[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2809 Introduced in House (IH)]







110th CONGRESS
  1st Session
                                H. R. 2809

To ensure that the United States leads the world baseline in developing 
  and manufacturing next generation energy technologies, to grow the 
  economy of the United States, to create new highly trained, highly 
skilled American jobs, to eliminate American overdependence on foreign 
           oil, and to address the threat of global warming.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             June 21, 2007

 Mr. Inslee (for himself, Mr. Van Hollen, Mr. Langevin, Mr. Honda, Mr. 
    Smith of Washington, Mr. Schiff, Mr. Delahunt, Mr. Ellison, Ms. 
   Baldwin, Mr. Hinchey, Mr. Fattah, Mr. Israel, Mr. Jefferson, Mr. 
  Emanuel, Mr. Davis of Illinois, Ms. Lee, Mr. Shays, and Mr. Weiner) 
 introduced the following bill; which was referred to the Committee on 
 Energy and Commerce, and in addition to the Committees on Rules, Ways 
 and Means, Education and Labor, Foreign Affairs, Judiciary, Financial 
  Services, Science and Technology, Oversight and Government Reform, 
  Natural Resources, Agriculture, and the Budget, 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 ensure that the United States leads the world baseline in developing 
  and manufacturing next generation energy technologies, to grow the 
  economy of the United States, to create new highly trained, highly 
skilled American jobs, to eliminate American overdependence on foreign 
           oil, and to address the threat of global warming.

    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 ``New Apollo Energy 
Act of 2007''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
                TITLE I--FINDINGS AND PERFORMANCE GOALS

Sec. 101. Findings.
Sec. 102. Performance goals.
                          TITLE II--EFFICIENCY

                      Subtitle A--Green Buildings

Sec. 201. Short title.
Sec. 202. Findings.
Sec. 203. Definitions.
Sec. 204. Coordinating agency.
Sec. 205. Public education and training.
Sec. 206. Blue ribbon panel.
Sec. 207. Research and development report.
Sec. 208. Greenhouse gas emission standards.
Sec. 209. Study of use of FHA energy efficient mortgage program.
Sec. 210. Healthy, high-performance schools.
Sec. 211. Loan guarantees for public institutions of higher education.
Sec. 212. Accountability of Federal agencies.
Sec. 213. State and local government block grants.
Sec. 214. Authorization of appropriations.
Sec. 215. Increase and extension of energy efficient commercial 
                            buildings deduction.
                    Subtitle B--Consumer Assistance

Sec. 221. Appliance standards.
Sec. 222. Energy Star certification for solar water heaters and 
                            tankless water heaters.
                       Subtitle C--Tax Provision

Sec. 231. Energy credit for combined heat and power system property.
                    TITLE III--TRANSPORTATION SECTOR

Sec. 301. Performance goals.
              Subtitle A--Plug-In Hybrid Electric Vehicles

Sec. 311. Short title.
Sec. 312. Definition.
Sec. 313. Research and development grants.
Sec. 314. Pilot project.
Sec. 315. Test site.
Sec. 316. Plan.
Sec. 317. Plug-in hybrid motor vehicle tax credit.
        Subtitle B--Increase Ridership of Public Transportation

Sec. 321. Increased uniform dollar limitation for all types of 
                            transportation fringe benefits.
Sec. 322. Credit for employer costs of providing certain mass 
                            transportation fringe benefits to their 
                            employees.
Sec. 323. Clarification of Federal employee benefits.
Sec. 324. Extension of transportation fringe benefit to bicycle 
                            commuters.
            Subtitle C--Emissions Reductions and Oil Savings

                      Chapter 1--Biofuels Security

Sec. 331. Short title.
                     subchapter a--renewable fuels

Sec. 341. Renewable fuel program.
Sec. 342. Installation of e-85 fuel pumps by major oil companies at 
                            owned stations and branded stations.
Sec. 343. Minimum Federal fleet requirement.
Sec. 344. Application of Gasohol Competition Act of 1980.
                 subchapter b--dual fueled automobiles

Sec. 351. Requirement to manufacture dual fueled automobiles.
Sec. 352. Manufacturing incentives for dual fueled automobiles.
                    Chapter 2--Emissions Reductions

Sec. 361. Extension of biodiesel tax credits.
Sec. 362. Low carbon fuel standard.
Sec. 363. Loan guarantee program to demonstrate low carbon renewable 
                            fuel.
Sec. 364. Require automakers to reduce tailpipe GHG emissions.
Sec. 365. Elimination of 2-FLEET rule.
                      TITLE IV--ELECTRICITY SECTOR

                       Subtitle A--Tax Incentives

Sec. 401. Extension through 2018 for placing qualified facilities in 
                            service for producing renewable electric 
                            energy.
Sec. 402. Extension of energy credit.
Sec. 403. Expansion and modification of renewable resource credit.
Sec. 404. Energy credit for small wind, small geothermal, small 
                            biomass, and small kinetic hydropower.
Sec. 405. Modifications for clean renewable energy bonds.
Sec. 406. Expansion and increase for residential energy efficient 
                            property credit.
Sec. 407. Expansion of renewable resource credit to include thermal 
                            energy.
           Subtitle B--Promoting Energy Efficient Investments

Sec. 411. Rate modifications promoting energy efficiency investments.
Sec. 412. Feed-in tariff system study.
              Subtitle C--National Renewable Energy Zones

Sec. 421. New electricity transmission lines designed primarily to 
                            carry electricity from renewable energy 
                            resources.
Sec. 422. Short title.
Sec. 423. Findings.
Sec. 424. National renewable energy zones.
Sec. 425. Federal Power Marketing Administrations and TVA.
Sec. 426. Consistency with environmental laws.
                        Subtitle D--Net Metering

Sec.  431. Establishing minimum net metering and interconnection 
                            standards.
Sec. 432. Retail electric and gas utility efficiency policies.
                Subtitle E--Renewable Portfolio Standard

Sec. 441. Renewable portfolio standard.
     Subtitle F--Marine and Hydrokinetic Renewable Energy Promotion

Sec. 451. Short title.
Sec. 452. Definition.
Sec. 453. Research and development.
Sec. 454. Adaptive Management and Environmental Fund.
Sec. 455. Programmatic environmental impact statement.
              Subtitle G--Carbon Capture and Sequestration

Sec. 461. Carbon capture and storage research, development, and 
                            demonstration program.
                        TITLE V--GREEN WORKFORCE

               Subtitle A--Small Manufacturer Assistance

Sec. 501. Small manufacturer assistance through Hollings Manufacturing 
                            Extension Partnership Program.
            Subtitle B--Green Workforce Education Incentives

Sec. 511. National Green Certification Standards.
Sec. 512. Environmentally literate workforce grant program.
Sec. 513. Carbon neutrality grants in institutions of higher 
                            educations.
Sec. 514. National green ranking system grant.
Sec. 515. Green building and zero-energy home design training grants.
Sec. 516. Student loan forgiveness for green workforce members.
Sec. 517. Definitions.
   TITLE VI--FEDERAL GOVERNMENT LEVERAGE TO MOVE NEW TECHNOLOGIES TO 
                                 MARKET

           Subtitle A--Incentives for Clean Energy Technology

Sec. 601. New Energy Technologies Commission.
Sec. 602. Loan Guarantees Program.
Sec. 603. Grant Program to Create Clean Energy Business Districts.
     Subtitle B--Clean Energy Exports and International Investment

Sec. 611. Clean energy technology exports program.
Sec. 612. International energy technology deployment program.
                     Subtitle C--Export-Import Bank

Sec. 621. Require the Export-Import Bank of the United States to meet 
                            renewable energy targets in its lending 
                            practices.
Sec. 622. Increase in the amount of financing made available by the 
                            Export-Import Bank for transactions 
                            involving renewable energy and energy 
                            efficiency.
Sec. 623. Office of renewable energy promotion.
Sec. 624. Report on Export-Import Bank financing for transactions 
                            involving renewable energy or energy 
                            efficiency.
Sec. 625. Report on effect of Export-Import Bank financing on 
                            greenhouse gas emissions.
   Subtitle D--Emerging Clean Energy Technology Venture Capital Fund

Sec. 631. Findings.
Sec. 632. Establishment of fund.
Sec. 633. Authorization of appropriations.
                  TITLE VII--GREENHOUSE GAS REDUCTIONS

                   Subtitle A--Global Climate Change

Sec. 701. Global climate change.
            Subtitle B--Climate Change Research Initiatives

Sec. 711. Research grants through National Science Foundation.
Sec. 712. Abrupt climate change research.
Sec. 713. Development of new measurement technologies.
Sec. 714. Technology development and diffusion.
Sec. 715. Public land.
Sec. 716. Sea level rise from polar ice sheet melting.
                          TITLE VIII--OFFSETS

             Subtitle A--Denial of Oil and Gas Tax Benefits

Sec. 801. Short title.
Sec. 802. Denial of deduction for income attributable to domestic 
                            production of oil, natural gas, or primary 
                            products thereof.
Sec. 803. 7-year amortization of geological and geophysical 
                            expenditures for certain major integrated 
                            oil companies.
        Subtitle B--Royalties Under Offshore Oil and Gas Leases

Sec. 811. Short title.
Sec. 812. Price thresholds for royalty suspension provisions.
Sec. 813. Clarification of authority to impose price thresholds for 
                            certain lease sales.
Sec. 814. Eligibility for new leases and the transfer of leases; 
                            conservation of resources fees.
Sec. 815. Repeal of certain taxpayer subsidized royalty relief for the 
                            oil and gas industry.
     Subtitle C--Strategic Energy Efficiency and Renewable Reserve

Sec. 821. Strategic Energy Efficiency and Renewables Reserve for 
                            investments in renewable energy and energy 
                            efficiency.

                TITLE I--FINDINGS AND PERFORMANCE GOALS

SEC. 101. FINDINGS.

    Congress finds the following:
            (1) A bold new national energy plan can lead to a surge of 
        investment in, development of, and deployment of clean energy 
        and energy efficient technologies that would result in the 
        creation of millions of highly-trained manufacturing and 
        technical jobs throughout the United States economy.
            (2) Climate change, national security and energy dependence 
        are a related set of global challenges.
            (3) The United States currently relies on oil for over 95 
        percent of its transportation fuel needs.
            (4) The United States currently imports 60 percent of the 
        oil it consumes and consumes about one fourth of the world's 
        daily oil production.
            (5) A major portion of the world's oil supply is controlled 
        by unstable governments and countries that are known to 
        finance, harbor, or otherwise support terrorism and terrorist 
        activities.
            (6) Since World War II, the United States has made 
        significant expenditures of American taxpayer dollars in 
        attempts to stabilize governments and protect United States 
        interests in the Middle East.
            (7) Countries such as Japan, Germany, Denmark, and Great 
        Britain lead the United States in manufacturing alternative 
        energy technologies that both decrease reliance on fossil fuels 
        and do not contribute to global warming.
            (8) The United States has led the world in the development 
        of a wide array of technological advances and is now poised to 
        lead the world, using its unique national genius for 
        innovation, in the development of a host of new energy 
        technologies.
            (9) Development of renewable energy resources in the United 
        States offers a substantial opportunity for economic 
        development in rural, agriculture-dependent areas.
            (10) Human activities have caused rapid increases in 
        atmospheric concentrations of carbon dioxide and other 
        greenhouse gases in the last century.
            (11) According to the Intergovernmental Panel on Climate 
        Change and the National Research Council--
                    (A) the earth has warmed in the last century; and
                    (B) the majority of the observed warming is 
                attributable to human activities, including fossil 
                fuel-generated carbon dioxide emissions.
            (12) To avoid catastrophic global warming, the United 
        States should take decisive action with other nations to reduce 
        greenhouse gas emissions by 80 percent by 2050.
            (13) Projected climate change poses a serious threat to 
        United States national security.
            (14) Projected climate change will add to tensions even in 
        stable regions of the world.

SEC. 102. PERFORMANCE GOALS.

    In order to ensure that the national energy policy of the United 
States is the most effective policy for protecting national and 
homeland security, expanding our economy and creating jobs, addressing 
global warming and environmental health concerns, and protecting the 
interests of United States consumers, Congress establishes the New 
Apollo Energy Act Performance Goals, which the President shall consider 
when formulating and enforcing national energy policy. These goals are 
as follows:
            (1) Reduce the projected demand for gasoline in the United 
        States by at least 70 billion gallons annually by 2030.
            (2) Create and retain 3,000,000 new highly skilled, high-
        wage jobs in the United States by 2015.
            (3) Meet 10 percent of the country's electricity needs from 
        electricity generated from renewable resources by 2012, and 
        meet 20 percent of the country's electricity needs from 
        electricity generated from renewable resources by 2020.
            (4) Lower energy costs for consumers by meeting at least 10 
        percent of projected electricity demand and 5 percent of 
        natural gas demand by 2020 through increased conservation and 
        improved energy efficiency.
            (5) Freeze U.S. greenhouse gas emissions in 2010, at 2009 
        levels. Beginning in 2011, cuts emissions to achieve 1990 
        emissions levels by 2020. After 2020, cut emissions each year 
        to reach 80 percent below 1990 levels by 2050.
            (6) Encourage domestic manufacturing and production of new 
        energy and energy efficient technologies.
            (7) Require that 100 percent of all domestically 
        manufactured automobiles be duel-fueled vehicles by 2017.
            (8) Increase the Federal fleet requirement to 100 percent 
        duel-fueled or plug-in hybrid vehicles by 2008.
            (9) Redevelop and enhance existing industrial facilities in 
        areas of the country adversely impacted by manufacturing job 
        losses.
            (10) Promote rural economic development.

                          TITLE II--EFFICIENCY

                      Subtitle A--Green Buildings

SEC. 201. SHORT TITLE.

    This Act may be cited as the ``Advanced Design in Energy for Living 
Efficiently Act of 2007''.

SEC. 202. FINDINGS.

    The Congress finds that--
            (1) green building design practices have a positive effect 
        on the reduction of greenhouse gases, the health of the 
        environment, increases in production of workers, and improved 
        water supply for communities;
            (2) buildings account for 38 percent of carbon dioxide 
        emissions per year;
            (3) buildings consume approximately 40 percent of the 
        energy and 70 percent of the electricity in the United States 
        per year;
            (4) an up-front investment of 2 percent in green building 
        design, on average, results in life cycle savings of 20 percent 
        of the total operation costs of a building;
            (5) case studies show examples of a 2 to 16 percent 
        increase in productivity in buildings that incorporate green 
        building design;
            (6) students with the most daylight in their classrooms 
        progressed 20 percent faster on mathematics tests and 26 
        percent faster on reading tests in one year than those with the 
        least day lighting;
            (7) the development of a research agenda for green building 
        design must consider whole building performance, and such 
        development should be founded on achievable and measurable 
        performance goals;
            (8) the tools and knowledge are currently available to meet 
        the goals of this Act; and
            (9) green building design is a national priority, and can 
        reduce the long-term operating costs for individuals and 
        enhance their ability to repay the mortgage.

SEC. 203. DEFINITIONS.

    For purposes of this Act--
            (1) the term ``Administrator'' means the Administrator of 
        the Environmental Protection Agency;
            (2) the term ``green building'' means a building that uses 
        sustainable design principles to reduce the use of nonrenewable 
        resources, minimize environmental impact, and relate people 
        with the natural environment;
            (3) the term ``institution of higher education'' has the 
        meaning given that term in section 101 of the Higher Education 
        Act of 1965 (20 U.S.C. 1001); and
            (4) the term ``State'' means one of the several States, the 
        District of Columbia, the Commonwealth of Puerto Rico, the 
        United States Virgin Islands, Guam, American Samoa, the 
        Commonwealth of the Northern Mariana Islands, or any other 
        commonwealth, territory, or possession of the United States.

SEC. 204. COORDINATING AGENCY.

    (a) In General.--The Administrator shall serve as the coordinating 
agency for Federal information on green building design and practices, 
including information regarding construction, use, and decommissioning 
of green buildings, and shall obtain from all Federal agencies any 
information relating thereto that is not protected from disclosure by 
law.
    (b) Availability of Information.--The Administrator, in 
consultation with the National Institute of Building Sciences, shall 
make the information obtained under subsection (a) readily available to 
the building industry and consumers.

SEC. 205. PUBLIC EDUCATION AND TRAINING.

    (a) In General.--The Administrator, in coordination with the 
National Institute of Building Sciences and in conjunction with 
private-sector building-related entities, shall establish a program to 
create and distribute informational materials to increase the knowledge 
of the general public about green building design principles.
    (b) Green Building Training.--Not later than 6 months after the 
date of enactment of this Act, the Administrator, working through a 
grant to the United States Green Building Council, shall provide for 
the establishment of criteria for appropriate education and training of 
architects, engineers, and developers in green building design and 
application.

SEC. 206. BLUE RIBBON PANEL.

    (a) Establishment.--The National Institute of Building Sciences 
shall establish a blue ribbon panel to provide independent advice and 
counsel to the Administrator on policy issues associated with the 
conservation of energy in residential, commercial, and Federal 
buildings, green building design systems, the health of the indoor 
environment, and reduction of water use and waste output.
    (b) Appointment.--The blue ribbon panel shall be appointed by the 
Board of Directors of the National Institute of Building Sciences. 
Appointees shall represent all sectors that are knowledgeable about or 
affected by green buildings, including architects, professional 
engineers, government officials, representatives of consumer 
organizations, representatives of construction labor organizations, 
product manufacturers, builders, housing management experts, and 
experts in building standards, codes, research, testing, and fire 
safety.
    (c) Report to Congress.--Not later than 1 year after the date of 
enactment of this Act, the blue ribbon panel shall report to Congress 
on the results of study to determine best practices for quantifying the 
information necessary to make informed property investment decisions, 
including with respect to buildings that meet carbon-neutral emission 
standards and use green building design practices.

SEC. 207. RESEARCH AND DEVELOPMENT REPORT.

    Not later than 6 months after the date of enactment of this Act, 
the National Institute of Building Sciences shall report to Congress on 
the estimated amount of funding necessary for research and development 
on green building design in the United States. Such report shall 
include recommendations on further policies needed to promote green 
building design.

SEC. 208. GREENHOUSE GAS EMISSION STANDARDS.

    (a) Establishment.--Not later than 1 year after the date of 
enactment of this Act, the National Institute of Building Sciences 
shall establish standards for the construction of new commercial and 
residential buildings that will reduce carbon emissions, compared to 
emissions from similar buildings in 2003, by--
            (1) 40 percent by 2010; and
            (2) 70 percent by 2020.
    (b) Compliance.--
            (1) Requirement.--Not later than 6 years after the date of 
        enactment of this Act, each State shall demonstrate to the 
        satisfaction of the Administrator that--
                    (A) such State (and all of the local jurisdictions 
                within such State) has--
                            (i) adopted the standards established under 
                        subsection (a); and
                            (ii) fully implemented such standards; or
                    (B) technical barriers exist that prevent such 
                adoption and implementation.
            (2) Supporting information.--In order to make a 
        demonstration to the Administrator under paragraph (1), a State 
        shall receive, and submit to the Administrator, reports from 
        all local jurisdictions in the State on how many building 
        permits were issued each year and how many of these permits met 
        the standards established under subsection (a).

SEC. 209. STUDY OF USE OF FHA ENERGY EFFICIENT MORTGAGE PROGRAM.

    (a) Study.--The Comptroller General of the United States shall 
conduct a study of the program of the Secretary of Housing and Urban 
Development for energy efficient mortgages insured under title II of 
the National Housing Act, established and operated pursuant to section 
106 of the Energy Policy Act of 1992 (42 U.S.C. 12712 note) and 
expanded in 1995 pursuant to subsection (b) of such section, to 
determine--
            (1) the extent to which such program is utilized by 
        mortgagors in the United States;
            (2) any impediments to wider or more efficient use of such 
        program, including any such impediments relating to--
                    (A) knowledge of or about the program; and
                    (B) the terms, limitations, or operation of the 
                program;
            (3) effective actions which may be taken to increase 
        utilization of the program by mortgagors in the United States.
    (b) Report.--Not later than the expiration of the 6-month period 
beginning on the date of the enactment of this Act, the Comptroller 
General shall submit to the Congress a report describing the findings 
of the study pursuant to subsection (a) and setting forth 
recommendations for actions under subsection (a)(3).

SEC. 210. HEALTHY, HIGH-PERFORMANCE SCHOOLS.

    (a) Grant Program Authorized.--The Administrator of the 
Environmental Protection Agency, acting through the National Institute 
of Building Sciences, in consultation with the Secretary of Energy and 
the Secretary of Education, is authorized to award grants to State 
educational agencies to permit such State educational agencies to carry 
out this section.
    (b) Subgrants.--
            (1) In general.--A State educational agency receiving a 
        grant under this section shall use funds made available under 
        the grant to award subgrants to local educational agencies to 
        permit such local educational agencies to carry out the 
        activities described in subsection (e).
            (2) Limitation.--A State educational agency shall award 
        subgrants under this subsection to local educational agencies 
        that are the neediest, as determined by the State, and that 
        have made a commitment to develop healthy, high-performance 
        school buildings in accordance with the plan developed and 
        approved under subsection (c)(1).
    (c) Implementation.--
            (1) Plans.--A State educational agency shall award 
        subgrants under this section only to local educational agencies 
        that, in consultation with the State educational agency and 
        State agencies with responsibilities relating to energy and 
        health, have developed plans that the State educational agency 
        determines to be feasible and appropriate in order to achieve 
        the purposes for which the subgrants are made.
            (2) Supplementing grant funds.--The State educational 
        agency shall encourage local educational agencies that receive 
        subgrants under this section to supplement their subgrant funds 
        with funds from other sources in order to implement their 
        plans.
    (d) Administration.--A State educational agency receiving a grant 
under this section shall use the grant funds made available under this 
section for one or more of the following:
            (1) To evaluate compliance by local educational agencies 
        with the requirements of this section.
            (2) To distribute information and materials on healthy, 
        high-performance school buildings for both new and existing 
        facilities.
            (3) To organize and conduct programs for school board 
        members, school district personnel, and others to disseminate 
        information on healthy, high-performance school buildings.
            (4) To provide technical services and assistance in 
        planning and designing healthy, high-performance school 
        buildings.
            (5) To collect and monitor information pertaining to 
        healthy, high-performance school building projects.
    (e) Local Uses of Funds.--
            (1) In general.--A local educational agency that receives a 
        subgrant under this section shall use the subgrant funds to 
        plan and prepare for healthy, high-performance school building 
        projects that--
                    (A) reduce energy use to at least 30 percent below 
                that of a school constructed in compliance with 
                standards prescribed in chapter 8 of the 2000 
                International Energy Conservation Code, or a similar 
                State code intended to achieve substantially equivalent 
                results;
                    (B) meet Federal and State health and safety codes; 
                and
                    (C) support healthful, energy efficient, and 
                environmentally sound practices.
            (2) Use of funds.--A local educational agency that receives 
        a subgrant under this section shall use funds for one or more 
        of the following:
                    (A) To develop a comprehensive energy audit of the 
                energy consumption characteristics of a building and 
                the need for additional energy conservation measures 
                necessary to allow schools to meet the guidelines set 
                out in paragraph (1).
                    (B) To produce a comprehensive analysis of building 
                strategies, designs, materials, and equipment that--
                            (i) are cost effective, produce greater 
                        energy efficiency, and enhance indoor air 
                        quality; and
                            (ii) can be used when conducting school 
                        construction and renovation or purchasing 
                        materials and equipment.
                    (C) To obtain research and provide technical 
                services and assistance in planning and designing 
                healthy, high-performance school buildings, including 
                developing a timeline for implementation of such plans.
    (f) Information and Assistance.--The Administrator of the 
Environmental Protection Agency, acting through the National Institute 
of Building Sciences, shall provide information and assistance to local 
educational agencies on sustainable design. The information and 
assistance shall include--
            (1) information on how benefits of sustainable design can 
        benefit life cycle costs to all school districts at no cost to 
        school districts; and
            (2) assistance on how to create curriculum for 
        environmental science classes to study local effects of 
        sustainable design.
    (g) Report to Congress.--The Administrator shall conduct a biennial 
review of State actions implementing this section and carrying out the 
plans developed under this section through State and local funding, and 
shall submit a report to Congress on the results of such reviews.
    (h) Limitations.--No funds received under this section may be used 
for any of the following:
            (1) Payment of maintenance of costs in connection with any 
        projects constructed in whole or in part with Federal funds 
        provided under this section.
            (2) Construction, renovation, or repair of school 
        facilities.
            (3) Construction, renovation, repair, or acquisition of a 
        stadium or other facility primarily used for athletic contests 
        or exhibitions, or other events for which admission is charged 
        to the general public.
    (i) Definitions.--In this section:
            (1) The term ``healthy, high-performance school building'' 
        means a school building in which the design, construction, 
        operation, and maintenance--
                    (A) use energy-efficient and affordable practices 
                and materials;
                    (B) are cost-effective;
                    (C) enhance indoor air quality; and
                    (D) protect and conserve water.
            (2) The terms ``local educational agency'' and ``State 
        educational agency'' have the meaning given those terms in 
        section 9101 of the Elementary and Secondary Education Act of 
        1965 (20 U.S.C. 7801).
    (j) Conforming Repeal.--Subpart 18 (20 U.S.C. 7277 et seq.) of part 
D of title V of the Elementary and Secondary Education Act of 1965 is 
repealed.

SEC. 211. LOAN GUARANTEES FOR PUBLIC INSTITUTIONS OF HIGHER EDUCATION.

    (a) Program.--The Administrator shall establish a program to make 
loan guarantees available to public institutions of higher education in 
a State for the construction or renovation of permanent buildings that 
meet the standards established under section 8(a).
    (b) Qualifications.--The Administrator shall establish the 
qualifications necessary for an institution to be eligible for a loan 
guarantee under this section, including qualifications to protect the 
financial interests of the Federal Government.
    (c) Approval.--The Administrator shall approve or disapprove an 
application for a loan guarantee under this section not later than 30 
days after receiving a completed application.
    (d) Authorization of Appropriations.--There are authorized to be 
appropriated to the Administrator such sums as may be necessary to 
carry out this section.

SEC. 212. ACCOUNTABILITY OF FEDERAL AGENCIES.

    (a) Agency Actions.--Each Federal agency shall--
            (1) increase the energy efficiency of its facilities and 
        operations;
            (2) annually transmit to the President and the Congress a 
        report on the energy efficiency increases and carbon emission 
        reductions associated with its facilities and operation; and
            (3) reward agency employees who make significant 
        contributions to the reduction of agency carbon emissions.
    (b) Energy Manager Training.--The energy manager, designated under 
section 304 of Executive Order No. 13123, of each Federal agency shall 
be required to receive training approved by the Administrator on green 
building design, construction, use, and decommissioning, and to receive 
an annual refresher course approved by the Administrator on those 
subjects.
    (c) Energy Efficiency Budget Report.--Not later than 6 months after 
the date of enactment of this Act, the Comptroller General shall 
transmit to the Congress a report comparing the energy efficiency 
budget request by the President for each Federal agency for fiscal 
years 2006 and 2007 with the requests from the agency to the President 
for energy efficiency budget amounts for those fiscal years.

SEC. 213. STATE AND LOCAL GOVERNMENT BLOCK GRANTS.

    (a) In General.--The Administrator shall make block grants to State 
and local governments. Such grants may be used for--
            (1) the renovation of existing buildings to achieve the 
        standards established by the National Institute of Building 
        Sciences under section 8(a);
            (2) redesigning existing plans for new buildings to enable 
        those plans to meet such standards;
            (3) research and development of technologies to enable and 
        support green building design and the achievement of such 
        standards; and
            (4) public education and training, including training for 
        homeowners, business owners, first time home buyers, and 
        contractors, on green buildings and their construction, use, 
        and decommissioning.
    (b) Mandatory Use.--All block grants received under this section 
shall be used, at least in part, for the purpose described in 
subsection (a)(4).
    (c) Eligibility.--No State or local government may receive a block 
grant under this section unless it demonstrates to the satisfaction of 
the Administrator that--
            (1) the State or local government (and in the case of a 
        State, all the local jurisdictions within the State) has--
                    (A) adopted the standards established under section 
                8(a); and
                    (B) fully implemented such standards; or
            (2) technical barriers exist that prevent such adoption and 
        implementation.
    (d) Research and Development Coordination.--The Administrator shall 
monitor activities described in subsection (a)(3) to prevent 
unnecessary duplication of research and development efforts.
    (e) Authorization of Appropriations.--There are authorized to be 
appropriated to the Administrator for making grants under this section 
$1,000,000,000 for the period encompassing fiscal years 2009 through 
2018.

SEC. 214. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to the Administrator for 
carrying out this Act, other than sections 11 and 13 $50,000,000 for 
each of the fiscal years 2009 through 2013.

SEC. 215. INCREASE AND EXTENSION OF ENERGY EFFICIENT COMMERCIAL 
              BUILDINGS DEDUCTION.

    (a) Increase.--Section 179D of the Internal Revenue Code of 1986 
(relating to energy efficient commercial buildings deduction) is 
amended--
            (1) in subsection (b)(1)(A) by striking ``$1.80'' and 
        inserting ``$2.25'', and
            (2) in subsection (d)(1)(A) by striking ``by substituting'' 
        and all that follows through the period at the end and 
        inserting ``by substituting `$.75' for `$2.25'.''.
    (b) Extension.--Subsection (h) of section 179D of such Code 
(relating to termination) is amended by striking ``December 31, 2008'' 
and inserting ``December 31, 2013''.
    (c) Effective Date.--The amendments made by this section shall 
apply to property placed in service after the date of the enactment of 
this Act, in taxable years ending after such date.

                    Subtitle B--Consumer Assistance

SEC. 221. APPLIANCE STANDARDS.

    (a) Consumer Appliance Requirement.--Section 325 of the Energy 
Policy and Conservation Act (42 U.S.C. 6295) is amended by adding at 
the end the following new subsection:
    ``(ii) Standby Mode.--
            ``(1) Requirement.--Except as provided in paragraph (2), 
        any final rule adopted after July 1, 2012, to set a new or 
        revised energy efficiency standard for a covered product shall 
        specify that a covered product manufactured on or after the 
        effective date of such new or revised standard shall, when in 
        standby mode, operate with not more than 1 watt of electric 
        power.
            ``(2) Exceptions.--
                    ``(A) Extensions.--The Secretary may provide a 
                single extension of up to 2 years for compliance with 
                paragraph (1) with respect to a covered product if the 
                Secretary finds that such extension is appropriate.
                    ``(B) Exemptions.--The Secretary may provide an 
                exemption from the requirement under paragraph (1) for 
                a covered product, after public notice and opportunity 
                for comment, if the Secretary finds that--
                            ``(i) achieving the requirement is not 
                        technologically feasible and economically 
                        justified for that covered product; or
                            ``(ii) such an exemption is warranted for 
                        medical or military reasons.
                Any exemption provided under this subparagraph shall be 
                reviewed at least once every 5 years.''.
    (b) Consumer Appliance Test Procedures.--Section 323(b) of the 
Energy Policy and Conservation Act (42 U.S.C. 6293(b)) is amended by 
adding at the end the following new paragraph:
    ``(17) Not later than July 1, 2009, the Secretary shall issue a 
final rule establishing test procedures for standby power consumption 
for all covered products, except for products for which the current 
test procedure already measures standby power consumption.''.
    (c) Repeal.--
            (1) In general.--Section 325(u) of the Energy Policy and 
        Conservation Act (42 U.S.C. 6295(u)) is amended--
                    (A) by striking paragraph (2); and
                    (B) by redesignating paragraphs (3) through (5) as 
                paragraphs (2) through (4), respectively.
            (2) Effective date.--The amendments made by paragraph (1) 
        shall take effect on the date described in section 325(ii)(I) 
        of the Energy Policy and Conservation Act as, added by 
        subsection (a) of this section.
    (d) Industrial Equipment Requirement.--Section 342 of the Energy 
Policy and Conservation Act (42 U.S.C. 6313) is amended by adding at 
the end the following new subsection:
    ``(f) Standby Power.--
            ``(1) Requirement.--Except as provided in paragraph (2), 
        any final rule adopted after July 1, 2012, to set a new or 
        revised energy efficiency standard for covered equipment shall 
        specify that covered equipment manufactured on or after the 
        effective date of such new or revised standard shall, when in 
        standby mode, operate with not more than 1 watt of electric 
        power.
            ``(2) Exceptions.--
                    ``(A) Extensions.--The Secretary may provide a 
                single extension of up to 5 years for compliance with 
                paragraph (1) with respect to a covered equipment if 
                the Secretary finds that such extension is appropriate.
                    ``(B) Exemptions.--The Secretary may provide an 
                exemption from the requirement under paragraph (1) for 
                covered equipment, after public notice and opportunity 
                for comment, if the Secretary finds that--
                            ``(i) achieving the requirement is not 
                        technologically feasible and economically 
                        justified for that covered equipment; or
                            ``(ii) such an exemption is warranted for 
                        medical or military reasons.
                Any exemption provided under this subparagraph shall be 
                reviewed at least once every 5 years.''.
    (e) Industrial Equipment Test Procedures.--Section 343(a) of the 
Energy Policy and Conservation Act (42 U.S.C. 6314(a)) is amended by 
adding at the end the following new paragraph:
    ``(9) Not later than July 1, 2009, the Secretary shall issue a 
final rule establishing test procedures for standby power consumption 
for all covered equipment, except for equipment for which the current 
test procedure already measures standby power consumption.''.

SEC. 222. ENERGY STAR CERTIFICATION FOR SOLAR WATER HEATERS AND 
              TANKLESS WATER HEATERS.

    Not later than January 1, 2009, the Secretary of Energy, in 
consultation with the Administrator of the Environmental Protection 
Agency, shall adopt regulations establishing Energy Star Program 
requirements and an Energy Star rating program for commercial and 
residential solar water heating devices and tankless water heating 
devices.

                       Subtitle C--Tax Provision

SEC. 231. ENERGY CREDIT FOR COMBINED HEAT AND POWER SYSTEM PROPERTY.

    (a) In General.--Section 48(a)(3)(A) of the Internal Revenue Code 
of 1986 (defining energy property) is by striking ``or'' at the end of 
clause (iii), by inserting ``or'' at the end of clause (iv), and by 
adding at the end the following new clause:
                            ``(v) combined heat and power system 
                        property,''.
    (b) Combined Heat and Power System Property.--Section 48 of such 
Code (relating to energy credit) is amended by adding at the end the 
following new subsection:
    ``(d) Combined Heat and Power System Property.--For purposes of 
subsection (a)--
            ``(1) Combined heat and power system property.--The term 
        `combined heat and power system property' means property 
        comprising a system--
                    ``(A) which uses the same energy source for the 
                simultaneous or sequential generation of electrical 
                power, mechanical shaft power, or both, in combination 
                with the generation of steam or other forms of useful 
                thermal energy (including heating and cooling 
                applications),
                    ``(B) which has an electrical capacity of not more 
                than 50 megawatts or a mechanical energy capacity of 
                not more than 67,000 horsepower or an equivalent 
                combination of electrical and mechanical energy 
                capacities,
                    ``(C) which produces--
                            ``(i) at least 20 percent of its total 
                        useful energy in the form of thermal energy 
                        which is not used to produce electrical or 
                        mechanical power (or combination thereof), and
                            ``(ii) at least 20 percent of its total 
                        useful energy in the form of electrical or 
                        mechanical power (or combination thereof),
                    ``(D) the energy efficiency percentage of which 
                exceeds 60 percent, and
                    ``(E) which is placed in service before January 1, 
                2011.
            ``(2) Special rules.--
                    ``(A) Energy efficiency percentage.--For purposes 
                of this subsection, the energy efficiency percentage of 
                a system is the fraction--
                            ``(i) the numerator of which is the total 
                        useful electrical, thermal, and mechanical 
                        power produced by the system at normal 
                        operating rates, and expected to be consumed in 
                        its normal application, and
                            ``(ii) the denominator of which is the 
                        higher heating value of the primary fuel 
                        sources for the system.
                    ``(B) Determinations made on btu basis.--The energy 
                efficiency percentage and the percentages under 
                paragraph (1)(C) shall be determined on a Btu basis.
                    ``(C) Input and output property not included.--The 
                term `combined heat and power system property' does not 
                include property used to transport the energy source to 
                the facility or to distribute energy produced by the 
                facility.
                    ``(D) Certain exception not to apply.--The first 
                sentence of the matter in subsection (a)(3) which 
                follows subparagraph (D) thereof shall not apply to 
                combined heat and power system property.
            ``(3) Systems using bagasse.--If a system is designed to 
        use bagasse for at least 90 percent of the energy source--
                    ``(A) paragraph (1)(D) shall not apply, but
                    ``(B) the amount of credit determined under 
                subsection (a) with respect to such system shall not 
                exceed the amount which bears the same ratio to such 
                amount of credit (determined without regard to this 
                subparagraph) as the energy efficiency percentage of 
                such system bears to 60 percent.
            ``(4) Nonapplication of certain rules.--For purposes of 
        determining if the term `combined heat and power system 
        property' includes technologies which generate electricity or 
        mechanical power using back-pressure steam turbines in place of 
        existing pressure-reducing valves or which make use of waste 
        heat from industrial processes such as by using organic 
        rankine, stirling, or kalina heat engine systems, paragraph (1) 
        shall be applied without regard to subparagraphs (C) and (D) 
        thereof .''.
    (c) Effective Date.--The amendments made by this section shall 
apply to periods after December 31, 2007, in taxable years ending after 
such date, under rules similar to the rules of section 48(m) of the 
Internal Revenue Code of 1986 (as in effect on the day before the date 
of the enactment of the Revenue Reconciliation Act of 1990).

