Breaking Our Long-Term Dependence Energy Act of 2006 or the BOLD Energy Act of 2006 - Directs the Secretary of Transportation to establish: (1) a rebate program for reducing fuel consumption levels; and (2) a National Tire Efficiency Program.
Requires motor vehicle manufacturers to equip 30% of their 2011 models and 100% of all 2017 models with alternative fuel technology.
Amends the Internal Revenue Code to allow new tax credits for: (1) idling reduction devices; (2) the manufacture of advanced technology motor vehicles; (3) wind energy property; and (4) investment in clean energy coal bonds and combined heat and power system property.
Repeals the limitation on the number of hybrid and advanced lean burn technology vehicles eligible for the alternative motor vehicle tax credit.
Extends through 2010: (1) the tax credits for electric vehicles, energy efficient homes, and nonbusiness energy property; and (2) the tax deduction for energy efficient commercial buildings.
Extends through 2012 tax credits for: (1) producing energy from certain renewable resources; (2) investment in clean renewable energy bonds; (3) residential energy efficient property; and (4) investment in solar energy property.
Extends through 2013 income and excise tax credits for alcohol, biodiesel, and renewable diesel used as fuel.
Increases from 30 to 50% the tax credit rate for alternative vehicle refueling property (service stations for dispensing alternative fuels to retail consumers) and extends such credit through 2013.
Allows use of civil penalties for noncompliance with fuel economy standards to finance alternative vehicle refueling properties.
Increases the tax credit rate for enhanced oil recovery from 15 to 20% for enhanced oil recovery project costs.
Directs the Secretary of Energy to establish programs for: (1) new vehicles technology research and development; (2) building refineries for converting coal into liquid transportation fuel; (3) energy trading credits; and (4) advanced clean low-rank coal development.
Directs the Secretary of the Interior to offer the 181 Area (Gulf of Mexico) for oil and gas leasing within one year of enactment of this Act.
Amends the Clean Air Act to: (1) increase the volume of renewable fuels (including biodiesel) to 30 billion gallons by 2025; (2) increase the level of cellulosic biomass and sugar in renewable fuels; (3) establish a program to produce cellulosic ethanol and ethanol produced from sugar; and (4) set forth a renewable fuel program for the diesel motor pool.
Authorizes appropriations for projects to promote the transition to a hydrogen-based economy.
[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5331 Introduced in House (IH)]
109th CONGRESS
2d Session
H. R. 5331
To promote energy production and conservation, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
May 9, 2006
Mr. Pomeroy (for himself and Ms. Kaptur) introduced the following bill;
which was referred to the Committee on Energy and Commerce, and in
addition to the Committees on Ways and Means, Agriculture, Resources,
and Science, for a period to be subsequently determined by the Speaker,
in each case for consideration of such provisions as fall within the
jurisdiction of the committee concerned
_______________________________________________________________________
A BILL
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; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Breaking Our Long-
Term Dependence Energy Act of 2006'' or the ``BOLD Energy Act of
2006''.
(b) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Findings and purposes.
Sec. 3. Definitions.
TITLE I--VEHICLE FUEL ECONOMY
Sec. 101. National automobile fuel efficiency rebate program.
Sec. 102. Research and development program for lightweight materials.
Sec. 103. Tire efficiency program.
Sec. 104. Idling reduction tax credit.
TITLE II--ALTERNATIVE FUEL VEHICLES
Sec. 201. Promotion of advanced technology motor vehicles.
Sec. 202. Research and development program for new vehicle
technologies.
Sec. 203. Consumer incentives to purchase advanced technology vehicles.
Sec. 204. Extension of full credit for qualified electric vehicles.
TITLE III--ALTERNATIVE FUELS
Sec. 301. Biofuels.
Sec. 302. Continuation of bioenergy program.
Sec. 303. Renewable fuel standard.
Sec. 304. Minimum quantity of renewable fuel derived from cellulosic
biomass.
Sec. 305. Minimum quantity of renewable fuel derived from sugar.
Sec. 306. Ethanol promotion program.
Sec. 307. Renewable fuel program for the diesel motor pool.
Sec. 308. Extension and modification of income and excise tax credits
for renewable fuels.
Sec. 309. Domestic refinery diversification.
Sec. 310. Transition to a hydrogen-based economy.
Sec. 311. Modification and extension of alternative vehicle refueling
property credit.
Sec. 312. Use of native grasses on conservation reserve land for
biomass harvesting.
Sec. 313. Use of CAFE penalties to build alternative fueling
infrastructure.
TITLE IV--DOMESTIC PRODUCTION OF OIL AND NATURAL GAS
Sec. 401. Modifications to enhanced oil recovery credit.
Sec. 402. Offshore oil and gas leasing in 181 Area of Gulf of Mexico.
TITLE V--ELECTRICITY AND RENEWABLES
Sec. 501. DOE national and North American electricity grid studies.
Sec. 502. Tax-exempt financing of electric transmission facilities not
subject to private business use test.
Sec. 503. Extension of credit for producing electricity from certain
renewable resources.
Sec. 504. Federal renewable portfolio standard.
Sec. 505. Extension and expansion of clean renewable energy bonds.
Sec. 506. Credit for wind energy property installed in residences and
businesses.
Sec. 507. Extension of business solar investment credit.
Sec. 508. Extension of credit residential energy efficient property.
Sec. 509. Clean energy coal bonds.
Sec. 510. Increase in credit limitation for qualifying gasification
projects.
Sec. 511. Modification of qualifying advanced coal project credit.
Sec. 512. Great Plains Synfuels Trust.
TITLE VI--ENERGY EFFICIENCY
Sec. 601. Energy credit for combined heat and power system property.
Sec. 602. Extension of new energy efficient home credit.
Sec. 603. Modification and extension of energy efficient commercial
buildings deduction.
Sec. 604. Extension of nonbusiness energy property.
SEC. 2. FINDINGS AND PURPOSES.
(a) Findings.--Congress finds that--
(1) the dependence of the United States on foreign oil is
projected to remain dangerously high over the next few decades
unless serious action is taken;
(2) over \1/3\ of the trade deficit of the United States
over the last year is because of imported petroleum products;
(3) oil prices in the United States have risen more than 95
percent over the last 2 years and are projected to remain at,
or exceed, historically high levels for the foreseeable future;
(4) Brazil has drastically decreased oil imports by
aggressively promoting biofuels and flexible fuel vehicles;
(5) using renewable energy, promoting clean coal
technology, and offering incentives for energy efficiency will
improve air quality and reduce the demand for imported natural
gas;
(6) transmission capacity constraints prevent some regions
of the United States from fully developing domestic energy
resources;
(7) the United States has abundant domestic resources to
create alternative fuels that will dramatically lessen
dependence on foreign oil;
(8) increasing funding for research, development, and
commercialization of new energy technologies will enable the
United States to significantly reduce the reliance of the
United States on foreign energy suppliers;
(9) a bold energy plan to make the United States more
energy-independent should be implemented immediately; and
(10) a bold and comprehensive energy plan will help keep
energy prices affordable for consumers in the United States.
(b) Purposes.--The purposes of this Act are--
(1) to reduce the dependence of the United States on
foreign oil;
(2) to expand the production and use of alternative fuels
and alternative fuel vehicles;
(3) to promote the development of renewable energy sources
for electricity production;
(4) to encourage responsible development of domestic fossil
fuel resources; and
(5) to reward consumers and businesses for conservation and
energy efficiency.
SEC. 3. DEFINITIONS.
In this Act:
(1) Battery.--The term ``battery'' means an energy storage
device used in an on-road or nonroad vehicle powered in whole
or in part using an off-board or on-board source of
electricity.
(2) Carbon capture capability.--The term ``carbon capture
capability'' means a gasification plant design that is
determined by the Secretary to reflect reasonable consideration
for, and be capable of, accommodating the equipment likely to
be necessary to capture carbon dioxide from the gaseous stream,
for later use or sequestration, which would otherwise be
emitted in the flue gas from a project that uses a nonrenewable
fuel.
(3) CTL.--The term ``CTL'' means the Coal-To-Liquid
process, by which any grade of coal is transformed into a
liquid transportation fuel.
(4) CTL refinery.--The term ``CTL refinery'' means a
facility at which coal is transformed into liquid
transportation fuel through CTL.
(5) 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.
(6) Engine dominant hybrid electric vehicle.--The term
``engine dominant hybrid electric vehicle'' means an on-road or
nonroad vehicle that--
(A) is propelled by an internal combustion engine
or heat engine using--
(i) any combustible fuel; and
(ii) an on-board, rechargeable storage
device; and
(B) has no means of using an off-board source of
electricity.
(7) Fuel cell vehicle.--The term ``fuel cell vehicle''
means an on-road or nonroad vehicle that uses a fuel cell (as
defined in section 803 of the Spark M. Matsunaga Hydrogen Act
of 2005 (42 U.S.C. 16152)).
(8) Military mission line.--The term ``Military Mission
Line'' means the north-south line at 86 deg.41 W. longitude.
(9) National transmission grid.--The term ``national
transmission grid'' means new overlaying facilities or upgrades
to existing interstate transmission facilities in the United
States necessary for integrating and operating with the
existing transmission grid.
(10) North american transmission grid.--The term ``North
American transmission grid'' means new overlaying facilities or
upgrades to existing interstate transmission facilities in
North America necessary for integrating and operating with the
existing transmission grid.
(11) Nonroad vehicle.--The term ``nonroad vehicle'' has the
meaning given the term in section 216 of the Clean Air Act (42
U.S.C. 7550).
(12) 181 area.--The term ``181 Area'' means the area
identified in map 15, page 58, of the Proposed Final Outer
Continental Shelf Oil and Gas Leasing Program for 1997-2002 of
the Minerals Management Service.
(13) Plug-in hybrid electric vehicle.--The term ``plug-in
hybrid electric vehicle'' means an on-road or nonroad vehicle
that is propelled by an internal combustion engine or heat
engine that--
(A) uses--
(i) any combustible fuel; and
(ii) an on-board, rechargeable storage
device; and
(B) has a means of using an off-board source of
electricity.
(14) Plug-in hybrid fuel cell vehicle.--The term ``plug-in
hybrid fuel cell vehicle'' means a fuel cell vehicle with a
battery powered by an off-board source of electricity.
(15) Secretary.--The term ``Secretary'' means the Secretary
of Energy.
TITLE I--VEHICLE FUEL ECONOMY
SEC. 101. NATIONAL AUTOMOBILE FUEL EFFICIENCY REBATE PROGRAM.
(a) In General.--Chapter 329 of title 49, United States Code, is
amended--
(1) in section 32901(a)--
(A) by redesignating paragraphs (10) through (16)
as paragraphs (14) through (20), respectively;
(B) by redesignating paragraphs (7) through (9) as
paragraphs (10) through (12), respectively;
(C) by inserting after paragraph (6) the following:
``(7) `baseline fuel consumption level' is calculated by
dividing 1 by the baseline fuel economy;
``(8) `baseline fuel economy', for a particular class of
vehicle in a particular model year, means 110 percent of the
combined average fuel economy for such class of vehicle in the
previous model year;
``(9) `combined average fuel economy' means--
``(A) as applied to automobiles (except passenger
automobiles), the weighted average fuel economy of all
manufacturers calculated under section 32904(a)(1)(A);
and
``(B) as applied to passenger automobiles, the
weighted average fuel economy of all manufacturers
calculated under section 32904(a)(1)(B),
except that such calculation shall be determined on a gallons per mile
basis, and in the case of dual fueled automobiles, the calculation of
average fuel economy shall not be adjusted as set forth under section
32905(b);''; and
(D) by inserting after paragraph (12), as
redesignated, the following:
``(13) `fuel consumption level' is calculated by dividing 1
by the fuel economy''; and
(2) by inserting after section 32903 the following:
``SEC. 32903A. REBATES FOR REDUCING FUEL CONSUMPTION LEVELS.
``(a) Eligibility.--A consumer is eligible for a rebate under this
section if the consumer originally places an automobile into service in
the United States that attains or exceeds the baseline fuel economy.
``(b) Rebate Amount.--An eligible consumer who submits a rebate
request to the Secretary of the Transportation, in accordance with the
regulations promulgated pursuant to subsection (c), shall be awarded a
rebate in an amount equal to--
``(1) $500, if the automobile placed in service by the
consumer has a fuel consumption level that equals the baseline
fuel consumption level or is lower than the baseline fuel
consumption level by less than 0.005 gallons per mile;
``(2) $1,000, if the automobile placed in service by the
consumer has a fuel consumption level that is lower than the
baseline fuel consumption level by at least 0.005 gallons per
mile and less than 0.010 gallons per mile;
``(3) $1,500, if the automobile placed in service by the
consumer has a fuel consumption level that is lower than the
baseline fuel consumption level by at least 0.010 gallons per
mile and less than 0.015 gallons per mile;
``(4) $2,000, if the automobile placed in service by the
consumer has a fuel consumption level that is lower than the
baseline fuel consumption level by at least 0.015 gallons per
mile and less than 0.020 gallons per mile; and
``(5) $2,500, if the automobile placed in service by the
consumer has a fuel consumption level that is lower than the
baseline fuel consumption level by at least 0.020 gallons per
mile.
