Text: S.875 — 110th Congress (2007-2008)All Information (Except Text)

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Introduced in Senate (03/14/2007)


110th CONGRESS
1st Session
S. 875


To improve energy security of the United States through a 50 percent reduction in the oil intensity of the economy of the United States by 2030 and the prudent expansion of secure oil supplies, to be achieved by raising the fuel efficiency of the vehicular transportation fleet, increasing the availability of alternative fuel sources, fostering responsible oil exploration and production, and improving international arrangements to secure the global oil supply, and for other purposes.


IN THE SENATE OF THE UNITED STATES

March 14, 2007

Mr. Dorgan (for himself and Mr. Craig) introduced the following bill; which was read twice and referred to the Committee on Finance


A BILL

To improve energy security of the United States through a 50 percent reduction in the oil intensity of the economy of the United States by 2030 and the prudent expansion of secure oil supplies, to be achieved by raising the fuel efficiency of the vehicular transportation fleet, increasing the availability of alternative fuel sources, fostering responsible oil exploration and production, and improving international arrangements to secure the global oil supply, 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 “Security and Fuel Efficiency Energy Act of 2007” or the “SAFE Energy Act of 2007”.

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


Sec. 1. Short title; table of contents.

Sec. 101. Definitions.

Sec. 102. Annual increase in average fuel economy standards.

Sec. 103. Tax credits for alternative motor vehicles and fuel-efficient motor vehicles.

Sec. 104. Advanced technology motor vehicles manufacturing credit.

Sec. 105. Increase in maximum allowable gross weight for vehicles using the National System of Interstate and Defense Highways.

Sec. 201. Renewable fuel standard.

Sec. 202. Modification of credit for alternative fuel vehicle refueling property.

Sec. 203. Ethanol-blend fuel infrastructure.

Sec. 204. Requirement to increase percentage of dual fueled automobiles.

Sec. 205. Emerging biofuels.

Sec. 206. Biodiesel.

Sec. 207. Unconventional fossil fuels.

Sec. 208. Study of incentives for renewable fuels.

Sec. 301. Definition.

Sec. 302. Authorization of activities and exports involving hydrocarbon resources by United States persons.

Sec. 303. Travel in connection with authorized hydrocarbon exploration and extraction activities.

Sec. 304. Moratorium of oil and gas leasing in certain areas of the Gulf of Mexico.

Sec. 305. Inventory of outer Continental Shelf oil and natural gas resources off southeastern coast of the United States.

Sec. 306. Enhanced oil recovery.

Sec. 401. Bureau of International Energy Policy.

Sec. 402. Strategic energy infrastructure equipment reserve.

SEC. 101. Definitions.

(a) Definition of automobile.—Section 32901(a)(3) of title 49, United States Code, is amended—

(1) by striking “4-wheeled”; and

(2) by striking “, and rated at—” and all that follows and inserting a period.

(b) Definition of passenger automobile.—Section 32901(a)(16) of such title is amended by striking “decides by regulation—” and all that follows through the period and inserting “determines by regulation, to have a significant feature (except 4-wheel drive) designed for off-highway operation.”.

(c) Fuel economy information.—Section 32908(a) of such title is amended—

(1) in the subsection header, by striking “definitions” and inserting “definition”; and

(2) by striking “section—” and all that follows through “(2)” and inserting “section, the term”.

(d) Effective date.—The amendments made by this section shall take effect on January 1, 2010, and shall apply to automobiles manufactured for model year 2012 and for each subsequent model year.

SEC. 102. Annual increase in average fuel economy standards.

(a) Fuel efficiency standards.—

(1) IN GENERAL.—Section 32902 of title 49, United States Code, is amended by striking subsections (a) through (c) and inserting the following:

“(a) In general.—Not later than 18 months before the beginning of each model year beginning with model year 2012, the Secretary of Transportation, by regulation, shall prescribe average fuel economy standards for automobiles manufactured by a manufacturer for that model year in accordance with subsection (b). The Secretary of Transportation shall prescribe separate average fuel economy standards for different classes of automobiles. The Secretary shall establish average fuel economy standards for medium-duty trucks that are consistent with the projected benefits of hybridization. In this section, the term ‘medium-duty truck’ means a truck (as defined in section 30127) with a gross vehicle weight between 10,000 and 26,000 pounds.

“(b) Annual increases in fuel economy standards.—

“(1) FOR MODEL YEAR 2012.—For model year 2012, the average fuel economy standard for each class of automobiles shall be the average combined highway and city miles per gallon performance of all automobiles within that class of automobiles in 2011 (rounded to the nearest 110 mile per gallon).

“(2) FOR MODEL YEARS AFTER MODEL YEAR 2012.—For each model year beginning with model year 2013 and ending with model year 2030, the average fuel economy attained by the fleet of automobiles manufactured or sold in the United States shall be at least 4 percent greater than the average fuel economy standard for the fleet in the previous model year (rounded to the nearest 110 mile per gallon).

“(c) Amending fuel economy standards.—

“(1) IN GENERAL.—Notwithstanding subsections (a) and (b), the Secretary of Transportation may prescribe an average fuel economy standard for a class of automobiles in a model year that is lower than the standard required under subsection (b) if the Secretary of Transportation, in consultation with the National Academy of Sciences, determines that the average fuel economy standard prescribed in accordance with subsections (a) and (b) for that class of automobiles in that model year—

“(A) is technologically not achievable;

“(B) cannot be achieved without materially reducing the overall safety of automobiles manufactured or sold in the United States and no offsetting safety improvements can be practicably implemented for that model year; or

“(C) is shown not to be cost effective.

“(2) MAXIMUM STANDARD.—Any average fuel economy standard prescribed for a class of automobiles in a model year under paragraph (1) shall be the maximum standard that—

“(A) is technologically achievable;

“(B) can be achieved without materially reducing the overall safety of automobiles manufactured or sold in the United States; and

“(C) is cost effective.

