Text: S.3523 — 110th Congress (2007-2008)All Information (Except Text)

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Introduced in Senate (09/18/2008)


110th CONGRESS
2d Session
S. 3523


To provide 8 steps for energy sufficiency, and for other purposes.


IN THE SENATE OF THE UNITED STATES

September 18 (legislative day, September 17), 2008

Mr. Enzi introduced the following bill; which was read twice and referred to the Committee on Finance


A BILL

To provide 8 steps for energy sufficiency, and for other purposes.

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

SECTION 1. Short title; table of contents.

(a) Short title.—This Act may be cited as the “Eight Steps to Energy Sufficiency Act of 2008”.

(b) Table of contents.—The table of contents of this Act is as follows:


Sec. 1. Short title; table of contents.

Sec. 101. Advanced batteries for electric drive vehicles.

Sec. 111. Expanding information on energy savings techniques.

Sec. 201. Publication of projected State lines on outer continental shelf.

Sec. 202. Production of oil and natural gas in new producing areas.

Sec. 203. Conforming amendments.

Sec. 211. Removal of prohibition on final regulations for commercial leasing program for oil shale resources on public land.

Sec. 301. Refinery permitting process.

Sec. 311. Removal of additional fee for new applications for permits to drill.

Sec. 321. Report on National Environmental Policy Act of 1969.

Sec. 401. Hydrogen installation, infrastructure, and fuel costs.

Sec. 402. Report on cellulosic ethanol.

Sec. 500. Amendment of 1986 code.

Sec. 501. Extension and modification of renewable energy production tax credit.

Sec. 502. Extension and modification of solar energy and fuel cell investment tax credit.

Sec. 503. Extension and modification of residential energy efficient property credit.

Sec. 504. Extension and modification of credit for clean renewable energy bonds.

Sec. 505. Extension of special rule to implement FERC restructuring policy.

Sec. 511. Extension and modification of credit for energy efficiency improvements to existing homes.

Sec. 512. Extension and modification of tax credit for energy efficient new homes.

Sec. 513. Extension and modification of energy efficient commercial buildings deduction.

Sec. 514. Modification and extension of energy efficient appliance credit for appliances produced after 2007.

Sec. 521. Termination of authority to deduct amounts from share of oil and gas leasing revenues provided to States.

Sec. 601. Definitions.

Sec. 602. Coal-to-liquid fuel loan guarantee program.

Sec. 603. Coal-to-liquid facilities loan program.

Sec. 604. Location of coal-to-liquid manufacturing facilities.

Sec. 605. Strategic petroleum reserve.

Sec. 606. Authorization to conduct research, development, testing, and evaluation of assured domestic fuels.

Sec. 607. Coal-to-liquid long-term fuel procurement and department of defense development.

Sec. 608. Report on emissions of Fischer-Tropsch products used as transportation fuels.

Sec. 611. Credit for investment in coal-to-liquid fuels projects.

Sec. 612. Temporary expensing for equipment used in coal-to-liquid fuels process.

Sec. 613. Extension of alternative fuel credit for fuel derived from coal through the fischer-tropsch process.

Sec. 614. Modifications to enhanced oil recovery credit.

Sec. 615. Allowance of enhanced oil, natural gas, and coalbed methane recovery, and capture and sequestration credit against the alternative minimum tax.

Sec. 621. Carbon sequestration and capture.

Sec. 631. Statement of policy.

Sec. 632. Clean coal research and development.

Sec. 633. Clean coal demonstration.

Sec. 634. Identification of clean coal research, development, and demonstration projects.

Sec. 641. Short title.

Sec. 642. Modification of special rules for atmospheric pollution control facilities.

Sec. 643. Extension and modification of production credit for closed-loop biomass.

Sec. 644. Qualifying new clean coal power plant credit.

Sec. 645. Investment credit for equipment used to capture, transport, and store carbon dioxide.

Sec. 646. Tax credit for carbon dioxide sequestration in the generation of electricity.

Sec. 647. Clean energy coal bonds.

Sec. 701. Definitions.

Sec. 702. Withdrawal of land.

Sec. 703. Receipt and storage facilities.

Sec. 704. Repeal of capacity limitation.

Sec. 705. Infrastructure activities.

Sec. 706. Rail line.

Sec. 707. Nuclear Waste Fund.

Sec. 708. Waste confidence.

Sec. 711. Investment tax credit for investments in nuclear power facilities.

Sec. 712. 5-year accelerated depreciation for new nuclear power facilities.

Sec. 801. Definitions.

Sec. 802. Leasing program for land within the Coastal Plain.

Sec. 803. Lease sales.

Sec. 804. Grant of leases by the Secretary.

Sec. 805. Lease terms and conditions.

Sec. 806. Coastal Plain environmental protection.

Sec. 807. Expedited judicial review.

Sec. 808. Rights-of-way and easements across Coastal Plain.

Sec. 809. Conveyance.

Sec. 810. Local government impact aid and community service assistance.

Sec. 811. Prohibition on exports.

Sec. 812. Allocation of revenues.

SEC. 101. Advanced batteries for electric drive vehicles.

(a) Definitions.—In this section:

(1) ADVANCED BATTERY.—The term “advanced battery” means an electrical storage device that is suitable for a vehicle application.

(2) ENGINEERING INTEGRATION COSTS.—The term “engineering integration costs” includes the cost of engineering tasks relating to—

(A) the incorporation of qualifying components into the design of an advanced battery; and

(B) the design of tooling and equipment and the development of manufacturing processes and material for suppliers of production facilities that produce qualifying components or advanced batteries.

(3) SECRETARY.—The term “Secretary” means the Secretary of Energy.

(b) Advanced battery research and development.—

(1) IN GENERAL.—The Secretary shall—

(A) expand and accelerate research and development efforts for advanced batteries; and

(B) emphasize lower cost means of producing abuse-tolerant advanced batteries with the appropriate balance of power and energy capacity to meet market requirements.

(2) AUTHORIZATION OF APPROPRIATIONS.—There is authorized to be appropriated to carry out this subsection $100,000,000 for each of fiscal years 2010 through 2014.

(c) Direct loan program.—

(1) IN GENERAL.—Subject to the availability of appropriated funds, not later than 1 year after the date of enactment of this Act, the Secretary shall carry out a program to provide a total of not more than $250,000,000 in loans to eligible individuals and entities for not more than 30 percent of the costs of 1 or more of—

(A) reequipping a manufacturing facility in the United States to produce advanced batteries;

(B) expanding a manufacturing facility in the United States to produce advanced batteries; or

(C) establishing a manufacturing facility in the United States to produce advanced batteries.

(2) ELIGIBILITY.—

(A) IN GENERAL.—To be eligible to obtain a loan under this subsection, an individual or entity shall—

(i) be financially viable without the receipt of additional Federal funding associated with a proposed project under this subsection;

(ii) provide sufficient information to the Secretary for the Secretary to ensure that the qualified investment is expended efficiently and effectively; and

(iii) meet such other criteria as may be established and published by the Secretary.

(B) CONSIDERATION.—In selecting eligible individuals or entities for loans under this subsection, the Secretary may consider whether the proposed project of an eligible individual or entity under this subsection would—

(i) reduce manufacturing time;

(ii) reduce manufacturing energy intensity;

(iii) reduce negative environmental impacts or byproducts; or

(iv) increase spent battery or component recycling.

(3) RATES, TERMS, AND REPAYMENT OF LOANS.—A loan provided under this subsection—

(A) shall have an interest rate that, as of the date on which the loan is made, is equal to the cost of funds to the Department of the Treasury for obligations of comparable maturity;

(B) shall have a term that is equal to the lesser of—

(i) the projected life, in years, of the eligible project to be carried out using funds from the loan, as determined by the Secretary; or

(ii) 25 years; and

(C) may be subject to a deferral in repayment for not more than 5 years after the date on which the eligible project carried out using funds from the loan first begins operations, as determined by the Secretary.

(4) PERIOD OF AVAILABILITY.—A loan under this subsection shall be available for—

(A) facilities and equipment placed in service before December 30, 2020; and

(B) engineering integration costs incurred during the period beginning on the date of enactment of this Act and ending on December 30, 2020.

(5) FEES.—The cost of administering a loan made under this subsection shall not exceed $100,000.

(6) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated such sums as are necessary to carry out this subsection for each of fiscal years 2009 through 2013.

(d) Sense of the Senate on purchase of plug-in electric drive vehicles.—It is the sense of the Senate that, to the maximum extent practicable, the Federal Government should implement policies to increase the purchase of plug-in electric drive vehicles by the Federal Government.

SEC. 111. Expanding information on energy savings techniques.

Not later than 1 year after the date of enactment of this Act, the Secretary of Energy shall submit to Congress a report that contains recommendations on—

(1) educational outreach opportunities that can be implemented by Federal agencies to increase the knowledge of the people of the United States of energy saving techniques that can be used in daily life; and

(2) actions that can be taken by Congress to increase the knowledge of the people of the United States of energy saving techniques that can be used in daily life.

SEC. 201. Publication of projected State lines on outer continental shelf.

Section 4(a)(2)(A) of the Outer Continental Shelf Lands Act (43 U.S.C. 1333(a)(2)(A)) is amended—

(1) by designating the first, second, and third sentences as clause (i), (iii), and (iv), respectively;

(2) in clause (i) (as so designated), by inserting before the period at the end the following: “not later than 90 days after the date of enactment of the Eight Steps for Energy Security Act of 2008”; and

(3) by inserting after clause (i) (as so designated) the following:

    “(i)(I) The projected lines shall also be used for the purpose of preleasing and leasing activities conducted in new producing areas under section 32.

    “(II) This clause shall not affect any property right or title to Federal submerged land on the outer Continental Shelf.

    “(III) In carrying out this clause, the President shall consider the offshore administrative boundaries beyond State submerged lands for planning, coordination, and administrative purposes of the Department of the Interior, but may establish different boundaries.”.

SEC. 202. Production of oil and natural gas in new producing areas.

The Outer Continental Shelf Lands Act (43 U.S.C. 1331 et seq.) is amended by adding at the end the following:

“SEC. 32. Production of oil and natural gas in new producing areas.

“(a) Definitions.—In this section:

“(1) COASTAL POLITICAL SUBDIVISION.—The term ‘coastal political subdivision’ means a political subdivision of a new producing State any part of which political subdivision is—

“(A) within the coastal zone (as defined in section 304 of the Coastal Zone Management Act of 1972 (16 U.S.C. 1453)) of the new producing State as of the date of enactment of this section; and

“(B) not more than 200 nautical miles from the geographic center of any leased tract.

“(2) MORATORIUM AREA.—

“(A) IN GENERAL.—The term ‘moratorium area’ means an area covered by sections 104 through 105 of the Department of the Interior, Environment, and Related Agencies Appropriations Act, 2008 (Public Law 110–161; 121 Stat. 2118) (as in effect on the day before the date of enactment of this section).

“(B) EXCLUSION.—The term ‘moratorium area’ does not include an area located in the Gulf of Mexico.

“(3) NEW PRODUCING AREA.—The term ‘new producing area’ means any moratorium area within the offshore administrative boundaries beyond the submerged land of a State that is located greater than 50 miles from the coastline of the State.

“(4) NEW PRODUCING STATE.—The term ‘new producing State’ means a State that has, within the offshore administrative boundaries beyond the submerged land of the State, a new producing area available for oil and gas leasing under subsection (b).

“(5) OFFSHORE ADMINISTRATIVE BOUNDARIES.—The term ‘offshore administrative boundaries’ means the administrative boundaries established by the Secretary beyond State submerged land for planning, coordination, and administrative purposes of the Department of the Interior and published in the Federal Register on January 3, 2006 (71 Fed. Reg. 127).

“(6) QUALIFIED OUTER CONTINENTAL SHELF REVENUES.—

“(A) IN GENERAL.—The term ‘qualified outer Continental Shelf revenues’ means all rentals, royalties, bonus bids, and other sums due and payable to the United States from leases entered into on or after the date of enactment of this section for new producing areas.

“(B) EXCLUSIONS.—The term ‘qualified outer Continental Shelf revenues’ does not include—

“(i) revenues from a bond or other surety forfeited for obligations other than the collection of royalties;

“(ii) revenues from civil penalties;

“(iii) royalties taken by the Secretary in-kind and not sold;

“(iv) revenues generated from leases subject to section 8(g); or

“(v) any revenues considered qualified outer Continental Shelf revenues under section 102 of the Gulf of Mexico Energy Security Act of 2006 (43 U.S.C. 1331 note; Public Law 109–432).

“(b) Petition for leasing new producing areas.—

“(1) IN GENERAL.—Beginning on the date on which the President delineates projected State lines under section 4(a)(2)(A)(ii), the Governor of a State, with the concurrence of the legislature of the State, with a new producing area within the offshore administrative boundaries beyond the submerged land of the State may submit to the Secretary a petition requesting that the Secretary make the new producing area available for oil and gas leasing.

“(2) ACTION BY SECRETARY.—Notwithstanding section 18, as soon as practicable after receipt of a petition under paragraph (1), the Secretary shall approve the petition if the Secretary determines that leasing the new producing area would not create an unreasonable risk of harm to the marine, human, or coastal environment.

“(c) Disposition of qualified outer continental shelf revenues from new producing areas.—

“(1) IN GENERAL.—Notwithstanding section 9 and subject to the other provisions of this subsection, for each applicable fiscal year, the Secretary of the Treasury shall deposit—

“(A) 50 percent of qualified outer Continental Shelf revenues in the general fund of the Treasury; and

“(B) 50 percent of qualified outer Continental Shelf revenues in a special account in the Treasury from which the Secretary shall disburse—

“(i) 75 percent to new producing States in accordance with paragraph (2); and

“(ii) 25 percent to provide financial assistance to States in accordance with section 6 of the Land and Water Conservation Fund Act of 1965 (16 U.S.C. 460l–8), which shall be considered income to the Land and Water Conservation Fund for purposes of section 2 of that Act (16 U.S.C. 460l–5).

“(2) ALLOCATION TO NEW PRODUCING STATES AND COASTAL POLITICAL SUBDIVISIONS.—

“(A) ALLOCATION TO NEW PRODUCING STATES.—Effective for fiscal year 2008 and each fiscal year thereafter, the amount made available under paragraph (1)(B)(i) shall be allocated to each new producing State in amounts (based on a formula established by the Secretary by regulation) proportional to the amount of qualified outer Continental Shelf revenues generated in the new producing area offshore each State.

“(B) PAYMENTS TO COASTAL POLITICAL SUBDIVISIONS.—

“(i) IN GENERAL.—The Secretary shall pay 20 percent of the allocable share of each new producing State, as determined under subparagraph (A), to the coastal political subdivisions of the new producing State.

“(ii) ALLOCATION.—The amount paid by the Secretary to coastal political subdivisions shall be allocated to each coastal political subdivision in accordance with the regulations promulgated under subparagraph (A).

“(3) MINIMUM ALLOCATION.—The amount allocated to a new producing State for each fiscal year under paragraph (2) shall be at least 5 percent of the amounts available for the fiscal year under paragraph (1)(B)(i).

“(4) TIMING.—The amounts required to be deposited under subparagraph (B) of paragraph (1) for the applicable fiscal year shall be made available in accordance with that subparagraph during the fiscal year immediately following the applicable fiscal year.

“(5) AUTHORIZED USES.—

“(A) IN GENERAL.—Subject to subparagraph (B), each new producing State and coastal political subdivision shall use all amounts received under paragraph (2) in accordance with all applicable Federal and State laws, only for 1 or more of the following purposes:

“(i) Projects and activities for the purposes of coastal protection, including conservation, coastal restoration, hurricane protection, and infrastructure directly affected by coastal wetland losses.

“(ii) Mitigation of damage to fish, wildlife, or natural resources.

“(iii) Implementation of a federally approved marine, coastal, or comprehensive conservation management plan.

“(iv) Funding of onshore infrastructure projects.

“(v) Planning assistance and the administrative costs of complying with this section.

“(B) LIMITATION.—Not more than 3 percent of amounts received by a new producing State or coastal political subdivision under paragraph (2) may be used for the purposes described in subparagraph (A)(v).

“(6) ADMINISTRATION.—Amounts made available under paragraph (1)(B) shall—

“(A) be made available, without further appropriation, in accordance with this subsection;

“(B) remain available until expended; and

“(C) be in addition to any amounts appropriated under—

“(i) other provisions of this Act;

“(ii) the Land and Water Conservation Fund Act of 1965 (16 U.S.C. 460l–4 et seq.); or

“(iii) any other provision of law.

“(d) Disposition of qualified outer continental shelf revenues from other areas.—Notwithstanding section 9, for each applicable fiscal year, the terms and conditions of subsection (c) shall apply to the disposition of qualified outer Continental Shelf revenues that—

“(1) are derived from oil or gas leasing in an area that is not included in the current 5-year plan of the Secretary for oil or gas leasing; and

“(2) are not assumed in the budget of the United States Government submitted by the President under section 1105 of title 31, United States Code.”.

SEC. 203. Conforming amendments.

Sections 104 and 105 of the Department of the Interior, Environment, and Related Agencies Appropriations Act, 2008 (Public Law 110–161; 121 Stat. 2118) are amended by striking “No funds” each place it appears and inserting “Except as provided in section 32 of the Outer Continental Shelf Lands Act, no funds”.

SEC. 211. Removal of prohibition on final regulations for commercial leasing program for oil shale resources on public land.

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

SEC. 301. Refinery permitting process.

(a) Definitions.—In this section:

(1) ADMINISTRATOR.—The term “Administrator” means the Administrator of the Environmental Protection Agency.

(2) INDIAN TRIBE.—The term “Indian tribe” has the meaning given the term in section 4 of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450b).

(3) PERMIT.—The term “permit” means any permit, license, approval, variance, or other form of authorization that a refiner is required to obtain—

(A) under any Federal law; or

(B) from a State or Indian tribal government agency delegated authority by the Federal Government, or authorized under Federal law, to issue permits.

(4) REFINER.—The term “refiner” means a person that—

(A) owns or operates a refinery; or

(B) seeks to become an owner or operator of a refinery.

(5) REFINERY.—

(A) IN GENERAL.—The term “refinery” means—

(i) a facility at which crude oil is refined into transportation fuel or other petroleum products; and

(ii) a coal liquification or coal-to-liquid facility at which coal is processed into synthetic crude oil or any other fuel.

(B) INCLUSIONS.—The term “refinery” includes an expansion of a refinery.

(6) REFINERY EXPANSION.—The term “refinery expansion” means a physical change in a refinery that results in an increase in the capacity of the refinery.

(7) REFINERY PERMITTING AGREEMENT.—The term “refinery permitting agreement” means an agreement entered into between the Administrator and a State or Indian tribe under subsection (b).

(8) SECRETARY.—The term “Secretary” means the Secretary of Commerce.

(9) STATE.—The term “State” means—

(A) a State;

(B) the District of Columbia;

(C) the Commonwealth of Puerto Rico; and

(D) any other territory or possession of the United States.

(b) Streamlining of refinery permitting process.—

(1) IN GENERAL.—At the request of the Governor of a State or the governing body of an Indian tribe, the Administrator shall enter into a refinery permitting agreement with the State or Indian tribe under which the process for obtaining all permits necessary for the construction and operation of a refinery shall be streamlined using a systematic interdisciplinary multimedia approach as provided in this section.

(2) AUTHORITY OF ADMINISTRATOR.—Under a refinery permitting agreement—

(A) the Administrator shall have authority, as applicable and necessary, to—

(i) accept from a refiner a consolidated application for all permits that the refiner is required to obtain to construct and operate a refinery;

(ii) in consultation and cooperation with each Federal, State, or Indian tribal government agency that is required to make any determination to authorize the issuance of a permit, establish a schedule under which each agency shall—

(I) concurrently consider, to the maximum extent practicable, each determination to be made; and

(II) complete each step in the permitting process; and

(iii) issue a consolidated permit that combines all permits issued under the schedule established under clause (ii); and

(B) the Administrator shall provide to State and Indian tribal government agencies—

(i) financial assistance in such amounts as the agencies reasonably require to hire such additional personnel as are necessary to enable the government agencies to comply with the applicable schedule established under subparagraph (A)(ii); and

(ii) technical, legal, and other assistance in complying with the refinery permitting agreement.

(3) AGREEMENT BY THE STATE.—Under a refinery permitting agreement, a State or governing body of an Indian tribe shall agree that—

(A) the Administrator shall have each of the authorities described in paragraph (2); and

(B) each State or Indian tribal government agency shall—

(i) in accordance with State law, make such structural and operational changes in the agencies as are necessary to enable the agencies to carry out consolidated project-wide permit reviews concurrently and in coordination with the Environmental Protection Agency and other Federal agencies; and

(ii) comply, to the maximum extent practicable, with the applicable schedule established under paragraph (2)(A)(ii).

(4) DEADLINES.—

(A) NEW REFINERIES.—In the case of a consolidated permit for the construction of a new refinery, the Administrator and the State or governing body of an Indian tribe shall approve or disapprove the consolidated permit not later than—

(i) 360 days after the date of the receipt of the administratively complete application for the consolidated permit; or

(ii) on agreement of the applicant, the Administrator, and the State or governing body of the Indian tribe, 90 days after the expiration of the deadline established under clause (i).

(B) EXPANSION OF EXISTING REFINERIES.—In the case of a consolidated permit for the expansion of an existing refinery, the Administrator and the State or governing body of an Indian tribe shall approve or disapprove the consolidated permit not later than—

(i) 120 days after the date of the receipt of the administratively complete application for the consolidated permit; or

(ii) on agreement of the applicant, the Administrator, and the State or governing body of the Indian tribe, 30 days after the expiration of the deadline established under clause (i).

(5) FEDERAL AGENCIES.—Each Federal agency that is required to make any determination to authorize the issuance of a permit shall comply with the applicable schedule established under paragraph (2)(A)(ii).

(6) JUDICIAL REVIEW.—Any civil action for review of any permit determination under a refinery permitting agreement shall be brought exclusively in the United States district court for the district in which the refinery is located or proposed to be located.

(7) EFFICIENT PERMIT REVIEW.—In order to reduce the duplication of procedures, the Administrator shall use State permitting and monitoring procedures to satisfy substantially equivalent Federal requirements under this title.

(8) SEVERABILITY.—If 1 or more permits that are required for the construction or operation of a refinery are not approved on or before any deadline established under paragraph (4), the Administrator may issue a consolidated permit that combines all other permits that the refiner is required to obtain other than any permits that are not approved.

(9) SAVINGS.—Nothing in this subsection affects the operation or implementation of otherwise applicable law regarding permits necessary for the construction and operation of a refinery.

(10) CONSULTATION WITH LOCAL GOVERNMENTS.—Congress encourages the Administrator, States, and tribal governments to consult, to the maximum extent practicable, with local governments in carrying out this subsection.

(11) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated such sums as are necessary to carry out this subsection.

(12) EFFECT ON LOCAL AUTHORITY.—Nothing in this subsection affects—

(A) the authority of a local government with respect to the issuance of permits; or

(B) any requirement or ordinance of a local government (such as a zoning regulation).

(c) Fischer-tropsch fuels.—

(1) IN GENERAL.—In cooperation with the Secretary of Energy, the Secretary of Defense, the Administrator of the Federal Aviation Administration, Secretary of Health and Human Services, and Fischer-Tropsch industry representatives, the Administrator shall—

(A) conduct a research and demonstration program to evaluate the air quality benefits of ultra-clean Fischer-Tropsch transportation fuel, including diesel and jet fuel;

(B) evaluate the use of ultra-clean Fischer-Tropsch transportation fuel as a mechanism for reducing engine exhaust emissions; and

(C) submit recommendations to Congress on the most effective use and associated benefits of these ultra-clean fuel for reducing public exposure to exhaust emissions.

