109th CONGRESS
2d Session
S. 2748
To amend the Internal Revenue Code of 1986 to provide tax incentives
to promote energy production and conservation, and for other purposes.
IN THE SENATE OF THE UNITED STATES
May 4, 2006
Mr. BINGAMAN (for himself, Mr. BAYH, Mr. COLEMAN, Mr. LIEBERMAN, Mr. LUGAR,
Ms. CANTWELL, Ms. COLLINS, Mr. SALAZAR, Mr. KERRY, Mrs. CLINTON, and Mr.
NELSON of Florida) introduced the following bill; which was read twice and
referred to the Committee on Finance
A BILL
To amend the Internal Revenue Code of 1986 to provide tax incentives
to promote energy production and conservation, and for other purposes.
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 CODE; TABLE OF CONTENTS.
(a) Short Title- This Act may be cited as the `Enhanced Energy Security
Tax Incentives Act of 2006'.
(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 for this Act is as follows:
Sec. 1. Short title; amendment of Code; table of contents.
TITLE I--EXTENSION OF INCENTIVES
Sec. 101. Extension of credit for electricity produced from certain renewable
resources.
Sec. 102. Extension and expansion of credit to holders of clean renewable
energy bonds.
Sec. 103. Extension of energy efficient commercial buildings deduction.
Sec. 104. Extension and expansion of new energy efficient home credit.
Sec. 105. Extension of nonbusiness energy property credit.
Sec. 106. Extension of residential energy efficient property credit.
Sec. 107. Extension of credit for business installation of qualified fuel
cells and stationary microturbine power plants.
Sec. 108. Extension of business solar investment tax credit.
Sec. 109. Extension of alternative fuel excise tax provisions, income
tax credits, and tariff duties.
Sec. 110. Extension of full credit for qualified electric vehicles.
TITLE II--INCENTIVES FOR ALTERNATIVE FUEL VEHICLES
Sec. 201. Consumer incentives to purchase advanced technology vehicles.
Sec. 202. Advanced technology motor vehicles manufacturing credit.
Sec. 203. Tax incentives for private fleets.
Sec. 204. Modification of alternative vehicle refueling property credit.
Sec. 205. Inclusion of heavy vehicles in limitation on depreciation of
certain luxury automobiles.
Sec. 206. Idling reduction tax credit.
TITLE III--ADDITIONAL INCENTIVES
Sec. 301. Energy credit for combined heat and power system property.
Sec. 302. Three-year applicable recovery period for depreciation of qualified
energy management devices.
Sec. 303. Three-year applicable recovery period for depreciation of qualified
water submetering devices.
TITLE IV--REVENUE PROVISIONS
Sec. 401. Revaluation of LIFO inventories of large integrated oil companies.
Sec. 402. Elimination of amortization of geological and geophysical expenditures
for major integrated oil companies.
Sec. 403. Modifications of foreign tax credit rules applicable to large
integrated oil companies which are dual capacity taxpayers.
TITLE I--EXTENSION OF INCENTIVES
SEC. 101. EXTENSION OF CREDIT FOR ELECTRICITY PRODUCED FROM CERTAIN RENEWABLE
RESOURCES.
Section 45(d) (relating to qualified facilities) is amended by striking
`2008' each place it appears and inserting `2011'.
SEC. 102. EXTENSION AND EXPANSION OF CREDIT TO HOLDERS OF CLEAN RENEWABLE
ENERGY BONDS.
(a) In General- Section 54(m) (relating to termination) is amended by striking
`2007' and inserting `2010'.
(b) Annual Volume Cap for Bonds Issued During Extension Period- Paragraph
(1) of section 54(f) (relating to limitation on amount of bonds designated)
is amended to read as follows:
`(1) NATIONAL LIMITATION-
`(A) INITIAL NATIONAL LIMITATION- With respect to bonds issued after
December 31, 2005, and before January 1, 2008, there is a national clean
renewable energy bond limitation of $800,000,000.
`(B) ANNUAL NATIONAL LIMITATION- With respect to bonds issued after
December 31, 2007, and before January 1, 2011, there is a national clean
renewable energy bond limitation for each calendar year of $800,000,000.'.
(c) Effective Date- The amendments made by this section shall apply to bonds
issued after the date of the enactment of this Act.
SEC. 103. EXTENSION OF ENERGY EFFICIENT COMMERCIAL BUILDINGS DEDUCTION.
Section 179D(h) (relating to termination) is amended by striking `2007'
and inserting `2010'.
SEC. 104. EXTENSION AND EXPANSION OF NEW ENERGY EFFICIENT HOME CREDIT.
(a) Extension- Section 45L(g) (relating to termination) is amended by striking
`2007' and inserting `2010'.