“(3) CONSIDERATIONS IN DETERMINATION OF COST EFFECTIVENESS.—In determining cost effectiveness under paragraph (1)(C), the Secretary of Transportation shall take into account the total value to the United States of reduced petroleum use, including the value of reducing external costs of petroleum use, using a value for such costs equal to 50 percent of the value of 1 gallon of gasoline saved or the amount determined in an analysis of the external costs of petroleum use that considers—

“(A) value to consumers;

“(B) economic security;

“(C) national security;

“(D) foreign policy;

“(E) the impact of oil use—

“(i) on sustained cartel rents paid to foreign suppliers;

“(ii) on long-run potential gross domestic product due to higher normal-market oil price levels, including inflationary impacts;

“(iii) on import costs, wealth transfers, and potential gross domestic product due to increased trade imbalances;

“(iv) on import costs and wealth transfers during oil shocks;

“(v) on macroeconomic dislocation and adjustment costs during oil shocks;

“(vi) on the cost of existing energy security policies, including the management of the Strategic Petroleum Reserve;

“(vii) on the timing and severity of the oil peaking problem;

“(viii) on the risk, probability, size, and duration of oil supply disruptions;

“(ix) on the strategic behavior of the Organization of the Petroleum Exporting Countries and long-run oil pricing;

“(x) on the short term elasticity of energy demand and the magnitude of price increases resulting from a supply shock;

“(xi) on oil imports, military costs, and related security costs, including intelligence, homeland security, sea lane security and infrastructure, and other military activities;

“(xii) on oil imports, diplomatic and foreign policy flexibility, and connections to geopolitical strife, terrorism, and international development activities;

“(xiii) all relevant environmental hazards under the jurisdiction of the Environmental Protection Agency; and

“(xiv) on well-to-wheels urban and local air emissions of pollutants and their uninternalized costs;

“(F) the impact of the oil or energy intensity of the United States economy on the sensitivity of the economy to oil price changes, including the magnitude of gross domestic product losses in response to short term price shocks or long term price increases;

“(G) the impact of United States payments for oil imports on political, economic, and military developments in unstable or unfriendly oil-exporting countries;

“(H) the uninternalized costs of pipeline and storage oil seepage, and for risk of oil spills from production, handling, and transport, and related landscape damage; and

“(I) additional relevant factors, as determined by the Secretary.

“(4) MINIMUM VALUATION.—When considering the value to consumers of a gallon of gasoline saved, the Secretary of Transportation may not use a value less than the greatest of—

“(A) the average national cost of a gallon of gasoline sold in the United States during the 12-month period ending on the date on which the new fuel economy standard is proposed;

“(B) the most recent weekly estimate by the Energy Information Administration of the Department of Energy of the average national cost of a gallon of gasoline (all grades) sold in the United States; or

“(C) the gasoline prices projected by the Energy Information Administration for the 20-year period beginning in the year following the year in which the standards are established.”.

(2) CONFORMING AMENDMENTS.—Title 49, United States Code, is amended—

(A) in section 32902—

(i) in subsection (d) by striking “subsection (b) or (c) of this section” and inserting “subsection (a), (b), or (c)”;

(ii) by striking subsection (f);

(iii) in subsection (g)—

(I) by striking “subsection (a) or (d)” and inserting “this section”; and

(II) by striking “(and submit the amendment to Congress when required under subsection (c)(2) of this section)”; and

(iv) in subsection (h) by striking “subsections (c), (f), and (g) of this section” and inserting “subsections (c) and (g)”;

(B) in section 32903—

(i) by striking “section 32902(b)–(d) of this title” each place it occurs and inserting “subsections (a) through (d) of section 32902”; and

(ii) in subsection (e), by striking “section 32902(a) of this title” and inserting “subsections (a) through (d) of section 32902”; and

(C) in section 32904—

(i) in subsection (a)—

(I) by striking “subject to—” and all that follows through “(B) section 32902(a)–(d) of this title” and inserting “subject to subsections (a) through (d) of section 32902”; and

(II) by redesignating clauses (i) and (ii) as subparagraphs (A) and (B), respectively;

(ii) by striking subsection (b); and

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

(b) Repeal of credit for dual fueled automobiles.—

(1) IN GENERAL.—Section 32905 of title 49, United States Code, is amended—

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

“(b) Dual fueled automobiles.—The Administrator of the Environmental Protection Agency shall measure the fuel economy for any model of dual fueled automobile manufactured in model year 2012 and any model year thereafter, in accordance with section 32904.”; and

(B) by amending subsection (d) to read as follows:

“(d) Gaseous fuel dual fueled automobiles.—The Administrator of the Environmental Protection Agency shall measure the fuel economy for any model of gaseous fuel dual fueled automobile manufactured in model year 2012 and any model year thereafter, in accordance with section 32904.”.

(2) CONFORMING AMENDMENTS.—Such section 32905 is further amended—

(A) by repealing subsection (f); and

(B) redesignating subsections (g) and (h) as subsections (f) and (g), respectively.

(c) Effective date.—The amendments made by this section shall take effect on January 1, 2010.

SEC. 103. Tax credits for alternative motor vehicles and fuel-efficient motor vehicles.

(a) Modifications to alternative motor vehicle credit.—

(1) ELIMINATION OF LIMITATION ON NUMBER OF NEW QUALIFIED HYBRID AND ADVANCED LEAN BURN TECHNOLOGY VEHICLES ELIGIBLE FOR FULL ALTERNATIVE MOTOR VEHICLE TAX CREDIT.—

(A) IN GENERAL.—Section 30B of the Internal Revenue Code of 1986 is amended—

(i) by striking subsection (f); and

(ii) by redesignating subsections (g) through (j), as amended by subsection (a), as subsections (f) through (i), respectively.

