[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 2993 Introduced in Senate (IS)]








109th CONGRESS
  2d Session
                                S. 2993

 To amend the Internal Revenue Code of 1986 to impose a temporary oil 
 profit fee and to use the proceeds of the fee collected to provide a 
Strategic Energy Fund and expand certain energy tax incentives, and for 
                            other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              May 23, 2006

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

_______________________________________________________________________

                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to impose a temporary oil 
 profit fee and to use the proceeds of the fee collected to provide a 
Strategic Energy Fund and expand 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.

    This Act may be cited as the ``Strategic Energy Fund Act of 2006''.

                     TITLE I--STRATEGIC ENERGY FUND

           Subtitle A--Establishment of Strategic Energy Fund

SEC. 101. STRATEGIC ENERGY FUND.

    (a) In General.--Subchapter A of chapter 98 of the Internal Revenue 
Code of 1986 (relating to trust fund code) is amended by adding at the 
end the following new section:

``SEC. 9511. STRATEGIC ENERGY FUND.

    ``(a) Establishment.--There is established in the Treasury of the 
United States a trust fund to be known as the `Strategic Energy Fund', 
consisting of such amounts as may be appropriated or credited to such 
Fund as provided in this section or section 9602(b).
    ``(b) Transfers to Fund.--
            ``(1) In general.--There are hereby appropriated to the 
        Strategic Energy Fund amounts equivalent to the taxes received 
        in the Treasury under section 5896.
            ``(2) Limitation.--The aggregate amount appropriated under 
        this subsection shall not exceed--
                    ``(A) for purposes described in subsection 
                (c)(1)(A)--
                            ``(i) $1,000,000,000 during fiscal year 
                        2007, and
                            ``(ii) $2,000,000,000 during each of fiscal 
                        years 2008 through 2011, and
                    ``(B) for purposes described in subsection 
                (c)(1)(B), $350,000,000 for fiscal years 2007 through 
                2016.
    ``(c) Expenditures.--
            ``(1) In general.--Amounts in the Strategic Energy Fund 
        shall be available, without further appropriation, to carry 
        out--
                    ``(A) the purposes authorized under section 161 of 
                the Strategic Energy Fund Act of 2006; and
                    ``(B) projects under section 1510 of the Energy 
                Policy Act of 2005 (42 U.S.C. 16501) and section 212 of 
                the Clean Air Act (42 U.S.C. 7546) that have a design 
                capacity to produce, in the aggregate, 1,000,000,000 
                gallons of cellulosic biomass, without regard to 
                section 1510(l) of the Energy Policy Act of 2005 (42 
                U.S.C. 16501(l)) .
            ``(2) Unexpended funds.--Any funds that have not been 
        expended by September 30, 2016, shall be credited back to the 
        general fund as miscellaneous tax receipts.''.
    (b) Clerical Amendment.--The table of sections for such subchapter 
is amended by adding at the end the following new item:

``Sec. 9511. Strategic Energy Fund.''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.

       Subtitle B--Incentives to Accelerate Biofuels Availability

SEC. 111. MODIFICATION OF ALTERNATIVE FUEL VEHICLE REFUELING PROPERTY 
              CREDIT.

    (a) Increase in Credit Amount.--Section 30C of the Internal Revenue 
Code of 1986 (relating to alternative fuel vehicle refueling property 
credit) is amended--
            (1) by striking ``30 percent'' in subsection (a) and 
        inserting ``50 percent'', and
            (2) by striking ``$30,000'' in subsection (b)(1) and 
        inserting ``$50,000''.
    (b) Credit Allowed for Electric Drive Transportation Property.--
Paragraph (1) of section 30C(c) of the Internal Revenue Code of 1986 
(relating to qualified alternative fuel vehicle refueling property) is 
amended by striking ``, but only with respect to any fuel'' and 
inserting ``, except that in the case of property described in 
paragraph (3)(A) thereof, only with respect to fuels''.
    (c) Extension of Credit.--Subsection (g) section 30C of the 
Internal Revenue Code of 1986 (relating to termination) is amended to 
read as follows:
    ``(g) Termination of Availability of Credit.--This section shall 
not apply to property placed in service after the earlier of December 
31, 2014, or the date after which more than 20,000 alternative 
refueling properties have been installed through use of this credit.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to property placed in service after the date of the enactment of 
this Act, in taxable years ending after such date.

SEC. 112. EXTENSION OF BIODIESEL INCOME AND EXCISE TAX CREDITS.

    (a) In General.--Sections 40A(g), 6426(c)(6), and 6427(e)(5)(B) of 
the Internal Revenue Code of 1986 are each amended by striking ``2008'' 
and inserting ``2014''.
    (b) Effective Date.--The amendments made by this section shall take 
effect on January 1, 2009.

SEC. 113. SMALL ETHANOL PRODUCER CREDIT EXPANDED FOR PRODUCERS OF 
              SUCROSE AND CELLULOSIC ETHANOL.

    (a) In General.--Subparagraph (C) of section 40(b)(4) of the 
Internal Revenue Code of 1986 (relating to small ethanol producer 
credit) is amended by inserting ``(30,000,000 gallons for any sucrose 
or cellulosic ethanol producer)'' after ``15,000,000 gallons''.
    (b) Sucrose or Cellulosic Ethanol Producer.--Section 40(b)(4) of 
the Internal Revenue Code of 1986 is amended by adding at the end the 
following new subparagraph:
                    ``(E) Sucrose or cellulosic ethanol producer.--
                            ``(i) In general.--For purposes of this 
                        paragraph, the term `sucrose or cellulosic 
                        ethanol producer' means a producer of ethanol 
                        using sucrose feedstock or cellulosic 
                        feedstock.
                            ``(ii) Sucrose feedstock.--For purposes of 
                        clause (i), the term `sucrose feedstock' means 
                        any raw sugar, refined sugar, or sugar 
                        equivalents (including juice and extract). Such 
                        term does not include any molasses, beet thick 
                        juice, or other similar products as determined 
                        by the Secretary.''.
    (c) Conforming Amendments.--
            (1) Section 40(g)(2) of the Internal Revenue Code of 1986 
        is amended by striking ``15,000,000 gallon limitation'' and 
        inserting ``15,000,000 and 30,000,000 gallon limitations''.
            (2) Section 40(g)(5)(B) of such Code is amended by striking 
        ``15,000,000 gallons'' and inserting ``the gallon limitation 
        under subsection (b)(4)(C)''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

    Subtitle C--Incentives to Deployment of Fuel-Efficient Vehicles

SEC. 121. CREDIT FOR PRODUCTION OF QUALIFIED FLEXIBLE FUEL VEHICLES.

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

``SEC. 45N. PRODUCTION OF QUALIFIED FLEXIBLE FUEL MOTOR VEHICLES.