(b) Inclusion of 30 Percent Homes-
(1) IN GENERAL- Section 45L(c) (relating to energy saving requirements)
is amended--
(A) by striking `or' at the end of paragraph (2),
(B) by redesignating paragraph (3) as paragraph (4), and
(C) by inserting after paragraph (2) the following new paragraph:
`(A) to have a level of annual heating and cooling energy consumption
which is at least 30 percent below the annual level described in paragraph
(1), and
`(B) to have building envelope component improvements account for at
least 1/3 of such 30 percent, or'.
(2) APPLICABLE AMOUNT OF CREDIT- Section 45L(a)(2) is amended by striking
`paragraph (3)' and inserting `paragraph (3) or (4)'.
(3) EFFECTIVE DATE- The amendments made by this subsection shall apply
to qualified new energy efficient homes acquired after the date of the
enactment of this Act.
SEC. 105. EXTENSION OF NONBUSINESS ENERGY PROPERTY CREDIT.
Section 25C(g) (relating to termination) is amended by striking `2007' and
inserting `2010'.
SEC. 106. EXTENSION OF RESIDENTIAL ENERGY EFFICIENT PROPERTY CREDIT.
Section 25D(g) (relating to termination) is amended by striking `2007' and
inserting `2010'.
SEC. 107. EXTENSION OF CREDIT FOR BUSINESS INSTALLATION OF QUALIFIED FUEL
CELLS AND STATIONARY MICROTURBINE POWER PLANTS.
Sections 48(c)(1)(E) and 48(c)(2)(E) (relating to termination) are each
amended by striking `2007' and inserting `2010'.
SEC. 108. EXTENSION OF BUSINESS SOLAR INVESTMENT TAX CREDIT.
Sections 48(a)(2)(A)(i)(II) and 48(a)(3)(A)(ii) (relating to termination)
are each amended by striking `2008' and inserting `2011'.
SEC. 109. EXTENSION OF ALTERNATIVE FUEL EXCISE TAX PROVISIONS, INCOME
TAX CREDITS, AND TARIFF DUTIES.
(a) Biodiesel- Sections 40A(g), 6426(c)(6), and 6427(e)(5)(B) are each amended
by striking `2008' and inserting `2010'.
(1) FUELS- Sections 6426(d)(4) and 6427(e)(5)(C) are each amended by striking
`September 30, 2009' and inserting `December 31, 2010'.
(2) REFUELING PROPERTY- Section 30C(g) is amended by striking `2009' and
inserting `2010'.
(c) Ethanol Tariff Schedule- Headings 9901.00.50 and 9901.00.52 of the Harmonized
Tariff Schedule of the United States (19 U.S.C. 3007) are each amended in
the effective period column by striking `10/1/2007' each place it appears
and inserting `1/1/2011'.
(d) Effective Date- The amendments made by this section shall take effect
on January 1, 2007.
SEC. 110. EXTENSION OF FULL CREDIT FOR QUALIFIED ELECTRIC VEHICLES.
(a) In General- Section 30(e) is amended by striking `2006' and inserting
`2010'.
(b) Repeal of Phaseout- Section 30(b) (relating to limitations) is amended
by striking paragraph (2) and by redesignating paragraph (3) as paragraph
(2).
(c) Credit Allowable Against Alternative Minimum Tax- Paragraph (2) of section
30(b), as redesignated by subsection (b), is amended to read as follows:
`(2) APPLICATION WITH OTHER CREDITS- The credit allowed by subsection
(a) for any taxable year shall not exceed the excess (if any) of--
`(A) the sum of the regular tax for the taxable year plus the tax imposed
by section 55, over
`(B) the sum of the credits allowable under subpart A and section 27.'.
(d) Effective Date- The amendments made by this section shall apply to taxable
years beginning after December 31, 2005.
TITLE II--INCENTIVES FOR ALTERNATIVE FUEL VEHICLES
SEC. 201. CONSUMER INCENTIVES TO PURCHASE ADVANCED TECHNOLOGY VEHICLES.
(a) Elimination on Number of New Qualified Hybrid and Advanced Lean Burn
Technology Vehicles Eligible for Alternative Motor Vehicle Credit-
(1) IN GENERAL- Section 30B is amended by striking subsection (f) and
by redesignating subsections (g) through (j) as subsections (f) through
(i), respectively.
(2) CONFORMING AMENDMENTS-
(A) Paragraphs (4) and (6) of section 30B(h) are each amended by striking
`(determined without regard to subsection (g))' and inserting `determined
without regard to subsection (f))'.
(B) Section 38(b)(25) is amended by striking `section 30B(g)(1)' and
inserting `section 30B(f)(1)'.
(C) Section 55(c)(2) is amended by striking `section 30B(g)(2)' and
inserting `section 30B(f)(2)'.