For purposes of this subsection, the Secretary shall calculate fuel
economy based on a gallons per mile standard.
``(c) Rulemaking.--
``(1) In general.--The Secretary of Transportation shall
promulgate regulations to carry out this section.
``(2) Rebate notices.--In promulgating regulations pursuant
to this subsection, the Secretary of Transportation shall
ensure that--
``(A) information about the rebates available under
this section is provided to the public, expressed in
miles per gallon;
``(B) a notice of the amount of the rebate
available under this section is posted on each
automobile that qualifies for such rebate; and
``(C) a rebate check in an amount determined under
subsection (b) is sent directly to each consumer who
demonstrates eligibility under subsection (a).''.
(b) Coordination With Vehicle Tax Credits.--
(1) Alternative motor vehicle tax credit.--Section 30B(h)
of the Internal Revenue Code of 1986 is amended by adding at
the end the following new paragraph:
``(11) Coordination with rebates.--No credit shall be
allowed under this section to any taxpayer with respect to any
motor vehicle if such taxpayer receives a rebate under section
32903A of title 49, United States Code.''.
(2) Credit for qualified electric vehicles.--Section 30(d)
of the Internal Revenue Code of 1986 is amended by adding at
the end the following new paragraph:
``(5) Coordination with rebates.--No credit shall be
allowed under this section to any taxpayer with respect to any
motor vehicle if such taxpayer receives a rebate under section
32903A of title 49, United States Code.''.
(c) Study.--
(1) In general.--The Secretary of Transportation shall
undertake a study to compare and evaluate the effectiveness of
the rebates under section 32903A of title 49, United States
Code, and the credits under sections 30 and 30B of the Internal
Revenue Code of 1986. The study shall include--
(A) an evaluation of the rebates under such section
32903A and the effectiveness of such rebates in
improving the average fuel economy of automobiles
purchased in the United States; and
(B) an evaluation of the credits under such
sections 30 and 30B and the effectiveness of such
credits in increasing purchases of electric vehicles,
new qualified hybrid vehicles, and advanced lean burn
technology vehicles.
(2) Report.--Not later than December 31, 2009, the
Secretary of Transportation shall transmit to the President and
to Congress a written report presenting the results of the
study conducted pursuant to this subsection. The report shall
include--
(A) recommendations for changes in the rebate
structure under such section 32903A to further improve
the average fuel economy of automobiles purchased in
the United States;
(B) recommendations for changes in the credits
under such sections 30 and 30B to further increase the
purchases of alternative fuel and lean burn technology
vehicles that lessen the United States dependence on
imported foreign oil; and
(C) recommendations for consolidating such rebates
and credits into one unified incentive structure for
the purchase of automobiles that will further reduce
such dependence.
(d) Clerical Amendment.--The table of sections in chapter 329 of
title 49, United States Code, is amended by inserting after the item
relating to section 32903 the following:
``Sec. 32903A. Rebates for reducing fuel consumption levels.''.
SEC. 102. RESEARCH AND DEVELOPMENT PROGRAM FOR LIGHTWEIGHT MATERIALS.
There are authorized to be appropriated to the Secretary for
research and development relating to carbon-fiber composites and
lightweight steel alloys to reduce the weight of automobiles--
(1) $33,750,000 for fiscal year 2007;
(2) $40,000,000 for fiscal year 2008;
(3) $47,250,000 for fiscal year 2009;
(4) $54,000,000 for fiscal year 2010; and
(5) $60,000,000 for fiscal year 2011.
SEC. 103. TIRE EFFICIENCY PROGRAM.
(a) Standards for Tires Manufactured for Interstate Commerce.--
Section 30123 of title 49, United States Code, is amended--
(1) in subsection (b)--
(A) in the first sentence, by striking ``The
Secretary'' and inserting the following:
``(1) Uniform quality grading system.--The Secretary'';
(B) in the second sentence, by striking ``The
Secretary'' and inserting the following:
``(2) Nomenclature and marketing practices.--The
Secretary'';
(C) in the third sentence, by striking ``A tire
standard'' and inserting the following:
``(3) Effect of standards and regulations.--A tire
standard''; and
(2) by adding at the end the following:
``(d) National Tire Efficiency Program.--
``(1) Definition.--In this subsection, the term `tire
efficiency', with respect to a tire, means the extent to which
the tire contributes to the fuel economy of the motor vehicle
on which the tire is mounted.
``(2) Program.--The Secretary shall develop and carry out a
national tire efficiency program for tires designed for use on
passenger cars and light trucks.
``(3) Requirements.--Not later than March 31, 2007, the
Secretary shall issue regulations, which establish--
``(A) policies and procedures for testing and
labeling tires for fuel economy to enable tire buyers
to make informed purchasing decisions about the fuel
economy of tires; and
``(B) policies and procedures to promote the
purchase of energy efficient replacement tires,
including purchase incentives, website listings on the
Internet, printed fuel economy guide booklets, and
mandatory requirements for tire retailers to provide
tire buyers with fuel efficiency information on tires.
``(4) Applicability.--The policies, procedures, and
standards developed under paragraph (3) shall apply to all tire
types and models regulated under the uniform tire quality
grading standards in section 575.104 of title 49, Code of
Federal Regulations, as in effect on the date of enactment of
this Act (or a successor regulation).
``(5) No preemption of state law.--Nothing in this section
shall be construed to preempt any provision of State law
relating to higher fuel economy standards applicable to
replacement tires designed for use on passenger cars and light
trucks.
``(6) Exceptions.--Nothing in this section shall apply to--
``(A) a tire or group of tires with the same stock
keeping unit, plant, and year, for which the volume of
tires produced or imported is less than 15,000
annually;
``(B) a deep tread, winter-type snow tire, space-
saver tire, or temporary use spare tire;
``(C) a tire with a normal rim diameter of 12
inches or less;
``(D) a motorcycle tire; or
``(E) a tire manufactured specifically for use in
an off-road motorized recreational vehicle.''.
(b) Conforming Amendment.--Section 30103(b)(1) of title 49, United
States Code, is amended by striking ``When'' and inserting ``Except as
provided in section 30123(d), if''.
(c) Time for Implementation.--Beginning not later than March 31,
2007, the Secretary of Transportation shall administer the national
tire efficiency program established under section 30123(d) of title 49,
United States Code, in accordance with the policies, procedures, and
standards developed under section 30123(d)(3) of such title.
(d) Authorization of Appropriations.--There are authorized to be
appropriated, for each of the fiscal years 2007 through 2011, such sums
as may be necessary to carry out section 30123(d) of title 49, United
States Code, as added by subsection (a).
SEC. 104. IDLING REDUCTION TAX CREDIT.
(a) In General.--Subpart D of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 (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.''.
(b) Credit to Be Part of General Business Credit.--Subsection (b)
of section 38 of the Internal Revenue Code of 1986 (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 of the Internal Revenue Code of 1986
is amended by inserting after the item relating to section 45M
the following new item:
``Sec. 45N. Idling reduction credit.''.
(2) Section 1016(a) of such Code 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:
``(38) 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) of such Code 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 II--ALTERNATIVE FUEL VEHICLES
SEC. 201. PROMOTION OF ADVANCED TECHNOLOGY MOTOR VEHICLES.
(a) Purposes.--It is the purpose of this section--
(1) to facilitate the production of advanced technology
motor vehicles capable of lessening our dependence on foreign
oil, and
(2) to ensure that domestic and foreign automakers receive
adequate incentives in the form of a manufacturing tax credit
or equivalent employee healthcare cost relief to meet the
vehicle fleet requirements established under subsection (b).
(b) Production Requirements.--Section 32905 of title 49, United
States Code, is amended by adding at the end the following:
``(h) Alternative Fueled Automobiles.--Each manufacturer that
manufactures automobiles for sale or use in the United States shall
ensure that--
``(1) beginning in model year 2011, not less than 30
percent of such automobiles are advanced technology motor
vehicles (as defined in section 30D(c)(1) of the Internal
Revenue Code of 1986); and
``(2) beginning in model year 2017, all such automobiles
are advanced technology motor vehicles (as so defined).''.
(c) Incentives for Production Requirements.--
(1) Advanced technology motor vehicles manufacturing
credit.--
(A) In general.--Subpart B of part IV of subchapter
A of chapter 1 of the Internal Revenue Code of 1986
(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.--
``(1) In general.--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 the qualified investment of an
eligible taxpayer for such taxable year.
``(2) Limitation.--The amount of the credit allowed under
paragraph (1) for any taxable year shall not exceed
$250,000,000.
``(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 of the eligible taxpayer to
produce advanced technology motor vehicles or to
produce eligible components,
``(B) for engineering integration of such vehicles
and components as described in subsection (d),
``(C) for research and development 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 section 201(2)
of the Breaking Our Long-Term Dependence Energy Act of
2006).
``(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,
``(iv) power controls,
``(v) integrated starter generator, or
``(vi) battery,
``(B) with respect to any hydraulic new qualified
hybrid motor vehicle--
``(i) hydraulic accumulator vessel,
``(ii) hydraulic pump, or
``(iii) hydraulic pump-motor assembly,
``(C) with respect to any new advanced lean burn
technology motor vehicle--
``(i) diesel engine,
``(ii) turbocharger,
``(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.
``(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--
``(1) for which 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, and
``(2) which has not submitted an application for financial
assistance under the program established under section
201(b)(2) of the Breaking Our Long-Term Dependence Energy Act
of 2006.
``(f) Limitation Based on Amount of Tax.--The credit allowed under
subsection (a) for the taxable year shall not exceed the excess of--
``(1) the sum 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.
``(h) No Double Benefit.--
``(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 paragraphs (4) and (5) of section 179A(e) 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, 2015.''.
(B) Conforming amendments.--
(i) Section 1016(a) of the Internal Revenue
Code of 1986, 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 new
paragraph:
``(39) to the extent provided in section 30D(g).''.
(ii) Section 6501(m) of such Code, as
amended by this Act, is amended by inserting
``30D(k),'' after ``30C(e)(5),''.
(iii) The table of sections for subpart B
of part IV of subchapter A of chapter 1 of such
Code 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
paragraph shall apply to amounts incurred in taxable
years beginning after December 31, 2006.
(2) Advanced technology motor vehicle manufacturer
healthcare relief program.--
(A) Coordinating task force.--Not later than 6
months after the date of enactment of this Act, the
Secretary of Energy, the Secretary of Health and Human
Services, the Secretary of Transportation, and the
Secretary of the Treasury shall establish, and appoint
an equal number of representatives to, a task force
(referred to in this paragraph as the ``task force'')
to administer the program established under this
paragraph.
(B) Establishment of program.--
(i) In general.--Not later than 1 year
after the date of enactment of this Act, the
task force established under subparagraph (A)
shall establish a program to provide financial
assistance to eligible domestic automobile
manufacturers for the costs incurred in
providing health benefits to their retired
employees.
(ii) Consultation.--In establishing the
program under clause (i), the task force shall
consult with representatives from the domestic
automobile manufacturers, unions representing
employees of such manufacturers, and consumer
and environmental groups.
(C) Eligible domestic automobile manufacturer.--To
be eligible to receive financial assistance under the
program established under subparagraph (B), a domestic
automobile manufacturer shall--
(i) submit an application to the task force
at such time, in such manner, and containing
such information as the task force shall
require;
(ii) certify that such manufacturer is
providing full health care coverage to all of
its domestic employees;
(iii) certify that such manufacturer--
(I) has not elected the credit
allowed under section 30D of the
Internal Revenue Code of 1986, and
(II) but for such nonelection,
would be an eligible taxpayer for
purposes of such credit under section
30D(e)(1) of such Code; and
(iv) provide additional assurances and
information as the task force may require,
including information needed by the task force
to audit the manufacturer's compliance with the
requirements of the program.
(D) Limitation.--The total amount of financial
assistance that may be provided each year under the
program under subparagraph (B) with respect to any
single domestic automobile manufacturer shall not
exceed an amount equal to the lesser of--
(i) the lesser of --
(I) 35 percent of the qualified
investment of such manufacturer for
such year (as determined under section
30D(b) of such Code without regard to
the limitation under section 30D(f) of
such Code), or
(II) the aggregate retiree health
care expenditures for such
manufacturer, or
(ii) $250,000,000.
