HR 2776 RH
Union Calendar No. 130
110th CONGRESS
1st Session
H. R. 2776
[Report No. 110-214]
To amend the Internal Revenue Code of 1986 to provide tax incentives
for the production of renewable energy and energy conservation.
IN THE HOUSE OF REPRESENTATIVES
June 19, 2007
Mr. RANGEL (for himself, Mr. LEVIN, Mr. MCDERMOTT, Mr. LEWIS of Georgia, Mr.
NEAL of Massachusetts, Mr. MCNULTY, Mr. TANNER, Mr. BECERRA, Mr. DOGGETT, Mr.
POMEROY, Mrs. JONES of Ohio, Mr. THOMPSON of California, Mr. LARSON of
Connecticut, Mr. EMANUEL, Mr. BLUMENAUER, Mr. KIND, Mr. PASCRELL, Ms. BERKLEY,
Mr. CROWLEY, Mr. VAN HOLLEN, Ms. SCHWARTZ, and Mr. DAVIS of Alabama) introduced
the following bill; which was referred to the Committee on Ways and Means
June 27, 2007
Reported with an amendment, committed to the Committee of the Whole House on
the State of the Union, and ordered to be printed
[Strike out all after the enacting clause and insert the part printed in
italic]
[For text of introduced bill, see copy of bill as introduced on June 19,
2007]
A BILL
To amend the Internal Revenue Code of 1986 to provide tax incentives
for the production of renewable energy and energy conservation.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE; TABLE OF
CONTENTS.
(a) Short Title- This Act may be cited as the `Renewable Energy and
Energy Conservation Tax Act of 2007'.
(b) Amendment of 1986 Code- Except as otherwise expressly provided,
whenever in this Act an amendment or repeal is expressed in terms of an
amendment to, or repeal of, a section or other provision, the reference shall
be considered to be made to a section or other provision of the Internal
Revenue Code of 1986.
(c) Table of Contents- The table of contents of this Act is as
follows:
Sec. 1. Short title; amendment of 1986 Code; table of
contents.
TITLE I--PRODUCTION INCENTIVES
Sec. 101. Extension and modification of renewable energy
credit.
Sec. 102. Production credit for electricity produced from marine
renewables.
Sec. 103. Extension and modification of energy credit.
Sec. 104. New clean renewable energy bonds.
Sec. 105. Extension and modification of special rule to implement
FERC and State electric restructuring policy.
Sec. 106. Repeal of dollar limitation and allowance against
alternative minimum tax for residential solar and fuel cell property
credit.
TITLE II--CONSERVATION
Subtitle A--Transportation
Sec. 201. Credit for plug-in hybrid vehicles.
Sec. 202. Extension and modification of alternative fuel vehicle
refueling property credit.
Sec. 203. Extension and modification of credits for biodiesel and
renewable diesel.
Sec. 204. Credit for production of cellulosic alcohol.
Sec. 205. Extension of transportation fringe benefit to bicycle
commuters.
Sec. 206. Modification of limitation on automobile
depreciation.
Sec. 207. Restructuring of New York Liberty Zone tax
credits.
Subtitle B--Other Conservation Provisions
Sec. 211. Qualified energy conservation bonds.
Sec. 212. Qualified residential energy efficiency assistance
bonds.
Sec. 213. Extension of energy efficient commercial buildings
deduction.
Sec. 214. Modifications of energy efficient appliance credit for
appliances produced after 2007.
Sec. 215. Five-year applicable recovery period for depreciation of
qualified energy management devices.
TITLE III--REVENUE PROVISIONS
Subtitle A--Denial of Oil and Gas Tax Benefits
Sec. 301. Denial of deduction for income attributable to domestic
production of oil, natural gas, or primary products thereof.
Sec. 302. 7-year amortization of geological and geophysical
expenditures for certain major integrated oil companies.
Sec. 303. Clarification of determination of foreign oil and gas
extraction income.
Subtitle B--Clarification of Eligibility for Certain Fuel
Credits
Sec. 311. Clarification of eligibility for renewable diesel
credit.
Sec. 312. Clarification that credits for fuel are designed to
provide an incentive for United States production.
TITLE IV--OTHER PROVISIONS
Subtitle A--Studies
Sec. 401. Carbon audit of the tax code.
Sec. 402. Comprehensive study of biofuels.
Subtitle B--Application of Certain Labor Standards on Projects Financed
Under Tax Credit Bonds
Sec. 411. Application of certain labor standards on projects
financed under tax credit bonds.
TITLE I--PRODUCTION INCENTIVES
SEC. 101. EXTENSION AND MODIFICATION OF RENEWABLE ENERGY
CREDIT.
(a) Extension of Credit- Each of the following provisions of section
45(d) (relating to qualified facilities) is amended by striking `January 1,
2009' and inserting `January 1, 2013':
(2) Clauses (i) and (ii) of paragraph (2)(A).
(3) Clauses (i)(I) and (ii) of paragraph (3)(A).
(8) Subparagraphs (A) and (B) of paragraph (9).
(b) Modification of Credit Phaseout-
(1) REPEAL OF PHASEOUT- Subsection (b) of section 45 is
amended--
(A) by striking paragraph (1), and
(B) by striking `the 8 cent amount in paragraph (1),' in paragraph
(2) thereof.
(2) LIMITATION BASED ON INVESTMENT IN FACILITY- Subsection (b) of
section 45 is amended by inserting before paragraph (2) the following new
paragraph:
`(1) LIMITATION BASED ON INVESTMENT IN FACILITY-
`(A) IN GENERAL- In the case of any qualified facility originally
placed in service after December 31, 2008, 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--
`(i) the applicable percentage with respect to such facility,
multiplied by
`(ii) the eligible basis of such facility.
`(B) CARRYFORWARD OF UNUSED LIMITATION AND EXCESS CREDIT-
`(i) UNUSED LIMITATION- If the limitation imposed under
subparagraph (A) with respect to any facility for any taxable year
exceeds the credit determined under subsection (a) (determined without
regard to this paragraph) with respect to 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.
`(ii) EXCESS CREDIT- If the credit determined under subsection
(a) (determined without regard to this paragraph) 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
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.
`(C) APPLICABLE PERCENTAGE- For purposes of this
paragraph--
`(i) IN GENERAL- The term `applicable percentage' means, with
respect to any facility, the appropriate percentage prescribed by the
Secretary for the month in which such facility is originally placed in
service.
`(ii) METHOD OF PRESCRIBING PERCENTAGES- The percentages
prescribed by the Secretary for any month under clause (i) shall be
percentages which yield over a 10-year period amounts of limitation
under subparagraph (A) which have a present value equal to 35 percent of
the eligible basis of the facility.
`(iii) METHOD OF DISCOUNTING- The present value under clause
(ii) shall be determined--
`(I) as of the last day of the 1st year of the 10-year period
referred to in clause (ii),
`(II) by using a discount rate equal to the average annual
interest rate of tax-exempt obligations having a term of 10 years or
more which are issued during the month preceding the month for which
the percentage is being prescribed, and
`(III) by taking into account the limitation under
subparagraph (A) for any year on the last day of such
year.
`(D) ELIGIBLE BASIS- For purposes of this paragraph, the term
`eligible basis' means, with respect to any facility, the basis of such
facility determined as of the time that such facility is originally placed
in service.
`(E) SPECIAL RULE FOR FIRST AND LAST YEAR OF CREDIT PERIOD- In the
case of any taxable year any portion of which is not within the 10-year
period described in subsection (a)(2)(A)(ii) with respect to any facility,
the amount of the limitation under subparagraph (A) with respect to such
facility shall be reduced by an amount which bears the same ratio to the
amount of such limitation (determined without regard to this subparagraph)
as such portion of the taxable year which is not within such period bears
to the entire taxable year.'.
(1) IN GENERAL- Except as provided in paragraph (2), the amendments
made by this section shall apply to property originally placed in service
after December 31, 2008.
(2) REPEAL OF CREDIT PHASEOUT- The amendments made by subsection
(b)(1) shall apply to taxable years ending after December 31,
2008.
SEC. 102. PRODUCTION CREDIT FOR ELECTRICITY PRODUCED FROM MARINE
RENEWABLES.
(a) In General- Paragraph (1) of section 45(c) (relating to resources)
is amended by striking `and' at the end of subparagraph (G), by striking the
period at the end of subparagraph (H) and inserting `, and', and by adding at
the end the following new subparagraph:
`(I) marine and hydrokinetic renewable energy.'.
(b) Marine Renewables- Subsection (c) of section 45 is amended by
adding at the end the following new paragraph:
`(10) MARINE AND HYDROKINETIC RENEWABLE ENERGY-
`(A) IN GENERAL- The term `marine and hydrokinetic renewable
energy' means energy derived from--
`(i) waves, tides, and currents in oceans, estuaries, and tidal
areas,
`(ii) free flowing water in rivers, lakes, and
streams,
`(iii) free flowing water in an irrigation system, canal, or
other man-made channel, including projects that utilize nonmechanical
structures to accelerate the flow of water for electric power production
purposes, or
`(iv) differentials in ocean temperature (ocean thermal energy
conversion).
`(B) EXCEPTIONS- Such term shall not include any energy which is
derived from any source which utilizes a dam, diversionary structure
(except as provided in subparagraph (A)(iii)), or impoundment for electric
power production purposes.'.
(c) Definition of Facility- Subsection (d) of section 45 is amended by
adding at the end the following new paragraph:
`(11) MARINE AND HYDROKINETIC RENEWABLE ENERGY FACILITIES- In the
case of a facility producing electricity from marine and hydrokinetic
renewable energy, the term `qualified facility' means any facility owned by
the taxpayer--
`(A) which has a nameplate capacity rating of at least 150
kilowatts, and
`(B) which is originally placed in service on or after the date of
the enactment of this paragraph and before January 1,
2013.'.
(d) Credit Rate- Subparagraph (A) of section 45(b)(4) is amended by
striking `or (9)' and inserting `(9), or (11)'.
(e) Coordination With Small Irrigation Power- Paragraph (5) of section
45(d), as amended by this Act, is amended by striking `January 1, 2013' and
inserting `the date of the enactment of paragraph (11)'.
(f) Effective Date- The amendments made by this section shall apply to
electricity produced and sold after the date of the enactment of this Act, in
taxable years ending after such date.
SEC. 103. EXTENSION AND MODIFICATION OF ENERGY CREDIT.
(1) SOLAR ENERGY PROPERTY- Paragraphs (2)(A)(i)(II) and (3)(A)(ii)
of section 48(a) (relating to energy credit) are each amended by striking
`January 1, 2009' and inserting `January 1, 2017'.
(2) FUEL CELL PROPERTY- Subparagraph (E) of section 48(c)(1)
(relating to qualified fuel cell property) is amended by striking `December
31, 2008' and inserting `December 31, 2016'.
(b) Allowance of Energy Credit Against Alternative Minimum Tax-
Subparagraph (B) of section 38(c)(4) (relating to specified credits) is
amended by striking `and' at the end of clause (iii), by striking the period
at the end of clause (iv) and inserting `, and', and by adding at the end the
following new clause:
`(v) the credit determined under section 46 to the extent that
such credit is attributable to the energy credit determined under
section 48.'.