                    TITLE III--TRANSPORTATION SECTOR

SEC. 301. PERFORMANCE GOALS.

    Congress finds this title will:
            (1) Reduce greenhouse gas emissions from the use of motor 
        vehicles by 22 percent below currently projected levels.
            (2) Prevent 662 million metric tons of carbon dioxide from 
        being produced, which is the equivalent of taking 96 million of 
        today's automobiles off the road in one year.
            (3) Reduce United States oil consumption by 3.6 million 
        barrels of oil per day.

              Subtitle A--Plug-in Hybrid Electric Vehicles

SEC. 311. SHORT TITLE.

    This subtitle may be cited as the ``Get Real Incentives to Drive 
Plug-in Act''.

SEC. 312. DEFINITION.

    For purposes of this subtitle, the term ``plug-in hybrid electric 
vehicle'' means an on-road or nonroad vehicle that is propelled by an 
internal combustion engine or heat engine using--
            (1) any combustible fuel;
            (2) an on-board, rechargeable storage device;
            (3) a means of using an off-board source of electricity; 
        and
            (4) fuel cell technology.

SEC. 313. RESEARCH AND DEVELOPMENT GRANTS.

    (a) In General.--The Secretary of Transportation shall establish a 
program to make grants to owners of domestic motor vehicle 
manufacturing or production facilities for research, development, and 
demonstration on plug-in hybrid electric vehicles.
    (b) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary of Transportation for carrying out this 
section $500,000,000 for the period encompassing fiscal years 2008 
through 2012.

SEC. 314. PILOT PROJECT.

    The Secretary of Transportation shall establish a pilot project to 
determine how best to integrate plug-in hybrid electric vehicles into 
the electric power grid and into the overall transportation 
infrastructure.

SEC. 315. TEST SITE.

    The Secretary of Transportation shall establish a test site for the 
advancement of battery technologies for plug-in hybrid electric 
vehicles, to be modeled after the Department of Transportation's NHTSA 
Vehicle Research and Test Center in Ohio.

SEC. 316. PLAN.

    Not later than 2 years after the date of enactment of this 
subtitle, the Secretary of Transportation, in collaboration with the 
Secretary of Energy, shall transmit to Congress a plan for the 
introduction and implementation of a plug-in hybrid electric vehicle 
support infrastructure.

SEC. 317. PLUG-IN HYBRID MOTOR VEHICLE TAX CREDIT.

    (a) In General.--Section 30B of the Internal Revenue Code of 1986 
is amended by redesignating subsections (i) and (j) as subsections (j) 
and (k), respectively, and by inserting after subsection (h) the 
following new subsection:
    ``(i) New Plug-In Hybrid Motor Vehicle Credit.--
            ``(1) In general.--For purposes of subsection (a), the new 
        plug-in hybrid motor vehicle credit determined under this 
        subsection with respect to a new qualified plug-in hybrid motor 
        vehicle placed in service by the taxpayer during the taxable 
        year is $2,500, if such vehicle is a new qualified plug-in 
        hybrid motor vehicle with a gross vehicle weight rating of not 
        more than 8,500 pounds.
            ``(2) Increase for additional kilowatt hours.--The amount 
        determined under paragraph (1) shall be increased by $500 for 
        each whole number of kilowatt hours by which the storage 
        capacity of the on-board, rechargeable electricity storage 
        device used by such vehicle exceeds 2.5 kilowatt hours, but 
        does not exceed 49.5 kilowatt hours.
            ``(3) New qualified plug-in hybrid motor vehicle.--For 
        purposes of this subsection, the term `new qualified plug-in 
        hybrid motor vehicle' means a motor vehicle--
                    ``(A) which is propelled by an internal combustion 
                engine or heat engine using--
                            ``(i) any combustible fuel,
                            ``(ii) an on-board, rechargeable storage 
                        device with a storage capacity of at least 2.5 
                        kilowatt hours, and
                            ``(iii) a means of using an off-board 
                        source of electricity,
                    ``(B) which, in the case of a passenger automobile 
                or light truck, has received on or after the date of 
                the enactment of this section a certificate that such 
                vehicle meets or exceeds the Bin 5 Tier II emission 
                level 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) the original use of which commences with the 
                taxpayer,
                    ``(D) which is acquired for use or lease by the 
                taxpayer and not for resale, and
                    ``(E) which is made by a manufacturer.''.
    (b) Conforming Amendments.--
            (1) Section 30B(a) of such Code is amended by striking 
        ``and'' at the end of paragraph (3), by striking the period at 
        the end of paragraph (4) and inserting ``, and'', and by adding 
        at the end the following new paragraph:
            ``(5) the new plug-in hybrid motor vehicle credit 
        determined under subsection (i).''.
            (2) Section 30B(k)(2) of such Code, as redesignated by 
        subsection (a), is amended--
                    (A) by striking ``or'' and inserting a comma, and
                    (B) by inserting ``, or a new qualified plug-in 
                hybrid motor vehicle (as described in subsection 
                (i)(3))'' after ``subsection (d)(2)(A))''.
    (c) Effective Date.--The amendments made by this section shall 
apply to property placed in service after the date of the enactment of 
this Act, in taxable years ending after such date.

        Subtitle B--Increase Ridership of Public Transportation

SEC. 321. INCREASED UNIFORM DOLLAR LIMITATION FOR ALL TYPES OF 
              TRANSPORTATION FRINGE BENEFITS.

    (a) In General.--Section 132(f)(2) of the Internal Revenue Code of 
1986 (relating to limitation on exclusion) is amended--
            (1) by striking ``$100'' in subparagraph (A) and inserting 
        ``$200'', and
            (2) by striking ``$175'' in subparagraph (B) and inserting 
        ``$200''.
    (b) Inflation Adjustment Conforming Amendments.--Subparagraph (A) 
of section 132(f)(6) of such Code (relating to inflation adjustment) is 
amended--
            (1) by striking the last sentence,
            (2) by striking ``1999'' and inserting ``2008'', and
            (3) by striking ``1998'' and inserting ``2007''.
    (c) Effective Date.--The amendments made by this subsection shall 
apply to taxable years beginning after December 31, 2006.

SEC. 322. CREDIT FOR EMPLOYER COSTS OF PROVIDING CERTAIN MASS 
              TRANSPORTATION FRINGE BENEFITS TO THEIR EMPLOYEES.

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

``SEC. 45O. CREDIT FOR EMPLOYER COSTS OF PROVIDING CERTAIN MASS 
              TRANSPORTATION FRINGE BENEFITS TO THEIR EMPLOYEES.

    ``(a) In General.--For purposes of section 38, the mass 
transportation fringe credit is an amount equal to 25 percent of the 
cost paid or incurred by an employer during the taxable year for 
providing any qualified transportation fringe described in subparagraph 
(A) or (B) of section 132(f)(1) to employees of such employer.
    ``(b) Limitation.--The amount of the credit under subsection (a) 
for a month may not exceed the dollar amount per month to which the 
amount of the fringe benefits are limited under subparagraph (A) of 
section 132(f)(2).
    ``(c) Election To Have Credit Not Apply.--A taxpayer may elect to 
have this section not apply for any taxable year.''.
    (b) Conforming Amendments.--
            (1) Credit to be part of general business credit.--
        Subsection (b) of section 38 of such Code (relating to current 
        year business credit) 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 mass transportation fringe credit determined 
        under section 45O(a).''.
            (2) Clerical amendment.--The table of sections for subpart 
        D of part IV of subchapter A of chapter 1 of such Code is 
        amended by adding at the end the following new item:

``45O. Credit for employer costs of providing certain mass 
                            transportation fringe benefits to their 
                            employees.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2007.

SEC. 323. CLARIFICATION OF FEDERAL EMPLOYEE BENEFITS.

    Section 7905 of title 5, United States Code, is amended--
            (1) in subsection (a)--
                    (A) in paragraph (2)(C) by inserting ``and'' after 
                the semicolon;
                    (B) in paragraph (3) by striking ``; and'' and 
                inserting a period; and
                    (C) by striking paragraph (4); and
            (2) in subsection (b)(2)(A) by amending subparagraph (A) to 
        read as follows:
                    ``(A) a qualified transportation fringe as defined 
                in section 132(f)(1) of the Internal Revenue Code of 
                1986;''.

SEC. 324. EXTENSION OF TRANSPORTATION FRINGE BENEFIT TO BICYCLE 
              COMMUTERS.

    (a) In General.--Paragraph (1) of section 132(f) of the Internal 
Revenue Code of 1986 (relating to general rule for qualified 
transportation fringe) is amended by adding at the end the following:
                    ``(D) Bicycle commuting allowance.''.
    (b) Bicycle Commuting Allowance Defined.--Paragraph (5) of section 
132(f) of such Code (relating to definitions) is amended by adding at 
the end the following:
                    ``(F) Bicycle commuting allowance.--The term 
                `bicycle commuting allowance' means an amount provided 
                to an employee for transportation on a bicycle if such 
                transportation is in connection with travel between the 
                employee's residence and place of employment.''.
    (c) Limitation on Exclusion.--Paragraph (2) of section 132(f) of 
such Code is amended by striking ``subparagraphs (A) and (B)'' and 
inserting ``subparagraphs (A), (B), and (D)''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2007.

            Subtitle C--Emissions Reductions and Oil Savings

                      CHAPTER 1--BIOFUELS SECURITY

SEC. 331. SHORT TITLE.

    This chapter may be cited as the ``Biofuels Security Act of 2007''.

                     Subchapter A--Renewable Fuels

SEC. 341. RENEWABLE FUEL PROGRAM.

    Section 211(o)(2) of the Clean Air Act (42 U.S.C. 7545(o)(2)) is 
amended by striking subparagraph (B) and inserting the following:
                    ``(B) Applicable volume.--
                            ``(i) In general.--For the purpose of 
                        subparagraph (A), the applicable volume for 
                        calendar year 2010 and each calendar year 
                        thereafter shall be determined, by rule, by the 
                        Administrator, in consultation with the 
                        Secretary of Agriculture and the Secretary of 
                        Energy, in a manner that ensures that--
                                    ``(I) the requirements described in 
                                clause (ii) for specified calendar 
                                years are met; and
                                    ``(II) the applicable volume for 
                                each calendar year not specified in 
                                clause (ii) is determined on an annual 
                                basis.
                            ``(ii) Requirements.--The requirements 
                        referred to in clause (i) are--
                                    ``(I) for calendar year 2010, at 
                                least 10,000,000,000 gallons of 
                                renewable fuel;
                                    ``(II) for calendar year 2020, at 
                                least 30,000,000,000 gallons of 
                                renewable fuel; and
                                    ``(III) for calendar year 2030, at 
                                least 60,000,000,000 gallons of 
                                renewable fuel.''.

SEC. 342. INSTALLATION OF E-85 FUEL PUMPS BY MAJOR OIL COMPANIES AT 
              OWNED STATIONS AND BRANDED STATIONS.

    Section 211(o) of the Clean Air Act (42 U.S.C. 7545(o)) is amended 
by adding at the end the following:
            ``(11) Installation of e-85 fuel pumps by major oil 
        companies at owned stations and branded stations.--
                    ``(A) Definitions.--In this paragraph:
                            ``(i) E-85 fuel.--The term `E-85 fuel' 
                        means a blend of gasoline approximately 85 
                        percent of the content of which is derived from 
                        ethanol produced in the United States.
                            ``(ii) Major oil company.--The term `major 
                        oil company' means any person that, 
                        individually or together with any other person 
                        with respect to which the person has an 
                        affiliate relationship or significant ownership 
                        interest, has not less than 4,500 retail 
                        station outlets according to the latest 
                        publication of the Petroleum News Annual 
                        Factbook.
                            ``(iii) Secretary.--The term `Secretary' 
                        means the Secretary of Energy, acting in 
                        consultation with the Administrator of the 
                        Environmental Protection Agency and the 
                        Secretary of Agriculture.
                    ``(B) Regulations.--The Secretary shall promulgate 
                regulations to ensure that each major oil company that 
                sells or introduces gasoline into commerce in the 
                United States through wholly-owned stations or branded 
                stations installs or otherwise makes available 1 or 
                more pumps that dispense E-85 fuel (including any other 
                equipment necessary, such as including tanks, to ensure 
                that the pumps function properly) at not less than the 
                applicable percentage of the wholly-owned stations and 
                the branded stations of the major oil company specified 
                in subparagraph (C).
                    ``(C) Applicable percentage.--For the purpose of 
                subparagraph (B), the applicable percentage of the 
                wholly-owned stations and the branded stations shall be 
                determined in accordance with the following table:

                                       Applicable percentage of wholly-
                                            owned stations and branded 
                                                             stations  
``Calendar year:                                          (percent):   
    2008..........................................                   5 
    2009..........................................                  10 
    2010..........................................                  15 
    2011..........................................                  20 
    2012..........................................                  25 
    2013..........................................                  30 
    2014..........................................                  35 
    2015..........................................                  40 
    2016..........................................                  45 
    2017 and each calendar year thereafter........                  50.
                    ``(D) Geographic distribution.--
                            ``(i) In general.--Subject to clause (ii), 
                        in promulgating regulations under subparagraph 
                        (B), the Secretary shall ensure that each major 
                        oil company described in subparagraph (B) 
                        installs or otherwise makes available 1 or more 
                        pumps that dispense E-85 fuel at not less than 
                        a minimum percentage (specified in the 
                        regulations) of the wholly-owned stations and 
                        the branded stations of the major oil company 
                        in each State.
                            ``(ii) Requirement.--In specifying the 
                        minimum percentage under clause (i), the 
                        Secretary shall ensure that each major oil 
                        company installs or otherwise makes available 1 
                        or more pumps described in that clause in each 
                        State in which the major oil company operates.
                    ``(E) Financial responsibility.--In promulgating 
                regulations under subparagraph (B), the Secretary shall 
                ensure that each major oil company described in that 
                subparagraph assumes full financial responsibility for 
                the costs of installing or otherwise making available 
                the pumps described in that subparagraph and any other 
                equipment necessary (including tanks) to ensure that 
                the pumps function properly.
                    ``(F) Production credits for exceeding e-85 fuel 
                pumps installation requirement.--
                            ``(i) Earning and period for applying 
                        credits.--If the percentage of the wholly-owned 
                        stations and the branded stations of a major 
                        oil company at which the major oil company 
                        installs E-85 fuel pumps in a particular 
                        calendar year exceeds the percentage required 
                        under subparagraph (C), the major oil company 
                        earns credits under this paragraph, which may 
                        be applied to any of the 3 consecutive calendar 
                        years immediately after the calendar year for 
                        which the credits are earned.
                            ``(ii) Trading credits.--Subject to clause 
                        (iii), a major oil company that has earned 
                        credits under clause (i) may sell credits to 
                        another major oil company to enable the 
                        purchaser to meet the requirement under 
                        subparagraph (C).
                            ``(iii) Exception.--A major oil company may 
                        not use credits purchased under clause (ii) to 
                        fulfill the geographic distribution requirement 
                        in subparagraph (D).''.

SEC. 343. MINIMUM FEDERAL FLEET REQUIREMENT.

    Section 303(b)(1) of the Energy Policy Act of 1992 (42 U.S.C. 
13212(b)(1)) is amended--
            (1) in subparagraph (C), by striking ``and'' after the 
        semicolon;
            (2) in subparagraph (D), by striking ``fiscal year 1999 and 
        thereafter,'' and inserting ``each of fiscal years 1999 through 
        2007; and'';
            (3) by inserting after subparagraph (D) the following:
                    ``(E) 100 percent in fiscal year 2008 and 
                thereafter,''; and
            (4) by inserting after the period at the end the following: 
        ``For purposes of this subsection, the term `alternative fueled 
        vehicle' shall include plug-in hybrid vehicles (as defined in 
        section 30B of the Internal Revenue Code of 1986).''.

SEC. 344. APPLICATION OF GASOHOL COMPETITION ACT OF 1980.

    Section 26 of the Clayton Act (15 U.S.C. 26a) is amended--
            (1) by redesignating subsection (c) as subsection (d);
            (2) by inserting after subsection (b) the following:
    ``(c) For purposes of subsection (a), restricting the right of a 
franchisee to install on the premises of that franchisee a renewable 
fuel pump, such as one that dispenses E85, shall be considered an 
unlawful restriction.''; and
            (3) in subsection (d) (as redesignated by paragraph (1))--
                    (A) by striking ``section,'' and inserting the 
                following: ``section--
            ``(1) the term'';
                    (B) by striking the period at the end and inserting 
                ``; and''; and
                    (C) by adding at the end the following:
            ``(2) the term `gasohol' includes any blend of ethanol and 
        gasoline such as E-85.''.

                 Subchapter B--Dual Fueled Automobiles

SEC. 351. REQUIREMENT TO MANUFACTURE DUAL FUELED AUTOMOBILES.

    (a) Requirement.--
            (1) In general.--Chapter 329 of title 49, United States 
        Code, is amended by inserting after section 32902 the 
        following:
``Sec. 32902A. Requirement to manufacture dual fueled automobiles
    ``(a) Requirement.--Each manufacturer of new automobiles that are 
capable of operating on gasoline or diesel fuel shall ensure that the 
percentage of such automobiles, manufactured in any model year after 
model year 2007 and distributed in commerce for sale in the United 
States, which are dual fueled automobiles is equal to not less than the 
applicable percentage set forth in the following table:

                               The percentage of dual fueled automobiles
                                manufactured shall be not less than:
``For each of the following
 model years:
  2008.......................  10
  2009.......................  20
  2010.......................  30
  2011.......................  40
  2012.......................  50
  2013.......................  60
  2014.......................  70
  2015.......................  80
  2016.......................  90
  2017 and beyond............  100.

    ``(b) Production Credits for Exceeding Flexible Fuel Automobile 
Production Requirement.--
            ``(1) Earning and period for applying credits.--If the 
        number of dual fueled automobiles manufactured by a 
        manufacturer in a particular model year exceeds the number 
        required under subsection (a), the manufacturer earns credits 
        under this section, which may be applied to any of the 3 
        consecutive model years immediately after the model year for 
        which the credits are earned.
            ``(2) Trading credits.--A manufacturer that has earned 
        credits under paragraph (1) may sell credits to another 
        manufacturer to enable the purchaser to meet the requirement 
        under subsection (a).''.
            (2) Technical amendment.--The table of sections for chapter 
        329 of title 49, United States Code, is amended by inserting 
        after the item relating to section 32902 the following:

``32902A. Requirement to manufacture dual fueled automobiles.''.
    (b) Activities To Promote the Use of Certain Alternative Fuels.--
The Secretary of Transportation shall carry out activities to promote 
the use of fuel mixtures containing gasoline or diesel fuel and 1 or 
more alternative fuels, including a mixture containing at least 85 
percent of methanol, denatured ethanol, and other alcohols by volume 
with gasoline or other fuels, to power automobiles in the United 
States.

SEC. 352. MANUFACTURING INCENTIVES FOR DUAL FUELED AUTOMOBILES.

    Section 32905(b) of title 49, United States Code, is amended--
            (1) by redesignating paragraphs (1) and (2) as 
        subparagraphs (A) and (B), respectively;
            (2) by inserting ``(1)'' before ``Except'';
            (3) by striking ``model years 1993-2010'' and inserting 
        ``model year 1993 through the first model year beginning not 
        less than 18 months after the date of enactment of the Biofuels 
        Security Act of 2007''; and
            (4) by adding at the end the following:
    ``(2) Except as provided in paragraph (5), subsection (d), or 
section 32904(a)(2), the Administrator shall measure the fuel economy 
for each model of dual fueled automobiles manufactured by a 
manufacturer in the first model year beginning not less than 30 months 
after the date of enactment of the Biofuels Security Act of 2007 by 
dividing 1.0 by the sum of--
            ``(A) 0.7 divided by the fuel economy measured under 
        section 32904(c) when operating the model on gasoline or diesel 
        fuel; and
            ``(B) 0.3 divided by the fuel economy measured under 
        subsection (a) when operating the model on alternative fuel.
    ``(3) Except as provided in paragraph (5), subsection (d), or 
section 32904(a)(2), the Administrator shall measure the fuel economy 
for each model of dual fueled automobiles manufactured by a 
manufacturer in the first model year beginning not less than 42 months 
after the date of enactment of the Biofuels Security Act of 2007 by 
dividing 1.0 by the sum of--
            ``(A) 0.9 divided by the fuel economy measured under 
        section 32904(c) when operating the model on gasoline or diesel 
        fuel; and
            ``(B) 0.1 divided by the fuel economy measured under 
        subsection (a) when operating the model on alternative fuel.
    ``(4) Except as provided in subsection (d) or section 32904(a)(2), 
the Administrator shall measure the fuel economy for each model of dual 
fueled automobiles manufactured by a manufacturer in each model year 
beginning not less than 54 months after the date of enactment of the 
Biofuels Security Act of 2007 in accordance with section 32904(c).
    ``(5) Notwithstanding paragraphs (2) through (4), the fuel economy 
for all dual fueled automobiles manufactured to comply with the 
requirements under section 32902A(a), including automobiles for which 
dual fueled automobile credits have been used or traded under section 
32902A(b), shall be measured in accordance with section 32904(c).''.

                    CHAPTER 2--EMISSIONS REDUCTIONS

SEC. 361. EXTENSION OF BIODIESEL TAX CREDITS.

    (a) In General.--Sections 40A(g), 6426(c)(6), and 6427(e)(5)(B) of 
the Internal Revenue Code of 1986 are each amended by striking ``2008'' 
and inserting ``2018''.
    (b) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.

SEC. 362. LOW CARBON FUEL STANDARD.

    The Clean Air Act (42 U.S.C. 7401 et seq.) is amended by adding at 
the end the following:

 ``TITLE VII--GREENHOUSE GAS EMISSIONS FROM VEHICLE AND AIRCRAFT FUELS

``SEC. 701. PURPOSE.

    ``The purpose of this title is to provide a reduction in the 
aggregate greenhouse gas emissions per unit of energy consumed by 
vehicles and aircraft.

``SEC. 702. FINDINGS.

    ``The Congress finds that:
            ``(1) The United States consumes a quarter of the world's 
        oil and the oil used in transportation accounts for a third of 
        the United States emissions of the greenhouse gases that cause 
        global warming.
            ``(2) To avoid catastrophic global warming, the United 
        States should take decisive action with other nations to reduce 
        greenhouse gas emissions by 60 to 80 percent by 2050.
            ``(3) Transitioning our transportation sector to more 
        efficient use of oil and low-carbon petroleum alternatives is 
        essential to reducing global warming pollution.
            ``(4) It is necessary and feasible to reduce emissions of 
        greenhouse gases, enhance national security by reducing 
        dependence on oil and promote economic well-being without 
        sacrificing land, water and air quality, by enacting energy 
        policies that motivate environmental performance.

``SEC. 703. DEFINITIONS.

    ``For purposes of this title:
            ``(1) Administrator.--The term `Administrator' means the 
        Administrator of the Environmental Protection Agency.
            ``(2) Carbon dioxide equivalent.--With respect to each 
        greenhouse gas, the term `carbon dioxide equivalent' means the 
        amount of the greenhouse gas resulting from that fuel that 
        traps the same amount of heat as one metric ton of carbon 
        dioxide, as determined by the Administrator.
            ``(3) Greenhouse gas.--The term `greenhouse gas' means 
        carbon dioxide, hydrofluorocarbons, methane, nitrous oxide, 
        perfluorocarbons, sulfur hexafluoride, and any other 
        anthropogenically-emitted gas that is determined by the 
        Administrator, after notice and comment, to contribute to 
        global warming to a non-negligible degree.
            ``(4) Lifecycle greenhouse gas emissions.--The term 
        `lifecycle greenhouse gas emissions' means greenhouse gases 
        emitted during the entire cycle of extraction, cultivation, 
        production, manufacturing, feedstock extraction, marketing, and 
        distribution for a fuel or other sources of energy, as well as 
        those emitted during the use of such fuels and sources by 
        vehicles and aircraft. The term includes changes in land use 
        and land cover associated with each phase of such cycle.
            ``(5) Vehicle.--The term `vehicle' means a motor vehicle as 
        defined in section 216 and any other device used for the 
        transportation of persons or goods (other than an aircraft).

``SEC. 704. LOW CARBON FUEL PERFORMANCE STANDARDS.

    ``(a) Vehicle Fuel Standard.--Not later than January 1, 2010, the 
Administrator shall promulgate low carbon fuel performance standards 
for fuels and other sources of energy used to propel vehicles. Such 
standards shall begin to apply in the year 2015.
    ``(b) Graduated Reductions for Vehicle Fuel.--The Administrator 
shall promulgate, by rule, a declining standard for each 5 calendar 
year period beginning in 2015. Each such standard shall represent a 
graduated percentage reduction in aggregate emissions of greenhouse 
gases per Btu in each 5-year period after 2014 through 2050 as provided 
in the following table. The reduction for each such period shall be 
measured from the baseline for vehicle fuel, as determined by the 
Administrator under subsection (f).


 
 
 
``5-year period                          Percent reduction
  2015 through 2019....................  3 percent
  2020 through 2024....................  6 percent
  2025 through 2029....................  9 percent
  2030 through 2034....................  12 percent
  2035through 2039.....................  15 percent
  2040 through 2044....................  18 percent
  2045 through 2049....................  21 percent

    ``(c) Additional Reductions.--Each 5 years during the period 2015 
through 2050 the Administrator shall review available control 
technology, safety considerations, and land and other resources 
available for production of fuels and other sources of energy used to 
propel vehicles. Following such review, the Administrator may, by rule, 
promulgate a more stringent standard than the standard otherwise 
applicable under subsection (b) which more stringent standard, based on 
such review, the Administrator determines to be requisite to protect 
the public health and welfare from any known or anticipated adverse 
effects associated with greenhouse gas emissions.
    ``(d) Standard for Aircraft Fuel.--Not later than January 1, 2010, 
the Administrator shall promulgate a low carbon fuel performance 
standard for fuels and other sources of energy used by aircraft. The 
performance standard for such fuels and other sources of energy for 
aircraft for each year after 2015 shall be the baseline for that fuel, 
as determined by the Administrator under subsection (f). Such standard 
shall begin to apply in the year 2015 and continue to apply through the 
calendar year 2019. The standard shall remain in effect thereafter 
unless, for each 5 year period thereafter, beginning in 2020, the 
Administrator and the Secretary of Transportation determine that a more 
stringent standard is necessary to carry out the purposes of this Act. 
Such determination may be made only after a thorough review of 
available technology and safety considerations. Following such 
determination, the Administrator shall promulgate a rule establishing a 
more stringent standard.
    ``(e) Terms of Standards.--Each standard under this section shall 
be expressed in carbon dioxide, or carbon dioxide equivalent, emissions 
per Btu of energy from the aggregate of all fuels and other sources of 
energy used by vehicles or by aircraft.
    ``(f) Baseline.--
            ``(1) Vehicle fuel.--The baseline for vehicle fuel for 
        purposes of the standards under this section shall be the 
        aggregate greenhouse gas emissions per Btu from all such fuel 
        and other sources of energy used by vehicles in calendar year 
        2007, as determined by the Administrator.
            ``(2) Aircraft fuel.--For fuel used by aircraft, the 
        baseline for purposes of the standard under this section shall 
        be the aggregate greenhouse gas emissions per Btu from all such 
        fuel and other sources of energy used by aircraft in calendar 
        year 2007, as determined by the Administrator.

``SEC. 705. EPA REGULATIONS; CALCULATION OF EMISSIONS PER BTU.

    ``(a) Regulations.--After consultation with the Secretary of Energy 
and the Secretary of Commerce, and a review of all compliance methods, 
the Administrator, after notice and opportunity for comment, shall 
promulgate, not later than January 1, 2010, and may periodically revise 
thereafter, regulations requiring compliance with the annual 
performance standards established under section 703.
    ``(b) Calculations of Greenhouse Emission Rate Per Btu.--
            ``(1) Individual calculations under standard methodology.--
        The regulations under this section shall provide standard, 
        transparent and public methods for each producer, importer, or 
        blender of a fuel or other source of energy used, directly or 
        indirectly, as a fuel for vehicles or aircraft to calculate the 
        greenhouse gases emitted per Btu of such fuel or other source 
        of energy when so used.
            ``(2) Lifecycle greenhouse gas emission calculation.--The 
        regulations under this section shall include appropriate 
        methods for estimating the lifecycle greenhouse gas emissions 
        of each fuel and other energy source. For purposes of such 
        regulations, the Administrator shall develop methods to 
        quantify the direct and indirect emissions resulting from 
        biofuel production.
            ``(3) Special adjustment for electricity and hydrogen.--In 
        making the calculation under this subsection, the Administrator 
        shall adjust the Btus of energy delivered from the use of 
        electricity and hydrogen used as a fuel or source of energy for 
        vehicles and aircraft. Such adjustment shall reflect the 
        greenhouse gas reductions on a per mile basis in order to 
        reflect the inherent energy efficiency of an average battery 
        electric, plug in hybrid electric vehicle, or hydrogen fuel 
        cell vehicle.
            ``(4) NAS report.--The Administrator shall, not less than 
        90 days after the enactment of this Act, enter into a contract 
        with the National Academy of Sciences to assess and recommend 
        methods to calculate the lifecycle greenhouse gas emissions 
        associated with the production and use of fuels and other 
        sources of energy used as a fuel for vehicles and aircraft.
            ``(5) Consultation.--In developing regulations under this 
        section, the Administrator shall consult with State agencies 
        and other government entities within and outside the United 
        States having programs for control of greenhouse gas emissions 
        from vehicle fuels and shall promulgate such regulations after 
        consideration of the report under paragraph (4).

``SEC. 706. COMPLIANCE WITH STANDARD.

    ``(a) Requirement To Meet Standard.--The regulations under this 
title shall provide that each producer, importer or blender of a fuel 
or other source of energy used for transportation by vehicles or 
aircraft shall be required to generate or obtain in each calendar year 
after 2009 credits equal to the excess, if any, of paragraph (1) over 
paragraph (2) multiplied by paragraph (3). No producer, importer, or 
blender shall be required to obtain credits if the fuel or other source 
of energy meets the aggregate performance standard under section 703 
for the calendar year concerned.
            ``(1) The greenhouse gases (expressed as carbon dioxide or 
        carbon dioxide equivalent) emitted per Btu of fuel or other 
        energy produced, imported, or blended by such producer, 
        importer, or blender in the calendar year concerned.
            ``(2) The aggregate performance standard for all such 
        producers, importer, or blenders established under section 703 
        for the calendar year concerned.
            ``(3) The total number of Btus used in vehicles and 
        aircraft that is provided by the fuel or other energy produced, 
        imported, or blended by such producer, importer or blender in 
        the year concerned.
    ``(b) Generation, Trading, and Banking of Credits.--
            ``(1) Credit generation.--For each calendar year after the 
        calendar year 2014, each producer, importer, or blender of each 
        fuel or other source of energy used for transportation by 
        vehicles or aircraft shall be credited with greenhouse gas 
        emission credits equal to the excess, if any, of paragraph (2) 
        of subsection (a) over paragraph (1) of subsection (a) 
        multiplied by paragraph (3) of subsection (a).
            ``(2) Trading.--The regulations under this section shall 
        allow purchase, sale, and trading of such allowance producers, 
        importers and blenders, and other persons. Credits generated 
        this section may be held and traded by any person. Credits 
        under this section do not constitute a property right, and 
        nothing in any provision of law shall be construed to limit the 
        authority of the United States to terminate or limit any such 
        credit.
            ``(3) Banking.--Credits generated under this section may be 
        used in the year in which they are generated and in the 
        following calendar year.
    ``(c) Monitoring.--The Administrator shall promulgate rules to 
ensure that greenhouse gas emissions and the use of credits generated 
under this section are accurately tracked, reported, and verified.
    ``(d) Enforcement.--
            ``(1) In general.--If any fuel or other source of energy 
        used, directly or indirectly, by vehicles exceeds in any 
        calendar year the standard established under this section and 
        the producer, importer or blender thereof has not acquired 
        credits to offset such excess, the producer, importer or 
        blender shall pay a civil penalty in an amount determined under 
        paragraph (2).
            ``(2) Amount of civil penalty.--The amount of the civil 
        penalty under this subsection shall be twice the market price 
        for the credits that would be necessary for such producer, 
        blender, or importer to meet the standard for the fuel or 
        energy source concerned. The Administrator shall establish the 
        method of determining such market price.
            ``(3) No demand required.--A civil penalty under this 
        subsection shall be due and payable to the Administrator 
        without demand.
            ``(4) Civil action.--The Administrator may bring a civil 
        action in the appropriate United States district court to 
        recover the amount of any civil penalty due and payable under 
        this subsection.

``SEC. 707. CERTIFICATION AND LABELING OF LOW-CARBON TRANSPORTATION 
              FUELS.

    ``(a) Identification.--Not later than January 1, 2009, the 
Administrator shall identify and label low-carbon transportation fuels 
based on the following criteria.
            ``(1) The fuel is responsible for at least 20 percent lower 
        lifecycle greenhouse gas emissions per BTU delivered compared 
        to the 2007 baseline.
            ``(2) The fuel is likely to have fewer adverse impacts on 
        wildlife habitat, biodiversity, water quality or air quality 
        over the lifecycle of the fuel, than conventional 
        transportation fuels.
            ``(3) The fuel achieves reduction in petroleum content over 
        its lifecycle.
In the case of electric energy and hydrogen used, directly or 
indirectly, as a fuel or source of energy for vehicles, the 
Administrator shall apply the special adjustment factor referred to in 
section 705(b)(3) in identifying low-carbon transportation fuels.
    ``(b) Certification.--Not later than January 1, 2009, the 
Administrator shall establish a low-carbon fuel certification process 
to certify fuels that the Administrator has identified as low-carbon 
fuels, make that certification information available to consumers. 
Under regulations promulgated by the Administrator any person 
manufacturing, importing, or distributing low-carbon fuels may provide 
labeling for such fuels in accordance with regulations promulgated by 
the Administrator and promote public awareness of those fuels.

``SEC. 708. FUEL SAFEGUARDS.

