H.R. 2809 (110th): New Apollo Energy Act of 2007

The text of the bill below is as of Jun 21, 2007 (Introduced).

Source: GPO

I

110th CONGRESS

1st Session

H. R. 2809

IN THE HOUSE OF REPRESENTATIVES

June 21, 2007

(for himself, Mr. Van Hollen, Mr. Langevin, Mr. Honda, Mr. Smith of Washington, Mr. Schiff, Mr. Delahunt, Mr. Ellison, Ms. Baldwin, Mr. Hinchey, Mr. Fattah, Mr. Israel, Mr. Jefferson, Mr. Emanuel, Mr. Davis of Illinois, Ms. Lee, Mr. Shays, and Mr. Weiner) introduced the following bill; which was referred to the Committee on Energy and Commerce, and in addition to the Committees on Rules, Ways and Means, Education and Labor, Foreign Affairs, Judiciary, Financial Services, Science and Technology, Oversight and Government Reform, Natural Resources, Agriculture, and the Budget, 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 ensure that the United States leads the world baseline in developing and manufacturing next generation energy technologies, to grow the economy of the United States, to create new highly trained, highly skilled American jobs, to eliminate American overdependence on foreign oil, and to address the threat of global warming.

1.

Short title; table of contents

(a)

Short title

This Act may be cited as the New Apollo Energy Act of 2007.

(b)

Table of contents

The table of contents of this Act is as follows:

Sec. 1. Short title; table of contents.

Title I—Findings and performance goals

Sec. 101. Findings.

Sec. 102. Performance goals.

Title II—Efficiency

Subtitle A—Green buildings

Sec. 201. Short title.

Sec. 202. Findings.

Sec. 203. Definitions.

Sec. 204. Coordinating agency.

Sec. 205. Public education and training.

Sec. 206. Blue ribbon panel.

Sec. 207. Research and development report.

Sec. 208. Greenhouse gas emission standards.

Sec. 209. Study of use of FHA energy efficient mortgage program.

Sec. 210. Healthy, high-performance schools.

Sec. 211. Loan guarantees for public institutions of higher education.

Sec. 212. Accountability of Federal agencies.

Sec. 213. State and local government block grants.

Sec. 214. Authorization of appropriations.

Sec. 215. Increase and extension of energy efficient commercial buildings deduction.

Subtitle B—Consumer assistance

Sec. 221. Appliance standards.

Sec. 222. Energy Star certification for solar water heaters and tankless water heaters.

Subtitle C—Tax provision

Sec. 231. Energy credit for combined heat and power system property.

Title III—Transportation sector

Sec. 301. Performance goals.

Subtitle A—Plug-in hybrid electric vehicles

Sec. 311. Short title.

Sec. 312. Definition.

Sec. 313. Research and development grants.

Sec. 314. Pilot project.

Sec. 315. Test site.

Sec. 316. Plan.

Sec. 317. Plug-in hybrid motor vehicle tax credit.

Subtitle B—Increase ridership of public transportation

Sec. 321. Increased uniform dollar limitation for all types of transportation fringe benefits.

Sec. 322. Credit for employer costs of providing certain mass transportation fringe benefits to their employees.

Sec. 323. Clarification of Federal employee benefits.

Sec. 324. Extension of transportation fringe benefit to bicycle commuters.

Subtitle C—Emissions reductions and oil savings

Chapter 1—Biofuels security

Sec. 331. Short title.

Subchapter A—Renewable fuels

Sec. 341. Renewable fuel program.

Sec. 342. Installation of e–85 fuel pumps by major oil companies at owned stations and branded stations.

Sec. 343. Minimum Federal fleet requirement.

Sec. 344. Application of Gasohol Competition Act of 1980.

Subchapter B—Dual fueled automobiles

Sec. 351. Requirement to manufacture dual fueled automobiles.

Sec. 352. Manufacturing incentives for dual fueled automobiles.

Chapter 2—Emissions reductions

Sec. 361. Extension of biodiesel tax credits.

Sec. 362. Low carbon fuel standard.

Sec. 363. Loan guarantee program to demonstrate low carbon renewable fuel.

Sec. 364. Require automakers to reduce tailpipe GHG emissions.

Sec. 365. Elimination of 2–FLEET rule.

Title IV—Electricity sector

Subtitle A—Tax incentives

Sec. 401. Extension through 2018 for placing qualified facilities in service for producing renewable electric energy.

Sec. 402. Extension of energy credit.

Sec. 403. Expansion and modification of renewable resource credit.

Sec. 404. Energy credit for small wind, small geothermal, small biomass, and small kinetic hydropower.

Sec. 405. Modifications for clean renewable energy bonds.

Sec. 406. Expansion and increase for residential energy efficient property credit.

Sec. 407. Expansion of renewable resource credit to include thermal energy.

Subtitle B—Promoting energy efficient investments

Sec. 411. Rate modifications promoting energy efficiency investments.

Sec. 412. Feed-in tariff system study.

Subtitle C—National renewable energy zones

Sec. 421. New electricity transmission lines designed primarily to carry electricity from renewable energy resources.

Sec. 422. Short title.

Sec. 423. Findings.

Sec. 424. National renewable energy zones.

Sec. 425. Federal Power Marketing Administrations and TVA.

Sec. 426. Consistency with environmental laws.

Subtitle D—Net metering

Sec.  431. Establishing minimum net metering and interconnection standards.

Sec. 432. Retail electric and gas utility efficiency policies.

Subtitle E—Renewable portfolio standard

Sec. 441. Renewable portfolio standard.

Subtitle F—Marine and hydrokinetic renewable energy promotion

Sec. 451. Short title.

Sec. 452. Definition.

Sec. 453. Research and development.

Sec. 454. Adaptive Management and Environmental Fund.

Sec. 455. Programmatic environmental impact statement.

Subtitle G—Carbon capture and sequestration

Sec. 461. Carbon capture and storage research, development, and demonstration program.

Title V—Green workforce

Subtitle A—Small manufacturer assistance

Sec. 501. Small manufacturer assistance through Hollings Manufacturing Extension Partnership Program.

Subtitle B—Green workforce education incentives

Sec. 511. National Green Certification Standards.

Sec. 512. Environmentally literate workforce grant program.

Sec. 513. Carbon neutrality grants in institutions of higher educations.

Sec. 514. National green ranking system grant.

Sec. 515. Green building and zero-energy home design training grants.

Sec. 516. Student loan forgiveness for green workforce members.

Sec. 517. Definitions.

Title VI—Federal Government leverage to move new technologies to market

Subtitle A—Incentives for clean energy technology

Sec. 601. New Energy Technologies Commission.

Sec. 602. Loan Guarantees Program.

Sec. 603. Grant Program to Create Clean Energy Business Districts.

Subtitle B—Clean energy exports and international investment

Sec. 611. Clean energy technology exports program.

Sec. 612. International energy technology deployment program.

Subtitle C—Export-Import Bank

Sec. 621. Require the Export-Import Bank of the United States to meet renewable energy targets in its lending practices.

Sec. 622. Increase in the amount of financing made available by the Export-Import Bank for transactions involving renewable energy and energy efficiency.

Sec. 623. Office of renewable energy promotion.

Sec. 624. Report on Export-Import Bank financing for transactions involving renewable energy or energy efficiency.

Sec. 625. Report on effect of Export-Import Bank financing on greenhouse gas emissions.

Subtitle D—Emerging clean energy technology venture capital fund

Sec. 631. Findings.

Sec. 632. Establishment of fund.

Sec. 633. Authorization of appropriations.

Title VII—Greenhouse gas reductions

Subtitle A—Global climate change

Sec. 701. Global climate change.

Subtitle B—Climate change research initiatives

Sec. 711. Research grants through National Science Foundation.

Sec. 712. Abrupt climate change research.

Sec. 713. Development of new measurement technologies.

Sec. 714. Technology development and diffusion.

Sec. 715. Public land.

Sec. 716. Sea level rise from polar ice sheet melting.

Title VIII—Offsets

Subtitle A—Denial of oil and gas tax benefits

Sec. 801. Short title.

Sec. 802. Denial of deduction for income attributable to domestic production of oil, natural gas, or primary products thereof.

Sec. 803. 7-year amortization of geological and geophysical expenditures for certain major integrated oil companies.

Subtitle B—Royalties under offshore oil and gas leases

Sec. 811. Short title.

Sec. 812. Price thresholds for royalty suspension provisions.

Sec. 813. Clarification of authority to impose price thresholds for certain lease sales.

Sec. 814. Eligibility for new leases and the transfer of leases; conservation of resources fees.

Sec. 815. Repeal of certain taxpayer subsidized royalty relief for the oil and gas industry.

Subtitle C—Strategic energy efficiency and renewable reserve

Sec. 821. Strategic Energy Efficiency and Renewables Reserve for investments in renewable energy and energy efficiency.

I

Findings and performance goals

101.

Findings

Congress finds the following:

(1)

A bold new national energy plan can lead to a surge of investment in, development of, and deployment of clean energy and energy efficient technologies that would result in the creation of millions of highly-trained manufacturing and technical jobs throughout the United States economy.

(2)

Climate change, national security and energy dependence are a related set of global challenges.

(3)

The United States currently relies on oil for over 95 percent of its transportation fuel needs.

(4)

The United States currently imports 60 percent of the oil it consumes and consumes about one fourth of the world’s daily oil production.

(5)

A major portion of the world’s oil supply is controlled by unstable governments and countries that are known to finance, harbor, or otherwise support terrorism and terrorist activities.

(6)

Since World War II, the United States has made significant expenditures of American taxpayer dollars in attempts to stabilize governments and protect United States interests in the Middle East.

(7)

Countries such as Japan, Germany, Denmark, and Great Britain lead the United States in manufacturing alternative energy technologies that both decrease reliance on fossil fuels and do not contribute to global warming.

(8)

The United States has led the world in the development of a wide array of technological advances and is now poised to lead the world, using its unique national genius for innovation, in the development of a host of new energy technologies.

(9)

Development of renewable energy resources in the United States offers a substantial opportunity for economic development in rural, agriculture-dependent areas.

(10)

Human activities have caused rapid increases in atmospheric concentrations of carbon dioxide and other greenhouse gases in the last century.

(11)

According to the Intergovernmental Panel on Climate Change and the National Research Council—

(A)

the earth has warmed in the last century; and

(B)

the majority of the observed warming is attributable to human activities, including fossil fuel-generated carbon dioxide emissions.

(12)

To avoid catastrophic global warming, the United States should take decisive action with other nations to reduce greenhouse gas emissions by 80 percent by 2050.

(13)

Projected climate change poses a serious threat to United States national security.

(14)

Projected climate change will add to tensions even in stable regions of the world.

102.

Performance goals

In order to ensure that the national energy policy of the United States is the most effective policy for protecting national and homeland security, expanding our economy and creating jobs, addressing global warming and environmental health concerns, and protecting the interests of United States consumers, Congress establishes the New Apollo Energy Act Performance Goals, which the President shall consider when formulating and enforcing national energy policy. These goals are as follows:

(1)

Reduce the projected demand for gasoline in the United States by at least 70 billion gallons annually by 2030.

(2)

Create and retain 3,000,000 new highly skilled, high-wage jobs in the United States by 2015.

(3)

Meet 10 percent of the country’s electricity needs from electricity generated from renewable resources by 2012, and meet 20 percent of the country’s electricity needs from electricity generated from renewable resources by 2020.

(4)

Lower energy costs for consumers by meeting at least 10 percent of projected electricity demand and 5 percent of natural gas demand by 2020 through increased conservation and improved energy efficiency.

(5)

Freeze U.S. greenhouse gas emissions in 2010, at 2009 levels. Beginning in 2011, cuts emissions to achieve 1990 emissions levels by 2020. After 2020, cut emissions each year to reach 80 percent below 1990 levels by 2050.

(6)

Encourage domestic manufacturing and production of new energy and energy efficient technologies.

(7)

Require that 100 percent of all domestically manufactured automobiles be duel-fueled vehicles by 2017.

(8)

Increase the Federal fleet requirement to 100 percent duel-fueled or plug-in hybrid vehicles by 2008.

(9)

Redevelop and enhance existing industrial facilities in areas of the country adversely impacted by manufacturing job losses.

(10)

Promote rural economic development.

II

Efficiency

A

Green buildings

201.

Short title

This Act may be cited as the Advanced Design in Energy for Living Efficiently Act of 2007.

202.

Findings

The Congress finds that—

(1)

green building design practices have a positive effect on the reduction of greenhouse gases, the health of the environment, increases in production of workers, and improved water supply for communities;

(2)

buildings account for 38 percent of carbon dioxide emissions per year;

(3)

buildings consume approximately 40 percent of the energy and 70 percent of the electricity in the United States per year;

(4)

an up-front investment of 2 percent in green building design, on average, results in life cycle savings of 20 percent of the total operation costs of a building;

(5)

case studies show examples of a 2 to 16 percent increase in productivity in buildings that incorporate green building design;

(6)

students with the most daylight in their classrooms progressed 20 percent faster on mathematics tests and 26 percent faster on reading tests in one year than those with the least day lighting;

(7)

the development of a research agenda for green building design must consider whole building performance, and such development should be founded on achievable and measurable performance goals;

(8)

the tools and knowledge are currently available to meet the goals of this Act; and

(9)

green building design is a national priority, and can reduce the long-term operating costs for individuals and enhance their ability to repay the mortgage.

203.

Definitions

For purposes of this Act—

(1)

the term Administrator means the Administrator of the Environmental Protection Agency;

(2)

the term green building means a building that uses sustainable design principles to reduce the use of nonrenewable resources, minimize environmental impact, and relate people with the natural environment;

(3)

the term institution of higher education has the meaning given that term in section 101 of the Higher Education Act of 1965 (20 U.S.C. 1001); and

(4)

the term State means one of the several States, the District of Columbia, the Commonwealth of Puerto Rico, the United States Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, or any other commonwealth, territory, or possession of the United States.

204.

Coordinating agency

(a)

In general

The Administrator shall serve as the coordinating agency for Federal information on green building design and practices, including information regarding construction, use, and decommissioning of green buildings, and shall obtain from all Federal agencies any information relating thereto that is not protected from disclosure by law.

(b)

Availability of information

The Administrator, in consultation with the National Institute of Building Sciences, shall make the information obtained under subsection (a) readily available to the building industry and consumers.

205.

Public education and training

(a)

In general

The Administrator, in coordination with the National Institute of Building Sciences and in conjunction with private-sector building-related entities, shall establish a program to create and distribute informational materials to increase the knowledge of the general public about green building design principles.

(b)

Green building training

Not later than 6 months after the date of enactment of this Act, the Administrator, working through a grant to the United States Green Building Council, shall provide for the establishment of criteria for appropriate education and training of architects, engineers, and developers in green building design and application.

206.

Blue ribbon panel

(a)

Establishment

The National Institute of Building Sciences shall establish a blue ribbon panel to provide independent advice and counsel to the Administrator on policy issues associated with the conservation of energy in residential, commercial, and Federal buildings, green building design systems, the health of the indoor environment, and reduction of water use and waste output.

(b)

Appointment

The blue ribbon panel shall be appointed by the Board of Directors of the National Institute of Building Sciences. Appointees shall represent all sectors that are knowledgeable about or affected by green buildings, including architects, professional engineers, government officials, representatives of consumer organizations, representatives of construction labor organizations, product manufacturers, builders, housing management experts, and experts in building standards, codes, research, testing, and fire safety.

(c)

Report to Congress

Not later than 1 year after the date of enactment of this Act, the blue ribbon panel shall report to Congress on the results of study to determine best practices for quantifying the information necessary to make informed property investment decisions, including with respect to buildings that meet carbon-neutral emission standards and use green building design practices.

207.

Research and development report

Not later than 6 months after the date of enactment of this Act, the National Institute of Building Sciences shall report to Congress on the estimated amount of funding necessary for research and development on green building design in the United States. Such report shall include recommendations on further policies needed to promote green building design.

208.

Greenhouse gas emission standards

(a)

Establishment

Not later than 1 year after the date of enactment of this Act, the National Institute of Building Sciences shall establish standards for the construction of new commercial and residential buildings that will reduce carbon emissions, compared to emissions from similar buildings in 2003, by—

(1)

40 percent by 2010; and

(2)

70 percent by 2020.

(b)

Compliance

(1)

Requirement

Not later than 6 years after the date of enactment of this Act, each State shall demonstrate to the satisfaction of the Administrator that—

(A)

such State (and all of the local jurisdictions within such State) has—

(i)

adopted the standards established under subsection (a); and

(ii)

fully implemented such standards; or

(B)

technical barriers exist that prevent such adoption and implementation.

(2)

Supporting information

In order to make a demonstration to the Administrator under paragraph (1), a State shall receive, and submit to the Administrator, reports from all local jurisdictions in the State on how many building permits were issued each year and how many of these permits met the standards established under subsection (a).

209.

Study of use of FHA energy efficient mortgage program

(a)

Study

The Comptroller General of the United States shall conduct a study of the program of the Secretary of Housing and Urban Development for energy efficient mortgages insured under title II of the National Housing Act, established and operated pursuant to section 106 of the Energy Policy Act of 1992 (42 U.S.C. 12712 note) and expanded in 1995 pursuant to subsection (b) of such section, to determine—

(1)

the extent to which such program is utilized by mortgagors in the United States;

(2)

any impediments to wider or more efficient use of such program, including any such impediments relating to—

(A)

knowledge of or about the program; and

(B)

the terms, limitations, or operation of the program;

(3)

effective actions which may be taken to increase utilization of the program by mortgagors in the United States.

(b)

Report

Not later than the expiration of the 6-month period beginning on the date of the enactment of this Act, the Comptroller General shall submit to the Congress a report describing the findings of the study pursuant to subsection (a) and setting forth recommendations for actions under subsection (a)(3).

210.

Healthy, high-performance schools

(a)

Grant program authorized

The Administrator of the Environmental Protection Agency, acting through the National Institute of Building Sciences, in consultation with the Secretary of Energy and the Secretary of Education, is authorized to award grants to State educational agencies to permit such State educational agencies to carry out this section.

(b)

Subgrants

(1)

In general

A State educational agency receiving a grant under this section shall use funds made available under the grant to award subgrants to local educational agencies to permit such local educational agencies to carry out the activities described in subsection (e).

(2)

Limitation

A State educational agency shall award subgrants under this subsection to local educational agencies that are the neediest, as determined by the State, and that have made a commitment to develop healthy, high-performance school buildings in accordance with the plan developed and approved under subsection (c)(1).

(c)

Implementation

(1)

Plans

A State educational agency shall award subgrants under this section only to local educational agencies that, in consultation with the State educational agency and State agencies with responsibilities relating to energy and health, have developed plans that the State educational agency determines to be feasible and appropriate in order to achieve the purposes for which the subgrants are made.

(2)

Supplementing grant funds

The State educational agency shall encourage local educational agencies that receive subgrants under this section to supplement their subgrant funds with funds from other sources in order to implement their plans.

(d)

Administration

A State educational agency receiving a grant under this section shall use the grant funds made available under this section for one or more of the following:

(1)

To evaluate compliance by local educational agencies with the requirements of this section.

(2)

To distribute information and materials on healthy, high-performance school buildings for both new and existing facilities.

(3)

To organize and conduct programs for school board members, school district personnel, and others to disseminate information on healthy, high-performance school buildings.

(4)

To provide technical services and assistance in planning and designing healthy, high-performance school buildings.

(5)

To collect and monitor information pertaining to healthy, high-performance school building projects.

(e)

Local uses of funds

(1)

In general

A local educational agency that receives a subgrant under this section shall use the subgrant funds to plan and prepare for healthy, high-performance school building projects that—

(A)

reduce energy use to at least 30 percent below that of a school constructed in compliance with standards prescribed in chapter 8 of the 2000 International Energy Conservation Code, or a similar State code intended to achieve substantially equivalent results;

(B)

meet Federal and State health and safety codes; and

(C)

support healthful, energy efficient, and environmentally sound practices.

(2)

Use of funds

A local educational agency that receives a subgrant under this section shall use funds for one or more of the following:

(A)

To develop a comprehensive energy audit of the energy consumption characteristics of a building and the need for additional energy conservation measures necessary to allow schools to meet the guidelines set out in paragraph (1).

(B)

To produce a comprehensive analysis of building strategies, designs, materials, and equipment that—

(i)

are cost effective, produce greater energy efficiency, and enhance indoor air quality; and

(ii)

can be used when conducting school construction and renovation or purchasing materials and equipment.

(C)

To obtain research and provide technical services and assistance in planning and designing healthy, high-performance school buildings, including developing a timeline for implementation of such plans.

(f)

Information and assistance

The Administrator of the Environmental Protection Agency, acting through the National Institute of Building Sciences, shall provide information and assistance to local educational agencies on sustainable design. The information and assistance shall include—

(1)

information on how benefits of sustainable design can benefit life cycle costs to all school districts at no cost to school districts; and

(2)

assistance on how to create curriculum for environmental science classes to study local effects of sustainable design.

(g)

Report to Congress

The Administrator shall conduct a biennial review of State actions implementing this section and carrying out the plans developed under this section through State and local funding, and shall submit a report to Congress on the results of such reviews.

(h)

Limitations

No funds received under this section may be used for any of the following:

(1)

Payment of maintenance of costs in connection with any projects constructed in whole or in part with Federal funds provided under this section.

(2)

Construction, renovation, or repair of school facilities.

(3)

Construction, renovation, repair, or acquisition of a stadium or other facility primarily used for athletic contests or exhibitions, or other events for which admission is charged to the general public.

(i)

Definitions

In this section:

(1)

The term healthy, high-performance school building means a school building in which the design, construction, operation, and maintenance—

(A)

use energy-efficient and affordable practices and materials;

(B)

are cost-effective;

(C)

enhance indoor air quality; and

(D)

protect and conserve water.

(2)

The terms local educational agency and State educational agency have the meaning given those terms in section 9101 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 7801).

(j)

Conforming repeal

Subpart 18 (20 U.S.C. 7277 et seq.) of part D of title V of the Elementary and Secondary Education Act of 1965 is repealed.

211.

Loan guarantees for public institutions of higher education

(a)

Program

The Administrator shall establish a program to make loan guarantees available to public institutions of higher education in a State for the construction or renovation of permanent buildings that meet the standards established under section 8(a).

(b)

Qualifications

The Administrator shall establish the qualifications necessary for an institution to be eligible for a loan guarantee under this section, including qualifications to protect the financial interests of the Federal Government.

(c)

Approval

The Administrator shall approve or disapprove an application for a loan guarantee under this section not later than 30 days after receiving a completed application.

(d)

Authorization of appropriations

There are authorized to be appropriated to the Administrator such sums as may be necessary to carry out this section.

212.

Accountability of Federal agencies

(a)

Agency actions

Each Federal agency shall—

(1)

increase the energy efficiency of its facilities and operations;

(2)

annually transmit to the President and the Congress a report on the energy efficiency increases and carbon emission reductions associated with its facilities and operation; and

(3)

reward agency employees who make significant contributions to the reduction of agency carbon emissions.

(b)

Energy manager training

The energy manager, designated under section 304 of Executive Order No. 13123, of each Federal agency shall be required to receive training approved by the Administrator on green building design, construction, use, and decommissioning, and to receive an annual refresher course approved by the Administrator on those subjects.

(c)

Energy efficiency budget report

Not later than 6 months after the date of enactment of this Act, the Comptroller General shall transmit to the Congress a report comparing the energy efficiency budget request by the President for each Federal agency for fiscal years 2006 and 2007 with the requests from the agency to the President for energy efficiency budget amounts for those fiscal years.

213.

State and local government block grants

(a)

In general

The Administrator shall make block grants to State and local governments. Such grants may be used for—

(1)

the renovation of existing buildings to achieve the standards established by the National Institute of Building Sciences under section 8(a);

(2)

redesigning existing plans for new buildings to enable those plans to meet such standards;

(3)

research and development of technologies to enable and support green building design and the achievement of such standards; and

(4)

public education and training, including training for homeowners, business owners, first time home buyers, and contractors, on green buildings and their construction, use, and decommissioning.

(b)

Mandatory use

All block grants received under this section shall be used, at least in part, for the purpose described in subsection (a)(4).

(c)

Eligibility

No State or local government may receive a block grant under this section unless it demonstrates to the satisfaction of the Administrator that—

(1)

the State or local government (and in the case of a State, all the local jurisdictions within the State) has—

(A)

adopted the standards established under section 8(a); and

(B)

fully implemented such standards; or

(2)

technical barriers exist that prevent such adoption and implementation.

(d)

Research and development coordination

The Administrator shall monitor activities described in subsection (a)(3) to prevent unnecessary duplication of research and development efforts.

(e)

Authorization of appropriations

There are authorized to be appropriated to the Administrator for making grants under this section $1,000,000,000 for the period encompassing fiscal years 2009 through 2018.

214.

Authorization of appropriations

There are authorized to be appropriated to the Administrator for carrying out this Act, other than sections 11 and 13 $50,000,000 for each of the fiscal years 2009 through 2013.

215.

Increase and extension of energy efficient commercial buildings deduction

(a)

Increase

Section 179D of the Internal Revenue Code of 1986 (relating to energy efficient commercial buildings deduction) is amended—

(1)

in subsection (b)(1)(A) by striking $1.80 and inserting $2.25, and

(2)

in subsection (d)(1)(A) by striking by substituting and all that follows through the period at the end and inserting by substituting $.75 for $2.25..

(b)

Extension

Subsection (h) of section 179D of such Code (relating to termination) is amended by striking December 31, 2008 and inserting December 31, 2013.

(c)

Effective date

The amendments made by this section shall apply to property placed in service after the date of the enactment of this Act, in taxable years ending after such date.

B

Consumer assistance

221.

Appliance standards

(a)

Consumer appliance requirement

Section 325 of the Energy Policy and Conservation Act (42 U.S.C. 6295) is amended by adding at the end the following new subsection:

(ii)

Standby mode

(1)

Requirement

Except as provided in paragraph (2), any final rule adopted after July 1, 2012, to set a new or revised energy efficiency standard for a covered product shall specify that a covered product manufactured on or after the effective date of such new or revised standard shall, when in standby mode, operate with not more than 1 watt of electric power.

(2)

Exceptions

(A)

Extensions

The Secretary may provide a single extension of up to 2 years for compliance with paragraph (1) with respect to a covered product if the Secretary finds that such extension is appropriate.

(B)

Exemptions

The Secretary may provide an exemption from the requirement under paragraph (1) for a covered product, after public notice and opportunity for comment, if the Secretary finds that—

(i)

achieving the requirement is not technologically feasible and economically justified for that covered product; or

(ii)

such an exemption is warranted for medical or military reasons.

Any exemption provided under this subparagraph shall be reviewed at least once every 5 years.

.

(b)

Consumer appliance test procedures

Section 323(b) of the Energy Policy and Conservation Act (42 U.S.C. 6293(b)) is amended by adding at the end the following new paragraph:

(17)

Not later than July 1, 2009, the Secretary shall issue a final rule establishing test procedures for standby power consumption for all covered products, except for products for which the current test procedure already measures standby power consumption.

.

(c)

Repeal

(1)

In general

Section 325(u) of the Energy Policy and Conservation Act (42 U.S.C. 6295(u)) is amended—

(A)

by striking paragraph (2); and

(B)

by redesignating paragraphs (3) through (5) as paragraphs (2) through (4), respectively.

(2)

Effective date

The amendments made by paragraph (1) shall take effect on the date described in section 325(ii)(I) of the Energy Policy and Conservation Act as, added by subsection (a) of this section.

(d)

Industrial equipment requirement

Section 342 of the Energy Policy and Conservation Act (42 U.S.C. 6313) is amended by adding at the end the following new subsection:

(f)

Standby power

(1)

Requirement

Except as provided in paragraph (2), any final rule adopted after July 1, 2012, to set a new or revised energy efficiency standard for covered equipment shall specify that covered equipment manufactured on or after the effective date of such new or revised standard shall, when in standby mode, operate with not more than 1 watt of electric power.

(2)

Exceptions

(A)

Extensions

The Secretary may provide a single extension of up to 5 years for compliance with paragraph (1) with respect to a covered equipment if the Secretary finds that such extension is appropriate.

(B)

Exemptions

The Secretary may provide an exemption from the requirement under paragraph (1) for covered equipment, after public notice and opportunity for comment, if the Secretary finds that—

(i)

achieving the requirement is not technologically feasible and economically justified for that covered equipment; or

(ii)

such an exemption is warranted for medical or military reasons.

Any exemption provided under this subparagraph shall be reviewed at least once every 5 years.

.

(e)

Industrial equipment test procedures

Section 343(a) of the Energy Policy and Conservation Act (42 U.S.C. 6314(a)) is amended by adding at the end the following new paragraph:

(9)

Not later than July 1, 2009, the Secretary shall issue a final rule establishing test procedures for standby power consumption for all covered equipment, except for equipment for which the current test procedure already measures standby power consumption.

.

222.

Energy Star certification for solar water heaters and tankless water heaters

Not later than January 1, 2009, the Secretary of Energy, in consultation with the Administrator of the Environmental Protection Agency, shall adopt regulations establishing Energy Star Program requirements and an Energy Star rating program for commercial and residential solar water heating devices and tankless water heating devices.

C

Tax provision

231.

Energy credit for combined heat and power system property

(a)

In General

Section 48(a)(3)(A) of the Internal Revenue Code of 1986 (defining energy property) is by striking or at the end of clause (iii), by inserting or at the end of clause (iv), and by adding at the end the following new clause:

(v)

combined heat and power system property,

.

(b)

Combined Heat and Power System Property

Section 48 of such Code (relating to energy credit) is amended by adding at the end the following new subsection:

(d)

Combined Heat and Power System Property

For purposes of subsection (a)—

(1)

Combined heat and power system property

The term combined heat and power system property means property comprising a system—

(A)

which uses the same energy source for the simultaneous or sequential generation of electrical power, mechanical shaft power, or both, in combination with the generation of steam or other forms of useful thermal energy (including heating and cooling applications),

(B)

which has an electrical capacity of not more than 50 megawatts or a mechanical energy capacity of not more than 67,000 horsepower or an equivalent combination of electrical and mechanical energy capacities,

(C)

which produces—

(i)

at least 20 percent of its total useful energy in the form of thermal energy which is not used to produce electrical or mechanical power (or combination thereof), and

(ii)

at least 20 percent of its total useful energy in the form of electrical or mechanical power (or combination thereof),

(D)

the energy efficiency percentage of which exceeds 60 percent, and

(E)

which is placed in service before January 1, 2011.

(2)

Special rules

(A)

Energy efficiency percentage

For purposes of this subsection, the energy efficiency percentage of a system is the fraction—

(i)

the numerator of which is the total useful electrical, thermal, and mechanical power produced by the system at normal operating rates, and expected to be consumed in its normal application, and

(ii)

the denominator of which is the higher heating value of the primary fuel sources for the system.

(B)

Determinations made on btu basis

The energy efficiency percentage and the percentages under paragraph (1)(C) shall be determined on a Btu basis.

(C)

Input and output property not included

The term combined heat and power system property does not include property used to transport the energy source to the facility or to distribute energy produced by the facility.

(D)

Certain exception not to apply

The first sentence of the matter in subsection (a)(3) which follows subparagraph (D) thereof shall not apply to combined heat and power system property.

(3)

Systems using bagasse

If a system is designed to use bagasse for at least 90 percent of the energy source—

(A)

paragraph (1)(D) shall not apply, but

(B)

the amount of credit determined under subsection (a) with respect to such system shall not exceed the amount which bears the same ratio to such amount of credit (determined without regard to this subparagraph) as the energy efficiency percentage of such system bears to 60 percent.

