I
109th CONGRESS
2d Session
H. R. 5331
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.
Short title; table of contents
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
.
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 CAFÉ 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.
Findings and purposes
Findings
Congress finds that—
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;
over 1/3 of the trade deficit of the United States over the last year is because of imported petroleum products;
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;
Brazil has drastically decreased oil imports by aggressively promoting biofuels and flexible fuel vehicles;
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;
transmission capacity constraints prevent some regions of the United States from fully developing domestic energy resources;
the United States has abundant domestic resources to create alternative fuels that will dramatically lessen dependence on foreign oil;
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;
a bold energy plan to make the United States more energy-independent should be implemented immediately; and
a bold and comprehensive energy plan will help keep energy prices affordable for consumers in the United States.
Purposes
The purposes of this Act are—
to reduce the dependence of the United States on foreign oil;
to expand the production and use of alternative fuels and alternative fuel vehicles;
to promote the development of renewable energy sources for electricity production;
to encourage responsible development of domestic fossil fuel resources; and
to reward consumers and businesses for conservation and energy efficiency.
Definitions
In this Act:
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.
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.
CTL
The term CTL means the Coal-To-Liquid process, by which any grade of coal is transformed into a liquid transportation fuel.
CTL refinery
The term CTL refinery means a facility at which coal is transformed into liquid transportation fuel through CTL.
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.
Engine dominant hybrid electric vehicle
The term engine dominant hybrid electric vehicle means an on-road or nonroad vehicle that—
is propelled by an internal combustion engine or heat engine using—
any combustible fuel; and
an on-board, rechargeable storage device; and
has no means of using an off-board source of electricity.
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)).
Military mission line
The term Military Mission Line means the north-south line at 86°41′ W. longitude.
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.
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.
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).
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.
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—
uses—
any combustible fuel; and
an on-board, rechargeable storage device; and
has a means of using an off-board source of electricity.
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.
Secretary
The term Secretary means the Secretary of Energy.
VEHICLE FUEL ECONOMY
National automobile fuel efficiency rebate program
In General
Chapter 329 of title 49, United States Code, is amended—
in section 32901(a)—
by redesignating paragraphs (10) through (16) as paragraphs (14) through (20), respectively;
by redesignating paragraphs (7) through (9) as paragraphs (10) through (12), respectively;
by inserting after paragraph (6) the following:
baseline fuel consumption level
is calculated by dividing 1 by the baseline fuel economy;
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;
combined average fuel economy
means—
as applied to automobiles (except passenger automobiles), the weighted average fuel economy of all manufacturers calculated under section 32904(a)(1)(A); and
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
by inserting after paragraph (12), as redesignated, the following:
fuel consumption level
is calculated by dividing 1 by the fuel economy
; and
by inserting after section 32903 the following:
Rebates for reducing fuel consumption levels
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.
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—
$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;
$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;
$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;
$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
$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.
Rulemaking
In general
The Secretary of Transportation shall promulgate regulations to carry out this section.
Rebate notices
In promulgating regulations pursuant to this subsection, the Secretary of Transportation shall ensure that—
information about the rebates available under this section is provided to the public, expressed in miles per gallon;
a notice of the amount of the rebate available under this section is posted on each automobile that qualifies for such rebate; and
a rebate check in an amount determined under subsection (b) is sent directly to each consumer who demonstrates eligibility under subsection (a).
.
Coordination With Vehicle Tax Credits
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:
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.
.
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:
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.
.
Study
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—
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
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.
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—
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;
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
recommendations for consolidating such rebates and credits into one unified incentive structure for the purchase of automobiles that will further reduce such dependence.
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.
.
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—
$33,750,000 for fiscal year 2007;
$40,000,000 for fiscal year 2008;
$47,250,000 for fiscal year 2009;
$54,000,000 for fiscal year 2010; and
$60,000,000 for fiscal year 2011.
Tire efficiency program
Standards for Tires Manufactured for Interstate Commerce
Section 30123 of title 49, United States Code, is amended—
in subsection (b)—
in the first sentence, by striking The Secretary
and inserting the following:
Uniform quality grading system
The Secretary
;
in the second sentence, by striking The Secretary
and inserting the following:
Nomenclature and marketing practices
The Secretary
;
in the third sentence, by striking A tire standard
and inserting the following:
Effect of standards and regulations
A tire standard
; and
by adding at the end the following:
National Tire Efficiency Program
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.
Program
The Secretary shall develop and carry out a national tire efficiency program for tires designed for use on passenger cars and light trucks.
Requirements
Not later than March 31, 2007, the Secretary shall issue regulations, which establish—
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
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.
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).
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.
Exceptions
Nothing in this section shall apply to—
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;
a deep tread, winter-type snow tire, space-saver tire, or temporary use spare tire;
a tire with a normal rim diameter of 12 inches or less;
a motorcycle tire; or
a tire manufactured specifically for use in an off-road motorized recreational vehicle.
.
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
.
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.
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).
Idling reduction tax credit
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:
Idling reduction credit
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.
Limitation
The maximum amount allowed as a credit under subsection (a) shall not exceed $1,000 per device.
Definitions
For purposes of subsection (a)—
Qualifying idling reduction device
The term qualifying idling reduction device means any device or system of devices that—
is installed on a heavy-duty diesel-powered on-highway vehicle,
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,
the original use of which commences with the taxpayer,
is acquired for use by the taxpayer and not for resale, and
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.