(c) Increase of Credit Limitation for Fuel Cell Property- Subparagraph
(B) of section 48(c)(1) is amended by striking `$500' and inserting
`$1,500'.
(d) Public Electric Utility Property Taken Into Account-
(1) IN GENERAL- Paragraph (3) of section 48(a) is amended by
striking the second sentence thereof.
(2) CONFORMING AMENDMENTS-
(A) Paragraph (1) of section 48(c) is amended by striking
subparagraph (D) and redesignating subparagraph (E) as subparagraph
(D).
(B) Paragraph (2) of section 48(c) is amended by striking
subparagraph (D) and redesignating subparagraph (E) as subparagraph
(D).
(e) Clerical Amendments- Paragraphs (1)(B) and (2)(B) of section 48(c)
are each amended by striking `paragraph (1)' and inserting `subsection
(a)'.
(1) IN GENERAL- Except as otherwise provided in this subsection, the
amendments made by this section shall take effect on the date of the
enactment of this Act.
(2) ALLOWANCE AGAINST ALTERNATIVE MINIMUM TAX- The amendments made
by subsection (b) shall apply to credits determined under section 46 of the
Internal Revenue Code of 1986 in taxable years beginning after the date of
the enactment of this Act and to carrybacks of such credits.
(3) INCREASE IN LIMITATION FOR FUEL CELL PROPERTY- The amendment
made by subsection (c) shall apply to periods after the date of the
enactment of this Act, in taxable years ending after such date, under rules
similar to the rules of section 48(m) of the Internal Revenue Code of 1986
(as in effect on the day before the date of the enactment of the Revenue
Reconciliation Act of 1990).
(4) PUBLIC ELECTRIC UTILITY PROPERTY- The amendments made by
subsection (d) shall apply to periods after June 20, 2007, in taxable years
ending after such date, under rules similar to the rules of section 48(m) of
the Internal Revenue Code of 1986 (as in effect on the day before the date
of the enactment of the Revenue Reconciliation Act of 1990).
SEC. 104. NEW CLEAN RENEWABLE ENERGY BONDS.
(a) In General- Part IV of subchapter A of chapter 1 (relating to
credits against tax) is amended by adding at the end the following new
subpart:
`Subpart I--Qualified Tax Credit Bonds
`Sec. 54A. Credit to holders of qualified tax credit
bonds.
`Sec. 54B. New clean renewable energy bonds.
`SEC. 54A. CREDIT TO HOLDERS OF QUALIFIED TAX CREDIT BONDS.
`(a) Allowance of Credit- If a taxpayer holds a qualified tax credit
bond on one or more credit allowance dates of the bond during any taxable
year, there shall be allowed as a credit against the tax imposed by this
chapter for the taxable year an amount equal to the sum of the credits
determined under subsection (b) with respect to such dates.
`(1) IN GENERAL- The amount of the credit determined under this
subsection with respect to any credit allowance date for a qualified tax
credit bond is 25 percent of the annual credit determined with respect to
such bond.
`(2) ANNUAL CREDIT- The annual credit determined with respect to any
qualified tax credit bond is the product of--
`(A) the applicable credit rate, multiplied by
`(B) the outstanding face amount of the bond.
`(3) APPLICABLE CREDIT RATE- For purposes of paragraph (2), the
applicable credit rate is the rate which the Secretary estimates will permit
the issuance of qualified tax credit bonds with a specified maturity or
redemption date without discount and without interest cost to the qualified
issuer. The applicable credit rate with respect to any qualified tax credit
bond shall be determined as of the first day on which there is a binding,
written contract for the sale or exchange of the bond.
`(4) SPECIAL RULE FOR ISSUANCE AND REDEMPTION- In the case of a bond
which is issued during the 3-month period ending on a credit allowance date,
the amount of the credit determined under this subsection with respect to
such credit allowance date shall be a ratable portion of the credit
otherwise determined based on the portion of the 3-month period during which
the bond is outstanding. A similar rule shall apply when the bond is
redeemed or matures.
`(c) Limitation Based on Amount of Tax-
`(1) IN GENERAL- The credit allowed under subsection (a) for any
taxable year shall not exceed the excess of--
`(A) the sum of the regular tax liability (as defined in section
26(b)) plus the tax imposed by section 55, over
`(B) the sum of the credits allowable under this part (other than
subpart C and this subpart).
`(2) CARRYOVER OF UNUSED CREDIT- If the credit allowable under
subsection (a) exceeds the limitation imposed by paragraph (1) for such
taxable year, such excess shall be carried to the succeeding taxable year
and added to the credit allowable under subsection (a) for such taxable year
(determined before the application of paragraph (1) for such succeeding
taxable year).
`(d) Qualified Tax Credit Bond- For purposes of this section--
`(1) QUALIFIED TAX CREDIT BOND- The term `qualified tax credit bond'
means a new clean renewable energy bond which is part of an issue that meets
the requirements of paragraphs (2), (3), (4), (5), and (6).
`(2) SPECIAL RULES RELATING TO EXPENDITURES-
`(A) IN GENERAL- An issue shall be treated as meeting the
requirements of this paragraph if, as of the date of issuance, the issuer
reasonably expects--
`(i) 100 percent or more of the available project proceeds to be
spent for 1 or more qualified purposes within the 3-year period
beginning on such date of issuance, and
`(ii) a binding commitment with a third party to spend at least
10 percent of such available project proceeds will be incurred within
the 6-month period beginning on such date of issuance.
`(B) FAILURE TO SPEND REQUIRED AMOUNT OF BOND PROCEEDS WITHIN 3
YEARS-
`(i) IN GENERAL- To the extent that less than 100 percent of the
available project proceeds of the issue are expended by the close of the
expenditure period for 1 or more qualified purposes, the issuer shall
redeem all of the nonqualified bonds within 90 days after the end of
such period. For purposes of this paragraph, the amount of the
nonqualified bonds required to be redeemed shall be determined in the
same manner as under section 142.
`(ii) EXPENDITURE PERIOD- For purposes of this subpart, the term
`expenditure period' means, with respect to any issue, the 3-year period
beginning on the date of issuance. Such term shall include any extension
of such period under clause (iii).
`(iii) EXTENSION OF PERIOD- Upon submission of a request prior
to the expiration of the expenditure period (determined without regard
to any extension under this clause), the Secretary may extend such
period if the issuer establishes that the failure to expend the proceeds
within the original expenditure period is due to reasonable cause and
the expenditures for qualified purposes will continue to proceed with
due diligence.
`(C) QUALIFIED PURPOSE- For purposes of this paragraph, the term
`qualified purpose' means a purpose specified in section
54B(a)(1).
`(D) REIMBURSEMENT- For purposes of this subtitle, available
project proceeds of an issue shall be treated as spent for a qualified
purpose if such proceeds are used to reimburse the issuer for amounts paid
for a qualified purpose after the date that the Secretary makes an
allocation of bond limitation with respect to such issue, but only
if--
`(i) prior to the payment of the original expenditure, the
issuer declared its intent to reimburse such expenditure with the
proceeds of a qualified tax credit bond,
`(ii) not later than 60 days after payment of the original
expenditure, the issuer adopts an official intent to reimburse the
original expenditure with such proceeds, and
`(iii) the reimbursement is made not later than 18 months after
the date the original expenditure is paid.
`(3) REPORTING- An issue shall be treated as meeting the
requirements of this paragraph if the issuer of qualified tax credit bonds
submits reports similar to the reports required under section
149(e).
`(4) SPECIAL RULES RELATING TO ARBITRAGE-
`(A) IN GENERAL- An issue shall be treated as meeting the
requirements of this paragraph if the issuer satisfies the requirements of
section 148 with respect to the proceeds of the issue.
`(B) SPECIAL RULE FOR INVESTMENTS DURING EXPENDITURE PERIOD- An
issue shall not be treated as failing to meet the requirements of
subparagraph (A) by reason of any investment of available project proceeds
during the expenditure period.
`(C) SPECIAL RULE FOR RESERVE FUNDS- An issue shall not be treated
as failing to meet the requirements of subparagraph (A) by reason of any
fund which is expected to be used to repay such issue if--
`(i) such fund is funded at a rate not more rapid than equal
annual installments,
`(ii) such fund is funded in a manner that such fund will not
exceed the amount necessary to repay the issue if invested at the
maximum rate permitted under clause (iii), and
`(iii) the yield on such fund is not greater than the discount
rate determined under paragraph (5)(B) with respect to the
issue.
`(5) MATURITY LIMITATION-
`(A) IN GENERAL- An issue shall not be treated as meeting the
requirements of this paragraph if the maturity of any bond which is part
of such issue exceeds the maximum term determined by the Secretary under
subparagraph (B).
`(B) MAXIMUM TERM- During each calendar month, the Secretary shall
determine the maximum term permitted under this paragraph for bonds issued
during the following calendar month. Such maximum term shall be the term
which the Secretary estimates will result in the present value of the
obligation to repay the principal on the bond being equal to 50 percent of
the face amount of such bond. Such present value shall be determined using
as a discount rate the average annual interest rate of tax-exempt
obligations having a term of 10 years or more which are issued during the
month. If the term as so determined is not a multiple of a whole year,
such term shall be rounded to the next highest whole year.
`(6) PROHIBITION ON FINANCIAL CONFLICTS OF INTEREST- An issue shall
be treated as meeting the requirements of this paragraph if the issuer
certifies that--
`(A) applicable State and local law requirements governing
conflicts of interest are satisfied with respect to such issue,
and
`(B) if the Secretary prescribes additional conflicts of interest
rules governing the appropriate Members of Congress, Federal, State, and
local officials, and their spouses, such additional rules are satisfied
with respect to such issue.
`(e) Other Definitions- For purposes of this subchapter--
`(1) CREDIT ALLOWANCE DATE- The term `credit allowance date'
means--
Such term includes the last day on which the bond is
outstanding.
`(2) BOND- The term `bond' includes any obligation.
`(3) STATE- The term `State' includes the District of Columbia and
any possession of the United States.
`(4) AVAILABLE PROJECT PROCEEDS- The term `available project
proceeds' means--
`(i) the proceeds from the sale of an issue,
over
`(ii) the issuance costs financed by the issue (to the extent
that such costs do not exceed 2 percent of such proceeds),
and
`(B) the proceeds from any investment of the excess described in
subparagraph (A).
`(f) Credit Treated as Interest- For purposes of this subtitle, the
credit determined under subsection (a) shall be treated as interest which is
includible in gross income.
`(g) S Corporations and Partnerships- In the case of a tax credit bond
held by an S corporation or partnership, the allocation of the credit allowed
by this section to the shareholders of such corporation or partners of such
partnership shall be treated as a distribution.
`(h) Bonds Held by Regulated Investment Companies and Real Estate
Investment Trusts- If any qualified tax credit bond is held by a regulated
investment company or a real estate investment trust, the credit determined
under subsection (a) shall be allowed to shareholders of such company or
beneficiaries of such trust (and any gross income included under subsection
(f) with respect to such credit shall be treated as distributed to such
shareholders or beneficiaries) under procedures prescribed by the
Secretary.