(4)

Nonapplication of certain rules

For purposes of determining if the term combined heat and power system property includes technologies which generate electricity or mechanical power using back-pressure steam turbines in place of existing pressure-reducing valves or which make use of waste heat from industrial processes such as by using organic rankine, stirling, or kalina heat engine systems, paragraph (1) shall be applied without regard to subparagraphs (C) and (D) thereof .

.

(c)

Effective Date

The amendments made by this section shall apply to periods after December 31, 2007, 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).

III

Transportation sector

301.

Performance goals

Congress finds this title will:

(1)

Reduce greenhouse gas emissions from the use of motor vehicles by 22 percent below currently projected levels.

(2)

Prevent 662 million metric tons of carbon dioxide from being produced, which is the equivalent of taking 96 million of today’s automobiles off the road in one year.

(3)

Reduce United States oil consumption by 3.6 million barrels of oil per day.

A

Plug-in hybrid electric vehicles

311.

Short title

This subtitle may be cited as the Get Real Incentives to Drive Plug-in Act.

312.

Definition

For purposes of this subtitle, 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 using—

(1)

any combustible fuel;

(2)

an on-board, rechargeable storage device;

(3)

a means of using an off-board source of electricity; and

(4)

fuel cell technology.

313.

Research and development grants

(a)

In general

The Secretary of Transportation shall establish a program to make grants to owners of domestic motor vehicle manufacturing or production facilities for research, development, and demonstration on plug-in hybrid electric vehicles.

(b)

Authorization of appropriations

There are authorized to be appropriated to the Secretary of Transportation for carrying out this section $500,000,000 for the period encompassing fiscal years 2008 through 2012.

314.

Pilot project

The Secretary of Transportation shall establish a pilot project to determine how best to integrate plug-in hybrid electric vehicles into the electric power grid and into the overall transportation infrastructure.

315.

Test site

The Secretary of Transportation shall establish a test site for the advancement of battery technologies for plug-in hybrid electric vehicles, to be modeled after the Department of Transportation’s NHTSA Vehicle Research and Test Center in Ohio.

316.

Plan

Not later than 2 years after the date of enactment of this subtitle, the Secretary of Transportation, in collaboration with the Secretary of Energy, shall transmit to Congress a plan for the introduction and implementation of a plug-in hybrid electric vehicle support infrastructure.

317.

Plug-in hybrid motor vehicle tax credit

(a)

In General

Section 30B of the Internal Revenue Code of 1986 is amended by redesignating subsections (i) and (j) as subsections (j) and (k), respectively, and by inserting after subsection (h) the following new subsection:

(i)

New Plug-In Hybrid Motor Vehicle Credit

(1)

In general

For purposes of subsection (a), the new plug-in hybrid motor vehicle credit determined under this subsection with respect to a new qualified plug-in hybrid motor vehicle placed in service by the taxpayer during the taxable year is $2,500, if such vehicle is a new qualified plug-in hybrid motor vehicle with a gross vehicle weight rating of not more than 8,500 pounds.

(2)

Increase for additional kilowatt hours

The amount determined under paragraph (1) shall be increased by $500 for each whole number of kilowatt hours by which the storage capacity of the on-board, rechargeable electricity storage device used by such vehicle exceeds 2.5 kilowatt hours, but does not exceed 49.5 kilowatt hours.

(3)

New qualified plug-in hybrid motor vehicle

For purposes of this subsection, the term new qualified plug-in hybrid motor vehicle means a motor vehicle—

(A)

which is propelled by an internal combustion engine or heat engine using—

(i)

any combustible fuel,

(ii)

an on-board, rechargeable storage device with a storage capacity of at least 2.5 kilowatt hours, and

(iii)

a means of using an off-board source of electricity,

(B)

which, in the case of a passenger automobile or light truck, has received on or after the date of the enactment of this section a certificate that such vehicle meets or exceeds the Bin 5 Tier II emission level 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,

(C)

the original use of which commences with the taxpayer,

(D)

which is acquired for use or lease by the taxpayer and not for resale, and

(E)

which is made by a manufacturer.

.

(b)

Conforming Amendments

(1)

Section 30B(a) of such Code is amended by striking and at the end of paragraph (3), by striking the period at the end of paragraph (4) and inserting , and, and by adding at the end the following new paragraph:

(5)

the new plug-in hybrid motor vehicle credit determined under subsection (i).

.

(2)

Section 30B(k)(2) of such Code, as redesignated by subsection (a), is amended—

(A)

by striking or and inserting a comma, and

(B)

by inserting , or a new qualified plug-in hybrid motor vehicle (as described in subsection (i)(3)) after subsection (d)(2)(A)).

(c)

Effective Date

The amendments made by this section shall apply to property placed in service after the date of the enactment of this Act, in taxable years ending after such date.

B

Increase ridership of public transportation

321.

Increased uniform dollar limitation for all types of transportation fringe benefits

(a)

In general

Section 132(f)(2) of the Internal Revenue Code of 1986 (relating to limitation on exclusion) is amended—

(1)

by striking $100 in subparagraph (A) and inserting $200, and

(2)

by striking $175 in subparagraph (B) and inserting $200.

(b)

Inflation adjustment conforming amendments

Subparagraph (A) of section 132(f)(6) of such Code (relating to inflation adjustment) is amended—

(1)

by striking the last sentence,

(2)

by striking 1999 and inserting 2008, and

(3)

by striking 1998 and inserting 2007.

(c)

Effective date

The amendments made by this subsection shall apply to taxable years beginning after December 31, 2006.

322.

Credit for employer costs of providing certain mass transportation fringe benefits to their employees

(a)

In general

Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to business-related credits) is amended by adding at the end the following new section:

45O.

Credit for employer costs of providing certain mass transportation fringe benefits to their employees

(a)

In general

For purposes of section 38, the mass transportation fringe credit is an amount equal to 25 percent of the cost paid or incurred by an employer during the taxable year for providing any qualified transportation fringe described in subparagraph (A) or (B) of section 132(f)(1) to employees of such employer.

(b)

Limitation

The amount of the credit under subsection (a) for a month may not exceed the dollar amount per month to which the amount of the fringe benefits are limited under subparagraph (A) of section 132(f)(2).

(c)

Election To have credit not apply

A taxpayer may elect to have this section not apply for any taxable year.

.

(b)

Conforming amendments

(1)

Credit to be part of general business credit

Subsection (b) of section 38 of such Code (relating to current year business credit) is amended by striking plus at the end of paragraph (30), by striking the period at the end of paragraph (31) and inserting , plus, and by adding at the end the following new paragraph:

(32)

the mass transportation fringe credit determined under section 45O(a).

.

(2)

Clerical amendment

The table of sections for subpart D of part IV of subchapter A of chapter 1 of such Code is amended by adding at the end the following new item:

45O. Credit for employer costs of providing certain mass transportation fringe benefits to their employees.

.

(c)

Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2007.

323.

Clarification of Federal employee benefits

Section 7905 of title 5, United States Code, is amended—

(1)

in subsection (a)—

(A)

in paragraph (2)(C) by inserting and after the semicolon;

(B)

in paragraph (3) by striking ; and and inserting a period; and

(C)

by striking paragraph (4); and

(2)

in subsection (b)(2)(A) by amending subparagraph (A) to read as follows:

(A)

a qualified transportation fringe as defined in section 132(f)(1) of the Internal Revenue Code of 1986;

.

324.

Extension of transportation fringe benefit to bicycle commuters

(a)

In general

Paragraph (1) of section 132(f) of the Internal Revenue Code of 1986 (relating to general rule for qualified transportation fringe) is amended by adding at the end the following:

(D)

Bicycle commuting allowance.

.

(b)

Bicycle commuting allowance defined

Paragraph (5) of section 132(f) of such Code (relating to definitions) is amended by adding at the end the following:

(F)

Bicycle commuting allowance

The term bicycle commuting allowance means an amount provided to an employee for transportation on a bicycle if such transportation is in connection with travel between the employee’s residence and place of employment.

.

(c)

Limitation on exclusion

Paragraph (2) of section 132(f) of such Code is amended by striking subparagraphs (A) and (B) and inserting subparagraphs (A), (B), and (D).

(d)

Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2007.

C

Emissions reductions and oil savings

1

Biofuels security

331.

Short title

This chapter may be cited as the Biofuels Security Act of 2007.

A

Renewable fuels

341.

Renewable fuel program

Section 211(o)(2) of the Clean Air Act (42 U.S.C. 7545(o)(2)) is amended by striking subparagraph (B) and inserting the following:

(B)

Applicable volume

(i)

In general

For the purpose of subparagraph (A), the applicable volume for calendar year 2010 and each calendar year thereafter shall be determined, by rule, by the Administrator, in consultation with the Secretary of Agriculture and the Secretary of Energy, in a manner that ensures that—

(I)

the requirements described in clause (ii) for specified calendar years are met; and

(II)

the applicable volume for each calendar year not specified in clause (ii) is determined on an annual basis.

(ii)

Requirements

The requirements referred to in clause (i) are—

(I)

for calendar year 2010, at least 10,000,000,000 gallons of renewable fuel;

(II)

for calendar year 2020, at least 30,000,000,000 gallons of renewable fuel; and

(III)

for calendar year 2030, at least 60,000,000,000 gallons of renewable fuel.

.

342.

Installation of e–85 fuel pumps by major oil companies at owned stations and branded stations

Section 211(o) of the Clean Air Act (42 U.S.C. 7545(o)) is amended by adding at the end the following:

(11)

Installation of e–85 fuel pumps by major oil companies at owned stations and branded stations

(A)

Definitions

In this paragraph:

(i)

E–85 fuel

The term E–85 fuel means a blend of gasoline approximately 85 percent of the content of which is derived from ethanol produced in the United States.

(ii)

Major oil company

The term major oil company means any person that, individually or together with any other person with respect to which the person has an affiliate relationship or significant ownership interest, has not less than 4,500 retail station outlets according to the latest publication of the Petroleum News Annual Factbook.

(iii)

Secretary

The term Secretary means the Secretary of Energy, acting in consultation with the Administrator of the Environmental Protection Agency and the Secretary of Agriculture.

(B)

Regulations

The Secretary shall promulgate regulations to ensure that each major oil company that sells or introduces gasoline into commerce in the United States through wholly-owned stations or branded stations installs or otherwise makes available 1 or more pumps that dispense E–85 fuel (including any other equipment necessary, such as including tanks, to ensure that the pumps function properly) at not less than the applicable percentage of the wholly-owned stations and the branded stations of the major oil company specified in subparagraph (C).

(C)

Applicable percentage

For the purpose of subparagraph (B), the applicable percentage of the wholly-owned stations and the branded stations shall be determined in accordance with the following table:

Applicable percentage of
wholly-owned stations and
branded stations
Calendar year:(percent):
20085
200910
201015
201120
201225
201330
201435
201540
201645
2017 and each calendar year thereafter50.
(D)

Geographic distribution

(i)

In general

Subject to clause (ii), in promulgating regulations under subparagraph (B), the Secretary shall ensure that each major oil company described in subparagraph (B) installs or otherwise makes available 1 or more pumps that dispense E–85 fuel at not less than a minimum percentage (specified in the regulations) of the wholly-owned stations and the branded stations of the major oil company in each State.

(ii)

Requirement

In specifying the minimum percentage under clause (i), the Secretary shall ensure that each major oil company installs or otherwise makes available 1 or more pumps described in that clause in each State in which the major oil company operates.

(E)

Financial responsibility

In promulgating regulations under subparagraph (B), the Secretary shall ensure that each major oil company described in that subparagraph assumes full financial responsibility for the costs of installing or otherwise making available the pumps described in that subparagraph and any other equipment necessary (including tanks) to ensure that the pumps function properly.

(F)

Production credits for exceeding e–85 fuel pumps installation requirement

(i)

Earning and period for applying credits

If the percentage of the wholly-owned stations and the branded stations of a major oil company at which the major oil company installs E–85 fuel pumps in a particular calendar year exceeds the percentage required under subparagraph (C), the major oil company earns credits under this paragraph, which may be applied to any of the 3 consecutive calendar years immediately after the calendar year for which the credits are earned.

(ii)

Trading credits

Subject to clause (iii), a major oil company that has earned credits under clause (i) may sell credits to another major oil company to enable the purchaser to meet the requirement under subparagraph (C).

(iii)

Exception

A major oil company may not use credits purchased under clause (ii) to fulfill the geographic distribution requirement in subparagraph (D).

.

343.

Minimum Federal fleet requirement

Section 303(b)(1) of the Energy Policy Act of 1992 (42 U.S.C. 13212(b)(1)) is amended—

(1)

in subparagraph (C), by striking and after the semicolon;

(2)

in subparagraph (D), by striking fiscal year 1999 and thereafter, and inserting each of fiscal years 1999 through 2007; and;

(3)

by inserting after subparagraph (D) the following:

(E)

100 percent in fiscal year 2008 and thereafter,

; and

(4)

by inserting after the period at the end the following: For purposes of this subsection, the term alternative fueled vehicle shall include plug-in hybrid vehicles (as defined in section 30B of the Internal Revenue Code of 1986)..

344.

Application of Gasohol Competition Act of 1980

Section 26 of the Clayton Act (15 U.S.C. 26a) is amended—

(1)

by redesignating subsection (c) as subsection (d);

(2)

by inserting after subsection (b) the following:

(c)

For purposes of subsection (a), restricting the right of a franchisee to install on the premises of that franchisee a renewable fuel pump, such as one that dispenses E85, shall be considered an unlawful restriction.

; and

(3)

in subsection (d) (as redesignated by paragraph (1))—

(A)

by striking “section,” and inserting the following: “section—

(1)

the term

;

(B)

by striking the period at the end and inserting ; and; and

(C)

by adding at the end the following:

(2)

the term gasohol includes any blend of ethanol and gasoline such as E–85.

.

B

Dual fueled automobiles

351.

Requirement to manufacture dual fueled automobiles

(a)

Requirement

(1)

In general

Chapter 329 of title 49, United States Code, is amended by inserting after section 32902 the following:

32902A.

Requirement to manufacture dual fueled automobiles

(a)

Requirement

Each manufacturer of new automobiles that are capable of operating on gasoline or diesel fuel shall ensure that the percentage of such automobiles, manufactured in any model year after model year 2007 and distributed in commerce for sale in the United States, which are dual fueled automobiles is equal to not less than the applicable percentage set forth in the following table:

The percentage of
dual fueled automobiles
For each of the followingmanufactured shall be
  model years: not less than:
200810
200920
201030
201140
201250
201360
201470
201580
201690
2017 and beyond100.
(b)

Production Credits for Exceeding Flexible Fuel Automobile Production Requirement

(1)

Earning and period for applying credits

If the number of dual fueled automobiles manufactured by a manufacturer in a particular model year exceeds the number required under subsection (a), the manufacturer earns credits under this section, which may be applied to any of the 3 consecutive model years immediately after the model year for which the credits are earned.

(2)

Trading credits

A manufacturer that has earned credits under paragraph (1) may sell credits to another manufacturer to enable the purchaser to meet the requirement under subsection (a).

.

(2)

Technical amendment

The table of sections for chapter 329 of title 49, United States Code, is amended by inserting after the item relating to section 32902 the following:

32902A. Requirement to manufacture dual fueled automobiles.

.

(b)

Activities To Promote the Use of Certain Alternative Fuels

The Secretary of Transportation shall carry out activities to promote the use of fuel mixtures containing gasoline or diesel fuel and 1 or more alternative fuels, including a mixture containing at least 85 percent of methanol, denatured ethanol, and other alcohols by volume with gasoline or other fuels, to power automobiles in the United States.

352.

Manufacturing incentives for dual fueled automobiles

Section 32905(b) of title 49, United States Code, is amended—

(1)

by redesignating paragraphs (1) and (2) as subparagraphs (A) and (B), respectively;

(2)

by inserting (1) before Except;

(3)

by striking model years 1993–2010 and inserting model year 1993 through the first model year beginning not less than 18 months after the date of enactment of the Biofuels Security Act of 2007; and

(4)

by adding at the end the following:

(2)

Except as provided in paragraph (5), subsection (d), or section 32904(a)(2), the Administrator shall measure the fuel economy for each model of dual fueled automobiles manufactured by a manufacturer in the first model year beginning not less than 30 months after the date of enactment of the Biofuels Security Act of 2007 by dividing 1.0 by the sum of—

(A)

0.7 divided by the fuel economy measured under section 32904(c) when operating the model on gasoline or diesel fuel; and

(B)

0.3 divided by the fuel economy measured under subsection (a) when operating the model on alternative fuel.

(3)

Except as provided in paragraph (5), subsection (d), or section 32904(a)(2), the Administrator shall measure the fuel economy for each model of dual fueled automobiles manufactured by a manufacturer in the first model year beginning not less than 42 months after the date of enactment of the Biofuels Security Act of 2007 by dividing 1.0 by the sum of—

(A)

0.9 divided by the fuel economy measured under section 32904(c) when operating the model on gasoline or diesel fuel; and

(B)

0.1 divided by the fuel economy measured under subsection (a) when operating the model on alternative fuel.

(4)

Except as provided in subsection (d) or section 32904(a)(2), the Administrator shall measure the fuel economy for each model of dual fueled automobiles manufactured by a manufacturer in each model year beginning not less than 54 months after the date of enactment of the Biofuels Security Act of 2007 in accordance with section 32904(c).

(5)

Notwithstanding paragraphs (2) through (4), the fuel economy for all dual fueled automobiles manufactured to comply with the requirements under section 32902A(a), including automobiles for which dual fueled automobile credits have been used or traded under section 32902A(b), shall be measured in accordance with section 32904(c).

.

2

Emissions reductions

361.

Extension of biodiesel tax credits

(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 2008 and inserting 2018.

(b)

Effective date

The amendments made by this section shall take effect on the date of the enactment of this Act.

362.

Low carbon fuel standard

The Clean Air Act (42 U.S.C. 7401 et seq.) is amended by adding at the end the following:

VII

Greenhouse gas emissions from vehicle and aircraft fuels

701.

Purpose

The purpose of this title is to provide a reduction in the aggregate greenhouse gas emissions per unit of energy consumed by vehicles and aircraft.

702.

Findings

The Congress finds that:

(1)

The United States consumes a quarter of the world’s oil and the oil used in transportation accounts for a third of the United States emissions of the greenhouse gases that cause global warming.

(2)

To avoid catastrophic global warming, the United States should take decisive action with other nations to reduce greenhouse gas emissions by 60 to 80 percent by 2050.

(3)

Transitioning our transportation sector to more efficient use of oil and low-carbon petroleum alternatives is essential to reducing global warming pollution.

(4)

It is necessary and feasible to reduce emissions of greenhouse gases, enhance national security by reducing dependence on oil and promote economic well-being without sacrificing land, water and air quality, by enacting energy policies that motivate environmental performance.

703.

Definitions

For purposes of this title:

(1)

Administrator

The term Administrator means the Administrator of the Environmental Protection Agency.

(2)

Carbon dioxide equivalent

With respect to each greenhouse gas, the term carbon dioxide equivalent means the amount of the greenhouse gas resulting from that fuel that traps the same amount of heat as one metric ton of carbon dioxide, as determined by the Administrator.

(3)

Greenhouse gas

The term greenhouse gas means carbon dioxide, hydrofluorocarbons, methane, nitrous oxide, perfluorocarbons, sulfur hexafluoride, and any other anthropogenically-emitted gas that is determined by the Administrator, after notice and comment, to contribute to global warming to a non-negligible degree.

(4)

Lifecycle greenhouse gas emissions

The term ‘lifecycle greenhouse gas emissions’ means greenhouse gases emitted during the entire cycle of extraction, cultivation, production, manufacturing, feedstock extraction, marketing, and distribution for a fuel or other sources of energy, as well as those emitted during the use of such fuels and sources by vehicles and aircraft. The term includes changes in land use and land cover associated with each phase of such cycle.

(5)

Vehicle

The term vehicle means a motor vehicle as defined in section 216 and any other device used for the transportation of persons or goods (other than an aircraft).

704.

Low carbon fuel performance standards

(a)

Vehicle fuel standard

Not later than January 1, 2010, the Administrator shall promulgate low carbon fuel performance standards for fuels and other sources of energy used to propel vehicles. Such standards shall begin to apply in the year 2015.

(b)

Graduated reductions for vehicle fuel

The Administrator shall promulgate, by rule, a declining standard for each 5 calendar year period beginning in 2015. Each such standard shall represent a graduated percentage reduction in aggregate emissions of greenhouse gases per Btu in each 5-year period after 2014 through 2050 as provided in the following table. The reduction for each such period shall be measured from the baseline for vehicle fuel, as determined by the Administrator under subsection (f).

Percent
5-year period:reduction:
2015 through 20193 percent
2020 through 20246 percent
2025 through 20299 percent
2030 through 203412 percent
2035 through 203915 percent
2040 through 204418 percent
2045 through 204921 percent.
(c)

Additional reductions

Each 5 years during the period 2015 through 2050 the Administrator shall review available control technology, safety considerations, and land and other resources available for production of fuels and other sources of energy used to propel vehicles. Following such review, the Administrator may, by rule, promulgate a more stringent standard than the standard otherwise applicable under subsection (b) which more stringent standard, based on such review, the Administrator determines to be requisite to protect the public health and welfare from any known or anticipated adverse effects associated with greenhouse gas emissions.

(d)

Standard for aircraft fuel

Not later than January 1, 2010, the Administrator shall promulgate a low carbon fuel performance standard for fuels and other sources of energy used by aircraft. The performance standard for such fuels and other sources of energy for aircraft for each year after 2015 shall be the baseline for that fuel, as determined by the Administrator under subsection (f). Such standard shall begin to apply in the year 2015 and continue to apply through the calendar year 2019. The standard shall remain in effect thereafter unless, for each 5 year period thereafter, beginning in 2020, the Administrator and the Secretary of Transportation determine that a more stringent standard is necessary to carry out the purposes of this Act. Such determination may be made only after a thorough review of available technology and safety considerations. Following such determination, the Administrator shall promulgate a rule establishing a more stringent standard.

(e)

Terms of standards

Each standard under this section shall be expressed in carbon dioxide, or carbon dioxide equivalent, emissions per Btu of energy from the aggregate of all fuels and other sources of energy used by vehicles or by aircraft.

(f)

Baseline

(1)

Vehicle fuel

The baseline for vehicle fuel for purposes of the standards under this section shall be the aggregate greenhouse gas emissions per Btu from all such fuel and other sources of energy used by vehicles in calendar year 2007, as determined by the Administrator.

(2)

Aircraft fuel

For fuel used by aircraft, the baseline for purposes of the standard under this section shall be the aggregate greenhouse gas emissions per Btu from all such fuel and other sources of energy used by aircraft in calendar year 2007, as determined by the Administrator.

705.

EPA regulations; calculation of emissions per Btu

(a)

Regulations

After consultation with the Secretary of Energy and the Secretary of Commerce, and a review of all compliance methods, the Administrator, after notice and opportunity for comment, shall promulgate, not later than January 1, 2010, and may periodically revise thereafter, regulations requiring compliance with the annual performance standards established under section 703.

(b)

Calculations of greenhouse emission rate per Btu

(1)

Individual calculations under standard methodology

The regulations under this section shall provide standard, transparent and public methods for each producer, importer, or blender of a fuel or other source of energy used, directly or indirectly, as a fuel for vehicles or aircraft to calculate the greenhouse gases emitted per Btu of such fuel or other source of energy when so used.

(2)

Lifecycle greenhouse gas emission calculation

The regulations under this section shall include appropriate methods for estimating the lifecycle greenhouse gas emissions of each fuel and other energy source. For purposes of such regulations, the Administrator shall develop methods to quantify the direct and indirect emissions resulting from biofuel production.

(3)

Special adjustment for electricity and hydrogen

In making the calculation under this subsection, the Administrator shall adjust the Btus of energy delivered from the use of electricity and hydrogen used as a fuel or source of energy for vehicles and aircraft. Such adjustment shall reflect the greenhouse gas reductions on a per mile basis in order to reflect the inherent energy efficiency of an average battery electric, plug in hybrid electric vehicle, or hydrogen fuel cell vehicle.

(4)

NAS report

The Administrator shall, not less than 90 days after the enactment of this Act, enter into a contract with the National Academy of Sciences to assess and recommend methods to calculate the lifecycle greenhouse gas emissions associated with the production and use of fuels and other sources of energy used as a fuel for vehicles and aircraft.

(5)

Consultation

In developing regulations under this section, the Administrator shall consult with State agencies and other government entities within and outside the United States having programs for control of greenhouse gas emissions from vehicle fuels and shall promulgate such regulations after consideration of the report under paragraph (4).

706.

Compliance with standard

(a)

Requirement To meet standard

The regulations under this title shall provide that each producer, importer or blender of a fuel or other source of energy used for transportation by vehicles or aircraft shall be required to generate or obtain in each calendar year after 2009 credits equal to the excess, if any, of paragraph (1) over paragraph (2) multiplied by paragraph (3). No producer, importer, or blender shall be required to obtain credits if the fuel or other source of energy meets the aggregate performance standard under section 703 for the calendar year concerned.

(1)

The greenhouse gases (expressed as carbon dioxide or carbon dioxide equivalent) emitted per Btu of fuel or other energy produced, imported, or blended by such producer, importer, or blender in the calendar year concerned.

(2)

The aggregate performance standard for all such producers, importer, or blenders established under section 703 for the calendar year concerned.

(3)

The total number of Btus used in vehicles and aircraft that is provided by the fuel or other energy produced, imported, or blended by such producer, importer or blender in the year concerned.

(b)

Generation, trading, and banking of credits

(1)

Credit generation

For each calendar year after the calendar year 2014, each producer, importer, or blender of each fuel or other source of energy used for transportation by vehicles or aircraft shall be credited with greenhouse gas emission credits equal to the excess, if any, of paragraph (2) of subsection (a) over paragraph (1) of subsection (a) multiplied by paragraph (3) of subsection (a).

(2)

Trading

The regulations under this section shall allow purchase, sale, and trading of such allowance producers, importers and blenders, and other persons. Credits generated this section may be held and traded by any person. Credits under this section do not constitute a property right, and nothing in any provision of law shall be construed to limit the authority of the United States to terminate or limit any such credit.

(3)

Banking

Credits generated under this section may be used in the year in which they are generated and in the following calendar year.

(c)

Monitoring

The Administrator shall promulgate rules to ensure that greenhouse gas emissions and the use of credits generated under this section are accurately tracked, reported, and verified.

(d)

Enforcement

(1)

In general

If any fuel or other source of energy used, directly or indirectly, by vehicles exceeds in any calendar year the standard established under this section and the producer, importer or blender thereof has not acquired credits to offset such excess, the producer, importer or blender shall pay a civil penalty in an amount determined under paragraph (2).

(2)

Amount of civil penalty

The amount of the civil penalty under this subsection shall be twice the market price for the credits that would be necessary for such producer, blender, or importer to meet the standard for the fuel or energy source concerned. The Administrator shall establish the method of determining such market price.

(3)

No demand required

A civil penalty under this subsection shall be due and payable to the Administrator without demand.

(4)

Civil action

The Administrator may bring a civil action in the appropriate United States district court to recover the amount of any civil penalty due and payable under this subsection.

707.

Certification and labeling of low-carbon transportation fuels

(a)

Identification

Not later than January 1, 2009, the Administrator shall identify and label low-carbon transportation fuels based on the following criteria.

(1)

The fuel is responsible for at least 20 percent lower lifecycle greenhouse gas emissions per BTU delivered compared to the 2007 baseline.

(2)

The fuel is likely to have fewer adverse impacts on wildlife habitat, biodiversity, water quality or air quality over the lifecycle of the fuel, than conventional transportation fuels.

(3)

The fuel achieves reduction in petroleum content over its lifecycle.

In the case of electric energy and hydrogen used, directly or indirectly, as a fuel or source of energy for vehicles, the Administrator shall apply the special adjustment factor referred to in section 705(b)(3) in identifying low-carbon transportation fuels.
(b)

Certification

Not later than January 1, 2009, the Administrator shall establish a low-carbon fuel certification process to certify fuels that the Administrator has identified as low-carbon fuels, make that certification information available to consumers. Under regulations promulgated by the Administrator any person manufacturing, importing, or distributing low-carbon fuels may provide labeling for such fuels in accordance with regulations promulgated by the Administrator and promote public awareness of those fuels.

708.

Fuel safeguards

(a)

Definitions

As used in this section:

(1)

The term Community Fire Safety Zone means the immediate vicinity of buildings and other areas regularly occupied by people, or of infrastructure, at risk of wildfire.

(2)

The term Ecosystem conversion means altering the native habitat to such an extent that it no longer supports most characteristic native species and ecological processes.

(3)

The term native habitat means dynamic groupings of native plant and animal communities that occur together on the landscape or in the water and are tied together by similar ecological processes, underlying environmental features such as geology, or environmental gradients such as elevation, but does not include land that is currently in agricultural production.

(4)

National interest lands

The term National interest lands means areas designated as national wildlife refuges, national forests, or national grasslands, areas managed by the National Park Service (including national parks and monuments), and lands managed by the Bureau of Land Management.

(5)

The term Community Fire Safety Zone means the immediate vicinity of buildings and other areas regularly occupied by people, or of infrastructure, at risk of wildfire.

(6)

The term Sensitive Lands means old growth forests; roadless areas on national forests, wilderness study areas; native grasslands; intact, rare, threatened or endangered ecosystems; and any area containing significant concentrations of biodiversity values including endemism, endangered species, high species richness, and refugia.

(b)

In general

Under regulations of the Administrator, no transportation fuel sold in interstate commerce after January 1, 2010 may be derived all or in part from biomass from the following sources:

(1)

Lands where the Administrator determines that ecosystem conversion has occurred after the date of the enactment of this Act.

(2)

Sensitive Lands.

(3)

Land enrolled in the Conservation Reserve Program established under subchapter B of chapter 1 of subtitle D of title XII of the Food Security Act of 1985 (16 U.S.C. 3831 et seq.) or the wetlands reserves program established under subchapter C of chapter 1 of subtitle D of title XII of the Food Security Act of 1985 (16 U.S.C. 3837 et seq.), unless the biomass is produced in a manner consistent with all applicable guidelines and terms, and conditions under the program.

(4)

National interest lands with the exception of either of the following:

(A)

Harvest residue, mill waste, or pre-commercial thinnings, from lands assigned to timber production.

(B)

Biomass obtained from a Community Fire Safety Zone.

(5)

Recyclable postconsumer waste paper, painted, treated, or pressurized wood, wood contaminated with plastic or metals.

(6)

Municipal solid waste (as defined in the Solid Waste Disposal Act).

(7)

Materials produced, harvested, acquired, transported, or processed pursuant to an exemption from otherwise applicable environmental laws or rules.

709.

Air quality impacts

(a)

In general

The Administrator shall ensure, under regulation, that no transportation fuel sold or introduced in interstate commerce after January 1, 2010, shall result in—

(1)

average per gallon vehicle emissions (measured on a mass basis) of air pollutants in excess of the quantity of those emissions attributable to gasoline sold or introduced into commerce in the United States during calendar year 2007; or

(2)

a violation of any motor vehicle emission or fuel content limitation under any other provision of this Act.

710.

Research and development funding

There is authorized to be appropriated to the Secretary of Energy such sums as may be necessary carry out a cooperative program of research and development relating to lower carbon alternatives for aircraft jet fuel and fuel for other vehicles. The program shall provide for matching Federal grants to private entities carrying out such research and development.

711.

State laws

Nothing in this title shall be interpreted to preempt or limit State actions to address climate change.

.

363.

Loan guarantee program to demonstrate low carbon renewable fuel

(a)

In general

Section 1703 of the Energy Policy Act of 2005 is amended by adding the following new subsection after subsection (b) and redesignating subsections (c) through (e) as (d) through (f):

(c)

Low carbon renewable fuel projects

(1)

Definitions

In this subsection:

(A)

Low carbon renewable fuel

The term low carbon renewable fuel means transportation fuel that is not an ether and that is produced from renewable biomass; or is natural gas produced from a biogas source, including a landfill, sewage waste treatment plant, feedlot, or other place where decaying organic material is found; is used to replace or reduce the quantity of fossil fuel present in a fuel mixture used for transportation; and has a lifecycle greenhouse gas emissions, per unit of energy, that is at least 60 percent less than the baseline defined in section 704 of the Clean Air Act.