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.
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.
No Double Benefit
For purposes of this section—
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.
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.
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.
.
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:
the idling reduction tax credit determined under section 45N(a).
.
Conforming Amendments
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.
.
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:
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).
.
Section 6501(m) of such Code is amended by inserting 45N(e),
after 45D(c)(4),
.
Effective Date
The amendments made by this section shall apply to taxable years beginning after December 31, 2006.
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.
ALTERNATIVE FUEL VEHICLES
Promotion of advanced technology motor vehicles
Purposes
It is the purpose of this section—
to facilitate the production of advanced technology motor vehicles capable of lessening our dependence on foreign oil, and
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).
Production Requirements
Section 32905 of title 49, United States Code, is amended by adding at the end the following:
Alternative Fueled Automobiles
Each manufacturer that manufactures automobiles for sale or use in the United States shall ensure that—
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
beginning in model year 2017, all such automobiles are advanced technology motor vehicles (as so defined).
.
Incentives for Production Requirements
Advanced technology motor vehicles manufacturing credit
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:
Advanced technology motor vehicles manufacturing credit
Credit Allowed
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.
Limitation
The amount of the credit allowed under paragraph (1) for any taxable year shall not exceed $250,000,000.
Qualified Investment
For purposes of this section—
In general
The qualified investment for any taxable year is equal to the incremental costs incurred during such taxable year—
to re-equip, expand, or establish any manufacturing facility of the eligible taxpayer to produce advanced technology motor vehicles or to produce eligible components,
for engineering integration of such vehicles and components as described in subsection (d),
for research and development related to advanced technology motor vehicles and eligible components, and
for employee retraining with respect to the manufacturing of such vehicles or components (determined without regard to wages or salaries of such retrained employees).
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.
Advanced Technology Motor Vehicles and Eligible Components
For purposes of this section—
Advanced technology motor vehicle
The term advanced technology motor vehicle means—
any qualified electric vehicle (as defined in section 30(c)(1)),
any new qualified fuel cell motor vehicle (as defined in section 30B(b)(3)),
any new advanced lean burn technology motor vehicle (as defined in section 30B(c)(3)),
any new qualified hybrid motor vehicle (as defined in section 30B(d)(2)(A) and determined without regard to any gross vehicle weight rating),
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
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).
Eligible components
The term eligible component means any component inherent to any advanced technology motor vehicle, including—
with respect to any gasoline or diesel-electric new qualified hybrid motor vehicle—
electric motor or generator,
power split device,
power control unit,
power controls,
integrated starter generator, or
battery,
with respect to any hydraulic new qualified hybrid motor vehicle—
hydraulic accumulator vessel,
hydraulic pump, or
hydraulic pump-motor assembly,
with respect to any new advanced lean burn technology motor vehicle—
diesel engine,
turbocharger,
fuel injection system, or
after-treatment system, such as a particle filter or NOx absorber, and
with respect to any advanced technology motor vehicle, any other component submitted for approval by the Secretary.
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—
establishing functional, structural, and performance requirements for component and subsystems to meet overall vehicle objectives for a specific application,
designing interfaces for components and subsystems with mating systems within a specific vehicle application,
designing cost effective, efficient, and reliable manufacturing processes to produce components and subsystems for a specific vehicle application, and
validating functionality and performance of components and subsystems for a specific vehicle application.
Eligible Taxpayer
For purposes of this section, the term eligible taxpayer means any taxpayer—
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
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.
Limitation Based on Amount of Tax
The credit allowed under subsection (a) for the taxable year shall not exceed the excess of—
the sum of—
the regular tax liability (as defined in section 26(b)) for such taxable year, plus
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
the sum of the credits allowable under subpart A and sections 27, 30, and 30B for the taxable year.
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.
No Double Benefit
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.
Research and development costs
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.
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.
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.
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
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.
Regulations
The Secretary shall prescribe such regulations as necessary to carry out the provisions of this section.
Termination
This section shall not apply to any qualified investment after December 31, 2015.
.
Conforming amendments
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:
to the extent provided in section 30D(g).
.
Section 6501(m) of such Code, as amended by this Act, is amended by inserting 30D(k),
after 30C(e)(5),
.
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.
.
Effective date
The amendments made by this paragraph shall apply to amounts incurred in taxable years beginning after December 31, 2006.
Advanced technology motor vehicle manufacturer healthcare relief program
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.
Establishment of program
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.
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.
Eligible domestic automobile manufacturer
To be eligible to receive financial assistance under the program established under subparagraph (B), a domestic automobile manufacturer shall—
submit an application to the task force at such time, in such manner, and containing such information as the task force shall require;
certify that such manufacturer is providing full health care coverage to all of its domestic employees;
certify that such manufacturer—
has not elected the credit allowed under section 30D of the Internal Revenue Code of 1986, and
but for such nonelection, would be an eligible taxpayer for purposes of such credit under section 30D(e)(1) of such Code; and
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.
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—
the lesser of —
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
the aggregate retiree health care expenditures for such manufacturer, or
$250,000,000.
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).
Authorization of appropriations
There are authorized to be appropriated, such sums as may be necessary in each fiscal year to carry out this paragraph.
