H.R. 6709 (110th): National Conservation, Environment, and Energy Independence Act

110th Congress, 2007–2009. Text as of Jul 31, 2008 (Introduced).

Status & Summary | PDF | Source: GPO

I

110th CONGRESS

2d Session

H. R. 6709

IN THE HOUSE OF REPRESENTATIVES

July 31, 2008

(for himself, Mr. Abercrombie, Mr. Costa, Mr. Burton of Indiana, Mr. Gene Green of Texas, Mr. Brown of South Carolina, Mr. Lampson, Mr. Bishop of Utah, Mr. Walz of Minnesota, Mr. Hayes, Mr. Foster, Mrs. Capito, Mr. Boren, Mrs. Drake, Mr. Cuellar, Mr. Tim Murphy of Pennsylvania, Mr. Altmire, Mr. Smith of Nebraska, Mr. McIntyre, Mr. Sali, Mrs. Boyda of Kansas, Mr. Lamborn, Mr. Ortiz, Mr. Rogers of Kentucky, Ms. Herseth Sandlin, Mr. Kingston, Mr. Holden, Mr. Miller of Florida, Mr. Cazayoux, Mr. Lewis of California, Mr. Barrow, Mr. Wilson of South Carolina, Mr. Kanjorski, Mr. Kline of Minnesota, Mr. Marshall, Mr. Mica, Mr. Donnelly, Mr. McCarthy of California, Mr. Lincoln Davis of Tennessee, Mr. Terry, Mr. Patrick J. Murphy of Pennsylvania, Mr. Souder, Mr. Bishop of Georgia, Mr. Pence, Mr. Melancon, Mr. Broun of Georgia, Mr. Bartlett of Maryland, and Mr. Taylor) introduced the following bill; which was referred to the Committee on Natural Resources, and in addition to the Committees on Energy and Commerce, Ways and Means, Science and Technology, Education and Labor, the Budget, and Rules, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

A BILL

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

1.

Short title

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

2.

Table of contents

The table of contents for this Act is as follows:

Sec. 1. Short title.

Sec. 2. Table of contents.

Title I—Offshore and Onshore Leasing and Other Energy Production

Sec. 101. Termination of prohibitions on expenditures for, and withdrawals from, offshore and onshore leasing and other limitations on energy production.

Sec. 102. Outer Continental Shelf leasing program.

Sec. 103. Sharing of revenues.

Sec. 104. Policies regarding buying and building American.

Sec. 105. Elimination of other restrictions on use of energy alternatives.

Title II—Cleaner Energy Production and Energy Conservation Incentives

Sec. 201. Extension of renewable energy credit.

Sec. 202. Extension of credit for alternative fuel vehicles.

Sec. 203. Extension of alternative fuel vehicle refueling property credit.

Sec. 204. Extension of credit for energy efficient appliances.

Sec. 205. Extension of credit for nonbusiness energy property.

Sec. 206. Extension of credit for residential energy efficient property.

Sec. 207. Extension of new energy efficient home credit.

Sec. 208. Extension of energy efficient commercial buildings deduction.

Sec. 209. Extension of energy credit.

Sec. 210. Extension of credit for clean renewable energy bonds.

Sec. 211. Extension of credits for biodiesel and renewable diesel.

Sec. 212. Credit for plug-in hybrid vehicles.

Title III—Modifying the Strategic Petroleum Reserve and Funding Conservation and Energy Research and Development

Sec. 301. Findings.

Sec. 302. Definitions.

Sec. 303. Objectives.

Sec. 304. Modification of the Strategic Petroleum Reserve.

Sec. 305. Energy Independence and Security Fund.

I

Offshore and Onshore Leasing and Other Energy Production

101.

Termination of prohibitions on expenditures for, and withdrawals from, offshore and onshore leasing and other limitations on energy production

(a)

Prohibitions on Expenditures

All provisions of Federal law that prohibit the expenditure of appropriated funds to conduct natural gas, oil, oil shale, and other energy production leasing and preleasing activities for Federal lands shall have no force or effect with respect to such activities.

(b)

Revocation Withdrawals

All withdrawals of Federal submerged lands of the Outer Continental Shelf from leasing, including withdrawals by the President under the authority of section 12(a) of the Outer Continental Shelf Lands Act (43 U.S.C. 1341(a)), are hereby revoked and are no longer in effect with respect to the leasing of areas for exploration for, and development and production of natural gas and oil.

(c)

Gulf of Mexico oil and gas

Section 104 of division C of the Tax Relief and Health Care Act of 2006 (Public Law 109–432; 120 Stat. 3003) is repealed.

(d)

Oil shale

Section 433 of the Department of the Interior, Environment, and Related Agencies Appropriations Act, 2008 (division F of Public Law 110–161; 121 Stat. 2152) is repealed.

102.

Outer continental shelf leasing program

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

10.