(B)

Transportation fuel

The term transportation fuel means fuel used to power motor vehicles, nonroad engines, or aircraft.

(C)

Renewable biomass

The term renewable biomass is any organic matter that is available on a renewable or recurring basis, including dedicated energy crops and trees, agricultural food and feed crop residues, aquatic plants, animal wastes, wood and wood residues, and other vegetative waste materials. Biomass sources that are covered under this definition are subject to the limitations set forth section 708 of the Clean Air Act.

(2)

Projects

The Secretary may make loan guarantees under this section to carry out commercial demonstration projects to demonstrate the feasibility and viability of producing low carbon renewable fuel until the technology becomes commercially viable and feasible.

(3)

Design capacity

Each project for which a loan guarantee is provided under this subsection shall have a design capacity to produce at least 30,000,000 gallons of renewable fuel each year.

(4)

Applicant assurances

An applicant for a loan guarantee under this subsection shall provide assurances, satisfactory to the Secretary, that—

(A)

the project design has been validated through the operation of a continuous process facility with a cumulative output of at least 50,000 gallons of renewable fuel;

(B)

the project has been subject to a full technical review;

(C)

the project is covered by adequate project performance guarantees;

(D)

the project, with the loan guarantee, is economically viable; and

(E)

there is a reasonable assurance of repayment of the guaranteed loan.

.

(b)

Funding

Section 1704(a) of such Act is amended by adding the following at the end thereof: Not less than 30 percent of the funds made available under this section shall be used for purposes of loan guarantees under section 1703(c) for low carbon renewable fuel. The aggregate amount of guarantees under section 1703(c) at any one time shall not exceed $20,000,000,000.

364.

Require automakers to reduce tailpipe GHG emissions

Title II of the Clean Air Act (42 U.S.C. 7581 et seq.) is amended by adding at the following:

D

Greenhouse gas emission reductions

251.

Definitions

In this part:

(1)

Greenhouse gas

The term greenhouse gas means——

(A)

carbon dioxide;

(B)

methane;

(C)

nitrous oxide;

(D)

hydrofluorocarbons;

(E)

perflourocarbons; and

(F)

sulfur hexafluoride.

(2)

Motor vehicle

The term motor vehicle has the meaning given to such term in section 216.

252.

Greenhouse gas emission reductions from automobiles

(a)

Vehicle emissions baseline

Not later than January 1, 2009, based on the aggregate quantity and variety of new automobiles sold in the United States during model year 2002 and the average greenhouse gas emissions from those new automobiles, the Administrator shall determine the average quantity of greenhouse gas emissions per vehicle mile (referred to in this section as the new vehicle emissions baseline).

(b)

Subsequent average emissions from new automobiles

Not later than June 1, 2015, and annually thereafter, based on the aggregate quantity and variety of new automobiles sold in the United States during the preceding model year and the average greenhouse gas emissions from those new automobiles during the preceding model year, the Administrator shall determine the average quantity of greenhouse gas emissions per vehicle mile for the model year.

(c)

Required reductions in greenhouse gas emissions from automobiles

(1)

In general

The Administrator shall, by regulation, require each manufacturer of automobiles for sale in the United States to reduce the average quantity of greenhouse gas emissions per vehicle mile of the aggregate quantity and variety of automobiles manufactured by the manufacturer to a level that is——

(A)

for automobiles manufactured in model year 2016, 30 percent less than the new vehicle emissions baseline; and

(B)

not later than every fifth model year thereafter, such percent as shall be specified by the Administrator that is less than the average quantity of greenhouse gas emissions per vehicle mile required for the model year preceding that fifth model year, as determined by the Administrator under subsection (b).

.

365.

Elimination of 2–FLEET rule

(a)

In general

Section 32904 of title 49, United States Code, is amended—

(1)

by striking subsection (b); and

(2)

by redesignating subsections (c) through (e) as subsections (b) through (d), respectively.

(b)

Effective date

The amendments made by subsection (a) shall apply to model year 2010 and subsequent model years.

IV

Electricity sector

A

Tax incentives

401.

Extension through 2018 for placing qualified facilities in service for producing renewable electric energy

(a)

In general

Subsection (d) of section 45 of the Internal Revenue Code of 1986 (relating to qualified facilities) is amended by striking January 1, 2009 each place it appears and inserting January 1, 2019.

(b)

Effective date

The amendments made by this section shall apply to property originally placed in service on or after January 1, 2009.

402.

Extension of energy credit

(a)

In general

Section 48 of such Code (relating to energy credit) is amended—

(1)

by striking January 1, 2009 in both places it appears and inserting January 1, 1019, and

(2)

by striking December 31, 2008 in both places it appears and inserting December 31, 2018.

403.

Expansion and modification of renewable resource credit

(a)

Additional qualified energy resources

(1)

In general

Section 45(c)(1) of such Code (relating to resources) is amended by striking and at the end of subparagraph (F), by striking the period at the end of subparagraph (G), and by adding at the end the following new subparagraphs:

(I)

incremental geothermal production, and

(J)

marine and hydrokinetic renewable energy.

.

(2)

Definition of resources

Section 45(c) of such Code is amended by adding at the end the following new paragraphs:

(10)

Incremental geothermal production

(A)

In general

In the case of an incremental geothermal facility described in subsection (d)(9), the term ‘incremental geothermal production’ means for any taxable year the excess of—

(i)

the total kilowatt hours of electricity produced from such facility for the taxable year, over

(ii)

the average annual kilowatt hours produced at such facility for 5 of the previous 7 calendar years before the date of the enactment of this paragraph after eliminating the highest and the lowest kilowatt hour production years in such 7-year period.

(B)

Special rule

A facility described in subsection (d)(9) which was placed in service at least 7 years before the date of the enactment of this paragraph shall commencing with the year in which such 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) with such cumulative sum not to exceed 30 percent.

(11)

Marine and hydrokinetic renewable energy

(A)

In general

The term marine and hydrokinetic renewable energy means energy derived from—

(i)

waves, tides, or currents in oceans, estuaries, or tidal areas,

(ii)

free flowing water in rivers, lakes, or streams,

(iii)

free flowing water in man-made channels, including projects that utilize nonmechanical structures to accelerate the flow of water for electric power production purposes, or

(iv)

differentials in ocean temperature.

(B)

Exceptions

Such term shall not include any energy which is—

(i)

described in subparagraphs (A) through (I) of paragraph (1), or

(ii)

derived from any source that utilizes a dam, diversionary structure, or impoundment for electric power production purposes, except as provided in subparagraph (A)(iii).

.

(3)

Definition of facilities

Section 45(d) of such Code (relating to qualified facilities) is amended by adding at the end the following new paragraphs:

(11)

Incremental geothermal facilities

In the case of a facility using incremental geothermal to produce electricity, the term qualified facility means any facility owned by the taxpayer which is originally placed in service before the date of the enactment of this paragraph, but only to the extent of its incremental geothermal production. In the case of a qualified facility described in the preceding sentence, the 10-year period referred to in subsection (a) shall be treated as beginning not earlier than such date of enactment. Such term shall not include any property described in section 48(a)(3) the basis of which is taken into account by the taxpayer for purposes of determining the energy credit under section 48.

(12)

Marine and hydrokinetic renewable energy

In the case of a facility producing electricity from marine and hydrokinetic renewable energy, the term qualified facility means any facility owned by the taxpayer which is originally placed in service after the date of the enactment of this paragraph and before January 1, 2019.

.

(b)

Full credit rate for qualified hydropower facility

Subparagraph (A) of section 45(b)(4) of such Code is amended by striking (7), or (9) and inserting or (7).

(c)

Effective date

The amendments made by this section shall apply to electricity produced and sold in taxable years beginning after the date of the enactment of this Act.

404.

Energy credit for small wind, small geothermal, small biomass, and small kinetic hydropower

(a)

In general

(1)

Energy properties

Subparagraph (A) of section 48(a)(3) of such Code, as amended by this title, is amended by striking or at the end of clause (iii), by inserting or at the end of clause (iv), and by adding at the end the following new clause:

(v)

equipment which uses wind, a geothermal deposit, biomass, or marine and hydrokinetic energy to generate electricity, if such equipment has a nameplate capacity of 2 megawatts or less and the principal consumer of such electricity is the taxpayer,

.

(2)

Energy percentage

Subclause (II) of section 48(a)(2)(A)(i) of such Code is amended by striking paragraph (3)(A)(i) and inserting clause (i) or (vi) of paragraph (3)(A).

(3)

Geothermal; biomass; marine and hydrokinetic energy defined

Section 48 of such Code is amended by adding at the end the following new subsection:

(d)

Geothermal; biomass; marine and hydrokinetic energy

For purposes of this section—

(1)

Geothermal

The term geothermal deposit has the meaning given such term by section 613(e)(2).

(2)

Biomass

The term biomass has the meaning given such term by section 45K(c)(3).

(3)

Marine and hydrokinetic energy

The term marine and hydrokinetic energy has the meaning given such term by section 45(c)(11).

.

(b)

Effective date

The amendments made by this section shall apply to property placed in service after the date of the enactment of this Act, in taxable years ending after such date.

405.

Modifications for clean renewable energy bonds

(a)

In general

(1)

Increase in limitation and change to annual limit

Paragraph (1) of section 54(f) of such Code (relating to limitation on amount of bonds designated) is amended by striking of $1,200,000,000 in subsection (f)(1) and inserting for each calendar year of $2,000,000,000

(2)

Extension of termination

Subsection (m) of section 54 (relating to termination) is amended by striking 2008 subsection (m) and inserting 2018.

(3)

Modification in allocation of national annual bond limitation

Paragraph (2) of section 54 of such Code is amended—

(A)

by striking may not allocate and all that follows through the period and inserting shall allocate— , and

(B)

by adding the end the following new subparagraphs:

(A)

$1,187,500,000 of the annual national clean renewable energy bond limitation to finance qualified projects of qualified borrowers which are public power entities,

(B)

$750,000,000 of such limitation to finance qualified projects of qualifiied borrowers which are cooperative electric companies, and

(C)

$62,500,000 of such limitation to finance qualified projects of qualified borrowers which are governmental bodies.

.

(4)

Public power entity defined

Subsection (j) of section 54 of such Code (defining Cooperative electric company; qualified energy tax credit bond lender; governmental body; qualified borrower) is amended—

(A)

by redesignating paragraphs (4) and (5) as paragraphs (5) and (6), respectively, and by inserting after paragraph (3) the following new paragraph:

(4)

Public power entity

The term public power entity means a State utility with a service obligation, as such terms are defined in section 217 of the Federal Power Act (as in effect on the date of enactment of this paragraph).

.

(B)

in paragraph (5), as so redesignated, by striking or at the end of subparagraph (B), by striking the period at the end of subparagraph (C) and inserting , or, and by adding at the end the following new subparagraph:

(D)

a public power entity.

, and

(C)

in paragraph (6), as so redesignated, by striking or at the end of subparagraph (A), by striking the period at the end of subparagraph (B) and inserting , or, and by adding at the end the following new subparagraph:

(C)

a public power entity.

.

(b)

Effective date

The amendments made by this section shall apply to bonds issued after December 31, 2007.

406.

Expansion and increase for residential energy efficient property credit

(a)

Increase in credit limitation for residential solar property

Paragraph (1) of section 25D(b) of the Internal Revenue Code (relating to limitations) is amended—

(1)

by striking $2,000 in subparagraph (B) and inserting $4,000, and

(2)

by striking subparagraph (A) and redesignating subparagraphs (B) and (C) and subparagraphs (A) and (B), respectively.

(b)

Inclusion of wind

(1)

In general

Subsection (a) of section 25D of such Code (relating to allowance of credit) is amended by striking and at the end of paragraph (2), by striking the period at the end of paragraph (3), and by adding at the end the following new paragraph:

(4)

30 percent of the qualified wind property expenditures made by the taxpayer during such year,

.

(2)

Definition

Subsection (d) of section 25D of such Code (relating to definitions) is amended by adding at the end the following new paragraphs:

(4)

Qualified wind property expenditures

The term qualified wind property expenditures means an expenditure for property which uses wind to generate electricity for use in a dwelling unit located in the United States and used as a principal residence (within the meaning of section 121) by the taxpayer.

.

(c)

Effective date

The amendments made by this section shall apply to property placed in service in taxable years beginning after December 31, 2007.

407.

Expansion of renewable resource credit to include thermal energy

(a)

In general

(1)

Production of thermal energy

Paragraph (2) of section 45(a) of the Internal Revenue Code of 1986 is amended by inserting after electricity the following: or each 3,413 British Thermal Units of thermal energy (or fraction thereof).

(2)

Recycled energy as qualified energy resource

Paragraph (1) of section 45(c) of such Code, as amended by this Act, is amended by striking and at the end of subparagraph (I), by striking the period at the end of subparagraph (J) and inserting and, and by adding at the end the following new subparagraph:

(K)

recycled energy.

.

(3)

Definition of resource

Subsection (c) of section 45 of such Code is amended by adding at the end the following new paragraph:

(12)

Recycled energy

(A)

In general

The term recycled energy means electricity or thermal energy derived from combined heat and power, industrial waste heat, or municipal waste heat.

(B)

Definitions

For purposes of this paragraph—

(i)

Combined heat and power

The term combined heat and power means a system which uses the same energy source, which may be non-renewable fuel, 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).

(ii)

Industrial waste heat

The term industrial waste heat means heat which—

(I)

is a byproduct of a manufacturing process, and

(II)

is normally not recovered or used.

(iii)

Municipal waste heat

The term municipal waste heat means heat which—

(I)

is a byproduct of a municipal sewage treatment or other municipal process, and

(II)

is normally not recovered or used.

.

(4)

Definition of facility

Subsection (d) of section 45 of such Code is amended by adding at the end the following:

(13)

Recycled energy

(A)

In general

In the case of a facility using recycled energy to produce electricity or thermal energy, the term qualified facility means a facility which—

(i)

is a combined heat and power facility, an industrial waste heat facility, or a municipal waste heat facility, and

(ii)

which is placed in service after the date of the enactment of this paragraph and before January 1, 2014.

(B)

Combined heat and power

For purposes of this paragraph, the term combined heat and power facility means any facility—

(i)

owned by the taxpayer,

(ii)

which produces—

(I)

at least 20 percent of its total useful energy in the form of thermal energy, and

(II)

at least 20 percent of its total useful energy in the form of electrical or mechanical power (or a combination thereof), and

(iii)

the energy efficiency percentage of which exceeds 60 percent.

(C)

Industrial waste heat or municipal waste heat

For purposes of this paragraph, the term industrial waste heat facility means any facility which uses industrial waste heat to produce electricity or thermal energy.

(D)

Municipal waste heat facility

For purposes of this paragraph, the term municipal waste heat facility means any facility which uses municipal waste heat to produce electricity or thermal energy.

(E)

Energy efficiency percentage

For purposes of subparagraph (B), the term energy efficiency percentage, with respect to a facility, means the percentage determined by dividing—

(i)

the total useful electrical, thermal, and mechanical power, calculated in British Thermal Units, produced by the system at normal operating rates, by

(ii)

the lower heating value, calculated in British Thermal Units, of the primary fuel source for the system.

.

(5)

Reduced credit

Subparagraph (A) of section 45(b)(4) of such Code (relating to credit rate and period for electricity produced and sold from certain facilities) is amended—

(A)

by striking or (7) inserting (7), or (13), and

(B)

by inserting or thermal energy sold in any calendar year after 2007 at a facility described in subsection (d)(13), after subsection (d),.

(6)

Conforming amendments

(A)

Subsection (a) of section 45 of such Code is amended by inserting and thermal energy after renewable electricity.

(B)

Paragraph (2) of section 45(c) of such Code is amended by inserting or thermal energy after electricity.

(C)

Subsection (d) of section 45 of such Code is amended by inserting or thermal energy after electricity in each place it appears.

(D)

Subsection (e) of section 45 of such Code is amended by inserting or thermal energy after electricity each place it appears in paragraphs (1) and (4).

(E)

Paragraph (8) of section 38(b) of such Code is amended by inserting or thermal energy after electricity.

(F)

The heading of section 45 of such Code is amended by inserting or thermal energy after Electricity.

(G)

The table of sections for subpart D of part IV of subchapter A of chapter 1 is amended by striking the item relating to section 45 and inserting the following new item:

Sec. 45. Electricity or thermal energy produced from certain renewable resources, etc.

.

(b)

Effective date

The amendments made by this section shall apply to electricity or thermal energy produced and sold after the date of the enactment of his Act.

B

Promoting energy efficient investments

411.

Rate modifications promoting energy efficiency investments

(a)

Electric utilities

Section 111(d) of the Public Utility Regulatory Policies Act of 1978 is amended by inserting at the end thereof:

(16)

Rate design modifications to promote energy efficiency investments

(A)

In general

The rates allowed to be charged by any electric utility shall—

(i)

align utility incentives with the delivery of cost-effective energy efficiency; and

(ii)

promote energy efficiency investments.

(B)

Policy options

In complying with subparagraph (A), each State regulatory authority and each nonregulated utility shall consider—

(i)

removing the throughput incentive and other regulatory and management disincentives to energy efficiency;

(ii)

providing utility incentives for the successful management of energy efficiency programs;

(iii)

including the impact on adoption of energy efficiency as 1 of the goals of retail rate design, recognizing that energy efficiency must be balanced with other objectives;

(iv)

adopting rate designs that encourage energy efficiency for each customer class; and

(v)

allowing timely recovery of energy efficiency-related costs.

.

(b)

Natural gas utility

Section 303 of the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 3203(b)) is amended by adding the following at the end of subsection (b):

(5)

Energy efficiency

Each natural gas utility shall—

(A)

integrate energy efficiency resources into the plans and planning processes of the natural gas utility; and

(B)

adopt policies that establish energy efficiency as a priority resource in the plans and planning processes of the natural gas utility.

(6)

Rate design modifications to promote energy efficiency

The rates allowed to be charged by a natural gas utility shall align utility incentives with the deployment of cost-effective energy efficiency. In complying with the standard under this paragraph, each State regulatory authority and each nonregulated utility shall consider—

(A)

separating fixed-cost revenue recovery from the volume of transportation or sales service provided to the customer;

(B)

providing to utilities incentives for the successful management of energy efficiency programs, such as allowing utilities to retain a portion of the cost-reducing benefits accruing from the programs;

(C)

promoting the impact on adoption of energy efficiency as 1 of the goals of retail rate design, recognizing that energy efficiency must be balanced with other objectives; and

(D)

adopting rate designs that encourage energy efficiency for each customer class.

.

(c)

Compliance

(1)

Time limitations

Section 112(b) of the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2622(b)) is amended by adding at the end the following:

(6)
(A)

Not later than 1 year after the enactment of this paragraph, each State regulatory authority (with respect to each electric utility for which it has ratemaking authority) and each nonregulated utility shall commence the consideration referred to in section 111, or set a hearing date for consideration, with respect to the standard established by paragraph (16) of section 111(d).

(B)

Not later than two years after the date of the enactment of the this paragraph, each State regulatory authority (with respect to each electric utility for which it has ratemaking authority), and each nonregulated electric utility, shall complete the consideration, and shall make the determination, referred to in section 111 with respect to each standard established by paragraph (1) of section 111(d)

.

(2)

Failure to comply

Section 112(d) of the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2622(c)) is amended by adding at the end the following: In the case of the standard established by paragraph (15), the reference contained in this subsection to the date of enactment of this Act shall be deemed to be a reference to the date of enactment of paragraph (16)..

(3)

Prior State action

(A)

In general

Section 112 of the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2622) is amended by adding at the end the following:

(f)

Prior State Actions

Subsections (b) and (c) of this section shall not apply to the standard established by paragraph (15) of section 111(d) in the case of any electric utility in a State if, before the enactment of this subsection—

(1)

the State has implemented for such utility the standard concerned (or a comparable standard);

(2)

the State regulatory authority for such State or relevant nonregulated electric utility has conducted a proceeding to consider implementation of the standard concerned (or a comparable standard) for such utility; or

(3)

the State legislature has voted on the implementation of such standard (or a comparable standard) for such utility.

.

(B)

Cross reference

Section 124 of such Act (16 U.S.C. 2634) is amended by adding the following at the end thereof: In the case of each standard established by paragraph (16) of section 111(d), the reference contained in this subsection to the date of enactment of the Act shall be deemed to be a reference to the date of enactment of paragraph (16)..

(d)

Compliance date

Section 303 of the Public Utility Regulatory Policies Act of 1978 is amended by striking Not later than 2 years after the date of the enactment of this Act (or after the enactment of the Energy Policy Act of 1992 in the case of standards under paragraphs (3) and (4) of subsection (b)) and inserting Not later than 2 years after the date of the enactment of the standard concerned.

(e)

Prior State actions

Section 310 of the Public Utility Regulatory Policies Act of 1978 is amended by striking of this Act in each place it appears and inserting the standard under section 303(b).

412.

Feed-in tariff system study

(a)

Study and report

Not later than 1 year after the date of enactment of this Act, the Lawrence Berkeley National Laboratory shall transmit to Congress a report on the results of a study on feed-in tariff systems, which shall include recommendations for an appropriate pricing structure to best ensure that investors in renewable energy technologies can receive a reasonable return on their investment.

(b)

Definition

In this section:

(1)

The term feed-in tariff system means a system under which—

(A)

renewable energy technologies have priority access to the electricity market; and

(B)

for a fixed period of time, electric utilities are required to pay predetermined amounts for electric power sold to the utility by producers using renewable energy sources.

(2)

The term renewable energy has the meaning given to such term in section 203 of the Energy Policy Act of 2005.

(c)

Authorization of appropriations

There are authorized to be appropriated such sums as are necessary to carry out this report.

C

National renewable energy zones

421.

New electricity transmission lines designed primarily to carry electricity from renewable energy resources

The Secretary of the Treasury, in consultation with the Secretary of Energy, the Secretary of Commerce, and the Administrator of the Environmental Protection Agency, shall establish an appropriate investment tax credit for the construction of new electricity transmission lines designed primarily to carry electricity from renewable energy resources. Such credit shall be sufficient to encourage the development of promising rural renewable energy domestic resources that otherwise would likely not be developed.

422.

Short title

This title may be cited as the Rural Clean Energy Superhighways Act.

423.

Findings

The Congress finds that—

(1)

electricity produced from renewable resources helps to reduce greenhouse gas emissions, and limits emissions of other pollutants regulated pursuant to the Clean Air Act, enhances national energy security, and provides substantial economic benefits;

(2)

the potential exists for a far greater percentage of electric production in the United States to be generated through the use of renewable resources than current levels;

(3)

many of the best potential renewable energy resources are located in rural areas far from population centers;

(4)

the lack of adequate electric transmission capacity is one of the primary obstacles to the development of electric generation facilities fueled by renewable energy resources;

(5)

the economies of many rural areas would substantially benefit from the increased development of electric generation facilities fueled by renewable energy resources; and

(6)

it is in the national interest for the Federal government to implement policies that will enhance the amount of electric transmission capacity available to take full advantage of renewable energy resources to generate electricity.

424.

National renewable energy zones

(a)

In general

Title II of the Federal Power Act (16 U.S.C. 824 et seq.) is amended—

(1)

by inserting before the section heading of section 201 (16 U.S.C. 824 et seq.) the following:

Subtitle A—Regulation of Electric Utility Companies

; and

(2)

by adding at the end the following:

B

National Renewable Energy Zones

231.

Definitions

In this subtitle:

(1)

The term Commission means the Federal Energy Regulatory Commission.

(2)

The term electricity from renewable energymeans electric energy generated from_

(A)

solar, wind, geothermal or ocean energy;

(B)

biomass (as defined in section 203(a) of the Energy Policy Act of 2005);

(C)

landfill gas; or

(D)

incremental hydropower.

(3)

The term Federal Power Marketing Administration means any agency or instrumentality of the United States (other than the Tennessee Valley Authority) which sells electric energy.

(4)

The term Federal Transmitting Utility means a Federal Power Marketing Administration that owns or operates electric transmission facilities or the Tennessee Valley Authority.

(5)

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).

(6)

The term renewable energy trunkline shall mean a radial transmission line at a voltage of 115 kV or above, including all associated transmission facilities and equipment within a National Renewable Energy Zone that is used to deliver electricity from renewable energy to the point where the trunkline connects to a high-voltage electric transmission facility, including any modifications, additions or upgrades to such facilities and equipment. A renewable energy trunkline shall not include network upgrades.

(7)

The term high-voltage electric transmission facility means those electric facilities with a capability in excess of 200 kilovolts.

(8)

The term network upgrades shall mean the additions or modifications to the transmission provider’s high-voltage transmission system other than renewable energy trunkline facilities.

(9)

The term President means the President of the United States.

(10)

The term Indian lands means—

(A)

any land within the limits of any Indian reservation, pueblo or Rancheria,

(B)

any land not within the limits of any Indian reservation, pueblo or Rancheria title to which was on the date of passage of this Act either held in trust by the United States for the benefit of any Indian tribe or individual or held by any Indian tribe or individual subject to restriction by the United States against alienation,

(C)

any dependent Indian community, and

(D)

any land conveyed to any Alaska Native corporation under the Alaska Native Claims Settlement Act.

(11)

The term electricity consuming area means the area within which electricity from renewable energy would be consumed if new high-voltage electric transmission facilities were to be constructed to deliver electricity from renewable energy generated in a National Renewable Energy Zone.

232.

Designation of National Renewable Energy Zones

(a)

Designation

Within six months after the date of enactment of this Act, the President or the President’s designee shall designate as a National Renewable Energy Zone each area that meets each of the following conditions:

(1)

The potential to generate in excess of one gigawatt of electricity from renewable energy without having a material detrimental impact on reliability.

(2)

An insufficient level of electric transmission capacity to achieve the potential identified pursuant to paragraph (1).

(3)

Access, for renewable energy to be generated in the National Renewable Energy Zone, to one or more electricity consuming areas if there were a sufficient level of transmission capacity.

(b)

Factors

In making the designations required by subsection (a), the Secretary take into account the following:

(1)

State and Federal requirements for utilities to incorporate renewable energy as part of serving load; and

(2)

The impact of electric transmission facility development on the aesthetic and environmental values of land contained in an area eligible for National Renewable Energy Zone designation.

(c)

Additional facilities

Within six months of the designation of a National Renewable Energy Zone, the President or the President’s designee shall identify, and provide public notice of, specific additional high-voltage electric transmission facilities and other nontransmission alternatives required to substantially increase the generation of electricity from renewable energy within each National Renewable Energy Zone.

(d)

Public views

Before designating an area as a National Renewable Energy Zone, the President or the President’s designee shall afford each affected State, Indian Tribe and other interested persons a reasonable opportunity to present their views and recommendations before a designation shall be effective.

(e)

Expansion

The President or the President’s designee shall every three years after the date of enactment consider whether to expand an existing National Renewable Energy Zone or designate a new National Renewable Energy Zone pursuant to the criteria set forth in subsection (a).

233.

Encouraging clean energy superhighway development in National Renewable Energy Zones

(a)

Cost recovery

(1)

The Commission shall issue and enforce such regulations as are necessary to ensure that a public utility transmission provider that finances transmission capacity to transmit electricity from renewable energy from a National Renewable Energy Zone to an electricity consuming area after the date of enactment of this subtitle recovers through its rates for transmission service all costs and a reasonable return on equity associated with the construction and operation of such new transmission capacity.

(2)

A regulation under paragraph (1) shall be enforceable in accordance with the provisions of law applicable to enforcement of regulations under this Act.

(b)

Alternative transmission financing mechanism

The Commission shall permit a renewable energy trunkline built by a public utility transmission provider in a National Renewable Energy Zone to, in advance of generation interconnection requests, be initially funded through a transmission charge imposed upon all transmission customers of the transmission provider or, if the renewable energy trunkline is built in an area served by a regional transmission organization or independent system operator, all of the transmission customers of such transmission operator, if the Commission makes each of the following findings:

(1)

The renewable energy resources that would utilize the renewable energy trunkline are remote from the grid and load centers.

(2)

The renewable energy trunkline will likely result in multiple individual renewable energy electric generation projects being developed by multiple competing developers. The renewable energy trunkline has at least one project subscribed through an executed generation interconnection agreement with the transmission provider and has tangible demonstration of additional interest.

As new electric generation projects are constructed and interconnected to the renewable energy trunkline, the transmission services contract holder for such generation project will, on a going forward basis, pay a pro-rata share of the renewable energy trunkline facility's costs, thus reducing the effect on the rates of customers of the public utility transmission provider.

.

(b)

Transmission cost allocation

Section 206 of the Federal Power Act (16 U.S.C. 824e) is amended by adding the following new subsection at the end thereof:

(e)
(1)

Within six months of the date the President designates an area as a National Renewable Energy Zone, the State utility commissions or other appropriate bodies having jurisdiction over the public utilities providing service in the National Renewable Energy Zone or an adjacent electricity consuming area may jointly propose to the Commission a cost allocation plan for high-voltage electric transmission facilities built by a public utility transmission provider that would serve the electricity consuming area.

(2)

The Commission may approve the plan proposed by the States pursuant to paragraph (1) if, taking into account the users of the transmission facilities, the plan will result in rates that are just and reasonable and not unduly discriminatory or preferential and the plan would not unduly inhibit the development of renewable energy electric generation projects.

(3)

Unless a plan has been approved by the Commission pursuant to paragraph (2), the Commission shall fairly allocate the costs of new high-voltage electric transmission facilities built in the area by one or more public utility transmission providers (recognizing the national and regional benefits associated with increased access to electricity from renewable energy) pursuant to a rolled-in transmission charge. nothing in this subsection shall expand, directly or indirectly, the jurisdiction of the Commission with respect to any Federal Transmitting Utility.

.

(c)

Federal transmitting utilities

(1)

If no privately or publicly funded entity commits within one year of the identification required in section 232(c) of the Federal Power Act to finance (either on its own or through a third party financing arrangement with a Federal Transmitting Utility) a high-voltage electric transmission facility identified in such notice, a Federal Transmitting Utility shall finance the construction of the high-voltage electric transmission facility and operate and maintain such facility if the Federal Transmitting Utility determines—

(A)

the facility would be located within the area in which the Federal Transmitting Utility is statutorily authorized to construct transmission facilities;

(B)

the facility may be constructed and operated without having a material detrimental impact on reliability; and

(C)

equally effective nontransmission options are unavailable.

(2)
(A)

Subject to the availability of appropriated funds, the Department of Energy is authorized to issue and sell bonds, notes, and other evidence of indebtedness to the Secretary of Treasury from time to time in an amount not to exceed $10,000,000,000 outstanding at any one time. The Department of Energy shall deposit the amounts raised pursuant to this subsection to a Transmission Fund, which shall be located in the U.S. Treasury.

(B)

Amounts deposited in the Transmission Fund shall be available without further appropriation or fiscal year limitation to a Federal Transmitting Utility to fund the construction, operation and maintenance of high-voltage electric transmission facilities authorized by subsection (1). Except as specified in subparagraph (C), amounts used for construction, operation and maintenance shall be recovered by the Federal Transmitting Utility and repaid to the Transmission Fund over a period of 50 years.

(C)

If a Federal Transmitting Utility determines that revenue from users of the high-voltage electric transmission facility may not be sufficient to recover its costs over time, it may set a transmission rate for its use separate from rates charged for the use of the Federal Transmitting Utility’s other transmission facilities. In such event, power and transmission customers of the Federal Transmitting Utility shall not be liable for the costs of the high-voltage transmission facility except for the amount of transmission capacity such customers utilize as determined by each Federal Transmitting Utility. Any amounts that cannot be so recovered from such separate rate over a period of 50 years shall not be required to be repaid by the Federal Transmitting Utility to the Transmission Fund in the United States Treasury.

