Text: H.R.6709 — 110th Congress (2007-2008)

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Introduced in House (07/31/2008)


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[Congressional Bills 110th Congress]
[From the U.S. Government Printing Office]
[H.R. 6709 Introduced in House (IH)]







110th CONGRESS
  2d Session
                                H. R. 6709

  To greatly enhance the Nation's path toward energy independence and 
  environmental, energy, economic, and national security, by amending 
 Federal policy to increase the production of domestic energy sources, 
      to dedicate fixed percentages of the royalties received for 
 conservation programs, environmental restoration projects, renewable 
 energy research and development, clean energy technology research and 
  development, increased development of existing energy sources, and 
  energy assistance for those in need, and to share a portion of such 
        royalties with producing States, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 31, 2008

Mr. Peterson of Pennsylvania (for himself, Mr. Abercrombie, Mr. Costa, 
  Mr. Burton of Indiana, Mr. Gene Green of Texas, Mr. Brown of South 
 Carolina, Mr. Lampson, Mr. Bishop of Utah, Mr. Walz of Minnesota, Mr. 
Hayes, Mr. Foster, Mrs. Capito, Mr. Boren, Mrs. Drake, Mr. Cuellar, Mr. 
  Tim Murphy of Pennsylvania, Mr. Altmire, Mr. Smith of Nebraska, Mr. 
 McIntyre, Mr. Sali, Mrs. Boyda of Kansas, Mr. Lamborn, Mr. Ortiz, Mr. 
Rogers of Kentucky, Ms. Herseth Sandlin, Mr. Kingston, Mr. Holden, Mr. 
 Miller of Florida, Mr. Cazayoux, Mr. Lewis of California, Mr. Barrow, 
 Mr. Wilson of South Carolina, Mr. Kanjorski, Mr. Kline of Minnesota, 
 Mr. Marshall, Mr. Mica, Mr. Donnelly, Mr. McCarthy of California, Mr. 
    Lincoln Davis of Tennessee, Mr. Terry, Mr. Patrick J. Murphy of 
    Pennsylvania, Mr. Souder, Mr. Bishop of Georgia, Mr. Pence, Mr. 
   Melancon, Mr. Broun of Georgia, Mr. Bartlett of Maryland, and Mr. 
   Taylor) introduced the following bill; which was referred to the 
 Committee on Natural Resources, and in addition to the Committees on 
Energy and Commerce, Ways and Means, Science and Technology, Education 
   and Labor, the Budget, and Rules, 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 greatly enhance the Nation's path toward energy independence and 
  environmental, energy, economic, and national security, by amending 
 Federal policy to increase the production of domestic energy sources, 
      to dedicate fixed percentages of the royalties received for 
 conservation programs, environmental restoration projects, renewable 
 energy research and development, clean energy technology research and 
  development, increased development of existing energy sources, and 
  energy assistance for those in need, and to share a portion of such 
        royalties with producing States, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``National Conservation, Environment, 
and Energy Independence Act''.

SEC. 2. TABLE OF CONTENTS.

    The table of contents for this Act is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.
   TITLE I--OFFSHORE AND ONSHORE LEASING AND OTHER ENERGY PRODUCTION

Sec. 101. Termination of prohibitions on expenditures for, and 
                            withdrawals from, offshore and onshore 
                            leasing and other limitations on energy 
                            production.
Sec. 102. Outer Continental Shelf leasing program.
Sec. 103. Sharing of revenues.
Sec. 104. Policies regarding buying and building American.
Sec. 105. Elimination of other restrictions on use of energy 
                            alternatives.
 TITLE II--CLEANER ENERGY PRODUCTION AND ENERGY CONSERVATION INCENTIVES

Sec. 201. Extension of renewable energy credit.
Sec. 202. Extension of credit for alternative fuel vehicles.
Sec. 203. Extension of alternative fuel vehicle refueling property 
                            credit.
Sec. 204. Extension of credit for energy efficient appliances.
Sec. 205. Extension of credit for nonbusiness energy property.
Sec. 206. Extension of credit for residential energy efficient 
                            property.
Sec. 207. Extension of new energy efficient home credit.
Sec. 208. Extension of energy efficient commercial buildings deduction.
Sec. 209. Extension of energy credit.
Sec. 210. Extension of credit for clean renewable energy bonds.
Sec. 211. Extension of credits for biodiesel and renewable diesel.
Sec. 212. Credit for plug-in hybrid vehicles.
   TITLE III--MODIFYING THE STRATEGIC PETROLEUM RESERVE AND FUNDING 
            CONSERVATION AND ENERGY RESEARCH AND DEVELOPMENT

Sec. 301. Findings.
Sec. 302. Definitions.
Sec. 303. Objectives.
Sec. 304. Modification of the Strategic Petroleum Reserve.
Sec. 305. Energy Independence and Security Fund.

   TITLE I--OFFSHORE AND ONSHORE LEASING AND OTHER ENERGY PRODUCTION

SEC. 101. TERMINATION OF PROHIBITIONS ON EXPENDITURES FOR, AND 
              WITHDRAWALS FROM, OFFSHORE AND ONSHORE LEASING AND OTHER 
              LIMITATIONS ON ENERGY PRODUCTION.

    (a) Prohibitions on Expenditures.--All provisions of Federal law 
that prohibit the expenditure of appropriated funds to conduct natural 
gas, oil, oil shale, and other energy production leasing and preleasing 
activities for Federal lands shall have no force or effect with respect 
to such activities.
    (b) Revocation Withdrawals.--All withdrawals of Federal submerged 
lands of the Outer Continental Shelf from leasing, including 
withdrawals by the President under the authority of section 12(a) of 
the Outer Continental Shelf Lands Act (43 U.S.C. 1341(a)), are hereby 
revoked and are no longer in effect with respect to the leasing of 
areas for exploration for, and development and production of natural 
gas and oil.
    (c) Gulf of Mexico Oil and Gas.--Section 104 of division C of the 
Tax Relief and Health Care Act of 2006 (Public Law 109-432; 120 Stat. 
3003) is repealed.
    (d) Oil Shale.--Section 433 of the Department of the Interior, 
Environment, and Related Agencies Appropriations Act, 2008 (division F 
of Public Law 110-161; 121 Stat. 2152) is repealed.

