[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 2398 Introduced in Senate (IS)]








109th CONGRESS
  2d Session
                                S. 2398

  To establish an Advanced Research Projects Administration-Energy to 
 initiate high risk, innovative energy research to improve the energy 
security of the United States, to extend certain energy tax incentives, 
                        and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 9, 2006

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

_______________________________________________________________________

                                 A BILL


 
  To establish an Advanced Research Projects Administration-Energy to 
 initiate high risk, innovative energy research to improve the energy 
security of the United States, to extend certain energy tax incentives, 
                        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 ``Energy 
Competitiveness Act of 2006''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
       TITLE I--ADVANCED RESEARCH PROJECTS ADMINISTRATION-ENERGY

Sec. 101. Advanced Research Projects Administration-Energy.
                    TITLE II--ENERGY TAX INCENTIVES

            Subtitle A--Energy Infrastructure Tax Incentives

Sec. 201. Extension of credit for electricity produced from certain 
                            renewable resources.
Sec. 202. Extension and expansion of credit to holders of clean 
                            renewable energy bonds.
Sec. 203. Extension and expansion of qualifying advanced coal project 
                            credit.
Sec. 204. Extension and expansion of qualifying gasification project 
                            credit.
               Subtitle B--Domestic Fossil Fuel Security

Sec. 211. Extension of election to expense certain refineries.
       Subtitle C--Conservation and Energy Efficiency Provisions

Sec. 221. Extension of energy efficient commercial buildings deduction.
Sec. 222. Extension of new energy efficient home credit.
Sec. 223. Extension of residential energy efficient property credit.
Sec. 224. Extension of credit for business installation of qualified 
                            fuel cells and stationary microturbine 
                            power plants.
Sec. 225. Extension of business solar investment tax credit.
         Subtitle D--Alternative Fuels and Vehicles Incentives

Sec. 231. Extension of excise tax provisions and income tax credit for 
                            biodiesel and alternative fuels.
Sec. 232. Exception from depreciation limitation for certain 
                            alternative and electric passenger 
                            automobiles.

       TITLE I--ADVANCED RESEARCH PROJECTS ADMINISTRATION-ENERGY

SEC. 101. ADVANCED RESEARCH PROJECTS ADMINISTRATION-ENERGY.

