workforce,
students in such public school or program (as the case may be) will be subject to the same academic standards and assessments as other students educated by the eligible local education agency,
the comprehensive education plan of such public school or program is approved by the eligible local education agency, and
such public school is located in an empowerment zone or enterprise community (including any such zone or community designated after the date of the enactment of this section), or
there is a reasonable expectation (as of the date of issuance of the bonds) that at least 35 percent of the students attending such school or participating in such program (as the case may be) will be eligible for free or reduced-cost lunches under the school lunch program established under the National School Lunch Act.
Eligible local education agency
For purposes of this
section, the term eligible local education agency
means any
local educational agency as defined in section 9101 of the Elementary and
Secondary Education Act of 1965.
Qualified purpose
The term qualified purpose
means, with respect to any qualified zone academy—
rehabilitating or repairing the public school facility in which the academy is established,
providing equipment for use at such academy,
developing course materials for education to be provided at such academy, and
training teachers and other school personnel in such academy.
Qualified contributions
The term qualified
contribution
means any contribution (of a type and quality acceptable
to the eligible local education agency) of—
equipment for use in the qualified zone academy (including state-of-the-art technology and vocational equipment),
technical assistance in developing curriculum or in training teachers in order to promote appropriate market driven technology in the classroom,
services of employees as volunteer mentors,
internships, field trips, or other educational opportunities outside the academy for students, or
any other property or service specified by the eligible local education agency.
.
Conforming amendments
Paragraph (1) of section 54A(d) is amended to read as follows:
Qualified tax credit bond
The term qualified tax credit
bond
means—
a qualified forestry conservation bond, or
a qualified zone academy bond,
.
Subparagraph (C) of section 54A(d)(2) is amended to read as follows:
Qualified purpose
For purposes of this paragraph, the term
qualified purpose
means—
in the case of a qualified forestry conservation bond, a purpose specified in section 54B(e), and
in the case of a qualified zone academy bond, a purpose specified in section 54C(a)(1).
.
Section 1397E is amended by adding at the end the following new subsection:
Termination
This section shall not apply to any obligation issued after the date of the enactment of this subsection.
.
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:
.
Effective date
The amendments made by this section shall apply to obligations issued after the date of the enactment of this Act.
Tax incentives for investment in the District of Columbia
Designation of Zone
In general
Subsection (f) of section 1400 is amended
by striking 2007
both places it appears and inserting
2009
.
Effective date
The amendments made by this subsection shall apply to periods beginning after December 31, 2007.
Tax-Exempt Economic Development Bonds
In general
Subsection (b) of section 1400A is amended
by striking 2007
and inserting 2009
.
Effective date
The amendment made by this subsection shall apply to bonds issued after December 31, 2007.
Zero Percent Capital Gains Rate
In general
Subsection (b) of section 1400B is amended
by striking 2008
each place it appears and inserting
2010
.
Conforming amendments
Section 1400B(e)(2) is amended—
by striking 2012
and
inserting 2014
, and
by striking 2012
in the heading
thereof and inserting 2014
.
Section 1400B(g)(2) is amended by striking
2012
and inserting 2014
.
Section 1400F(d) is amended by striking
2012
and inserting 2014
.
Effective dates
Extension
The amendments made by paragraph (1) shall apply to acquisitions after December 31, 2007.
Conforming amendments
The amendments made by paragraph (2) shall take effect on the date of the enactment of this Act.
First-Time Homebuyer Credit
In general
Subsection (i) of section 1400C is amended
by striking 2008
and inserting 2010
.
Effective date
The amendment made by this subsection shall apply to property purchased after December 31, 2007.
Economic development credit for American Samoa
In general
Subsection (d) of section 119 of division A of the Tax Relief and Health Care Act of 2006 is amended—
by striking first two taxable
years
and inserting first 4 taxable years
, and
by striking January 1, 2008
and inserting January 1, 2010
.
Effective date
The amendment made by this section shall apply to taxable years beginning after December 31, 2007.
Enhanced charitable deduction for contributions of food inventory
In general
Clause (iv) of section 170(e)(3)(C) is
amended by striking December 31, 2007
and inserting
December 31, 2009
.
Effective date
The amendment made by this section shall apply to contributions made after December 31, 2007.