`(i) Credits May Be Stripped- Under regulations prescribed by the
Secretary--
`(1) IN GENERAL- There may be a separation (including at issuance)
of the ownership of a qualified tax credit bond and the entitlement to the
credit under this section with respect to such bond. In case of any such
separation, the credit under this section shall be allowed to the person who
on the credit allowance date holds the instrument evidencing the entitlement
to the credit and not to the holder of the bond.
`(2) CERTAIN RULES TO APPLY- In the case of a separation described
in paragraph (1), the rules of section 1286 shall apply to the qualified tax
credit bond as if it were a stripped bond and to the credit under this
section as if it were a stripped coupon.
`SEC. 54B. NEW CLEAN RENEWABLE ENERGY BONDS.
`(a) New Clean Renewable Energy Bond- For purposes of this subpart,
the term `new clean renewable energy bond' means any bond issued as part of an
issue if--
`(1) 100 percent of the available project proceeds of such issue are
to be used for capital expenditures incurred by public power providers or
cooperative electric companies for one or more qualified renewable energy
facilities,
`(2) the bond is issued by a qualified issuer, and
`(3) the issuer designates such bond for purposes of this
section.
`(b) Reduced Credit Amount- The annual credit determined under section
54A(b) with respect to any new clean renewable energy bond shall be 70 percent
of the amount so determined without regard to this subsection.
`(c) Limitation on Amount of Bonds Designated-
`(1) IN GENERAL- The maximum aggregate face amount of bonds which
may be designated under subsection (a) by any issuer shall not exceed the
limitation amount allocated under this subsection to such issuer.
`(2) NATIONAL LIMITATION ON AMOUNT OF BONDS DESIGNATED- There is a
national new clean renewable energy bond limitation of $2,000,000,000 which
shall be allocated by the Secretary as provided in paragraph (3), except
that--
`(A) not more than 60 percent thereof may be allocated to
qualified projects of public power providers, and
`(B) not more than 40 percent thereof may be allocated to
qualified projects of cooperative electric companies.
`(3) METHOD OF ALLOCATION-
`(A) ALLOCATION AMONG PUBLIC POWER PROVIDERS- After the Secretary
determines the qualified projects of public power providers which are
appropriate for receiving an allocation of the national new clean
renewable energy bond limitation, the Secretary shall, to the maximum
extent practicable, make allocations among such projects in such manner
that the amount allocated to each such project bears the same ratio to the
cost of such project as the limitation under subparagraph (2)(A) bears to
the cost of all such projects.
`(B) ALLOCATION AMONG COOPERATIVE ELECTRIC COMPANIES- The
Secretary shall make allocations of the amount of the national new clean
renewable energy bond limitation described in paragraph (2)(B) among
qualified projects of cooperative electric companies in such manner as the
Secretary determines appropriate.
`(d) Definitions- For purposes of this section--
`(1) QUALIFIED RENEWABLE ENERGY FACILITY- The term `qualified
renewable energy facility' means a qualified facility (as determined under
section 45(d) without regard to paragraphs (8) and (10) thereof and to any
placed in service date) owned by a public power provider or a cooperative
electric company.
`(2) PUBLIC POWER PROVIDER- The term `public power provider' means a
State utility with a service obligation, as such terms are defined in
section 217 of the Federal Power Act (as in effect on the date of the
enactment of this paragraph).
`(3) COOPERATIVE ELECTRIC COMPANY- The term `cooperative electric
company' means a mutual or cooperative electric company described in section
501(c)(12) or section 1381(a)(2)(C).
`(4) CLEAN RENEWABLE ENERGY BOND LENDER- The term `clean renewable
energy bond lender' means a lender which is a cooperative which is owned by,
or has outstanding loans to, 100 or more cooperative electric companies and
is in existence on February 1, 2002, and shall include any affiliated entity
which is controlled by such lender.
`(5) QUALIFIED ISSUER- The term `qualified issuer' means a public
power provider, a cooperative electric company, a clean renewable energy
bond lender, or a not-for-profit electric utility which has received a loan
or loan guarantee under the Rural Electrification Act.'.
(b) Reporting- Subsection (d) of section 6049 (relating to returns
regarding payments of interest) is amended by adding at the end the following
new paragraph:
`(9) REPORTING OF CREDIT ON QUALIFIED TAX CREDIT BONDS-
`(A) IN GENERAL- For purposes of subsection (a), the term
`interest' includes amounts includible in gross income under section 54A
and such amounts shall be treated as paid on the credit allowance date (as
defined in section 54A(e)(1)).
`(B) REPORTING TO CORPORATIONS, ETC- Except as otherwise provided
in regulations, in the case of any interest described in subparagraph (A)
of this paragraph, subsection (b)(4) of this section shall be applied
without regard to subparagraphs (A), (H), (I), (J), (K), and
(L)(i).
`(C) REGULATORY AUTHORITY- The Secretary may prescribe such
regulations as are necessary or appropriate to carry out the purposes of
this paragraph, including regulations which require more frequent or more
detailed reporting.'.
(c) Conforming Amendments-
(1) Sections 54(c)(2) and 1400N(l)(3)(B) are each amended by
striking `subpart C' and inserting `subparts C and I'.
(2) Section 1397E(c)(2) is amended by striking `subpart H' and
inserting `subparts H and I'.
(3) Section 6401(b)(1) is amended by striking `and H' and inserting
`H, and I'.
(4) The heading of subpart H of part IV of subchapter A of chapter 1
is amended by striking `Certain Bonds' and inserting `Clean
Renewable Energy Bonds'.
(5) The table of subparts for part IV of subchapter A of chapter 1
is amended by striking the item relating to subpart H and inserting the
following new items:
`subpart h. nonrefundable credit to holders of clean renewable energy
bonds.
`subpart i. qualified tax credit bonds.'.
(d) Effective Dates- The amendments made by this section shall apply
to obligations issued after the date of the enactment of this Act.
SEC. 105. EXTENSION AND MODIFICATION OF SPECIAL RULE TO IMPLEMENT FERC
AND STATE ELECTRIC RESTRUCTURING POLICY.
(a) Extension for Qualified Electric Utilities-
(1) IN GENERAL- Paragraph (3) of section 451(i) (relating to special
rule for sales or dispositions to implement Federal Energy Regulatory
Commission or State electric restructuring policy) is amended by striking
`before January 1, 2008,' and inserting `before January 1, 2010, by a
qualified electric utility,'.
(2) QUALIFIED ELECTRIC UTILITY- Subsection (i) of section 451 is
amended by redesignating paragraphs (6) through (10) as paragraphs (7)
through (11), respectively, and by inserting after paragraph (5) the
following new paragraph:
`(6) QUALIFIED ELECTRIC UTILITY- For purposes of this subsection,
the term `qualified electric utility' means--
`(A) an electric utility (as defined in section 3(22) of the
Federal Power Act (16 U.S.C. 796(22))), and
`(B) any person in the same holding company system (as defined in
section 1262(9) of the Public Utility Holding Company Act of 2005 (42
U.S.C. 16451(9))) as an electric utility referred to subparagraph
(A).'.
(b) Extension of Period for Transfer of Operational Control Authorized
by FERC- Clause (ii) of section 451(i)(4)(B) is amended by striking `December
31, 2007' and inserting `the date which is 4 years after the close of the
taxable year in which the transaction occurs'.
(c) Property Located Outside the United States Not Treated as Exempt
Utility Property- Paragraph (5) of section 451(i) is amended by adding at the
end the following new subparagraph:
`(C) EXCEPTION FOR PROPERTY LOCATED OUTSIDE THE UNITED STATES- The
term `exempt utility property' shall not include any property which is
located outside the United States.'.
(1) EXTENSION- The amendment made by subsection (a) shall apply to
transactions after December 31, 2007.
(2) TRANSFERS OF OPERATIONAL CONTROL- The amendment made by
subsection (b) shall take effect as if included in section 909 of the
American Jobs Creation Act of 2004.
(3) EXCEPTION FOR PROPERTY LOCATED OUTSIDE THE UNITED STATES- The
amendment made by subsection (c) shall apply to transactions after the date
of the enactment of this Act.
SEC. 106. REPEAL OF DOLLAR LIMITATION AND ALLOWANCE AGAINST ALTERNATIVE
MINIMUM TAX FOR RESIDENTIAL SOLAR AND FUEL CELL PROPERTY CREDIT.
(a) Repeal of Maximum Dollar Limitation-
(1) IN GENERAL- Subsection (b) of section 25D (relating to
limitations) is amended to read as follows:
`(b) Certification of Solar Water Heating Property- No credit shall be
allowed under this section for an item of property described in subsection
(d)(1) unless such property is certified for performance by the non-profit
Solar Rating Certification Corporation or a comparable entity endorsed by the
government of the State in which such property is installed.'.
(2) CONFORMING AMENDMENTS-
(A) Subsection (e) of section 25D is amended by striking paragraph
(4) and by redesignating paragraphs (5) through (9) as paragraphs (4)
through (8), respectively.
(B) Paragraph (1) of section 25C(e) is amended by striking `(8),
and (9)' and inserting `and (8) (and paragraph (4) as in effect before its
repeal by the Renewable Energy and Energy Conservation Tax Act of
2007)'.
(b) Credit Allowed Against Alternative Minimum Tax-
(1) IN GENERAL- Subsection (c) of section 25D is amended to read as
follows:
`(c) Limitation Based on Amount of Tax; Carryforward of Unused Credit-
`(1) LIMITATION BASED ON AMOUNT OF TAX- In the case of a taxable
year to which section 26(a)(2) does not apply, the credit allowed under
subsection (a) for the taxable year shall not exceed the excess
of--
`(A) the sum of the regular tax liability (as defined in section
26(b)) plus the tax imposed by section 55, over
`(B) the sum of the credits allowable under this subpart (other
than this section) and section 27 for the taxable year.
`(2) CARRYFORWARD OF UNUSED CREDIT-
`(A) RULE FOR YEARS IN WHICH ALL PERSONAL CREDITS ALLOWED AGAINST
REGULAR AND ALTERNATIVE MINIMUM TAX- In the case of a taxable year to
which section 26(a)(2) applies, if the credit allowable under subsection
(a) exceeds the limitation imposed by section 26(a)(2) for such taxable
year reduced by the sum of the credits allowable under this subpart (other
than this section), such excess shall be carried to the succeeding taxable
year and added to the credit allowable under subsection (a) for such
succeeding taxable year.
`(B) RULE FOR OTHER YEARS- In the case of a taxable year to which
section 26(a)(2) does not apply, if the credit allowable under subsection
(a) exceeds the limitation imposed by paragraph (1) for such taxable year,
such excess shall be carried to the succeeding taxable year and added to
the credit allowable under subsection (a) for such succeeding taxable
year.'.
(2) CONFORMING AMENDMENTS-
(A) Section 23(b)(4)(B) is amended by inserting `and section 25D'
after `this section'.