    ``(a) Allowance of Credit.--For purposes of section 38, in the case 
of a manufacturer, the qualified flexible fuel motor vehicle production 
credit determined under this section for any taxable year is an amount 
equal to the incremental flexible fuel motor vehicle cost for each 
qualified flexible fuel motor vehicle produced in the United States by 
the manufacturer during the taxable year.
    ``(b) Incremental Flexible Fuel Motor Vehicle Cost.--With respect 
to any qualified flexible fuel motor vehicle, the incremental flexible 
fuel motor vehicle cost is an amount equal to the lesser of--
            ``(1) the excess of--
                    ``(A) the cost of producing such qualified flexible 
                fuel motor vehicle, over
                    ``(B) the cost of producing such motor vehicle if 
                such motor vehicle was not a qualified flexible fuel 
                motor vehicle, or
            ``(2) $150.
    ``(c) Qualified Flexible Fuel Motor Vehicle.--For purposes of this 
section, the term `qualified flexible fuel motor vehicle' means a motor 
vehicle (as defined under section 30(c)(2))--
            ``(1) the production of which is not required for the 
        manufacturer to meet--
                    ``(A) the maximum credit allowable for vehicles 
                described in paragraph (2) in determining the fleet 
                average fuel economy requirements (as determined under 
                section 32904 of title 49, United States Code) of the 
                manufacturer for the model year ending in the taxable 
                year, or
                    ``(B) the requirements of any other provision of 
                Federal law, and
            ``(2) which is designed so that the vehicle is propelled by 
        an engine which can use as a fuel a petroleum mixture of which 
        85 percent (or another percentage of not less than 70 percent, 
        as the Secretary may determine, by rule, to provide for 
        requirements relating to cold start, safety, or vehicle 
        functions) of the volume of consists of ethanol or biodiesel.
    ``(d) Other Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Manufacturer.--The term `manufacturer' has the 
        meaning given such term 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.).
            ``(2) 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.
            ``(3) No double benefit.--The amount of any deduction or 
        credit allowable under this chapter (other than the credits 
        allowable under this section and section 30B) shall be reduced 
        by the amount of credit allowed under subsection (a) for such 
        vehicle for the taxable year.
            ``(4) Election not to take credit.--No credit shall be 
        allowed under subsection (a) for any vehicle if the taxpayer 
        elects to not have this section apply to such vehicle.
    ``(e) Cross Reference.--For an election to claim certain minimum 
tax credits in lieu of the credit determined under this section, see 
section 53(e).''.
    (b) Credit Allowed Against the Alternative Minimum Tax.--Section 
38(c)(4)(B) of the Internal Revenue Code of 1986 (defining specified 
credits) is amended by striking the period at the end of clause 
(ii)(II) and inserting ``, and'', and by adding at the end the 
following new clause:
                            ``(iii) the credit determined under section 
                        45N.''.
    (c) Election to Use Additional Amt Credit.--Section 53 of the 
Internal Revenue Code of 1986 (relating to credit for prior year 
minimum tax liability) is amended by adding at the end the following 
new subsection:
    ``(e) Additional Credit in Lieu of Flexible Fuel Motor Vehicle 
Credit.--
            ``(1) In general.--In the case of a taxpayer making an 
        election under this subsection for a taxable year, the 
        limitation under subsection (c) for such taxable year shall be 
        increased by the amount of the credit determined under section 
        45N for such taxable year.
            ``(2) Election.--A taxpayer may make an election under this 
        subsection for any taxable year only if the taxpayer elects not 
        to take the credit under section 45N for such taxable year 
        pursuant to section 45N(c)(4). Any election under this 
        subsection may not be revoked except with the consent of the 
        Secretary.
            ``(3) Credit refundable.--The aggregate increase in the 
        credit under this section for any taxable year by reason of 
        this subsection shall for purposes of this title (other than 
        subsection (b)(2) of this section) be treated as a credit 
        allowed to the taxpayer under subpart C.''.
    (d) Conforming Amendments.--
            (1) Section 38(b) of the Internal Revenue Code of 1986 is 
        amended by striking ``and'' at the end of paragraph (29), by 
        striking the period at the end of paragraph (30) and inserting 
        ``, plus'', and by adding at the end the following new 
        paragraph:
            ``(31) the qualified flexible fuel motor vehicle production 
        credit determined under section 45N(a).''.
            (2) Section 1016(a) of such Code 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:
            ``(38) in the case of a facility with respect to which a 
        credit was allowed under section 45N, to the extent provided in 
        section 45N(d)(2).''.
    (e) Clerical Amendment.--The table of sections for subpart D 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. 45N. Production of qualified flexible fuel motor vehicles.''.
    (f) Effective Date.--The amendments made by this section shall 
apply to motor vehicles produced in model years ending after the date 
of the enactment of this Act.

SEC. 122. TAX CREDIT FOR FUEL-EFFICIENT FLEETS.

    (a) In General.--Subpart E of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by inserting after 
section 48B the following new section:

``SEC. 48C. FUEL-EFFICIENT FLEET CREDIT.

    ``(a) General Rule.--For purposes of section 46, the fuel-efficient 
fleet credit for any taxable year is 15 percent of the qualified fuel-
efficient vehicle investment amount of an eligible taxpayer for such 
taxable year.
    ``(b) Vehicle Purchase Requirement.--In the case of any eligible 
taxpayer which places less than 10 qualified fuel-efficient vehicles in 
service during the taxable year, the qualified fuel-efficient vehicle 
investment amount shall be zero.
    ``(c) Qualified Fuel-Efficient Vehicle Investment Amount.--For 
purposes of this section--
            ``(1) In general.--The term `qualified fuel-efficient 
        vehicle investment amount' means the basis of any qualified 
        fuel-efficient vehicle placed in service by an eligible 
        taxpayer during the taxable year.
            ``(2) Qualified fuel-efficient vehicle.--
                    ``(A) In general.--The term `qualified fuel-
                efficient vehicle' means an vehicle which has a fuel 
                economy which is at least 150 percent greater than the 
                average fuel economy standard for an vehicle of the 
                same class and model year.
                    ``(B) Certain vehicles excluded.--Such term shall 
                not include any vehicle for which a credit is allowed 
                to the eligible taxpayer under section 30 or 30B.
            ``(3) Other terms.--The terms `vehicle', `average fuel 
        economy standard', `fuel economy', and `model year' have the 
        meanings given to such terms under section 32901 of title 49, 
        United States Code.
    ``(d) Eligible Taxpayer.--The term `eligible taxpayer' means, with 
respect to any taxable year, a taxpayer who owns a fleet of 100 or more 
vehicles which are used in the trade or business of the taxpayer on the 
first day of such taxable year.
    ``(e) Termination.--This section shall not apply to any vehicle 
placed in service after December 31, 2010.''.
    (b) Credit Treated as Part of Investment Credit.--Section 46 of the 
Internal Revenue Code of 1986 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 fuel-efficient fleet credit.''.
    (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 at the end the following new clause:
                            ``(v) the basis of any qualified fuel-
                        efficient vehicle which is taken into account 
                        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 48 the following new item:

``Sec. 48C. Fuel-efficient fleet credit.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to periods after December 31, 2005, 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. 123. 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.) is amended by adding at the end the following new section:

``SEC. 30D. 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 the qualified investment of an eligible taxpayer for such 
taxable year.
    ``(b) Qualified Investment.--For purposes of this section--
            ``(1) In general.--The term `qualified investment' means, 
        with respect to any taxable year, the sum of--
                    ``(A) the costs paid or incurred by the eligible 
                taxpayer during such taxable year--
                            ``(i) to re-equip, expand, or establish any 
                        manufacturing facility of the eligible taxpayer 
                        to produce advanced technology motor vehicles 
                        or to produce eligible components, and
                            ``(ii) for qualified research (as defined 
                        in section 41(d)) related to advanced 
                        technology motor vehicles and eligible 
                        components, and
                    ``(B) qualified engineering integration costs.
            ``(2) Attribution rules.--For purposes of paragraph 
        (1)(A)(i), in the case of a manufacturing facility of the 
        eligible taxpayer which produces both advanced technology motor 
        vehicles and other motor vehicles, or eligible components and 
        other components, only the amount paid or incurred for the 
        production of advanced technology motor vehicles and eligible 
        components shall be taken into account.
    ``(c) 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.
    ``(d) Definitions.--For purposes of this section--
            ``(1) Advanced technology motor vehicle.--The term 
        `advanced technology motor vehicle' means--
                    ``(A) any new qualified fuel cell motor vehicle (as 
                defined in section 30B(b)(3)),
                    ``(B) any new advanced lean burn technology motor 
                vehicle (as defined in section 30B(c)(3)),
                    ``(C) any new qualified hybrid motor vehicle (as 
                defined in section 30B(d)(3)(A) and determined without 
                regard to any gross vehicle weight rating), and
                    ``(D) any new qualified alternative motor fuel 
                vehicle (as defined in section 30B(e)(4)).
            ``(2) Eligible components.--The term `eligible component' 
        means any component inherent to any advanced technology motor 
        vehicle but not inherent to a motor vehicle which is not an 
        advanced technology motor vehicle, including--
                    ``(A) with respect to any gasoline or diesel-
                electric new qualified hybrid motor vehicle, any--
                            ``(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, any--
                            ``(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, any--
                            ``(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) Qualified engineering integration costs.--For 
        purposes of subsection (b)(1)(B), the term `qualified 
        engineering integration costs' means, with respect to any 
        advanced technology motor vehicle, costs incurred prior to the 
        market introduction of such motor vehicle for engineering tasks 
        related to--
                    ``(A) establishing functional, structural, and 
                performance requirements for components and subsystems 
                to meet overall vehicle objectives for a specific 
                application,
                    ``(B) designing interfaces for components and 
                subsystems with mating systems within a specific 
                vehicle application,
                    ``(C) designing cost effective, efficient, and 
                reliable manufacturing processes to produce components 
                and subsystems for a specific vehicle application, and
                    ``(D) validating functionality and performance of 
                components and subsystems for a specific vehicle 
                application.
            ``(4) Motor vehicle.--The term `motor vehicle' has the 
        meaning given such term by section 30(c)(2).
    ``(e) Limitation Based on Amount of Tax.--
            ``(1) In general.--The credit allowed under subsection (a) 
        for any taxable year shall not exceed the sum of--
                    ``(A) the taxpayer's regular tax liability (as 
                defined in section 26(b)) for the taxable year, plus
                    ``(B) the tax imposed under section 55 for the 
                taxable year.
            ``(2) Carryover of unused credit amounts.--
                    ``(A) In general.--If the credit allowable under 
                subsection (a) for a taxable year exceeds the 
                limitation under paragraph (1) for such taxable year, 
                such excess shall be allowed--
                            ``(i) as a credit carryback to each of the 
                        13 taxable years preceding such year, and
                            ``(ii) as a credit carryforward to each of 
                        the 20 taxable years following such year.
                    ``(B) Amount carried to each year.--For purposes of 
                this paragraph, rules similar to the rules of section 
                39(a)(2) shall apply.
    ``(f) Special Rules.--
            ``(1) 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.
            ``(2) Investments and property outside the united states.--
        No credit shall be allowed under subsection (a) with respect 
        to--
                    ``(A) any manufacturing facility which is located 
                outside the United States, and
                    ``(B) any engineering integration or research and 
                development conducted outside the United States.
            ``(3) Aggregation of expenditures; allocations.--For 
        purposes of this section, rules similar to the rules of 
        paragraphs (1) and (2) of section 41(f) shall apply.
            ``(4) Recapture.--The Secretary shall, by regulation, 
        provide for recapturing the benefit of any credit allowable 
        under subsection (a) with respect to any manufacturing facility 
        which ceases to produce advanced technology motor vehicles or 
        eligible components.
            ``(5) Public statement.--
                    ``(A) In general.--No credit shall be allowed under 
                subsection (a) for any taxable year unless the eligible 
                taxpayer makes publicly available a statement 
                describing the activities of the eligible taxpayer for 
                which the credit is allowed and the public benefits of 
                such activities, including the estimated amount of any 
                reduction in national oil consumption in future years 
                as a result of such activities.
                    ``(B) Time for publication.--The statement required 
                under subparagraph (A) shall be made available not 
                later than 90 days after the end of the taxable year 
                for which the credit under subsection (a) is allowed 
                and shall be in such form as the Secretary shall 
                prescribe.
            ``(6) No double benefit.--
                    ``(A) Coordination with other deductions and 
                credits.--Except as provided in subparagraph (B), 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.
                    ``(B) Research and development costs.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), any amount described in subsection 
                        (b)(1)(A)(ii) 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.
                            ``(ii) Costs taken into account in 
                        determining base period research expenses.--Any 
                        amounts described in subsection (b)(1)(A)(ii) 
                        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.
    ``(g) 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.
    ``(h) Regulations.--The Secretary shall prescribe such regulations 
as necessary to carry out the provisions of this section.''.
    (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 (37), by striking the period at the end of 
        paragraph (38) and inserting ``, and'', and by adding at the 
        end the following new paragraph:
            ``(39) to the extent provided in section 30D(f)(1).''.
            (2) Section 6501(m) of such Code is amended by inserting 
        ``30D(g),'' 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 30C the following new item:

``Sec. 30D. 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, 
1993.

                 Subtitle D--Incentives for Clean Power

SEC. 131. EXTENSION OF PRODUCTION TAX 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 ``2018''.

SEC. 132. EXTENSION AND MODIFICATION OF INVESTMENT TAX CREDIT WITH 
              RESPECT TO SOLAR ENERGY PROPERTY AND QUALIFIED FUEL CELL 
              PROPERTY.

    (a) Solar Energy Property.--Paragraphs (2)(A)(i)(II) and (3)(A)(ii) 
of section 48(a) of the Internal Revenue Code of 1986 are each amended 
by striking ``2008'' and inserting ``2015''.
    (b) Eligible Fuel Cell Property.--Paragraph (1)(E) of section 48(c) 
of the Internal Revenue Code of 1986 is amended by striking ``2007'' 
and inserting ``2014''.
    (c) Credits Allowed Against the Alternative Minimum Tax.--
            (1) In general.--Section 38(c)(4)(B) of the Internal 
        Revenue Code of 1986 (defining specified credits), as amended 
        by this Act, is amended by striking the period at the end of 
        clause (iii) and inserting ``, and,'' and by adding at the end 
        the following new clause:
                            ``(iv) the portion of the investment credit 
                        under section 46(2) as determined under section 
                        48(a)(2)(A)(i).''.
            (2) Effective date.--The amendments made by this subsection 
        shall apply to taxable years beginning after December 31, 2005.
    (d) Solar Investment Credit Allowed for Public Utility Property.--
            (1) In general.--The second sentence of section 48(a)(3) of 
        the Internal Revenue Code of 1986 is amended by inserting 
        ``(other than property described in clause (i) or (ii) of 
        subparagraph (A))'' before ``shall not''.
            (2) Effective date.--The amendments made by this subsection 
        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. 133. CREDIT FOR WIND ENERGY SYSTEMS.

    (a) Residential.--
            (1) In general.--Section 25D(a) of the Internal Revenue 
        Code of 1986 is amended by striking ``and'' at the end of 
        paragraph (2), by striking the period at the end of paragraph 
        (3) and inserting ``, and'', and by adding at the end the 
        following new paragraph:
            ``(4) 30 percent of the qualified small wind energy 
        property expenditures made by the taxpayer during such year.''.
            (2) Limitation.--Section 25D(b)(1) of the Internal Revenue 
        Code of 1986 is amended by striking ``and'' at the end of 
        subparagraph (B), by striking the period at the end of 
        subparagraph (A) and inserting ``, and'', and by adding at the 
        end the following new subparagraph:
                    ``(D) $500 with respect to each half kilowatt of 
                capacity (not to exceed $2,000) of qualifying wind 
                turbines for which qualified small wind energy property 
                expenditures are made.''.
            (3) Qualified small wind energy property expenditures.--
        Section 25D(d) of the Internal Revenue Code of 1986 is amended 
        by adding at the end the following new paragraph:
            ``(4) Qualified small wind energy property expenditure.--
                    ``(A) In general.--The term `qualified wind energy 
                property expenditure' means an expenditure for property 
                which uses a qualifying wind turbine to generate 
                electricity for use in connection with a dwelling unit 
                located in the United States and used as a residence by 
                the taxpayer.
                    ``(B) Qualifying wind turbine.--The term 
                `qualifying wind turbine' means a wind turbine of 100 
                kilowatts of rated capacity or less which meets the 
                latest performance rating standards published by the 
                American Wind Energy Association and which is used to 
                generate electricity and carries at least a 5-year 
                limited warranty covering defects in design, material, 
                or workmanship, and, for property that is not installed 
                by the taxpayer, at least a 5-year limited warranty 
                covering defects in installation.''.
    (b) Business.--Section 48(a)(3)(A) of the Internal Revenue Code of 
1986 (defining energy property) is amended by striking ``or'' at the 
end of clause (iii), by adding ``or'' at the end of clause (iv), and by 
inserting after clause (iv) the following new clause:
                            ``(v) qualifying wind turbine (as defined 
                        in section 25D(d)(B)),''.
    (c) Effective Date.--The amendments made by this section shall 
apply to property placed in service after the date of the enactment of 
this Act, in taxable years ending after such date.