Enhanced charitable deduction for contributions of book inventory to public schools
In general
Clause (iv) of section 170(e)(3)(D) is
amended by striking December 31, 2007
and inserting
December 31, 2009
.
Effective date
The amendment made by this section shall apply to contributions made after December 31, 2007.
Enhanced deduction for qualified computer contributions
In general
Subparagraph (G) of section 170(e)(6) is
amended by striking December 31, 2007
and inserting
December 31, 2009
.
Effective date
The amendment made by this section shall apply to contributions made during taxable years beginning after December 31, 2007.
Basis adjustment to stock of S corporations making charitable contributions of property
In general
The last sentence of section 1367(a)(2) is
amended by striking December 31, 2007
and inserting
December 31, 2009
.
Effective date
The amendment made by this section shall apply to contributions made in taxable years beginning after December 31, 2007.
Work opportunity tax credit for Hurricane Katrina employees
In general
Paragraph (1) of section 201(b) of the
Katrina Emergency Tax Relief Act of 2005 is amended by striking
2-year
and inserting 4-year
.
Effective date
The amendment made by subsection (a) shall apply to individuals hired after August 27, 2007.
Subpart F exception for active financing income
Exempt insurance income
Paragraph (10) of section 953(e) (relating to application) is amended—
by striking January 1, 2009
and inserting January 1, 2010
, and
by striking December 31,
2008
and inserting December 31, 2009
.
Exception to treatment as foreign personal holding company income
Paragraph (9) of section 954(h) (relating
to application) is amended by striking January 1, 2009
and
inserting January 1, 2010
.
Look-thru rule for related controlled foreign corporations
In general
Subparagraph (C) of section 954(c)(6)
(relating to application) is amended by striking January 1, 2009
and inserting January 1, 2010
.
Effective date
The amendment made by this section shall apply to taxable years of foreign corporations beginning after December 31, 2008, and to taxable years of United States shareholders with or within which such taxable years of foreign corporations end.
Expensing for certain qualified film and television productions
In general
Subsection (f) of section 181 is amended by
striking December 31, 2008
and inserting December 31,
2009
.
Effective date
The amendment made by this section shall apply to productions commencing after December 31, 2008.
Other Extensions
Authority to disclose information related to terrorist activities made permanent
In general
Subparagraph (C) of section 6103(i)(3) is amended by striking clause (iv).
Disclosure on request
Paragraph (7) of section 6103(i) is amended by striking subparagraph (E).
Effective date
The amendments made by this section shall apply to disclosures after the date of the enactment of this Act.
Authority for undercover operations made permanent
In general
Subsection (c) of section 7608 is amended by striking paragraph (6).
Effective date
The amendment made by this section shall take effect on January 1, 2008.
Increase in limit on cover over of rum excise tax to Puerto Rico and the Virgin Islands
In general
Paragraph (1) of section 7652(f) is amended
by striking January 1, 2008
and inserting January 1,
2010
.
Effective date
The amendment made by this section shall apply to distilled spirits brought into the United States after December 31, 2007.
Additional tax relief and other provisions
Refundable child credit
Modification of threshold amount
Clause (i) of section
24(d)(1)(B) is amended by inserting ($8,500 in the case of taxable years
beginning in 2009)
after $10,000
.
Effective date
The amendment made by subsection (a) shall apply to taxable years beginning after December 31, 2008.
Provisions related to film and television productions
Modification of limitation on expensing
Subparagraph (A) of section 181(a)(2) is amended to read as follows:
In general
Paragraph (1) shall not apply to so much of the aggregate cost of any qualified film or television production as exceeds $15,000,000.
.
Modifications to deduction for domestic activities
Determination of W-2 wages
Paragraph (2) of section 199(b) is amended by adding at the end the following new subparagraph:
Special rule for qualified film
In the case of a qualified film, such term shall include compensation for services performed in the United States by actors, production personnel, directors, and producers.
.
Definition of qualified film
Paragraph (6) of section 199(c) is amended
by adding at the end the following: A qualified film shall include any
copyrights, trademarks, or other intangibles with respect to such film. The
methods and means of distributing a qualified film shall not affect the
availability of the deduction under this section.
.