SEC. 102. OUTER CONTINENTAL SHELF LEASING PROGRAM.

    The Outer Continental Shelf Lands Act (43 U.S.C. 1331 et seq.) is 
amended by inserting after section 9 the following:

``SEC. 10. MORATORIA AREA AND STATE DISAPPROVAL REQUIREMENT WITH 
              RESPECT TO LEASING.

    ``(a) Prohibition on Leasing.--The Secretary may not issue any 
lease authorizing exploration for, or development of, natural gas or 
oil in any area of the outer Continental Shelf that is located within 
25 miles of the coastline of a State.
    ``(b) State Disapproval Authority.--The Secretary may not issue any 
lease authorizing exploration for, or development of, natural gas or 
oil in any area of the outer Continental Shelf that is located more 
than 25 miles and less than 50 miles from the coastline of a State if 
the State has enacted, within the 1-year period beginning on the date 
of the enactment of the National Conservation, Environment, and Energy 
Independence Act, a law disapproving of the issuance of such leases by 
the Secretary.
    ``(c) Military Operations.--The Secretary shall consult with the 
Secretary of Defense regarding military operations needs in the Outer 
Continental Shelf. The Secretary shall work with the Secretary of 
Defense to resolve any conflicts that might arise between such 
operations and leasing under this section. If the Secretaries are 
unable to resolve all such conflicts, any unresolved issues shall be 
referred by the Secretaries to the President in a timely fashion for 
immediate resolution.''.

SEC. 103. SHARING OF REVENUES.