     Subtitle E--Incentives to Increase Oil Recovery Using Carbon 
                             Sequestration

SEC. 141. TAX CREDIT FOR CARBON DIOXIDE CAPTURED FROM INDUSTRIAL 
              SOURCES AND USED IN ENHANCED OIL AND NATURAL GAS 
              RECOVERY.

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

``SEC. 45O. CREDIT FOR CARBON DIOXIDE CAPTURED FROM INDUSTRIAL SOURCES 
              AND USED AS A TERTIARY INJECTANT IN ENHANCED OIL AND 
              NATURAL GAS RECOVERY.

    ``(a) General Rule.--For purposes of section 38, the captured 
carbon dioxide tertiary injectant credit for any taxable year is an 
amount equal to the product of--
            ``(1) the credit amount, and
            ``(2) the qualified carbon dioxide captured from industrial 
        sources and used as a tertiary injectant in qualified enhanced 
        oil and natural gas recovery which is attributable to the 
        taxpayer.
    ``(b) Credit Amount.--For purposes of this section--
            ``(1) In general.--The credit amount is $0.75 per 1,000 
        standard cubic feet.
            ``(2) Inflation adjustment.--In the case of any taxable 
        year beginning in a calendar year after 2007, there shall be 
        substituted for the $0.75 amount under paragraph (1) an amount 
        equal to the product of--
                    ``(A) $0.75, 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 `2006' 
                for `1990'.
    ``(c) Qualified Carbon Dioxide.--For purposes of this section--
            ``(1) In general.--The term `qualified carbon dioxide' 
        means carbon dioxide captured from an anthropogenic source 
        that--
                    ``(A) would otherwise be released into the 
                atmosphere as industrial emission of greenhouse gas,
                    ``(B) is measurable at the source of capture,
                    ``(C) is compressed, treated, and transported via 
                pipeline,
                    ``(D) is sold as a tertiary injectant in qualified 
                enhanced oil and natural gas recovery, and
                    ``(E) is permanently sequestered in geological 
                formations as a result of the enhanced oil and natural 
                gas recovery process.
            ``(2) Anthropogenic source.--An anthropogenic source of 
        carbon dioxide is an industrial source, including any of the 
        following types of plants, and facilities related to such 
        plant--
                    ``(A) a coal and natural gas fired electrical 
                generating power station,
                    ``(B) a natural gas processing and treating plant,
                    ``(C) an ethanol plant,
                    ``(D) a fertilizer plant, and
                    ``(E) a chemical plant.
            ``(3) Definitions.--
                    ``(A) Qualified enhanced oil and natural gas 
                recovery.--The term `qualified enhanced oil and natural 
                gas recovery' has the meaning given such term by 
                section 43(c)(2).
                    ``(B) Tertiary injectant.--The term `tertiary 
                injectant' has the same meaning as when used within 
                section 193(b)(1).
    ``(d) Other Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Only carbon dioxide captured within the united states 
        taken into account.--Sales shall be taken into account under 
        this section only with respect to qualified carbon dioxide 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)).
            ``(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 re-captured, recycled, and re-
        injected as part of the enhanced oil and natural gas recovery 
        process.
            ``(3) Credit attributable to taxpayer.--Any credit under 
        this section shall be attributable to the person that captures, 
        treats, compresses, transports and sells the carbon dioxide for 
        use as a tertiary injectant in enhanced oil and natural gas 
        recovery, except to the extent provided in regulations 
        prescribed by the Secretary.''.
    (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 (30), by 
striking the period at the end of paragraph (31) and inserting ``, 
plus'', and by adding at the end of following new paragraph:
            ``(32) the captured carbon dioxide tertiary injectant 
        credit determined under section 45O(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), as amended by this Act, is amended by 
adding at the end the following new section:

``Sec. 45O. Credit for carbon dioxide captured from industrial sources 
                            and used as a tertiary injectant in 
                            enhanced oil and natural gas recovery.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

         Subtitle F--Incentives for Energy Efficient Buildings

SEC. 151. 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 ``2014''.

SEC. 152. EXTENSION AND EXPANSION OF NEW ENERGY EFFICIENT HOME CREDIT.

    (a) Extension.--Section 45L(g) of the Internal Revenue Code of 1986 
(relating to termination) is amended by striking ``2007'' and inserting 
``2014''.
    (b) Inclusion of 30 Percent Homes.--
            (1) In general.--Section 45L(c) of the Internal Revenue 
        Code of 1986 (relating to energy saving requirements) is 
        amended--
                    (A) by striking ``or'' at the end of paragraph (2);
                    (B) by redesignating paragraph (3) as paragraph 
                (4); and
                    (C) by inserting after paragraph (2) the following 
                new paragraph:
            ``(3) certified--
                    ``(A) to have a level of annual heating and cooling 
                energy consumption which is at least 30 percent below 
                the annual level described in paragraph (1), and
                    ``(B) to have building envelope component 
                improvements account for at least 1/3 of such 30 
                percent, or.''.
            (2) Applicable amount of credit.--Section 45L(a)(2) is 
        amended by striking ``paragraph (3)'' and inserting ``paragraph 
        (3) or (4)''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to qualified new energy efficient homes acquired 
        after the date of the enactment of this Act.

                   Subtitle G--Clean Energy Research

SEC. 161. ASSISTANT SECRETARY FOR ADVANCED ENERGY RESEARCH, TECHNOLOGY 
              DEVELOPMENT, AND DEPLOYMENT.