(B) CONFORMING AMENDMENTS.—

(i) Paragraphs (4) and (6) of section 30B(g) of such Code, as redesignated by paragraph (1)(B), are each amended by striking “(determined without regard to subsection (g))” and inserting “(determined without regard to subsection (f))”.

(ii) Section 38(b)(25) of such Code is amended by striking “section 30B(g)(1)” and inserting “section 30B(f)(1)”.

(iii) Section 55(c)(2) of such Code is amended by striking “section 30B(g)(2)” and inserting “section 30B(f)(2)”.

(iv) Section 1016(a)(36) of such Code is amended by striking “section 30B(h)(4)” and inserting “section 30B(g)(4)”.

(v) Section 6501(m) of such Code is amended by striking “section 30B(h)(9)” and inserting “section 30B(g)(9)”.

(C) EFFECTIVE DATE.—The amendments made by this subsection shall apply to property placed in service after December 31, 2005, in taxable years ending after such date.

(2) EXTENSION OF NEW QUALIFIED HYBRID MOTOR VEHICLE CREDIT FOR VEHICLES OVER 8,500 POUNDS.—Paragraph (3) of section 30B(i), as redesignated by subsection (a)(1)(B), is amended by striking “2009” and inserting “2011”.

(3) EFFECTIVE DATE.—The amendments made by this subsection shall apply to vehicles placed in service after the date of the enactment of this Act.

(b) Credit for new qualified fuel-efficient vehicles produced after 2010.—

(1) IN GENERAL.—Subpart B of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:

“SEC. 30D. New qualified fuel-efficient motor vehicle credit.

“(a) In general.—There shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the amount determined under subsection (b) with respect to each new qualified fuel-efficient motor vehicle placed in service by the taxpayer during the taxable year.

“(b) Credit amount.—

“(1) FUEL ECONOMY.—

“(A) IN GENERAL.—The credit amount determined under this paragraph shall be determined in accordance with the following table:


““In the case of a vehicle which achieves a fuel economy (expressed as a percentage of the 2012 model year average fuel economy standard) of— The credit amount is—
At least 125 percent but less than 150 percent $400
At least 150 percent but less than 175 percent $800
At least 175 percent but less than 200 percent $1,200
At least 200 percent but less than 225 percent $1,600
At least 220 percent but less than 250 percent $2,000
At least 250 percent $2,400.

“(B) 2012 MODEL YEAR AVERAGE FUEL ECONOMY STANDARD.—For purposes of subparagraph (A), the 2012 model year average fuel economy standard with respect to a vehicle shall be the average fuel economy standard (determined on a gasoline gallon equivalent basis) for such model year, as prescribed by the Secretary of Transportation under section 32902 of title 49, United States Code, with respect to the class to which such vehicle belongs.

“(2) CONSERVATION CREDIT.—The amount determined under paragraph (1) with respect to a new qualified fuel-efficient motor vehicle shall be increased by the conservation credit amount determined in accordance with the following table:


““In the case of a vehicle which achieves a lifetime fuel savings expressed in gallons of gasoline) of— The conservation credit amount is—
At least 1,200 but less than 1,800 $250
At least 1,800 but less than 2,400 $500
At least 2,400 but less than 3,000 $750
At least 3,000 $1,000.

“(c) New qualified fuel-efficient motor vehicle.—For purposes of this section, the term ‘new qualified fuel-efficient motor vehicle’ means a passenger automobile or a light truck—

“(1) described in subsections (c)(3), (d)(3), or (e)(3) of section 30B,

“(2) which has received a certificate of conformity under the Clean Air Act and meets or exceeds the equivalent qualifying California low emission vehicle standard under section 243(e)(2) of the Clean Air Act for that make and model year, and

“(A) in the case of a vehicle having a gross vehicle weight rating of 6,000 pounds or less, the Bin 5 Tier II emission standard established in regulations prescribed by the Administrator of the Environmental Protection Agency under section 202(i) of the Clean Air Act for that make and model year vehicle, and

“(B) in the case of a vehicle having a gross vehicle weight rating of more than 6,000 pounds but not more than 8,500 pounds, the Bin 8 Tier II emission standard which is so established,

“(3) the original use of which commences with the taxpayer after December 31, 2010, and

“(4) which is acquired for use or lease by the taxpayer and not for resale.

“(d) Other definitions.—For purposes of this section—

“(1) LIFETIME FUEL SAVINGS.—The term ‘lifetime fuel savings’ means, in the case of any new qualified fuel-efficient motor vehicle, an amount equal to the excess (if any) of—

“(A) 120,000 divided by the 2012 model year average fuel economy standard for the vehicle class, over

“(B) 120,000 divided by the fuel economy for such vehicle.

“(2) MOTOR VEHICLE.—The term ‘motor vehicle’ has the meaning given such term by section 30(c)(2).

“(3) FUEL ECONOMY.—The fuel economy with respect to any vehicle shall be measured in a manner which is substantially similar to the manner fuel economy is measured in accordance with procedures under part 600 of subchapter Q of chapter I of title 40, Code of Federal Regulations, as in effect on the date of the enactment of this section.

“(4) OTHER TERMS.—The terms ‘automobile’, “passenger automobile”, “medium duty passenger vehicle”, “light truck”, and ‘manufacturer’ have the meanings given such terms in regulations prescribed by the Administrator of the Environmental Protection Agency for purposes of the administration of title II of the Clean Air Act (42 U.S.C. 7521 et seq.).

“(e) Special rules.—

“(1) REDUCTION IN BASIS.—For purposes of this subtitle, the basis of any property for which a credit is allowable under subsection (a) shall be reduced by the amount of such credit so allowed.