    (a) In General.--Section 8(g) of the Outer Continental Shelf Lands 
Act (43 U.S.C. 1337(g)) is amended--
            (1) in paragraph (2) by striking ``Notwithstanding'' and 
        inserting ``Except as provided in paragraph (6), and 
        notwithstanding'';
            (2) by redesignating paragraphs (6) and (7) as paragraphs 
        (8) and (9); and
            (3) by inserting after paragraph (5) the following:
            ``(6) Bonus bids and royalties under qualified leases.--
                    ``(A) New leases.--Of amounts received by the 
                United States as bonus bids, royalties, rentals, and 
                other sums collected under any qualified lease on 
                submerged lands made available for leasing under this 
                Act by the enactment of the National Conservation, 
                Environment, and Energy Independence Act that are 
                located within the seaward boundaries of a State 
                established under section 4(a)(2)(A)--
                            ``(i) 30 percent shall be deposited in the 
                        general fund of the Treasury;
                            ``(ii) 30 percent shall be paid to the 
                        States that are producing States with respect 
                        to those submerged lands;
                            ``(iii) 8 percent shall be deposited in the 
                        Conservation Reserve established by paragraph 
                        (7);
                            ``(iv) 10 percent shall be deposited in the 
                        Environment Restoration Reserve established by 
                        paragraph (7);
                            ``(v) 15 percent shall be deposited in the 
                        Renewable Energy Reserve established by 
                        paragraph (7);
                            ``(vi) 5 percent shall be deposited in the 
                        Carbon Capture/Sequestration and Nuclear Waste 
                        Reserve Established by paragraph (7); and
                            ``(vii) 2 percent shall be available to the 
                        Secretary of Health and Human Services for 
                        carrying out the Low-Income Home Energy 
                        Assistance Act of 1981 (42 U.S.C. 8621, et 
                        seq.).
                    ``(B) Leased tract that lies partially within the 
                seaward boundaries of a state.--In the case of a leased 
                tract that lies partially within the seaward boundaries 
                of a State, the amounts of bonus bids and royalties 
                from such tract that are subject to subparagraph 
                (A)(ii) with respect to such State shall be a 
                percentage of the total amounts of bonus bids and 
                royalties from such tract that is equivalent to the 
                total percentage of surface acreage of the tract that 
                lies within such seaward boundaries.
                    ``(C) Use of payments to states.--Amounts paid to a 
                State under subparagraph (A)(ii) shall be used by the 
                State for one or more of the following:
                            ``(i) Education.
                            ``(ii) Transportation.
                            ``(iii) Coastal restoration, environmental 
                        restoration, and beach replenishment.
                            ``(iv) Energy infrastructure.
                            ``(v) Renewable energy development.
                            ``(vi) Energy efficiency and conservation.
                            ``(vii) Any other purpose determined by 
                        State law.
                    ``(D) Definitions.--In this paragraph:
                            ``(i) Adjacent state.--The term `Adjacent 
                        State' means, with respect to any program, 
                        plan, lease sale, leased tract or other 
                        activity, proposed, conducted, or approved 
                        pursuant to the provisions of this Act, any 
                        State the laws of which are declared, pursuant 
                        to section 4(a)(2), to be the law of the United 
                        States for the portion of the outer Continental 
                        Shelf on which such program, plan, lease sale, 
                        leased tract, or activity appertains or is, or 
                        is proposed to be, conducted.
                            ``(ii) Adjacent zone.--The term `adjacent 
                        zone' means, with respect to any program, plan, 
                        lease sale, leased tract, or other activity, 
                        proposed, conducted, or approved pursuant to 
                        the provisions of this Act, the portion of the 
                        outer Continental Shelf for which the laws of a 
                        particular adjacent State are declared, 
                        pursuant to section 4(a)(2), to be the law of 
                        the United States.
                            ``(iii) Producing state.--The term 
                        `producing State' means an Adjacent State 
                        having an adjacent zone containing leased 
                        tracts from which are derived bonus bids and 
                        royalties under a lease under this Act.
                            ``(iv) State.--The term `State' includes 
                        Puerto Rico and the other territories of the 
                        United States.
                            ``(v) Qualified lease.--The term `qualified 
                        lease' means a natural gas or oil lease made 
                        available under this Act granted after the date 
                        of the enactment of the National Conservation, 
                        Environment, and Energy Independence Act, for 
                        an area that is available for leasing as a 
                        result of enactment of section 101 of that Act.
                    ``(E) Application.--This paragraph shall apply to 
                bonus bids and royalties received by the United States 
                under qualified leases after September 30, 2008.
            ``(7) Establishment of reserve accounts.--
                    ``(A) In general.--For budgetary purposes, there is 
                established as a separate account to receive deposits 
                under paragraph (6)(A)--
                            ``(i) the Conservation Reserve, to offset 
                        the cost of legislation enacted after the date 
                        of the enactment of the National Conservation, 
                        Environment, and Energy Independence Act for 
                        conservation programs, such as weatherization, 
                        and conservation tax credits and deductions for 
                        energy efficiency in the residential, 
                        commercial, industrial and public sectors, 
                        including Conservation Districts;
                            ``(ii) the Environment Restoration Reserve, 
                        to offset the cost of legislation enacted after 
                        the date of the enactment of the National 
                        Conservation, Environment, and Energy 
                        Independence Act to conduct restoration 
                        activities to improve the overall health of the 
                        ecosystems primarily or entirely within 
                        wildlife refuges, national parks, lakes, bays, 
                        rivers, and streams, including the Great Lakes, 
                        the Chesapeake and Delaware Bays, the San 
                        Francisco Bay/Sacramento San Joaquin Bay Delta, 
                        the Florida Everglades, New York Harbor, the 
                        Colorado River Basin, and Intracoastal 
                        Waterways and inlets that serve them;
                            ``(iii) the Renewable Energy Reserve, to 
                        offset the cost of legislation enacted after 
                        the date of the enactment of the National 
                        Conservation, Environment, and Energy 
                        Independence Act to accelerate the use of 
                        cleaner domestic energy resources and 
                        alternative fuels; to promote the utilization 
                        of energy-efficient products and practices; and 
                        to increase research, development, and 
                        deployment of clean renewable energy and 
                        efficiency technologies and job training 
                        programs for those purposes; and
                            ``(iv) the Carbon Capture and Sequestration 
                        Reserve, to offset the cost of legislation 
                        enacted after the date of the enactment of the 
                        National Conservation, Environment, and Energy 
                        Independence Act to promote research and 
                        development projects associated with carbon 
                        capture and storage in the production of liquid 
                        transportation fuels, synthetic natural gas, 
                        chemical feedstocks, and electricity, and for 
                        the disposition and recycling/reprocessing of 
                        nuclear waste from nuclear power plants.
                    ``(B) Procedure for adjustments.--
                            ``(i) Budget committee chairman.--After the 
                        reporting of a bill or joint resolution, or the 
                        offering of an amendment thereto or the 
                        submission of a conference report thereon, 
                        providing funding for the purposes set forth in 
                        clause (i), (ii), (iii), or (iv) of 
                        subparagraph (A) in excess of the amount of the 
                        deposits under paragraph (6)(A) for those 
                        purposes for fiscal year 2009, the chairman of 
                        the Committee on the Budget of the applicable 
                        House of Congress shall make the adjustments 
                        set forth in clause (ii) for the amount of new 
                        budget authority and outlays in that measure 
                        and the outlays flowing from that budget 
                        authority.
                            ``(ii) Matters to be adjusted.--The 
                        adjustments referred to in clause (i) are to be 
                        made to--
                                    ``(I) the discretionary spending 
                                limits, if any, set forth in the 
                                appropriate concurrent resolution on 
                                the budget;
                                    ``(II) the allocations made 
                                pursuant to the appropriate concurrent 
                                resolution on the budget pursuant to 
                                section 302(a) of the Congressional 
                                Budget Act of 1974; and
                                    ``(III) the budget aggregates 
                                contained in the appropriate concurrent 
                                resolution on the budget as required by 
                                section 301(a) of the Congressional 
                                Budget Act of 1974.
                            ``(iii) Amounts of adjustments.--The 
                        adjustments referred to in clauses (i) and (ii) 
                        shall not exceed the receipts estimated by the 
                        Congressional Budget Office that are 
                        attributable to this Act for the fiscal year in 
                        which the adjustments are made.
                    ``(C) Expenditures only by secretary of the 
                interior in consultation.--Legislation shall not be 
                treated as legislation referred to in subparagraph (A) 
                unless any expenditure under such legislation for a 
                purpose referred to in that subparagraph may be made 
                only after consultation with the Administrator of the 
                Environmental Protection Agency, the Administrator of 
                the National Oceanic and Atmospheric Administration, 
                the Secretary of the Army acting through the Corps of 
                Engineers, and, as appropriate, the Secretary of State.
            ``(8) Maintenance of effort by states.--The Secretary of 
        the Interior, the Secretary of Health and Human Services, the 
        Secretary of Energy, and any other Federal official with 
        authority to implement legislation referred to in paragraph 
        (6)(A) shall ensure that financial assistance provided to a 
        State under that legislation for any purpose with amounts made 
        available under this subsection or in any legislation with 
        respect to which paragraph (7) applies supplement, and do not 
        replace, the amounts expended by the State for that purpose 
        before the date of the enactment of the National Conservation, 
        Environment, and Energy Independence Act''.
    (b) Establishment of State Seaward Boundaries.--Section 4(a)(2)(A) 
of the Outer Continental Shelf Lands Act (43 U.S.C. 1333(a)(2)(A)) is 
amended in the first sentence by striking ``, and the President'' and 
all that follows through the end of the sentence and inserting the 
following: ``. Such extended lines are deemed to be as indicated on the 
maps for each Outer Continental Shelf region entitled `Alaska OCS 
Region State Adjacent Zone and OCS Planning Areas', `Pacific OCS Region 
State Adjacent Zones and OCS Planning Areas', `Gulf of Mexico OCS 
Region State Adjacent Zones and OCS Planning Areas', and `Atlantic OCS 
Region State Adjacent Zones and OCS Planning Areas', all of which are 
dated September 2005 and on file in the Office of the Director, 
Minerals Management Service. The preceding sentence shall not apply 
with respect to the treatment under section 105 of the Gulf of Mexico 
Energy Security Act of 2006 (title I of division C of Public Law 109-
432) of qualified outer Continental Shelf revenues deposited and 
disbursed under subsection (a)(2) of that section.''.