(E) Application of certain rules.--Rules similar to
the rules under subsections (g) and (h) of section 30D
of such Code shall apply with respect to any qualified
investment used to determine the financial assistance
provided under the program under subparagraph (B).
(F) Authorization of appropriations.--There are
authorized to be appropriated, such sums as may be
necessary in each fiscal year to carry out this
paragraph.
(G) Limitation on backsliding.--To be eligible to
receive financial assistance under subparagraph (B), a
manufacturer shall provide assurances to the task force
that fuel savings achieved with respect its average
adjusted fuel economy will not result in decreases with
respect to fuel economy elsewhere in the domestic
fleet. The task force shall determine compliance with
such assurances using accepted measurements of fuel
savings.
(H) Termination of program.--The program
established under subparagraph (B) shall terminate on
December 31, 2015.
SEC. 202. RESEARCH AND DEVELOPMENT PROGRAM FOR NEW VEHICLE
TECHNOLOGIES.
(a) Purposes.--The purposes of this section are--
(1) to enable and promote, in partnership with industry,
comprehensive development, demonstration, and commercialization
of a wide range of electric drive components, systems, and
vehicles using diverse electric drive transportation
technologies;
(2) to make critical public investments to help private
industry, institutions of higher education, National
Laboratories, and research institutions to expand innovation,
industrial growth, and jobs in the United States;
(3) to expand the availability of the existing electric
infrastructure for fueling light-duty transportation vehicles
and other on-road and nonroad vehicles that are using petroleum
and are mobile sources of emissions, with the goals of--
(A) enhancing the energy security of the United
States;
(B) reducing dependence on imported oil; and
(C) reducing emissions through the expansion of
grid supported mobility;
(4) to accelerate the widespread commercialization of
electric drive vehicle technology into all sizes and
applications of vehicles, including commercialization of plug-
in hybrid electric vehicles and plug-in hybrid fuel cell
vehicles; and
(5) to improve the energy efficiency of and reduce the
petroleum use in transportation.
(b) Program.--The Secretary shall conduct a program of research,
development, demonstration, and commercial application for electric
drive transportation technology, including--
(1) high capacity, high-efficiency batteries;
(2) high-efficiency on-board and off-board charging
components;
(3) high-powered drive train systems for passenger and
commercial vehicles and for nonroad equipment;
(4) control system development and power train development
and integration for plug-in hybrid electric vehicles, plug-in
hybrid fuel cell vehicles, and engine dominant hybrid electric
vehicles, including--
(A) development of efficient cooling systems;
(B) analysis and development of control systems
that minimize the emissions profile when clean diesel
engines are part of a plug-in hybrid drive system; and
(C) development of different control systems that
optimize for different goals, including--
(i) battery life;
(ii) reduction of petroleum consumption;
and
(iii) green house gas reduction;
(5) nanomaterial technology applied to both battery and
fuel cell systems;
(6) large-scale demonstrations, testing, and evaluation of
plug-in hybrid electric vehicles in different applications with
different batteries and control systems, including--
(A) military applications;
(B) mass market passenger and light-duty truck
applications;
(C) private fleet applications; and
(D) medium- and heavy-duty applications;
(7) development, in consultation with the Administrator of
the Environmental Protection Agency, of procedures for testing
and certification of criteria pollutants, fuel economy, and
petroleum use for light-, medium-, and heavy-duty vehicle
applications, including consideration of--
(A) the vehicle and fuel as a system, not just an
engine; and
(B) nightly off-board charging; and
(8) advancement of battery and corded electric
transportation technologies in mobile source applications by--
(A) improvement in battery, drive train, and
control system technologies; and
(B) working with industry and the Administrator of
the Environmental Protection Agency to--
(i) understand and inventory markets; and
(ii) identify and implement methods of
removing barriers for existing and emerging
applications.
(c) Authorization of Appropriations.--There is authorized to be
appropriated to carry out this section $300,000,000 for each of fiscal
years 2007 through 2012.
SEC. 203. CONSUMER INCENTIVES TO PURCHASE ADVANCED TECHNOLOGY VEHICLES.
(a) Elimination of Limitation on Number of New Qualified Hybrid and
Advanced Lean Burn Technology Vehicles Eligible for Alternative Motor
Vehicle Credit.--
(1) In general.--Section 30B of the Internal Revenue Code
of 1986 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) of the
Internal Revenue Code of 1986 are each amended by
striking ``(determined without regard to subsection
(g))'' and inserting ``determined without regard to
subsection (f))''.
(B) Section 38(b)(25) of such Code is amended by
striking ``section 30B(g)(1)'' and inserting ``section
30B(f)(1)''.
(C) Section 55(c)(2) of such Code is amended by
striking ``section 30B(g)(2)'' and inserting ``section
30B(f)(2)''.
(D) Section 1016(a)(36) of such Code is amended by
striking ``section 30B(h)(4)'' and inserting ``section
30B(g)(4)''.
(E) Section 6501(m) of such Code is amended by
striking ``section 30B(h)(9)'' and inserting ``section
30B(g)(9)''.
(b) 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. 204. EXTENSION OF FULL CREDIT FOR QUALIFIED ELECTRIC VEHICLES.
(a) In General.--Section 30(e) of the Internal Revenue Code of 1986
is amended by striking ``2006'' and inserting ``2010''.
(b) Repeal of Phaseout.--Section 30(b) of the Internal Revenue Code
of 1986 (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) of the Internal Revenue Code of 1986, 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 III--ALTERNATIVE FUELS
SEC. 301. BIOFUELS.
(a) Authorization of Appropriations.--Section 931(c) of the Energy
Policy Act of 2005 (42 U.S.C. 16231(c)) is amended--
(1) in paragraph (1), by striking ``$213,000,000'' and
inserting ``$251,000,000'';
(2) in paragraph (2)--
(A) by striking ``$251,000,000'' and inserting
``$270,000,000''; and
(B) by striking ``and'';
(3) in paragraph (3)--
(A) by striking ``$274,000,000'' and inserting
``$294,000,000''; and
(B) by striking the period at the end and inserting
a semicolon; and
(4) by adding at the end the following:
``(4) $318,000,000 for fiscal year 2010; and
``(5) $343,000,000 for fiscal year 2011.''.
(b) Definition of Biomass.--Section 932(a)(1)(A) of the Energy
Policy Act of 2005 (42 U.S.C. 16232(a)(1)(A)) is amended by adding
after ``organic material'' the following: ``(including sugarcane, sugar
beets, sugar components, and cellulose)''.
SEC. 302. CONTINUATION OF BIOENERGY PROGRAM.
Section 9010(c) of the Farm Security and Rural Investment Act of
2002 (7 U.S.C. 8108(c)) is amended--
(1) by striking ``section--'' and all that follows through
``not more than'' and inserting ``section not more than''; and
(2) by striking ``2006;'' and all that follows and
inserting ``2007.''.
SEC. 303. RENEWABLE FUEL STANDARD.
Section 211(o)(2)(B) of the Clean Air Act (42 U.S.C. 7545(o)(2)(B))
is amended--
(1) by striking clause (i) and inserting the following:
``(i) Calendar years 2006 through 2025.--
For the purpose of subparagraph (A), the
applicable volume for any of calendar years
2006 through 2025 shall be determined in
accordance with the following table:
Applicable volume of renewable fuel
``Calendar year: (in billions of gallons):
2006.......................................... 4.0
2007.......................................... 4.7
2008.......................................... 5.5
2009.......................................... 6.2
2010.......................................... 6.9
2011.......................................... 7.5
2012.......................................... 7.6
2013.......................................... 9.2
2014.......................................... 11
2015.......................................... 12.7
2016.......................................... 14.4
2017.......................................... 16.2
2018.......................................... 17.9
2019.......................................... 19.6
2020.......................................... 21.4
2021.......................................... 23.1
2022.......................................... 24.8
2023.......................................... 26.5
2024.......................................... 28.3
2025.......................................... 30.''
; and
(2) in clause (ii)--
(A) in the clause heading, by striking ``2013'' and
inserting ``2026'';
(B) by striking ``2013'' and inserting ``2026'';
and
(C) by striking ``2012'' and inserting ``2025''.
SEC. 304. MINIMUM QUANTITY OF RENEWABLE FUEL DERIVED FROM CELLULOSIC
BIOMASS.
Section 211(o)(2)(B) of the Clean Air Act (42 U.S.C. 7545(o)(2)(B))
is amended by striking clause (iii) and inserting the following:
``(iii) Minimum quantity derived from
cellulosic biomass.--
``(I) In general.--The applicable
volume referred to in clauses (i) and
(ii) shall contain a minimum of--
``(aa) for calendar year
2010, 100,000,000 gallons that
are derived from cellulosic
biomass;
``(bb) for calendar year
2011, 150,000,000 gallons that
are derived from cellulosic
biomass;
``(cc) for calendar year
2012, 200,000,000 gallons that
are derived from cellulosic
biomass; and
``(dd) for calendar year
2013 and each calendar year
thereafter, 250,000,000 gallons
that are derived from
cellulosic biomass.
``(II) Ratio.--For calendar year
2014 and each calendar year thereafter,
the 2.5-to-1 ratio referred to in
paragraph (4) shall not apply.''.
SEC. 305. MINIMUM QUANTITY OF RENEWABLE FUEL DERIVED FROM SUGAR.
Section 211(o)(2)(B) of the Clean Air Act (42 U.S.C. 7545(o)(2)(B))
is amended by adding at the end the following:
``(v) Minimum quantity derived from
sugar.--
``(I) Definition of sugar.--In this
clause:
``(aa) In general.--The
term `sugar' means sugarcane,
sugar beets, or sugar
components that are produced in
the United States or imported
subject to tariff rate quota
allocations.
``(bb) Exclusions.--The
term `sugar' does not include
domestic or imported molasses,
imported thick beet juice, or
other imported products not
subject to tariff-rate quota
allocations that are used as
feedstock.
``(II) Minimum number of gallons.--
The applicable volume referred to in
clauses (i) and (ii) shall contain a
minimum of--
``(aa) for calendar year
2008, 100,000,000 gallons
derived from sugar;
``(bb) for calendar year
2009, 108,000,000 gallons
derived from sugar;
``(cc) for calendar year
2010, 117,000,000 gallons
derived from sugar;
``(dd) for calendar year
2011, 126,000,000 gallons
derived from sugar;
``(ee) for calendar year
2012, 135,000,000 gallons
derived from sugar;
``(ff) for calendar year
2013, 144,000,000 gallons
derived from sugar;
``(gg) for calendar year
2014, 153,000,000 gallons
derived from sugar;
``(hh) for calendar year
2015, 161,000,000 gallons
derived from sugar;
``(ii) for calendar year
2016, 170,000,000 gallons
derived from sugar;
``(jj) for calendar year
2017, 179,000,000 gallons
derived from sugar;
``(kk) for calendar year
2018, 188,000,000 gallons
derived from sugar;
``(ll) for calendar year
2019, 197,000,000 gallons
derived from sugar;
``(mm) for calendar year
2020, 206,000,000 gallons
derived from sugar;
``(nn) for calendar year
2021, 214,000,000 gallons
derived from sugar;
``(oo) for calendar year
2022, 223,000,000 gallons
derived from sugar;
``(pp) for calendar year
2023, 232,000,000 gallons
derived from sugar;
``(qq) for calendar year
2024, 241,000,000 gallons
derived from sugar; and
``(rr) for calendar year
2025 and each calendar year
thereafter, 250,000,000 gallons
derived from sugar.''.
SEC. 306. ETHANOL PROMOTION PROGRAM.
Section 211(o) of the Clean Air Act (42 U.S.C. 7545(o)) is amended
by adding at the end the following:
``(11) Ethanol promotion program.--
``(A) In general.--The Secretary of Agriculture
shall carry out a program to support the development,
commercialization, and production of cellulosic ethanol
and ethanol produced from sugar under this subsection.
``(B) Administration.--The program--
``(i) may include loan guarantees, loans,
grants, and other forms of assistance; and
``(ii) shall be designed to ensure the
production of ethanol in quantities sufficient
to meet the requirements of this subsection.
``(C) Prevention of sugar loan forfeitures.--
``(i) In general.--The Secretary shall
carry out the program under this paragraph in a
manner that is consistent with, and supports
the continued no-cost implementation of, the
sugar program established under section 156 of
the Federal Agriculture Improvement and Reform
Act of 1996 (7 U.S.C. 7272) in accordance with
section 902 of the Food Security Act of 1985
(Public Law 99-198; 7 U.S.C. 1446g note).
``(ii) Administration.--To carry out clause
(i), in determining the overall allotment
quantity for any crop of domestic sugar, the
Secretary shall--
``(I) consider projected sugar used
as sucrose ethanol feedstock as an
addition to domestic food use; and
``(II) count the sales of sugar to
a sucrose ethanol producer against the
annual marketing allocation of domestic
sugar processors.