    (a) Establishment.--There is established the Advanced Research 
Projects Administration-Energy (referred to in this section as ``ARPA-
E'').
    (b) Goals.--The goals of ARPA-E are to reduce the quantity of 
energy the United States imports from foreign sources and to improve 
the competitiveness of the United States economy by--
            (1) promoting revolutionary changes in the critical 
        technologies that would promote energy competitiveness;
            (2) turning cutting-edge science and engineering into 
        technologies for energy and environmental application; and
            (3) accelerating innovation in energy and the environment 
        for both traditional and alternative energy sources and in 
        energy efficiency mechanisms to--
                    (A) reduce energy use;
                    (B) decrease the reliance of the United States on 
                foreign energy sources; and
                    (C) improve energy competitiveness.
    (c) Director.--
            (1) In general.--ARPA-E shall be headed by a Director 
        (referred to in this section as the ``Director'') appointed by 
        the President.
            (2) Positions at level v.--Section 5316 of title 5, United 
        States Code, is amended by adding at the end the following:
            ``Director, Advanced Research Projects Administration-
        Energy.''.
    (d) Duties.--
            (1) In general.--In carrying out this section, the Director 
        shall award competitive grants, cooperative agreements, or 
        contracts to institutions of higher education, companies, or 
        consortia of such entities (which may include federally funded 
        research and development centers) to achieve the goal described 
        in subsection (b) through acceleration of--
                    (A) energy-related research;
                    (B) development of resultant techniques, processes, 
                and technologies, and related testing and evaluation; 
                and
                    (C) demonstration and commercial application of the 
                most promising technologies and research applications.
            (2) Small-business concerns.--The Director shall carry out 
        programs established under this section, to the maximum extent 
        practicable, in a manner that is similar to the Small Business 
        Innovation Research Program established under section 9 of the 
        Small Business Act (15 U.S.C. 638) to ensure that small-
        business concerns are fully able to participate in the 
        programs.
    (e) Personnel.--
            (1) Program managers.--
                    (A) Appointment.--The Director shall appoint 
                employees to serve as program managers for each of the 
                programs that are established to carry out the duties 
                of ARPA-E under this section.
                    (B) Duties.--Program managers shall be responsible 
                for--
                            (i) establishing research and development 
                        goals for the program, as well as publicizing 
                        goals of the program to the public and private 
                        sectors;
                            (ii) soliciting applications for specific 
                        areas of particular promise, especially areas 
                        for which the private sector cannot or will not 
                        provide funding;
                            (iii) selecting research projects for 
                        support under the program from among 
                        applications submitted to ARPA-E, based on--
                                    (I) the scientific and technical 
                                merit of the proposed projects;
                                    (II) the demonstrated capabilities 
                                of the applicants to successfully carry 
                                out the proposed research project; and
                                    (III) such other criteria as are 
                                established by the Director; and
                            (iv) monitoring the progress of projects 
                        supported under the program.
            (2) Other personnel.--
                    (A) In general.--Subject to subparagraph (B), the 
                Director shall appoint such employees as are necessary 
                to carry out the duties of ARPA-E under this section.
                    (B) Limitations.--The Director shall appoint not 
                more than 250 employees to carry out the duties of 
                ARPA-E under this section, including not less than 180 
                technical staff, of which--
                            (i) not less than 20 staff shall be senior 
                        technical managers (including program managers 
                        designated under paragraph (1)); and
                            (ii) not less than 80 staff shall be 
                        technical program managers.
            (3) Experimental personnel authority.--In appointing 
        personnel for ARPA-E, the Director shall have the hiring and 
        management authorities described in section 1101 of the Strom 
        Thurmond National Defense Authorization Act for Fiscal Year 
        1999 (Public Law 105-261; 5 U.S.C. 3104 note).
            (4) Maximum duration of employment.--
                    (A) Program managers and senior technical 
                managers.--
                            (i) In general.--Subject to clause (ii), a 
                        program manager and a senior technical manager 
                        appointed under this subsection shall serve for 
                        a term not to exceed 4 years after the date of 
                        appointment.
                            (ii) Extensions.--The Director may extend 
                        the term of employment of a program manager or 
                        a senior technical manager appointed under this 
                        subsection for not more than 4 years through 1 
                        or more 2-year terms.
                    (B) Technical program managers.--A technical 
                program manager appointed under this subsection shall 
                serve for a term not to exceed 6 years after the date 
                of appointment.
            (5) Location.--The office of an officer or employee of 
        ARPA-E shall not be located in the headquarters of the 
        Department of Energy.
    (f) Transactions Other Than Contracts and Grants.--
            (1) In general.--To carry out projects through ARPA-E, the 
        Director may enter into transactions (other than contracts, 
        cooperative agreements, and grants) to carry out advanced 
        research projects under this section under similar terms and 
        conditions as the authority is exercised under section 646(g) 
        of the Department of Energy Organization Act (42 U.S.C. 
        7256(g)).
            (2) Peer review.--Peer review shall not be required for 75 
        percent of the research projects carried out by the Director 
        under this section.
    (g) Prizes for Advanced Technology Achievements.--The Director may 
carry out a program to award cash prizes in recognition of outstanding 
achievements in basic, advanced, and applied research, technology 
development, and prototype development that have the potential for 
application to the performance of the mission of ARPA-E under similar 
terms and conditions as the authority is exercised under section 1008 
of the Energy Policy Act of 2005 (42 U.S.C. 16396).
    (h) Coordination of Activities.--The Director--
            (1) shall ensure that the activities of ARPA-E are 
        coordinated with activities of Department of Energy offices and 
        outside agencies; and
            (2) may carry out projects jointly with other agencies.
    (i) Report.--Not later than September 30, 2007, the Director shall 
submit to Congress a report on the activities of ARPA-E under this 
section, including a recommendation on whether ARPA-E needs an energy 
research laboratory.
    (j) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section--
            (1) $300,000,000 for fiscal year 2007;
            (2) $600,000,000 for fiscal year 2008;
            (3) $1,100,000,000 for fiscal year 2009;
            (4) $1,500,000,000 for fiscal year 2010; and
            (5) $2,000,000,000 for fiscal year 2011.

                    TITLE II--ENERGY TAX INCENTIVES

            Subtitle A--Energy Infrastructure Tax Incentives

SEC. 201. EXTENSION OF CREDIT FOR ELECTRICITY PRODUCED FROM CERTAIN 
              RENEWABLE RESOURCES.

    Section 45(d) of the Internal Revenue Code of 1986 (relating to 
qualified facilities) is amended by striking ``2008'' each place it 
appears and inserting ``2011''.