Moratoria area and State disapproval requirement with respect to leasing

(a)

Prohibition on leasing

The Secretary may not issue any lease authorizing exploration for, or development of, natural gas or oil in any area of the outer Continental Shelf that is located within 25 miles of the coastline of a State.

(b)

State disapproval authority

The Secretary may not issue any lease authorizing exploration for, or development of, natural gas or oil in any area of the outer Continental Shelf that is located more than 25 miles and less than 50 miles from the coastline of a State if the State has enacted, within the 1-year period beginning on the date of the enactment of the National Conservation, Environment, and Energy Independence Act, a law disapproving of the issuance of such leases by the Secretary.

(c)

Military operations

The Secretary shall consult with the Secretary of Defense regarding military operations needs in the Outer Continental Shelf. The Secretary shall work with the Secretary of Defense to resolve any conflicts that might arise between such operations and leasing under this section. If the Secretaries are unable to resolve all such conflicts, any unresolved issues shall be referred by the Secretaries to the President in a timely fashion for immediate resolution.

.

103.

Sharing of revenues

(a)

In General

Section 8(g) of the Outer Continental Shelf Lands Act (43 U.S.C. 1337(g)) is amended—

(1)

in paragraph (2) by striking Notwithstanding and inserting Except as provided in paragraph (6), and notwithstanding;

(2)

by redesignating paragraphs (6) and (7) as paragraphs (8) and (9); and

(3)

by inserting after paragraph (5) the following:

(6)

Bonus bids and royalties under qualified leases

(A)

New leases

Of amounts received by the United States as bonus bids, royalties, rentals, and other sums collected under any qualified lease on submerged lands made available for leasing under this Act by the enactment of the National Conservation, Environment, and Energy Independence Act that are located within the seaward boundaries of a State established under section 4(a)(2)(A)—

(i)

30 percent shall be deposited in the general fund of the Treasury;

(ii)

30 percent shall be paid to the States that are producing States with respect to those submerged lands;

(iii)

8 percent shall be deposited in the Conservation Reserve established by paragraph (7);

(iv)

10 percent shall be deposited in the Environment Restoration Reserve established by paragraph (7);

(v)

15 percent shall be deposited in the Renewable Energy Reserve established by paragraph (7);

(vi)

5 percent shall be deposited in the Carbon Capture/Sequestration and Nuclear Waste Reserve Established by paragraph (7); and

(vii)

2 percent shall be available to the Secretary of Health and Human Services for carrying out the Low-Income Home Energy Assistance Act of 1981 (42 U.S.C. 8621, et seq.).

(B)

Leased tract that lies partially within the seaward boundaries of a state

In the case of a leased tract that lies partially within the seaward boundaries of a State, the amounts of bonus bids and royalties from such tract that are subject to subparagraph (A)(ii) with respect to such State shall be a percentage of the total amounts of bonus bids and royalties from such tract that is equivalent to the total percentage of surface acreage of the tract that lies within such seaward boundaries.

(C)

Use of payments to States

Amounts paid to a State under subparagraph (A)(ii) shall be used by the State for one or more of the following:

(i)

Education.

(ii)

Transportation.

(iii)

Coastal restoration, environmental restoration, and beach replenishment.

(iv)

Energy infrastructure.

(v)

Renewable energy development.

(vi)

Energy efficiency and conservation.

(vii)

Any other purpose determined by State law.

(D)

Definitions

In this paragraph:

(i)

Adjacent state

The term Adjacent State means, with respect to any program, plan, lease sale, leased tract or other activity, proposed, conducted, or approved pursuant to the provisions of this Act, any State the laws of which are declared, pursuant to section 4(a)(2), to be the law of the United States for the portion of the outer Continental Shelf on which such program, plan, lease sale, leased tract, or activity appertains or is, or is proposed to be, conducted.

(ii)

Adjacent zone

The term adjacent zone means, with respect to any program, plan, lease sale, leased tract, or other activity, proposed, conducted, or approved pursuant to the provisions of this Act, the portion of the outer Continental Shelf for which the laws of a particular adjacent State are declared, pursuant to section 4(a)(2), to be the law of the United States.

(iii)

Producing State

The term producing State means an Adjacent State having an adjacent zone containing leased tracts from which are derived bonus bids and royalties under a lease under this Act.

(iv)

State

The term State includes Puerto Rico and the other territories of the United States.

(v)

Qualified lease

The term qualified lease means a natural gas or oil lease made available under this Act granted after the date of the enactment of the National Conservation, Environment, and Energy Independence Act, for an area that is available for leasing as a result of enactment of section 101 of that Act.

(E)

Application

This paragraph shall apply to bonus bids and royalties received by the United States under qualified leases after September 30, 2008.