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.
Termination of program
The program established under subparagraph (B) shall terminate on December 31, 2015.
Research and development program for new vehicle technologies
Purposes
The purposes of this section are—
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;
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;
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—
enhancing the energy security of the United States;
reducing dependence on imported oil; and
reducing emissions through the expansion of grid supported mobility;
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
to improve the energy efficiency of and reduce the petroleum use in transportation.
Program
The Secretary shall conduct a program of research, development, demonstration, and commercial application for electric drive transportation technology, including—
high capacity, high-efficiency batteries;
high-efficiency on-board and off-board charging components;
high-powered drive train systems for passenger and commercial vehicles and for nonroad equipment;
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—
development of efficient cooling systems;
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
development of different control systems that optimize for different goals, including—
battery life;
reduction of petroleum consumption; and
green house gas reduction;
nanomaterial technology applied to both battery and fuel cell systems;
large-scale demonstrations, testing, and evaluation of plug-in hybrid electric vehicles in different applications with different batteries and control systems, including—
military applications;
mass market passenger and light-duty truck applications;
private fleet applications; and
medium- and heavy-duty applications;
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—
the vehicle and fuel as a system, not just an engine; and
nightly off-board charging; and
advancement of battery and corded electric transportation technologies in mobile source applications by—
improvement in battery, drive train, and control system technologies; and
working with industry and the Administrator of the Environmental Protection Agency to—
understand and inventory markets; and
identify and implement methods of removing barriers for existing and emerging applications.
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.
Consumer incentives to purchase advanced technology vehicles
Elimination of Limitation on Number of New Qualified Hybrid and Advanced Lean Burn Technology Vehicles Eligible for Alternative Motor Vehicle Credit
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.
Conforming amendments
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))
.
Section 38(b)(25) of such Code is amended by striking section 30B(g)(1)
and inserting section 30B(f)(1)
.
Section 55(c)(2) of such Code is amended by striking section 30B(g)(2)
and inserting section 30B(f)(2)
.
Section 1016(a)(36) of such Code is amended by striking section 30B(h)(4)
and inserting section 30B(g)(4)
.
Section 6501(m) of such Code is amended by striking section 30B(h)(9)
and inserting section 30B(g)(9)
.
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.
Extension of full credit for qualified electric vehicles
In General
Section 30(e) of the Internal Revenue Code of 1986 is amended by striking 2006
and inserting 2010
.
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).
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:
Application with other credits
The credit allowed by subsection (a) for any taxable year shall not exceed the excess (if any) of—
the sum of the regular tax for the taxable year plus the tax imposed by section 55, over
the sum of the credits allowable under subpart A and section 27.
.
Effective Date
The amendments made by this section shall apply to taxable years beginning after December 31, 2005.
ALTERNATIVE FUELS
Biofuels
Authorization of Appropriations
Section 931(c) of the Energy Policy Act of 2005 (42 U.S.C. 16231(c)) is amended—
in paragraph (1), by striking $213,000,000
and inserting $251,000,000
;
in paragraph (2)—
by striking $251,000,000
and inserting $270,000,000
; and
by striking and
;
in paragraph (3)—
by striking $274,000,000
and inserting $294,000,000
; and
by striking the period at the end and inserting a semicolon; and
by adding at the end the following:
$318,000,000 for fiscal year 2010; and
$343,000,000 for fiscal year 2011.
.
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)
.
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—
by striking section—
and all that follows through not more than
and inserting section not more than
; and
by striking 2006;
and all that follows and inserting 2007.
.
Renewable fuel standard
Section 211(o)(2)(B) of the Clean Air Act (42 U.S.C. 7545(o)(2)(B)) is amended—
by striking clause (i) and inserting the following:
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
in clause (ii)—
in the clause heading, by striking 2013
and inserting 2026
;
by striking 2013
and inserting 2026
; and
by striking 2012
and inserting 2025
.
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:
Minimum quantity derived from cellulosic biomass
In general
The applicable volume referred to in clauses (i) and (ii) shall contain a minimum of—
for calendar year 2010, 100,000,000 gallons that are derived from cellulosic biomass;
for calendar year 2011, 150,000,000 gallons that are derived from cellulosic biomass;
for calendar year 2012, 200,000,000 gallons that are derived from cellulosic biomass; and
for calendar year 2013 and each calendar year thereafter, 250,000,000 gallons that are derived from cellulosic biomass.
Ratio
For calendar year 2014 and each calendar year thereafter, the 2.5-to-1 ratio referred to in paragraph (4) shall not apply.
.
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:
Minimum quantity derived from sugar
Definition of sugar
In this clause:
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.
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.