“(2) NO DOUBLE BENEFIT.—

“(A) COORDINATION WITH OTHER VEHICLE CREDITS.—No credit shall be allowed under subsection (a) with respect to any new qualified fuel-efficient motor vehicle for any taxable year if a credit is allowed with respect to such motor vehicle for such taxable year under section 30 or 30B.

“(B) OTHER TAX BENEFITS.—The amount of any deduction or credit (other than the credit allowable under this section and any credit described in subparagraph (A)) allowable under this chapter with respect to any new qualified fuel-efficient motor vehicle shall be reduced by the amount of credit allowed under subsection (a) for such motor vehicle for such taxable year.

“(3) PROPERTY USED OUTSIDE THE UNITED STATES, ETC., NOT QUALIFIED.—No credit shall be allowable under subsection (a) with respect to any property referred to in section 50(b)(1) or with respect to the portion of the cost of any property taken into account under section 179.

“(4) ELECTION NOT TO TAKE CREDIT.—No credit shall be allowed under subsection (a) for any vehicle if the taxpayer elects not to have this section apply to such vehicle.

“(f) Application With Other Credits.—

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

“(2) PERSONAL CREDIT.—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 and 30, over

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

“(g) Regulations.—

“(1) IN GENERAL.—Except as provided in paragraph (2), the Secretary shall promulgate such regulations as necessary to carry out the provisions of this section.

“(2) COORDINATION IN PRESCRIPTION OF CERTAIN REGULATIONS.—The Secretary of the Treasury, in coordination with the Secretary of Transportation and the Administrator of the Environmental Protection Agency, shall prescribe such regulations as necessary to determine whether a motor vehicle meets the requirements to be eligible for a credit under this section.”.

(2) CONFORMING AMENDMENTS.—

(A) Section 1016(a) of the Internal Revenue Code of 1986 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 30D(e)(1).”.

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

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


“Sec. 30D. New qualified fuel-efficient motor vehicle credit.”.

(3) EFFECTIVE DATE.—The amendments made by this subsection shall apply to vehicles placed in service after December 31, 2010.

SEC. 104. Advanced technology motor vehicles manufacturing credit.

(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.), as amended by this Act, is amended by adding at the end the following new section:

“SEC. 30E. Advanced technology motor vehicles manufacturing credit.

“(a) Credit allowed.—There shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to 35 percent of so much of the qualified investment of an eligible taxpayer for such taxable year as does not exceed $75,000,000.

“(b) Qualified investment.—For purposes of this section—

“(1) IN GENERAL.—The qualified investment for any taxable year is equal to the incremental costs incurred during such taxable year—

“(A) to re-equip, expand, or establish any manufacturing facility in the United States of the eligible taxpayer to produce advanced technology motor vehicles or to produce eligible components,

“(B) for engineering integration performed in the United States of such vehicles and components as described in subsection (d),

“(C) for research and development performed in the United States related to advanced technology motor vehicles and eligible components, and

“(D) for employee retraining with respect to the manufacturing of such vehicles or components (determined without regard to wages or salaries of such retrained employees).

“(2) ATTRIBUTION RULES.—In the event a facility of the eligible taxpayer produces both advanced technology motor vehicles and conventional motor vehicles, or eligible and non-eligible components, only the qualified investment attributable to production of advanced technology motor vehicles and eligible components shall be taken into account.

“(c) Advanced technology motor vehicles and eligible components.—For purposes of this section—

“(1) ADVANCED TECHNOLOGY MOTOR VEHICLE.—The term ‘advanced technology motor vehicle’ means—

“(A) any qualified electric vehicle (as defined in section 30(c)(1)),

“(B) any new qualified fuel cell motor vehicle (as defined in section 30B(b)(3)),

“(C) any new advanced lean burn technology motor vehicle (as defined in section 30B(c)(3)),

“(D) any new qualified hybrid motor vehicle (as defined in section 30B(d)(2)(A) and determined without regard to any gross vehicle weight rating),

“(E) any new qualified alternative fuel motor vehicle (as defined in section 30B(e)(4), including any mixed-fuel vehicle (as defined in section 30B(e)(5)(B)),

“(F) any other motor vehicle using electric drive transportation technology (as defined in paragraph (3)), and

“(G) any new qualified fuel-efficient motor vehicle (as defined in section 30D(c)).

“(2) ELIGIBLE COMPONENTS.—The term ‘eligible component’ means any component inherent to any advanced technology motor vehicle, including—

“(A) with respect to any gasoline or diesel-electric new qualified hybrid motor vehicle—

“(i) electric motor or generator,

“(ii) power split device,

“(iii) power control unit,

“(iv) power controls,

“(v) integrated starter generator, or

“(vi) battery,

“(B) with respect to any hydraulic new qualified hybrid motor vehicle—

“(i) hydraulic accumulator vessel,

“(ii) hydraulic pump, or

“(iii) hydraulic pump-motor assembly,

“(C) with respect to any new advanced lean burn technology motor vehicle—

“(i) diesel engine,

“(ii) turbocharger,

“(iii) fuel injection system, or

“(iv) after-treatment system, such as a particle filter or NOX absorber, and

“(D) with respect to any advanced technology motor vehicle, any other component submitted for approval by the Secretary.

“(3) ELECTRIC DRIVE TRANSPORTATION TECHNOLOGY.—The term ‘electric drive transportation technology’ means technology used by vehicles that use an electric motor for all or part of their motive power and that may or may not use off-board electricity, such as battery electric vehicles, fuel cell vehicles, engine dominant hybrid electric vehicles, plug-in hybrid electric vehicles, and plug-in hybrid fuel cell vehicles.

