The Matthias Chronicles

Thursday, October 2, 2008, 3:00 AM

H.R. 1424: Bailout Bill, Part 8

10             with a gross vehicle weight rating of more than
11             10,000 pounds but not more than 14,000
12             pounds,
13                    ``(C) $12,500, in the case of any new
14             qualified plug-in electric drive motor vehicle
15             with a gross vehicle weight rating of more than
16             14,000 pounds but not more than 26,000
17             pounds, and
18                    ``(D) $15,000, in the case of any new
19             qualified plug-in electric drive motor vehicle
20             with a gross vehicle weight rating of more than
21             26,000 pounds.
22             ``(2) LIMITATION    ON NUMBER OF PASSENGER

23       VEHICLES AND LIGHT TRUCKS ELIGIBLE FOR CRED-

24       IT.--

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 1                    ``(A) IN    GENERAL.--In   the case of a new
 2             qualified plug-in electric drive motor vehicle
 3             sold during the phaseout period, only the appli-
 4             cable percentage of the credit otherwise allow-
 5             able under subsection (a) shall be allowed.
 6                    ``(B) PHASEOUT        PERIOD.--For   purposes
 7             of this subsection, the phaseout period is the
 8             period beginning with the second calendar quar-
 9             ter following the calendar quarter which in-
10             cludes the first date on which the total number
11             of such new qualified plug-in electric drive
12             motor vehicles sold for use in the United States
13             after December 31, 2008, is at least 250,000.
14                    ``(C)     APPLICABLE     PERCENTAGE.--For

15             purposes of subparagraph (A), the applicable
16             percentage is--
17                            ``(i) 50 percent for the first 2 cal-
18                    endar quarters of the phaseout period,
19                            ``(ii) 25 percent for the 3d and 4th
20                    calendar quarters of the phaseout period,
21                    and
22                            ``(iii) 0 percent for each calendar
23                    quarter thereafter.

                                193
 1                    ``(D) CONTROLLED     GROUPS.--Rules    simi-
 2             lar to the rules of section 30B(f)(4) shall apply
 3             for purposes of this subsection.
 4       ``(c) NEW QUALIFIED PLUG-IN ELECTRIC DRIVE
 5 MOTOR VEHICLE.--For purposes of this section, the term
 6 `new qualified plug-in electric drive motor vehicle' means
 7 a motor vehicle--
 8             ``(1) which draws propulsion using a traction
 9       battery with at least 4 kilowatt hours of capacity,
10             ``(2) which uses an offboard source of energy to
11       recharge such battery,
12             ``(3) which, in the case of a passenger vehicle
13       or light truck which has a gross vehicle weight rat-
14       ing of not more than 8,500 pounds, has received a
15       certificate of conformity under the Clean Air Act
16       and meets or exceeds the equivalent qualifying Cali-
17       fornia low emission vehicle standard under section
18       243(e)(2) of the Clean Air Act for that make and
19       model year, and
20                    ``(A) in the case of a vehicle having a gross
21             vehicle weight rating of 6,000 pounds or less,
22             the Bin 5 Tier II emission standard established
23             in regulations prescribed by the Administrator
24             of the Environmental Protection Agency under

                                 194
 1             section 202(i) of the Clean Air Act for that
 2             make and model year vehicle, and
 3                    ``(B) in the case of a vehicle having a gross
 4             vehicle weight rating of more than 6,000
 5             pounds but not more than 8,500 pounds, the
 6             Bin 8 Tier II emission standard which is so es-
 7             tablished,
 8             ``(4) the original use of which commences with
 9       the taxpayer,
10             ``(5) which is acquired for use or lease by the
11       taxpayer and not for resale, and
12             ``(6) which is made by a manufacturer.
13       ``(d) APPLICATION WITH OTHER CREDITS.--
14             ``(1) BUSINESS     CREDIT TREATED AS PART OF

15       GENERAL BUSINESS CREDIT.--So          much of the credit
16       which would be allowed under subsection (a) for any
17       taxable year (determined without regard to this sub-
18       section) that is attributable to property of a char-
19       acter subject to an allowance for depreciation shall
20       be treated as a credit listed in section 38(b) for such
21       taxable year (and not allowed under subsection (a)).
22             ``(2) PERSONAL     CREDIT.--