    ``(a) Definitions.--As used in this section:
            ``(1) The term `Community Fire Safety Zone' means the 
        immediate vicinity of buildings and other areas regularly 
        occupied by people, or of infrastructure, at risk of wildfire.
            ``(2) The term `Ecosystem conversion' means altering the 
        native habitat to such an extent that it no longer supports 
        most characteristic native species and ecological processes.
            ``(3) The term `native habitat' means dynamic groupings of 
        native plant and animal communities that occur together on the 
        landscape or in the water and are tied together by similar 
        ecological processes, underlying environmental features such as 
        geology, or environmental gradients such as elevation, but does 
        not include land that is currently in agricultural production.
            ``(4) National interest lands.--The term `National interest 
        lands' means areas designated as national wildlife refuges, 
        national forests, or national grasslands, areas managed by the 
        National Park Service (including national parks and monuments), 
        and lands managed by the Bureau of Land Management.
            ``(5) The term `Community Fire Safety Zone' means the 
        immediate vicinity of buildings and other areas regularly 
        occupied by people, or of infrastructure, at risk of wildfire.
            ``(6) The term `Sensitive Lands' means old growth forests; 
        roadless areas on national forests, wilderness study areas; 
        native grasslands; intact, rare, threatened or endangered 
        ecosystems; and any area containing significant concentrations 
        of biodiversity values including endemism, endangered species, 
        high species richness, and refugia.
    ``(b) In General.--Under regulations of the Administrator, no 
transportation fuel sold in interstate commerce after January 1, 2010 
may be derived all or in part from biomass from the following sources:
            ``(1) Lands where the Administrator determines that 
        ecosystem conversion has occurred after the date of the 
        enactment of this Act.
            ``(2) Sensitive Lands.
            ``(3) Land enrolled in the Conservation Reserve Program 
        established under subchapter B of chapter 1 of subtitle D of 
        title XII of the Food Security Act of 1985 (16 U.S.C. 3831 et 
        seq.) or the wetlands reserves program established under 
        subchapter C of chapter 1 of subtitle D of title XII of the 
        Food Security Act of 1985 (16 U.S.C. 3837 et seq.), unless the 
        biomass is produced in a manner consistent with all applicable 
        guidelines and terms, and conditions under the program.
            ``(4) National interest lands with the exception of either 
        of the following:
                    ``(A) Harvest residue, mill waste, or pre-
                commercial thinnings, from lands assigned to timber 
                production.
                    ``(B) Biomass obtained from a Community Fire Safety 
                Zone.
            ``(5) Recyclable postconsumer waste paper, painted, 
        treated, or pressurized wood, wood contaminated with plastic or 
        metals.
            ``(6) Municipal solid waste (as defined in the Solid Waste 
        Disposal Act).
            ``(7) Materials produced, harvested, acquired, transported, 
        or processed pursuant to an exemption from otherwise applicable 
        environmental laws or rules.

``SEC. 709. AIR QUALITY IMPACTS.

    ``(a) In General.--The Administrator shall ensure, under 
regulation, that no transportation fuel sold or introduced in 
interstate commerce after January 1, 2010, shall result in--
            ``(1) average per gallon vehicle emissions (measured on a 
        mass basis) of air pollutants in excess of the quantity of 
        those emissions attributable to gasoline sold or introduced 
        into commerce in the United States during calendar year 2007; 
        or
            ``(2) a violation of any motor vehicle emission or fuel 
        content limitation under any other provision of this Act.

``SEC. 710. RESEARCH AND DEVELOPMENT FUNDING.

    ``There is authorized to be appropriated to the Secretary of Energy 
such sums as may be necessary carry out a cooperative program of 
research and development relating to lower carbon alternatives for 
aircraft jet fuel and fuel for other vehicles. The program shall 
provide for matching Federal grants to private entities carrying out 
such research and development.

``SEC. 711. STATE LAWS.

    ``Nothing in this title shall be interpreted to preempt or limit 
State actions to address climate change.''.

SEC. 363. LOAN GUARANTEE PROGRAM TO DEMONSTRATE LOW CARBON RENEWABLE 
              FUEL.

    (a) In General.--Section 1703 of the Energy Policy Act of 2005 is 
amended by adding the following new subsection after subsection (b) and 
redesignating subsections (c) through (e) as (d) through (f):
    ``(c) Low Carbon Renewable Fuel Projects.--
            ``(1) Definitions.--In this subsection:
                    ``(A) Low carbon renewable fuel.--The term `low 
                carbon renewable fuel' means transportation fuel that 
                is not an ether and that is produced from renewable 
                biomass; or is natural gas produced from a biogas 
                source, including a landfill, sewage waste treatment 
                plant, feedlot, or other place where decaying organic 
                material is found; is used to replace or reduce the 
                quantity of fossil fuel present in a fuel mixture used 
                for transportation; and has a lifecycle greenhouse gas 
                emissions, per unit of energy, that is at least 60 
                percent less than the baseline defined in section 704 
                of the Clean Air Act.
                    ``(B) Transportation fuel.--The term 
                `transportation fuel' means fuel used to power motor 
                vehicles, nonroad engines, or aircraft.
                    ``(C) Renewable biomass.--The term `renewable 
                biomass' is any organic matter that is available on a 
                renewable or recurring basis, including dedicated 
                energy crops and trees, agricultural food and feed crop 
                residues, aquatic plants, animal wastes, wood and wood 
                residues, and other vegetative waste materials. Biomass 
                sources that are covered under this definition are 
                subject to the limitations set forth section 708 of the 
                Clean Air Act.
            ``(2) Projects.--The Secretary may make loan guarantees 
        under this section to carry out commercial demonstration 
        projects to demonstrate the feasibility and viability of 
        producing low carbon renewable fuel until the technology 
        becomes commercially viable and feasible.
            ``(3) Design capacity.--Each project for which a loan 
        guarantee is provided under this subsection shall have a design 
        capacity to produce at least 30,000,000 gallons of renewable 
        fuel each year.
            ``(4) Applicant assurances.--An applicant for a loan 
        guarantee under this subsection shall provide assurances, 
        satisfactory to the Secretary, that--
                    ``(A) the project design has been validated through 
                the operation of a continuous process facility with a 
                cumulative output of at least 50,000 gallons of 
                renewable fuel;
                    ``(B) the project has been subject to a full 
                technical review;
                    ``(C) the project is covered by adequate project 
                performance guarantees;
                    ``(D) the project, with the loan guarantee, is 
                economically viable; and
                    ``(E) there is a reasonable assurance of repayment 
                of the guaranteed loan.''.
    (b) Funding.--Section 1704(a) of such Act is amended by adding the 
following at the end thereof: ``Not less than 30 percent of the funds 
made available under this section shall be used for purposes of loan 
guarantees under section 1703(c) for low carbon renewable fuel. The 
aggregate amount of guarantees under section 1703(c) at any one time 
shall not exceed $20,000,000,000''.

SEC. 364. REQUIRE AUTOMAKERS TO REDUCE TAILPIPE GHG EMISSIONS.

    Title II of the Clean Air Act (42 U.S.C. 7581 et seq.) is amended 
by adding at the following:

              ``PART D--GREENHOUSE GAS EMISSION REDUCTIONS

``SEC. 251. DEFINITIONS.

    ``In this part:
            ``(1) Greenhouse gas.--The term `greenhouse gas' means----
                    ``(A) carbon dioxide;
                    ``(B) methane;
                    ``(C) nitrous oxide;
                    ``(D) hydrofluorocarbons;
                    ``(E) perflourocarbons; and
                    ``(F) sulfur hexafluoride.
            ``(2) Motor vehicle.--The term `motor vehicle' has the 
        meaning given to such term in section 216.

``SEC. 252. GREENHOUSE GAS EMISSION REDUCTIONS FROM AUTOMOBILES.

    ``(a) Vehicle Emissions Baseline.--Not later than January 1, 2009, 
based on the aggregate quantity and variety of new automobiles sold in 
the United States during model year 2002 and the average greenhouse gas 
emissions from those new automobiles, the Administrator shall determine 
the average quantity of greenhouse gas emissions per vehicle mile 
(referred to in this section as the `new vehicle emissions baseline').
    ``(b) Subsequent Average Emissions From New Automobiles.--Not later 
than June 1, 2015, and annually thereafter, based on the aggregate 
quantity and variety of new automobiles sold in the United States 
during the preceding model year and the average greenhouse gas 
emissions from those new automobiles during the preceding model year, 
the Administrator shall determine the average quantity of greenhouse 
gas emissions per vehicle mile for the model year.
    ``(c) Required Reductions in Greenhouse Gas Emissions From 
Automobiles.--
            ``(1) In general.--The Administrator shall, by regulation, 
        require each manufacturer of automobiles for sale in the United 
        States to reduce the average quantity of greenhouse gas 
        emissions per vehicle mile of the aggregate quantity and 
        variety of automobiles manufactured by the manufacturer to a 
        level that is----
                    ``(A) for automobiles manufactured in model year 
                2016, 30 percent less than the new vehicle emissions 
                baseline; and
                    ``(B) not later than every fifth model year 
                thereafter, such percent as shall be specified by the 
                Administrator that is less than the average quantity of 
                greenhouse gas emissions per vehicle mile required for 
                the model year preceding that fifth model year, as 
                determined by the Administrator under subsection 
                (b).''.

SEC. 365. ELIMINATION OF 2-FLEET RULE.

    (a) In General.--Section 32904 of title 49, United States Code, is 
amended--
            (1) by striking subsection (b); and
            (2) by redesignating subsections (c) through (e) as 
        subsections (b) through (d), respectively.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to model year 2010 and subsequent model years.

                      TITLE IV--ELECTRICITY SECTOR

                       Subtitle A--Tax Incentives

SEC. 401. EXTENSION THROUGH 2018 FOR PLACING QUALIFIED FACILITIES IN 
              SERVICE FOR PRODUCING RENEWABLE ELECTRIC ENERGY.

    (a) In General.--Subsection (d) of section 45 of the Internal 
Revenue Code of 1986 (relating to qualified facilities) is amended by 
striking ``January 1, 2009'' each place it appears and inserting 
``January 1, 2019''.
    (b) Effective Date.--The amendments made by this section shall 
apply to property originally placed in service on or after January 1, 
2009.

SEC. 402. EXTENSION OF ENERGY CREDIT.

    (a) In General.--Section 48 of such Code (relating to energy 
credit) is amended--
            (1) by striking ``January 1, 2009'' in both places it 
        appears and inserting ``January 1, 1019'', and
            (2) by striking ``December 31, 2008'' in both places it 
        appears and inserting ``December 31, 2018''.

SEC. 403. EXPANSION AND MODIFICATION OF RENEWABLE RESOURCE CREDIT.

    (a) Additional Qualified Energy Resources.--
            (1) In general.--Section 45(c)(1) of such Code (relating to 
        resources) is amended by striking ``and'' at the end of 
        subparagraph (F), by striking the period at the end of 
        subparagraph (G), and by adding at the end the following new 
        subparagraphs:
                    ``(I) incremental geothermal production, and
                    ``(J) marine and hydrokinetic renewable energy.''.
            (2) Definition of resources.--Section 45(c) of such Code is 
        amended by adding at the end the following new paragraphs:
            ``(10) Incremental geothermal production.--
                    ``(A) In general.--In the case of an incremental 
                geothermal facility described in subsection (d)(9), the 
                term `incremental geothermal production' means for any 
                taxable year the excess of--
                            ``(i) the total kilowatt hours of 
                        electricity produced from such facility for the 
                        taxable year, over
                            ``(ii) the average annual kilowatt hours 
                        produced at such facility for 5 of the previous 
                        7 calendar years before the date of the 
                        enactment of this paragraph after eliminating 
                        the highest and the lowest kilowatt hour 
                        production years in such 7-year period.
                    ``(B) Special rule.--A facility described in 
                subsection (d)(9) which was placed in service at least 
                7 years before the date of the enactment of this 
                paragraph shall commencing with the year in which such 
                date of enactment occurs, reduce the amount calculated 
                under subparagraph (A)(ii) each year, on a cumulative 
                basis, by the average percentage decrease in the annual 
                kilowatt hour production for the 7-year period 
                described in subparagraph (A)(ii) with such cumulative 
                sum not to exceed 30 percent.
            ``(11) Marine and hydrokinetic renewable energy.--
                    ``(A) In general.--The term `marine and 
                hydrokinetic renewable energy' means energy derived 
                from--
                            ``(i) waves, tides, or currents in oceans, 
                        estuaries, or tidal areas,
                            ``(ii) free flowing water in rivers, lakes, 
                        or streams,
                            ``(iii) free flowing water in man-made 
                        channels, including projects that utilize 
                        nonmechanical structures to accelerate the flow 
                        of water for electric power production 
                        purposes, or
                            ``(iv) differentials in ocean temperature.
                    ``(B) Exceptions.--Such term shall not include any 
                energy which is--
                            ``(i) described in subparagraphs (A) 
                        through (I) of paragraph (1), or
                            ``(ii) derived from any source that 
                        utilizes a dam, diversionary structure, or 
                        impoundment for electric power production 
                        purposes, except as provided in subparagraph 
                        (A)(iii).''.
            (3) Definition of facilities.--Section 45(d) of such Code 
        (relating to qualified facilities) is amended by adding at the 
        end the following new paragraphs:
            ``(11) Incremental geothermal facilities.--In the case of a 
        facility using incremental geothermal to produce electricity, 
        the term `qualified facility' means any facility owned by the 
        taxpayer which is originally placed in service before the date 
        of the enactment of this paragraph, but only to the extent of 
        its incremental geothermal production. In the case of a 
        qualified facility described in the preceding sentence, the 10-
        year period referred to in subsection (a) shall be treated as 
        beginning not earlier than such date of enactment. Such term 
        shall not include any property described in section 48(a)(3) 
        the basis of which is taken into account by the taxpayer for 
        purposes of determining the energy credit under section 48.
            ``(12) Marine and hydrokinetic renewable energy.--In the 
        case of a facility producing electricity from marine and 
        hydrokinetic renewable energy, the term `qualified facility' 
        means any facility owned by the taxpayer which is originally 
        placed in service after the date of the enactment of this 
        paragraph and before January 1, 2019.''.
    (b) Full Credit Rate for Qualified Hydropower Facility.--
Subparagraph (A) of section 45(b)(4) of such Code is amended by 
striking ``(7), or (9)'' and inserting ``or (7)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to electricity produced and sold in taxable years beginning after 
the date of the enactment of this Act.

SEC. 404. ENERGY CREDIT FOR SMALL WIND, SMALL GEOTHERMAL, SMALL 
              BIOMASS, AND SMALL KINETIC HYDROPOWER.

    (a) In General.--
            (1) Energy properties.--Subparagraph (A) of section 
        48(a)(3) of such Code, as amended by this title, is amended by 
        striking ``or'' at the end of clause (iii), by inserting ``or'' 
        at the end of clause (iv), and by adding at the end the 
        following new clause:
                            ``(v) equipment which uses wind, a 
                        geothermal deposit, biomass, or marine and 
                        hydrokinetic energy to generate electricity, if 
                        such equipment has a nameplate capacity of 2 
                        megawatts or less and the principal consumer of 
                        such electricity is the taxpayer,''.
            (2) Energy percentage.--Subclause (II) of section 
        48(a)(2)(A)(i) of such Code is amended by striking ``paragraph 
        (3)(A)(i)'' and inserting ``clause (i) or (vi) of paragraph 
        (3)(A)''.
            (3) Geothermal; biomass; marine and hydrokinetic energy 
        defined.--Section 48 of such Code is amended by adding at the 
        end the following new subsection:
    ``(d) Geothermal; Biomass; Marine and Hydrokinetic Energy.--For 
purposes of this section--
            ``(1) Geothermal.--The term `geothermal deposit' has the 
        meaning given such term by section 613(e)(2).
            ``(2) Biomass.--The term `biomass' has the meaning given 
        such term by section 45K(c)(3).
            ``(3) Marine and hydrokinetic energy.--The term `marine and 
        hydrokinetic energy' has the meaning given such term by section 
        45(c)(11).''.
    (b) Effective Date.--The amendments made by this section shall 
apply to property placed in service after the date of the enactment of 
this Act, in taxable years ending after such date.

SEC. 405. MODIFICATIONS FOR CLEAN RENEWABLE ENERGY BONDS.

    (a) In General.--
            (1) Increase in limitation and change to annual limit.--
        Paragraph (1) of section 54(f) of such Code (relating to 
        limitation on amount of bonds designated) is amended by 
        striking ``of $1,200,000,000'' in subsection (f)(1) and 
        inserting ``for each calendar year of $2,000,000,000''--
            (2) Extension of termination.--Subsection (m) of section 54 
        (relating to termination) is amended by striking ``2008'' 
        subsection (m) and inserting ``2018''.
            (3) Modification in allocation of national annual bond 
        limitation.--Paragraph (2) of section 54 of such Code is 
        amended--
                    (A) by striking ``may not allocate'' and all that 
                follows through the period and inserting ``shall 
                allocate--'' , and
                    (B) by adding the end the following new 
                subparagraphs:
                    ``(A) $1,187,500,000 of the annual national clean 
                renewable energy bond limitation to finance qualified 
                projects of qualified borrowers which are public power 
                entities,
                    ``(B) $750,000,000 of such limitation to finance 
                qualified projects of qualifiied borrowers which are 
                cooperative electric companies, and
                    ``(C) $62,500,000 of such limitation to finance 
                qualified projects of qualified borrowers which are 
                governmental bodies.''.
            (4) Public power entity defined.--Subsection (j) of section 
        54 of such Code (defining Cooperative electric company; 
        qualified energy tax credit bond lender; governmental body; 
        qualified borrower) is amended--
                    (A) by redesignating paragraphs (4) and (5) as 
                paragraphs (5) and (6), respectively, and by inserting 
                after paragraph (3) the following new paragraph:
            ``(4) Public power entity.--The term `public power entity' 
        means a State utility with a service obligation, as such terms 
        are defined in section 217 of the Federal Power Act (as in 
        effect on the date of enactment of this paragraph).''.
                    (B) in paragraph (5), as so redesignated, by 
                striking ``or'' at the end of subparagraph (B), by 
                striking the period at the end of subparagraph (C) and 
                inserting ``, or'', and by adding at the end the 
                following new subparagraph:
                    ``(D) a public power entity.'', and
                    (C) in paragraph (6), as so redesignated, by 
                striking ``or'' at the end of subparagraph (A), by 
                striking the period at the end of subparagraph (B) and 
                inserting ``, or'', and by adding at the end the 
                following new subparagraph:
                    ``(C) a public power entity.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to bonds issued after December 31, 2007.

SEC. 406. EXPANSION AND INCREASE FOR RESIDENTIAL ENERGY EFFICIENT 
              PROPERTY CREDIT.

    (a) Increase in Credit Limitation for Residential Solar Property.--
Paragraph (1) of section 25D(b) of the Internal Revenue Code (relating 
to limitations) is amended--
            (1) by striking ``$2,000'' in subparagraph (B) and 
        inserting ``$4,000'', and
            (2) by striking subparagraph (A) and redesignating 
        subparagraphs (B) and (C) and subparagraphs (A) and (B), 
        respectively.
    (b) Inclusion of Wind.--
            (1) In general.--Subsection (a) of section 25D of such Code 
        (relating to allowance of credit) is amended by striking 
        ``and'' at the end of paragraph (2), by striking the period at 
        the end of paragraph (3), and by adding at the end the 
        following new paragraph:
            ``(4) 30 percent of the qualified wind property 
        expenditures made by the taxpayer during such year,''.
            (2) Definition.--Subsection (d) of section 25D of such Code 
        (relating to definitions) is amended by adding at the end the 
        following new paragraphs:
            ``(4) Qualified wind property expenditures.--The term 
        `qualified wind property expenditures' means an expenditure for 
        property which uses wind to generate electricity for use in a 
        dwelling unit located in the United States and used as a 
        principal residence (within the meaning of section 121) by the 
        taxpayer.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to property placed in service in taxable years beginning after 
December 31, 2007.

SEC. 407. EXPANSION OF RENEWABLE RESOURCE CREDIT TO INCLUDE THERMAL 
              ENERGY.

    (a) In General.--
            (1) Production of thermal energy.--Paragraph (2) of section 
        45(a) of the Internal Revenue Code of 1986 is amended by 
        inserting after ``electricity'' the following: ``or each 3,413 
        British Thermal Units of thermal energy (or fraction 
        thereof)''.
            (2) Recycled energy as qualified energy resource.--
        Paragraph (1) of section 45(c) of such Code, as amended by this 
        Act, is amended by striking ``and'' at the end of subparagraph 
        (I), by striking the period at the end of subparagraph (J) and 
        inserting ``and'', and by adding at the end the following new 
        subparagraph:
                    ``(K) recycled energy.''.
            (3) Definition of resource.--Subsection (c) of section 45 
        of such Code is amended by adding at the end the following new 
        paragraph:
            ``(12) Recycled energy.--
                    ``(A) In general.--The term `recycled energy' means 
                electricity or thermal energy derived from combined 
                heat and power, industrial waste heat, or municipal 
                waste heat.
                    ``(B) Definitions.--For purposes of this 
                paragraph--
                            ``(i) Combined heat and power.--The term 
                        `combined heat and power' means a system which 
                        uses the same energy source, which may be non-
                        renewable fuel, for the simultaneous or 
                        sequential generation of electrical power, 
                        mechanical shaft power, or both, in combination 
                        with the generation of steam or other forms of 
                        useful thermal energy (including heating and 
                        cooling applications).
                            ``(ii) Industrial waste heat.--The term 
                        `industrial waste heat' means heat which--
                                    ``(I) is a byproduct of a 
                                manufacturing process, and
                                    ``(II) is normally not recovered or 
                                used.
                            ``(iii) Municipal waste heat.--The term 
                        `municipal waste heat' means heat which--
                                    ``(I) is a byproduct of a municipal 
                                sewage treatment or other municipal 
                                process, and
                                    ``(II) is normally not recovered or 
                                used.''.
            (4) Definition of facility.--Subsection (d) of section 45 
        of such Code is amended by adding at the end the following:
            ``(13) Recycled energy.--
                    ``(A) In general.--In the case of a facility using 
                recycled energy to produce electricity or thermal 
                energy, the term `qualified facility' means a facility 
                which--
                            ``(i) is a combined heat and power 
                        facility, an industrial waste heat facility, or 
                        a municipal waste heat facility, and
                            ``(ii) which is placed in service after the 
                        date of the enactment of this paragraph and 
                        before January 1, 2014.
                    ``(B) Combined heat and power.--For purposes of 
                this paragraph, the term `combined heat and power 
                facility' means any facility--
                            ``(i) owned by the taxpayer,
                            ``(ii) which produces--
                                    ``(I) at least 20 percent of its 
                                total useful energy in the form of 
                                thermal energy, and
                                    ``(II) at least 20 percent of its 
                                total useful energy in the form of 
                                electrical or mechanical power (or a 
                                combination thereof), and
                            ``(iii) the energy efficiency percentage of 
                        which exceeds 60 percent.
                    ``(C) Industrial waste heat or municipal waste 
                heat.--For purposes of this paragraph, the term 
                `industrial waste heat facility' means any facility 
                which uses industrial waste heat to produce electricity 
                or thermal energy.
                    ``(D) Municipal waste heat facility.--For purposes 
                of this paragraph, the term municipal waste heat 
                facility means any facility which uses municipal waste 
                heat to produce electricity or thermal energy.
                    ``(E) Energy efficiency percentage.--For purposes 
                of subparagraph (B), the term `energy efficiency 
                percentage', with respect to a facility, means the 
                percentage determined by dividing--
                            ``(i) the total useful electrical, thermal, 
                        and mechanical power, calculated in British 
                        Thermal Units, produced by the system at normal 
                        operating rates, by
                            ``(ii) the lower heating value, calculated 
                        in British Thermal Units, of the primary fuel 
                        source for the system.''.
            (5) Reduced credit.--Subparagraph (A) of section 45(b)(4) 
        of such Code (relating to credit rate and period for 
        electricity produced and sold from certain facilities) is 
        amended--
                    (A) by striking ``or (7)'' inserting ``(7), or 
                (13)'', and
                    (B) by inserting ``or thermal energy sold in any 
                calendar year after 2007 at a facility described in 
                subsection (d)(13),'' after ``subsection (d),''.
            (6) Conforming amendments.--
                    (A) Subsection (a) of section 45 of such Code is 
                amended by inserting ``and thermal energy'' after 
                ``renewable electricity''.
                    (B) Paragraph (2) of section 45(c) of such Code is 
                amended by inserting ``or thermal energy'' after 
                ``electricity''.
                    (C) Subsection (d) of section 45 of such Code is 
                amended by inserting ``or thermal energy'' after 
                ``electricity'' in each place it appears.
                    (D) Subsection (e) of section 45 of such Code is 
                amended by inserting ``or thermal energy'' after 
                ``electricity'' each place it appears in paragraphs (1) 
                and (4).
                    (E) Paragraph (8) of section 38(b) of such Code is 
                amended by inserting ``or thermal energy'' after 
                ``electricity''.
                    (F) The heading of section 45 of such Code is 
                amended by inserting ``or thermal energy'' after 
                ``electricity''.
                    (G) The table of sections for subpart D of part IV 
                of subchapter A of chapter 1 is amended by striking the 
                item relating to section 45 and inserting the following 
                new item:

``Sec. 45. Electricity or thermal energy produced from certain 
                            renewable resources, etc.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to electricity or thermal energy produced and sold after the date 
of the enactment of his Act.

           Subtitle B--Promoting Energy Efficient Investments

SEC. 411. RATE MODIFICATIONS PROMOTING ENERGY EFFICIENCY INVESTMENTS.

    (a) Electric Utilities.--Section 111(d) of the Public Utility 
Regulatory Policies Act of 1978 is amended by inserting at the end 
thereof:
            ``(16) Rate design modifications to promote energy 
        efficiency investments.--
                    ``(A) In general.--The rates allowed to be charged 
                by any electric utility shall--
                            ``(i) align utility incentives with the 
                        delivery of cost-effective energy efficiency; 
                        and
                            ``(ii) promote energy efficiency 
                        investments.
                    ``(B) Policy options.--In complying with 
                subparagraph (A), each State regulatory authority and 
                each nonregulated utility shall consider--
                            ``(i) removing the throughput incentive and 
                        other regulatory and management disincentives 
                        to energy efficiency;
                            ``(ii) providing utility incentives for the 
                        successful management of energy efficiency 
                        programs;
                            ``(iii) including the impact on adoption of 
                        energy efficiency as 1 of the goals of retail 
                        rate design, recognizing that energy efficiency 
                        must be balanced with other objectives;
                            ``(iv) adopting rate designs that encourage 
                        energy efficiency for each customer class; and
                            ``(v) allowing timely recovery of energy 
                        efficiency-related costs.''.
    (b) Natural Gas Utility.--Section 303 of the Public Utility 
Regulatory Policies Act of 1978 (16 U.S.C. 3203(b)) is amended by 
adding the following at the end of subsection (b):
            ``(5) Energy efficiency.--Each natural gas utility shall--
                    ``(A) integrate energy efficiency resources into 
                the plans and planning processes of the natural gas 
                utility; and
                    ``(B) adopt policies that establish energy 
                efficiency as a priority resource in the plans and 
                planning processes of the natural gas utility.
            ``(6) Rate design modifications to promote energy 
        efficiency.--The rates allowed to be charged by a natural gas 
        utility shall align utility incentives with the deployment of 
        cost-effective energy efficiency. In complying with the 
        standard under this paragraph, each State regulatory authority 
        and each nonregulated utility shall consider--
                    ``(A) separating fixed-cost revenue recovery from 
                the volume of transportation or sales service provided 
                to the customer;
                    ``(B) providing to utilities incentives for the 
                successful management of energy efficiency programs, 
                such as allowing utilities to retain a portion of the 
                cost-reducing benefits accruing from the programs;
                    ``(C) promoting the impact on adoption of energy 
                efficiency as 1 of the goals of retail rate design, 
                recognizing that energy efficiency must be balanced 
                with other objectives; and
                    ``(D) adopting rate designs that encourage energy 
                efficiency for each customer class.''.
    (c) Compliance.--
            (1) Time limitations.--Section 112(b) of the Public Utility 
        Regulatory Policies Act of 1978 (16 U.S.C. 2622(b)) is amended 
        by adding at the end the following:
            ``(6)(A) Not later than 1 year after the enactment of this 
        paragraph, each State regulatory authority (with respect to 
        each electric utility for which it has ratemaking authority) 
        and each nonregulated utility shall commence the consideration 
        referred to in section 111, or set a hearing date for 
        consideration, with respect to the standard established by 
        paragraph (16) of section 111(d).
            ``(B) Not later than two years after the date of the 
        enactment of the this paragraph, each State regulatory 
        authority (with respect to each electric utility for which it 
        has ratemaking authority), and each nonregulated electric 
        utility, shall complete the consideration, and shall make the 
        determination, referred to in section 111 with respect to each 
        standard established by paragraph (1) of section 111(d)''.
            (2) Failure to comply.--Section 112(d) of the Public 
        Utility Regulatory Policies Act of 1978 (16 U.S.C. 2622(c)) is 
        amended by adding at the end the following: ``In the case of 
        the standard established by paragraph (15), the reference 
        contained in this subsection to the date of enactment of this 
        Act shall be deemed to be a reference to the date of enactment 
        of paragraph (16).''.
            (3) Prior state action.--
                    (A) In general.--Section 112 of the Public Utility 
                Regulatory Policies Act of 1978 (16 U.S.C. 2622) is 
                amended by adding at the end the following:
    ``(f) Prior State Actions.--Subsections (b) and (c) of this section 
shall not apply to the standard established by paragraph (15) of 
section 111(d) in the case of any electric utility in a State if, 
before the enactment of this subsection--
            ``(1) the State has implemented for such utility the 
        standard concerned (or a comparable standard);
            ``(2) the State regulatory authority for such State or 
        relevant nonregulated electric utility has conducted a 
        proceeding to consider implementation of the standard concerned 
        (or a comparable standard) for such utility; or
            ``(3) the State legislature has voted on the implementation 
        of such standard (or a comparable standard) for such 
        utility.''.
                    (B) Cross reference.--Section 124 of such Act (16 
                U.S.C. 2634) is amended by adding the following at the 
                end thereof: ``In the case of each standard established 
                by paragraph (16) of section 111(d), the reference 
                contained in this subsection to the date of enactment 
                of the Act shall be deemed to be a reference to the 
                date of enactment of paragraph (16).''.
    (d) Compliance Date.--Section 303 of the Public Utility Regulatory 
Policies Act of 1978 is amended by striking ``Not later than 2 years 
after the date of the enactment of this Act (or after the enactment of 
the Energy Policy Act of 1992 in the case of standards under paragraphs 
(3) and (4) of subsection (b))'' and inserting ``Not later than 2 years 
after the date of the enactment of the standard concerned''.
    (e) Prior State Actions.--Section 310 of the Public Utility 
Regulatory Policies Act of 1978 is amended by striking ``of this Act'' 
in each place it appears and inserting ``the standard under section 
303(b)''.

SEC. 412. FEED-IN TARIFF SYSTEM STUDY.

    (a) Study and Report.--Not later than 1 year after the date of 
enactment of this Act, the Lawrence Berkeley National Laboratory shall 
transmit to Congress a report on the results of a study on feed-in 
tariff systems, which shall include recommendations for an appropriate 
pricing structure to best ensure that investors in renewable energy 
technologies can receive a reasonable return on their investment.
    (b) Definition.--In this section:
            (1) The term ``feed-in tariff system'' means a system under 
        which--
                    (A) renewable energy technologies have priority 
                access to the electricity market; and
                    (B) for a fixed period of time, electric utilities 
                are required to pay predetermined amounts for electric 
                power sold to the utility by producers using renewable 
                energy sources.
            (2) The term ``renewable energy'' has the meaning given to 
        such term in section 203 of the Energy Policy Act of 2005.
    (c) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary to carry out this report.

              Subtitle C--National Renewable Energy Zones

SEC. 421. NEW ELECTRICITY TRANSMISSION LINES DESIGNED PRIMARILY TO 
              CARRY ELECTRICITY FROM RENEWABLE ENERGY RESOURCES.

    The Secretary of the Treasury, in consultation with the Secretary 
of Energy, the Secretary of Commerce, and the Administrator of the 
Environmental Protection Agency, shall establish an appropriate 
investment tax credit for the construction of new electricity 
transmission lines designed primarily to carry electricity from 
renewable energy resources. Such credit shall be sufficient to 
encourage the development of promising rural renewable energy domestic 
resources that otherwise would likely not be developed.

SEC. 422. SHORT TITLE.

    This title may be cited as the ``Rural Clean Energy Superhighways 
Act''.

SEC. 423. FINDINGS.

    The Congress finds that--
            (1) electricity produced from renewable resources helps to 
        reduce greenhouse gas emissions, and limits emissions of other 
        pollutants regulated pursuant to the Clean Air Act, enhances 
        national energy security, and provides substantial economic 
        benefits;
            (2) the potential exists for a far greater percentage of 
        electric production in the United States to be generated 
        through the use of renewable resources than current levels;
            (3) many of the best potential renewable energy resources 
        are located in rural areas far from population centers;
            (4) the lack of adequate electric transmission capacity is 
        one of the primary obstacles to the development of electric 
        generation facilities fueled by renewable energy resources;
            (5) the economies of many rural areas would substantially 
        benefit from the increased development of electric generation 
        facilities fueled by renewable energy resources; and
            (6) it is in the national interest for the Federal 
        government to implement policies that will enhance the amount 
        of electric transmission capacity available to take full 
        advantage of renewable energy resources to generate 
        electricity.

SEC. 424. NATIONAL RENEWABLE ENERGY ZONES.

    (a) In General.--Title II of the Federal Power Act (16 U.S.C. 824 
et seq.) is amended--
            (1) by inserting before the section heading of section 201 
        (16 U.S.C. 824 et seq.) the following:
     ``subtitle a--regulation of electric utility companies''; and
            (2) by adding at the end the following:

             ``Subtitle B--National Renewable Energy Zones

``SEC. 231. DEFINITIONS.

    ``In this subtitle:
            ``(1) The term `Commission' means the Federal Energy 
        Regulatory Commission.
            ``(2) The term `electricity from renewable energy'means 
        electric energy generated from_
                    ``(A) solar, wind, geothermal or ocean energy;
                    ``(B) biomass (as defined in section 203(a) of the 
                Energy Policy Act of 2005);
                    ``(C) landfill gas; or
                    ``(D) incremental hydropower.
            ``(3) The term `Federal Power Marketing Administration' 
        means any agency or instrumentality of the United States (other 
        than the Tennessee Valley Authority) which sells electric 
        energy.
            ``(4) The term `Federal Transmitting Utility' means a 
        Federal Power Marketing Administration that owns or operates 
        electric transmission facilities or the Tennessee Valley 
        Authority.
            ``(5) The term `geothermal energy' means energy derived 
        from a geothermal deposit (within the meaning of section 
        613(e)(2) of the Internal Revenue Code of 1986).
            ``(6) The term `renewable energy trunkline' shall mean a 
        radial transmission line at a voltage of 115 kV or above, 
        including all associated transmission facilities and equipment 
        within a National Renewable Energy Zone that is used to deliver 
        electricity from renewable energy to the point where the 
        trunkline connects to a high-voltage electric transmission 
        facility, including any modifications, additions or upgrades to 
        such facilities and equipment. A renewable energy trunkline 
        shall not include network upgrades.
            ``(7) The term `high-voltage electric transmission 
        facility' means those electric facilities with a capability in 
        excess of 200 kilovolts.
            ``(8) The term `network upgrades' shall mean the additions 
        or modifications to the transmission provider's high-voltage 
        transmission system other than renewable energy trunkline 
        facilities.
            ``(9) The term `President' means the President of the 
        United States.
            ``(10) The term `Indian lands' 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 passage of this Act either held in trust 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.
            ``(11) The term `electricity consuming area' means the area 
        within which electricity from renewable energy would be 
        consumed if new high-voltage electric transmission facilities 
        were to be constructed to deliver electricity from renewable 
        energy generated in a National Renewable Energy Zone.

``SEC. 232. DESIGNATION OF NATIONAL RENEWABLE ENERGY ZONES.

    ``(a) Designation.--Within six months after the date of enactment 
of this Act, the President or the President's designee shall designate 
as a National Renewable Energy Zone each area that meets each of the 
following conditions:
            ``(1) The potential to generate in excess of one gigawatt 
        of electricity from renewable energy without having a material 
        detrimental impact on reliability.
            ``(2) An insufficient level of electric transmission 
        capacity to achieve the potential identified pursuant to 
        paragraph (1).
            ``(3) Access, for renewable energy to be generated in the 
        National Renewable Energy Zone, to one or more electricity 
        consuming areas if there were a sufficient level of 
        transmission capacity.
    ``(b) Factors.--In making the designations required by subsection 
(a), the Secretary take into account the following:
            ``(1) State and Federal requirements for utilities to 
        incorporate renewable energy as part of serving load; and
            ``(2) The impact of electric transmission facility 
        development on the aesthetic and environmental values of land 
        contained in an area eligible for National Renewable Energy 
        Zone designation.
    ``(c) Additional Facilities.--Within six months of the designation 
of a National Renewable Energy Zone, the President or the President's 
designee shall identify, and provide public notice of, specific 
additional high-voltage electric transmission facilities and other 
nontransmission alternatives required to substantially increase the 
generation of electricity from renewable energy within each National 
Renewable Energy Zone.
    ``(d) Public Views.--Before designating an area as a National 
Renewable Energy Zone, the President or the President's designee shall 
afford each affected State, Indian Tribe and other interested persons a 
reasonable opportunity to present their views and recommendations 
before a designation shall be effective.
    ``(e) Expansion.--The President or the President's designee shall 
every three years after the date of enactment consider whether to 
expand an existing National Renewable Energy Zone or designate a new 
National Renewable Energy Zone pursuant to the criteria set forth in 
subsection (a).