“(d) Engineering integration costs.—For purposes of subsection (b)(1)(B), costs for engineering integration are costs incurred prior to the market introduction of advanced technology vehicles for engineering tasks related to—

“(1) establishing functional, structural, and performance requirements for component and subsystems to meet overall vehicle objectives for a specific application,

“(2) designing interfaces for components and subsystems with mating systems within a specific vehicle application,

“(3) designing cost effective, efficient, and reliable manufacturing processes to produce components and subsystems for a specific vehicle application, and

“(4) validating functionality and performance of components and subsystems for a specific vehicle application.

“(e) Eligible taxpayer.—For purposes of this section, the term ‘eligible taxpayer’ means any taxpayer if more than 50 percent of its gross receipts for the taxable year is derived from the manufacture of motor vehicles or any component parts of such vehicles.

“(f) Limitation based on amount of tax.—The credit allowed under subsection (a) for the taxable year shall not exceed the excess of—

“(1) the sum of—

“(A) the regular tax liability (as defined in section 26(b)) for such taxable year, plus

“(B) the tax imposed by section 55 for such taxable year and any prior taxable year beginning after 1986 and not taken into account under section 53 for any prior taxable year, over

“(2) the sum of the credits allowable under subpart A and sections 27, 30, and 30B for the taxable year.

“(g) 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.

“(h) No double benefit.—

“(1) COORDINATION WITH OTHER DEDUCTIONS AND CREDITS.—Except as provided in paragraph (2), the amount of any deduction or other credit allowable under this chapter for any cost taken into account in determining the amount of the credit under subsection (a) shall be reduced by the amount of such credit attributable to such cost.

“(2) RESEARCH AND DEVELOPMENT COSTS.—

“(A) IN GENERAL.—Except as provided in subparagraph (B), any amount described in subsection (b)(1)(C) taken into account in determining the amount of the credit under subsection (a) for any taxable year shall not be taken into account for purposes of determining the credit under section 41 for such taxable year.

“(B) COSTS TAKEN INTO ACCOUNT IN DETERMINING BASE PERIOD RESEARCH EXPENSES.—Any amounts described in subsection (b)(1)(C) taken into account in determining the amount of the credit under subsection (a) for any taxable year which are qualified research expenses (within the meaning of section 41(b)) shall be taken into account in determining base period research expenses for purposes of applying section 41 to subsequent taxable years.

“(i) Business carryovers allowed.—If the credit allowable under subsection (a) for a taxable year exceeds the limitation under subsection (f) for such taxable year, such excess (to the extent of the credit allowable with respect to property subject to the allowance for depreciation) shall be allowed as a credit carryback and carryforward under rules similar to the rules of section 39.

“(j) Special rules.—For purposes of this section, rules similar to the rules of section 179A(e)(4) and paragraphs (1) and (2) of section 41(f) shall apply

“(k) 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.

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

“(m) Termination.—This section shall not apply to any qualified investment after December 31, 2010.”.

(b) Conforming amendments.—

(1) Section 1016(a) of the Internal Revenue Code of 1986 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 30E(g).”.

(2) Section 6501(m) of such Code is amended by inserting “30E(k),” after “30C(e)(5),”.

(3) 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 30D the following new item:


“Sec. 30E. Advanced technology motor vehicles manufacturing credit.”.

(c) Effective date.—The amendments made by this section shall apply to amounts incurred in taxable years beginning after December 31, 2006.

SEC. 105. Increase in maximum allowable gross weight for vehicles using the National System of Interstate and Defense Highways.

(a) Special rule for vehicles with a supplementary sixth axle.—Not later than 180 days after the Secretary of Transportation makes a positive determination under subsection (d), the Secretary of Transportation shall promulgate regulations, in accordance with section 127(a) of title 23, United States Code, that set the maximum allowable gross weight for a vehicle using the National System of Interstate and Defense Highways at 97,000 pounds for vehicles with a supplementary sixth axle.

(b) Conditions on regulations.—The regulations promulgated under subsection (a)—

(1) shall ensure that a loaded tractor trailer with a supplementary sixth axle and a gross weight of not more than 97,000 pounds that is traveling at 60 miles per hour has a stopping distance of not greater than 355 feet; and

(2) shall not require a fundamental alteration of the vehicle architecture that is common for use in the transportation of goods as of the day before the date of the enactment of this Act.

(c) Study.—The Secretary of Transportation shall conduct a study that—

(1) analyzes the safety impacts of allowing significantly longer and heavier vehicles to use the National System of Interstate and Defense Highways than are allowed under regulations in effect as of the day before the date of the enactment of this Act; and

(2) considers the potential impact on highway safety of applying lower speed limits on such vehicles than the limits in effect on the day before the date of the enactment of this Act.

(d) Determination.—Not later than 180 days after the date of the enactment of this Act, the Secretary of Transportation shall determine whether allowing significantly longer and heavier vehicles to use the National System of Interstate and Defense Highways than are allowed as of the day before the date of the enactment of this Act would have a material impact on highway safety.

SEC. 201. Renewable fuel standard.

Section 211(o) of the Clean Air Act (42 U.S.C. 7545(o) is amended—

(1) in paragraph (2)(B)—

(A) by striking clause (i) and inserting the following:

“(i) CALENDAR YEARS 2006 THROUGH 2020.—

“(I) RENEWABLE FUEL.—For the purpose of subparagraph (A), subject to subclause (II), the applicable total volume for any of calendar years 2006 through 2020 shall be determined in accordance with the following table:

  Applicable total volume of renewable fuel
“Calendar year: (in billions of gallons):
2006 4.0
2007 4.7
2008 7.1
2009 9.5
2010 12.0
2011 12.6
2012 13.2
2013 13.8
2014 14.4
2015 15.0
2016 18.0
2017 21.0
2018 24.0
2019 27.0
2020 30.0.