23                    ``(A) IN   GENERAL.--For   purposes of this
24             title, the credit allowed under subsection (a) for
25             any taxable year (determined after application

                                195
 1             of paragraph (1)) shall be treated as a credit
 2             allowable under subpart A for such taxable
 3             year.
 4                    ``(B) LIMITATION    BASED ON AMOUNT OF

 5             TAX.--In    the case of a taxable year to which
 6             section 26(a)(2) does not apply, the credit al-
 7             lowed under subsection (a) for any taxable year
 8             (determined after application of paragraph (1))
 9             shall not exceed the excess of--
10                         ``(i) the sum of the regular tax liabil-
11                    ity (as defined in section 26(b)) plus the
12                    tax imposed by section 55, over
13                         ``(ii) the sum of the credits allowable
14                    under subpart A (other than this section
15                    and sections 23 and 25D) and section 27
16                    for the taxable year.
17       ``(e) OTHER DEFINITIONS         AND   SPECIAL RULES.--
18 For purposes of this section--
19             ``(1) MOTOR     VEHICLE.--The    term `motor vehi-
20       cle' has the meaning given such term by section
21       30(c)(2).
22             ``(2) OTHER      TERMS.--The     terms `passenger
23       automobile', `light truck', and `manufacturer' have
24       the meanings given such terms in regulations pre-
25       scribed by the Administrator of the Environmental

                                 196
 1       Protection Agency for purposes of the administra-
 2       tion of title II of the Clean Air Act (42 U.S.C. 7521
 3       et seq.).
 4             ``(3) TRACTION      BATTERY CAPACITY.--Traction

 5       battery capacity shall be measured in kilowatt hours
 6       from a 100 percent state of charge to a zero percent
 7       state of charge.
 8             ``(4) REDUCTION       IN BASIS.--For   purposes of
 9       this subtitle, the basis of any property for which a
10       credit is allowable under subsection (a) shall be re-
11       duced by the amount of such credit so allowed.
12             ``(5) NO     DOUBLE BENEFIT.--The       amount of
13       any deduction or other credit allowable under this
14       chapter for a new qualified plug-in electric drive
15       motor vehicle shall be reduced by the amount of
16       credit allowed under subsection (a) for such vehicle
17       for the taxable year.
18             ``(6) PROPERTY       USED BY TAX-EXEMPT ENTI-

19       TY.--In      the case of a vehicle the use of which is de-
20       scribed in paragraph (3) or (4) of section 50(b) and
21       which is not subject to a lease, the person who sold
22       such vehicle to the person or entity using such vehi-
23       cle shall be treated as the taxpayer that placed such
24       vehicle in service, but only if such person clearly dis-
25       closes to such person or entity in a document the

                               197
 1       amount of any credit allowable under subsection (a)
 2       with respect to such vehicle (determined without re-
 3       gard to subsection (b)(2)).
 4               ``(7)   PROPERTY     USED   OUTSIDE    UNITED

 5       STATES, ETC., NOT QUALIFIED.--No        credit shall be
 6       allowable under subsection (a) with respect to any
 7       property referred to in section 50(b)(1) or with re-
 8       spect to the portion of the cost of any property
 9       taken into account under section 179.
10               ``(8) RECAPTURE.--The Secretary shall, by reg-
11       ulations, provide for recapturing the benefit of any
12       credit allowable under subsection (a) with respect to
13       any property which ceases to be property eligible for
14       such credit (including recapture in the case of a
15       lease period of less than the economic life of a vehi-
16       cle).
17               ``(9) ELECTION     TO NOT TAKE CREDIT.--No

18       credit shall be allowed under subsection (a) for any
19       vehicle if the taxpayer elects not to have this section
20       apply to such vehicle.
21               ``(10) INTERACTION    WITH AIR QUALITY AND

22       MOTOR VEHICLE SAFETY STANDARDS.--Unless            oth-
23       erwise provided in this section, a motor vehicle shall
24       not be considered eligible for a credit under this sec-
25       tion unless such vehicle is in compliance with--