``SEC. 233. ENCOURAGING CLEAN ENERGY SUPERHIGHWAY DEVELOPMENT IN 
              NATIONAL RENEWABLE ENERGY ZONES.

    ``(a) Cost Recovery.--(1) The Commission shall issue and enforce 
such regulations as are necessary to ensure that a public utility 
transmission provider that finances transmission capacity to transmit 
electricity from renewable energy from a National Renewable Energy Zone 
to an electricity consuming area after the date of enactment of this 
subtitle recovers through its rates for transmission service all costs 
and a reasonable return on equity associated with the construction and 
operation of such new transmission capacity.
    ``(2) A regulation under paragraph (1) shall be enforceable in 
accordance with the provisions of law applicable to enforcement of 
regulations under this Act.
    ``(b) Alternative Transmission Financing Mechanism.--The Commission 
shall permit a renewable energy trunkline built by a public utility 
transmission provider in a National Renewable Energy Zone to, in 
advance of generation interconnection requests, be initially funded 
through a transmission charge imposed upon all transmission customers 
of the transmission provider or, if the renewable energy trunkline is 
built in an area served by a regional transmission organization or 
independent system operator, all of the transmission customers of such 
transmission operator, if the Commission makes each of the following 
findings:
            ``(1) The renewable energy resources that would utilize the 
        renewable energy trunkline are remote from the grid and load 
        centers.
            ``(2) The renewable energy trunkline will likely result in 
        multiple individual renewable energy electric generation 
        projects being developed by multiple competing developers. The 
        renewable energy trunkline has at least one project subscribed 
        through an executed generation interconnection agreement with 
        the transmission provider and has tangible demonstration of 
        additional interest.
As new electric generation projects are constructed and interconnected 
to the renewable energy trunkline, the transmission services contract 
holder for such generation project will, on a going forward basis, pay 
a pro-rata share of the renewable energy trunkline facility's costs, 
thus reducing the effect on the rates of customers of the public 
utility transmission provider.''.
    (b) Transmission Cost Allocation.--Section 206 of the Federal Power 
Act (16 U.S.C. 824e) is amended by adding the following new subsection 
at the end thereof:
    ``(e)(1) Within six months of the date the President designates an 
area as a National Renewable Energy Zone, the State utility commissions 
or other appropriate bodies having jurisdiction over the public 
utilities providing service in the National Renewable Energy Zone or an 
adjacent electricity consuming area may jointly propose to the 
Commission a cost allocation plan for high-voltage electric 
transmission facilities built by a public utility transmission provider 
that would serve the electricity consuming area.
    ``(2) The Commission may approve the plan proposed by the States 
pursuant to paragraph (1) if, taking into account the users of the 
transmission facilities, the plan will result in rates that are just 
and reasonable and not unduly discriminatory or preferential and the 
plan would not unduly inhibit the development of renewable energy 
electric generation projects.
    ``(3) Unless a plan has been approved by the Commission pursuant to 
paragraph (2), the Commission shall fairly allocate the costs of new 
high-voltage electric transmission facilities built in the area by one 
or more public utility transmission providers (recognizing the national 
and regional benefits associated with increased access to electricity 
from renewable energy) pursuant to a rolled-in transmission charge. 
nothing in this subsection shall expand, directly or indirectly, the 
jurisdiction of the Commission with respect to any Federal Transmitting 
Utility.''.
    (c) Federal Transmitting Utilities.--(1) If no privately or 
publicly funded entity commits within one year of the identification 
required in section 232(c) of the Federal Power Act to finance (either 
on its own or through a third party financing arrangement with a 
Federal Transmitting Utility) a high-voltage electric transmission 
facility identified in such notice, a Federal Transmitting Utility 
shall finance the construction of the high-voltage electric 
transmission facility and operate and maintain such facility if the 
Federal Transmitting Utility determines--
                    (A) the facility would be located within the area 
                in which the Federal Transmitting Utility is 
                statutorily authorized to construct transmission 
                facilities;
                    (B) the facility may be constructed and operated 
                without having a material detrimental impact on 
                reliability; and
                    (C) equally effective nontransmission options are 
                unavailable.
    (2)(A) Subject to the availability of appropriated funds, the 
Department of Energy is authorized to issue and sell bonds, notes, and 
other evidence of indebtedness to the Secretary of Treasury from time 
to time in an amount not to exceed $10,000,000,000 outstanding at any 
one time. The Department of Energy shall deposit the amounts raised 
pursuant to this subsection to a Transmission Fund, which shall be 
located in the U.S. Treasury.
    (B) Amounts deposited in the Transmission Fund shall be available 
without further appropriation or fiscal year limitation to a Federal 
Transmitting Utility to fund the construction, operation and 
maintenance of high-voltage electric transmission facilities authorized 
by subsection (1). Except as specified in subparagraph (C), amounts 
used for construction, operation and maintenance shall be recovered by 
the Federal Transmitting Utility and repaid to the Transmission Fund 
over a period of 50 years.
    (C) If a Federal Transmitting Utility determines that revenue from 
users of the high-voltage electric transmission facility may not be 
sufficient to recover its costs over time, it may set a transmission 
rate for its use separate from rates charged for the use of the Federal 
Transmitting Utility's other transmission facilities. In such event, 
power and transmission customers of the Federal Transmitting Utility 
shall not be liable for the costs of the high-voltage transmission 
facility except for the amount of transmission capacity such customers 
utilize as determined by each Federal Transmitting Utility. Any amounts 
that cannot be so recovered from such separate rate over a period of 50 
years shall not be required to be repaid by the Federal Transmitting 
Utility to the Transmission Fund in the United States Treasury.
    (3) The regulations promulgated pursuant to this Act shall, to the 
maximum extent practicable, ensure that not less than 75 percent of the 
capacity of any high-voltage electric transmission line constructed by 
a Federal transmitting utility pursuant to this section is used for 
electricity from renewable energy.

SEC. 425. FEDERAL POWER MARKETING ADMINISTRATIONS AND TVA.

    (a) Promotion of Renewable Energy and Energy Efficiency.--The 
Western Area Power Administration, the Southeastern Area Power 
Administration, the Southwestern Area Power Administration and the 
Tennessee Valley Authority shall each identify and, to the extent 
economically feasible and not inconsistent with other statutory 
obligations, take steps to promote energy conservation and renewable 
energy electric resource development in the regions served by such 
utility.
    (b) Acquisition of Renewable Energy and Renewable Energy Credits.--
Each Federal Power Marketing Administration and the Tennessee Valley 
Authority may, subject to advance payment arrangements by the Federal 
Government being in place that assure the Federal Power Marketing 
Administration is held financially harmless for its actions pursuant to 
this section, use its purchasing power to acquire on behalf of the 
Federal government electricity from renewable energy and renewable 
energy credits in sufficient amounts to meet the requirements of 
section 203 of the Energy Policy Act of 2005. The Federal agencies on 
behalf of which a Federal Power Marketing Administration or the 
Tennessee Valley Authority acquires renewable energy or renewable 
energy credits shall fully reimburse the Federal Power Marketing 
Administration or the Tennessee Valley Authority for such transactions.
    (c) Tribal Renewable Energy.--Each Federal Power Marketing 
Administration and the Tennessee Valley Authority shall identify 
opportunities for promoting the development of facilities generating 
electricity from renewable energy on Indian lands.
    (d) Nonreimbursable Funds.--The amounts expended by a Federal Power 
Marketing Administration or the Tennessee Valley Authority pursuant to 
this section shall not be subject to reimbursement by the customers of 
such utility.

SEC. 426. CONSISTENCY WITH ENVIRONMENTAL LAWS.

    Nothing in this Act shall be deemed to waive any existing Federal 
or State environmental protection provision, including the requirements 
of--
            (1) the National Forest Management Act of 1976 (16 U.S.C. 
        472a et seq.);
            (2) the Endangered Species Act of 1973 (16 U.S.C. 1531 et 
        seq.);
            (3) the National Environmental Policy Act of 1969 (42 
        U.S.C. 4231 et. seq.);
            (4) the Federal Water Pollution Control Act of 1969 (33 
        U.S.C. 1251 et . seq.); and
            (5) the Federal Land Policy and Management Act of 1976 (43 
        U.S.C. 1701 et seq.).

                        Subtitle D--Net Metering

SEC. 431. ESTABLISHING MINIMUM NET METERING AND INTERCONNECTION 
              STANDARDS.

    (a) Findings.--The Congress finds that it is in the public interest 
to:
            (1) Enable small businesses, residences, schools, churches, 
        farms with small electric generation units, and other retail 
        electric customers who generate electric energy to return or 
        sell surplus electric energy on the open market.
            (2) Encourage private investment in renewable and alternate 
        energy resources.
            (3) Stimulate the economic growth.
            (4) Enhance the continued diversification section of energy 
        resources used in the United States.
            (5) Remove regulatory barriers for net metering.
    (b) Net Metering and Interconnection Standards.--Section 113 of the 
Public Utility Regulatory Policies Act of 1978 is amended by adding the 
following new subsections at the end thereof:
    ``(d) Net Metering.--
            ``(1) Definitions.--As used in this subsection:
                    ``(A) The term `customer-generator' means the owner 
                or operator of a qualified generation unit.
                    ``(B) The term `net metering' means measuring the 
                difference between the electricity supplied to a 
                customer-generator and the electricity generated by a 
                customer-generator that is delivered to a local 
                distribution section system at the same point of 
                interconnection during an applicable billing period and 
                providing an energy credit to a customer-generator in 
                the form of a kilowatt-hour credit for each kilowatt-
                hour of energy produced by a customer-generator from a 
                qualified generation unit.
                    ``(C) The term `qualified generation unit' means an 
                electric energy generation unit that meets each of the 
                following requirements:
                            ``(i) The unit is a fuel cell or uses as 
                        its energy source either solar, wind, biomass, 
                        geothermal, anaerobic digestion or landfill 
                        gas, or a combination of the foregoing.
                            ``(ii) The unit has a generating capacity 
                        of not more than 1,000 kilowatts.
                            ``(iii) The unit is located on premises 
                        that are owned, operated, leased, or otherwise 
                        controlled by the customer-generator.
                            ``(iv) The unit operates in parallel with 
                        the retail electric supplier.
                            ``(v) The unit is intended primarily to 
                        offset part or all of the customer-generator's 
                        requirements for electric energy.
                    ``(D) The term `retail electric supplier' means any 
                electric utility that sells electric energy to the 
                ultimate consumer thereof.
                    ``(E) The term `local distribution system' means 
                any system for the distribution section of electric 
                energy to the ultimate consumer thereof, whether or not 
                the owner or operator of such system is also a retail 
                electric supplier.
            ``(2) Adoption.--Not later than one year after the 
        enactment of this subsection, each State regulatory authority 
        (with respect to each electric utility for which it has 
        ratemaking authority), and each nonregulated electric utility, 
        shall provide public notice and conduct a hearing respecting 
        the standards established by paragraph (3) and, on the basis of 
        such hearing, shall adopt such standard.
            ``(3) Establishment of net metering standard.--Each retail 
        electric supplier shall offer to arrange (either directly or 
        through a local distribution company or other third party) to 
        make net metering available, on a first-come-first-served 
        basis, to each of its retail customers in accordance with the 
        provisions of this subsection and each of the following 
        requirements:
                    ``(A) Rates and charges and contract terms and 
                conditions for the sale of electric energy to customer-
                generators shall be the same as the rates and charges 
                and contract terms and conditions that would be 
                applicable if the customer-generator did not own or 
                operate a qualified generation unit and use a net 
                metering system.
                    ``(B) Each retail electric supplier shall notify 
                all of its retail customers of the standard established 
                under this paragraph upon adoption of such standard.
            ``(4) Net energy measurement.--Each retail electric 
        supplier shall arrange to provide to customer-generators who 
        qualify for net metering under subsection (b) an electrical 
        energy meter capable of net metering and measuring the flow of 
        electricity either to or from the customer and using a single 
        meter and single register, except where it is not practical to 
        do so. Where it is not practical to provide the meter to the 
        customer-generator, the retail electric supplier (either 
        directly or through a local distribution company or other third 
        party) shall, at its own expense, install one or more of such 
        electric energy meters for the customer-generator concerned.
            ``(5) Billing.--Each retail electric supplier subject to 
        subsection (b) shall calculate the electric energy consumption 
        for a customer using a net metering system in the following 
        manner:
                    ``(A) The retail electric supplier shall measure 
                the net electricity produced or consumed during the 
                billing period using the metering installed as provided 
                in paragraph (4).
                    ``(B) If the electricity supplied by the retail 
                electric supplier exceeds the electricity generated by 
                the customer-generator during the billing period, the 
                customer-generator shall be billed for the net electric 
                energy supplied by the retail electric supplier in 
                accordance with normal billing practices
                    ``(C)(i) If electric energy generated by the 
                customer-generator exceeds the electric energy supplied 
                by the retail electric supplier, the customer-generator 
                shall be billed for the appropriate customer charges 
                for that billing period and credited for the excess 
                electric energy generated during the billing period, 
                with this credit appearing as a kilowatt-hour credit on 
                the bill for the following billing period. The 
                kilowatt-hour credits shall be applied to customer-
                generator electric energy consumption on the following 
                billing period bill (except for a billing period that 
                ends in the next calendar year). At the beginning of 
                each calendar year, any remaining unused kilowatt-hour 
                credits shall be extinguished.
                    ``(ii) Except as provided in this clause, if the 
                customer-generator is using a meter and retail billing 
                arrangement that has time differentiated rates, (a 
                `time-of-use meter'), the kilowatt-hour credit shall be 
                based on the ratio representing the difference in 
                retail rates for each time of use rate or the credits 
                shall be shown on the customer-generator's bill as a 
                monetary credit reflecting retail rates at the time of 
                generation of the electric energy by the customer-
                generator. Notwithstanding the standard established 
                under section 11(d)(14), the supplier may require, at 
                the supplier's option, the customer-generator with net 
                metering to take electric service under a non-time 
                differentiated energy rate tariff or service that it 
                offers to customers in the same rate class as the 
                customer-generator.
            ``(6) Percent limitations.--
                    ``(A) Two percent limitation.--The standard 
                established under this subsection shall not apply for a 
                calendar year in the case of a customer-generator 
                served by a local distribution company when the total 
                generating capacity of all customer-generators with net 
                metering systems served by that local distribution 
                company in that calendar year is equal to or in excess 
                of 2 percent of the capacity necessary to meet the 
                local distribution company's average forecasted 
                aggregate customer peak demand for that calendar year.
                    ``(B) One percent limitation.--The standard 
                established under this subsection shall not apply for a 
                calendar year in the case of a customer-generator 
                served by a local distribution company when the total 
                generating capacity of all customer-generators with net 
                metering systems served by that local distribution 
                company in that calendar year using a single type of 
                qualified generation units (as listed in paragraph 
                (1)(C)(i)) is equal to or in excess of 1 percent of the 
                capacity necessary to meet the company's average 
                forecasted aggregate customer peak demand for that 
                calendar year.
                    ``(C) Records and notice.--- Each retail electric 
                supplier shall maintain, and make available to the 
                public, records of the total generating capacity of 
                customer-generators of such system that are using net 
                metering, the type of generating systems and energy 
                source used by the electric generating systems used by 
                such customer-generators. Each such retail electric 
                supplier shall notify the State regulatory authority 
                and the Federal Energy Regulatory Commission when the 
                total generating capacity of such customer-generators 
                is equal to or in excess of the limitations set forth 
                in subparagraph (B).
            ``(7) Ownership of credits.--For purposes of Federal and 
        State laws providing renewable energy credits or greenhouse gas 
        credits, the customer-generator with a qualified generating 
        unit and net metering shall be treated as owning and having 
        title to the renewable energy attributes, renewable energy 
        credits and greenhouse gas emission credits related to any 
        electricity produced by the qualified generating unit. No 
        retail electric supplier shall claim title to or ownership of 
        any renewable energy attributes, renewable energy credits or 
        greenhouse gas emission credits of the customer-generator as a 
        result of interconnecting the customer-generator or providing 
        or offering the customer-generator net metering.
            ``(8) Safety and performance standards.--(A) A qualified 
        generation unit and net metering system used by a customer-
        generator shall meet all applicable safety and performance and 
        reliability standards established by the national electrical 
        code, the Institute of Electrical and Electronics Engineers, 
        Underwriters Laboratories, or the American National Standards 
        Institute.
            ``(B) The Commission shall, after consultation with State 
        regulatory authorities and nonregulated local distribution 
        systems and after notice and opportunity for comment, prohibit 
        by regulation the imposition of additional charges by electric 
        suppliers and local distribution systems for equipment or 
        services for safety or performance that are additional to those 
        necessary to meet the standards and requirements referred to in 
        subparagraph (A) of this paragraph and subsection (e) of this 
        section (relating to interconnection).
            ``(9) Determination of compliance.--Any State regulatory 
        authority (with respect to each electric utility for which it 
        has ratemaking authority), and each nonregulated electric 
        utility may apply to the Commission for a determination that 
        any State net metering requirement or regulations complies with 
        the requirements of this subsection. In the absence of such a 
        determination, the Commission, on its own motion or pursuant to 
        the petition of any interested person, may, after notice and 
        opportunity for a hearing on the record, issue an order 
        requiring against any retail electric supplier or local 
        distribution company, or both, to require compliance with this 
        subsection. Any person who violates any requirement of this 
        subsection or any order of the Commission under this subsection 
        shall be subject to civil penalties in the amount of $10,000 
        for each day that such violation continues. Such penalties may 
        be assessed by the Commission, after notice and opportunity for 
        hearing, in the same manner as penalties are assessed under 
        section 31(d) of the Federal Power Act.
    ``(e) Interconnection Standards.--
            ``(1) Definitions.--For purposes of this subsection, the 
        terms defined in subsection (d) shall apply.
            ``(2) Model standards.--(A) Within one year after the 
        enactment of this subsection the Commission shall publish model 
        standards for the physical connection between local 
        distribution systems and qualified generation units and 
        electric generation units that meet the requirements of 
        subsection (d)(1)(C) other than clause (ii) thereof and that do 
        not exceed 20,000 kilowatts of capacity. Such model standards 
        shall be designed to encourage the use of qualified generation 
        units and to ensure the safety and reliability of such units 
        and the local distribution systems interconnected with such 
        units.
            ``(B) The model standards shall have two separate expedited 
        procedures for interconnecting qualified generation units up to 
        15 kilowatts and a separate standard that expedites 
        interconnection for qualified generation units up to 2000 
        kilowatts. Such expedited procedures shall be based on those 
        best practices among the States that have adopted 
        interconnection standards. In designing such expedited 
        procedures, the Commission shall consider Interstate Renewable 
        Energy Council Model Rule MR-I2005.
            ``(C) Within 2 years after the enactment of this 
        subsection, each State shall adopt the model standards 
        published under this paragraph, with or without modification, 
        and submit such standards to the Commission for approval. The 
        Commission shall approve a modification of the model standards 
        only if the Commission determines that such modification is 
        consistent with or superior to the purpose of such standards 
        and is required by reason of local conditions.
            ``(D) If standards have not been approved under this 
        paragraph by the Commission for any State within 2 years after 
        the enactment of this subsection, the Commission shall, by rule 
        or order, enforce the Commission's model standards in such 
        State until such time as State standards are approved by the 
        Commission.
            ``(E) Within two years after the enactment of this 
        subsection, and after notice and opportunity for comment, the 
        Commission shall publish an update of such model standards, 
        considering changes in the underlying standards and 
        technologies. Such updates shall be made available to State 
        regulatory authorities for their consideration.
            ``(3) Safety, reliability, performance, and cost.--The 
        standards under this section shall establish those measures for 
        the safety and reliability of the affected equipment and local 
        distribution systems as may be appropriate. Such standards 
        shall be consistent with all applicable safety and performance 
        standards established by the national electrical code, the 
        Institute of Electrical and Electronics Engineers, Underwriters 
        Laboratories, or the American National Standards Institute yet 
        constitute the minimum cost and technical burdens to the 
        interconnecting customer generator as the Commission shall, by 
        rule, prescribe.
            ``(4) Additional charges.--The model standards under this 
        subsection prohibit the imposition of additional charges by 
        local distribution systems for equipment or services for 
        interconnection that are additional to those necessary to meet 
        such standards and that are in excess of the charges and 
        equipment requirements identified in the best practices of 
        states with interconnection standards.
            ``(5) Relationship to existing law regarding 
        interconnection.--Nothing in this subsection affects the 
        application of section 111(d)(15) relating to interconnection.
            ``(6) Consumer friendly contracts.--The Commission shall 
        promulgate regulations insuring that simplified contracts will 
        be used for the interconnection of electric energy by electric 
        energy transmission or distribution systems and generating 
        facilities that have a power production capacity not greater 
        than 2000 kilowatts and shall consider the best practices for 
        consumer friendly contracts adopted by States or national 
        associations of state regulators. Such contracts shall not 
        require liability or other insurance in excess of what is 
        typically carried by customer-generators for general liability.
            ``(7) Enforcement.--Any person who violates any requirement 
        of this subsection shall be subject to civil penalties in the 
        amount of $10,000 for each day that such violation continues. 
        Such penalties may be assessed by the Commission, after notice 
        and opportunity for hearing, in the same manner as penalties 
        are assessed under section 31(d) of the Federal Power Act.''.
    (c) Relationship to State Law.--Section 117 of the Public Utility 
Regulatory Policies Act of 1978 is amended by striking ``Nothing'' and 
inserting ``(1) Except as provided in paragraph (2), nothing'' and by 
adding the following at the end thereof:
    ``(2) No State or nonregulated utility may adopt or enforce any 
standard or requirement concerning net metering or interconnection that 
restricts access to the electric power transmission or distribution 
system by qualified generators beyond those standards and requirements 
identified in section 113(d). Nothing in this Act shall preclude a 
State from adopting or enforcing incentives or requirements to 
encourage qualified generation and net metering that are additional to 
or equivalent to those required under section 113(d) or that afford 
greater access to the electric power transmission and distribution 
system by qualified generators as defined in section 113(d) or afford 
greater compensation or credit for electricity generated by such 
generators.''.

SEC. 432. RETAIL ELECTRIC AND GAS UTILITY EFFICIENCY POLICIES.

    (a) In General.--The Public Utility Regulatory Policies Act of 1978 
is amended by adding the following after section 609:

``SEC. 610. EFFICIENCY RESOURCE STANDARDS FOR RETAIL ELECTRICITY AND 
              NATURAL GAS DISTRIBUTORS.

    ``(a) Definitions.--In this section:
            ``(1) Base quantity.--The term `base quantity', with 
        respect to a retail electricity or natural gas distributor, 
        means the total quantity of electric energy or natural gas 
        delivered by the retail electricity or natural gas distributor 
        to retail customers during the most recent calendar year for 
        which information is available.
            ``(2) Combined heat and power system.--The terms `combined 
        heat and power system' and `CHP system' mean a system that--
                    ``(A) uses the same energy source for the 
                simultaneous or sequential generation of electrical 
                power, mechanical power, or both, in combination with 
                the generation of steam or other forms of useful 
                thermal energy (including heating and cooling 
                applications);
                    ``(B) produces at least 20 percent of its total 
                useful energy in the form of thermal energy, and at 
                least 15 percent of its total useful energy in the form 
                of electrical or mechanical power (or a combination 
                thereof);
                    ``(C) except for systems designed for operation on 
                cellulosic biomass fuel, has a marginal net heat rate 
                of no more than 7,500 Btu/kWh, calculated on a higher 
                heating value basis;
                    ``(D) is designed for continuous operation; and
                    ``(E) if generating electricity provides such 
                electricity primarily for use for a facility or group 
                of facilities located near the point where the 
                electricity is generated, and from which net wholesale 
                sales of electricity are not in excess of 50 percent of 
                total annual generation.
            ``(3) Customer facility.--The term `customer facility' 
        means an end-use consumer of electricity or natural gas served 
        by a retail electricity or natural gas distributor.
            ``(4) Deemed savings.--The term `deemed savings' means an 
        estimate of the average per unit savings from installation of 
        specific common energy efficiency measures. Deemed savings 
        estimates shall be based on field studies or billing analyses 
        of savings at a sample of sites where the specific measure is 
        installed.
            ``(5) Electric and natural gas savings corporation .--The 
        term `Electric and Natural Gas Savings Corporation ' means the 
        corporation certified pursuant to subsection (d)(7)(C).
            ``(6) Electricity.--(A) The term `electricity savings' 
        means any of the following:
                    ``(i) Reductions in end-use electricity consumption 
                achieved by a customer facility relative to_
                            ``(I) consumption at the same facility in a 
                        base year, as defined in rules issued by the 
                        Secretary;
                            ``(II) in the case of replacement of 
                        equipment at the end of its life or of new 
                        equipment that does not replace existing 
                        equipment, consumption of new equipment of 
                        average efficiency, as defined in rules issued 
                        by the Secretary; or
                            ``(III) in the case of a new facility, 
                        consumption at a reference facility, as defined 
                        in rules issued by the Secretary.
                    ``(ii) Reductions in distribution system losses of 
                electricity achieved by a retail electricity 
                distributor relative to losses attributable to new or 
                replacement distribution system equipment of average 
                efficiency, as defined in rules issued by the 
                Secretary.
                    ``(iii) Any combination of the foregoing.
            ``(B) The reductions referred to in subparagraph (A) may be 
        due to--
                    ``(i) energy efficiency measures, including demand 
                response measures that result in improved energy 
                efficiency;
                    ``(ii) combined heat and power systems as 
                calculated under subparagraph (D);
                    ``(iii) recycled energy; or
                    ``(iv) in the case of distribution system losses, 
                upgraded distribution transformers, upgraded electrical 
                connectors, high temperature superconductors, or other 
                measures to reduce such losses as specified in rules 
                issued by the Secretary.
            ``(C) The reductions in end-use electricity consumption at 
        a customer facility shall be reduced on a Btu basis by the Btu 
        equivalent of any associated increases in fuel consumption at 
        such facility. The conversion of any such fuel consumption 
        increase to an equivalent amount of electricity on a Btu basis 
        shall be determined by the Secretary based on the average heat 
        rate of central station generation in the region (accounting 
        for average transmission and distribution losses in the 
        region), as determined in rules issued by the Secretary.
            ``(D) For a combined heat and power (CHP) system, the 
        electricity savings shall be the electricity and mechanical 
        power generated by the CHP system net of fuel used by the 
        system, where the fuel used is the product of--
                    ``(i) the electricity and mechanical power 
                generated by the CHP system;
                    ``(ii) the net-effective heat rate for the CHP 
                system; and
                    ``(iii) the inverse of the average heat rate of 
                central station generation in the region, taking into 
                consideration avoided transmission and distribution 
                losses resulting from on-site generation as determined 
                under subparagraph (C).
            ``(7) Natural gas savings.--(A) The term `natural gas 
        savings' means--
                    ``(i) reductions in end-use natural gas consumption 
                achieved by a customer facility relative to--
                            ``(I) consumption at the same facility in a 
                        base year, as defined in rules issued by the 
                        Secretary;
                            ``(II) in the case of replacement of 
                        equipment at the end of its life or of new 
                        equipment that does not replace existing 
                        equipment, consumption of new equipment of 
                        average efficiency, as defined in rules issued 
                        by the Secretary; or
                            ``(III) in the case of a new facility, 
                        consumption at a reference facility, as defined 
                        in rules issued by the Secretary;
                    ``(ii) reductions in leakage, operational losses, 
                and gas fuel consumption in the operation of a gas 
                distribution system achieved by a retail gas 
                distributor relative to such losses in a base year, as 
                defined in rules issued by the Secretary; or
                    ``(iii) any combination of the foregoing.
            ``(B) The natural gas savings may be due to--
                    ``(i) energy efficiency measures;
                    ``(ii) recycled energy; or
                    ``(iii) in the case of gas distribution system 
                losses, technologies and practices as specified in 
                rules issued by the Secretary including measures 
                recommended for gas distribution systems by the Natural 
                Gas STAR Program administered by the Environmental 
                Protection Agency.
            ``(C) The reductions in natural gas consumption shall be 
        reduced on a Btu equivalent basis by any associated increases 
        in the consumption of electricity or other substitute fuels by 
        a customer facility or a natural gas distributor, as determined 
        under rules issued by the Secretary. The conversion of any such 
        increase in the consumption of electricity or other fuels to an 
        equivalent amount of natural gas consumption on a Btu basis 
        shall be determined by the Secretary based on the average heat 
        rate of central station electric generation in the region and 
        average transmission and distribution losses in the region, as 
        determined under rules issued by the Secretary.
            ``(8) Net effective heat rate.--The term `net effective 
        heat rate' means a ratio, the numerator of which is the higher 
        heating value of the increment of fuel required by a CHP system 
        to produce electricity and mechanical power, over and above the 
        fuel that would be required to produce the equivalent thermal 
        output of the CHP system by a system without power generation, 
        expressed in British thermal units, and the denominator of 
        which is the power output of the CHP system, expressed in 
        kilowatt-hours.
            ``(9) Performance standard.--The term `performance 
        standard' means the performance standard for energy savings 
        established under subsection (b).
            ``(10) Recycled energy.--The term `recycled energy' means 
        electrical or mechanical power, or both, or thermal energy 
        produced by modifying an industrial or commercial system that 
        was in place prior to January 1, 2007, such that the modified 
        system--
                    ``(A) recaptures energy that would otherwise be 
                wasted from sources, including--
                            ``(i) waste heat from industrial processes, 
                        natural gas compressor stations, and other 
                        sources;
                            ``(ii) pressure in a fluid or gas system 
                        including but not limited to steam, natural 
                        gas, and water; and
                            ``(iii) blast furnace, coke oven, carbon 
                        black, and petrochemical process waste gas, or 
                        pollution control projects, including thermal 
                        oxidizers and gas flares; and
                    ``(B) uses equipment and technologies including--
                            ``(i) back-pressure turbines in parallel 
                        with existing pressure-reducing valves in 
                        steam, water and gas systems;
                            ``(ii) organic Rankine, Stirling, or Kalina 
                        cycle heat engine systems driven by waste heat; 
                        or
                            ``(iii) heat recovery steam generators with 
                        steam turbine generators that recover waste 
                        heat.
            ``(11) Retail electricity or natural gas distributor.--The 
        term `retail electricity or natural gas distributor' means a 
        person (including a Federal, State, or local entity) that--
                    ``(A) distributes electric energy or natural gas to 
                consumers in the United States for a calendar year, 
                including electricity or natural gas supplied by 
                unregulated suppliers, regardless of whether such 
                suppliers are affiliated or unaffiliated with the 
                distributor; and
                    ``(B) sold not less than 800,000 megawatt-hours of 
                electric energy or 1 billion cubic feet of natural gas 
                to consumers in the United States for purposes other 
                than resale during the preceding calendar year.
        For purposes of this paragraph, electricity or natural gas sold 
        at wholesale to large end-use customers shall be included but 
        natural gas sold to wholesale electric generators to generate 
        electric power for resale shall not be not included.
    ``(b) Performance Standard.--
            ``(1) In general.--Each retail electricity or natural gas 
        distributor shall undertake electricity and natural gas savings 
        measures in each calendar year beginning with 2009 that produce 
        electricity and natural gas savings as a percentage of the 
        distributor's base quantity at the applicable rate specified in 
        paragraph (5).
            ``(2) Savings.--The savings described in paragraph (1) 
        shall represent savings realized in the specified year from 
        measures implemented in that year and all preceding years 
        beginning with 2007.
            ``(3) Limits.--Savings from combined heat and power 
        systems, recycled energy, and electricity or natural gas 
        distribution system measures may be used by a distributor to 
        satisfy no more than 50 percent of the applicable savings 
        specified for any year in the table contained in paragraph (5).
            ``(4) Compliance.--(A) Each retail electricity or natural 
        gas distributor subject to this subsection may use any 
        electricity or natural gas savings measures available to the 
        distributor to achieve compliance with the performance standard 
        established under this section, on the condition that the 
        electricity and natural gas savings achieved by such measures 
        are calculated and verified pursuant to the rules issued under 
        subsection (c).
            ``(B) A retail electricity or natural gas distributor may 
        demonstrate compliance with the performance standard through 
        the accumulation of_
                    ``(i) electricity or natural gas savings credits 
                achieved by such electricity or natural gas distributor 
                and certified under clause (i) of subsection (d)(2)(A);
                    ``(ii) electricity or natural gas savings credits 
                obtained by purchase under subsection (d)(6);
                    ``(iii) electricity or natural gas savings credits 
                borrowed against future years under subsection (d)(7); 
                or
                    ``(iv) any combination of credits described in 
                clauses (i), (ii), and (iii).
            ``(5) Applicable rates.--(A) The applicable rates referred 
        to in paragraph (1) are as follows:


------------------------------------------------------------------------
       ``Year          Electricity Savings (%)   Natural Gas Savings (%)
------------------------------------------------------------------------
         2009                      0.25                      0.20
------------------------------------------------------------------------
         2010                      0.75                      0.50
------------------------------------------------------------------------
         2011                      1.50                      0.80
------------------------------------------------------------------------
         2012                      2.25                      1.15
------------------------------------------------------------------------
         2013                      3.00                      1.50
------------------------------------------------------------------------
         2014                      4.00                      2.00
------------------------------------------------------------------------
         2015                      5.00                      2.50
------------------------------------------------------------------------
         2016                      6.00                      3.00
------------------------------------------------------------------------
         2017                      7.00                      3.50
------------------------------------------------------------------------
         2018                      8.00                      4.00
------------------------------------------------------------------------
         2019                      9.00                      4.50
------------------------------------------------------------------------
         2020                     10.00                      5.00
------------------------------------------------------------------------

