The Matthias Chronicles

Thursday, October 2, 2008, 3:00 AM

H.R. 1424: Bailout Bill, Part 7

 9       ON SUCH ADVANCES.--

10                    (A) TRANSFER       TO GENERAL FUND.--On

11             the refinancing date, the Trust Fund shall
12             repay the market value of the outstanding re-
13             payable advances, plus accrued interest, by
14             transferring into the general fund of the Treas-
15             ury the following sums:
16                         (i) The proceeds from obligations that
17                    the Trust Fund shall issue to the Sec-
18                    retary of the Treasury in such amounts as
19                    the Secretaries of Labor and the Treasury
20                    shall determine and bearing interest at the
21                    Treasury rate, and that shall be in such
22                    forms and denominations and be subject to
23                    such other terms and conditions, including
24                    maturity, as the Secretary of the Treasury
25                    shall prescribe.

                                165
 1                        (ii) All, or that portion, of the appro-
 2                    priation made to the Trust Fund pursuant
 3                    to paragraph (3) that is needed to cover
 4                    the difference defined in that paragraph.
 5                    (B) REPAYMENT    OF OBLIGATIONS.--In    the
 6             event that the Trust Fund is unable to repay
 7             the obligations that it has issued to the Sec-
 8             retary of the Treasury under subparagraph
 9             (A)(i) and this subparagraph, or is unable to
10             make benefit payments and other authorized ex-
11             penditures, the Trust Fund shall issue obliga-
12             tions to the Secretary of the Treasury in such
13             amounts as may be necessary to make such re-
14             payments, payments, and expenditures, with a
15             maturity of 1 year, and bearing interest at the
16             Treasury 1-year rate. These obligations shall be
17             in such forms and denominations and be sub-
18             ject to such other terms and conditions as the
19             Secretary of the Treasury shall prescribe.
20                    (C) AUTHORITY    TO ISSUE OBLIGATIONS.--

21             The Trust Fund is authorized to issue obliga-
22             tions to the Secretary of the Treasury under
23             subparagraphs (A)(i) and (B). The Secretary of
24             the Treasury is authorized to purchase such ob-
25             ligations of the Trust Fund. For the purposes

                               166
 1             of making such purchases, the Secretary of the
 2             Treasury may use as a public debt transaction
 3             the proceeds from the sale of any securities
 4             issued under chapter 31 of title 31, United
 5             States Code, and the purposes for which securi-
 6             ties may be issued under such chapter are ex-
 7             tended to include any purchase of such Trust
 8             Fund obligations under this subparagraph.
 9             (3) ONE-TIME    APPROPRIATION.--There     is here-
10       by appropriated to the Trust Fund an amount suffi-
11       cient to pay to the general fund of the Treasury the
12       difference between--
13                    (A) the market value of the outstanding
14             repayable advances, plus accrued interest; and
15                    (B) the proceeds from the obligations
16             issued by the Trust Fund to the Secretary of
17             the Treasury under paragraph (2)(A)(i).
18             (4) PREPAYMENT        OF TRUST FUND OBLIGA-

19       TIONS.--The     Trust Fund is authorized to repay any
20       obligation issued to the Secretary of the Treasury
21       under subparagraphs (A)(i) and (B) of paragraph
22       (2) prior to its maturity date by paying a prepay-
23       ment price that would, if the obligation being pre-
24       paid (including all unpaid interest accrued thereon
25       through the date of prepayment) were purchased by

                                 167
 1       a third party and held to the maturity date of such
 2       obligation, produce a yield to the third-party pur-
 3       chaser for the period from the date of purchase to
 4       the maturity date of such obligation substantially
 5       equal to the Treasury yield on outstanding market-
 6       able obligations of the United States having a com-
 7       parable maturity to this period.
 8   SEC. 114. SPECIAL RULES FOR REFUND OF THE COAL EX-

 9                    CISE TAX TO CERTAIN COAL PRODUCERS

10                    AND EXPORTERS.

11       (a) REFUND.--
12             (1) COAL     PRODUCERS.--

13                     (A) IN   GENERAL.--Notwithstanding    sub-
14             sections (a)(1) and (c) of section 6416 and sec-
15             tion 6511 of the Internal Revenue Code of
16             1986, if--
17                         (i) a coal producer establishes that
18                     such coal producer, or a party related to
19                     such coal producer, exported coal produced
20                     by such coal producer to a foreign country
21                     or shipped coal produced by such coal pro-
22                     ducer to a possession of the United States,
23                     or caused such coal to be exported or
24                     shipped, the export or shipment of which

