[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1945 Introduced in House (IH)]







110th CONGRESS
  1st Session
                                H. R. 1945

         To improve the energy efficiency of the United States.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             April 19, 2007

Mr. Shays (for himself and Mr. Hinchey) introduced the following bill; 
  which was referred to the Committee on Energy and Commerce, and in 
   addition to the Committees on Ways and Means, Natural Resources, 
 Transportation and Infrastructure, and Science and Technology, for a 
 period to be subsequently determined by the Speaker, in each case for 
consideration of such provisions as fall within the jurisdiction of the 
                          committee concerned

_______________________________________________________________________

                                 A BILL


 
         To improve the energy efficiency of the United States.

    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 For Our 
Future Act''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
                           TITLE I--SAVE OIL

Sec. 101. Help consumers buy more fuel efficient cars.
Sec. 102. Energy efficient motor vehicles manufacturing credit.
Sec. 103. Transit-oriented development corridors.
Sec. 104. Automobile Fuel Economy Standards.
Sec. 105. Inclusion of sports utility vehicles in limitation on 
                            depreciation of certain luxury automobiles.
Sec. 106. Fuel efficiency standards for replacement tires.
Sec. 107. Heavy duty vehicle fuel economy requirements.
                TITLE II--REDUCE HEAT AND ELECTRIC BILLS

                      Subtitle A--General Programs

Sec. 201. Weatherization assistance.
Sec. 202. Energy Star programs.
Sec. 203. Renewable electricity production credit.
Sec. 204. Efficiency resource standard.
Sec. 205. Federal renewable portfolio standard.
Sec. 206. Net metering.
                Subtitle B--Energy Efficiency Incentive

Sec. 211. Performance based energy improvements for non-business 
                            property.
Sec. 212. Extension and modification of credit for nonbusiness energy 
                            property.
Sec. 213. Extension and clarification of new energy efficient home 
                            credit.
Sec. 214. Extension and modification of deduction for energy efficient 
                            commercial buildings.
Sec. 215. Deduction for energy efficient low-rise buildings.
Sec. 216. Energy efficient property deduction.
Sec. 217. Credit for energy savings certifications.
                    TITLE III--SAVE TAX PAYERS MONEY

Sec. 301. Repeal of certain provisions of the Energy Policy Act of 
                            2005.
Sec. 302. Repeal of certain tax provisions of the Energy Policy Act of 
                            2005.
                  TITLE IV--STATE AND LOCAL AUTHORITY

Sec. 401. State consumer product energy efficiency standards.
Sec. 402. Appeals from consistency determinations under Coastal Zone 
                            Management Act of 1972.
Sec. 403. Siting of interstate electric transmission facilities.
Sec. 404. New natural gas storage facilities.
Sec. 405. Process coordination; hearings; rules of procedure.
Sec. 406. Repeal of preemption of State law relating to automobile fuel 
                            economy standards.
           TITLE V--RENEWABLE ENERGY RESEARCH AND DEVELOPMENT

Sec. 501. Advanced biofuel technologies.
Sec. 502. Advanced hydrogen storage technologies.
Sec. 503. Advanced solar photovoltaic technologies.
Sec. 504. Advanced wind energy technologies.
Sec. 505. Continuing programs.
Sec. 506. Plug-in hybrid electric vehicle technology program.
Sec. 507. Photovoltaic demonstration program.

                           TITLE I--SAVE OIL

SEC. 101. HELP CONSUMERS BUY MORE FUEL EFFICIENT CARS.

    (a) Repeal of Limit on Number of Cars Eligible for Credit.--Section 
30B of the Internal Revenue Code of 1986 (relating to alternative motor 
vehicle credit) is amended by striking subsection (f).
    (b) Emissions Standards.--Clause (iv) of section 30B(c)(3)(A) of 
such Code is amended to read as follows:
                            ``(iv) for 2004 and later model vehicles, 
                        has received a certificate that such vehicle 
                        meets or exceeds the Bin 5 Tier II emission 
                        standard established in regulations prescribed 
                        by the Administrator of the Environmental 
                        Protection Agency under section 202(i) of the 
                        Clean Air Act for that make and model year 
                        vehicle,''.
    (c) Effective Date.--The amendments made by this section shall take 
effect as if included in the amendments made by section 1341(a) of the 
Energy Tax Incentives Act of 2005.

SEC. 102. ENERGY EFFICIENT 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. ENERGY EFFICIENT MOTOR VEHICLES MANUFACTURING CREDIT.

    ``(a) Credit Allowed.--In the case of an eligible taxpayer, subject 
to a credit allocation under subsection (e) to such eligible taxpayer, 
there shall be allowed as a credit against the tax imposed by this 
chapter for the taxable year to an amount equal to the sum of--
            ``(1) the initial investment credit determined under 
        subsection (b) for the taxable year,
            ``(2) the fuel economy achievement credit determined under 
        subsection (c) for such taxable year, and
            ``(3) the eligible components R&D credit determined under 
        subsection (d) for such taxable year.
    ``(b) Initial Investment Credit.--For purposes of this section, the 
initial investment credit is equal to 20 percent of the qualified 
investment of an eligible taxpayer with respect to energy efficient 
motor vehicles during the taxable year beginning in 2008.
    ``(c) Fuel Economy Achievement Credit.--For purposes of this 
section--
            ``(1) In general.--In the case of an eligible taxpayer who 
        meets the requirements of paragraph (2) for a model year ending 
        in a taxable year specified in the table contained in paragraph 
        (3), the fuel economy achievement credit for such taxable year 
        is equal to 30 percent of the sum of--
                    ``(A) at the election of the eligible taxpayer, 
                such qualified investment for any preceding taxable 
                year beginning after 2007 if such taxable year has not 
                previously been taken into account under this 
                subsection by such taxpayer, plus
                    ``(B) at the election of the eligible taxpayer, the 
                qualified investment with respect to energy efficient 
                motor vehicles of the eligible taxpayer for the taxable 
                year beginning in 2017.
            ``(2) Demonstrated combined fleet economy improvements.--
        The requirements of this paragraph are met for any model year 
        ending in a taxable year if the eligible taxpayer can 
        demonstrate to the satisfaction of the Secretary that the 
        percentage by which the taxpayer's overall combined fuel 
        economy standard for the taxpayer's vehicle fleet for such 
        model year exceeds such standard for such taxpayer's 2007 model 
        year as reported to the National Highway Traffic Safety 
        Administration under section 32907 of title 49, United States 
        Code, is not less than the percentage determined for such model 
        year under paragraph (3).
            ``(3) Percentage increase.--The percentage determined under 
        this paragraph for any taxable year is equal to--

``Model year ending in                                       Percentage
  taxable year                                                 increase
        2010...................................................      5 
        2011...................................................     10 
        2012...................................................     15 
        2013...................................................     20 
        2014...................................................   27.5 
        2015...................................................     35 
        2016...................................................   42.5 
        2017...................................................     50.
    ``(d) Eligible Components R&D Credit.--For purposes of this 
section, the eligible R&D credit for any taxable year is equal to 30 
percent of the research and development costs paid or incurred by an 
eligible taxpayer for such taxable year with respect to eligible 
components used or to be used in the manufacture of energy efficient 
motor vehicles.
    ``(e) Limitation.--
            ``(1) Initial investment credit and fuel economy 
        achievement credit.--Subject to paragraph (2), the aggregate 
        amount of initial investment credits and fuel economy 
        achievement credits allowed under subsection (a) for any 
        taxable year beginning in a calendar year after 2007 shall be 
        allocated by the Secretary among all eligible taxpayers--
                    ``(A) based on each eligible taxpayer's percentage 
                of the total qualified investment of all such 
                taxpayers, and
                    ``(B) such that such aggregate amount does not 
                exceed--
                            ``(i) $1,000,000,000, plus
                            ``(ii) any amount of credit unallocated 
                        during any preceding calendar year.
            ``(2) Eligible components r&d credit.--Of the dollar amount 
        available for allocation under paragraph (1) for any taxable 
        year, 10 percent of such amount shall be allocated in the same 
        manner by the Secretary among all eligible taxpayers with 
        respect to the eligible components R&D credit.
    ``(f) Qualified Investment.--For purposes of this section--
            ``(1) In general.--The qualified investment for any taxable 
        year is equal to the incremental costs incurred during such 
        taxable year--
                    ``(A) to re-equip or expand any manufacturing 
                facility of the eligible taxpayer to produce energy 
                efficient motor vehicles or to produce eligible 
                components, and
                    ``(B) for engineering integration of such vehicles 
                and components as described in subsection (h).
            ``(2) Attribution rules.--In the event a facility of the 
        eligible taxpayer produces both energy efficient motor vehicles 
        and conventional motor vehicles, or eligible and non-eligible 
        components, only the qualified investment attributable to 
        production of energy efficient motor vehicles and the research 
        and development costs attributable to eligible components shall 
        be taken into account.
    ``(g) Energy Efficient Motor Vehicles and Eligible Components.--For 
purposes of this section--
            ``(1) Energy efficient motor vehicle.--The term `energy 
        efficient motor vehicle' means--
                    ``(A) any new advanced lean burn technology motor 
                vehicle (as defined in section 30B(c)(3) determined 
                without regard to subparagraph (A)(iv)(II) thereof or 
                the weight limitation under subparagraph (A)(iv)(I) 
                thereof),
                    ``(B) any new qualified hybrid motor vehicle (as 
                defined in section 30B(d)(3)(A) determined without 
                regard to subparagraph (A)(ii)(II) thereof, the weight 
                limitation under subparagraph (A)(ii)(I) thereof, and 
                subparagraph (A)(iv) thereof), or
                    ``(C) any other new technology motor vehicle 
                identified by the Secretary as offering a substantial 
                increase in fuel economy.
            ``(2) Eligible components.--The term `eligible component' 
        means any component inherent to any energy efficient motor 
        vehicle, including--
                    ``(A) with respect to any gasoline-electric new 
                qualified hybrid motor vehicle--
                            ``(i) electric motor or generator,
                            ``(ii) power split device,
                            ``(iii) power control unit,
                            ``(iv) power controls,
                            ``(v) integrated starter generator, or
                            ``(vi) battery,
                    ``(B) with respect to any new advanced lean burn 
                technology motor vehicle--
                            ``(i) diesel engine,
                            ``(ii) turbocharger,
                            ``(iii) fuel injection system, or
                            ``(iv) after-treatment system, such as a 
                        particle filter or NOx absorber, and
                    ``(C) with respect to any energy efficient motor 
                vehicle, any other component approved by the Secretary.
    ``(h) Engineering Integration Costs.--For purposes of subsection 
(f)(1)(B), costs for engineering integration are costs incurred prior 
to the market introduction of energy efficient vehicles for engineering 
tasks related to--
            ``(1) incorporating eligible components into the design of 
        energy efficient motor vehicles, and
            ``(2) designing new tooling and equipment for production 
        facilities which produce eligible components or energy 
        efficient motor vehicles.
    ``(i) Eligible Taxpayer.--For purposes of this section, the term 
`eligible taxpayer' means, with respect to any taxable year, any 
taxpayer if more than 25 percent of the taxpayer's gross receipts for 
the taxable year is derived from the manufacture of motor vehicles or 
any component parts of such vehicles.
    ``(j) Limitation Based on Amount of Tax.--The credit allowed under 
subsection (a) for the taxable year shall not exceed the excess of--
            ``(1) the sum of--
                    ``(A) the regular tax liability (as defined in 
                section 26(b)) for such taxable year, plus
                    ``(B) the tax imposed by section 55 for such 
                taxable year, over
            ``(2) the sum of the credits allowable under subpart A and 
        sections 27, 30, 30B, and 30C for the taxable year.
    ``(k) 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.
    ``(l) No Double Benefit.--
            ``(1) Coordination with other deductions and credits.--The 
        amount of any deduction or other credit allowable under this 
        chapter for any cost taken into account in determining the 
        amount of the credit under subsection (a) shall be reduced by 
        the amount of such credit attributable to such cost.
            ``(2) Research and development costs.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), any amount described in subsection 
                (d) taken into account in determining the amount of the 
                credit under subsection (a) for any taxable year shall 
                not be taken into account for purposes of determining 
                the credit under section 41 for such taxable year.
                    ``(B) Costs taken into account in determining base 
                period research expenses.--Any amounts described in 
                subsection (d) 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.
    ``(m) Business Carryovers Allowed.--If the credit allowable under 
subsection (a) for a taxable year exceeds the limitation under 
subsection (j) for such taxable year, such excess (to the extent of the 
credit allowable with respect to property subject to the allowance for 
depreciation) shall be allowed as a credit carryback and carryforward 
under rules similar to the rules of section 39.
    ``(n) Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Definitions.--Any term which is used in this section 
        and in chapter 329 of title 49, United States Code, shall have 
        the meaning given such term by such chapter.
            ``(2) Special rules.--Rules similar to the rules of 
        paragraphs (4) and (5) of section 179A(e) and paragraphs (1) 
        and (2) of section 41(f) shall apply.
    ``(o) 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.
    ``(p) Regulations.--The Secretary shall prescribe such regulations 
as necessary to carry out the provisions of this section.
    ``(q) Termination.--This section shall not apply to any qualified 
investment made after December 31, 2017.''.
    (b) Conforming Amendments.--
            (1) 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 new paragraph:
            ``(38) to the extent provided in section 30D(k).''.
            (2) Section 6501(m) of such Code is amended by inserting 
        ``30D(o),'' 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. Energy efficient motor vehicles manufacturing credit.''.
    (c) Effective Date.--The amendments made by this subsection shall 
apply to amounts incurred in taxable years beginning after December 31, 
2007.

SEC. 103. TRANSIT-ORIENTED DEVELOPMENT CORRIDORS.