(D) Section 1016(a)(36) is amended by striking `section 30B(h)(4)' and
inserting `section 30B(g)(4)'.
(E) Section 6501(m) is amended by striking `section 30B(h)(9)' and inserting
`section 30B(g)(9)'.
(b) Extension of Alternative Vehicle Credit for New Qualified Hybrid Motor
Vehicles- Paragraph (3) of section 30B(i) (as redesignated by subsection
(a)) 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 December 31, 2005, in taxable years ending after
such date.
SEC. 202. ADVANCED TECHNOLOGY MOTOR VEHICLES MANUFACTURING CREDIT.
(a) In General- Subpart B of part IV of subchapter A of chapter 1 (relating
to foreign tax credit, etc.) is amended by adding at the end the following
new section:
`SEC. 30D. ADVANCED TECHNOLOGY MOTOR VEHICLES MANUFACTURING CREDIT.
`(a) Credit Allowed- There shall be allowed as a credit against the tax
imposed by this chapter for the taxable year an amount equal to 35 percent
of so much of the qualified investment of an eligible taxpayer for such
taxable year as does not exceed $75,000,000.
`(b) Qualified Investment- For purposes of this section--
`(1) IN GENERAL- The qualified investment for any taxable year is equal
to the incremental costs incurred during such taxable year--
`(A) to re-equip, expand, or establish any manufacturing facility in
the United States of the eligible taxpayer to produce advanced technology
motor vehicles or to produce eligible components,
`(B) for engineering integration performed in the United States of such
vehicles and components as described in subsection (d),
`(C) for research and development performed in the United States related
to advanced technology motor vehicles and eligible components, and
`(D) for employee retraining with respect to the manufacturing of such
vehicles or components (determined without regard to wages or salaries
of such retrained employees).
`(2) ATTRIBUTION RULES- In the event a facility of the eligible taxpayer
produces both advanced technology motor vehicles and conventional motor
vehicles, or eligible and non-eligible components, only the qualified
investment attributable to production of advanced technology motor vehicles
and eligible components shall be taken into account.
`(c) Advanced Technology Motor Vehicles and Eligible Components- For purposes
of this section--
`(1) ADVANCED TECHNOLOGY MOTOR VEHICLE- The term `advanced technology
motor vehicle' means--
`(A) any qualified electric vehicle (as defined in section 30(c)(1)),
`(B) any new qualified fuel cell motor vehicle (as defined in section
30B(b)(3)),
`(C) any new advanced lean burn technology motor vehicle (as defined
in section 30B(c)(3)),
`(D) any new qualified hybrid motor vehicle (as defined in section 30B(d)(2)(A)
and determined without regard to any gross vehicle weight rating),
`(E) any new qualified alternative fuel motor vehicle (as defined in
section 30B(e)(4), including any mixed-fuel vehicle (as defined in section
30B(e)(5)(B)), and
`(F) any other motor vehicle using electric drive transportation technology
(as defined in paragraph (3)).
`(2) ELIGIBLE COMPONENTS- The term `eligible component' means any component
inherent to any advanced technology motor vehicle, including--
`(A) with respect to any gasoline or diesel-electric new qualified hybrid
motor vehicle--
`(i) electric motor or generator,
`(ii) power split device,
`(iii) power control unit,
`(v) integrated starter generator, or
`(B) with respect to any hydraulic new qualified hybrid motor vehicle--
`(i) hydraulic accumulator vessel,
`(iii) hydraulic pump-motor assembly,
`(C) with respect to any new advanced lean burn technology motor vehicle--
`(iii) fuel injection system, or
`(iv) after-treatment system, such as a particle filter or NOx absorber,
and
`(D) with respect to any advanced technology motor vehicle, any other
component submitted for approval by the Secretary.
`(3) ELECTRIC DRIVE TRANSPORTATION TECHNOLOGY- The term `electric drive
transportation technology' means technology used by vehicles that use
an electric motor for all or part of their motive power and that may or
may not use off-board electricity, such as battery electric vehicles,
fuel cell vehicles, engine dominant hybrid electric vehicles, plug-in
hybrid electric vehicles, and plug-in hybrid fuel cell vehicles.
`(d) Engineering Integration Costs- For purposes of subsection (b)(1)(B),
costs for engineering integration are costs incurred prior to the market
introduction of advanced technology vehicles for engineering tasks related
to--
`(1) establishing functional, structural, and performance requirements
for component and subsystems to meet overall vehicle objectives for a
specific application,
`(2) designing interfaces for components and subsystems with mating systems
within a specific vehicle application,
`(3) designing cost effective, efficient, and reliable manufacturing processes
to produce components and subsystems for a specific vehicle application,
and
`(4) validating functionality and performance of components and subsystems
for a specific vehicle application.