(2) GUIDANCE AND TECHNICAL SUPPORT.—The Administrator shall, to the extent necessary, issue any guidance or technical support documents that would facilitate the effective use and associated benefit of Fischer-Tropsch fuel and blends.

(3) REQUIREMENTS.—The program described in paragraph (1) shall consider—

(A) the use of neat (100 percent) Fischer-Tropsch fuel and blends with conventional crude oil-derived fuel for heavy-duty and light-duty diesel engines and the aviation sector; and

(B) the production costs associated with domestic production of those ultra clean fuel and prices for consumers.

(4) REPORTS.—The Administrator shall submit to the Committee on Environment and Public Works and the Committee on Energy and Natural Resources of the Senate and the Committee on Energy and Commerce of the House of Representatives—

(A) not later than 1 year, an interim report on actions taken to carry out this subsection; and

(B) not later than 2 years, a final report on actions taken to carry out this subsection.

SEC. 311. Removal of additional fee for new applications for permits to drill.

The second undesignated paragraph of the matter under the heading “management of lands and resources” under the heading “Bureau of Land Management” of title I of the Department of the Interior, Environment, and Related Agencies Appropriations Act, 2008 (Public Law 110–161; 121 Stat. 2098) is amended by striking “to be reduced” and all that follows through “each new application,”.

SEC. 321. Report on National Environmental Policy Act of 1969.

Not later than 180 days after the date of enactment of this Act, the Secretary of the Interior, in consultation with the Secretary of Energy and the Administrator of the Environmental Protection Agency, shall submit to Congress a report on actions that can be taken to streamline the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) to limit litigation under that Act and increase energy production.

SEC. 401. Hydrogen installation, infrastructure, and fuel costs.

(a) In general.—Subpart B of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to foreign tax credit, etc.) is amended by adding at the end the following new section:

“SEC. 30D. Hydrogen installation, infrastructure, and fuel costs.

“(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—

“(1) the hydrogen installation and infrastructure costs credit determined under subsection (b), and

“(2) the hydrogen fuel costs credit determined under subsection (c).

“(b) Hydrogen installation and infrastructure costs credit.—

“(1) IN GENERAL.—For purposes of subsection (a), the hydrogen installation and infrastructure costs credit determined under this subsection with respect to each eligible hydrogen production and distribution facility of the taxpayer is an amount equal to—

“(A) 30 percent of so much of the installation costs which when added to such costs taken into account with respect to such facility for all preceding taxable years under this subparagraph does not exceed $200,000, plus

“(B) 30 percent of so much of the infrastructure costs for the taxable year as does not exceed $200,000 with respect to such facility, and which when added to such costs taken into account with respect to such facility for all preceding taxable years under this subparagraph does not exceed $600,000.

Nothing in this section shall permit the same cost to be taken into account more than once.

“(2) ELIGIBLE HYDROGEN PRODUCTION AND DISTRIBUTION FACILITY.—For purposes of this subsection, the term ‘eligible hydrogen production and distribution facility’ means a hydrogen production and distribution facility which is placed in service after December 31, 2008.

“(c) Hydrogen fuel costs credit.—

“(1) IN GENERAL.—For purposes of subsection (a), the hydrogen fuel costs credit determined under this subsection with respect to each eligible hydrogen device of the taxpayer is an amount equal to the qualified hydrogen expenditure amounts with respect to such device.

“(2) QUALIFIED HYDROGEN EXPENDITURE AMOUNT.—For purposes of this subsection—

“(A) IN GENERAL.—The term ‘qualified hydrogen expenditure amount’ means, with respect to each eligible hydrogen energy conversion device of the taxpayer with a production capacity of not more than 25 kilowatts of electricity per year, the lesser of—

“(i) 30 percent of the amount paid or incurred by the taxpayer during the taxable year for hydrogen which is consumed by such device, and

“(ii) $2,000.

In the case of any device which is not owned by the taxpayer at all times during the taxable year, the $2,000 amount in subparagraph (B) shall be reduced by an amount which bears the same ratio to $2,000 as the portion of the year which such device is not owned by the taxpayer bears to the entire year.

“(B) HIGHER LIMITATION FOR DEVICES WITH MORE PRODUCTION CAPACITY.—In the case of any eligible hydrogen energy conversion device with a production capacity of—

“(i) more than 25 but less than 100 kilowatts of electricity per year, subparagraph (A) shall be applied by substituting ‘$4,000’ for ‘$2,000’ each place it appears, and

“(ii) not less than 100 kilowatts of electricity per year, subparagraph (A) shall be applied by substituting ‘$6,000’ for ‘$2,000’ each place it appears.

“(3) ELIGIBLE HYDROGEN ENERGY CONVERSION DEVICES.—For purposes of this subsection—

“(A) IN GENERAL.—The term ‘eligible hydrogen energy conversion device’ means, with respect to any taxpayer, any hydrogen energy conversion device which—

“(i) is placed in service after December 31, 2004, and

“(ii) is wholly owned by the taxpayer during the taxable year.

If an owner of a device (determined without regard to this subparagraph) provides to the primary user of such device a written statement that such user shall be treated as the owner of such device for purposes of this section, then such user (and not such owner) shall be so treated.

“(B) HYDROGEN ENERGY CONVERSION DEVICE.—The term ‘hydrogen energy conversion device’ means—

“(i) any electrochemical device which converts hydrogen into electricity, and

“(ii) any combustion engine which burns hydrogen as a fuel.

“(d) Reduction in basis.—For purposes of this subtitle, if a credit is allowed under this section for any expenditure with respect to any property, the increase in the basis of such property which would (but for this paragraph) result from such expenditure shall be reduced by the amount of the credit so allowed.

“(e) 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 amounts which (but for subsection (g) would be allowed as a deduction under section 162 shall be treated as a credit listed in section 38(b) for such taxable year (and not allowed under subsection (a)).

“(2) PERSONAL CREDIT.—The credit allowed under subsection (a) (after the application of paragraph (1)) for any taxable year shall not exceed the excess (if any) of—

“(A) the regular tax liability (as defined in section 26(b)) reduced by the sum of the credits allowable under subpart A and sections 27, 30, 30B, and 30C, over

“(B) the tentative minimum tax for the taxable year.

“(f) Denial of double benefit.—The amount of any deduction or other credit allowable under this chapter for any cost taken into account in determining the amount of the credit under subsection (a) shall be reduced by the amount of such credit attributable to such cost.

“(g) Recapture.—The Secretary shall, by regulations, provided 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.

“(h) Election not To take credit.—No credit shall be allowed under subsection (a) for any property if the taxpayer elects not to have this section apply to such property.

“(i) Regulations.—The Secretary shall prescribe such regulations as necessary to carry out the provisions of this section.

“(j) Termination.—This section shall not apply to any costs after December 31, 2012.”.

(b) Conforming amendments.—

(1) Section 38(b) of the Internal Revenue Code of 1986 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 hydrogen installation, infrastructure, and fuel credit to which section 30D(e)(1) applies.”.

(2) Section 55(c)(3) of such Code is amended by inserting “30F(e)(2),” after “30C(d)(2),”.

(3) Section 1016(a) of such Code 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(d).”.

(4) Section 6501(m) of such Code is amended by inserting “30D(h),” after “30C(e)(5),”.

(5) The table of sections for subpart B of part IV of subchapter A of chapter 1 of such Code is amended by inserting after the item relating to section 30C the following new item:


“Sec. 30D. Hydrogen installation, infrastructure, and fuel costs.”.

(c) Effective date.—The amendments made by this section shall apply to amounts paid or incurred after the date of the enactment of this Act, in taxable years ending after such date.

SEC. 402. Report on cellulosic ethanol.

Not later than 180 days after the date of enactment of this Act, the Administrator of the Environmental Protection Agency, in consultation with the Secretary of Energy and the Secretary of the Interior, shall provide to Congress a report that—

(1) analyzes Federal incentives to increase the production of cellulosic ethanol; and

(2) provides recommendations—

(A) on the effectiveness of those incentives; and

(B) for additional incentives to increase production of cellulosic ethanol.

SEC. 500. Amendment of 1986 code.

Except as otherwise expressly provided, whenever in this subtitle an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1986.

SEC. 501. Extension and modification of renewable energy production tax credit.

(a) Extension of credit.—Each of the following provisions of section 45(d) (relating to qualified facilities) is amended by striking “January 1, 2009” and inserting “January 1, 2014”:

(1) Paragraph (1).

(2) Clauses (i) and (ii) of paragraph (2)(A).

(3) Clauses (i)(I) and (ii) of paragraph (3)(A).

(4) Paragraph (4).

(5) Paragraph (5).

(6) Paragraph (6).

(7) Paragraph (7).

(8) Paragraph (8).

(9) Subparagraphs (A) and (B) of paragraph (9).

(b) Production credit for electricity produced from marine renewables.—

(1) IN GENERAL.—Paragraph (1) of section 45(c) (relating to resources) is amended by striking “and” at the end of subparagraph (G), by striking the period at the end of subparagraph (H) and inserting “, and”, and by adding at the end the following new subparagraph:

“(I) marine and hydrokinetic renewable energy.”.

(2) MARINE RENEWABLES.—Subsection (c) of section 45 is amended by adding at the end the following new paragraph:

“(10) MARINE AND HYDROKINETIC RENEWABLE ENERGY.—

“(A) IN GENERAL.—The term ‘marine and hydrokinetic renewable energy’ means energy derived from—

“(i) waves, tides, and currents in oceans, estuaries, and tidal areas,

“(ii) free flowing water in rivers, lakes, and streams,

“(iii) free flowing water in an irrigation system, canal, or other man-made channel, including projects that utilize nonmechanical structures to accelerate the flow of water for electric power production purposes, or

“(iv) differentials in ocean temperature (ocean thermal energy conversion).

“(B) EXCEPTIONS.—Such term shall not include any energy which is derived from any source which utilizes a dam, diversionary structure (except as provided in subparagraph (A)(iii)), or impoundment for electric power production purposes.”.

(3) DEFINITION OF FACILITY.—Subsection (d) of section 45 is amended by adding at the end the following new paragraph:

“(11) MARINE AND HYDROKINETIC RENEWABLE ENERGY FACILITIES.—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—

“(A) which has a nameplate capacity rating of at least 150 kilowatts, and

“(B) which is originally placed in service on or after the date of the enactment of this paragraph and before January 1, 2010.”.

(4) CREDIT RATE.—Subparagraph (A) of section 45(b)(4) is amended by striking “or (9)” and inserting “(9), or (11)”.

(5) COORDINATION WITH SMALL IRRIGATION POWER.—Paragraph (5) of section 45(d), as amended by subsection (a), is amended by striking “January 1, 2010” and inserting “the date of the enactment of paragraph (11)”.

(c) Sales of electricity to regulated public utilities treated as sales to unrelated persons.—Section 45(e)(4) (relating to related persons) is amended by adding at the end the following new sentence: “A taxpayer shall be treated as selling electricity to an unrelated person if such electricity is sold to a regulated public utility (as defined in section 7701(a)(33).”.

(d) Trash facility clarification.—Paragraph (7) of section 45(d) is amended—

(1) by striking “facility which burns” and inserting “facility (other than a facility described in paragraph (6)) which uses”, and

(2) by striking “combustion”.

(e) Effective dates.—

(1) EXTENSION.—The amendments made by subsection (a) shall apply to property originally placed in service after December 31, 2008.

(2) MODIFICATIONS.—The amendments made by subsections (b) and (c) shall apply to electricity produced and sold after the date of the enactment of this Act, in taxable years ending after such date.

(3) TRASH FACILITY CLARIFICATION.—The amendments made by subsection (d) shall apply to electricity produced and sold before, on, or after December 31, 2007.

SEC. 502. Extension and modification of solar energy and fuel cell investment tax credit.

(a) Extension of credit.—

(1) SOLAR ENERGY PROPERTY.—Paragraphs (2)(A)(i)(II) and (3)(A)(ii) of section 48(a) (relating to energy credit) are each amended by striking “January 1, 2009” and inserting “January 1, 2017”.

(2) FUEL CELL PROPERTY.—Subparagraph (E) of section 48(c)(1) (relating to qualified fuel cell property) is amended by striking “December 31, 2008” and inserting “December 31, 2017”.

(3) QUALIFIED MICROTURBINE PROPERTY.—Subparagraph (E) of section 48(c)(2) (relating to qualified microturbine property) is amended by striking “December 31, 2008” and inserting “December 31, 2017”.

(b) Allowance of energy credit against alternative minimum tax.—Subparagraph (B) of section 38(c)(4) (relating to specified credits) is amended by striking “and” at the end of clause (iii), by striking the period at the end of clause (iv) and inserting “, and”, and by adding at the end the following new clause:

“(v) the credit determined under section 46 to the extent that such credit is attributable to the energy credit determined under section 48.”.

(c) Repeal of dollar per kilowatt limitation for fuel cell property.—

(1) IN GENERAL.—Section 48(c)(1) (relating to qualified fuel cell), as amended by subsection (a)(2), is amended by striking subparagraph (B) and by redesignating subparagraphs (C), (D), and (E) as subparagraphs (B), (C), and (D), respectively.

(2) CONFORMING AMENDMENT.—Section 48(a)(1) is amended by striking “paragraphs (1)(B) and (2)(B) of subsection (c)” and inserting “subsection (c)(2)(B)”.

(d) Public electric utility property taken into account.—

(1) IN GENERAL.—Paragraph (3) of section 48(a) is amended by striking the second sentence thereof.

(2) CONFORMING AMENDMENTS.—

(A) Paragraph (1) of section 48(c), as amended by this section, is amended by striking subparagraph (C) and redesignating subparagraph (D) as subparagraph (C).

(B) Paragraph (2) of section 48(c), as amended by subsection (a)(3), is amended by striking subparagraph (D) and redesignating subparagraph (E) as subparagraph (D).

(e) Effective dates.—

(1) EXTENSION.—The amendments made by subsection (a) shall take effect on the date of the enactment of this Act.

(2) ALLOWANCE AGAINST ALTERNATIVE MINIMUM TAX.—The amendments made by subsection (b) shall apply to credits determined under section 46 of the Internal Revenue Code of 1986 in taxable years beginning after the date of the enactment of this Act and to carrybacks of such credits.

(3) FUEL CELL PROPERTY AND PUBLIC ELECTRIC UTILITY PROPERTY.—The amendments made by subsections (c) and (d) shall apply to periods after the date of the enactment of this Act, in taxable years ending after such date, under rules similar to the rules of section 48(m) of the Internal Revenue Code of 1986 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990).

SEC. 503. Extension and modification of residential energy efficient property credit.

(a) Extension.—Section 25D(g) (relating to termination) is amended by striking “December 31, 2008” and inserting “December 31, 2009”.

(b) No dollar limitation for credit for solar electric property.—

(1) IN GENERAL.—Section 25D(b)(1) (relating to maximum credit) is amended by striking subparagraph (A) and by redesignating subparagraphs (B) and (C) as subparagraphs (A) and (B), respectively.

(2) CONFORMING AMENDMENTS.—Section 25D(e)(4) is amended—

(A) by striking clause (i) in subparagraph (A),

(B) by redesignating clauses (ii) and (iii) in subparagraph (A) as clauses (i) and (ii), respectively, and

(C) by striking “, (2),” in subparagraph (C).

(c) Credit allowed against alternative minimum tax.—

(1) IN GENERAL.—Subsection (c) of section 25D is amended to read as follows:

“(c) Limitation based on amount of tax; carryforward of unused credit.—

“(1) 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 the taxable year shall not exceed the excess of—

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

“(B) the sum of the credits allowable under this subpart (other than this section) and section 27 for the taxable year.

“(2) CARRYFORWARD OF UNUSED CREDIT.—

“(A) RULE FOR YEARS IN WHICH ALL PERSONAL CREDITS ALLOWED AGAINST REGULAR AND ALTERNATIVE MINIMUM TAX.—In the case of a taxable year to which section 26(a)(2) applies, if the credit allowable under subsection (a) exceeds the limitation imposed by section 26(a)(2) for such taxable year reduced by the sum of the credits allowable under this subpart (other than this section), such excess shall be carried to the succeeding taxable year and added to the credit allowable under subsection (a) for such succeeding taxable year.

“(B) RULE FOR OTHER YEARS.—In the case of a taxable year to which section 26(a)(2) does not apply, if the credit allowable under subsection (a) exceeds the limitation imposed by paragraph (1) for such taxable year, such excess shall be carried to the succeeding taxable year and added to the credit allowable under subsection (a) for such succeeding taxable year.”.

(2) CONFORMING AMENDMENTS.—

(A) Section 23(b)(4)(B) is amended by inserting “and section 25D” after “this section”.

(B) Section 24(b)(3)(B) is amended by striking “and 25B” and inserting “, 25B, and 25D”.

(C) Section 25B(g)(2) is amended by striking “section 23” and inserting “sections 23 and 25D”.

(D) Section 26(a)(1) is amended by striking “and 25B” and inserting “25B, and 25D”.

(d) Effective date.—

(1) IN GENERAL.—The amendments made by this section shall apply to taxable years beginning after December 31, 2007.

(2) APPLICATION OF EGTRRA SUNSET.—The amendments made by subparagraphs (A) and (B) of subsection (c)(2) shall be subject to title IX of the Economic Growth and Tax Relief Reconciliation Act of 2001 in the same manner as the provisions of such Act to which such amendments relate.

SEC. 504. Extension and modification of credit for clean renewable energy bonds.

(a) Extension.—Section 54(m) (relating to termination) is amended by striking “December 31, 2008” and inserting “December 31, 2009”.

(b) Increase in national limitation.—Section 54(f) (relating to limitation on amount of bonds designated) is amended—

(1) by inserting “, and for the period beginning after the date of the enactment of the Clean Energy Tax Stimulus Act of 2008 and ending before January 1, 2010, $400,000,000” after “$1,200,000,000” in paragraph (1),

(2) by striking “$750,000,000 of the” in paragraph (2) and inserting “$750,000,000 of the $1,200,000,000”, and

(3) by striking “bodies” in paragraph (2) and inserting “bodies, and except that the Secretary may not allocate more than 13 of the $400,000,000 national clean renewable energy bond limitation to finance qualified projects of qualified borrowers which are public power providers nor more than 13 of such limitation to finance qualified projects of qualified borrowers which are mutual or cooperative electric companies described in section 501(c)(12) or section 1381(a)(2)(C)”.

(c) Public power providers defined.—Section 54(j) is amended—

(1) by adding at the end the following new paragraph:

“(6) PUBLIC POWER PROVIDER.—The term ‘public power provider’ 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 the enactment of this paragraph).”, and

(2) by inserting “; public power provider” before the period at the end of the heading.

(d) Technical amendment.—The third sentence of section 54(e)(2) is amended by striking “subsection (l)(6)” and inserting “subsection (l)(5)”.

(e) Effective date.—The amendments made by this section shall apply to bonds issued after the date of the enactment of this Act.

SEC. 505. Extension of special rule to implement FERC restructuring policy.

(a) Qualifying electric transmission transaction.—

(1) IN GENERAL.—Section 451(i)(3) (defining qualifying electric transmission transaction) is amended by striking “January 1, 2008” and inserting “January 1, 2010”.

(2) EFFECTIVE DATE.—The amendment made by this subsection shall apply to transactions after December 31, 2007.

(b) Independent transmission company.—

(1) IN GENERAL.—Section 451(i)(4)(B)(ii) (defining independent transmission company) is amended by striking “December 31, 2007” and inserting “the date which is 2 years after the date of such transaction”.

(2) EFFECTIVE DATE.—The amendment made by this subsection shall take effect as if included in the amendments made by section 909 of the American Jobs Creation Act of 2004.

SEC. 511. Extension and modification of credit for energy efficiency improvements to existing homes.

(a) Extension of credit.—Section 25C(g) (relating to termination) is amended by striking “December 31, 2007” and inserting “December 31, 2009”.

(b) Qualified biomass fuel property.—

(1) IN GENERAL.—Section 25C(d)(3) is amended—

(A) by striking “and” at the end of subparagraph (D),

(B) by striking the period at the end of subparagraph (E) and inserting “, and”, and

(C) by adding at the end the following new subparagraph:

“(F) a stove which uses the burning of biomass fuel to heat a dwelling unit located in the United States and used as a residence by the taxpayer, or to heat water for use in such a dwelling unit, and which has a thermal efficiency rating of at least 75 percent.”.

(2) BIOMASS FUEL.—Section 25C(d) (relating to residential energy property expenditures) is amended by adding at the end the following new paragraph:

“(6) BIOMASS FUEL.—The term ‘biomass fuel’ means any plant-derived fuel available on a renewable or recurring basis, including agricultural crops and trees, wood and wood waste and residues (including wood pellets), plants (including aquatic plants), grasses, residues, and fibers.”.

(c) Modifications of standards for energy-efficient building property.—

(1) ELECTRIC HEAT PUMPS.—Subparagraph (B) of section 25C(d)(3) is amended to read as follows:

“(A) an electric heat pump which achieves the highest efficiency tier established by the Consortium for Energy Efficiency, as in effect on January 1, 2008.”.

(2) CENTRAL AIR CONDITIONERS.—Section 25C(d)(3)(D) is amended by striking “2006” and inserting “2008”.

(3) WATER HEATERS.—Subparagraph (E) of section 25C(d) is amended to read as follows:

“(E) a natural gas, propane, or oil water heater which has either an energy factor of at least 0.80 or a thermal efficiency of at least 90 percent.”.

(4) OIL FURNACES AND HOT WATER BOILERS.—Paragraph (4) of section 25C(d) is amended to read as follows:

“(4) QUALIFIED NATURAL GAS, PROPANE, AND OIL FURNACES AND HOT WATER BOILERS.—

“(A) QUALIFIED NATURAL GAS FURNACE.—The term ‘qualified natural gas furnace’ means any natural gas furnace which achieves an annual fuel utilization efficiency rate of not less than 95.

“(B) QUALIFIED NATURAL GAS HOT WATER BOILER.—The term ‘qualified natural gas hot water boiler’ means any natural gas hot water boiler which achieves an annual fuel utilization efficiency rate of not less than 90.

“(C) QUALIFIED PROPANE FURNACE.—The term ‘qualified propane furnace’ means any propane furnace which achieves an annual fuel utilization efficiency rate of not less than 95.

“(D) QUALIFIED PROPANE HOT WATER BOILER.—The term ‘qualified propane hot water boiler’ means any propane hot water boiler which achieves an annual fuel utilization efficiency rate of not less than 90.

“(E) QUALIFIED OIL FURNACES.—The term ‘qualified oil furnace’ means any oil furnace which achieves an annual fuel utilization efficiency rate of not less than 90.

“(F) QUALIFIED OIL HOT WATER BOILER.—The term ‘qualified oil hot water boiler’ means any oil hot water boiler which achieves an annual fuel utilization efficiency rate of not less than 90.”.

(d) Effective date.—The amendments made this section shall apply to expenditures made after December 31, 2007.

SEC. 512. Extension and modification of tax credit for energy efficient new homes.

(a) Extension of credit.—Subsection (g) of section 45L (relating to termination) is amended by striking “December 31, 2008” and inserting “December 31, 2010”.

(b) Allowance for contractor's personal residence.—Subparagraph (B) of section 45L(a)(1) is amended to read as follows:

“(B)(i) acquired by a person from such eligible contractor and used by any person as a residence during the taxable year, or

“(ii) used by such eligible contractor as a residence during the taxable year.”.

(c) Effective date.—The amendments made by this section shall apply to homes acquired after December 31, 2008.