(B) Section 24(b)(3)(B) is amended by striking `and 25B' and
inserting `, 25B, and 25D'.
(C) Section 25B(g)(2) is amended by striking `section 23' and
inserting `sections 23 and 25D'.
(D) Section 26(a)(1) is amended by striking `and 25B' and
inserting `25B, and 25D'.
(1) IN GENERAL- Except as otherwise provided in this subsection, the
amendments made by this section shall apply to expenditures made after the
date of the enactment of this Act.
(2) ALLOWANCE AGAINST ALTERNATIVE MINIMUM TAX-
(A) IN GENERAL- The amendments made by subsection (b) shall apply
to taxable years beginning after the date of the enactment of this
Act.
(B) APPLICATION OF EGTRRA SUNSET- The amendments made by
subparagraphs (A) and (B) of subsection (b)(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.
TITLE II--CONSERVATION
Subtitle A--Transportation
SEC. 201. CREDIT FOR PLUG-IN HYBRID VEHICLES.
(a) In General- Subpart B of part IV of subchapter A of chapter 1
(relating to other credits) is amended by adding at the end the following new
section:
`SEC. 30D. PLUG-IN HYBRID VEHICLES.
`(a) Allowance of Credit- There shall be allowed as a credit against
the tax imposed by this chapter for the taxable year an amount equal to the
sum of the credit amounts determined under subsection (b) with respect to each
qualified plug-in hybrid vehicle placed in service by the taxpayer during the
taxable year.
`(b) Per Vehicle Dollar Limitation-
`(1) IN GENERAL- The amount determined under this subsection with
respect to any qualified plug-in hybrid vehicle is the sum of the amounts
determined under paragraphs (2) and (3) with respect to such
vehicle.
`(2) BASE AMOUNT- The amount determined under this paragraph is
$4,000.
`(3) BATTERY CAPACITY- In the case of 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.
`(c) Application With Other Credits-
`(1) BUSINESS CREDIT TREATED AS PART OF GENERAL BUSINESS CREDIT- So
much of the credit which would be allowed under subsection (a) for any
taxable year (determined without regard to this subsection) that is
attributable to property of a character subject to an allowance for
depreciation shall be treated as a credit listed in section 38(b) for such
taxable year (and not allowed under subsection (a)).
`(A) IN GENERAL- For purposes of this title, the credit allowed
under subsection (a) for any taxable year (determined after application of
paragraph (1)) shall be treated as a credit allowable under subpart A for
such taxable year.
`(B) LIMITATION BASED ON AMOUNT OF TAX- In the case of a taxable
year to which section 26(a)(2) does not apply, the credit allowed under
subsection (a) for any taxable year (determined after application of
paragraph (1)) shall not exceed the excess of--
`(i) the sum of the regular tax liability (as defined in section
26(b)) plus the tax imposed by section 55, over
`(ii) the sum of the credits allowable under subpart A (other
than this section and sections 23 and 25D) and section 27 for the
taxable year.
`(d) Qualified Plug-In Hybrid Vehicle- For purposes of this
section--
`(1) IN GENERAL- The term `qualified plug-in hybrid vehicle' means a
motor vehicle (as defined in section 30(c)(2))--
`(A) the original use of which commences with the
taxpayer,
`(B) which is acquired for use or lease by the taxpayer and not
for resale,
`(C) which is made by a manufacturer,
`(D) which has a gross vehicle weight rating of less than 14,000
pounds,
`(E) which has received a certificate of conformity under the
Clean Air Act and meets or exceeds the Bin 5 Tier II emission standard
established in regulations prescribed by the Administrator of the
Environmental Protection Agency under section 202(i) of the Clean Air Act
for that make and model year vehicle,
`(F) which is propelled to a significant extent by an electric
motor which draws electricity from a battery which--
`(i) has a capacity of not less than 4 kilowatt hours,
and
`(ii) is capable of being recharged from an external source of
electricity, and
`(i) is also propelled to a significant extent by other than an
electric motor, or
`(ii) has a significant onboard source of electricity which also
recharges the battery referred to in subparagraph (F).
`(2) EXCEPTION- The term `qualified plug-in hybrid 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.
`(3) OTHER TERMS- The terms `passenger automobile', `light truck',
and `manufacturer' have the meanings given such terms in regulations
prescribed by the Administrator of the Environmental Protection Agency for
purposes of the administration of title II of the Clean Air Act (42 U.S.C.
7521 et seq.).
`(4) BATTERY CAPACITY- The term `capacity' means, with respect to
any battery, the quantity of electricity which the battery is capable of
storing, expressed in kilowatt hours, as measured from a 100 percent state
of charge to a 0 percent state of charge.
`(e) Limitation on Number of Qualified Plug-In Hybrid Vehicles
Eligible for Credit-
`(1) IN GENERAL- In the case of a qualified plug-in hybrid vehicle
sold during the phaseout period, only the applicable percentage of the
credit otherwise allowable under subsection (a) shall be allowed.
`(2) PHASEOUT PERIOD- For purposes of this subsection, the phaseout
period is the period beginning with the second calendar quarter following
the calendar quarter which includes the first date on which the number of
qualified plug-in hybrid 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.
`(3) APPLICABLE PERCENTAGE- For purposes of paragraph (1), the
applicable percentage is--
`(A) 50 percent for the first 2 calendar quarters of the phaseout
period,
`(B) 25 percent for the 3d and 4th calendar quarters of the
phaseout period, and
`(C) 0 percent for each calendar quarter thereafter.
`(4) CONTROLLED GROUPS- Rules similar to the rules of section
30B(f)(4) shall apply for purposes of this subsection.
`(1) BASIS REDUCTION- The basis of any property for which a credit
is allowable under subsection (a) shall be reduced by the amount of such
credit (determined without regard to subsection (c)).
`(2) RECAPTURE- The Secretary shall, by regulations, provide for
recapturing the benefit of any credit allowable under subsection (a) with
respect to any property which ceases to be property eligible for such
credit.
`(3) PROPERTY USED OUTSIDE UNITED STATES, ETC., NOT QUALIFIED- No
credit shall be allowed under subsection (a) with respect to any property
referred to in section 50(b)(1) or with respect to the portion of the cost
of any property taken into account under section 179.
`(4) ELECTION NOT TO TAKE CREDIT- No credit shall be allowed under
subsection (a) for any vehicle if the taxpayer elects to not have this
section apply to such vehicle.
`(5) PROPERTY USED BY TAX-EXEMPT ENTITY; INTERACTION WITH AIR
QUALITY AND MOTOR VEHICLE SAFETY STANDARDS- Rules similar to the rules of
paragraphs (6) and (10) of section 30B(h) shall apply for purposes of this
section.'.
(b) Plug-In Vehicles Not Treated as New Qualified Hybrid Vehicles-
Section 30B(d)(3) is amended by adding at the end the following new
subparagraph:
`(D) EXCLUSION OF PLUG-IN VEHICLES- Any vehicle with respect to
which a credit is allowable under section 30D (determined without regard
to subsection (c) thereof) shall not be taken into account under this
section.'.
(c) Credit Made Part of General Business Credit- Section 38(b) is
amended--
(1) by striking `and' each place it appears at the end of any
paragraph,
(2) by striking `plus' each place it appears at the end of any
paragraph,
(3) by striking the period at the end of paragraph (31) and
inserting `, plus', and
(4) by adding at the end the following new paragraph:
`(32) the portion of the plug-in hybrid vehicle credit to which
section 30D(c)(1) applies.'.
(d) Conforming Amendments-
(1)(A) Section 24(b)(3)(B), as amended by this Act, is amended by
striking `and 25D' and inserting `25D, and 30D'.
(B) Section 25(e)(1)(C)(ii) is amended by inserting `30D,' after
`25D,'.
(C) Section 25B(g)(2), as amended by this Act, is amended by
striking `and 25D' and inserting `, 25D, and 30D'.
(D) Section 26(a)(1), as amended by this Act, is amended by striking
`and 25D' and inserting `25D, and 30D'.
(E) Section 1400C(d)(2) is amended by striking `and 25D' and
inserting `25D, and 30D'.
(2) Section 1016(a) is amended by striking `and' at the end of
paragraph (36), by striking the period at the end of paragraph (37) and
inserting `, and', and by adding at the end the following new
paragraph:
`(38) to the extent provided in section 30D(f)(1).'.
(3) Section 6501(m) is amended by inserting `30D(f)(4),' after
`30C(e)(5),'.
(4) The table of sections for subpart B of part IV of subchapter A
of chapter 1 is amended by adding at the end the following new
item:
`Sec. 30D. Plug-in hybrid vehicles.'.
(e) Treatment of Alternative Motor Vehicle Credit as a Personal
Credit-
(1) IN GENERAL- Paragraph (2) of section 30B(g) is amended to read
as follows:
`(2) PERSONAL CREDIT- The credit allowed under subsection (a) for
any taxable year (after application of paragraph (1)) shall be treated as a
credit allowable under subpart A for such taxable year.'.
(2) CONFORMING AMENDMENTS-
(A) Subparagraph (A) of section 30C(d)(2) is amended by striking
`sections 27, 30, and 30B' and inserting `sections 27 and
30'.
(B) Paragraph (3) of section 55(c) is amended by striking
`30B(g)(2),'.
(1) IN GENERAL- Except as otherwise provided in this subsection, the
amendments made by this section shall apply to taxable years beginning after
December 31, 2007.
(2) TREATMENT OF ALTERNATIVE MOTOR VEHICLE CREDIT AS PERSONAL
CREDIT- The amendments made by subsection (e) shall apply to taxable years
beginning after December 31, 2006.
(g) Application of EGTRRA Sunset- The amendment made by subsection
(d)(1)(A) shall be subject to title IX of the Economic Growth and Tax Relief
Reconciliation Act of 2001 in the same manner as the provision of such Act to
which such amendment relates.
SEC. 202. EXTENSION AND MODIFICATION OF ALTERNATIVE FUEL VEHICLE
REFUELING PROPERTY CREDIT.
(a) Increase in Credit Amount- Section 30C (relating to alternative
fuel vehicle refueling property credit) is amended--
(1) by striking `30 percent' in subsection (a) and inserting `50
percent', and
(2) by striking `$30,000' in subsection (b)(1) and inserting
`$50,000'.
(b) Extension of Credit- Paragraph (2) of section 30C(g) (relating to
termination) is amended by striking `December 31, 2009' and inserting
`December 31, 2010'.
(c) Effective Date- The amendments made by this section shall apply to
property placed in service after the date of the enactment of this Act, in
taxable years ending after such date.
SEC. 203. EXTENSION AND MODIFICATION OF CREDITS FOR BIODIESEL AND
RENEWABLE DIESEL.
(a) In General- Sections 40A(g), 6426(c)(6), and 6427(e)(5)(B) are
each amended by striking `December 31, 2008' and inserting `December 31,
2010'.
(b) Uniform Treatment of Diesel Produced From Biomass- Paragraph (3)
of section 40A(f) is amended--
(1) by striking `using a thermal depolymerization process',
and
(2) by striking `or D396' in subparagraph (B) and inserting `or
other equivalent standard approved by the Secretary for fuels to be used in
diesel-powered highway vehicles'.