                                198
 1                    ``(A) the applicable provisions of the Clean
 2             Air Act for the applicable make and model year
 3             of the vehicle (or applicable air quality provi-
 4             sions of State law in the case of a State which
 5             has adopted such provision under a waiver
 6             under section 209(b) of the Clean Air Act), and
 7                    ``(B) the motor vehicle safety provisions of
 8             sections 30101 through 30169 of title 49,
 9             United States Code.
10       ``(f) REGULATIONS.--
11             ``(1) IN   GENERAL.--Except   as provided in para-
12       graph (2), the Secretary shall promulgate such regu-
13       lations as necessary to carry out the provisions of
14       this section.
15             ``(2) COORDINATION     IN PRESCRIPTION OF CER-

16       TAIN REGULATIONS.--The         Secretary of the Treas-
17       ury, in coordination with the Secretary of Transpor-
18       tation and the Administrator of the Environmental
19       Protection Agency, shall prescribe such regulations
20       as necessary to determine whether a motor vehicle
21       meets the requirements to be eligible for a credit
22       under this section.
23       ``(g) TERMINATION.--This section shall not apply to
24 property purchased after December 31, 2014.''.

                               199
 1       (b) COORDINATION WITH ALTERNATIVE MOTOR VE-
 2   HICLE   CREDIT.--Section 30B(d)(3) is amended by adding
 3 at the end the following new subparagraph:
 4                    ``(D) EXCLUSION   OF PLUG-IN VEHICLES.--

 5             Any vehicle with respect to which a credit is al-
 6             lowable under section 30D (determined without
 7             regard to subsection (d) thereof) shall not be
 8             taken into account under this section.''.
 9       (c) CREDIT MADE PART           OF   GENERAL BUSINESS
10 CREDIT.--Section 38(b), as amended by this Act, is
11 amended by striking ``plus'' at the end of paragraph (33),
12 by striking the period at the end of paragraph (34) and
13 inserting ``plus'', and by adding at the end the following
14 new paragraph:
15             ``(35) the portion of the new qualified plug-in
16       electric drive motor vehicle credit to which section
17       30D(d)(1) applies.''.
18       (d) CONFORMING AMENDMENTS.--
19             (1)(A) Section 24(b)(3)(B), as amended by sec-
20       tion 106, is amended by striking ``and 25D'' and in-
21       serting ``25D, and 30D''.
22             (B) Section 25(e)(1)(C)(ii) is amended by in-
23       serting ``30D,'' after ``25D,''.

                                         200
 1                (C) Section 25B(g)(2), as amended by section
 2         106, is amended by striking ``and 25D'' and insert-
 3         ing ``, 25D, and 30D''.
 4                (D) Section 26(a)(1), as amended by section
 5         106, is amended by striking ``and 25D'' and insert-
 6         ing ``25D, and 30D''.
 7                (E) Section 1400C(d)(2) is amended by striking
 8         ``and 25D'' and inserting ``25D, and 30D''.
 9                (2) Section 1016(a) is amended by striking
10         ``and'' at the end of paragraph (35), by striking the
11         period at the end of paragraph (36) and inserting ``,
12         and'', and by adding at the end the following new
13         paragraph:
14                ``(37)      to    the     extent      provided           in   section
15         30D(e)(4).''.
16                (3) Section 6501(m) is amended by inserting
17         ``30D(e)(9),'' after ``30C(e)(5),''.
18                (4) The table of sections for subpart B of part
19         IV of subchapter A of chapter 1 is amended by add-
20         ing at the end the following new item:
     ``Sec. 30D. New qualified plug-in electric drive motor vehicles.''.

21         (e) EFFECTIVE DATE.--The amendments made by
22 this section shall apply to taxable years beginning after
23 December 31, 2008.
24         (f)     APPLICATION            OF     EGTRRA            SUNSET.--The
25 amendment made by subsection (d)(1)(A) shall be subject

                                 201
 1 to title IX of the Economic Growth and Tax Relief Rec-
 2 onciliation Act of 2001 in the same manner as the provi-
 3 sion of such Act to which such amendment relates.
 4   SEC. 206. EXCLUSION FROM HEAVY TRUCK TAX FOR IDLING

 5                    REDUCTION UNITS AND ADVANCED INSULA-

 6                    TION.

 7       (a) IN GENERAL.--Section 4053 is amended by add-
 8 ing at the end the following new paragraphs:
 9             ``(9) IDLING    REDUCTION DEVICE.--Any       device
10       or system of devices which--
11                     ``(A) is designed to provide to a vehicle
12             those services (such as heat, air conditioning, or
13             electricity) that would otherwise require the op-
14             eration of the main drive engine while the vehi-
15             cle is temporarily parked or remains stationary
16             using one or more devices affixed to a tractor,
17             and
18                     ``(B) is determined by the Administrator of
19             the Environmental Protection Agency, in con-
20             sultation with the Secretary of Energy and the
21             Secretary of Transportation, to reduce idling of
22             such vehicle at a motor vehicle rest stop or
23             other location where such vehicles are tempo-
24             rarily parked or remain stationary.