                                  168
 1                    was other than through an exporter who
 2                    meets the requirements of paragraph (2),
 3                           (ii) such coal producer filed an excise
 4                    tax return on or after October 1, 1990,
 5                    and on or before the date of the enactment
 6                    of this Act, and
 7                           (iii) such coal producer files a claim
 8                    for refund with the Secretary not later
 9                    than the close of the 30-day period begin-
10                    ning on the date of the enactment of this
11                    Act,
12             then the Secretary shall pay to such coal pro-
13             ducer an amount equal to the tax paid under
14             section 4121 of such Code on such coal ex-
15             ported or shipped by the coal producer or a
16             party related to such coal producer, or caused
17             by the coal producer or a party related to such
18             coal producer to be exported or shipped.
19                    (B) SPECIAL       RULES FOR CERTAIN TAX-

20             PAYERS.--For       purposes of this section--
21                           (i) IN   GENERAL.--If   a coal producer
22                    or a party related to a coal producer has
23                    received a judgment described in clause
24                    (iii), such coal producer shall be deemed to
25                    have established the export of coal to a for-

                                 169
 1                    eign country or shipment of coal to a pos-
 2                    session of the United States under sub-
 3                    paragraph (A)(i).
 4                         (ii) AMOUNT    OF PAYMENT.--If     a tax-
 5                    payer described in clause (i) is entitled to
 6                    a payment under subparagraph (A), the
 7                    amount of such payment shall be reduced
 8                    by any amount paid pursuant to the judg-
 9                    ment described in clause (iii).
10                         (iii) JUDGMENT    DESCRIBED.--A     judg-
11                    ment is described in this subparagraph if
12                    such judgment--
13                              (I) is made by a court of com-
14                         petent jurisdiction within the United
15                         States,
16                              (II)   relates   to   the   constitu-
17                         tionality of any tax paid on exported
18                         coal under section 4121 of the Inter-
19                         nal Revenue Code of 1986, and
20                              (III) is in favor of the coal pro-
21                         ducer or the party related to the coal
22                         producer.
23             (2) EXPORTERS.--Notwithstanding subsections
24       (a)(1) and (c) of section 6416 and section 6511 of
25       the Internal Revenue Code of 1986, and a judgment

                                170
 1       described in paragraph (1)(B)(iii) of this subsection,
 2       if--
 3                    (A) an exporter establishes that such ex-
 4              porter exported coal to a foreign country or
 5              shipped coal to a possession of the United
 6              States, or caused such coal to be so exported or
 7              shipped,
 8                    (B) such exporter filed a tax return on or
 9              after October 1, 1990, and on or before the
10              date of the enactment of this Act, and
11                    (C) such exporter files a claim for refund
12              with the Secretary not later than the close of
13              the 30-day period beginning on the date of the
14              enactment of this Act,
15       then the Secretary shall pay to such exporter an
16       amount equal to $0.825 per ton of such coal ex-
17       ported by the exporter or caused to be exported or
18       shipped, or caused to be exported or shipped, by the
19       exporter.
20       (b) LIMITATIONS.--Subsection (a) shall not apply
21 with respect to exported coal if a settlement with the Fed-
22 eral Government has been made with and accepted by, the
23 coal producer, a party related to such coal producer, or
24 the exporter, of such coal, as of the date that the claim
25 is filed under this section with respect to such exported

                              171
 1 coal. For purposes of this subsection, the term ``settlement
 2 with the Federal Government'' shall not include any settle-
 3 ment or stipulation entered into as of the date of the en-
 4 actment of this Act, the terms of which contemplate a
 5 judgment concerning which any party has reserved the
 6 right to file an appeal, or has filed an appeal.
 7       (c) SUBSEQUENT REFUND PROHIBITED.--No refund
 8 shall be made under this section to the extent that a credit
 9 or refund of such tax on such exported or shipped coal
10 has been paid to any person.
11       (d) DEFINITIONS.--For purposes of this section--
12             (1) COAL     PRODUCER.--The     term ``coal pro-
13       ducer'' means the person in whom is vested owner-
14       ship of the coal immediately after the coal is severed
15       from the ground, without regard to the existence of
16       any contractual arrangement for the sale or other
17       disposition of the coal or the payment of any royal-
18       ties between the producer and third parties. The
19       term includes any person who extracts coal from
20       coal waste refuse piles or from the silt waste product
21       which results from the wet washing (or similar proc-
22       essing) of coal.
23             (2) EXPORTER.--The term ``exporter'' means a
24       person, other than a coal producer, who does not
25       have a contract, fee arrangement, or any other