SEC. 513. Extension and modification of energy efficient commercial buildings deduction.

(a) Extension.—Section 179D(h) (relating to termination) is amended by striking “December 31, 2008” and inserting “December 31, 2009”.

(b) Adjustment of maximum deduction amount.—

(1) IN GENERAL.—Subparagraph (A) of section 179D(b)(1) (relating to maximum amount of deduction) is amended by striking “$1.80” and inserting “$2.25”.

(2) PARTIAL ALLOWANCE.—Paragraph (1) of section 179D(d) is amended—

(A) by striking “$.60” and inserting “$0.75”, and

(B) by striking “$1.80” and inserting “$2.25”.

(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.

SEC. 514. Modification and extension of energy efficient appliance credit for appliances produced after 2007.

(a) In general.—Subsection (b) of section 45M (relating to applicable amount) is amended to read as follows:

“(b) Applicable amount.—For purposes of subsection (a)—

“(1) DISHWASHERS.—The applicable amount is—

“(A) $45 in the case of a dishwasher which is manufactured in calendar year 2008 or 2009 and which uses no more than 324 kilowatt hours per year and 5.8 gallons per cycle, and

“(B) $75 in the case of a dishwasher which is manufactured in calendar year 2008, 2009, or 2010 and which uses no more than 307 kilowatt hours per year and 5.0 gallons per cycle (5.5 gallons per cycle for dishwashers designed for greater than 12 place settings).

“(2) CLOTHES WASHERS.—The applicable amount is—

“(A) $75 in the case of a residential top-loading clothes washer manufactured in calendar year 2008 which meets or exceeds a 1.72 modified energy factor and does not exceed a 8.0 water consumption factor,

“(B) $125 in the case of a residential top-loading clothes washer manufactured in calendar year 2008 or 2009 which meets or exceeds a 1.8 modified energy factor and does not exceed a 7.5 water consumption factor,

“(C) $150 in the case of a residential or commercial clothes washer manufactured in calendar year 2008, 2009, or 2010 which meets or exceeds 2.0 modified energy factor and does not exceed a 6.0 water consumption factor, and

“(D) $250 in the case of a residential or commercial clothes washer manufactured in calendar year 2008, 2009, or 2010 which meets or exceeds 2.2 modified energy factor and does not exceed a 4.5 water consumption factor.

“(3) REFRIGERATORS.—The applicable amount is—

“(A) $50 in the case of a refrigerator which is manufactured in calendar year 2008, and consumes at least 20 percent but not more than 22.9 percent less kilowatt hours per year than the 2001 energy conservation standards,

“(B) $75 in the case of a refrigerator which is manufactured in calendar year 2008 or 2009, and consumes at least 23 percent but no more than 24.9 percent less kilowatt hours per year than the 2001 energy conservation standards,

“(C) $100 in the case of a refrigerator which is manufactured in calendar year 2008, 2009, or 2010, and consumes at least 25 percent but not more than 29.9 percent less kilowatt hours per year than the 2001 energy conservation standards, and

“(D) $200 in the case of a refrigerator manufactured in calendar year 2008, 2009, or 2010 and which consumes at least 30 percent less energy than the 2001 energy conservation standards.”.

(b) Eligible production.—

(1) SIMILAR TREATMENT FOR ALL APPLIANCES.—Subsection (c) of section 45M (relating to eligible production) is amended—

(A) by striking paragraph (2),

(B) by striking “(1) In general” and all that follows through “the eligible” and inserting “The eligible”, and

(C) by moving the text of such subsection in line with the subsection heading and redesignating subparagraphs (A) and (B) as paragraphs (1) and (2), respectively.

(2) MODIFICATION OF BASE PERIOD.—Paragraph (2) of section 45M(c), as amended by paragraph (1) of this section, is amended by striking “3-calendar year” and inserting “2-calendar year”.

(c) Types of energy efficient appliances.—Subsection (d) of section 45M (defining types of energy efficient appliances) is amended to read as follows:

“(d) Types of energy efficient appliance.—For purposes of this section, the types of energy efficient appliances are—

“(1) dishwashers described in subsection (b)(1),

“(2) clothes washers described in subsection (b)(2), and

“(3) refrigerators described in subsection (b)(3).”.

(d) Aggregate credit amount allowed.—

(1) INCREASE IN LIMIT.—Paragraph (1) of section 45M(e) (relating to aggregate credit amount allowed) is amended to read as follows:

“(1) AGGREGATE CREDIT AMOUNT ALLOWED.—The aggregate amount of credit allowed under subsection (a) with respect to a taxpayer for any taxable year shall not exceed $75,000,000 reduced by the amount of the credit allowed under subsection (a) to the taxpayer (or any predecessor) for all prior taxable years beginning after December 31, 2007.”.

(2) EXCEPTION FOR CERTAIN REFRIGERATOR AND CLOTHES WASHERS.—Paragraph (2) of section 45M(e) is amended to read as follows:

“(2) AMOUNT ALLOWED FOR CERTAIN REFRIGERATORS AND CLOTHES WASHERS.—Refrigerators described in subsection (b)(3)(D) and clothes washers described in subsection (b)(2)(D) shall not be taken into account under paragraph (1).”.

(e) Qualified energy efficient appliances.—

(1) IN GENERAL.—Paragraph (1) of section 45M(f) (defining qualified energy efficient appliance) is amended to read as follows:

“(1) QUALIFIED ENERGY EFFICIENT APPLIANCE.—The term ‘qualified energy efficient appliance’ means—

“(A) any dishwasher described in subsection (b)(1),

“(B) any clothes washer described in subsection (b)(2), and

“(C) any refrigerator described in subsection (b)(3).”.

(2) CLOTHES WASHER.—Section 45M(f)(3) (defining clothes washer) is amended by inserting “commercial” before “residential” the second place it appears.

(3) TOP-LOADING CLOTHES WASHER.—Subsection (f) of section 45M (relating to definitions) is amended by redesignating paragraphs (4), (5), (6), and (7) as paragraphs (5), (6), (7), and (8), respectively, and by inserting after paragraph (3) the following new paragraph:

“(4) TOP-LOADING CLOTHES WASHER.—The term ‘top-loading clothes washer’ means a clothes washer which has the clothes container compartment access located on the top of the machine and which operates on a vertical axis.”.

(4) REPLACEMENT OF ENERGY FACTOR.—Section 45M(f)(6), as redesignated by paragraph (3), is amended to read as follows:

“(6) MODIFIED ENERGY FACTOR.—The term ‘modified energy factor’ means the modified energy factor established by the Department of Energy for compliance with the Federal energy conservation standard.”.

(5) GALLONS PER CYCLE; WATER CONSUMPTION FACTOR.—Section 45M(f) (relating to definitions), as amended by paragraph (3), is amended by adding at the end the following:

“(9) GALLONS PER CYCLE.—The term ‘gallons per cycle’ means, with respect to a dishwasher, the amount of water, expressed in gallons, required to complete a normal cycle of a dishwasher.

“(10) WATER CONSUMPTION FACTOR.—The term ‘water consumption factor’ means, with respect to a clothes washer, the quotient of the total weighted per-cycle water consumption divided by the cubic foot (or liter) capacity of the clothes washer.”.

(f) Effective date.—The amendments made by this section shall apply to appliances produced after December 31, 2007.

SEC. 521. Termination of authority to deduct amounts from share of oil and gas leasing revenues provided to States.

(a) in general.—Effective December 26, 2007, the matter under the heading “ADMINISTRATIVE PROVISIONS” under the heading “Minerals Management Service” of title I of the Department of the Interior, Environment, and Related Agencies Appropriations Act, 2008 (Subdivision F of Public Law 110–161; 121 Stat. 2109) is amended by striking the second undesignated paragraph.

(b) Administration.—Notwithstanding any other provision of law, the Secretary of the Treasury and the Secretary of the Interior shall not deduct any amount from or reduce the amount of payments otherwise payable to States under section 35 of the Mineral Leasing Act (30 U.S.C. 191).

SEC. 601. Definitions.

In this subtitle:

(1) COAL-TO-LIQUID.—The term “coal-to-liquid” means—

(A) with respect to a process or technology, the use of a feedstock, the majority of which is the coal resources of the United States, using the class of reactions known as Fischer-Tropsch, to produce synthetic fuel suitable for transportation; and

(B) with respect to a facility, the portion of a facility related to producing the inputs to the Fischer-Tropsch process, the Fischer-Tropsch process, finished fuel production, or the capture, transportation, or sequestration of byproducts of the use of a feedstock that is primarily domestic coal at the Fischer-Tropsch facility, including carbon emissions.

(2) SECRETARY.—The term “Secretary” means the Secretary of Energy.

SEC. 602. Coal-to-liquid fuel loan guarantee program.

(a) Eligible projects.—Section 1703(b) of the Energy Policy Act of 2005 (42 U.S.C. 16513(b)) is amended by adding at the end the following:

“(11) Large-scale coal-to-liquid facilities (as defined in section 601 of the Eight Steps to Energy Sufficiency Act of 2008) that use a feedstock, the majority of which is the coal resources of the United States, to produce not less than 10,000 barrels a day of liquid transportation fuel.”.

(b) Authorization of appropriations.—Section 1704 of the Energy Policy Act of 2005 (42 U.S.C. 16514) is amended by adding at the end the following:

“(c) Coal-to-liquid projects.—

“(1) IN GENERAL.—There are authorized to be appropriated such sums as are necessary to provide the cost of guarantees for projects involving large-scale coal-to-liquid facilities under section 1703(b)(11).

“(2) ALTERNATIVE FUNDING.—If no appropriations are made available under paragraph (1), an eligible applicant may elect to provide payment to the Secretary, to be delivered if and at the time the application is approved, in the amount of the estimated cost of the loan guarantee to the Federal Government, as determined by the Secretary.

“(3) LIMITATIONS.—

“(A) IN GENERAL.—No loan guarantees shall be provided under this title for projects described in paragraph (1) after (as determined by the Secretary)—

“(i) the tenth such loan guarantee is issued under this title; or

“(ii) production capacity covered by such loan guarantees reaches 100,000 barrels per day of coal-to-liquid fuel.

“(B) INDIVIDUAL PROJECTS.—

“(i) IN GENERAL.—A loan guarantee may be provided under this title for any large-scale coal-to-liquid facility described in paragraph (1) that produces no more than 20,000 barrels of coal-to-liquid fuel per day.

“(ii) NON-FEDERAL FUNDING REQUIREMENT.—To be eligible for a loan guarantee under this title, a large-scale coal-to-liquid facility described in paragraph (1) that produces more than 20,000 barrels per day of coal-to-liquid fuel shall be eligible to receive a loan guarantee for the proportion of the cost of the facility that represents 20,000 barrels of coal-to-liquid fuel per day of production.

“(4) REQUIREMENTS.—

“(A) GUIDELINES.—Not later than 180 days after the date of enactment of this subsection, the Secretary shall publish guidelines for the coal-to-liquids loan guarantee application process.

“(B) APPLICATIONS.—Not later than 1 year after the date of enactment of this subsection, the Secretary shall begin to accept applications for coal-to-liquid loan guarantees under this subsection.

“(C) DEADLINE.—Not later than 1 year from the date of acceptance of an application under subparagraph (B), the Secretary shall evaluate the application and make final determinations under this subsection.

“(5) REPORTS TO CONGRESS.—The Secretary shall submit to the Committee on Energy and Natural Resources of the Senate and the Committee on Energy and Commerce of the House of Representatives a report describing the status of the program under this subsection not later than each of—

“(A) 180 days after the date of enactment of this subsection;

“(B) 1 year after the date of enactment of this subsection; and

“(C) the dates on which the Secretary approves the first and fifth applications for coal-to-liquid loan guarantees under this subsection.”.

SEC. 603. Coal-to-liquid facilities loan program.

(a) Definition of eligible recipient.—In this section, the term “eligible recipient” means an individual, organization, or other entity that owns, operates, or plans to construct a coal-to-liquid facility that will produce at least 10,000 barrels per day of coal-to-liquid fuel.

(b) Establishment.—The Secretary shall establish a program under which the Secretary shall provide loans, in a total amount not to exceed $20,000,000, for use by eligible recipients to pay the Federal share of the cost of obtaining any services necessary for the planning, permitting, and construction of a coal-to-liquid facility.

(c) Application.—To be eligible to receive a loan under subsection (b), the eligible recipient shall submit to the Secretary an application at such time, in such manner, and containing such information as the Secretary may require.

(d) Non-Federal match.—To be eligible to receive a loan under this section, an eligible recipient shall use non-Federal funds to provide a dollar-for-dollar match of the amount of the loan.

(e) Repayment of loan.—

(1) IN GENERAL.—To be eligible to receive a loan under this section, an eligible recipient shall agree to repay the original amount of the loan to the Secretary not later than 5 years after the date of the receipt of the loan.

(2) SOURCE OF FUNDS.—Repayment of a loan under paragraph (1) may be made from any financing or assistance received for the construction of a coal-to-liquid facility described in subsection (a), including a loan guarantee provided under section 1703(b)(11) of the Energy Policy Act of 2005 (42 U.S.C. 16513(b)(11)).

(f) Requirements.—

(1) GUIDELINES.—Not later than 180 days after the date of enactment of this Act, the Secretary shall publish guidelines for the coal-to-liquids loan application process.

(2) APPLICATIONS.—Not later than 1 year after the date of enactment of this Act, the Secretary shall begin to accept applications for coal-to-liquid loans under this section.

(g) Reports to Congress.—Not later than each of 180 days and 1 year after the date of enactment of this Act, the Secretary shall submit to the Committee on Energy and Natural Resources of the Senate and the Committee on Energy and Commerce of the House of Representatives a report describing the status of the program under this section.

(h) Authorization of appropriations.—There is authorized to be appropriated to carry out this section $200,000,000, to remain available until expended.

SEC. 604. Location of coal-to-liquid manufacturing facilities.

The Secretary, in coordination with the head of any affected agency, shall promulgate such regulations as the Secretary determines to be necessary to support the development on Federal land (including land of the Department of Energy, military bases, and military installations closed or realigned under the defense base closure and realignment) of coal-to-liquid manufacturing facilities and associated infrastructure, including the capture, transportation, or sequestration of carbon dioxide.

SEC. 605. Strategic petroleum reserve.

(a) Development, operation, and maintenance of reserve.—Section 159 of the Energy Policy and Conservation Act (42 U.S.C. 6239) is amended—

(1) by redesignating subsections (f), (g), (j), (k), and (l) as subsections (a), (b), (e), (f), and (g), respectively; and

(2) by inserting after subsection (b) (as redesignated by paragraph (1)) the following:

“(c) Study of maintaining coal-to-liquid products in reserve.—Not later than 1 year after the date of enactment of the Eight Steps to Energy Sufficiency Act of 2008, the Secretary and the Secretary of Defense shall—

“(1) conduct a study of the feasibility and suitability of maintaining coal-to-liquid products in the Reserve; and

“(2) submit to the Committee on Energy and Natural Resources and the Committee on Armed Services of the Senate and the Committee on Energy and Commerce and the Committee on Armed Services of the House of Representatives a report describing the results of the study.

“(d) Construction of storage facilities.—As soon as practicable after the date of enactment of the Eight Steps to Energy Sufficiency Act of 2008, the Secretary may construct 1 or more storage facilities in the vicinity of pipeline infrastructure and at least 1 military base.”.

(b) Petroleum products for storage in reserve.—Section 160 of the Energy Policy and Conservation Act (42 U.S.C. 6240) is amended—

(1) in subsection (a)—

(A) in paragraph (1), by inserting a semicolon at the end;

(B) in paragraph (2), by striking “and” at the end;

(C) in paragraph (3), by striking the period at the end and inserting “; and”; and

(D) by adding at the end the following:

“(4) coal-to-liquid products (as defined in section 601 of the Eight Steps to Energy Sufficiency Act of 2008), as the Secretary determines to be appropriate, in a quantity not to exceed 20 percent of the total quantity of petroleum and petroleum products in the Reserve.”;

(2) in subsection (b), by redesignating paragraphs (3) through (5) as paragraphs (2) through (4), respectively; and

(3) by redesignating subsections (f) and (h) as subsections (d) and (e), respectively.

(c) Conforming amendments.—Section 167 of the Energy Policy and Conservation Act (42 U.S.C. 6247) is amended—

(1) in subsection (b)—

(A) by redesignating paragraphs (2) and (3) as paragraphs (1) and (2), respectively; and

(B) in paragraph (2) (as redesignated by subparagraph (A)), by striking “section 160(f)” and inserting “section 160(e)”; and

(2) in subsection (d), in the matter preceding paragraph (1), by striking “section 160(f)” and inserting “section 160(e)”.

SEC. 606. Authorization to conduct research, development, testing, and evaluation of assured domestic fuels.

Of the amount authorized to be appropriated for the Air Force for research, development, testing, and evaluation, $10,000,000 may be made available for the Air Force Research Laboratory to continue support efforts to test, qualify, and procure synthetic fuels developed from coal for aviation jet use.

SEC. 607. Coal-to-liquid long-term fuel procurement and department of defense development.

Section 2922d of title 10, United States Code, is amended—

(1) in subsection (b)—

(A) by striking “The Secretary” and inserting the following:

“(1) IN GENERAL.—The Secretary”; and

(B) by adding at the end the following:

“(2) COAL-TO-LIQUID PRODUCTION FACILITIES.—

“(A) IN GENERAL.—The Secretary of Defense may enter into contracts or other agreements with private companies or other entities to develop and operate coal-to-liquid facilities (as defined in section 601 of the Eight Steps to Energy Sufficiency Act of 2008) on or near military installations.

“(B) CONSIDERATIONS.—In entering into contracts and other agreements under subparagraph (A), the Secretary shall consider land availability, testing opportunities, and proximity to raw materials.”;

(2) in subsection (d)—

(A) by striking “Subject to applicable provisions of law, any” and inserting “Any”; and

(B) by striking “1 or more years” and inserting “up to 25 years”; and

(3) by adding at the end the following:

“(f) Authorization of appropriations.—There are authorized to be appropriated such sums as are necessary to carry out this section.”.

SEC. 608. Report on emissions of Fischer-Tropsch products used as transportation fuels.

(a) In general.—In cooperation with the Administrator of the Environmental Protection Agency, the Secretary of Defense, the Administrator of the Federal Aviation Administration, and the Secretary of Health and Human Services, the Secretary shall—

(1) carry out a research and demonstration program to evaluate the emissions of the use of Fischer-Tropsch fuel for transportation, including diesel and jet fuel;

(2) evaluate the effect of using Fischer-Tropsch transportation fuel on land and air engine exhaust emissions; and

(3) in accordance with subsection (e), submit to Congress a report on the effect on air quality and public health of using Fischer-Tropsch fuel in the transportation sector.

(b) Guidance and technical support.—The Secretary shall issue any guidance or technical support documents necessary to facilitate the effective use of Fischer-Tropsch fuel and blends under this section.

(c) Facilities.—For the purpose of evaluating the emissions of Fischer-Tropsch transportation fuels, the Secretary shall—

(1) support the use and capital modification of existing facilities and the construction of new facilities at the research centers designated in section 417 of the Energy Policy Act of 2005 (42 U.S.C. 15977); and

(2) engage those research centers in the evaluation and preparation of the report required under subsection (a)(3).

(d) Requirements.—The program described in subsection (a)(1) shall consider—

(1) the use of neat (100 percent) Fischer-Tropsch fuel and blends of Fischer-Tropsch fuels with conventional crude oil-derived fuel for heavy-duty and light-duty diesel engines and the aviation sector; and

(2) the production costs associated with domestic production of those fuels and prices for consumers.

(e) Reports.—The Secretary shall submit to the Committee on Energy and Natural Resources of the Senate and the Committee on Energy and Commerce of the House of Representatives—

(1) not later than 180 days after the date of enactment of this Act, an interim report on actions taken to carry out this section; and

(2) not later than 1 year after the date of enactment of this Act, a final report on actions taken to carry out this section.

(f) Authorization of Appropriations.—There are authorized to be appropriated such sums as are necessary to carry out this section.

SEC. 611. Credit for investment in coal-to-liquid fuels projects.

(a) In General.—Section 46 of the Internal Revenue Code of 1986 (relating to amount of credit) 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 qualifying coal-to-liquid fuels project credit.”.

(b) Amount of credit.—Subpart E of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to rules for computing investment credit) is amended by inserting after section 48B the following new section:

“SEC. 48C. Qualifying coal-to-liquid fuels project credit.

“(a) In General.—For purposes of section 46, the qualifying coal-to-liquid fuels project credit for any taxable year is an amount equal to 20 percent of the qualified investment for such taxable year.

“(b) Qualified Investment.—

“(1) IN GENERAL.—For purposes of subsection (a), the qualified investment for any taxable year is the basis of property placed in service by the taxpayer during such taxable year which is part of a qualifying coal-to-liquid fuels project—

“(A)(i) the construction, reconstruction, or erection of which is completed by the taxpayer; or

“(ii) which is acquired by the taxpayer if the original use of such property commences with the taxpayer; and

“(B) with respect to which depreciation (or amortization in lieu of depreciation) is allowable.

“(2) APPLICABLE RULES.—For purposes of this section, rules similar to the rules of subsection (a)(4) and (b) of section 48 shall apply.

“(c) Definitions.—For purposes of this section—

“(1) QUALIFYING COAL-TO-LIQUID FUELS PROJECT.—The term ‘qualifying coal-to-liquid fuels project’ means any domestic project which—

“(A) employs the class of reactions known as Fischer-Tropsch to produce at least 10,000 barrels per day of transportation grade liquid fuels from a feedstock that is primarily domestic coal (including any property which allows for the capture, transportation, or sequestration of by-products resulting from such process, including carbon emissions); and

“(B) any portion of the qualified investment in which is certified under the qualifying coal-to-liquid program as eligible for credit under this section in an amount (not to exceed $200,000,000) determined by the Secretary.

“(2) COAL.—The term ‘coal’ means any carbonized or semicarbonized matter, including peat.

“(d) Qualifying coal-to-liquid fuels project program.—

“(1) IN GENERAL.—The Secretary, in consultation with the Secretary of Energy, shall establish a qualifying coal-to-liquid fuels project program to consider and award certifications for qualified investment eligible for credits under this section to 10 qualifying coal-to-liquid fuels project sponsors under this section. The total qualified investment which may be awarded eligibility for credit under the program shall not exceed $2,000,000,000.

“(2) PERIOD OF ISSUANCE.—A certificate of eligibility under paragraph (1) may be issued only during the 10-fiscal year period beginning on October 1, 2007.

“(3) SELECTION CRITERIA.—The Secretary shall not make a competitive certification award for qualified investment for credit eligibility under this section unless the recipient has documented to the satisfaction of the Secretary that—

“(A) the proposal of the award recipient is financially viable;

“(B) the recipient will provide sufficient information to the Secretary for the Secretary to ensure that the qualified investment is spent efficiently and effectively;

“(C) the fuels identified with respect to the gasification technology for such project will comprise at least 90 percent of the fuels required by the project for the production of transportation grade liquid fuels;

“(D) the award recipient's project team is competent in the planning and construction of coal gasification facilities and familiar with operation of the Fischer-Tropsch process, with preference given to those recipients with experience which demonstrates successful and reliable operations of such process; and

“(E) the award recipient has met other criteria established and published by the Secretary.

“(e) Denial of double benefit.—No deduction or other credit shall be allowed with respect to the basis of any property taken into account in determining the credit allowed under this section.”.