            ``(B) At least 2 years before the beginning of any year 
        after 2020, the Secretary, after notice and opportunity for 
        comment, shall set the applicable rate, taking into 
        consideration the economic and environmental benefits of the 
        energy savings and the cost of the savings measures.
    ``(c) Determination of Compliance Rules.--Not later than 1 year 
after the date of enactment of this section, the Secretary shall issue 
rules that describe the means to be used to calculate and verify 
compliance with the performance standard that include each of the 
following:
            ``(1) Procedures and standards for defining and measuring 
        electricity savings and natural gas savings from customer 
        facility end-uses and from utility distribution systems that 
        occur in a calendar year (including measures implemented in 
        previous calendar years beginning in 2007). At a minimum, these 
        procedures and standards shall--
                    ``(A) specify the types and categories of 
                efficiency measures that will be eligible for 
                certification under subsection (d)(2);
                    ``(B) require that energy consumption estimates for 
                customer facilities or portions thereof in the base and 
                current years be adjusted, when appropriate, to account 
                for changes in weather, level of production, and 
                building area;
                    ``(C) allow energy consumption estimates from 
                discrete processes and equipment within industrial 
                facilities in the base and current years to be adjusted 
                for factors identified by rule that may be responsible 
                for significant year-to-year changes;
                    ``(D) allow energy consumption estimates from 
                discrete processes and equipment within industrial 
                facilities in the base and current years to be adjusted 
                for factors identified by rule that may be responsible 
                for significant year-to-year changes;
                    ``(E) account for the useful life of energy saving 
                measures;
                    ``(F) include deemed savings values for commonly-
                used efficiency measures and make provision for such 
                values to be periodically reviewed and revised;
                    ``(G) minimize the chances that more than one 
                entity will claim credit for the same savings; and
                    ``(H) exclude savings that--
                            ``(i) are attributable to measures or 
                        systems installed before January 1, 2007, or to 
                        modifications of processes or systems 
                        undertaken prior to January 1, 2007;
                            ``(ii) are otherwise required by Federal, 
                        State, local, or Indian tribal law or 
                        regulation;
                            ``(iii) are achieved without the 
                        intervention of the electricity or natural gas 
                        distributor or of any other entity seeking 
                        credits under paragraph (2)(A)(ii) of , except 
                        as provided under subsection (e);
                            ``(iv) are attributable to Federal, State, 
                        or local tax incentives, grants, loans, or 
                        other public financial support for energy 
                        efficiency measures; or
                            ``(v) have already been credited under this 
                        section to another entity.
            ``(2) Procedures and standards for verification of 
        electricity or natural gas savings reported by retail 
        electricity and natural gas distributors. At a minimum, such 
        procedures and standards shall--
                    ``(A) provide for periodic spot checks on a sample 
                of sites to verify that measures are in place and 
                functioning;
                    ``(B) provide that savings estimates are calibrated 
                with billing analysis or end-use metering on a sample 
                of sites where technically feasible and economically 
                justified; and
                    ``(C) provide for the protection of customers' 
                proprietary information against unwarranted disclosure.
            ``(3) Requirements for the content and format of a biennial 
        report from each retail electricity or natural gas distributor 
        demonstrating the compliance of the distributor with the 
        performance standard, including a detailed description of the 
        calculation of electricity and natural gas savings to enable 
        the appropriate regulatory authority to verify and enforce 
        compliance with the requirements of this section (including 
        regulations issued under this section).
            ``(4) Provision for reviewing and revising the electricity 
        and natural gas consumption of reference facilities and of new 
        equipment of average efficiency at intervals of not greater 
        than 4 years.
    ``(d) Credit and Trading System.--
            ``(1) Establishment.--Not later than one year after the 
        date of enactment of this section, and after consultation with 
        the Administrator of the Environmental Protection Agency, the 
        Secretary shall issue rules establishing a nationwide credit 
        and credit trading system for electricity and natural gas 
        savings.
            ``(2) Credits.--
                    ``(A) In general.--In accordance with the rules 
                issued under paragraph (1), the Secretary
                            ``(i) shall certify as credits, electricity 
                        and natural gas savings achieved by a retail 
                        electricity or natural gas distributor in a 
                        given calendar year if the savings comply with 
                        the rules issued under subsection (c)(1);
                            ``(ii) shall certify as credits, customer 
                        electricity and natural gas savings undertaken 
                        by State agencies and other entities if--
                                    ``(I) a retail electricity or 
                                natural gas distributor did not help 
                                finance measures to achieve these 
                                savings; and
                                    ``(II) the savings comply with the 
                                rules issued under subsection (c); and
                            ``(iii) shall not award credits to any 
                        retail electricity or natural gas distributor 
                        subject to State administration and enforcement 
                        under subsection (g) unless the Secretary has 
                        determined that the administration and 
                        enforcement are at least equivalent to 
                        administration and enforcement by the 
                        Secretary.
                    ``(B) Amount of credits.--A credit certified by the 
                Secretary under this subsection--
                            ``(i) shall equal 1,000 kilowatt-hours, in 
                        the case of an electricity savings credit; or
                            ``(ii) shall equal 10 therms, in the case 
                        of a natural gas savings credit.
            ``(3) Treatment of credits.--
                    ``(A) Use of credits.--A credit may be counted 
                toward compliance with the performance standard only 
                once.
                    ``(B) Property rights.--An electricity or natural 
                gas savings credit certified under this subsection 
                shall not be considered to be a property right.
                    ``(C) Reduction and termination of credits.--
                Nothing in this section or any other provision of the 
                law limits the authority of the United States to reduce 
                or terminate a credit certified under this subsection.
            ``(4) Fee.--
                    ``(A) In general.--To receive certification of an 
                electricity or natural gas savings credit under this 
                section, the recipient of the credit shall pay a fee, 
                calculated by the Secretary, in an amount that is equal 
                to the lesser of the following:
                            ``(i) The administrative costs of issuing, 
                        recording, monitoring the sale or exchange, and 
                        tracking, of the credit.
                            ``(ii) For the years 2009 and 2010, 5 
                        percent of the fair market value of the credit, 
                        as determined by the Secretary, and for the 
                        years 2011 and thereafter, 3 percent of the 
                        fair market value of the credit, as determined 
                        by the Secretary.
                    ``(B) Use of fees by secretary.--Subject to annual 
                appropriation, the Secretary shall use amounts 
                equivalent to the fees paid under this paragraph to pay 
                administrative costs described in subparagraph (A)(i). 
                If receipts exceed the administrative costs incurred by 
                the Secretary in any two consecutive fiscal years, the 
                Secretary shall, not later than January 1 of the first 
                fiscal year thereafter, reduce the fee accordingly.
            ``(5) Credit sale and use.--
                    ``(A) Sale.--A retail electric or natural gas 
                distributor may sell a credit certified under this 
                subsection to any other entity, and other entities may 
                sell such credit to a retail electric or natural gas 
                distributor or any other entity, in accordance with 
                accounting and verification procedures contained in 
                rules issued by the Secretary under paragraph (1).
                    ``(B) Use.--A credit certified under this 
                subsection and sold under subparagraph (A) may be used 
                by a purchasing retail electricity or natural gas 
                distributor for purposes of complying with the 
                performance standard.
                    ``(C) Duration of validity.--A credit certified 
                under this subsection may only be used for compliance 
                with this section for 3 years from the date issued.
            ``(6) Credit borrowing.--(A) During the first year covered 
        by the performance standard, a retail electricity or natural 
        gas distributor that has reason to believe that the distributor 
        will not have sufficient electricity or natural gas savings 
        credits to comply with the performance standard may--
                    ``(i) submit a plan to the Secretary demonstrating 
                that the retail electricity or natural gas distributor 
                will earn or acquire sufficient credits within the 
                subsequent 2 calendar years that would enable the 
                retail electricity or natural gas distributor to meet 
                the performance standard for all three calendar years; 
                and
                    ``(ii) upon the approval of the plan by the 
                Secretary, apply credits expected to be earned or 
                acquired within the subsequent 2 calendar years to meet 
                the performance standard for the applicable calendar 
                year.
            ``(B) Any retail electricity or natural gas distributor 
        that has submitted such a plan shall, by March 31 of the fourth 
        calendar year, submit to the Secretary the credits necessary to 
        repay all credits borrowed.
            ``(7) Buyout option.--
                    ``(A) In general.--An electricity or natural gas 
                distributor may elect to comply with this section for 
                any calendar year by paying to the certified Electric 
                and Natural Gas Savings Corporation not later than 
                March 31 of the following year, a fee of 5 cents per 
                kilowatt-hour or 50 cents per therm, for any portion of 
                the electricity or natural gas savings credit the 
                distributor would otherwise be obligated to achieve for 
                the year.
                    ``(B) Use of buyout fees.--The Electric and Natural 
                Gas Savings Corporation shall--
                            ``(i) deposit fees received under 
                        subparagraph (A) in an escrow account 
                        established by the Corporation; and
                            ``(ii) periodically distribute amounts in 
                        the escrow account to States requesting such 
                        funds for use in creating electricity or 
                        natural gas savings at customer facilities.
                States requesting funds from the account established by 
                the Corporation shall submit specific program 
                proposals, including funds requested, estimated savings 
                and measure lifetime(s), and estimated cost per kWh or 
                therm saved. The Corporation shall develop guidelines 
                for these submissions. The Corporation shall distribute 
                funds based on the following criteria: Estimated 
                savings per dollar of funds provided from the escrow 
                account, maximizing consumer opportunities to 
                participate across all States, and, beginning in year 
                3, past history of each State in meeting energy savings 
                and cost-effectiveness targets.
                    ``(C) Electric and natural gas savings 
                corporation.--
                            ``(i) Establishment and certification.--Any 
                        person may submit an application to the 
                        Secretary for the establishment and 
                        certification of a not-for-profit corporation, 
                        to be known as the Electric and Natural Gas 
                        Savings Corporation, to carry out this 
                        paragraph. The Secretary shall certify the 
                        corporation if the Secretary determines that 
                        the corporation has submitted the most 
                        qualified application indicating capability to 
                        carry out this paragraph. The Secretary may 
                        revoke such certification at any time for good 
                        cause, and in any such case, the Secretary may 
                        accept applications from other persons and 
                        certify another person as the Electric and 
                        Natural Gas Savings Corporation.
                            ``(ii) Authority of corporation.--No person 
                        may distribute more than 800,000 megawatt-hours 
                        of electric energy or more than 1 billion cubic 
                        feet of natural gas to consumers in the United 
                        States for purposes other than resale in any 
                        calendar year, including electricity or natural 
                        gas supplied by unregulated suppliers, 
                        regardless of whether such suppliers are 
                        affiliated or unaffiliated with the distributor 
                        unless such person complies with requirements 
                        established by the Corporation for the payment 
                        of fees under this paragraph.
                            ``(iii) Status of corporation.--The 
                        Corporation shall not be treated as a 
                        department, agency, or instrumentality of the 
                        United States for any purpose.
                            ``(iv) Books and records.--The books and 
                        records of the Corporation shall be available 
                        to the public at reasonable hours and under 
                        reasonable conditions, without charge.
                            ``(v) Penalty.--Any person who violates 
                        clause (ii) of this subparagraph shall be 
                        subject to a civil penalty to be assessed and 
                        collected by the Secretary in the amount equal 
                        to three times the total of the fees which are 
                        due and payable to the corporation under this 
                        paragraph.
    ``(e) Enforcement of Compliance.--
            ``(1) In general.--If a State regulatory authority with 
        jurisdiction over a retail electricity or natural gas 
        distributor notifies the Secretary that the State regulatory 
        authority will enforce compliance by the distributor with the 
        performance standard under this section, the State regulatory 
        authority shall have the authority to administer and enforce 
        the performance standard for the distributor under State law.
            ``(2) Authority of secretary.--The Secretary shall 
        administer and enforce the performance standard for all 
        electricity and natural gas distributors for which a State 
        regulatory authority described in paragraph (1) has not 
        notified the Secretary as described in that paragraph.
            ``(3) Compliance report.--Not later that July 1, 2010, and 
        every 2 years thereafter, each retail electricity and natural 
        gas distributor shall submit a compliance report conforming to 
        the provisions of the rule described in subsection (c)(3) to 
        either--
                    ``(A) the appropriate State regulatory authority, 
                if the authority has notified the Secretary as 
                described in paragraph (1); or
                    ``(B) the Secretary.
            ``(4) Failure to comply.--
                    ``(A) In general.--In the case of any retail 
                electricity or natural gas distributor for which the 
                Secretary is enforcing compliance with the standards 
                under this section, if the distributor fails to comply 
                with the performance standard for more than one 
                calendar year, the Secretary shall_
                            ``(i) determine the number of kilowatt-
                        hours of electricity savings, or therms of 
                        natural gas savings, by which the distributor 
                        has fallen short of meeting the performance 
                        standard; and
                            ``(ii) by order, require the distributor, 
                        after notice and opportunity for hearing, to 
                        deposit in the escrow account established under 
                        paragraph (8)(B) of subsection (e) an amount 
                        equal to 6.0 cents per kilowatt-hour for each 
                        such kilowatt hour, and 60 cents per therm for 
                        each such therm.
                    ``(B) Judicial review of orders.--
                            ``(i) In general.--A retail electricity or 
                        natural gas distributor ordered to make a 
                        payment under subparagraph (A)(ii) may, not 
                        later than 60 days after the date of issuance 
                        of the order, bring a civil action in the 
                        United States Court of Appeals for the District 
                        of Columbia for judicial review of the order.
                            ``(ii) Remedies.--The court specified in 
                        clause (i) shall have jurisdiction to enter a 
                        judgment affirming, modifying, or setting aside 
                        an order that is the subject of a civil action 
                        brought under that clause, or remanding the 
                        order, in whole or in part, to the Secretary.
    ``(f) Information Collection.--The Secretary may collect any 
information necessary to verify and audit each of the following:
            ``(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 
        distributor to the Secretary.
            ``(3) The quantity of electricity and natural gas sales of 
        all retail electricity and natural gas distributors.
    ``(g) State Law.--
            ``(1) In general.--Nothing in this section supersedes or 
        otherwise affects any State or local law or regulation 
        requiring or otherwise relating to electricity or natural gas 
        savings to the extent that the State or local law or regulation 
        contains more stringent savings requirements or has different 
        procedures for buyout or penalties than those contained in this 
        section.
            ``(2) Site-specific savings.--A State may require the 
        performance standard for electricity or natural gas savings of 
        any distributor within its jurisdiction to be achieved by 
        measures undertaken--
                    ``(A) within the State;
                    ``(B) within the service territory of any regional 
                transmission organization serving the State;
                    ``(C) within any group of States participating in a 
                regional program for the control of green house gas 
                emissions; or
                    ``(D) within any airshed designated by the State.
            ``(3) Treatment under state law.--A retail electricity or 
        natural gas distributor that achieves electricity or natural 
        gas savings under this section in accordance with any State or 
        local savings requirement specifically applicable to such 
        distributor shall be entitled to full credit under this section 
        for the savings to the extent that the savings meet the 
        requirements of this section (including regulations issued 
        under this section), including measurement, verification, and 
        monitoring requirements.
    ``(h) Development of Model Provisions.--Not later than 18 months 
after the date of enactment of this section, the Federal Energy 
Regulatory Commission shall, following public notice and comment, 
develop and publish model provisions for adoption by State utility 
regulatory commissions regarding each of the following:
            ``(1) Revenue stability and incentives for distributors.--
        Policies for rate-setting and return on investment for State-
        regulated electricity and natural gas distributors that 
        participate in successful, cost-effective energy efficiency 
        programs. Such model language shall include provisions for 
        decoupling the earnings of such regulated entities from full 
        dependence on the volume of electricity or natural gas 
        distributed by them to customer facilities. Such model language 
        shall also include provisions for policies for cost recovery 
        and other financial incentives, such that electric and gas 
        utility investors are rewarded similarly for similar levels of 
        investment in customer energy efficiency and in conventional 
        utility assets and that regulated utilities are encouraged to 
        include end-use efficiency measures and utility-owned, 
        customer-owned, or third party-owned CHP systems in electric 
        capacity and transmission and distribution plans.
            ``(2) Nondiscriminatory identification of cost-effective 
        savings opportunities.--Establishing a public, 
        nondiscriminatory bidding process open to customers and demand 
        side management service providers to identify cost-effective 
        electricity or natural gas savings opportunities within a 
        retail electricity or natural gas distributor's service area. 
        The model bidding plan shall provide for a distributor to 
        procure all or a portion of its proposed savings measures, 
        including measures proposed by the distributor or its 
        affiliates, in cost-effective rank order. The model plan shall 
        also address the process that will be used by the distributor 
        to identify and obtain further electricity or natural gas 
        savings in the event that insufficient savings are procured 
        through the bid process.
            ``(3) Development of model language on revenue decoupling 
        and shareholder incentives in ratemaking policies.--Rate-
        setting and earnings for State-regulated electricity and 
        natural gas distributors that participate in successful, cost-
        effective energy efficiency programs. Such model language shall 
        include, but not be limited to, recommendations for decoupling 
        the earnings of such regulated entities from full dependence on 
        the volume of electricity or natural gas distributed by them to 
        customer facilities. Such model language shall also include 
        recommendations for policies for cost recovery and shareholder 
        incentives, such that electric and gas utility investors are 
        rewarded similarly for similar levels of investment in customer 
        energy efficiency and in conventional utility assets.
    ``(i) State Adoption of FERC Model Provisions.--Each State utility 
regulatory authority shall adopt the model provisions referred to in 
subsection (h) in the same manner and subject to the same rules and 
review as apply in the case of standards referred to in section 113(b) 
and 303(b). For purposes of any provision of title I or III of this 
Act, the model provisions referred to in subsection (h) shall be 
treated as standards under section 113(b) (in the case of State 
regulated electricity distributors) or 303(b) (in the case of natural 
gas distributors), except that in the case of such model provisions, 
any reference contained in this Act to the date of enactment of this 
Act shall be deemed to be a reference to the date of enactment of this 
section. Each such State utility regulatory authority shall adopt the 
model provisions not later than 24 months after the date of enactment 
of this section in the case of paragraphs (1) and (2) of subsection (h) 
or 42 months after such date of enactment in the case of paragraph (3) 
of subsection (h)).''.
    (b) Table of Contents.--The table of contents for title VI of such 
Act is amended by adding the following new items at the end thereof:

``Sec. 609. Rural and remote communities electrification grants.
``Sec. 610. Efficiency resource standard for retail electricity and 
                            natural gas distributors.''.

                Subtitle E--Renewable Portfolio Standard

SEC. 441. RENEWABLE PORTFOLIO STANDARD.

    Title VI of the Public Utility Regulatory Policies Act of 1978 (16 
U.S.C. 2601 et seq.) is amended by adding at the end the following:

``SEC. 609. FEDERAL RENEWABLE PORTFOLIO STANDARD.

    ``(a) Renewable Energy Requirement.--
            ``(1) In general.--Each electric utility that sells 
        electricity to electric consumers shall obtain a percentage of 
        the base amount of electricity it sells to electric consumers 
        in any calendar year from new renewable energy or existing 
        renewable energy. The percentage obtained in a calendar year 
        shall not be less than the amount specified in the following 
        table:

``Calendar Year                               Minimum Annual Percentage
        2008 through 2011......................................    5.0 
        2012 through 2015......................................   10.0 
        2016 through 2019......................................   15.0 
        2020 through 2030......................................   20.0.
            ``(2) Means of compliance.--An electric utility shall meet 
        the requirements of paragraph (1) by--
                    ``(A) generating electric energy using new 
                renewable energy or existing renewable energy;
                    ``(B) purchasing electric energy generated by new 
                renewable energy or existing renewable energy;
                    ``(C) purchasing renewable energy credits issued 
                under subsection (b); or
                    ``(D) a combination of the foregoing.
    ``(b) Renewable Energy Credit Trading Program.--
            ``(1) Not later than January 1, 2008, the Secretary shall 
        establish a renewable energy credit trading program to permit 
        an electric utility that does not generate or purchase enough 
        electric energy from renewable energy to meet its obligations 
        under subsection (a)(1) to satisfy such requirements by 
        purchasing sufficient renewable energy credits.
            ``(2) As part of such program the Secretary shall--
                    ``(A) issue renewable energy credits to generators 
                of electric energy from new renewable energy;
                    ``(B) sell renewable energy credits to electric 
                utilities at the rate of 1.5 cents per kilowatt-hour 
                (as adjusted for inflation under subsection (g));
                    ``(C) ensure that a kilowatt hour, including the 
                associated renewable energy credit, shall be used only 
                once for purposes of compliance with this section; and
                    ``(D) allow double credits for generation from 
                facilities on Indian Lands, and triple credits for 
                generation from small renewable distributed generators 
                (meaning those no larger than 1 megawatt).
            ``(3) Credits under paragraph (2)(A) may only be used for 
        compliance with this section for 3 years from the date issued.
    ``(c) Enforcement.--
            ``(1) Civil penalties.--Any electric utility that fails to 
        meet the renewable energy requirements of subsection (a) shall 
        be subject to a civil penalty.
            ``(2) Amount of penalty.--The amount of the civil penalty 
        shall be determined by multiplying the number of kilowatt-hours 
        of electric energy sold to electric consumers in violation of 
        subsection (a) by the greater of 1.5 cents (adjusted for 
        inflation under subsection (g)) or 200 percent of the average 
        market value of renewable energy credits during the year in 
        which the violation occurred.
            ``(3) Mitigation or waiver.--The Secretary may mitigate or 
        waive a civil penalty under this subsection if the electric 
        utility was unable to comply with subsection (a) for reasons 
        outside of the reasonable control of the utility. The Secretary 
        shall reduce the amount of any penalty determined under 
        paragraph (2) by an amount paid by the electric utility to a 
        State for failure to comply with the requirement of a State 
        renewable energy program if the State requirement is greater 
        than the applicable requirement of subsection (a).
            ``(4) Procedure for assessing penalty.--The Secretary shall 
        assess a civil penalty under this subsection in accordance with 
        the procedures prescribed by section 333(d) of the Energy 
        Policy and Conservation Act of 1954 (42 U.S.C. 6303).
    ``(d) State Renewable Energy Account Program.--
            ``(1) The Secretary shall establish, not later than 
        December 31, 2008, a State renewable energy account program.
            ``(2) All money collected by the Secretary from the sale of 
        renewable energy credits and the assessment of civil penalties 
        under this section shall be deposited into the renewable energy 
        account established pursuant to this subsection. The State 
        renewable energy account shall be held by the Secretary and 
        shall not be transferred to the Treasury Department.
            ``(3) Proceeds deposited in the State renewable energy 
        account shall be used by the Secretary, subject to 
        appropriations, for a program to provide grants to the State 
        agency responsible for developing State energy conservation 
        plans under section 362 of the Energy Policy and Conservation 
        Act (42 U.S.C. 6322) for the purposes of promoting renewable 
        energy production, including programs that promote technologies 
        that reduce the use of electricity at customer sites such as 
        solar water heating.
            ``(4) The Secretary may issue guidelines and criteria for 
        grants awarded under this subsection. State energy offices 
        receiving grants under this section shall maintain such records 
        and evidence of compliance as the Secretary may require.
            ``(5) In allocating funds under this program, the Secretary 
        shall give preference--
                    ``(A) to States in regions which have a 
                disproportionately small share of economically 
                sustainable renewable energy generation capacity; and 
                (B) to State programs to stimulate or enhance 
                innovative renewable energy technologies.
    ``(e) Rules.--The Secretary shall issue rules implementing this 
section not later than 1 year after the date of enactment of this 
section.
    ``(f) Exemptions.--This section shall not apply in any calendar 
year to an electric utility--
            ``(1) that sold less than 4,000,000 megawatt-hours of 
        electric energy to electric consumers during the preceding 
        calendar year; or
            ``(2) in Hawaii.
    ``(g) Inflation Adjustment.--Not later than December 31 of each 
year beginning in 2008, the Secretary shall adjust for inflation the 
price of a renewable energy credit under subsection (b)(2)(B) and the 
amount of the civil penalty per kilowatt-hour under subsection (c)(2).
    ``(h) State Programs.--Nothing in this section shall diminish any 
authority of a State or political subdivision thereof to adopt or 
enforce any law or regulation respecting renewable energy, but, except 
as provided in subsection (c)(3), no such law or regulation shall 
relieve any person of any requirement otherwise applicable under this 
section. The Secretary, in consultation with States having such 
renewable energy programs, shall, to the maximum extent practicable, 
facilitate coordination between the Federal program and State programs.
    ``(i) Definitions.--For purposes of this section:
            ``(1) Base amount of electricity.--The term `base amount of 
        electricity' means the total amount of electricity sold by an 
        electric utility to electric consumers in a calendar year, 
        excluding--
                    ``(A) electricity generated by a hydroelectric 
                facility (including a pumped storage facility but 
                excluding incremental hydropower); and
                    ``(B) electricity generated through the 
                incineration of municipal solid waste.
            ``(2) Distributed generation facility.--The term 
        `distributed generation facility' means a facility at a 
        customer site.
            ``(3) Existing renewable energy.--The term `existing 
        renewable energy' means, except as provided in paragraph 
        (7)(B), electric energy generated at a facility (including a 
        distributed generation facility) placed in service prior to the 
        date of enactment of this section from solar, wind, or 
        geothermal energy; ocean energy; biomass (as defined in section 
        203(a) of the Energy Policy Act of 2005); or landfill gas.
            ``(4) Geothermal energy.--The term `geothermal energy' 
        means energy derived from a geothermal deposit (within the 
        meaning of section 613(e)(2) of the Internal Revenue Code of 
        1986).
            ``(5) Incremental geothermal production.--
                    ``(A) In general.--The term `incremental geothermal 
                production' means for any year the excess of--
                            ``(i) the total kilowatt hours of 
                        electricity produced from a facility (including 
                        a distributed generation facility) using 
                        geothermal energy, over
                            ``(ii) the average annual kilowatt hours 
                        produced at such facility for 5 of the previous 
                        7 calendar years before the date of enactment 
                        of this section after eliminating the highest 
                        and the lowest kilowatt hour production years 
                        in such 7-year period.
                    ``(B) Special rule.--A facility described in 
                subparagraph (A) which was placed in service at least 7 
                years before the date of enactment of this section 
                shall commencing with the year in which such date of 
                enactment occurs, reduce the amount calculated under 
                subparagraph (A)(ii) each year, on a cumulative basis, 
                by the average percentage decrease in the annual 
                kilowatt hour production for the 7-year period 
                described in subparagraph (A)(ii) with such cumulative 
                sum not to exceed 30 percent.
            ``(6) Incremental hydropower.--The term `incremental 
        hydropower' means additional energy generated as a result of 
        efficiency improvements or capacity additions made on or after 
        the date of enactment of this section or the effective date of 
        an existing applicable State renewable portfolio standard 
        program at a hydroelectric facility that was placed in service 
        before that date. The term does not include additional energy 
        generated as a result of operational changes not directly 
        associated with efficiency improvements or capacity additions. 
        Efficiency improvements and capacity additions shall be 
        measured on the basis of 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.
            ``(7) New renewable energy.--The term `new renewable 
        energy' means--
                    ``(A) electric energy generated at a facility 
                (including a distributed generation facility) placed in 
                service on or after January 1, 2003, from--
                            ``(i) solar, wind, or geothermal energy or 
                        ocean energy;
                            ``(ii) biomass (as defined in section 
                        203(a) of the Energy Policy Act of 2005);
                            ``(iii) landfill gas; or
                            ``(iv) incremental hydropower; and
                    ``(B) for electric energy generated at a facility 
                (including a distributed generation facility) placed in 
                service prior to the date of enactment of this 
                section--
                            ``(i) the additional energy above the 
                        average generation in the 3 years preceding the 
                        date of enactment of this section at the 
                        facility from--
                                    ``(I) solar or wind energy or ocean 
                                energy;
                                    ``(II) biomass (as defined in 
                                section 203(a) of the Energy Policy Act 
                                of 2005);
                                    ``(III) landfill gas; or
                                    ``(IV) incremental hydropower.
                            ``(ii) the incremental geothermal 
                        production.
            ``(8) Ocean energy.--The term `ocean energy' includes 
        current, wave, tidal, and thermal energy.
    ``(j) Sunset.--This section expires on December 31, 2030.''.

     Subtitle F--Marine and Hydrokinetic Renewable Energy Promotion

SEC. 451. SHORT TITLE.

    This subtitle may be cited as the ``Marine and Hydrokinetic 
Renewable Energy Promotion Act of 2007''.

SEC. 452. DEFINITION.

    For purposes of this subtitle, the term ``marine and hydrokinetic 
renewable energy'' means electrical energy from--
            (1) waves, tides, and currents in oceans, estuaries, and 
        tidal areas;
            (2) free flowing water in rivers, lakes, and streams;
            (3) free flowing water in man-made channels, including 
        projects that utilize nonmechanical structures to accelerate 
        the flow of water for electric power production purposes; and
            (4) differentials in ocean temperature (ocean thermal 
        energy conversion).



The term shall not include energy from any source that utilizes a dam, 
diversionary structure, or impoundment for electric power production 
purposes, except as provided in paragraph (3).

SEC. 453. RESEARCH AND DEVELOPMENT.

    (a) Program.--The Secretary of Energy, in consultation with the 
Secretary of Commerce and the Secretary of the Interior, shall 
establish a program of marine and hydrokinetic renewable energy 
research focused on--
            (1) developing and demonstrating marine and hydrokinetic 
        renewable energy technologies;
            (2) reducing the manufacturing and operation costs of 
        marine and hydrokinetic renewable energy technologies;
            (3) increasing the reliability and survivability of marine 
        and hydrokinetic renewable energy facilities;
            (4) integrating marine and hydrokinetic renewable energy 
        into electric grids;
            (5) identifying opportunities for cross fertilization and 
        development of economies of scale between offshore wind and 
        marine and hydrokinetic renewable energy sources;
            (6) identifying, in consultation with the Secretary of 
        Commerce and the Secretary of the Interior, the environmental 
        impacts of marine and hydrokinetic renewable energy 
        technologies and ways to address adverse impacts, and providing 
        public information concerning technologies and other means 
        available for monitoring and determining environmental impacts; 
        and
            (7) standards development, demonstration, and technology 
        transfer for advanced systems engineering and system 
        integration methods to identify critical interfaces.
    (b) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary of Energy for carrying out this section 
$50,000,000 for each of the fiscal years 2008 through 2017.

SEC. 454. ADAPTIVE MANAGEMENT AND ENVIRONMENTAL FUND.

    (a) Findings.--The Congress finds that--
            (1) the use of marine and hydrokinetic renewable energy 
        technologies can avoid contributions to global warming gases, 
        and such technologies can be produced domestically;
            (2) marine and hydrokinetic renewable energy is a nascent 
        industry; and
            (3) the United States must work to promote new renewable 
        energy technologies that reduce contributions to global warming 
        gases and improve our country's domestic energy production in a 
        manner that is consistent with environmental protection, 
        recreation, and other public values.
    (b) Establishment.--The Secretary of Energy shall establish an 
Adaptive Management and Environmental Fund, and shall lend amounts from 
that fund to entities described in subsection (f) to cover the costs of 
projects that produce marine and hydrokinetic renewable energy. Such 
costs include design, fabrication, deployment, operation, monitoring, 
and decommissioning costs. Loans under this section may be subordinate 
to project-related loans provided by commercial lending institutions to 
the extent the Secretary of Energy considers appropriate.
    (c) Reasonable Access.--As a condition of receiving a loan under 
this section, a recipient shall provide reasonable access, to Federal 
or State agencies and other research institutions as the Secretary 
considers appropriate, to the project area and facilities for the 
purposes of independent environmental research.
    (d) Public Availability.--The results of any assessment or 
demonstration paid for, in whole or in part, with funds provided under 
this section shall be made available to the public, except to the 
extent that they contain information that is protected from disclosure 
under section 552(b) of title 5, United States Code.
    (e) Repayment of Loans.--
            (1) In general.--The Secretary of Energy shall require a 
        recipient of a loan under this section to repay the loan, plus 
        interest at a rate of 2.1 percent per year, over a period not 
        to exceed 20 years, beginning after the commercial generation 
        of electric power from the project commences. Such repayment 
        shall be required at a rate that takes into account the 
        economic viability of the loan recipient and ensures regular 
        and timely repayment of the loan.
            (2) Beginning of repayment required.--No repayments shall 
        be required under this subsection until after the project 
        generates net proceeds. For purposes of this paragraph, the 
        term ``net proceeds'' means proceeds from the commercial sale 
        of electricity after payment of project-related costs, 
        including taxes and regulatory fees that have not been paid 
        using funds from a loan provided for the project under this 
        section.
            (3) Termination.--Repayment of a loan made under this 
        section shall terminate as of the date that the project for 
        which the loan was provided ceases commercial generation of 
        electricity if a governmental permitting authority has ordered 
        the closure of the facility because of a finding that the 
        project has unacceptable adverse environmental impacts, except 
        that the Secretary shall require a loan recipient to continue 
        making loan repayments for the cost of equipment, obtained 
        using funds from the loan that have not otherwise been repaid 
        under rules established by the Secretary, that is utilized in a 
        subsequent project for the commercial generation of 
        electricity.
    (f) Adaptive Management Plan.--In order to receive a loan under 
this section, an applicant for a Federal license or permit to 
construct, operate, or maintain a marine or hydrokinetic renewable 
energy project shall provide to the Federal agency with primary 
jurisdiction to issue such license or permit an adaptive management 
plan for the proposed project. Such plan shall--
            (1) be prepared in consultation with other parties to the 
        permitting or licensing proceeding, including all Federal, 
        State, municipal, and tribal agencies with authority under 
        applicable Federal law to require or recommend design or 
        operating conditions, for protection, mitigation, and 
        enhancement of fish and wildlife resources, water quality, 
        navigation, public safety, land reservations, or recreation, 
        for incorporation into the permit or license;
            (2) set forth specific and measurable objectives for the 
        protection, mitigation, and enhancement of fish and wildlife 
        resources, water quality, navigation, public safety, land 
        reservations, or recreation, as required or recommended by 
        governmental agencies described in paragraph (1), and shall 
        require monitoring to ensure that these objectives are met;
            (3) provide specifically for the modification or, if 
        necessary, removal of the marine or hydrokinetic renewable 
        energy project based on findings by the licensing or permitting 
        agency that the marine or hydrokinetic renewable energy project 
        has not attained or will not attain the specific and measurable 
        objectives set forth in paragraph (2); and
            (4) be approved and incorporated in the Federal license or 
        permit.
    (g) Sunset.--The Secretary of Energy shall transmit a report to the 
Congress when the Secretary of Energy determines that the technologies 
supported under this subtitle have achieved a level of maturity 
sufficient to enable the expiration of the programs under this 
subtitle. The Secretary of Energy shall not make any new loans under 
this section after the report is transmitted under this subsection.

SEC. 455. PROGRAMMATIC ENVIRONMENTAL IMPACT STATEMENT.

    The Secretary of Commerce and the Secretary of the Interior shall, 
in cooperation with the Federal Energy Regulatory Commission and the 
Secretary of Energy, and in consultation with appropriate State 
agencies, jointly prepare programmatic environmental impact statements 
which contain all the elements of an environmental impact statement 
under section 102 of the National Environmental Policy Act of 1969 (42 
U.S.C. 4332), regarding the impacts of the deployment of marine and 
hydrokinetic renewable energy technologies in the navigable waters of 
the United States. One programmatic environmental impact statement 
shall be prepared under this section for each of the Environmental 
Protection Agency regions of the United States. The agencies shall 
issue the programmatic environmental impact statements under this 
section not later than 18 months after the date of enactment of this 
Act. The programmatic environmental impact statements shall evaluate 
among other things the potential impacts of site selection on fish and 
wildlife and related habitat. Nothing in this section shall operate to 
delay consideration of any application for a license or permit for a 
marine and hydrokinetic renewable energy technology project.

              Subtitle G--Carbon Capture and Sequestration

SEC. 461. CARBON CAPTURE AND STORAGE RESEARCH, DEVELOPMENT, AND 
              DEMONSTRATION PROGRAM.

    (a) Amendments.--Section 963 of the Energy Policy Act of 2005 (42 
U.S.C. 16293) is amended--
            (1) in the section heading, by striking ``research and 
        development'' and inserting ``and storage research, 
        development, and demonstration'';
            (2) in subsection (a)--
                    (A) by striking ``research and development'' and 
                inserting ``and storage research, development, and 
                demonstration''; and
                    (B) by striking ``capture technologies on 
                combustion-based systems'' and inserting ``capture and 
                storage technologies related to energy systems'';
            (3) in subsection (b)--
                    (A) in paragraph (3), by striking ``and'' at the 
                end;
                    (B) in paragraph (4), by striking the period at the 
                end and inserting ``; and''; and
                    (C) by adding at the end the following:
            ``(5) to expedite and carry out large-scale testing of 
        carbon sequestration systems in a range of geological 
        formations that will provide information on the cost and 
        feasibility of deployment of sequestration technologies.''; and
            (4) by striking subsection (c) and inserting the following:
    ``(c) Programmatic Activities.--
            ``(1) Energy research and development underlying carbon 
        capture and storage technologies.--
                    ``(A) In general.--The Secretary shall carry out 
                fundamental science and engineering research (including 
                laboratory-scale experiments, numeric modeling, and 
                simulations) to develop and document the performance of 
                new approaches to capture and store carbon dioxide.
                    ``(B) Program integration.--The Secretary shall 
                ensure that fundamental research carried out under this 
                paragraph is appropriately applied to energy technology 
                development activities and the field testing of carbon 
                sequestration activities, including--
                            ``(i) development of new or improved 
                        technologies for the capture of carbon dioxide;
                            ``(ii) modeling and simulation of 
                        geological sequestration field demonstrations; 
                        and
                            ``(iii) quantitative assessment of risks 
                        relating to specific field sites for testing of 
                        sequestration technologies.
            ``(2) Field validation testing activities.--
                    ``(A) In general.--The Secretary shall promote, to 
                the maximum extent practicable, regional carbon 
                sequestration partnerships to conduct geologic 
                sequestration tests involving carbon dioxide injection 
                and monitoring, mitigation, and verification operations 
                in a variety of candidate geological settings, 
                including--
                            ``(i) operating oil and gas fields;
                            ``(ii) depleted oil and gas fields;
                            ``(iii) unmineable coal seams;
                            ``(iv) saline formations; and
                            ``(v) deep geologic systems that may be 
                        used as engineered reservoirs to extract 
                        economical quantities of heat from geothermal 
                        resources of low permeability or porosity.
                    ``(B) Objectives.--The objectives of tests 
                conducted under this paragraph shall be--
                            ``(i) to develop and validate geophysical 
                        tools, analysis, and modeling to monitor, 
                        predict, and verify carbon dioxide containment;
                            ``(ii) to validate modeling of geological 
                        formations;
                            ``(iii) to refine storage capacity 
                        estimated for particular geological formations;
                            ``(iv) to determine the fate of carbon 
                        dioxide concurrent with and following injection 
                        into geological formations;
                            ``(v) to develop and implement best 
                        practices for operations relating to, and 
                        monitoring of, injection and storage of carbon 
                        dioxide in geologic formations;
                            ``(vi) to assess and ensure the safety of 
                        operations related to geological storage of 
                        carbon dioxide; and
                            ``(vii) to allow the Secretary to 
                        promulgate policies, procedures, requirements, 
                        and guidance to ensure that the objectives of 
                        this subparagraph are met in large-scale 
                        testing and deployment activities for carbon 
                        capture and storage that are funded by the 
                        Department of Energy.
            ``(3) Large-scale testing and deployment.--
                    ``(A) In general.--The Secretary shall conduct not 
                less than 7 initial large-volume sequestration tests 
                for geological containment of carbon dioxide (at least 
                1 of which shall be international in scope) to validate 
                information on the cost and feasibility of commercial 
                deployment of technologies for geological containment 
                of carbon dioxide.
                    ``(B) Diversity of formations to be studied.--In 
                selecting formations for study under this paragraph, 
                the Secretary shall consider a variety of geological 
                formations across the United States, and require 
                characterization and modeling of candidate formations, 
                as determined by the Secretary.
            ``(4) Preference in project selection from meritorious 
        proposals.--In making competitive awards under this subsection, 
        subject to the requirements of section 989, the Secretary shall 
        give preference to proposals from partnerships among 
        industrial, academic, and government entities.
            ``(5) Cost sharing.--Activities under this subsection shall 
        be considered research and development activities that are 
        subject to the cost-sharing requirements of section 988(b).
    ``(d) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section--
            ``(1) $90,000,000 for fiscal year 2008;
            ``(2) $105,000,000 for fiscal year 2009; and
            ``(3) $120,000,000 for fiscal year 2010.''.
    (b) Table of Contents Amendment.--The item relating to section 963 
in the table of contents for the Energy Policy Act of 2005 is amended 
to read as follows:

``Sec. 963. Carbon capture and storage research, development, and 
                            demonstration program.''.