                                172
 1       agreement with a producer or seller of such coal to
 2       export or ship such coal to a third party on behalf
 3       of the producer or seller of such coal and--
 4                    (A) is indicated in the shipper's export
 5             declaration or other documentation as the ex-
 6             porter of record, or
 7                    (B) actually exported such coal to a for-
 8             eign country or shipped such coal to a posses-
 9             sion of the United States, or caused such coal
10             to be so exported or shipped.
11             (3) RELATED      PARTY.--The    term ``a party re-
12       lated to such coal producer'' means a person who--
13                    (A) is related to such coal producer
14             through any degree of common management,
15             stock ownership, or voting control,
16                    (B) is related (within the meaning of sec-
17             tion 144(a)(3) of the Internal Revenue Code of
18             1986) to such coal producer, or
19                    (C) has a contract, fee arrangement, or
20             any other agreement with such coal producer to
21             sell such coal to a third party on behalf of such
22             coal producer.
23             (4) SECRETARY.--The term ``Secretary'' means
24       the Secretary of Treasury or the Secretary's des-
25       ignee.

                               173
 1       (e) TIMING   OF   REFUND.--With respect to any claim
 2 for refund filed pursuant to this section, the Secretary
 3 shall determine whether the requirements of this section
 4 are met not later than 180 days after such claim is filed.
 5 If the Secretary determines that the requirements of this
 6 section are met, the claim for refund shall be paid not
 7 later than 180 days after the Secretary makes such deter-
 8 mination.
 9       (f) INTEREST.--Any refund paid pursuant to this
10 section shall be paid by the Secretary with interest from
11 the date of overpayment determined by using the overpay-
12 ment rate and method under section 6621 of the Internal
13 Revenue Code of 1986.
14       (g) DENIAL    OF   DOUBLE BENEFIT.--The payment
15 under subsection (a) with respect to any coal shall not ex-
16 ceed--
17             (1) in the case of a payment to a coal producer,
18       the amount of tax paid under section 4121 of the
19       Internal Revenue Code of 1986 with respect to such
20       coal by such coal producer or a party related to such
21       coal producer, and
22             (2) in the case of a payment to an exporter, an
23       amount equal to $0.825 per ton with respect to such
24       coal exported by the exporter or caused to be ex-
25       ported by the exporter.

                                 174
 1        (h) APPLICATION      OF   SECTION.--This section applies
 2 only to claims on coal exported or shipped on or after Oc-
 3 tober 1, 1990, through the date of the enactment of this
 4 Act.
 5        (i) STANDING NOT CONFERRED.--
 6             (1) EXPORTERS.--With respect to exporters,
 7        this section shall not confer standing upon an ex-
 8        porter to commence, or intervene in, any judicial or
 9        administrative proceeding concerning a claim for re-
10        fund by a coal producer of any Federal or State tax,
11        fee, or royalty paid by the coal producer.
12             (2) COAL       PRODUCERS.--With     respect to coal
13        producers, this section shall not confer standing
14        upon a coal producer to commence, or intervene in,
15        any judicial or administrative proceeding concerning
16        a claim for refund by an exporter of any Federal or
17        State tax, fee, or royalty paid by the producer and
18        alleged to have been passed on to an exporter.
19   SEC. 115. TAX CREDIT FOR CARBON DIOXIDE SEQUESTRA-

20                    TION.

21        (a) IN GENERAL.--Subpart D of part IV of sub-
22 chapter A of chapter 1 (relating to business credits) is
23 amended by adding at the end the following new section:

                                175
 1   ``SEC. 45Q. CREDIT FOR CARBON DIOXIDE SEQUESTRATION.