(7)

Establishment of reserve accounts

(A)

In general

For budgetary purposes, there is established as a separate account to receive deposits under paragraph (6)(A)—

(i)

the Conservation Reserve, to offset the cost of legislation enacted after the date of the enactment of the National Conservation, Environment, and Energy Independence Act for conservation programs, such as weatherization, and conservation tax credits and deductions for energy efficiency in the residential, commercial, industrial and public sectors, including Conservation Districts;

(ii)

the Environment Restoration Reserve, to offset the cost of legislation enacted after the date of the enactment of the National Conservation, Environment, and Energy Independence Act to conduct restoration activities to improve the overall health of the ecosystems primarily or entirely within wildlife refuges, national parks, lakes, bays, rivers, and streams, including the Great Lakes, the Chesapeake and Delaware Bays, the San Francisco Bay/Sacramento San Joaquin Bay Delta, the Florida Everglades, New York Harbor, the Colorado River Basin, and Intracoastal Waterways and inlets that serve them;

(iii)

the Renewable Energy Reserve, to offset the cost of legislation enacted after the date of the enactment of the National Conservation, Environment, and Energy Independence Act to accelerate the use of cleaner domestic energy resources and alternative fuels; to promote the utilization of energy-efficient products and practices; and to increase research, development, and deployment of clean renewable energy and efficiency technologies and job training programs for those purposes; and

(iv)

the Carbon Capture and Sequestration Reserve, to offset the cost of legislation enacted after the date of the enactment of the National Conservation, Environment, and Energy Independence Act to promote research and development projects associated with carbon capture and storage in the production of liquid transportation fuels, synthetic natural gas, chemical feedstocks, and electricity, and for the disposition and recycling/reprocessing of nuclear waste from nuclear power plants.

(B)

Procedure for adjustments

(i)

Budget committee chairman

After the reporting of a bill or joint resolution, or the offering of an amendment thereto or the submission of a conference report thereon, providing funding for the purposes set forth in clause (i), (ii), (iii), or (iv) of subparagraph (A) in excess of the amount of the deposits under paragraph (6)(A) for those purposes for fiscal year 2009, the chairman of the Committee on the Budget of the applicable House of Congress shall make the adjustments set forth in clause (ii) for the amount of new budget authority and outlays in that measure and the outlays flowing from that budget authority.

(ii)

Matters to be adjusted

The adjustments referred to in clause (i) are to be made to—

(I)

the discretionary spending limits, if any, set forth in the appropriate concurrent resolution on the budget;

(II)

the allocations made pursuant to the appropriate concurrent resolution on the budget pursuant to section 302(a) of the Congressional Budget Act of 1974; and

(III)

the budget aggregates contained in the appropriate concurrent resolution on the budget as required by section 301(a) of the Congressional Budget Act of 1974.

(iii)

Amounts of adjustments

The adjustments referred to in clauses (i) and (ii) shall not exceed the receipts estimated by the Congressional Budget Office that are attributable to this Act for the fiscal year in which the adjustments are made.

(C)

Expenditures only by Secretary of the Interior in consultation

Legislation shall not be treated as legislation referred to in subparagraph (A) unless any expenditure under such legislation for a purpose referred to in that subparagraph may be made only after consultation with the Administrator of the Environmental Protection Agency, the Administrator of the National Oceanic and Atmospheric Administration, the Secretary of the Army acting through the Corps of Engineers, and, as appropriate, the Secretary of State.

(8)

Maintenance of effort by States

The Secretary of the Interior, the Secretary of Health and Human Services, the Secretary of Energy, and any other Federal official with authority to implement legislation referred to in paragraph (6)(A) shall ensure that financial assistance provided to a State under that legislation for any purpose with amounts made available under this subsection or in any legislation with respect to which paragraph (7) applies supplement, and do not replace, the amounts expended by the State for that purpose before the date of the enactment of the National Conservation, Environment, and Energy Independence Act

.

(b)

Establishment of State Seaward Boundaries

Section 4(a)(2)(A) of the Outer Continental Shelf Lands Act (43 U.S.C. 1333(a)(2)(A)) is amended in the first sentence by striking , and the President and all that follows through the end of the sentence and inserting the following: . Such extended lines are deemed to be as indicated on the maps for each Outer Continental Shelf region entitled Alaska OCS Region State Adjacent Zone and OCS Planning Areas, Pacific OCS Region State Adjacent Zones and OCS Planning Areas, Gulf of Mexico OCS Region State Adjacent Zones and OCS Planning Areas, and Atlantic OCS Region State Adjacent Zones and OCS Planning Areas, all of which are dated September 2005 and on file in the Office of the Director, Minerals Management Service. The preceding sentence shall not apply with respect to the treatment under section 105 of the Gulf of Mexico Energy Security Act of 2006 (title I of division C of Public Law 109–432) of qualified outer Continental Shelf revenues deposited and disbursed under subsection (a)(2) of that section..

104.