    (a) Definitions.--In this section, the following definitions apply:
            (1) Definitions from title 49, united states code.--The 
        terms ``capital project'', ``local governmental authority'', 
        ``public transportation'', and ``urbanized area'' have the 
        meanings such terms have under section 5302(a) of title 49, 
        United States Code.
            (2) State.--The term ``State'' means a State of the United 
        States, the District of Columbia, Puerto Rico, the Northern 
        Mariana Islands, Guam, American Samoa, and the United States 
        Virgin Islands.
            (3) Transit-oriented development corridor.--The term 
        ``transit-oriented development corridor'' means rights-of-way 
        for fixed-guideway public transportation facilities, including 
        commercial development that is connected with any such facility 
        physically and functionally.
    (b) In General.--In consultation with State transportation 
departments and metropolitan planning organizations, the Secretary of 
Transportation shall designate, in urbanized areas, at least 20 
transit-oriented development corridors by 2015 and 50 transit-oriented 
development corridors by 2025.
    (c) Transit Grants.--The Secretary of Transportation shall award 
grants to a State or local governmental authority to construct or 
improve transit facilities, bicycle transportation facilities, and 
pedestrian walkways in a transit-oriented development corridor, 
including capital projects.
    (d) Research and Development.--In order to support effective 
deployment of grants and incentives under this section, the Secretary 
of Transportation shall establish a transit-oriented development 
corridors research and development program for the conduct of research 
on best practices and performance criteria for transit-oriented 
development corridors.
    (e) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section $500,000,000 for each of fiscal 
years 2008 through 2019, of which $2,000,000 per fiscal year is 
authorized for the research and development program under subsection 
(d).
    (f) Labor Standards.--The Secretary of Transportation shall not 
provide a grant under this section unless the Secretary receives 
reasonable assurances from a State that laborers and mechanics employed 
by contractors or subcontractors in the performance of construction or 
modernization on the a transit project will be paid wages not less than 
those prevailing on similar construction or modernization in the 
locality as determined by the Secretary of Labor under subchapter IV of 
chapter 31 of title 40, United States Code (known as the Davis-Bacon 
Act).

SEC. 104. AUTOMOBILE FUEL ECONOMY STANDARDS.

    (a) Phased Increases in Fuel Economy Standards.--
            (1) Passenger automobiles.--
                    (A) Minimum standards.--Section 32902(b) of title 
                49, United States Code, is amended to read as follows:
    ``(b) Passenger Automobiles.--Except as otherwise provided under 
this section, the average fuel economy standard for passenger 
automobiles manufactured by a manufacturer in a model year--
            ``(1) after model year 1984 and before model year 2008 
        shall be 25 miles per gallon;
            ``(2) after model year 2007 and before model year 2011 
        shall be 28 miles per gallon;
            ``(3) after model year 2010 and before model year 2014 
        shall be 32 miles per gallon;
            ``(4) after model year 2013 and before model year 2017 
        shall be 36 miles per gallon; and
            ``(5) after model year 2016 shall be 40 miles per 
        gallon.''.
                    (B) Higher standards set by regulation.--Section 
                32902(c) of title 49, United States Code, is amended--
                            (i) by striking paragraph (2); and
                            (ii) in paragraph (1)--
                                    (I) by striking ``(1) Subject to 
                                paragraph (2) of this subsection, the'' 
                                and inserting ``The''; and
                                    (II) by striking ``amending the 
                                standard'' and inserting ``increasing 
                                the standard otherwise applicable''.
    (b) Increased Inclusiveness of Definitions of Automobile and 
Passenger Automobile.--
            (1) Automobile.--
                    (A) In general.--Section 32901(a)(3) of title 49, 
                United States Code, is amended--
                            (i) by striking ``6,000 pounds'' each place 
                        it appears and inserting ``12,000 pounds''; and
                            (ii) in subparagraph (B)--
                                    (I) by striking ``10,000 pounds'' 
                                and inserting ``14,000 pounds''; and
                                    (II) in clause (ii), by striking 
                                ``an average fuel economy standard'' 
                                and all that follows through 
                                ``conservation or''.
                    (B) Special rule.--Section 32908(a)(1) of such 
                title is amended by striking ``8,500 pounds'' and 
                inserting ``14,000 pounds''.
            (2) Passenger automobile.--Section 32901(a)(16) of title 
        49, United States Code, is amended to read as follows:
            ``(16) `passenger automobile' means an automobile having a 
        gross vehicle weight of 10,000 pounds or less that is designed 
        to be used principally for the transportation of persons;''.
            (3) Applicability.--The amendments made by this section 
        shall apply with respect to automobiles manufactured for model 
        years beginning after the date of enactment of this Act.
    (c) Civil Penalties.--
            (1) Increased penalty for violations of fuel economy 
        standards.--Section 32912(b) of title 49, United States Code, 
        is amended--
                    (A) by inserting ``(1)'' before ``Except as 
                provided'';
                    (B) by striking ``$5'' and inserting ``the dollar 
                amount applicable under paragraph (2)'';
                    (C) by redesignating paragraphs (1), (2), and (3) 
                as subparagraphs (A), (B), and (C), respectively; and
                    (D) by adding at the end the following:
            ``(2)(A) The dollar amount referred to in paragraph (1) is 
        $10, as increased from time to time under subparagraph (B);
            ``(B) Effective on October 1 of each year, the dollar 
        amount applicable under subparagraph (A) shall be increased by 
        the percentage (rounded to the nearest \1/10\ of 1 percent) by 
        which the price index for July of such year exceeds the price 
        index for July of the preceding year. The amount calculated 
        under the preceding sentence shall be rounded to the nearest 
        $0.10.
            ``(C) In this paragraph, the term `price index' means the 
        Consumer Price Index for all-urban consumers published monthly 
        by the Department of Labor.''.
            (2) Conforming amendment.--Section 32912(c)(1) of title 49, 
        United States Code, is amended--
                    (A) by striking subparagraph (B); and
                    (B) by redesignating subparagraphs (C) and (D) as 
                subparagraphs (B) and (C), respectively.
            (3) Applicability.--The amendments made by subsection (a) 
        shall apply with respect to automobiles manufactured for model 
        years beginning after the date of enactment of this Act.

SEC. 105. INCLUSION OF SPORTS UTILITY VEHICLES IN LIMITATION ON 
              DEPRECIATION OF CERTAIN LUXURY AUTOMOBILES.

    (a) In General.--Subparagraph (A) of section 280F(d)(5) of the 
Internal Revenue Code of 1986 (defining passenger automobile) is 
amended by striking clause (ii) and all that follows and inserting the 
following new clause:
                            ``(ii) (I) except as provided in subclause 
                        (II) or (III), which is rated at 6,000 pounds 
                        unloaded gross vehicle weight or less,
                            ``(II) in the case of a truck or van, which 
                        is rated at 6,000 pounds gross vehicle weight 
                        or less, or
                            ``(III) in the case of a sports utility 
                        vehicle not described in subclause (I), which 
                        is rated at more than 6,000 pounds but not more 
                        than 14,000 pounds gross vehicle weight.''.
    (b) Definition.--Paragraph (5) of section 280F(d) of such Code is 
amended by adding at the end the following new subparagraph:
                    ``(C) Sports utility vehicles.--The term `sports 
                utility vehicle' does not include any vehicle which--
                            ``(i) does not have the primary load 
                        carrying device or container attached,
                            ``(ii) has a seating capacity of more than 
                        12 individuals,
                            ``(iii) is designed for more than 9 
                        individuals in seating rearward of the driver's 
                        seat,
                            ``(iv) is equipped with an open cargo area, 
                        or a covered box not readily accessible from 
                        the passenger compartment, of at least 72.0 
                        inches in interior length, or
                            ``(v) has an integral enclosure, fully 
                        enclosing the driver compartment and load 
                        carrying device, does not have seating rearward 
                        of the driver's seat, and has no body section 
                        protruding more than 30 inches ahead of the 
                        leading edge of the windshield.''.
    (c) Conforming Amendment.--Section 179(b) of such Code (relating to 
limitations) is amended by striking paragraph (6).
    (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.

SEC. 106. FUEL EFFICIENCY STANDARDS FOR REPLACEMENT TIRES.

    (a) Standards for Tires Manufactured for Interstate Commerce.--
Section 30123 of title 49, United States Code, is amended--
            (1) in subsection (b), by inserting after the first 
        sentence the following: ``The grading system shall include 
        standards for rating the fuel efficiency of tires designed for 
        use on passenger cars and light trucks.''; and
            (2) by adding at the end of the following:
    ``(d) National Tire Fuel Efficiency Program.--(1) The Secretary 
shall develop and carry out a national tire efficiency program for 
tires designed for use on passenger cars and light trucks. The program 
shall include the following:
                    ``(A) Policies and procedures for testing and 
                labeling tires for fuel economy to enable tire buyers 
                to make informed purchasing decisions about the fuel 
                economy of tires.
                    ``(B) Policies and procedures to promote the 
                purchase of energy-efficient replacement tires, 
                including purchase incentives, website listings on the 
                Internet, printed fuel economy guide booklets, and 
                mandatory requirements for tire retailers to provide 
                tire buyers with fuel-efficiency information on tires.
                    ``(C) Minimum fuel economy standards for tires, 
                promulgated by the Secretary.
    ``(2) The minimum fuel economy standards for tires required under 
paragraph (1)(C) shall--
            ``(A) ensure that, in conjunction with the requirements of 
        paragraph (2)(B), the average fuel economy of replacement tires 
        is equal to or better than the average fuel economy of tires 
        sold as original equipment;
            ``(B) secure the maximum technically feasible and cost-
        effective fuel savings;
            ``(C) not adversely affect tire safety;
            ``(D) not adversely affect the average tire life of 
        replacement tires;
            ``(E) incorporate the results from--
                    ``(i) laboratory testing; and
                    ``(ii) to the extent appropriate and available, on-
                road fleet testing programs conducted by manufacturers; 
                and
            ``(F) not adversely affect efforts to manage scrap tires.
    ``(3) The policies, procedures, and standards developed under 
paragraph (1) shall apply to all tire types and models that are covered 
by the Uniform Tire Quality Grading Standards in section 575.104 of 
title 49, Code of Federal Regulations (or any successor regulation).
    ``(4) Not less than every 3 years, the Secretary shall review the 
minimum fuel economy standards in effect for tires under this 
subsection and revise the standards as necessary to ensure compliance 
with requirements under paragraph (2). The Secretary may not reduce the 
average fuel economy standards applicable to replacement tires.
    ``(5) Nothing in this section shall be construed to preempt any 
provisions of State law relating to higher fuel economy standards 
applicable to replacement tires designed for use on passenger cars and 
light trucks. Nothing in this chapter shall apply to--
            ``(A) a tire or group of tires with the same product 
        identification number, plant, and year, for which the volume of 
        tires produced or imported is less than 15,000 annually;
            ``(B) a deep tread, winter-type snow tire, space-saver 
        tire, or temporary use spare tire;
            ``(C) a tire with a normal rim diameter of 12 inches or 
        less;
            ``(D) a motorcycle tire; or
            ``(E) a tire manufactured specifically for use in an off-
        road motorized recreational vehicle.
    ``(6) In this subsection, the term `fuel economy', with respect to 
tires, means the extent to which the tire contribute to the fuel 
economy of the motor vehicles on which the tire are mounted.''.
    (b) Conforming Amendment.--Section 30103(b)(1) of title 49, United 
States Code, is amended by striking ``When'' and inserting ``Except as 
provided in section 30123(d) of this title, when''.
    (c) Implementation.--The Secretary of Transportation shall ensure 
that the national tire fuel efficiency program required under section 
30123(d) of title 49, United States Code (as added by subsection 
(a)(2)), is administered so as to apply the policies, procedures, and 
standards developed under paragraph (2) of such subsection beginning 
not later than March 31, 2008.

SEC. 107. HEAVY DUTY VEHICLE FUEL ECONOMY REQUIREMENTS.

    (a) Fuel Economy Standards for Heavy Duty Trucks.--Part C of 
subtitle VI of title 49, United States Code, is amended by adding after 
chapter 329 the following new chapter:

      ``CHAPTER 330--HEAVY DUTY VEHICLE FUEL ECONOMY REQUIREMENTS

``Sec. 33001. General
            ``(1) Purpose and policy.--The purpose of this chapter is 
        to reduce petroleum consumption by heavy duty motor vehicles to 
        the maximum extent feasible. Therefore it is necessary to 
        prescribe fuel economy requirements for heavy duty motor 
        vehicles.
            ``(2) Definition.--In this chapter, `heavy duty motor 
        vehicle' means a vehicle of greater than 10,000 pounds gross 
        vehicle weight that is driven or drawn by mechanical power and 
        manufactured primarily for use on public streets, roads, and 
        highways, but does not include a vehicle operated only on a 
        rail line.
``Sec. 33002. Requirements
            ``(1) General requirements.--The Secretary of 
        Transportation shall prescribe heavy duty motor vehicle fuel 
        economy requirements, which may be complete vehicle fuel 
        economy standards or some combination of engine fuel economy 
        standards and requirements for other vehicle components and 
        accessories. Such requirements shall be established for as many 
        categories of heavy duty motor vehicle as feasible and at a 
        minimum shall be prescribed for tractor-trailers of 26,000 lbs. 
        or more gross vehicle weight. The requirements shall be 
        practicable, meet the need for heavy duty motor vehicle fuel 
        consumption reduction, and be stated in objective terms.
            ``(2) Testing protocols.--The Administrator of the 
        Environmental Protection Agency shall prescribe test protocols 
        for determining compliance with standards and other 
        requirements prescribed by the Secretary.
            ``(3) Considerations.--When prescribing heavy duty motor 
        vehicle fuel economy standards under paragraph (1), the 
        Secretary shall--
                    ``(A) consider relevant available heavy duty motor 
                vehicle fuel consumption information;
                    ``(B) consider whether a proposed standard is 
                reasonable, practicable, and appropriate for the 
                particular type of heavy duty motor vehicle for which 
                it is prescribed; and
                    ``(C) consider the extent to which the standard 
                will carry out section 33001 of this title.
            ``(4) Cooperation.--The Secretary may advise, assist, and 
        cooperate with departments, agencies, and instrumentalities of 
        the Federal government, States, and other public and private 
        agencies in developing fuel economy standards for heavy duty 
        motor vehicles.
            ``(5) Effective dates of standards.--The Secretary shall 
        specify the effective date and heavy duty model years of a fuel 
        economy standard prescribed under this chapter in the order 
        prescribing the standard.
            ``(6) 5-year plan for testing protocols.--The Secretary 
        shall establish and periodically review and update on a 
        continuing basis a 5-year plan for testing motor vehicle fuel 
        economy requirements prescribed under this chapter. In 
        developing the plan and establishing testing priorities, the 
        Secretary shall consider factors the Secretary considers 
        appropriate, consistent with section 33001 of this title and 
        the Secretary's other duties and powers under this chapter.''.
    (b) Clerical Amendment.--The table of sections of subtitle VI of 
title 49, United States Code, is amended by inserting after the item 
relating to chapter 329, the following new item:

``330. Heavy Duty Vehicle Fuel Economy 
                            Requirements................................
                            ...33001''.