“(II) CELLULOSIC BIOMASS ETHANOL.—For the purpose of paragraph (1), of the total volume of renewable fuel required under subclause (I), the applicable volume for any of calendar years 2012 through 2020 for cellulosic biomass ethanol shall be determined in accordance with the following table:

  Applicable volume of cellulosic biomass ethanol
“Calendar year: (in billions of gallons):
2012 0.25
2013 1.0
2014 3.0
2015 5.0
2016 7.0
2017 9.0
2018 11.0
2019 13.0
2020 15.0”;

(B) in clause (ii)—

(i) in the clause heading, by striking “2013” and inserting “2021”;

(ii) by striking “2013” and inserting “2021”; and

(iii) by striking “2012” and inserting “2020”;

(C) in clause (iii), by striking “thereafter—” and all that follows through “(II) the” and inserting “thereafter, the”;

(D) in clause (iv)—

(i) by striking “2013” and inserting “2021”; and

(ii) in subclause (II)(bb), by striking “2012” and inserting “2020”;

(2) in paragraph (3)—

(A) in subparagraph (A), by striking “2011” and inserting “2019”; and

(B) in subparagraph (B)(i), by striking “2012” and inserting “2020”; and

(3) in paragraph (6)(A), by striking “2012” and inserting “2020”.

SEC. 202. Modification of credit for alternative fuel vehicle refueling property.

(a) Increase in credit amount.—

(1) IN GENERAL.—Subsection (a) of section 30C of the Internal Revenue Code of 1986 (relating to alternative fuel vehicle refueling property credit) is amended by striking “30 percent” and inserting “35 percent”.

(2) FURTHER INCREASE FOR BLENDER PUMPS.—

(A) IN GENERAL.—Section 30C(a) of such Code, as amended by paragraph (1), is amended by inserting “(40 percent in the case of any qualified alternative fuel vehicle refueling property which is a blender pump)” after “property”.

(B) BLENDER PUMP.—Section 30C(c) of such Code is amended by adding at the end the following new paragraph:

“(3) BLENDER PUMP.—The term ‘blender pump’ means any fuel pump which, with respect to any fuel described in paragraph (1)(A)(i)—

“(A) sources ethanol and gasoline products from separate underground storage tanks,

“(B) incorporates the use of inlet valves from such tanks to enable varying amounts of ethanol and gasoline products to be blended within a chamber in the pump, and

“(C) dispenses the various blends of ethanol and gasoline products through separate hoses.”.

(b) Credit allowed for blended ethanol other than E85.—Subparagraph (A) of section 30C(c)(1) of the Internal Revenue Code of 1986 (defining qualified alternative fuel vehicle refueling property) is amended to read as follows:

“(A) at least—

“(i) 11 percent of the volume of which consists of ethanol, or

“(ii) 85 percent of the volume of which consists of one or more of the following: natural gas, compressed natural gas, liquefied natural gas, liquified petroleum gas, or hydrogen, or”.

(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. 203. Ethanol-blend fuel infrastructure.

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

“(11) INSTALLATION OF ETHANOL-BLEND FUEL PUMPS BY COVERED OWNERS AT STATIONS.—

“(A) DEFINITIONS.—In this paragraph:

“(i) COVERED OWNER.—The term ‘covered owner’ means any person that, individually or together with any other person with respect to which the person has an affiliate relationship or significant ownership interest, owns 10 or more retail station outlets, as determined by the Secretary.

“(ii) ETHANOL-BLEND FUEL.—The term ‘ethanol-blend fuel’ means a blend of gasoline not more than 85 percent, nor less than 80 percent, of the content of which is derived from ethanol produced in the United States, as defined by the Secretary in a manner consistent with applicable standards of the American Society for Testing and Materials.

“(iii) SECRETARY.—The term ‘Secretary’ means the Secretary of Energy, acting in consultation with the Administrator and the Secretary of Agriculture.

“(B) ASSESSMENT.—Not later than 5 years after the date of enactment of this paragraph, the Secretary shall make an assessment of the progress made toward the creation of adequate infrastructure for the production and distribution of ethanol-blend fuel (including the creation of adequate qualified alternative fuel vehicle refueling property that is a blender pump).

“(C) REGULATIONS.—If the Secretary determines (in the assessment made under subparagraph (B)) that adequate progress has not been made toward the creation of adequate infrastructure for the production and distribution of ethanol-blend fuel, the Secretary shall promulgate regulations to ensure, to the maximum extent practicable, that each covered owner installs or otherwise makes available 1 or more pumps that dispense ethanol-blend fuel (including any other equipment necessary, such as tanks, to ensure that the pumps function properly) at not less than the applicable percentage of the retail station outlets of the covered owner specified in subparagraph (D).

“(D) APPLICABLE PERCENTAGES.—For the purpose of subparagraph (C), the applicable percentage of the retail station outlets shall be—

“(i) during the 10-year period beginning on the date of any determination made under subparagraph (C), 10 percent; and

“(ii) after the 10-year period described in clause (i), 20 percent.

“(E) FINANCIAL RESPONSIBILITY.—In promulgating regulations under subparagraph (C), the Secretary shall ensure that each covered owner described in that subparagraph assumes full financial responsibility for the costs of installing or otherwise making available the pumps described in that subparagraph and any other equipment necessary (including tanks) to ensure that the pumps function properly.

“(F) PRODUCTION CREDITS FOR EXCEEDING ETHANOL-BLEND FUEL PUMPS INSTALLATION REQUIREMENT.—

“(i) EARNING AND PERIOD FOR APPLYING CREDITS.—If the percentage of the retail station outlets of a covered owner at which the covered owner installs ethanol-blend fuel pumps in a particular calendar year exceeds the percentage required under subparagraph (D), the covered owner shall earn credits under this paragraph, which may be applied to any of the 3 consecutive calendar years immediately after the calendar year for which the credits are earned.