``(D) Authorization of appropriations.--There are
authorized to be appropriated such sums as are
necessary to carry out this paragraph.''.
SEC. 307. RENEWABLE FUEL PROGRAM FOR THE DIESEL MOTOR POOL.
(a) In General.--Section 211 of the Clean Air Act (42 U.S.C. 7545)
is amended by inserting after subsection (o) the following:
``(p) Renewable Fuel Program for the Diesel Motor Pool.--
``(1) Definition of renewable fuel.--
``(A) In general.--In this subsection, the term
`renewable fuel' has the meaning given the term in
subsection (o)(1)(C).
``(B) Inclusions.--The term `renewable fuel'
includes a diesel fuel substitute produced from--
``(i) animal fat;
``(ii) vegetable oil;
``(iii) recycled yellow grease;
``(iv) thermal depolymerization;
``(v) thermochemical conversion;
``(vi) the coal-to-liquid process
(including the Fischer-Tropsch process); or
``(vii) a diesel-ethanol blend.
``(2) Renewable fuel program.--
``(A) Regulations.--
``(i) In general.--Not later than 1 year
after the date of enactment of this subsection,
the Administrator shall promulgate regulations
to ensure that diesel sold or introduced into
commerce in the United States (except in
noncontiguous States or territories), on an
annual average basis, contains the applicable
volume of renewable fuel determined in
accordance with subparagraph (B).
``(ii) Provisions of regulations.--
Regardless of the date of promulgation, the
regulations promulgated under clause (i)--
``(I) shall contain compliance
provisions applicable to refineries,
blenders, distributors, and importers,
as appropriate, to ensure that the
requirements of this paragraph are met;
but
``(II) shall not--
``(aa) restrict geographic
areas in which renewable fuel
may be used; or
``(bb) impose any per-
gallon obligation for the use
of renewable fuel.
``(iii) Requirement in case of failure to
promulgate regulations.--If the Administrator
fails to promulgate regulations under clause
(i), the percentage of renewable fuel in the
diesel motor pool sold or dispensed to
consumers in the United States, on a volume
basis, shall be .006 percent for calendar year
2008.
``(B) Applicable volume.--
``(i) Calendar years 2008 through 2015.--
For the purpose of subparagraph (A), the
applicable volume for any of calendar years
2008 through 2015 shall be determined in
accordance with the following table:
``Applicable volume of renewable
fuel in diesel motor pool
(in millions of gallons): Calendar year:
250........................................... 2008
500........................................... 2009
750........................................... 2010
1,000......................................... 2011
1,250......................................... 2012
1,500......................................... 2013
1,750......................................... 2014
2,000......................................... 2015.
``(ii) Calendar year 2016 and thereafter.--
The applicable volume for calendar year 2016
and each calendar year thereafter shall be
determined by the Administrator, in
coordination with the Secretary of Agriculture
and the Secretary of Energy, based on a review
of the implementation of the program during
calendar years 2008 through 2015, including a
review of--
``(I) the impact of the use of
renewable fuels on the environment, air
quality, energy security, job creation,
and rural economic development; and
``(II) the expected annual rate of
future production of renewable fuels to
be used as a blend component or
replacement to the diesel motor pool.
``(iii) Minimum applicable volume.--For the
purpose of subparagraph (A), the applicable
volume for calendar year 2016 and each calendar
year thereafter shall be equal to the product
obtained by multiplying--
``(I) the number of gallons of
diesel that the Administrator estimates
will be sold or introduced into
commerce during the calendar year; and
``(II) the ratio that--
``(aa) 2,000,000,000
gallons of renewable fuel;
bears to
``(bb) the number of
gallons of diesel sold or
introduced into commerce during
calendar year 2015.
``(3) Applicable percentages.--
``(A) Provision of estimate of volumes of diesel
sales.--Not later than October 31 of each of calendar
years 2007 through 2015, the Administrator of the
Energy Information Administration shall provide to the
Administrator an estimate, with respect to the
following calendar year, of the volumes of diesel
projected to be sold or introduced into commerce in the
United States.
``(B) Determination of applicable percentages.--
``(i) In general.--Not later than November
30 of each of calendar years 2008 through 2015,
based on the estimate provided under
subparagraph (A), the Administrator shall
determine and publish in the Federal Register,
with respect to the following calendar year,
the renewable fuel obligation that ensures that
the requirements of paragraph (2) are met.
``(ii) Required elements.--The renewable
fuel obligation determined for a calendar year
under clause (i) shall--
``(I) be applicable to refineries,
blenders, and importers, as
appropriate;
``(II) be expressed in terms of a
volume percentage of diesel sold or
introduced into commerce in the United
States; and
``(III) subject to subparagraph
(C), consist of a single applicable
percentage that applies to all
categories of persons described in
subclause (I).
``(C) Adjustments.--In determining the applicable
percentage for a calendar year, the Administrator shall
make adjustments to prevent the imposition of redundant
obligations on any person described in subparagraph
(B)(ii)(I).
``(4) Credit program.--
``(A) In general.--The regulations promulgated
pursuant to paragraph (2)(A) shall provide for the
generation of an appropriate amount of credits by any
person that refines, blends, or imports diesel that
contains a quantity of renewable fuel that is greater
than the quantity required under paragraph (2).
``(B) Use of credits.--A person that generates a
credit under subparagraph (A) may use the credit, or
transfer all or a portion of the credit to another
person, for the purpose of complying with regulations
promulgated pursuant to paragraph (2).
``(C) Duration of credits.--A credit generated
under this paragraph shall be valid during the 1-year
period beginning on the date on which the credit is
generated.
``(D) Inability to generate or purchase sufficient
credits.--The regulations promulgated pursuant to
paragraph (2)(A) shall include provisions allowing any
person that is unable to generate or purchase
sufficient credits under subparagraph (A) to meet the
requirements of paragraph (2) by carrying forward a
credit generated during a previous year on the
condition that the person, during the calendar year
following the year in which the renewable fuel deficit
is created--
``(i) achieves compliance with the
renewable fuel requirement under paragraph (2);
and
``(ii) generates or purchases additional
credits under subparagraph (A) to offset the
deficit of the previous year.
``(5) Waivers.--
``(A) In general.--The Administrator, in
consultation with the Secretary of Agriculture and the
Secretary of Energy, may waive the requirements of
paragraph (2) in whole or in part on receipt of a
petition of 1 or more States by reducing the national
quantity of renewable fuel for the diesel motor pool
required under paragraph (2) based on a determination
by the Administrator, after public notice and
opportunity for comment, that--
``(i) implementation of the requirement
would severely harm the economy or environment
of a State, a region, or the United States; or
``(ii) there is an inadequate domestic
supply of renewable fuel.
``(B) Petitions for waivers.--Not later than 90
days after the date on which the Administrator receives
a petition under subparagraph (A), the Administrator,
in consultation with the Secretary of Agriculture and
the Secretary of Energy, shall approve or disapprove
the petition.
``(C) Termination of waivers.--
``(i) In general.--Except as provided in
clause (ii), a waiver under subparagraph (A)
shall terminate on the date that is 1 year
after the date on which the waiver is provided.
``(ii) Exception.--The Administrator, in
consultation with the Secretary of Agriculture
and the Secretary of Energy, may extend a
waiver under subparagraph (A), as the
Administrator determines to be appropriate.''.
(b) Penalties and Enforcement.--Section 211(d) of the Clean Air Act
(42 U.S.C. 7545(d)) is amended--
(1) in paragraph (1), by striking ``or (o)'' each place it
appears and inserting ``(o), or (p)''; and
(2) in paragraph (2), by striking ``and (o)'' each place it
appears and inserting ``(o), and (p)''.
(c) Technical Amendments.--Section 211 of the Clean Air Act (42
U.S.C. 7545) is amended--
(1) in subsection (c)(4)(C), by redesignating the second
clause (v) as clause (vi);
(2) in subsection (i)(4), by striking ``section 324'' each
place it appears and inserting ``section 325'';
(3) in subsection (k)(10), by indenting subparagraphs (E)
and (F) appropriately;
(4) in subsection (n), by striking ``section 219(2)'' and
inserting ``section 216(2)'';
(5) by redesignating the second subsection (r) and
subsection (s) as subsections (s) and (t), respectively; and
(6) in subsection (t)(1) (as redesignated by paragraph
(5)), by striking ``this subtitle'' and inserting ``this
part''.
SEC. 308. EXTENSION AND MODIFICATION OF INCOME AND EXCISE TAX CREDITS
FOR RENEWABLE FUELS.
(a) Income Tax Credits.--
(1) Alcohol used as fuel.--
(A) In general.--Paragraph (1) of section 40(e) of
the Internal Revenue Code of 1986 is amended--
(i) by striking ``2010'' in subparagraph
(A) and inserting ``2013'', and
(ii) by striking ``2011'' in subparagraph
(B) and inserting ``2014''.
(B) Reduced credit for ethanol blenders.--
Subsection (h) of section 40 of such Code is amended--
(i) by striking ``2010'' in paragraph (1)
and inserting ``2013'', and
(ii) by striking ``2010'' in the table in
paragraph (2) and inserting ``2013''.
(2) Biodiesel and renewable diesel used as fuel.--
Subsection (g) of section 40A of the Internal Revenue Code of
1986 is amended by striking ``2008'' and inserting ``2013''.
(3) Small ethanol producer credit expanded for producers of
sucrose and cellulosic ethanol.--
(A) In general.--Subparagraph (C) of section
40(b)(4) of such Code (relating to small ethanol
producer credit) is amended by inserting ``(30,000,000
gallons for any sucrose or cellulosic ethanol
producer)'' after ``15,000,000 gallons''.
(B) Sucrose or cellulosic ethanol producer.--
Section 40(b)(4) of such Code is amended by adding at
the end the following new subparagraph:
``(E) Sucrose or cellulosic ethanol producer.--
``(i) In general.--For purposes of this
paragraph, the term `sucrose or cellulosic
ethanol producer' means a producer of ethanol
using sucrose feedstock or cellulosic
feedstock.
``(ii) Sucrose feedstock.--For purposes of
clause (i), the term `sucrose feedstock' means
any raw sugar, refined sugar, or sugar
equivalents (including juice and extract). Such
term does not include any molasses, beet thick
juice, or other similar products as determined
by the Secretary.''.
(C) Conforming amendments.--
(i) Section 40(g)(2) of such Code is
amended by striking ``15,000,000 gallon
limitation'' and inserting ``15,000,000 and
30,000,000 gallon limitations''.
(ii) Section 40(g)(5)(B) of such Code is
amended by striking ``15,000,000 gallons'' and
inserting ``the gallon limitation under
subsection (b)(4)(C)''.
(b) Excise Tax Credits.--
(1) Alcohol fuel mixture credit.--Paragraph (5) of section
6426(b) of the Internal Revenue Code of 1986 is amended by
striking ``2010'' and inserting ``2013''.
(2) Biodiesel mixture credit.--Paragraph (6) of section
6426(c) of the Internal Revenue Code of 1986 is amended by
striking ``2010'' and inserting ``2013''.
(3) Alternative fuel credit.--Paragraph (4) of section
6426(d) of the Internal Revenue Code of 1986 is amended by
striking ``2009'' and inserting ``2013''.
(c) Payments for Fuel Used in Trade or Business.--
(1) Alcohol fuel mixtures.--Section 6427(e)(5)(A) of the
Internal Revenue Code of 1986 is amended by striking ``2010''
and inserting ``2013''.
(2) Biodiesel mixtures.--Section 6427(e)(5)(B) of such Code
is amended by striking ``2008'' and inserting ``2013''.
(3) Alternative fuel and alternative fuel mixtures.--
Section 6427(e)(5)(C) of such Code is amended by striking
``2009'' and inserting ``2013''.
(d) Effective Date.--
(1) Subsection (a).--The amendments made by subsection (a)
shall apply to taxable years beginning after the date of the
enactment of this Act.
(2) Subsection (b).--The amendments made by subsection (b)
shall apply to any sale, use, or removal for any period after
the date of enactment of this Act.
(3) Subsection (c).--The amendments made by subsection (c)
shall apply to any sale or use for any period after the date of
enactment of this Act.
SEC. 309. DOMESTIC REFINERY DIVERSIFICATION.
(a) Program.--The Secretary shall award grants for qualifying
projects to support the commercial deployment of CTL refineries.
(b) Project Criteria.--A project shall be considered to be a
qualifying project under this section if the Secretary determines
that--
(1) the purpose of the project is the deployment of a CTL
refinery in the United States;
(2) the grant recipient is financially viable without the
receipt of additional Federal funding;
(3) the project site has been identified;
(4) a preliminary feasibility study has been completed;
(5) a long-term source of coal has been identified and
secured; and
(6) the refinery will be designed to have--
(A) a production capacity of at least 12,000
barrels per day; and
(B) carbon capture capability.