Policies regarding buying and building American

(a)

Intent of Congress

It is the intent of the Congress that this Act, among other things, result in a healthy and growing American industrial, manufacturing, transportation, and service sector employing the vast talents of America’s workforce to assist in the development of energy from domestic sources. Moreover, the Congress intends to monitor the deployment of personnel and material onshore and offshore to encourage the development of American technology and manufacturing to enable United States workers to benefit from this Act by good jobs and careers, as well as the establishment of important industrial facilities to support expanded access to American resources.

(b)

Safeguard for Extraordinary Ability

Section 30(a) of the Outer Continental Shelf Lands Act (43 U.S.C. 1356(a)) is amended in the matter preceding paragraph (1) by striking regulations which and inserting regulations that shall be supplemental and complimentary with and under no circumstances a substitution for the provisions of the Constitution and laws of the United States extended to the subsoil and seabed of the outer Continental Shelf pursuant to section 4 of this Act, except insofar as such laws would otherwise apply to individuals who have extraordinary ability in the sciences, arts, education, or business, which has been demonstrated by sustained national or international acclaim, and that.

105.

Elimination of other restrictions on use of energy alternatives

(a)

Renewable biomass

Section 211(o)(1)(I) of the Clean Air Act (42 U.S.C. 7545(o)(1)(I)) is amended effective January 1, 2009—

(1)

in clause (ii), by striking on non-federal land; and

(2)

in clause (iv), by striking that are from non-federal forestlands, including forestlands and inserting from forestlands, including those on public lands and those.

(b)

Alternative fuels

Section 526 of the Energy Independence and Security Act of 2007 (42 U.S.C. 17142) is repealed.

(c)

Limitation on Number of new Qualified Hybrid Advanced Lean-Burn Technology Vehicles

Section 30B of the Internal Revenue Code of 1986 is amended by striking subsection (f).

II

Cleaner Energy Production and Energy Conservation Incentives

201.

Extension of renewable energy credit

Each of the following provisions of section 45(d) of the Internal Revenue Code of 1986 (relating to qualified facilities) is amended by striking January 1, 2009 and inserting January 1, 2013:

(1)

Paragraph (1) (relating to wind facility).

(2)

Clauses (i) and (ii) of paragraph (2)(A) (relating to closed-loop biomass facility).

(3)

Clauses (i)(I) and (ii) of paragraph (3)(A) (relating to (open-loop biomass facility).

(4)

Paragraph (4) (relating to geothermal energy facility).

(5)

Paragraph (5) (relating to small irrigation power facility).

(6)

Paragraph (6) (relating to landfill gas facilities).

(7)

Paragraph (7) (relating to trash combustion facilities).

(8)

Paragraph (8) (relating to refined coal production facility).

(9)

Subparagraphs (A) and (B) of paragraph (9) (relating to qualified hydropower facility).

202.

Extension of credit for alternative fuel vehicles

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

203.

Extension of alternative fuel vehicle refueling property credit

(a)

In general

Paragraph (2) of section 30C(g) of such Code (relating to termination) is amended by striking December 31, 2009 and inserting December 31, 2010.

(b)

Alternative fuels

Paragraph (1) of section 30C(g) of the Internal Revenue Code of 1986 is amended by striking hydrogen, inserting hydrogen or alternative fuels (as defined in section 30B(e)(4)(B))..

204.

Extension of credit for energy efficient appliances

(a)

In general

Subsection (b) of section 45M of the Internal Revenue Code of 1986 (relating to applicable amount) is amended by striking calendar year 2006 or 2007 each place it appears in paragraphs (1)(A)(i), 1(1)(B)(i), (1)(C)(ii)(I), and (1)(C)(iii)(I), and inserting calendar year 2006, 2007, 2008, 2009, 2010, 2011, 2012, or 2013.

(b)

Restart of credit limitation

Paragraph (1) of section 45M(e) of such Code (relating to aggregate credit amount allowed) is amended by inserting beginning after December 31, 2007 after for all prior taxable years.

(c)

Effective date

The amendments made by this section shall apply to appliances produced after December 31, 2007.

205.

Extension of credit for nonbusiness energy property

(a)

In general

Section 25C(g) of the Internal Revenue Code of 1986 (relating to termination) is amended by striking December 31, 2007 and inserting December 31, 2013.

(b)

Effective date

The amendment made by this section shall apply to property placed in service after December 31, 2007.

206.

Extension of credit for residential energy efficient property

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

207.

Extension of new energy efficient home credit

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

208.

Extension of energy efficient commercial buildings deduction

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

209.

Extension of energy credit

(a)

Solar energy property

Paragraphs (2)(A)(i)(II) and (3)(A)(ii) of section 48(a) of the Internal Revenue Code of 1986 (relating to energy credit) are each amended by striking January 1, 2009 and inserting January 1, 2017.