`(e) Eligible Taxpayer- For purposes of this section, the term `eligible
taxpayer' means any taxpayer if more than 50 percent of its gross receipts
for the taxable year is derived from the manufacture of motor vehicles or
any component parts of such vehicles.
`(f) Limitation Based on Amount of Tax- The credit allowed under subsection
(a) for the taxable year shall not exceed the excess of--
`(A) the regular tax liability (as defined in section 26(b)) for such
taxable year, plus
`(B) the tax imposed by section 55 for such taxable year and any prior
taxable year beginning after 1986 and not taken into account under section
53 for any prior taxable year, over
`(2) the sum of the credits allowable under subpart A and sections 27,
30, and 30B for the taxable year.
`(g) Reduction in Basis- For purposes of this subtitle, if a credit is allowed
under this section for any expenditure with respect to any property, the
increase in the basis of such property which would (but for this paragraph)
result from such expenditure shall be reduced by the amount of the credit
so allowed.
`(1) COORDINATION WITH OTHER DEDUCTIONS AND CREDITS- Except as provided
in paragraph (2), the amount of any deduction or other credit allowable
under this chapter for any cost taken into account in determining the
amount of the credit under subsection (a) shall be reduced by the amount
of such credit attributable to such cost.
`(2) RESEARCH AND DEVELOPMENT COSTS-
`(A) IN GENERAL- Except as provided in subparagraph (B), any amount
described in subsection (b)(1)(C) taken into account in determining
the amount of the credit under subsection (a) for any taxable year shall
not be taken into account for purposes of determining the credit under
section 41 for such taxable year.
`(B) COSTS TAKEN INTO ACCOUNT IN DETERMINING BASE PERIOD RESEARCH EXPENSES-
Any amounts described in subsection (b)(1)(C) taken into account in
determining the amount of the credit under subsection (a) for any taxable
year which are qualified research expenses (within the meaning of section
41(b)) shall be taken into account in determining base period research
expenses for purposes of applying section 41 to subsequent taxable years.
`(i) Business Carryovers Allowed- If the credit allowable under subsection
(a) for a taxable year exceeds the limitation under subsection (f) for such
taxable year, such excess (to the extent of the credit allowable with respect
to property subject to the allowance for depreciation) shall be allowed
as a credit carryback and carryforward under rules similar to the rules
of section 39.
`(j) Special Rules- For purposes of this section, rules similar to the rules
of section 179A(e)(4) and paragraphs (1) and (2) of section 41(f) shall
apply
`(k) Election Not to Take Credit- No credit shall be allowed under subsection
(a) for any property if the taxpayer elects not to have this section apply
to such property.
`(l) Regulations- The Secretary shall prescribe such regulations as necessary
to carry out the provisions of this section.
`(m) Termination- This section shall not apply to any qualified investment
after December 31, 2010.'.
(b) Conforming Amendments-
(1) 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(g).'.
(2) Section 6501(m) is amended by inserting `30D(k),' after `30C(e)(5),'.
(3) The table of sections for subpart B of part IV of subchapter A of
chapter 1 is amended by inserting after the item relating to section 30C
the following new item:
`Sec. 30D. Advanced technology motor vehicles manufacturing credit.'.
(c) Effective Date- The amendments made by this section shall apply to amounts
incurred in taxable years beginning after December 31, 2005.
SEC. 203. TAX INCENTIVES FOR PRIVATE FLEETS.
(a) In General- Subpart E of part IV of subchapter A of chapter 1 is amended
by inserting after section 48B the following new section:
`SEC. 48C. FUEL-EFFICIENT FLEET CREDIT.
`(a) General Rule- For purposes of section 46, the fuel-efficient fleet
credit for any taxable year is 15 percent of the qualified fuel-efficient
vehicle investment amount of an eligible taxpayer for such taxable year.
`(b) Vehicle Purchase Requirement- In the case of any eligible taxpayer
which places less than 10 qualified fuel-efficient vehicles in service during
the taxable year, the qualified fuel-efficient vehicle investment amount
shall be zero.
`(c) Qualified Fuel-Efficient Vehicle Investment Amount- For purposes of
this section--
`(1) IN GENERAL- The term `qualified fuel-efficient vehicle investment
amount' means the basis of any qualified fuel-efficient vehicle placed
in service by an eligible taxpayer during the taxable year.
`(2) QUALIFIED FUEL-EFFICIENT VEHICLE- The term `qualified fuel-efficient
vehicle' means an automobile which has a fuel economy which is at least
125 percent greater than the average fuel economy standard for an automobile
of the same class and model year.
`(3) OTHER TERMS- The terms `automobile', `average fuel economy standard',
`fuel economy', and `model year' have the meanings given to such terms
under section 32901 of title 49, United States Code.