SEC. 202. EXTENSION AND EXPANSION OF CREDIT TO HOLDERS OF CLEAN 
              RENEWABLE ENERGY BONDS.

    (a) In General.--Section 54(m) of the Internal Revenue Code of 1986 
(relating to termination) is amended by striking ``2007'' and inserting 
``2010''.
    (b) Annual Volume Cap for Bonds Issued During Extension Period.--
Paragraph (1) of section 54(f) of the Internal Revenue Code of 1986 
(relating to limitation on amount of bonds designated) is amended to 
read as follows:
            ``(1) National limitation.--
                    ``(A) Initial national limitation.--With respect to 
                bonds issued after December 31, 2005, and before 
                January 1, 2008, there is a national clean renewable 
                energy bond limitation of $800,000,000.
                    ``(B) Annual national limitation.--With respect to 
                bonds issued after December 31, 2007, and before 
                January 1, 2011, there is a national clean renewable 
                energy bond limitation for each calendar year of 
                $800,000,000.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to bonds issued after the date of the enactment of this Act.

SEC. 203. EXTENSION AND EXPANSION OF QUALIFYING ADVANCED COAL PROJECT 
              CREDIT.

    (a) In General.--Section 48A(d)(3)(A) of the Internal Revenue Code 
of 1986 (relating to aggregate credits) is amended by striking 
``$1,300,000,000'' and inserting ``$1,800,000,000''.
    (b) Authorization of Additional Integrated Gasification Combined 
Cycle Projects.--Subparagraph (B) of section 48A(d)(3) of te Internal 
Revenue Code of 1986 (relating to aggregate credits) is amended to read 
as follows:
                    ``(B) Particular projects.--Of the dollar amount in 
                subparagraph (A), the Secretary is authorized to 
                certify--
                            ``(i) $800,000,000 for integrated 
                        gasification combined cycle projects the 
                        application for which is submitted during the 
                        period described in paragraph (2)(A)(i),
                            ``(ii) $500,000,000 for projects which use 
                        other advanced coal-based generation 
                        technologies the application for which is 
                        submitted during the period described in 
                        paragraph (2)(A)(i), and
                            ``(iii) $500,000,000 for integrated 
                        gasification combined cycle projects the 
                        application for which is submitted during the 
                        period described in paragraph (2)(A)(ii).''.
    (c) Application Period for Additional Projects.--Subparagraph (A) 
of section 48A(d)(2) of the Internal Revenue Code of 1986 (relating to 
certification) is amended to read as follows:
                    ``(A) Application period.--Each applicant for 
                certification under this paragraph shall submit an 
                application meeting the requirements of subparagraph 
                (B). An applicant may only submit an application--
                            ``(i) for an allocation from the dollar 
                        amount specified in clause (i) or (ii) of 
                        paragraph (3)(A) during the 3-year period 
                        beginning on the date the Secretary establishes 
                        the program under paragraph (1), and
                            ``(ii) for an allocation from the dollar 
                        amount specified in paragraph (3)(A)(iii) 
                        during the 3-year period beginning at the 
                        termination of the period described in clause 
                        (i).''.
    (d) Effective Date.--The amendments made by this section shall take 
effect as if included in the amendments made by section 1307 of the 
Energy Policy Act of 2005.

SEC. 204. EXTENSION AND EXPANSION OF QUALIFYING GASIFICATION PROJECT 
              CREDIT.

    (a) In General.--Section 48B(d)(1) of the Internal Revenue Code of 
1986 (relating to qualifying gasification project program) is amended 
by striking ``$350,000,000'' and inserting ``$850,000,000''.
    (b) Effective Date.--The amendment made by this section shall take 
effect as if included in the amendments made by section 1307 of the 
Energy Policy Act of 2005.

               Subtitle B--Domestic Fossil Fuel Security

SEC. 211. EXTENSION OF ELECTION TO EXPENSE CERTAIN REFINERIES.