(3)

The regulations promulgated pursuant to this Act shall, to the maximum extent practicable, ensure that not less than 75 percent of the capacity of any high-voltage electric transmission line constructed by a Federal transmitting utility pursuant to this section is used for electricity from renewable energy.

425.

Federal Power Marketing Administrations and TVA

(a)

Promotion of renewable energy and energy efficiency

The Western Area Power Administration, the Southeastern Area Power Administration, the Southwestern Area Power Administration and the Tennessee Valley Authority shall each identify and, to the extent economically feasible and not inconsistent with other statutory obligations, take steps to promote energy conservation and renewable energy electric resource development in the regions served by such utility.

(b)

Acquisition of renewable energy and renewable energy credits

Each Federal Power Marketing Administration and the Tennessee Valley Authority may, subject to advance payment arrangements by the Federal Government being in place that assure the Federal Power Marketing Administration is held financially harmless for its actions pursuant to this section, use its purchasing power to acquire on behalf of the Federal government electricity from renewable energy and renewable energy credits in sufficient amounts to meet the requirements of section 203 of the Energy Policy Act of 2005. The Federal agencies on behalf of which a Federal Power Marketing Administration or the Tennessee Valley Authority acquires renewable energy or renewable energy credits shall fully reimburse the Federal Power Marketing Administration or the Tennessee Valley Authority for such transactions.

(c)

Tribal renewable energy

Each Federal Power Marketing Administration and the Tennessee Valley Authority shall identify opportunities for promoting the development of facilities generating electricity from renewable energy on Indian lands.

(d)

Nonreimbursable funds

The amounts expended by a Federal Power Marketing Administration or the Tennessee Valley Authority pursuant to this section shall not be subject to reimbursement by the customers of such utility.

426.

Consistency with environmental laws

Nothing in this Act shall be deemed to waive any existing Federal or State environmental protection provision, including the requirements of—

(1)

the National Forest Management Act of 1976 (16 U.S.C. 472a et seq.);

(2)

the Endangered Species Act of 1973 (16 U.S.C. 1531 et seq.);

(3)

the National Environmental Policy Act of 1969 (42 U.S.C. 4231 et. seq.);

(4)

the Federal Water Pollution Control Act of 1969 (33 U.S.C. 1251 et . seq.); and

(5)

the Federal Land Policy and Management Act of 1976 (43 U.S.C. 1701 et seq.).

D

Net metering

431.

Establishing minimum net metering and interconnection standards

(a)

Findings

The Congress finds that it is in the public interest to:

(1)

Enable small businesses, residences, schools, churches, farms with small electric generation units, and other retail electric customers who generate electric energy to return or sell surplus electric energy on the open market.

(2)

Encourage private investment in renewable and alternate energy resources.

(3)

Stimulate the economic growth.

(4)

Enhance the continued diversification section of energy resources used in the United States.

(5)

Remove regulatory barriers for net metering.

(b)

Net metering and interconnection standards

Section 113 of the Public Utility Regulatory Policies Act of 1978 is amended by adding the following new subsections at the end thereof:

(d)

Net metering

(1)

Definitions

As used in this subsection:

(A)

The term customer-generator means the owner or operator of a qualified generation unit.

(B)

The term net metering means measuring the difference between the electricity supplied to a customer-generator and the electricity generated by a customer-generator that is delivered to a local distribution section system at the same point of interconnection during an applicable billing period and providing an energy credit to a customer-generator in the form of a kilowatt-hour credit for each kilowatt-hour of energy produced by a customer-generator from a qualified generation unit.

(C)

The term qualified generation unit means an electric energy generation unit that meets each of the following requirements:

(i)

The unit is a fuel cell or uses as its energy source either solar, wind, biomass, geothermal, anaerobic digestion or landfill gas, or a combination of the foregoing.

(ii)

The unit has a generating capacity of not more than 1,000 kilowatts.

(iii)

The unit is located on premises that are owned, operated, leased, or otherwise controlled by the customer-generator.

(iv)

The unit operates in parallel with the retail electric supplier.

(v)

The unit is intended primarily to offset part or all of the customer-generator’s requirements for electric energy.

(D)

The term retail electric supplier means any electric utility that sells electric energy to the ultimate consumer thereof.

(E)

The term local distribution system means any system for the distribution section of electric energy to the ultimate consumer thereof, whether or not the owner or operator of such system is also a retail electric supplier.

(2)

Adoption

Not later than one year after the enactment of this subsection, each State regulatory authority (with respect to each electric utility for which it has ratemaking authority), and each nonregulated electric utility, shall provide public notice and conduct a hearing respecting the standards established by paragraph (3) and, on the basis of such hearing, shall adopt such standard.

(3)

Establishment of net metering standard

Each retail electric supplier shall offer to arrange (either directly or through a local distribution company or other third party) to make net metering available, on a first-come-first-served basis, to each of its retail customers in accordance with the provisions of this subsection and each of the following requirements:

(A)

Rates and charges and contract terms and conditions for the sale of electric energy to customer-generators shall be the same as the rates and charges and contract terms and conditions that would be applicable if the customer-generator did not own or operate a qualified generation unit and use a net metering system.

(B)

Each retail electric supplier shall notify all of its retail customers of the standard established under this paragraph upon adoption of such standard.

(4)

Net energy measurement

Each retail electric supplier shall arrange to provide to customer-generators who qualify for net metering under subsection (b) an electrical energy meter capable of net metering and measuring the flow of electricity either to or from the customer and using a single meter and single register, except where it is not practical to do so. Where it is not practical to provide the meter to the customer-generator, the retail electric supplier (either directly or through a local distribution company or other third party) shall, at its own expense, install one or more of such electric energy meters for the customer-generator concerned.

(5)

Billing

Each retail electric supplier subject to subsection (b) shall calculate the electric energy consumption for a customer using a net metering system in the following manner:

(A)

The retail electric supplier shall measure the net electricity produced or consumed during the billing period using the metering installed as provided in paragraph (4).

(B)

If the electricity supplied by the retail electric supplier exceeds the electricity generated by the customer-generator during the billing period, the customer-generator shall be billed for the net electric energy supplied by the retail electric supplier in accordance with normal billing practices

(C)
(i)

If electric energy generated by the customer-generator exceeds the electric energy supplied by the retail electric supplier, the customer-generator shall be billed for the appropriate customer charges for that billing period and credited for the excess electric energy generated during the billing period, with this credit appearing as a kilowatt-hour credit on the bill for the following billing period. The kilowatt-hour credits shall be applied to customer-generator electric energy consumption on the following billing period bill (except for a billing period that ends in the next calendar year). At the beginning of each calendar year, any remaining unused kilowatt-hour credits shall be extinguished.

(ii)

Except as provided in this clause, if the customer-generator is using a meter and retail billing arrangement that has time differentiated rates, (a time-of-use meter), the kilowatt-hour credit shall be based on the ratio representing the difference in retail rates for each time of use rate or the credits shall be shown on the customer-generator’s bill as a monetary credit reflecting retail rates at the time of generation of the electric energy by the customer-generator. Notwithstanding the standard established under section 11(d)(14), the supplier may require, at the supplier’s option, the customer-generator with net metering to take electric service under a non-time differentiated energy rate tariff or service that it offers to customers in the same rate class as the customer-generator.

(6)

Percent limitations

(A)

Two percent limitation

The standard established under this subsection shall not apply for a calendar year in the case of a customer-generator served by a local distribution company when the total generating capacity of all customer-generators with net metering systems served by that local distribution company in that calendar year is equal to or in excess of 2 percent of the capacity necessary to meet the local distribution company’s average forecasted aggregate customer peak demand for that calendar year.

(B)

One percent limitation

The standard established under this subsection shall not apply for a calendar year in the case of a customer-generator served by a local distribution company when the total generating capacity of all customer-generators with net metering systems served by that local distribution company in that calendar year using a single type of qualified generation units (as listed in paragraph (1)(C)(i)) is equal to or in excess of 1 percent of the capacity necessary to meet the company’s average forecasted aggregate customer peak demand for that calendar year.

(C)

Records and notice

- Each retail electric supplier shall maintain, and make available to the public, records of the total generating capacity of customer-generators of such system that are using net metering, the type of generating systems and energy source used by the electric generating systems used by such customer-generators. Each such retail electric supplier shall notify the State regulatory authority and the Federal Energy Regulatory Commission when the total generating capacity of such customer-generators is equal to or in excess of the limitations set forth in subparagraph (B).

(7)

Ownership of credits

For purposes of Federal and State laws providing renewable energy credits or greenhouse gas credits, the customer-generator with a qualified generating unit and net metering shall be treated as owning and having title to the renewable energy attributes, renewable energy credits and greenhouse gas emission credits related to any electricity produced by the qualified generating unit. No retail electric supplier shall claim title to or ownership of any renewable energy attributes, renewable energy credits or greenhouse gas emission credits of the customer-generator as a result of interconnecting the customer-generator or providing or offering the customer-generator net metering.

(8)

Safety and performance standards

(A)

A qualified generation unit and net metering system used by a customer-generator shall meet all applicable safety and performance and reliability standards established by the national electrical code, the Institute of Electrical and Electronics Engineers, Underwriters Laboratories, or the American National Standards Institute.

(B)

The Commission shall, after consultation with State regulatory authorities and nonregulated local distribution systems and after notice and opportunity for comment, prohibit by regulation the imposition of additional charges by electric suppliers and local distribution systems for equipment or services for safety or performance that are additional to those necessary to meet the standards and requirements referred to in subparagraph (A) of this paragraph and subsection (e) of this section (relating to interconnection).

(9)

Determination of compliance

Any State regulatory authority (with respect to each electric utility for which it has ratemaking authority), and each nonregulated electric utility may apply to the Commission for a determination that any State net metering requirement or regulations complies with the requirements of this subsection. In the absence of such a determination, the Commission, on its own motion or pursuant to the petition of any interested person, may, after notice and opportunity for a hearing on the record, issue an order requiring against any retail electric supplier or local distribution company, or both, to require compliance with this subsection. Any person who violates any requirement of this subsection or any order of the Commission under this subsection shall be subject to civil penalties in the amount of $10,000 for each day that such violation continues. Such penalties may be assessed by the Commission, after notice and opportunity for hearing, in the same manner as penalties are assessed under section 31(d) of the Federal Power Act.

(e)

Interconnection standards

(1)

Definitions

For purposes of this subsection, the terms defined in subsection (d) shall apply.

(2)

Model standards

(A)

Within one year after the enactment of this subsection the Commission shall publish model standards for the physical connection between local distribution systems and qualified generation units and electric generation units that meet the requirements of subsection (d)(1)(C) other than clause (ii) thereof and that do not exceed 20,000 kilowatts of capacity. Such model standards shall be designed to encourage the use of qualified generation units and to ensure the safety and reliability of such units and the local distribution systems interconnected with such units.

(B)

The model standards shall have two separate expedited procedures for interconnecting qualified generation units up to 15 kilowatts and a separate standard that expedites interconnection for qualified generation units up to 2000 kilowatts. Such expedited procedures shall be based on those best practices among the States that have adopted interconnection standards. In designing such expedited procedures, the Commission shall consider Interstate Renewable Energy Council Model Rule MR–I2005.

(C)

Within 2 years after the enactment of this subsection, each State shall adopt the model standards published under this paragraph, with or without modification, and submit such standards to the Commission for approval. The Commission shall approve a modification of the model standards only if the Commission determines that such modification is consistent with or superior to the purpose of such standards and is required by reason of local conditions.

(D)

If standards have not been approved under this paragraph by the Commission for any State within 2 years after the enactment of this subsection, the Commission shall, by rule or order, enforce the Commission's model standards in such State until such time as State standards are approved by the Commission.

(E)

Within two years after the enactment of this subsection, and after notice and opportunity for comment, the Commission shall publish an update of such model standards, considering changes in the underlying standards and technologies. Such updates shall be made available to State regulatory authorities for their consideration.

(3)

Safety, reliability, performance, and cost

The standards under this section shall establish those measures for the safety and reliability of the affected equipment and local distribution systems as may be appropriate. Such standards shall be consistent with all applicable safety and performance standards established by the national electrical code, the Institute of Electrical and Electronics Engineers, Underwriters Laboratories, or the American National Standards Institute yet constitute the minimum cost and technical burdens to the interconnecting customer generator as the Commission shall, by rule, prescribe.

(4)

Additional charges

The model standards under this subsection prohibit the imposition of additional charges by local distribution systems for equipment or services for interconnection that are additional to those necessary to meet such standards and that are in excess of the charges and equipment requirements identified in the best practices of states with interconnection standards.

(5)

Relationship to existing law regarding interconnection

Nothing in this subsection affects the application of section 111(d)(15) relating to interconnection.

(6)

Consumer friendly contracts

The Commission shall promulgate regulations insuring that simplified contracts will be used for the interconnection of electric energy by electric energy transmission or distribution systems and generating facilities that have a power production capacity not greater than 2000 kilowatts and shall consider the best practices for consumer friendly contracts adopted by States or national associations of state regulators. Such contracts shall not require liability or other insurance in excess of what is typically carried by customer-generators for general liability.

(7)

Enforcement

Any person who violates any requirement of this subsection shall be subject to civil penalties in the amount of $10,000 for each day that such violation continues. Such penalties may be assessed by the Commission, after notice and opportunity for hearing, in the same manner as penalties are assessed under section 31(d) of the Federal Power Act.

.

(c)

Relationship to State law

Section 117 of the Public Utility Regulatory Policies Act of 1978 is amended by striking Nothing and inserting (1) Except as provided in paragraph (2), nothing and by adding the following at the end thereof:

(2)

No State or nonregulated utility may adopt or enforce any standard or requirement concerning net metering or interconnection that restricts access to the electric power transmission or distribution system by qualified generators beyond those standards and requirements identified in section 113(d). Nothing in this Act shall preclude a State from adopting or enforcing incentives or requirements to encourage qualified generation and net metering that are additional to or equivalent to those required under section 113(d) or that afford greater access to the electric power transmission and distribution system by qualified generators as defined in section 113(d) or afford greater compensation or credit for electricity generated by such generators.

.

432.

Retail electric and gas utility efficiency policies

(a)

In general

The Public Utility Regulatory Policies Act of 1978 is amended by adding the following after section 609:

610.

Efficiency resource standards for retail electricity and natural gas distributors

(a)

Definitions

In this section:

(1)

Base quantity

The term base quantity, with respect to a retail electricity or natural gas distributor, means the total quantity of electric energy or natural gas delivered by the retail electricity or natural gas distributor to retail customers during the most recent calendar year for which information is available.

(2)

Combined heat and power system

The terms combined heat and power system and CHP system mean a system that—

(A)

uses the same energy source for the simultaneous or sequential generation of electrical power, mechanical power, or both, in combination with the generation of steam or other forms of useful thermal energy (including heating and cooling applications);

(B)

produces at least 20 percent of its total useful energy in the form of thermal energy, and at least 15 percent of its total useful energy in the form of electrical or mechanical power (or a combination thereof);

(C)

except for systems designed for operation on cellulosic biomass fuel, has a marginal net heat rate of no more than 7,500 Btu/kWh, calculated on a higher heating value basis;

(D)

is designed for continuous operation; and

(E)

if generating electricity provides such electricity primarily for use for a facility or group of facilities located near the point where the electricity is generated, and from which net wholesale sales of electricity are not in excess of 50 percent of total annual generation.

(3)

Customer facility

The term customer facility means an end-use consumer of electricity or natural gas served by a retail electricity or natural gas distributor.

(4)

Deemed savings

The term deemed savings means an estimate of the average per unit savings from installation of specific common energy efficiency measures. Deemed savings estimates shall be based on field studies or billing analyses of savings at a sample of sites where the specific measure is installed.

(5)

Electric and Natural Gas Savings Corporation

The term Electric and Natural Gas Savings Corporation means the corporation certified pursuant to subsection (d)(7)(C).

(6)

Electricity

(A)

The term electricity savings means any of the following:

(i)

Reductions in end-use electricity consumption achieved by a customer facility relative to_

(I)

consumption at the same facility in a base year, as defined in rules issued by the Secretary;

(II)

in the case of replacement of equipment at the end of its life or of new equipment that does not replace existing equipment, consumption of new equipment of average efficiency, as defined in rules issued by the Secretary; or

(III)

in the case of a new facility, consumption at a reference facility, as defined in rules issued by the Secretary.

(ii)

Reductions in distribution system losses of electricity achieved by a retail electricity distributor relative to losses attributable to new or replacement distribution system equipment of average efficiency, as defined in rules issued by the Secretary.

(iii)

Any combination of the foregoing.

(B)

The reductions referred to in subparagraph (A) may be due to—

(i)

energy efficiency measures, including demand response measures that result in improved energy efficiency;

(ii)

combined heat and power systems as calculated under subparagraph (D);

(iii)

recycled energy; or

(iv)

in the case of distribution system losses, upgraded distribution transformers, upgraded electrical connectors, high temperature superconductors, or other measures to reduce such losses as specified in rules issued by the Secretary.

(C)

The reductions in end-use electricity consumption at a customer facility shall be reduced on a Btu basis by the Btu equivalent of any associated increases in fuel consumption at such facility. The conversion of any such fuel consumption increase to an equivalent amount of electricity on a Btu basis shall be determined by the Secretary based on the average heat rate of central station generation in the region (accounting for average transmission and distribution losses in the region), as determined in rules issued by the Secretary.

(D)

For a combined heat and power (CHP) system, the electricity savings shall be the electricity and mechanical power generated by the CHP system net of fuel used by the system, where the fuel used is the product of—

(i)

the electricity and mechanical power generated by the CHP system;

(ii)

the net-effective heat rate for the CHP system; and

(iii)

the inverse of the average heat rate of central station generation in the region, taking into consideration avoided transmission and distribution losses resulting from on-site generation as determined under subparagraph (C).

(7)

Natural gas savings

(A)

The term natural gas savings means—

(i)

reductions in end-use natural gas consumption achieved by a customer facility relative to—

(I)

consumption at the same facility in a base year, as defined in rules issued by the Secretary;

(II)

in the case of replacement of equipment at the end of its life or of new equipment that does not replace existing equipment, consumption of new equipment of average efficiency, as defined in rules issued by the Secretary; or

(III)

in the case of a new facility, consumption at a reference facility, as defined in rules issued by the Secretary;

(ii)

reductions in leakage, operational losses, and gas fuel consumption in the operation of a gas distribution system achieved by a retail gas distributor relative to such losses in a base year, as defined in rules issued by the Secretary; or

(iii)

any combination of the foregoing.

(B)

The natural gas savings may be due to—

(i)

energy efficiency measures;

(ii)

recycled energy; or

(iii)

in the case of gas distribution system losses, technologies and practices as specified in rules issued by the Secretary including measures recommended for gas distribution systems by the Natural Gas STAR Program administered by the Environmental Protection Agency.

(C)

The reductions in natural gas consumption shall be reduced on a Btu equivalent basis by any associated increases in the consumption of electricity or other substitute fuels by a customer facility or a natural gas distributor, as determined under rules issued by the Secretary. The conversion of any such increase in the consumption of electricity or other fuels to an equivalent amount of natural gas consumption on a Btu basis shall be determined by the Secretary based on the average heat rate of central station electric generation in the region and average transmission and distribution losses in the region, as determined under rules issued by the Secretary.

(8)

Net effective heat rate

The term net effective heat rate means a ratio, the numerator of which is the higher heating value of the increment of fuel required by a CHP system to produce electricity and mechanical power, over and above the fuel that would be required to produce the equivalent thermal output of the CHP system by a system without power generation, expressed in British thermal units, and the denominator of which is the power output of the CHP system, expressed in kilowatt-hours.

(9)

Performance standard

The term performance standard means the performance standard for energy savings established under subsection (b).

(10)

Recycled energy

The term recycled energy means electrical or mechanical power, or both, or thermal energy produced by modifying an industrial or commercial system that was in place prior to January 1, 2007, such that the modified system—

(A)

recaptures energy that would otherwise be wasted from sources, including—

(i)

waste heat from industrial processes, natural gas compressor stations, and other sources;

(ii)

pressure in a fluid or gas system including but not limited to steam, natural gas, and water; and

(iii)

blast furnace, coke oven, carbon black, and petrochemical process waste gas, or pollution control projects, including thermal oxidizers and gas flares; and

(B)

uses equipment and technologies including—

(i)

back-pressure turbines in parallel with existing pressure-reducing valves in steam, water and gas systems;

(ii)

organic Rankine, Stirling, or Kalina cycle heat engine systems driven by waste heat; or

(iii)

heat recovery steam generators with steam turbine generators that recover waste heat.

(11)

Retail electricity or natural gas distributor

The term retail electricity or natural gas distributor means a person (including a Federal, State, or local entity) that—

(A)

distributes electric energy or natural gas to consumers in the United States for a calendar year, including electricity or natural gas supplied by unregulated suppliers, regardless of whether such suppliers are affiliated or unaffiliated with the distributor; and

(B)

sold not less than 800,000 megawatt-hours of electric energy or 1 billion cubic feet of natural gas to consumers in the United States for purposes other than resale during the preceding calendar year.

For purposes of this paragraph, electricity or natural gas sold at wholesale to large end-use customers shall be included but natural gas sold to wholesale electric generators to generate electric power for resale shall not be not included.
(b)

Performance standard

(1)

In general

Each retail electricity or natural gas distributor shall undertake electricity and natural gas savings measures in each calendar year beginning with 2009 that produce electricity and natural gas savings as a percentage of the distributor’s base quantity at the applicable rate specified in paragraph (5).

(2)

Savings

The savings described in paragraph (1) shall represent savings realized in the specified year from measures implemented in that year and all preceding years beginning with 2007.

(3)

Limits

Savings from combined heat and power systems, recycled energy, and electricity or natural gas distribution system measures may be used by a distributor to satisfy no more than 50 percent of the applicable savings specified for any year in the table contained in paragraph (5).

(4)

Compliance

(A)

Each retail electricity or natural gas distributor subject to this subsection may use any electricity or natural gas savings measures available to the distributor to achieve compliance with the performance standard established under this section, on the condition that the electricity and natural gas savings achieved by such measures are calculated and verified pursuant to the rules issued under subsection (c).

(B)

A retail electricity or natural gas distributor may demonstrate compliance with the performance standard through the accumulation of_

(i)

electricity or natural gas savings credits achieved by such electricity or natural gas distributor and certified under clause (i) of subsection (d)(2)(A);

(ii)

electricity or natural gas savings credits obtained by purchase under subsection (d)(6);

(iii)

electricity or natural gas savings credits borrowed against future years under subsection (d)(7); or

(iv)

any combination of credits described in clauses (i), (ii), and (iii).

(5)

Applicable rates

(A)

The applicable rates referred to in paragraph (1) are as follows:

YearElectricity
savings (%)
Natural gas
savings (%)
2009 0.250.20
2010 0.750.50
2011 1.500.80
2012 2.251.15
2013 3.001.50
2014 4.002.00
2015 5.002.50
2016 6.003.00
2017 7.003.50
2018 8.004.00
2019 9.004.50
202010.005.00.
(B)

At least 2 years before the beginning of any year after 2020, the Secretary, after notice and opportunity for comment, shall set the applicable rate, taking into consideration the economic and environmental benefits of the energy savings and the cost of the savings measures.

(c)

Determination of compliance rules

Not later than 1 year after the date of enactment of this section, the Secretary shall issue rules that describe the means to be used to calculate and verify compliance with the performance standard that include each of the following:

(1)

Procedures and standards for defining and measuring electricity savings and natural gas savings from customer facility end-uses and from utility distribution systems that occur in a calendar year (including measures implemented in previous calendar years beginning in 2007). At a minimum, these procedures and standards shall—

(A)

specify the types and categories of efficiency measures that will be eligible for certification under subsection (d)(2);

(B)

require that energy consumption estimates for customer facilities or portions thereof in the base and current years be adjusted, when appropriate, to account for changes in weather, level of production, and building area;

(C)

allow energy consumption estimates from discrete processes and equipment within industrial facilities in the base and current years to be adjusted for factors identified by rule that may be responsible for significant year-to-year changes;

(D)

allow energy consumption estimates from discrete processes and equipment within industrial facilities in the base and current years to be adjusted for factors identified by rule that may be responsible for significant year-to-year changes;

(E)

account for the useful life of energy saving measures;

(F)

include deemed savings values for commonly-used efficiency measures and make provision for such values to be periodically reviewed and revised;

(G)

minimize the chances that more than one entity will claim credit for the same savings; and

(H)

exclude savings that—

(i)

are attributable to measures or systems installed before January 1, 2007, or to modifications of processes or systems undertaken prior to January 1, 2007;

(ii)

are otherwise required by Federal, State, local, or Indian tribal law or regulation;

(iii)

are achieved without the intervention of the electricity or natural gas distributor or of any other entity seeking credits under paragraph (2)(A)(ii) of , except as provided under subsection (e);

(iv)

are attributable to Federal, State, or local tax incentives, grants, loans, or other public financial support for energy efficiency measures; or

(v)

have already been credited under this section to another entity.

(2)

Procedures and standards for verification of electricity or natural gas savings reported by retail electricity and natural gas distributors. At a minimum, such procedures and standards shall—

(A)

provide for periodic spot checks on a sample of sites to verify that measures are in place and functioning;

(B)

provide that savings estimates are calibrated with billing analysis or end-use metering on a sample of sites where technically feasible and economically justified; and

(C)

provide for the protection of customers’ proprietary information against unwarranted disclosure.

(3)

Requirements for the content and format of a biennial report from each retail electricity or natural gas distributor demonstrating the compliance of the distributor with the performance standard, including a detailed description of the calculation of electricity and natural gas savings to enable the appropriate regulatory authority to verify and enforce compliance with the requirements of this section (including regulations issued under this section).

(4)

Provision for reviewing and revising the electricity and natural gas consumption of reference facilities and of new equipment of average efficiency at intervals of not greater than 4 years.

(d)

Credit and trading system

(1)

Establishment

Not later than one year after the date of enactment of this section, and after consultation with the Administrator of the Environmental Protection Agency, the Secretary shall issue rules establishing a nationwide credit and credit trading system for electricity and natural gas savings.

(2)

Credits

(A)

In general

In accordance with the rules issued under paragraph (1), the Secretary

(i)

shall certify as credits, electricity and natural gas savings achieved by a retail electricity or natural gas distributor in a given calendar year if the savings comply with the rules issued under subsection (c)(1);

(ii)

shall certify as credits, customer electricity and natural gas savings undertaken by State agencies and other entities if—

(I)

a retail electricity or natural gas distributor did not help finance measures to achieve these savings; and

(II)

the savings comply with the rules issued under subsection (c); and

(iii)

shall not award credits to any retail electricity or natural gas distributor subject to State administration and enforcement under subsection (g) unless the Secretary has determined that the administration and enforcement are at least equivalent to administration and enforcement by the Secretary.

(B)

Amount of credits

A credit certified by the Secretary under this subsection—

(i)

shall equal 1,000 kilowatt-hours, in the case of an electricity savings credit; or

(ii)

shall equal 10 therms, in the case of a natural gas savings credit.

(3)

Treatment of credits

(A)

Use of credits

A credit may be counted toward compliance with the performance standard only once.

(B)

Property rights

An electricity or natural gas savings credit certified under this subsection shall not be considered to be a property right.

(C)

Reduction and termination of credits

Nothing in this section or any other provision of the law limits the authority of the United States to reduce or terminate a credit certified under this subsection.

(4)

Fee

(A)

In general

To receive certification of an electricity or natural gas savings credit under this section, the recipient of the credit shall pay a fee, calculated by the Secretary, in an amount that is equal to the lesser of the following:

(i)

The administrative costs of issuing, recording, monitoring the sale or exchange, and tracking, of the credit.

(ii)

For the years 2009 and 2010, 5 percent of the fair market value of the credit, as determined by the Secretary, and for the years 2011 and thereafter, 3 percent of the fair market value of the credit, as determined by the Secretary.

(B)

Use of fees by Secretary

Subject to annual appropriation, the Secretary shall use amounts equivalent to the fees paid under this paragraph to pay administrative costs described in subparagraph (A)(i). If receipts exceed the administrative costs incurred by the Secretary in any two consecutive fiscal years, the Secretary shall, not later than January 1 of the first fiscal year thereafter, reduce the fee accordingly.

(5)

Credit sale and use

(A)

Sale

A retail electric or natural gas distributor may sell a credit certified under this subsection to any other entity, and other entities may sell such credit to a retail electric or natural gas distributor or any other entity, in accordance with accounting and verification procedures contained in rules issued by the Secretary under paragraph (1).

(B)

Use

A credit certified under this subsection and sold under subparagraph (A) may be used by a purchasing retail electricity or natural gas distributor for purposes of complying with the performance standard.

(C)

Duration of validity

A credit certified under this subsection may only be used for compliance with this section for 3 years from the date issued.

(6)

Credit borrowing

(A)

During the first year covered by the performance standard, a retail electricity or natural gas distributor that has reason to believe that the distributor will not have sufficient electricity or natural gas savings credits to comply with the performance standard may—

(i)

submit a plan to the Secretary demonstrating that the retail electricity or natural gas distributor will earn or acquire sufficient credits within the subsequent 2 calendar years that would enable the retail electricity or natural gas distributor to meet the performance standard for all three calendar years; and

(ii)

upon the approval of the plan by the Secretary, apply credits expected to be earned or acquired within the subsequent 2 calendar years to meet the performance standard for the applicable calendar year.

(B)

Any retail electricity or natural gas distributor that has submitted such a plan shall, by March 31 of the fourth calendar year, submit to the Secretary the credits necessary to repay all credits borrowed.

(7)

Buyout option

(A)

In general

An electricity or natural gas distributor may elect to comply with this section for any calendar year by paying to the certified Electric and Natural Gas Savings Corporation not later than March 31 of the following year, a fee of 5 cents per kilowatt-hour or 50 cents per therm, for any portion of the electricity or natural gas savings credit the distributor would otherwise be obligated to achieve for the year.

(B)

Use of buyout fees

The Electric and Natural Gas Savings Corporation shall—

(i)

deposit fees received under subparagraph (A) in an escrow account established by the Corporation; and

(ii)

periodically distribute amounts in the escrow account to States requesting such funds for use in creating electricity or natural gas savings at customer facilities.

States requesting funds from the account established by the Corporation shall submit specific program proposals, including funds requested, estimated savings and measure lifetime(s), and estimated cost per kWh or therm saved. The Corporation shall develop guidelines for these submissions. The Corporation shall distribute funds based on the following criteria: Estimated savings per dollar of funds provided from the escrow account, maximizing consumer opportunities to participate across all States, and, beginning in year 3, past history of each State in meeting energy savings and cost-effectiveness targets.
(C)

Electric and Natural Gas Savings Corporation

(i)

Establishment and certification

Any person may submit an application to the Secretary for the establishment and certification of a not-for-profit corporation, to be known as the Electric and Natural Gas Savings Corporation, to carry out this paragraph. The Secretary shall certify the corporation if the Secretary determines that the corporation has submitted the most qualified application indicating capability to carry out this paragraph. The Secretary may revoke such certification at any time for good cause, and in any such case, the Secretary may accept applications from other persons and certify another person as the Electric and Natural Gas Savings Corporation.

(ii)

Authority of corporation

No person may distribute more than 800,000 megawatt-hours of electric energy or more than 1 billion cubic feet of natural gas to consumers in the United States for purposes other than resale in any calendar year, including electricity or natural gas supplied by unregulated suppliers, regardless of whether such suppliers are affiliated or unaffiliated with the distributor unless such person complies with requirements established by the Corporation for the payment of fees under this paragraph.