(c) Use.--A grant under this section may be used to offset costs
associated with the deployment of a CTL refinery in the United States,
such as the costs of preliminary engineering and engineering design
specifications.
(d) Maximum Amount.--The amount of a grant made for a qualifying
project under this section shall not exceed $50,000,000.
(e) Report.--Not later than 1 year after the date of enactment of
this Act, and annually thereafter until amounts made available to carry
out this section are expended, the Secretary shall submit to Congress a
report describing--
(1) the status of projects funded under this section; and
(2) the reasons for the denial of any grant for a project
funded under this section.
(f) Authorization of Appropriations.--There is authorized to be
appropriated to the Secretary to carry out this section $500,000,000,
to remain available until expended.
SEC. 310. TRANSITION TO A HYDROGEN-BASED ECONOMY.
(a) In General.--There are authorized to be appropriated to the
Secretary the following amounts to carry out projects to promote the
transition to a hydrogen-based economy:
(1) For 4 demonstration projects under which hydrogen is
produced from 3 or more feedstocks, $200,000,000 for each of
fiscal years 2007 through 2011, of which each demonstration
project shall receive $50,000,000 for each fiscal year.
(2) For hydrogen storage for on-road and off-road
applications--
(A) $38,000,000 for fiscal year 2007;
(B) $45,000,000 for fiscal year 2008;
(C) $53,000,000 for fiscal year 2009;
(D) $60,000,000 for fiscal year 2010; and
(E) $70,000,000 for fiscal year 2010.
(3) For technologies for the production and purification of
hydrogen with pressures of 10,000 pounds per square inch or
more--
(A) $40,000,000 for fiscal year 2007;
(B) $48,000,000 for fiscal year 2008;
(C) $56,000,000 for fiscal year 2009; and
(D) $62,000,000 for fiscal year 2010.
(4) For the incorporation of carbon sequestration
strategies into hydrogen production technologies for carbon
sequestered from plants used to produce hydrogen, using as a
model the program established under section 963 of the Energy
Policy Act of 2005 (42 U.S.C. 16293)--
(A) $50,000,000 for fiscal year 2007;
(B) $75,000,000 for fiscal year 2008;
(C) $100,000,000 for fiscal year 2009; and
(D) $110,000,000 for fiscal year 2010.
(5) For development of a national hydrogen infrastructure
plan, such sums as are necessary.
(6) For the National Center for Hydrogen Technology
designated by the Department of Energy--
(A) $3,500,000 for fiscal year 2007;
(B) $4,000,000 for fiscal year 2008;
(C) $4,500,000 for fiscal year 2009; and
(D) $5,000,000 for fiscal year 2010.
(7) For regional centers for hydrogen technology designated
by the Department of Energy, $17,000,000 for fiscal year 2007.
(8) For the Controlled Hydrogen Fleet and Infrastructure
Demonstration Validation Program of the Department of Energy--
(A) for the controlled hydrogen fleet--
(i) $30,000,000 for fiscal year 2007;
(ii) $35,000,000 for fiscal year 2008;
(iii) $41,000,000 for fiscal year 2009; and
(iv) $47,000,000 for fiscal year 2010; and
(B) for infrastructure demonstration validation--
(i) $18,000,000 for fiscal year 2007;
(ii) $22,000,000 for fiscal year 2008;
(iii) $26,000,000 for fiscal year 2009; and
(iv) $30,000,000 for fiscal year 2010.
(9) For the hydrogen automotive technologies programs of
the Department of Defense--
(A) $25,000,000 for fiscal year 2007;
(B) $30,000,000 for fiscal year 2008;
(C) $35,000,000 for fiscal year 2009; and
(D) $40,000,000 for fiscal year 2010.
(b) Federal and State Procurement of Fuel Cell Vehicles and
Hydrogen Energy Systems.--Section 782(e) of the Energy Policy Act of
2005 (42 U.S.C. 16122(e)) is amended by striking paragraphs (2) and (3)
and inserting the following:
``(2) $35,000,000 for fiscal year 2009;
``(3) $80,000,000 for fiscal year 2010; and''.
(c) Federal Procurement of Stationary, Portable, and Micro Fuel
Cells.--Section 783(d) of the Energy Policy Act of 2005 (42 U.S.C.
16123(d)) is amended by striking paragraphs (2) through (5) and
inserting the following:
``(2) $75,000,000 for fiscal year 2007;
``(3) $100,000,000 for fiscal year 2008;
``(4) $125,000,000 for fiscal year 2009;
``(5) $150,000,000 for fiscal year 2010; and''.
(d) Hydrogen Programs.--Section 805 of the Energy Policy Act of
2005 (42 U.S.C. 16154) is amended--
(1) in subsection (h), by striking paragraphs (3) through
(5) and inserting the following:
``(3) $232,000,000 for fiscal year 2008;
``(4) $252,500,000 for fiscal year 2009;
``(5) $283,000,000 for fiscal year 2010; and''; and
(2) in subsection (i), by striking paragraphs (2) through
(5) and inserting the following:
``(2) $180,000,000 for fiscal year 2007;
``(3) $200,000,000 for fiscal year 2008;
``(4) $220,000,000 for fiscal year 2009;
``(5) $240,000,000 for fiscal year 2010; and''.
SEC. 311. MODIFICATION AND EXTENSION OF ALTERNATIVE VEHICLE REFUELING
PROPERTY CREDIT.
(a) Increase in Credit Amount.--Subsection (a) of section 30C of
the Internal Revenue Code of 1986 is amended by striking ``30 percent''
and inserting ``50 percent''.
(b) Credit Allowable Against Alternative Minimum Tax.--Paragraph
(2) of section 30C of the Internal Revenue Code of 1986 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) Extension of Credit.--Paragraph (2) of section 30C(g) of the
Internal Revenue Code of 1986 is amended by striking ``December 31,
2009'' and inserting ``December 31, 2013''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2005.
SEC. 312. USE OF NATIVE GRASSES ON CONSERVATION RESERVE LAND FOR
BIOMASS HARVESTING.
(a) Purpose.--The purpose of this section is to clarify that an
owner or operator of a farm or ranch that has entered into a
conservation reserve contract may harvest perennial, permanent cover
crops on land that is subject to the contract for the production of
cellulosic ethanol, biogas, biobased hydrogen, other biobased liquid
fuels, or other biobased products.
(b) Use of Native Grasses.--Section 1232(a)(7)(A) of the Food
Security Act of 1985 (16 U.S.C. 3832(a)(7)(A)) is amended--
(1) in clause (ii), by striking ``and'' after the semicolon
at the end; and
(2) by adding at the end the following:
``(iv) shall permit the use of native
grasses to produce cellulosic ethanol, biogas,
biobased hydrogen, other biobased liquid fuel,
or other biobased products (collectively
referred to in this clause as `biobased
products'), except that--
``(I) native grasses may not be
used to produce biobased products on
land that is enrolled in the
conservation reserve if the land is
devoted to shallow water for wildlife,
wildlife habitat, diversion or erosion
prevention, wetland restoration, rare
or declining habitat, or upland bird
habitat buffers;
``(II) native grasses may be used
to produce biobased products under this
subparagraph only during the period
beginning September 31, and ending May
1, of each year; and
``(III) not more than 50 percent of
any plot that is enrolled in the
conservation reserve may be used to
produce biobased products each year;
and''.
SEC. 313. USE OF CAFE PENALTIES TO BUILD ALTERNATIVE FUELING
INFRASTRUCTURE.
Section 32912 of title 49, United States Code, is amended by adding
at the end the following
``(e) Alternative Fueling Infrastructure Trust Fund.--
``(1) Establishment.--There is established in the Treasury
of the United States a trust fund, to be known as the
Alternative Fueling Infrastructure Trust Fund, consisting of--
``(A) such amounts as are deposited into the Trust
Fund under paragraph (2); and
``(B) any interest earned on investment of amounts
in the Trust Fund.
``(2) Deposits.--The Secretary of Transportation shall
remit to the Treasury 90 percent of the amounts collected in
civil penalties each year under this section for deposit to the
Trust Fund.
``(3) Investment of amounts.--
``(A) In general.--The Secretary of the Treasury
shall invest such portion of the Trust Fund as is not,
in the judgment of the Secretary of the Treasury,
required to meet current withdrawals.
``(B) Interest-bearing obligations.--Investments
may be made only in interest-bearing obligations of the
United States.
``(C) Acquisition of obligations.--For the purpose
of investments under subparagraph (A), obligations may
be acquired--
``(i) on original issue at the issue price;
or
``(ii) by purchase of outstanding
obligations at the market price.
``(D) Sale of obligations.--Any obligation acquired
by the Trust Fund may be sold by the Secretary of the
Treasury at the market price.
``(E) Credits to trust fund.--The interest on, and
the proceeds from the sale or redemption of, any
obligations held in the Trust Fund shall be credited to
and form a part of the Trust Fund.
``(4) Transfers of amounts.--
``(A) In general.--The amounts required to be
transferred to the Trust Fund under this subsection
shall be transferred at least quarterly from the
general fund of the Treasury to the Trust Fund on the
basis of estimates made by the Secretary of the
Treasury.
``(B) Adjustments.--Proper adjustment shall be made
in amounts subsequently transferred to the extent prior
estimates were in excess of or less than the amounts
required to be transferred.
``(5) Expenditures from the fund.--
``(A) In general.--The Secretary of Energy shall
obligate such sums as are available in the Trust Fund
to establish a grant program to increase the number of
locations at which consumers may purchase alternative
fuels.
``(B) Amount and persons eligible.--The Secretary
of Energy may award grants under this paragraph in an
amount not to exceed $150,000 to persons who have
expertise in--
``(i) operating a fueling station; or
``(ii) administering grants for the purpose
of establishing an alternative fueling
infrastructure.
``(C) Other considerations.--
``(i) Number of vehicles to be served.--In
awarding grants under this paragraph, the
Secretary shall consider the number of vehicles
in service capable of using a specific type of
alternative fuel.
``(ii) Matching funds.--A recipient of a
grant under this paragraph shall provide a non-
Federal match of not less than $1 for every $3
of grant funds received under this paragraph.
``(iii) Selection of locations.--Each grant
recipient shall select the location for each
alternative fuel station to be constructed with
grant funds received under this paragraph on a
formal, open, and competitive basis.
``(D) Use of funds.--Grants received under this
paragraph may be used to--
``(i) construct new facilities to dispense
alternative fuels;
``(ii) purchase equipment to upgrade,
expand, or otherwise improve existing
alternative fuel facilities; or
``(iii) purchase equipment or pay for
specific turnkey fueling services by
alternative fuel providers.
``(E) Requirement for facilities.--Facilities
constructed or upgraded with a grant awarded under this
paragraph shall--
``(i) provide alternative fuel to the
public for a period of not less than 4 years
from the date on which the facility opens;
``(ii) establish a marketing plan to
advance the sale and use of alternative fuels;
``(iii) prominently display the price of
the alternative fuel being provided on the
station marquee and in the station;
``(iv) provide point of sale materials on
alternative fuel;
``(v) clearly label the dispenser with
consistent materials;
``(vi) price the alternative fuel at a
margin that is not greater than that which is
received for unleaded gasoline; and
``(vii) support and use all available tax
incentives to reduce the cost of the
alternative fuel to the lowest possible retail
price.
``(F) Notification of opening of facility.--Not
later than the date on which an alternative fuel
station described in this paragraph begins to offer
alternative fuel to the public, the person that
received the grant to construct or upgrade the station
shall notify the Secretary of Energy of such opening.
The Secretary of Energy shall add each new alternative
fuel station to the alternative fuel station locator on
the Department of Energy Website when the Secretary
receives notification under this subparagraph.
``(G) Report.--Not later than 6 months after the
receipt of a grant award under this paragraph, and
every 6 months thereafter, each person receiving a
grant under this subsection shall submit a report to
the Secretary of Energy that describes--
``(i) the status of each alternative fuel
station constructed with grant funds received
under this paragraph;
``(ii) the amount of alternative fuel
dispensed at each station during the preceding
6-month period; and
``(iii) the average price per gallon of the
alternative fuel sold at each station during
the preceding 6-month period.''.
TITLE IV--DOMESTIC PRODUCTION OF OIL AND NATURAL GAS
SEC. 401. MODIFICATIONS TO ENHANCED OIL RECOVERY CREDIT.
(a) Enhanced Credit for Carbon Dioxide Injections.--Section 43 of
the Internal Revenue Code of 1986 is amended by adding at the end the
following new subsection:
``(f) Enhanced Credit for Projects Using Qualified Carbon
Dioxide.--
``(1) In general.--In the case of any qualified enhanced
oil recovery project described in paragraph (2), subsection (a)
shall be applied by substituting `20 percent' for `15 percent'.