(b)

Fuel cell property

Subparagraph (E) of section 48(c)(1) of such Code (relating to qualified fuel cell property) is amended by striking December 31, 2008 and inserting December 31, 2016.

(c)

Microturbine property

Subparagraph (E) of section 48(c)(2) of such Code (relating to qualified microturbine property) is amended by striking December 31, 2008 and inserting December 31, 2013.

210.

Extension of credit for clean renewable energy bonds

(a)

Extension

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

211.

Extension of credits for biodiesel and renewable diesel

(a)

In general

Sections 40A(g), 6426(c)(6), and 6427(e)(5)(B) of the Internal Revenue Code of 1986 are each amended by striking December 31, 2008 and inserting December 31, 2013.

(b)

Effective date

The amendments made by this section shall apply to fuel produced, and sold or used, after December 31, 2008.

212.

Credit for plug-in hybrid vehicles

(a)

In general

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

30D.

Plug-in hybrid vehicles

(a)

Allowance of credit

There shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the sum of the credit amounts determined under subsection (b) with respect to each qualified plug-in hybrid vehicle placed in service by the taxpayer during the taxable year.

(b)

Per vehicle dollar limitation

(1)

In general

The amount determined under this subsection with respect to any qualified plug-in hybrid vehicle is the sum of the amounts determined under paragraphs (2) and (3) with respect to such vehicle.

(2)

Base amount

The amount determined under this paragraph is $4,000.

(3)

Battery capacity

In the case of vehicle which draws propulsion energy from a battery with not less than 5 kilowatt hours of capacity, the amount determined under this paragraph is $200, plus $200 for each kilowatt hour of capacity in excess of 5 kilowatt hours. The amount determined under this paragraph shall not exceed $2,000.

(c)

Application with other credits

(1)

Business credit treated as part of general business credit

So much of the credit which would be allowed under subsection (a) for any taxable year (determined without regard to this subsection) that is attributable to property of a character subject to an allowance for depreciation shall be treated as a credit listed in section 38(b) for such taxable year (and not allowed under subsection (a)).

(2)

Personal credit

(A)

In general

For purposes of this title, the credit allowed under subsection (a) for any taxable year (determined after application of paragraph (1)) shall be treated as a credit allowable under subpart A for such taxable year.

(B)

Limitation based on amount of tax

In the case of a taxable year to which section 26(a)(2) does not apply, the credit allowed under subsection (a) for any taxable year (determined after application of paragraph (1)) shall not exceed the excess of—

(i)

the sum of the regular tax liability (as defined in section 26(b)) plus the tax imposed by section 55, over

(ii)

the sum of the credits allowable under subpart A (other than this section and sections 23 and 25D) and section 27 for the taxable year.

(d)

Qualified plug-In hybrid vehicle

For purposes of this section—

(1)

In general

The term qualified plug-in hybrid vehicle means a motor vehicle (as defined in section 30(c)(2))—

(A)

the original use of which commences with the taxpayer,

(B)

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

(C)

which is made by a manufacturer,

(D)

which has a gross vehicle weight rating of less than 14,000 pounds,

(E)

which has received a certificate of conformity under the Clean Air Act and meets or exceeds the Bin 5 Tier II emission standard established in regulations prescribed by the Administrator of the Environmental Protection Agency under section 202(i) of the Clean Air Act for that make and model year vehicle,

(F)

which is propelled to a significant extent by an electric motor which draws electricity from a battery which—

(i)

has a capacity of not less than 4 kilowatt hours, and

(ii)

is capable of being recharged from an external source of electricity, and

(G)

which either—

(i)

is also propelled to a significant extent by other than an electric motor, or

(ii)

has a significant onboard source of electricity which also recharges the battery referred to in subparagraph (F).

(2)

Exception

The term qualified plug-in hybrid vehicle shall not include any vehicle which is not a passenger automobile or light truck if such vehicle has a gross vehicle weight rating of less than 8,500 pounds.

(3)

Other terms

The terms passenger automobile, light truck, and manufacturer have the meanings given such terms in regulations prescribed by the Administrator of the Environmental Protection Agency for purposes of the administration of title II of the Clean Air Act (42 U.S.C. 7521 et seq.).

(4)

Battery capacity

The term capacity means, with respect to any battery, the quantity of electricity which the battery is capable of storing, expressed in kilowatt hours, as measured from a 100 percent state of charge to a 0 percent state of charge.

(e)

Special rules

(1)

Basis reduction

The basis of any property for which a credit is allowable under subsection (a) shall be reduced by the amount of such credit (determined without regard to subsection (c)).

(2)

Recapture

The Secretary shall, by regulations, provide for recapturing the benefit of any credit allowable under subsection (a) with respect to any property which ceases to be property eligible for such credit.

(3)

Property used outside United States, etc., not qualified

No credit shall be allowed under subsection (a) with respect to any property referred to in section 50(b)(1) or with respect to the portion of the cost of any property taken into account under section 179.