SEC. 104. POLICIES REGARDING BUYING AND BUILDING AMERICAN.

    (a) Intent of Congress.--It is the intent of the Congress that this 
Act, among other things, result in a healthy and growing American 
industrial, manufacturing, transportation, and service sector employing 
the vast talents of America's workforce to assist in the development of 
energy from domestic sources. Moreover, the Congress intends to monitor 
the deployment of personnel and material onshore and offshore to 
encourage the development of American technology and manufacturing to 
enable United States workers to benefit from this Act by good jobs and 
careers, as well as the establishment of important industrial 
facilities to support expanded access to American resources.
    (b) Safeguard for Extraordinary Ability.--Section 30(a) of the 
Outer Continental Shelf Lands Act (43 U.S.C. 1356(a)) is amended in the 
matter preceding paragraph (1) by striking ``regulations which'' and 
inserting ``regulations that shall be supplemental and complimentary 
with and under no circumstances a substitution for the provisions of 
the Constitution and laws of the United States extended to the subsoil 
and seabed of the outer Continental Shelf pursuant to section 4 of this 
Act, except insofar as such laws would otherwise apply to individuals 
who have extraordinary ability in the sciences, arts, education, or 
business, which has been demonstrated by sustained national or 
international acclaim, and that''.

SEC. 105. ELIMINATION OF OTHER RESTRICTIONS ON USE OF ENERGY 
              ALTERNATIVES.

    (a) Renewable Biomass.--Section 211(o)(1)(I) of the Clean Air Act 
(42 U.S.C. 7545(o)(1)(I)) is amended effective January 1, 2009--
            (1) in clause (ii), by striking ``on non-federal land''; 
        and
            (2) in clause (iv), by striking ``that are from non-federal 
        forestlands, including forestlands'' and inserting ``from 
        forestlands, including those on public lands and those''.
    (b) Alternative Fuels.--Section 526 of the Energy Independence and 
Security Act of 2007 (42 U.S.C. 17142) is repealed.
    (c) Limitation on Number of New Qualified Hybrid Advanced Lean-Burn 
Technology Vehicles.--Section 30B of the Internal Revenue Code of 1986 
is amended by striking subsection (f).

 TITLE II--CLEANER ENERGY PRODUCTION AND ENERGY CONSERVATION INCENTIVES

SEC. 201. EXTENSION OF RENEWABLE ENERGY CREDIT.

    Each of the following provisions of section 45(d) of the Internal 
Revenue Code of 1986 (relating to qualified facilities) is amended by 
striking ``January 1, 2009'' and inserting ``January 1, 2013'':
            (1) Paragraph (1) (relating to wind facility).
            (2) Clauses (i) and (ii) of paragraph (2)(A) (relating to 
        closed-loop biomass facility).
            (3) Clauses (i)(I) and (ii) of paragraph (3)(A) (relating 
        to (open-loop biomass facility).
            (4) Paragraph (4) (relating to geothermal energy facility).
            (5) Paragraph (5) (relating to small irrigation power 
        facility).
            (6) Paragraph (6) (relating to landfill gas facilities).
            (7) Paragraph (7) (relating to trash combustion 
        facilities).
            (8) Paragraph (8) (relating to refined coal production 
        facility).
            (9) Subparagraphs (A) and (B) of paragraph (9) (relating to 
        qualified hydropower facility).

SEC. 202. EXTENSION OF CREDIT FOR ALTERNATIVE FUEL VEHICLES.

    Paragraphs (2), (3), and (4) of section 30B(j) of the Internal 
Revenue Code of 1986 are each amended by striking the date therein and 
inserting ``December 31, 2014''.

SEC. 203. EXTENSION OF ALTERNATIVE FUEL VEHICLE REFUELING PROPERTY 
              CREDIT.

    (a) In General.--Paragraph (2) of section 30C(g) of such Code 
(relating to termination) is amended by striking ``December 31, 2009'' 
and inserting ``December 31, 2010''.
    (b) Alternative Fuels.--Paragraph (1) of section 30C(g) of the 
Internal Revenue Code of 1986 is amended by striking ``hydrogen,'' 
inserting ``hydrogen or alternative fuels (as defined in section 
30B(e)(4)(B)).''.

SEC. 204. EXTENSION OF CREDIT FOR ENERGY EFFICIENT APPLIANCES.

    (a) In General.--Subsection (b) of section 45M of the Internal 
Revenue Code of 1986 (relating to applicable amount) is amended by 
striking ``calendar year 2006 or 2007'' each place it appears in 
paragraphs (1)(A)(i), 1(1)(B)(i), (1)(C)(ii)(I), and (1)(C)(iii)(I), 
and inserting ``calendar year 2006, 2007, 2008, 2009, 2010, 2011, 2012, 
or 2013''.
    (b) Restart of Credit Limitation.--Paragraph (1) of section 45M(e) 
of such Code (relating to aggregate credit amount allowed) is amended 
by inserting ``beginning after December 31, 2007'' after ``for all 
prior taxable years''.
    (c) Effective Date.--The amendments made by this section shall 
apply to appliances produced after December 31, 2007.

SEC. 205. EXTENSION OF CREDIT FOR NONBUSINESS ENERGY PROPERTY.

    (a) In General.--Section 25C(g) of the Internal Revenue Code of 
1986 (relating to termination) is amended by striking ``December 31, 
2007'' and inserting ``December 31, 2013''.
    (b) Effective Date.--The amendment made by this section shall apply 
to property placed in service after December 31, 2007.

SEC. 206. EXTENSION OF CREDIT FOR RESIDENTIAL ENERGY EFFICIENT 
              PROPERTY.

    Section 25D(g) of the Internal Revenue Code of 1986 (relating to 
termination) is amended by striking ``December 31, 2008'' and inserting 
``December 31, 2014''.