(c) Conforming amendments.—

(1) Section 49(a)(1)(C) of the Internal Revenue Code of 1986 is amended by striking “and” at the end of clause (iii), by striking the period at the end of clause (iv) and inserting “, and”, and by adding after clause (iv) the following new clause:

“(v) the basis of any property which is part of a qualifying coal-to-liquid fuels project under section 48C.”.

(2) The table of sections for subpart E of part IV of subchapter A of chapter 1 of such Code is amended by inserting after the item relating to section 48B the following new item:


“Sec. 48C. Qualifying coal-to-liquid fuels project credit.”.

(d) Effective date.—The amendments made by this section shall apply to periods after the date of the enactment of this Act, under rules similar to the rules of section 48(m) of the Internal Revenue Code of 1986 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990).

SEC. 612. Temporary expensing for equipment used in coal-to-liquid fuels process.

(a) In General.—Part VI of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after section 179D the following new section:

“SEC. 179E. Election to expense certain coal-to-liquid fuels facilities.

“(a) Treatment as Expenses.—A taxpayer may elect to treat the cost of any qualified coal-to-liquid fuels process property as an expense which is not chargeable to capital account. Any cost so treated shall be allowed as a deduction for the taxable year in which the expense is incurred.

“(b) Election.—

“(1) IN GENERAL.—An election under this section for any taxable year shall be made on the taxpayer's return of the tax imposed by this chapter for the taxable year. Such election shall be made in such manner as the Secretary may by regulations prescribe.

“(2) ELECTION IRREVOCABLE.—Any election made under this section may not be revoked except with the consent of the Secretary.

“(c) Qualified coal-to-liquid fuels process property.—The term ‘qualified coal-to-liquid fuels process property’ means any property located in the United States—

“(1) which employs the Fischer-Tropsch process to produce transportation grade liquid fuels from a feedstock that is primarily domestic coal (including any property which allows for the capture, transportation, or sequestration of by-products resulting from such process, including carbon emissions);

“(2) the original use of which commences with the taxpayer;

“(3) the construction of which—

“(A) except as provided in subparagraph (B), is subject to a binding construction contract entered into after the date of the enactment of this section and before January 1, 2011, but only if there was no written binding construction contract entered into on or before such date of enactment; or

“(B) in the case of self-constructed property, began after the date of the enactment of this section and before January 1, 2011; and

“(4) which is placed in service by the taxpayer after the date of the enactment of this section and before January 1, 2016.

“(d) Election To allocate deduction to cooperative owner.—If—

“(1) a taxpayer to which subsection (a) applies is an organization to which part I of subchapter T applies; and

“(2) one or more persons directly holding an ownership interest in the taxpayer are organizations to which part I of subchapter T apply, the taxpayer may elect to allocate all or a portion of the deduction allowable under subsection (a) to such persons. Such allocation shall be equal to the person's ratable share of the total amount allocated, determined on the basis of the person's ownership interest in the taxpayer. The taxable income of the taxpayer shall not be reduced under section 1382 by reason of any amount to which the preceding sentence applies.

“(e) Basis reduction.—

“(1) IN GENERAL.—For purposes of this title, if a deduction is allowed under this section with respect to any qualified coal-to-liquid fuels process property, the basis of such property shall be reduced by the amount of the deduction so allowed.

“(2) ORDINARY INCOME RECAPTURE.—For purposes of section 1245, the amount of the deduction allowable under subsection (a) with respect to any property which is of a character subject to the allowance for depreciation shall be treated as a deduction allowed for depreciation under section 167.

“(f) Application with other deductions and credits.—

“(1) OTHER DEDUCTIONS.—No deduction shall be allowed under any other provision of this chapter with respect to any expenditure with respect to which a deduction is allowed under subsection (a) to the taxpayer.

“(2) CREDITS.—No credit shall be allowed under section 38 with respect to any amount for which a deduction is allowed under subsection (a).

“(g) Reporting.—No deduction shall be allowed under subsection (a) to any taxpayer for any taxable year unless such taxpayer files with the Secretary a report containing such information with respect to the operation of the property of the taxpayer as the Secretary shall require.”.

(b) Conforming amendments.—

(1) Section 1016(a) of the Internal Revenue Code of 1986, as amended by this Act, is amended by striking “and” at the end of paragraph (36), by striking the period at the end of paragraph (37) and inserting “, and”, and by adding at the end the following new paragraph:

“(38) to the extent provided in section 179E(e)(1).”.

(2) Section 1245(a) of such Code is amended by inserting “179E,” after “179D,” both places it appears in paragraphs (2)(C) and (3)(C).

(3) Section 263(a)(1) of such Code is amended by striking “or” at the end of subparagraph (J), by striking the period at the end of subparagraph (K) and inserting “, or”, and by inserting after subparagraph (K) the following new subparagraph:

“(L) expenditures for which a deduction is allowed under section 179E.”.

(4) Section 312(k)(3)(B) of such Code is amended by striking “or 179D” each place it appears in the heading and text and inserting “179D, or 179E”.

(5) The table of sections for part VI of subchapter B of chapter 1 of such Code is amended by inserting after the item relating to section 179D the following new item:


“Sec. 179E. Election to expense certain coal-to-liquid fuels facilities.”.

(c) Effective date.—The amendments made by this section shall apply to properties placed in service after the date of the enactment of this Act.

SEC. 613. Extension of alternative fuel credit for fuel derived from coal through the fischer-tropsch process.

(a) Alternative fuel credit.—Paragraph (4) of section 6426(d) of the Internal Revenue Code of 1986 is amended to read as follows:

“(4) TERMINATION.—This subsection shall not apply to—

“(A) any sale or use involving liquid fuel derived from a feedstock that is primarily domestic coal (including peat) through the Fischer-Tropsch process for any period after September 30, 2020;

“(B) any sale or use involving liquified hydrogen for any period after September 30, 2014; and

“(C) any other sale or use for any period after September 30, 2009.”.

(b) Payments.—

(1) IN GENERAL.—Paragraph (5) of section 6427(e) of the Internal Revenue Code of 1986 is amended by striking “and” and the end of subparagraph (C), by striking the period at the end of subparagraph (D) and inserting “, and”, and by adding at the end the following new subparagraph:

“(E) any alternative fuel or alternative fuel mixture (as so defined) involving liquid fuel derived from coal (including peat) through the Fischer-Tropsch process sold or used after September 30, 2020.”.

(2) CONFORMING AMENDMENT.—Section 6427(e)(5)(C) of such Code is amended by striking “subparagraph (D)” and inserting “subparagraphs (D) and (E)”.

SEC. 614. Modifications to enhanced oil recovery credit.

(a) Enhanced Credit for Carbon Dioxide Injections.—Section 43 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:

“(f) Enhanced credit for projects using qualified carbon dioxide.—

“(1) IN GENERAL.—For purposes of this section—

“(A) the term ‘qualified project’ includes a project described in paragraph (2); and

“(B) in the case of a project described in paragraph (2), subsection (a) shall be applied by substituting ‘50 percent’ for ‘15 percent’.

“(2) PROJECTS DESCRIBED.—A project is described in this paragraph if it begins or is substantially expanded after December 31, 2007, and—

“(A) uses qualified carbon dioxide in an enhanced oil, natural gas, or coalbed methane recovery method, which involves flooding or injection; or

“(B) enables the capture or sequestration of qualified carbon dioxide.

“(3) DEFINITIONS.—For purposes of this subsection:

“(A) CAPTURE OR SEQUESTRATION.—The term ‘capture or sequestration’ means any equipment or facility necessary to—

“(i) capture or separate qualified carbon dioxide from other emissions;

“(ii) transport qualified carbon dioxide; or

“(iii) process and use qualified carbon dioxide in a qualified project.

“(B) ENHANCED COALBED METHANE RECOVERY.—The term ‘enhanced coalbed methane recovery’ means recovery of coalbed methane by injecting or flooding with qualified carbon dioxide.

“(C) ENHANCED NATURAL GAS RECOVERY.—The term ‘enhanced natural gas recovery’ means recovery of natural gas by injecting or flooding with qualified carbon dioxide.

“(D) ENHANCED OIL RECOVERY.—The term ‘enhanced oil recovery’ means recovery of oil by injecting or flooding with qualified carbon dioxide.

“(E) QUALIFIED CARBON DIOXIDE.—The term ‘qualified carbon dioxide’ means carbon dioxide which is produced from the gasification and subsequent refinement of a feedstock which is primarily domestic coal, at a facility which produces coal-to-liquid fuel.

“(4) TERMINATION.—This subsection shall not apply to costs paid or incurred for any qualified project after December 31, 2020.”.

(b) Conforming amendments.—

(1) Section 43 of the Internal Revenue Code of 1986 is amended—

(A) by striking “enhanced oil recovery credit” in subsection (a) and inserting “enhanced oil, natural gas, and coalbed methane recovery, and capture and sequestration credit”;

(B) by striking “qualified enhanced oil recovery costs” each place it appears and inserting “qualified costs”;

(C) by striking “qualified enhanced oil recovery project” each place it appears and inserting “qualified project”; and

(D) by striking the heading and inserting:

“SEC. 43. Enhanced oil, natural gas, and coalbed methane recovery, and capture and sequestration credit”.

(2) The item in the table of sections for subpart D of part IV of subchapter A of chapter 1 of such Code relating to section 43 is amended to read as follows:


“Sec. 43. Enhanced oil, natural gas, and coalbed methane recovery, and capture and sequestration credit.”.

(c) Effective date.—The amendments made by this section shall apply to costs paid or incurred in taxable years ending after December 31, 2007.

SEC. 615. Allowance of enhanced oil, natural gas, and coalbed methane recovery, and capture and sequestration credit against the alternative minimum tax.

(a) In general.—Subsection (c) of section 38 of the Internal Revenue Code of 1986 (relating to limitation based on amount of tax) is amended by redesignating paragraphs (4) and (5) as paragraphs (5) and (6), respectively, and by inserting after paragraph (3) the following new paragraph:

“(4) SPECIAL RULES FOR ENHANCED OIL, NATURAL GAS, AND COALBED METHANE RECOVERY, AND CAPTURE AND SEQUESTRATION CREDIT.—In the case of the enhanced oil, natural gas, and coalbed methane recovery, and capture and sequestration credit determined under section 43—

“(A) this section and section 39 shall be applied separately with respect to such credit; and

“(B) in applying paragraph (1) to such credit—

“(i) the tentative minimum tax shall be treated as being zero; and

“(ii) the limitation under paragraph (1) (as modified by clause (i)) shall be reduced by the credit allowed under subsection (a) for the taxable year (other than the enhanced oil, natural gas, and coalbed methane recovery, and capture and sequestration credit and the specified credits).”.

(b) Conforming amendments.—

(1) Section 38(c)(2)(A)(ii)(II) of the Internal Revenue Code of 1986 is amended by inserting “the enhanced oil, natural gas, and coalbed methane recovery, and capture and sequestration credit,” after “employee credit,”.

(2) Section 38(c)(3)(A)(ii)(II) of such Code is amended by inserting “, the enhanced oil, natural gas, coalbed methane recovery, capture and sequestration credit,” after “employee credit”.

(c) Effective Date.—The amendments made by this section shall apply to taxable years ending after December 31, 2007.

SEC. 621. Carbon sequestration and capture.

(a) Definitions.—In this section:

(1) ANTHROPOGENIC.—The term “anthropogenic” means produced or caused by human activity.

(2) CARBON DIOXIDE.—The term “carbon dioxide” means anthropogenically sourced carbon dioxide that is of sufficient purity and quality as to not compromise the safety and efficiency of any reservoir in which the carbon dioxide is stored.

(3) FEDERAL AGENCY.—The term “Federal agency” means any department, agency, or instrumentality of the United States.

(4) GEOLOGICAL STORAGE.—The term “geological storage” means permanent or short-term underground storage of carbon dioxide in a reservoir.

(5) PERSON.—

(A) IN GENERAL.—The term “person” means an individual, corporation, company (including a limited liability company), association, partnership, State, municipality, or Federal agency.

(B) INCLUSIONS.—The term “person” includes an officer, employee, and agent of any corporation, company (including a limited liability company), association, partnership, State, municipality, or Federal agency.

(6) RESERVOIR.—

(A) IN GENERAL.—The term “reservoir” means any subsurface sedimentary stratum, formation, aquifer, or cavity or void (whether natural or artificially created) that is suitable for, or capable of being made suitable for, the injection and storage of carbon dioxide.

(B) INCLUSIONS.—The term “reservoir” includes—

(i) an oil and gas reservoir;

(ii) a saline formation or coal seam; and

(iii) the seabed and subsoil of a submarine area.

(7) STATE.—

(A) IN GENERAL.—The term “State” means—

(i) each of the several States of the United States;

(ii) the District of Columbia;

(iii) the Commonwealth of Puerto Rico;

(iv) Guam;

(v) American Samoa;

(vi) the Commonwealth of the Northern Mariana Islands;

(vii) the Federated States of Micronesia;

(viii) the Republic of the Marshall Islands;

(ix) the Republic of Palau; and

(x) the United States Virgin Islands.

(B) INCLUSIONS.—The term “State” includes all territorial water, seabed, and subsoil of submarine areas of each State.

(8) STATE REGULATORY AGENCY.—The term “State regulatory agency” means the agency designated by the Governor of a State to administer a carbon dioxide storage program of the State.

(9) STORAGE FACILITY.—

(A) IN GENERAL.—The term “storage facility” means—

(i) an underground reservoir, underground equipment, and surface structures and equipment used in an operation to store carbon dioxide in a reservoir; and

(ii) any other facilities that the Administrator may include by regulation or permit.

(B) EXCLUSIONS.—The term “storage facility” does not include pipelines used to transport the carbon dioxide from 1 or more capture facilities to the storage and injection site.

(10) STORAGE OPERATOR.—The term “storage operator” means any person or other entity authorized by the Administrator or State regulatory agency to operate a storage facility.

(11) UNDERGROUND RESERVOIR.—The term “underground reservoir”, with respect to a storage facility, includes any necessary and reasonable areal buffer and subsurface monitoring zones that are—

(A) designated by the Administrator or State regulatory agency for the purpose of ensuring the safe and efficient operation of the storage facility for the storage of carbon dioxide; and

(B) selected to protect against pollution, invasion, and escape or migration of the stored carbon dioxide.

(b) State carbon dioxide geological storage programs.—

(1) REGULATIONS.—

(A) IN GENERAL.—The Administrator shall—

(i) not later than 180 days after the date of enactment of this Act, publish in the Federal Register proposed regulations for State carbon dioxide storage programs; and

(ii) not later than 180 days after the date of publication of the proposed regulations under clause (i), promulgate final regulations for State carbon dioxide storage programs that meet the requirements described in paragraph (2)(A), including such modifications as the Administrator determines to be appropriate.

(B) UPDATING.—The Administrator may periodically review and, as necessary, revise the regulations promulgated under this subsection.

(2) STATE REGULATORY AUTHORITY.—

(A) IN GENERAL.—The regulations promulgated under paragraph (1)(A)(ii) shall establish minimum requirements that States shall meet in order to be approved to administer a carbon dioxide storage program under subsection (c)(1), including—

(i) a prohibition on carbon dioxide storage in the State that is not authorized by a permit issued by the State;

(ii) inspection, monitoring, recordkeeping, and reporting requirements; and

(iii) authority for the State regulatory agency to issue a permit, after public notice and hearing, approving a storage facility for the proposed geological storage of carbon dioxide if the State regulatory authority determines that—

(I) the horizontal and vertical boundaries of the geological storage facility designated by the permit are appropriate for the storage facility;

(II) the storage facility and reservoir are suitable and feasible for the injection and storage of carbon dioxide;

(III) a good faith effort has been made to obtain the consent of a majority of the owners having property interests affected by the storage facility, and that the storage operator intends to acquire any remaining interest by eminent domain or by a method otherwise allowed by law;

(IV) the use of the storage facility for the geological storage of carbon dioxide will not result in the unpermitted migration of carbon dioxide into other formations containing fresh drinking water or oil, gas, coal, or other commercial mineral deposits that are not owned by the storage operator; and

(V) the proposed storage would—

(aa) not unduly endanger human health or the environment; and

(bb) be in the public interest.

(B) STATE AUTHORITY.—A State regulatory agency approved under subsection (c)(1) to administer a carbon dioxide storage program shall issue such orders, permits, certificates, rules, and regulations, including establishment of such appropriate and sufficient financial sureties as are necessary, for the purpose of regulating the drilling, operation, and well plugging and abandonment and removal of surface buildings and equipment of the storage facility in order to protect the storage facility against pollution, invasion, and the escape or migration of carbon dioxide.

(C) EMINENT DOMAIN.—A storage operator may be empowered by a State to exercise the right of eminent domain under State law to acquire all surface and subsurface rights and interests necessary or useful for the purpose of operating the storage facility, including easements and rights-of-way across land that are necessary to transport carbon dioxide among components of the storage facility.

(D) VARIANCE IN CONDITIONS.—The regulations promulgated under paragraph (1)(A)(ii) shall permit or provide for consideration of varying geological, hydrological, and historical conditions in different States and in different areas within a State.

(E) ENHANCED RECOVERY OPERATIONS.—

(i) IN GENERAL.—Upon the approval of a State to administer a carbon dioxide storage program under subsection (c)(1), the State regulatory agency designated by the State may develop rules to allow the conversion into a storage facility of an enhanced recovery operation that is in existence as of the date on which administration of the program by the State is approved.

(ii) OIL AND GAS RECOVERY.—Nothing in this section applies to or otherwise affects the use of carbon dioxide as a part of or in conjunction with any enhanced recovery method the sole purpose of which is enhanced oil or gas recovery.

(c) State primary enforcement responsibility.—

(1) APPROVAL OF STATE CARBON DIOXIDE STORAGE PROGRAMS.—

(A) APPLICATION.—

(i) IN GENERAL.—After promulgation of the regulations under subsection (b)(1)(A)(ii), each State may submit to the Administrator an application that demonstrates, to the satisfaction of the Administrator, that the State—

(I) has adopted, after providing for reasonable notice and an opportunity for public comment, and will implement, a carbon dioxide storage program that meets the requirements of the regulations; and

(II) will keep such records and make such reports with respect to the activities of the State under the carbon dioxide storage program as the Administrator may require by regulation.

(ii) REVISIONS.—Not later than the expiration of the 270-day period beginning on the date on which any regulation promulgated under subsection (b)(1)(A)(ii) is revised or amended with respect to a requirement applicable to State carbon dioxide storage programs, each State with a carbon dioxide storage program approved under subparagraph (B) shall submit, in such form and in such manner as the Administrator may require, a notice to the Administrator that demonstrates, to the satisfaction of the Administrator, that the State carbon dioxide storage program meets the revised or amended requirement.

(B) APPROVAL OR DISAPPROVAL.—Not later than 90 days after the date on which a State submits to the Administrator an application under subparagraph (A)(i) or a notice under subparagraph (A)(ii), and after a reasonable (as determined by the Administrator) opportunity for discussion, the Administrator shall by regulation approve, disapprove, or approve in part and disapprove in part, the carbon dioxide storage program proposed by the State.

(C) EFFECT OF APPROVAL.—If the Administrator approves the carbon dioxide storage program of a State under subparagraph (B), the State shall have primary enforcement responsibility for carbon dioxide storage in the State until such time as the Administrator determines, by regulation, that the State no longer meets the requirements of subparagraph (A)(i).

(D) PUBLIC PARTICIPATION.—Before making a determination under subparagraph (B) or (C), the Administrator shall provide an opportunity for a public hearing with respect to the determination.

(2) STATES WITHOUT PRIMARY ENFORCEMENT RESPONSIBILITY.—

(A) IN GENERAL.—If a State fails to submit an application under paragraph (1)(A)(i) by the date that is 270 days after the date of promulgation of regulations under subsection (b)(1)(A)(ii), the Administrator shall by regulation prescribe (and may from time to time by regulation revise) a program applicable to the State that meets the terms and conditions of subsection (b)(2).

(B) DISAPPROVAL.—If the Administrator disapproves all or a portion of the program of a State under paragraph (1)(B), if the Administrator determines under paragraph (1)(C) that a State no longer meets the requirements of subclause (I) or (II) of paragraph (1)(A)(i), or if a State fails to submit a notice before the expiration of the period specified in paragraph (1)(A)(ii), the Administrator shall by regulation, not later than 90 days after the date of the disapproval, determination, or expiration (as the case may be), prescribe (and may from time to time by regulation revise) a program applicable to the State that meets the requirements of subsection (b)(2).

(C) APPLICABILITY.—A program prescribed by the Administrator under subparagraph (B) shall apply in a State only to the extent that a program adopted by the State that the Administrator determines meets the requirements of this section or subsection (b)(2) is not in effect.

(D) PUBLIC PARTICIPATION.—Before promulgating any regulation under subparagraph (B) or (C), the Administrator shall provide an opportunity for a public hearing with respect to the regulation.

(d) Enforcement of program.—

(1) NOTIFICATION.—

(A) IN GENERAL.—In any case in which the Administrator determines, during a period during which a State has primary enforcement responsibility for carbon dioxide storage, that any person who is subject to a requirement of the carbon dioxide storage program is violating the requirement, the Administrator shall notify the State and the person violating the requirement of the violation.

(B) FAILURE TO ENFORCE.—If, after the date that is 30 days after the Administrator notifies a State of a violation under subparagraph (A), the State has not commenced appropriate enforcement action, the Administrator shall—

(i) issue an order under paragraph (2) requiring the person to—

(I) correct the matter; and

(II) comply with the requirement; or

(ii) bring a civil action in accordance with paragraph (3).

(C) VIOLATIONS IN CERTAIN STATES.—In any case in which the Administrator determines, during a period during which a State does not have primary enforcement responsibility for carbon dioxide storage, that any person subject to any requirement of any applicable carbon dioxide storage program in the State is violating the requirement, the Administrator shall—

(i) issue an order under paragraph (2) requiring the person to comply with requirement; or

(ii) bring a civil action in accordance with paragraph (3).

(2) ADMINISTRATIVE ORDERS AND APPEALS.—

(A) IN GENERAL.—In any case in which the Administrator has the authority to bring a civil action under this subsection with respect to any regulation or other requirement of this section, the Administrator may, in addition to bringing the civil action, issue an order under this paragraph that—

(i) assesses a civil penalty of not more than $10,000 for each day of violation for any past or current violation, up to a maximum aggregate civil penalty of $125,000, for each covered entity;

(ii) requires compliance with the regulation or other requirement; or

(iii) accomplishes each of the actions described in clauses (i) and (ii).

(B) TIMING.—An order under this paragraph shall be issued by the Administrator only after an opportunity (provided in accordance with this paragraph) for a hearing.

(C) NOTICE.—Before issuing any order under subparagraph (A), the Administrator shall provide to the person to whom the order applies—

(i) written notice of the intent of the Administrator to issue the order; and

(ii) the opportunity to request, within the 30-day period beginning on the date of receipt by the person of the notice, a hearing on the order.

(D) REQUIREMENTS.—A hearing described in subparagraph (C)(ii)—

(i) shall not be subject to section 554 or 556 of title 5, United States Code; but

(ii) shall provide to each interested person a reasonable opportunity to be heard and to present evidence.

(E) NOTICE AND COMMENT.—The Administrator shall provide public notice of, and a reasonable opportunity to comment on, any proposed order.

(F) SPECIFIC NOTICE.—Any person who comments on any proposed order under subparagraph (E) shall be given notice of any hearing under this paragraph and of any order.

(G) EFFECTIVE DATE.—Any order issued under this paragraph shall become effective on the date that is 30 days after the date of issuance of the order, unless an appeal is taken pursuant to subparagraph (K).

(H) CONTENTS OF ORDER.—Any order issued under this paragraph—

(i) shall state with reasonable specificity the nature of the violation; and

(ii) may specify a reasonable period to achieve compliance.