                TITLE II--REDUCE HEAT AND ELECTRIC BILLS

                      Subtitle A--General Programs

SEC. 201. WEATHERIZATION ASSISTANCE.

    Section 422 of the Energy Conservation and Production Act (42 
U.S.C. 6872) is amended--
            (1) by striking ``$500,000,000'' and inserting 
        ``$1,000,000,000'';
            (2) by striking ``$600,000,000'' and inserting 
        ``$1,200,000,000''; and
            (3) by striking ``$700,000,000'' and inserting 
        ``$1,400,000,000''.

SEC. 202. ENERGY STAR PROGRAMS.

    There are authorized to be appropriated for carrying out the Energy 
Star program under section 324A of the Energy Policy and Conservation 
Act--
            (1) to the Administrator of the Environmental Protection 
        Agency $100,000,000 for each fiscal year; and
            (2) to the Secretary of Energy $12,000,000 for each fiscal 
        year.

SEC. 203. RENEWABLE ELECTRICITY PRODUCTION CREDIT.

    (a) Extension.--Section 45(d) of the Internal Revenue Code of 1986 
(relating to qualified facilities) is amended--
            (1) by striking ``January 1, 2009'' each place it appears 
        in paragraphs (1), (2), (3), (5), (6), and (7) and inserting 
        ``January 1, 2014'', and
            (2) by striking ``January 1, 2009 (January 1, 2006, in the 
        case of a facility using solar energy)'' in paragraph (4) and 
        inserting ``January 1, 2014 (January 1, 2012, in the case of a 
        facility using solar energy)''.
    (b) Extension of Credit for Residential Energy Efficient 
Property.--Subsection (g) of section 25D of such Code (relating to 
termination) is amended by striking ``December 31, 2007'' and inserting 
``December 31, 2014''.

SEC. 204. EFFICIENCY RESOURCE STANDARD.

    (a) Amendment.--Title VII of the Public Utility Regulatory Policies 
Act of 1978 is amended by adding the following new section at the end 
thereof:

``SEC. 610. EFFICIENCY RESOURCE STANDARD FOR RETAIL ELECTRICITY AND 
              NATURAL GAS SUPPLIERS.

    ``(a) Resource Standard.--Each retail electricity and natural gas 
supplier shall undertake energy savings measures in each calendar year 
from 2007 through 2011 and thereafter that produce electricity demand 
savings and electricity and natural gas usage savings, as a percentage 
of the supplier's base amount as shown in the following table. These 
targets represent savings realized from measures installed in the 
current year, plus cumulative savings realized from measures installed 
in all previous years. Each retail electricity and natural gas supplier 
subject to this subsection may use any electricity or natural gas 
savings measures available to it to achieve compliance with the 
performance standard established under this section, so long as the 
electricity and natural gas savings achieved by such measures can be 
calculated and verified pursuant to the rules promulgated under 
subsection (b).


------------------------------------------------------------------------
                                                           Reductions in
                                     Reductions in peak     electricity
               Year                  electricity demand     and natural
                                                             gas usage
------------------------------------------------------------------------
2007.............................  0.25%................           0.25%
------------------------------------------------------------------------
2008.............................  0.75%................           0.75%
------------------------------------------------------------------------
2009.............................  1.75%................            1.5%
------------------------------------------------------------------------
2010.............................  2.75%................           2.25%
------------------------------------------------------------------------
2011 and thereafter..............  3.75%................            3.0%
------------------------------------------------------------------------

    ``(b) Determination of Compliance.--The Secretary shall promulgate 
rules not later than one year after the enactment of this section 
regarding the means to be used to calculate and verify compliance with 
the performance standard established under subsection (a). Each retail 
electric and natural gas supplier subject to this section shall 
calculate its compliance with such standard in accordance with such 
rules. The rules shall include each of the following:
            ``(1) Procedures and standards for defining and measuring 
        electricity savings achieved or obtained by electricity and 
        natural gas suppliers (hereinafter in this section referred to 
        as `electricity and natural gas savings') from customer 
        facility end-uses that occur in a calendar year from all 
        measures in place in that year (including measures implemented 
        in previous years that produce electricity and natural gas 
        savings in such calendar year).
            ``(2) Procedures and standards for verification of 
        electricity and natural gas savings reported by the retail 
        electricity and natural gas supplier.
            ``(3) Requirements for the contents and format of a bi-
        annual report from each retail electricity and natural gas 
        supplier demonstrating its compliance with the requirements of 
        subsection (a). The bi-annual report must include sufficient 
        detail regarding the calculation of electricity and natural gas 
        savings to enable the regulatory authority to verify and 
        enforce compliance with the requirements of this section and 
        the regulations under this section.
    ``(c) Credit and Trading System.--(1) After consultation with the 
Administrator of the Environmental Protection Agency, the Secretary 
shall promulgate rules establishing a nationwide credit and credit 
trading system for electricity and natural gas savings. Under such 
rules the Secretary may certify as credits electricity or natural 
savings achieved by a retail electricity or natural gas supplier in a 
given year in excess of the quantity of electricity or natural gas 
savings required that calendar year for such supplier to meet the 
resource standard, as long as such savings comply with the rules 
established under subsection (b). The Secretary shall also certify as 
credits customer energy savings created by retail electric or natural 
gas suppliers or other entities, as long as such savings comply with 
the rules established under subsection (b). An electricity savings 
credit shall equal one kilowatt hour; a natural gas savings credit 
shall constitute one therm.
    ``(2) The Secretary shall not award credits to any retail 
electricity or natural gas supplier subject to State administration and 
enforcement under subsection (d) unless the Secretary has determined 
that such administration and enforcement are at least equivalent to 
administration and enforcement by the Secretary.
    ``(3) An electricity or natural gas savings credit is not a 
property right. Nothing in this or any other provision of law shall be 
construed to limit the authority of the United States to terminate or 
limit such credits.
    ``(4) A retail electric or natural gas supplier may sell such 
credit to any other entity, and other entities may sell such credits to 
retail electric or natural gas suppliers, in accordance with the 
accounting and verification rules established by the Secretary. Such 
credit may be used by a purchasing retail electricity or natural gas 
supplier for purposes of complying with the resource standards set 
forth in subsection (a).
    ``(5) In order to receive an electricity or natural gas savings 
credit, the recipient of an electricity savings credit shall pay a fee, 
calculated by the Secretary, in an amount that is equal to the 
administrative costs of issuing, recording, monitoring the sale or 
exchange of, and tracking the credit or does not exceed five percent of 
the dollar value of the credit, whichever is lower. The Secretary shall 
retain the fee and use it to pay these administrative costs.
    ``(6) A credit may be counted toward compliance with subsection (a) 
only once. A retail electricity or natural gas supplier may satisfy the 
requirements of subsection (a) through the accumulation of--
            ``(A) electricity or natural gas savings credits obtained 
        by purchase or exchange under paragraph (7);
            ``(B) electricity or natural gas savings credits borrowed 
        against future years under paragraph (8); or
            ``(C) any combination of credits under subparagraphs (A) 
        and (B).
    ``(7) An electricity or natural gas savings credit may be sold or 
exchanged by the entity to whom issued or by any other entity that 
acquires the credit. An energy efficiency credit for any year that is 
not used to satisfy the minimum energy savings requirement of 
subsection (a) for that year may be carried forward for use within the 
next 4 years.
    ``(8) During the first year covered by the standards, a retail 
electricity or natural gas supplier that has reason to believe that it 
will not have sufficient electricity savings credits to comply with 
subsection (a) may--
            ``(A) submit a plan to the Secretary demonstrating that the 
        retail electricity or natural gas supplier will earn sufficient 
        credits within the next two calendar years which, when taken 
        into account, will enable the retail electricity or natural gas 
        supplier to meet the requirements of subsection (a) for the 
        calendar year involved; and
            ``(B) upon the approval of the plan by the Secretary, apply 
        credits that the plan demonstrates will be earned within the 
        next two calendar years to meet the requirements of subsection 
        (a) for the calendar year involved.
    ``(9) Any retail electricity or natural gas supplier may elect to 
comply with the requirements of this section in any calendar year by 
paying a fee of 3 cents per kilowatt hour, and 30 cents per therm, for 
any portion of the electricity or natural gas savings it would be 
obligated to achieve in that year by not later than March 31 of the 
following year. Funds produced from such fees shall be deposited in an 
escrow account established by the Secretary, and shall be distributed 
to the States for their use in creating electricity or natural gas 
savings at customer facilities.
    ``(d) Enforcement of Compliance.--(1) If the State regulatory 
authority with ratemaking jurisdiction over a State-regulated retail 
electricity or natural gas supplier notifies the Secretary that it will 
enforce compliance by such supplier with the performance standards 
under subsection (a) of this section, such State regulatory authority 
shall have the authority to administer and enforce such standards for 
such supplier under State law. If the State regulatory authority does 
not so notify the Secretary, the Secretary shall exercise such 
authority until receiving such notice from the State regulatory 
authority.
    ``(2) Not later than July 1 of the calendar years 2008, 2010, 2012, 
2014, and 2016, each retail electricity and natural gas supplier shall 
submit the compliance report required under subsection (b) to--
            ``(A) the appropriate State regulatory authority, if such 
        authority has notified the Secretary under subsection (d), or
            ``(B) the Secretary to determine and enforce compliance 
        with the standards.
    ``(3) In the case of any retail electricity or natural gas supplier 
for which the Secretary is enforcing compliance with the standards 
under this section, if such supplier fails to comply with such 
standards for two consecutive calendar years, the Secretary shall 
determine the number of kilowatt hours of electricity savings, or 
therms of natural gas savings, by which the supplier has fallen short 
of the standards, and, by order, require such supplier, after notice 
and opportunity for hearing, to deposit in an escrow account to be 
designated by the Secretary an amount equal to 3.5 cents per kilowatt 
hour for each such kilowatt hour, and 35 cents per therm for each such 
therm. The holder of such escrow account shall annually distribute the 
total amount of such account to the States to be used by the States for 
the purpose of achieving customer electricity and natural gas savings. 
Any retail electricity or natural gas supplier required to make such a 
payment may, within 60 calendar days after the issuance of such order, 
bring an action in the United States Court of Appeals for the District 
of Columbia for judicial review of such order. Such court shall have 
jurisdiction to enter a judgment affirming, modifying, or setting aside 
such order or remanding such order in whole or in part to the 
Secretary.
    ``(e) Information Collection.--The Secretary may collect the 
information necessary to verify and audit--
            ``(1) the annual electric energy sales, natural gas sales, 
        electricity savings, and natural gas savings of any entity 
        applying for electricity or natural gas savings credits under 
        this section,
            ``(2) the validity of electricity or natural gas savings 
        credits submitted by a retail electricity or natural gas 
        supplier to the Secretary, and
            ``(3) the quantity of electricity and natural gas sales of 
        all retail electricity and natural gas suppliers.
    ``(f) State Law.--Nothing in this section shall supersede or 
otherwise affect any State or local law requiring or otherwise relating 
to reductions in total annual electricity or natural gas energy 
consumption by or peak power consumption by electric consumers to the 
extent that such State or local law requires more stringent reductions 
than those required under this section. Any retail electricity or 
natural gas supplier that achieves reductions referred to in this 
section in accordance with State requirements shall be entitled to full 
credit under this section for such reductions to the extent that such 
reductions meet the requirements of this section and the regulations 
under this section (including verification and monitoring 
requirements).
    ``(g) Definitions.--For purposes of this section:
            ``(1) The term `retail electricity or natural supplier' 
        means a person that sells electric energy or natural gas to 
        consumers and sold not less than 1,000,000 megawatt-hours of 
        electric energy or 20,000,000 therms of natural gas to 
        consumers for purposes other than resale during the preceding 
        calendar year; except that such term does not include the 
        United States, a State or any political subdivision of a State, 
        or any agency, authority, or instrumentality of any one or more 
        of the foregoing, or a rural electric cooperative.
            ``(2) The term `retail electricity or natural gas 
        supplier's base amount' means the total amount of electric 
        energy or natural gas sold by the retail electricity or natural 
        gas supplier to customers during the most recent calendar year 
        for which information is available.
            ``(3) The term `electricity savings' means reductions in 
        end-use electricity consumption in customer facilities relative 
        to consumption at those same facilities in a base year as 
        defined in rules issued by the Secretary, or in the case of new 
        facilities, relative to reference facilities defined in rules 
        issued by the Secretary, or distributed generation efficiency 
        measures, including fuel cells and combined heat and power 
        (CHP) technologies, that provide electricity only for onsite 
        customer use.
            ``(4) The term `natural gas savings' means reductions in 
        end-use natural gas consumption in customer facilities relative 
        to consumption at those same facilities in a base year as 
        defined in rules issued by the Secretary, or in the case of new 
        facilities, relative to reference facilities defined in rules 
        issued by the Secretary.''.
    (b) Table of Contents.--The table of contents for title VII of the 
Public Utility Regulatory Policies Act of 1978 is amended by adding the 
following new item at the end thereof:

``Sec. 610. Efficiency resource standard for retail electricity and 
                            natural gas suppliers.''.

SEC. 205. FEDERAL RENEWABLE PORTFOLIO STANDARD.

    (a) In General.--Title VI of the Public Utility Regulatory Policies 
Act of 1978 is amended by adding at the end the following:

``SEC. 611. FEDERAL RENEWABLE PORTFOLIO STANDARD.