`(d) Eligible Taxpayer- The term `eligible taxpayer' means, with respect
to any taxable year, a taxpayer who owns a fleet of 100 or more vehicles
which are used in the trade or business of the taxpayer on the first day
of such taxable year.
`(e) Termination- This section shall not apply to any vehicle placed in
service after December 31, 2010.'.
(b) Credit Treated as Part of Investment Credit- Section 46 is amended by
striking `and' at the end of paragraph (3), by striking the period at the
end of paragraph (4) and inserting `, and', and by adding at the end the
following new paragraph:
`(5) the fuel-efficient fleet credit.'.
(c) Conforming Amendments-
(1) Section 49(a)(1)(C) is amended by striking `and' at the end of clause
(iii), by striking the period at the end of clause (iv) and inserting
`, and', and by adding at the end the following new clause:
`(v) the basis of any qualified fuel-efficient vehicle which is taken
into account under section 48C.'.
(2) The table of sections for subpart E of part IV of subchapter A of
chapter 1 is amended by inserting after the item relating to section 48
the following new item:
`Sec. 48C. Fuel-efficient fleet credit.'.
(d) Effective Date- The amendments made by this section shall apply to periods
after December 31, 2005, 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. 204. MODIFICATION OF ALTERNATIVE VEHICLE REFUELING PROPERTY CREDIT.
(a) Increase in Credit Amount- Subsection (a) of section 30C is amended
by striking `30 percent' and inserting `50 percent'.
(b) Credit Allowable Against Alternative Minimum Tax- Paragraph (2) of section
30C is amended to read as follows:
`(2) PERSONAL CREDIT- The credit allowed under subsection (a) (after the
application of paragraph (1)) for any taxable year shall not exceed the
excess (if any) of--
`(A) the sum of the regular tax for the taxable year plus the tax imposed
by section 55, over
`(B) the sum of the credits allowable under subpart A and sections 27,
30, and 30B.'.
(c) Effective Date- The amendments made by this section shall apply to taxable
years beginning after December 31, 2005.
SEC. 205. INCLUSION OF HEAVY VEHICLES IN LIMITATION ON DEPRECIATION OF
CERTAIN LUXURY AUTOMOBILES.
(a) In General- Section 280F(d)(5)(A) (defining passenger automobile) is
amended--
(1) by striking clause (ii) and inserting the following new clause:
`(ii)(I) which is rated at 6,000 pounds unloaded gross vehicle weight
or less, or
`(II) which is rated at more than 6,000 pounds but not more than 14,000
pounds gross vehicle weight.',
(2) by striking `clause (ii)' in the second sentence and inserting `clause
(ii)(I)'.
(b) Effective Date- The amendments made by this section shall apply to property
placed in service after the date of the enactment of this Act.
SEC. 206. IDLING REDUCTION TAX CREDIT.
(a) In General- Subpart D of part IV of subchapter A of chapter 1 (relating
to business-related credits) is amended by adding at the end the following
new section:
`SEC. 45N. IDLING REDUCTION CREDIT.
`(a) General Rule- For purposes of section 38, the idling reduction tax
credit determined under this section for the taxable year is an amount equal
to 25 percent of the amount paid or incurred for each qualifying idling
reduction device placed in service by the taxpayer during the taxable year.
`(b) Limitation- The maximum amount allowed as a credit under subsection
(a) shall not exceed $1,000 per device.
`(c) Definitions- For purposes of subsection (a)--
`(1) QUALIFYING IDLING REDUCTION DEVICE- The term `qualifying idling reduction
device' means any device or system of devices that--
`(A) is installed on a heavy-duty diesel-powered on-highway vehicle,
`(B) is designed to provide to such vehicle those services (such as
heat, air conditioning, or electricity) that would otherwise require
the operation of the main drive engine while the vehicle is temporarily
parked or remains stationary,
`(C) the original use of which commences with the taxpayer,
`(D) is acquired for use by the taxpayer and not for resale, and
`(E) is certified by the Secretary of Energy, in consultation with the
Administrator of the Environmental Protection Agency and the Secretary
of Transportation, to reduce long-duration idling of such vehicle at
a motor vehicle rest stop or other location where such vehicles are
temporarily parked or remain stationary.
`(2) HEAVY-DUTY DIESEL-POWERED ON-HIGHWAY VEHICLE- The term `heavy-duty
diesel-powered on-highway vehicle' means any vehicle, machine, tractor,
trailer, or semi-trailer propelled or drawn by mechanical power and used
upon the highways in the transportation of passengers or property, or
any combination thereof determined by the Federal Highway Administration.
`(3) LONG-DURATION IDLING- The term `long-duration idling' means the operation
of a main drive engine, for a period greater than 15 consecutive minutes,
where the main drive engine is not engaged in gear. Such term does not
apply to routine stoppages associated with traffic movement or congestion.