(I) CONSIDERATIONS.—In assessing any civil penalty under this paragraph, the Administrator shall take into consideration all appropriate factors, including—

(i) the seriousness of the violation;

(ii) the economic benefit (if any) resulting from the violation;

(iii) any history of similar violations;

(iv) any good-faith efforts to comply with the applicable requirements;

(v) the economic impact of the penalty on the violator; and

(vi) such other matters as justice may require.

(J) OTHER ACTIONS.—Any violation with respect to which the Administrator has commenced and is diligently prosecuting a civil action under a provision of law other than this section, or has issued an order under this paragraph assessing a civil penalty, shall not be subject to a civil action under paragraph (3).

(K) APPEALS.—Any person against whom an order is issued may file an appeal of the order, not later than 30 days after the date of issuance of the order, with—

(i) the United States District Court for the District of Columbia; or

(ii) the United States district court for the district in which the violation is alleged to have occurred.

(L) DISTRIBUTION OF COPIES.—An appellant shall simultaneously send a copy of an appeal filed under subparagraph (K) by certified mail to the Administrator and to the Attorney General.

(M) RECORD.—The Administrator shall promptly file in the appropriate court described in subparagraph (K) a certified copy of the record on which an order was based.

(N) JUDICIAL ACTION.—A court having jurisdiction over an order issued under this paragraph shall not—

(i) set aside or remand the order unless the court determines that—

(I) there is not substantial evidence on the record, taken as a whole, to support the finding of a violation; or

(II) the assessment by the Administrator of a civil penalty, or a requirement for compliance, constitutes an abuse of discretion; or

(ii) impose additional civil penalties for the same violation unless the court determines that the assessment by the Administrator of a civil penalty constitutes an abuse of discretion.

(O) FAILURE TO PAY.—

(i) IN GENERAL.—If any person fails to pay an assessment of a civil penalty after an order becomes effective under subparagraph (G), or after a court, in a civil action brought under subparagraph (K), has entered a final judgment in favor of the Administrator, the Administrator may request the Attorney General to bring a civil action in an appropriate United States district court to recover the amount assessed, plus costs, attorneys' fees, and interest at currently prevailing rates, calculated from the date on which the order is effective or the date of the final judgment, as the case may be.

(ii) NO REVIEW OF AMOUNT.—In a civil action brought under clause (i), the validity, amount, and appropriateness of the civil penalty shall not be subject to review.

(P) AUTHORITY OF ADMINISTRATOR.—The Administrator may, in connection with administrative proceedings under this paragraph—

(i) issue subpoenas compelling the attendance and testimony of witnesses and subpoenas duces tecum; and

(ii) request the Attorney General to bring a civil action to enforce any subpoena issued under this subparagraph.

(Q) ENFORCEMENT.—The United States district courts shall have jurisdiction to enforce, and impose sanctions with respect to, subpoenas issued under subparagraph (P).

(3) CIVIL AND CRIMINAL ACTIONS.—

(A) IN GENERAL.—A civil action referred to in subparagraph (B) or (C) of paragraph (1) shall be brought in the appropriate United States district court.

(B) AUTHORITY; JUDGEMENT.—A court described in subparagraph (A)—

(i) shall have jurisdiction to require compliance with any requirement of an applicable carbon dioxide storage program or with an order issued under paragraph (2); and

(ii) may enter such judgment as the protection of public health may require.

(C) PENALTIES.—Any person who violates any requirement of an applicable carbon dioxide storage program or an order requiring compliance under paragraph (2)—

(i) shall be subject to a civil penalty of not more than $25,000 for each day of such violation; and

(ii) if the violation is willful, may, in addition to or in lieu of the civil penalty under clause (i), be imprisoned for not more than 3 years, fined in accordance with title 18, United States Code, or both.

(4) EFFECT ON STATE AUTHORITY.—

(A) IN GENERAL.—Nothing in this subsection diminishes or otherwise affects any authority of a State or political subdivision of a State to adopt or enforce any law (including a regulation) (relating to the storage of carbon dioxide.

(B) OTHER REQUIREMENTS.—No law (including a regulation) described in subparagraph (A) shall relieve any person of any requirement otherwise applicable under this Act.

(e) Financial assurances for storage operators.—

(1) IN GENERAL.—Each storage operator shall be required by the State regulatory agency (in the case of a State with primary enforcement authority) or the Administrator (in the case of a State that does not have primary enforcement authority) to have and maintain financial assurances of such type and in such amounts as are necessary to cover public liability claims relating to the storage facility of the storage operator.

(2) MAINTENANCE OF FINANCIAL ASSURANCES.—The financial assurances required under paragraph (1) shall be maintained by the storage operator until such time as the operator obtains a certificate of completion of injection operations under subsection (f).

(3) AMOUNT.—The amount of financial assurances required under paragraph (1) shall be the maximum amount of liability insurance available at a reasonable cost and on reasonable terms from private sources (including private insurance, private contractual indemnities, self-insurance, or a combination of those measures), as determined by the Administrator.

(f) Cessation of storage operations.—Upon a showing by a storage operator that a storage facility is reasonably expected to retain mechanical integrity and remain in place, the State regulatory agency (in the case of a State with primary enforcement authority) or the Administrator (in the case of a State that does not have primary enforcement authority) shall issue a certificate of completion of injection operations to the storage operator.

(g) Liability of storage operators for release of carbon dioxide.—

(1) IN GENERAL.—The Administrator shall agree to indemnify and hold harmless a storage operator (and if different from the storage operator, the owner of the storage facility) that has maintained financial assurances under subsection (e) from liability arising from the leakage of carbon dioxide at any storage facility operated by the storage operator, to the extent that the liability is in excess of the level of financial protection required of the storage operator.

(2) COMPLETION OF OPERATIONS.—Upon the issuance of certificate of completion of injection operations by a State regulatory agency (in the case of a State with primary enforcement authority) or the Administrator (in the case of a State that does not have primary enforcement authority)—

(A) the Administrator shall be vested with complete and absolute title and ownership of the storage facility and any stored carbon dioxide at the facility;

(B) the storage operator and all generators of any injected carbon dioxide shall be released from all further liability associated with the project; and

(C)(i) any performance bonds posted by the storage operator shall be released; and

(ii) continued monitoring of the storage facility, including remediation of any well leakage, shall become the responsibility of the Administrator.

(h) Funding.—

(1) IN GENERAL.—For each fiscal year, the Administrator shall collect an annual assessment from each storage operator for each storage facility that has not obtained a certificate of completion of injection operations.

(2) ASSESSMENT AMOUNT.—The amount of the assessment for a storage facility for a fiscal year shall be equal to the product obtained by multiplying—

(A) the per-ton assessment for the fiscal year calculated under paragraph (4); and

(B) the total number of tons of carbon dioxide injected for storage by the storage operator during the preceding fiscal year at all storage facilities operated by the storage operator during the fiscal year.

(3) AGGREGATE AMOUNT.—The aggregate amount of assessments collected from all storage operators under paragraph (1) for any fiscal year shall be equal to the sum of, with respect to the fiscal year—

(A) any indemnification payments required to be made pursuant to subsection (g)(1);

(B) any costs associated with storage facilities to which the Administrator has taken title pursuant to subsection (g)(2), including costs associated with any—

(i) inspection, monitoring, recordkeeping, and reporting requirements of those facilities;

(ii) remediation of carbon dioxide leakage; or

(iii) plugging and abandoning of remaining wells; and

(C) any costs associated with public liability of storage facilities to which the Administrator has taken title pursuant to subsection (g)(2).

(4) CALCULATION OF ASSESSMENT.—The assessment under this subsection per ton of carbon dioxide for a fiscal year shall be equal to the quotient obtained by dividing—

(A) the aggregate amount of assessments calculated under paragraph (3) for the fiscal year; by

(B) the aggregate number of tons of carbon dioxide injected for storage during the preceding fiscal year by all storage operators.

(5) INFORMATION.—The Administrator shall require the submission of such information by each storage operator on an annual basis as is necessary to make the calculations required under this subsection.

(i) Relationship to other laws.—

(1) IN GENERAL.—The Administrator shall promulgate regulations for permitting commercial-scale underground injection of carbon dioxide for purposes of geological sequestration under this section.

(2) SAFE DRINKING WATER ACT.—Section 1421 of the Safe Drinking Water Act (42 U.S.C. 300h) shall not be used as a basis for permitting commercial-scale underground injection or storage of carbon dioxide.

SEC. 631. Statement of policy.

It is the policy of the United States to reduce carbon emissions from technology improvements to coal-fired power plants that will reduce the quantity of coal burned and carbon dioxide emitted per unit of power produced.

SEC. 632. Clean coal research and development.

(a) In general.—The Secretary shall expand and accelerate efforts to conduct research and develop technologies that reduce carbon dioxide emissions from coal-fired facilities with an emphasis on commercial viability and reliability.

(b) Short-, medium- and long-term technology areas.—The Secretary shall emphasize technologies that reduce carbon dioxide emissions in the short-, medium-, and long-term time frames, including—

(1) innovations for existing power plants that reduce carbon dioxide emissions by energy efficiency increases or by capturing carbon emissions, including technologies that—

(A) reduce the quantity of fuel combusted per unit of electricity output;

(B) reduce parasitic power loss from carbon control technology;

(C) improve compression of the separated and captured carbon dioxide;

(D) reuse or reduce water consumption and withdrawal; and

(E) capture carbon dioxide post-combustion from flue gas, such as through the use of ammonia-based, aqueous amine or ionic liquid solutions or other methods;

(2) new combustion systems, including—

(A) oxyfuel combustion that burns fuel in the presence of oxygen and recirculated flue gas instead of air producing a concentrated stream of carbon dioxide that can be readily captured for storage or use;

(B) chemical looping combustion that burns fuel in the presence of a solid oxygen carrier instead of air producing concentrated stream of carbon dioxide that can be readily captured for storage or use;

(C) high-temperature and pressure steam systems, such as ultra supercritical steam generation, that result in high net plant efficiency and reduced fuel consumption, thus producing less carbon dioxide per unit of energy;

(D) other innovative carbon dioxide control technologies appropriate for new combustion systems; and

(E) high temperature and high pressure materials that will result in much higher plant efficiencies and carbon dioxide emission reductions;

(3) innovations for IGCC systems that build on the ability of the IGCC to separate pollutants and carbon emissions from gas streams, including—

(A) advanced membrane technology for carbon dioxide separation;

(B) improved air separation systems;

(C) improved compression for the separated and captured carbon dioxide; and

(D) other innovative carbon dioxide control technologies appropriate for IGCC systems;

(4) advanced combustion turbines, including—

(A) ultra low emission hydrogen turbines; and

(B) oxycoal combustion turbines; and

(5) sequestration of captured carbon in geological formations, including—

(A) plume tracking;

(B) carbon dioxide leak detection and mitigation;

(C) carbon dioxide fate and transport models; and

(D) site evaluation instrumentation.

(c) Authorization of appropriations.—There are authorized to be appropriated to carry out this section, to remain available until expended—

(1) for innovations at power plants in operation as of the date of enactment of this Act $450,000,000 for the period of fiscal years 2009 through 2020;

(2) for new combustion systems $450,000,000 for the period of fiscal years 2009 through 2025;

(3) for IGCC systems $850,000,000 for the period of fiscal years 2009 through 2025;

(4) for advanced combustion turbines $350,000,000 for the period of fiscal years 2009 through 2025; and

(5) for carbon storage $400,000,000 for the period of fiscal years 2009 through 2020.

SEC. 633. Clean coal demonstration.

(a) In general.—The Secretary shall expand and accelerate the demonstration of technologies that reduce carbon dioxide emissions from coal-fired facilities by demonstrating, at a minimum—

(1) through facilities in operation as of the date of enactment of this Act—

(A) post-combustion carbon dioxide capture at pilot scale at not less than 2 facilities, the award of contracts for which shall be completed by 2010;

(B) oxycoal combustion at commercial scale retrofitted to not less than 1 facility, the award of contracts for which shall be completed by 2012;

(C) post-combustion carbon dioxide capture at commercial scale retrofitted to not less than 1 facility, the award of contracts for which shall be completed by 2012;

(D) heat rate and efficiency improvements at commercial scale at not less than 2 facilities, the award of contracts for which shall be completed by 2012;

(E) water consumption reduction at commercial scale at not less than 2 facilities, the award of contracts for which shall be completed by 2012;

(F) post-combustion carbon dioxide capture at pilot scale with technologies other than technologies demonstrated under subparagraphs (A) and (C) at not less than 1 facility, the award of contracts for which shall be completed by 2012;

(G) heat rate and efficiency improvements at commercial scale at not less than 3 facilities, the award of contracts for which shall be completed by 2014;

(H) water consumption reduction at commercial scale at not less than 3 facilities, the award of contracts for which shall be completed by 2014; and

(I) post-combustion carbon dioxide capture at pilot scale with technologies other than technologies demonstrated under subparagraphs (A), (C), and (F) at not less than 1 facility, the award of contracts for which shall be completed by 2016;

(2) through new coal combustion facilities that include carbon capture—

(A) oxycoal combustion at pilot scale at not less than 1 facility, the award of contracts for which shall be completed by 2010;

(B) post-combustion carbon dioxide capture at pilot scale at not less than 1 facility, the award of contracts for which shall be completed by 2012;

(C) oxycoal combustion at commercial scale at not less than 1 facility, the award of contracts for which shall be completed by 2012;

(D) supercritical pulverized coal combustion with advanced emission controls and partial carbon dioxide capture at commercial scale at not less than 1 facility, the award of contracts for which shall be completed by 2012;

(E) oxycoal supercritical circulating fluidized bed combustion at commercial scale at not less than 1 facility, the award of contracts for which shall be completed by 2012;

(F) post-combustion carbon dioxide capture at commercial scale at not less than 1 facility, the award of contracts for which shall be completed by 2012;

(G) post-combustion carbon dioxide capture at pilot scale with technologies other than technologies demonstrated under subparagraphs (B) or (F) at not less than 1 facility, the award of contracts for which shall be completed by 2014;

(H) ultra supercritical (1290°F) pulverized coal combustion with near-zero emission controls and 90 percent carbon dioxide capture at commercial scale at not less than 1 facility, the award of contracts for which shall be completed by 2014;

(I) oxycoal combustion with an advanced oxygen separation system at commercial scale at not less than 1 facility, the award of contracts for which shall be completed by 2016;

(J) second generation post-combustion carbon dioxide capture at commercial scale at not less than 1 facility, the award of contracts for which shall be completed by 2014;

(K) chemical looping combustion at commercial scale at not less than 1 facility, the award of contracts for which shall be completed by 2018; and

(L) ultra advanced supercritical (1400°F) combustion with near-zero emission controls and 90 percent integrated carbon dioxide capture at commercial scale at not less than 1 facility, the award of contracts for which shall be completed by 2018;

(3) through IGCC with carbon capture—

(A) partial carbon dioxide capture without a water gas shift system at commercial scale at not less than 1 facility, the award of contracts for which shall be completed by 2010;

(B) using G class turbine at not less than 1 facility with at least 400 megawatts in generating capacity, the award of contracts for which shall be completed by 2012;

(C) using H class turbines at not less than 1 facility with at least 400 megawatts in generating capacity, the award of contracts for which shall be completed by 2014; and

(D) using H class turbines at not less than 1 facility with at least 400 megawatts in generating capacity, the award of contracts for which shall be completed by 2016.

(4) through advanced turbines using—

(A) monitoring systems for advanced IGCC gas turbine at commercial scale at not less than 1 facility, the award of contracts for which shall be completed by 2010;

(B) advanced oxygen separation of at least 2,000 tons per day in size integrated with a combustion turbine at not less than 1 facility, the award of contracts for which shall be completed by 2012;

(C) an oxyfuel turbine of at least 50 megawatts in generating capacity, at not less than 1 facility, the award of contracts for which shall be completed by 2015;

(D) advanced oxygen separation of at least 2,000 tons per day in size integrated with a gas turbine at not less than 1 facility, the award of contracts for which shall be completed by 2015; and

(E) an oxyfuel turbine of at least 400 megawatts in generating capacity, at not less than 1 facility, the award of contracts for which shall be completed by 2020; and

(5) for storage of carbon dioxide captured through—

(A) a field test of sequestration of at least 1,000,000 tons of carbon dioxide per year in a saline formation, the award of contracts for which shall be completed by 2010;

(B) field tests of sequestration of at least 2,000,000 tons of carbon dioxide per year in a saline formation, the award of contracts for which shall be completed by 2012; and

(C) a field test of sequestration of at least 1,000,000 tons of carbon dioxide per year in a saline formation, the award of contracts for which shall be completed by 2014.

(b) Sequestration of captured carbon dioxide.—In any demonstration referred to in subsection (a) that demonstrates carbon dioxide capture, the carbon dioxide capture shall be used for enhanced oil recovery, sequestered in geologically appropriate formations, or permanently sequestered or reused, with funds made available to carry out each such demonstration for the respective purpose of the demonstration.

(c) Authorization of appropriations.—There are authorized to be appropriated to carry out this section, to remain available until expended—

(1) for demonstrations through facilities in operation as of the date of enactment of this Act $850,000,000 for the period of fiscal years 2009 through 2025;

(2) for new combustion systems $1,950,000,000 for the period of fiscal years 2009 through 2025;

(3) for IGCC systems $2,950,000,000 for the period of fiscal years 2009 through 2025;

(4) for advanced combustion turbines $400,000,000 for the period of fiscal years 2009 through 2025; and

(5) for carbon storage $1,350,000,000 for the period of fiscal years 2009 through 2020.

SEC. 634. Identification of clean coal research, development, and demonstration projects.

(a) In general.—The Secretary shall take such steps as are necessary to carry out this subtitle.

(b) Public comment.—Not later than 90 days after the date of enactment of this Act and every 2 years thereafter, the Secretary shall institute a public comment period of at least 45 days to assist the determination of the specific research, development, and demonstration projects required under this subtitle.

(c) Applications.—Not later than 120 days after the end of each public comment period required under subsection (b), the Secretary shall—

(1) publicly identify the specific types of projects that the Secretary intends to pursue to carry out this subtitle;

(2) establish selection criteria for the specific types of projects identified under paragraph (1); and

(3) establish an application process that allows persons that are interested in participating in projects identified under paragraph (1) to provide such information as the Secretary determines to be necessary.

SEC. 641. Short title.

This subtitle may be cited as the “Energy Security and Climate Enhancement Through Clean Coal Technology Act of 2008”.

SEC. 642. Modification of special rules for atmospheric pollution control facilities.

(a) In general.—Subsection (d) of section 169 of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

“(6) SPECIAL RULES FOR CERTAIN ATMOSPHERIC POLLUTION CONTROL FACILITIES.—Notwithstanding paragraph (1), the term ‘pollution control facility’ includes any mechanical or electronic system which—

“(A) which is a new identifiable treatment facility (as defined in paragraph (4)),

“(B) which is—

“(i) installed after December 31, 2007, and

“(ii) used in connection with an electric generation plant or other property which is primarily coal fired, and

“(C) which is certified by the owner or operator of the plant or other property, in such form and manner as prescribed by the Secretary, to reduce carbon dioxide emissions per net megawatt hour of electricity generation by—

“(i) optimizing combustion,

“(ii) optimizing sootblowing and heat transfer,

“(iii) upgrading steam temperature control capabilities,

“(iv) reducing exit gas temperatures (air heater modifications),

“(v) predrying low rank coals using power plant waste heat,

“(vi) modifying steam turbines or change the steam path/blading,

“(vii) replacing single speed motors with variable speed drives for fans and pumps,

“(viii) improving operational controls, including neural networks, or

“(ix) any other means approved by the Secretary, in consultation with the Secretary of Health and Human Services.”.

(b) Deduction not adjusted for purposes of determining alternative minimum tax.—Paragraph (5) of section 56(a) of the Internal Revenue Code of 1986 is amended by adding at the end the following new sentence: “The preceding sentences of this paragraph shall not apply to any pollution control facility described in section 169(d)(6).”.

(c) Effective date.—The amendments made by this section shall apply to property placed in service after December 31, 2007.

SEC. 643. Extension and modification of production credit for closed-loop biomass.

(a) In general.—Clause (ii) of section 45(d)(2)(A) of the Internal Revenue Code of 1986 is amended to read as follows:

“(iii) owned by the taxpayer which after before January 1, 2014 is originally placed in service and modified, or is originally placed in service as a facility, to use closed-loop biomass to co-fire (or, in the case of an integrated gasification combined cycle facility, to co-process) with coal, with other biomass, or with both.”.

(b) Effective date.—The amendment made by this section shall apply to electricity produced and sold after the date of the enactment of this Act.

SEC. 644. Qualifying new clean coal power plant credit.

(a) In general.—Subpart E of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986, as amended by this Act, is amended by inserting after section 48C the following new section:

“SEC. 48D. Qualifying new clean coal power plant credit.

“(a) Allowance of credit.—

“(1) IN GENERAL.—For purposes of section 46, the qualifying new clean coal power plant credit for any taxable year is an amount equal to the applicable percentage of the qualified investment for such taxable year.

“(2) APPLICABLE PERCENTAGE.—For purposes of paragraph (1), the applicable percentage shall be determined as follows:


“In the case of a plant which either has— The applicable percentage is:
a design net heat rate below— or a carbon dioxide emission rate of—
7,580 Btu/kWh (45% efficiency) 1,577 lbs/MWh or less 30 percent
7,760 Btu/kWh (44% efficiency) 1,613 lbs/MWh or less 28 percent
7,940 Btu/kWh (43% efficiency) 1,650 lbs/MWh or less 26 percent
8,120 Btu/kWh (42% efficiency) 1,690 lbs/MWh or less 20 percent
8,322 Btu/kWh (41% efficiency) 1,731 lbs/MWh or less 10 percent
8,530 Btu/kWh (40% efficiency) 1,774 lbs/MWh or less 10 percent

“(b) Qualified investment.—

“(1) IN GENERAL.—For purposes of subsection (a), the qualified investment for any taxable year is the basis of eligible property placed in service by the taxpayer during such taxable year which is part of a qualifying new clean coal power plant—

“(A)(i) the construction, reconstruction, or erection of which is completed by the taxpayer, or

“(ii) which is acquired by the taxpayer if the original use of such property commences with the taxpayer, and

“(B) with respect to which depreciation (or amortization in lieu of depreciation) is allowable.

“(2) SPECIAL RULE FOR CERTAIN SUBSIDIZED PROPERTY.—Rules similar to section 48(a)(4) shall apply for purposes of this section.

“(3) CERTAIN QUALIFIED PROGRESS EXPENDITURES RULES MADE APPLICABLE.—Rules similar to the rules of subsections (c)(4) and (d) of section 46 (as in effect on the day before the enactment of the Revenue Reconciliation Act of 1990) shall apply for purposes of this section.

“(c) Definitions.—For purposes of this section—

“(1) ELIGIBLE PROPERTY.—The term ‘eligible property’ means any property which is a part of a qualifying new clean coal power plant.

“(2) QUALIFYING NEW CLEAN COAL POWER PLANT.—The term ‘qualifying new clean coal power plant’ means a facility which—

“(A) which meets the requirements of section 48A(e),

“(B) which either—

“(i) has a design net heat rate of below 8,530 Btu/kWh, or

“(ii) has a carbon dioxide emission rate of 1,774 lbs/MWh or less, and

“(C) which—

“(i) is designed to capture carbon dioxide emissions, or

“(ii)(I) is designed to include a built-in space for future carbon dioxide capture hardware (and improved foundations and ironwork necessary to accommodate the additional hardware),

“(II) includes an engineering feasibility study identifying a system, including associated cost and performance parameters, to retrofit carbon capture equipment, and

“(III) includes a site or sited identified where carbon dioxide may be stored or used for commercial purposes.