                        TITLE V--GREEN WORKFORCE

               Subtitle A--Small Manufacturer Assistance

SEC. 501. SMALL MANUFACTURER ASSISTANCE THROUGH HOLLINGS MANUFACTURING 
              EXTENSION PARTNERSHIP PROGRAM.

    (a) In General.--Subsection (b) of section 25 of the National 
Institute of Standards and Technology Act (15 U.S.C. 278k(b)) is 
amended by striking ``and'' at the end of paragraph (2), by striking 
the period at the end of paragraph (3) and inserting ``; and'', and by 
adding at the end the following new paragraph:
            ``(4) information sharing and planning assistance for small 
        manufacturing firms in identifying and implementing new green 
        manufacturing technologies.''.
    (b) Authorization of Appropriations.--There are authorized to be 
appropriated for the assistance described in paragraph (4) of section 
25 of such Act $50,000,000 for fiscal year 2009 and for each fiscal 
year thereafter.

            Subtitle B--Green Workforce Education Incentives

SEC. 511. NATIONAL GREEN CERTIFICATION STANDARDS.

    (a) In General.--Not later than 1 year after the date of the 
enactment of this Act and every 3 years thereafter, the Environmental 
Protection Agency, the Institute of Environmental Health Sciences, 
National Science Foundation, and National Oceanic and Atmospheric 
Administration, in consultation with the Department of Labor and 
Education, (hereinafter in this subtitle collectively referred to as 
the ``Green Certification Standards Board'') shall establish the green 
workforce standards described in subsection (b).
    (b) Green Workforce Standards.--The green workforce standards 
described in this subsection are standards--
            (1) for successfully training individuals in advanced 
        vehicle manufacturing, alternative fuel vehicle repair and 
        maintenence, energy technology product development and 
        deployment, and green building design and construction, and
            (2) designed to be applied in determining--
                    (A) eligibility for grants under sections 512, 513, 
                514, and 515, and
                    (B) whether requirements for instruction in green 
                workforce skills are met for purposes of determining 
                eligibility for loan forgiveness under section 428L of 
                the Higher Education Act of 1965.

SEC. 512. ENVIRONMENTALLY LITERATE WORKFORCE GRANT PROGRAM.

    (a) In General.--The Secretary of Education may make grants, in 
consultation with the Green Certification Standards Board, to 
institutions of higher education to use for any of the following 
purposes:
            (1) Reducing or eliminating dependency on combustion 
        engines in the operation of the institution.
            (2) Establishing environmental and green energy literacy 
        instruction as a requirement for an undergraduate degree.
            (3) Integrating environmental awareness and sustainability 
        curriculum in programs of instruction, particularly in 
        business, engineering, architecture, technology, manufacturing 
        programs.
            (4) Conducting professional development programs for 
        faculty in all disciplines to enable faculty to incorporate 
        environmental and sustainability content in their courses.
    (b) Application Requirement.--To be eligible for a grant under this 
section, an eligible entity shall prepare and submit to the Secretary 
an application at such time, and in such manner, and containing such 
information as the Secretary may require.
    (c) Eligible Entity.--For purposes of this section, the term 
``eligible entity'' means any institution of higher education that has 
been deemed qualified by the Green Certification Standards Board.
    (d) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary such sums as are necessary to carry out 
this section.

SEC. 513. CARBON NEUTRALITY GRANTS IN INSTITUTIONS OF HIGHER 
              EDUCATIONS.

    (a) In General.--The Secretary of Education may make grants, in 
consultation with the Green Certification Standards Board, to 
institutions of higher education to use for any of the following 
purposes:
            (1) Implementing existing plans to achieve full carbon 
        neutrality in the operations of the institution.
            (2) Disseminating the institution's best practices to 
        achieving full carbon neutrality.
            (3) Providing technical assistance and training to the 
        institution's surrounding community in achieving full carbon 
        neutrality.
    (b) Matching Requirement.--A grant made under this section may not 
exceed the amount that the institute of higher education receiving the 
grant certifies, to the Secretary, will be provided (in cash or in 
kind) from non-governmental sources to carry out the purposes for which 
the grant is made.
    (c) Application Requirement.--To be eligible for a grant under this 
section, an institution of higher education shall prepare and submit to 
the Secretary an application at such time, and in such manner, and 
containing such information as the Secretary may require.
    (d) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary such sums as are necessary to carry out 
this section.

SEC. 514. NATIONAL GREEN RANKING SYSTEM GRANT.

    (a) In General.--
            (1) Grant.--The Director of National Institute of 
        Environmental Health Sciences may make grants, in consultation 
        with the Green Certification Standards Board, to a qualified 
        entity to develop and implement standards for a national green 
        ranking system for institutions of higher education based on 
        the following factors:
                    (A) Environmental literacy of an institution's 
                graduates.
                    (B) Availability of programs of instruction in 
                advanced vehicle manufacturing, alternative fuel 
                vehicle repair and maintenance, energy technology 
                product development and deployment, green building 
                design and construction, and other green technology.
                    (C) Extent of the institution's sustainable and low 
                impact facilities and operations.
            (2) Report.--Such ranking system must be released not later 
        than 1 year after the date of the enactment of this Act, and 
        every 3 years thereafter, and must be made available to the 
        general public and to appropriate publications and student 
        guides.
    (b) Application Requirement.--To be eligible for a grant under this 
section, an entity shall prepare and submit to the Director an 
application at such time, and in such manner, and containing such 
information as the Director may require.
    (c) Authorization of Appropriations.--There are authorized to be 
appropriated to the Director such sums as are necessary to carry out 
this section.

SEC. 515. GREEN BUILDING AND ZERO-ENERGY HOME DESIGN TRAINING GRANTS.

    (a) In General.--
            (1) Grants.--The Director of National Institute of 
        Environmental Health Sciences may make grants, in consultation 
        with the Green Certification Standards Board, to institutions 
        of higher education to use for programs of instruction which 
        train individuals in any of the following:
                    (A) Green building design and construction.
                    (B) Zero-energy home design and construction.
            (2) Goal.--It shall be the goal of the grant program to 
        help fund the training of 10,000 students in the programs of 
        instruction described in paragraph (1).
    (b) Application Requirement.--To be eligible for a grant under this 
section, an institution of higher education shall prepare and submit to 
the Director an application at such time, and in such manner, and 
containing such information as the Director may require.
    (c) Authorization of Appropriations.--There are authorized to be 
appropriated to the Director such sums as are necessary to carry out 
this section.

SEC. 516. STUDENT LOAN FORGIVENESS FOR GREEN WORKFORCE MEMBERS.

    The Higher Education Act of 1965 is amended by inserting after 
section 428K (20 U.S.C. 1078-11) the following:

``SEC. 428L. LOAN FORGIVENESS FOR GREEN WORKFORCE MEMBERS.

    ``(a) Program Authorized.--
            ``(1) In general.--For the purpose of encouraging 
        individuals to enter and continue employment as green workforce 
        members, the Secretary is authorized, from the funds 
        appropriated under subsection (h), to forgive, in accordance 
        with this section, the student loan debt of any new borrower 
        after the date of enactment of the New Apollo Energy Act of 
        2007, who--
                    ``(A) is employed as a green workforce member;
                    ``(B) incurred such student loan debt in obtaining 
                instruction in green workforce skills that complies 
                with the green workforce standards established under 
                section 511 of the New Apollo Energy Act of 2007; and
                    ``(C) is not in default on a loan for which the 
                borrower seeks forgiveness.
            ``(2) Method of loan forgiveness.--To provide the loan 
        forgiveness authorized in paragraph (1), the Secretary is 
        authorized to carry out a program--
                    ``(A) through the holder of the loan, to assume the 
                obligation to repay a green loan amount (as determined 
                under subsection (b)) for a loan made under this part; 
                and
                    ``(B) to cancel a green loan amount (as so 
                determined) for a loan made under part D of this title.
    ``(b) Qualified Loan Amounts.--The Secretary shall forgive the loan 
obligation of the borrower, in accordance with subsection (a)(2), not 
to exceed $17,500 in the aggregate, in the following increments:
            ``(1) For the completion of the first 2 years of employment 
        as a green workforce member for which the borrower seeks 
        forgiveness under this section, 20 percent of the borrower's 
        total loan obligation that was incurred in obtaining 
        instruction in green workforce skills that complies with the 
        green workforce standards established under section 511 of the 
        New Apollo Energy Act of 2007, not to exceed $3,500.
            ``(2) For the completion of the 3rd year of such 
        employment, 20 percent of such total loan obligation, not to 
        exceed $4,500.
            ``(3) For the completion of each of the 4th and 5th years 
        of such employment, 40 percent of such total loan obligation, 
        not to exceed $7,000 for each year.
    ``(c) Award Basis; Priority.--
            ``(1) Award basis.--The Secretary shall provide forgiveness 
        benefits under this section on a first-come, first-served basis 
        (subject to paragraph (2)) and subject to the availability of 
        appropriations.
            ``(2) Priority.--The Secretary, in consultation with Green 
        Certification Standards Board established under section 511 of 
        the New Apollo Energy Act of 2007, shall establish priorities 
        in providing forgiveness benefits under this section for a 
        fiscal year by designating a percentage of loans for green 
        workforce members employed in advanced vehicle manufacturing, 
        alternative fuel vehicle repair and maintenance, clean energy 
        technology product development and deployment, or green 
        building construction based on the national need in each of 
        those areas.
    ``(d) Qualified Instruction Expenses.--To be eligible for 
forgiveness under this section, a student loan obligation shall have 
been incurred to cover all or a portion the cost of attendance at an 
eligible institution for one or more periods of enrollment in a program 
of instruction that--
            ``(1) is in a skill required for employment in advanced 
        vehicle manufacturing, alternative fuel vehicle repair or 
        maintenance, clean energy technology product development and 
        deployment, or green building construction, as determined in 
        accordance with regulations prescribed by the Secretary; and
            ``(2) complies with the green workforce standards 
        established under section 511 of the New Apollo Energy Act of 
        2007.
    ``(e) Construction.--Nothing in this section shall be construed to 
authorize the refunding of any repayment of a loan.
    ``(f) Regulations.--The Secretary is authorized to issue such 
regulations as may be necessary to carry out the provisions of this 
section.
    ``(g) Definitions.--In this section:
            ``(1) Green workforce member.--The term `green workforce 
        member' means an individual who is qualified to be and is 
        employed in advanced vehicle manufacturing, alternative fuel 
        vehicle repair and maintenance, clean energy technology product 
        development and deployment, or green building construction.
            ``(2) Advanced vehicle manufacturing.--The term `advanced 
        vehicle manufacturing' means the manufacturing of --
                    ``(A) any new advanced lean burn technology motor 
                vehicle (as defined in section 30B(c)(3) of the 
                Internal Revenue Code of 1986):
                    ``(B) any new qualified hybrid motor vehicle (as 
                defined in section 30B(d)(3)(A) of such Code and 
                determined without regard to any gross vehicle weight 
                rating); or
                    ``(C) any new vehicle that is a light-duty, medium-
                duty, or heavy-duty on-road or nonroad vehicle that is 
                propelled by an internal combustion engine, heat 
                engine, or an electric motor (or any combination 
                thereof) and an energy storage system using (or capable 
                of using)--
                            ``(i) any combustible fuel;
                            ``(ii) an on-board, rechargeable storage 
                        device: and
                            ``(iii) a means of using an off-board 
                        source of electricity to operate the vehicle in 
                        intermittent or continuous all-electric mode.
            ``(3) Alternative fuel vehicle repair and maintenance.--The 
        term `alternative fuel vehicle repair and maintenance' means 
        vehicle repair and maintenance for advanced green technologies 
        --
                    ``(A) to re-equip, expand, or establish any 
                manufacturing facility of the eligible taxpayer to 
                produce advanced technology motor vehicles or to 
                produce components used in such vehicles;
                    ``(B) for engineering integration of such vehicles;
                    ``(C) for research and development related to 
                advanced technology motor vehicles; and
                    ``(D) to repair vehicles that utilize an energy 
                supply or end-use technology, including a technology 
                using renewable energy sources, that over its lifecycle 
                and compared to similar technologies in commercial 
                use--
                            ``(i) emits substantially lower levels of 
                        pollutants or greenhouse gases, or both; and
                            ``(ii) may generate substantially smaller 
                        or less toxic (or both) volumes of solid or 
                        liquid waste.
            ``(4) Clean energy technology product development and 
        deployment.--The term `clean energy technology product 
        development and deployment' means the development and 
        deployment of an energy supply or end-use technology, including 
        a technology using renewable energy sources, that, over its 
        lifecycle and compared to similar technologies in commercial 
        use--
                    ``(A) emits substantially lower levels of 
                pollutants or greenhouse gases, or both; and
                    ``(B) may generate substantially smaller or less 
                toxic (or both) volumes of solid or liquid waste.
            ``(5) Green building construction.--The term `green 
        building design and construction' means building design and 
        construction that uses sustainable design principles to reduce 
        the use of nonrenewable resources, minimize environmental 
        impact, and relate people with the natural environment.
    ``(h) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section such sums as may be necessary 
for fiscal year 2008 and each of the 5 succeeding fiscal years.''.

SEC. 517. DEFINITIONS.

    In this subtitle:
            (1) The terms ``advanced vehicle manufacturing'', 
        ``alternative fuel vehicle repair and maintenance'', ``energy 
        technology product development and deployment'', ``green 
        building design and construction'' have the meaning given such 
        terms, respectively, in section 428L of the Higher Education 
        Act of 1965,
            (2) The term ``institution of higher education'' has the 
        meaning given such term in section 101(a) of the Higher 
        Education Act of 1965 (20 U.S.C. 1001(a)).

   TITLE VI--FEDERAL GOVERNMENT LEVERAGE TO MOVE NEW TECHNOLOGIES TO 
                                 MARKET

           Subtitle A--Incentives for Clean Energy Technology

SEC. 601. NEW ENERGY TECHNOLOGIES COMMISSION.

    (a) Establishment.--There is established a commission to be known 
as the ``New Energy Technologies Commission'' (hereafter in this 
section referred to as the ``Commission'').
    (b) Duties.--
            (1) Identify new energy technologies eligible for 
        incentives.--
                    (A) In general.--The Commission shall oversee--
                            (i) the identification of--
                                    (I) Apollo Approved energy 
                                efficiency technologies; and
                                    (II) Apollo Approved domestic clean 
                                energy production technologies; that 
                                the Commission finds substantially 
                                contributes to the goals of this Act 
                                and merits consideration for favorable 
                                incentives by Congress; and
                            (ii) the identification of criteria and 
                        standards for determining technologies eligible 
                        under clause (i) as qualifying energy 
                        efficiency standards used to determine 
                        eligibility for the loan guarantees and grants 
                        outlined in this title.
                    (B) Matters to be considered by the commission.--In 
                developing energy efficiency standards, the Commission 
                shall--
                            (i) consult with the Environmental 
                        Protection Agency program known as ``Energy 
                        Star''; and
                            (ii) focus on technologies manufactured 
                        domestically.
            (2) Report.--Not later than one year after the date of 
        enactment of this Act, and every six months thereafter the 
        Commission shall submit to Congress a report that contains--
                    (A) a detailed statement of any technology that 
                qualifies for or merits the incentives in this title;
                    (B) recommendations for incentives specifically 
                tailored to be beneficial to such technologies and any 
                standards that should be defined in statute to 
                determine eligibility for such benefits; and
                    (C) recommendations for other legislation, 
                administrative actions, and voluntary actions necessary 
                to implement such incentives.
            (3) Apollo approved energy technologies.--For purposes of 
        this section, the term ``Apollo Approved energy technologies'' 
        means any final unit product that the Commission finds 
        substantially contributes to the goals of this Act and merits 
        consideration for favorable incentives by Congress not already 
        included in this Act.
            (4) Apollo approved domestic clean energy production 
        technologies.--For purposes of this section, the term ``Apollo 
        Approved domestic clean energy production technologies'' means 
        any domestic energy production technology that the Commission 
        finds substantially contributes to the goals of this Act and 
        merits consideration for favorable incentives by Congress not 
        already included in this Act.
    (c) Membership.--
            (1) In general.--The Commission shall be comprised of 11 
        members.
            (2) Appointments by this act.--The following are hereby 
        designated as members of the Commission:
                    (A) The Secretary of the Department of Energy, the 
                Director of the Office of Energy Efficiency and 
                Renewable Energy of the Department of Energy, or the 
                Administrator of the Energy Information Administration 
                of the Department of Energy.
                    (B) The Secretary of the Department of Commerce or 
                designee.
                    (C) The Secretary of the Department of Treasury or 
                designee.
                    (D) The Director of the Environmental Protection 
                Agency or designee.
            (3) Appointments by the senate and house of 
        representatives.--Seven members appointed jointly by the 
        majority leader and minority leader of the Senate and the 
        Speaker and minority leader of the House of Representatives, of 
        whom--
                    (A) 1 shall represent consumer advocacy 
                organizations focusing on energy issues;
                    (B) 1 shall represent auto manufacturers;
                    (C) 1 shall represent the lending community;
                    (D) 1 shall represent environmental advocacy 
                organizations focusing on energy issues;
                    (E) 1 shall represent organized labor;
                    (F) 1 shall represent small business manufacturers; 
                and
                    (G) 1 shall represent the energy industry.
            (4) Date of appointments.--The appointment of a member of 
        the Commission shall be made not later than 30 days after the 
        date of enactment of this Act.
            (5) Term.--A member shall be appointed for 5 year terms.
    (d) Powers of Commission.--
            (1) Hearings and sessions.--The Commission may, for the 
        purpose of carrying out this section, hold hearings, sit and 
        act at times and places, take testimony, and receive evidence 
        to carry out its duties under subsection (b). The Commission 
        may administer oaths or affirmations to witnesses appearing 
        before it.
            (2) Powers of members and agents.--Any member or agent of 
        the Commission may, if authorized by the Commission, take any 
        action which the Commission is authorized to take by this 
        section.
            (3) Obtaining official information.--
                    (A) Requirement to furnish.--Except as provided in 
                subparagraph (B), if the Commission submits a request 
                to a Federal department or agency for information 
                necessary to enable the Commission to carry out this 
                section, the head of that department or agency shall 
                furnish that information to the Commission.
                    (B) Exception for national security.--If the head 
                of a Federal department or agency determines that it is 
                necessary to withhold requested information from 
                disclosure to protect the national security interests 
                of the United States, the department or agency head 
                shall not furnish that information to the Commission.
            (4) Mails.--The Commission may use the United States mails 
        in the same manner and under the same conditions as other 
        departments and agencies of the United States.
            (5) Administrative support services.--Upon the request of 
        the Director, the Administrator of General Services shall 
        provide to the Commission, on a reimbursable basis, the 
        administrative support services necessary for the Commission to 
        carry out this section.
            (6) Gifts and donations.--The Commission may accept, use, 
        and dispose of gifts or donations of services or property to 
        carry out this Act, but only to the extent or in the amounts 
        provided in advance in appropriation Acts.
            (7) Contracts.--The Commission may contract with and 
        compensate persons and government agencies for supplies and 
        services, without regard to section 3709 of the Revised 
        Statutes (41 U.S.C. 5).
    (e) Initial Meeting-.--The Commission shall hold the initial 
meeting of the Commission not later than the earlier of--
            (1) the date that is 30 days after the date on which all 
        members of the Commission have been appointed; or
            (2) the date that is 90 days after the date of enactment of 
        this Act, regardless of whether all members have been 
        appointed.
    (f) Chairperson and Vice Chairperson.--The Commission shall select 
a Chairperson and Vice Chairperson from among the members of the 
Commission determined under subsection (c)(2).
    (g) Executive Committee.--The Commission shall have an executive 
committee comprised of any five members of the Commission.
    (h) Conflicts of Interest.--Each member appointed to the Commission 
shall submit a financial disclosure report pursuant to the Ethics in 
Government Act of 1978, notwithstanding the minimum required rate of 
compensation or time period employed.
    (i) Staff Appointment and Compensation.--The Chairperson, in 
consultation with the Vice Chairperson, in accordance with rules agreed 
upon by the Commission, may appoint and fix the compensation of a staff 
director and such other personnel as may be necessary to enable the 
Commission to carry out its functions, without regard to the provisions 
of title 5, United States Code, governing appointments in the 
competitive service, and without regard to the provisions of chapter 51 
and subchapter III of chapter 53 of such title relating to 
classification and General Schedule pay rates; except that no rate of 
pay fixed under this subsection may exceed the equivalent of that 
payable for a position at level V of the Executive Schedule under 
section 5316 of title 5, United States Code.
    (j) Personnel as Federal Employees.--
            (1) In general.--The staff director and any personnel of 
        the Commission who are employees shall be employees under 
        section 2105 of title 5, United States Code, for purposes of 
        chapters 63, 81, 83, 84, 85, 87, 89, and 90 of that title.
            (2) Members of commission.--Subparagraph (A) shall not be 
        construed to apply to members of the Commission.
    (k) Detailees.--Any Federal Government employee may be detailed to 
the Commission without reimbursement from the Commission, and such 
detailee shall retain the rights, status, and privileges of his or her 
regular employment without interruption.
    (l) Consultant Services.--The Commission is authorized to procure 
the services of experts and consultants in accordance with section 3109 
of title 5, United States Code, but at rates not to exceed the daily 
rate paid a person occupying a position at level IV of the Executive 
Schedule under section 5315 of title 5, United States Code.
    (m) Member Compensation.--Each member of the Commission specified 
in subsection (c)(3) may be compensated at a rate not to exceed the 
daily equivalent of the annual rate of basic pay in effect for a 
position at level IV of the Executive Schedule under section 5315 of 
title 5, United States Code, for each day during which that member is 
engaged in the actual performance of the duties of the Commission.
    (n) Information and Administrative Expenses.--The Federal agencies 
and members specified in subsection (c)(3) shall provide the Commission 
such information and pay such administrative and members expenses as 
the Commission requires to carry out this section, consistent with the 
requirements and guidelines of the Federal Advisory Commission Act (5 
U.S.C. App.).
    (o) Travel Expenses.--While away from their homes or regular places 
of business in the performance of services for the Commission, members 
of the Commission shall be allowed travel expenses, including per diem 
in lieu of subsistence, in the same manner as persons employed 
intermittently in the Government service are allowed expenses under 
section 5703 of title 5, United States Code.
    (p) Authorization of Appropriations.--
            (1) In general.--There is authorized to be appropriated to 
        the Commission such sums as may be necessary to carry out this 
        section.
            (2) Availability.--Amounts appropriated under paragraph (1) 
        are authorized to remain available until expended.

SEC. 602. LOAN GUARANTEES PROGRAM.

    (a) In General.--The New Energy Technologies Commission shall 
establish and carry out loan guarantee and grant programs for 
investments made in structures and equipment necessary to produce 
innovative energy technologies in the United States, including advanced 
wind turbines, advanced solar power, advanced marine, high conductivity 
transmission lines, advanced geothermal, energy efficient appliances, 
fuel efficient cars, and high capacity efficient airplanes.
            (1) Applicant assurances.--An applicant for a loan 
        guarantee under this section shall provide assurances, 
        satisfactory to the Commission, that--
                    (A) the project has been subject to a full 
                technical review;
                    (B) the project is covered by adequate project 
                performance guarantees;
                    (C) the project, with the loan guarantee, is 
                economically viable; and
                    (D) there is a reasonable assurance of repayment of 
                the guaranteed loan.
            (2) Limitations.--
                    (A) Maximum guarantee.--Except as provided in 
                subparagraph (B), a loan guarantee under this section 
                may be issued for up to 70 percent of the estimated 
                cost of a project, but may not exceed $500,000,000 for 
                a project.
                    (B) Additional guarantees.--
                            (i) In general.--The Commission may issue 
                        additional loan guarantees for a project to 
                        cover up to 80 percent of the excess of actual 
                        project cost over estimated project cost but 
                        not to exceed 15 percent of the amount of the 
                        original guarantee.
                            (ii) Principal and interest.--Subject to 
                        subparagraph (A), the Commission shall 
                        guarantee 100 percent of the principal and 
                        interest of a loan made under subparagraph (A).
            (3) Equity contributions.--To be eligible for a loan 
        guarantee under this section, an applicant for the loan 
        guarantee shall have binding commitments from equity investors 
        to provide an initial equity contribution of at least 30 
        percent of the total project cost.
            (4) Approval.--An application for a loan guarantee under 
        this section shall be approved or disapproved by the Commission 
        not later than 90 days after the application is received by the 
        Commission.
    (b) Guarantee Fee.--The recipient of a loan guarantee under 
subsection (a) shall pay the Commission an amount determined by the 
Commission to be sufficient to cover the administrative costs of the 
Commission relating to the loan guarantee.
    (c) Payment of Principal and Interest; Default; Recovery of 
Losses.--(1) With respect to any loan guaranteed pursuant to this 
section, the commission is authorized to enter into a contract to pay 
the lender for and on behalf of the borrower the principal and interest 
charges which become due and payable on the unpaid balance of such loan 
if the commission finds--
            (A) that the borrower is unable to meet principal and 
        interest charges, that it is in the public interest to permit 
        the borrower to continue to pursue the purposes of the project, 
        and that the probable net cost to the Federal Government in 
        paying such principal will be less than that which would result 
        in the event of a default; and
            (B) that the amount of such principal and interest charges 
        which the Commission is authorized to pay shall be no greater 
        than the amount of principal and interest which the borrower is 
        obligated to pay under the loan agreement shall take such 
        action as may be appropriate to recover the amounts of such 
        payments (including any payment of principal and interest under 
        subsection (a)(2)(ii)) from such assets of the defaulting 
        borrower as are associated with the activity with respect to 
        which the loan was made or from any other surety included in 
        the terms of the guarantee.
    (2) In the event of any default by a qualified borrower on a 
guaranteed loan, the Commission is authorized to make payment in 
accordance with the guarantee, and the Attorney General.
    (d) Full Faith and Credit.--The full faith and credit of the United 
States is pledged to the payment of all guarantees made under this 
section. Any such guarantee made by the Commission shall be conclusive 
evidence of the eligibility of the loan for the guarantee with respect 
to principal and interest. The validity of the guarantee shall be 
incontestable in the hands of a holder of the guaranteed loan.
    (e) Authorization of Appropriations.--The aggregate amount of 
guarantees under this section for fiscal years 2008 through 2017 shall 
not exceed $200,000,000,000.

SEC. 603. GRANT PROGRAM TO CREATE CLEAN ENERGY BUSINESS DISTRICTS.

    (a) In General.--The Secretary of Energy is authorized to make 
grants to units of State government, local government, private, non-
profit community development organizations, and Indian tribe economic 
development entities for the purpose of building infrastructure, 
promoting and marketing centralized business district developments with 
a focus on the innovative clean energy technologies.
            (1) Conditions.--The Secretary shall issue grants on a 
        competitive basis for projects that will--
                    (A) promote job growth and economic development 
                in--
                            (i) rural communities; or
                            (ii) economically depressed areas, 
                        including inner-city urban areas;
                    (B) promote the deployment of innovative clean 
                energy technologies with broad applications and the 
                potential for export to developing countries;
                    (C) create partnerships between private industry 
                and public institutions;
                    (D) provide opportunities for the development, 
                demonstration, and deployment of federally-funded 
                research technologies;
                    (E) promote smart growth by assuring that projects 
                are located near--
                            (i) residential neighborhoods; or
                            (ii) affordable public transportation.
    (b) Authorization of Appropriations.--For the purposes of this 
section there are authorized to be appropriated to the Secretary 
$250,000,000 for the fiscal years 2008 through 2012.

     Subtitle B--Clean Energy Exports and International Investment

SEC. 611. CLEAN ENERGY TECHNOLOGY EXPORTS PROGRAM.

    (a) Definitions.--In this section:
            (1) Interagency working group.--The term ``interagency 
        working group'' means the Interagency Working Group on Clean 
        Energy Technology Exports established under subsection (b).
            (2) United states clean energy technology.--The term 
        ``United States clean energy technology'' means an energy 
        supply or end-use technology, including a technology using 
        renewable energy sources, that--
                    (A) over its lifecycle and compared to a similar 
                technology already in commercial use in developing 
                countries, countries in transition, and other partner 
                countries--
                            (i) emits substantially lower levels of 
                        pollutants and/or greenhouse gases; and
                            (ii) may generate substantially smaller 
                        and/or less toxic volumes of solid or liquid 
                        waste; and
                    (B) consists of manufactured articles, materials, 
                and supplies produced in the United States 
                substantially all from articles, materials, or supplies 
                mined, produced, or manufactured in the United States, 
                within the meaning of the Buy American Act (41 U.S.C. 
                10a).
    (b) Interagency Working Group.--
            (1) Establishment.--Not later than 90 days after the date 
        of enactment of this section, the Chairman of the White House 
        Council on Environmental Quality, the Secretary of Energy, the 
        Secretary of Commerce, and the Administrator of the United 
        States Agency for International Development shall jointly 
        establish a Interagency Working Group on Clean Energy 
        Technology Exports. The interagency working group will, in 
        partnership with industry, focus on opening and expanding 
        energy markets and transferring clean energy technology 
        generated in the United States to developing countries, 
        countries in transition, and other partner countries that are 
        expected to experience, over the next 20 years, the most 
        significant growth in energy production and associated 
        greenhouse gas emissions, including through technology transfer 
        programs under the Framework Convention on Climate Change, 
        other international agreements, and relevant Federal efforts.
            (2) Membership.--The interagency working group shall be 
        chaired by the Chairman of the White House Council on 
        Environmental Quality and shall also include representatives 
        from--
                    (A) the Department of Commerce;
                    (B) the Department of the Treasury;
                    (C) the Department of Energy;
                    (D) the Environmental Protection Agency;
                    (E) the United States Agency for International 
                Development;
                    (F) the Export-Import Bank;
                    (G) the Overseas Private Investment Corporation;
                    (H) the Trade and Development Agency;
                    (I) the Small Business Administration;
                    (J) the Office of United States Trade 
                Representative; and
                    (K) other Federal agencies, as determined by the 
                President.
            (3) Duties.--The interagency working group shall--
                    (A) analyze technology, policy, and market 
                opportunities for international development, 
                demonstration, and deployment of clean energy 
                technology developed in the United States;
                    (B) investigate issues associated with building 
                capacity to deploy clean energy technology generated in 
                the United States in developing countries, countries in 
                transition, and other partner countries, including--
                            (i) energy-sector reform;
                            (ii) creation of open, transparent, and 
                        competitive markets for clean energy 
                        technologies;
                            (iii) availability of trained personnel to 
                        deploy and maintain the technology;
                            (iv) demonstration and cost-buydown 
                        mechanisms to promote first adoption of the 
                        technology; and
                            (v) to promote sustainable economic 
                        development, increase access to modern energy 
                        services, reduce greenhouse gas emissions, and 
                        strengthen energy security and independence in 
                        developing countries in partnership with 
                        industry through the deployment of clean energy 
                        technologies;
                    (C) examine relevant trade, tax, international, and 
                other policy issues to assess what policies would help 
                open markets and improve United States clean energy 
                technology exports in support of the following areas--
                            (i) enhancing energy innovation and 
                        cooperation, including energy sector and market 
                        reform, capacity building, and financing 
                        measures;
                            (ii) improving energy end-use efficiency 
                        technologies, including buildings and 
                        facilities, vehicle, industrial, and co-
                        generation technology initiatives;
                            (iii) promoting energy supply technologies, 
                        including fossil, nuclear, and renewable 
                        technology initiatives;
                            (iv) reducing the trade deficit of the 
                        United States through the export of United 
                        States energy technologies and technological, 
                        project deployment, and development expertise; 
                        and
                            (v) retaining and creating manufacturing 
                        and related service jobs in the United States;
                    (D) establish an advisory committee involving the 
                private sector and other interested groups on the 
                export and deployment of United States clean energy 
                technology;
                    (E) monitor each agency's progress towards meeting 
                goals in the 5-year strategic plan submitted to 
                Congress pursuant to the Energy and Water Development 
                Appropriations Act, 2001, and the Energy and Water 
                Development Appropriations Act, 2002;
                    (F) make recommendations to heads of appropriate 
                Federal agencies on ways to streamline Federal programs 
                and policies to improve each agency's role in the 
                international development, demonstration, and 
                deployment of United States clean energy technology;
                    (G) make assessments and recommendations regarding 
                the distinct technological, market, regional, and 
                stakeholder challenges necessary to carry out the 
                program;
                    (H) recommend conditions and criteria that will 
                help ensure that United States funds promote sound 
                energy policies in participating countries while 
                simultaneously opening their markets and exporting 
                United States energy technology;
                    (I) establish methodologies for the measurement, 
                monitoring, verification, and reporting under 
                subsection (d) of the greenhouse gas emission impacts 
                of clean energy projects and policies in developing 
                countries; and
                    (J) establish a registry that is accessible to the 
                public through electronic means (including through the 
                Internet) in which information reported under 
                subsection (d) shall be collected.
    (c) Federal Support for Clean Energy Technology Transfer.--
Notwithstanding any other provision of law, each Federal agency or 
Government corporation carrying out an assistance program in support of 
the activities of United States persons and industry partnerships in 
the environment or energy sector of a developing country, country in 
transition, or other partner country shall support, to the maximum 
extent practicable, the transfer of United States clean energy 
technology as part of that program. Such assistance programs shall 
support activities including, but not limited to, financial, 
environmental and safety consulting, manufacturing, design and 
engineering, financing, and other services rendered by United States 
persons and industry partnerships.
    (d) Annual Report.--Not later than 90 days after the date of the 
enactment of this Act, and on March 31 of each year thereafter, the 
Interagency Working Group shall submit a report to Congress on its 
activities during the preceding calendar year. The report shall include 
a description of the technology, policy, and market opportunities for 
international development, demonstration, and deployment of United 
States clean energy technology investigated by the Interagency Working 
Group in that year, as well as any policy recommendations to improve 
the expansion of clean energy markets and United States clean energy 
technology exports.
    (e) Authorization of Appropriations.--There are authorized to be 
appropriated to the appropriate departments, agencies, and entities of 
the United States such sums as may be necessary for each of the fiscal 
years 2008 through 2018 to support the transfer of United States clean 
energy technology, consistent with the subsidy codes of the World Trade 
Organization, as part of assistance programs carried out by those 
departments, agencies, and entities in support of activities of United 
States persons in the energy sector of a developing country, country in 
transition, or other partner country.

SEC. 612. INTERNATIONAL ENERGY TECHNOLOGY DEPLOYMENT PROGRAM.