(1) IN GENERAL- Except as provided in paragraph (2), the amendments
made by this section shall apply to fuel produced, and sold or used, after
the date of the enactment of this Act.
(2) UNIFORM TREATMENT OF DIESEL PRODUCED FROM BIOMASS- The
amendments made by subsection (b) shall apply to fuel produced, and sold or
used, after the date which is 30 days after the date of the enactment of
this Act.
SEC. 204. CREDIT FOR PRODUCTION OF CELLULOSIC ALCOHOL.
(a) In General- Subsection (b) of section 40 is amended by
redesignating paragraph (5) as paragraph (6) and by inserting after paragraph
(4) the following new paragraph:
`(5) CELLULOSIC ALCOHOL FUEL PRODUCER CREDIT-
`(A) IN GENERAL- The cellulosic alcohol fuel producer credit of
any cellulosic alcohol fuel producer for any taxable year is 50 cents for
each gallon of qualified cellulosic fuel production of such
producer.
`(B) QUALIFIED CELLULOSIC FUEL PRODUCTION- For purposes of this
paragraph, the term `qualified cellulosic fuel production' means any
cellulosic alcohol which is produced by a cellulosic alcohol fuel
producer, and which during the taxable year--
`(i) is sold by such producer to another
person--
`(I) for use by such other person in the production of a
qualified mixture in such other person's trade or business (other than
casual off-farm production),
`(II) for use by such other person as a fuel in a trade or
business, or
`(III) who sells such alcohol at retail to another person and
places such alcohol in the fuel tank of such other person,
or
`(ii) is used or sold by such producer for any purpose described
in clause (i).
`(C) CELLULOSIC ALCOHOL- For purposes of this paragraph, the term
`cellulosic alcohol' means any alcohol which--
`(i) is produced in the United States for use as a fuel in the
United States, and
`(ii) is derived from any lignocellulosic or hemicellulosic
matter that is available on a renewable or recurring
basis.
For purposes of this subparagraph, the term `United States'
includes any possession of the United States.
`(D) CELLULOSIC ALCOHOL FUEL PRODUCER- For purposes of this
paragraph, the term `cellulosic alcohol fuel producer' means any person
who produces cellulosic alcohol in a trade or business and is registered
with the Secretary as a cellulosic alcohol fuel producer.
`(E) ADDITIONAL DISTILLATION EXCLUDED- The qualified cellulosic
fuel production of any producer for any taxable year shall not include any
alcohol which is purchased by the producer and with respect to which such
producer increases the proof of the alcohol by additional
distillation.'.
(b) Conforming Amendments-
(1) Subsection (a) of section 40 is amended by striking `plus' at
the end of paragraph (1), by striking `plus' at the end of paragraph (2), by
striking the period at the end of paragraph (3) and inserting `, plus', and
by adding at the end the following new paragraph:
`(4) in the case of a cellulosic alcohol fuel producer, the
cellulosic alcohol fuel producer credit.'.
(2) Clause (ii) of section 40(d)(3)(C) is amended by striking
`subsection (b)(4)(B)' and inserting `paragraph (4)(B) or (5)(B) of
subsection (b)'.
(c) Effective Date- The amendments made by this section shall apply to
alcohol produced after December 31, 2007.
SEC. 205. EXTENSION OF TRANSPORTATION FRINGE BENEFIT TO BICYCLE
COMMUTERS.
(a) In General- Paragraph (1) of section 132(f) of the Internal
Revenue Code of 1986 (relating to general rule for qualified transportation
fringe) is amended by adding at the end the following:
`(D) Any qualified bicycle commuting
reimbursement.'.
(b) Limitation on Exclusion- Paragraph (2) of section 132(f) of such
Code is amended by striking `and' at the end of subparagraph (A), by striking
the period at the end of subparagraph (B) and inserting `, and', and by adding
at the end the following new subparagraph:
`(C) the applicable annual limitation in the case of any qualified
bicycle commuting reimbursement.'.
(c) Definitions- Paragraph (5) of section 132(f) of such Code
(relating to definitions) is amended by adding at the end the
following:
`(F) DEFINITIONS RELATED TO BICYCLE COMMUTING REIMBURSEMENT-
`(i) QUALIFIED BICYCLE COMMUTING REIMBURSEMENT- The term
`qualified bicycle commuting reimbursement' means, with respect to any
calendar year, any employer reimbursement during the 15-month period
beginning with the first day of such calendar year for reasonable
expenses incurred by the employee during such calendar year for the
purchase of a bicycle and bicycle improvements, repair, and storage, if
such bicycle is regularly used for travel between the employee's
residence and place of employment.
`(ii) APPLICABLE ANNUAL LIMITATION- The term `applicable annual
limitation' means, with respect to any employee for any calendar year,
the product of $20 multiplied by the number of qualified bicycle
commuting months during such year.
`(iii) QUALIFIED BICYCLE COMMUTING MONTH- The term `qualified
bicycle commuting month' means, with respect to any employee, any month
during which such employee--
`(I) regularly uses the bicycle for a substantial portion of
the travel between the employee's residence and place of employment,
and
`(II) does not receive any benefit described in subparagraph
(A), (B), or (C) of paragraph (1).'.
(d) Constructive Receipt of Benefit- Paragraph (4) of section 132(f)
is amended by inserting `(other than a qualified bicycle commuting
reimbursement)' after `qualified transportation fringe'.
(e) Effective Date- The amendments made by this section shall apply to
taxable years beginning after December 31, 2007.
SEC. 206. MODIFICATION OF LIMITATION ON AUTOMOBILE
DEPRECIATION.
(a) In General- Paragraph (5) of section 280F(d) of the Internal
Revenue Code of 1986 (defining passenger automobile) is amended to read as
follows:
`(5) PASSENGER AUTOMOBILE-
`(A) IN GENERAL- Except as provided in subparagraph (B), the term
`passenger automobile' means any 4-wheeled vehicle--
`(i) which is primarily designed or which can be used to carry
passengers over public streets, roads, or highways (except any vehicle
operated exclusively on a rail or rails), and
`(ii) which is rated at not more than 14,000 pounds gross
vehicle weight.
`(B) EXCEPTIONS- The term `passenger automobile' shall not
include--
`(i) any exempt-design vehicle, and
`(ii) any exempt-use vehicle.
`(C) EXEMPT-DESIGN VEHICLE- The term `exempt-design vehicle'
means--
`(i) any vehicle which, by reason of its nature or design, is
not likely to be used more than a de minimis amount for personal
purposes, and
`(I) which is designed to have a seating capacity of more than
9 persons behind the driver's seat,
`(II) which is equipped with a cargo area of at least 5 feet
in interior length which is an open area or is designed for use as an
open area but is enclosed by a cap and is not readily accessible
directly from the passenger compartment, or
`(III) has an integral enclosure, fully enclosing the driver
compartment and load carrying device, does not have seating rearward
of the driver's seat, and has no body section protruding more than 30
inches ahead of the leading edge of the
windshield.
`(D) EXEMPT-USE VEHICLE- The term `exempt-use vehicle'
means--
`(i) any ambulance, hearse, or combination ambulance-hearse used
by the taxpayer directly in a trade or business,
`(ii) any vehicle used by the taxpayer directly in the trade or
business of transporting persons or property for compensation or hire,
and
`(iii) any truck or van if substantially all of the use of such
vehicle by the taxpayer is directly in--
`(I) a farming business (within the meaning of section
263A(e)(4)),
`(II) the transportation of a substantial amount of equipment,
supplies, or inventory, or
`(III) the moving or delivery of property which requires
substantial cargo capacity.
`(E) RECAPTURE- In the case of any vehicle which is not a
passenger automobile by reason of being an exempt-use vehicle, if such
vehicle ceases to be an exempt-use vehicle in any taxable year after the
taxable year in which such vehicle is placed in service, a rule similar to
the rule of subsection (b) shall apply.'.
(b) Conforming Amendment- Section 179(b) of such Code (relating to
limitations) is amended by striking paragraph (6).
(c) Effective Date- The amendments made by this section shall apply to
property placed in service after December 31, 2007.
SEC. 207. RESTRUCTURING OF NEW YORK LIBERTY ZONE TAX CREDITS.
(a) In General- Part I of subchapter Y of chapter 1 is amended by
redesignating section 1400L as section 1400K and by adding at the end the
following new section:
`SEC. 1400L. NEW YORK LIBERTY ZONE TAX CREDITS.
`(a) In General- In the case of a New York Liberty Zone governmental
unit, there shall be allowed as a credit against any taxes imposed for any
payroll period by section 3402 for which such governmental unit is liable
under section 3403 an amount equal to so much of the portion of the qualifying
project expenditure amount allocated under subsection (b)(3) to such
governmental unit for the calendar year as is allocated by such governmental
unit to such period under subsection (b)(4).
`(b) Qualifying Project Expenditure Amount- For purposes of this
section--
`(1) IN GENERAL- The term `qualifying project expenditure amount'
means, with respect to any calendar year, the sum of--
`(A) the total expenditures paid or incurred during such calendar
year by all New York Liberty Zone governmental units and the Port
Authority of New York and New Jersey for any portion of qualifying
projects located wholly within the City of New York, New York,
and
`(B) any such expenditures--
`(i) paid or incurred in any preceding calendar year which
begins after the date of enactment of this section, and
`(ii) not previously allocated under paragraph
(3).
`(2) QUALIFYING PROJECT- The term `qualifying project' means any
transportation infrastructure project, including highways, mass transit
systems, railroads, airports, ports, and waterways, in or connecting with
the New York Liberty Zone (as defined in section 1400K(h)), which is
designated as a qualifying project under this section jointly by the
Governor of the State of New York and the Mayor of the City of New York, New
York.
`(A) IN GENERAL- The Governor of the State of New York and the
Mayor of the City of New York, New York, shall jointly allocate to each
New York Liberty Zone governmental unit the portion of the qualifying
project expenditure amount which may be taken into account by such
governmental unit under subsection (a) for any calendar year in the credit
period.
`(B) AGGREGATE LIMIT- The aggregate amount which may be allocated
under subparagraph (A) for all calendar years in the credit period shall
not exceed $2,000,000,000.
`(C) ANNUAL LIMIT- The aggregate amount which may be allocated
under subparagraph (A) for any calendar year in the credit period shall
not exceed the sum of--
`(ii) the aggregate amount authorized to be allocated under this
paragraph for all preceding calendar years in the credit period which
was not so allocated.
`(D) UNALLOCATED AMOUNTS AT END OF CREDIT PERIOD- If, as of the
close of the credit period, the amount under subparagraph (B) exceeds the
aggregate amount allocated under subparagraph (A) for all calendar years
in the credit period, the Governor of the State of New York and the Mayor
of the City of New York, New York, may jointly allocate to New York
Liberty Zone governmental units for any calendar year in the 5-year period
following the credit period an amount equal to--
`(II) the qualifying project expenditure amount for such
calendar year, reduced by
`(ii) the aggregate amount allocated under this subparagraph for
all preceding calendar years.