(iii)

Status of corporation

The Corporation shall not be treated as a department, agency, or instrumentality of the United States for any purpose.

(iv)

Books and records

The books and records of the Corporation shall be available to the public at reasonable hours and under reasonable conditions, without charge.

(v)

Penalty

Any person who violates clause (ii) of this subparagraph shall be subject to a civil penalty to be assessed and collected by the Secretary in the amount equal to three times the total of the fees which are due and payable to the corporation under this paragraph.

(e)

Enforcement of compliance

(1)

In general

If a State regulatory authority with jurisdiction over a retail electricity or natural gas distributor notifies the Secretary that the State regulatory authority will enforce compliance by the distributor with the performance standard under this section, the State regulatory authority shall have the authority to administer and enforce the performance standard for the distributor under State law.

(2)

Authority of Secretary

The Secretary shall administer and enforce the performance standard for all electricity and natural gas distributors for which a State regulatory authority described in paragraph (1) has not notified the Secretary as described in that paragraph.

(3)

Compliance report

Not later that July 1, 2010, and every 2 years thereafter, each retail electricity and natural gas distributor shall submit a compliance report conforming to the provisions of the rule described in subsection (c)(3) to either—

(A)

the appropriate State regulatory authority, if the authority has notified the Secretary as described in paragraph (1); or

(B)

the Secretary.

(4)

Failure to comply

(A)

In general

In the case of any retail electricity or natural gas distributor for which the Secretary is enforcing compliance with the standards under this section, if the distributor fails to comply with the performance standard for more than one calendar year, the Secretary shall_

(i)

determine the number of kilowatt-hours of electricity savings, or therms of natural gas savings, by which the distributor has fallen short of meeting the performance standard; and

(ii)

by order, require the distributor, after notice and opportunity for hearing, to deposit in the escrow account established under paragraph (8)(B) of subsection (e) an amount equal to 6.0 cents per kilowatt-hour for each such kilowatt hour, and 60 cents per therm for each such therm.

(B)

Judicial review of orders

(i)

In general

A retail electricity or natural gas distributor ordered to make a payment under subparagraph (A)(ii) may, not later than 60 days after the date of issuance of the order, bring a civil action in the United States Court of Appeals for the District of Columbia for judicial review of the order.

(ii)

Remedies

The court specified in clause (i) shall have jurisdiction to enter a judgment affirming, modifying, or setting aside an order that is the subject of a civil action brought under that clause, or remanding the order, in whole or in part, to the Secretary.

(f)

Information collection

The Secretary may collect any information necessary to verify and audit each of the following:

(1)

The annual electric energy sales, natural gas sales, electricity savings, and natural gas savings of any entity applying for electricity or natural gas savings credits under this section.

(2)

The validity of electricity or natural gas savings credits submitted by a retail electricity or natural gas distributor to the Secretary.

(3)

The quantity of electricity and natural gas sales of all retail electricity and natural gas distributors.

(g)

State law

(1)

In general

Nothing in this section supersedes or otherwise affects any State or local law or regulation requiring or otherwise relating to electricity or natural gas savings to the extent that the State or local law or regulation contains more stringent savings requirements or has different procedures for buyout or penalties than those contained in this section.

(2)

Site-specific savings

A State may require the performance standard for electricity or natural gas savings of any distributor within its jurisdiction to be achieved by measures undertaken—

(A)

within the State;

(B)

within the service territory of any regional transmission organization serving the State;

(C)

within any group of States participating in a regional program for the control of green house gas emissions; or

(D)

within any airshed designated by the State.

(3)

Treatment under State law

A retail electricity or natural gas distributor that achieves electricity or natural gas savings under this section in accordance with any State or local savings requirement specifically applicable to such distributor shall be entitled to full credit under this section for the savings to the extent that the savings meet the requirements of this section (including regulations issued under this section), including measurement, verification, and monitoring requirements.

(h)

Development of model provisions

Not later than 18 months after the date of enactment of this section, the Federal Energy Regulatory Commission shall, following public notice and comment, develop and publish model provisions for adoption by State utility regulatory commissions regarding each of the following:

(1)

Revenue stability and incentives for distributors

Policies for rate-setting and return on investment for State-regulated electricity and natural gas distributors that participate in successful, cost-effective energy efficiency programs. Such model language shall include provisions for decoupling the earnings of such regulated entities from full dependence on the volume of electricity or natural gas distributed by them to customer facilities. Such model language shall also include provisions for policies for cost recovery and other financial incentives, such that electric and gas utility investors are rewarded similarly for similar levels of investment in customer energy efficiency and in conventional utility assets and that regulated utilities are encouraged to include end-use efficiency measures and utility-owned, customer-owned, or third party-owned CHP systems in electric capacity and transmission and distribution plans.

(2)

Nondiscriminatory identification of cost-effective savings opportunities

Establishing a public, nondiscriminatory bidding process open to customers and demand side management service providers to identify cost-effective electricity or natural gas savings opportunities within a retail electricity or natural gas distributor’s service area. The model bidding plan shall provide for a distributor to procure all or a portion of its proposed savings measures, including measures proposed by the distributor or its affiliates, in cost-effective rank order. The model plan shall also address the process that will be used by the distributor to identify and obtain further electricity or natural gas savings in the event that insufficient savings are procured through the bid process.

(3)

Development of model language on revenue decoupling and shareholder incentives in ratemaking policies

Rate-setting and earnings for State-regulated electricity and natural gas distributors that participate in successful, cost-effective energy efficiency programs. Such model language shall include, but not be limited to, recommendations for decoupling the earnings of such regulated entities from full dependence on the volume of electricity or natural gas distributed by them to customer facilities. Such model language shall also include recommendations for policies for cost recovery and shareholder incentives, such that electric and gas utility investors are rewarded similarly for similar levels of investment in customer energy efficiency and in conventional utility assets.

(i)

State adoption of FERC model provisions

Each State utility regulatory authority shall adopt the model provisions referred to in subsection (h) in the same manner and subject to the same rules and review as apply in the case of standards referred to in section 113(b) and 303(b). For purposes of any provision of title I or III of this Act, the model provisions referred to in subsection (h) shall be treated as standards under section 113(b) (in the case of State regulated electricity distributors) or 303(b) (in the case of natural gas distributors), except that in the case of such model provisions, any reference contained in this Act to the date of enactment of this Act shall be deemed to be a reference to the date of enactment of this section. Each such State utility regulatory authority shall adopt the model provisions not later than 24 months after the date of enactment of this section in the case of paragraphs (1) and (2) of subsection (h) or 42 months after such date of enactment in the case of paragraph (3) of subsection (h)).

.

(b)

Table of contents

The table of contents for title VI of such Act is amended by adding the following new items at the end thereof:

Sec. 609. Rural and remote communities electrification grants.

Sec. 610. Efficiency resource standard for retail electricity and natural gas distributors.

.

E

Renewable portfolio standard

441.

Renewable portfolio standard

Title VI of the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2601 et seq.) is amended by adding at the end the following:

609.
(a)

Renewable energy requirement

(1)

In general

Each electric utility that sells electricity to electric consumers shall obtain a percentage of the base amount of electricity it sells to electric consumers in any calendar year from new renewable energy or existing renewable energy. The percentage obtained in a calendar year shall not be less than the amount specified in the following table:

Minimum annual
Calendar years:percentage:
2008 through 20115.0
2012 through 201510.0
2016 through 201915.0
2020 through 203020.0.
(2)

Means of compliance

An electric utility shall meet the requirements of paragraph (1) by—

(A)

generating electric energy using new renewable energy or existing renewable energy;

(B)

purchasing electric energy generated by new renewable energy or existing renewable energy;

(C)

purchasing renewable energy credits issued under subsection (b); or

(D)

a combination of the foregoing.

(b)

Renewable energy credit trading program

(1)

Not later than January 1, 2008, 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 (a)(1) to satisfy such requirements by purchasing sufficient renewable energy credits.

(2)

As part of such program the Secretary shall—

(A)

issue renewable energy credits to generators of electric energy from new renewable energy;

(B)

sell renewable energy credits to electric utilities at the rate of 1.5 cents per kilowatt-hour (as adjusted for inflation under subsection (g));

(C)

ensure that a kilowatt hour, including the associated renewable energy credit, shall be used only once for purposes of compliance with this section; and

(D)

allow double credits for generation from facilities on Indian Lands, and triple credits for generation from small renewable distributed generators (meaning those no larger than 1 megawatt).

(3)

Credits under paragraph (2)(A) may only be used for compliance with this section for 3 years from the date issued.

(c)

Enforcement

(1)

Civil penalties

Any electric utility that fails to meet the renewable energy requirements of subsection (a) shall be subject to a civil penalty.

(2)

Amount of penalty

The amount of the civil penalty shall be determined by multiplying the number of kilowatt-hours of electric energy sold to electric consumers in violation of subsection (a) by the greater of 1.5 cents (adjusted for inflation under subsection (g)) or 200 percent of the average market value of renewable energy credits during the year in which the violation occurred.

(3)

Mitigation or waiver

The Secretary may mitigate or waive a civil penalty under this subsection if the electric utility was unable to comply with subsection (a) for reasons outside of the reasonable control of the utility. 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 (a).

(4)

Procedure for assessing penalty

The Secretary shall assess a civil penalty under this subsection in accordance with the procedures prescribed by section 333(d) of the Energy Policy and Conservation Act of 1954 (42 U.S.C. 6303).

(d)

State renewable energy account program

(1)

The Secretary shall establish, not later than December 31, 2008, a State renewable energy account program.

(2)

All money 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. The State renewable energy account shall be held by the Secretary and shall not be transferred to the Treasury Department.

(3)

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.

(4)

The Secretary may issue guidelines and criteria for grants awarded under this subsection. State energy offices receiving grants under this section shall maintain such records and evidence of compliance as the Secretary may require.

(5)

In allocating funds under this program, the Secretary shall give preference—

(A)

to States in regions which have a disproportionately small share of economically sustainable renewable energy generation capacity; and (B) to State programs to stimulate or enhance innovative renewable energy technologies.

(e)

Rules

The Secretary shall issue rules implementing this section not later than 1 year after the date of enactment of this section.

(f)

Exemptions

This section shall not apply in any calendar year to an electric utility—

(1)

that sold less than 4,000,000 megawatt-hours of electric energy to electric consumers during the preceding calendar year; or

(2)

in Hawaii.

(g)

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 (b)(2)(B) and the amount of the civil penalty per kilowatt-hour under subsection (c)(2).

(h)

State programs

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 (c)(3), no such law or regulation shall relieve any person of any requirement otherwise applicable under this section. The Secretary, in consultation with States having such renewable energy programs, shall, to the maximum extent practicable, facilitate coordination between the Federal program and State programs.

(i)

Definitions

For purposes of this section:

(1)

Base amount of electricity

The term base amount of electricity means the total amount of electricity sold by an electric utility to electric consumers in a calendar year, excluding—

(A)

electricity generated by a hydroelectric facility (including a pumped storage facility but excluding incremental hydropower); and

(B)

electricity generated through the incineration of municipal solid waste.

(2)

Distributed generation facility

The term distributed generation facility means a facility at a customer site.

(3)

Existing renewable energy

The term existing renewable energy means, except as provided in paragraph (7)(B), electric energy generated at a facility (including a distributed generation facility) placed in service prior to the date of enactment of this section from solar, wind, or geothermal energy; ocean energy; biomass (as defined in section 203(a) of the Energy Policy Act of 2005); or landfill gas.

(4)

Geothermal energy

The term geothermal energy means energy derived from a geothermal deposit (within the meaning of section 613(e)(2) of the Internal Revenue Code of 1986).

(5)

Incremental geothermal production

(A)

In general

The term incremental geothermal production means for any year the excess of—

(i)

the total kilowatt hours of electricity produced from a facility (including a distributed generation facility) using geothermal energy, over

(ii)

the average annual kilowatt hours produced at such facility for 5 of the previous 7 calendar years before the date of enactment of this section after eliminating the highest and the lowest kilowatt hour production years in such 7-year period.

(B)

Special rule

A facility described in subparagraph (A) which was placed in service at least 7 years before the date of enactment of this section shall commencing with the year in which such 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) with such cumulative sum not to exceed 30 percent.

(6)

Incremental hydropower

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. The term does not include additional energy generated as a result of operational changes not directly associated with efficiency improvements or capacity additions. Efficiency improvements and capacity additions shall be measured on the basis of the same water flow information used to determine a historic average annual generation baseline for the hydroelectric facility and certified by the Secretary or the Federal Energy Regulatory Commission.

(7)

New renewable energy

The term new renewable energy means—

(A)

electric energy generated at a facility (including a distributed generation facility) placed in service on or after January 1, 2003, from—

(i)

solar, wind, or geothermal energy or ocean energy;

(ii)

biomass (as defined in section 203(a) of the Energy Policy Act of 2005);

(iii)

landfill gas; or

(iv)

incremental hydropower; and

(B)

for electric energy generated at a facility (including a distributed generation facility) placed in service prior to the date of enactment of this section—

(i)

the additional energy above the average generation in the 3 years preceding the date of enactment of this section at the facility from—

(I)

solar or wind energy or ocean energy;

(II)

biomass (as defined in section 203(a) of the Energy Policy Act of 2005);

(III)

landfill gas; or

(IV)

incremental hydropower.

(ii)

the incremental geothermal production.

(8)

Ocean energy

The term ocean energy includes current, wave, tidal, and thermal energy.

(j)

Sunset

This section expires on December 31, 2030.

.

F

Marine and hydro­kinetic renewable energy promotion

451.

Short title

This subtitle may be cited as the Marine and Hydrokinetic Renewable Energy Promotion Act of 2007.

452.

Definition

For purposes of this subtitle, the term marine and hydrokinetic renewable energy means electrical energy from—

(1)

waves, tides, and currents in oceans, estuaries, and tidal areas;

(2)

free flowing water in rivers, lakes, and streams;

(3)

free flowing water in man-made channels, including projects that utilize nonmechanical structures to accelerate the flow of water for electric power production purposes; and

(4)

differentials in ocean temperature (ocean thermal energy conversion).

The term shall not include energy from any source that utilizes a dam, diversionary structure, or impoundment for electric power production purposes, except as provided in paragraph (3).
453.

Research and development

(a)

Program

The Secretary of Energy, in consultation with the Secretary of Commerce and the Secretary of the Interior, shall establish a program of marine and hydrokinetic renewable energy research focused on—

(1)

developing and demonstrating marine and hydrokinetic renewable energy technologies;

(2)

reducing the manufacturing and operation costs of marine and hydrokinetic renewable energy technologies;

(3)

increasing the reliability and survivability of marine and hydrokinetic renewable energy facilities;

(4)

integrating marine and hydrokinetic renewable energy into electric grids;

(5)

identifying opportunities for cross fertilization and development of economies of scale between offshore wind and marine and hydrokinetic renewable energy sources;

(6)

identifying, in consultation with the Secretary of Commerce and the Secretary of the Interior, the environmental impacts of marine and hydrokinetic renewable energy technologies and ways to address adverse impacts, and providing public information concerning technologies and other means available for monitoring and determining environmental impacts; and

(7)

standards development, demonstration, and technology transfer for advanced systems engineering and system integration methods to identify critical interfaces.

(b)

Authorization of appropriations

There are authorized to be appropriated to the Secretary of Energy for carrying out this section $50,000,000 for each of the fiscal years 2008 through 2017.

454.

Adaptive Management and Environmental Fund

(a)

Findings

The Congress finds that—

(1)

the use of marine and hydrokinetic renewable energy technologies can avoid contributions to global warming gases, and such technologies can be produced domestically;

(2)

marine and hydrokinetic renewable energy is a nascent industry; and

(3)

the United States must work to promote new renewable energy technologies that reduce contributions to global warming gases and improve our country’s domestic energy production in a manner that is consistent with environmental protection, recreation, and other public values.

(b)

Establishment

The Secretary of Energy shall establish an Adaptive Management and Environmental Fund, and shall lend amounts from that fund to entities described in subsection (f) to cover the costs of projects that produce marine and hydrokinetic renewable energy. Such costs include design, fabrication, deployment, operation, monitoring, and decommissioning costs. Loans under this section may be subordinate to project-related loans provided by commercial lending institutions to the extent the Secretary of Energy considers appropriate.

(c)

Reasonable access

As a condition of receiving a loan under this section, a recipient shall provide reasonable access, to Federal or State agencies and other research institutions as the Secretary considers appropriate, to the project area and facilities for the purposes of independent environmental research.

(d)

Public availability

The results of any assessment or demonstration paid for, in whole or in part, with funds provided under this section shall be made available to the public, except to the extent that they contain information that is protected from disclosure under section 552(b) of title 5, United States Code.

(e)

Repayment of loans

(1)

In general

The Secretary of Energy shall require a recipient of a loan under this section to repay the loan, plus interest at a rate of 2.1 percent per year, over a period not to exceed 20 years, beginning after the commercial generation of electric power from the project commences. Such repayment shall be required at a rate that takes into account the economic viability of the loan recipient and ensures regular and timely repayment of the loan.

(2)

Beginning of repayment required

No repayments shall be required under this subsection until after the project generates net proceeds. For purposes of this paragraph, the term net proceeds means proceeds from the commercial sale of electricity after payment of project-related costs, including taxes and regulatory fees that have not been paid using funds from a loan provided for the project under this section.

(3)

Termination

Repayment of a loan made under this section shall terminate as of the date that the project for which the loan was provided ceases commercial generation of electricity if a governmental permitting authority has ordered the closure of the facility because of a finding that the project has unacceptable adverse environmental impacts, except that the Secretary shall require a loan recipient to continue making loan repayments for the cost of equipment, obtained using funds from the loan that have not otherwise been repaid under rules established by the Secretary, that is utilized in a subsequent project for the commercial generation of electricity.

(f)

Adaptive management plan

In order to receive a loan under this section, an applicant for a Federal license or permit to construct, operate, or maintain a marine or hydrokinetic renewable energy project shall provide to the Federal agency with primary jurisdiction to issue such license or permit an adaptive management plan for the proposed project. Such plan shall—

(1)

be prepared in consultation with other parties to the permitting or licensing proceeding, including all Federal, State, municipal, and tribal agencies with authority under applicable Federal law to require or recommend design or operating conditions, for protection, mitigation, and enhancement of fish and wildlife resources, water quality, navigation, public safety, land reservations, or recreation, for incorporation into the permit or license;

(2)

set forth specific and measurable objectives for the protection, mitigation, and enhancement of fish and wildlife resources, water quality, navigation, public safety, land reservations, or recreation, as required or recommended by governmental agencies described in paragraph (1), and shall require monitoring to ensure that these objectives are met;

(3)

provide specifically for the modification or, if necessary, removal of the marine or hydrokinetic renewable energy project based on findings by the licensing or permitting agency that the marine or hydrokinetic renewable energy project has not attained or will not attain the specific and measurable objectives set forth in paragraph (2); and

(4)

be approved and incorporated in the Federal license or permit.

(g)

Sunset

The Secretary of Energy shall transmit a report to the Congress when the Secretary of Energy determines that the technologies supported under this subtitle have achieved a level of maturity sufficient to enable the expiration of the programs under this subtitle. The Secretary of Energy shall not make any new loans under this section after the report is transmitted under this subsection.

455.

Programmatic environmental impact statement

The Secretary of Commerce and the Secretary of the Interior shall, in cooperation with the Federal Energy Regulatory Commission and the Secretary of Energy, and in consultation with appropriate State agencies, jointly prepare programmatic environmental impact statements which contain all the elements of an environmental impact statement under section 102 of the National Environmental Policy Act of 1969 (42 U.S.C. 4332), regarding the impacts of the deployment of marine and hydrokinetic renewable energy technologies in the navigable waters of the United States. One programmatic environmental impact statement shall be prepared under this section for each of the Environmental Protection Agency regions of the United States. The agencies shall issue the programmatic environmental impact statements under this section not later than 18 months after the date of enactment of this Act. The programmatic environmental impact statements shall evaluate among other things the potential impacts of site selection on fish and wildlife and related habitat. Nothing in this section shall operate to delay consideration of any application for a license or permit for a marine and hydrokinetic renewable energy technology project.

G

Carbon capture and sequestration

461.

Carbon capture and storage research, development, and demonstration program

(a)

Amendments

Section 963 of the Energy Policy Act of 2005 (42 U.S.C. 16293) is amended—

(1)

in the section heading, by striking research and development and inserting and storage research, development, and demonstration;

(2)

in subsection (a)—

(A)

by striking research and development and inserting and storage research, development, and demonstration; and

(B)

by striking capture technologies on combustion-based systems and inserting capture and storage technologies related to energy systems;

(3)

in subsection (b)—

(A)

in paragraph (3), by striking and at the end;

(B)

in paragraph (4), by striking the period at the end and inserting ; and; and

(C)

by adding at the end the following:

(5)

to expedite and carry out large-scale testing of carbon sequestration systems in a range of geological formations that will provide information on the cost and feasibility of deployment of sequestration technologies.

; and

(4)

by striking subsection (c) and inserting the following:

(c)

Programmatic Activities

(1)

Energy research and development underlying carbon capture and storage technologies

(A)

In general

The Secretary shall carry out fundamental science and engineering research (including laboratory-scale experiments, numeric modeling, and simulations) to develop and document the performance of new approaches to capture and store carbon dioxide.

(B)

Program integration

The Secretary shall ensure that fundamental research carried out under this paragraph is appropriately applied to energy technology development activities and the field testing of carbon sequestration activities, including—

(i)

development of new or improved technologies for the capture of carbon dioxide;

(ii)

modeling and simulation of geological sequestration field demonstrations; and

(iii)

quantitative assessment of risks relating to specific field sites for testing of sequestration technologies.

(2)

Field validation testing activities

(A)

In general

The Secretary shall promote, to the maximum extent practicable, regional carbon sequestration partnerships to conduct geologic sequestration tests involving carbon dioxide injection and monitoring, mitigation, and verification operations in a variety of candidate geological settings, including—

(i)

operating oil and gas fields;

(ii)

depleted oil and gas fields;

(iii)

unmineable coal seams;

(iv)

saline formations; and

(v)

deep geologic systems that may be used as engineered reservoirs to extract economical quantities of heat from geothermal resources of low permeability or porosity.

(B)

Objectives

The objectives of tests conducted under this paragraph shall be—

(i)

to develop and validate geophysical tools, analysis, and modeling to monitor, predict, and verify carbon dioxide containment;

(ii)

to validate modeling of geological formations;

(iii)

to refine storage capacity estimated for particular geological formations;

(iv)

to determine the fate of carbon dioxide concurrent with and following injection into geological formations;

(v)

to develop and implement best practices for operations relating to, and monitoring of, injection and storage of carbon dioxide in geologic formations;

(vi)

to assess and ensure the safety of operations related to geological storage of carbon dioxide; and

(vii)

to allow the Secretary to promulgate policies, procedures, requirements, and guidance to ensure that the objectives of this subparagraph are met in large-scale testing and deployment activities for carbon capture and storage that are funded by the Department of Energy.

(3)

Large-scale testing and deployment

(A)

In general

The Secretary shall conduct not less than 7 initial large-volume sequestration tests for geological containment of carbon dioxide (at least 1 of which shall be international in scope) to validate information on the cost and feasibility of commercial deployment of technologies for geological containment of carbon dioxide.

(B)

Diversity of formations to be studied

In selecting formations for study under this paragraph, the Secretary shall consider a variety of geological formations across the United States, and require characterization and modeling of candidate formations, as determined by the Secretary.

(4)

Preference in project selection from meritorious proposals

In making competitive awards under this subsection, subject to the requirements of section 989, the Secretary shall give preference to proposals from partnerships among industrial, academic, and government entities.

(5)

Cost sharing

Activities under this subsection shall be considered research and development activities that are subject to the cost-sharing requirements of section 988(b).

(d)

Authorization of Appropriations

There are authorized to be appropriated to carry out this section—

(1)

$90,000,000 for fiscal year 2008;

(2)

$105,000,000 for fiscal year 2009; and

(3)

$120,000,000 for fiscal year 2010.

.

(b)

Table of contents amendment

The item relating to section 963 in the table of contents for the Energy Policy Act of 2005 is amended to read as follows:

Sec. 963. Carbon capture and storage research, development, and demonstration program.

.

V

Green workforce

A

Small manufacturer assistance

501.

Small manufacturer assistance through Hollings Manufacturing Extension Partnership Program

(a)

In general

Subsection (b) of section 25 of the National Institute of Standards and Technology Act (15 U.S.C. 278k(b)) is amended by striking and at the end of paragraph (2), by striking the period at the end of paragraph (3) and inserting ; and, and by adding at the end the following new paragraph:

(4)

information sharing and planning assistance for small manufacturing firms in identifying and implementing new green manufacturing technologies.

.

(b)

Authorization of appropriations

There are authorized to be appropriated for the assistance described in paragraph (4) of section 25 of such Act $50,000,000 for fiscal year 2009 and for each fiscal year thereafter.

B

Green workforce education incentives

511.

National Green Certification Standards

(a)

In general

Not later than 1 year after the date of the enactment of this Act and every 3 years thereafter, the Environmental Protection Agency, the Institute of Environmental Health Sciences, National Science Foundation, and National Oceanic and Atmospheric Administration, in consultation with the Department of Labor and Education, (hereinafter in this subtitle collectively referred to as the Green Certification Standards Board) shall establish the green workforce standards described in subsection (b).

(b)

Green workforce standards

The green workforce standards described in this subsection are standards—

(1)

for successfully training individuals in advanced vehicle manufacturing, alternative fuel vehicle repair and maintenence, energy technology product development and deployment, and green building design and construction, and

(2)

designed to be applied in determining—

(A)

eligibility for grants under sections 512, 513, 514, and 515, and

(B)

whether requirements for instruction in green workforce skills are met for purposes of determining eligibility for loan forgiveness under section 428L of the Higher Education Act of 1965.

512.

Environmentally literate workforce grant program

(a)

In general

The Secretary of Education may make grants, in consultation with the Green Certification Standards Board, to institutions of higher education to use for any of the following purposes:

(1)

Reducing or eliminating dependency on combustion engines in the operation of the institution.

(2)

Establishing environmental and green energy literacy instruction as a requirement for an undergraduate degree.

(3)

Integrating environmental awareness and sustainability curriculum in programs of instruction, particularly in business, engineering, architecture, technology, manufacturing programs.

(4)

Conducting professional development programs for faculty in all disciplines to enable faculty to incorporate environmental and sustainability content in their courses.

(b)

Application requirement

To be eligible for a grant under this section, an eligible entity shall prepare and submit to the Secretary an application at such time, and in such manner, and containing such information as the Secretary may require.

(c)

Eligible entity

For purposes of this section, the term eligible entity means any institution of higher education that has been deemed qualified by the Green Certification Standards Board.

(d)

Authorization of appropriations

There are authorized to be appropriated to the Secretary such sums as are necessary to carry out this section.

513.

Carbon neutrality grants in institutions of higher educations

(a)

In general

The Secretary of Education may make grants, in consultation with the Green Certification Standards Board, to institutions of higher education to use for any of the following purposes:

(1)

Implementing existing plans to achieve full carbon neutrality in the operations of the institution.

(2)

Disseminating the institution’s best practices to achieving full carbon neutrality.

(3)

Providing technical assistance and training to the institution’s surrounding community in achieving full carbon neutrality.

(b)

Matching requirement

A grant made under this section may not exceed the amount that the institute of higher education receiving the grant certifies, to the Secretary, will be provided (in cash or in kind) from non-governmental sources to carry out the purposes for which the grant is made.

(c)

Application requirement

To be eligible for a grant under this section, an institution of higher education shall prepare and submit to the Secretary an application at such time, and in such manner, and containing such information as the Secretary may require.

(d)

Authorization of appropriations

There are authorized to be appropriated to the Secretary such sums as are necessary to carry out this section.

514.

National green ranking system grant

(a)

In general

(1)

Grant

The Director of National Institute of Environmental Health Sciences may make grants, in consultation with the Green Certification Standards Board, to a qualified entity to develop and implement standards for a national green ranking system for institutions of higher education based on the following factors:

(A)

Environmental literacy of an institution’s graduates.

(B)

Availability of programs of instruction in advanced vehicle manufacturing, alternative fuel vehicle repair and maintenance, energy technology product development and deployment, green building design and construction, and other green technology.

(C)

Extent of the institution’s sustainable and low impact facilities and operations.

(2)

Report

Such ranking system must be released not later than 1 year after the date of the enactment of this Act, and every 3 years thereafter, and must be made available to the general public and to appropriate publications and student guides.

(b)

Application requirement

To be eligible for a grant under this section, an entity shall prepare and submit to the Director an application at such time, and in such manner, and containing such information as the Director may require.

(c)

Authorization of appropriations

There are authorized to be appropriated to the Director such sums as are necessary to carry out this section.

515.

Green building and zero-energy home design training grants

(a)

In general

(1)

Grants

The Director of National Institute of Environmental Health Sciences may make grants, in consultation with the Green Certification Standards Board, to institutions of higher education to use for programs of instruction which train individuals in any of the following:

(A)

Green building design and construction.

(B)

Zero-energy home design and construction.

(2)

Goal

It shall be the goal of the grant program to help fund the training of 10,000 students in the programs of instruction described in paragraph (1).

(b)

Application requirement

To be eligible for a grant under this section, an institution of higher education shall prepare and submit to the Director an application at such time, and in such manner, and containing such information as the Director may require.

(c)

Authorization of appropriations

There are authorized to be appropriated to the Director such sums as are necessary to carry out this section.

516.

Student loan forgiveness for green workforce members

The Higher Education Act of 1965 is amended by inserting after section 428K (20 U.S.C. 1078–11) the following:

428L.

Loan forgiveness for green workforce members

(a)

Program authorized

(1)

In general

For the purpose of encouraging individuals to enter and continue employment as green workforce members, the Secretary is authorized, from the funds appropriated under subsection (h), to forgive, in accordance with this section, the student loan debt of any new borrower after the date of enactment of the New Apollo Energy Act of 2007, who—

(A)

is employed as a green workforce member;

(B)

incurred such student loan debt in obtaining instruction in green workforce skills that complies with the green workforce standards established under section 511 of the New Apollo Energy Act of 2007; and

(C)

is not in default on a loan for which the borrower seeks forgiveness.

(2)

Method of loan forgiveness

To provide the loan forgiveness authorized in paragraph (1), the Secretary is authorized to carry out a program—

(A)

through the holder of the loan, to assume the obligation to repay a green loan amount (as determined under subsection (b)) for a loan made under this part; and

(B)

to cancel a green loan amount (as so determined) for a loan made under part D of this title.

(b)

Qualified loan amounts

The Secretary shall forgive the loan obligation of the borrower, in accordance with subsection (a)(2), not to exceed $17,500 in the aggregate, in the following increments:

(1)

For the completion of the first 2 years of employment as a green workforce member for which the borrower seeks forgiveness under this section, 20 percent of the borrower’s total loan obligation that was incurred in obtaining instruction in green workforce skills that complies with the green workforce standards established under section 511 of the New Apollo Energy Act of 2007, not to exceed $3,500.

(2)

For the completion of the 3rd year of such employment, 20 percent of such total loan obligation, not to exceed $4,500.

(3)

For the completion of each of the 4th and 5th years of such employment, 40 percent of such total loan obligation, not to exceed $7,000 for each year.

(c)

Award basis; priority

(1)

Award basis

The Secretary shall provide forgiveness benefits under this section on a first-come, first-served basis (subject to paragraph (2)) and subject to the availability of appropriations.

(2)

Priority

The Secretary, in consultation with Green Certification Standards Board established under section 511 of the New Apollo Energy Act of 2007, shall establish priorities in providing forgiveness benefits under this section for a fiscal year by designating a percentage of loans for green workforce members employed in advanced vehicle manufacturing, alternative fuel vehicle repair and maintenance, clean energy technology product development and deployment, or green building construction based on the national need in each of those areas.