``(2) Specified qualified enhanced oil recovery project.--
``(A) In general.--A qualified enhanced oil
recovery project is described in this paragraph if--
``(i) the project begins or is
substantially expanded after December 31, 2006,
and
``(ii) the project uses qualified carbon
dioxide in an oil recovery method which
involves flooding or injection.
``(B) Qualified carbon dioxide.--For purposes of
this subsection, the term `qualified carbon dioxide'
means carbon dioxide that is--
``(i) from an industrial source, or
``(ii) separated from natural gas and
natural gas liquids at a natural gas processing
plant.
``(3) Termination.--This subsection shall not apply to
costs paid or incurred for any qualified enhanced oil recovery
project after December 31, 2010.''.
(b) Effective Date.--The amendments made by this section shall
apply to costs paid or incurred in taxable years ending after December
31, 2006.
SEC. 402. OFFSHORE OIL AND GAS LEASING IN 181 AREA OF GULF OF MEXICO.
(a) Definition of Secretary.--In this section, the term
``Secretary'' means the Secretary of the Interior, acting through the
Minerals Management Service.
(b) Lease Sale.--Except as otherwise provided in this section, the
Secretary shall offer the 181 Area for oil and gas leasing pursuant to
the Outer Continental Shelf Lands Act (43 U.S.C. 1331 et seq.) as soon
as practicable, but not later than 1 year, after the date of enactment
of this Act.
(c) Excluded Areas.--In carrying out subsection (b), the Secretary
shall not offer for oil and gas leasing--
(1) any area east of the Military Mission Line, unless the
Secretary of Defense agrees in writing before the area is
offered for lease that the area can be developed in a manner
that will not interfere with military activities; or
(2) any area that is within 100 miles of the coastline of
the State of Florida.
(d) Leasing Program.--The 181 Area shall be offered for lease under
this section notwithstanding the omission of the 181 Area from any
outer Continental Shelf leasing program under section 18 of the Outer
Continental Shelf Lands Act (43 U.S.C. 1344).
TITLE V--ELECTRICITY AND RENEWABLES
SEC. 501. DOE NATIONAL AND NORTH AMERICAN ELECTRICITY GRID STUDIES.
(a) Findings.--Congress finds that--
(1) the interstate transmission system of North America
cannot reliably handle the existing and expected dramatic
increase in future electric transactions;
(2) significant new transmission capacity is urgently
needed to maintain reliability and meet the needs of a growing
demand for electricity;
(3) transmission shortages and constraints are contributing
to wholesale and retail electric market failures that are
harming electric consumers in, and the economy of, the United
States;
(4) existing transmission capacity limits the development
of renewable and other energy sources by constraining delivery
of those resources into the national power market;
(5) excessive congestion unnecessarily raises costs for all
consumers; and
(6) an adequate transmission system is critical to national
security.
(b) Studies.--
(1) In general.--Not later than 1 year after the date of
enactment of this Act, the Secretary, in consultation with the
Rural Utilities Service, the Federal Power Marketing
Administrations, the Federal Energy Regulatory Commission, and
other appropriate regional entities, shall carry out--
(A) a study, to be known as the ``National
Transmission Grid Study'', to determine the feasibility
of constructing a national transmission grid with
nationwide functionality and benefits similar to those
provided by construction of the Interstate Highway
System; and
(B) a study, to be known as the ``North American
Transmission Grid Study'', to determine the feasibility
of constructing an integrated North American
transmission grid with international functionality and
benefits similar to those provided by construction of
the Interstate Highway System.
(2) Study.--In carrying out the studies, the Secretary
shall take into consideration--
(A) economic viability, including the cost-
effectiveness of developing a national transmission
grid or North American transmission grid, as
appropriate;
(B) economic growth in the United States, including
the extent to which that economic growth is constrained
by the lack of adequate or reasonably-priced
electricity;
(C) limited transmission infrastructure, resulting
in the inability or limited ability to transmit
available power supply resources;
(D) diversification of power supply;
(E) requirements and needs relating to the national
defense and homeland security of the United States;
(F) promotion of national energy security;
(G) transmission losses; and
(H) reliability.
(c) Report to Congress.--Not later than 90 days after the date of
completion of the studies required by subsection (c)(1), the Secretary
shall submit to Congress a report describing the viability of
constructing--
(1) a national transmission grid in accordance with
nationwide functionality and benefits similar to those provided
by construction of the Interstate System; and
(2) an integrated North American transmission grid with
international functionality and benefits similar to those
provided by construction of the Interstate System.
(d) Authorization of Appropriations.--There are authorized to be
appropriated such sums as are necessary to carry out this section.
SEC. 502. TAX-EXEMPT FINANCING OF ELECTRIC TRANSMISSION FACILITIES NOT
SUBJECT TO PRIVATE BUSINESS USE TEST.
(a) In General.--Section 141(b)(6) of the Internal Revenue Code of
1986 (defining private business use) is amended by adding at the end
the following new subparagraph:
``(C) Exception for electric transmission
facilities.--For purposes of the 1st sentence of
subparagraph (A), the operation or use of an electric
transmission facility by any person which is not a
governmental unit shall not be considered a private
business use.''.
(b) Effective Date.--The amendment made by this section shall apply
to bonds issued after the date of the enactment of this Act.
SEC. 503. EXTENSION OF CREDIT FOR PRODUCING ELECTRICITY FROM CERTAIN
RENEWABLE RESOURCES.
(a) In General.--Paragraphs (1) through (7) of section 45(d) of the
Internal Revenue Code of 1986 are each amended by striking ``January 1,
2008'' each place it appears and inserting ``January 1, 2013''.
(b) Effective Date.--The amendments made by this section shall take
effect on the date of the enactment of this Act.
SEC. 504. FEDERAL RENEWABLE PORTFOLIO STANDARD.
The Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2601
et seq.) is amended by adding at the end of title VI the following:
``SEC. 610. FEDERAL RENEWABLE PORTFOLIO STANDARD.
``(a) Definitions.--In this section:
``(1) Base amount of electricity.--The term `base amount of
electricity' means the total amount of electricity sold by an
electric utility to electric consumers in a calendar year,
excluding--
``(A) electricity generated by a hydroelectric
facility (including a pumped storage facility but
excluding incremental hydropower); and
``(B) electricity generated through the
incineration of municipal solid waste.
``(2) Distributed generation facility.--The term
`distributed generation facility' means a facility at a
customer site.
``(3) Existing renewable energy.--The term `existing
renewable energy' means, except as provided in paragraph
(7)(B), electric energy generated at a facility (including a
distributed generation facility) placed in service prior to the
date of enactment of this section from--
``(A) solar, wind, or geothermal energy;
``(B) ocean energy;
``(C) biomass (as defined in section 203(b) of the
Energy Policy Act of 2005 (42 U.S.C. 15852(b))); or
``(D) landfill gas.
``(4) Geothermal energy.--The term `geothermal energy'
means energy derived from a geothermal deposit (within the
meaning of section 613(e)(2) of the Internal Revenue Code of
1986).
``(5) Incremental geothermal production.--
``(A) In general.--The term `incremental geothermal
production' means, for any year, the difference
between--
``(i) the total kilowatt hours of
electricity produced from a facility (including
a distributed generation facility) using
geothermal energy, and
``(ii) the average annual kilowatt hours
produced at the facility for 5 of the 7
calendar years preceding the date of enactment
of this section after eliminating the highest
and the lowest kilowatt hour production years
in that 7-year period.
``(B) Special rule.--A facility described in
subparagraph (A) that was placed in service at least 7
years before the date of enactment of this section
shall, beginning with the year in which that date of
enactment occurs, reduce the amount calculated under
subparagraph (A)(ii) each year, on a cumulative basis,
by the average percentage decrease in the annual
kilowatt hour production for the 7-year period
described in subparagraph (A)(ii), the cumulative sum
of which shall not exceed 30 percent.
``(6) Incremental hydropower.--
``(A) In general.--The term `incremental
hydropower' means additional energy generated as a
result of efficiency improvements or capacity additions
made on or after the date of enactment of this section
or the effective date of an existing applicable State
renewable portfolio standard program at a hydroelectric
facility that was placed in service before that date.
``(B) Exclusions.--The term `incremental
hydropower' does not include additional energy
generated as a result of operational changes not
directly associated with efficiency improvements or
capacity additions.
``(C) Measurement of improvements and additions.--
Efficiency improvements and capacity additions referred
to in subparagraph (A) shall be measured on the basis
of the same water flow information used to determine a
historic average annual generation baseline for the
hydroelectric facility and certified by the Secretary
or the Federal Energy Regulatory Commission.
``(7) New renewable energy.--The term `new renewable
energy' means--
``(A) electric energy generated at a facility
(including a distributed generation facility) placed in
service on or after January 1, 2003, from--
``(i) solar, wind, or geothermal energy or
ocean energy;
``(ii) biomass (as defined in section
203(b) of the Energy Policy Act of 2005 (42
U.S.C. 15852(b)));
``(iii) landfill gas; or
``(iv) incremental hydropower; and
``(B) for electric energy generated at a facility
(including a distributed generation facility) placed in
service before the date of enactment of this section--
``(i) the additional energy above the
average generation in the 3 years preceding the
date of enactment of this section at the
facility from--
``(I) solar or wind energy or ocean
energy;
``(II) biomass (as defined in
section 203(b) of the Energy Policy Act
of 2005 (42 U.S.C. 15852(b)));
``(III) landfill gas; or
``(IV) incremental hydropower; and
``(ii) the incremental geothermal
production.
``(8) Ocean energy.--The term `ocean energy' includes
current, wave, tidal, and thermal energy.
``(b) Renewable Energy Requirement.--
``(1) Requirement.--
``(A) In general.--Each electric utility that sells
electricity to electric consumers shall obtain a
percentage of the base amount of electricity the
electric utility sells to electric consumers in any
calendar year from new renewable energy or existing
renewable energy.
``(B) Percentages.--The percentage obtained in a
calendar year shall not be less than the amount
specified in the following table:
Minimum annual
``Calendar year: percentage:
2008 through 2011............................. 2.5
2012 through 2015............................. 5.0
2016 through 2019............................. 7.5
2020 through 2030............................. 10.0.
``(2) Means of compliance.--An electric utility shall meet
the requirements of paragraph (1) by--
``(A) generating electric energy using new
renewable energy or existing renewable energy;
``(B) purchasing electric energy generated by new
renewable energy or existing renewable energy;
``(C) purchasing renewable energy credits issued
under subsection (c); or
``(D) a combination of the foregoing.
``(c) Renewable Energy Credit Trading Program.--
``(1) In general.--Not later than January 1, 2007, the
Secretary shall establish a renewable energy credit trading
program to permit an electric utility that does not generate or
purchase enough electric energy from renewable energy to meet
its obligations under subsection (b)(1) to satisfy the
requirements by purchasing sufficient renewable energy credits.
``(2) Responsibilities of secretary.--As part of the
program, the Secretary shall--
``(A) issue renewable energy credits to generators
of electric energy from new renewable energy;
``(B) sell renewable energy credits to electric
utilities at the rate of 1.5 cents per kilowatt-hour
(as adjusted for inflation under subsection (h));
``(C) ensure that a kilowatt hour, including the
associated renewable energy credit, shall be used only
once for purposes of compliance with this section; and
``(D) allow double credits for generation from
facilities on Indian land, and triple credits for
generation from small renewable distributed generators
(meaning those no larger than 1 megawatt).
``(3) Use of credits.--A credit under paragraph (2)(A) may
only be used for compliance with this section for the 3-year
period beginning on the date of issuance of the credit.
``(d) Enforcement.--
``(1) Civil penalties.--Any electric utility that fails to
meet the renewable energy requirements of subsection (b) shall
be subject to a civil penalty.
``(2) Amount of penalty.--The amount of the civil penalty
shall be determined by multiplying the number of kilowatt-hours
of electric energy sold to electric consumers in violation of
subsection (b) by the greater of 1.5 cents (adjusted for
inflation under subsection (h)) or 200 percent of the average
market value of renewable energy credits during the year in
which the violation occurred.
``(3) Mitigation or waiver.--
``(A) In general.--The Secretary may mitigate or
waive a civil penalty under this subsection if the
electric utility was unable to comply with subsection
(b) for reasons outside of the reasonable control of
the utility.
``(B) Reduction of amount.--The Secretary shall
reduce the amount of any penalty determined under
paragraph (2) by an amount paid by the electric utility
to a State for failure to comply with the requirement
of a State renewable energy program if the State
requirement is greater than the applicable requirement
of subsection (b).
``(4) Procedure for assessing penalty.--The Secretary shall
assess a civil penalty under this subsection in accordance with
the procedures prescribed by section 333(d) of the Energy
Policy and Conservation Act of 1954 (42 U.S.C. 6303).