Minimum number of gallons
The applicable volume referred to in clauses (i) and (ii) shall contain a minimum of—
for calendar year 2008, 100,000,000 gallons derived from sugar;
for calendar year 2009, 108,000,000 gallons derived from sugar;
for calendar year 2010, 117,000,000 gallons derived from sugar;
for calendar year 2011, 126,000,000 gallons derived from sugar;
for calendar year 2012, 135,000,000 gallons derived from sugar;
for calendar year 2013, 144,000,000 gallons derived from sugar;
for calendar year 2014, 153,000,000 gallons derived from sugar;
for calendar year 2015, 161,000,000 gallons derived from sugar;
for calendar year 2016, 170,000,000 gallons derived from sugar;
for calendar year 2017, 179,000,000 gallons derived from sugar;
for calendar year 2018, 188,000,000 gallons derived from sugar;
for calendar year 2019, 197,000,000 gallons derived from sugar;
for calendar year 2020, 206,000,000 gallons derived from sugar;
for calendar year 2021, 214,000,000 gallons derived from sugar;
for calendar year 2022, 223,000,000 gallons derived from sugar;
for calendar year 2023, 232,000,000 gallons derived from sugar;
for calendar year 2024, 241,000,000 gallons derived from sugar; and
for calendar year 2025 and each calendar year thereafter, 250,000,000 gallons derived from sugar.
.
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:
Ethanol promotion program
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.
Administration
The program—
may include loan guarantees, loans, grants, and other forms of assistance; and
shall be designed to ensure the production of ethanol in quantities sufficient to meet the requirements of this subsection.
Prevention of sugar loan forfeitures
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).
Administration
To carry out clause (i), in determining the overall allotment quantity for any crop of domestic sugar, the Secretary shall—
consider projected sugar used as sucrose ethanol feedstock as an addition to domestic food use; and
count the sales of sugar to a sucrose ethanol producer against the annual marketing allocation of domestic sugar processors.
Authorization of appropriations
There are authorized to be appropriated such sums as are necessary to carry out this paragraph.
.
Renewable fuel program for the diesel motor pool
In General
Section 211 of the Clean Air Act (42 U.S.C. 7545) is amended by inserting after subsection (o) the following:
Renewable Fuel Program for the Diesel Motor Pool
Definition of renewable fuel
In general
In this subsection, the term renewable fuel has the meaning given the term in subsection (o)(1)(C).
Inclusions
The term renewable fuel includes a diesel fuel substitute produced from—
animal fat;
vegetable oil;
recycled yellow grease;
thermal depolymerization;
thermochemical conversion;
the coal-to-liquid process (including the Fischer-Tropsch process); or
a diesel-ethanol blend.
Renewable fuel program
Regulations
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).
Provisions of regulations
Regardless of the date of promulgation, the regulations promulgated under clause (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
shall not—
restrict geographic areas in which renewable fuel may be used; or
impose any per-gallon obligation for the use of renewable fuel.
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.
Applicable volume
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. |
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—
the impact of the use of renewable fuels on the environment, air quality, energy security, job creation, and rural economic development; and
the expected annual rate of future production of renewable fuels to be used as a blend component or replacement to the diesel motor pool.
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—
the number of gallons of diesel that the Administrator estimates will be sold or introduced into commerce during the calendar year; and
the ratio that—
2,000,000,000 gallons of renewable fuel; bears to
the number of gallons of diesel sold or introduced into commerce during calendar year 2015.
Applicable percentages
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.
Determination of applicable percentages
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.
Required elements
The renewable fuel obligation determined for a calendar year under clause (i) shall—
be applicable to refineries, blenders, and importers, as appropriate;
be expressed in terms of a volume percentage of diesel sold or introduced into commerce in the United States; and
subject to subparagraph (C), consist of a single applicable percentage that applies to all categories of persons described in subclause (I).
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).
Credit program
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).
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).
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.
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—
achieves compliance with the renewable fuel requirement under paragraph (2); and
generates or purchases additional credits under subparagraph (A) to offset the deficit of the previous year.
Waivers
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—
implementation of the requirement would severely harm the economy or environment of a State, a region, or the United States; or
there is an inadequate domestic supply of renewable fuel.
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.
Termination of waivers
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.
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.
.
Penalties and Enforcement
Section 211(d) of the Clean Air Act (42 U.S.C. 7545(d)) is amended—
in paragraph (1), by striking or (o)
each place it appears and inserting (o), or (p)
; and
in paragraph (2), by striking and (o)
each place it appears and inserting (o), and (p)
.
Technical Amendments
Section 211 of the Clean Air Act (42 U.S.C. 7545) is amended—
in subsection (c)(4)(C), by redesignating the second clause (v) as clause (vi);
in subsection (i)(4), by striking section 324
each place it appears and inserting section 325
;
in subsection (k)(10), by indenting subparagraphs (E) and (F) appropriately;
in subsection (n), by striking section 219(2)
and inserting section 216(2)
;
by redesignating the second subsection (r) and subsection (s) as subsections (s) and (t), respectively; and
in subsection (t)(1) (as redesignated by paragraph (5)), by striking this subtitle
and inserting this part
.
Extension and modification of income and excise tax credits for renewable fuels
Income Tax Credits
Alcohol used as fuel
In general
Paragraph (1) of section 40(e) of the Internal Revenue Code of 1986 is amended—
by striking 2010
in subparagraph (A) and inserting 2013
, and
by striking 2011
in subparagraph (B) and inserting 2014
.
Reduced credit for ethanol blenders
Subsection (h) of section 40 of such Code is amended—
by striking 2010
in paragraph (1) and inserting 2013
, and
by striking 2010
in the table in paragraph (2) and inserting 2013
.
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
.
Small ethanol producer credit expanded for producers of sucrose and cellulosic ethanol
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
.
Sucrose or cellulosic ethanol producer
Section 40(b)(4) of such Code is amended by adding at the end the following new subparagraph:
Sucrose or cellulosic ethanol producer
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.