(4)

Election not to take credit

No credit shall be allowed under subsection (a) for any vehicle if the taxpayer elects to not have this section apply to such vehicle.

(5)

Property used by tax-exempt entity; interaction with air quality and motor vehicle safety standards

Rules similar to the rules of paragraphs (6) and (10) of section 30B(h) shall apply for purposes of this section.

.

(b)

Plug-In vehicles not treated as new qualified hybrid vehicles

Section 30B(d)(3) is amended by adding at the end the following new subparagraph:

(D)

Exclusion of plug-in vehicles

Any vehicle with respect to which a credit is allowable under section 30D (determined without regard to subsection (c) thereof) shall not be taken into account under this section.

.

(c)

Credit made part of general business credit

Section 38(b) is amended by striking plus at the end of paragraph (32), by striking the period at the end of paragraph (33) and inserting ‘‘, plus’’, and by adding at the end the following new paragraph:

(34)

the portion of the plug-in hybrid vehicle credit to which section 30D(c)(1) applies.

.

(d)

Conforming amendments

(1)
(A)

Section 24(b)(3)(B), as amended by this Act, is amended by striking and 25D and inserting 25D, and 30D.

(B)

Section 25(e)(1)(C)(ii) is amended by inserting 30D, after 25D,.

(C)

Section 25B(g)(2), as amended by this Act, is amended by striking and 25D and inserting , 25D, and 30D.

(D)

Section 26(a)(1), as amended by this Act, is amended by striking and 25D and inserting 25D, and 30D.

(E)

Section 1400C(d)(2) is amended by striking and 25D and inserting 25D, and 30D.

(2)

Section 1016(a) is amended by striking and at the end of paragraph (35), by striking the period at the end of paragraph (36) and inserting , and, and by adding at the end the following new paragraph:

(37)

to the extent provided in section 30D(e)(1).

.

(3)

Section 6501(m) is amended by inserting 30D(e)(4), after 30C(e)(5),.

(4)

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

Sec. 30D. Plug-in hybrid vehicles.

.

(e)

Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2008.

III

Modifying the Strategic Petroleum Reserve and Funding Conservation and Energy Research and Development

301.

Findings

Congress finds the following:

(1)

The Strategic Petroleum Reserve (SPR) was created by Congress in 1975, to protect the Nation from any future oil supply disruptions. When the program was established, United States refiners were capable of handling light and medium crude and the make up of the SPR matched this capacity. This is not the case today.

(2)

A GAO analysis found that nearly half of the refineries considered vulnerable to supply disruptions are not compatible with the types of oil currently stored in the SPR and would be unable to maintain normal refining capacity if forced to rely on SPR oil as currently constituted, thereby reducing the effectiveness of the SPR in the event of a supply disruption. GAO concluded that the SPR should be comprised of at least 10 percent heavy crude.

(3)

This Act implements the GAO recommendation and dedicates funds received from the transactions to existing energy conservation, research, and assistance programs.

302.

Definitions

In this title—

(1)

the term light grade petroleum means crude oil with an API gravity of 35 degrees or higher;

(2)

the term heavy grade petroleum means crude oil with an API gravity of 26 degrees or lower; and

(3)

the term Secretary means the Secretary of Energy.

303.

Objectives

The objectives of this title are as follows:

(1)

To modernize the composition of the Strategic Petroleum Reserve to reflect the current processing capabilities of refineries in the United States.

(2)

To provide increased funding to accelerate conservation, energy research and development, and assistance through existing programs.

304.

Modification of the Strategic Petroleum Reserve

Notwithstanding section 161 of the Energy Policy and Conservation Act (42 U.S.C. 6241), the Secretary shall publish a plan not later than 30 days after the date of enactment of this Act to—

(1)

exchange as soon as possible light grade petroleum from the Strategic Petroleum Reserve, in an amount equal to 10 percent of the total number of barrels of crude oil in the Reserve as of the date of enactment of this Act, for an equivalent volume of heavy grade petroleum plus any additional cash bonus bids received that reflect the difference in the market value between light grade petroleum and heavy grade petroleum and the timing of deliveries of the heavy grade petroleum;

(2)

from the gross proceeds of the cash bonus bids, deposit the amount necessary to pay for the direct administrative and operational costs of the exchange into the SPR Petroleum Account established under section 167 of the Energy Policy and Conservation Act (42 U.S.C. 6247); and

(3)

deposit 90 percent of the remaining net proceeds from the exchange into the account established under section 305(a).

305.

Energy Independence and Security Fund

(a)

Establishment

There is hereby established in the Treasury of the United States the Energy Independence and Security Fund (in this section referred to as the Fund).

(b)

Administration

The Secretary shall be responsible for administering the Fund for the purpose of carrying out this section.