Partnerships
Subparagraph (A) of section 199(d)(1) 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:
in the case of each partner of a partnership, or shareholder of an S corporation, who owns (directly or indirectly) at least 20 percent of the capital interests in such partnership or of the stock of such S corporation—
such partner or shareholder shall be treated as having engaged directly in any film produced by such partnership or S corporation, and
such partnership or S corporation shall be treated as having engaged directly in any film produced by such partner or shareholder.
.
Conforming amendment
Section 181(d)(3)(A) is amended by striking
actors
and all that follows and inserting actors,
production personnel, directors, and producers.
.
Effective date
In general
Except as otherwise provided in this subsection, the amendments made by this section shall apply to taxable years beginning after December 31, 2007.
Expensing
The amendments made by subsection (a) shall apply to qualified film and television productions commencing after December 31, 2007.
Exemption from excise tax for certain arrows designed for use by children
In general
Paragraph (2) of section 4161(b) (relating to arrows) is amended by redesignating subparagraph (B) as subparagraph (C) and by inserting after subparagraph (A) the following new subparagraph:
Exemption for certain arrow shafts
Subparagraph (A) shall not apply to any shaft measuring 5/16 of an inch or less in diameter and consisting of either—
all fiberglass and hollow, or
all natural wood,
.
Effective date
The amendments made by this section shall apply to shafts first sold after the date of enactment of this Act.
Modification of penalty on understatement of taxpayer’s liability by tax return preparer
In general
Subsection (a) of section 6694 (relating to understatement due to unreasonable positions) is amended to read as follows:
Understatement due to unreasonable positions
In general
If a tax return preparer—
prepares any return or claim of refund with respect to which any part of an understatement of liability is due to a position described in paragraph (2), and
knew (or reasonably should have known) of the position,
Unreasonable position
In general
Except as otherwise provided in this paragraph, a position is described in this paragraph unless there is or was substantial authority for the position.
Disclosed positions
If the position was disclosed as provided in section 6662(d)(2)(B)(ii)(I) and is not a position to which subparagraph (C) applies, the position is described in this paragraph unless there is a reasonable basis for the position.
Reportable transactions
If the position is with respect to a reportable transaction to which section 6662A applies, the position is described in this paragraph unless it is reasonable to believe that the position would more likely than not be sustained on its merits.
Reasonable cause exception
No penalty shall be imposed under this subsection if it is shown that there is reasonable cause for the understatement and the tax return preparer acted in good faith.
.
Effective date
The amendment made by this section shall apply—
in the case of a position other than a position described in subparagraph (C) of section 6694(a)(2) of the Internal Revenue Code of 1986 (as amended by this section), to returns prepared after May 25, 2007, and
in the case of a position described in such subparagraph (C), to returns prepared for taxable years beginning after the date of the enactment of this Act.
Revenue provisions
Limitation of deduction for income attributable to domestic production of oil, gas, or primary products thereof
In general
Section 199(d) is amended by redesignating paragraph (9) as paragraph (10) and by inserting after paragraph (8) the following new paragraph:
Special rule for taxpayers with oil related qualified production activities income
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—
the oil related qualified production activities income of the taxpayer for the taxable year,
the qualified production activities income of the taxpayer for the taxable year, or
taxable income (determined without regard to this section).
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.
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.
.
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)
.
Effective date
The amendments made by this section shall apply to taxable years beginning after December 31, 2008.
Elimination of the different treatment of foreign oil and gas extraction income and foreign oil related income for purposes of the foreign tax credit
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:
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—
the amount of the combined foreign oil and gas income for the taxable year,
multiplied by—
in the case of a corporation, the percentage which is equal to the highest rate of tax specified under section 11(b), or
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.
Combined foreign oil and gas income; foreign oil and gas taxes
For purposes of this section—
Combined foreign oil and gas income
The term combined foreign oil and gas income means, with respect to any taxable year, the sum of—
foreign oil and gas extraction income, and
foreign oil related income.
Foreign oil and gas taxes
The term foreign oil and gas taxes means, with respect to any taxable year, the sum of—
oil and gas extraction taxes, and
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.
.
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:
Recapture of foreign oil and gas losses by recharacterizing later combined foreign oil and gas income
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—
first by the amount determined under subparagraph (B), and
then by the amount determined under subparagraph (C).