`(4) ALLOCATION TO PAYROLL PERIODS- Each New York Liberty Zone
governmental unit which has been allocated a portion of the qualifying
project expenditure amount under paragraph (3) for a calendar year may
allocate such portion to payroll periods beginning in such calendar year as
such governmental unit determines appropriate.
`(c) Carryover of Unused Allocations-
`(1) IN GENERAL- Except as provided in paragraph (2), if the amount
allocated under subsection (b)(3) to a New York Liberty Zone governmental
unit for any calendar year exceeds the aggregate taxes imposed by section
3402 for which such governmental unit is liable under section 3403 for
periods beginning in such year, such excess shall be carried to the
succeeding calendar year and added to the allocation of such governmental
unit for such succeeding calendar year.
`(2) REALLOCATION- If a New York Liberty Zone governmental unit does
not use an amount allocated to it under subsection (b)(3) within the time
prescribed by the Governor of the State of New York and the Mayor of the
City of New York, New York, then such amount shall after such time be
treated for purposes of subsection (b)(3) in the same manner as if it had
never been allocated.
`(d) Definitions and Special Rules- For purposes of this
section--
`(1) CREDIT PERIOD- The term `credit period' means the 12-year
period beginning on January 1, 2008.
`(2) NEW YORK LIBERTY ZONE GOVERNMENTAL UNIT- The term `New York
Liberty Zone governmental unit' means--
`(A) the State of New York,
`(B) the City of New York, New York, and
`(C) any agency or instrumentality of such State or
City.
`(3) TREATMENT OF FUNDS- Any expenditure for a qualifying project
taken into account for purposes of the credit under this section shall be
considered State and local funds for the purpose of any Federal
program.
`(4) TREATMENT OF CREDIT AMOUNTS FOR PURPOSES OF WITHHOLDING TAXES-
For purposes of this title, a New York Liberty Zone governmental unit shall
be treated as having paid to the Secretary, on the day on which wages are
paid to employees, an amount equal to the amount of the credit allowed to
such entity under subsection (a) with respect to such wages, but only if
such governmental unit deducts and withholds wages for such payroll period
under section 3401 (relating to wage withholding).
`(e) Reporting- The Governor of the State of New York and the Mayor of
the City of New York, New York, shall jointly submit to the Secretary an
annual report--
`(A) the qualifying project expenditure amount for the calendar
year, and
`(B) the amount allocated to each New York Liberty Zone
governmental unit under subsection (b)(3) for the calendar year,
and
`(2) includes such other information as the Secretary may require to
carry out this section.
`(f) Guidance- The Secretary may prescribe such guidance as may be
necessary or appropriate to ensure compliance with the purposes of this
section.'
(b) Termination of Special Allowance and Expensing- Subparagraph (A)
of section 1400K(b)(2), as redesignated by subsection (a), is amended by
striking the parenthetical therein and inserting `(in the case of
nonresidential real property and residential rental property, the date of the
enactment of the Renewable Energy and Energy Conservation Tax Act of 2007 or,
if acquired pursuant to a binding contract in effect on such enactment date,
December 31, 2009)'.
(c) Conforming Amendments-
(1) Section 38(c)(3)(B) is amended by striking `section 1400L(a)'
and inserting `section 1400K(a)'.
(2) Section 168(k)(2)(D)(ii) is amended by striking `section
1400L(c)(2)' and inserting `section 1400K(c)(2)'.
(3) The table of sections for part I of subchapter Y of chapter 1 is
amended by redesignating the item relating to section 1400L as an item
relating to section 1400K and by inserting after such item the following new
item:
`Sec. 1400L. New York Liberty Zone tax credits.'.
(d) Effective Date- The amendments made by this section shall take
effect on the date of the enactment of this Act.
Subtitle B--Other Conservation Provisions
SEC. 211. QUALIFIED ENERGY CONSERVATION BONDS.
(a) In General- Subpart I of part IV of subchapter A of chapter 1, as
added by section 104, is amended by adding at the end the following new
section:
`SEC. 54C. QUALIFIED ENERGY CONSERVATION BONDS.
`(a) Qualified Energy Conservation Bond- For purposes of this
subchapter, the term `qualified energy conservation bond' means any bond
issued as part of an issue if--
`(1) 100 percent of the available project proceeds of such issue are
to be used for one or more qualified conservation purposes,
`(2) the bond is issued by a State or local government,
and
`(3) the issuer designates such bond for purposes of this
section.
`(b) Limitation on Amount of Bonds Designated- The maximum aggregate
face amount of bonds which may be designated under subsection (a) by any
issuer shall not exceed the limitation amount allocated to such issuer under
subsection (d).
`(c) National Limitation on Amount of Bonds Designated- There is a
national qualified energy conservation bond limitation of
$3,600,000,000.
`(1) IN GENERAL- The limitation applicable under subsection (c)
shall be allocated by the Secretary among the States in proportion to the
population of the States.
`(2) ALLOCATIONS TO LARGEST LOCAL GOVERNMENTS-
`(A) IN GENERAL- In the case of any State in which there is a
large local government, each such local government shall be allocated a
portion of such State's allocation which bears the same ratio to the
State's allocation (determined without regard to this subparagraph) as the
population of such large local government bears to the population of such
State.
`(B) ALLOCATION OF UNUSED LIMITATION TO STATE- The amount
allocated under this subsection to a large local government may be
reallocated by such local government to the State in which such local
government is located.
`(C) LARGE LOCAL GOVERNMENT- For purposes of this section, the
term `large local government' means any municipality or county if such
municipality or county has a population of 100,000 or more.
`(3) ALLOCATION TO ISSUERS; RESTRICTION ON PRIVATE ACTIVITY BONDS-
Any allocation under this subsection to a State or large local government
shall be allocated by such State or large local government to issuers within
the State in a manner that results in not less than 70 percent of the
allocation to such State or large local government being used to designate
bonds which are not private activity bonds.
`(e) Qualified Conservation Purpose- For purposes of this
section--
`(1) IN GENERAL- The term `qualified conservation purpose' means any
of the following:
`(A) Capital expenditures incurred for purposes of--
`(i) reducing energy consumption in publicly-owned buildings by
at least 20 percent,
`(ii) implementing green community programs, or
`(iii) rural development involving the production of electricity
from renewable energy resources.
`(B) Expenditures with respect to research facilities, and
research grants, to support research in--
`(i) development of cellulosic ethanol or other nonfossil
fuels,
`(ii) technologies for the capture and sequestration of carbon
dioxide produced through the use of fossil fuels,
`(iii) increasing the efficiency of existing technologies for
producing nonfossil fuels,
`(iv) automobile battery technologies and other technologies to
reduce fossil fuel consumption in transportation, or
`(v) technologies to reduce energy use in
buildings.
`(C) Mass commuting facilities and related facilities that reduce
the consumption of energy, including expenditures to reduce pollution from
vehicles used for mass commuting.
`(D) Demonstration projects designed to promote the
commercialization of--
`(i) green building technology,
`(ii) conversion of agricultural waste for use in the production
of fuel or otherwise,
`(iii) advanced battery manufacturing
technologies,
`(iv) technologies to reduce peak use of electricity,
or
`(v) technologies for the capture and sequestration of carbon
dioxide emitted from combusting fossil fuels in order to produce
electricity.
`(E) Public education campaigns to promote energy
efficiency.
`(2) SPECIAL RULES FOR PRIVATE ACTIVITY BONDS- For purposes of this
section, in the case of any private activity bond, the term `qualified
conservation purposes' shall not include any expenditure which is not a
capital expenditure.
`(1) IN GENERAL- The population of any State or local government
shall be determined for purposes of this section as provided in section
146(j) for the calendar year which includes the date of the enactment of
this section.
`(2) SPECIAL RULE FOR COUNTIES- In determining the population of any
county for purposes of this section, any population of such county which is
taken into account in determining the population of any municipality which
is a large local government shall not be taken into account in determining
the population of such county.
`(g) Application to Indian Tribal Governments- An Indian tribal
government shall be treated for purposes of this section in the same manner as
a large local government, except that--
`(1) an Indian tribal government shall be treated for purposes of
subsection (d) as located within a State to the extent of so much of the
population of such government as resides within such State, and
`(2) any bond issued by an Indian tribal government shall be treated
as a qualified energy conservation bond only if issued as part of an issue
the available project proceeds of which are used for purposes for which such
Indian tribal government could issue bonds to which section 103(a)
applies.'.
(b) Conforming Amendments-
(1) Paragraph (1) of section 54A(d), as added by section 104, is
amended to read as follows:
`(1) QUALIFIED TAX CREDIT BOND- The term `qualified tax credit bond'
means--
`(A) a new clean renewable energy bond, or
`(B) a qualified energy conservation bond,
which is part of an issue that meets requirements of paragraphs (2),
(3), (4), and (5).'.
(2) Subparagraph (C) of section 54A(d)(2), as added by section 104,
is amended to read as follows:
`(C) QUALIFIED PURPOSE- For purposes of this paragraph, the term
`qualified purpose' means--
`(i) in the case of a new clean renewable energy bond, a purpose
specified in section 54B(a)(1), and
`(ii) in the case of a qualified energy conservation bond, a
purpose specified in section 54C(a)(1).'.
(3) The table of sections for subpart I of part IV of subchapter A
of chapter 1 is amended by adding at the end the following new
item:
`Sec. 54C. Qualified energy conservation bonds.'.
(c) Effective Date- The amendments made by this section shall apply to
obligations issued after the date of the enactment of this Act.
SEC. 212. QUALIFIED RESIDENTIAL ENERGY EFFICIENCY ASSISTANCE
BONDS.
(a) In General- Subpart I of part IV of subchapter A of chapter 1 (as
amended by this Act) is amended by adding at the end the following new
section:
`SEC. 54D. QUALIFIED RESIDENTIAL ENERGY EFFICIENCY ASSISTANCE
BONDS.
`(a) Qualified Residential Energy Efficiency Assistance Bond- For
purposes of this subchapter, the term `qualified residential energy efficiency
assistance bond' means any bond issued as part of an issue if--
`(1) 100 percent of the available project proceeds of such issue are
to be used for 1 or more qualified residential energy efficiency assistance
purposes,
`(2) not less than 20 percent of the available project proceeds of
such issue are to be used for 1 or more qualified low-income residential
energy efficiency assistance purposes,
`(3) repayments of principal and applicable interest on financing
provided by the issue are used not later than the close of the 3-month
period beginning on the date the prepayment (or complete repayment) is
received to redeem bonds which are part of the issue or to provide for 1 or
more qualified residential energy efficiency assistance purposes,
`(4) the bond is issued by a State, and
`(5) the issuer designates such bond for purposes of this
section.
`(b) Limitation on Amount of Bonds Designated- The maximum aggregate
face amount of bonds which may be designated under subsection (a) by any
issuer shall not exceed the limitation amount allocated under subsection (d)
to such issuer.
`(c) National Limitation on Amount of Bonds Designated- There is a
national qualified energy conservation bond limitation of
$2,400,000,000.