SEC. 207. EXTENSION OF NEW ENERGY EFFICIENT HOME CREDIT.

    Subsection (g) of section 45L of the Internal Revenue Code of 1986 
(relating to termination) is amended by striking ``December 31, 2008'' 
and inserting ``December 31, 2013''.

SEC. 208. EXTENSION OF ENERGY EFFICIENT COMMERCIAL BUILDINGS DEDUCTION.

    Section 179D(h) of the Internal Revenue Code of 1986 (relating to 
termination) is amended by striking ``December 31, 2008'' and inserting 
``December 31, 2013''.

SEC. 209. EXTENSION OF ENERGY CREDIT.

    (a) Solar Energy Property.--Paragraphs (2)(A)(i)(II) and (3)(A)(ii) 
of section 48(a) of the Internal Revenue Code of 1986 (relating to 
energy credit) are each amended by striking ``January 1, 2009'' and 
inserting ``January 1, 2017''.
    (b) Fuel Cell Property.--Subparagraph (E) of section 48(c)(1) of 
such Code (relating to qualified fuel cell property) is amended by 
striking ``December 31, 2008'' and inserting ``December 31, 2016''.
    (c) Microturbine Property.--Subparagraph (E) of section 48(c)(2) of 
such Code (relating to qualified microturbine property) is amended by 
striking ``December 31, 2008'' and inserting ``December 31, 2013''.

SEC. 210. EXTENSION OF CREDIT FOR CLEAN RENEWABLE ENERGY BONDS.

    (a) Extension.--Section 54(m) of the Internal Revenue Code of 1986 
(relating to termination) is amended by striking ``December 31, 2008'' 
and inserting ``December 31, 2013''.

SEC. 211. EXTENSION OF CREDITS FOR BIODIESEL AND RENEWABLE DIESEL.

    (a) In General.--Sections 40A(g), 6426(c)(6), and 6427(e)(5)(B) of 
the Internal Revenue Code of 1986 are each amended by striking 
``December 31, 2008'' and inserting ``December 31, 2013''.
    (b) Effective Date.--The amendments made by this section shall 
apply to fuel produced, and sold or used, after December 31, 2008.

SEC. 212. CREDIT FOR PLUG-IN HYBRID VEHICLES.

    (a) In General.--Subpart B of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to other credits) is 
amended by adding at the end the following new section:

``SEC. 30D. PLUG-IN HYBRID VEHICLES.