 2       ``(a) GENERAL RULE.--For purposes of section 38,
 3 the carbon dioxide sequestration credit for any taxable
 4 year is an amount equal to the sum of--
 5             ``(1) $20 per metric ton of qualified carbon di-
 6       oxide which is--
 7                    ``(A) captured by the taxpayer at a quali-
 8             fied facility, and
 9                    ``(B) disposed of by the taxpayer in secure
10             geological storage, and
11             ``(2) $10 per metric ton of qualified carbon di-
12       oxide which is--
13                    ``(A) captured by the taxpayer at a quali-
14             fied facility, and
15                    ``(B) used by the taxpayer as a tertiary
16             injectant in a qualified enhanced oil or natural
17             gas recovery project.
18       ``(b) QUALIFIED CARBON DIOXIDE.--For purposes of
19 this section--
20             ``(1) IN   GENERAL.--The   term `qualified carbon
21       dioxide' means carbon dioxide captured from an in-
22       dustrial source which--
23                    ``(A) would otherwise be released into the
24             atmosphere as industrial emission of green-
25             house gas, and

                                  176
 1                      ``(B) is measured at the source of capture
 2              and verified at the point of disposal or injec-
 3              tion.
 4              ``(2) RECYCLED      CARBON DIOXIDE.--The     term
 5       `qualified carbon dioxide' includes the initial deposit
 6       of captured carbon dioxide used as a tertiary
 7       injectant. Such term does not include carbon dioxide
 8       that is re-captured, recycled, and re-injected as part
 9       of the enhanced oil and natural gas recovery process.
10       ``(c) QUALIFIED FACILITY.--For purposes of this
11 section, the term `qualified facility' means any industrial
12 facility--
13              ``(1) which is owned by the taxpayer,
14              ``(2) at which carbon capture equipment is
15       placed in service, and
16              ``(3) which captures not less than 500,000 met-
17       ric tons of carbon dioxide during the taxable year.
18       ``(d) SPECIAL RULES        AND   OTHER DEFINITIONS.--
19 For purposes of this section--
20              ``(1) ONLY     CARBON DIOXIDE CAPTURED AND

21       DISPOSED OF OR USED WITHIN THE UNITED STATES

22       TAKEN INTO ACCOUNT.--The           credit under this sec-
23       tion shall apply only with respect to qualified carbon
24       dioxide the capture and disposal or use of which is
25       within--

                               177
 1                    ``(A) the United States (within the mean-
 2             ing of section 638(1)), or
 3                    ``(B) a possession of the United States
 4             (within the meaning of section 638(2)).
 5             ``(2) SECURE   GEOLOGICAL STORAGE.--The     Sec-
 6       retary, in consultation with the Administrator of the
 7       Environmental Protection Agency, shall establish
 8       regulations for determining adequate security meas-
 9       ures for the geological storage of carbon dioxide
10       under subsection (a)(1)(B) such that the carbon di-
11       oxide does not escape into the atmosphere. Such
12       term shall include storage at deep saline formations
13       and unminable coal seems under such conditions as
14       the Secretary may determine under such regulations.
15             ``(3) TERTIARY     INJECTANT.--The    term `ter-
16       tiary injectant' has the same meaning as when used
17       within section 193(b)(1).
18             ``(4) QUALIFIED    ENHANCED OIL OR NATURAL

19       GAS RECOVERY PROJECT.--The         term `qualified en-
20       hanced oil or natural gas recovery project' has the
21       meaning given the term `qualified enhanced oil re-
22       covery project' by section 43(c)(2), by substituting
23       `crude oil or natural gas' for `crude oil' in subpara-
24       graph (A)(i) thereof.

                                178
 1             ``(5) CREDIT    ATTRIBUTABLE TO TAXPAYER.--

 2       Any credit under this section shall be attributable to
 3       the person that captures and physically or contrac-
 4       tually ensures the disposal of or the use as a tertiary
 5       injectant of the qualified carbon dioxide, except to
 6       the extent provided in regulations prescribed by the
 7       Secretary.
 8             ``(6) RECAPTURE.--The Secretary shall, by reg-
 9       ulations, provide for recapturing the benefit of any
10       credit allowable under subsection (a) with respect to
11       any qualified carbon dioxide which ceases to be cap-
12       tured, disposed of, or used as a tertiary injectant in
13       a manner consistent with the requirements of this
14       section.
15             ``(7) INFLATION    ADJUSTMENT.--In     the case of
16       any taxable year beginning in a calendar year after
17       2009, there shall be substituted for each dollar
18       amount contained in subsection (a) an amount equal
19       to the product of--
20                    ``(A) such dollar amount, multiplied by
21                    ``(B) the inflation adjustment factor for
22             such calendar year determined under section
23             43(b)(3)(B) for such calendar year, determined
24             by substituting `2008' for `1990'.