`(d) No Double Benefit- For purposes of this section--
`(1) REDUCTION IN BASIS- If a credit is determined under this section
with respect to any property by reason of expenditures described in subsection
(a), the basis of such property shall be reduced by the amount of the
credit so determined.
`(2) OTHER DEDUCTIONS AND CREDITS- No deduction or credit shall be allowed
under any other provision of this chapter with respect to the amount of
the credit determined under this section.
`(e) Election Not To Claim Credit- This section shall not apply to a taxpayer
for any taxable year if such taxpayer elects to have this section not apply
for such taxable year.
`(f) Termination- This section shall not apply to any property placed in
service after December 31, 2010.'.
(b) Credit to Be Part of General Business Credit- Subsection (b) of section
38 (relating to general business credit) is amended by striking `and' at
the end of paragraph (29), by striking the period at the end of paragraph
(30) and inserting `, plus' , and by adding at the end the following new
paragraph:
`(31) the idling reduction tax credit determined under section 45N(a).'.
(c) Conforming Amendments-
(1) The table of sections for subpart D of part IV of subchapter A of
chapter 1 is amended by inserting after the item relating to section 45M
the following new item:
`Sec. 45N. Idling reduction credit.'.
(2) Section 1016(a), as amended by this Act, is amended by striking `and'
at the end of paragraph (37), by striking the period at the end of paragraph
(38) and inserting `, and', and by adding at the end the following:
`(39) in the case of a facility with respect to which a credit was allowed
under section 45N, to the extent provided in section 45N(d)(A).'.
(3) Section 6501(m) is amended by inserting `45N(e),' after `45D(c)(4),'.
(d) Effective Date- The amendments made by this section shall apply to taxable
years beginning after December 31, 2006.
(e) Determination of Certification Standards by Secretary of Energy for
Certifying Idling Reduction Devices- Not later than 6 months after the date
of the enactment of this Act and in order to reduce air pollution and fuel
consumption, the Secretary of Energy, in consultation with the Administrator
of the Environmental Protection Agency and the Secretary of Transportation,
shall publish the standards under which the Secretary, in consultation with
the Administrator of the Environmental Protection Agency and the Secretary
of Transportation, will, for purposes of section 45N of the Internal Revenue
Code of 1986 (as added by this section), certify the idling reduction devices
which will reduce long-duration idling of vehicles at motor vehicle rest
stops or other locations where such vehicles are temporarily parked or remain
stationary in order to reduce air pollution and fuel consumption.
TITLE III--ADDITIONAL INCENTIVES
SEC. 301. ENERGY CREDIT FOR COMBINED HEAT AND POWER SYSTEM PROPERTY.
(a) In General- Section 48(a)(3)(A) (defining energy property) is by striking
`or' at the end of clause (iii), by inserting `or' at the end of clause
(iv), and by adding at the end the following new clause:
`(v) combined heat and power system property,'.
(b) Combined Heat and Power System Property- Section 48 is amended by adding
at the end the following new subsection:
`(d) Combined Heat and Power System Property- For purposes of subsection
(a)(3)(A)(v)--
`(1) COMBINED HEAT AND POWER SYSTEM PROPERTY- The term `combined heat
and power system property' means property comprising a system--
`(A) which uses the same energy source for the simultaneous or sequential
generation of electrical power, mechanical shaft power, or both, in
combination with the generation of steam or other forms of useful thermal
energy (including heating and cooling applications),
`(B) which has an electrical capacity of not more than 15 megawatts
or a mechanical energy capacity of not more than 2,000 horsepower or
an equivalent combination of electrical and mechanical energy capacities,
`(i) at least 20 percent of its total useful energy in the form of
thermal energy which is not used to produce electrical or mechanical
power (or combination thereof), and
`(ii) at least 20 percent of its total useful energy in the form of
electrical or mechanical power (or combination thereof),
`(D) the energy efficiency percentage of which exceeds 60 percent, and
`(E) which is placed in service before January 1, 2011.
`(A) ENERGY EFFICIENCY PERCENTAGE- For purposes of this subsection,
the energy efficiency percentage of a system is the fraction--
`(i) the numerator of which is the total useful electrical, thermal,
and mechanical power produced by the system at normal operating rates,
and expected to be consumed in its normal application, and
`(ii) the denominator of which is the higher heating value of the
primary fuel sources for the system.
`(B) DETERMINATIONS MADE ON BTU BASIS- The energy efficiency percentage
and the percentages under paragraph (1)(C) shall be determined on a
Btu basis.
`(C) INPUT AND OUTPUT PROPERTY NOT INCLUDED- The term `combined heat
and power system property' does not include property used to transport
the energy source to the facility or to distribute energy produced by
the facility.