Reduction for pre-2009 foreign oil extraction losses
The reduction under this paragraph shall be equal to the lesser of—
the foreign oil and gas extraction income of the taxpayer for the taxable year (determined without regard to this paragraph), or
the excess of—
the aggregate amount of foreign oil extraction losses for preceding taxable years beginning after December 31, 1982, and before January 1, 2009, over
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 Renewable Energy and Job Creation Tax Act of 2008) for preceding taxable years beginning after December 31, 1982.
Reduction for post-2008 foreign oil and gas losses
The reduction under this paragraph shall be equal to the lesser of—
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
the excess of—
the aggregate amount of foreign oil and gas losses for preceding taxable years beginning after December 31, 2008, over
so much of such aggregate amount as was recharacterized under this paragraph for preceding taxable years beginning after December 31, 2008.
Foreign oil and gas loss defined
In general
For purposes of this paragraph, the term foreign oil and gas loss means the amount by which—
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
the sum of the deductions properly apportioned or allocated thereto.
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.
Expropriation and casualty losses not taken into account
For purposes of clause (i), there shall not be taken into account—
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
any loss for the taxable year which arises from fire, storm, shipwreck, or other casualty, or from theft,
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 Renewable Energy and Job Creation Tax Act of 2008.
.
Carryback and carryover of disallowed credits
Section 907(f) (relating to carryback and carryover of disallowed credits) is amended—
by striking oil and gas extraction
taxes
each place it appears and inserting foreign oil and gas
taxes
, and
by adding at the end the following new paragraph:
Transition rules for pre-2009 and 2009 disallowed credits
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—
by substituting oil and gas
extraction taxes
for foreign oil and gas taxes
each
place it appears in paragraphs (1), (2), and (3), and
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).
2009 credits
In the case of any unused credit year beginning in 2009, the amendments made to this subsection by the Renewable Energy and Job Creation Tax 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.
.
Conforming amendment
Section 6501(i) is amended by striking
oil and gas extraction taxes
and inserting foreign oil
and gas taxes
.
Effective date
The amendments made by this section shall apply to taxable years beginning after December 31, 2008.
Broker reporting of customer’s basis in securities transactions
In general
Broker reporting for securities transactions
Section 6045 is amended by adding at the end the following new subsection:
Additional information required in the case of securities transactions, etc
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).
Additional information required
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).
Determination of adjusted basis
For purposes of subparagraph (A)—
In general
The customer’s adjusted basis shall be determined—
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
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.
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.
Covered security
For purposes of this subsection—
In general
The term covered security means any specified security acquired on or after the applicable date if such security—
was acquired through a transaction in the account in which such security is held, or
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.
Specified security
The term specified security means—
any share of stock in a corporation,
any note, bond, debenture, or other evidence of indebtedness,
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
any other financial instrument with respect to which the Secretary determines that adjusted basis reporting is appropriate for purposes of this subsection.
Applicable date
The term applicable date means—
January 1, 2011, in the case of any specified security which is stock in a corporation (other than any stock described in clause (ii)),
January 1, 2012, in the case of any stock for which an average basis method is permissible under section 1012, and
January 1, 2013, or such later date determined by the Secretary in the case of any other specified security.
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.
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.
.
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:
Application to options on securities
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.
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.
Prospective application
Paragraphs (1) and (2) shall not apply to any option which is granted or acquired before January 1, 2013.
Definitions
For purposes of this subsection, the terms covered security and specified security shall have the meanings given such terms in subsection (g)(3).
.
Extension of period for statements sent to customers
In general
Subsection (b) of section 6045 is amended
by striking January 31
and inserting February
15
.
Statements related to substitute payments
Subsection (d) of section 6045 is amended—
by striking at such time
and
, and
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.
.
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.
.
Determination of basis of certain securities on account by account or average basis method
Section 1012 is amended—
by striking The basis of
property
and inserting the following:
In general
The basis of property
,
by striking The cost of real
property
and inserting the following:
Special rule for apportioned real estate taxes
The cost of real property
, and
by adding at the end the following new subsections:
Determinations by account
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.
Application to certain regulated investment companies
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.
Election for treatment as single account
If a regulated investment company elects to have this subparagraph apply with respect to one or more of its stockholders—
subparagraph (A) shall not apply with respect to any stock in such company held by such stockholders, and
all stock in such company 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.
Definitions
For purposes of this section, the terms specified security and applicable date shall have the meaning given such terms in section 6045(g).