                                        179
 1         ``(e) APPLICATION            OF   SECTION.--The credit under
 2 this section shall apply with respect to qualified carbon
 3 dioxide before the end of the calendar year in which the
 4 Secretary, in consultation with the Administrator of the
 5 Environmental              Protection          Agency,      certifies   that
 6 75,000,000 metric tons of qualified carbon dioxide have
 7 been captured and disposed of or used as a tertiary
 8 injectant.''.
 9         (b) CONFORMING AMENDMENT.--Section 38(b) (re-
10 lating to general business credit) is amended by striking
11 ``plus'' at the end of paragraph (32), by striking the period
12 at the end of paragraph (33) and inserting ``, plus'', and
13 by adding at the end of following new paragraph:
14                ``(34) the carbon dioxide sequestration credit
15         determined under section 45Q(a).''.
16         (c) CLERICAL AMENDMENT.--The table of sections
17 for subpart B of part IV of subchapter A of chapter 1
18 (relating to other credits) is amended by adding at the
19 end the following new section:
     ``Sec. 45Q. Credit for carbon dioxide sequestration.''.

20         (d) EFFECTIVE DATE.--The amendments made by
21 this section shall apply to carbon dioxide captured after
22 the date of the enactment of this Act.

                               180
 1   SEC. 116. CERTAIN INCOME AND GAINS RELATING TO IN-

 2                    DUSTRIAL SOURCE CARBON DIOXIDE TREAT-

 3                    ED AS QUALIFYING INCOME FOR PUBLICLY

 4                    TRADED PARTNERSHIPS.

 5       (a) IN GENERAL.--Subparagraph (E) of section
 6 7704(d)(1) (defining qualifying income) is amended by in-
 7 serting ``or industrial source carbon dioxide'' after ``tim-
 8 ber)''.
 9       (b) EFFECTIVE DATE.--The amendment made by
10 this section shall take effect on the date of the enactment
11 of this Act, in taxable years ending after such date.
12   SEC. 117. CARBON AUDIT OF THE TAX CODE.

13       (a) STUDY.--The Secretary of the Treasury shall
14 enter into an agreement with the National Academy of
15 Sciences to undertake a comprehensive review of the Inter-
16 nal Revenue Code of 1986 to identify the types of and
17 specific tax provisions that have the largest effects on car-
18 bon and other greenhouse gas emissions and to estimate
19 the magnitude of those effects.
20       (b) REPORT.--Not later than 2 years after the date
21 of enactment of this Act, the National Academy of
22 Sciences shall submit to Congress a report containing the
23 results of study authorized under this section.
24       (c) AUTHORIZATION      OF   APPROPRIATIONS.--There is
25 authorized to be appropriated to carry out this section
26 $1,500,000 for the period of fiscal years 2009 and 2010.

                                 181
 1   TITLE     II--TRANSPORTATION
 2      AND DOMESTIC FUEL SECU-
 3      RITY PROVISIONS
 4   SEC. 201. INCLUSION OF CELLULOSIC BIOFUEL IN BONUS

 5                    DEPRECIATION     FOR   BIOMASS    ETHANOL

 6                    PLANT PROPERTY.

 7       (a) IN GENERAL.--Paragraph (3) of section 168(l)
 8 is amended to read as follows:
 9             ``(3) CELLULOSIC        BIOFUEL.--The   term `cel-
10       lulosic biofuel' means any liquid fuel which is pro-
11       duced from any lignocellulosic or hemicellulosic mat-
12       ter that is available on a renewable or recurring
13       basis.''.
14       (b) CONFORMING AMENDMENTS.--Subsection (l) of
15 section 168 is amended--
16             (1) by striking ``cellulosic biomass ethanol''
17       each place it appears and inserting ``cellulosic
18       biofuel'',
19             (2) by striking ``CELLULOSIC BIOMASS ETH-
20       ANOL''      in the heading of such subsection and insert-
21       ing ``CELLULOSIC BIOFUEL'', and
22             (3) by striking ``CELLULOSIC        BIOMASS ETH-