(d)

Qualified Instruction Expenses

To be eligible for forgiveness under this section, a student loan obligation shall have been incurred to cover all or a portion the cost of attendance at an eligible institution for one or more periods of enrollment in a program of instruction that—

(1)

is in a skill required for employment in advanced vehicle manufacturing, alternative fuel vehicle repair or maintenance, clean energy technology product development and deployment, or green building construction, as determined in accordance with regulations prescribed by the Secretary; and

(2)

complies with the green workforce standards established under section 511 of the New Apollo Energy Act of 2007.

(e)

Construction

Nothing in this section shall be construed to authorize the refunding of any repayment of a loan.

(f)

Regulations

The Secretary is authorized to issue such regulations as may be necessary to carry out the provisions of this section.

(g)

Definitions

In this section:

(1)

Green workforce member

The term green workforce member means an individual who is qualified to be and is employed in advanced vehicle manufacturing, alternative fuel vehicle repair and maintenance, clean energy technology product development and deployment, or green building construction.

(2)

Advanced vehicle manufacturing

The term advanced vehicle manufacturing means the manufacturing of —

(A)

any new advanced lean burn technology motor vehicle (as defined in section 30B(c)(3) of the Internal Revenue Code of 1986):

(B)

any new qualified hybrid motor vehicle (as defined in section 30B(d)(3)(A) of such Code and determined without regard to any gross vehicle weight rating); or

(C)

any new vehicle that is a light-duty, medium-duty, or heavy-duty on-road or nonroad vehicle that is propelled by an internal combustion engine, heat engine, or an electric motor (or any combination thereof) and an energy storage system using (or capable of using)—

(i)

any combustible fuel;

(ii)

an on-board, rechargeable storage device: and

(iii)

a means of using an off-board source of electricity to operate the vehicle in intermittent or continuous all-electric mode.

(3)

Alternative fuel vehicle repair and maintenance

The term alternative fuel vehicle repair and maintenance means vehicle repair and maintenance for advanced green technologies —

(A)

to re-equip, expand, or establish any manufacturing facility of the eligible taxpayer to produce advanced technology motor vehicles or to produce components used in such vehicles;

(B)

for engineering integration of such vehicles;

(C)

for research and development related to advanced technology motor vehicles; and

(D)

to repair vehicles that utilize an energy supply or end-use technology, including a technology using renewable energy sources, that over its lifecycle and compared to similar technologies in commercial use—

(i)

emits substantially lower levels of pollutants or greenhouse gases, or both; and

(ii)

may generate substantially smaller or less toxic (or both) volumes of solid or liquid waste.

(4)

Clean energy technology product development and deployment

The term clean energy technology product development and deployment means the development and deployment of an energy supply or end-use technology, including a technology using renewable energy sources, that, over its lifecycle and compared to similar technologies in commercial use—

(A)

emits substantially lower levels of pollutants or greenhouse gases, or both; and

(B)

may generate substantially smaller or less toxic (or both) volumes of solid or liquid waste.

(5)

Green building construction

The term green building design and construction means building design and construction that uses sustainable design principles to reduce the use of nonrenewable resources, minimize environmental impact, and relate people with the natural environment.

(h)

Authorization of appropriations

There are authorized to be appropriated to carry out this section such sums as may be necessary for fiscal year 2008 and each of the 5 succeeding fiscal years.

.

517.

Definitions

In this subtitle:

(1)

The terms advanced vehicle manufacturing, alternative fuel vehicle repair and maintenance, energy technology product development and deployment, green building design and construction have the meaning given such terms, respectively, in section 428L of the Higher Education Act of 1965,

(2)

The term institution of higher education has the meaning given such term in section 101(a) of the Higher Education Act of 1965 (20 U.S.C. 1001(a)).

VI

Federal Government leverage to move new technologies to market

A

Incentives for clean energy technology

601.

New Energy Technologies Commission

(a)

Establishment

There is established a commission to be known as the New Energy Technologies Commission (hereafter in this section referred to as the Commission).

(b)

Duties

(1)

Identify new energy technologies eligible for incentives

(A)

In general

The Commission shall oversee—

(i)

the identification of—

(I)

Apollo Approved energy efficiency technologies; and

(II)

Apollo Approved domestic clean energy production technologies; that the Commission finds substantially contributes to the goals of this Act and merits consideration for favorable incentives by Congress; and

(ii)

the identification of criteria and standards for determining technologies eligible under clause (i) as qualifying energy efficiency standards used to determine eligibility for the loan guarantees and grants outlined in this title.

(B)

Matters to be considered by the commission

In developing energy efficiency standards, the Commission shall—

(i)

consult with the Environmental Protection Agency program known as Energy Star; and

(ii)

focus on technologies manufactured domestically.

(2)

Report

Not later than one year after the date of enactment of this Act, and every six months thereafter the Commission shall submit to Congress a report that contains—

(A)

a detailed statement of any technology that qualifies for or merits the incentives in this title;

(B)

recommendations for incentives specifically tailored to be beneficial to such technologies and any standards that should be defined in statute to determine eligibility for such benefits; and

(C)

recommendations for other legislation, administrative actions, and voluntary actions necessary to implement such incentives.

(3)

Apollo approved energy technologies

For purposes of this section, the term Apollo Approved energy technologies means any final unit product that the Commission finds substantially contributes to the goals of this Act and merits consideration for favorable incentives by Congress not already included in this Act.

(4)

Apollo approved domestic clean energy production technologies

For purposes of this section, the term Apollo Approved domestic clean energy production technologies means any domestic energy production technology that the Commission finds substantially contributes to the goals of this Act and merits consideration for favorable incentives by Congress not already included in this Act.

(c)

Membership

(1)

In general

The Commission shall be comprised of 11 members.

(2)

Appointments by this Act

The following are hereby designated as members of the Commission:

(A)

The Secretary of the Department of Energy, the Director of the Office of Energy Efficiency and Renewable Energy of the Department of Energy, or the Administrator of the Energy Information Administration of the Department of Energy.

(B)

The Secretary of the Department of Commerce or designee.

(C)

The Secretary of the Department of Treasury or designee.

(D)

The Director of the Environmental Protection Agency or designee.

(3)

Appointments by the Senate and House of Representatives

Seven members appointed jointly by the majority leader and minority leader of the Senate and the Speaker and minority leader of the House of Representatives, of whom—

(A)

1 shall represent consumer advocacy organizations focusing on energy issues;

(B)

1 shall represent auto manufacturers;

(C)

1 shall represent the lending community;

(D)

1 shall represent environmental advocacy organizations focusing on energy issues;

(E)

1 shall represent organized labor;

(F)

1 shall represent small business manufacturers; and

(G)

1 shall represent the energy industry.

(4)

Date of appointments

The appointment of a member of the Commission shall be made not later than 30 days after the date of enactment of this Act.

(5)

Term

A member shall be appointed for 5 year terms.

(d)

Powers of Commission

(1)

Hearings and sessions

The Commission may, for the purpose of carrying out this section, hold hearings, sit and act at times and places, take testimony, and receive evidence to carry out its duties under subsection (b). The Commission may administer oaths or affirmations to witnesses appearing before it.

(2)

Powers of members and agents

Any member or agent of the Commission may, if authorized by the Commission, take any action which the Commission is authorized to take by this section.

(3)

Obtaining official information

(A)

Requirement to furnish

Except as provided in subparagraph (B), if the Commission submits a request to a Federal department or agency for information necessary to enable the Commission to carry out this section, the head of that department or agency shall furnish that information to the Commission.

(B)

Exception for national security

If the head of a Federal department or agency determines that it is necessary to withhold requested information from disclosure to protect the national security interests of the United States, the department or agency head shall not furnish that information to the Commission.

(4)

Mails

The Commission may use the United States mails in the same manner and under the same conditions as other departments and agencies of the United States.

(5)

Administrative support services

Upon the request of the Director, the Administrator of General Services shall provide to the Commission, on a reimbursable basis, the administrative support services necessary for the Commission to carry out this section.

(6)

Gifts and donations

The Commission may accept, use, and dispose of gifts or donations of services or property to carry out this Act, but only to the extent or in the amounts provided in advance in appropriation Acts.

(7)

Contracts

The Commission may contract with and compensate persons and government agencies for supplies and services, without regard to section 3709 of the Revised Statutes (41 U.S.C. 5).

(e)

Initial Meeting-

The Commission shall hold the initial meeting of the Commission not later than the earlier of—

(1)

the date that is 30 days after the date on which all members of the Commission have been appointed; or

(2)

the date that is 90 days after the date of enactment of this Act, regardless of whether all members have been appointed.

(f)

Chairperson and Vice Chairperson

The Commission shall select a Chairperson and Vice Chairperson from among the members of the Commission determined under subsection (c)(2).

(g)

Executive Committee

The Commission shall have an executive committee comprised of any five members of the Commission.

(h)

Conflicts of Interest

Each member appointed to the Commission shall submit a financial disclosure report pursuant to the Ethics in Government Act of 1978, notwithstanding the minimum required rate of compensation or time period employed.

(i)

Staff Appointment and Compensation

The Chairperson, in consultation with the Vice Chairperson, in accordance with rules agreed upon by the Commission, may appoint and fix the compensation of a staff director and such other personnel as may be necessary to enable the Commission to carry out its functions, without regard to the provisions of title 5, United States Code, governing appointments in the competitive service, and without regard to the provisions of chapter 51 and subchapter III of chapter 53 of such title relating to classification and General Schedule pay rates; except that no rate of pay fixed under this subsection may exceed the equivalent of that payable for a position at level V of the Executive Schedule under section 5316 of title 5, United States Code.

(j)

Personnel as Federal Employees

(1)

In general

The staff director and any personnel of the Commission who are employees shall be employees under section 2105 of title 5, United States Code, for purposes of chapters 63, 81, 83, 84, 85, 87, 89, and 90 of that title.

(2)

Members of commission

Subparagraph (A) shall not be construed to apply to members of the Commission.

(k)

Detailees

Any Federal Government employee may be detailed to the Commission without reimbursement from the Commission, and such detailee shall retain the rights, status, and privileges of his or her regular employment without interruption.

(l)

Consultant Services

The Commission is authorized to procure the services of experts and consultants in accordance with section 3109 of title 5, United States Code, but at rates not to exceed the daily rate paid a person occupying a position at level IV of the Executive Schedule under section 5315 of title 5, United States Code.

(m)

Member Compensation

Each member of the Commission specified in subsection (c)(3) may be compensated at a rate not to exceed the daily equivalent of the annual rate of basic pay in effect for a position at level IV of the Executive Schedule under section 5315 of title 5, United States Code, for each day during which that member is engaged in the actual performance of the duties of the Commission.

(n)

Information and Administrative Expenses

The Federal agencies and members specified in subsection (c)(3) shall provide the Commission such information and pay such administrative and members expenses as the Commission requires to carry out this section, consistent with the requirements and guidelines of the Federal Advisory Commission Act (5 U.S.C. App.).

(o)

Travel Expenses

While away from their homes or regular places of business in the performance of services for the Commission, members of the Commission shall be allowed travel expenses, including per diem in lieu of subsistence, in the same manner as persons employed intermittently in the Government service are allowed expenses under section 5703 of title 5, United States Code.

(p)

Authorization of Appropriations

(1)

In general

There is authorized to be appropriated to the Commission such sums as may be necessary to carry out this section.

(2)

Availability

Amounts appropriated under paragraph (1) are authorized to remain available until expended.

602.

Loan Guarantees Program

(a)

In general

The New Energy Technologies Commission shall establish and carry out loan guarantee and grant programs for investments made in structures and equipment necessary to produce innovative energy technologies in the United States, including advanced wind turbines, advanced solar power, advanced marine, high conductivity transmission lines, advanced geothermal, energy efficient appliances, fuel efficient cars, and high capacity efficient airplanes.

(1)

Applicant assurances

An applicant for a loan guarantee under this section shall provide assurances, satisfactory to the Commission, that—

(A)

the project has been subject to a full technical review;

(B)

the project is covered by adequate project performance guarantees;

(C)

the project, with the loan guarantee, is economically viable; and

(D)

there is a reasonable assurance of repayment of the guaranteed loan.

(2)

Limitations

(A)

Maximum guarantee

Except as provided in subparagraph (B), a loan guarantee under this section may be issued for up to 70 percent of the estimated cost of a project, but may not exceed $500,000,000 for a project.

(B)

Additional guarantees

(i)

In general

The Commission may issue additional loan guarantees for a project to cover up to 80 percent of the excess of actual project cost over estimated project cost but not to exceed 15 percent of the amount of the original guarantee.

(ii)

Principal and interest

Subject to subparagraph (A), the Commission shall guarantee 100 percent of the principal and interest of a loan made under subparagraph (A).

(3)

Equity contributions

To be eligible for a loan guarantee under this section, an applicant for the loan guarantee shall have binding commitments from equity investors to provide an initial equity contribution of at least 30 percent of the total project cost.

(4)

Approval

An application for a loan guarantee under this section shall be approved or disapproved by the Commission not later than 90 days after the application is received by the Commission.

(b)

Guarantee Fee

The recipient of a loan guarantee under subsection (a) shall pay the Commission an amount determined by the Commission to be sufficient to cover the administrative costs of the Commission relating to the loan guarantee.

(c)

Payment of principal and interest; default; recovery of losses

(1)

With respect to any loan guaranteed pursuant to this section, the commission is authorized to enter into a contract to pay the lender for and on behalf of the borrower the principal and interest charges which become due and payable on the unpaid balance of such loan if the commission finds—

(A)

that the borrower is unable to meet principal and interest charges, that it is in the public interest to permit the borrower to continue to pursue the purposes of the project, and that the probable net cost to the Federal Government in paying such principal will be less than that which would result in the event of a default; and

(B)

that the amount of such principal and interest charges which the Commission is authorized to pay shall be no greater than the amount of principal and interest which the borrower is obligated to pay under the loan agreement shall take such action as may be appropriate to recover the amounts of such payments (including any payment of principal and interest under subsection (a)(2)(ii)) from such assets of the defaulting borrower as are associated with the activity with respect to which the loan was made or from any other surety included in the terms of the guarantee.

(2)

In the event of any default by a qualified borrower on a guaranteed loan, the Commission is authorized to make payment in accordance with the guarantee, and the Attorney General.

(d)

Full Faith and Credit

The full faith and credit of the United States is pledged to the payment of all guarantees made under this section. Any such guarantee made by the Commission shall be conclusive evidence of the eligibility of the loan for the guarantee with respect to principal and interest. The validity of the guarantee shall be incontestable in the hands of a holder of the guaranteed loan.

(e)

Authorization of Appropriations

The aggregate amount of guarantees under this section for fiscal years 2008 through 2017 shall not exceed $200,000,000,000.

603.

Grant Program to Create Clean Energy Business Districts

(a)

In general

The Secretary of Energy is authorized to make grants to units of State government, local government, private, non-profit community development organizations, and Indian tribe economic development entities for the purpose of building infrastructure, promoting and marketing centralized business district developments with a focus on the innovative clean energy technologies.

(1)

Conditions

The Secretary shall issue grants on a competitive basis for projects that will—

(A)

promote job growth and economic development in—

(i)

rural communities; or

(ii)

economically depressed areas, including inner-city urban areas;

(B)

promote the deployment of innovative clean energy technologies with broad applications and the potential for export to developing countries;

(C)

create partnerships between private industry and public institutions;

(D)

provide opportunities for the development, demonstration, and deployment of federally-funded research technologies;

(E)

promote smart growth by assuring that projects are located near—

(i)

residential neighborhoods; or

(ii)

affordable public transportation.

(b)

Authorization of Appropriations

For the purposes of this section there are authorized to be appropriated to the Secretary $250,000,000 for the fiscal years 2008 through 2012.

B

Clean energy exports and international investment

611.

Clean energy technology exports program

(a)

Definitions

In this section:

(1)

Interagency Working Group

The term interagency working group means the Interagency Working Group on Clean Energy Technology Exports established under subsection (b).

(2)

United States clean energy technology

The term United States clean energy technology means an energy supply or end-use technology, including a technology using renewable energy sources, that—

(A)

over its lifecycle and compared to a similar technology already in commercial use in developing countries, countries in transition, and other partner countries—

(i)

emits substantially lower levels of pollutants and/or greenhouse gases; and

(ii)

may generate substantially smaller and/or less toxic volumes of solid or liquid waste; and

(B)

consists of manufactured articles, materials, and supplies produced in the United States substantially all from articles, materials, or supplies mined, produced, or manufactured in the United States, within the meaning of the Buy American Act (41 U.S.C. 10a).

(b)

Interagency Working Group

(1)

Establishment

Not later than 90 days after the date of enactment of this section, the Chairman of the White House Council on Environmental Quality, the Secretary of Energy, the Secretary of Commerce, and the Administrator of the United States Agency for International Development shall jointly establish a Interagency Working Group on Clean Energy Technology Exports. The interagency working group will, in partnership with industry, focus on opening and expanding energy markets and transferring clean energy technology generated in the United States to developing countries, countries in transition, and other partner countries that are expected to experience, over the next 20 years, the most significant growth in energy production and associated greenhouse gas emissions, including through technology transfer programs under the Framework Convention on Climate Change, other international agreements, and relevant Federal efforts.

(2)

Membership

The interagency working group shall be chaired by the Chairman of the White House Council on Environmental Quality and shall also include representatives from—

(A)

the Department of Commerce;

(B)

the Department of the Treasury;

(C)

the Department of Energy;

(D)

the Environmental Protection Agency;

(E)

the United States Agency for International Development;

(F)

the Export-Import Bank;

(G)

the Overseas Private Investment Corporation;

(H)

the Trade and Development Agency;

(I)

the Small Business Administration;

(J)

the Office of United States Trade Representative; and

(K)

other Federal agencies, as determined by the President.

(3)

Duties

The interagency working group shall—

(A)

analyze technology, policy, and market opportunities for international development, demonstration, and deployment of clean energy technology developed in the United States;

(B)

investigate issues associated with building capacity to deploy clean energy technology generated in the United States in developing countries, countries in transition, and other partner countries, including—

(i)

energy-sector reform;

(ii)

creation of open, transparent, and competitive markets for clean energy technologies;

(iii)

availability of trained personnel to deploy and maintain the technology;

(iv)

demonstration and cost-buydown mechanisms to promote first adoption of the technology; and

(v)

to promote sustainable economic development, increase access to modern energy services, reduce greenhouse gas emissions, and strengthen energy security and independence in developing countries in partnership with industry through the deployment of clean energy technologies;

(C)

examine relevant trade, tax, international, and other policy issues to assess what policies would help open markets and improve United States clean energy technology exports in support of the following areas—

(i)

enhancing energy innovation and cooperation, including energy sector and market reform, capacity building, and financing measures;

(ii)

improving energy end-use efficiency technologies, including buildings and facilities, vehicle, industrial, and co-generation technology initiatives;

(iii)

promoting energy supply technologies, including fossil, nuclear, and renewable technology initiatives;

(iv)

reducing the trade deficit of the United States through the export of United States energy technologies and technological, project deployment, and development expertise; and

(v)

retaining and creating manufacturing and related service jobs in the United States;

(D)

establish an advisory committee involving the private sector and other interested groups on the export and deployment of United States clean energy technology;

(E)

monitor each agency’s progress towards meeting goals in the 5-year strategic plan submitted to Congress pursuant to the Energy and Water Development Appropriations Act, 2001, and the Energy and Water Development Appropriations Act, 2002;

(F)

make recommendations to heads of appropriate Federal agencies on ways to streamline Federal programs and policies to improve each agency’s role in the international development, demonstration, and deployment of United States clean energy technology;

(G)

make assessments and recommendations regarding the distinct technological, market, regional, and stakeholder challenges necessary to carry out the program;

(H)

recommend conditions and criteria that will help ensure that United States funds promote sound energy policies in participating countries while simultaneously opening their markets and exporting United States energy technology;

(I)

establish methodologies for the measurement, monitoring, verification, and reporting under subsection (d) of the greenhouse gas emission impacts of clean energy projects and policies in developing countries; and

(J)

establish a registry that is accessible to the public through electronic means (including through the Internet) in which information reported under subsection (d) shall be collected.

(c)

Federal support for clean energy technology transfer

Notwithstanding any other provision of law, each Federal agency or Government corporation carrying out an assistance program in support of the activities of United States persons and industry partnerships in the environment or energy sector of a developing country, country in transition, or other partner country shall support, to the maximum extent practicable, the transfer of United States clean energy technology as part of that program. Such assistance programs shall support activities including, but not limited to, financial, environmental and safety consulting, manufacturing, design and engineering, financing, and other services rendered by United States persons and industry partnerships.

(d)

Annual report

Not later than 90 days after the date of the enactment of this Act, and on March 31 of each year thereafter, the Interagency Working Group shall submit a report to Congress on its activities during the preceding calendar year. The report shall include a description of the technology, policy, and market opportunities for international development, demonstration, and deployment of United States clean energy technology investigated by the Interagency Working Group in that year, as well as any policy recommendations to improve the expansion of clean energy markets and United States clean energy technology exports.

(e)

Authorization of appropriations

There are authorized to be appropriated to the appropriate departments, agencies, and entities of the United States such sums as may be necessary for each of the fiscal years 2008 through 2018 to support the transfer of United States clean energy technology, consistent with the subsidy codes of the World Trade Organization, as part of assistance programs carried out by those departments, agencies, and entities in support of activities of United States persons in the energy sector of a developing country, country in transition, or other partner country.

612.

International energy technology deployment program

Section 1608 of the Energy Policy Act of 1992 (42 U.S.C. 13387) is amended by striking subsection (l) and inserting the following:

(l)

International energy technology deployment program

(1)

Definitions

In this subsection:

(A)

International energy deployment project

The term international energy deployment project means a project to construct an energy production facility outside the United States—

(i)

the output of which will be consumed outside the United States; and

(ii)

the deployment of which will result in a greenhouse gas reduction per unit of energy produced when compared to the technology that would otherwise be implemented—

(I)

20 percentage points or more, in the case of a unit placed in service before January 1, 2010;

(II)

40 percentage points or more, in the case of a unit placed in service after December 31, 2009, and before January 1, 2020; or

(III)

60 percentage points or more, in the case of a unit placed in service after December 31, 2019, and before January 1, 2030.

(B)

Qualifying international energy deployment project

The term qualifying international energy deployment project means an international energy deployment project that—

(i)

is submitted by a United States firm to the Secretary and establishes industry partnerships in accordance with procedures established by the Secretary by regulation;

(ii)

uses technology or services that have been successfully developed or deployed in the United States;

(iii)

uses technology or services that consists of manufactured articles, materials, and supplies produced in the United States substantially from articles, materials, or supplies mined, produced, or manufactured in the United States, within the meaning of the Buy American Act (41 U.S.C. 10a);

(iv)

meets the criteria of subsection (k);

(v)

is approved by the Secretary, with notice of the approval being published in the Federal Register; and

(vi)

complies with such terms and conditions as the Secretary establishes by regulation.

(C)

United States

For purposes of this paragraph, the term United States, when used in a geographical sense, means the 50 States, the District of Columbia, Puerto Rico, Guam, the Virgin Islands, American Samoa, and the Commonwealth of the Northern Mariana Islands.

(2)

Pilot program for financial assistance

(A)

In general

Not later than 180 days after the date of enactment of this subsection, the Secretary shall, by regulation, provide for a pilot program for financial assistance for qualifying international energy deployment projects.

(B)

Selection criteria

After consultation with the Secretary of State, the Secretary of Commerce, and the United States Trade Representative, the Secretary shall select projects for participation in the program based solely on the criteria under this title and without regard to the country in which the project is located.

(C)

Financial assistance

(i)

In general

A United States firm that undertakes a qualifying international energy deployment project that is selected to participate in the pilot program shall be eligible to receive funding support, a loan, or a loan guarantee from the Secretary.

(ii)

Rate of interest

The rate of interest of any loan made under clause (i) shall be equal to the rate for Treasury obligations then issued for periods of comparable maturities.

(iii)

Amount

The amount of a loan or loan guarantee under clause (i) shall not exceed 50 percent of the total cost of the qualified international energy deployment project.

(iv)

Developed countries

Loans or loan guarantees made for projects to be located in a developed country, as listed in Annex I of the United Nations Framework Convention on Climate Change, shall require at least a 50 percent contribution towards the total cost of the loan or loan guarantee by the host country.

(v)

Developing countries

Loans or loan guarantees made for projects to be located in a developing country (those countries not listed in Annex I of the United Nations Framework Convention on Climate Change) shall require at least a 10 percent contribution towards the total cost of the loan or loan guarantee by the host country.

(vi)

Capacity building research

Proposals made for projects to be located in a developing country may include a research component intended to build technological capacity within the host country. Such research must be related to the technologies being deployed and must involve both an institution in the host country and an industry, university or national laboratory participant from the United States. The host institution shall contribute at least 50 percent of funds provided for the capacity building research.

(vii)

Grants

(I)

In general

The Secretary, in consultation with the Secretary of Energy and the Administrator of the United States Agency for International Development, may, at the request of the United States ambassador to a host country, make grants to help address and overcome specific, urgent, and unforeseen obstacles in the implementation of a qualifying project.

(II)

Maximum amount

The total amount of a grant made for a qualifying project under this paragraph may not exceed $1,000,000.

(D)

Coordination with other programs

A qualifying international energy deployment project funded under this section shall not be eligible as a qualifying clean coal technology under section 415 of the Clean Air Act (42 U.S.C. 7651n).

(E)

Report

Not later than 5 years after the date of enactment of this subsection, the Secretary shall submit to the President a report on the results of the pilot projects.

(F)

Recommendation

Not later than 60 days after receiving the report under subparagraph (E), the President shall submit to Congress a recommendation, based on the results of the pilot projects as reported by the Secretary of Energy, concerning whether the financial assistance program under this section should be continued, expanded, reduced, or eliminated.

(3)

Performance criteria for major energy consumers

(A)

Identification of Major Energy Consumers

Not later than 1 year after the date of enactment of this subsection, the Task Force shall identify those developing countries that, by virtue of present and projected energy consumption, represent the predominant share of energy use among developing countries.

(B)

Performance Criteria

As a condition of accepting assistance provided under this section, any developing country identified under subparagraph (A) shall—

(i)

meet the eligibility criteria established under section 607 of the Millennium Challenge Act of 2003 (22 U.S.C. 7706), notwithstanding the eligibility of the developing country as a candidate country under section 606 of that Act (22 U.S.C. 7705); and

(ii)

agree to establish and report on progress in meeting specific goals for reduced energy-related greenhouse gas emissions and specific goals for—

(I)

increased access to clean energy services among unserved and underserved populations;

(II)

increased use of renewable energy resources;

(III)

increased use of lower greenhouse gas-emitting fossil fuel-burning technologies;

(IV)

greater reliance on advanced energy technologies;

(V)

the sustainable use of traditional energy resources; or

(VI)

other goals for improving energy-related environmental performance, including the reduction or avoidance of local air and water quality and solid waste contaminants.

(4)

Authorization of appropriations

There are authorized to be appropriated to the Secretary to carry out this section $500,000,000 for each of fiscal years 2008 through 2018, to remain available until expended.

.

C

Export-Import Bank

621.

Require the Export-Import Bank of the United States to meet renewable energy targets in its lending practices

(a)

Allocation of Assistance Among Energy Projects

Of the total amount available to the Export-Import Bank of the United States for the extension of credit for transactions related to energy projects, the Bank shall, not later than the beginning of fiscal year 2008, use—

(1)

not more than 85 percent for transactions related to fossil fuel projects; and

(2)

not less than 15 percent for transactions related to renewable energy and energy efficiency projects.

(b)

Renewable Energy and Technology Commission

(1)

Establishment

Within 1 year after the date of the enactment of this Act, the Export-Import Bank of the United States (in this subsection referred to as the Bank) shall establish a commission which shall be known as the Renewable Energy and Technology Commission (in this subsection referred to as the Commission).

(2)

Function

The Commission shall help the Bank achieve the percentage goal set forth in subsection (a)(2) by the beginning of fiscal year 2008, by proactively assisting the Bank in identifying new opportunities for renewable energy and energy efficiency financing.

(3)

Composition

The Commission shall be composed of—

(A)

6 representatives selected by companies involved in renewable energy and energy efficiency technology;

(B)

2 representatives selected by environmental organizations;

(C)

2 members of the academic community who are knowledgeable about renewable energy; and

(D)

representatives of the Bank.

(4)

Reports

The Commission shall submit annually to the Committee on Natural Resources and the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate a report that contains the following information for the fiscal year covered by the report:

(A)

A detailed description of the activities of the Commission.

(B)

Any recommendations made by the Commission that were adopted by the Bank.

(C)

An analysis comparing the level of credit extended by the Bank for renewable energy and energy efficiency projects with the level of credit so extended for the preceding fiscal year.

(c)

Definition of Renewable Energy and Energy Efficiency Projects

In this section, the term renewable energy and energy efficiency projects means projects related to solar, wind, biomass, or geothermal energy sources.

622.

Increase in the amount of financing made available by the Export-Import Bank for transactions involving renewable energy and energy efficiency

Section 2(b)(1) of the Export-Import Bank Act of 1945 (12 U.S.C. 635(b)(1)) is amended by adding at the end the following:

(M)
(i)

For each fiscal year that begins after the 1-year period that begins with the date of the enactment of this subparagraph, the Bank shall make available, from the aggregate loan authority available to the Bank, an amount to finance transactions directly related to the production of renewable energy or to energy efficiency, which shall be not less than—

(I)

in the case of the 1st such fiscal year, $200,000,000;

(II)

in the case of each of the 2nd through 6th such fiscal years, 120 percent of the amount made available in accordance with this clause to finance the transactions for the then preceding fiscal year; and

(III)

in the case of each fiscal year after the 6th such fiscal year, the amount made available in accordance with this clause to finance the transactions for such 6th fiscal year.

(ii)

In this Act, the term renewable energy means solar energy, wind energy, energy generated by the use of a fuel cell, geothermal energy, and less than 10 megawatts of energy generated by hydropower.

.

623.

Office of renewable energy promotion

Section 3 of the Export-Import Bank Act of 1945 (12 U.S.C. 635a) is amended by adding at the end the following:

(j)

Office of renewable energy promotion

(1)

Establishment

Within 1 year after the date of the enactment of this subsection, the Bank shall establish an Office of Renewable Energy Promotion (in this subsection referred to as the “Office”) staffed by individuals with expertise in financing renewable energy technologies.

(2)

Functions

The Office shall assist the Bank in complying with section 2(b)(1)(M) by identifying opportunities to provide financing for transactions directly related to the production of renewable energy or to energy efficiency.

.

624.

Report on Export-Import Bank financing for transactions involving renewable energy or energy efficiency

Section 8 of the Export-Import Bank Act of 1945 (12 U.S.C. 635g) is amended by adding at the end the following:

(g)

Financing for transactions involving renewable energy or energy efficiency

The Bank shall include in its annual report under subsection (a) of this section—

(1)

a description of the activities of the Office;

(2)

a description of the number of transactions and the amount of credit extended by the Bank for renewable energy and energy efficiency technologies, disaggregated by the types of renewable energy specified in section 2(b)(1)(M)(ii); and

(3)

a comparison between the number and amount referred to in paragraph (2) for the period covered by the report, and the numbers and amounts reported for all preceding periods pursuant to this subsection.

.

625.

Report on effect of Export-Import Bank financing on greenhouse gas emissions

(a)

In general

Within 5 years after the date of the enactment of this Act, the Export-Import Bank of the United States shall prepare and submit to the Committee on Financial Services of the House of Representatives and the Committee on Finance of the Senate a report that—

(1)

estimates the amount of greenhouse gases emitted annually as a result of the activities financed by the Bank; and

(2)

identifies opportunities to reduce the amount of greenhouse gases emitted as a result of the activities.