    ``(a) Allowance of Credit.--There shall be allowed as a credit 
against the tax imposed by this chapter for the taxable year an amount 
equal to the sum of the credit amounts determined under subsection (b) 
with respect to each qualified plug-in hybrid vehicle placed in service 
by the taxpayer during the taxable year.
    ``(b) Per Vehicle Dollar Limitation.--
            ``(1) In general.--The amount determined under this 
        subsection with respect to any qualified plug-in hybrid vehicle 
        is the sum of the amounts determined under paragraphs (2) and 
        (3) with respect to such vehicle.
            ``(2) Base amount.--The amount determined under this 
        paragraph is $4,000.
            ``(3) Battery capacity.--In the case of vehicle which draws 
        propulsion energy from a battery with not less than 5 kilowatt 
        hours of capacity, the amount determined under this paragraph 
        is $200, plus $200 for each kilowatt hour of capacity in excess 
        of 5 kilowatt hours. The amount determined under this paragraph 
        shall not exceed $2,000.
    ``(c) Application With Other Credits.--
            ``(1) Business credit treated as part of general business 
        credit.--So much of the credit which would be allowed under 
        subsection (a) for any taxable year (determined without regard 
        to this subsection) that is attributable to property of a 
        character subject to an allowance for depreciation shall be 
        treated as a credit listed in section 38(b) for such taxable 
        year (and not allowed under subsection (a)).
            ``(2) Personal credit.--
                    ``(A) In general.--For purposes of this title, the 
                credit allowed under subsection (a) for any taxable 
                year (determined after application of paragraph (1)) 
                shall be treated as a credit allowable under subpart A 
                for such taxable year.
                    ``(B) Limitation based on amount of tax.--In the 
                case of a taxable year to which section 26(a)(2) does 
                not apply, the credit allowed under subsection (a) for 
                any taxable year (determined after application of 
                paragraph (1)) shall not exceed the excess of--
                            ``(i) the sum of the regular tax liability 
                        (as defined in section 26(b)) plus the tax 
                        imposed by section 55, over
                            ``(ii) the sum of the credits allowable 
                        under subpart A (other than this section and 
                        sections 23 and 25D) and section 27 for the 
                        taxable year.
    ``(d) Qualified Plug-In Hybrid Vehicle.--For purposes of this 
section--
            ``(1) In general.--The term `qualified plug-in hybrid 
        vehicle' means a motor vehicle (as defined in section 
        30(c)(2))--
                    ``(A) the original use of which commences with the 
                taxpayer,
                    ``(B) which is acquired for use or lease by the 
                taxpayer and not for resale,
                    ``(C) which is made by a manufacturer,
                    ``(D) which has a gross vehicle weight rating of 
                less than 14,000 pounds,
                    ``(E) which has received a certificate of 
                conformity under the Clean Air Act and meets or exceeds 
                the Bin 5 Tier II emission standard established in 
                regulations prescribed by the Administrator of the 
                Environmental Protection Agency under section 202(i) of 
                the Clean Air Act for that make and model year vehicle,
                    ``(F) which is propelled to a significant extent by 
                an electric motor which draws electricity from a 
                battery which--
                            ``(i) has a capacity of not less than 4 
                        kilowatt hours, and
                            ``(ii) is capable of being recharged from 
                        an external source of electricity, and
                    ``(G) which either--
                            ``(i) is also propelled to a significant 
                        extent by other than an electric motor, or
                            ``(ii) has a significant onboard source of 
                        electricity which also recharges the battery 
                        referred to in subparagraph (F).
            ``(2) Exception.--The term `qualified plug-in hybrid 
        vehicle' shall not include any vehicle which is not a passenger 
        automobile or light truck if such vehicle has a gross vehicle 
        weight rating of less than 8,500 pounds.
            ``(3) Other terms.--The terms `passenger automobile', 
        `light truck', and `manufacturer' have the meanings given such 
        terms in regulations prescribed by the Administrator of the 
        Environmental Protection Agency for purposes of the 
        administration of title II of the Clean Air Act (42 U.S.C. 7521 
        et seq.).
            ``(4) Battery capacity.--The term `capacity' means, with 
        respect to any battery, the quantity of electricity which the 
        battery is capable of storing, expressed in kilowatt hours, as 
        measured from a 100 percent state of charge to a 0 percent 
        state of charge.
    ``(e) Special Rules.--
            ``(1) Basis reduction.--The basis of any property for which 
        a credit is allowable under subsection (a) shall be reduced by 
        the amount of such credit (determined without regard to 
        subsection (c)).
            ``(2) Recapture.--The Secretary shall, by regulations, 
        provide for recapturing the benefit of any credit allowable 
        under subsection (a) with respect to any property which ceases 
        to be property eligible for such credit.
            ``(3) Property used outside united states, etc., not 
        qualified.--No credit shall be allowed under subsection (a) 
        with respect to any property referred to in section 50(b)(1) or 
        with respect to the portion of the cost of any property taken 
        into account under section 179.
            ``(4) Election not to take credit.--No credit shall be 
        allowed under subsection (a) for any vehicle if the taxpayer 
        elects to not have this section apply to such vehicle.
            ``(5) Property used by tax-exempt entity; interaction with 
        air quality and motor vehicle safety standards.--Rules similar 
        to the rules of paragraphs (6) and (10) of section 30B(h) shall 
        apply for purposes of this section.''.
    (b) Plug-In Vehicles Not Treated as New Qualified Hybrid 
Vehicles.--Section 30B(d)(3) is amended by adding at the end the 
following new subparagraph:
                    ``(D) Exclusion of plug-in vehicles.--Any vehicle 
                with respect to which a credit is allowable under 
                section 30D (determined without regard to subsection 
                (c) thereof) shall not be taken into account under this 
                section.''.
    (c) Credit Made Part of General Business Credit.--Section 38(b) is 
amended by striking ``plus'' at the end of paragraph (32), by striking 
the period at the end of paragraph (33) and inserting ``, plus'', and 
by adding at the end the following new paragraph:
            ``(34) the portion of the plug-in hybrid vehicle credit to 
        which section 30D(c)(1) applies.''.
    (d) Conforming Amendments.--
            (1)(A) Section 24(b)(3)(B), as amended by this Act, is 
        amended by striking ``and 25D'' and inserting ``25D, and 30D''.
            (B) Section 25(e)(1)(C)(ii) is amended by inserting 
        ``30D,'' after ``25D,''.
            (C) Section 25B(g)(2), as amended by this Act, is amended 
        by striking ``and 25D'' and inserting ``, 25D, and 30D''.
            (D) Section 26(a)(1), as amended by this Act, is amended by 
        striking ``and 25D'' and inserting ``25D, and 30D''.
            (E) Section 1400C(d)(2) is amended by striking ``and 25D'' 
        and inserting ``25D, and 30D''.
            (2) Section 1016(a) is amended by striking ``and'' at the 
        end of paragraph (35), by striking the period at the end of 
        paragraph (36) and inserting ``, and'', and by adding at the 
        end the following new paragraph:
            ``(37) to the extent provided in section 30D(e)(1).''.
            (3) Section 6501(m) is amended by inserting ``30D(e)(4),'' 
        after ``30C(e)(5),''.
            (4) The table of sections for subpart B of part IV of 
        subchapter A of chapter 1 is amended by adding at the end the 
        following new item:

``Sec. 30D. Plug-in hybrid vehicles.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2008.

   TITLE III--MODIFYING THE STRATEGIC PETROLEUM RESERVE AND FUNDING 
            CONSERVATION AND ENERGY RESEARCH AND DEVELOPMENT

SEC. 301. FINDINGS.

    Congress finds the following:
            (1) The Strategic Petroleum Reserve (SPR) was created by 
        Congress in 1975, to protect the Nation from any future oil 
        supply disruptions. When the program was established, United 
        States refiners were capable of handling light and medium crude 
        and the make up of the SPR matched this capacity. This is not 
        the case today.
            (2) A GAO analysis found that nearly half of the refineries 
        considered vulnerable to supply disruptions are not compatible 
        with the types of oil currently stored in the SPR and would be 
        unable to maintain normal refining capacity if forced to rely 
        on SPR oil as currently constituted, thereby reducing the 
        effectiveness of the SPR in the event of a supply disruption. 
        GAO concluded that the SPR should be comprised of at least 10 
        percent heavy crude.
            (3) This Act implements the GAO recommendation and 
        dedicates funds received from the transactions to existing 
        energy conservation, research, and assistance programs.

SEC. 302. DEFINITIONS.

    In this title--
            (1) the term ``light grade petroleum'' means crude oil with 
        an API gravity of 35 degrees or higher;
            (2) the term ``heavy grade petroleum'' means crude oil with 
        an API gravity of 26 degrees or lower; and
            (3) the term ``Secretary'' means the Secretary of Energy.

SEC. 303. OBJECTIVES.

    The objectives of this title are as follows:
            (1) To modernize the composition of the Strategic Petroleum 
        Reserve to reflect the current processing capabilities of 
        refineries in the United States.
            (2) To provide increased funding to accelerate 
        conservation, energy research and development, and assistance 
        through existing programs.

SEC. 304. MODIFICATION OF THE STRATEGIC PETROLEUM RESERVE.