    (a) Establishment.--
            (1) In general.--The Secretary of Energy shall establish in 
        the Department of Energy the position of Assistant Secretary 
        for Advanced Energy Research, Technology Development, and 
        Deployment (referred to in this section as the ``Assistant 
        Secretary''), to be headed by, and to report to, the Secretary.
            (2) Qualifications.--The Assistant Secretary shall be an 
        individual with--
                    (A) an advanced education degree in energy 
                technology; and
                    (B) substantial commercial research and technology 
                development and deployment experience.
    (b) Mission.--The mission of the Assistant Secretary is--
            (1) to implement an innovative energy research, technology 
        development, and deployment program to--
                    (A) increase national security by significantly 
                reducing petroleum and imported fuels consumption;
                    (B) significantly improve the efficiency of 
                electricity use and the reliability of the electricity 
                system; and
                    (C) significantly reduce greenhouse gas emissions; 
                and
            (2) to sponsor a diverse portfolio of cutting-edge, high-
        payoff research, development, and deployment projects to carry 
        out the program.
    (c) Experimental Personnel Authority.--The Assistant Secretary may 
staff the office of the Assistant Secretary primarily using a program 
of experimental use of special personnel management authority in order 
to facilitate recruitment of eminent experts in science or engineering 
for management of research and development projects and programs 
administered by the Assistant Secretary under similar terms and 
conditions as the authority is exercised under section 1101 of the 
Strom Thurmond National Defense Authorization Act for Fiscal Year 1999 
(Public Law 105-261; 5 U.S.C. 3104 note), as determined by the 
Assistant Secretary.
    (d) Transactions Other Than Contracts and Grants.--To carry out 
projects under this section, the Assistant Secretary may enter into 
transactions to carry out advanced research projects under this 
subsection 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)).
    (e) Prizes for Advanced Technology Achievements.--
            (1) In general.--Subject to paragraphs (2) through (4), the 
        Assistant Secretary 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 to advance the 
        mission described in subsection (b) 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).
            (2) Competition requirements.--In carrying out this 
        subsection, the Assistant Secretary shall--
                    (A) use a competitive process for the selection of 
                recipients of cash prizes; and
                    (B) conduct widely-advertised solicitation of 
                submissions of research results, technology 
                developments, and prototypes.
            (3) Maximum amount for all cash prizes.--The total amount 
        of all cash prizes awarded for a fiscal year under this 
        subsection may not exceed $50,000,000.
            (4) Maximum amount of individual cash prizes.--The amount 
        of an individual cash prize awarded under this subsection may 
        not exceed $10,000,000 unless the amount of the award is 
        approved by the Secretary of Energy.
    (f) Commercialization of Cellulosic Biomass Ethanol.--Of the 
amounts that are made available to carry out this section, the 
Assistant Secretary shall use not less that $1,000,000,000 to conduct 
research and development to increase yields, reduce production costs, 
and take other steps to accelerate the commercialization of cellulosic 
biomass ethanol (as defined in section 211(o)(1) of the Clean Air Act 
(42 U.S.C. 7545(o)(1))).
    (g) Annual Reports.--As soon as practicable after the end of each 
fiscal year for which the Assistant Secretary receives funds under 
subsection (h), the Assistant Secretary shall submit to the Committee 
on Energy and Natural Resources of the Senate and the Committee on 
Energy and Commerce, and the Committee on Science, of the House of 
Representatives a report on the progress, challenges, future 
milestones, and strategic plan of the Assistant Secretary, including--
            (1) a description of, and rationale for, any changes in the 
        strategic plan;
            (2) the adequacy of human and financial resources necessary 
        to achieve the mission described in subsection (b); and
            (3) in the case of cash prizes awarded under subsection 
        (e), a description of--
                    (A) the applications of the research, technology, 
                or prototypes for which prizes were awarded;
                    (B) the total amount of the prizes that were 
                awarded;
                    (C) the methods used for solicitation and 
                evaluation of submissions and an assessment of the 
                effectiveness of those methods; and
                    (D) recommendations to improve the prize program.
    (h)  Relationship to Other Authority.--The program under this 
section may be carried out in conjunction with, or in addition to, the 
exercise of any other authority of the Assistant Secretary to acquire, 
support, or stimulate basic, advanced, and applied research, technology 
development, or prototype projects.

              TITLE II--REALIGNING OIL COMPANY INCENTIVES

                     Subtitle A--Excess Oil Profits

SEC. 201. TEMPORARY OIL PROFIT FEE.

    (a) In General.--Subtitle E of the Internal Revenue Code of 1986 
(relating to alcohol, tobacco, and certain other excise taxes) is 
amended by adding at the end the following new chapter:

            ``CHAPTER 56--TEMPORARY FEE ON EXCESS OIL PROFIT

``Sec. 5896. Imposition of fee.
``Sec. 5897. Excess profit; etc.
``Sec. 5898. Special rules and definitions.

``SEC. 5896. IMPOSITION OF FEE.

    ``(a) In General.--In addition to any other tax imposed under this 
title, there is hereby imposed on any applicable taxpayer an excise fee 
in an amount equal to 50 percent of the excess profit of such taxpayer 
for any taxable year beginning during 2006 or 2007.
    ``(b) Applicable Taxpayer.--For purposes of this chapter, the term 
`applicable taxpayer' means, with respect to operations in the United 
States--
            ``(1) any integrated oil company (as defined in section 
        291(b)(4)), and
            ``(2) any other producer or refiner of crude oil with gross 
        receipts from the sale of such crude oil or refined oil 
        products for the taxable year exceeding $100,000,000.

``SEC. 5897. EXCESS PROFIT; ETC.

    ``(a) General Rule.--For purposes of this chapter, the term `excess 
profit' means the excess of the adjusted taxable income of the 
applicable taxpayer for the taxable year over the reasonably inflated 
average profit for such taxable year.
    ``(b) Adjusted Taxable Income.--For purposes of this chapter, with 
respect to any applicable taxpayer, the adjusted taxable income for any 
taxable year is equal to the taxable income for such taxable year 
(within the meaning of section 63 and determined without regard to this 
subsection)--
            ``(1) increased by any interest expense deduction, 
        charitable contribution deduction, and any net operating loss 
        deduction carried forward from any prior taxable year, and
            ``(2) reduced by--
                    ``(A) any interest income, dividend income, and net 
                operating losses to the extent such losses exceed 
                taxable income for the taxable year, and
                    ``(B) any qualified domestic energy investment for 
                such taxable year.
In the case of any applicable taxpayer which is a foreign corporation, 
the adjusted taxable income shall be determined with respect to such 
income which is effectively connected with the conduct of a trade or 
business in the United States.
    ``(c) Reasonably Inflated Average Profit.--For purposes of this 
chapter, with respect to any applicable taxpayer, the reasonably 
inflated average profit for any taxable year is an amount equal to the 
average of the adjusted taxable income of such taxpayer for taxable 
years beginning during the 2000-2004 taxable year period (determined 
without regard to the taxable year with the highest adjusted taxable 
income in such period) plus 10 percent of such average.
    ``(d) Qualified Domestic Energy Investment.--For purposes of this 
chapter, the term `qualified domestic energy investment' means any 
amount paid or incurred with respect to--
            ``(1) qualified refinery property (as defined in section 
        179C(c) and determined without regard to any termination date),
            ``(2) any qualified facility described in paragraph (1), 
        (2), (3), or (4) of section 45(d) (determined without regard to 
        any placed in service date), and
            ``(3) any facility for the production of alcohol used as a 
        fuel (within the meaning of section 40) or biodiesel or agri-
        biodiesel used as a fuel (within the meaning of section 40A).

``SEC. 5898. SPECIAL RULES AND DEFINITIONS.

    ``(a) Withholding and Deposit of Fee.--The Secretary shall provide 
such rules as are necessary for the withholding and deposit of the fee 
imposed under section 5896.
    ``(b) Records and Information.--Each taxpayer liable for the fee 
under section 5896 shall keep such records, make such returns, and 
furnish such information as the Secretary may by regulations prescribe.
    ``(c) Return of Fee.--The Secretary shall provide for the filing 
and the time of such filing of the return of the fee imposed under 
section 5896.
    ``(d) Crude Oil.--The term `crude oil' includes crude oil 
condensates and natural gasoline.
    ``(e) Businesses Under Common Control.--For purposes of this 
chapter, all members of the same controlled group of corporations 
(within the meaning of section 267(f)) and all persons under common 
control (within the meaning of section 52(b) but determined by treating 
an interest of more than 50 percent as a controlling interest) shall be 
treated as 1 person.
    ``(f) Regulations.--The Secretary shall prescribe such regulations 
as may be necessary or appropriate to carry out the purposes of this 
chapter.''.
    (b) Clerical Amendment.--The table of chapters for subtitle E of 
the Internal Revenue Code of 1986 is amended by adding at the end the 
following new item:

          ``Chapter 56. Temporary Fee on Excess Oil Profit.''.

    (c) Deductibility of Fee.--The first sentence of section 164(a) of 
the Internal Revenue Code of 1986 (relating to deduction for taxes) is 
amended by inserting after paragraph (5) the following new paragraph:
            ``(6) The fee imposed by section 5896.''.

                Subtitle B--Energy Fairness for America

SEC. 211. ELIMINATION OF DEDUCTION FOR INTANGIBLE DRILLING AND 
              DEVELOPMENT COSTS FOR MAJOR OIL COMPANIES.

    (a) In General.--Section 263(c) of the Internal Revenue Code of 
1986 is amended by adding at the end the following new sentences: 
``This subsection shall not apply during any taxable year with respect 
to an applicable taxpayer (as defined in section 5896(b)) if during the 
preceding taxable year for the production of oil, the average price of 
crude oil in the United States is greater than $34.71 per barrel, and 
for the production of natural gas, the average wellhead price of 
natural gas in the United States is greater than $4.34 per 1,000 cubic 
feet. For purposes of the preceding sentence, the Secretary shall 
determine average prices, taking into consideration the most recent 
data reported by the Energy Information Administration. For taxable 
years beginning after December 31, 2007, each dollar amount specified 
in this subsection shall be adjusted to reflect changes for the 12-
month period ending the preceding September 30 in the Consumer Price 
Index for All Urban Consumers published by the Bureau of Labor 
Statistics of the Department of Labor.''
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after the date of the enactment of this Act.