23       ANOL''      in the heading of paragraph (2) thereof and
24       inserting ``CELLULOSIC      BIOFUEL''.

                                182
 1       (c) EFFECTIVE DATE.--The amendments made by
 2 this section shall apply to property placed in service after
 3 the date of the enactment of this Act, in taxable years
 4 ending after such date.
 5   SEC. 202. CREDITS FOR BIODIESEL AND RENEWABLE DIE-

 6                    SEL.

 7       (a) IN GENERAL.--Sections 40A(g), 6426(c)(6), and
 8 6427(e)(5)(B) are each amended by striking ``December
 9 31, 2008'' and inserting ``December 31, 2009''.
10       (b) INCREASE IN RATE OF CREDIT.--
11             (1) INCOME     TAX CREDIT.--Paragraphs     (1)(A)
12       and (2)(A) of section 40A(b) are each amended by
13       striking ``50 cents'' and inserting ``$1.00''.
14             (2) EXCISE     TAX CREDIT.--Paragraph      (2) of
15       section 6426(c) is amended to read as follows:
16             ``(2) APPLICABLE       AMOUNT.--For   purposes of
17       this subsection, the applicable amount is $1.00.''.
18             (3) CONFORMING     AMENDMENTS.--

19                     (A) Subsection (b) of section 40A is
20             amended by striking paragraph (3) and by re-
21             designating paragraphs (4) and (5) as para-
22             graphs (3) and (4), respectively.
23                     (B) Paragraph (2) of section 40A(f) is
24             amended to read as follows:

                                 183
 1             ``(2) EXCEPTION.--Subsection (b)(4) shall not
 2       apply with respect to renewable diesel.''.
 3                     (C) Paragraphs (2) and (3) of section
 4             40A(e) are each amended by striking ``sub-
 5             section (b)(5)(C)'' and inserting ``subsection
 6             (b)(4)(C)''.
 7                     (D) Clause (ii) of section 40A(d)(3)(C) is
 8             amended by striking ``subsection (b)(5)(B)''
 9             and inserting ``subsection (b)(4)(B)''.
10       (c) UNIFORM TREATMENT            OF   DIESEL PRODUCED
11 FROM BIOMASS.--Paragraph (3) of section 40A(f) is
12 amended--
13             (1) by striking ``diesel fuel'' and inserting ``liq-
14       uid fuel'',
15             (2)       by    striking   ``using     a   thermal
16       depolymerization process'', and
17             (3) by inserting ``, or other equivalent standard
18       approved by the Secretary'' after ``D396''.
19       (d) COPRODUCTION        OF    RENEWABLE DIESEL WITH
20 PETROLEUM FEEDSTOCK.--
21             (1) IN     GENERAL.--Paragraph       (3) of section
22       40A(f) is amended by adding at the end the fol-
23       lowing new sentences: ``Such term does not include
24       any fuel derived from coprocessing biomass with a
25       feedstock which is not biomass. For purposes of this

                                  184
 1       paragraph, the term `biomass' has the meaning
 2       given such term by section 45K(c)(3).''.
 3             (2) CONFORMING       AMENDMENT.--Paragraph      (3)
 4       of section 40A(f) is amended by striking ``(as de-
 5       fined in section 45K(c)(3))''.
 6       (e) ELIGIBILITY OF CERTAIN AVIATION FUEL.--Sub-
 7 section (f) of section 40A (relating to renewable diesel)
 8 is amended by adding at the end the following new para-
 9 graph:
10             ``(4) CERTAIN     AVIATION FUEL.--

11                    ``(A) IN   GENERAL.--Except   as provided in
12             the last 3 sentences of paragraph (3), the term
13             `renewable diesel' shall include fuel derived from
14             biomass which meets the requirements of a De-
15             partment of Defense specification for military
16             jet fuel or an American Society of Testing and
17             Materials specification for aviation turbine fuel.
18                    ``(B) APPLICATION    OF    MIXTURE    CRED-

19             ITS.--In   the case of fuel which is treated as re-
20             newable diesel solely by reason of subparagraph
21             (A), subsection (b)(1) and section 6426(c) shall
22             be applied with respect to such fuel by treating
23             kerosene as though it were diesel fuel.''.
24       (f) MODIFICATION RELATING          TO   DEFINITION    OF