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.
.
Conforming amendments
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
.
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)
.
Excise Tax Credits
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
.
Biodiesel mixture credit
Paragraph (6) of section 6426(c) of the Internal Revenue Code of 1986 is amended by striking 2010
and inserting 2013
.
Alternative fuel credit
Paragraph (4) of section 6426(d) of the Internal Revenue Code of 1986 is amended by striking 2009
and inserting 2013
.
Payments for Fuel Used in Trade or Business
Alcohol fuel mixtures
Section 6427(e)(5)(A) of the Internal Revenue Code of 1986 is amended by striking 2010
and inserting 2013
.
Biodiesel mixtures
Section 6427(e)(5)(B) of such Code is amended by striking 2008
and inserting 2013
.
Alternative fuel and alternative fuel mixtures
Section 6427(e)(5)(C) of such Code is amended by striking 2009
and inserting 2013
.
Effective Date
Subsection (a)
The amendments made by subsection (a) shall apply to taxable years beginning after the date of the enactment of this Act.
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.
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.
Domestic refinery diversification
Program
The Secretary shall award grants for qualifying projects to support the commercial deployment of CTL refineries.
Project Criteria
A project shall be considered to be a qualifying project under this section if the Secretary determines that—
the purpose of the project is the deployment of a CTL refinery in the United States;
the grant recipient is financially viable without the receipt of additional Federal funding;
the project site has been identified;
a preliminary feasibility study has been completed;
a long-term source of coal has been identified and secured; and
the refinery will be designed to have—
a production capacity of at least 12,000 barrels per day; and
carbon capture capability.
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.
Maximum Amount
The amount of a grant made for a qualifying project under this section shall not exceed $50,000,000.
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—
the status of projects funded under this section; and
the reasons for the denial of any grant for a project funded under this section.
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.
Transition to a hydrogen-based economy
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:
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.
For hydrogen storage for on-road and off-road applications—
$38,000,000 for fiscal year 2007;
$45,000,000 for fiscal year 2008;
$53,000,000 for fiscal year 2009;
$60,000,000 for fiscal year 2010; and
$70,000,000 for fiscal year 2010.
For technologies for the production and purification of hydrogen with pressures of 10,000 pounds per square inch or more—
$40,000,000 for fiscal year 2007;
$48,000,000 for fiscal year 2008;
$56,000,000 for fiscal year 2009; and
$62,000,000 for fiscal year 2010.
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)—
$50,000,000 for fiscal year 2007;
$75,000,000 for fiscal year 2008;
$100,000,000 for fiscal year 2009; and
$110,000,000 for fiscal year 2010.
For development of a national hydrogen infrastructure plan, such sums as are necessary.
For the National Center for Hydrogen Technology designated by the Department of Energy—
$3,500,000 for fiscal year 2007;
$4,000,000 for fiscal year 2008;
$4,500,000 for fiscal year 2009; and
$5,000,000 for fiscal year 2010.
For regional centers for hydrogen technology designated by the Department of Energy, $17,000,000 for fiscal year 2007.
For the Controlled Hydrogen Fleet and Infrastructure Demonstration Validation Program of the Department of Energy—
for the controlled hydrogen fleet—
$30,000,000 for fiscal year 2007;
$35,000,000 for fiscal year 2008;
$41,000,000 for fiscal year 2009; and
$47,000,000 for fiscal year 2010; and
for infrastructure demonstration validation—
$18,000,000 for fiscal year 2007;
$22,000,000 for fiscal year 2008;
$26,000,000 for fiscal year 2009; and
$30,000,000 for fiscal year 2010.
For the hydrogen automotive technologies programs of the Department of Defense—
$25,000,000 for fiscal year 2007;
$30,000,000 for fiscal year 2008;
$35,000,000 for fiscal year 2009; and
$40,000,000 for fiscal year 2010.
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:
$35,000,000 for fiscal year 2009;
$80,000,000 for fiscal year 2010; and
.
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:
$75,000,000 for fiscal year 2007;
$100,000,000 for fiscal year 2008;
$125,000,000 for fiscal year 2009;
$150,000,000 for fiscal year 2010; and
.
Hydrogen Programs
Section 805 of the Energy Policy Act of 2005 (42 U.S.C. 16154) is amended—
in subsection (h), by striking paragraphs (3) through (5) and inserting the following:
$232,000,000 for fiscal year 2008;
$252,500,000 for fiscal year 2009;
$283,000,000 for fiscal year 2010; and
; and
in subsection (i), by striking paragraphs (2) through (5) and inserting the following:
$180,000,000 for fiscal year 2007;
$200,000,000 for fiscal year 2008;
$220,000,000 for fiscal year 2009;
$240,000,000 for fiscal year 2010; and
.
Modification and extension of alternative vehicle refueling property credit
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
.
Credit Allowable Against Alternative Minimum Tax
Paragraph (2) of section 30C of the Internal Revenue Code of 1986 is amended to read as follows:
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—
the sum of the regular tax for the taxable year plus the tax imposed by section 55, over
the sum of the credits allowable under subpart A and sections 27, 30, and 30B.
.
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
.
Effective Date
The amendments made by this section shall apply to taxable years beginning after December 31, 2005.