    Section 1608 of the Energy Policy Act of 1992 (42 U.S.C. 13387) is 
amended by striking subsection (l) and inserting the following:
    ``(l) International Energy Technology Deployment Program.--
            ``(1) Definitions.--In this subsection:
                    ``(A) International energy deployment project.--The 
                term `international energy deployment project' means a 
                project to construct an energy production facility 
                outside the United States--
                            ``(i) the output of which will be consumed 
                        outside the United States; and
                            ``(ii) the deployment of which will result 
                        in a greenhouse gas reduction per unit of 
                        energy produced when compared to the technology 
                        that would otherwise be implemented--
                                    ``(I) 20 percentage points or more, 
                                in the case of a unit placed in service 
                                before January 1, 2010;
                                    ``(II) 40 percentage points or 
                                more, in the case of a unit placed in 
                                service after December 31, 2009, and 
                                before January 1, 2020; or
                                    ``(III) 60 percentage points or 
                                more, in the case of a unit placed in 
                                service after December 31, 2019, and 
                                before January 1, 2030.
                    ``(B) Qualifying international energy deployment 
                project.--The term `qualifying international energy 
                deployment project' means an international energy 
                deployment project that--
                            ``(i) is submitted by a United States firm 
                        to the Secretary and establishes industry 
                        partnerships in accordance with procedures 
                        established by the Secretary by regulation;
                            ``(ii) uses technology or services that 
                        have been successfully developed or deployed in 
                        the United States;
                            ``(iii) uses technology or services that 
                        consists of manufactured articles, materials, 
                        and supplies produced in the United States 
                        substantially from articles, materials, or 
                        supplies mined, produced, or manufactured in 
                        the United States, within the meaning of the 
                        Buy American Act (41 U.S.C. 10a);
                            ``(iv) meets the criteria of subsection 
                        (k);
                            ``(v) is approved by the Secretary, with 
                        notice of the approval being published in the 
                        Federal Register; and
                            ``(vi) complies with such terms and 
                        conditions as the Secretary establishes by 
                        regulation.
                    ``(C) United states.--For purposes of this 
                paragraph, the term `United States', when used in a 
                geographical sense, means the 50 States, the District 
                of Columbia, Puerto Rico, Guam, the Virgin Islands, 
                American Samoa, and the Commonwealth of the Northern 
                Mariana Islands.
            ``(2) Pilot program for financial assistance.--
                    ``(A) In general.--Not later than 180 days after 
                the date of enactment of this subsection, the Secretary 
                shall, by regulation, provide for a pilot program for 
                financial assistance for qualifying international 
                energy deployment projects.
                    ``(B) Selection criteria.--After consultation with 
                the Secretary of State, the Secretary of Commerce, and 
                the United States Trade Representative, the Secretary 
                shall select projects for participation in the program 
                based solely on the criteria under this title and 
                without regard to the country in which the project is 
                located.
                    ``(C) Financial assistance.--
                            ``(i) In general.--A United States firm 
                        that undertakes a qualifying international 
                        energy deployment project that is selected to 
                        participate in the pilot program shall be 
                        eligible to receive funding support, a loan, or 
                        a loan guarantee from the Secretary.
                            ``(ii) Rate of interest.--The rate of 
                        interest of any loan made under clause (i) 
                        shall be equal to the rate for Treasury 
                        obligations then issued for periods of 
                        comparable maturities.
                            ``(iii) Amount.--The amount of a loan or 
                        loan guarantee under clause (i) shall not 
                        exceed 50 percent of the total cost of the 
                        qualified international energy deployment 
                        project.
                            ``(iv) Developed countries.--Loans or loan 
                        guarantees made for projects to be located in a 
                        developed country, as listed in Annex I of the 
                        United Nations Framework Convention on Climate 
                        Change, shall require at least a 50 percent 
                        contribution towards the total cost of the loan 
                        or loan guarantee by the host country.
                            ``(v) Developing countries.--Loans or loan 
                        guarantees made for projects to be located in a 
                        developing country (those countries not listed 
                        in Annex I of the United Nations Framework 
                        Convention on Climate Change) shall require at 
                        least a 10 percent contribution towards the 
                        total cost of the loan or loan guarantee by the 
                        host country.
                            ``(vi) Capacity building research.--
                        Proposals made for projects to be located in a 
                        developing country may include a research 
                        component intended to build technological 
                        capacity within the host country. Such research 
                        must be related to the technologies being 
                        deployed and must involve both an institution 
                        in the host country and an industry, university 
                        or national laboratory participant from the 
                        United States. The host institution shall 
                        contribute at least 50 percent of funds 
                        provided for the capacity building research.
                            ``(vii) Grants.--
                                    ``(I) In general.--The Secretary, 
                                in consultation with the Secretary of 
                                Energy and the Administrator of the 
                                United States Agency for International 
                                Development, may, at the request of the 
                                United States ambassador to a host 
                                country, make grants to help address 
                                and overcome specific, urgent, and 
                                unforeseen obstacles in the 
                                implementation of a qualifying project.
                                    ``(II) Maximum amount.--The total 
                                amount of a grant made for a qualifying 
                                project under this paragraph may not 
                                exceed $1,000,000.
                    ``(D) Coordination with other programs.--A 
                qualifying international energy deployment project 
                funded under this section shall not be eligible as a 
                qualifying clean coal technology under section 415 of 
                the Clean Air Act (42 U.S.C. 7651n).
                    ``(E) Report.--Not later than 5 years after the 
                date of enactment of this subsection, the Secretary 
                shall submit to the President a report on the results 
                of the pilot projects.
                    ``(F) Recommendation.--Not later than 60 days after 
                receiving the report under subparagraph (E), the 
                President shall submit to Congress a recommendation, 
                based on the results of the pilot projects as reported 
                by the Secretary of Energy, concerning whether the 
                financial assistance program under this section should 
                be continued, expanded, reduced, or eliminated.
            ``(3) Performance criteria for major energy consumers.--
                    ``(A) Identification of major energy consumers.--
                Not later than 1 year after the date of enactment of 
                this subsection, the Task Force shall identify those 
                developing countries that, by virtue of present and 
                projected energy consumption, represent the predominant 
                share of energy use among developing countries.
                    ``(B) Performance criteria.--As a condition of 
                accepting assistance provided under this section, any 
                developing country identified under subparagraph (A) 
                shall--
                            ``(i) meet the eligibility criteria 
                        established under section 607 of the Millennium 
                        Challenge Act of 2003 (22 U.S.C. 7706), 
                        notwithstanding the eligibility of the 
                        developing country as a candidate country under 
                        section 606 of that Act (22 U.S.C. 7705); and
                            ``(ii) agree to establish and report on 
                        progress in meeting specific goals for reduced 
                        energy-related greenhouse gas emissions and 
                        specific goals for--
                                    ``(I) increased access to clean 
                                energy services among unserved and 
                                underserved populations;
                                    ``(II) increased use of renewable 
                                energy resources;
                                    ``(III) increased use of lower 
                                greenhouse gas-emitting fossil fuel-
                                burning technologies;
                                    ``(IV) greater reliance on advanced 
                                energy technologies;
                                    ``(V) the sustainable use of 
                                traditional energy resources; or
                                    ``(VI) other goals for improving 
                                energy-related environmental 
                                performance, including the reduction or 
                                avoidance of local air and water 
                                quality and solid waste contaminants.
            ``(4) Authorization of appropriations.--There are 
        authorized to be appropriated to the Secretary to carry out 
        this section $500,000,000 for each of fiscal years 2008 through 
        2018, to remain available until expended.''.

                     Subtitle C--Export-Import Bank

SEC. 621. REQUIRE THE EXPORT-IMPORT BANK OF THE UNITED STATES TO MEET 
              RENEWABLE ENERGY TARGETS IN ITS LENDING PRACTICES.

    (a) Allocation of Assistance Among Energy Projects.--Of the total 
amount available to the Export-Import Bank of the United States for the 
extension of credit for transactions related to energy projects, the 
Bank shall, not later than the beginning of fiscal year 2008, use--
            (1) not more than 85 percent for transactions related to 
        fossil fuel projects; and
            (2) not less than 15 percent for transactions related to 
        renewable energy and energy efficiency projects.
    (b) Renewable Energy and Technology Commission.--
            (1) Establishment.--Within 1 year after the date of the 
        enactment of this Act, the Export-Import Bank of the United 
        States (in this subsection referred to as the ``Bank'') shall 
        establish a commission which shall be known as the ``Renewable 
        Energy and Technology Commission'' (in this subsection referred 
        to as the ``Commission'').
            (2) Function.--The Commission shall help the Bank achieve 
        the percentage goal set forth in subsection (a)(2) by the 
        beginning of fiscal year 2008, by proactively assisting the 
        Bank in identifying new opportunities for renewable energy and 
        energy efficiency financing.
            (3) Composition.--The Commission shall be composed of--
                    (A) 6 representatives selected by companies 
                involved in renewable energy and energy efficiency 
                technology;
                    (B) 2 representatives selected by environmental 
                organizations;
                    (C) 2 members of the academic community who are 
                knowledgeable about renewable energy; and
                    (D) representatives of the Bank.
            (4) Reports.--The Commission shall submit annually to the 
        Committee on Natural Resources and the Committee on Financial 
        Services of the House of Representatives and the Committee on 
        Banking, Housing, and Urban Affairs of the Senate a report that 
        contains the following information for the fiscal year covered 
        by the report:
                    (A) A detailed description of the activities of the 
                Commission.
                    (B) Any recommendations made by the Commission that 
                were adopted by the Bank.
                    (C) An analysis comparing the level of credit 
                extended by the Bank for renewable energy and energy 
                efficiency projects with the level of credit so 
                extended for the preceding fiscal year.
    (c) Definition of Renewable Energy and Energy Efficiency 
Projects.--In this section, the term ``renewable energy and energy 
efficiency projects'' means projects related to solar, wind, biomass, 
or geothermal energy sources.

SEC. 622. INCREASE IN THE AMOUNT OF FINANCING MADE AVAILABLE BY THE 
              EXPORT-IMPORT BANK FOR TRANSACTIONS INVOLVING RENEWABLE 
              ENERGY AND ENERGY EFFICIENCY.

    Section 2(b)(1) of the Export-Import Bank Act of 1945 (12 U.S.C. 
635(b)(1)) is amended by adding at the end the following:
    ``(M)(i) For each fiscal year that begins after the 1-year period 
that begins with the date of the enactment of this subparagraph, the 
Bank shall make available, from the aggregate loan authority available 
to the Bank, an amount to finance transactions directly related to the 
production of renewable energy or to energy efficiency, which shall be 
not less than--
            ``(I) in the case of the 1st such fiscal year, 
        $200,000,000;
            ``(II) in the case of each of the 2nd through 6th such 
        fiscal years, 120 percent of the amount made available in 
        accordance with this clause to finance the transactions for the 
        then preceding fiscal year; and
            ``(III) in the case of each fiscal year after the 6th such 
        fiscal year, the amount made available in accordance with this 
        clause to finance the transactions for such 6th fiscal year.
    ``(ii) In this Act, the term `renewable energy' means solar energy, 
wind energy, energy generated by the use of a fuel cell, geothermal 
energy, and less than 10 megawatts of energy generated by 
hydropower.''.

SEC. 623. OFFICE OF RENEWABLE ENERGY PROMOTION.

    Section 3 of the Export-Import Bank Act of 1945 (12 U.S.C. 635a) is 
amended by adding at the end the following:
    ``(j) Office of Renewable Energy Promotion.--
            ``(1) Establishment.--Within 1 year after the date of the 
        enactment of this subsection, the Bank shall establish an 
        Office of Renewable Energy Promotion (in this subsection 
        referred to as the ``Office'') staffed by individuals with 
        expertise in financing renewable energy technologies.
            ``(2) Functions.--The Office shall assist the Bank in 
        complying with section 2(b)(1)(M) by identifying opportunities 
        to provide financing for transactions directly related to the 
        production of renewable energy or to energy efficiency.''.

SEC. 624. REPORT ON EXPORT-IMPORT BANK FINANCING FOR TRANSACTIONS 
              INVOLVING RENEWABLE ENERGY OR ENERGY EFFICIENCY.

    Section 8 of the Export-Import Bank Act of 1945 (12 U.S.C. 635g) is 
amended by adding at the end the following:
    ``(g) Financing for Transactions Involving Renewable Energy or 
Energy Efficiency.--The Bank shall include in its annual report under 
subsection (a) of this section--
            ``(1) a description of the activities of the Office;
            ``(2) a description of the number of transactions and the 
        amount of credit extended by the Bank for renewable energy and 
        energy efficiency technologies, disaggregated by the types of 
        renewable energy specified in section 2(b)(1)(M)(ii); and
            ``(3) a comparison between the number and amount referred 
        to in paragraph (2) for the period covered by the report, and 
        the numbers and amounts reported for all preceding periods 
        pursuant to this subsection.''.

SEC. 625. REPORT ON EFFECT OF EXPORT-IMPORT BANK FINANCING ON 
              GREENHOUSE GAS EMISSIONS.

    (a) In General.--Within 5 years after the date of the enactment of 
this Act, the Export-Import Bank of the United States shall prepare and 
submit to the Committee on Financial Services of the House of 
Representatives and the Committee on Finance of the Senate a report 
that--
            (1) estimates the amount of greenhouse gases emitted 
        annually as a result of the activities financed by the Bank; 
        and
            (2) identifies opportunities to reduce the amount of 
        greenhouse gases emitted as a result of the activities.
    (b) Greenhouse Gas Defined.--In subsection (a), the term 
``greenhouse gas'' means carbon dioxide, hydrofluorocarbons, methane, 
nitrous oxide, perfluorocarbons, sulfur hexafluoride, or any other 
anthropogenically-emitted gas that is determined by the Administrator 
of the Environmental Protection Agency, after notice and comment, to 
contribute to global warming to a non-negligible degree.

   Subtitle D--Emerging Clean Energy Technology Venture Capital Fund

SEC. 631. FINDINGS.

    Congress finds the following:
            (1) It is in the interests of the United States to promote 
        technologies that reduce our dependence on fossil fuels.
            (2) New and emerging clean energy technologies often fail 
        to achieve commercial success due to funding shortfalls, often 
        termed ``the Valley of Death'', before the technologies attract 
        the necessary private venture capital funding required for 
        further development.

SEC. 632. ESTABLISHMENT OF FUND.

    The Secretary of Energy, using authorities granted to the Secretary 
of Defense under section 2371 of title 10, United States Code, shall 
provide for the establishment of a nonprofit venture capital investment 
corporation, to be known as the Emerging Clean Energy Technology 
Venture Capital Fund, for the purpose of making funding available to 
United States companies for the development of technologies used--
            (1) for the production of renewable energy; or
            (2) to improve energy efficiency.

SEC. 633. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to the Secretary of Energy 
$100,000,000 for each of the fiscal years 2008 through 2012 for 
carrying out this subtitle.

                  TITLE VII--GREENHOUSE GAS REDUCTIONS

                   Subtitle A--Global Climate Change

SEC. 701. GLOBAL CLIMATE CHANGE.

    (a) In General.--The Clean Air Act (42 U.S.C. 7401 et seq.) is 
amended by adding at the end the following new title:

                  ``TITLE VIII--GLOBAL CLIMATE CHANGE

                  ``TITLE VIII--GLOBAL CLIMATE CHANGE

``Sec. 801. Definitions.
     ``Subtitle A--Stopping and Reversing Greenhouse Gas Emissions

``Sec. 811. Regulations; greenhouse gas emissions limitations.
``Sec. 812. Scientific review of the safe climate level.
``Sec. 813. Required review of emission reductions needed to maintain 
                            the safe climate level.
``Sec. 814. Distribution of allowances between auctions and 
                            allocations; nature of allowances.
``Sec. 815. Auction of allowances.
``Sec. 816. Allocation of allowances.
``Sec. 817. Adaptation assistance.
``Sec. 818. Early reduction credits.
``Sec. 819. Avoiding significant economic harm.
``Sec. 820. Use and transfer of credits.
``Sec. 821. Compliance and enforcement.
``Sec. 822. Equalizing the treatment of domestic and imported 
                            industrial products sold in the United 
                            States.
                      ``Subtitle B--Offset Credits

``Sec. 831. Outreach initiative on revenue enhancement for agricultural 
                            producers.
``Sec. 832. Offset measurement for agricultural, forestry, wetlands, 
                            and other land use-related sequestration 
                            projects.
``Sec. 833. Offset credits from greenhouse gas emissions reduction 
                            projects.
``Sec. 834. Borrowing at program start-up based on contracts to 
                            purchase offset credits.
``Sec. 835. Review and correction of accounting for offset credits.
              ``Subtitle C--National Registry for Credits

``Sec. 841. Establishment and operation of national registry.
``Sec. 842. Monitoring and reporting.

``SEC. 801. DEFINITIONS.

    ``In this title:
            ``(1) Allocation.--The term `allocation', with respect to 
        an allowance, means the issuance of an allowance directly to 
        covered entities, at no cost, under this title.
            ``(2) Allowance.--The term `allowance' means an 
        authorization under this title to emit 1 metric ton of carbon 
        dioxide (or a carbon dioxide equivalent), as allocated to a 
        covered entity pursuant to section 816.
            ``(3) Carbon dioxide equivalent.--The term `carbon dioxide 
        equivalent' means, with respect to a greenhouse gas, the 
        quantity of the greenhouse gas that makes the same contribution 
        to global warming as 1 metric ton of carbon dioxide, as 
        determined by the Administrator.
            ``(4) Covered entity.--The term `covered entity' means an 
        entity (including a branch, department, agency, or 
        instrumentality of Federal, State, or local government) that--
                    ``(A) owns or controls a source of greenhouse gas 
                emissions in the electric power, industrial, or 
                commercial sector of the United States economy (as 
                defined in the Inventory), refines or imports products 
                for use in transportation, or produces or imports 
                hydrofluorocarbons, perfluorocarbons, or sulfur 
                hexafluoride; and
                    ``(B) emits, from any single facility owned by the 
                entity, over 10,000 metric tons of greenhouse gas per 
                year, measured in units of carbon dioxide equivalents, 
                or--
                            ``(i) refines or imports products that, 
                        when combusted, will emit;
                            ``(ii) produces or imports 
                        hydrofluorocarbons, perfluorocarbons, or sulfur 
                        hexafluoride that, when used, will emit; or
                            ``(iii) produces or imports other 
                        greenhouse gases that, when used, will emit, 
                        over 10,000 metric tons of greenhouse gas per 
                        year, measured in units of carbon dioxide 
                        equivalents.
            ``(5) Credit.--
                    ``(A) In general.--The term `credit' means an 
                authorization under this title to emit greenhouse gases 
                equivalent to 1 metric ton of carbon dioxide.
                    ``(B) Inclusions.--The term `credit' includes--
                            ``(i) an allowance;
                            ``(ii) an offset credit;
                            ``(iii) an early reduction credit; or
                            ``(iv) an international credit.
            ``(6) Early reduction credit.--The term `early reduction 
        credit' means a credit issued under section 818 for a reduction 
        in the quantity of emissions or an increase in sequestration 
        equivalent to 1 metric ton of carbon dioxide.
            ``(7) Eligible entity.--The term `eligible entity' include 
        any entity determined by the Administrator to be eligible to 
        receive emissions allowance allocations or the value of such 
        allowances.
            ``(8) Greenhouse gas authorized account representative.--
        The term `greenhouse gas authorized account representative' 
        means, for a covered entity, an individual who is authorized by 
        the owner and operator of the covered entity to represent and 
        legally bind the owner and operator in matters pertaining to 
        this title.
            ``(9) Industry sector.--The term `industry sector' means 
        any sector of the economy of a country (including, where 
        applicable, the forestry sector) that is responsible for 
        significant quantities of greenhouse gas emissions.
            ``(10) Invasive species.--The term `invasive species' means 
        a species (including pathogens, seeds, spores, or any other 
        biological material relating to a species) the introduction of 
        which causes or is likely to cause economic or environmental 
        harm or harm to human health.
            ``(11) Inventory.--The term `Inventory' means the Inventory 
        of U.S. Greenhouse Gas Emissions and Sinks, prepared in 
        compliance with the United Nations Framework Convention on 
        Climate Change Decision 3/CP.5.
            ``(12) Land-grant colleges and universities.--The term 
        `land-grant colleges and universities' has the meaning given 
        the term in section 1404 of the National Agricultural Research, 
        Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3103).
            ``(13) Leakage.--The term `leakage' means an increase in 
        greenhouse gas emissions or a decrease in sequestration of 
        greenhouse gases that is--
                    ``(A) outside the area of a project; and
                    ``(B) attributable to the project.
            ``(14) Native plant.--The term `native plant' means an 
        indigenous, terrestrial, or aquatic plant species that evolved 
        naturally in an ecosystem.
            ``(15) New covered entity.--The term `new covered entity' 
        means a covered entity that has operated for not more than 3 
        years.
            ``(16) Offset credit.--The term `offset credit' means a 
        credit issued for an offset project pursuant to subtitle B 
        certifying a reduction in the quantity of emissions or an 
        increase in sequestration equivalent to 1 metric ton of carbon 
        dioxide.
            ``(17) Offset practice.--The term `offset practice' means a 
        practice that--
                    ``(A) reduces greenhouse gas emissions or increases 
                sequestration; and
                    ``(B) may be eligible to create an offset credit 
                under this title.
            ``(18) Offset project.--The term `offset project' means a 
        project that reduces greenhouse gas emissions or increases 
        sequestration of carbon dioxide or a carbon dioxide equivalent 
        by a method other than reduction of greenhouse gas emissions at 
        a covered entity.
            ``(19) Panel.--The term `Panel' means the Climate Science 
        Advisory Panel established by this title.
            ``(20) Plant material.--The term `plant material' means--
                    ``(A) a seed;
                    ``(B) a part of a plant; or
                    ``(C) a whole plant.
            ``(21) Renewable energy.--The term `renewable energy' means 
        electricity generated from--
                    ``(A) wind;
                    ``(B) organic waste (excluding incinerated 
                municipal solid waste);
                    ``(C) biomass (including anaerobic digestion from 
                farm systems and landfill gas recovery); or
                    ``(D) a hydroelectric, geothermal, solar thermal, 
                photovoltaic, tidal, wave, or other nonfossil fuel, 
                nonnuclear source.
            ``(22) Renewable energy entity.--The term `renewable energy 
        entity' means an electric generating entity that exclusively 
        uses renewable energy to generate electricity for sale.
            ``(23) Restoration.--
                    ``(A) In general.--The term `restoration' means 
                assisting the recovery of an ecosystem that has been 
                degraded, damaged, or destroyed.
                    ``(B) Inclusion.--The term `restoration' includes 
                the reestablishment in an ecosystem of preexisting 
                biotic integrity with respect to species composition 
                and community structure.
            ``(24) Sequestration.--The term `sequestration' means the 
        separation, isolation, or removal of greenhouse gases from the 
        atmosphere.
            ``(25) Sequestration flow.--The term `sequestration flow' 
        means the uptake of greenhouse gases each year from 
        sequestration practices, as calculated under section 832.
            ``(26) UNFCCC.--The term `UNFCCC' means the United Nations 
        Framework Convention on Climate Change, done at New York on May 
        9, 1992.

     ``Subtitle A--Stopping and Reversing Greenhouse Gas Emissions

``SEC. 811. REGULATIONS; GREENHOUSE GAS EMISSIONS LIMITATIONS.

    ``(a) Regulations.--Not later than 18 months after the date of 
enactment of this title, the Administrator shall promulgate regulations 
to establish an allowance trading program to address emissions of 
greenhouse gases from covered entities in the United States.
    ``(b) Greenhouse Gas Emissions Limitations.--Not later than 2 years 
after the date of enactment of this section, the Administrator shall 
promulgate annual emission reduction targets for each calendar year 
beginning in 2010 and ending in 2050, as follows:
            ``(1) In 2010, the quantity of United States greenhouse gas 
        emissions shall not exceed the quantity of United States 
        greenhouse gases projected to be emitted in 2009.
            ``(2) Beginning in 2011, the quantity of United States 
        greenhouse gas emissions shall be reduced by approximately 2 
        percent each year, such that the quantity of such emissions in 
        2020 does not exceed the quantity of United States greenhouse 
        gases emitted in 1990.
            ``(3) Beginning in 2021, the quantity of United States 
        greenhouse gas emissions shall be reduced by approximately 5 
        percent each year, such that the quantity of such emissions in 
        2050 does not exceed 20 percent of the quantity of United 
        States greenhouse gases emitted in 1990.

``SEC. 812. SCIENTIFIC REVIEW OF THE SAFE CLIMATE LEVEL.

    ``(a) Definition and Objective of Maintaining the Safe Climate 
Level.--
            ``(1) Finding.--Congress finds that ratification by the 
        Senate in 1992 of the UNFCCC, commitments which were affirmed 
        by the President in 2002, established for the United States an 
        objective of stabilization of greenhouse gas concentrations in 
        the atmosphere at a level that would prevent dangerous 
        anthropogenic interference with the climate system.
            ``(2) Definition of safe climate level.--In this section, 
        the term `safe climate level' means the climate level referred 
        to in paragraph (1).
    ``(b) Climate Science Advisory Panel.--
            ``(1) Establishment.--Not later than 270 days after the 
        date of enactment of this title, the Administrator shall 
        establish an advisory panel, to be known as the `Climate 
        Science Advisory Panel' .
            ``(2) Duties.--The Panel shall--
                    ``(A) inform Congress and the Administrator of the 
                state of climate science;
                    ``(B) not later than December 31, 2010, and not 
                less frequently than every 4 years thereafter, issue a 
                report that is endorsed by at least 7 members of the 
                Panel that describes recommendations for the 
                Administrator, based on the best available information 
                in the fields of climate science, including reports 
                from the Intergovernmental Panel on Climate Change, 
                relating to--
                            ``(i) the specific concentration, in parts 
                        per million, of all greenhouse gases in carbon 
                        dioxide equivalents at or below which 
                        constitutes the safe climate level; and
                            ``(ii) the projected timeframe for 
                        achieving the safe climate level.
            ``(3) Composition.--
                    ``(A) In general.--The Panel shall be composed of 8 
                climate scientists and 3 former Federal officials, as 
                described in subparagraphs (B) through (D).
                    ``(B) Climate scientists.--Not later than 270 days 
                after the date of enactment of this title, the 
                President of the National Academy of Sciences shall 
                appoint to serve on the Panel 8 climate scientists from 
                among individuals who--
                            ``(i) have earned doctorate degrees;
                            ``(ii) have performed research in physical, 
                        biological, or social sciences, mathematics, 
                        economics, or related fields, with a particular 
                        focus on or link to 1 or more aspects of 
                        climate science;
                            ``(iii) have records of peer-reviewed 
                        publications that include--
                                    ``(I) publications in main-stream, 
                                high-quality scientific journals (such 
                                as journals associated with respected 
                                scientific societies or those with a 
                                high impact factor, as determined by 
                                the Institute for Scientific 
                                Information);
                                    ``(II) recent publications relating 
                                to earth systems, and particularly 
                                relating to the climate system; and
                                    ``(III) a high publication rate, 
                                typically at least 2 or 3 papers per 
                                year; and
                            ``(iv) have participated in high-level 
                        committees, such as those formed by the 
                        National Academy of Sciences or by leading 
                        scientific societies.
                    ``(C) Restriction.--A majority of climate 
                scientists appointed to the Panel under subparagraph 
                (B) shall be participating, as of the date of 
                appointment to the Panel, in active research in the 
                physical or biological sciences, with a particular 
                focus on or link to 1 or more aspects of climate 
                science.
                    ``(D) Federal officials.--
                            ``(i) In general.--Subject to clause (ii), 
                        the Administrator shall appoint as members of 
                        the Panel, the longest-serving former 
                        Administrators of the Environmental Protection 
                        Agency for each of the 3 most recent former 
                        Presidents.
                            ``(ii) Timing.--The 3 most recent former 
                        Presidents described in clause (i) shall be 
                        identified as of the deadline for appointments 
                        to the Panel under subparagraph (B) or (E)(ii), 
                        whichever is applicable.
                            ``(iii) Substitutes.--If a former 
                        Administrator described in clause (i) declines 
                        appointment, or is unable to serve, as a member 
                        of the Panel, the Administrator shall appoint 
                        in place of the former Administrator--
                                    ``(I) the longest-serving former 
                                Administrator for the applicable 
                                President who agrees to serve; or
                                    ``(II) if no individual described 
                                in subclause (I) accepts appointment as 
                                a member of the Panel, the longest-
                                serving Assistant Administrator for Air 
                                and Radiation for the applicable 
                                President who agrees to serve.
                    ``(E) Terms of service and vacancies.--
                            ``(i) Terms.--The initial term of a member 
                        of the Panel shall be--
                                    ``(I) to the maximum extent 
                                practicable, the period covered by, and 
                                extending through the date of issuance 
                                of, each report under paragraph (2)(B); 
                                but
                                    ``(II) not longer than 4 years.
                            ``(ii) Subsequent panels and reports.--On 
                        the issuance of each report under paragraph 
                        (2)(B)--
                                    ``(I) the Panel that submitted the 
                                report shall terminate; and
                                    ``(II)(aa) pursuant to 
                                subparagraphs (B) and (C), the 
                                President of the National Academy of 
                                Sciences shall appoint climate 
                                scientists (including at least 3 
                                climate scientists who served as 
                                members of the preceding Panel) to 
                                serve as members of a new Panel by not 
                                later than 15 months after the deadline 
                                for issuance of the report under 
                                paragraph (2)(B); and
                                    ``(bb) pursuant to subparagraph 
                                (D), the Administrator shall appoint 3 
                                Federal officials as members of the new 
                                Panel by the deadline described in item 
                                (aa).
                            ``(iii) Vacancies.--Vacancies in the 
                        membership of the Panel--
                                    ``(I) shall not affect the power of 
                                the remaining members to execute the 
                                functions of the Panel; and
                                    ``(II) shall be filled in the same 
                                manner in which the original 
                                appointment was made.
                    ``(F) Chairperson and vice chairperson.--The Panel 
                shall elect a Chairperson and Vice Chairperson as soon 
                as practicable.
                    ``(G) Compensation of members.--A member of the 
                Panel shall be compensated at a rate equal to the daily 
                equivalent of the annual rate of basic pay prescribed 
                for level IV of the Executive Schedule under section 
                5315 of title 5, United States Code, for each day 
                (including travel time) during which the member is 
                engaged in the performance of the duties of the Panel.
                    ``(H) Travel expenses.--A member of the Panel shall 
                be allowed travel expenses, including per diem in lieu 
                of subsistence, at rates authorized for an employee of 
                an agency under subchapter I of chapter 57 of title 5, 
                United States Code, while away from the home or regular 
                place of business of the member in the performance of 
                the duties of the Panel.
            ``(4) Staff.--
                    ``(A) In general.--The Chairperson of the Panel 
                may, without regard to the civil service laws 
                (including regulations), appoint and terminate an 
                executive director and such other additional personnel 
                as are necessary to enable the Panel to perform the 
                duties of the Panel.
                    ``(B) Confirmation of executive director.--The 
                employment of an executive director shall be subject to 
                confirmation by the Panel.
                    ``(C) Compensation.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), the Chairperson of the Panel may 
                        fix the compensation of the executive director 
                        and other personnel without regard to the 
                        provisions of chapter 51 and subchapter III of 
                        chapter 53 of title 5, United States Code, 
                        relating to classification of positions and 
                        General Schedule pay rates.
                            ``(ii) Exception.--The rate of pay for the 
                        executive director and other personnel shall 
                        not exceed the rate payable for level V of the 
                        Executive Schedule under section 5316 of title 
                        5, United States Code.
                    ``(D) Detail of federal government employees.--
                            ``(i) In general.--An employee of the 
                        Federal Government may be detailed to the staff 
                        of the Panel without reimbursement.
                            ``(ii) Treatment of detailees.--The detail 
                        of the employee shall be without interruption 
                        or loss of civil service status or privilege.
                    ``(E) Procurement of temporary and intermittent 
                services.--The Chairperson or executive director of the 
                Panel may procure temporary and intermittent services 
                in accordance with section 3109(b) of title 5, United 
                States Code, at rates for individuals that do not 
                exceed the daily equivalent of the annual rate of basic 
                pay prescribed for level V of the Executive Schedule 
                under section 5316 of that title.
            ``(5) Hearings.--The Panel may hold such hearings, meet and 
        act at such times and places, take such testimony, and receive 
        such evidence as the Panel considers advisable to carry out 
        this section.
            ``(6) Information from federal agencies.--
                    ``(A) In general.--The Panel may secure directly 
                from a Federal agency such information as the Panel 
                considers necessary to carry out this section.
                    ``(B) Provision of information.--On request of the 
                Chairperson of the Panel, the head of the agency shall 
                provide the information to the Panel.
            ``(7) Postal services.--The Panel may use the United States 
        mail in the same manner and under the same conditions as other 
        agencies of the Federal Government.

``SEC. 813. REQUIRED REVIEW OF EMISSION REDUCTIONS NEEDED TO MAINTAIN 
              THE SAFE CLIMATE LEVEL.

    ``(a) Review and Determination Regarding Reduction Rate.--Not later 
than December 31, 2015, the Administrator, after providing public 
notice and opportunity to comment, shall promulgate a final rule 
pursuant to which the Administrator shall review the reduction rate for 
greenhouse gas emissions required under section 811 and determine--
            ``(1) whether to--
                    ``(A) accept the recommendations of the Panel under 
                section 812(b)(2) regarding the safe climate level and 
                the timeframe for achieving the safe climate level;
                    ``(B) establish a more stringent safe climate level 
                or timeframe, together with a detailed explanation of 
                the justification of the Administrator for rejection of 
                the recommendations of the Panel.
    ``(b) Modification of Reduction Rate.--
            ``(1) In general.--If the Administrator makes a 
        determination described in subparagraph (A) or (B) of 
        subsection (a)(1),the final rule promulgated pursuant to 
        subsection (a) shall establish a required level of emissions 
        reductions for each calendar year, beginning with calendar year 
        2020, based on the considerations described in paragraph (2).
            ``(2) Considerations.--
                    ``(A) Primary consideration.--In establishing the 
                required level of emission reductions pursuant to 
                paragraph (1), the Administrator shall take into 
                consideration primarily the emission reductions 
                necessary to stabilize atmospheric greenhouse gas 
                concentrations at the safe climate level within the 
                timeframe specified under section 812(b)(2)(B).
                    ``(B) Secondary considerations.--In establishing 
                the required level of emission reductions pursuant to 
                paragraph (1), in addition to the primary consideration 
                described in paragraph (2), the Administrator shall 
                take into consideration--
                            ``(i) technological capability to reduce 
                        greenhouse gas emissions;
                            ``(ii) the progress that foreign countries 
                        have made toward reducing their greenhouse gas 
                        emissions;
                            ``(iii) the economic impacts within the 
                        United States of implementing this subtitle, 
                        including impacts on the major emitting 
                        sectors; and
                            ``(iv) the economic impacts within the 
                        United States of inadequate action.
    ``(c) Enforcement Provision.--
            ``(1) In general.--If the Administrator fails to meet a 
        deadline for promulgation of any regulation under subsection 
        (a), the Administrator shall withhold from allocation to 
        covered entities that would otherwise be entitled to an 
        allocation of allowances under this subtitle a total of 10 
        percent of the allowances for each covered entity for each year 
        after the deadline until the Administrator promulgates the 
        applicable regulation.
            ``(2) Return of allowances.--On promulgation of a delayed 
        regulation described in paragraph (1), the Administrator shall 
        distribute any allowances withheld under that paragraph--
                    ``(A) among the covered entities from which the 
                allowances were withheld; and
                    ``(B) in accordance with section 816.
    ``(d) Subsequent Rulemakings.--
            ``(1) In general.--Not later than December 31, 2019, and 
        every 4 years thereafter, the Administrator shall promulgate a 
        new final rule described in subsection (a) in accordance with 
        this section.
            ``(2) Effective date.--If a new final rule promulgated 
        pursuant to paragraph (1) changes a level of emission 
        reductions required under the preceding final rule, the 
        effective date of the new final rule shall be January 1 of the 
        calendar year that is 5 years after the deadline for 
        promulgation of the new final rule under paragraph (1).

``SEC. 814. DISTRIBUTION OF ALLOWANCES BETWEEN AUCTIONS AND 
              ALLOCATIONS; NATURE OF ALLOWANCES.