    Notwithstanding section 161 of the Energy Policy and Conservation 
Act (42 U.S.C. 6241), the Secretary shall publish a plan not later than 
30 days after the date of enactment of this Act to--
            (1) exchange as soon as possible light grade petroleum from 
        the Strategic Petroleum Reserve, in an amount equal to 10 
        percent of the total number of barrels of crude oil in the 
        Reserve as of the date of enactment of this Act, for an 
        equivalent volume of heavy grade petroleum plus any additional 
        cash bonus bids received that reflect the difference in the 
        market value between light grade petroleum and heavy grade 
        petroleum and the timing of deliveries of the heavy grade 
        petroleum;
            (2) from the gross proceeds of the cash bonus bids, deposit 
        the amount necessary to pay for the direct administrative and 
        operational costs of the exchange into the SPR Petroleum 
        Account established under section 167 of the Energy Policy and 
        Conservation Act (42 U.S.C. 6247); and
            (3) deposit 90 percent of the remaining net proceeds from 
        the exchange into the account established under section 305(a).

SEC. 305. ENERGY INDEPENDENCE AND SECURITY FUND.

    (a) Establishment.--There is hereby established in the Treasury of 
the United States the ``Energy Independence and Security Fund'' (in 
this section referred to as the ``Fund'').
    (b) Administration.--The Secretary shall be responsible for 
administering the Fund for the purpose of carrying out this section.
    (c) Deposits.--The Secretary shall transfer the balance of funds in 
the SPR Petroleum Account on the date of enactment of this Act in 
excess of $10,000,000 into the Fund.
    (d) Distribution of Funds.--The Secretary shall make available for 
obligation, without further appropriation and without fiscal year 
limitation, the following amounts from the Fund:
            (1) Advanced research projects agency--energy.--The 
        Secretary shall transfer $100,000,000 to the account ``Energy 
        Transformation Acceleration Fund'', established under section 
        5012(m) of the America COMPETES Act (42 U.S.C. 16538(m)), to 
        remain available until expended. Of the funds so transferred, 
        the Secretary shall further allocate the amounts made available 
        for obligation as follows:
                    (A) $50,000,000 shall be available for university-
                based research projects.
                    (B) $10,000,000 shall be available for program 
                direction expenses.
            (2) Wind energy research and development.--The Secretary 
        shall transfer $15,000,000 to the account ``Energy Efficiency 
        and Renewable Energy'', to remain available until expended, for 
        necessary expenses for a program to support the development of 
        next-generation wind turbines, including turbines capable of 
        operating in areas with low wind speeds, as authorized in 
        section 931(a)(2)(B) of the Energy Policy Act of 2005 (42 
        U.S.C. 16231(a)(2)(B)).
            (3) Solar energy research and development.--The Secretary 
        shall transfer $30,000,000 to the account ``Energy Efficiency 
        and Renewable Energy'', to remain available until expended, for 
        necessary expenses for a program to accelerate the research, 
        development, demonstration, and deployment of solar energy 
        technologies, and public education and outreach materials 
        pursuant to such program, as authorized by section 931(a)(2)(A) 
        of the Energy Policy Act of 2005 (42 U.S.C. 16231(a)(2)(A)).
            (4) Low income weatherization and liheap.--The Secretary 
        shall transfer $100,000,000 to the account ``Weatherization 
        Assistance Program'', to remain available until expended, for 
        necessary expenses for a program to weatherize low income 
        housing, as authorized by section 411 of the Energy 
        Independence and Security Act of 2007 (Public Law 110-140). The 
        Secretary shall transfer $100,000,000 to the Secretary of 
        Health and Human Services for distribution to States under 
        section 2604(a) through (d) of the Low-Income Home Energy 
        Assistance Act of 1981 (42 U.S.C. 8623(a)-(d)).
            (5) Marine and hydrokinetic renewable electric energy.--The 
        Secretary shall transfer $30,000,000 to the account ``Energy 
        Efficiency and Renewable Energy'', to remain available until 
        expended, for necessary expenses for a program to accelerate 
        the research, development, demonstration, and deployment of 
        ocean and wave energy, including hydrokinetic renewable energy, 
        as authorized by section 931 of the Energy Policy Act of 2005 
        (42 U.S.C. 16231) and section 636 of the Energy Independence 
        and Security Act of 2007 (42 U.S.C. 17215).
            (6) Advanced vehicles research, development, and 
        demonstration.--The Secretary shall transfer $40,000,000 to the 
        account ``Energy Efficiency and Renewable Energy'', to remain 
        available until expended, for necessary expenses for research, 
        development, and demonstration on advanced, cost-effective 
        technologies to improve the energy efficiency and environmental 
        performance of vehicles, as authorized in section 911(a)(2)(A) 
        of the Energy Policy Act of 2005 (42 U.S.C. 16191(a)(2)(A)).
            (7) Industrial energy efficiency research and 
        development.--The Secretary shall transfer $110,000,000 to the 
        account ``Energy Efficiency and Renewable Energy'', to remain 
        available until expended, for necessary expenses for a program 
        to accelerate the research, development, demonstration, and 
        deployment of new technologies to improve the energy efficiency 
        and reduce greenhouse gas emissions from industrial processes, 
        as authorized in section 911(a)(2)(C) of the Energy Policy Act 
        of 2005 (42 U.S.C. 16191(a)(2)(C)) and in section 452 of the 
        Energy Independence and Security Act of 2007 (42 U.S.C. 17111).
            (8) Building and lighting energy efficiency research and 
        development.--The Secretary shall transfer $70,000,000 to the 
        account ``Energy Efficiency and Renewable Energy'', to remain 
        available until expended, for necessary expenses for a program 
        to accelerate the research, development, demonstration, and 
        deployment of new technologies to improve the energy efficiency 
        of and reduce greenhouse gas emissions from buildings, as 
        authorized in section 321(g) of the Energy Independence and 
        Security Act of 2007 (42 U.S.C. 6295 note), section 422 of the 
        Energy Independence and Security Act of 2007 (42 U.S.C. 17082), 
        and section 912 of the Energy Policy Act of 2005 (42 U.S.C. 
        16192).
            (9) Geothermal energy development.--The Secretary shall 
        transfer $30,000,000 to the account ``Energy Efficiency and 
        Renewable Energy'', to remain available until expended, for 
        necessary expenses for geothermal research and development 
        activities to be managed by the National Renewable Energy 
        Laboratory, as authorized by sections 613, 614, 615, and 616 of 
        the Energy Independence and Security Act of 2007 (42 U.S.C. 
        17192-95) and section 931(a)(2)(C) of the Energy Policy Act of 