    ``(a) Minimum Renewable Generation Requirement.--For each calendar 
year beginning in calendar year 2009, each retail electric supplier 
shall submit to the Secretary, not later than April 1 of the following 
calendar year, renewable energy credits in an amount equal to the 
required annual percentage specified in subsection (b).
    ``(b) Required Annual Percentage.--For calendar years after 2008, 
the required annual percentage of the retail electric supplier's base 
amount that shall be generated from renewable energy resources, or 
otherwise credited towards such percentage requirement pursuant to 
subsection (c), shall be the percentage specified in the following 
table:

                                                        Required annual
``Calendar Years                                             percentage
                2009 through 2010..........................          1 
                2010 through 2011..........................          2 
                2011 through 2012..........................          4 
                2012 through 2013..........................          6 
                2013 through 2015..........................          8 
                2015 through 2016..........................         10 
                2016 through 2017..........................         12 
                2017 through 2018..........................         14 
                2018 through 2019..........................         16 
                2019 through 2020..........................         18 
                2020 and thereafter........................         20.
    ``(c) Submission of Credits.--(1) A retail electric supplier may 
satisfy the requirements of subsection (a) through the submission of 
renewable energy credits--
            ``(A) issued to the retail electric supplier under 
        subsection (d);
            ``(B) obtained by purchase or exchange under subsection 
        (e); or
            ``(C) borrowed under subsection (f).
    ``(2) A renewable energy credit may be counted toward compliance 
with subsection (a) only once.
    ``(d) Issuance of Credits.--(1) The Secretary shall establish by 
rule, not later than 1 year after the date of enactment of this 
section, a program to issue and monitor the sale or exchange of, and 
track, renewable energy credits.
    ``(2) Under the program established by the Secretary, an entity 
that generates electric energy through the use of a renewable energy 
resource may apply to the Secretary for the issuance of renewable 
energy credits. The application shall indicate--
            ``(A) the type of renewable energy resource used to produce 
        the electricity;
            ``(B) the location where the electric energy was produced; 
        and
            ``(C) any other information the Secretary determines 
        appropriate.
    ``(3)(A) Except as provided in subparagraphs (B), (C), and (D), the 
Secretary shall issue to each entity that generates electric energy one 
renewable energy credit for each kilowatt hour of electric energy the 
entity generates from the date of enactment of this section and in each 
subsequent calendar year through the use of a renewable energy resource 
at an eligible facility.
    ``(B) For incremental hydropower the renewable energy credits shall 
be calculated based on the expected increase in average annual 
generation resulting from the efficiency improvements or capacity 
additions. The number of credits shall be calculated using the same 
water flow information used to determine a historic average annual 
generation baseline for the hydroelectric facility and certified by the 
Secretary or the Federal Energy Regulatory Commission. The calculation 
of the renewable energy credits for incremental hydropower shall not be 
based on any operational changes at the hydroelectric facility not 
directly associated with the efficiency improvements or capacity 
additions.
    ``(C) The Secretary shall issue two renewable energy credits for 
each kilowatt hour of electric energy generated and supplied to the 
grid in that calendar year through the use of a renewable energy 
resource at an eligible facility located on Indian land. For purposes 
of this paragraph, renewable energy generated by biomass cofired with 
other fuels is eligible for two credits only if the biomass was grown 
on such land.
    ``(D) For electric energy resources produced from a generation 
offset, the Secretary shall issue two renewable energy credits for each 
kilowatt hour generated.
    ``(E) To be eligible for a renewable energy credit, the unit of 
electric energy generated through the use of a renewable energy 
resource may be sold or may be used by the generator. If both a 
renewable energy resource and a non-renewable energy resource are used 
to generate the electric energy, the Secretary shall issue renewable 
energy credits based on the proportion of the renewable energy 
resources used. The Secretary shall identify renewable energy credits 
by type and date of generation.
    ``(4) When a generator sells electric energy generated through the 
use of a renewable energy resource to a retail electric supplier under 
a contract subject to section 210 of this Act, the retail electric 
supplier is treated as the generator of the electric energy for the 
purposes of this section or the duration of the contract.
    ``(5) The Secretary shall issue renewable energy credits for 
existing facility offsets to be applied against a retail electric 
supplier's required annual percentage. Such credits are not tradeable 
and may be used only in the calendar year generation actually occurs.
    ``(e) Credit Trading.--A renewable energy credit, may be sold or 
exchanged by the entity to whom issued or by any other entity who 
acquires the renewable energy credit. A renewable energy credit for any 
year that is not used to satisfy the minimum renewable generation 
requirement of subsection (a) for that year may be carried forward for 
use within the next 4 years.
    ``(f) Credit Borrowing.--At any time before the end of calendar 
year 2009, a retail electric supplier that has reason to believe it 
will not have sufficient renewable energy credits to comply with 
subsection (a) may--
            ``(1) submit a plan to the Secretary demonstrating that the 
        retail electric supplier will earn sufficient credits within 
        the next 3 calendar years which, when taken into account, will 
        enable the retail electric supplier to meet the requirements of 
        subsection (a) for calendar year 2009 and the subsequent 
        calendar years involved; and
            ``(2) upon the approval of the plan by the Secretary, apply 
        renewable energy credits that the plan demonstrates will be 
        earned within the next 3 calendar years to meet the 
        requirements of subsection (a) for each calendar year involved.
The retail electric supplier must repay all of the borrowed renewable 
energy credits by submitting an equivalent number of renewable energy 
credits, in addition to those otherwise required under subsection (a), 
by calendar year 2010 or any earlier deadlines specified in the 
approved plan. Failure to repay the borrowed renewable energy credits 
shall subject the retail electric supplier to civil penalties under 
subsection (h) for violation of the requirements of subsection (a) for 
each calendar year involved.
    ``(g) Credit Cost Cap.--The Secretary shall offer renewable energy 
credits for sale at the lesser of 3 cents per kilowatt-hour or 200 
percent of the average market value of renewable credits for the 
applicable compliance period. On January 1 of each year following 
calendar year 2008, the Secretary shall adjust for inflation the price 
charged per credit for such calendar year, based on the Gross Domestic 
Product Implicit Price Deflator.
    ``(h) Enforcement.--The Secretary may bring an action in the 
appropriate United States district court to impose a civil penalty on a 
retail electric supplier that does not comply with subsection (a), 
unless the retail electric supplier was unable to comply with 
subsection (a) for reasons outside of the supplier's reasonable control 
(including weather-related damage, mechanical failure, lack of 
transmission capacity or availability, strikes, lockouts, actions of a 
governmental authority). A retail electric supplier who does not submit 
the required number of renewable energy credits under subsection (a) 
shall be subject to a civil penalty of not more than the greater of 3 
cents or 200 percent of the average market value of credits for the 
compliance period for each renewable energy credit not submitted..
    ``(i) Information Collection.--The Secretary may collect the 
information necessary to verify and audit--
            ``(1) the annual electric energy generation and renewable 
        energy generation of any entity applying for renewable energy 
        credits under this section;
            ``(2) the validity of renewable energy credits submitted by 
        a retail electric supplier to the Secretary; and
            ``(3) the quantity of electricity sales of all retail 
        electric suppliers.
    ``(j) Environmental Savings Clause.--Incremental hydropower shall 
be subject to all applicable environmental laws and licensing and 
regulatory requirements.
    ``(k) Existing Programs.--This section does not preclude a State 
from imposing additional renewable energy requirements in that State, 
including specifying eligible technologies under such State 
requirements.
    ``(l) Definitions.--For purposes of this section:
            ``(1) Biomass.--The term `biomass' means any organic 
        material that is available on a renewable or recurring basis, 
        including dedicated energy crops, trees grown for energy 
        production, wood waste and wood residues, plants (including 
        aquatic plants, grasses, and agricultural crops), residues, 
        fibers, animal wastes and other organic waste materials (but 
        not including unsegregated municipal solid waste (garbage)), 
        and fats and oils, except that with respect to material removed 
        from National Forest System lands the term includes only 
        organic material from--
                    ``(A) thinnings from trees that are less than 12 
                inches in diameter;
                    ``(B) slash;
                    ``(C) brush; and
                    ``(D) mill residues.
            ``(2) Eligible facility.--The term `eligible facility' 
        means--
                    ``(A) a facility for the generation of electric 
                energy from a renewable energy resource that is placed 
                in service on or after the date of enactment of this 
                section; or
                    ``(B) a repowering or cofiring increment that is 
                placed in service on or after the date of enactment of 
                this section at a facility for the generation of 
                electric energy from a renewable energy resource that 
                was placed in service before that date.
            ``(3) Eligible renewable energy resource.--The term 
        `renewable energy resource' means solar, wind, ocean, or 
        geothermal energy, biomass (excluding solid waste and paper 
        that is commonly recycled), landfill gas, a generation offset, 
        or incremental hydropower.
            ``(4) Generation offset.--The term `generation offset' 
        means reduced electricity usage metered at a site where a 
        customer consumes energy from a renewable energy technology.
            ``(5) Existing facility offset.--The term `existing 
        facility offset' means renewable energy generated from an 
        existing facility, not classified as an eligible facility, that 
        is owned or under contract, directly or indirectly, to a retail 
        electric supplier on the date of enactment of this section.
            ``(6) Incremental hydropower.--The term `incremental 
        hydropower' means additional generation that is achieved from 
        increased efficiency or additions of capacity on or after the 
        date of enactment of this section or the effective date of the 
        applicable State renewable portfolio standard program, at a 
        hydroelectric facility that was placed in service before that 
        date.
            ``(7) Indian land.--The term `Indian land' means--
                    ``(A) any land within the limits of any Indian 
                reservation, pueblo, or rancheria;
                    ``(B) any land not within the limits of any Indian 
                reservation, pueblo, or rancheria title to which was on 
                the date of enactment of this paragraph either held by 
                the United States for the benefit of any Indian tribe 
                or individual or held by any Indian tribe or individual 
                subject to restriction by the United States against 
                alienation;
                    ``(C) any dependent Indian community; and
                    ``(D) any land conveyed to any Alaska Native 
                corporation under the Alaska Native Claims Settlement 
                Act.
            ``(8) Indian tribe.--The term `Indian tribe' means any 
        Indian tribe, band, nation, or other organized group or 
        community, including any Alaskan Native village or regional or 
        village corporation as defined in or established pursuant to 
        the Alaska Native Claims Settlement Act (43 U.S.C. 1601 et 
        seq.), which is recognized as eligible for the special programs 
        and services provided by the United States to Indians because 
        of their status as Indians.
            ``(9) Renewable energy.--The term `renewable energy' means 
        electric energy generated by a renewable energy resource.
            ``(10) Renewable energy resource.--The term `renewable 
        energy resource' means solar, wind, ocean, geothermal energy, 
        biomass (not including municipal solid waste), landfill gas, a 
        generation offset, or incremental hydropower.
            ``(11) Repowering or cofiring increment.--The term 
        `repowering or cofiring increment' means--
                    ``(A) the additional generation from a modification 
                that is placed in service on or after the date of 
                enactment of this section to expand electricity 
                production at a facility used to generate electric 
                energy from a renewable energy resource or to cofire 
                biomass that was placed in service before the date of 
                enactment of this section, or
                    ``(B) the additional generation above the average 
                generation in the 3 years preceding the date of 
                enactment of this section to expand electricity 
                production at a facility used to generate electric 
                energy from a renewable energy resource or to cofire 
                biomass that was placed in service before the date of 
                enactment of this section.
            ``(12) Retail electric supplier.--The term `retail electric 
        supplier' means a person that sells electric energy to electric 
        consumers and sold not less than 1,000,000 megawatt-hours of 
        electric energy to electric consumers for purposes other than 
        resale during the preceding calendar year; except that such 
        term does not include the United States, a State or any 
        political subdivision of a State, or any agency, authority, or 
        instrumentality of any one or more of the foregoing.
            ``(13) Retail electric supplier's base amount.--The term 
        `retail electric supplier's base amount' means the total amount 
        of electric energy sold by the retail electric supplier to 
        electric customers during the most recent calendar year for 
        which information is available, excluding electric energy 
        generated by--
                    ``(A) an eligible renewable energy resource; or
                    ``(B) a hydroelectric facility.
    ``(m) Sunset.--This section expires December 31, 2030.''.
    (b) Table of Contents.--The table of contents for such title is 
amended by adding the following new item at the end:

``Sec. 611. Federal renewable portfolio standard.''.

SEC. 206. NET METERING.

    (a) Adoption of Standard.--Section 111(d)(11) of the Public Utility 
Regulatory Policies Act of 1978 (16 U.S.C. 2621(d)) is amended to read 
as follows:
            ``(11) Net metering.--(A) Each electric utility shall make 
        available upon request net metering service to any electric 
        consumer that the electric utility serves.
            ``(B) For purposes of implementing this paragraph, any 
        reference contained in this section to the date of enactment of 
        the Public Utility Regulatory Policies Act of 1978 shall be 
        deemed to be a reference to the date of enactment of this 
        paragraph.
            ``(C) Notwithstanding subsections (b) and (c) of section 
        112, each State regulatory authority may consider and make a 
        determination concerning whether it is appropriate in the 
        public interest to not implement the standard set out in 
        subparagraph (A) not later than 1 year after the date of 
        enactment of this paragraph.
            ``(D) Nothing in this section shall preclude a State from 
        establishing additional incentives or to encourage on-site 
        generating facilities and net metering in addition to that 
        required under this section.
            ``(E) The Department shall report within 11 months of 
        enactment and annually thereafter on the public benefit 
        provided by adoption of net metering and interconnection 
        standards, and the status of state adoption of such.''.
    (b) Special Rules for Net Metering.--Section 115 of the Public 
Utility Regulatory Policies Act of 1978 (16 U.S.C. 2625) is amended by 
adding at the end the following:
    ``(i) Net Metering.--In undertaking the consideration and making 
the determination under section 111 with respect to the standard 
concerning net metering established by section 111(d)(11), the term net 
metering service shall mean a service provided in accordance with the 
following standards:
            ``(1) An electric utility--
                    ``(A) shall charge the owner or operator of an on-
                site generating facility rates and charges that are 
                identical to those that would be charged other electric 
                consumers of the electric utility in the same rate 
                class; and
                    ``(B) shall not charge the owner or operator of an 
                on-site generating facility any additional standby, 
                capacity, interconnection, or other rate or charge.
            ``(2) An electric utility that sells electric energy to the 
        owner or operator of an on-site generating facility shall 
        measure the quantity of electric energy produced by the on-site 
        facility and the quantity of electric energy consumed by the 
        owner or operator of an on-site generating facility during a 
        billing period with a single bi-directional meter or otherwise 
        in accordance with reasonable metering practices.
            ``(3) If the quantity of electric energy sold by the 
        electric utility to an on-site generating facility exceeds the 
        quantity of electric energy supplied by the on-site generating 
        facility to the electric utility during the billing period, the 
        electric utility may bill the owner or operator for the net 
        quantity of electric energy sold, in accordance with reasonable 
        metering practices.
            ``(4) If the quantity of electric energy supplied by the 
        on-site generating facility to the electric utility exceeds the 
        quantity of electric energy sold by the electric utility to the 
        on-site generating facility during the billing period--
                    ``(A) the electric utility may bill the owner or 
                operator of the on-site generating facility for the 
                appropriate charges for the billing period in 
                accordance with paragraph; and
                    ``(B) the owner or operator of the on-site 
                generating facility shall be credited for the excess 
                kilowatt-hours generated during the billing period, 
                with the kilowatt-hour credit appearing on the bill for 
                the following billing period.
            ``(5) An eligible on-site generating facility and net 
        metering system used by an electric consumer shall meet all 
        applicable safety, performance, reliability, and 
        interconnection standards established by the National 
        Electrical Code, the Institute of Electrical and Electronics 
        Engineers, and Underwriters Laboratories.
            ``(6) The Commission, after consultation with State 
        regulatory authorities and unregulated electric utilities and 
        after notice and opportunity for comment, may adopt, by rule, 
        additional control and testing and interconnection requirements 
        for on-site generating facilities and net metering systems that 
        the Commission determines are necessary to protect public 
        safety and system reliability.
            ``(7) For purposes of this subsection:
                    ``(A) The term `eligible on-site generating 
                facility' means a facility on the site of a residential 
                electric consumer with a maximum generating capacity of 
                10 kilowatts or less that is fueled by solar energy, 
                wind energy, or fuel cells; or a facility on the site 
                of a commercial electric consumer with a maximum 
                generating capacity of 500 1000 kilowatts or less that 
                is fueled solely by a renewable energy resource, 
                landfill gas, or a high efficiency system.
                    ``(B) The term `renewable energy resource' means 
                solar, wind, biomass, micro-freeflow hydro, or 
                geothermal energy.
                    ``(C) The term `high efficiency system' means fuel 
                cells or combined heat and power.
                    ``(D) The term `net metering service' means service 
                to an electric consumer under which electric energy 
                generated by that electric consumer from an eligible 
                on-site generating facility and delivered to the local 
                distribution facilities may be used to offset electric 
                energy provided by the electric utility to the electric 
                consumer during the applicable billing period.''.