(c)

Deposits

The Secretary shall transfer the balance of funds in the SPR Petroleum Account on the date of enactment of this Act in excess of $10,000,000 into the Fund.

(d)

Distribution of Funds

The Secretary shall make available for obligation, without further appropriation and without fiscal year limitation, the following amounts from the Fund:

(1)

Advanced Research Projects Agency—Energy

The Secretary shall transfer $100,000,000 to the account Energy Transformation Acceleration Fund, established under section 5012(m) of the America COMPETES Act (42 U.S.C. 16538(m)), to remain available until expended. Of the funds so transferred, the Secretary shall further allocate the amounts made available for obligation as follows:

(A)

$50,000,000 shall be available for university-based research projects.

(B)

$10,000,000 shall be available for program direction expenses.

(2)

Wind energy research and development

The Secretary shall transfer $15,000,000 to the account Energy Efficiency and Renewable Energy, to remain available until expended, for necessary expenses for a program to support the development of next-generation wind turbines, including turbines capable of operating in areas with low wind speeds, as authorized in section 931(a)(2)(B) of the Energy Policy Act of 2005 (42 U.S.C. 16231(a)(2)(B)).

(3)

Solar energy research and development

The Secretary shall transfer $30,000,000 to the account Energy Efficiency and Renewable Energy, to remain available until expended, for necessary expenses for a program to accelerate the research, development, demonstration, and deployment of solar energy technologies, and public education and outreach materials pursuant to such program, as authorized by section 931(a)(2)(A) of the Energy Policy Act of 2005 (42 U.S.C. 16231(a)(2)(A)).

(4)

Low income weatherization and liheap

The Secretary shall transfer $100,000,000 to the account Weatherization Assistance Program, to remain available until expended, for necessary expenses for a program to weatherize low income housing, as authorized by section 411 of the Energy Independence and Security Act of 2007 (Public Law 110–140). The Secretary shall transfer $100,000,000 to the Secretary of Health and Human Services for distribution to States under section 2604(a) through (d) of the Low-Income Home Energy Assistance Act of 1981 (42 U.S.C. 8623(a)–(d)).

(5)

Marine and hydrokinetic renewable electric energy

The Secretary shall transfer $30,000,000 to the account Energy Efficiency and Renewable Energy, to remain available until expended, for necessary expenses for a program to accelerate the research, development, demonstration, and deployment of ocean and wave energy, including hydrokinetic renewable energy, as authorized by section 931 of the Energy Policy Act of 2005 (42 U.S.C. 16231) and section 636 of the Energy Independence and Security Act of 2007 (42 U.S.C. 17215).

(6)

Advanced vehicles research, development, and demonstration

The Secretary shall transfer $40,000,000 to the account Energy Efficiency and Renewable Energy, to remain available until expended, for necessary expenses for research, development, and demonstration on advanced, cost-effective technologies to improve the energy efficiency and environmental performance of vehicles, as authorized in section 911(a)(2)(A) of the Energy Policy Act of 2005 (42 U.S.C. 16191(a)(2)(A)).

(7)

Industrial energy efficiency research and development

The Secretary shall transfer $110,000,000 to the account Energy Efficiency and Renewable Energy, to remain available until expended, for necessary expenses for a program to accelerate the research, development, demonstration, and deployment of new technologies to improve the energy efficiency and reduce greenhouse gas emissions from industrial processes, as authorized in section 911(a)(2)(C) of the Energy Policy Act of 2005 (42 U.S.C. 16191(a)(2)(C)) and in section 452 of the Energy Independence and Security Act of 2007 (42 U.S.C. 17111).

(8)

Building and lighting energy efficiency research and development

The Secretary shall transfer $70,000,000 to the account Energy Efficiency and Renewable Energy, to remain available until expended, for necessary expenses for a program to accelerate the research, development, demonstration, and deployment of new technologies to improve the energy efficiency of and reduce greenhouse gas emissions from buildings, as authorized in section 321(g) of the Energy Independence and Security Act of 2007 (42 U.S.C. 6295 note), section 422 of the Energy Independence and Security Act of 2007 (42 U.S.C. 17082), and section 912 of the Energy Policy Act of 2005 (42 U.S.C. 16192).

(9)

Geothermal energy development

The Secretary shall transfer $30,000,000 to the account Energy Efficiency and Renewable Energy, to remain available until expended, for necessary expenses for geothermal research and development activities to be managed by the National Renewable Energy Laboratory, as authorized by sections 613, 614, 615, and 616 of the Energy Independence and Security Act of 2007 (42 U.S.C. 17192–95) and section 931(a)(2)(C) of the Energy Policy Act of 2005 (42 U.S.C. 16231(a)(2)(C)).