SEC. 212. OIL AND GAS ROYALTY-RELATED AMENDMENTS.

    (a) Repeal.--Sections 344 through 346 of the Energy Policy Act of 
2005 (42 U.S.C. 15902 et seq.) are repealed.
    (b) Termination of Alaska Offshore Royalty Suspension.--Section 
8(a)(3)(B) of the Outer Continental Shelf Lands Act (43 U.S.C. 
1337(a)(3)(B)) is amended by striking ``and in the Planning Areas 
offshore Alaska''.

SEC. 213. EXTENSION OF ELECTION TO EXPENSE CERTAIN REFINERIES.

    (a) Extension.--
            (1) In general.--Section 179C(c)(1) of the Internal Revenue 
        Code of 1986 (defining qualified refinery property) is 
        amended--
                    (A) 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
                    (B) by inserting ``if described in subsection 
                (d)(1)'' after ``of which'' in subparagraph (F)(i).
            (2) 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)).''.
            (3) Effective date.--The amendments made by this subsection 
        shall take effect as if included in the amendment made by 
        section 1323(a) of the Energy Policy Act of 2005.
    (b) Nonapplication for Major Oil Companies.--
            (1) In general.--Section 179C of the Internal Revenue Code 
        of 1986 is amended by adding at the end the following new 
        subsection:
    ``(i) Nonapplication of Section.--This section shall not apply 
during any taxable year with respect to an applicable taxpayer (as 
defined in section 5896(b)) if during the preceding taxable year for 
the production of oil, the average price of crude oil in the United 
States is greater than $34.71 per barrel. For purposes of the preceding 
sentence, the Secretary shall determine average prices, taking into 
consideration the most recent data reported by the Energy Information 
Administration. For taxable years beginning after December 31, 2007, 
the dollar amount specified in this paragraph shall be adjusted to 
reflect changes for the 12-month period ending the preceding September 
30 in the Consumer Price Index for All Urban Consumers published by the 
Bureau of Labor Statistics of the Department of Labor.''.
            (2) Effective date.--The amendment made by this subsection 
        shall apply to taxable years beginning after the date of the 
        enactment of this Act.

SEC. 214. ELIMINATION OF AMORTIZATION OF GEOLOGICAL AND GEOPHYSICAL 
              EXPENDITURES FOR MAJOR OIL COMPANIES.

    (a) In General.--Section 167(h) of the Internal Revenue Code of 
1986 is amended by adding at the end the following new paragraph:
            ``(5) Nonapplication of section.--This subsection shall not 
        apply during any taxable year with respect to an applicable 
        taxpayer (as defined in section 5896(b)) if during the 
        preceding taxable year for the production of oil, the average 
        price of crude oil in the United States is greater than $34.71 
        per barrel, and for the production of natural gas, the average 
        wellhead price of natural gas in the United States is greater 
        than $4.34 per 1,000 cubic feet. For purposes of the preceding 
        sentence, the Secretary shall determine average prices, taking 
        into consideration the most recent data reported by the Energy 
        Information Administration. For taxable years beginning after 
        December 31, 2007, each dollar amount specified in this 
        subparagraph shall be adjusted to reflect changes for the 12-
        month period ending the preceding September 30 in the Consumer 
        Price Index for All Urban Consumers published by the Bureau of 
        Labor Statistics of the Department of Labor.''.
    (b) Effective Date.--The amendments made by this section shall take 
effect on and after the date of the enactment of this Act.

SEC. 215. REVALUATION OF LIFO INVENTORIES OF MAJOR OIL COMPANIES.

    (a) General Rule.--Notwithstanding any other provision of law, if a 
taxpayer is an applicable taxpayer (as defined in section 5896(b)) for 
its last taxable year ending in calendar year 2005, the taxpayer 
shall--
            (1) increase, effective as of the close of such taxable 
        year, the value of each historic LIFO layer of inventories of 
        crude oil, natural gas, or any other petroleum product (within 
        the meaning of section 4611) by the layer adjustment amount, 
        and
            (2) decrease its cost of goods sold for such taxable year 
        by the aggregate amount of the increases under paragraph (1).
If the aggregate amount of the increases under paragraph (1) exceed the 
taxpayer's cost of goods sold for such taxable year, the taxpayer's 
gross income for such taxable year shall be increased by the amount of 
such excess.
    (b) Layer Adjustment Amount.--For purposes of this section--
            (1) In general.--The term ``layer adjustment amount'' 
        means, with respect to any historic LIFO layer, the product 
        of--
                    (A) $18.75, and
                    (B) the number of barrels of crude oil (or in the 
                case of natural gas or other petroleum products, the 
                number of barrel-of-oil equivalents) represented by the 
                layer.
            (2) Barrel-of-oil equivalent.--The term ``barrel-of-oil 
        equivalent'' has the meaning given such term by section 
        29(d)(5) (as in effect before its redesignation by the Energy 
        Tax Incentives Act of 2005).
    (c) Application of Requirement.--
            (1) No change in method of accounting.--Any adjustment 
        required by this section shall not be treated as a change in 
        method of accounting.
            (2) Underpayments of estimated tax.--No addition to the tax 
        shall be made under section 6655 of the Internal Revenue Code 
        of 1986 (relating to failure by corporation to pay estimated 
        tax) with respect to any underpayment of an installment 
        required to be paid with respect to the taxable year described 
        in subsection (a) to the extent such underpayment was created 
        or increased by this section.

SEC. 216. MODIFICATIONS OF FOREIGN TAX CREDIT RULES APPLICABLE TO MAJOR 
              OIL COMPANIES WHICH ARE DUAL CAPACITY TAXPAYERS.

    (a) In General.--Section 901 of the Internal Revenue Code of 1986 
(relating to credit for taxes of foreign countries and of possessions 
of the United States) is amended by redesignating subsection (m) as (n) 
and by inserting after subsection (l) the following new subsection:
    ``(m) Special Rules Relating to Major Oil Companies Which Are Dual 
Capacity Taxpayers.--
            ``(1) General rule.--Notwithstanding any other provision of 
        this chapter, any amount paid or accrued by a dual capacity 
        taxpayer which is an applicable taxpayer (as defined in section 
        5896(b)) to a foreign country or possession of the United 
        States for any period shall not be considered a tax--
                    ``(A) if, for such period, the foreign country or 
                possession does not impose a generally applicable 
                income tax, or
                    ``(B) to the extent such amount exceeds the amount 
                (determined in accordance with regulations) which--
                            ``(i) is paid by such dual capacity 
                        taxpayer pursuant to the generally applicable 
                        income tax imposed by the country or 
                        possession, or
                            ``(ii) would be paid if the generally 
                        applicable income tax imposed by the country or 
                        possession were applicable to such dual 
                        capacity taxpayer.
                Nothing in this paragraph shall be construed to imply 
                the proper treatment of any such amount not in excess 
                of the amount determined under subparagraph (B).
            ``(2) Dual capacity taxpayer.--For purposes of this 
        subsection, the term `dual capacity taxpayer' means, with 
        respect to any foreign country or possession of the United 
        States, a person who--
                    ``(A) is subject to a levy of such country or 
                possession, and
                    ``(B) receives (or will receive) directly or 
                indirectly a specific economic benefit (as determined 
                in accordance with regulations) from such country or 
                possession.
            ``(3) Generally applicable income tax.--For purposes of 
        this subsection--
                    ``(A) In general.--The term `generally applicable 
                income tax' means an income tax (or a series of income 
                taxes) which is generally imposed under the laws of a 
                foreign country or possession on income derived from 
                the conduct of a trade or business within such country 
                or possession.
                    ``(B) Exceptions.--Such term shall not include a 
                tax unless it has substantial application, by its terms 
                and in practice, to--
                            ``(i) persons who are not dual capacity 
                        taxpayers, and
                            ``(ii) persons who are citizens or 
                        residents of the foreign country or 
                        possession.''.
    (b) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        apply to taxes paid or accrued in taxable years beginning after 
        the date of the enactment of this Act.
            (2) Contrary treaty obligations upheld.--The amendments 
        made by this section shall not apply to the extent contrary to 
        any treaty obligation of the United States.