                Subtitle B--Energy Efficiency Incentive

SEC. 211. PERFORMANCE BASED ENERGY IMPROVEMENTS FOR NON-BUSINESS 
              PROPERTY.

    (a) In General.--Subpart A of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by inserting after 
section 25D the following new section:

``SEC. 25E. PERFORMANCE BASED ENERGY IMPROVEMENTS.

    ``(a) In General.--In the case of an individual, there shall be 
allowed as a credit against the tax imposed by this chapter for the 
taxable year an amount equal to the amount of qualified energy 
efficiency expenditures paid or incurred by the taxpayer during the 
taxable year.
    ``(b) Limitations.--
            ``(1) In general.--The amount allowed as a credit under 
        subsection (a) shall not exceed the product of--
                    ``(A) the qualified energy savings achieved, and
                    ``(B) $4,000.
            ``(2) Minimum amount of qualified energy savings.--No 
        credit shall be allowed under subsection (a) with respect to 
        any principal residence which achieves a qualified energy 
        savings of less than 20 percent.
            ``(3) Limitation based on amount of tax.--In the case of 
        taxable years to which section 26(a)(2) does not apply, the 
        credit allowed under subsection (a) for any taxable year shall 
        not exceed the excess of--
                    ``(A) the sum of the regular tax liability (as 
                defined in section 26(b)) plus the tax imposed by 
                section 55, over
                    ``(B) the sum of the credit allowable under this 
                subpart (other than this section and sections 23, 24, 
                and 25B) and section 27 for the taxable year.
    ``(c) Qualified Energy Efficiency Expenditures.--For purposes of 
this section:
            ``(1) In general.--The term `qualified energy efficiency 
        expenditures' means any amount paid or incurred which is 
        related to producing qualified energy savings in a principal 
        residence of the taxpayer which is located in the United 
        States.
            ``(2) No double benefit for certain expenditures.--The term 
        `qualified energy efficiency expenditures' shall not include 
        any expenditure for which a deduction or credit is otherwise 
        allowed to the taxpayer under this chapter.
            ``(3) Principal residence.--The term `principal residence' 
        has the same meaning as when used in section 121, except that--
                    ``(A) no ownership requirement shall be imposed, 
                and
                    ``(B) the period for which a building is treated as 
                used as a principal residence shall also include the 
                60-day period ending on the 1st day on which it would 
                (but for this subparagraph) first be treated as used as 
                a principal residence.
    ``(d) Qualified Energy Savings.--For purposes of this section--
            ``(1) In general.--The term `qualified energy savings' 
        means, with respect to any principal residence, the amount 
        (measured as a percentage) by which--
                    ``(A) the annual energy use with respect to the 
                principal residence after qualified energy efficiency 
                expenditures are made, as certified under paragraph 
                (2), is less than
                    ``(B) the annual energy use with respect to the 
                principal residence before the qualified energy 
                efficiency expenditures were made, as certified under 
                paragraph (2).
        In determining annual energy use under subparagraph (B), any 
        energy efficiency improvements which are not attributable to 
        qualified energy efficiency expenditures shall be disregarded.
            ``(2) Certification.--
                    ``(A) In general.--The Secretary, in consultation 
                with the Secretary of Energy, shall prescribe the 
                procedures and methods for the making of certifications 
                under this paragraph based on the Residential Energy 
                Services Network (RESNET) Technical Guidelines in 
                effect on the date of the enactment of this section.
                    ``(B) Qualified individuals.--Any certification 
                made under this paragraph may only be made by an 
                individual who is recognized by an organization 
                certified by the Secretary for such purposes.
    ``(e) Special Rules.--For purposes of this section rules similar to 
the rules under paragraphs (4), (5), (6), (7), (8), and (9) of section 
25D(e) and section 25C(e)(2) shall apply.
    ``(f) Basis Adjustments.--For purposes of this subtitle, if a 
credit is allowed under this section with respect to any expenditure 
with respect to any property, the increase in the basis of such 
property which would (but for this subsection) result from such 
expenditure shall be reduced by the amount of the credit so allowed.
    ``(g) Termination.--This section shall not apply with respect to 
any property placed in service after December 31, 2011.''.
    (b) Interim Guidance on Certification.--
            (1) In general.--Not later than 90 days after the date of 
        the enactment of this Act, the Secretary of the Treasury, in 
        consultation with the Secretary of Energy, shall issue interim 
        guidance on--
                    (A) the procedures and methods for making 
                certifications under sections 25E(d)(2)(A) and 
                179F(d)(2)(A) of the Internal Revenue Code of 1986, as 
                added by subsection (a) and section 203, respectively;
                    (B) the recognition of qualified individuals under 
                sections 25E(d)(2)(B) and 179F(d)(2)(B) of such Code 
                for the purpose of making such certifications; and
                    (C) how participation in State energy efficiency 
                programs can be used in the procedures and methods 
                described in subparagraph (A).
            (2) Consultation with stakeholders.--
                    (A) In general.--The Secretary of the Treasury, in 
                issuing guidance pursuant to paragraph (1), shall 
                consider comments from energy efficiency experts and 
                other interested parties.
                    (B) Other considerations.--In the case of guidance 
                issued pursuant to paragraph (1)(B), the Secretary of 
                the Treasury shall also consider--
                            (i) the Residential Energy Services Network 
                        Technical Guidelines and other pertinent 
                        guidelines for evaluating energy savings;
                            (ii) energy modeling software, including 
                        software accredited through the Residential 
                        Energy Services Network; and
                            (iii) quality assurance procedures of the 
                        Building Performance Institute, Home 
                        Performance through Energy Star, and the 
                        Residential Energy Services Network.
    (c) Alternative Certification Methods.--
            (1) In general.--The Secretary of the Treasury shall 
        establish a procedure for individuals and businesses to 
        petition for the approval of alternative methods of 
        certification under sections 25E(d)(2)(A) and 179F(d)(2)(A) of 
        the Internal Revenue Code of 1986, as added by subsection (a) 
        and section 203, respectively.
            (2) Determination.--The Secretary of the Treasury shall 
        make a determination on the approval or disapproval of such 
        alternative methods of certification not later than 90 days 
        after receiving a petition under paragraph (1).
    (d) Conforming Amendments.--
            (1) Section 1016(a) is amended by striking ``and'' at the 
        end of paragraph (36), by striking the period at the end of 
        paragraph (37) and inserting ``, and'', and by adding at the 
        end the following new paragraph:
            ``(38) to the extent provided in section 25E(f).''.
            (2) The table of sections for subpart A of part IV of 
        subchapter A chapter 1 is amended by inserting after the item 
        relating to section 25D the following new item:

``Sec. 25E. Performance based energy improvements.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to amounts paid or incurred in taxable years beginning after the 
date of the enactment of this Act.

SEC. 212. EXTENSION AND MODIFICATION OF CREDIT FOR NONBUSINESS ENERGY 
              PROPERTY.

    (a) Extension.--Subsection (g) of section 25C (relating to 
termination) is amended by striking ``December 31, 2007'' and inserting 
``December 31, 2011''.
    (b) Labor Costs for Qualified Energy Efficiency Improvements.--
Section 25C(c)(1) is amended by adding at the end the following new 
flush sentence:
        ``The amount taken into account under subsection (a)(1) with 
        respect to qualified energy efficiency improvements shall 
        include expenditures for labor costs properly allocable to the 
        onsite preparation, assembly, or original installation of any 
        component described in this paragraph.''.
    (c) Modifications for Residential Energy Efficiency Property 
Expenditures.--
            (1) Increased limitation for oil furnaces and natural gas, 
        propane, and oil hot water boilers.--
                    (A) In general.--Subparagraphs (B) and (C) of 
                section 25C(b)(3) are amended to read as follows:
                    ``(B) $150 for any qualified natural gas furnace or 
                qualified propane furnace, and
                    ``(C) $300 for--
                            ``(i) any item of energy-efficient building 
                        property, and
                            ``(ii) any qualified oil furnace, qualified 
                        natural gas hot water boiler, qualified propane 
                        hot water boiler, or qualified oil hot water 
                        boiler.''.
                    (B) Conforming amendment.--Clause (ii) of section 
                25C(d)(2)(A) is amended to read as follows:
                            ``(ii) any qualified natural gas furnace, 
                        qualified propane furnace, qualified oil 
                        furnace, qualified natural gas hot water 
                        boiler, qualified propane hot water boiler, or 
                        qualified oil hot water boiler, or''.
            (2) Modifications of standards for energy-efficient 
        building property.--
                    (A) Electric heat pumps.--Subparagraph (B) of 
                section 25C(d)(3) is amended to read as follows:
                    ``(A) an electric heat pump which achieves the 
                highest efficiency tier established by the Consortium 
                for Energy Efficiency, as in effect on January 1, 
                2008.''.
                    (B) Central air conditioners.--Section 25C(d)(3)(D) 
                is amended by striking ``2006'' and inserting ``2008''.
                    (C) Water heaters.--Subparagraph (E) of section 
                25C(d) is amended to read as follows:
                    ``(E) a natural gas, propane, or oil water heater 
                which has either an energy factor of at least 0.80 or a 
                thermal efficiency of at least 90 percent.''.
                    (D) Oil furnaces and hot water boilers.--Paragraph 
                (4) of section 25C(d) is amended to read as follows:
            ``(4) Qualified natural gas, propane, and oil furnaces and 
        hot water boilers.--
                    ``(A) Qualified natural gas furnace.--The term 
                `qualified natural gas furnace' means any natural gas 
                furnace which achieves an annual fuel utilization 
                efficiency rate of not less than 95.
                    ``(B) Qualified natural gas hot water boiler.--The 
                term `qualified natural gas hot water boiler' means any 
                natural gas hot water boiler which achieves an annual 
                fuel utilization efficiency rate of not less than 90.
                    ``(C) Qualified propane furnace.--The term 
                `qualified propane furnace' means any propane furnace 
                which achieves an annual fuel utilization efficiency 
                rate of not less than 95.
                    ``(D) Qualified propane hot water boiler.--The term 
                `qualified propane hot water boiler' means any propane 
                hot water boiler which achieves an annual fuel 
                utilization efficiency rate of not less than 90.
                    ``(E) Qualified oil furnaces.--The term `qualified 
                oil furnace' means any oil furnace which achieves an 
                annual fuel utilization efficiency rate of not less 
                than 90.
                    ``(F) Qualified oil hot water boiler.--The term 
                `qualified oil hot water boiler' means any oil hot 
                water boiler which achieves an annual fuel utilization 
                efficiency rate of not less than 90.''.
            (3) Elimination of lifetime limitation.--Paragraph (1) of 
        section 25C(b) is amended by inserting ``by reason of 
        subsection (a)(1)'' after ``under this section''.
    (d) Modification of Qualified Energy Efficiency Improvements.--
            (1) In general.--Paragraph (1) of section 25C(c) is amended 
        by inserting ``, or an asphalt roof with appropriate cooling 
        granules,'' before ``which meet the Energy Star program 
        requirements''.
            (2) Building envelope component.--Subparagraph (D) of 
        section 25C(c)(2) is amended--
                    (A) by inserting ``or asphalt roof'' after ``metal 
                roof'', and
                    (B) by inserting ``or cooling granules'' after 
                ``pigmented coatings''.
    (e) Natural Gas Fired Heat Pumps.--Section 25C(d)(3), as amended by 
this section, is amended by striking ``and'' at the end of subparagraph 
(D), by striking the period at the end of subparagraph (E) and 
inserting ``, and'', and by adding at the end the following new 
subparagraph:
                    ``(F) a natural gas fired heat pump with a heating 
                coefficient of performance (COP) of at least 1.1.''.
    (f) Elimination of Credit for Qualified Energy Efficiency 
Improvements in 2010.--
            (1) In general.--Subsection (a) of section 25C is amended 
        to read as follows:
    ``(a) Allowance of Credit.--In the case of an individual, there 
shall be allowed as a credit against the tax imposed by this chapter 
for the taxable year an amount equal to the amount of residential 
energy property expenditures paid or incurred by the taxpayer during 
the taxable year.''.
            (2) Conforming amendments.--
                    (A) Section 25C(b), as amended by subsection (b), 
                is amended by striking paragraphs (1) and (2) and by 
                redesignating paragraph (3) as paragraph (1).
                    (B) Section 25C(b)(1), as redesignated by 
                subparagraph (A), is amended by striking ``by reason of 
                subsection (a)(2)''.
                    (C) Section 25C is amended by striking subsection 
                (c).
    (g) Clarification of Eligibility of Standards for Qualified Energy 
Property.--Section 25C(d)(2)(C) is amended by striking ``and'' at the 
end of clause (i), by striking the period at the end of clause (ii) and 
inserting ``, and'', and by adding at the end the following new clause:
                            ``(iii) shall allow for the testing of 
                        products regardless of the size or capacity of 
                        the product.''.
    (h) Effective Dates.--
            (1) In general.--Except as provided in paragraphs (2) and 
        (3), the amendments made by this section shall apply to 
        property placed in service after the date of the enactment of 
        this Act.
            (2) Standards for electric heat pumps and central air 
        conditioners.--The amendments made by subparagraphs (A) and (B) 
        subsection (c)(2) shall apply to property placed in service 
        after December 31, 2007.
            (3) Elimination of credit for qualified energy efficiency 
        improvements.--The amendments made by subsection (f) shall 
        apply to property placed in service after December 31, 2009.