                                    202
 1             ``(10) ADVANCED        INSULATION.--Any    insulation
 2         that has an R value of not less than R35 per inch.''.
 3         (b) EFFECTIVE DATE.--The amendment made by
 4 this section shall apply to sales or installations after the
 5 date of the enactment of this Act.
 6   SEC. 207. ALTERNATIVE FUEL VEHICLE REFUELING PROP-

 7                    ERTY CREDIT.

 8         (a) EXTENSION       OF   CREDIT.--Paragraph (2) of sec-
 9 tion 30C(g) is amended by striking ``December 31, 2009''
10 and inserting ``December 31, 2010''.
11         (b) INCLUSION     OF   ELECTRICITY   AS A   CLEAN-BURN-
12   ING   FUEL.--Section 30C(c)(2) is amended by adding at
13 the end the following new subparagraph:
14                     ``(C) Electricity.''.
15         (c) EFFECTIVE DATE.--The amendments made by
16 this section shall apply to property placed in service after
17 the date of the enactment of this Act, in taxable years
18 ending after such date.

                                203
 1   SEC. 208. CERTAIN INCOME AND GAINS RELATING TO AL-

 2                    COHOL FUELS AND MIXTURES, BIODIESEL

 3                    FUELS AND MIXTURES, AND ALTERNATIVE

 4                    FUELS AND MIXTURES TREATED AS QUALI-

 5                    FYING   INCOME   FOR   PUBLICLY   TRADED

 6                    PARTNERSHIPS.

 7       (a) IN GENERAL.--Subparagraph (E) of section
 8 7704(d)(1), as amended by this Act, is amended by strik-
 9 ing ``or industrial source carbon dioxide'' and inserting ``,
10 industrial source carbon dioxide, or the transportation or
11 storage of any fuel described in subsection (b), (c), (d),
12 or (e) of section 6426, or any alcohol fuel defined in sec-
13 tion 6426(b)(4)(A) or any biodiesel fuel as defined in sec-
14 tion 40A(d)(1)'' after ``timber)''.
15       (b) EFFECTIVE DATE.--The amendment made by
16 this section shall take effect on the date of the enactment
17 of this Act, in taxable years ending after such date.
18   SEC. 209. EXTENSION AND MODIFICATION OF ELECTION TO

19                    EXPENSE CERTAIN REFINERIES.

20       (a) EXTENSION.--Paragraph (1) of section 179C(c)
21 (relating to qualified refinery property) is amended--
22             (1) by striking ``January 1, 2012'' in subpara-
23       graph (B) and inserting ``January 1, 2014'', and
24             (2) by striking ``January 1, 2008'' each place
25       it appears in subparagraph (F) and inserting ``Janu-
26       ary 1, 2010''.

                                  204
 1       (b) INCLUSION OF FUEL DERIVED FROM SHALE AND
 2 TAR SANDS.--
 3             (1) IN       GENERAL.--Subsection   (d) of section
 4       179C is amended by inserting ``, or directly from
 5       shale or tar sands'' after ``(as defined in section
 6       45K(c))''.
 7             (2) CONFORMING       AMENDMENT.--Paragraph       (2)
 8       of section 179C(e) is amended by inserting ``shale,
 9       tar sands, or'' before ``qualified fuels''.
10       (c) EFFECTIVE DATE.--The amendments made by
11 this section shall apply to property placed in service after
12 the date of the enactment of this Act.
13   SEC. 210. EXTENSION OF SUSPENSION OF TAXABLE IN-

14                    COME LIMIT ON PERCENTAGE DEPLETION

15                    FOR   OIL   AND   NATURAL   GAS   PRODUCED

16                    FROM MARGINAL PROPERTIES.

17       Subparagraph (H) of section 613A(c)(6) (relating to
18 oil and gas produced from marginal properties) is amend-
19 ed by striking ``for any taxable year'' and all that follows
20 and inserting ``for any taxable year--
21                          ``(i) beginning after December 31,
22                     1997, and before January 1, 2008, or
23                          ``(ii) beginning after December 31,
24                     2008, and before January 1, 2010.''.