Use of native grasses on conservation reserve land for biomass harvesting
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.
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—
in clause (ii), by striking and
after the semicolon at the end; and
by adding at the end the following:
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—
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;
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
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
.
Use of CAFÉ penalties to build alternative fueling infrastructure
Section 32912 of title 49, United States Code, is amended by adding at the end the following
Alternative Fueling Infrastructure Trust Fund
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—
such amounts as are deposited into the Trust Fund under paragraph (2); and
any interest earned on investment of amounts in the Trust Fund.
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.
Investment of amounts
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.
Interest-bearing obligations
Investments may be made only in interest-bearing obligations of the United States.
Acquisition of obligations
For the purpose of investments under subparagraph (A), obligations may be acquired—
on original issue at the issue price; or
by purchase of outstanding obligations at the market price.
Sale of obligations
Any obligation acquired by the Trust Fund may be sold by the Secretary of the Treasury at the market price.
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.
Transfers of amounts
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.
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.
Expenditures from the fund
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.
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—
operating a fueling station; or
administering grants for the purpose of establishing an alternative fueling infrastructure.
Other considerations
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.
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.
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.
Use of funds
Grants received under this paragraph may be used to—
construct new facilities to dispense alternative fuels;
purchase equipment to upgrade, expand, or otherwise improve existing alternative fuel facilities; or
purchase equipment or pay for specific turnkey fueling services by alternative fuel providers.
Requirement for facilities
Facilities constructed or upgraded with a grant awarded under this paragraph shall—
provide alternative fuel to the public for a period of not less than 4 years from the date on which the facility opens;
establish a marketing plan to advance the sale and use of alternative fuels;
prominently display the price of the alternative fuel being provided on the station marquee and in the station;
provide point of sale materials on alternative fuel;
clearly label the dispenser with consistent materials;
price the alternative fuel at a margin that is not greater than that which is received for unleaded gasoline; and
support and use all available tax incentives to reduce the cost of the alternative fuel to the lowest possible retail price.
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.
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—
the status of each alternative fuel station constructed with grant funds received under this paragraph;
the amount of alternative fuel dispensed at each station during the preceding 6-month period; and
the average price per gallon of the alternative fuel sold at each station during the preceding 6-month period.
.
DOMESTIC PRODUCTION OF OIL AND NATURAL GAS
Modifications to enhanced oil recovery credit
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:
Enhanced Credit for Projects Using Qualified Carbon Dioxide
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
.
Specified qualified enhanced oil recovery project
In general
A qualified enhanced oil recovery project is described in this paragraph if—
the project begins or is substantially expanded after December 31, 2006, and
the project uses qualified carbon dioxide in an oil recovery method which involves flooding or injection.
Qualified carbon dioxide
For purposes of this subsection, the term qualified carbon dioxide means carbon dioxide that is—
from an industrial source, or
separated from natural gas and natural gas liquids at a natural gas processing plant.
Termination
This subsection shall not apply to costs paid or incurred for any qualified enhanced oil recovery project after December 31, 2010.
.
Effective Date
The amendments made by this section shall apply to costs paid or incurred in taxable years ending after December 31, 2006.
Offshore oil and gas leasing in 181 Area of Gulf of Mexico
Definition of Secretary
In this section, the term Secretary means the Secretary of the Interior, acting through the Minerals Management Service.
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.
Excluded Areas
In carrying out subsection (b), the Secretary shall not offer for oil and gas leasing—
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
any area that is within 100 miles of the coastline of the State of Florida.
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).
ELECTRICITY AND RENEWABLES
DOE national and North American electricity grid studies
Findings
Congress finds that—
the interstate transmission system of North America cannot reliably handle the existing and expected dramatic increase in future electric transactions;
significant new transmission capacity is urgently needed to maintain reliability and meet the needs of a growing demand for electricity;
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;
existing transmission capacity limits the development of renewable and other energy sources by constraining delivery of those resources into the national power market;
excessive congestion unnecessarily raises costs for all consumers; and
an adequate transmission system is critical to national security.
Studies
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 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
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.
Study
In carrying out the studies, the Secretary shall take into consideration—
economic viability, including the cost-effectiveness of developing a national transmission grid or North American transmission grid, as appropriate;
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;
limited transmission infrastructure, resulting in the inability or limited ability to transmit available power supply resources;
diversification of power supply;
requirements and needs relating to the national defense and homeland security of the United States;
promotion of national energy security;
transmission losses; and
reliability.
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—
a national transmission grid in accordance with nationwide functionality and benefits similar to those provided by construction of the Interstate System; and
an integrated North American transmission grid with international functionality and benefits similar to those provided by construction of the Interstate System.
Authorization of Appropriations
There are authorized to be appropriated such sums as are necessary to carry out this section.
Tax-exempt financing of electric transmission facilities not subject to private business use test
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:
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.
.
Effective Date
The amendment made by this section shall apply to bonds issued after the date of the enactment of this Act.
Extension of credit for producing electricity from certain renewable resources
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
.
Effective Date
The amendments made by this section shall take effect on the date of the enactment of this Act.
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:
Federal renewable portfolio standard
Definitions
In this section:
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—
electricity generated by a hydroelectric facility (including a pumped storage facility but excluding incremental hydropower); and
electricity generated through the incineration of municipal solid waste.