SEC. 213. EXTENSION AND CLARIFICATION OF NEW ENERGY EFFICIENT HOME 
              CREDIT.

    (a) Extension.--Subsection (g) of section 45L (relating to 
termination), as amended by section 205 of division A of the Tax Relief 
and Health Care Act of 2006, is amended by striking ``December 31, 
2008'' and inserting ``December 31, 2011''.
    (b) Clarification.--
            (1) In general.--Paragraph (1) of section 45L(a) is amended 
        by striking ``and'' at the end of subparagraph (A) and by 
        striking subparagraph (B) and inserting the following:
                    ``(B) acquired by a person from such eligible 
                contractor, and
                    ``(C) used by any person as a residence during the 
                taxable year.''.
            (2) Effective date.--The amendments made by this subsection 
        shall take effect as if included in section 1332 of the Energy 
        Policy Act of 2005.

SEC. 214. EXTENSION AND MODIFICATION OF DEDUCTION FOR ENERGY EFFICIENT 
              COMMERCIAL BUILDINGS.

    (a) Extension.--Subsection (h) of section 179D (relating to 
termination) is amended to read as follows:
    ``(h) Termination.--This section shall not apply with respect to 
property--
            ``(1) which is certified under subsection (d)(6) after 
        December 31, 2012, or
            ``(2) which is placed in service after December 31, 2014.
A provisional certification shall be treated as meeting the 
requirements of paragraph (1) if it is based on the building plans, 
subject to inspection and testing after installation.''.
    (b) Increase in Maximum Amount of Deduction.--
            (1) In general.--Subparagraph (A) of section 179D(b)(1) is 
        amended by striking ``$1.80'' and inserting ``$2.25''.
            (2) Partial allowance.--Paragraph (1) of section 179D(d) is 
        amended--
                    (A) by striking ``$.60'' and inserting ``$0.75'', 
                and
                    (B) by striking ``$1.80'' and inserting ``$2.25''.
    (c) Modifications to Certain Special Rules.--
            (1) Methods of calculating energy savings.--
                    (A) In general.--Paragraph (2) of section 179D(d) 
                is amended--
                            (i) by inserting ``in detail'' after 
                        ``based'',
                            (ii) by inserting ``, except that the 
                        Secretary shall use Standard 90.1-2001 in lieu 
                        of the California title 24 energy standards and 
                        the tables contained therein and the Secretary 
                        may add requirements from Standard 90.1-2001 
                        (or any successor standard)'' before the period 
                        at the end, and
                            (iii) by adding at the end the following 
                        new sentence: ``The calculation methods 
                        contained in such regulations shall also 
                        provide for the calculation of appropriate 
                        energy savings for design methods and 
                        technologies not otherwise credited in such 
                        manual or standard, including energy savings 
                        associated with natural ventilation, 
                        evaporative cooling, automatic lighting 
                        controls (such as occupancy sensors, 
                        photocells, and time clocks), day lighting, 
                        designs utilizing semi-conditioned spaces which 
                        maintain adequate comfort conditions without 
                        air conditioning or without heating, improved 
                        fan system efficiency (including reductions in 
                        static pressure), advanced unloading mechanisms 
                        for mechanical cooling (such as multiple or 
                        variable speed compressors), on-site generation 
                        of electricity (including combined heat and 
                        power systems, fuel cells, and renewable energy 
                        generation such as solar energy), and wiring 
                        with lower energy losses than wiring satisfying 
                        Standard 90.1-2001 requirements for building 
                        power distribution systems.''.
                    (B) Requirements for computer software used in 
                calculating energy and power consumption costs.--
                Paragraph (3)(B) of section 179D(d) is amended by 
                striking ``and'' at the end of clause (ii), by striking 
                the period at the end of clause (iii) and inserting ``, 
                and'', and by adding at the end the following:
                            ``(iv) which automatically--
                                    ``(I) generates the features, 
                                energy use, and energy and power 
                                consumption costs of a reference 
                                building which meets Standard 90.1-
                                2001,
                                    ``(II) generates the features, 
                                energy use, and energy and power 
                                consumption costs of a compliant 
                                building or system which reduces the 
                                annual energy and power costs by 50 
                                percent compared to Standard 90.1-2001, 
                                and
                                    ``(III) compares such features, 
                                energy use, and consumption costs to 
                                the features, energy use, and 
                                consumption costs of the building or 
                                system with respect to which the 
                                calculation is being made.''.
            (2) Targets for partial allowance of credit.--Paragraph 
        (1)(B) of section 179D(d) is amended--
                    (A) by striking ``The Secretary'' and inserting the 
                following:
                            ``(i) In general.--The Secretary'', and
                    (B) by adding at the end the following:
                            ``(ii) Additional requirements.--For 
                        purposes of clause (i)--
                                    ``(I) the Secretary shall determine 
                                prescriptive criteria that can be 
                                modeled explicitly for reference 
                                buildings which meet the requirements 
                                of subsection (c)(1)(D) for different 
                                building types and regions,
                                    ``(II) a system may be certified as 
                                meeting the target under subparagraph 
                                (A)(ii) if the appropriate reference 
                                building either meets the requirements 
                                of subsection (c)(1)(D) with such 
                                system rather than the comparable 
                                reference system (using the calculation 
                                under paragraph (2)) or meets the 
                                relevant prescriptive criteria under 
                                subclause (I), and
                                    ``(III) the lighting system target 
                                shall be based on lighting power 
                                density, except that it shall allow 
                                lighting controls credits that trade 
                                off for lighting power density savings 
                                based on Section 3.2.2 of the 2005 
                                California Nonresidential Alternative 
                                Calculation Method Approval Manual.
                            ``(iii) Publication.--The Secretary shall 
                        publish in the Federal Register the bases for 
                        the target levels established in the 
                        regulations under clause (i).''.
    (d) Alternative Standards.--Section 179D(d) is amended by adding at 
the end the following new paragraph:
            ``(7) Alternative standards pending final regulations.--
        Until such time as the Secretary issues final regulations under 
        paragraph (1)(B)--
                    ``(A) in the case of property which is part of a 
                building envelope, the building envelope system target 
                under paragraph (1)(A)(ii) shall be a 7 percent 
                reduction in total annual energy and power costs 
                (determined in the same manner as under subsection 
                (c)(1)(D)), and
                    ``(B) in the case of property which is part of the 
                heating, cooling, ventilation, and hot water systems, 
                the heating, cooling, ventilation, and hot water system 
                shall be treated as meeting the target under paragraph 
                (1)(A)(ii) if it would meet the requirement in 
                subsection (c)(1)(D) if combined with a building 
                envelope system and lighting system which met their 
                respective targets under paragraph(1)(A)(ii) (including 
                interim targets in effect under subsections (f) and 
                subparagraph (A)).''.
    (e) Modifications to Lighting Standards.--
            (1) Standards to be alternate standards.--Subsection (f) of 
        section 179D is amended by--
                    (A) striking ``Interim'' in the heading and 
                inserting ``Alternative'', and
                    (B) inserting ``, or, if the taxpayer elects, in 
                lieu of the target set forth in such final 
                regulations'' after ``lighting system'' at the end of 
                the matter preceding paragraph (1).
            (2) Qualified individuals.--Section 179D(d)(6)(C) is 
        amended by adding at the end the following: ``For purposes of 
        certification of whether the alternative target for lighting 
        systems under subsection (f) is met, individuals qualified to 
        determine compliance shall include individuals who are 
        certified as Lighting Certified (LC) by the National Council on 
        Qualifications for the Lighting Professions, Certified Energy 
        Managers (CEM) by the Association of Energy Engineers, and LEED 
        Accredited Professionals (AP) by the U.S. Green Buildings 
        Council.''.
            (3) Requirement for bilevel switching.--Section 179D(f)(2) 
        is amended by adding at the end the following new subparagraph:
            ``(3) Application of subsection to bilevel switching.--
                    ``(A) In general.--Notwithstanding paragraph 
                (2)(C)(i), this subsection shall apply to a system 
                which does not include provisions for bilevel switching 
                if the reduction in lighting power density is at least 
                37.5 percent of the minimum requirements in Table 
                9.3.1.1 or Table 9.3.1.2 (not including additional 
                interior lighting allowances) of Standard 90.1-2001.
                    ``(B) Reduction in deduction.--In the case of a 
                system to which this subsection applies by reason of 
                subparagraph (A), paragraph (2) shall be applied--
                            ``(i) by substituting `50 percent' for `40 
                        percent' in subparagraph (A) thereof, and
                            ``(ii) in subparagraph (B)(ii) thereof--
                                    ``(I) by substituting `37.5 
                                percentage points' for `25 percentage 
                                points', and
                                    ``(II) by substituting `12.5' for 
                                `15'.''.
    (f) Public Property.--Paragraph (4) of section 179(d) is amended by 
striking ``the Secretary shall promulgate a regulation to allow the 
allocation of the deduction'' and inserting ``the deduction under this 
section shall be allowed''.
    (g) Effective Date.--The amendments made by this section shall 
apply to property placed in service in taxable years beginning after 
the date of the enactment of this Act.

SEC. 215. DEDUCTION FOR ENERGY EFFICIENT LOW-RISE BUILDINGS.

    (a) In General.--Part VI of subchapter B of chapter 1, as amended 
by section 404 of division A of the Tax Relief and Health Care Act of 
2006, is amended by inserting after section 179E the following new 
section:

``SEC. 179F. ENERGY EFFICIENT LOW-RISE BUILDINGS DEDUCTION.

    ``(a) In General.--There shall be allowed as a deduction an amount 
equal to the amount of qualified energy efficiency expenditures paid or 
incurred by the taxpayer during the taxable year.
    ``(b) Limitations.--
            ``(1) In general.--The amount allowed as a credit under 
        subsection (a) with respect to any dwelling unit shall not 
        exceed the product of--
                    ``(A) the qualified energy savings achieved, and
                    ``(B) $12,000.
            ``(2) Minimum amount of qualified energy savings.--No 
        credit shall be allowed under subsection (a) with respect to 
        any dwelling unit in a qualified low-rise building which 
        achieves a qualified energy savings of less than 20 percent.
    ``(c) Qualified Energy Efficiency Expenditures.--For purposes of 
this section--
            ``(1) In general.--The term `qualified energy efficiency 
        expenditures' means any amount paid or incurred which is 
        related to producing qualified energy savings in any dwelling 
        unit located in a qualified low-rise building of the taxpayer 
        which is located in the United States.
            ``(2) No double benefit for certain expenditures.--The term 
        `qualified energy efficiency expenditures' shall not include 
        any expenditure for any property for which a deduction has been 
        allowed to the taxpayer under section 179G.
            ``(3) Qualified low-rise building.--The term `qualified 
        low-rise building' means a building--
                    ``(A) with respect to which depreciation is 
                allowable under section 167,
                    ``(B) which is used for multifamily housing, and
                    ``(C) which is not within the scope of Standard 
                90.1-2001 (as defined under section 179D(c)(2)).
    ``(d) Qualified Energy Savings.--For purposes of this section--
            ``(1) In general.--The term `qualified energy savings' 
        means, with respect to any dwelling unit in a qualified low-
        rise building, the amount (measured as a percentage) by which--
                    ``(A) the annual energy use with respect to such 
                dwelling unit after qualified energy efficiency 
                expenditures are made, as certified under paragraph 
                (2), is less than
                    ``(B) the annual energy use with respect to such 
                dwelling unit before the qualified energy efficiency 
                expenditures were made, as certified under paragraph 
                (2).
        In determining annual energy use under subparagraph (B), any 
        energy efficiency improvements which are not attributable to 
        qualified energy efficiency expenditures shall be disregarded.
            ``(2) Certification.--
                    ``(A) In general.--The Secretary, in consultation 
                with the Secretary of Energy, shall prescribe the 
                procedures and method for the making of certifications 
                under this paragraph based on the Residential Energy 
                Services Network (RESNET) Technical Guidelines in 
                effect on the date of the enactment of this Act.
                    ``(B) Qualified individuals.--Any certification 
                made under this paragraph may only be made by an 
                individual who is recognized by an organization 
                certified by the Secretary for such purposes.
    ``(e) Special Rules.--For purposes of this section, rules similar 
to the rules under paragraphs (8) and (9) of section 25D(e) shall 
apply.
    ``(f) Basis Adjustments.--For purposes of this subtitle, if a 
credit is allowed under this section with respect to any expenditure 
with respect to any property, the increase in the basis of such 
property which would (but for this subsection) result from such 
expenditure shall be reduced by the amount of the credit so allowed.
    ``(g) Termination.--This section shall not apply with respect to 
any property placed in service after December 31, 2011.''.
    (b) Conforming Amendments.--
            (1) Section 263(a)(1), as amended by section 404 of 
        division A of the Tax Relief and Health Care Act of 2006, the 
        is amended by striking ``or'' at the end of subparagraph (K), 
        by striking the period at the end of subparagraph (L) and 
        inserting ``, or'', and by inserting after subparagraph (L) the 
        following new subparagraph:
                    ``(M) expenditures for which a deduction is allowed 
                under section 179F.''.
            (2) Section 312(k)(3)(B) is amended by striking ``179, 
        179A, 179B, 179C, 179D, or 179E'' each place it appears in the 
        heading and text and inserting ``179, 179A, 179B, 179C, 179D, 
        179E, or 179F''.
            (3) Section 1016(a), as amended by section 101, 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 179F(f).''.
            (4) Section 1245(a) is amended by inserting ``179F,'' after 
        ``179E,'' both places it appears in paragraphs (2)(C) and 
        (3)(C).
            (5) The table of sections for part VI of subchapter B is 
        amended by inserting after the item relating to section 179E 
        the following new item:

``Sec. 179F. Energy efficient low-rise buildings deduction.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to amounts paid or incurred in taxable years beginning after the 
date of the enactment of this Act.