                                   205
 1   SEC. 211. TRANSPORTATION FRINGE BENEFIT TO BICYCLE

 2                    COMMUTERS.

 3       (a) IN GENERAL.--Paragraph (1) of section 132(f)
 4 is amended by adding at the end the following:
 5                     ``(D) Any qualified bicycle commuting re-
 6             imbursement.''.
 7       (b) LIMITATION       ON   EXCLUSION.--Paragraph (2) of
 8 section 132(f) is amended by striking ``and'' at the end
 9 of subparagraph (A), by striking the period at the end
10 of subparagraph (B) and inserting ``, and'', and by adding
11 at the end the following new subparagraph:
12                     ``(C) the applicable annual limitation in
13             the case of any qualified bicycle commuting re-
14             imbursement.''.
15       (c) DEFINITIONS.--Paragraph (5) of section 132(f)
16 is amended by adding at the end the following:
17                     ``(F) DEFINITIONS   RELATED TO BICYCLE

18             COMMUTING REIMBURSEMENT.--

19                         ``(i) QUALIFIED   BICYCLE COMMUTING

20                     REIMBURSEMENT.--The     term `qualified bi-
21                     cycle commuting reimbursement' means,
22                     with respect to any calendar year, any em-
23                     ployer reimbursement during the 15-month
24                     period beginning with the first day of such
25                     calendar year for reasonable expenses in-
26                     curred by the employee during such cal-

                                    206
 1                    endar year for the purchase of a bicycle
 2                    and bicycle improvements, repair, and stor-
 3                    age, if such bicycle is regularly used for
 4                    travel between the employee's residence
 5                    and place of employment.
 6                        ``(ii) APPLICABLE         ANNUAL     LIMITA-

 7                    TION.--The     term `applicable annual limita-
 8                    tion' means, with respect to any employee
 9                    for any calendar year, the product of $20
10                    multiplied by the number of qualified bicy-
11                    cle commuting months during such year.
12                        ``(iii)    QUALIFIED       BICYCLE     COM-

13                    MUTING MONTH.--The           term `qualified bi-
14                    cycle commuting month' means, with re-
15                    spect to any employee, any month during
16                    which such employee--
17                              ``(I) regularly uses the bicycle for
18                        a substantial portion of the travel be-
19                        tween the employee's residence and
20                        place of employment, and
21                              ``(II) does not receive any benefit
22                        described in subparagraph (A), (B),
23                        or (C) of paragraph (1).''.
24       (d) CONSTRUCTIVE RECEIPT             OF    BENEFIT.--Para-
25 graph (4) of section 132(f) is amended by inserting

                              207
 1 ``(other than a qualified bicycle commuting reimburse-
 2 ment)'' after ``qualified transportation fringe''.
 3       (e) EFFECTIVE DATE.--The amendments made by
 4 this section shall apply to taxable years beginning after
 5 December 31, 2008.
 6   TITLE III--ENERGY CONSERVA-
 7      TION AND EFFICIENCY PRO-
 8      VISIONS
 9   SEC. 301. QUALIFIED ENERGY CONSERVATION BONDS.

10       (a) IN GENERAL.--Subpart I of part IV of sub-
11 chapter A of chapter 1, as amended by section 107, is
12 amended by adding at the end the following new section:
13   ``SEC. 54D. QUALIFIED ENERGY CONSERVATION BONDS.

14       ``(a) QUALIFIED ENERGY CONSERVATION BOND.--
15 For purposes of this subchapter, the term `qualified en-
16 ergy conservation bond' means any bond issued as part
17 of an issue if--
18             ``(1) 100 percent of the available project pro-
19       ceeds of such issue are to be used for one or more
20       qualified conservation purposes,
21             ``(2) the bond is issued by a State or local gov-
22       ernment, and
23             ``(3) the issuer designates such bond for pur-
24       poses of this section.