SEC. 217. DENIAL OF DEDUCTION FOR INCOME ATTRIBUTABLE TO DOMESTIC 
              PRODUCTION OF OIL, NATURAL GAS, OR PRIMARY PRODUCTS 
              THEREOF.

    (a) In General.--Subparagraph (B) of section 199(c)(4) of the 
Internal Revenue Code of 1986 (relating to exceptions) is amended by 
striking ``or'' at the end of clause (ii), by striking the period at 
the end of clause (iii) and inserting ``, or'', and by inserting after 
clause (iii) the following new clause:
                            ``(iv) in the case of any applicable 
                        taxpayer (as defined in section 5896(b)), the 
                        production, refining, processing, 
                        transportation, or distribution of oil, natural 
                        gas, or any primary product thereof during any 
                        taxable year described in section 
                        167(h)(5)(A).''.
    (b) Conforming Amendments.--Section 199(c)(4) of the Internal 
Revenue Code of 1986 is amended--
            (1) in subparagraph (A)(i)(III) by striking ``electricity, 
        natural gas,'' and inserting ``electricity'', and
            (2) in subparagraph (B)(ii) by striking ``electricity, 
        natural gas,'' and inserting ``electricity''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2005.

SEC. 218. RULES RELATING TO FOREIGN OIL AND GAS INCOME.

    (a) Separate Basket for Foreign Tax Credit.--
            (1) Years before 2007.--Paragraph (1) of section 904(d) of 
        the Internal Revenue Code of 1986 (relating to separate 
        application of section with respect to certain categories of 
        income), as in effect for years beginning before 2007, is 
        amended by striking `and' at the end of subparagraph (H), by 
        redesignating subparagraph (I) as subparagraph (J), and by 
        inserting after subparagraph (H) the following new 
        subparagraph:
                    ``(I) foreign oil and gas income, and''.
            (2) 2007 and after.--Paragraph (1) of section 904(d) of 
        such Code, as in effect for years beginning after 2006, is 
        amended by striking ``and'' at the end of subparagraph (A), by 
        striking the period at the end of subparagraph (B) and 
        inserting ``, and'', and by adding at the end the following:
                    ``(C) foreign oil and gas income.''.
    (b) Definition.--
            (1) Years before 2007.--Paragraph (2) of section 904(d) of 
        the Internal Revenue Code of 1986, as in effect for years 
        beginning before 2007, is amended by redesignating 
        subparagraphs (H) and (I) as subparagraphs (I) and (J), 
        respectively, and by inserting after subparagraph (G) the 
        following new subparagraph:
                    ``(H) Foreign oil and gas income.--The term 
                `foreign oil and gas income' has the meaning given such 
                term by section 954(g).''.
            (2) 2007 and after.--Section 904(d)(2) of such Code, as in 
        effect for years after 2006, is amended by redesignating 
        subparagraphs (J) and (K) as subparagraphs (K) and (L) and by 
        inserting after subparagraph (I) the following:
                    ``(J) Foreign oil and gas income.--For purposes of 
                this section--
                            ``(i) In general.--The term `foreign oil 
                        and gas income' has the meaning given such term 
                        by section 954(g).
                            ``(ii) Coordination.--Passive category 
                        income and general category income shall not 
                        include foreign oil and gas income (as so 
                        defined).''.
    (c) Conforming Amendments.--
            (1) Section 904(d)(3)(F)(i) of the Internal Revenue Code of 
        1986 is amended by striking ``or (E)'' and inserting ``(E), or 
        (I)''.
            (2) Section 907(a) of such Code is hereby repealed.
            (3) Section 907(c)(4) of such Code is hereby repealed.
            (4) Section 907(f) of such Code is hereby repealed.
    (d) Effective Dates.--
            (1) In general.--The amendments made by this section shall 
        apply to taxable years beginning after the date of the 
        enactment of this Act.
            (2) Years after 2006.--The amendments made by paragraphs 
        (1)(B) and (2)(B) shall apply to taxable years beginning after 
        December 31, 2006.
            (3) Transitional rules.--
                    (A) Separate basket treatment.--Any taxes paid or 
                accrued in a taxable year beginning on or before the 
                date of the enactment of this Act, with respect to 
                income which was described in subparagraph (I) of 
                section 904(d)(1) of such Code (as in effect on the day 
                before the date of the enactment of this Act), shall be 
                treated as taxes paid or accrued with respect to 
                foreign oil and gas income to the extent the taxpayer 
                establishes to the satisfaction of the Secretary of the 
                Treasury that such taxes were paid or accrued with 
                respect to foreign oil and gas income.
                    (B) Carryovers.--Any unused oil and gas extraction 
                taxes which under section 907(f) of such Code (as so in 
                effect) would have been allowable as a carryover to the 
                taxpayer's first taxable year beginning after the date 
                of the enactment of this Act (without regard to the 
                limitation of paragraph (2) of such section 907(f) for 
                first taxable year) shall be allowed as carryovers 
                under section 904(c) of such Code in the same manner as 
                if such taxes were unused taxes under such section 
                904(c) with respect to foreign oil and gas extraction 
                income.
                    (C) Losses.--The amendment made by subsection 
                (c)(3) shall not apply to foreign oil and gas 
                extraction losses arising in taxable years beginning on 
                or before the date of the enactment of this Act.

SEC. 219. ELIMINATION OF DEFERRAL FOR FOREIGN OIL AND GAS EXTRACTION 
              INCOME.

    (a) General Rule.--Paragraph (1) of section 954(g) of the Internal 
Revenue Code of 1986 (defining foreign base company oil related income) 
is amended to read as follows:
            ``(1) In general.--Except as otherwise provided in this 
        subsection, the term `foreign oil and gas income' means, in the 
        case of any applicable taxpayer (as defined in section 5896(b)) 
        during any taxable year described in section 167(h)(5)(A), any 
        income of a kind which would be taken into account in 
        determining the amount of--
                    ``(A) foreign oil and gas extraction income (as 
                defined in section 907(c)), or
                    ``(B) foreign oil related income (as defined in 
                section 907(c)).''.
    (b) Conforming Amendments.--
            (1) Subsections (a)(5), (b)(5), and (b)(6) of section 954, 
        and section 952(c)(1)(B)(ii)(I) of the Internal Revenue Code of 
        1986, are each amended by striking ``base company oil related 
        income'' each place it appears (including in the heading of 
        subsection (b)(8)) and inserting ``oil and gas income''.
            (2) Subsection (b)(4) of section 954 of such Code is 
        amended by striking ``base company oil-related income'' and 
        inserting ``oil and gas income''.
            (3) The subsection heading for subsection (g) of section 
        954 of such Code is amended by striking ``Foreign Base Company 
        Oil Related Income'' and inserting ``Foreign Oil and Gas 
        Income''.
            (4) Subparagraph (A) of section 954(g)(2) of such Code is 
        amended by striking ``foreign base company oil related income'' 
        and inserting ``foreign oil and gas income''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years of foreign corporations beginning after the date 
of the enactment of this Act, and to taxable years of United States 
shareholders ending with or within such taxable years of foreign 
corporations.

Subtitle C--Protection and Retention of Value of Publicly-Owned Energy 
                               Resources

SEC. 221. SUSPENSION OF ROYALTY RELIEF.