``(e) State Renewable Energy Account Program.--
``(1) In general.--Not later than December 31, 2008, the
Secretary shall establish a State renewable energy account
program.
``(2) Deposit of amounts.--All funds collected by the
Secretary from the sale of renewable energy credits and the
assessment of civil penalties under this section shall be
deposited into the renewable energy account established
pursuant to this subsection.
``(3) Maintenance of account.--The State renewable energy
account shall be held by the Secretary and shall not be
transferred to the Treasury Department.
``(4) Use of amounts.--Proceeds deposited in the State
renewable energy account shall be used by the Secretary,
subject to appropriations, for a program to provide grants to
the State agency responsible for developing State energy
conservation plans under section 362 of the Energy Policy and
Conservation Act (42 U.S.C. 6322) for the purposes of promoting
renewable energy production, including programs that promote
technologies that reduce the use of electricity at customer
sites such as solar water heating.
``(5) Guidelines and criteria.--The Secretary may issue
guidelines and criteria for grants awarded under this
subsection.
``(6) Maintenance of records and evidence of compliance.--
State energy offices receiving grants under this section shall
maintain such records and evidence of compliance as the
Secretary may require.
``(7) Allocation of funds.--In allocating funds under this
program, the Secretary shall give preference--
``(A) to States in regions that have a
disproportionately small share of economically
sustainable renewable energy generation capacity; and
``(B) to State programs to stimulate or enhance
innovative renewable energy technologies.
``(f) Rules.--Not later than 1 year after the date of enactment of
this section, the Secretary shall issue rules implementing this
section.
``(g) Exemptions.--This section shall not apply in any calendar
year to an electric utility that--
``(1) sold less than 4,000,000 megawatt-hours of electric
energy to electric consumers during the preceding calendar
year; or
``(2) is located in Hawaii.
``(h) Inflation Adjustment.--Not later than December 31 of each
year beginning in 2008, the Secretary shall adjust for inflation the
price of a renewable energy credit under subsection (c)(2)(B) and the
amount of the civil penalty per kilowatt-hour under subsection (d)(2).
``(i) State Programs.--
``(1) In general.--Nothing in this section shall diminish
any authority of a State or political subdivision thereof to
adopt or enforce any law or regulation respecting renewable
energy, but, except as provided in subsection (d)(3), no such
law or regulation shall relieve any person of any requirement
otherwise applicable under this section.
``(2) Federal-state coordination.--The Secretary, in
consultation with States having renewable energy programs,
shall, to the maximum extent practicable, facilitate
coordination between the Federal program and State programs.
``(j) Termination of Authority.--This section and the authority
provided by this section terminate on December 31, 2030.''.
SEC. 505. EXTENSION AND EXPANSION OF CLEAN RENEWABLE ENERGY BONDS.
(a) Extension.--Section 54(m) of the Internal Revenue Code of 1986
(relating to termination) is amended by striking ``2007'' and inserting
``2012''.
(b) Annual Volume Cap for Bonds Issued During Extension Period.--
Paragraph (1) of section 54(f) of the Internal Revenue Code of 1986
(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, 2013, there is a national clean renewable
energy bond limitation for each calendar year of
$1,000,000,000.''.
(c) Effective Date.--The amendments made by this section shall
apply to bonds issued after the date of the enactment of this Act.
SEC. 506. CREDIT FOR WIND ENERGY PROPERTY INSTALLED IN RESIDENCES AND
BUSINESSES.
(a) In General.--Subpart B of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986, as amended by this Act, is
amended by inserting after section 30C the following new section:
``SEC. 30E. WIND ENERGY PROPERTY.
``(a) Allowance of Credit.--There shall be allowed as a credit
against the tax imposed by this chapter for the taxable year an amount
equal to 30 percent of the amount paid or incurred by the taxpayer for
qualified wind energy property placed in service or installed during
such taxable year.
``(b) Limitations.--
``(1) In general.--The credit allowed under subsection (a)
(determined without regard to paragraph (2)) for any taxable
year shall not exceed $10,000.
``(2) Limitation based on amount of tax.--
``(A) In general.--The credit allowed under
subsection (a) for any taxable year shall not exceed
the excess of--
``(i) the sum of the regular tax liability
(as defined in section 26(b)) plus the tax
imposed by section 55, over
``(ii) the sum of the credits allowable
under this part (other than under this section
and subpart C thereof, relating to refundable
credits) and section 1397E.
``(B) Carryover of unused credit.--If the credit
allowable under subsection (a) exceeds the limitation
imposed by subparagraph (A) for such taxable year, such
excess shall be carried to the succeeding taxable year
and added to the credit allowable under subsection (a)
for such taxable year.
``(c) Qualified Wind Energy Property.--For purposes of this
section, the term `qualified wind energy property' means a wind turbine
if--
``(1) such turbine is placed in service or installed on or
in connection with property located in the United States,
``(2) in the case of an individual, the property on or in
connection with which such turbine is installed is a dwelling
unit which is used as a residence by the taxpayer,
``(3) such turbine is used to generate electricity for the
property on or in connection with which it is installed, and
``(4) the original use of such turbine commences with the
taxpayer.
``(d) Special Rules.--For purposes of this section--
``(1) Tenant-stockholder in cooperative housing
corporation.--In the case of an individual who is a tenant-
stockholder (as defined in section 216(b)(2)) in a cooperative
housing corporation (as defined in section 216(b)(1)), such
individual shall be treated as having paid his tenant-
stockholder's proportionate share (as defined in section
216(b)(3)) of any expenditures paid or incurred for qualified
wind energy property by such corporation, and such credit shall
be allocated appropriately to such individual.
``(2) Condominiums.--
``(A) In general.--In the case of an individual who
is a member of a condominium management association
with respect to a condominium which he owns, such
individual shall be treated as having paid his
proportionate share of expenditures paid or incurred
for qualified wind energy property by such association,
and such credit shall be allocated appropriately to
such individual.
``(B) Condominium management association.--For
purposes of this paragraph, the term `condominium
management association' means an organization which
meets the requirements of section 528(c)(2) with
respect to a condominium project of which substantially
all of the units are used by individuals as residences.
``(3) Labor costs; property subsidized by energy
financing.--Rules similar to the rules of paragraphs (1) and
(9) of section 25D(e) shall apply for purposes of this section.
``(e) Basis Adjustment.--For purposes of this subtitle, if a credit
is allowed under this section for any expenditure with respect to a
residence or other property, the basis of such residence or other
property shall be reduced by the amount of the credit so allowed.
``(f) Termination.--The credit allowed under this section shall not
apply to property placed in service or installed after December 31,
2011.''.
(b) Conforming Amendment.--Subsection (a) of section 1016 of the
Internal Revenue Code of 1986 (relating to general rule for adjustments
to basis) 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) in the case of a residence or other property with
respect to which a credit was allowed under section 30E, to the
extent provided in section 30E(e).''.
(c) Clerical Amendment.--The table of sections for subpart B of
part IV of subchapter A of chapter 1 of the Internal Revenue Code of
1986 is amended by inserting after the item relating to section 30D the
following new item:
``Sec. 30E. Wind energy property.''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years ending after December 31, 2006.
SEC. 507. EXTENSION OF BUSINESS SOLAR INVESTMENT CREDIT.
(a) Energy Percentage.--Subclause (II) of section 48(a)(2)(A)(i) of
the Internal Revenue Code of 1986 is amended by striking ``January 1,
2008'' and inserting ``January 1, 2013''.
(b) Hybrid Solar Lighting Systems.--Clause (ii) of section
48(a)(3)(A) of the Internal Revenue Code of 1986 is amended by striking
``January 1, 2008'' and inserting ``January 1, 2013''.
(c) Solar Investment Credit Allowed for Public Utility Property.--
The second sentence of section 48(a)(3) of the Internal Revenue Code of
1986 is amended by inserting ``(other than property described in clause
(i) or (ii) of subparagraph (A))'' before ``shall not''.
(d) Effective Date.--The amendments made by this section shall
apply to periods after the date of the enactment of this Act, in
taxable years ending after such date, under rules similar to the rules
of section 48(m) of the Internal Revenue Code of 1986 (as in effect on
the day before the date of the enactment of the Revenue Reconciliation
Act of 1990).
SEC. 508. EXTENSION OF CREDIT RESIDENTIAL ENERGY EFFICIENT PROPERTY.
(a) In General.--Section 25D(g) of the Internal Revenue Code of
1986 is amended by striking ``December 31, 2007'' and inserting
``December 31, 2012''.
(b) Effective Date.--The amendment 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. 509. CLEAN ENERGY COAL BONDS.
(a) In General.--Subpart H of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 is amended by adding at the end
the following new section:
``SEC. 54A. CREDIT TO HOLDERS OF CLEAN ENERGY COAL BONDS.
``(a) Allowance of Credit.--If a taxpayer holds a clean energy coal
bond on 1 or more credit allowance dates of the bond occurring during
any taxable year, there shall be allowed as a credit against the tax
imposed by this chapter for the taxable year an amount equal to the sum
of the credits determined under subsection (b) with respect to such
dates.
``(b) Amount of Credit.--
``(1) In general.--The amount of the credit determined
under this subsection with respect to any credit allowance date
for a clean energy coal bond is 25 percent of the annual credit
determined with respect to such bond.
``(2) Annual credit.--The annual credit determined with
respect to any clean energy coal bond is the product of--
``(A) the credit rate determined by the Secretary
under paragraph (3) for the day on which such bond was
sold, multiplied by
``(B) the outstanding face amount of the bond.
``(3) Determination.--For purposes of paragraph (2), with
respect to any clean energy coal bond, the Secretary shall
determine daily or cause to be determined daily a credit rate
which shall apply to the first day on which there is a binding,
written contract for the sale or exchange of the bond. The
credit rate for any day is the credit rate which the Secretary
or the Secretary's designee estimates will permit the issuance
of clean energy coal bonds with a specified maturity or
redemption date without discount and without interest cost to
the qualified issuer.
``(4) Credit allowance date.--For purposes of this section,
the term `credit allowance date' means--
``(A) March 15,
``(B) June 15,
``(C) September 15, and
``(D) December 15.
Such term also includes the last day on which the bond is
outstanding.
``(5) Special rule for issuance and redemption.--In the
case of a bond which is issued during the 3-month period ending
on a credit allowance date, the amount of the credit determined
under this subsection with respect to such credit allowance
date shall be a ratable portion of the credit otherwise
determined based on the portion of the 3-month period during
which the bond is outstanding. A similar rule shall apply when
the bond is redeemed or matures.
``(c) Limitation Based on Amount of Tax.--The credit allowed under
subsection (a) for any taxable year shall not exceed the excess of--
``(1) the sum of the regular tax liability (as defined in
section 26(b)) plus the tax imposed by section 55, over
``(2) the sum of the credits allowable under this part
(other than subpart C thereof (relating to refundable credits)
and this section) and section 1397E.
``(d) Clean Energy Coal Bond.--For purposes of this section--
``(1) In general.--The term `clean energy coal bond' means
any bond issued as part of an issue if--
``(A) the bond is issued by a qualified issuer
pursuant to an allocation by the Secretary to such
issuer of a portion of the national clean energy coal
bond limitation under subsection (f)(2),
``(B) 95 percent or more of the proceeds from the
sale of such issue are to be used for capital
expenditures incurred by qualified borrowers for 1 or
more qualified projects,
``(C) the qualified issuer designates such bond for
purposes of this section and the bond is in registered
form, and
``(D) the issue meets the requirements of
subsection (h).
``(2) Qualified project; special use rules.--
``(A) In general.--The term `qualified project'
means a qualifying advanced coal project (as defined in
section 48A(c)(1)) placed in service by a qualified
borrower.
``(B) Refinancing rules.--For purposes of paragraph
(1)(B), a qualified project may be refinanced with
proceeds of a clean energy coal bond only if the
indebtedness being refinanced (including any obligation
directly or indirectly refinanced by such indebtedness)
was originally incurred by a qualified borrower after
the date of the enactment of this section.
``(C) Reimbursement.--For purposes of paragraph
(1)(B), a clean energy coal bond may be issued to
reimburse a qualified borrower for amounts paid after
the date of the enactment of this section with respect
to a qualified project, but only if--
``(i) prior to the payment of the original
expenditure, the qualified borrower declared
its intent to reimburse such expenditure with
the proceeds of a clean energy coal bond,
``(ii) not later than 60 days after payment
of the original expenditure, the qualified
issuer adopts an official intent to reimburse
the original expenditure with such proceeds,
and
``(iii) the reimbursement is made not later
than 18 months after the date the original
expenditure is paid.