Average basis for stock acquired pursuant to a periodic stock investment plan
In general
In the case of any stock acquired after December 31, 2010, in connection with a periodic stock investment plan, the basis of such stock while held as part of such plan shall be determined using one of the methods which may be used for determining the basis of stock in a regulated investment company.
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 periodic stock investment plan immediately before such transfer (properly adjusted for any fees or other charges taken into account in connection with such transfer).
Separate accounts; election for treatment as single account
Rules similar to the rules of subsection (c)(2) shall apply for purposes of this subsection.
Periodic stock investment plan
For purposes of this subsection—
In general
The term periodic stock investment
plan
means—
any stock purchase plan, and
any dividend reinvestment plan.
Stock purchase plan
The term stock purchase plan
means any arrangement under which identical stock is periodically purchased
pursuant to a written plan.
Dividend reinvestment plan
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.
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.
.
Information by transferors to aid brokers
In general
Subpart B of part III of subchapter A of chapter 61 is amended by inserting after section 6045 the following new section:
Information required in connection with transfers of covered securities to brokers
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).
Applicable person
For purposes of subsection (a), the term applicable person means—
any broker (as defined in section 6045(c)(1)), and
any other person as provided by the Secretary in regulations.
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.
.
Assessable penalties
Paragraph (2) of section 6724(d) is amended by redesignating subparagraphs (I) through (DD) as subparagraphs (J) through (EE), respectively, and by inserting after subparagraph (H) the following new subparagraph:
section 6045A (relating to information required in connection with transfers of covered securities to brokers),
.
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.
.
Additional issuer information To aid brokers
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:
Returns relating to actions affecting basis of specified securities
In general
According to the forms or regulations prescribed by the Secretary, any issuer of a specified security shall make a return setting forth—
a description of any organizational action which affects the basis of such specified security of such issuer,
the quantitative effect on the basis of such specified security resulting from such action, and
such other information as the Secretary may prescribe.
Time for filing return
Any return required by subsection (a) shall be filed not later than the earlier of—
45 days after the date of the action described in subsection (a), or
January 15 of the year following the calendar year during which such action occurred.
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—
the name, address, and phone number of the information contact of the person required to make such return,
the information required to be shown on such return with respect to such security, and
such other information as the Secretary may prescribe.
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.
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—
the name, address, phone number, and email address of the information contact of such person, and
the information described in paragraphs (1), (2), and (3) of subsection (a).
.
Assessable penalties
Subparagraph (B) of section 6724(d)(1) 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:
section 6045B(a) (relating to returns relating to actions affecting basis of specified securities),
.
Paragraph (2) of section 6724(d), as amended 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:
subsections (c) and (e) of section 6045B (relating to returns relating to actions affecting basis of specified securities),
.
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.
.
Effective date
In general
Except as otherwise provided in this subsection, the amendments made by this section shall take effect on January 1, 2011.
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.
0.2 percent FUTA surtax
In general
Section 3301 (relating to rate of tax) is amended—
by striking through 2008
in
paragraph (1) and inserting through 2009
, and
by striking calendar year
2009
in paragraph (2) and inserting calendar year
2010
.
Effective date
The amendments made by this section shall apply to wages paid after December 31, 2008.
Increase and extension of Oil Spill Liability Trust Fund tax
Increase in rate
In general
Section 4611(c)(2)(B) (relating to rates)
is amended by striking is 5 cents a barrel.
and
inserting
is—
in the case of crude oil received or petroleum products entered before January 1, 2017, 8 cents a barrel, and
in the case of crude oil received or petroleum products entered after December 31, 2016, 9 cents a barrel.
.
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.
Extension
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:
Termination
The Oil Spill Liability Trust Fund financing rate shall not apply after December 31, 2017.
.
Conforming amendment
Section 4611(f)(1) is amended by striking
paragraphs (2) and (3)
and inserting paragraph
(2)
.
Effective date
The amendments made by this subsection shall take effect on the date of the enactment of this Act.
Nonqualified deferred compensation from certain tax indifferent parties
In general
Subpart B of part II of subchapter E of chapter 1 is amended by inserting after section 457 the following new section:
Nonqualified deferred compensation from certain tax indifferent parties
In general
Any compensation of a service provider which is deferred under a nonqualified deferred compensation plan of a nonqualified entity shall be includible in gross income when there is no substantial risk of forfeiture of the rights to such compensation.