“(d) Qualifying new clean coal power plant program.—

“(1) ESTABLISHMENT.—Not later than 180 days after the date of enactment of this section, the Secretary, in consultation with the Secretary of Energy, shall establish a qualifying new clean coal power plant program, under which the Secretary shall certify projects eligible for the credit under subsection (a).

“(2) APPLICATION.—An application under for certification under this section shall contain such information as the Secretary may require in order to make a determination to accept or reject an application for certification as meeting the requirements of this section. Any information contained in the application shall be protected as provided in section 552(b)(4) of title 5, United States Code.

“(3) AGGREGATE CREDITS.—The aggregate or projects certified by the Secretary under this subsection shall not exceed an aggregate capacity for electricity generation of more than 6,000 megawatts.

“(e) Recapture of credit.—The Secretary shall provide for recapturing the benefit of any credit allowable under subsection (a) with respect to any project which fails to attain or maintain any of the requirements of this section.”.

(b) Conforming amendments.—

(1) Section 46 of the Internal Revenue Code of 1986, as amended by this Act, is amended by striking “and” at the end of paragraph (4), by striking the period at the end of paragraph (5) and inserting “, and”, and by adding at the end the following new paragraph:

“(6) the qualifying new clean coal power plant credit.”.

(2) Section 49(a)(1)(C) of such Code, as amended by this Act, is amended by striking “and” at the end of clause (iv), by striking the period at the end of clause (v) and inserting “, and”, and by adding at the end the following new clause:

“(vi) the basis of any property which is part of a qualifying new clean coal power plant under section 48D.”.

(3) The table of sections for subpart E of part IV of subchapter A of chapter 1 of such Code, as amended by this Act, is amended by inserting after the item relating to section 48C the following new item:


“Sec. 48D. Qualifying new clean coal power plant credit.”.

(c) Effective date.—The amendments made by this section shall apply to periods after the date of the enactment of this Act, under rules similar to the rules of section 48(m) of the Internal Revenue Code of 1986 (as in effect before the date of the enactment of the Revenue Reconciliation Act of 1990).

SEC. 645. Investment credit for equipment used to capture, transport, and store carbon dioxide.

(a) In general.—Subpart E of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986, as amended by this Act, is amended by inserting after section 48D the following new section:

“SEC. 48E. Equipment used to capture, transport, and store carbon dioxide emissions.

“(a) General rule.—For purposes of section 46, the qualifying carbon dioxide equipment credit for any taxable year is an amount equal to 30 percent of the qualified investment for such taxable year.

“(b) Qualified investment.—For purposes of subsection (a), the qualified investment for any taxable year is the basis of eligible property placed in service by the taxpayer during such taxable year.

“(c) Definitions.—For purposes of this section—

“(1) ELIGIBLE PROPERTY.—The term ‘eligible property’ means equipment installed on a qualified coal-fired electric power generating unit to capture, transport, and store carbon dioxide produced at such generating unit, including equipment to separate and pressurize carbon dioxide for transport (including hardware to operate such equipment) and equipment to transport, inject, and monitor such carbon dioxide, as further specified and identified, by rule, by the Secretary.

“(2) QUALIFIED COAL-FIRED ELECTRIC GENERATION UNIT.—The term ‘qualified coal-fired electric generation unit’ means a unit which, after installation of eligible property, is designed to capture and store in a geologic formation not less than 500,000 metric tons of carbon dioxide per year.

“(d) Aggregate credits.—The credits allowed under subsection (a) shall apply only to the first 9,000 megawatts of capacity of qualified coal-fired electric power generating units certified by the Secretary under subsection (e).

“(e) Certification.—

“(1) CERTIFICATION PROCESS.—The Secretary shall establish a certification process to determine the extent to which eligible property has been installed on a qualified coal-fired electric power generating unit, and to make such other determinations as the Secretary deems appropriate. The Secretary shall prepare an application for certification.

“(2) REQUIREMENTS FOR APPLICATIONS FOR CERTIFICATION.—An application for certification shall contain such information as the Secretary may require in order to establish credit entitlement. Any information contained in an application shall be protected as provided in section 552(b)(4) of title 5, United States Code.”.

(b) Conforming amendments.—

(1) Section 46 of the Internal Revenue Code of 1986, as amended by this Act, is amended by striking “and” at the end of paragraph (5), by striking the period at the end of paragraph (6) and inserting “, and”, and by adding at the end the following new paragraph:

“(7) the qualifying carbon dioxide equipment credit.”.

(2) Section 49(a)(1)(C) of such Code, as amended by this Act, is amended by striking “and” at the end of clause (v), by striking the period at the end of clause (vi) and inserting “, and”, and by adding at the end the following new clause:

“(vii) the basis of any eligible property under section 48E.”.

(3) The table of sections for subpart E of part IV of subchapter A of chapter 1 of such Code, as amended by this Act is amended by inserting after the item relating to section 48D the following new section:


“Sec. 48E. Equipment used to capture, transport, and store carbon dioxide emissions.”.

(c) Effective date.—The amendments made by this section shall apply to periods after the date of the enactment of this Act, under rules similar to the rules of section 48(m) of the Internal Revenue Code of 1986 (as in effect before the date of the enactment of the Revenue Reconciliation Act of 1990).

SEC. 646. Tax credit for carbon dioxide sequestration in the generation of electricity.

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

“SEC. 45Q. Credit sequestering carbon dioxide in the generation of electricity.

“(a) General rule.—For purposes of section 38, the carbon dioxide sequestration credit for any taxable year is an amount equal to the sum of—

“(1) $30 per metric ton of qualified carbon dioxide which is—

“(A) captured by the taxpayer at a qualified facility during the credit period, and

“(B) disposed of by the taxpayer in secure geological storage, and

“(2) $10 per metric ton of qualified carbon dioxide which is—

“(A) captured by the taxpayer at a qualified facility during the credit period, and

“(B) used by the taxpayer as a tertiary injectant in a qualified enhanced oil or natural gas recovery project.

“(b) Qualified facility.—For purposes of this section—

“(1) IN GENERAL.—The term ‘qualified facility’ means any industrial facility—

“(A) which is owned by the taxpayer;

“(B) at which carbon capture equipment is placed in service;

“(C) which captures not less than 500,000 metric tons of carbon dioxide during the taxable year; and

“(D) which is certified by the Secretary under paragraph (2).

“(2) CERTIFICATION.—

“(A) IN GENERAL.—The Secretary, in consultation with the Secretary of Energy, shall establish a program under which facilities which use coal for the generation of electricity are certified for purposes of this section.

“(B) LIMITATION.—The total aggregate generating capacity of all facilities certified by the Secretary under this paragraph shall not exceed 9,000 megawatts.

“(c) Qualified carbon dioxide.—For purposes of this section—

“(1) IN GENERAL.—The term ‘qualified carbon dioxide’ means carbon dioxide captured from an industrial source which—

“(A) would otherwise be released into the atmosphere as industrial emissions of greenhouse gas, and

“(B) is measured at the source of capture and verified at the point of disposal or injection.

“(2) RECYCLED CARBON DIOXIDE.—The term ‘qualified carbon dioxide’ includes the initial deposit of captured carbon dioxide used as a tertiary injectant. Such term does not include carbon dioxide that is recaptured, recycled, and reinjected as part of the enhanced oil and natural gas recovery process.

“(d) Special rules and definitions.—For purposes of this section—

“(1) CREDIT PERIOD.—The term ‘credit period’ means, with respect to any qualified facility, the 10-year period beginning on the date on which qualified carbon dioxide for which a credit was allowed under subsection (a) was first captured.

“(2) ONLY CARBON DIOXIDE CAPTURED WITHIN THE UNITED STATES TAKEN INTO ACCOUNT.—The credit under this section shall apply only with respect to qualified carbon dioxide the capture of which is within—

“(A) the United States (within the meaning of section 638(1)); or

“(B) a possession of the United States (within the meaning of section 638(2)).

“(3) SECURE GEOLOGICAL STORAGE.—The Secretary, in consultation with the Administrator of the Environmental Protection Agency, shall establish regulations for determining adequate security measures for the geological storage of carbon dioxide under subsection (a)(1)(B) such that the carbon dioxide does not escape into the atmosphere. Such term shall include storage at deep saline formations and unminable coal seems under such conditions as the Secretary may determine under such regulations.

“(4) TERTIARY INJECTANT.—The term ‘tertiary injectant’ has the same meaning as when used within section 193(b)(1).

“(5) QUALIFIED ENHANCED OIL OR NATURAL GAS RECOVERY PROJECT.—The term ‘qualified enhanced oil or natural gas recovery project’ has the meaning given the term ‘qualified enhanced oil recovery project’ by section 43(c)(2), by substituting ‘crude oil or natural gas’ for ‘crude oil’ in subparagraph (A)(i) thereof.

“(6) CREDIT ATTRIBUTABLE TO TAXPAYER.—Any credit under this section shall be attributable to the person that captures and physically or contractually ensures the disposal of or the use as a tertiary injectant of the qualified carbon dioxide, except to the extent provided in regulations prescribed by the Secretary.

“(7) RECAPTURE.—The Secretary shall, by regulations, provide for recapturing the benefit of any credit allowable under subsection (a) with respect to any qualified carbon dioxide which ceases to be captured, disposed of, or used as a tertiary injectant in a manner consistent with the requirements of this section.

“(8) INFLATION ADJUSTMENT.—In the case of any taxable year beginning in a calendar year after 2008, there shall be substituted for each dollar amount contained in subsection (a) an amount equal to the product of—

“(A) such dollar amount; multiplied by

“(B) the inflation adjustment factor for such calendar year determined under section 43(b)(3)(B) for such calendar year, determined by substituting ‘2007’ for ‘1990’.”.

(b) Conforming amendment.—Section 38(b) of the Internal Revenue Code of 1986 (relating to general business credit), as amended by this Act, is amended by striking “plus” at the end of paragraph (33), by striking the period at the end of paragraph (34) and inserting “, plus”, and by adding at the end of following new paragraph:

“(35) the carbon dioxide sequestration credit determined under section 45Q(a).”.

(c) Clerical amendment.—The table of sections for subpart B of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to other credits) is amended by adding at the end the following new section:


“Sec. 45Q. Credit for sequestering carbon dioxide in the generation of electricity.”.

(d) Effective date.—The amendments made by this section shall apply carbon dioxide captured after the date of the enactment of this Act.

SEC. 647. Clean energy coal bonds.

(a) In general.—Subpart I of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to qualified tax credit bonds) is amended by adding at the end the following new section:

“SEC. 54C. Clean energy coal bonds.

“(a) Clean energy coal bond.—For purposes of this subchapter—

“(1) IN GENERAL.—The term ‘clean energy coal bond’ means any bond issued as part of an issue if—

“(A) the bond is issued by a qualified issuer pursuant to an allocation by the Secretary to such issuer of a portion of the national clean energy coal bond limitation under subsection (b)(2);

“(B) 100 percent of the available project proceeds from the sale of such issue are to be used for capital expenditures incurred by qualified borrowers for 1 or more qualified projects;

“(C) the qualified issuer designates such bond for purposes of this section and the bond is in registered form; and

“(D) in lieu of the requirements of section 54A(d)(2), the issue meets the requirements of subsection (c).

“(2) QUALIFIED PROJECT; SPECIAL USE RULES.—

“(A) IN GENERAL.—The term ‘qualified project’ means a qualified clean coal project (as defined in subsection (f)(1)) placed in service by a qualified borrower.

“(B) REFINANCING RULES.—For purposes of paragraph (1)(B), a qualified project may be refinanced with proceeds of a clean energy coal bond only if the indebtedness being refinanced (including any obligation directly or indirectly refinanced by such indebtedness) was originally incurred by a qualified borrower after the date of the enactment of this section.

“(C) REIMBURSEMENT.—For purposes of paragraph (1)(B), a clean energy coal bond may be issued to reimburse a qualified borrower for amounts paid after the date of the enactment of this section with respect to a qualified project, but only if—

“(i) prior to the payment of the original expenditure, the qualified borrower declared its intent to reimburse such expenditure with the proceeds of a clean energy coal bond;

“(ii) not later than 60 days after payment of the original expenditure, the qualified issuer adopts an official intent to reimburse the original expenditure with such proceeds; and

“(iii) reimbursement is not made later than 18 months after the date the original expenditure is paid or the date the project is placed in service or abandoned, but in no event more than 3 years after the original expenditure is paid.

“(D) TREATMENT OF CHANGES IN USE.—For purposes of paragraph (1)(B), the proceeds of an issue shall not be treated as used for a qualified project to the extent that a qualified borrower takes any action within its control which causes such proceeds not to be used for a qualified project. The Secretary shall prescribe regulations specifying remedial actions that may be taken (including conditions to taking such remedial actions) to prevent an action described in the preceding sentence from causing a bond to fail to be a clean energy coal bond.

“(b) Limitation on amount of bonds designated.—

“(1) NATIONAL LIMITATION.—There is a national clean energy coal bond limitation of $5,000,000,000.

“(2) ALLOCATION BY SECRETARY.—The Secretary shall allocate the amount described in paragraph (1) among qualified projects in such manner as the Secretary determines appropriate.

“(c) Special rules relating to expenditures.—

“(1) IN GENERAL.—An issue shall be treated as meeting the requirements of this subsection if, as of the date of issuance. the qualified issuer reasonably expects—

“(A) 100 percent or more of the available project proceeds from the sale of the issue are to be spent for 1 or more qualified projects within the 5-year period beginning on the date of issuance of the clean energy bond;

“(B) a binding commitment with a third party to spend at least 10 percent of such available project proceeds from the sale of the issue will be incurred within the 6-month period beginning on the date of issuance of the clean energy bond or, in the case of a clean energy bond the available project proceeds of which are to be loaned to 2 or more qualified borrowers, such binding commitment will be incurred within the 6-month period beginning on the date of the loan of such proceeds to a qualified borrower; and

“(C) such projects will be completed with due diligence and the available project proceeds from the sale of the issue will be spent with due diligence.

“(2) EXTENSION OF PERIOD.—Upon submission of a request prior to the expiration of the period described in paragraph (1)(A), the Secretary may extend such period if the qualified issuer establishes that the failure to satisfy the 5-year requirement is due to reasonable cause and the related projects will continue to proceed with due diligence.

“(3) FAILURE TO SPEND REQUIRED AMOUNT OF BOND PROCEEDS WITHIN 5 YEARS.—To the extent that less than 100 percent of the available project proceeds of such issue are expended by the close of the 5-year period beginning on the date of issuance (or if an extension has been obtained under paragraph (2), by the close of the extended period), the qualified issuer shall redeem all of the nonqualified bonds within 90 days after the end of such period. For purposes of this paragraph, the amount of the nonqualified bonds required to be redeemed shall be determined in the same manner as under section 142.

“(d) Cooperative electric company; qualified energy tax credit bond lender; governmental body; qualified borrower.—For purposes of this section—

“(1) COOPERATIVE ELECTRIC COMPANY.—The term ‘cooperative electric company’ means a mutual or cooperative electric company described in section 501(c)(12) or section 1381(a)(2)(C), or a not-for-profit electric utility which has received a loan or loan guarantee under the Rural Electrification Act.

“(2) CLEAN ENERGY BOND LENDER.—The term ‘clean energy bond lender’ means a lender which is a cooperative which is owned by, or has outstanding loans to, 100 or more cooperative electric companies and is in existence on February 1, 2002, and shall include any affiliated entity which is controlled by such lender.

“(3) 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).

“(4) QUALIFIED ISSUER.—The term ‘qualified issuer’ means—

“(A) a clean energy bond lender;

“(B) a cooperative electric company; or

“(C) a public power entity.

“(5) QUALIFIED BORROWER.—The term ‘qualified borrower’ means—

“(A) a mutual or cooperative electric company described in section 501(c)(12) or 1381(a)(2)(C); or

“(B) a public power entity.

“(e) Special rules relating to pool bonds.—No portion of a pooled financing bond may be allocable to any loan unless the borrower has entered into a written loan commitment for such portion prior to the issue date of such issue.

“(f) Other definitions and special rules.—For purposes of this section—

“(1) QUALIFIED CLEAN COAL PROJECT.—For purposes of this section, the term ‘qualified clean coal project’ means—

“(A) an atmospheric pollution control facility (within the meaning of section 169(d)(5)(C));

“(B) a closed-loop biomass facility (within the meaning of section 45(d)(2));

“(C) a qualified new clean coal power plant (within the meaning of section 48D(d)(1));

“(D) a qualifying carbon dioxide equipment described in section 48E(c)(1); or

“(E) a qualified facility (within the meaning of section 450(c)).

“(2) POOLED FINANCING BOND.—The term ‘pooled financing bond’ shall have the meaning given such term by section 149(f)(4)(A).

“(g) Termination.—This section shall not apply with respect to any bond issued after December 31, 2018.”.

(b) Conforming amendments.—

(1) Paragraph (1) of section 54A(d) of the Internal Revenue Code of 1986 is amended to read as follows:

“(1) QUALIFIED TAX CREDIT BOND.—The term ‘qualified tax credit bond’ means—

“(A) a qualified forestry conservation bond, or

“(B) a clean energy coal bond,

which is part of an issue that meets requirements of paragraphs (2), (3), (4), (5), and (6).”.

(2) Subparagraph (C) of section 54A(d)(2) of such Code is amended to read as follows:

“(C) QUALIFIED PURPOSE.—For purposes of this paragraph, the term ‘qualified purpose’ means—

“(i) in the case of a qualified forestry conservation bond, a purpose specified in section 54B(e); and

“(ii) in the case of a clean energy coal bond, a purpose specified in section 54C(f)(1).”.

(c) Clerical amendment.—The table of sections for subpart I of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new item:


“Sec. 54C. Clean energy coal bonds.”.

(d) Effective date.—The amendments made by this section shall apply to bonds issued after December 31, 2008.

SEC. 701. Definitions.

In this subtitle:

(1) DISPOSAL.—The term “disposal” has the meaning given the term in section 2 of the Nuclear Waste Policy Act of 1982 (42 U.S.C. 10101).

(2) HIGH-LEVEL RADIOACTIVE WASTE.—The term “high-level radioactive waste” has the meaning given the term in section 2 of the Nuclear Waste Policy Act of 1982 (42 U.S.C. 10101).

(3) PROJECT.—The term “Project” means the Yucca Mountain Project.

(4) REPOSITORY.—The term “repository” has the meaning given the term in section 2 of the Nuclear Waste Policy Act of 1982 (42 U.S.C. 10101).

(5) SECRETARY.—The term “Secretary” means the Secretary of Energy.

(6) SPENT NUCLEAR FUEL.—The term “spent nuclear fuel” has the meaning given the term in section 2 of the Nuclear Waste Policy Act of 1982 (42 U.S.C. 10101).

(7) YUCCA MOUNTAIN SITE.—The term “Yucca Mountain site” has the meaning given the term in section 2 of the Nuclear Waste Policy Act of 1982 (42 U.S.C. 10101).

SEC. 702. Withdrawal of land.

(a) Land withdrawal; jurisdiction; reservation; acquisition.—

(1) LAND WITHDRAWAL.—Subject to valid existing rights, and except as otherwise provided in this subtitle, the land described in subsection (b) is withdrawn permanently from any form of entry, appropriation, or disposal under the public land laws, including, without limitation—

(A) the mineral leasing laws;

(B) the geothermal leasing laws;

(C) materials sales laws; and

(D) the mining laws.

(2) JURISDICTION.—As of the date of enactment of this Act, any land described in subsection (b) that is under the jurisdiction of the Secretary of the Air Force or the Secretary of the Interior shall be—

(A) transferred to the Secretary; and

(B) under the jurisdiction of the Secretary.

(3) RESERVATION.—The land described in subsection (b) is reserved for use by the Secretary for activities associated with the disposal of high-level radioactive waste and spent nuclear fuel under the Nuclear Waste Policy Act of 1982 (42 U.S.C. 10101 et seq.), including—

(A) development;

(B) preconstruction testing and performance confirmation;

(C) licensing;

(D) construction;

(E) management and operation;

(F) monitoring;

(G) closure and post-closure; and

(H) other such activities associated with the disposal of high-level radioactive waste and spent nuclear fuel under the Nuclear Waste Policy Act of 1982 (42 U.S.C. 10101 et seq.).

(b) Land description.—

(1) BOUNDARIES.—The land referred to in subsection (a) is the approximately 147,000 acres of land located in Nye County, Nevada, as generally depicted on the map relating to the Project, numbered YMP–03–024.2, entitled “Proposed Land Withdrawal”, and dated July 21, 2005.

(2) LEGAL DESCRIPTION AND MAP.—

(A) IN GENERAL.—As soon as practicable after the date of enactment of this Act, the Secretary of the Interior shall—

(i) publish in the Federal Register a notice containing a legal description of the land described in this subsection; and

(ii) provide to Congress, the Governor of the State of Nevada, and the Archivist of the United States—

(I) a copy of the map referred to in paragraph (1); and

(II) the legal description of the land.

(B) TREATMENT.—

(i) IN GENERAL.—The map and legal description referred to in subparagraph (A) shall have the same force and effect as if the map and legal description were included in this subtitle.

(ii) TECHNICAL CORRECTIONS.—The Secretary of the Interior may correct any clerical or typographical error in the map and legal description referred to in subparagraph (A).

(c) Revocations.—

(1) PUBLIC LAND ORDER.—Public Land Order 6802, dated September 25, 1990 (as extended by Public Land Order 7534), and any condition or memorandum of understanding accompanying the land order (as so extended), is revoked.

(2) RIGHT OF WAY.—The rights-of-way reservations relating to the Project, numbered N–48602 and N–47748 and dated January 5, 2001, are revoked.

(d) Management of withdrawn land.—

(1) IN GENERAL.—The Secretary, in consultation with the Secretary of the Air Force and the Secretary of the Interior, as appropriate, shall manage the land withdrawn under subsection (a)(1) in accordance with—

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

(B) this subtitle; and

(C) other applicable laws.

(2) MANAGEMENT PLAN.—

(A) DEVELOPMENT.—Not later than 3 years after the date of enactment of this Act, the Secretary, in consultation with the Secretary of the Air Force and the Secretary of the Interior, as appropriate, shall develop and submit to Congress and the State of Nevada a management plan for the use of the land withdrawn under subsection (a)(1).

(B) PRIORITY.—Subject to subparagraphs (C), (D), and (E), use of the land withdrawn under subsection (a)(1) for an activity not relating to the Project shall be subject to such conditions and restrictions as the Secretary considers to be appropriate to facilitate activities relating to the Project.

(C) AIR FORCE USE.—The management plan may provide for the continued use by the Department of the Air Force of the portion of the land withdrawn under subsection (a)(1) located within the Nellis Air Force base test and training range under such terms and conditions as may be agreed to by the Secretary and the Secretary of the Air Force.

(D) NEVADA TEST SITE USE.—The management plan may provide for the continued use by the National Nuclear Security Administration of the portion of the land withdrawn under subsection (a)(1) located within the Nevada test site of the Administration under such conditions as the Secretary considers to be necessary to minimize any effect on activities relating to the Project or other activities of the Administration.

(E) OTHER USES.—

(i) IN GENERAL.—The management plan shall include provisions—

(I) relating to the maintenance of wildlife habitat on the land withdrawn under subsection (a)(1); and

(II) under which the Secretary may permit any use not relating to the Project, as the Secretary considers to be appropriate, in accordance with the requirements under clause (ii).