    (a) Requirement.--Subject to subsection (b), the Secretary of the 
Interior (referred to in this subtitle as the ``Secretary'') shall 
suspend the application of any provision of Federal law under which a 
person would otherwise be provided relief from a requirement to pay a 
royalty for the production of oil or natural gas from Federal land 
(including submerged land) occurring after the date of enactment of 
this Act during a period in which--
            (1) for the production of oil, the average price of crude 
        oil in the United States during the 4-week period immediately 
        preceding the suspension is greater than $34.71 per barrel; and
            (2) for the production of natural gas, the average wellhead 
        price of natural gas in the United States during the 4-week 
        period immediately preceding the suspension is greater than 
        $4.34 per 1,000 cubic feet.
    (b) Determination of Average Prices.--
            (1) Data.--For purposes of subsection (a), the Secretary 
        shall determine average prices, taking into consideration the 
        most recent data reported by the Energy Information 
        Administration.
            (2) Adjustment.--For fiscal year 2008 and each subsequent 
        fiscal year, each dollar amount specified in subsection (a) 
        shall be adjusted to reflect changes for the 12-month period 
        ending the preceding November 30 in the Consumer Price Index 
        for All Urban Consumers published by the Bureau of Labor 
        Statistics of the Department of Labor.

SEC. 222. RENEGOTIATION OF EXISTING LEASES.

    (a) In General.--Not later than 90 days after the date of enactment 
of this Act, the Secretary shall make a determination regarding the 
ability of the Secretary to renegotiate leases that--
            (1) are in effect prior to the date of enactment of this 
        Act;
            (2) authorize the production of oil or natural gas on 
        Federal land; and
            (3) do not contain terms at least equal to the royalty 
        relief price thresholds described in section 591.
    (b) Affirmative Determination.--
            (1) In general.--If the Secretary determines that the 
        Secretary has the authority to renegotiate leases described in 
        subsection (a), the Secretary shall immediately offer to 
        renegotiate the terms of those leases to include the royalty 
        relief price thresholds described in section 591.
            (2) Failure to renegotiate.--If a lessee fails to 
        renegotiate under paragraph (1), the Secretary shall preclude 
        that lessee from--
                    (A) entering into new leases; or
                    (B) obtaining other existing leases or interests in 
                leases.
    (c) Negative Determination.--If the Secretary determines that the 
Secretary does not have the authority to renegotiate leases described 
in subsection (a), the Secretary shall immediately submit to Congress 
recommendations for changes to law that will--
            (1) provide the authority necessary; or
            (2) produce the same level of revenue from leases for the 
        production of oil and gas from Federal land that will otherwise 
        be lost due to the failure of lessees to renegotiate and modify 
        the terms of existing leases as described in subsection (b)(1).

           Subtitle D--Reduction in Incentives to Guzzle Gas

SEC. 231. REDUCING INCENTIVES TO GUZZLE GAS.

    (a) Inclusion of Heavy Vehicles in Limitation on Depreciation of 
Certain Luxury Automobiles.--
            (1) In general.--Section 280F(d)(5)(A) of the Internal 
        Revenue Code of 1986 (defining passenger automobile) is 
        amended--
                    (A) by striking clause (ii) and inserting the 
                following new clause:
                            ``(ii)(I) which is rated at 6,000 pounds 
                        unloaded gross vehicle weight or less, or
                            ``(II) which is rated at more than 6,000 
                        pounds but not more than 14,000 pounds gross 
                        vehicle weight.'', and
                    (B) by striking ``clause (ii)'' in the second 
                sentence and inserting ``clause (ii)(I)''.
            (2) Exception for vehicles used in farming business.--
        Section 280F(d)(5)(B) of such Code (relating to exception for 
        certain vehicles) is amended by striking ``and'' at the end of 
        clause (ii), by redesignating clause (iii) as clause (iv), and 
        by inserting after clause (ii) the following new clause:
                            ``(iii) any vehicle used in a farming 
                        business (as defined in section 263A(e)(4), 
                        and''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to property placed in service after the date of the 
        enactment of this Act.
    (b) Updated Depreciation Deduction Limits.--
            (1) In general.--Subparagraph (A) of section 280F(a)(1) of 
        the Internal Revenue Code of 1986 (relating to limitation on 
        amount of depreciation for luxury automobiles) is amended to 
        read as follows:
                    ``(I) Limitation.--The amount of the depreciation 
                deduction for any taxable year shall not exceed for any 
                passenger automobile--
                            ``(i) for the 1st taxable year in the 
                        recovery period--
                                    ``(I) described in subsection 
                                (d)(5)(A)(ii)(I), $4,000,
                                    ``(II) described in the second 
                                sentence of subsection (d)(5)(A), 
                                $5,000, and
                                    ``(III) described in subsection 
                                (d)(5)(A)(ii)(II), $6,000,
                            ``(ii) for the 2nd taxable year in the 
                        recovery period--
                                    ``(I) described in subsection 
                                (d)(5)(A)(ii)(I), $6,400,
                                    ``(II) described in the second 
                                sentence of subsection (d)(5)(A), 
                                $8,000, and
                                    ``(III) described in subsection 
                                (d)(5)(A)(ii)(II), $9,600,
                            ``(iii) for the 3rd taxable year in the 
                        recovery period--
                                    ``(I) described in subsection 
                                (d)(5)(A)(ii)(I), $3,850,
                                    ``(II) described in the second 
                                sentence of subsection (d)(5)(A), 
                                $4,800, and
                                    ``(III) described in subsection 
                                (d)(5)(A)(ii)(II), $5,775, and
                            ``(iv) for each succeeding taxable year in 
                        the recovery period--
                                    ``(I) described in subsection 
                                (d)(5)(A)(ii)(I), $2,325,
                                    ``(II) described in the second 
                                sentence of subsection (d)(5)(A), 
                                $2,900, and
                                    ``(III) described in subsection 
                                (d)(5)(A)(ii)(II), $3,475.''.
            (2) Years after recovery period.--Section 280F(a)(1)(B)(ii) 
        of such Code is amended to read as follows:
                            ``(ii) Limitation.--The amount treated as 
                        an expense under clause (i) for any taxable 
                        year shall not exceed for any passenger 
                        automobile--
                                    ``(I) described in subsection 
                                (d)(5)(A)(ii)(I), $2,325,
                                    ``(II) described in the second 
                                sentence of subsection (d)(5)(A), 
                                $2,900, and
                                    ``(III) described in subsection 
                                (d)(5)(A)(ii)(II), $3,475.''.
            (3) Inflation adjustment.--Section 280F(d)(7) of such Code 
        (relating to automobile price inflation adjustment) is 
        amended--
                    (A) by striking ``after 1988'' in subparagraph (A) 
                and inserting ``after 2006'', and
                    (B) by striking subparagraph (B) and inserting the 
                following new subparagraph:
                    ``(B) Automobile price inflation adjustment.--For 
                purposes of this paragraph--
                            ``(i) In general.--The automobile price 
                        inflation adjustment for any calendar year is 
                        the percentage (if any) by which--
                                    ``(I) the average wage index for 
                                the preceding calendar year, exceeds
                                    ``(II) the average wage index for 
                                2005.
                            ``(ii) Average wage index.--The term 
                        `average wage index' means the average wage 
                        index published by the Social Security 
                        Administration.''.
            (4) Effective date.--The amendments made by this subsection 
        shall apply to property placed in service after the date of the 
        enactment of this Act.
    (c) Expensing Limitation for Farm Vehicles.--
            (1) In general.--Paragraph (6) of section 179(b) of the 
        Internal Revenue Code of 1986 (relating to limitations) is 
        amended to read as follows:
            ``(6) Limitation on cost taken into account for farm 
        vehicles.--The cost of any vehicle described in section 
        280F(d)(5)(B)(iii) for any taxable year which may be taken into 
        account under this section shall not exceed $30,000.''.
            (2) Effective date.--The amendment made by this subsection 
        shall apply to property placed in service after the date of the 
        enactment of this Act.
                                 <all>