“(ii) TRADING CREDITS.—A covered owner that has earned credits under clause (i) may sell credits to another covered owner to enable the purchaser to meet the requirement under subparagraph (D).”.

SEC. 204. Requirement to increase percentage of dual fueled automobiles.

(a) In general.—Section 32902 of title 49, United States Code, is amended by inserting after subsection (e) the following:

“(f) Requirement for annual increase in duel fueled automobiles.—Each manufacturer shall ensure that the percentage of automobiles manufactured by such manufacturer in each of model years 2012 through 2022 that are dual fueled automobiles is not less than 10 percentage points greater than the percentage of automobiles manufactured by such manufacturer in the previous model year that are dual fueled automobiles.”.

(b) Effective date.—The amendment made by subsection (a) shall take effect on the date specified in section 102(c).

SEC. 205. Emerging biofuels.

(a) Establishment of incentive program.—The Secretary of Energy (referred to in this section as the “Secretary”) shall establish a program under which the Secretary shall provide to eligible entities such incentives (including grants, tax credits, loans, and loan guarantees) as the Secretary determines to be appropriate for the production of cellulosic ethanol and other emerging biofuels derived from renewable sources (including municipal solid waste).

(b) Application.—To be eligible to receive an incentive under this section, an eligible entity shall submit to the Secretary an application at such time, in such manner, and containing such information as the Secretary may require, including—

(1) a description of the project for which the incentive will be used;

(2) a description of the use by the eligible entity of the incentive; and

(3) an estimate of the annual production using the incentive by the eligible entity of cellulosic ethanol or another biofuel, expressed on a per-gallon basis.

(c) Selection requirements.—

(1) MINIMUM NUMBER OF INCENTIVES.—The Secretary shall provide incentives under this section to not less than 6 biorefineries located in different regions of the United States.

(2) LEAST-COST INCENTIVES.—The Secretary shall provide incentives under this section only to eligible entities the applications of which reflect the least-cost use of the incentives, on a per-gallon basis, with respect to similar projects.

(d) Authorization of appropriations.—There is authorized to be appropriated to carry out this section $500,000,000.

SEC. 206. Biodiesel.

(a) In general.—Not later than 180 days after the date of enactment of this Act, the Secretary of Energy shall submit to Congress a report on any research and development challenges inherent in increasing to 5 percent the proportion of diesel fuel sold in the United States that is biodiesel, as defined in section 757 of the Energy Policy Act of 2005 (42 U.S.C. 16105).

(b) Regulations.—The Administrator of the Environmental Protection Agency shall promulgate regulations providing for the uniform labeling of biodiesel blends that are certified to meet applicable standards published by the American Society for Testing and Materials.

SEC. 207. Unconventional fossil fuels.

(a) In general.—The Secretary of Energy shall carry out a 10-year carbon capture research and development program to develop carbon dioxide capture technologies that can be used in the recovery of liquid fuels from oil shale and the production of liquid fuels in coal utilization facilities to minimize the emissions of carbon dioxide from those processes.

(b) Authorization of appropriations.—There are authorized to be appropriated to carry out this section—

(1) $50,000,000 for the period of fiscal years 2008 through 2012; and

(2) $100,000,000 for the period of fiscal years 2013 through 2017.

SEC. 208. Study of incentives for renewable fuels.

(a) Study.—The Secretary of Agriculture (in consultation with the Secretary of Energy, the Secretary of the Treasury, the Administrator of the Environmental Protection Agency, representatives of the biofuels industry, the oil industry, and other interested parties) shall conduct a study of the renewable fuels industry and markets in the United States, including—

(1) the costs to produce corn-based and cellulosic-based ethanol and biobutanol, biodiesel, and other emerging biofuels;

(2) the factors affecting the future market prices for those biofuels, including world oil prices; and

(3) the level of tax incentives necessary, to the maximum extent practicable, to grow the biofuels industry of the United States to reduce the dependence of the United States on foreign oil during calendar years 2011 through 2030.

(b) Goals.—The study shall include an analysis of the types and advantages and disadvantages of tax incentive options to, to the maximum extent practicable—

(1) limit the overall cost of the tax incentives to the Federal Government;

(2) encourage expansion of the biofuels industry by ensuring that new plants and recently-built plants can fully amortize the investments in the plants;

(3) reward energy-efficient and low carbon-emitting technologies;

(4) ensure that pioneering processes (such as those that convert cellulosic feedstocks like corn stover and switch grass to ethanol) are economically competitive with fossil fuels;

(5) encourage agricultural producer equity participation in ethanol plants; and

(6) encourage the development of higher blend markets, such as E–20, E–30, and E–85.

(c) Report.—Not later than 1 year after the date of enactment of this Act, the Secretary of Agriculture shall submit a report that describes the results of the study to—

(1) the Committee on Agriculture, Nutrition, and Forestry of the Senate;

(2) the Committee on Energy and Natural Resources of the Senate;

(3) the Committee on Environment and Public Works of the Senate;

(4) the Committee on Finance of the Senate;

(5) the Committee on Agriculture of the House of Representatives;

(6) the Committee on Energy and Commerce of the House of Representatives; and

(7) the Committee on Ways and Means of the House of Representatives.

SEC. 301. Definition.

In this title, the term “United States person” means—

(1) any United States citizen or alien lawfully admitted for permanent residence in the United States; and

(2) any person other than an individual, if 1 or more individuals described in paragraph (1) own or control at least 51 percent of the securities or other equity interest in the person.

SEC. 302. Authorization of activities and exports involving hydrocarbon resources by United States persons.

Notwithstanding any other provision of law (including a regulation), United States persons (including agents and affiliates of those United States persons) may—

(1) engage in any transaction necessary for the exploration for and extraction of hydrocarbon resources from any portion of any foreign exclusive economic zone that is contiguous to the exclusive economic zone of the United States; and

(2) export without license authority all equipment necessary for the exploration for or extraction of hydrocarbon resources described in paragraph (1).