    (a) In General.--Section 179C(c)(1) of the Internal Revenue Code of 
1986 (defining qualified refinery property) is amended--
            (1) by striking ``and before January 1, 2012'' in 
        subparagraph (B) and inserting ``and, in the case of any 
        qualified refinery described in subsection (d)(1), before 
        January 1, 2012'', and
            (2) by inserting ``if described in subsection (d)(1)'' 
        after ``of which'' in subparagraph (F)(i).
    (b) Conforming Amendment.--Subsection (d) of section 179C of the 
Internal Revenue Code of 1986 is amended to read as follows:
    ``(d) Qualified Refinery.--For purposes of this section, the term 
`qualified refinery' means any refinery located in the United States 
which is designed to serve the primary purpose of processing liquid 
fuel from--
            ``(1) crude oil, or
            ``(2) qualified fuels (as defined in section 45K(c)).''.
    (c) Effective Date.--The amendments made by this section shall take 
effect as if included in the amendment made by section 1323(a) of the 
Energy Policy Act of 2005.

       Subtitle C--Conservation and Energy Efficiency Provisions

SEC. 221. EXTENSION OF ENERGY EFFICIENT COMMERCIAL BUILDINGS DEDUCTION.

    Section 179D(h) of the Internal Revenue Code of 1986 (relating to 
termination) is amended by striking ``2007'' and inserting ``2010''.

SEC. 222. EXTENSION OF NEW ENERGY EFFICIENT HOME CREDIT.

    (a) In General.--Subsection (g) of section 45L of the Internal 
Revenue Code of 1986 (relating to new energy efficient home credit) is 
amended to read as follows:
    ``(g) Termination.--This section shall not apply to--
            ``(1) any qualified new energy efficient home meeting the 
        energy saving requirements of subsection (c)(1) acquired after 
        December 31, 2010, and
            ``(2) any qualified new energy efficient home meeting the 
        energy saving requirements of paragraph (2) or (3) of 
        subsection (c) acquired after December 31, 2007.''.
    (b) Effective Date.--The amendment made by this section shall take 
effect as if included in the amendments made by section 1332 of the 
Energy Policy Act of 2005.

SEC. 223. EXTENSION OF RESIDENTIAL ENERGY EFFICIENT PROPERTY CREDIT.

    Section 25D(g) of the Internal Revenue Code of 1986 (relating to 
termination) is amended by striking ``2007'' and inserting ``2010''.

SEC. 224. EXTENSION OF CREDIT FOR BUSINESS INSTALLATION OF QUALIFIED 
              FUEL CELLS AND STATIONARY MICROTURBINE POWER PLANTS.

    Sections 48(c)(1)(E) and 48(c)(2)(E) of the Internal Revenue Code 
of 1986 (relating to termination) are each amended by striking ``2007'' 
and inserting ``2010''.

SEC. 225. EXTENSION OF BUSINESS SOLAR INVESTMENT TAX CREDIT.

    Sections 48(a)(2)(A)(i)(II) and 48(a)(3)(A)(ii) of the Internal 
Revenue Code of 1986 (relating to termination) are each amended by 
striking ``2008'' and inserting ``2011''.

         Subtitle D--Alternative Fuels and Vehicles Incentives

SEC. 231. EXTENSION OF EXCISE TAX PROVISIONS AND INCOME TAX CREDIT FOR 
              BIODIESEL AND ALTERNATIVE FUELS.

    (a) Biodiesel.--Sections 40A(g), 6426(c)(6), and 6427(e)(5)(B) of 
the Internal Revenue Code of 1986 are each amended by striking ``2008'' 
and inserting ``2010''.
    (b) Alternative Fuel.--
            (1) Fuels.--Sections 6426(d)(4) and 6427(e)(5)(C) of the 
        Internal Revenue Code of 1986 are each amended by striking 
        ``September 30, 2009'' and inserting ``December 31, 2010''.
            (2) Refueling property.--Section 30C(g) of such Code is 
        amended by striking ``2009'' and inserting ``2010''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on January 1, 2007.

SEC. 232. EXCEPTION FROM DEPRECIATION LIMITATION FOR CERTAIN 
              ALTERNATIVE AND ELECTRIC PASSENGER AUTOMOBILES.

    (a) In General.--Paragraph (1) of section 280F(a) of the Internal 
Revenue Code of 1986 (relating to limitation) is amended by adding at 
the end the following new subparagraph:
                    ``(D) Special rule for certain alternative motor 
                vehicles and qualified electric vehicles.--Subparagraph 
                (A) shall not apply to any motor vehicle for which a 
                credit is allowable under section 30 or 30B.''.
    (b) Conforming Amendment.--Subparagraph (C) of section 280F(a)(1) 
of the Internal Revenue Code of 1986 is amended by striking clause (ii) 
and by redesignating clause (iii) as clause (ii).
    (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.
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