`(d) Limitation Allocated Among States- The limitation under
subsection (c) shall be allocated by the Secretary among the States in
proportion to the population of the States.
`(e) Qualified Residential Energy Efficiency Assistance Purpose- For
purposes of this section--
`(1) IN GENERAL- The term `qualified residential energy efficiency
assistance purpose' means any grant or low-interest loan to acquire
(including reasonable installation costs)--
`(A) any property which meets (at a minimum) the requirements of
the Energy Star program and which is to be installed in a dwelling
unit,
`(B) any property which uses wind, solar, or geothermal energy or
qualified fuel cell property (as defined in section 48(c)(1)) to generate
electricity, or to heat or cool water, for use in a dwelling unit (other
than property described in section 25D(e)(3)), and
`(C) any improvements to a dwelling unit which are made pursuant
to a plan certified by an energy efficiency expert that such improvement
will yield at least a 20 percent reduction in total household energy
consumption related to heating, cooling, lighting, and
appliances.
`(2) GEOTHERMAL HEAT PUMP- Any geothermal heat pump to provide
heating or cooling in a dwelling unit described in paragraph (1)(B) shall be
treated as described in paragraph (1)(B).
`(A) IN GENERAL- Such term shall not include any grant or loan for
improvements described in paragraph (1)(C) with respect to any dwelling
unit to the extent that such grant or loan (when added to all other grants
or loans for such improvements) exceeds $5,000.
`(B) INCREASED LIMITATION FOR CERTAIN PRINCIPAL RESIDENCES- In the
case of a dwelling unit which is used as a principal residence (within the
meaning of section 121) by the recipient of the grant or loan referred to
in subparagraph (A)--
`(i) subparagraph (A) shall be applied by substituting `$12,000'
for `$5,000' if such grant or loan would satisfy the requirements of
paragraph (1)(A) if such paragraph were applied by substituting `50
percent' for `20 percent', and
`(ii) in any case to which clause (i) does not apply,
subparagraph (A) shall be applied by substituting `$8,000' for `$5,000'
if such grant or loan would satisfy the requirements of paragraph (1)(A)
if such paragraph were applied by substituting `35 percent' for `20
percent'.
`(4) LOW-INTEREST LOAN- The term `low interest loan' means any loan
which charges interest at a rate which does not exceed the applicable
Federal rate in effect under section 1288(b)(1) determined as of the
issuance of the loan.
`(5) EXCLUSION OF CERTAIN PROPERTY- The following property shall not
be taken into account for purposes of paragraph (1)(A):
`(A) Any equipment used in connection with a swimming pool, hot
tub, or similar property.
`(C) Any device for converting digital signal to
analog.
`(E) Any video cassette recorder (VCR).
`(F) Any audio equipment.
`(H) Any other item of property where there is substantial
recreational use.
`(f) Qualified Low-Income Residential Efficiency Assistance Purpose-
For purposes of this section--
`(1) IN GENERAL- The term `qualified low-income residential energy
efficiency assistance purpose' means any qualified residential energy
efficiency assistance purpose with respect to a dwelling unit which is
occupied (at the time of the grant or loan) by individuals whose income is
50 percent or less of area median gross income. Rules similar to the rules
of section 142(d)(2)(B) shall apply for purposes of this
paragraph.
`(2) RESTRICTION TO GRANTS- Such term shall not include any
loan.
`(g) Definitions and Special Rules- For purposes of this
section--
`(1) APPLICABLE INTEREST- The term `applicable interest' means, with
respect to any loan, so much of any interest on such loan which exceeds 1
percentage point.
`(2) SPECIAL RULE RELATING TO ARBITRAGE- An issue shall not be
treated as failing to meet the requirements of section 54A(d)(4)(A) by
reason of any investment of available project proceeds in 1 or more
qualified residential energy efficiency assistance purposes.
`(3) POPULATION- The population of any State or local government
shall be determined as provided in section 146(j) for the calendar year
which includes the date of the enactment of this section.
`(A) REPORTS BY ISSUERS- Issuers of qualified residential energy
efficiency assistance bonds shall, not later than 6 months after the
expenditure period (as defined in section 54A) and annually thereafter
until the last such bond is redeemed, submit reports to the Secretary
regarding such bonds, including information regarding--
`(i) the number and monetary value of loans and grants provided
and the purposes for which provided,
`(ii) the number of dwelling units the energy efficiency of
which improved as result of such loans and grants,
`(iii) the types of property described in subsection (e)(1)(A)
installed as a result of such loans and grants and the projected energy
savings with respect to such property,
`(iv) the types of property described in subsection (e)(1)(B)
installed as a result of such loans and grants and the projected
production of such property, and
`(v) the projected energy savings as a result of such loans and
grants for improvements described in subsection
(e)(1)(C).
`(B) REPORT TO CONGRESS- Not later than 12 months after receipt of
the first report under subparagraph (A) and annually thereafter until the
last such report is required to be submitted, the Secretary, in
consultation with the Secretary of Energy and the Administrator of the
Environmental Protection Agency, shall submit a report to Congress
regarding the bond program under this section, including information
regarding--
`(i) the aggregate of each category of information described in
subparagraph (A) (including any independent assessment of projected
energy savings), and
`(ii) an estimate of the amount of greenhouse gas emissions
reduced as a result of such bond program.'.
(b) Conforming Amendments-
(1) Paragraph (1) of section 54A(d), as added by section 104 and
amended by section 211, is amended by striking `or' at the end of
subparagraph (A), by inserting `or' at the end of subparagraph (B), and by
inserting after subparagraph (B) the following new subparagraph:
`(C) a qualified residential energy efficiency assistance
bond,'.
(2) Subparagraph (C) of section 54A(d)(2), as added by section 104
and amended by section 211, is amended by striking `and' at the end of
clause (i), by striking the period at the end of clause (ii) and inserting
`, and', and by adding at the end the following new clause:
`(iii) in the case of a qualified residential energy efficiency
assistance bond, a purpose specified in section
54D(a)(1).'.
(3) The table of sections for subpart I of part IV of subchapter A
of chapter 1, as amended by this Act, is amended by adding at the end the
following new item:
`Sec. 54D. Qualified residential energy efficiency assistance
bonds.'.
(c) Effective Date- The amendments made by this section shall apply to
obligations issued after the date of the enactment of this Act.
SEC. 213. EXTENSION OF ENERGY EFFICIENT COMMERCIAL BUILDINGS
DEDUCTION.
Subsection (h) of section 179D (relating to termination) is amended by
striking `December 31, 2008' and inserting `December 31, 2013'.
SEC. 214. MODIFICATIONS OF ENERGY EFFICIENT APPLIANCE CREDIT FOR
APPLIANCES PRODUCED AFTER 2007.
(a) In General- Subsection (b) of section 45M (relating to applicable
amount) is amended to read as follows:
`(b) Applicable Amount- For purposes of subsection (a)--
`(1) DISHWASHERS- The applicable amount is--
`(A) $45 in the case of a dishwasher which is manufactured in
calendar year 2008 or 2009 and which uses no more than 324 kilowatt hours
per year and 5.8 gallons per cycle, and
`(B) $75 in the case of a dishwasher which is manufactured in
calendar year 2008, 2009, or 2010 and which uses no more than 307 kilowatt
hours per year and 5.0 gallons per cycle (5.5 gallons per cycle for
dishwashers designed for greater than 12 place settings).
`(2) CLOTHES WASHERS- The applicable amount is--
`(A) $75 in the case of a residential top-loading clothes washer
manufactured in calendar year 2008 which meets or exceeds a 1.72 modified
energy factor and does not exceed a 8.0 water consumption
factor,
`(B) $125 in the case of a residential top-loading clothes washer
manufactured in calendar year 2008 or 2009 which meets or exceeds a 1.8
modified energy factor and does not exceed a 7.5 water consumption
factor,
`(C) $150 in the case of a residential or commercial clothes
washer manufactured in calendar year 2008, 2009 or 2010 which meets or
exceeds 2.0 modified energy factor and does not exceed a 6.0 water
consumption factor, and
`(D) $250 in the case of a residential or commercial clothes
washer manufactured in calendar year 2008, 2009, or 2010 which meets or
exceeds 2.2 modified energy factor and does not exceed a 4.5 water
consumption factor.
`(3) REFRIGERATORS- The applicable amount is--
`(A) $50 in the case of a refrigerator which is manufactured in
calendar year 2008, and consumes at least 20 percent but not more than
22.9 percent less kilowatt hours per year than the 2001 energy
conservation standards,
`(B) $75 in the case of a refrigerator which is manufactured in
calendar year 2008 or 2009, and consumes at least 23 percent but no more
than 24.9 percent less kilowatt hours per year than the 2001 energy
conservation standards,
`(C) $100 in the case of a refrigerator which is manufactured in
calendar year 2008, 2009 or 2010, and consumes at least 25 percent but not
more than 29.9 percent less kilowatt hours per year than the 2001 energy
conservation standards, and
`(D) $200 in the case of a refrigerator manufactured in calendar
year 2008, 2009 or 2010 and which consumes at least 30 percent less energy
than the 2001 energy conservation standards.
`(4) DEHUMIDIFIERS- The applicable amount is--
`(A) $15 in the case of a dehumidifier manufactured in calendar
year 2008 that has a capacity less than or equal to 45 pints per day and
is 7.5 percent more efficient than the applicable Department of Energy
energy conservation standard effective October 2012, and
`(B) $25 in the case of a dehumidifier manufactured in calendar
year 2008 that has a capacity greater than 45 pints per day and is 7.5
percent more efficient than the applicable Department of Energy energy
conservation standard effective October 2012.'.
(1) SIMILAR TREATMENT FOR ALL APPLIANCES- Subsection (c) of section
45M (relating to eligible production) is amended--
(A) by striking paragraph (2),
(B) by striking `(1) IN GENERAL' and all that follows through `the
eligible' and inserting `The eligible', and
(C) by moving the text of such subsection in line with the
subsection heading and redesignating subparagraphs (A) and (B) as
paragraphs (1) and (2), respectively.
(2) MODIFICATION OF BASE PERIOD- Paragraph (2) of section 45M(c), as
amended by paragraph (1) of this section, is amended by striking `3-calendar
year' and inserting `2-calendar year'.
(c) Types of Energy Efficient Appliances- Subsection (d) of section
45M (defining types of energy efficient appliances) is amended to read as
follows:
`(d) Types of Energy Efficient Appliance- For purposes of this
section, the types of energy efficient appliances are--
`(1) dishwashers described in subsection (b)(1),
`(2) clothes washers described in subsection (b)(2),
`(3) refrigerators described in subsection (b)(3), and
`(4) dehumidifiers described in subsection (b)(4).'.
(d) Aggregate Credit Amount Allowed-
(1) INCREASE IN LIMIT- Paragraph (1) of section 45M(e) (relating to
aggregate credit amount allowed) is amended to read as follows:
`(1) AGGREGATE CREDIT AMOUNT ALLOWED- The aggregate amount of credit
allowed under subsection (a) with respect to a taxpayer for any taxable year
shall not exceed $75,000,000 reduced by the amount of the credit allowed
under subsection (a) to the taxpayer (or any predecessor) for all prior
taxable years beginning after December 31, 2007.'.