25 AGRI-BIODIESEL.--Paragraph (2) of section 40A(d) (re-

                               185
 1 lating to agri-biodiesel) is amended by striking ``and mus-
 2 tard seeds'' and inserting ``mustard seeds, and camelina''.
 3       (g) EFFECTIVE DATE.--
 4             (1) IN     GENERAL.--Except   as otherwise pro-
 5       vided in this subsection, the amendments made by
 6       this section shall apply to fuel produced, and sold or
 7       used, after December 31, 2008.
 8             (2) COPRODUCTION      OF RENEWABLE DIESEL

 9       WITH PETROLEUM FEEDSTOCK.--The              amendment
10       made by subsection (d) shall apply to fuel produced,
11       and sold or used, after the date of the enactment of
12       this Act.
13   SEC. 203. CLARIFICATION THAT CREDITS FOR FUEL ARE

14                    DESIGNED TO PROVIDE AN INCENTIVE FOR

15                    UNITED STATES PRODUCTION.

16       (a) ALCOHOL FUELS CREDIT.--Subsection (d) of
17 section 40 is amended by adding at the end the following
18 new paragraph:
19             ``(7) LIMITATION   TO ALCOHOL WITH CONNEC-

20       TION TO THE UNITED STATES.--No           credit shall be
21       determined under this section with respect to any al-
22       cohol which is produced outside the United States
23       for use as a fuel outside the United States. For pur-
24       poses of this paragraph, the term `United States' in-
25       cludes any possession of the United States.''.

                                186
 1         (b) BIODIESEL FUELS CREDIT.--Subsection (d) of
 2 section 40A is amended by adding at the end the following
 3 new paragraph:
 4              ``(5) LIMITATION    TO BIODIESEL WITH CONNEC-

 5         TION TO THE UNITED STATES.--No         credit shall be
 6         determined under this section with respect to any
 7         biodiesel which is produced outside the United
 8         States for use as a fuel outside the United States.
 9         For purposes of this paragraph, the term `United
10         States' includes any possession of the United
11         States.''.
12         (c) EXCISE TAX CREDIT.--
13              (1) IN   GENERAL.--Section   6426 is amended by
14         adding at the end the following new subsection:
15         ``(i) LIMITATION   TO   FUELS WITH CONNECTION       TO

16   THE   UNITED STATES.--
17              ``(1) ALCOHOL.--No credit shall be determined
18         under this section with respect to any alcohol which
19         is produced outside the United States for use as a
20         fuel outside the United States.
21              ``(2) BIODIESEL     AND ALTERNATIVE FUELS.--

22         No credit shall be determined under this section
23         with respect to any biodiesel or alternative fuel
24         which is produced outside the United States for use
25         as a fuel outside the United States.

                                187
 1 For purposes of this subsection, the term `United States'
 2 includes any possession of the United States.''.
 3             (2) CONFORMING     AMENDMENT.--Subsection     (e)
 4       of section 6427 is amended by redesignating para-
 5       graph (5) as paragraph (6) and by inserting after
 6       paragraph (4) the following new paragraph:
 7             ``(5) LIMITATION   TO FUELS WITH CONNECTION

 8       TO THE UNITED STATES.--No          amount shall be pay-
 9       able under paragraph (1) or (2) with respect to any
10       mixture or alternative fuel if credit is not allowed
11       with respect to such mixture or alternative fuel by
12       reason of section 6426(i).''.
13       (d) EFFECTIVE DATE.--The amendments made by
14 this section shall apply to claims for credit or payment
15 made on or after May 15, 2008.
16   SEC. 204. EXTENSION AND MODIFICATION OF ALTER-

17                    NATIVE FUEL CREDIT.

18       (a) EXTENSION.--
19             (1) ALTERNATIVE        FUEL CREDIT.--Paragraph

20       (4) of section 6426(d) (relating to alternative fuel
21       credit) is amended by striking ``September 30,
22       2009'' and inserting ``December 31, 2009''.
23             (2) ALTERNATIVE        FUEL MIXTURE CREDIT.--

24       Paragraph (3) of section 6426(e) (relating to alter-
25       native fuel mixture credit) is amended by striking