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 1       ``(b) REDUCED CREDIT AMOUNT.--The annual credit
 2 determined under section 54A(b) with respect to any
 3 qualified energy conservation bond shall be 70 percent of
 4 the amount so determined without regard to this sub-
 5 section.
 6       ``(c) LIMITATION        ON    AMOUNT    OF   BONDS DES-
 7   IGNATED.--The      maximum aggregate face amount of
 8 bonds which may be designated under subsection (a) by
 9 any issuer shall not exceed the limitation amount allocated
10 to such issuer under subsection (e).
11       ``(d) NATIONAL LIMITATION        ON    AMOUNT   OF   BONDS
12 DESIGNATED.--There is a national qualified energy con-
13 servation bond limitation of $800,000,000.
14       ``(e) ALLOCATIONS.--
15             ``(1) IN   GENERAL.--The        limitation applicable
16       under subsection (d) shall be allocated by the Sec-
17       retary among the States in proportion to the popu-
18       lation of the States.
19             ``(2) ALLOCATIONS        TO LARGEST LOCAL GOV-

20       ERNMENTS.--

21                    ``(A) IN   GENERAL.--In     the case of any
22             State in which there is a large local govern-
23             ment, each such local government shall be allo-
24             cated a portion of such State's allocation which
25             bears the same ratio to the State's allocation

                               209
 1             (determined without regard to this subpara-
 2             graph) as the population of such large local
 3             government bears to the population of such
 4             State.
 5                    ``(B) ALLOCATION   OF UNUSED LIMITATION

 6             TO STATE.--The       amount allocated under this
 7             subsection to a large local government may be
 8             reallocated by such local government to the
 9             State in which such local government is located.
10                    ``(C) LARGE    LOCAL GOVERNMENT.--For

11             purposes of this section, the term `large local
12             government' means any municipality or county
13             if such municipality or county has a population
14             of 100,000 or more.
15             ``(3) ALLOCATION       TO ISSUERS; RESTRICTION

16       ON    PRIVATE     ACTIVITY    BONDS.--Any    allocation
17       under this subsection to a State or large local gov-
18       ernment shall be allocated by such State or large
19       local government to issuers within the State in a
20       manner that results in not less than 70 percent of
21       the allocation to such State or large local govern-
22       ment being used to designate bonds which are not
23       private activity bonds.
24       ``(f) QUALIFIED CONSERVATION PURPOSE.--For
25 purposes of this section--

                                  210
 1             ``(1) IN    GENERAL.--The     term `qualified con-
 2       servation purpose' means any of the following:
 3                    ``(A) Capital expenditures incurred for
 4             purposes of--
 5                         ``(i) reducing energy consumption in
 6                    publicly-owned buildings by at least 20
 7                    percent,
 8                         ``(ii) implementing green community
 9                    programs,
10                         ``(iii) rural development involving the
11                    production of electricity from renewable
12                    energy resources, or
13                         ``(iv) any qualified facility (as deter-
14                    mined under section 45(d) without regard
15                    to paragraphs (8) and (10) thereof and
16                    without regard to any placed in service
17                    date).
18                    ``(B) Expenditures with respect to research
19             facilities, and research grants, to support re-
20             search in--
21                         ``(i) development of cellulosic ethanol
22                    or other nonfossil fuels,
23                         ``(ii) technologies for the capture and
24                    sequestration of carbon dioxide produced
25                    through the use of fossil fuels,

                                    211
 1                            ``(iii) increasing the efficiency of exist-
 2                    ing technologies for producing nonfossil
 3                    fuels,
 4                            ``(iv) automobile battery technologies
 5                    and other technologies to reduce fossil fuel
 6                    consumption in transportation, or
 7                            ``(v) technologies to reduce energy use
 8                    in buildings.
 9                    ``(C) Mass commuting facilities and related
10             facilities that reduce the consumption of energy,
11             including expenditures to reduce pollution from
12             vehicles used for mass commuting.
13                    ``(D) Demonstration projects designed to
14             promote the commercialization of--
15                            ``(i) green building technology,
16                            ``(ii) conversion of agricultural waste
17                    for use in the production of fuel or other-
18                    wise,
19                            ``(iii) advanced battery manufacturing
20                    technologies,
21                            ``(iv) technologies to reduce peak use
22                    of electricity, or
23                            ``(v) technologies for the capture and
24                    sequestration of carbon dioxide emitted