(ii) REQUIREMENTS.—

(I) GRAZING.—The Secretary may permit any grazing use to continue on the land withdrawn under subsection (a)(1) if the grazing use was established before the date of enactment of this Act, subject to such regulations, policies, and practices as the Secretary, in consultation with the Secretary of the Interior, determines to be appropriate, and in accordance with applicable grazing laws and policies, including—

(aa) the Act of June 28, 1934 (commonly known as the “Taylor Grazing Act”) (43 U.S.C. 315 et seq.);

(bb) title IV of the Federal Land Policy Management Act of 1976 (43 U.S.C. 1751 et seq.); and

(cc) the Public Rangelands Improvement Act of 1978 (43 U.S.C. 1901 et seq.).

(II) HUNTING AND TRAPPING.—The Secretary may permit any hunting or trapping use to continue on the land withdrawn under subsection (a)(1) if the hunting or trapping use was established before the date of enactment of this Act, at such time and in such zones as the Secretary, in consultation with the Secretary of the Interior and the State of Nevada, may establish, taking into consideration public safety, national security, administration, and public use and enjoyment of the land.

(F) PUBLIC ACCESS.—

(i) IN GENERAL.—The management plan may provide for limited public access to the portion of the land withdrawn under subsection (a)(1) that was under the control of the Bureau of Land Management on the day before the date of enactment of this Act.

(ii) SPECIFIC USES.—The management plan may permit public uses of the land relating to the Nye County Early Warning Drilling Program, utility corridors, and other uses the Secretary, in consultation with the Secretary of the Interior, considers to be consistent with the purposes of the withdrawal under subsection (a)(1).

(3) MINING.—

(A) IN GENERAL.—Surface and subsurface mining and oil and gas production, including slant drilling from outside the boundaries of the land withdrawn under subsection (a)(1), shall be prohibited at any time on or under the land.

(B) EVALUATION OF CLAIMS.—The Secretary of the Interior shall evaluate and adjudicate the validity of any mining claim relating to any portion of the land withdrawn under subsection (a)(1) that was under the control of the Bureau of Land Management on the day before the date of enactment of this Act.

(C) COMPENSATION.—The Secretary shall provide just compensation for the acquisition of any valid property right relating to mining pursuant to the withdrawal under subsection (a)(1).

(4) CLOSURES.—If the Secretary, in consultation with the Secretary of the Air Force and the Secretary of the Interior, as appropriate, determines that the health and safety of the public or the national defense and security require the closure of a road, trail, or other portion of the land withdrawn under subsection (a)(1) (including the airspace above the land), the Secretary—

(A) may close the road, trail, or portion of land (including airspace); and

(B) shall provide to the public a notice of the closure.

(5) IMPLEMENTATION.—The Secretary and the Secretary of the Air Force or the Secretary of the Interior, as appropriate, shall implement the management plan developed under paragraph (2) under such terms and conditions as may be agreed to by the Secretaries.

SEC. 703. Receipt and storage facilities.

Section 114(b) of the Nuclear Waste Policy Act of 1982 (42 U.S.C. 10134(b)) is amended—

(1) by striking “If the President” and inserting the following:

“(1) IN GENERAL.—If the President”; and

(2) by adding at the end the following:

“(2) APPLICATION FOR RECEIPT AND STORAGE FACILITIES.—

“(A) IN GENERAL.—In conjunction with the submission of an application for a construction authorization under this subsection, the Secretary shall apply to the Commission for a license in accordance with part 72 of title 10, Code of Federal Regulations (or a successor regulation), to construct and operate facilities to receive and store spent nuclear fuel and high-level radioactive waste at the Yucca Mountain site.

“(B) DEADLINE FOR FINAL DECISION BY COMMISSION.—The Commission shall issue a final decision approving or disapproving the issuance of the license not later than 18 months after the date of submission of the application to the Commission.”.

SEC. 704. Repeal of capacity limitation.

Section 114(d) of the Nuclear Waste Policy Act of 1982 (42 U.S.C. 10134(d)) is amended by striking the second and third sentences.

SEC. 705. Infrastructure activities.

Section 114 of the Nuclear Waste Policy Act of 1982 (42 U.S.C. 10134) is amended by adding at the end the following:

“(g) Infrastructure activities.—

“(1) CONSTRUCTION OF CONNECTED FACILITIES.—At any time after the completion by the Secretary of a final environmental impact statement that evaluates the activities to be performed under this subsection, the Secretary may commence the following activities in connection with any activity or facility licensed or to be licensed by the Commission at the Yucca Mountain site:

“(A) Preparation of the site for construction of the facility (including such activities as clearing, grading, and construction of temporary access roads and borrow areas).

“(B) Installation of temporary construction support facilities (including such items as warehouse and shop facilities, utilities, concrete mixing plants, docking and unloading facilities, and construction support buildings).

“(C) Excavation for facility structures.

“(D) Construction of service facilities (including such facilities as roadways, paving, railroad spurs, fencing, exterior utility and lighting systems, transmission lines, and sanitary sewerage treatment facilities).

“(E) Construction of structures, systems, and components that do not prevent or mitigate the consequences of possible accidents that could cause undue risk to the health and safety of the public.

“(F) Installation of structural foundations (including any necessary subsurface preparation) for structures, systems, and components that prevent or mitigate the consequences of possible accidents that could cause undue risk to the health and safety of the public.

“(2) AUTHORIZATION TO RECEIVE AND STORE.—

“(A) DEFINITIONS.—In this paragraph:

“(i) DEFENSE WASTE.—The term ‘defense waste’ means high-level radioactive waste, and spent nuclear fuel, that results from an atomic energy defense activity.

“(ii) LEGACY SPENT NUCLEAR FUEL.—The term ‘legacy spent nuclear fuel’ means spent nuclear fuel—

“(I) that is subject to a contract entered into pursuant to section 302; and

“(II) for which the Secretary determines that there is not at the time of the determination, and will not be within a reasonable time after the determination, sufficient domestic capacity available to recycle the spent nuclear fuel.

“(B) AUTHORIZATION FOR DEFENSE WASTE.—At any time after the issuance of a license for receipt and storage facilities under subsection (b)(2), the Secretary may transport defense waste to receipt and storage facilities at the Yucca Mountain site.

“(C) AUTHORIZATION FOR LEGACY SPENT NUCLEAR FUEL.—At any time after the issuance of a construction authorization under subsection (d) and the issuance of a license for receipt and storage facilities under subsection (b)(2), the Secretary may receive and store legacy spent nuclear fuel and high-level radioactive waste at the Yucca Mountain site.”.

SEC. 706. Rail line.

(a) Construction of rail line.—The Secretary shall acquire rights-of-way within the corridor designated in subsection (b) in accordance with this section, and shall construct and operate, or cause to be constructed and operated, a railroad and such facilities as are required to transport spent nuclear fuel and high-level radioactive waste from existing rail systems to the site of surface facilities within the geologic repository operations area for the receipt, handling, packaging, and storage of spent nuclear fuel and high-level radioactive waste prior to emplacement.

(b) Acquisition and withdrawal of land.—

(1) ROUTE DESIGNATION AND ACQUISITION.—

(A) RIGHTS-OF-WAY AND FACILITIES.—The Secretary shall acquire such rights-of-way and develop such facilities within the corridor referred to as “X” on the map dated [___] and on file with the Secretary as are necessary to carry out subsection (a).

(B) RECOMMENDATIONS.—The Secretary shall consider specific alignment proposals for the route for the corridor made by the State of Nevada and the units of local government within whose jurisdiction the route is proposed to pass.

(C) NOTICE AND DESCRIPTION.—Not later than 180 days after the date of enactment of this section, the Secretary shall—

(i) publish in the Federal Register a notice containing a legal description of the corridor; and

(ii) file copies of the map referred to in paragraph (1) and the legal description of the corridor with—

(I) Congress;

(II) the Secretary of the Interior;

(III) the Governor of the State of Nevada;

(IV) the Board of County Commissioners of Lincoln County, Nevada;

(V) the Board of County Commissioners of Nye County, Nevada; and

(VI) the Archivist of the United States.

(D) ADMINISTRATION.—

(i) EFFECT.—The map and legal description referred to in subparagraph (C) shall have the same force and effect as if the map and legal description were included in this subtitle.

(ii) CORRECTIONS.—The Secretary may correct clerical and typographical errors in the map and legal description and make minor adjustments in the boundaries of the corridor.

(2) WITHDRAWAL AND RESERVATION.—

(A) PUBLIC LAND.—Subject to valid existing rights, the public land depicted on the map referred to in paragraph (1)(C) is withdrawn from all forms of entry, appropriation, and disposal under the public land laws, including the mineral leasing laws, the geothermal laws, the material sale laws, and the mining laws.

(B) ADMINISTRATIVE JURISDICTION.—Administrative jurisdiction over the land is transferred from the Secretary of the Interior to the Secretary.

(C) RESERVATION.—The land is reserved for the use of the Secretary for the construction and operation of transportation facilities and associated activities under title I of the Nuclear Waste Policy Act of 1982 (42 U.S.C. 10121 et seq.)

(D) MEMORANDUM OF UNDERSTANDING.—The Secretary may also enter into a memorandum of understanding with the head of any other agency having administrative jurisdiction over other Federal land used for purposes of the corridor referred to in paragraph (1)(A).

(c) Environmental impact.—

(1) IN GENERAL.—The Secretary shall comply with all applicable requirements under the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) with respect to activities carried out under this section.

(2) CONSIDERATION OF POTENTIAL IMPACTS.—To the extent a Federal agency is required to consider the potential environmental impact of an activity carried out under this section, the Federal agency shall adopt, to the maximum extent practicable, an environmental impact statement prepared under this section.

(3) EFFECT OF ADOPTION OF STATEMENT.—The adoption by a Federal agency of an environmental impact statement under paragraph (2) shall be considered to satisfy the responsibilities of the Federal agency under the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.), and no further consideration under that subtitle shall be required by the Federal agency.

SEC. 707. Nuclear Waste Fund.

(a) Budget Act Allocations.—Effective for fiscal year 2008 and each fiscal year thereafter, funds appropriated from the Nuclear Waste Fund established under section 302 of the Nuclear Waste Policy Act of 1982 (42 U.S.C. 10222) shall not be subject to—

(1) the allocations for discretionary spending under section 302(a) of the Congressional Budget Act of 1974 (2 U.S.C. 633(a)); or

(2) the suballocations of appropriations committees under section 302(b) of that Act.

(b) Fund uses.—Section 302(d)(4) of the Nuclear Waste Policy Act of 1982 (42 U.S.C. 10222(d)(4)) is amended by striking “with” and all that follows through “storage site” and inserting “with surface facilities within the geologic repository operations area (including surface facilities for the receipt, handling, packaging, and storage of spent nuclear fuel and high-level radioactive waste prior to emplacement, or transportation to the repository of spent nuclear fuel or high-level radioactive waste to surface facilities for the receipt, handling, packaging, and storage of spent nuclear fuel and high-level radioactive waste prior to emplacement and the transportation, treating, or packaging of spent nuclear fuel or high-level radioactive waste to be disposed of in the repository, to be stored in a monitored retrievable storage site),”.

SEC. 708. Waste confidence.

For purposes of a determination by the Nuclear Regulatory Commission on whether to grant or amend any license to operate any civilian nuclear power reactor or high-level radioactive waste or spent fuel storage or treatment facility under the Atomic Energy Act of 1954 (42 U.S.C. 2011 et seq.), the provisions of this subtitle (including the amendments made by this subtitle) and the obligation of the Secretary to develop a repository in accordance with the Nuclear Waste Policy Act of 1982 (42 U.S.C. 10101 et seq.), shall provide sufficient and independent grounds for any further findings by the Nuclear Regulatory Commission of reasonable assurances that spent nuclear fuel and high-level radioactive waste would be disposed of safely and in a timely manner.

SEC. 711. Investment tax credit for investments in nuclear power facilities.

(a) New credit for nuclear power facilities.—Section 46 of the Internal Revenue Code of 1986, as amended by this Act, is amended—

(1) by striking “and” at the end of paragraph (6),

(2) by striking the period at the end of paragraph (7) and inserting “, and”, and

(3) by inserting after paragraph (7) the following new paragraph:

“(8) the nuclear power facility construction credit.”.

(b) Nuclear power facility construction credit.—Subpart E of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986, as amended by this Act, is amended by inserting after section 48E the following new section:

“SEC. 48F. Nuclear power facility construction credit.

“(a) In general.—For purposes of section 46, the nuclear power facility construction credit for any taxable year is 10 percent of the qualified nuclear power facility expenditures with respect to a qualified nuclear power facility.

“(b) When expenditures taken into account.—

“(1) IN GENERAL.—Qualified nuclear power facility expenditures shall be taken into account for the taxable year in which the qualified nuclear power facility is placed in service.

“(2) COORDINATION WITH SUBSECTION (C).—The amount which would (but for this paragraph) be taken into account under paragraph (1) with respect to any qualified nuclear power facility shall be reduced (but not below zero) by any amount of qualified nuclear power facility expenditures taken into account under subsection (c) by the taxpayer or a predecessor of the taxpayer (or, in the case of a sale and leaseback described in section 50(a)(2)(C), by the lessee), to the extent any amount so taken into account under subsection (c) has not been required to be recaptured under section 50(a).

“(c) Progress expenditures.—

“(1) IN GENERAL.—A taxpayer may elect to take into account qualified nuclear power facility expenditures—

“(A) SELF-CONSTRUCTED PROPERTY.—In the case of a qualified nuclear power facility which is a self-constructed facility, no earlier than the taxable year for which such expenditures are properly chargeable to capital account with respect to such facility, and

“(B) ACQUIRED FACILITY.—In the case of a qualified nuclear facility which is not self-constructed property, no earlier than the taxable year in which such expenditures are paid.

“(2) SPECIAL RULES FOR APPLYING PARAGRAPH (1).—For purposes of paragraph (1)—

“(A) COMPONENT PARTS, ETC.—Notwithstanding that a qualified nuclear power facility is a self-constructed facility, property described in paragraph (3)(B) shall be taken into account in accordance with paragraph (1)(B), and such amounts shall not be included in determining qualified nuclear power facility expenditures under paragraph (1)(A).

“(B) CERTAIN BORROWING DISREGARDED.—Any amount borrowed directly or indirectly by the taxpayer on a nonrecourse basis from the person constructing the facility for the taxpayer shall not be treated as an amount expended for such facility.

“(C) LIMITATION FOR FACILITIES OR COMPONENTS WHICH ARE NOT SELF-CONSTRUCTED.—

“(i) IN GENERAL.—In the case of a facility or a component of a facility which is not self-constructed, the amount taken into account under paragraph (1)(B) for any taxable year shall not exceed the excess of—

“(I) the product of the overall cost to the taxpayer of the facility or component of a facility, multiplied by the percentage of completion of the facility or component of a facility, less

“(II) the amount taken into account under paragraph (1)(B) for all prior taxable years as to such facility or component of a facility.

“(ii) CARRYOVER OF CERTAIN AMOUNTS.—In the case of a facility or component of a facility which is not self-constructed, if for the taxable year the amount which (but for clause (i)) would have been taken into account under paragraph (1)(B) exceeds the amount allowed by clause (i), then the amount of such excess shall increase the amount taken into account under paragraph (1)(B) for the succeeding taxable year without regard to this paragraph.

“(D) DETERMINATION OF PERCENTAGE OF COMPLETION.—The determination under subparagraph (C) of the portion of the overall cost to the taxpayer of the construction which is properly attributable to construction completed during any taxable year shall be made on the basis of engineering or architectural estimates or on the basis of cost accounting records, using information available at the close of the taxable year in which the credit is being claimed.

“(E) DETERMINATION OF OVERALL COST.—The determination under subparagraph (C) of the overall cost to the taxpayer of the construction of a facility shall be made on the basis of engineering or architectural estimates or on the basis of cost accounting records, using information available at the close of the taxable year in which the credit is being claimed.

“(F) NO PROGRESS EXPENDITURES FOR PROPERTY FOR YEAR PLACED IN SERVICE, ETC.—In the case of any qualified nuclear facility, no qualified nuclear facility expenditures shall be taken into account under this subsection for the earlier of—

“(i) the taxable year in which the facility is placed in service, or

“(ii) the first taxable year for which recapture is required under section 50(a)(2) with respect to such facility or for any taxable year thereafter.

“(3) SELF-CONSTRUCTED.—For purposes of this subsection—

“(A) The term ‘self-constructed facility’ means any facility if, at the close of the first taxable year to which the election in this subsection applies, it is reasonable to believe that more than 80 percent of the qualified nuclear facility expenditures for such facility will be made directly by the taxpayer.

“(B) A component of a facility shall be treated as not self-constructed if, at the close of the first taxable year in which expenditures for the component are paid, it is reasonable to believe that the cost of the component is at least 5 percent of the expected cost of the facility.

“(4) ELECTION.—An election shall be made under this subsection for a qualified nuclear power facility by claiming the nuclear power facility construction credit for expenditures described in paragraph (1) on the taxpayer’s return of the tax imposed by this chapter for the taxable year. Such an election shall apply to the taxable year for which made and all subsequent taxable years. Such an election, once made, may be revoked only with the consent of the Secretary.

“(d) Definitions and special rules.—For purposes of this section—

“(1) QUALIFIED NUCLEAR POWER FACILITY.—The term ‘qualified nuclear power facility’ means a facility which, when placed in service, will use nuclear power to produce electricity, the reactor design for which was approved after December 31, 1993 by the Nuclear Regulatory Commission (and such design or a substantially similar design of comparable capacity was not approved on or before such date), and the construction of which was approved by the Nuclear Regulatory Commission on or before December 31, 2013.

“(2) QUALIFIED NUCLEAR POWER FACILITY EXPENDITURES.—

“(A) IN GENERAL.—The term ‘qualified nuclear power facility expenditures’ means any amount paid, accrued, or properly chargeable to capital account—

“(i) with respect to a qualified nuclear power facility,

“(ii) for which depreciation will be allowable under section 168 once the facility is placed in service, and

“(iii) which is incurred before the qualified nuclear power facility is placed in service or in connection with the placement of such facility in service.

“(B) PRE-EFFECTIVE DATE EXPENDITURES.—Qualified nuclear power facility expenditures do not include any expenditures incurred by the taxpayer before January 1, 2008, to the extent that, at the close of the first taxable year to which the election in subsection (c) applies, it is reasonable to believe that such expenditures will constitute more than 20 percent of the total qualified nuclear power facility expenditures.

“(3) DELAYS AND SUSPENSION OF CONSTRUCTION.—

“(A) IN GENERAL.—Except as provided in section 50(a)(2)(C) and except for sales or dispositions between entities which meet the ownership test in section 1504(a), for purposes of applying this section and section 50, a nuclear power facility that is under construction shall cease, with respect to the taxpayer, to be a qualified nuclear power facility as of the date on which the taxpayer sells, disposes of, or cancels, abandons, or otherwise terminates the construction of, the facility.

“(B) RESUMPTION OF CONSTRUCTION.—If a nuclear power facility that is under construction ceases, with respect to the taxpayer, to be a qualified nuclear power facility by reason of subparagraph (A) and work is subsequently resumed on the construction of such facility the qualified nuclear power facility expenditures shall be determined without regard to any delay or temporary termination of construction of the facility.

“(e) Application of other rules.—Rules similar to the rules of subsections (c)(4) and (d) of section 46 (as in effect on the day before the enactment of the Revenue Reconciliation Act of 1990) shall apply for purposes of this section to the extent not inconsistent herewith.”.

(c) Provisions relating to credit recapture.—

(1) PROGRESS EXPENDITURE RECAPTURE RULES.—

(A) BASIC RULES.—Subparagraph (A) of section 50(a)(2) of the Internal Revenue Code of 1986 is amended to read as follows:

“(A) IN GENERAL.—If during any taxable year any building to which section 47(d) applied or any facility to which section 48F(c) applied ceases (by reason of sale or other disposition, cancellation or abandonment of contract, or otherwise) to be, with respect to the taxpayer, property which, when placed in service, will be a qualified rehabilitated building or a qualified nuclear power facility, then the tax under this chapter for such taxable year shall be increased by an amount equal to the aggregate decrease in the credits allowed under section 38 for all prior taxable years which would have resulted solely from reducing to zero the credit determined under this subpart with respect to such building or facility.”.

(B) AMENDMENT TO EXCESS CREDIT RECAPTURE RULE.—Subparagraph (B) of section 50(a)(2) of such Code is amended by—

(i) inserting “or paragraph (2) of section 48F(b)” after “paragraph (2) of section 47(b)”,

(ii) inserting “or section 48F(b)(1)” after “section 47(b)(1)”, and

(iii) inserting “or facility” after “building”.

(C) AMENDMENT OF SALE AND LEASEBACK RULE.—Subparagraph (C) of section 50(a)(2) of such Code is amended by—

(i) inserting “or section 48F(c)” after “section 47(d)”, and

(ii) inserting “or qualified nuclear power facility expenditures” after “qualified rehabilitation expenditures”.

(D) OTHER AMENDMENT.—Subparagraph (D) of section 50(a)(2) of such Code is amended by inserting “or section 48F(c)” after “section 47(d)”.

(d) No basis adjustment.—Section 50(c) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

“(6) NUCLEAR POWER FACILITY CONSTRUCTION CREDIT.—This subsection shall not apply to the nuclear power facility construction credit.”.

(e) Application of section 49.—Subparagraph (C) of section 49(a)(1) of the Internal Revenue Code of 1986, as amended by this Act, is amended—

(1) by striking “and” at the end of clause (vi),

(2) by striking the period at the end of clause (vii) and inserting “, and”, and

(3) by inserting after clause (vii) the following new clause:

“(viii) the basis of any property which is part of a qualified nuclear power facility under section 48F.”.

(f) Clerical amendment.—The table of sections for subpart E of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986, as amended by this Act, is amended by inserting after the item relating to section 48E the following new item:


“Sec. 48F. Nuclear power facility construction credit.”.

(g) Effective date.—The amendments made by this section shall apply to expenditures incurred and property placed in service in taxable years beginning after the date of enactment of this Act.

SEC. 712. 5-year accelerated depreciation for new nuclear power facilities.

(a) In general.—Subparagraph (B) of section 168(e)(3) of the Internal Revenue Code of 1986 (relating to 5-year property) is amended—

(1) by striking “and” at the end of clause (v),

(2) by striking the period at the end of clause (vi) and inserting “, and”, and

(3) by adding at the end the following new clause:

“(vii) any qualified nuclear power facility described in section 48F(d)(1).”.

(b) Effective date.—The amendments made by this section shall apply to property placed in service in taxable years beginning after the date of the enactment of this Act.

SEC. 801. Definitions.

In this title:

(1) COASTAL PLAIN.—The term “Coastal Plain” means that area identified as the “1002 Coastal Plain Area” on the map.

(2) FEDERAL AGREEMENT.—The term “Federal Agreement” means the Federal Agreement and Grant Right-of-Way for the Trans-Alaska Pipeline issued on January 23, 1974, in accordance with section 28 of the Mineral Leasing Act (30 U.S.C. 185) and the Trans-Alaska Pipeline Authorization Act (43 U.S.C. 1651 et seq.).

(3) FINAL STATEMENT.—The term “Final Statement” means the final legislative environmental impact statement on the Coastal Plain, dated April 1987, and prepared pursuant to section 1002 of the Alaska National Interest Lands Conservation Act (16 U.S.C. 3142) and section 102(2)(C) of the National Environmental Policy Act of 1969 (42 U.S.C. 4332(2)(C)).

(4) MAP.—The term “map” means the map entitled “Arctic National Wildlife Refuge”, dated September 2005, and prepared by the United States Geological Survey.