                               188
 1       ``September 30, 2009'' and inserting ``December 31,
 2       2009''.
 3             (3) PAYMENTS.--Subparagraph (C) of section
 4       6427(e)(5) (relating to termination) is amended by
 5       striking ``September 30, 2009'' and inserting ``De-
 6       cember 31, 2009''.
 7       (b) MODIFICATIONS.--
 8             (1) ALTERNATIVE       FUEL    TO      INCLUDE   COM-

 9       PRESSED OR LIQUIFIED BIOMASS GAS.--Paragraph

10       (2) of section 6426(d) (relating to alternative fuel
11       credit) is amended by striking ``and'' at the end of
12       subparagraph (E), by redesignating subparagraph
13       (F) as subparagraph (G), and by inserting after sub-
14       paragraph (E) the following new subparagraph:
15                    ``(F) compressed or liquefied gas derived
16             from biomass (as defined in section 45K(c)(3)),
17             and''.
18             (2) CREDIT     ALLOWED FOR AVIATION USE OF

19       FUEL.--Paragraph      (1) of section 6426(d) is amend-
20       ed by inserting ``sold by the taxpayer for use as a
21       fuel in aviation,'' after ``motorboat,''.
22       (c) CARBON CAPTURE REQUIREMENT               FOR   CERTAIN
23 FUELS.--
24             (1) IN    GENERAL.--Subsection        (d) of section
25       6426, as amended by subsection (a), is amended by

                                    189
 1       redesignating paragraph (4) as paragraph (5) and
 2       by inserting after paragraph (3) the following new
 3       paragraph:
 4             ``(4) CARBON       CAPTURE REQUIREMENT.--

 5                    ``(A) IN     GENERAL.--The     requirements of
 6             this paragraph are met if the fuel is certified,
 7             under such procedures as required by the Sec-
 8             retary, as having been derived from coal pro-
 9             duced at a gasification facility which separates
10             and sequesters not less than the applicable per-
11             centage of such facility's total carbon dioxide
12             emissions.
13                    ``(B)      APPLICABLE      PERCENTAGE.--For

14             purposes of subparagraph (A), the applicable
15             percentage is--
16                            ``(i) 50 percent in the case of fuel pro-
17                    duced after September 30, 2009, and on or
18                    before December 30, 2009, and
19                            ``(ii) 75 percent in the case of fuel
20                    produced after December 30, 2009.''.
21             (2) CONFORMING          AMENDMENT.--Subparagraph

22       (E) of section 6426(d)(2) is amended by inserting
23       ``which meets the requirements of paragraph (4) and
24       which is'' after ``any liquid fuel''.

                                 190
 1       (d) EFFECTIVE DATE.--The amendments made by
 2 this section shall apply to fuel sold or used after the date
 3 of the enactment of this Act.
 4   SEC. 205. CREDIT FOR NEW QUALIFIED PLUG-IN ELECTRIC

 5                    DRIVE MOTOR VEHICLES.

 6       (a) PLUG-IN ELECTRIC DRIVE MOTOR VEHICLE
 7 CREDIT.--Subpart B of part IV of subchapter A of chap-
 8 ter 1 (relating to other credits) is amended by adding at
 9 the end the following new section:
10   ``SEC. 30D. NEW QUALIFIED PLUG-IN ELECTRIC DRIVE

11                    MOTOR VEHICLES.

12       ``(a) ALLOWANCE OF CREDIT.--
13             ``(1) IN   GENERAL.--There    shall be allowed as a
14       credit against the tax imposed by this chapter for
15       the taxable year an amount equal to the applicable
16       amount with respect to each new qualified plug-in
17       electric drive motor vehicle placed in service by the
18       taxpayer during the taxable year.
19             ``(2) APPLICABLE        AMOUNT.--For   purposes of
20       paragraph (1), the applicable amount is sum of--
21                     ``(A) $2,500, plus
22                     ``(B) $417 for each kilowatt hour of trac-
23             tion battery capacity in excess of 4 kilowatt
24             hours.
25       ``(b) LIMITATIONS.--

                                191
 1             ``(1) LIMITATION       BASED   ON   WEIGHT.--The

 2       amount of the credit allowed under subsection (a) by
 3       reason of subsection (a)(2) shall not exceed--
 4                    ``(A) $7,500, in the case of any new quali-
 5             fied plug-in electric drive motor vehicle with a
 6             gross vehicle weight rating of not more than
 7             10,000 pounds,
 8                    ``(B) $10,000, in the case of any new
 9             qualified plug-in electric drive motor vehicle