Nonqualified entity
For purposes of this section, the term nonqualified entity means—
any foreign corporation unless substantially all of its income is—
effectively connected with the conduct of a trade or business in the United States, or
subject to a comprehensive foreign income tax, and
any partnership unless substantially all of its income is, directly or indirectly, allocated to—
United States persons (other than persons exempt from tax under this title),
foreign persons with respect to whom such income is subject to a comprehensive foreign income tax,
foreign persons with respect to whom—
such income is effectively connected with the conduct of a trade or business within the United States, and
a withholding tax is paid under section 1446 with respect to such income, or
organizations which are exempt from tax under this title if such income is unrelated business taxable income (as defined in section 512) with respect to such organization.
Determinability of amounts of compensation
In general
If the amount of any compensation is not determinable at the time that such compensation is otherwise includible in gross income under subsection (a)—
such amount shall be so includible in gross income when determinable, and
the tax imposed under this chapter for the taxable year in which such compensation is includible in gross income shall be increased by the sum of—
the amount of interest determined under paragraph (2), and
an amount equal to 20 percent of the amount of such compensation.
Interest
For purposes of paragraph (1)(B)(i), the interest determined under this paragraph for any taxable year is the amount of interest at the underpayment rate under section 6621 plus 1 percentage point on the underpayments that would have occurred had the deferred compensation been includible in gross income for the taxable year in which first deferred or, if later, the first taxable year in which such deferred compensation is not subject to a substantial risk of forfeiture.
Other definitions and special rules
For purposes of this section—
Substantial risk of forfeiture
In general
The rights of a person to compensation shall be treated as subject to a substantial risk of forfeiture only if such person’s rights to such compensation are conditioned upon the future performance of substantial services by any individual.
Exception for compensation based on gain recognized on an investment asset
In general
To the extent provided in regulations prescribed by the Secretary, if compensation of a service provider is determined solely by reference to the amount of gain recognized on the disposition of an investment asset, such compensation shall be treated as subject to a substantial risk of forfeiture until the date of such disposition.
Investment asset
For purposes of clause (i), the term
investment asset
means any single asset (other than an
investment fund or similar entity)—
acquired directly by an investment fund or similar entity,
with respect to which such entity does not (nor does any person related to such entity) participate in the active management of such asset (or if such asset is an interest in an entity, in the active management of the activities of such entity), and
substantially all of any gain on the disposition of which (other than such deferred compensation) is allocated to investors in such entity.
Coordination with special rule
Paragraph (3)(B) shall not apply to any compensation to which clause (i) applies.
Comprehensive foreign income tax
The term comprehensive foreign income tax means, with respect to any foreign person, the income tax of a foreign country if—
such person is eligible for the benefits of a comprehensive income tax treaty between such foreign country and the United States, or
such person demonstrates to the satisfaction of the Secretary that such foreign country has a comprehensive income tax.
Nonqualified deferred compensation plan
In general
The term nonqualified deferred compensation plan has the meaning given such term under section 409A(d), except that such term shall include any plan that provides a right to compensation based on the appreciation in value of a specified number of equity units of the service recipient.
Exception
Compensation shall not be treated as deferred for purposes of this section if the service provider receives payment of such compensation not later than 12 months after the end of the taxable year of the service recipient during which the right to the payment of such compensation is no longer subject to a substantial risk of forfeiture.
Service provider
The term service provider
has the meaning given such term in the regulations under section 409A,
determined without regard to method of accounting.
Exception for certain compensation with respect to effectively connected income
In the case of a foreign corporation with income which is taxable under section 882, this section shall not apply to compensation payable by such foreign corporation which, had such compensation been paid in cash on the date that such compensation ceased to be subject to a substantial risk of forfeiture, would have been deductible by such foreign corporation against such income.
Exception with respect to employees of certain subsidiaries
This section shall not apply to compensation deferred under a nonqualified deferred compensation plan of a nonqualified entity if—
such compensation is payable to an employee of a domestic subsidiary of such entity, and
such compensation is reasonably expected to be deductible by such subsidiary under section 404(a)(5) when such compensation is includible in income by such employee.
Application of rules
Rules similar to the rules of paragraphs (5) and (6) of section 409A(d) shall apply.