(10)

Smart grid technology research, development, and demonstration

The Secretary shall transfer $30,000,000 to the account Energy Efficiency and Renewable Energy, to remain available until expended, for necessary expenses for research, development, and demonstration of smart grid technologies, as authorized by section 1304 of the Energy Independence and Security Act of 2007 (42 U.S.C. 17384).

(11)

Carbon capture and storage

The Secretary shall transfer $385,000,000 to the account Fossil Energy Research and Development, to remain available until expended, for necessary expenses for a program of demonstration projects of carbon capture and storage, and for a research program to address public health, safety, and environmental impacts, as authorized by section 963 of the Energy Policy Act of 2005 (42 U.S.C. 16293) and sections 703 and 707 of the Energy Independence and Security Act of 2007 (42 U.S.C. 17251, 17255).

(12)

Nonconventional domestic natural gas production and environmental research

(A)

The Secretary shall transfer $50,000,000 to the account authorized by section 999H(e) of the Energy Policy Act of 2005 (42 U.S.C. 16378(e)), to remain available until expended.

(B)

The Secretary shall transfer $15,000,000 to the account Fossil Energy Research and Development, to remain available until expended, for necessary expenses for a program of basin-oriented assessments and public and private partnerships involving States and industry to foster the development of regional advanced technological, regulatory, and economic development strategies for the efficient and environmentally sustainable recovery and market delivery of natural gas and domestic petroleum resources within the United States, and for support for the Stripper Well Consortium.

(13)

Hydrogen research and development

The Secretary shall transfer $5,000,000 to the account Energy Efficiency and Renewable Energy, to remain available until expended, for necessary expenses for the Department of Energy’s H–Prize Program, as authorized by section 1008(f) of the Energy Policy Act of 2005 (42 U.S.C. 16396(f)).

(14)

Energy storage for transportation and electric power

(A)

The Secretary shall transfer $30,000,000 to the account Basic Energy Sciences, to remain available until expended, for necessary expenses for a program to accelerate basic research on energy storage systems to support electric drive vehicles, stationary applications, and electricity transmission and distribution, as authorized by section 641(p)(1) of the Energy Independence and Security Act of 2007 (42 U.S.C. 17231(p)(1)).

(B)

The Secretary shall transfer $70,000,000 to the account Energy Efficiency and Renewable Energy, to remain available until expended, including—

(i)

$30,000,000 for a program to accelerate applied research on energy storage systems to support electric drive vehicles, stationary applications, and electricity transmission and distribution as authorized by section 641(p)(2) of the Energy Independence and Security Act of 2007 (42 U.S.C. 17231(p)(2));

(ii)

$20,000,000 for energy storage systems demonstrations as authorized by section 641(p)(4) of the Energy Independence and Security Act of 2007 (42 U.S.C. 17231(p)(4)); and

(iii)

$20,000,000 for vehicle energy storage systems demonstrations as authorized by section 641(p)(5) of the Energy Independence and Security Act of 2007 (42 U.S.C. 17231(p)(5)).

(e)

Transfer Procedures

The Secretary shall make an initial transfer from the Fund no later than 30 days after the initial deposit of monies into the Fund. The Secretary shall make additional transfers no later than 30 days after subsequent deposits. If the amount available to be transferred is less than the levels authorized under subsection (d), the transfers for each program shall be allocated on a pro rata basis. If the amount available to be transferred exceeds the levels authorized under subsection (d), the transfers for each program shall be increased on a pro rata basis.

(f)

Management and Oversight

(1)

Additionality of fiscal year 2008 transfers

All amounts transferred under subsection (d) shall be in addition to, and shall not be substituted for, any funds appropriated for the same or similar purposes in the Consolidated Appropriations Act, 2008.

(2)

Excess funds

The total of all amounts transferred under subsection (d) and any funds appropriated for the same or similar purposes in the Consolidated Appropriations Act, 2008 may not exceed the amounts authorized in other Acts for such purposes. In the event that amounts made available under this title plus amounts under the Consolidated Appropriations Act, 2008 exceed the cumulative amounts authorized in other Acts for any program funded by this Act, the excess amounts shall be distributed to the other programs funded by this title on a pro rata basis.

(3)

Program plans and performance measures

The Secretary shall prepare and publish in the Federal Register a plan for the proposed use of all funds authorized in subsection (d). The plan also shall identify how the use of these funds will be additive to, and not displace, annual appropriations. The plans also shall identify performance measures to assess the additional benefits that may be realized from the application of the additional funding provided under this section. The initial plan shall be published in the Federal Register not later than 45 days after the date of enactment of this Act.

(4)

Congressional oversight and review

Nothing in this section shall limit or restrict the review and oversight of program plans by the appropriate committees of Congress. Nothing in this section shall limit or restrict the authority of Congress to set alternative spending limitations in annual appropriations Acts.

(5)

Apportionment

All transactions of the Fund shall be exempt from apportionment under the provisions of subchapter II of chapter 15 of title 31, United States Code.