                                  212
 1                     from combusting fossil fuels in order to
 2                     produce electricity.
 3                     ``(E) Public education campaigns to pro-
 4             mote energy efficiency.
 5             ``(2) SPECIAL      RULES FOR PRIVATE ACTIVITY

 6       BONDS.--For       purposes of this section, in the case of
 7       any private activity bond, the term `qualified con-
 8       servation purposes' shall not include any expenditure
 9       which is not a capital expenditure.
10       ``(g) POPULATION.--
11             ``(1) IN     GENERAL.--The      population of any
12       State or local government shall be determined for
13       purposes of this section as provided in section 146(j)
14       for the calendar year which includes the date of the
15       enactment of this section.
16             ``(2) SPECIAL     RULE FOR COUNTIES.--In      deter-
17       mining the population of any county for purposes of
18       this section, any population of such county which is
19       taken into account in determining the population of
20       any municipality which is a large local government
21       shall not be taken into account in determining the
22       population of such county.
23       ``(h) APPLICATION         TO   INDIAN TRIBAL GOVERN-
24   MENTS.--An       Indian tribal government shall be treated for

                                213
 1 purposes of this section in the same manner as a large
 2 local government, except that--
 3             ``(1) an Indian tribal government shall be treat-
 4       ed for purposes of subsection (e) as located within
 5       a State to the extent of so much of the population
 6       of such government as resides within such State,
 7       and
 8             ``(2) any bond issued by an Indian tribal gov-
 9       ernment shall be treated as a qualified energy con-
10       servation bond only if issued as part of an issue the
11       available project proceeds of which are used for pur-
12       poses for which such Indian tribal government could
13       issue bonds to which section 103(a) applies.''.
14       (b) CONFORMING AMENDMENTS.--
15             (1) Paragraph (1) of section 54A(d), as amend-
16       ed by this Act, is amended to read as follows:
17             ``(1) QUALIFIED    TAX CREDIT BOND.--The     term
18       `qualified tax credit bond' means--
19                    ``(A) a qualified forestry conservation
20             bond,
21                    ``(B) a new clean renewable energy bond,
22             or
23                    ``(C) a qualified energy conservation bond,
24       which is part of an issue that meets requirements of
25       paragraphs (2), (3), (4), (5), and (6).''.

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 1                (2) Subparagraph (C) of section 54A(d)(2), as
 2         amended by this Act, is amended to read as follows:
 3                       ``(C) QUALIFIED          PURPOSE.--For   purposes
 4                of this paragraph, the term `qualified purpose'
 5                means--
 6                             ``(i) in the case of a qualified forestry
 7                       conservation bond, a purpose specified in
 8                       section 54B(e),
 9                             ``(ii) in the case of a new clean renew-
10                       able energy bond, a purpose specified in
11                       section 54C(a)(1), and
12                             ``(iii) in the case of a qualified energy
13                       conservation bond, a purpose specified in
14                       section 54D(a)(1).''.
15                (3) The table of sections for subpart I of part
16         IV of subchapter A of chapter 1, as amended by this
17         Act, is amended by adding at the end the following
18         new item:
     ``Sec. 54D. Qualified energy conservation bonds.''.

19         (c) EFFECTIVE DATE.--The amendments made by
20 this section shall apply to obligations issued after the date
21 of the enactment of this Act.
22   SEC. 302. CREDIT FOR NONBUSINESS ENERGY PROPERTY.

23         (a) EXTENSION             OF    CREDIT.--Section 25C(g) is
24 amended by striking ``placed in service after December 31,
25 2007'' and inserting ``placed in service--