Regulations
The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section, including regulations—
disregarding a substantial risk of forfeiture in cases where necessary to carry out the purposes of this section, and
providing appropriate treatment where an individual who was employed by an employer which is not a nonqualified entity is temporarily employed by a nonqualified entity which is related to such employer.
.
Conforming amendment
Section 26(b)(2) is amended by striking
and
at the end of subparagraph (V), by striking the period at
the end of subparagraph (W) and inserting , and
, and by adding
at the end the following new subparagraph:
section 457A(c)(1)(B) (relating to determinability of amounts of compensation).
.
Clerical amendment
The table of sections of subpart B of part II of subchapter E of chapter 1 is amended by inserting after the item relating to section 457 the following new item:
.
Effective date
In general
Except as otherwise provided in this subsection, the amendments made by this section shall apply to amounts deferred which are attributable to services performed after December 31, 2008.
Application to existing deferrals
In the case of any amount deferred to which the amendments made by this section do not apply solely by reason of the fact that the amount is attributable to services performed before January 1, 2009, to the extent such amount is not includible in gross income in a taxable year beginning before 2018, such amounts shall be includible in gross income in the later of—
the last taxable year beginning before 2018, or
the taxable year in which there is no substantial risk of forfeiture of the rights to such compensation (determined in the same manner as determined for purposes of section 457A of the Internal Revenue Code of 1986, as added by this section).
Accelerated payments
No later than 120 days after the date of the enactment of this Act, the Secretary shall issue guidance providing a limited period of time during which a nonqualified deferred compensation arrangement attributable to services performed on or before December 31, 2008, may, without violating the requirements of section 409A(a) of the Internal Revenue Code of 1986, be amended to conform the date of distribution to the date the amounts are required to be included in income.
Certain back-to-back arrangements
If the taxpayer is also a service recipient and maintains one or more nonqualified deferred compensation arrangements for its service providers under which any amount is attributable to services performed on or before December 31, 2008, the guidance issued under paragraph (4) shall permit such arrangements to be amended to conform the dates of distribution under such arrangement to the date amounts are required to be included in the income of such taxpayer under this subsection.
Accelerated payment not treated as material modification
Any amendment to a nonqualified deferred compensation arrangement made pursuant to paragraph (4) or (5) shall not be treated as a material modification of the arrangement for purposes of section 409A of the Internal Revenue Code of 1986.
Certain preexisting arrangements
If, pursuant to a written binding contract entered into on or before December 31, 2007, any portion of compensation payable under such contract for a period is determined as a portion of the amount of gain recognized on the disposition during such period of a specified asset, the amendments made by this section shall not apply to the portion of compensation attributable to such disposition notwithstanding the fact that such portion of compensation may be reduced by realized losses or depreciation in the value of other assets during such period or a prior period or be attributable in part to services performed after December 31, 2008, but only if—
payment of such portion of compensation is received by the service provider and included in its gross income no later than the earlier of—
12 months after the end of the taxable year of the service recipient during which the disposition of the specified asset occurs, or
the last taxable year of the service provider beginning before January 1, 2018; and
the specified asset is held by the service recipient on the date of the enactment of this section.
Delay in application of worldwide allocation of interest
In general
Paragraphs (5)(D) and (6) of section 864(f)
are each amended by striking December 31, 2010
and inserting
December 31, 2016
.
Transition
Paragraph (7) of section 864(f) is amended
by striking 30 percent
and inserting 55
percent
.
Coordination with other legislation
If H.R. 6983 of the 110th Congress is enacted into law—
such law shall be treated, solely for purposes of carrying out the amendments made by this section, as having been enacted immediately before the enactment of this Act, and
in lieu of the amendments made by subsections (a) and (b):
Paragraphs (5)(D) and (6) of section
864(f), as amended by such law, are each amended by striking December
31, 2012
and inserting December 31, 2018
.
Subsection (f) of section 864, as amended by such law, is amended by striking paragraph (7).
Time for payment of corporate estimated taxes
The percentage under subparagraph (C) of section 401(1) of the Tax Increase Prevention and Reconciliation Act of 2005 in effect on the date of the enactment of this Act is increased by 58 percentage points.
Passed the House of Representatives September 26, 2008.
Lorraine C. Miller,
Clerk.
December 9, 2008
Read the second time and placed on the calendar