SEC. 303. Travel in connection with authorized hydrocarbon exploration and extraction activities.

Section 910 of the Trade Sanctions Reform and Export Enhancement Act of 2000 (22 U.S.C. 7209) is amended by inserting after subsection (b) the following:

“(c) General license authority for travel-related expenditures by persons engaging in hydrocarbon exploration and extraction activities.—

“(1) IN GENERAL.—The Secretary of the Treasury shall, authorize under a general license the travel-related transactions listed in section 515.560(c) of title 31, Code of Federal Regulations, for travel to, from or within Cuba in connection with exploration for and the extraction of hydrocarbon resources in any part of a foreign maritime Exclusive Economic Zone that is contiguous to the United States’ Exclusive Economic Zone.

“(2) PERSONS AUTHORIZED.—Persons authorized to travel to Cuba under this section include full-time employees, executives, agents, and consultants of oil and gas producers, distributors, and shippers.”.

SEC. 304. Moratorium of oil and gas leasing in certain areas of the Gulf of Mexico.

(a) In general.—Section 104(a) of the Gulf of Mexico Energy Security Act of 2006 (43 U.S.C. 1331 note; Public Law 109–432) is amended—

(1) by striking paragraph (1);

(2) in paragraph (2), by striking “125 miles” and inserting “45 miles”;

(3) in paragraph (3), by striking “100 miles” each place it appears and inserting “45 miles”; and

(4) by redesignating paragraphs (2) and (3) as paragraphs (1) and (2), respectively.

(b) Regulations.—

(1) IN GENERAL.—The Secretary of the Interior shall promulgate regulations that establish appropriate environmental safeguards for the exploration and production of oil and natural gas on the outer Continental Shelf.

(2) MINIMUM REQUIREMENTS.—At a minimum, the regulations shall include—

(A) provisions requiring surety bonds of sufficient value to ensure the mitigation of any foreseeable incident;

(B) provisions assigning liability to the leaseholder in the event of an incident causing damage or loss, regardless of the negligence of the leaseholder or lack of negligence;

(C) provisions no less stringent than those contained in the Spill Prevention, Control, and Countermeasure regulations promulgated under the Oil Pollution Act of 1990 (33 U.S.C. 2701 et seq.);

(D) provisions ensuring that—

(i) no facility for the exploration or production of resources is visible to the unassisted eye from any shore of any coastal State; and

(ii) the impact of offshore production facilities on coastal vistas is otherwise mitigated;

(E) provisions to ensure, to the maximum extent practicable, that exploration and production activities will result in no significant adverse effect on fish or wildlife (including habitat), subsistence resources, or the environment; and

(F) provisions that will impose seasonal limitations on activity to protect breeding, spawning, and wildlife migration patterns.

(c) Conforming amendment.—Section 105 of the Department of the Interior, Environment, and Related Agencies Appropriations Act, 2006 (Public Law 109-54; 119 Stat. 521) (as amended by section 103(d) of the Gulf of Mexico Energy Security Act of 2006 (43 U.S.C. 1331 note; Public Law 109–432)) is amended by inserting “and any other area that the Secretary of the Interior may offer for leasing, preleasing, or any related activity under section 104 of that Act” after “2006)”.

SEC. 305. Inventory of outer Continental Shelf oil and natural gas resources off southeastern coast of the United States.

(a) In general.—The Secretary of the Interior (referred to in this section as the “Secretary”) may conduct an inventory of oil and natural gas resources beneath the waters of the outer Continental Shelf (as defined in section 2 of the Outer Continental Shelf Lands Act (43 U.S.C. 1331)) off of the coast of the States of Virginia, North Carolina, South Carolina, or Georgia in accordance with this section.

(b) Best available technology.—In conducting the inventory, the Secretary shall use the best technology available to obtain accurate resource estimates.

(c) Request by Governor.—The Secretary may conduct an inventory under this section off the coast of a State described in subsection (a) only if the Governor of the State requests the inventory.

(d) Reports.—The Secretary shall submit to Congress and the requesting Governor a report on any inventory conducted under this section.

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

SEC. 306. Enhanced oil recovery.

Section 354(c)(4)(B) of the Energy Policy Act of 2005 (42 U.S.C. 15910(c)(4)(B)) is amended—

(1) in clause (iii), by striking “and” at the end;

(2) in clause (iv), by striking the period at the end and inserting “; and”; and

(3) by adding at the end the following:

    “(v) are carried out in geologically challenging fields.”.

SEC. 401. Bureau of International Energy Policy.

Section 101 of the National Security Act of 1947 (50 U.S.C. 402) is amended by adding at the end the following:

(1) by redesignating subsection (i) (as added by section 301 of Public Law 105–292 (112 Stat. 2800)) as subsection (k); and

(2) by adding at the end the following:

“(l) Bureau of International Energy Policy.—

“(1) ESTABLISHMENT.—There is established within the National Security Council a Bureau of International Energy.

“(2) DUTIES.—The Bureau shall, in conjunction with the Secretary of Defense, the Secretary of State, and the Secretary of Energy, prepare and submit to Congress an annual energy security report.”.

SEC. 402. Strategic energy infrastructure equipment reserve.

(a) Establishment.—The Secretary may establish and operate a strategic energy infrastructure equipment reserve.

(b) Use.—The reserve shall be used and operated for—

(1) the protection, conservation, maintenance, and testing of strategic energy infrastructure equipment; and

(2) the provision of strategic energy infrastructure equipment whenever and to the extent that—

(A) the Secretary, with the approval of the President, finds that the equipment is needed for energy security purposes; and

(B) the provision of the equipment is authorized by a joint resolution of Congress.

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