Distributed generation facility
The term distributed generation facility means a facility at a customer site.
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—
solar, wind, or geothermal energy;
ocean energy;
biomass (as defined in section 203(b) of the Energy Policy Act of 2005 (42 U.S.C. 15852(b))); or
landfill gas.
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).
Incremental geothermal production
In general
The term incremental geothermal production means, for any year, the difference between—
the total kilowatt hours of electricity produced from a facility (including a distributed generation facility) using geothermal energy, and
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.
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.
Incremental hydropower
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.
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.
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.
New renewable energy
The term new renewable energy means—
electric energy generated at a facility (including a distributed generation facility) placed in service on or after January 1, 2003, from—
solar, wind, or geothermal energy or ocean energy;
biomass (as defined in section 203(b) of the Energy Policy Act of 2005 (42 U.S.C. 15852(b)));
landfill gas; or
incremental hydropower; and
for electric energy generated at a facility (including a distributed generation facility) placed in service before the date of enactment of this section—
the additional energy above the average generation in the 3 years preceding the date of enactment of this section at the facility from—
solar or wind energy or ocean energy;
biomass (as defined in section 203(b) of the Energy Policy Act of 2005 (42 U.S.C. 15852(b)));
landfill gas; or
incremental hydropower; and
the incremental geothermal production.
Ocean energy
The term ocean energy includes current, wave, tidal, and thermal energy.
Renewable Energy Requirement
Requirement
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.
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. |
Means of compliance
An electric utility shall meet the requirements of paragraph (1) by—
generating electric energy using new renewable energy or existing renewable energy;
purchasing electric energy generated by new renewable energy or existing renewable energy;
purchasing renewable energy credits issued under subsection (c); or
a combination of the foregoing.
Renewable Energy Credit Trading Program
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.
Responsibilities of secretary
As part of the program, the Secretary shall—
issue renewable energy credits to generators of electric energy from new renewable energy;
sell renewable energy credits to electric utilities at the rate of 1.5 cents per kilowatt-hour (as adjusted for inflation under subsection (h));
ensure that a kilowatt hour, including the associated renewable energy credit, shall be used only once for purposes of compliance with this section; and
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).
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.
Enforcement
Civil penalties
Any electric utility that fails to meet the renewable energy requirements of subsection (b) shall be subject to a civil penalty.
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.
Mitigation or waiver
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.
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).
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).
State Renewable Energy Account Program
In general
Not later than December 31, 2008, the Secretary shall establish a State renewable energy account program.
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.
Maintenance of account
The State renewable energy account shall be held by the Secretary and shall not be transferred to the Treasury Department.
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.
Guidelines and criteria
The Secretary may issue guidelines and criteria for grants awarded under this subsection.
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.
Allocation of funds
In allocating funds under this program, the Secretary shall give preference—
to States in regions that have a disproportionately small share of economically sustainable renewable energy generation capacity; and
to State programs to stimulate or enhance innovative renewable energy technologies.
Rules
Not later than 1 year after the date of enactment of this section, the Secretary shall issue rules implementing this section.
Exemptions
This section shall not apply in any calendar year to an electric utility that—
sold less than 4,000,000 megawatt-hours of electric energy to electric consumers during the preceding calendar year; or
is located in Hawaii.
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).
State Programs
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.
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.
Termination of Authority
This section and the authority provided by this section terminate on December 31, 2030.
.
Extension and expansion of clean renewable energy bonds
Extension
Section 54(m) of the Internal Revenue Code of 1986 (relating to termination) is amended by striking 2007
and inserting 2012
.
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:
National limitation
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.
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.
.
Effective Date
The amendments made by this section shall apply to bonds issued after the date of the enactment of this Act.
Credit for wind energy property installed in residences and businesses
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:
Wind energy property
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.
Limitations
In general
The credit allowed under subsection (a) (determined without regard to paragraph (2)) for any taxable year shall not exceed $10,000.
Limitation based on amount of tax
In general
The credit allowed under subsection (a) for any taxable year shall not exceed the excess of—
the sum of the regular tax liability (as defined in section 26(b)) plus the tax imposed by section 55, over
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.
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.
Qualified Wind Energy Property
For purposes of this section, the term qualified wind energy property means a wind turbine if—
such turbine is placed in service or installed on or in connection with property located in the United States,
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,
such turbine is used to generate electricity for the property on or in connection with which it is installed, and
the original use of such turbine commences with the taxpayer.
Special Rules
For purposes of this section—
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.
Condominiums
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.
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.
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.
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.
Termination
The credit allowed under this section shall not apply to property placed in service or installed after December 31, 2011.
.
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:
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).
.
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.
.
Effective Date
The amendments made by this section shall apply to taxable years ending after December 31, 2006.
Extension of business solar investment credit
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
.
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
.
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
.
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).
Extension of credit residential energy efficient property
In General
Section 25D(g) of the Internal Revenue Code of 1986 is amended by striking December 31, 2007
and inserting December 31, 2012
.
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.
Clean energy coal bonds
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:
Credit to holders of clean energy coal bonds
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.
Amount of Credit
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.
Annual credit
The annual credit determined with respect to any clean energy coal bond is the product of—
the credit rate determined by the Secretary under paragraph (3) for the day on which such bond was sold, multiplied by
the outstanding face amount of the bond.