`(D) CERTAIN EXCEPTION NOT TO APPLY- The first sentence of the matter
in subsection (a)(3) which follows subparagraph (D) thereof shall not
apply to combined heat and power system property.
`(3) SYSTEMS USING BAGASSE- If a system is designed to use bagasse for
at least 90 percent of the energy source--
`(A) paragraph (1)(D) shall not apply, but
`(B) the amount of credit determined under subsection (a) with respect
to such system shall not exceed the amount which bears the same ratio
to such amount of credit (determined without regard to this paragraph)
as the energy efficiency percentage of such system bears to 60 percent.
`(4) NONAPPLICATION OF CERTAIN RULES- For purposes of determining if the
term `combined heat and power system property' includes technologies which
generate electricity or mechanical power using back-pressure steam turbines
in place of existing pressure-reducing valves or which make use of waste
heat from industrial processes such as by using organic rankin, stirling,
or kalina heat engine systems, paragraph (1) shall be applied without
regard to subparagraphs (C) and (D) thereof .'.
(c) Effective Date- The amendments made by this section shall apply to periods
after December 31, 2006, 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. 302. THREE-YEAR APPLICABLE RECOVERY PERIOD FOR DEPRECIATION OF QUALIFIED
ENERGY MANAGEMENT DEVICES.
(a) In General- Section 168(e)(3)(A) (defining 3-year property) is amended
by striking `and' at the end of clause (ii), by striking the period at the
end of clause (iii) and inserting `, and', and by adding at the end the
following new clause:
`(iv) 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 placed in service before January
1, 2011, by a taxpayer who is a supplier of electric energy or a provider
of electric energy services.
`(B) ENERGY MANAGEMENT DEVICE- For purposes of subparagraph (A), the
term `energy management device' means any meter or metering device which
is used by the taxpayer--
`(i) to measure and record electricity usage data on a time-differentiated
basis in at least 4 separate time segments per day, and
`(ii) to provide such data on at least a monthly basis to both consumers
and the taxpayer.'.
(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. 303. THREE-YEAR APPLICABLE RECOVERY PERIOD FOR DEPRECIATION OF QUALIFIED
WATER SUBMETERING DEVICES.
(a) In General- Section 168(e)(3)(A) (defining 3-year property), as amended
by this Act, 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) any qualified water submetering device.'.
(b) Definition of Qualified Water Submetering Device- Section 168(i) (relating
to definitions and special rules), as amended by this Act, is amended by
inserting at the end the following new paragraph:
`(19) QUALIFIED WATER SUBMETERING DEVICE-
`(A) IN GENERAL- The term `qualified water submetering device' means
any water submetering device which is placed in service before January
1, 2011, by a taxpayer who is an eligible resupplier with respect to
the unit for which the device is placed in service.
`(B) WATER SUBMETERING DEVICE- For purposes of this paragraph, the term
`water submetering device' means any submetering device which is used
by the taxpayer--
`(i) to measure and record water usage data, and
`(ii) to provide such data on at least a monthly basis to both consumers
and the taxpayer.
`(C) ELIGIBLE RESUPPLIER- For purposes of subparagraph (A), the term
`eligible resupplier' means any taxpayer who purchases and installs
qualified water submetering devices in every unit in any multi-unit
property.'.
(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.
TITLE IV--REVENUE PROVISIONS
SEC. 401. REVALUATION OF LIFO INVENTORIES OF LARGE INTEGRATED OIL COMPANIES.
(a) General Rule- Notwithstanding any other provision of law, if a taxpayer
is an applicable integrated oil company for its last taxable year ending
in calendar year 2005, the taxpayer shall--
(1) increase, effective as of the close of such taxable year, the value
of each historic LIFO layer of inventories of crude oil, natural gas,
or any other petroleum product (within the meaning of section 4611) by
the layer adjustment amount, and
(2) decrease its cost of goods sold for such taxable year by the aggregate
amount of the increases under paragraph (1).
If the aggregate amount of the increases under paragraph (1) exceed the
taxpayer's cost of goods sold for such taxable year, the taxpayer's gross
income for such taxable year shall be increased by the amount of such excess.
(b) Layer Adjustment Amount- For purposes of this section--
(1) IN GENERAL- The term `layer adjustment amount' means, with respect
to any historic LIFO layer, the product of--
(B) the number of barrels of crude oil (or in the case of natural gas
or other petroleum products, the number of barrel-of-oil equivalents)
represented by the layer.
(2) BARREL-OF-OIL EQUIVALENT- The term `barrel-of-oil equivalent' has
the meaning given such term by section 29(d)(5) (as in effect before its
redesignation by the Energy Tax Incentives Act of 2005).