(b)

Greenhouse gas defined

In subsection (a), the term greenhouse gas means carbon dioxide, hydrofluorocarbons, methane, nitrous oxide, perfluorocarbons, sulfur hexafluoride, or any other anthropogenically-emitted gas that is determined by the Administrator of the Environmental Protection Agency, after notice and comment, to contribute to global warming to a non-negligible degree.

D

Emerging clean energy technology venture capital fund

631.

Findings

Congress finds the following:

(1)

It is in the interests of the United States to promote technologies that reduce our dependence on fossil fuels.

(2)

New and emerging clean energy technologies often fail to achieve commercial success due to funding shortfalls, often termed the Valley of Death, before the technologies attract the necessary private venture capital funding required for further development.

632.

Establishment of fund

The Secretary of Energy, using authorities granted to the Secretary of Defense under section 2371 of title 10, United States Code, shall provide for the establishment of a nonprofit venture capital investment corporation, to be known as the Emerging Clean Energy Technology Venture Capital Fund, for the purpose of making funding available to United States companies for the development of technologies used—

(1)

for the production of renewable energy; or

(2)

to improve energy efficiency.

633.

Authorization of appropriations

There are authorized to be appropriated to the Secretary of Energy $100,000,000 for each of the fiscal years 2008 through 2012 for carrying out this subtitle.

VII

Greenhouse gas reductions

A

Global climate change

701.

Global climate change

(a)

In general

The Clean Air Act (42 U.S.C. 7401 et seq.) is amended by adding at the end the following new title:

VIII

GLOBAL CLIMATE CHANGE

Title VIII—GLOBAL CLIMATE CHANGE

Sec. 801. Definitions.

Subtitle A—Stopping and Reversing Greenhouse Gas Emissions

Sec. 811. Regulations; greenhouse gas emissions limitations.

Sec. 812. Scientific review of the safe climate level.

Sec. 813. Required review of emission reductions needed to maintain the safe climate level.

Sec. 814. Distribution of allowances between auctions and allocations; nature of allowances.

Sec. 815. Auction of allowances.

Sec. 816. Allocation of allowances.

Sec. 817. Adaptation assistance.

Sec. 818. Early reduction credits.

Sec. 819. Avoiding significant economic harm.

Sec. 820. Use and transfer of credits.

Sec. 821. Compliance and enforcement.

Sec. 822. Equalizing the treatment of domestic and imported industrial products sold in the United States.

Subtitle B—Offset Credits

Sec. 831. Outreach initiative on revenue enhancement for agricultural producers.

Sec. 832. Offset measurement for agricultural, forestry, wetlands, and other land use-related sequestration projects.

Sec. 833. Offset credits from greenhouse gas emissions reduction projects.

Sec. 834. Borrowing at program start-up based on contracts to purchase offset credits.

Sec. 835. Review and correction of accounting for offset credits.

Subtitle C—National Registry for Credits

Sec. 841. Establishment and operation of national registry.

Sec. 842. Monitoring and reporting.

801.

Definitions

In this title:

(1)

Allocation

The term allocation, with respect to an allowance, means the issuance of an allowance directly to covered entities, at no cost, under this title.

(2)

Allowance

The term allowance means an authorization under this title to emit 1 metric ton of carbon dioxide (or a carbon dioxide equivalent), as allocated to a covered entity pursuant to section 816.

(3)

Carbon dioxide equivalent

The term carbon dioxide equivalent means, with respect to a greenhouse gas, the quantity of the greenhouse gas that makes the same contribution to global warming as 1 metric ton of carbon dioxide, as determined by the Administrator.

(4)

Covered entity

The term covered entity means an entity (including a branch, department, agency, or instrumentality of Federal, State, or local government) that—

(A)

owns or controls a source of greenhouse gas emissions in the electric power, industrial, or commercial sector of the United States economy (as defined in the Inventory), refines or imports products for use in transportation, or produces or imports hydrofluorocarbons, perfluorocarbons, or sulfur hexafluoride; and

(B)

emits, from any single facility owned by the entity, over 10,000 metric tons of greenhouse gas per year, measured in units of carbon dioxide equivalents, or—

(i)

refines or imports products that, when combusted, will emit;

(ii)

produces or imports hydrofluorocarbons, perfluorocarbons, or sulfur hexafluoride that, when used, will emit; or

(iii)

produces or imports other greenhouse gases that, when used, will emit, over 10,000 metric tons of greenhouse gas per year, measured in units of carbon dioxide equivalents.

(5)

Credit

(A)

In general

The term credit means an authorization under this title to emit greenhouse gases equivalent to 1 metric ton of carbon dioxide.

(B)

Inclusions

The term credit includes—

(i)

an allowance;

(ii)

an offset credit;

(iii)

an early reduction credit; or

(iv)

an international credit.

(6)

Early reduction credit

The term early reduction credit means a credit issued under section 818 for a reduction in the quantity of emissions or an increase in sequestration equivalent to 1 metric ton of carbon dioxide.

(7)

Eligible entity

The term eligible entity include any entity determined by the Administrator to be eligible to receive emissions allowance allocations or the value of such allowances.

(8)

Greenhouse gas authorized account representative

The term greenhouse gas authorized account representative means, for a covered entity, an individual who is authorized by the owner and operator of the covered entity to represent and legally bind the owner and operator in matters pertaining to this title.

(9)

Industry sector

The term industry sector means any sector of the economy of a country (including, where applicable, the forestry sector) that is responsible for significant quantities of greenhouse gas emissions.

(10)

Invasive species

The term invasive species means a species (including pathogens, seeds, spores, or any other biological material relating to a species) the introduction of which causes or is likely to cause economic or environmental harm or harm to human health.

(11)

Inventory

The term Inventory means the Inventory of U.S. Greenhouse Gas Emissions and Sinks, prepared in compliance with the United Nations Framework Convention on Climate Change Decision 3/CP.5.

(12)

Land-grant colleges and universities

The term land-grant colleges and universities has the meaning given the term in section 1404 of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3103).

(13)

Leakage

The term leakage means an increase in greenhouse gas emissions or a decrease in sequestration of greenhouse gases that is—

(A)

outside the area of a project; and

(B)

attributable to the project.

(14)

Native plant

The term native plant means an indigenous, terrestrial, or aquatic plant species that evolved naturally in an ecosystem.

(15)

New covered entity

The term new covered entity means a covered entity that has operated for not more than 3 years.

(16)

Offset credit

The term offset credit means a credit issued for an offset project pursuant to subtitle B certifying a reduction in the quantity of emissions or an increase in sequestration equivalent to 1 metric ton of carbon dioxide.

(17)

Offset practice

The term offset practice means a practice that—

(A)

reduces greenhouse gas emissions or increases sequestration; and

(B)

may be eligible to create an offset credit under this title.

(18)

Offset project

The term offset project means a project that reduces greenhouse gas emissions or increases sequestration of carbon dioxide or a carbon dioxide equivalent by a method other than reduction of greenhouse gas emissions at a covered entity.

(19)

Panel

The term Panel means the Climate Science Advisory Panel established by this title.

(20)

Plant material

The term plant material means—

(A)

a seed;

(B)

a part of a plant; or

(C)

a whole plant.

(21)

Renewable energy

The term renewable energy means electricity generated from—

(A)

wind;

(B)

organic waste (excluding incinerated municipal solid waste);

(C)

biomass (including anaerobic digestion from farm systems and landfill gas recovery); or

(D)

a hydroelectric, geothermal, solar thermal, photovoltaic, tidal, wave, or other nonfossil fuel, nonnuclear source.

(22)

Renewable energy entity

The term renewable energy entity means an electric generating entity that exclusively uses renewable energy to generate electricity for sale.

(23)

Restoration

(A)

In general

The term restoration means assisting the recovery of an ecosystem that has been degraded, damaged, or destroyed.

(B)

Inclusion

The term restoration includes the reestablishment in an ecosystem of preexisting biotic integrity with respect to species composition and community structure.

(24)

Sequestration

The term sequestration means the separation, isolation, or removal of greenhouse gases from the atmosphere.

(25)

Sequestration flow

The term sequestration flow means the uptake of greenhouse gases each year from sequestration practices, as calculated under section 832.

(26)

UNFCCC

The term UNFCCC means the United Nations Framework Convention on Climate Change, done at New York on May 9, 1992.

A

Stopping and Reversing Greenhouse Gas Emissions

811.

Regulations; greenhouse gas emissions limitations

(a)

Regulations

Not later than 18 months after the date of enactment of this title, the Administrator shall promulgate regulations to establish an allowance trading program to address emissions of greenhouse gases from covered entities in the United States.

(b)

Greenhouse gas emissions limitations

Not later than 2 years after the date of enactment of this section, the Administrator shall promulgate annual emission reduction targets for each calendar year beginning in 2010 and ending in 2050, as follows:

(1)

In 2010, the quantity of United States greenhouse gas emissions shall not exceed the quantity of United States greenhouse gases projected to be emitted in 2009.

(2)

Beginning in 2011, the quantity of United States greenhouse gas emissions shall be reduced by approximately 2 percent each year, such that the quantity of such emissions in 2020 does not exceed the quantity of United States greenhouse gases emitted in 1990.

(3)

Beginning in 2021, the quantity of United States greenhouse gas emissions shall be reduced by approximately 5 percent each year, such that the quantity of such emissions in 2050 does not exceed 20 percent of the quantity of United States greenhouse gases emitted in 1990.

812.

Scientific review of the safe climate level

(a)

Definition and Objective of Maintaining the Safe Climate Level

(1)

Finding

Congress finds that ratification by the Senate in 1992 of the UNFCCC, commitments which were affirmed by the President in 2002, established for the United States an objective of stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system.

(2)

Definition of safe climate level

In this section, the term safe climate level means the climate level referred to in paragraph (1).

(b)

Climate science advisory panel

(1)

Establishment

Not later than 270 days after the date of enactment of this title, the Administrator shall establish an advisory panel, to be known as the Climate Science Advisory Panel .

(2)

Duties

The Panel shall—

(A)

inform Congress and the Administrator of the state of climate science;

(B)

not later than December 31, 2010, and not less frequently than every 4 years thereafter, issue a report that is endorsed by at least 7 members of the Panel that describes recommendations for the Administrator, based on the best available information in the fields of climate science, including reports from the Intergovernmental Panel on Climate Change, relating to—

(i)

the specific concentration, in parts per million, of all greenhouse gases in carbon dioxide equivalents at or below which constitutes the safe climate level; and

(ii)

the projected timeframe for achieving the safe climate level.

(3)

Composition

(A)

In general

The Panel shall be composed of 8 climate scientists and 3 former Federal officials, as described in subparagraphs (B) through (D).

(B)

Climate scientists

Not later than 270 days after the date of enactment of this title, the President of the National Academy of Sciences shall appoint to serve on the Panel 8 climate scientists from among individuals who—

(i)

have earned doctorate degrees;

(ii)

have performed research in physical, biological, or social sciences, mathematics, economics, or related fields, with a particular focus on or link to 1 or more aspects of climate science;

(iii)

have records of peer-reviewed publications that include—

(I)

publications in main-stream, high-quality scientific journals (such as journals associated with respected scientific societies or those with a high impact factor, as determined by the Institute for Scientific Information);

(II)

recent publications relating to earth systems, and particularly relating to the climate system; and

(III)

a high publication rate, typically at least 2 or 3 papers per year; and

(iv)

have participated in high-level committees, such as those formed by the National Academy of Sciences or by leading scientific societies.

(C)

Restriction

A majority of climate scientists appointed to the Panel under subparagraph (B) shall be participating, as of the date of appointment to the Panel, in active research in the physical or biological sciences, with a particular focus on or link to 1 or more aspects of climate science.

(D)

Federal officials

(i)

In general

Subject to clause (ii), the Administrator shall appoint as members of the Panel, the longest-serving former Administrators of the Environmental Protection Agency for each of the 3 most recent former Presidents.

(ii)

Timing

The 3 most recent former Presidents described in clause (i) shall be identified as of the deadline for appointments to the Panel under subparagraph (B) or (E)(ii), whichever is applicable.

(iii)

Substitutes

If a former Administrator described in clause (i) declines appointment, or is unable to serve, as a member of the Panel, the Administrator shall appoint in place of the former Administrator—

(I)

the longest-serving former Administrator for the applicable President who agrees to serve; or

(II)

if no individual described in subclause (I) accepts appointment as a member of the Panel, the longest-serving Assistant Administrator for Air and Radiation for the applicable President who agrees to serve.

(E)

Terms of service and vacancies

(i)

Terms

The initial term of a member of the Panel shall be—

(I)

to the maximum extent practicable, the period covered by, and extending through the date of issuance of, each report under paragraph (2)(B); but

(II)

not longer than 4 years.

(ii)

Subsequent panels and reports

On the issuance of each report under paragraph (2)(B)—

(I)

the Panel that submitted the report shall terminate; and

(II)
(aa)

pursuant to subparagraphs (B) and (C), the President of the National Academy of Sciences shall appoint climate scientists (including at least 3 climate scientists who served as members of the preceding Panel) to serve as members of a new Panel by not later than 15 months after the deadline for issuance of the report under paragraph (2)(B); and

(bb)

pursuant to subparagraph (D), the Administrator shall appoint 3 Federal officials as members of the new Panel by the deadline described in item (aa).

(iii)

Vacancies

Vacancies in the membership of the Panel—

(I)

shall not affect the power of the remaining members to execute the functions of the Panel; and

(II)

shall be filled in the same manner in which the original appointment was made.

(F)

Chairperson and vice chairperson

The Panel shall elect a Chairperson and Vice Chairperson as soon as practicable.

(G)

Compensation of members

A member of the Panel shall be compensated at a rate equal to the daily equivalent of the annual rate of basic pay prescribed for level IV of the Executive Schedule under section 5315 of title 5, United States Code, for each day (including travel time) during which the member is engaged in the performance of the duties of the Panel.

(H)

Travel expenses

A member of the Panel shall be allowed travel expenses, including per diem in lieu of subsistence, at rates authorized for an employee of an agency under subchapter I of chapter 57 of title 5, United States Code, while away from the home or regular place of business of the member in the performance of the duties of the Panel.

(4)

Staff

(A)

In general

The Chairperson of the Panel may, without regard to the civil service laws (including regulations), appoint and terminate an executive director and such other additional personnel as are necessary to enable the Panel to perform the duties of the Panel.

(B)

Confirmation of executive director

The employment of an executive director shall be subject to confirmation by the Panel.

(C)

Compensation

(i)

In general

Except as provided in clause (ii), the Chairperson of the Panel may fix the compensation of the executive director and other personnel without regard to the provisions of chapter 51 and subchapter III of chapter 53 of title 5, United States Code, relating to classification of positions and General Schedule pay rates.

(ii)

Exception

The rate of pay for the executive director and other personnel shall not exceed the rate payable for level V of the Executive Schedule under section 5316 of title 5, United States Code.

(D)

Detail of federal government employees

(i)

In general

An employee of the Federal Government may be detailed to the staff of the Panel without reimbursement.

(ii)

Treatment of detailees

The detail of the employee shall be without interruption or loss of civil service status or privilege.

(E)

Procurement of temporary and intermittent services

The Chairperson or executive director of the Panel may procure temporary and intermittent services in accordance with section 3109(b) of title 5, United States Code, at rates for individuals that do not exceed the daily equivalent of the annual rate of basic pay prescribed for level V of the Executive Schedule under section 5316 of that title.

(5)

Hearings

The Panel may hold such hearings, meet and act at such times and places, take such testimony, and receive such evidence as the Panel considers advisable to carry out this section.

(6)

Information from federal agencies

(A)

In general

The Panel may secure directly from a Federal agency such information as the Panel considers necessary to carry out this section.

(B)

Provision of information

On request of the Chairperson of the Panel, the head of the agency shall provide the information to the Panel.

(7)

Postal services

The Panel may use the United States mail in the same manner and under the same conditions as other agencies of the Federal Government.

813.

Required review of emission reductions needed to maintain the safe climate level

(a)

Review and determination regarding reduction rate

Not later than December 31, 2015, the Administrator, after providing public notice and opportunity to comment, shall promulgate a final rule pursuant to which the Administrator shall review the reduction rate for greenhouse gas emissions required under section 811 and determine—

(1)

whether to—

(A)

accept the recommendations of the Panel under section 812(b)(2) regarding the safe climate level and the timeframe for achieving the safe climate level;

(B)

establish a more stringent safe climate level or timeframe, together with a detailed explanation of the justification of the Administrator for rejection of the recommendations of the Panel.

(b)

Modification of reduction rate

(1)

In general

If the Administrator makes a determination described in subparagraph (A) or (B) of subsection (a)(1),the final rule promulgated pursuant to subsection (a) shall establish a required level of emissions reductions for each calendar year, beginning with calendar year 2020, based on the considerations described in paragraph (2).

(2)

Considerations

(A)

Primary consideration

In establishing the required level of emission reductions pursuant to paragraph (1), the Administrator shall take into consideration primarily the emission reductions necessary to stabilize atmospheric greenhouse gas concentrations at the safe climate level within the timeframe specified under section 812(b)(2)(B).

(B)

Secondary considerations

In establishing the required level of emission reductions pursuant to paragraph (1), in addition to the primary consideration described in paragraph (2), the Administrator shall take into consideration—

(i)

technological capability to reduce greenhouse gas emissions;

(ii)

the progress that foreign countries have made toward reducing their greenhouse gas emissions;

(iii)

the economic impacts within the United States of implementing this subtitle, including impacts on the major emitting sectors; and

(iv)

the economic impacts within the United States of inadequate action.

(c)

Enforcement Provision

(1)

In general

If the Administrator fails to meet a deadline for promulgation of any regulation under subsection (a), the Administrator shall withhold from allocation to covered entities that would otherwise be entitled to an allocation of allowances under this subtitle a total of 10 percent of the allowances for each covered entity for each year after the deadline until the Administrator promulgates the applicable regulation.

(2)

Return of allowances

On promulgation of a delayed regulation described in paragraph (1), the Administrator shall distribute any allowances withheld under that paragraph—

(A)

among the covered entities from which the allowances were withheld; and

(B)

in accordance with section 816.

(d)

Subsequent Rulemakings

(1)

In general

Not later than December 31, 2019, and every 4 years thereafter, the Administrator shall promulgate a new final rule described in subsection (a) in accordance with this section.

(2)

Effective date

If a new final rule promulgated pursuant to paragraph (1) changes a level of emission reductions required under the preceding final rule, the effective date of the new final rule shall be January 1 of the calendar year that is 5 years after the deadline for promulgation of the new final rule under paragraph (1).

814.

Distribution of allowances between auctions and allocations; nature of allowances

(a)

Distribution of Allowances Between Auctions and Allocations

(1)

In general

For each calendar year, the total quantity of allowances to be auctioned and allocated under this subtitle shall be equal to the annual tonnage limitation for emissions of greenhouse gases from covered entities specified in section 811 for the calendar year.

(2)

Distribution

The proportion of allowances to be auctioned pursuant to section 815 and allocated pursuant to section 816 for each calendar year beginning in calendar year 2010 shall be as follows:

Percentages of Allowances To Be Auctioned and Allocated
Calendar yearPercentage
to be
auctioned
Percentage
to be
allocated
2010 5050
2011 5347
2012 5644
2013 5941
2014 6238
2015 6535
2016 6832
2017 7129
2018 7426
2019 7723
2020 8020
2021 8317
2022 8614
2023 8911
2024 92 8
2025 96 4
2026100 0.
(b)

Nature of Allowances

An allowance—

(1)

shall not be considered to be a property right; and

(2)

may be terminated or limited by the Administrator.

(c)

No Judicial Review

An auction or allocation of an allowance by the Administrator shall not be subject to judicial review.

815.

Auction of allowances

(a)

In general

Not later than 2 years after the date of enactment of this title, the Administrator shall promulgate regulations establishing a procedure for the auction of the quantity of allowances specified in section 814(a) for each calendar year.

(b)

Deposit of proceeds

The Administrator shall deposit all proceeds from auctions conducted under this section in the General Fund of the United States Treasury.

816.

Allocation of allowances

(a)

Allocations to covered entities and other eligible entities

Beginning with calendar year 2010, the Administrator shall, by regulation, establish a process for the allocation of free tradeable allowances under this section that will—

(1)

provide equitable compensation for covered entities subject to unrecoverable costs resulting from the regulations promulgated under this title;

(2)

avoid overcompensating covered entities;

(3)

minimize the costs to the government of allocating tradeable allowances;

(4)

provide incentives for the deployment of new low and zero carbon energy technologies and energy efficiency upgrades at covered entities;

(5)

give credit to covered entities for emissions reductions made before 2010 and registered with the National Registry established in subtitle C;

(6)

recognize the investments that covered entities and their customers have made to reduce their energy use and greenhouse gas emissions prior to enactment of this title; and

(7)

maintain the international competitiveness of United States manufacturing and avoid the additional loss of United States manufacturing jobs.

(b)

Allocations to new covered entities and new eligible entities

(1)

Establishment

For each calendar year, the Administrator, in consultation with the Secretary of Energy the Secretary of Commerce, and with consideration to the allocation factors listed in subsection (a) shall promulgate regulations establishing—

(A)

a reserve of allowances to be allocated among new covered entities and new eligible entities for the calendar year; and

(B)

the methodology for allocating those allowances among new covered entities and new eligible entities.

(2)

Limitation

The number of allowances allocated under paragraph (1) during a calendar year shall be not more than 3 percent of the total number of allowances allocated among entities for the calendar year.

(3)

Unused allowances

For each calendar year, the Administrator shall reallocate to each entity any unused allowances from the new entity reserve established under paragraph (1) in the proportion that—

(A)

the number of allowances allocated to each entity for the calendar year; bears to

(B)

the number of allowances allocated to all entities for the calendar year.

(c)

Total quantity of allowances To be allocated

For each calendar year, the quantity of allowances allocated under subsection (a) shall be equal to the difference between subparagraphs (1) and (2)—

(1)

the allocation percentage in section 814 of the annual limitation for emissions of greenhouse gases from covered entities specified in section 811 for the calendar year, as modified, if applicable, under section 813; and

(2)

the quantity of allowances reserved for new covered entities under subsection (b) for the calendar year.

(d)

Coal-fired covered entities

(1)

In general

Notwithstanding any other provision of this subtitle, no allowance shall be allocated under this subtitle to a coal-fired covered entity unless the covered entity—

(A)

is powered by qualifying advanced clean coal technology, as defined pursuant to paragraph (2); or

(B)

entered operation before January 1, 2007.

(2)

Definition of qualifying advanced clean coal technology

(A)

In general

Not later than 18 months after the date of enactment of this title, the Administrator, by regulation, shall define the term qualifying advanced clean coal technology with respect to electric power generation.

(B)

Requirement

In promulgating a definition pursuant to subparagraph (A), the Administrator shall ensure that the term qualifying advanced clean coal technology reflects advances in available technology, taking into consideration—

(i)

net thermal efficiency;

(ii)

measures to capture and sequester carbon dioxide; and

(iii)

output-based emission rates for—

(I)

carbon dioxide;

(II)

sulfur dioxide;

(III)

oxides of nitrogen;

(IV)

filterable and condensable particulate matter; and

(V)

mercury.

(C)

Review and revision

(i)

In general

Not later than July 1, 2009, and each July 1 of every second year thereafter, the Administrator shall review and, if appropriate, revise the definition under subparagraph (A) based on technological advances during the preceding 2 calendar years.

(ii)

Notice and comment required

Subject to clause (iii), after the initial definition is established under subparagraph (A), no subsequent review or revision under this subparagraph shall be subject to the notice and comment provisions of section 307 of this Act or of section 553 of title 5, United States Code.

(iii)

Effect

Nothing in clause (ii) precludes the application of the notice and comment provisions of section 307 of this Act or of section 553 of title 5, United States Code, as the Administrator determines to be practicable.

817.

Adaptation assistance

(a)

Adaptation Assistance for Workers and Communities Negatively Affected by Climate Change and Greenhouse Gas Regulation

For each calendar year the Administrator shall, in consultation with the Secretary of labor and the Secretary of commerce, provide adaptation assistance for workers and communities—

(1)

to address local or regional impacts of climate change and the impacts, if any, from greenhouse gas regulation, including by providing assistance to displaced workers and disproportionately affected communities; and

(2)

to mitigate impacts of climate change and the impacts, in any, from greenhouse gas regulation on low-income energy consumers.

(b)

Adaptation assistance for fish and wildlife habitat

For each calendar year, the Administrator shall, in consultation with the United States Fish and Wildlife Service, the fund efforts to strengthen and restore habitat that improves the ability of fish and wildlife to adapt successfully to climate change. The funding made available for such purposes shall be directed toward the wildlife restoration fund subaccount known as the Wildlife Conservation and Restoration Account established under section 3 of the Pittman-Robertson Wildlife Restoration Act (16 U.S.C. 669b). Amounts deposited in the subaccount under this paragraph shall be available without further appropriation for obligation and expenditure under that Act.

(c)

There are authorized to be appropriated such sums as are necessary to carry out this section for each of fiscal years 2010 through 2050.

818.

Early reduction credits

(a)

Regulations

Not later than 2 years after the date of enactment of this title, the Administrator shall promulgate regulations that provide for the issuance on a 1-time basis, certification, and use of early reduction credits for greenhouse gas reduction or sequestration projects carried out during any of calendar years 2000 through 2010.

(b)

Eligible projects

A greenhouse gas reduction or sequestration project shall be eligible for early reduction credits if the project—

(1)

is carried out in the United States;

(2)

meets the standards contained in regulations promulgated by the Administrator under subsection (a) that the Administrator determines to be applicable to the project, including consistency with the requirements of—

(A)

paragraphs (2) through (5) of section 836(a), with respect to greenhouse gas reduction projects; and

(B)

section 832(a), with respect to sequestration projects; and

(3)

was reported to a State, regional or National registry or was otherwise accounted for in a manner that the Administrator determines to be legitimate—

(A)

under section 1605(b) of the Energy Policy Act of 1992 (42 U.S.C. 13385(b)); or

(B)

to a State or regional greenhouse gas registry.

(c)

Limitation

(1)

In general

The aggregate quantity of early reduction credits available for greenhouse gas reduction or sequestration projects for the period of calendar years 2000 through 2009 shall not exceed 10 percent of the tonnage limitation for calendar year 2010 for emissions of greenhouse gases from covered entities under section 811.

(2)

No other exceedance of tonnage limitation

No provision of this subtitle (other than paragraph (1)) or any regulation promulgated under this subtitle authorizes the issuance or use of a quantity of credits greater than the annual tonnage limitation for emissions of greenhouse gases from covered entities for a calendar year.

819.

Avoiding significant economic harm

(a)

In general

Pursuant to the regulations promulgated under this section, the Administrator may permit covered entities to use allowances in a calendar year before the calendar year for which the allowances were allocated.

(b)

Regulations

(1)

In general

Not later than 3 years after the date of enactment of this title, the Administrator, in coordination with the Secretary of the Treasury, shall promulgate regulations requiring the continuous monitoring of the operation of the carbon market and the effect of that market on the economy of the United States.

(2)

Requirements

The regulations shall—

(A)

establish the criteria for determining whether allowance prices have reached and sustained a level that is causing or will cause significant harm to the economy of the United States; and

(B)

take into consideration—

(i)

the obligation of the United States under this subtitle to stabilize greenhouse gas concentrations in the atmosphere at the safe climate level; and

(ii)

the costs of the anticipated impacts of climate change in the United States.

(3)

Prevention of economic harm

If the Administrator determines that allowance prices have reached and sustained a level that is causing or will cause significant harm to the economy of the United States, the regulations shall establish a program under which a covered entity may use allowances in a calendar year before the calendar year for which the allowances were allocated, including—

(A)

a requirement that allowances borrowed from the allocation of a future year reduce the allocation of allowances to the covered entity for the future year on a 1-to-1 basis;

(B)

a requirement for payment of interest on borrowed allowances requiring the submission of additional credits upon repayment of the allowances equal to the product obtained by multiplying—

(i)

the number of years between the advance use of allowances by a covered entity under clause (i) and the submission of additional credits under this clause; and

(ii)

the sum obtained by adding—

(I)

the Federal short-term rate, as defined pursuant to section 1274(d)(1)(C)(i) of the Internal Revenue Code of 1986; and

(II)

2 percent; and

(C)

a limitation that in no event may a covered entity—

(i)

satisfy more than 10 percent of the obligation of the covered entity under section 821(a) to surrender allowances by submitting allowances in a calendar year before the calendar year for which the allowances were allocated; and

(ii)

use allowances in a calendar year that is more than 3 years before the calendar year for which the allowances were allocated; and

820.

Use and transfer of credits

(a)

Use in Other Greenhouse Gas Allowance Trading Programs

(1)

In general

A credit obtained under this subtitle may be used in any other greenhouse gas allowance trading program, including a program of 1 or more States or subdivisions of States, that is approved by the Administrator and an authorized official for the other program for use of the allowance.

(2)

Reciprocity

A credit obtained from another greenhouse gas trading program, including a program of 1 or more States or subdivisions of States, that is approved by the Administrator and an authorized official for the other program may be used in the trading program under this title.

(b)

Allowance use before applicable calendar year

Except as provided in section 819, an allowance auctioned or allocated under this subtitle may not be used before the calendar year for which the allowance was auctioned or allocated.

(c)

Transfer

(1)

In general

Except as provided in paragraph (2), the transfer of a credit shall not take effect until receipt and recording by the Administrator of a written certification of the transfer that is executed by an authorized official of the person making the transfer.

(2)

Special rule for allowances

Notwithstanding paragraph (1), the transfer of an allowance auctioned or allocated under this subtitle may take effect before the calendar year for which the allowance was auctioned or allocated.

(d)

Banking of credits

Any covered entity may use a credit obtained under this subtitle in the calendar year for which the credit was auctioned or allocated, or in a subsequent calendar year, to demonstrate compliance with section 821.

(e)

Limitations on the use of offset credits

The owner of each covered entity may not satisfy more than 10 percent of the obligation of the covered entity under section 821(a) by submitting offset credits. The Administrator may modify the maximum allowable offset credits that a covered entity may use to demonstrate compliance with section 821(a). In evaluating this determination, the Administrator shall take into consideration:

(1)

technological capability to reduce greenhouse gas emissions; and

(2)

the economic impacts within the United States of allowing covered entities to submit a fewer or greater number of offset credits, including impacts on the major emitting sectors.

821.

Compliance and enforcement

(a)

In general

For calendar year 2010 and each calendar year thereafter, the owner of each covered entity shall surrender to the Administrator a quantity of credits that is equal to the total tons of carbon dioxide or, with respect to other greenhouse gases, tons in carbon dioxide equivalent, emitted by a covered entity during a calendar year.

(b)

Regulations

Not later than 2 years after the date of enactment of this title, the Administrator shall promulgate regulations establishing the procedures for the surrender of credits.

(c)

Penalty

The owner of a covered entity that emits greenhouse gases in excess of the number of credits that the owner of the covered entity holds for use of the covered entity for the calendar year shall—

(1)

submit to the Administrator 1.3 credits for each metric ton of excess greenhouse gas emissions of the covered entity; and

(2)

pay an excess emissions penalty equal to the product obtained by multiplying—

(A)

the number of tons of carbon dioxide, or the carbon dioxide equivalent of other greenhouse gases, emitted in excess of the total quantity of credits held by the covered entity; and

(B)
(i)

except as provided in clause (ii), $100, as adjusted for changes beginning on January 1, 2007, in accordance with the Consumer Price Index for All-Urban Consumers published by the Department of Labor; or

(ii)

if the average market price for a metric ton of carbon dioxide equivalent during a calendar year exceeds $60, $200, as adjusted for changes beginning on January 1, 2007, in accordance with the Consumer Price Index for All-Urban Consumers published by the Department of Labor.

822.