(5) SECRETARY.—The term “Secretary” means the Secretary of the Interior (or the designee of the Secretary), acting through the Director of the Bureau of Land Management in consultation with the Director of the United States Fish and Wildlife Service and in coordination with a State coordinator appointed by the Governor of the State of Alaska.

SEC. 802. Leasing program for land within the Coastal Plain.

(a) In general.—

(1) AUTHORIZATION.—Congress authorizes the exploration, leasing, development, production, and economically feasible and prudent transportation of oil and gas in and from the Coastal Plain.

(2) ACTIONS.—The Secretary shall take such actions as are necessary—

(A) to establish and implement, in accordance with this title, a competitive oil and gas leasing program that will result in an environmentally sound program for the exploration, development, and production of the oil and gas resources of the Coastal Plain while taking into consideration the interests and concerns of residents of the Coastal Plain, which is the homeland of the Kaktovikmiut Inupiat; and

(B) to administer this title through regulations, lease terms, conditions, restrictions, prohibitions, stipulations, and other provisions that—

(i) ensure the oil and gas exploration, development, and production activities on the Coastal Plain will result in no significant adverse effect on fish and wildlife, their habitat, subsistence resources, and the environment; and

(ii) require the application of the best commercially available technology for oil and gas exploration, development, and production to all exploration, development, and production operations under this title in a manner that ensures the receipt of fair market value by the public for the mineral resources to be leased.

(b) Repeal.—

(1) REPEAL.—Section 1003 of the Alaska National Interest Lands Conservation Act (16 U.S.C. 3143) is repealed.

(2) CONFORMING AMENDMENT.—The table of contents contained in section 1 of that Act (16 U.S.C. 3101 note) is amended by striking the item relating to section 1003.

(c) Compliance with requirements under certain other laws.—

(1) COMPATIBILITY.—For purposes of the National Wildlife Refuge System Administration Act of 1966 (16 U.S.C. 668dd et seq.)—

(A) the oil and gas pre-leasing and leasing program, and activities authorized by this section in the Coastal Plain, shall be considered to be compatible with the purposes for which the Arctic National Wildlife Refuge was established; and

(B) no further findings or decisions shall be required to implement that program and those activities.

(2) ADEQUACY OF THE DEPARTMENT OF THE INTERIOR'S LEGISLATIVE ENVIRONMENTAL IMPACT STATEMENT.—The Final Statement shall be considered to satisfy the requirements under the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) that apply with respect to preleasing activities, including exploration programs and actions authorized to be taken by the Secretary to develop and promulgate the regulations for the establishment of a leasing program authorized by this title before the conduct of the first lease sale.

(3) COMPLIANCE WITH NEPA FOR OTHER ACTIONS.—

(A) IN GENERAL.—Before conducting the first lease sale under this title, the Secretary shall prepare an environmental impact statement in accordance with the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) with respect to the actions authorized by this title that are not referred to in paragraph (2).

(B) IDENTIFICATION AND ANALYSIS.—Notwithstanding any other provision of law, in carrying out this paragraph, the Secretary shall not be required—

(i) to identify nonleasing alternative courses of action; or

(ii) to analyze the environmental effects of those courses of action.

(C) IDENTIFICATION OF PREFERRED ACTION.—Not later than 18 months after the date of enactment of this Act, the Secretary shall—

(i) identify only a preferred action and a single leasing alternative for the first lease sale authorized under this title; and

(ii) analyze the environmental effects and potential mitigation measures for those 2 alternatives.

(D) PUBLIC COMMENTS.—In carrying out this paragraph, the Secretary shall consider only public comments that are filed not later than 20 days after the date of publication of a draft environmental impact statement.

(E) EFFECT OF COMPLIANCE.—Notwithstanding any other provision of law, compliance with this paragraph shall be considered to satisfy all requirements for the analysis and consideration of the environmental effects of proposed leasing under this title.

(d) Relationship to State and local authority.—Nothing in this title expands or limits any State or local regulatory authority.

(e) Special areas.—

(1) DESIGNATION.—

(A) IN GENERAL.—The Secretary, after consultation with the State of Alaska, the North Slope Borough, Alaska, and the City of Kaktovik, Alaska, may designate not more than 45,000 acres of the Coastal Plain as a special area if the Secretary determines that the special area would be of such unique character and interest as to require special management and regulatory protection.

(B) SADLEROCHIT SPRING AREA.—The Secretary shall designate as a special area in accordance with subparagraph (A) the Sadlerochit Spring area, comprising approximately 4,000 acres as depicted on the map.

(2) MANAGEMENT.—The Secretary shall manage each special area designated under this subsection in a manner that—

(A) respects and protects the Native people of the area; and

(B) preserves the unique and diverse character of the area, including fish, wildlife, subsistence resources, and cultural values of the area.

(3) EXCLUSION FROM LEASING OR SURFACE OCCUPANCY.—

(A) IN GENERAL.—The Secretary may exclude any special area designated under this subsection from leasing.

(B) NO SURFACE OCCUPANCY.—If the Secretary leases all or a portion of a special area for the purposes of oil and gas exploration, development, production, and related activities, there shall be no surface occupancy of the land comprising the special area.

(4) DIRECTIONAL DRILLING.—Notwithstanding any other provision of this subsection, the Secretary may lease all or a portion of a special area under terms that permit the use of horizontal drilling technology from sites on leases located outside the special area.

(f) Limitation on closed areas.—The Secretary may not close land within the Coastal Plain to oil and gas leasing or to exploration, development, or production except in accordance with this title.

(g) Regulations.—

(1) IN GENERAL.—Not later than 15 months after the date of enactment of this Act, in consultation with appropriate agencies of the State of Alaska, the North Slope Borough, Alaska, and the City of Kaktovik, Alaska, the Secretary shall issue such regulations as are necessary to carry out this title, including rules and regulations relating to protection of the fish and wildlife, fish and wildlife habitat, and subsistence resources of the Coastal Plain.

(2) REVISION OF REGULATIONS.—The Secretary may periodically review and, as appropriate, revise the rules and regulations issued under paragraph (1) to reflect any significant scientific or engineering data that come to the attention of the Secretary.

SEC. 803. Lease sales.

(a) In General.—Land may be leased pursuant to this title to any person qualified to obtain a lease for deposits of oil and gas under the Mineral Leasing Act (30 U.S.C. 181 et seq.).

(b) Procedures.—The Secretary shall, by regulation, establish procedures for—

(1) receipt and consideration of sealed nominations for any area in the Coastal Plain for inclusion in, or exclusion (as provided in subsection (c)) from, a lease sale;

(2) the holding of lease sales after that nomination process; and

(3) public notice of and comment on designation of areas to be included in, or excluded from, a lease sale.

(c) Lease Sale Bids.—Bidding for leases under this title shall be by sealed competitive cash bonus bids.

(d) Acreage minimum in first sale.—For the first lease sale under this title, the Secretary shall offer for lease those tracts the Secretary considers to have the greatest potential for the discovery of hydrocarbons, taking into consideration nominations received pursuant to subsection (b)(1), but in no case less than 200,000 acres.

(e) Timing of Lease Sales.—The Secretary shall—

(1) not later than 22 months after the date of enactment of this Act, conduct the first lease sale under this title;

(2) not later than September 30, 2012, conduct a second lease sale under this title; and

(3) conduct additional sales at appropriate intervals if sufficient interest in exploration or development exists to warrant the conduct of the additional sales.

SEC. 804. Grant of leases by the Secretary.

(a) In General.—Upon payment by a lessee of such bonus as may be accepted by the Secretary, the Secretary may grant to the highest responsible qualified bidder in a lease sale conducted pursuant to section 803 a lease for any land on the Coastal Plain.

(b) Subsequent transfers.—

(1) IN GENERAL.—No lease issued under this title may be sold, exchanged, assigned, sublet, or otherwise transferred except with the approval of the Secretary.

(2) CONDITION FOR APPROVAL.—Before granting any approval described in paragraph (1), the Secretary shall consult with and give due consideration to the opinion of the Attorney General.

SEC. 805. Lease terms and conditions.

(a) In General.—An oil or gas lease issued pursuant to this title shall—

(1) provide for the payment of a royalty of not less than 1612 percent of the amount or value of the production removed or sold from the lease, as determined by the Secretary in accordance with regulations applicable to other Federal oil and gas leases;

(2) provide that the Secretary may close, on a seasonal basis, such portions of the Coastal Plain to exploratory drilling activities as are necessary to protect caribou calving areas and other species of fish and wildlife;

(3) require that each lessee of land within the Coastal Plain shall be fully responsible and liable for the reclamation of land within the Coastal Plain and any other Federal land that is adversely affected in connection with exploration, development, production, or transportation activities within the Coastal Plain conducted by the lessee or by any of the subcontractors or agents of the lessee;

(4) provide that the lessee may not delegate or convey, by contract or otherwise, that reclamation responsibility and liability to another person without the express written approval of the Secretary;

(5) provide that the standard of reclamation for land required to be reclaimed under this title shall be, to the maximum extent practicable—

(A) a condition capable of supporting the uses that the land was capable of supporting prior to any exploration, development, or production activities; or

(B) upon application by the lessee, to a higher or better standard, as approved by the Secretary;

(6) contain terms and conditions relating to protection of fish and wildlife, fish and wildlife habitat, subsistence resources, and the environment as required under section 802(a)(2);

(7) provide that each lessee, and each agent and contractor of a lessee, use their best efforts to provide a fair share of employment and contracting for Alaska Natives and Alaska Native Corporations from throughout the State of Alaska, as determined by the level of obligation previously agreed to in the Federal Agreement; and

(8) contain such other provisions as the Secretary determines to be necessary to ensure compliance with this title and regulations issued under this title.

(b) Project labor agreements.—The Secretary, as a term and condition of each lease under this title, and in recognizing the proprietary interest of the Federal Government in labor stability and in the ability of construction labor and management to meet the particular needs and conditions of projects to be developed under the leases issued pursuant to this title (including the special concerns of the parties to those leases), shall require that each lessee, and each agent and contractor of a lessee, under this title negotiate to obtain a project labor agreement for the employment of laborers and mechanics on production, maintenance, and construction under the lease.

SEC. 806. Coastal Plain environmental protection.

(a) No significant adverse effect standard To govern authorized coastal plain activities.—In accordance with section 802, the Secretary shall administer this title through regulations, lease terms, conditions, restrictions, prohibitions, stipulations, or other provisions that—

(1) ensure, to the maximum extent practicable, that oil and gas exploration, development, and production activities on the Coastal Plain will result in no significant adverse effect on fish and wildlife, fish and wildlife habitat, and the environment;

(2) require the application of the best commercially available technology for oil and gas exploration, development, and production on all new exploration, development, and production operations; and

(3) ensure that the maximum surface acreage covered in connection with the leasing program by production and support facilities, including airstrips and any areas covered by gravel berms or piers for support of pipelines, does not exceed 2,000 acres on the Coastal Plain.

(b) Site-specific assessment and mitigation.—The Secretary shall require, with respect to any proposed drilling and related activities on the Coastal Plain, that—

(1) a site-specific environmental analysis be made of the probable effects, if any, that the drilling or related activities will have on fish and wildlife, fish and wildlife habitat, subsistence resources, subsistence uses, and the environment;

(2) a plan be implemented to avoid, minimize, and mitigate (in that order and to the maximum extent practicable) any significant adverse effect identified under paragraph (1); and

(3) the development of the plan occur after consultation with—

(A) each agency having jurisdiction over matters mitigated by the plan;

(B) the State of Alaska;

(C) North Slope Borough, Alaska; and

(D) the City of Kaktovik, Alaska.

(c) Regulations To protect coastal plain fish and wildlife resources, subsistence users, and the environment.—Before implementing the leasing program authorized by this title, the Secretary shall prepare and issue regulations, lease terms, conditions, restrictions, prohibitions, stipulations, or other measures designed to ensure, to the maximum extent practicable, that the activities carried out on the Coastal Plain under this title are conducted in a manner consistent with the purposes and environmental requirements of this title.

(d) Compliance with Federal and State environmental laws and other requirements.—The proposed regulations, lease terms, conditions, restrictions, prohibitions, and stipulations for the leasing program under this title shall require—

(1) compliance with all applicable provisions of Federal and State environmental law (including regulations);

(2) implementation of and compliance with—

(A) standards that are at least as effective as the safety and environmental mitigation measures, as described in items 1 through 29 on pages 167 through 169 of the Final Statement, on the Coastal Plain;

(B) seasonal limitations on exploration, development, and related activities, as necessary, to avoid significant adverse effects during periods of concentrated fish and wildlife breeding, denning, nesting, spawning, and migration;

(C) design safety and construction standards for all pipelines and any access and service roads that minimize, to the maximum extent practicable, adverse effects on—

(i) the passage of migratory species (such as caribou); and

(ii) the flow of surface water by requiring the use of culverts, bridges, or other structural devices;

(D) prohibitions on general public access to, and use of, all pipeline access and service roads;

(E) stringent reclamation and rehabilitation requirements in accordance with this title for the removal from the Coastal Plain of all oil and gas development and production facilities, structures, and equipment on completion of oil and gas production operations, except in a case in which the Secretary determines that those facilities, structures, or equipment—

(i) would assist in the management of the Arctic National Wildlife Refuge; and

(ii) are donated to the United States for that purpose;

(F) appropriate prohibitions or restrictions on—

(i) access by all modes of transportation;

(ii) sand and gravel extraction; and

(iii) use of explosives;

(G) reasonable stipulations for protection of cultural and archaeological resources;

(H) measures to protect groundwater and surface water, including—

(i) avoidance, to the maximum extent practicable, of springs, streams, and river systems;

(ii) the protection of natural surface drainage patterns and wetland and riparian habitats; and

(iii) the regulation of methods or techniques for developing or transporting adequate supplies of water for exploratory drilling; and

(I) research, monitoring, and reporting requirements;

(3) that exploration activities (except surface geological studies) be limited to the period between approximately November 1 and May 1 of each year and be supported, if necessary, by ice roads, winter trails with adequate snow cover, ice pads, ice airstrips, and air transport methods (except that those exploration activities may be permitted at other times if the Secretary determines that the exploration will have no significant adverse effect on fish and wildlife, fish and wildlife habitat, subsistence resources, and the environment of the Coastal Plain);

(4) consolidation of facility siting;

(5) avoidance or reduction of air traffic-related disturbance to fish and wildlife;

(6) treatment and disposal of hazardous and toxic wastes, solid wastes, reserve pit fluids, drilling muds and cuttings, and domestic wastewater, including, in accordance with applicable Federal and State environmental laws (including regulations)—

(A) preparation of an annual waste management report;

(B) development and implementation of a hazardous materials tracking system; and

(C) prohibition on the use of chlorinated solvents;

(7) fuel storage and oil spill contingency planning;

(8) conduct of periodic field crew environmental briefings;

(9) avoidance of significant adverse effects on subsistence hunting, fishing, and trapping;

(10) compliance with applicable air and water quality standards;

(11) appropriate seasonal and safety zone designations around well sites, within which subsistence hunting and trapping shall be limited; and

(12) development and implementation of such other protective environmental requirements, restrictions, terms, or conditions as the Secretary, after consultation with the State of Alaska, North Slope Borough, Alaska, and the City of Kaktovik, Alaska, determines to be necessary.

(e) Considerations.—In preparing and issuing regulations, lease terms, conditions, restrictions, prohibitions, or stipulations under this section, the Secretary shall take into consideration—

(1) the stipulations and conditions that govern the National Petroleum Reserve-Alaska leasing program, as set forth in the 1999 Northeast National Petroleum Reserve-Alaska Final Integrated Activity Plan/Environmental Impact Statement;

(2) the environmental protection standards that governed the initial Coastal Plain seismic exploration program under parts 37.31 through 37.33 of title 50, Code of Federal Regulations (or successor regulations); and

(3) the land use stipulations for exploratory drilling on the KIC-ASRC private land described in Appendix 2 of the agreement between Arctic Slope Regional Corporation and the United States dated August 9, 1983.

(f) Facility consolidation planning.—

(1) IN GENERAL.—After providing for public notice and comment, the Secretary shall prepare and periodically update a plan to govern, guide, and direct the siting and construction of facilities for the exploration, development, production, and transportation of oil and gas resources from the Coastal Plain.

(2) OBJECTIVES.—The objectives of the plan shall be—

(A) the avoidance of unnecessary duplication of facilities and activities;

(B) the encouragement of consolidation of common facilities and activities;

(C) the location or confinement of facilities and activities to areas that will minimize impact on fish and wildlife, fish and wildlife habitat, subsistence resources, and the environment;

(D) the use of existing facilities, to the maximum extent practicable; and

(E) the enhancement of compatibility between wildlife values and development activities.

(g) Access to public land.—The Secretary shall—

(1) manage public land in the Coastal Plain in accordance with subsections (a) and (b) of section 811 of the Alaska National Interest Lands Conservation Act (16 U.S.C. 3121); and

(2) ensure that local residents shall have reasonable access to public land in the Coastal Plain for traditional uses.

SEC. 807. Expedited judicial review.

(a) Filing of complaints.—

(1) DEADLINE.—A complaint seeking judicial review of a provision of this title or an action of the Secretary under this title shall be filed—

(A) except as provided in subparagraph (B), during the 90-day period beginning on the date on which the action being challenged was carried out; or

(B) in the case of a complaint based solely on grounds arising after the 90-day period described in subparagraph (A), during the 90-day period beginning on the date on which the complainant knew or reasonably should have known about the grounds for the complaint.

(2) VENUE.—A complaint seeking judicial review of a provision of this title or an action of the Secretary under this title shall be filed in the United States Court of Appeals for the District of Columbia.

(3) SCOPE.—

(A) IN GENERAL.—Judicial review of a decision of the Secretary under this title (including an environmental analysis of such a lease sale) shall be—

(i) limited to a review of whether the decision is in accordance with this title; and

(ii) based on the administrative record of the decision.

(B) PRESUMPTIONS.—Any identification by the Secretary of a preferred course of action relating to a lease sale, and any analysis by the Secretary of environmental effects, under this title shall be presumed to be correct unless proven otherwise by clear and convincing evidence.

(b) Limitation on other review.—Any action of the Secretary that is subject to judicial review under this section shall not be subject to judicial review in any civil or criminal proceeding for enforcement.

SEC. 808. Rights-of-way and easements across Coastal Plain.

For purposes of section 1102(4)(A) of the Alaska National Interest Lands Conservation Act (16 U.S.C. 3162(4)(A)), any rights-of-way or easements across the Coastal Plain for the exploration, development, production, or transportation of oil and gas shall be considered to be established incident to the management of the Coastal Plain under this section.

SEC. 809. Conveyance.

Notwithstanding section 1302(h)(2) of the Alaska National Interest Lands Conservation Act (16 U.S.C. 3192(h)(2)), to remove any cloud on title to land, and to clarify land ownership patterns in the Coastal Plain, the Secretary shall—

(1) to the extent necessary to fulfill the entitlement of the Kaktovik Inupiat Corporation under sections 12 and 14 of the Alaska Native Claims Settlement Act (43 U.S.C. 1611, 1613), as determined by the Secretary, convey to that Corporation the surface estate of the land described in paragraph (1) of Public Land Order 6959, in accordance with the terms and conditions of the agreement between the Secretary, the United States Fish and Wildlife Service, the Bureau of Land Management, and the Kaktovik Inupiat Corporation, dated January 22, 1993; and

(2) convey to the Arctic Slope Regional Corporation the remaining subsurface estate to which that Corporation is entitled under the agreement between that corporation and the United States, dated August 9, 1983.

SEC. 810. Local government impact aid and community service assistance.

(a) Establishment of fund.—

(1) IN GENERAL.—As a condition on the receipt of funds under section 812(2), the State of Alaska shall establish in the treasury of the State, and administer in accordance with this section, a fund to be known as the “Coastal Plain Local Government Impact Aid Assistance Fund” (referred to in this section as the “Fund”).

(2) DEPOSITS.—Subject to paragraph (1), the Secretary of the Treasury shall deposit into the Fund, $35,000,000 each year from the amount available under section 812(2)(A).

(3) INVESTMENT.—The Governor of the State of Alaska (referred to in this section as the “Governor”) shall invest amounts in the Fund in interest-bearing securities of the United States or the State of Alaska.

(b) Assistance.—The Governor, in cooperation with the Mayor of the North Slope Borough, shall use amounts in the Fund to provide assistance to North Slope Borough, Alaska, the City of Kaktovik, Alaska, and any other borough, municipal subdivision, village, or other community in the State of Alaska that is directly impacted by exploration for, or the production of, oil or gas on the Coastal Plain under this title, or any Alaska Native Regional Corporation acting on behalf of the villages and communities within its region whose lands lie along the right of way of the Trans Alaska Pipeline System, as determined by the Governor.

(c) Application.—

(1) IN GENERAL.—To receive assistance under subsection (b), a community or Regional Corporation described in that subsection shall submit to the Governor, or to the Mayor of the North Slope Borough, an application in such time, in such manner, and containing such information as the Governor may require.

(2) ACTION BY NORTH SLOPE BOROUGH.—The Mayor of the North Slope Borough shall submit to the Governor each application received under paragraph (1) as soon as practicable after the date on which the application is received.

(3) ASSISTANCE OF GOVERNOR.—The Governor shall assist communities in submitting applications under this subsection, to the maximum extent practicable.

(d) Use of funds.—A community or Regional Corporation that receives funds under subsection (b) may use the funds—

(1) to plan for mitigation, implement a mitigation plan, or maintain a mitigation project to address the potential effects of oil and gas exploration and development on environmental, social, cultural, recreational, and subsistence resources of the community;

(2) to develop, carry out, and maintain—

(A) a project to provide new or expanded public facilities; or

(B) services to address the needs and problems associated with the effects described in paragraph (1), including firefighting, police, water and waste treatment, first responder, and other medical services;

(3) to compensate residents of the Coastal Plain for significant damage to environmental, social, cultural, recreational, or subsistence resources; and

(4) in the City of Kaktovik, Alaska—

(A) to develop a mechanism for providing members of the Kaktovikmiut Inupiat community an opportunity to—

(i) monitor development on the Coastal Plain; and

(ii) provide information and recommendations to the Governor based on traditional aboriginal knowledge of the natural resources, flora, fauna, and ecological processes of the Coastal Plain; and

(B) to establish a local coordination office, to be managed by the Mayor of the North Slope Borough, in coordination with the City of Kaktovik, Alaska—

(i) to coordinate with and advise developers on local conditions and the history of areas affected by development;

(ii) to provide to the Committee on Resources of the House of Representatives and the Committee on Energy and Natural Resources of the Senate annual reports on the status of the coordination between developers and communities affected by development;

(iii) to collect from residents of the Coastal Plain information regarding the impacts of development on fish, wildlife, habitats, subsistence resources, and the environment of the Coastal Plain; and

(iv) to ensure that the information collected under clause (iii) is submitted to—

(I) developers; and

(II) any appropriate Federal agency.

SEC. 811. Prohibition on exports.

An oil or gas lease issued under this title shall prohibit the exportation of oil or gas produced under the lease.

SEC. 812. Allocation of revenues.

Notwithstanding the Mineral Leasing Act (30 U.S.C. 181 et seq.) or any other provision of law, of the adjusted bonus, rental, and royalty receipts from Federal oil and gas leasing and operations authorized under this title:

(1) 50 percent shall be deposited in the general fund of the Treasury.

(2) The remainder shall be available as follows:

(A) $35,000,000 shall be deposited by the Secretary of the Treasury into the fund created under section 810(a)(1).

(B) The remainder shall be disbursed to the State of Alaska.


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