SEC. 216. ENERGY EFFICIENT PROPERTY DEDUCTION.

    (a) In General.--Part VI of subchapter B of chapter 1, as amended 
by section 203, is amended by inserting after section 179F the 
following new section:

``SEC. 179G. ENERGY EFFICIENT PROPERTY.

    ``(a) In General.--There shall be allowed as a deduction an amount 
equal to the energy efficient property expenditures paid or incurred by 
the taxpayer during the taxable year.
    ``(b) Limitation.--The amount of the deduction allowed under 
subsection (a) for any taxable years shall not exceed--
            ``(1) $150 for any advanced main air circulating fan,
            ``(2) $450 for any qualified natural gas furnace or 
        qualified propane furnace, and
            ``(3) $900 for--
                    ``(A) any item of energy-efficient building 
                property, and
                    ``(B) any qualified oil furnace, qualified natural 
                gas hot water boiler, qualified propane hot water 
                boiler, or qualified oil hot water boiler.
    ``(c) Energy Efficient Property Expenditures.--For purposes of this 
section--
            ``(1) In general.--The term `energy efficient property 
        expenditures' means expenditures paid by the taxpayer for 
        qualified energy property which is--
                    ``(A) of a character subject to the allowance for 
                depreciation, and
                    ``(B) originally placed in service by the taxpayer.
            ``(2) Qualified energy property.--The term `qualified 
        energy property' has the meaning given such term by section 
        25C(d)(2).
    ``(d) Basis Adjustments.--For purposes of this subtitle, if a 
deduction is allowed under this section with respect to any expenditure 
with respect to any property, the increase in the basis of such 
property which would (but for this subsection) result from such 
expenditure shall be reduced by the amount of the deduction so allowed.
    ``(e) Termination.--This section shall not apply with respect to 
any property placed in service after December 31, 2011.''.
    (b) No Double Benefit.--Section 179D(c) is amended by adding at the 
end the following new paragraph:
            ``(3) Certain property excluded.--The term `energy 
        efficient commercial building property' does not include any 
        property with respect to which a credit has been allowed to the 
        taxpayer under section 179G.''.
    (c) Conforming Amendments.--
            (1) Section 263(a)(1), as amended by section 203, is 
        amended by striking ``or'' at the end of subparagraph (K), by 
        striking the period at the end of subparagraph (L) and 
        inserting ``, or'', and by inserting after subparagraph (L) the 
        following new subparagraph:
                    ``(M) expenditures for which a deduction is allowed 
                under section 179G.''.
            (2) Section 312(k)(3)(B), as amended by section 203, is 
        amended by striking ``179, 179A, 179B, 179C, 179D, 179E, or 
        179F'' each place it appears in the heading and text and 
        inserting ``179, 179A, 179B, 179C, 179D, 179E, 179F, or 179G''.
            (3) Section 1016(a), as amended by section 203, is amended 
        by striking ``and'' at the end of paragraph (38), by striking 
        the period at the end of paragraph (39) and inserting ``, 
        and'', and by adding at the end the following new paragraph:
            ``(40) to the extent provided in section 179G(e).''.
            (4) Section 1245(a), as amended by section 203 is amended 
        by inserting ``179G,'' after ``179F,'' both places it appears 
        in paragraphs (2)(C) and (3)(C).
            (5) The table of sections for part VI of subchapter B is 
        amended by inserting after the item relating to section 179F 
        the following new item:

``Sec. 179G. Energy efficient property.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to property placed in service in taxable years beginning after 
the date of the enactment of this Act.

SEC. 217. CREDIT FOR ENERGY SAVINGS CERTIFICATIONS.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
is amended by adding at the end the following new section:

``SEC. 45O. ENERGY SAVINGS CERTIFICATION CREDIT.

    ``(a)  In General.--For purposes of section 38, the energy savings 
certification credit determined under this section for any taxable year 
is an amount equal to the sum of--
            ``(1) the qualified training and certification costs paid 
        or incurred by the taxpayer which may be taken into account for 
        such taxable year, plus
            ``(2) the qualified certification equipment expenditures 
        paid or incurred by the taxpayer which may be taken into 
        account for such taxable year.
    ``(b) Qualified Training and Certification Costs.--
            ``(1) In general.--The term `qualified training and 
        certification costs' means costs paid or incurred for training 
        which is required for the taxpayer or employees of the taxpayer 
        to be certified by the Secretary under section 25D(d)(2)(B) or 
        179F(d)(2)(B) for the purpose of certifying energy savings.
            ``(2) Limitation.--The qualified training and certification 
        costs taken into account under subsection (a)(1) for the 
        taxable year with respect to any individual shall not exceed 
        $500 reduced by the amount of the credit allowed under 
        subsection (a)(1) to the taxpayer (or any predecessor) with 
        respect to such individual for all prior taxable years.
            ``(3) Year costs taken into account.--Qualified training 
        and certifications costs with respect to any individual shall 
        not be taken into account under subsection (a)(1) before the 
        taxable year in which the individual with respect to whom such 
        costs are paid or incurred has performed 25 certifications 
        under sections 25E(d)(2)(A) and 179F(d)(2)(A).
    ``(c) Qualified Certification Equipment Expenditures.--
            ``(1) In general.--The term `qualified training equipment 
        expenditures' means costs paid or incurred for--
                    ``(A) blower doors,
                    ``(B) duct leakage testing equipment,
                    ``(C) flue gas combustion equipment, and
                    ``(D) digital manometers.
            ``(2) Limitation.--
                    ``(A) In general.--The qualified certification 
                equipment expenditures taken into account under 
                subsection (a)(2) with respect to any taxpayer for any 
                taxable year shall not exceed $1,000.
                    ``(B) Limitation on individual items.--The 
                qualified certification equipment expenditures taken 
                into account under subsection (a)(2) shall not exceed--
                            ``(i) $500 with respect to any blower door 
                        or duct leakage testing equipment, and
                            ``(ii) $100 with respect to any flue gas 
                        combustion equipment or digital manometer.
            ``(3) Year expenditures taken into account.--The qualified 
        certification equipment expenditures of any taxpayer shall not 
        be taken into account under subsection (a)(2) before the 
        taxable year in which the taxpayer has performed 25 
        certifications under sections 25E(d)(2)(A) and 179F(d)(2)(A).
    ``(d) Special Rules.--
            ``(1) Aggregation rules.--For purposes of this section, all 
        persons treated as a single employer under subsections (a) and 
        (b) of section 52 shall be treated as 1 person.
            ``(2) Basis reduction.--The basis of any property shall be 
        reduced by the portion of the cost of such property taken into 
        account under subsection (a).
            ``(3) Denial of double benefit.--
                    ``(A) In general.--No deduction shall be allowed 
                for that portion of the expenses otherwise allowable as 
                a deduction for the taxable year which is equal to the 
                amount taken into account under subsection (a) for such 
                taxable year.
                    ``(B) Amount previously deducted.--No credit shall 
                be allowed under subsection (a) with respect to any 
                amount for which a deduction has been allowed in any 
                preceding taxable year.''.
    (b) Credit Treated as Part of General Business Credit.--Section 
38(b) 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 the following new paragraph:
            ``(32) the energy savings certification credit determined 
        under section 45O(a).''.
    (c) Conforming Amendments.--
            (1) Section 1016(a), as amended by this Act, is amended by 
        striking ``and'' at the end of paragraph (39), by striking the 
        period at the end of paragraph (40) and inserting ``and'', and 
        by adding at the end the following new paragraph:
            ``(41) to the extent provided in section 45O(d)(2).''.
            (2) The table of sections for subpart D of part IV of 
        subchapter A of chapter 1 is amended by inserting after the 
        item relating to section 45N the following new item:

``Sec. 45O. Energy savings certification credit.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to amounts paid or incurred after the date of the enactment of 
this Act.

                    TITLE III--SAVE TAX PAYERS MONEY

SEC. 301. REPEAL OF CERTAIN PROVISIONS OF THE ENERGY POLICY ACT OF 
              2005.

    (a) Repeals.--The following provisions of the Energy Policy Act of 
2005, and the items relating thereto in the table of contents of that 
Act, are repealed:
            (1) Section 342 (relating to program on oil and gas 
        royalties in-kind).
            (2) Section 343 (relating to marginal property production 
        incentives).
            (3) Section 344 (relating to incentives for natural gas 
        production from deep wells in the shallow waters of the Gulf of 
        Mexico).
            (4) Section 345 (relating to royalty relief for deep water 
        production).
            (5) Section 357 (relating to comprehensive inventory of OCS 
        oil and natural gas resources).
            (6) Subtitle J of title IX (relating to ultra-deepwater and 
        unconventional natural gas and other petroleum resources).
    (b) Repeal 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. 302. REPEAL OF CERTAIN TAX PROVISIONS OF THE ENERGY POLICY ACT OF 
              2005.

    (a) Repeal.--The following provisions, and amendments made by such 
provisions, of the Energy Policy Act of 2005 are hereby repealed:
            (1) Section 1306 (relating to credit for production from 
        advanced nuclear power facilities).
            (2) Section 1307 (relating to credit for investment in 
        clean coal facilities).
            (3) Section 1308 (relating to electric transmission 
        property treated as 15-year property).
            (4) Section 1309 (relating to expansion of amortization for 
        certain atmospheric pollution control facilities).
            (5) Section 1310 (relating to modifications to special 
        rules for nuclear decommissioning costs).
            (6) Section 1321 (relating to extension of credit for 
        producing fuel from nonconventional source (coke or coke gas).
            (7) Section 1323 (relating to temporary expensing for 
        equipment used in refining of liquid fuels).
            (8) Section 1325 (relating to natural gas distribution 
        lines treated as 15-year property).
            (9) Section 1326 (relating to natural gas gathering lines 
        treated as 7-year property).
            (10) Section 1328 (relating to determination of small 
        refiner exception to oil depletion deduction).
            (11) Section 1329 (relating to amortization of geological 
        and geophysical expenditures).
    (b) Administration of Internal Revenue Code of 1986.--The Internal 
Revenue Code of 1986 shall be applied and administered as if the 
provisions, and amendments, specified in subsection (a) had never been 
enacted.

                  TITLE IV--STATE AND LOCAL AUTHORITY

SEC. 401. STATE CONSUMER PRODUCT ENERGY EFFICIENCY STANDARDS.

    Section 327 of the Energy Policy and Conservation Act (42 U.S.C. 
6297) is amended by adding at the end the following new subsection:
    ``(h) Limitation on Preemption.--Subsections (a), (b), and (c) 
shall not apply with respect to State regulation of energy consumption 
or water use of any covered product during any period of time--
            ``(1) after the expiration of 3 years after the required 
        date of issuance of a final rule determining whether Federal 
        standards for such consumption or use will be established or 
        revised, if such rule has not been issued; and
            ``(2) before the date on which such rule is issued.''.

SEC. 402. APPEALS FROM CONSISTENCY DETERMINATIONS UNDER COASTAL ZONE 
              MANAGEMENT ACT OF 1972.

    Section 319 of the Coastal Zone Management Act of 1972 (16 U.S.C. 
1465) is amended to read as if section 381 of the Energy Policy Act of 
2005 (119 Stat. 737) were not enacted.

SEC. 403. SITING OF INTERSTATE ELECTRIC TRANSMISSION FACILITIES.

    Section 216 of the Federal Power Act (16 U.S.C. 824p) is repealed.

SEC. 404. NEW NATURAL GAS STORAGE FACILITIES.

    Subsection (f) of section 4 of the Natural Gas Act (15 U.S.C. 
717c(f)) is repealed.

SEC. 405. PROCESS COORDINATION; HEARINGS; RULES OF PROCEDURE.

    The amendments to the Natural Gas Act made by section 313 of the 
Energy Policy Act of 2005 are repealed, and the Natural Gas Act shall 
be administered as if those amendments were never enacted.

SEC. 406. REPEAL OF PREEMPTION OF STATE LAW RELATING TO AUTOMOBILE FUEL 
              ECONOMY STANDARDS.

    Section 32919 of title 49, United States Code, is repealed.

           TITLE V--RENEWABLE ENERGY RESEARCH AND DEVELOPMENT

SEC. 501. ADVANCED BIOFUEL TECHNOLOGIES.

    (a) In General.--The Secretary of Energy shall carry out a program 
of research, development, demonstration, and commercial application for 
production of motor and other fuels from biomass.
    (b) Objectives.--The Secretary shall design the program under this 
section to--
            (1) develop technologies that would make ethanol produced 
        from cellulosic feedstocks cost competitive with ethanol 
        produced from corn by 2012;
            (2) conduct research and development on how to apply 
        advanced genetic engineering and bioengineering techniques to 
        increase the efficiency and lower the cost of industrial-scale 
        production of liquid fuels from cellulosic feedstocks; and
            (3) conduct research and development on the production of 
        hydrocarbons other than ethanol from biomass.
    (c) Institution of Higher Education Grants.--The Secretary shall 
designate not less than 10 percent of the funds appropriated under 
subsection (d) for each fiscal year to carry out the program for grants 
to competitively selected institutions of higher education around the 
country focused on meeting the objectives stated in subsection (b).
    (d) Authorization of Appropriations.--From amounts authorized to be 
appropriated under section 931(c) of the Energy Policy Act of 2005 (42 
U.S.C. 16231(c)), there are authorized to be appropriated to the 
Secretary to carry out this section--
            (1) $150,000,000 for fiscal year 2008;
            (2) $160,000,000 for fiscal year 2009; and
            (3) $175,000,000 for fiscal year 2010.

SEC. 502. ADVANCED HYDROGEN STORAGE TECHNOLOGIES.