                                 215
 1              ``(1) after December 31, 2007, and before Jan-
 2       uary 1, 2009, or
 3              ``(2) after December 31, 2009.''.
 4       (b) QUALIFIED BIOMASS FUEL PROPERTY.--
 5              (1) IN   GENERAL.--Section    25C(d)(3) is amend-
 6       ed--
 7                    (A) by striking ``and'' at the end of sub-
 8              paragraph (D),
 9                    (B) by striking the period at the end of
10              subparagraph (E) and inserting ``, and'', and
11                    (C) by adding at the end the following new
12              subparagraph:
13                    ``(F) a stove which uses the burning of bio-
14              mass fuel to heat a dwelling unit located in the
15              United States and used as a residence by the
16              taxpayer, or to heat water for use in such a
17              dwelling unit, and which has a thermal effi-
18              ciency rating of at least 75 percent.''.
19              (2) BIOMASS    FUEL.--Section   25C(d) is amend-
20       ed by adding at the end the following new para-
21       graph:
22              ``(6) BIOMASS    FUEL.--The   term `biomass fuel'
23       means any plant-derived fuel available on a renew-
24       able or recurring basis, including agricultural crops
25       and trees, wood and wood waste and residues (in-

                                216
 1       cluding wood pellets), plants (including aquatic
 2       plants), grasses, residues, and fibers.''.
 3       (c) MODIFICATION       OF    WATER HEATER REQUIRE-
 4   MENTS.--Section     25C(d)(3)(E) is amended by inserting
 5 ``or a thermal efficiency of at least 90 percent'' after
 6 ``0.80''.
 7       (d) COORDINATION WITH CREDIT           FOR   QUALIFIED
 8 GEOTHERMAL HEAT          PUMP   PROPERTY EXPENDITURES.--
 9             (1) IN    GENERAL.--Paragraph      (3) of section
10       25C(d), as amended by subsections (b) and (c), is
11       amended by striking subparagraph (C) and by redes-
12       ignating subparagraphs (D), (E), and (F) as sub-
13       paragraphs (C), (D), and (E), respectively.
14             (2) CONFORMING        AMENDMENT.--Subparagraph

15       (C) of section 25C(d)(2) is amended to read as fol-
16       lows:
17                    ``(C) REQUIREMENTS      AND     STANDARDS

18             FOR AIR CONDITIONERS AND HEAT PUMPS.--

19             The standards and requirements prescribed by
20             the Secretary under subparagraph (B) with re-
21             spect to the energy efficiency ratio (EER) for
22             central air conditioners and electric heat
23             pumps--
24                        ``(i) shall require measurements to be
25                    based on published data which is tested by

                                 217
 1                    manufacturers at 95 degrees Fahrenheit,
 2                    and
 3                          ``(ii) may be based on the certified
 4                    data of the Air Conditioning and Refrig-
 5                    eration Institute that are prepared in part-
 6                    nership with the Consortium for Energy
 7                    Efficiency.''.
 8       (e) MODIFICATION         OF   QUALIFIED ENERGY EFFI-
 9   CIENCY IMPROVEMENTS.--

10             (1) IN       GENERAL.--Paragraph   (1) of section
11       25C(c) is amended by inserting ``, or an asphalt roof
12       with appropriate cooling granules,'' before ``which
13       meet the Energy Star program requirements''.
14             (2) BUILDING       ENVELOPE COMPONENT.--Sub-

15       paragraph (D) of section 25C(c)(2) is amended--
16                    (A) by inserting ``or asphalt roof'' after
17             ``metal roof'', and
18                    (B) by inserting ``or cooling granules''
19             after ``pigmented coatings''.
20       (f) EFFECTIVE DATES.--
21             (1) IN   GENERAL.--Except     as provided in para-
22       graph (2), the amendments made this section shall
23       apply to expenditures made after December 31,
24       2008.

                                    218
 1              (2) MODIFICATION          OF QUALIFIED ENERGY EF-

 2       FICIENCY IMPROVEMENTS.--The             amendments made
 3       by subsection (e) shall apply to property placed in
 4       service after the date of the enactment of this Act.
 5   SEC. 303. ENERGY EFFICIENT COMMERCIAL BUILDINGS DE-

 6                    DUCTION.

 7       Subsection (h) of section 179D is amended by strik-
 8 ing ``December 31, 2008'' and inserting ``December 31,
 9 2013''.
10   SEC. 304. NEW ENERGY EFFICIENT HOME CREDIT.

11       Subsection (g) of section 45L (relating to termi-
12 nation) is amended by striking ``December 31, 2008'' and
13 inserting ``December 31, 2009''.
14   SEC. 305. MODIFICATIONS OF ENERGY EFFICIENT APPLI-

15                    ANCE CREDIT FOR APPLIANCES PRODUCED