(c) Application of Requirement-
(1) NO CHANGE IN METHOD OF ACCOUNTING- Any adjustment required by this
section shall not be treated as a change in method of accounting.
(2) UNDERPAYMENTS OF ESTIMATED TAX- No addition to the tax shall be made
under section 6655 of the Internal Revenue Code of 1986 (relating to failure
by corporation to pay estimated tax) with respect to any underpayment
of an installment required to be paid with respect to the taxable year
described in subsection (a) to the extent such underpayment was created
or increased by this section.
(d) Applicable Integrated Oil Company- For purposes of this section, the
term `applicable integrated oil company' means an integrated oil company
(as defined in section 291(b)(4) of the Internal Revenue Code of 1986) which
has an average daily worldwide production of crude oil of at least 500,000
barrels for the taxable year and which had gross receipts in excess of $1,000,000,000
for its last taxable year ending during calendar year 2005. For purposes
of this subsection all persons treated as a single employer under subsections
(a) and (b) of section 52 of the Internal Revenue Code of 1986 shall be
treated as 1 person and, in the case of a short taxable year, the rule under
section 448(c)(3)(B) shall apply.
SEC. 402. ELIMINATION OF AMORTIZATION OF GEOLOGICAL AND GEOPHYSICAL EXPENDITURES
FOR MAJOR INTEGRATED OIL COMPANIES.
(a) In General- Section 167(h) is amended by adding at the end the following
new paragraph:
`(5) NONAPPLICATION TO MAJOR INTEGRATED OIL COMPANIES- This subsection
shall not apply with respect to any expenses paid or incurred for any
taxable year by any integrated oil company (as defined in section 291(b)(4))
which has an average daily worldwide production of crude oil of at least
500,000 barrels for such taxable year.'.
(b) Effective Date- The amendment made by this section shall take effect
as if included in the amendment made by section 1329(a) of the Energy Policy
Act of 2005.
SEC. 403. MODIFICATIONS OF FOREIGN TAX CREDIT RULES APPLICABLE TO LARGE
INTEGRATED OIL COMPANIES WHICH ARE DUAL CAPACITY TAXPAYERS.
(a) In General- Section 901 (relating to credit for taxes of foreign countries
and of possessions of the United States) is amended by redesignating subsection
(m) as (n) and by inserting after subsection (l) the following new subsection:
`(m) Special Rules Relating to Large Integrated Oil Companies Which Are
Dual Capacity Taxpayers-
`(1) GENERAL RULE- Notwithstanding any other provision of this chapter,
any amount paid or accrued by a dual capacity taxpayer which is a large
integrated oil company to a foreign country or possession of the United
States for any period shall not be considered a tax--
`(A) if, for such period, the foreign country or possession does not
impose a generally applicable income tax, or
`(B) to the extent such amount exceeds the amount (determined in accordance
with regulations) which--
`(i) is paid by such dual capacity taxpayer pursuant to the generally
applicable income tax imposed by the country or possession, or
`(ii) would be paid if the generally applicable income tax imposed
by the country or possession were applicable to such dual capacity
taxpayer.
Nothing in this paragraph shall be construed to imply the proper treatment
of any such amount not in excess of the amount determined under subparagraph
(B).
`(2) DUAL CAPACITY TAXPAYER- For purposes of this subsection, the term
`dual capacity taxpayer' means, with respect to any foreign country or
possession of the United States, a person who--
`(A) is subject to a levy of such country or possession, and
`(B) receives (or will receive) directly or indirectly a specific economic
benefit (as determined in accordance with regulations) from such country
or possession.
`(3) GENERALLY APPLICABLE INCOME TAX- For purposes of this subsection--
`(A) IN GENERAL- The term `generally applicable income tax' means an
income tax (or a series of income taxes) which is generally imposed
under the laws of a foreign country or possession on income derived
from the conduct of a trade or business within such country or possession.
`(B) EXCEPTIONS- Such term shall not include a tax unless it has substantial
application, by its terms and in practice, to--
`(i) persons who are not dual capacity taxpayers, and
`(ii) persons who are citizens or residents of the foreign country
or possession.
`(4) LARGE INTEGRATED OIL COMPANY- For purposes of this subsection, the
term `large integrated oil company' means, with respect to any taxable
year, an integrated oil company (as defined in section 291(b)(4)) which--
`(A) had gross receipts in excess of $1,000,000,000 for such taxable
year, and
`(B) has an average daily worldwide production of crude oil of at least
500,000 barrels for such taxable year.'
(1) IN GENERAL- The amendments made by this section shall apply to taxes
paid or accrued in taxable years beginning after the date of the enactment
of this Act.
(2) CONTRARY TREATY OBLIGATIONS UPHELD- The amendments made by this section
shall not apply to the extent contrary to any treaty obligation of the
United States.
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