    (a) In General.--The Secretary of Energy shall carry out a program 
of research, development, demonstration, and commercial application for 
technologies to enable practical onboard storage of hydrogen for use as 
a fuel for light-duty motor vehicles.
    (b) Objective.--The Secretary shall design the program under this 
section to develop practical hydrogen storage technologies that would 
enable a hydrogen-fueled light-duty motor vehicle to travel 300 miles 
before refueling.

SEC. 503. ADVANCED SOLAR PHOTOVOLTAIC TECHNOLOGIES.

    (a) In General.--The Secretary of Energy shall carry out a program 
of research, development, demonstration, and commercial application for 
advanced solar photovoltaic technologies.
    (b) Objectives.--The Secretary shall design the program under this 
section to develop technologies that would--
            (1) make electricity generated by solar photovoltaic power 
        cost-competitive by 2015; and
            (2) enable the widespread use of solar photovoltaic power.
    (c) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary to carry out this section--
            (1) $148,000,000 for fiscal year 2008;
            (2) $155,000,000 for fiscal year 2009;
            (3) $165,000,000 for fiscal year 2010; and
            (4) $180,000,000 for fiscal year 2012.

SEC. 504. ADVANCED WIND ENERGY TECHNOLOGIES.

    (a) In General.--The Secretary of Energy shall carry out a program 
of research, development, demonstration, and commercial application for 
advanced wind energy technologies.
    (b) Objectives.--The Secretary shall design the program under this 
section to--
            (1) improve the efficiency and lower the cost of wind 
        turbines;
            (2) minimize adverse environmental impacts; and
            (3) develop new small-scale wind energy technologies for 
        use in low wind speed environments.
    (c) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary to carry out this section--
            (1) $44,000,000 for fiscal year 2008;
            (2) $48,400,000 for fiscal year 2009;
            (3) $53,240,000 for fiscal year 2010; and
            (4) $58,564,000 for fiscal year 2011.

SEC. 505. CONTINUING PROGRAMS.

    The Secretary of Energy shall continue to carry out the research, 
development, demonstration, and commercial application activities 
authorized in sections 921(b)(1) (for distributed energy), 923 (for 
micro-cogeneration technology), and 931(a)(2)(C), (D), and (E)(i) (for 
geothermal energy, hydropower, and ocean energy) of the Energy Policy 
Act of 2005.

SEC. 506. PLUG-IN HYBRID ELECTRIC VEHICLE TECHNOLOGY PROGRAM.

    (a) Short Title.--This section may be cited as the ``Plug-In Hybrid 
Electric Vehicle Act of 2007''.
    (b) Definitions.--In this section:
            (1) Battery.--The term ``battery'' means a device or system 
        for the electrochemical storage of energy.
            (2) E85.--The term ``E85'' means a fuel blend containing 85 
        percent ethanol and 15 percent gasoline by volume.
            (3) Electric drive transportation technology.--The term 
        ``electric drive transportation technology'' means--
                    (A) vehicles that use an electric motor for all or 
                part of their motive power and that may or may not use 
                offboard electricity, including battery electric 
                vehicles, hybrid electric vehicles, plug-in hybrid 
                electric vehicles, flexible fuel plug-in hybrid 
                electric vehicles, and electric rail; and
                    (B) related equipment, including electric equipment 
                necessary to recharge a plug-in hybrid electric 
                vehicle.
            (4) Flexible fuel plug-in hybrid electric vehicle.--The 
        term ``flexible fuel plug-in hybrid electric vehicle'' means a 
        plug-in hybrid electric vehicle warranted by its manufacturer 
        as capable of operating on any combination of gasoline or E85 
        for its onboard internal combustion or heat engine.
            (5) Hybrid electric vehicle.--The term ``hybrid electric 
        vehicle'' means a vehicle that--
                    (A) can be propelled using liquid combustible fuel 
                and electric power provided by an onboard battery; and
                    (B) utilizes regenerative power capture technology 
                to recover energy expended in braking the vehicle for 
                use in recharging the battery.
            (6) Plug-in hybrid electric vehicle.--The term ``plug-in 
        hybrid electric vehicle'' means a hybrid electric onroad light-
        duty vehicle that can be propelled solely on electric power for 
        a minimum of 20 miles under city driving conditions, and that 
        is capable of recharging its battery from an offboard 
        electricity source.
    (c) Program.--The Secretary of Energy shall conduct a program of 
research, development, demonstration, and commercial application on 
technologies needed for the development of plug-in hybrid electric 
vehicles and electric drive transportation, including--
            (1) high capacity, high efficiency batteries, to--
                    (A) improve battery life, energy storage capacity, 
                and power delivery capacity, and lower cost; and
                    (B) minimize waste and hazardous material 
                production in the entire value chain, including after 
                the end of the useful life of the batteries;
            (2) high efficiency onboard and offboard charging 
        components;
            (3) high power drive train systems for passenger and 
        commercial vehicles and for supporting equipment;
            (4) onboard energy management systems, power trains, and 
        systems integration for plug-in hybrid electric vehicles, 
        flexible fuel plug-in hybrid electric vehicles, and hybrid 
        electric vehicles, including efficient cooling systems and 
        systems that minimize the emissions profile of such vehicles; 
        and
            (5) lightweight materials, including research, development, 
        demonstration, and commercial application to reduce the cost of 
        materials such as steel alloys and carbon fibers.
    (d) Plug-In Hybrid Electric Vehicle Demonstration Program.--
            (1) Establishment.--The Secretary shall establish a 
        competitive grant pilot demonstration program to provide not 
        more than 25 grants annually to State governments, local 
        governments and public entities, metropolitan transportation 
        authorities, or combinations thereof to carry out a project or 
        projects for demonstration of plug-in hybrid electric vehicles.
            (2) Applications.--
                    (A) Requirements.--The Secretary shall issue 
                requirements for applying for grants under the 
                demonstration pilot program. The Secretary shall 
                require that applications, at a minimum, include a 
                description of how data will be--
                            (i) collected on the--
                                    (I) performance of the vehicle or 
                                vehicles and the components, including 
                                the battery, energy management, and 
                                charging systems, under various driving 
                                speeds, trip ranges, traffic, and other 
                                driving conditions;
                                    (II) costs of the vehicle or 
                                vehicles, including acquisition, 
                                operating, and maintenance costs, and 
                                how the project or projects will be 
                                self-sustaining after Federal 
                                assistance is completed; and
                                    (III) emissions of the vehicle or 
                                vehicles, including greenhouse gases, 
                                and the amount of petroleum displaced 
                                as a result of the project or projects; 
                                and
                            (ii) summarized for dissemination to the 
                        Department, other grantees, and the public.
                    (B) Partners.--An applicant under subparagraph (A) 
                may carry out a project or projects under the pilot 
                program in partnership with one or more private or 
                nonprofit entities, which may include institutions of 
                higher education, including Historically Black Colleges 
                and Universities, Hispanic Serving Institutions, and 
                other minority-serving institutions.
            (3) Selection criteria.--
                    (A) Preference.--When making awards under this 
                subsection, the Secretary shall consider each 
                applicant's previous experience involving plug-in 
                hybrid electric vehicles and shall give preference to 
                proposals that--
                            (i) provide the greatest demonstration per 
                        award dollar, with preference increasing as the 
                        number of miles that a plug-in hybrid electric 
                        vehicle can be propelled solely on electric 
                        power under city driving conditions increases; 
                        and
                            (ii) maximize the non-Federal share of 
                        project funding and demonstrate the greatest 
                        likelihood that each project proposed in the 
                        application will be maintained or expanded 
                        after Federal assistance under this subsection 
                        is completed.
                    (B) Breadth of demonstrations.--In awarding grants 
                under this subsection, the Secretary shall ensure the 
                program will demonstrate plug-in hybrid electric 
                vehicles under various circumstances, including--
                            (i) driving speeds;
                            (ii) trip ranges;
                            (iii) driving conditions;
                            (iv) climate conditions; and
                            (v) topography,
                to optimize understanding and function of plug-in 
                hybrid electric vehicles.
            (4) Pilot project requirements.--
                    (A) Subsequent funding.--An applicant that has 
                received a grant in one year may apply for additional 
                funds in subsequent years, but the Secretary shall not 
                provide more than $10,000,000 in Federal assistance 
                under the pilot program to any applicant for the period 
                encompassing fiscal years 2008 through fiscal year 
                2012.
                    (B) Information.--The Secretary shall establish 
                mechanisms to ensure that the information and knowledge 
                gained by participants in the pilot program are shared 
                among the pilot program participants and are available 
                to other interested parties, including other 
                applicants.
            (5) Award amounts.--The Secretary shall determine grant 
        amounts, but the maximum size of grants shall decline as the 
        cost of producing plug-in hybrid electric vehicles declines or 
        the cost of converting a hybrid electric vehicle to a plug-in 
        hybrid electric vehicle declines.
    (e) Cost Sharing.--The Secretary shall carry out the program under 
this section in compliance with section 988(a) through (d) and section 
989 of the Energy Policy Act of 2005 (42 U.S.C. 16352(a) through (d) 
and 16353).
    (f) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary--
            (1) for carrying out subsection (c), $250,000,000 for each 
        of fiscal years 2008 through 2012, of which up to $50,000,000 
        may be used for the program described in paragraph (5) of that 
        subsection; and
            (2) for carrying out subsection (d), $50,000,000 for each 
        of fiscal years 2008 through 2012.

SEC. 507. PHOTOVOLTAIC DEMONSTRATION PROGRAM.

    (a) Short Title.--This section may be cited as the ``Solar 
Utilization Now Demonstration Act of 2007'' or the ``SUN Act of 2007''.
    (b) In General.--The Secretary of Energy shall establish a program 
of grants to States to demonstrate advanced photovoltaic technology.
    (c) Requirements.--
            (1) Ability to meet requirements.--To receive funding under 
        the program under this section, a State must submit a proposal 
        that demonstrates, to the satisfaction of the Secretary, that 
        the State will meet the requirements of subsection (g).
            (2) Compliance with requirements.--If a State has received 
        funding under this section for the preceding year, the State 
        must demonstrate, to the satisfaction of the Secretary, that it 
        complied with the requirements of subsection (g) in carrying 
        out the program during that preceding year, and that it will do 
        so in the future, before it can receive further funding under 
        this section.
            (3) Funding allocation.--Except as provided in subsection 
        (d), each State submitting a proposal that meets the 
        requirements under subsection (c) shall receive funding under 
        the program based on the proportion of United States population 
        in the State according to the 2000 census. In each fiscal year, 
        the portion of funds attributable under this paragraph to 
        States that have not submitted proposals that meet the 
        requirements under subsection (c) in the time and manner 
        specified by the Secretary shall be distributed pro rata to the 
        States that have submitted proposals that meet the requirements 
        under subsection (c) in the specified time and manner.
    (d) Competition.--If more than $80,000,000 is available for the 
program under this section for any fiscal year, the Secretary shall 
allocate 75 percent of the total amount of funds available according to 
subsection (c)(3), and shall award the remaining 25 percent on a 
competitive basis to the States with the proposals the Secretary 
considers most likely to encourage the widespread adoption of 
photovoltaic technologies. In awarding funds under this subsection, the 
Secretary may give preference to proposals that would demonstrate the 
use of newer materials or technologies.
    (e) Proposals.--Not later than 6 months after the date of enactment 
of this Act, and in each subsequent fiscal year for the life of the 
program, the Secretary shall solicit proposals from the States to 
participate in the program under this section.
    (f) Competitive Criteria.--In awarding funds in a competitive 
allocation under subsection (d), the Secretary shall consider--
            (1) the likelihood of a proposal to encourage the 
        demonstration of, or lower the costs of, advanced photovoltaic 
        technologies; and
            (2) the extent to which a proposal is likely to--
                    (A) maximize the size of photovoltaic installation, 
                based on rated capacity;
                    (B) maximize the proportion of non-Federal cost 
                share; and
                    (C) limit State administrative costs.
    (g) State Program.--A program operated by a State with funding 
under this section shall provide competitive awards for the 
demonstration of advanced photovoltaic technologies. Each State program 
shall--
            (1) require a contribution of at least 60 percent per award 
        from non-Federal sources, which may include any combination of 
        State, local, and private funds, except that at least 10 
        percent of the funding must be supplied by the State;
            (2) limit awards for any single project to a maximum of 
        $5,000,000;
            (3) prohibit any nongovernmental recipient from receiving 
        more than $1,000,000 per year;
            (4) endeavor to fund recipients in the commercial, 
        industrial, institutional, governmental, and residential 
        sectors;
            (5) limit State administrative costs to no more than 10 
        percent of the grant;
            (6) report annually to the Secretary on--
                    (A) the amount of funds disbursed;
                    (B) the rated capacity of the photovoltaics 
                purchased and installed; and
                    (C) the results of the monitoring under paragraph 
                (7);
            (7) provide for measurement and verification of the output 
        of a representative sample of the photovoltaics systems 
        demonstrated throughout the average working life of the 
        systems, or at least 20 years;
            (8) require that applicant buildings must have received an 
        independent energy efficiency audit during the 6-month period 
        preceding the filing of the application; and
            (9) encourage Historically Black Colleges and Universities, 
        Hispanic Serving Institutions, and other minority-serving 
        institutions to apply for grants under this program.
    (h) Unexpended Funds.--If a State fails to expend any funds 
received under subsection (c) or (d) within 3 years of receipt, such 
remaining funds shall be returned to the Treasury.
    (i) Reports.--The Secretary shall report to Congress 5 years after 
funds are first distributed to the States under this section--
            (1) the amount of photovoltaics demonstrated;
            (2) the number of projects undertaken;
            (3) the administrative costs of the program;
            (4) the amount of funds that each State has not received 
        because of a failure to submit a qualifying proposal, as 
        described in subsection (c)(3);
            (5) the results of the monitoring under subsection (g)(7); 
        and
            (6) the total amount of funds distributed, including a 
        breakdown by State.
    (j) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary for the purposes of carrying out this 
section--
            (1) $50,000,000 for fiscal year 2008;
            (2) $100,000,000 for fiscal year 2009;
            (3) $150,000,000 for fiscal year 2010;
            (4) $200,000,000 for fiscal year 2011; and
            (5) $300,000,000 for fiscal year 2012.
                                 <all>