``(D) Treatment of changes in use.--For purposes of
paragraph (1)(B), the proceeds of an issue shall not be
treated as used for a qualified project to the extent
that a qualified borrower takes any action within its
control which causes such proceeds not to be used for a
qualified project. The Secretary shall prescribe
regulations specifying remedial actions that may be
taken (including conditions to taking such remedial
actions) to prevent an action described in the
preceding sentence from causing a bond to fail to be a
clean energy coal bond.
``(e) Maturity Limitations.--
``(1) Duration of term.--A bond shall not be treated as a
clean energy coal bond if the maturity of such bond exceeds the
maximum term determined by the Secretary under paragraph (2)
with respect to such bond.
``(2) Maximum term.--During each calendar month, the
Secretary shall determine the maximum term permitted under this
paragraph for bonds issued during the following calendar month.
Such maximum term shall be the term which the Secretary
estimates will result in the present value of the obligation to
repay the principal on the bond being equal to 50 percent of
the face amount of such bond. Such present value shall be
determined using as a discount rate the average annual interest
rate of tax of tax-exempt obligations having a term of 10 years
or more which are issued during the month. If the term as so
determined is not a multiple of a whole year, such term shall
be rounded to the next highest whole year.
``(3) Ratable principal amortization required.--A bond
shall not be treated as a clean energy coal bond unless it is
part of an issue which provides for an equal amount of
principal to be paid by the qualified issuer during each
calendar year that the issue is outstanding.
``(f) Limitation on Amount of Bonds Designated.--
``(1) National limitation.--There is a national clean
energy coal bond limitation of $1,000,000,000.
``(2) Allocation by secretary.--The Secretary shall
allocate the amount described in paragraph (1) among qualified
projects in such manner as the Secretary determines
appropriate.
``(g) Credit Included in Gross Income.--Gross income includes the
amount of the credit allowed to the taxpayer under this section
(determined without regard to subsection (c)) and the amount so
included shall be treated as interest income.
``(h) Special Rules Relating to Expenditures.--
``(1) In general.--An issue shall be treated as meeting the
requirements of this subsection if, as of the date of issuance,
the qualified issuer reasonably expects--
``(A) at least 95 percent of the proceeds from the
sale of the issue are to be spent for 1 or more
qualified projects within the 5-year period beginning
on the date of issuance of the clean energy bond,
``(B) a binding commitment with a third party to
spend at least 10 percent of the proceeds from the sale
of the issue will be incurred within the 6-month period
beginning on the date of issuance of the clean energy
bond or, in the case of a clean energy bond the
proceeds of which are to be loaned to 2 or more
qualified borrowers, such binding commitment will be
incurred within the 6-month period beginning on the
date of the loan of such proceeds to a qualified
borrower, and
``(C) such projects will be completed with due
diligence and the proceeds from the sale of the issue
will be spent with due diligence.
``(2) Extension of period.--Upon submission of a request
prior to the expiration of the period described in paragraph
(1)(A), the Secretary may extend such period if the qualified
issuer establishes that the failure to satisfy the 5-year
requirement is due to reasonable cause and the related projects
will continue to proceed with due diligence.
``(3) Failure to spend required amount of bond proceeds
within 5 years.--To the extent that less than 95 percent of the
proceeds of such issue are expended by the close of the 5-year
period beginning on the date of issuance (or if an extension
has been obtained under paragraph (2), by the close of the
extended period), the qualified issuer shall redeem all of the
nonqualified bonds within 90 days after the end of such period.
For purposes of this paragraph, the amount of the nonqualified
bonds required to be redeemed shall be determined in the same
manner as under section 142.
``(i) Special Rules Relating to Arbitrage.--A bond which is part of
an issue shall not be treated as a clean energy coal bond unless, with
respect to the issue of which the bond is a part, the qualified issuer
satisfies the arbitrage requirements of section 148 with respect to
proceeds of the issue.
``(j) Cooperative Electric Company; Qualified Energy Tax Credit
Bond Lender; Governmental Body; Qualified Borrower.--For purposes of
this section--
``(1) Cooperative electric company.--The term `cooperative
electric company' means a mutual or cooperative electric
company described in section 501(c)(12) or section
1381(a)(2)(C), or a not-for-profit electric utility which has
received a loan or loan guarantee under the Rural
Electrification Act.
``(2) Clean energy bond lender.--The term `clean energy
bond lender' means a lender which is a cooperative which is
owned by, or has outstanding loans to, 100 or more cooperative
electric companies and is in existence on February 1, 2002, and
shall include any affiliated entity which is controlled by such
lender.
``(3) Governmental body.--The term `governmental body'
means any State, territory, possession of the United States,
the District of Columbia, Indian tribal government, and any
political subdivision thereof.
``(4) Qualified issuer.--The term `qualified issuer'
means--
``(A) a clean energy bond lender,
``(B) a cooperative electric company,
``(C) a governmental body, or
``(D) the Tennessee Valley Authority.
``(5) Qualified borrower.--The term `qualified borrower'
means--
``(A) a mutual or cooperative electric company
described in section 501(c)(12) or 1381(a)(2)(C),
``(B) a governmental body, or
``(C) the Tennessee Valley Authority.
``(k) Special Rules Relating to Pool Bonds.--No portion of a pooled
financing bond may be allocable to any loan unless the borrower has
entered into a written loan commitment for such portion prior to the
issue date of such issue.
``(l) Other Definitions and Special Rules.--For purposes of this
section--
``(1) Bond.--The term `bond' includes any obligation.
``(2) Pooled financing bond.--The term `pooled financing
bond' shall have the meaning given such term by section
149(f)(4)(A).
``(3) Partnership; s corporation; and other pass-thru
entities.--
``(A) In general.--Under regulations prescribed by
the Secretary, in the case of a partnership, trust, S
corporation, or other pass-thru entity, rules similar
to the rules of section 41(g) shall apply with respect
to the credit allowable under subsection (a).
``(B) No basis adjustment.--Rules similar to the
rules under section 1397E(i)(2) shall apply.
``(4) Bonds held by regulated investment companies.--If any
clean energy coal bond is held by a regulated investment
company, the credit determined under subsection (a) shall be
allowed to shareholders of such company under procedures
prescribed by the Secretary.
``(5) Treatment for estimated tax purposes.--Solely for
purposes of sections 6654 and 6655, the credit allowed by this
section to a taxpayer by reason of holding a clean energy coal
bond on a credit allowance date shall be treated as if it were
a payment of estimated tax made by the taxpayer on such date.
``(6) Reporting.--Issuers of clean energy coal bonds shall
submit reports similar to the reports required under section
149(e).
``(m) Termination.--This section shall not apply with respect to
any bond issued after December 31, 2010.''.
(b) Reporting.--Subsection (d) of section 6049 of the Internal
Revenue Code of 1986 (relating to returns regarding payments of
interest) is amended by adding at the end the following new paragraph:
``(9) Reporting of credit on clean energy coal bonds.--
``(A) In general.--For purposes of subsection (a),
the term `interest' includes amounts includible in
gross income under section 54A(g) and such amounts
shall be treated as paid on the credit allowance date
(as defined in section 54A(b)(4)).
``(B) Reporting to corporations, etc.--Except as
otherwise provided in regulations, in the case of any
interest described in subparagraph (A), subsection
(b)(4) shall be applied without regard to subparagraphs
(A), (H), (I), (J), (K), and (L)(i) of such subsection.
``(C) Regulatory authority.--The Secretary may
prescribe such regulations as are necessary or
appropriate to carry out the purposes of this
paragraph, including regulations which require more
frequent or more detailed reporting.''.
(c) Clerical Amendment.--The table of sections for subpart H of
part IV of subchapter A of chapter 1 of the Internal Revenue Code of
1986 is amended by adding at the end the following new item:
``Sec. 54A. Credit to holders of clean energy coal bonds.''.
(d) Issuance of Regulations.--The Secretary of the Treasury shall
issues regulations required under section 54A of the Internal Revenue
Code of 1986 (as added by this section) not later than 120 days after
the date of the enactment of this Act.
(e) Effective Date.--The amendments made by this section shall
apply to bonds issued after December 31, 2006.
SEC. 510. INCREASE IN CREDIT LIMITATION FOR QUALIFYING GASIFICATION
PROJECTS.
(a) In General.--Paragraph (1) of section 48B(d) of the Internal
Revenue Code of 1986 is amended by striking ``$350,000,000'' and
inserting ``$4,000,000,000''.
(b) Effective Date.--The amendment made by this section shall take
effect as if included in section 1307 of the Energy Policy Act of 2005.
SEC. 511. MODIFICATION OF QUALIFYING ADVANCED COAL PROJECT CREDIT.
(a) In General.--Subparagraph (C) of section 48A(e)(1) of the
Internal Revenue Code of 1986 is amended by inserting ``(300 megawatts
in the case of projects using subbituminous or lignite as a primary
feedstock)'' after ``400 megawatts''.
(b) Effective Date.--The amendment made by this section shall take
effect as if included in section 1307 of the Energy Policy Act of 2005.
SEC. 512. GREAT PLAINS SYNFUELS TRUST.
(a) In General.--Not later than 90 days after the date of enactment
of this Act, the Secretary shall--
(1) establish a trust to be known as the ``Great Plains
Synfuels Trust'' (referred to in this section as the
``Trust''); and
(2) deposit in the Trust 50 percent of the revenue-sharing
payments that would otherwise be received under the asset
purchase agreement between the Secretary and the Dakota
Gasification Company, dated October 7, 1988, and as in effect
on the date of enactment of this Act, as a result of the
operation of the Great Plains Synfuels Plant.
(b) Coal Development Program.--Not later than 180 days after the
date of enactment of this Act, the Secretary shall--
(1) establish an advanced clean low-rank coal development
program; and
(2) use funds from the Trust, on such cost-sharing basis as
the Secretary shall establish, to carry out the program at the
Great Plains Synfuels Plant.
TITLE VI--ENERGY EFFICIENCY
SEC. 601. ENERGY CREDIT FOR COMBINED HEAT AND POWER SYSTEM PROPERTY.
(a) In General.--Section 48(a)(3)(A) of the Internal Revenue Code
of 1986 (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 of the
Internal Revenue Code of 1986 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,
``(C) which produces--
``(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.
``(2) Special rules.--
``(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
lower heating value of the 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.''.
(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. 602. EXTENSION OF NEW ENERGY EFFICIENT HOME CREDIT.
(a) In General.--Section 45L(g) of the Internal Revenue Code of
1986 is amended by striking ``December 31, 2007'' and inserting
``December 31, 2010''.
(b) Effective Date.--The amendment made by this section shall apply
to qualified new energy efficient homes acquired after the date of
enactment of this Act, in taxable years ending after such date.
SEC. 603. MODIFICATION AND EXTENSION OF ENERGY EFFICIENT COMMERCIAL
BUILDINGS DEDUCTION.
(a) Increase in Credit Amount.--
(1) In general.--Subparagraph (A) of section 179D(b)(1) of
the Internal Revenue Code of 1986 is amended by striking
``$1.80'' and inserting ``$2.25''.
(2) Partial allowance.--Subparagraph (A) of section 179D(1)
of such Code is amended--
(A) by striking ``$.60'' and inserting ``$.75'',
and
(B) by striking ``$1.80'' and inserting ``$2.25''.
(b) Extension.--Section 179D(g) of the Internal Revenue Code of
1986 is amended by striking ``December 31, 2007'' and inserting
``December 31, 2010''.
(c) Effective Date.--The amendments made by this section shall
apply to property placed in service after December 31, 2006.
SEC. 604. EXTENSION OF NONBUSINESS ENERGY PROPERTY.
(a) In General.--Section 25C(g) of the Internal Revenue Code of
1986 is amended by striking ``December 31, 2007'' and inserting
``December 31, 2010''.
(b) Effective Date.--The amendment made by this section shall apply
to property placed in service after the date of the enactment of this
Act.
<all>
Introduced in House
Introduced in House
Referred to the Committee on Energy and Commerce, and in addition to the Committees on Ways and Means, Agriculture, Resources, and Science, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Energy and Commerce, and in addition to the Committees on Ways and Means, Agriculture, Resources, and Science, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Energy and Commerce, and in addition to the Committees on Ways and Means, Agriculture, Resources, and Science, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Energy and Commerce, and in addition to the Committees on Ways and Means, Agriculture, Resources, and Science, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Energy and Commerce, and in addition to the Committees on Ways and Means, Agriculture, Resources, and Science, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Energy and Commerce, and in addition to the Committees on Ways and Means, Agriculture, Resources, and Science, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
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Executive Comment Requested from Interior.
Referred to the Subcommittee on Energy and Mineral Resources.
Referred to the Subcommittee on Department Operations, Oversight, Nutrition and Forestry.
Executive Comment Requested from USDA.
Referred to the Subcommittee on Energy and Air Quality.
Referred to the Subcommittee on Energy.
Referred to the Subcommittee on Environment, Technology, and Standards.