Equalizing the treatment of domestic and imported industrial products sold in the United States

(a)

Findings

Congress finds that—

(1)

Greenhouse gas emission reductions from industry sectors are necessary to protect from dangerous climate change—

(A)

human, animal, and plant life and health in the United States; and

(B)

the environment in the United States; and

(2)

the environmental and natural resource protections described in paragraph (1) would be undermined if manufacturing of industry sector products shifted to locations outside the United States without comparable limits on greenhouse gas emissions.

(b)

Equalize treatment for energy intensive products

Not later than December 31, 2008, the Administrator, in consultation with the United States Trade Representative, the Secretary of State, and the Secretary of Commerce, shall consider ways to establish equal treatment, with respect to greenhouse gas emissions, of domestic and imported industrial products sold in the United States. Not later than December 31, 2011, the Administrator shall begin to implement policies and recommend to Congress regulatory mechanisms that would assure that energy intensive materials sold into United States commerce, of domestic and foreign origin, are manufactured according to minimum performance standards with respect to the greenhouse gas emissions produced per ton of material produced.

(c)

Consultation

In developing policies and recommendations under this section, the Administrator shall consult with other government entities within and outside the United States having programs for control of greenhouse gas emissions from the manufacturing sector.

(d)

Considerations

In developing policies and recommendations under this section, the Administrator, in consultation with the United States Trade Representative, the Secretary of State, and the Secretary of Commerce, shall consider—

(1)

the principle of equal treatment of domestic and imported industrial products sold in the United States;

(2)

the need to sustain United States natural resources for use by future generations;

(3)

the distinction between foreign manufacturers from countries with regulation of greenhouse gases comparable to this title, and foreign manufacturers from countries without such comparable regulation;

(4)

the obligations of the United States and other countries under applicable treaties and trade agreements; and

(5)

such other factors as the Administrator, in consultation with the United States Trade Representative, the Secretary of State, and the Secretary of Commerce, determines to be relevant and appropriate.

(e)

International trade agreements

The United States Trade Representative shall negotiate trade agreements that are consistent with the standards regulated under this section.

B

Offset Credits

831.

Outreach initiative on revenue enhancement for agricultural producers

(a)

Purposes

The purposes of this subtitle are to achieve climate benefits, reduce overall costs to the United States economy, and enhance revenue for domestic agricultural producers, foresters, and other landowners by—

(1)

establishing procedures by which domestic agricultural producers, foresters, and other landowners can measure and report reductions in greenhouse gas emissions and increases in sequestration; and

(2)

publishing a handbook of guidance for domestic agricultural producers, foresters, and other landowners to market emission reductions to companies.

(b)

Establishment

The Secretary of Agriculture, acting through the Chief of the Natural Resources Conservation Service, the Chief of the Forest Service, the Administrator of the Cooperative State Research, Education, and Extension Service, and land-grant colleges and universities, in consultation with the Administrator and the heads of other appropriate departments and agencies, shall establish an outreach initiative to provide information to agricultural producers, agricultural organizations, foresters, and other landowners about opportunities under this subtitle to earn new revenue.

(c)

Components

The initiative under this section—

(1)

shall be designed to ensure that, to the maximum extent practicable, agricultural organizations and individual agricultural producers, foresters, and other landowners receive detailed practical information about—

(A)

opportunities to earn new revenue under this subtitle;

(B)

measurement protocols, monitoring, verifying, inventorying, registering, insuring, and marketing offsets under this title;

(C)

emerging domestic markets for energy crops, allowances, and offsets; and

(D)

local, regional, and national databases and aggregation networks to facilitate achievement, measurement, registration, and sales of offsets;

(2)

shall provide—

(A)

outreach materials, including the handbook published under subsection (d)(1), to interested parties;

(B)

workshops; and

(C)

technical assistance; and

(3)

may include the creation and development of regional marketing centers or coordination with existing centers (including centers within the Natural Resources Conservation Service or the Cooperative State Research, Education, and Extension Service or at land-grant colleges and universities).

(d)

Handbook

(1)

In general

Not later than 2 years after the date of enactment of this title, the Secretary of Agriculture, in consultation with the Administrator and after public input, shall publish a handbook for use by agricultural producers, agricultural cooperatives, foresters, other landowners, offset buyers, and other stakeholders that provides easy-to-use guidance on achieving, reporting, registering, and marketing offsets.

(2)

Distribution

The Secretary of Agriculture shall ensure, to the maximum extent practicable, that the handbook is distributed widely through land-grant colleges and universities and other appropriate institutions.

832.

Offset measurement for agricultural, forestry, wetlands, and other land use-related sequestration projects

(a)

In general

Not later than 2 years after the date of enactment of this title, the Secretary of Agriculture, in consultation with the Administrator, shall promulgate regulations establishing the requirements regarding the issuance, certification, and use of offset credits for greenhouse gas reductions from agricultural, forestry, wetlands, and other land use-related sequestration projects, including requirements—

(1)

for a region-specific discount factor for business-as-usual practices for specific types of sequestration projects, in accordance with subsection (c);

(2)

that ensure that the reductions are real, additional, verifiable, and enforceable;

(3)

that address leakage;

(4)

that the reductions are not otherwise required by any law (including a regulation) or other legally binding requirement;

(5)

for the quantification, monitoring, reporting, and verification of the reductions;

(6)

that ensure that offset credits are limited in duration to the period of sequestration of greenhouse gases, and rectify any loss of sequestration other than a loss caused by an error in calculation identified under this subtitle, by requiring the submission of additional credits of an equivalent quantity to the lost sequestration; and

(7)

that quantify sequestration flow.

(b)

Eligibility To Create Offset Credits

A sequestration project that commences operation on or after January 1, 2010, is eligible to create offset credits under this subtitle if the sequestration project satisfies the other applicable requirements of this subtitle.

(c)

Discounting for Business-as-Usual Practices

(1)

In general

In order to streamline the availability of offset credits for agricultural and other land use-related sequestration projects, the regulations promulgated under subsection (a) shall provide for the calculation and reporting of region-specific discount factors by the Secretary of Agriculture—

(A)

to be used by developers of agricultural projects and other land use-related sequestration projects; and

(B)

to account for business-as-usual practices for specific types of sequestration projects.

(2)

Calculation

Unless otherwise provided in this subtitle, the region-specific discount factor for business-as-usual practices for sequestration projects shall be calculated by dividing—

(A)

the difference between—

(i)

the quantity of greenhouse gases sequestered in the region as a result of the offset practice under this subtitle; and

(ii)

the quantity of greenhouse gases sequestered in the region as a result of the projected business-as-usual implementation of the applicable offset practice; by

(B)

the quantity of greenhouse gases sequestered in the region as a result of the offset practice under this subtitle.

(3)

Requirements

(A)

In general

The regulations promulgated under this section shall, to the maximum extent practicable—

(i)

define geographic regions with reference to land that has similar agricultural characteristics; and

(ii)

subject to subparagraph (B), define baseline historical reference periods for each category of sequestration practice, using the most recent period of sufficient length for which there are reasonably comprehensive data available.

(B)

Exception

If the Secretary of Agriculture determines that entities have increased implementation of the relevant offset practice during the most recent period in anticipation of legislation granting credit for the offsets, the regulations described in subparagraph (A)(ii) may define baseline historical reference periods for each category of sequestration practice using an earlier period.

(d)

Quantifying sequestration flow

The regulations that quantify sequestration flow shall include—

(1)

a default rate of sequestration flow, regionally specific to the maximum extent practicable, for each offset practice or combination of offset practices, that is estimated conservatively to allow for site-specific variations and data uncertainties;

(2)

a downward adjustment factor for any offset practice or combination of practices for which, in the judgment of the Secretary of Agriculture, there are substantial uncertainties in the sequestration flows estimated in paragraph (1), but still reasonably sufficient data to calculate a default rate of flow; and

(3)

Offset practice

or project-specific measurement, monitoring, and verification requirements for—

(A)

offset practices or projects for which there are insufficiently reliable data to calculate a default rate of sequestration flow; or

(B)

projects for which the project proponent chooses to use project-specific requirements.

(e)

Use of Native Plant Species in Offset Projects

Not later than 18 months after the date of enactment of this title, the Administrator, in consultation with the Secretary of Agriculture, shall promulgate regulations for selection, use, and storage of native and nonnative plant materials in the offset projects described in paragraph (2)—

(1)

to ensure native plant materials are given primary consideration, in accordance with applicable Department of Agriculture guidance for use of native plant materials;

(2)

to prohibit the use of Federal or State-designated noxious weeds; and

(3)

to prohibit the use of a species listed by a regional or State invasive plant council within the applicable region or State.

833.

Offset credits from greenhouse gas emissions reduction projects

(a)

In general

Not later than 2 years after the date of enactment of this title, the Administrator shall promulgate regulations establishing the requirements regarding the issuance, certification, and use of offset credits for greenhouse gas emissions reduction offset projects, including requirements—

(1)

for performance standards for specific types of offset projects, which represent significant improvements compared to recent practices in the geographic area, to be reviewed, and updated if the Administrator determines updating is appropriate, every 5 years;

(2)

that ensure that the reductions are real, additional, verifiable, enforceable, and permanent;

(3)

that address leakage;

(4)

that the reductions are not otherwise required by any law (including a regulation) or other legally binding requirement;

(5)

for the quantification, monitoring, reporting, and verification of the reductions; and

(6)

that specify the duration of offset credits for greenhouse gas emissions reduction projects under this section.

(b)

Eligibility To create offset credits

Greenhouse gas emissions reduction offset projects that commence operation on or after January 1, 2007, are eligible to create offset credits under this subtitle if the projects satisfy the other applicable requirements of this subtitle.

(c)

Creation of additional categories of greenhouse gas emissions reduction offset projects

The Administrator may, by regulation, create additional categories of greenhouse gas emissions reduction offset projects for types of projects for which the Administrator determines that compliance with the regulations promulgated under subsection (a) is feasible.

(d)

Prohibition on use

Notwithstanding the eligibility of greenhouse gas emission reduction projects to create offset credits in accordance with subsection (d), greenhouse gas emissions reduction offset projects shall not be eligible to create offset credits for use under this section beginning on the date on which the reductions are required by law (including regulations) or other legally binding requirement.

834.

Borrowing at program start-up based on contracts to purchase offset credits

(a)

In general

During calendar years 2011, 2012, and 2013, a covered entity may satisfy not more than 5 percent of the allowance submission requirements of section 822 by submitting to the Administrator contractual commitments to purchase offset credits that will implement an equivalent quantity of emission reductions or sequestration not later than December 31, 2015.

(b)

Approval of qualifying offset projects

Offset projects that may be appropriately carried out under this section shall be approved by the Administrator in accordance with this subtitle.

(c)

Repayment by 2015

(1)

In general

If a covered entity uses subsection (a) to comply with section 822, not later than the deadline in that section for allowance submissions for calendar year 2015, the covered entity shall submit additional credits of a quantity equivalent to the sum obtained by adding—

(A)

the value of credits submitted to comply with credit submission requirements described in subsection (a); and

(B)

interest calculated in accordance with paragraph (2).

(2)

Interest

Interest referred to in paragraph (1)(B) shall be equal to the product obtained by multiplying—

(A)

the number of years between—

(i)

the use by a covered entity of the method of compliance described in subsection (a); and

(ii)

the submission by the covered entity of additional credits under this subsection; and

(B)

the sum obtained by adding—

(i)

the Federal short-term rate, as defined pursuant to section 1274(d)(1)(C)(i) of the Internal Revenue Code of 1986; and

(ii)

2 percent.

835.

Review and correction of accounting for offset credits

(a)

Duty to monitor

The Secretary of Agriculture and the Administrator shall monitor regularly whether offset credits under the respective jurisdiction of each agency head under this subtitle are being awarded only for real and additional sequestration of greenhouse gases and reductions in greenhouse gas emissions, including—

(1)

the accuracy of default calculations of sequestration flow and greenhouse gas emission reductions achieved by the use of offset practices;

(2)

the calculation of region-specific discount factors; and

(3)

the accuracy of leakage calculations.

(b)

Periodic review

Not later than December 31, 2013, and every 5 years thereafter, the Secretary of Agriculture and the Administrator shall review the issuance of offset credits under the respective jurisdiction of each agency head under this subtitle to determine—

(1)

whether offset credits are being awarded only for real and additional sequestration of greenhouse gases or reductions in greenhouse gas emissions, as described in subsection (a);

(2)

the amount of excessive award of any offset credits;

(3)

the volume of offset credits that have been or are expected to be approved;

(4)

the impact of the offset credits on market prices; and

(5)

the impact of the offset credits on the trajectory of emissions from covered entities.

(c)

Duty To correct

If the Secretary of Agriculture or the Administrator determines that offset credits under the respective jurisdictions of the agency head have been awarded under this subtitle in excess of real and additional sequestration of greenhouse gases or reductions in emissions of greenhouse gases, the Secretary of Agriculture or the Administrator shall—

(1)

promptly correct on a prospective basis the sources of the errors, including correcting leakage factors, region-specific discount factors, default rates of sequestration flow, and other relevant information for the offset practices involved; and

(2)

quantify and publicly disclose the quantity of offset credits that have been awarded in excess of real and additional sequestration or emissions reductions.

C

National Registry for Credits

841.

Establishment and operation of national registry

(a)

In general

Except as provided in subsection (b), not later than July 1 of the year immediately prior to the first calendar year in which an annual tonnage limitation on the emission of greenhouse gases applies under section 811(b), the Administrator shall promulgate regulations to establish, operate, and maintain a national registry through which the Administrator shall—

(1)

record allocations of allowances and the issuance of offset credits or early reduction credits;

(2)

track transfers of credits;

(3)

retire all credits used for compliance;

(4)

subject to subsection (b), maintain transparent availability of registry information to the public, including the quarterly reports submitted under section 842(a);

(5)

prepare an annual assessment of the emission data in the quarterly reports submitted under section 842(a); and

(6)

take such action as is necessary to maintain the integrity of the registry, including adjustments to correct for—

(A)

errors or omissions in the reporting of data; and

(B)

the prevention of counterfeiting, double-counting, multiple registrations, multiple sales, and multiple retirements of credits.

(b)

Exception to Public Availability of Data

(1)

In general

Subsection (a)(4) shall not apply in any case in which the Administrator, in consultation with the Secretary of Defense, determines that publishing or otherwise making available information in accordance with that paragraph poses a risk to national security.

(2)

Statement of reasons

In a case described in paragraph (1), the Administrator shall publish a description of the determination and the reasons for the determination.

842.

Monitoring and reporting

(a)

Requirements

Each owner or operator of a covered entity, or to the extent applicable, the greenhouse gas authorized account representative for the covered entity, shall—

(1)

comply with the monitoring, recordkeeping, and reporting requirements of part 75 of title 40, Code of Federal Regulations (or successor regulations); and

(2)

submit to the Administrator electronic quarterly reports that describe the greenhouse gas mass emission data, fuel input data, and electricity output data for the covered entity.

(b)

Biomass cofiring

Not later than 18 months after the date of enactment of this title, the Administrator shall promulgate regulations that provide monitoring, recordkeeping, and reporting requirements for biomass cofiring at covered entities.

.

(b)

Conforming amendments

(1)

Federal enforcement

Section 113 of the Clean Air Act (42 U.S.C. 7413) is amended—

(A)

in subsection (a)(3), by striking or title VI, and inserting title VI, or title VII,;

(B)

in subsection (b)—

(i)

by redesignating paragraphs (1) through (3) as subparagraphs (A) through (C), respectively, and indenting the subparagraphs appropriately;

(ii)

by striking The Administrator shall and inserting the following:

(1)

In general

The Administrator shall

;

(iii)

in paragraph (1) (as designated by clause (ii)), in the matter preceding subparagraph (A) (as redesignated by clause (i)), by striking or a major stationary source and inserting a major stationary source, or a covered entity under title VII; and

(iv)

in subparagraph (B) (as redesignated by clause (i)), by striking or title VI and inserting title VI, or title VII;

(v)

in the matter following subparagraph (C) of paragraph (1) (as designated by clauses (i) and (ii))—

(I)

by striking Any action and inserting the following:

(2)

Judicial enforcement

(A)

In general

Any action

;

(II)

by striking Notice and inserting the following:

(B)

Notice

Notice

; and

(III)

by striking In the case and inserting the following:

(C)

Actions brought by administrator

In the case

;

(C)

in subsection (c)—

(i)

in the first sentence of paragraph (1), by striking or title VI (relating to stratospheric ozone control), and inserting title VI (relating to stratospheric ozone control), or title VII (relating to global warming pollution emission reductions),; and

(ii)

in the first sentence of paragraph (3), by striking or VI and inserting VI, or VII;

(D)

in subsection (d)(1)(B), by striking or VI and inserting VI, or VII; and

(E)

in subsection (f), in the first sentence, by striking or VI and inserting VI, or VII.

(2)

Inspections, monitoring, and entry

Section 114(a) of the Clean Air Act (42 U.S.C. 7414(a)) is amended by striking section 112, and all that follows through (ii) and inserting the following: section 112, any regulation of solid waste combustion under section 129, or any regulation of greenhouse gas emissions under title VII, (ii).

(3)

Administrative proceedings and judicial review

Section 307 of the Clean Air Act (42 U.S.C. 7607) is amended—

(A)

in subsection (a), by striking , or section 306 and inserting section 306, or title VII;

(B)

in subsection (b)(1)—

(i)

by striking section 111,, and inserting section 111,;

(ii)

by striking section 120, each place it appears and inserting section 120, any action under title VII,; and

(iii)

by striking 112,, and inserting 112,; and

(C)

in subsection (d)(1)—

(i)

by striking subparagraph (S);

(ii)

by redesignating the second subparagraph (N) and subparagraphs (O) through (R) as subparagraphs (O), (P), (Q), (R), and (S), respectively;

(iii)

by redesignating subparagraphs (T) and (U) as subparagraphs (U) and (V), respectively; and

(iv)

by inserting after subparagraph (S) (as redesignated by clause (ii)) the following:

(T)

the promulgation or revision of any regulation under title VII,

.

(4)

Unavailability of emissions data

Section 412(d) of the Clean Air Act (42 U.S.C. 7651k(d)) is amended in the first sentence—

(A)

by inserting or title VII after under subsection (a); and

(B)

by inserting or title VII after this title.

B

Climate change research initiatives

711.

Research grants through National Science Foundation

Section 105 of the Global Change Research Act of 1990 (15 U.S.C. 2935) is amended—

(1)

by redesignating subsection (c) as subsection (d); and

(2)

by inserting after subsection (b) the following:

(c)

Research Grants

(1)

List of priority research areas

The Committee shall develop a list of priority areas for research and development on climate change that are not being adequately addressed by Federal agencies.

(2)

Transmission of list

The Director of the Office of Science and Technology Policy shall submit the list developed under paragraph (1) to the National Science Foundation.

(3)

Authorization of appropriations

There are authorized to be appropriated to the National Science Foundation such sums as are necessary to carry out this subsection, to be made available through the Science and Technology Policy Institute, for research in the priority areas.

.

712.

Abrupt climate change research

(a)

In general

The Secretary of Commerce, acting through the National Oceanic and Atmospheric Administration, shall carry out a program of scientific research on abrupt climate change designed to provide timely warnings of the potential likelihood, magnitude, and consequences of, and measures to avoid, abrupt human-induced climate change.

(b)

Authorization of appropriations

There are authorized to be appropriated to the Secretary of Commerce such sums as are necessary to carry out this section.

713.

Development of new measurement technologies

(a)

In general

The Administrator of the Environmental Protection Agency shall carry out a program to develop, with technical assistance from appropriate Federal agencies, innovative standards and measurement technologies to calculate greenhouse gas emissions or reductions for which no accurate, reliable, low-cost measurement technology exists.

(b)

Administration

The program shall include technologies (including remote sensing technologies) to measure carbon changes and other greenhouse gas emissions and reductions from agriculture, forestry, wetlands, and other land use practices.

(c)

Authorization of appropriations

There are authorized to be appropriated to the Administrator such sums as are necessary to carry out this section.

714.

Technology development and diffusion

(a)

In general

The Director of the National Institute of Standards and Technology, acting through the Manufacturing Extension Partnership program, may develop a program to promote the use, by small manufacturers, of technologies and techniques that result in reduced emissions of greenhouse gases or increased sequestration of greenhouse gases.

(b)

Authorization of appropriations

There are authorized to be appropriated to the Director of the National Institute of Standards and Technology such sums as are necessary to carry out this section.

715.

Public land

(a)

In general

Not later than 3 years after the date of enactment of this Act, the Secretary of Agriculture and the Secretary of the Interior shall prepare a joint assessment or separate assessments setting forth recommendations for increased sequestration of greenhouse gases and reduction of greenhouse gas emissions on public land that is—

(1)

managed forestland;

(2)

managed rangeland or grassland; or

(3)

protected land, including national parks and designated wilderness areas.

(b)

Authorization of appropriations

There are authorized to be appropriated to the Secretary of Agriculture and the Secretary of the Interior such sums as are necessary to carry out this section.

716.

Sea level rise from polar ice sheet melting

(a)

In general

The Secretary of Commerce, acting through the National Oceanic and Atmospheric Administration and in cooperation with the Administrator of the National Aeronautics and Space Administration, shall carry out a program of scientific research to support modeling and observations into the potential role of the Greenland, west Antarctic, and east Antarctic ice sheets in any future increase in sea levels.

(b)

Authorization of appropriations

There are authorized to be appropriated to the Secretary of Commerce and the Administrator of the National Aeronautics and Space Administration such sums as are necessary to carry out this section.

VIII

Offsets

A

Denial of oil and gas tax benefits

801.

Short title

This subtitle may be cited as the Ending Subsidies for Big Oil Act of 2007.

802.

Denial of deduction for income attributable to domestic production of oil, natural gas, or primary products thereof

(a)

In general

Subparagraph (B) of section 199(c)(4) of the Internal Revenue Code of 1986 (relating to exceptions) is amended by striking or at the end of clause (ii), by striking the period at the end of clause (iii) and inserting , or, and by inserting after clause (iii) the following new clause:

(iv)

the sale, exchange, or other disposition of oil, natural gas, or any primary product thereof.

.

(b)

Primary product

Section 199(c)(4)(B) of such Code is amended by adding at the end the following flush sentence:

For purposes of clause (iv), the term primary product has the same meaning as when used in section 927(a)(2)(C), as in effect before its repeal.

.

(c)

Conforming amendments

Section 199(c)(4) of such Code is amended—

(1)

in subparagraph (A)(i)(III) by striking electricity, natural gas, and inserting electricity, and

(2)

in subparagraph (B)(ii) by striking electricity, natural gas, and inserting electricity.

(d)

Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2007.

803.

7-year amortization of geological and geophysical expenditures for certain major integrated oil companies

(a)

In general

Subparagraph (A) of section 167(h)(5) of the Internal Revenue Code of 1986 (relating to special rule for major integrated oil companies) is amended by striking 5-year and inserting 7-year.

(b)

Effective date

The amendment made by this section shall apply to amounts paid or incurred after the date of the enactment of this Act.

B

Royalties under offshore oil and gas leases

811.

Short title

This title may be cited as the Royalty Relief for American Consumers Act of 2007.

812.

Price thresholds for royalty suspension provisions

The Secretary of the Interior shall agree to a request by any lessee to amend any lease issued for any Central and Western Gulf of Mexico tract during the period of January 1, 1998, through December 31, 1999, to incorporate price thresholds applicable to royalty suspension provisions, that are equal to or less than the price thresholds described in clauses (v) through (vii) of section 8(a)(3)(C) of the Outer Continental Shelf Lands Act (43 U.S.C. 1337(a)(3)(C)). Any amended lease shall impose the new or revised price thresholds effective October 1, 2006. Existing lease provisions shall prevail through September 30, 2006.

813.

Clarification of authority to impose price thresholds for certain lease sales

Congress reaffirms the authority of the Secretary of the Interior under section 8(a)(1)(H) of the Outer Continental Shelf Lands Act (43 U.S.C. 1337(a)(1)(H)) to vary, based on the price of production from a lease, the suspension of royalties under any lease subject to section 304 of the Outer Continental Shelf Deep Water Royalty Relief Act (Public Law 104–58; 43 U.S.C. 1337 note).

814.

Eligibility for new leases and the transfer of leases; conservation of resources fees

(a)

Issuance of new leases

(1)

In general

The Secretary shall not issue any new lease that authorizes the production of oil or natural gas in the Gulf of Mexico under the Outer Continental Shelf Lands Act (43 U.S.C. 1331 et seq.) to a person described in paragraph (2) unless—

(A)

the person has renegotiated each covered lease with respect to which the person is a lessee, to modify the payment responsibilities of the person to include price thresholds that are equal to or less than the price thresholds described in clauses (v) through (vii) of section 8(a)(3)(C) of the Outer Continental Shelf Lands Act (43 U.S.C. 1337(a)(3)(C)); or

(B)

the person has—

(i)

paid all fees established by the Secretary under subsection (b) that are due with respect to each covered lease for which the person is a lessee; or

(ii)

entered into an agreement with the Secretary under which the person is obligated to pay such fees.

(2)

Persons described

A person referred to in paragraph (1) is a person that—

(A)

is a lessee that—

(i)

holds a covered lease on the date on which the Secretary considers the issuance of the new lease; or

(ii)

was issued a covered lease before the date of enactment of this Act, but transferred the covered lease to another person or entity (including a subsidiary or affiliate of the lessee) after the date of enactment of this Act; or

(B)

any other person or entity who has any direct or indirect interest in, or who derives any benefit from, a covered lease;

(3)

Multiple lessees

(A)

In general

For purposes of paragraph (1), if there are multiple lessees that own a share of a covered lease, the Secretary may implement separate agreements with any lessee with a share of the covered lease that modifies the payment responsibilities with respect to the share of the lessee to include price thresholds that are equal to or less than the price thresholds described in clauses (v) through (vii) of section 8(a)(3)(C) of the Outer Continental Shelf Lands Act (43 U.S.C. 1337(a)(3)(C)).

(B)

Treatment of share as covered lease

Beginning on the effective date of an agreement under subparagraph (A), any share subject to the agreement shall not constitute a covered lease with respect to any lessees that entered into the agreement.

(b)

Conservation of resources fees

(1)

In general

Not later than 60 days after the date of enactment of this Act, the Secretary of the Interior by regulation shall establish—

(A)

a conservation of resources fee for producing Federal oil and gas leases in the Gulf of Mexico; and

(B)

a conservation of resources fee for nonproducing Federal oil and gas leases in the Gulf of Mexico.

(2)

Producing lease fee terms

The fee under paragraph (1)(A)—

(A)

subject to subparagraph (C), shall apply to covered leases that are producing leases;

(B)

shall be set at $9 per barrel for oil and $1.25 per million Btu for gas, respectively, in 2005 dollars; and

(C)

shall apply only to production of oil or gas occurring—

(i)

in any calendar year in which the arithmetic average of the daily closing prices for light sweet crude oil on the New York Mercantile Exchange (NYMEX) exceeds $34.73 per barrel for oil and $4.34 per million Btu for gas in 2005 dollars; and

(ii)

on or after October 1, 2006.

(3)

Nonproducing lease fee terms

The fee under paragraph (1)(B)—

(A)

subject to subparagraph (C), shall apply to leases that are nonproducing leases;

(B)

shall be set at $3.75 per acre per year in 2005 dollars; and

(C)

shall apply on and after October 1, 2006.

(4)

Treatment of receipts

Amounts received by the United States as fees under this subsection shall be treated as offsetting receipts.

(c)

Transfers

A lessee or any other person who has any direct or indirect interest in, or who derives a benefit from, a lease shall not be eligible to obtain by sale or other transfer (including through a swap, spinoff, servicing, or other agreement) any covered lease, the economic benefit of any covered lease, or any other lease for the production of oil or natural gas in the Gulf of Mexico under the Outer Continental Shelf Lands Act (43 U.S.C. 1331 et seq.), unless—

(1)

the lessee or other person has—

(A)

renegotiated all covered leases of the lessee or other person; and

(B)

entered into an agreement with the Secretary to modify the terms of all covered leases of the lessee or other person to include limitations on royalty relief based on market prices that are equal to or less than the price thresholds described in clauses (v) through (vii) of section 8(a)(3)(C) of the Outer Continental Shelf Lands Act (43 U.S.C. 1337(a)(3)(C)); or

(2)

the lessee or other person has—

(A)

paid all fees established by the Secretary under subsection (b) that are due with respect to each covered lease for which the person is a lessee; or

(B)

entered into an agreement with the Secretary under which the person is obligated to pay such fees.

(d)

Definitions

In this section—

(1)

Covered lease

The term covered lease means a lease for oil or gas production in the Gulf of Mexico that is—

(A)

in existence on the date of enactment of this Act;

(B)

issued by the Department of the Interior under section 304 of the Outer Continental Shelf Deep Water Royalty Relief Act (43 U.S.C. 1337 note; Public Law 104–58); and

(C)

not subject to limitations on royalty relief based on market price that are equal to or less than the price thresholds described in clauses (v) through (vii) of section 8(a)(3)(C) of the Outer Continental Shelf Lands Act (43 U.S.C. 1337(a)(3)(C)).

(2)

Lessee

The term lessee includes any person or other entity that controls, is controlled by, or is in or under common control with, a lessee.

(3)

Secretary

The term Secretary means the Secretary of the Interior.

815.

Repeal of certain taxpayer subsidized royalty relief for the oil and gas industry

(a)

Repeal of provisions of Energy Policy Act of 2005

The following provisions of the Energy Policy Act of 2005 (Public Law 109–58) are repealed:

(1)

Section 344 (42 U.S.C. 15904; relating to incentives for natural gas production from deep wells in shallow waters of the Gulf of Mexico).

(2)

Section 345 (42 U.S.C. 15905; relating to royalty relief for deep water production in the Gulf of Mexico).

(3)

Subsection (i) of section 365 (42 U.S.C. 15924; relating to the prohibition on drilling-related permit application cost recovery fees).

(b)

Provisions relating to Planning Areas offshore Alaska

Section 8(a)(3)(B) of the Outer Continental Shelf Lands Act (43 U.S.C. 1337(a)(3)(B)) is amended by striking and in the Planning Areas offshore Alaska after West longitude.

(c)

Provisions relating to Naval Petroleum Reserve in Alaska

Section 107 of the Naval Petroleum Reserves Production Act of 1976 (as transferred, redesignated, moved, and amended by section 347 of the Energy Policy Act of 2005 (119 Stat. 704)) is amended—

(1)

in subsection (i) by striking paragraphs (2) through (6); and

(2)

by striking subsection (k).

C

Strategic energy efficiency and renewable reserve

821.

Strategic Energy Efficiency and Renewables Reserve for investments in renewable energy and energy efficiency

(a)

In general

For budgetary purposes, the additional Federal receipts by reason of the enactment of this Act shall be held in a separate account to be known as the Strategic Energy Efficiency and Renewables Reserve. The Strategic Energy Efficiency and Renewables Reserve shall be available to offset the cost of subsequent legislation—

(1)

to accelerate the use of clean domestic renewable energy resources and alternative fuels;

(2)

to promote the utilization of energy-efficient products and practices and conservation; and

(3)

to increase research, development, and deployment of clean renewable energy and efficiency technologies.

(b)

Procedure for adjustments

(1)

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 subsection (a) in excess of the amounts provided for those purposes for fiscal year 2007, the chairman of the Committee on the Budget of the applicable House of Congress shall make the adjustments set forth in paragraph (2) for the amount of new budget authority and outlays in that measure and the outlays flowing from that budget authority.

(2)

Matters to be adjusted

The adjustments referred to in paragraph (1) are to be made to—

(A)

the discretionary spending limits, if any, set forth in the appropriate concurrent resolution on the budget;

(B)

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

(C)

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.

(3)

Amounts of adjustments

The adjustments referred to in paragraphs (1) and (2) 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.