(2) EXCEPTION FOR CERTAIN REFRIGERATOR AND CLOTHES WASHERS-
Paragraph (2) of section 45M(e) is amended to read as follows:
`(2) AMOUNT ALLOWED FOR CERTAIN REFRIGERATORS AND CLOTHES WASHERS-
Refrigerators described in subsection (b)(3)(D) and clothes washers
described in subsection (b)(2)(D) shall not be taken into account under
paragraph (1).'.
(e) Qualified Energy Efficient Appliances-
(1) IN GENERAL- Paragraph (1) of section 45M(f) (defining qualified
energy efficient appliance) is amended to read as follows:
`(1) QUALIFIED ENERGY EFFICIENT APPLIANCE- The term `qualified
energy efficient appliance' means--
`(A) any dishwasher described in subsection (b)(1),
`(B) any clothes washer described in subsection
(b)(2),
`(C) any refrigerator described in subsection (b)(3),
and
`(D) any dehumidifier described in subsection
(b)(4).'.
(2) CLOTHES WASHER- Section 45M(f)(3) (defining clothes washer) is
amended by inserting `commercial' before `residential' the second place it
appears.
(3) TOP-LOADING CLOTHES WASHER- Subsection (f) of section 45M
(relating to definitions) is amended by redesignating paragraphs (4), (5),
(6), and (7) as paragraphs (5), (6), (7), and (8), respectively, and by
inserting after paragraph (3) the following new paragraph:
`(4) TOP-LOADING CLOTHES WASHER- The term `top-loading clothes
washer' means a clothes washer which has the clothes container compartment
access located on the top of the machine and which operates on a vertical
axis.'.
(4) DEHUMIDIFIER- Subsection (f) of section 45M, as amended by
paragraph (3), is amended by redesignating paragraphs (6), (7), and (8) as
paragraphs (7), (8) and (9), respectively, and by inserting after paragraph
(5) the following new paragraph:
`(6) DEHUMIDIFIER- The term `dehumidifier' means a self-contained,
electrically operated, and mechanically refrigerated encased assembly
consisting of--
`(A) a refrigerated surface that condenses moisture from the
atmosphere,
`(B) a refrigerating system, including an electric
motor,
`(C) an air-circulating fan, and
`(D) means for collecting or disposing of
condensate.'.
(5) REPLACEMENT OF ENERGY FACTOR- Section 45M(f)(7), as amended by
paragraph (4), is amended to read as follows:
`(7) 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.'.
(6) GALLONS PER CYCLE; WATER CONSUMPTION FACTOR- Section 45M(f)
(relating to definitions) is amended by adding at the end the
following:
`(10) 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.
`(11) WATER CONSUMPTION FACTOR- The term `water consumption factor'
means, with respect to a clothes washer, the quotient of the total weighted
per-cycle water consumption divided by the cubic foot (or liter) capacity of
the clothes washer.'.
(f) Effective Date- The amendments made by this section shall apply to
appliances produced after December 31, 2007.
SEC. 215. FIVE-YEAR APPLICABLE RECOVERY PERIOD FOR DEPRECIATION OF
QUALIFIED ENERGY MANAGEMENT DEVICES.
(a) In General- Section 168(e)(3)(B) (relating to 5-year property) is
amended by striking `and' at the end of clause (v), by striking the period at
the end of clause (vi) and inserting `, and', and by inserting after clause
(vi) the following new clause:
`(vii) any qualified energy management
device.'.
(b) Definition of Qualified Energy Management Device- Section 168(i)
(relating to definitions and special rules) is amended by inserting at the end
the following new paragraph:
`(18) QUALIFIED ENERGY MANAGEMENT DEVICE-
`(A) IN GENERAL- The term `qualified energy management device'
means any energy management device which is installed on real property of
a customer of the taxpayer and is placed in service by a taxpayer
who--
`(i) is a supplier of electric energy or a provider of electric
energy services, and
`(ii) provides all commercial and residential customers of such
supplier or provider with net metering upon the request of such
customer.
`(B) ENERGY MANAGEMENT DEVICE- For purposes of subparagraph (A),
the term `energy management device' means any time-based meter and related
communication equipment which is capable of being used by the taxpayer as
part of a system that--
`(i) measures and records electricity usage data on a
time-differentiated basis in at least 24 separate time segments per
day,
`(ii) provides for the exchange of information between supplier
or provider and the customer's energy management device in support of
time-based rates or other forms of demand response, and
`(iii) provides data to such supplier or provider so that the
supplier or provider can provide energy usage information to customers
electronically.
`(C) NET METERING- For purposes of subparagraph (A), the term `net
metering' means allowing customers a credit for providing electricity to
the supplier or provider.'.
(c) Effective Date- The amendments made by this section shall apply to
property placed in service after the date of the enactment of this
Act.
TITLE III--REVENUE PROVISIONS
Subtitle A--Denial of Oil and Gas Tax Benefits
SEC. 301. DENIAL OF DEDUCTION FOR INCOME ATTRIBUTABLE TO DOMESTIC
PRODUCTION OF OIL, NATURAL GAS, OR PRIMARY PRODUCTS THEREOF.
(a) In General- Subparagraph (B) of section 199(c)(4) (relating to
exceptions) is amended by striking `or' at the end of clause (ii), by striking
the period at the end of clause (iii) and inserting `, or', and by inserting
after clause (iii) the following new clause:
`(iv) the sale, exchange, or other disposition of oil, natural
gas, or any primary product thereof.'.
(b) Primary Product- Section 199(c)(4)(B) is amended by adding at the
end the following flush sentence:
`For purposes of clause (iv), the term `primary product' has the
same meaning as when used in section 927(a)(2)(C), as in effect before its
repeal.'.
(c) Conforming Amendments- Section 199(c)(4) is amended--
(1) in subparagraph (A)(i)(III) by striking `electricity, natural
gas,' and inserting `electricity', and
(2) in subparagraph (B)(ii) by striking `electricity, natural gas,'
and inserting `electricity'.
(d) Effective Date- The amendments made by this section shall apply to
taxable years beginning after December 31, 2007.
SEC. 302. 7-YEAR AMORTIZATION OF GEOLOGICAL AND GEOPHYSICAL EXPENDITURES
FOR CERTAIN MAJOR INTEGRATED OIL COMPANIES.
(a) In General- Subparagraph (A) of section 167(h)(5) (relating to
special rule for major integrated oil companies) is amended by striking
`5-year' and inserting `7-year'.
(b) Effective Date- The amendment made by this section shall apply to
amounts paid or incurred after the date of the enactment of this Act.
SEC. 303. CLARIFICATION OF DETERMINATION OF FOREIGN OIL AND GAS
EXTRACTION INCOME.
(a) In General- Paragraph (1) of section 907(c) is amended by
redesignating subparagraph (B) as subparagraph (C), by striking `or' at the
end of subparagraph (A), and by inserting after subparagraph (A) the following
new subparagraph:
`(B) so much of any transportation of such minerals as occurs
before the fair market value event, or'.
(b) Fair Market Value Event- Subsection (c) of section 907 is amended
by adding at the end the following new paragraph:
`(6) FAIR MARKET VALUE EVENT- For purposes of this section, the term
`fair market value event' means, with respect to any mineral, the first
point in time at which such mineral--
`(A) has a fair market value which can be determined on the basis
of a transfer, which is an arm's length transaction, of such mineral from
the taxpayer to a person who is not related (within the meaning of section
482) to such taxpayer, or
`(B) is at a location at which the fair market value is readily
ascertainable by reason of transactions among unrelated third parties with
respect to the same mineral (taking into account source, location,
quality, and chemical composition).'.
(c) Special Rule for Certain Petroleum Taxes- Subsection (c) of
section 907, as amended by subsection (b), is amended to by adding at the end
the following new paragraph:
`(7) OIL AND GAS TAXES- In the case of any tax imposed by a foreign
country which is limited in its application to taxpayers engaged in oil or
gas activities--
`(A) the term `oil and gas extraction taxes' shall include such
tax,
`(B) the term `foreign oil and gas extraction income' shall
include any taxable income which is taken into account in determining such
tax (or is directly attributable to the activity to which such tax
relates), and
`(C) the term `foreign oil related income' shall not include any
taxable income which is treated as foreign oil and gas extraction income
under subparagraph (B).'.
(d) Conforming Amendments-
(1) Subparagraph (C) of section 907(c)(1), as redesignated by this
section, is amended by inserting `or used by the taxpayer in the activity
described in subparagraph (B)' before the period at the end.
(2) Subparagraph (B) of section 907(c)(2) is amended to read as
follows:
`(B) so much of the transportation of such minerals or primary
products as is not taken into account under paragraph
(1)(B),'.
(e) Effective Date- The amendments made by this section shall apply to
taxable years beginning after the date of the enactment of this Act.
Subtitle B--Clarification of Eligibility for Certain Fuel
Credits
SEC. 311. CLARIFICATION OF ELIGIBILITY FOR RENEWABLE DIESEL
CREDIT.
(a) Coproduction With Petroleum Feedstock-
(1) 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).'.
(2) CONFORMING AMENDMENT- Paragraph (3) of section 40A(f) is amended
by striking `(as defined in section 45K(c)(3))'.
(b) Clarification of Eligibility for Alternative Fuel Credit-
(1) IN GENERAL- Subparagraph (F) of section 6426(d)(2) is amended by
striking `hydrocarbons' and inserting `fuel'.
(2) CONFORMING AMENDMENT- Section 6426 is amended by adding at the
end the following new subsection:
`(h) Denial of Double Benefit- No credit shall be determined under
subsection (d) or (e) with respect to any fuel with respect to which credit
may be determined under subsection (b) or (c) or under section 40 or
40A.'.
(1) IN GENERAL- Except as provided in paragraph (2), the amendments
made by this section shall apply to fuel produced, and sold or used, after
June 30, 2007.
(2) CLARIFICATION OF ELIGIBILITY FOR ALTERNATIVE FUEL CREDIT- The
amendment made by subsection (b) shall take effect as if included in section
11113 of the Safe, Accountable, Flexible, Efficient Transportation Equity
Act: A Legacy for Users.
SEC. 312. CLARIFICATION THAT CREDITS FOR FUEL ARE DESIGNED TO PROVIDE AN
INCENTIVE FOR UNITED STATES PRODUCTION.
(a) Biodiesel Fuels Credit- Paragraph (5) of section 40A(d), as added
by subsection (c), is amended to read as follows:
`(5) LIMITATION TO BIODIESEL WITH CONNECTION TO THE UNITED STATES-
No credit shall be determined under this section with respect to any
biodiesel unless--
`(A) such biodiesel is produced in the United States for use as a
fuel in the United States, and
`(B) the taxpayer obtains a certification (in such form and manner
as prescribed by the Secretary) from the producer of the biodiesel which
identifies the product produced and the location of such
production.