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.
Credit allowance date
For purposes of this section, the term credit allowance date means—
March 15,
June 15,
September 15, and
December 15.
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.
Limitation Based on Amount of Tax
The credit allowed under subsection (a) for any taxable year shall not exceed the excess of—
the sum of the regular tax liability (as defined in section 26(b)) plus the tax imposed by section 55, over
the sum of the credits allowable under this part (other than subpart C thereof (relating to refundable credits) and this section) and section 1397E.
Clean Energy Coal Bond
For purposes of this section—
In general
The term clean energy coal bond means any bond issued as part of an issue if—
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),
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,
the qualified issuer designates such bond for purposes of this section and the bond is in registered form, and
the issue meets the requirements of subsection (h).
Qualified project; special use rules
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.
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.
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—
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,
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
the reimbursement is made not later than 18 months after the date the original expenditure is paid.
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.
Maturity Limitations
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.
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.
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.
Limitation on Amount of Bonds Designated
National limitation
There is a national clean energy coal bond limitation of $1,000,000,000.
Allocation by secretary
The Secretary shall allocate the amount described in paragraph (1) among qualified projects in such manner as the Secretary determines appropriate.
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.
Special Rules Relating to Expenditures
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—
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,
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
such projects will be completed with due diligence and the proceeds from the sale of the issue will be spent with due diligence.
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.
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.
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.
Cooperative Electric Company; Qualified Energy Tax Credit Bond Lender; Governmental Body; Qualified Borrower
For purposes of this section—
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.
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.
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.
Qualified issuer
The term qualified issuer means—
a clean energy bond lender,
a cooperative electric company,
a governmental body, or
the Tennessee Valley Authority.
Qualified borrower
The term qualified borrower means—
a mutual or cooperative electric company described in section 501(c)(12) or 1381(a)(2)(C),
a governmental body, or
the Tennessee Valley Authority.
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.
Other Definitions and Special Rules
For purposes of this section—
Bond
The term bond includes any obligation.
Pooled financing bond
The term pooled financing bond shall have the meaning given such term by section 149(f)(4)(A).
Partnership; s corporation; and other pass-thru entities
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).
No basis adjustment
Rules similar to the rules under section 1397E(i)(2) shall apply.
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.
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.
Reporting
Issuers of clean energy coal bonds shall submit reports similar to the reports required under section 149(e).
Termination
This section shall not apply with respect to any bond issued after December 31, 2010.
.
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:
Reporting of credit on clean energy coal bonds
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)).
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.
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.
.
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.
.
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.
Effective Date
The amendments made by this section shall apply to bonds issued after December 31, 2006.
Increase in credit limitation for qualifying gasification projects
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
.
Effective Date
The amendment made by this section shall take effect as if included in section 1307 of the Energy Policy Act of 2005.
Modification of qualifying advanced coal project credit
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
.
Effective Date
The amendment made by this section shall take effect as if included in section 1307 of the Energy Policy Act of 2005.
Great Plains Synfuels Trust
In General
Not later than 90 days after the date of enactment of this Act, the Secretary shall—
establish a trust to be known as the Great Plains Synfuels Trust
(referred to in this section as the Trust
); and
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.
Coal Development Program
Not later than 180 days after the date of enactment of this Act, the Secretary shall—
establish an advanced clean low-rank coal development program; and
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.
ENERGY EFFICIENCY
Energy credit for combined heat and power system property
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:
combined heat and power system property,
.
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:
Combined Heat and Power System Property
For purposes of subsection (a)(3)(A)(v)—
Combined heat and power system property
The term combined heat and power system property means property comprising a system—
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),
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,
which produces—
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
at least 20 percent of its total useful energy in the form of electrical or mechanical power (or combination thereof),
the energy efficiency percentage of which exceeds 60 percent, and
which is placed in service before January 1, 2011.
Special rules
Energy efficiency percentage
For purposes of this subsection, the energy efficiency percentage of a system is the fraction—
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
the denominator of which is the lower heating value of the fuel sources for the system.
Determinations made on btu basis
The energy efficiency percentage and the percentages under paragraph (1)(C) shall be determined on a Btu basis.
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.
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.
Systems using bagasse
If a system is designed to use bagasse for at least 90 percent of the energy source—
paragraph (1)(D) shall not apply, but
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.
.
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).
Extension of new energy efficient home credit
In General
Section 45L(g) of the Internal Revenue Code of 1986 is amended by striking December 31, 2007
and inserting December 31, 2010
.
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.
Modification and extension of energy efficient commercial buildings deduction
Increase in Credit Amount
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
.
Partial allowance
Subparagraph (A) of section 179D(1) of such Code is amended—
by striking $.60
and inserting $.75
, and
by striking $1.80
and inserting $2.25
.
Extension
Section 179D(g) of the Internal Revenue Code of 1986 is amended by striking December 31, 2007
and inserting December 31, 2010
.
Effective Date
The amendments made by this section shall apply to property placed in service after December 31, 2006.
Extension of nonbusiness energy property
In General
Section 25C(g) of the Internal Revenue Code of 1986 is amended by striking December 31, 2007
and inserting December 31, 2010
.
Effective Date
The amendment made by this section shall apply to property placed in service after the date of the enactment of this Act.