        2005 (42 U.S.C. 16231(a)(2)(C)).
            (10) Smart grid technology research, development, and 
        demonstration.--The Secretary shall transfer $30,000,000 to the 
        account ``Energy Efficiency and Renewable Energy'', to remain 
        available until expended, for necessary expenses for research, 
        development, and demonstration of smart grid technologies, as 
        authorized by section 1304 of the Energy Independence and 
        Security Act of 2007 (42 U.S.C. 17384).
            (11) Carbon capture and storage.--The Secretary shall 
        transfer $385,000,000 to the account ``Fossil Energy Research 
        and Development'', to remain available until expended, for 
        necessary expenses for a program of demonstration projects of 
        carbon capture and storage, and for a research program to 
        address public health, safety, and environmental impacts, as 
        authorized by section 963 of the Energy Policy Act of 2005 (42 
        U.S.C. 16293) and sections 703 and 707 of the Energy 
        Independence and Security Act of 2007 (42 U.S.C. 17251, 17255).
            (12) Nonconventional domestic natural gas production and 
        environmental research.--
                    (A) The Secretary shall transfer $50,000,000 to the 
                account authorized by section 999H(e) of the Energy 
                Policy Act of 2005 (42 U.S.C. 16378(e)), to remain 
                available until expended.
                    (B) The Secretary shall transfer $15,000,000 to the 
                account ``Fossil Energy Research and Development'', to 
                remain available until expended, for necessary expenses 
                for a program of basin-oriented assessments and public 
                and private partnerships involving States and industry 
                to foster the development of regional advanced 
                technological, regulatory, and economic development 
                strategies for the efficient and environmentally 
                sustainable recovery and market delivery of natural gas 
                and domestic petroleum resources within the United 
                States, and for support for the Stripper Well 
                Consortium.
            (13) Hydrogen research and development.--The Secretary 
        shall transfer $5,000,000 to the account ``Energy Efficiency 
        and Renewable Energy'', to remain available until expended, for 
        necessary expenses for the Department of Energy's H-Prize 
        Program, as authorized by section 1008(f) of the Energy Policy 
        Act of 2005 (42 U.S.C. 16396(f)).
            (14) Energy storage for transportation and electric 
        power.--
                    (A) The Secretary shall transfer $30,000,000 to the 
                account ``Basic Energy Sciences'', to remain available 
                until expended, for necessary expenses for a program to 
                accelerate basic research on energy storage systems to 
                support electric drive vehicles, stationary 
                applications, and electricity transmission and 
                distribution, as authorized by section 641(p)(1) of the 
                Energy Independence and Security Act of 2007 (42 U.S.C. 
                17231(p)(1)).
                    (B) The Secretary shall transfer $70,000,000 to the 
                account ``Energy Efficiency and Renewable Energy'', to 
                remain available until expended, including--
                            (i) $30,000,000 for a program to accelerate 
                        applied research on energy storage systems to 
                        support electric drive vehicles, stationary 
                        applications, and electricity transmission and 
                        distribution as authorized by section 641(p)(2) 
                        of the Energy Independence and Security Act of 
                        2007 (42 U.S.C. 17231(p)(2));
                            (ii) $20,000,000 for energy storage systems 
                        demonstrations as authorized by section 
                        641(p)(4) of the Energy Independence and 
                        Security Act of 2007 (42 U.S.C. 17231(p)(4)); 
                        and
                            (iii) $20,000,000 for vehicle energy 
                        storage systems demonstrations as authorized by 
                        section 641(p)(5) of the Energy Independence 
                        and Security Act of 2007 (42 U.S.C. 
                        17231(p)(5)).
    (e) Transfer Procedures.--The Secretary shall make an initial 
transfer from the Fund no later than 30 days after the initial deposit 
of monies into the Fund. The Secretary shall make additional transfers 
no later than 30 days after subsequent deposits. If the amount 
available to be transferred is less than the levels authorized under 
subsection (d), the transfers for each program shall be allocated on a 
pro rata basis. If the amount available to be transferred exceeds the 
levels authorized under subsection (d), the transfers for each program 
shall be increased on a pro rata basis.
    (f) Management and Oversight.--
            (1) Additionality of fiscal year 2008 transfers.--All 
        amounts transferred under subsection (d) shall be in addition 
        to, and shall not be substituted for, any funds appropriated 
        for the same or similar purposes in the Consolidated 
        Appropriations Act, 2008.
            (2) Excess funds.--The total of all amounts transferred 
        under subsection (d) and any funds appropriated for the same or 
        similar purposes in the Consolidated Appropriations Act, 2008 
        may not exceed the amounts authorized in other Acts for such 
        purposes. In the event that amounts made available under this 
        title plus amounts under the Consolidated Appropriations Act, 
        2008 exceed the cumulative amounts authorized in other Acts for 
        any program funded by this Act, the excess amounts shall be 
        distributed to the other programs funded by this title on a pro 
        rata basis.
            (3) Program plans and performance measures.--The Secretary 
        shall prepare and publish in the Federal Register a plan for 
        the proposed use of all funds authorized in subsection (d). The 
        plan also shall identify how the use of these funds will be 
        additive to, and not displace, annual appropriations. The plans 
        also shall identify performance measures to assess the 
        additional benefits that may be realized from the application 
        of the additional funding provided under this section. The 
        initial plan shall be published in the Federal Register not 
        later than 45 days after the date of enactment of this Act.
            (4) Congressional oversight and review.--Nothing in this 
        section shall limit or restrict the review and oversight of 
        program plans by the appropriate committees of Congress. 
        Nothing in this section shall limit or restrict the authority 
        of Congress to set alternative spending limitations in annual 
        appropriations Acts.
            (5) Apportionment.--All transactions of the Fund shall be 
        exempt from apportionment under the provisions of subchapter II 
        of chapter 15 of title 31, United States Code.
                                 <all>