    ``(a) Distribution of Allowances Between Auctions and 
Allocations.--
            ``(1) In general.--For each calendar year, the total 
        quantity of allowances to be auctioned and allocated under this 
        subtitle shall be equal to the annual tonnage limitation for 
        emissions of greenhouse gases from covered entities specified 
        in section 811 for the calendar year.
            ``(2) Distribution.--The proportion of allowances to be 
        auctioned pursuant to section 815 and allocated pursuant to 
        section 816 for each calendar year beginning in calendar year 
        2010 shall be as follows:


        ``Percentages of Allowances to Be Auctioned and Allocated
------------------------------------------------------------------------
                             Percentage to be        Percentage to be
     Calendar year              auctioned                allocated
------------------------------------------------------------------------
             2010                       50                      50
             2011                       53                      47
             2012                       56                      44
             2013                       59                      41
             2014                       62                      38
             2015                       65                      35
             2016                       68                      32
             2017                       71                      29
             2018                       74                      26
             2019                       77                      23
             2020                       80                      20
             2021                       83                      17
             2022                       86                      14
             2023                       89                      11
             2024                       92                       8
             2025                       96                       4
             2026                      100                       0
------------------------------------------------------------------------

    ``(b) Nature of Allowances.--An allowance--
            ``(1) shall not be considered to be a property right; and
            ``(2) may be terminated or limited by the Administrator.
    ``(c) No Judicial Review.--An auction or allocation of an allowance 
by the Administrator shall not be subject to judicial review.

``SEC. 815. AUCTION OF ALLOWANCES.

    ``(a) In General.--Not later than 2 years after the date of 
enactment of this title, the Administrator shall promulgate regulations 
establishing a procedure for the auction of the quantity of allowances 
specified in section 814(a) for each calendar year.
    ``(b) Deposit of Proceeds.--The Administrator shall deposit all 
proceeds from auctions conducted under this section in the General Fund 
of the United States Treasury.

``SEC. 816. ALLOCATION OF ALLOWANCES.

    ``(a) Allocations to Covered Entities and Other Eligible 
Entities.--Beginning with calendar year 2010, the Administrator shall, 
by regulation, establish a process for the allocation of free tradeable 
allowances under this section that will--
            ``(1) provide equitable compensation for covered entities 
        subject to unrecoverable costs resulting from the regulations 
        promulgated under this title;
            ``(2) avoid overcompensating covered entities;
            ``(3) minimize the costs to the government of allocating 
        tradeable allowances;
            ``(4) provide incentives for the deployment of new low and 
        zero carbon energy technologies and energy efficiency upgrades 
        at covered entities;
            ``(5) give credit to covered entities for emissions 
        reductions made before 2010 and registered with the National 
        Registry established in subtitle C;
            ``(6) recognize the investments that covered entities and 
        their customers have made to reduce their energy use and 
        greenhouse gas emissions prior to enactment of this title; and
            ``(7) maintain the international competitiveness of United 
        States manufacturing and avoid the additional loss of United 
        States manufacturing jobs.
    ``(b) Allocations to New Covered Entities and New Eligible 
Entities.--
            ``(1) Establishment.--For each calendar year, the 
        Administrator, in consultation with the Secretary of Energy the 
        Secretary of Commerce, and with consideration to the allocation 
        factors listed in subsection (a) shall promulgate regulations 
        establishing--
                    ``(A) a reserve of allowances to be allocated among 
                new covered entities and new eligible entities for the 
                calendar year; and
                    ``(B) the methodology for allocating those 
                allowances among new covered entities and new eligible 
                entities.
            ``(2) Limitation.--The number of allowances allocated under 
        paragraph (1) during a calendar year shall be not more than 3 
        percent of the total number of allowances allocated among 
        entities for the calendar year.
            ``(3) Unused allowances.--For each calendar year, the 
        Administrator shall reallocate to each entity any unused 
        allowances from the new entity reserve established under 
        paragraph (1) in the proportion that--
                    ``(A) the number of allowances allocated to each 
                entity for the calendar year; bears to
                    ``(B) the number of allowances allocated to all 
                entities for the calendar year.
    ``(c) Total Quantity of Allowances To Be Allocated.--For each 
calendar year, the quantity of allowances allocated under subsection 
(a) shall be equal to the difference between subparagraphs (1) and 
(2)--
            ``(1) the allocation percentage in section 814 of the 
        annual limitation for emissions of greenhouse gases from 
        covered entities specified in section 811 for the calendar 
        year, as modified, if applicable, under section 813; and
            ``(2) the quantity of allowances reserved for new covered 
        entities under subsection (b) for the calendar year.
    ``(d) Coal-Fired Covered Entities.--
            ``(1) In general.--Notwithstanding any other provision of 
        this subtitle, no allowance shall be allocated under this 
        subtitle to a coal-fired covered entity unless the covered 
        entity--
                    ``(A) is powered by qualifying advanced clean coal 
                technology, as defined pursuant to paragraph (2); or
                    ``(B) entered operation before January 1, 2007.
            ``(2) Definition of qualifying advanced clean coal 
        technology.--
                    ``(A) In general.--Not later than 18 months after 
                the date of enactment of this title, the Administrator, 
                by regulation, shall define the term `qualifying 
                advanced clean coal technology' with respect to 
                electric power generation.
                    ``(B) Requirement.--In promulgating a definition 
                pursuant to subparagraph (A), the Administrator shall 
                ensure that the term `qualifying advanced clean coal 
                technology' reflects advances in available technology, 
                taking into consideration--
                            ``(i) net thermal efficiency;
                            ``(ii) measures to capture and sequester 
                        carbon dioxide; and
                            ``(iii) output-based emission rates for--
                                    ``(I) carbon dioxide;
                                    ``(II) sulfur dioxide;
                                    ``(III) oxides of nitrogen;
                                    ``(IV) filterable and condensable 
                                particulate matter; and
                                    ``(V) mercury.
                    ``(C) Review and revision.--
                            ``(i) In general.--Not later than July 1, 
                        2009, and each July 1 of every second year 
                        thereafter, the Administrator shall review and, 
                        if appropriate, revise the definition under 
                        subparagraph (A) based on technological 
                        advances during the preceding 2 calendar years.
                            ``(ii) Notice and comment required.--
                        Subject to clause (iii), after the initial 
                        definition is established under subparagraph 
                        (A), no subsequent review or revision under 
                        this subparagraph shall be subject to the 
                        notice and comment provisions of section 307 of 
                        this Act or of section 553 of title 5, United 
                        States Code.
                            ``(iii) Effect.--Nothing in clause (ii) 
                        precludes the application of the notice and 
                        comment provisions of section 307 of this Act 
                        or of section 553 of title 5, United States 
                        Code, as the Administrator determines to be 
                        practicable.

``SEC. 817. ADAPTATION ASSISTANCE.

    ``(a) Adaptation Assistance for Workers and Communities Negatively 
Affected by Climate Change and Greenhouse Gas Regulation.--For each 
calendar year the Administrator shall, in consultation with the 
Secretary of labor and the Secretary of commerce, provide adaptation 
assistance for workers and communities--
            ``(1) to address local or regional impacts of climate 
        change and the impacts, if any, from greenhouse gas regulation, 
        including by providing assistance to displaced workers and 
        disproportionately affected communities; and
            ``(2) to mitigate impacts of climate change and the 
        impacts, in any, from greenhouse gas regulation on low-income 
        energy consumers.
    ``(b) Adaptation Assistance for Fish and Wildlife Habitat.--For 
each calendar year, the Administrator shall, in consultation with the 
United States Fish and Wildlife Service, the fund efforts to strengthen 
and restore habitat that improves the ability of fish and wildlife to 
adapt successfully to climate change. The funding made available for 
such purposes shall be directed toward the wildlife restoration fund 
subaccount known as the Wildlife Conservation and Restoration Account 
established under section 3 of the Pittman-Robertson Wildlife 
Restoration Act (16 U.S.C. 669b). Amounts deposited in the subaccount 
under this paragraph shall be available without further appropriation 
for obligation and expenditure under that Act.
    ``(c) There are authorized to be appropriated such sums as are 
necessary to carry out this section for each of fiscal years 2010 
through 2050.

``SEC. 818. EARLY REDUCTION CREDITS.

    ``(a) Regulations.--Not later than 2 years after the date of 
enactment of this title, the Administrator shall promulgate regulations 
that provide for the issuance on a 1-time basis, certification, and use 
of early reduction credits for greenhouse gas reduction or 
sequestration projects carried out during any of calendar years 2000 
through 2010.
    ``(b) Eligible Projects.--A greenhouse gas reduction or 
sequestration project shall be eligible for early reduction credits if 
the project--
            ``(1) is carried out in the United States;
            ``(2) meets the standards contained in regulations 
        promulgated by the Administrator under subsection (a) that the 
        Administrator determines to be applicable to the project, 
        including consistency with the requirements of--
                    ``(A) paragraphs (2) through (5) of section 836(a), 
                with respect to greenhouse gas reduction projects; and
                    ``(B) section 832(a), with respect to sequestration 
                projects; and
            ``(3) was reported to a State, regional or National 
        registry or was otherwise accounted for in a manner that the 
        Administrator determines to be legitimate--
                    ``(A) under section 1605(b) of the Energy Policy 
                Act of 1992 (42 U.S.C. 13385(b)); or
                    ``(B) to a State or regional greenhouse gas 
                registry.
    ``(c) Limitation.--
            ``(1) In general.--The aggregate quantity of early 
        reduction credits available for greenhouse gas reduction or 
        sequestration projects for the period of calendar years 2000 
        through 2009 shall not exceed 10 percent of the tonnage 
        limitation for calendar year 2010 for emissions of greenhouse 
        gases from covered entities under section 811.
            ``(2) No other exceedance of tonnage limitation.--No 
        provision of this subtitle (other than paragraph (1)) or any 
        regulation promulgated under this subtitle authorizes the 
        issuance or use of a quantity of credits greater than the 
        annual tonnage limitation for emissions of greenhouse gases 
        from covered entities for a calendar year.

``SEC. 819. AVOIDING SIGNIFICANT ECONOMIC HARM.

    ``(a) In General.--Pursuant to the regulations promulgated under 
this section, the Administrator may permit covered entities to use 
allowances in a calendar year before the calendar year for which the 
allowances were allocated.
    ``(b) Regulations.--
            ``(1) In general.--Not later than 3 years after the date of 
        enactment of this title, the Administrator, in coordination 
        with the Secretary of the Treasury, shall promulgate 
        regulations requiring the continuous monitoring of the 
        operation of the carbon market and the effect of that market on 
        the economy of the United States.
            ``(2) Requirements.--The regulations shall--
                    ``(A) establish the criteria for determining 
                whether allowance prices have reached and sustained a 
                level that is causing or will cause significant harm to 
                the economy of the United States; and
                    ``(B) take into consideration--
                            ``(i) the obligation of the United States 
                        under this subtitle to stabilize greenhouse gas 
                        concentrations in the atmosphere at the safe 
                        climate level; and
                            ``(ii) the costs of the anticipated impacts 
                        of climate change in the United States.
            ``(3) Prevention of economic harm.--If the Administrator 
        determines that allowance prices have reached and sustained a 
        level that is causing or will cause significant harm to the 
        economy of the United States, the regulations shall establish a 
        program under which a covered entity may use allowances in a 
        calendar year before the calendar year for which the allowances 
        were allocated, including--
                    ``(A) a requirement that allowances borrowed from 
                the allocation of a future year reduce the allocation 
                of allowances to the covered entity for the future year 
                on a 1-to-1 basis;
                    ``(B) a requirement for payment of interest on 
                borrowed allowances requiring the submission of 
                additional credits upon repayment of the allowances 
                equal to the product obtained by multiplying--
                            ``(i) the number of years between the 
                        advance use of allowances by a covered entity 
                        under clause (i) and the submission of 
                        additional credits under this clause; and
                            ``(ii) the sum obtained by adding--
                                    ``(I) the Federal short-term rate, 
                                as defined pursuant to section 
                                1274(d)(1)(C)(i) of the Internal 
                                Revenue Code of 1986; and
                                    ``(II) 2 percent; and
                    ``(C) a limitation that in no event may a covered 
                entity--
                            ``(i) satisfy more than 10 percent of the 
                        obligation of the covered entity under section 
                        821(a) to surrender allowances by submitting 
                        allowances in a calendar year before the 
                        calendar year for which the allowances were 
                        allocated; and
                            ``(ii) use allowances in a calendar year 
                        that is more than 3 years before the calendar 
                        year for which the allowances were allocated; 
                        and

``SEC. 820. USE AND TRANSFER OF CREDITS.

    ``(a) Use in Other Greenhouse Gas Allowance Trading Programs.--
            ``(1) In general.--A credit obtained under this subtitle 
        may be used in any other greenhouse gas allowance trading 
        program, including a program of 1 or more States or 
        subdivisions of States, that is approved by the Administrator 
        and an authorized official for the other program for use of the 
        allowance.
            ``(2) Reciprocity.--A credit obtained from another 
        greenhouse gas trading program, including a program of 1 or 
        more States or subdivisions of States, that is approved by the 
        Administrator and an authorized official for the other program 
        may be used in the trading program under this title.
    ``(b) Allowance Use Before Applicable Calendar Year.--Except as 
provided in section 819, an allowance auctioned or allocated under this 
subtitle may not be used before the calendar year for which the 
allowance was auctioned or allocated.
    ``(c) Transfer.--
            ``(1) In general.--Except as provided in paragraph (2), the 
        transfer of a credit shall not take effect until receipt and 
        recording by the Administrator of a written certification of 
        the transfer that is executed by an authorized official of the 
        person making the transfer.
            ``(2) Special rule for allowances.--Notwithstanding 
        paragraph (1), the transfer of an allowance auctioned or 
        allocated under this subtitle may take effect before the 
        calendar year for which the allowance was auctioned or 
        allocated.
    ``(d) Banking of Credits.--Any covered entity may use a credit 
obtained under this subtitle in the calendar year for which the credit 
was auctioned or allocated, or in a subsequent calendar year, to 
demonstrate compliance with section 821.
    ``(e) Limitations on the Use of Offset Credits.--The owner of each 
covered entity may not satisfy more than 10 percent of the obligation 
of the covered entity under section 821(a) by submitting offset 
credits. The Administrator may modify the maximum allowable offset 
credits that a covered entity may use to demonstrate compliance with 
section 821(a). In evaluating this determination, the Administrator 
shall take into consideration:
            ``(1) technological capability to reduce greenhouse gas 
        emissions; and
            ``(2) the economic impacts within the United States of 
        allowing covered entities to submit a fewer or greater number 
        of offset credits, including impacts on the major emitting 
        sectors.

``SEC. 821. COMPLIANCE AND ENFORCEMENT.

    ``(a) In General.--For calendar year 2010 and each calendar year 
thereafter, the owner of each covered entity shall surrender to the 
Administrator a quantity of credits that is equal to the total tons of 
carbon dioxide or, with respect to other greenhouse gases, tons in 
carbon dioxide equivalent, emitted by a covered entity during a 
calendar year.
    ``(b) Regulations.--Not later than 2 years after the date of 
enactment of this title, the Administrator shall promulgate regulations 
establishing the procedures for the surrender of credits.
    ``(c) Penalty.--The owner of a covered entity that emits greenhouse 
gases in excess of the number of credits that the owner of the covered 
entity holds for use of the covered entity for the calendar year 
shall--
            ``(1) submit to the Administrator 1.3 credits for each 
        metric ton of excess greenhouse gas emissions of the covered 
        entity; and
            ``(2) pay an excess emissions penalty equal to the product 
        obtained by multiplying--
                    ``(A) the number of tons of carbon dioxide, or the 
                carbon dioxide equivalent of other greenhouse gases, 
                emitted in excess of the total quantity of credits held 
                by the covered entity; and
                    ``(B)(i) except as provided in clause (ii), $100, 
                as adjusted for changes beginning on January 1, 2007, 
                in accordance with the Consumer Price Index for All-
                Urban Consumers published by the Department of Labor; 
                or
                    ``(ii) if the average market price for a metric ton 
                of carbon dioxide equivalent during a calendar year 
                exceeds $60, $200, as adjusted for changes beginning on 
                January 1, 2007, in accordance with the Consumer Price 
                Index for All-Urban Consumers published by the 
                Department of Labor.

``SEC. 822. EQUALIZING THE TREATMENT OF DOMESTIC AND IMPORTED 
              INDUSTRIAL PRODUCTS SOLD IN THE UNITED STATES.

    ``(a) Findings.--Congress finds that--
            ``(1) Greenhouse gas emission reductions from industry 
        sectors are necessary to protect from dangerous climate 
        change--
                    ``(A) human, animal, and plant life and health in 
                the United States; and
                    ``(B) the environment in the United States; and
            ``(2) the environmental and natural resource protections 
        described in paragraph (1) would be undermined if manufacturing 
        of industry sector products shifted to locations outside the 
        United States without comparable limits on greenhouse gas 
        emissions.
    ``(b) Equalize Treatment for Energy Intensive Products.--Not later 
than December 31, 2008, the Administrator, in consultation with the 
United States Trade Representative, the Secretary of State, and the 
Secretary of Commerce, shall consider ways to establish equal 
treatment, with respect to greenhouse gas emissions, of domestic and 
imported industrial products sold in the United States. Not later than 
December 31, 2011, the Administrator shall begin to implement policies 
and recommend to Congress regulatory mechanisms that would assure that 
energy intensive materials sold into United States commerce, of 
domestic and foreign origin, are manufactured according to minimum 
performance standards with respect to the greenhouse gas emissions 
produced per ton of material produced.
    ``(c) Consultation.--In developing policies and recommendations 
under this section, the Administrator shall consult with other 
government entities within and outside the United States having 
programs for control of greenhouse gas emissions from the manufacturing 
sector.
    ``(d) Considerations.--In developing policies and recommendations 
under this section, the Administrator, in consultation with the United 
States Trade Representative, the Secretary of State, and the Secretary 
of Commerce, shall consider--
            ``(1) the principle of equal treatment of domestic and 
        imported industrial products sold in the United States;
            ``(2) the need to sustain United States natural resources 
        for use by future generations;
            ``(3) the distinction between foreign manufacturers from 
        countries with regulation of greenhouse gases comparable to 
        this title, and foreign manufacturers from countries without 
        such comparable regulation;
            ``(4) the obligations of the United States and other 
        countries under applicable treaties and trade agreements; and
            ``(5) such other factors as the Administrator, in 
        consultation with the United States Trade Representative, the 
        Secretary of State, and the Secretary of Commerce, determines 
        to be relevant and appropriate.
    ``(e) International Trade Agreements.--The United States Trade 
Representative shall negotiate trade agreements that are consistent 
with the standards regulated under this section.

                      ``Subtitle B--Offset Credits

``SEC. 831. OUTREACH INITIATIVE ON REVENUE ENHANCEMENT FOR AGRICULTURAL 
              PRODUCERS.

    ``(a) Purposes.--The purposes of this subtitle are to achieve 
climate benefits, reduce overall costs to the United States economy, 
and enhance revenue for domestic agricultural producers, foresters, and 
other landowners by--
            ``(1) establishing procedures by which domestic 
        agricultural producers, foresters, and other landowners can 
        measure and report reductions in greenhouse gas emissions and 
        increases in sequestration; and
            ``(2) publishing a handbook of guidance for domestic 
        agricultural producers, foresters, and other landowners to 
        market emission reductions to companies.
    ``(b) Establishment.--The Secretary of Agriculture, acting through 
the Chief of the Natural Resources Conservation Service, the Chief of 
the Forest Service, the Administrator of the Cooperative State 
Research, Education, and Extension Service, and land-grant colleges and 
universities, in consultation with the Administrator and the heads of 
other appropriate departments and agencies, shall establish an outreach 
initiative to provide information to agricultural producers, 
agricultural organizations, foresters, and other landowners about 
opportunities under this subtitle to earn new revenue.
    ``(c) Components.--The initiative under this section--
            ``(1) shall be designed to ensure that, to the maximum 
        extent practicable, agricultural organizations and individual 
        agricultural producers, foresters, and other landowners receive 
        detailed practical information about--
                    ``(A) opportunities to earn new revenue under this 
                subtitle;
                    ``(B) measurement protocols, monitoring, verifying, 
                inventorying, registering, insuring, and marketing 
                offsets under this title;
                    ``(C) emerging domestic markets for energy crops, 
                allowances, and offsets; and
                    ``(D) local, regional, and national databases and 
                aggregation networks to facilitate achievement, 
                measurement, registration, and sales of offsets;
            ``(2) shall provide--
                    ``(A) outreach materials, including the handbook 
                published under subsection (d)(1), to interested 
                parties;
                    ``(B) workshops; and
                    ``(C) technical assistance; and
            ``(3) may include the creation and development of regional 
        marketing centers or coordination with existing centers 
        (including centers within the Natural Resources Conservation 
        Service or the Cooperative State Research, Education, and 
        Extension Service or at land-grant colleges and universities).
    ``(d) Handbook.--
            ``(1) In general.--Not later than 2 years after the date of 
        enactment of this title, the Secretary of Agriculture, in 
        consultation with the Administrator and after public input, 
        shall publish a handbook for use by agricultural producers, 
        agricultural cooperatives, foresters, other landowners, offset 
        buyers, and other stakeholders that provides easy-to-use 
        guidance on achieving, reporting, registering, and marketing 
        offsets.
            ``(2) Distribution.--The Secretary of Agriculture shall 
        ensure, to the maximum extent practicable, that the handbook is 
        distributed widely through land-grant colleges and universities 
        and other appropriate institutions.

``SEC. 832. OFFSET MEASUREMENT FOR AGRICULTURAL, FORESTRY, WETLANDS, 
              AND OTHER LAND USE-RELATED SEQUESTRATION PROJECTS.

    ``(a) In General.--Not later than 2 years after the date of 
enactment of this title, the Secretary of Agriculture, in consultation 
with the Administrator, shall promulgate regulations establishing the 
requirements regarding the issuance, certification, and use of offset 
credits for greenhouse gas reductions from agricultural, forestry, 
wetlands, and other land use-related sequestration projects, including 
requirements--
            ``(1) for a region-specific discount factor for business-
        as-usual practices for specific types of sequestration 
        projects, in accordance with subsection (c);
            ``(2) that ensure that the reductions are real, additional, 
        verifiable, and enforceable;
            ``(3) that address leakage;
            ``(4) that the reductions are not otherwise required by any 
        law (including a regulation) or other legally binding 
        requirement;
            ``(5) for the quantification, monitoring, reporting, and 
        verification of the reductions;
            ``(6) that ensure that offset credits are limited in 
        duration to the period of sequestration of greenhouse gases, 
        and rectify any loss of sequestration other than a loss caused 
        by an error in calculation identified under this subtitle, by 
        requiring the submission of additional credits of an equivalent 
        quantity to the lost sequestration; and
            ``(7) that quantify sequestration flow.
    ``(b) Eligibility To Create Offset Credits.--A sequestration 
project that commences operation on or after January 1, 2010, is 
eligible to create offset credits under this subtitle if the 
sequestration project satisfies the other applicable requirements of 
this subtitle.
    ``(c) Discounting for Business-as-Usual Practices.--
            ``(1) In general.--In order to streamline the availability 
        of offset credits for agricultural and other land use-related 
        sequestration projects, the regulations promulgated under 
        subsection (a) shall provide for the calculation and reporting 
        of region-specific discount factors by the Secretary of 
        Agriculture--
                    ``(A) to be used by developers of agricultural 
                projects and other land use-related sequestration 
                projects; and
                    ``(B) to account for business-as-usual practices 
                for specific types of sequestration projects.
            ``(2) Calculation.--Unless otherwise provided in this 
        subtitle, the region-specific discount factor for business-as-
        usual practices for sequestration projects shall be calculated 
        by dividing--
                    ``(A) the difference between--
                            ``(i) the quantity of greenhouse gases 
                        sequestered in the region as a result of the 
                        offset practice under this subtitle; and
                            ``(ii) the quantity of greenhouse gases 
                        sequestered in the region as a result of the 
                        projected business-as-usual implementation of 
                        the applicable offset practice; by
                    ``(B) the quantity of greenhouse gases sequestered 
                in the region as a result of the offset practice under 
                this subtitle.
            ``(3) Requirements.--
                    ``(A) In general.--The regulations promulgated 
                under this section shall, to the maximum extent 
                practicable--
                            ``(i) define geographic regions with 
                        reference to land that has similar agricultural 
                        characteristics; and
                            ``(ii) subject to subparagraph (B), define 
                        baseline historical reference periods for each 
                        category of sequestration practice, using the 
                        most recent period of sufficient length for 
                        which there are reasonably comprehensive data 
                        available.
                    ``(B) Exception.--If the Secretary of Agriculture 
                determines that entities have increased implementation 
                of the relevant offset practice during the most recent 
                period in anticipation of legislation granting credit 
                for the offsets, the regulations described in 
                subparagraph (A)(ii) may define baseline historical 
                reference periods for each category of sequestration 
                practice using an earlier period.
    ``(d) Quantifying Sequestration Flow.--The regulations that 
quantify sequestration flow shall include--
            ``(1) a default rate of sequestration flow, regionally 
        specific to the maximum extent practicable, for each offset 
        practice or combination of offset practices, that is estimated 
        conservatively to allow for site-specific variations and data 
        uncertainties;
            ``(2) a downward adjustment factor for any offset practice 
        or combination of practices for which, in the judgment of the 
        Secretary of Agriculture, there are substantial uncertainties 
        in the sequestration flows estimated in paragraph (1), but 
        still reasonably sufficient data to calculate a default rate of 
        flow; and
            ``(3) Offset practice.--or project-specific measurement, 
        monitoring, and verification requirements for--
                    ``(A) offset practices or projects for which there 
                are insufficiently reliable data to calculate a default 
                rate of sequestration flow; or
                    ``(B) projects for which the project proponent 
                chooses to use project-specific requirements.
    ``(e) Use of Native Plant Species in Offset Projects.--Not later 
than 18 months after the date of enactment of this title, the 
Administrator, in consultation with the Secretary of Agriculture, shall 
promulgate regulations for selection, use, and storage of native and 
nonnative plant materials in the offset projects described in paragraph 
(2)--
            ``(1) to ensure native plant materials are given primary 
        consideration, in accordance with applicable Department of 
        Agriculture guidance for use of native plant materials;
            ``(2) to prohibit the use of Federal or State-designated 
        noxious weeds; and
            ``(3) to prohibit the use of a species listed by a regional 
        or State invasive plant council within the applicable region or 
        State.

``SEC. 833. OFFSET CREDITS FROM GREENHOUSE GAS EMISSIONS REDUCTION 
              PROJECTS.

    ``(a) In General.--Not later than 2 years after the date of 
enactment of this title, the Administrator shall promulgate regulations 
establishing the requirements regarding the issuance, certification, 
and use of offset credits for greenhouse gas emissions reduction offset 
projects, including requirements--
            ``(1) for performance standards for specific types of 
        offset projects, which represent significant improvements 
        compared to recent practices in the geographic area, to be 
        reviewed, and updated if the Administrator determines updating 
        is appropriate, every 5 years;
            ``(2) that ensure that the reductions are real, additional, 
        verifiable, enforceable, and permanent;
            ``(3) that address leakage;
            ``(4) that the reductions are not otherwise required by any 
        law (including a regulation) or other legally binding 
        requirement;
            ``(5) for the quantification, monitoring, reporting, and 
        verification of the reductions; and
            ``(6) that specify the duration of offset credits for 
        greenhouse gas emissions reduction projects under this section.
    ``(b) Eligibility To Create Offset Credits.--Greenhouse gas 
emissions reduction offset projects that commence operation on or after 
January 1, 2007, are eligible to create offset credits under this 
subtitle if the projects satisfy the other applicable requirements of 
this subtitle.
    ``(c) Creation of Additional Categories of Greenhouse Gas Emissions 
Reduction Offset Projects.--The Administrator may, by regulation, 
create additional categories of greenhouse gas emissions reduction 
offset projects for types of projects for which the Administrator 
determines that compliance with the regulations promulgated under 
subsection (a) is feasible.
    ``(d) Prohibition on Use.--Notwithstanding the eligibility of 
greenhouse gas emission reduction projects to create offset credits in 
accordance with subsection (d), greenhouse gas emissions reduction 
offset projects shall not be eligible to create offset credits for use 
under this section beginning on the date on which the reductions are 
required by law (including regulations) or other legally binding 
requirement.

``SEC. 834. BORROWING AT PROGRAM START-UP BASED ON CONTRACTS TO 
              PURCHASE OFFSET CREDITS.

    ``(a) In General.--During calendar years 2011, 2012, and 2013, a 
covered entity may satisfy not more than 5 percent of the allowance 
submission requirements of section 822 by submitting to the 
Administrator contractual commitments to purchase offset credits that 
will implement an equivalent quantity of emission reductions or 
sequestration not later than December 31, 2015.
    ``(b) Approval of Qualifying Offset Projects.--Offset projects that 
may be appropriately carried out under this section shall be approved 
by the Administrator in accordance with this subtitle.
    ``(c) Repayment by 2015.--
            ``(1) In general.--If a covered entity uses subsection (a) 
        to comply with section 822, not later than the deadline in that 
        section for allowance submissions for calendar year 2015, the 
        covered entity shall submit additional credits of a quantity 
        equivalent to the sum obtained by adding--
                    ``(A) the value of credits submitted to comply with 
                credit submission requirements described in subsection 
                (a); and
                    ``(B) interest calculated in accordance with 
                paragraph (2).
            ``(2) Interest.--Interest referred to in paragraph (1)(B) 
        shall be equal to the product obtained by multiplying--
                    ``(A) the number of years between--
                            ``(i) the use by a covered entity of the 
                        method of compliance described in subsection 
                        (a); and
                            ``(ii) the submission by the covered entity 
                        of additional credits under this subsection; 
                        and
                    ``(B) the sum obtained by adding--
                            ``(i) the Federal short-term rate, as 
                        defined pursuant to section 1274(d)(1)(C)(i) of 
                        the Internal Revenue Code of 1986; and
                            ``(ii) 2 percent.

``SEC. 835. REVIEW AND CORRECTION OF ACCOUNTING FOR OFFSET CREDITS.

    ``(a) Duty to Monitor.--The Secretary of Agriculture and the 
Administrator shall monitor regularly whether offset credits under the 
respective jurisdiction of each agency head under this subtitle are 
being awarded only for real and additional sequestration of greenhouse 
gases and reductions in greenhouse gas emissions, including--
            ``(1) the accuracy of default calculations of sequestration 
        flow and greenhouse gas emission reductions achieved by the use 
        of offset practices;
            ``(2) the calculation of region-specific discount factors; 
        and
            ``(3) the accuracy of leakage calculations.
    ``(b) Periodic Review.--Not later than December 31, 2013, and every 
5 years thereafter, the Secretary of Agriculture and the Administrator 
shall review the issuance of offset credits under the respective 
jurisdiction of each agency head under this subtitle to determine--
            ``(1) whether offset credits are being awarded only for 
        real and additional sequestration of greenhouse gases or 
        reductions in greenhouse gas emissions, as described in 
        subsection (a);
            ``(2) the amount of excessive award of any offset credits;
            ``(3) the volume of offset credits that have been or are 
        expected to be approved;
            ``(4) the impact of the offset credits on market prices; 
        and
            ``(5) the impact of the offset credits on the trajectory of 
        emissions from covered entities.
    ``(c) Duty To Correct.--If the Secretary of Agriculture or the 
Administrator determines that offset credits under the respective 
jurisdictions of the agency head have been awarded under this subtitle 
in excess of real and additional sequestration of greenhouse gases or 
reductions in emissions of greenhouse gases, the Secretary of 
Agriculture or the Administrator shall--
            ``(1) promptly correct on a prospective basis the sources 
        of the errors, including correcting leakage factors, region-
        specific discount factors, default rates of sequestration flow, 
        and other relevant information for the offset practices 
        involved; and
            ``(2) quantify and publicly disclose the quantity of offset 
        credits that have been awarded in excess of real and additional 
        sequestration or emissions reductions.

              ``Subtitle C--National Registry for Credits

``SEC. 841. ESTABLISHMENT AND OPERATION OF NATIONAL REGISTRY.

    ``(a) In General.--Except as provided in subsection (b), not later 
than July 1 of the year immediately prior to the first calendar year in 
which an annual tonnage limitation on the emission of greenhouse gases 
applies under section 811(b), the Administrator shall promulgate 
regulations to establish, operate, and maintain a national registry 
through which the Administrator shall--
            ``(1) record allocations of allowances and the issuance of 
        offset credits or early reduction credits;
            ``(2) track transfers of credits;
            ``(3) retire all credits used for compliance;
            ``(4) subject to subsection (b), maintain transparent 
        availability of registry information to the public, including 
        the quarterly reports submitted under section 842(a);
            ``(5) prepare an annual assessment of the emission data in 
        the quarterly reports submitted under section 842(a); and
            ``(6) take such action as is necessary to maintain the 
        integrity of the registry, including adjustments to correct 
        for--
                    ``(A) errors or omissions in the reporting of data; 
                and
                    ``(B) the prevention of counterfeiting, double-
                counting, multiple registrations, multiple sales, and 
                multiple retirements of credits.
    ``(b) Exception to Public Availability of Data.--
            ``(1) In general.--Subsection (a)(4) shall not apply in any 
        case in which the Administrator, in consultation with the 
        Secretary of Defense, determines that publishing or otherwise 
        making available information in accordance with that paragraph 
        poses a risk to national security.
            ``(2) Statement of reasons.--In a case described in 
        paragraph (1), the Administrator shall publish a description of 
        the determination and the reasons for the determination.

``SEC. 842. MONITORING AND REPORTING.

    ``(a) Requirements.--Each owner or operator of a covered entity, or 
to the extent applicable, the greenhouse gas authorized account 
representative for the covered entity, shall--
            ``(1) comply with the monitoring, recordkeeping, and 
        reporting requirements of part 75 of title 40, Code of Federal 
        Regulations (or successor regulations); and
            ``(2) submit to the Administrator electronic quarterly 
        reports that describe the greenhouse gas mass emission data, 
        fuel input data, and electricity output data for the covered 
        entity.
    ``(b) Biomass Cofiring.--Not later than 18 months after the date of 
enactment of this title, the Administrator shall promulgate regulations 
that provide monitoring, recordkeeping, and reporting requirements for 
biomass cofiring at covered entities.''.
    (b) Conforming Amendments.--
            (1) Federal enforcement.--Section 113 of the Clean Air Act 
        (42 U.S.C. 7413) is amended--
                    (A) in subsection (a)(3), by striking or title 
                VI,`` and inserting title VI, or title VII,'';
                    (B) in subsection (b)--
                            (i) by redesignating paragraphs (1) through 
                        (3) as subparagraphs (A) through (C), 
                        respectively, and indenting the subparagraphs 
                        appropriately;
                            (ii) by striking ``The Administrator 
                        shall'' and inserting the following:
            ``(1) In general.--The Administrator shall'';
                            (iii) in paragraph (1) (as designated by 
                        clause (ii)), in the matter preceding 
                        subparagraph (A) (as redesignated by clause 
                        (i)), by striking ``or a major stationary 
                        source'' and inserting ``a major stationary 
                        source, or a covered entity under title VII''; 
                        and
                            (iv) in subparagraph (B) (as redesignated 
                        by clause (i)), by striking ``or title VI'' and 
                        inserting ``title VI, or title VII'';
                            (v) in the matter following subparagraph 
                        (C) of paragraph (1) (as designated by clauses 
                        (i) and (ii))--
                                    (I) by striking ``Any action'' and 
                                inserting the following:
            ``(2) Judicial enforcement.--
                    ``(A) In general.--Any action'';
                                    (II) by striking ``Notice'' and 
                                inserting the following:
                    ``(B) Notice.--Notice''; and
                                    (III) by striking ``In the case'' 
                                and inserting the following:
                    ``(C) Actions brought by administrator.--In the 
                case'';
                    (C) in subsection (c)--
                            (i) in the first sentence of paragraph (1), 
                        by striking ``or title VI (relating to 
                        stratospheric ozone control),'' and inserting 
                        ``title VI (relating to stratospheric ozone 
                        control), or title VII (relating to global 
                        warming pollution emission reductions),''; and
                            (ii) in the first sentence of paragraph 
                        (3), by striking ``or VI'' and inserting ``VI, 
                        or VII'';
                    (D) in subsection (d)(1)(B), by striking ``or VI'' 
                and inserting ``VI, or VII''; and
                    (E) in subsection (f), in the first sentence, by 
                striking ``or VI'' and inserting ``VI, or VII''.
            (2) Inspections, monitoring, and entry.--Section 114(a) of 
        the Clean Air Act (42 U.S.C. 7414(a)) is amended by striking 
        ``section 112,'' and all that follows through ``(ii)'' and 
        inserting the following: ``section 112, any regulation of solid 
        waste combustion under section 129, or any regulation of 
        greenhouse gas emissions under title VII, (ii)''.
            (3) Administrative proceedings and judicial review.--
        Section 307 of the Clean Air Act (42 U.S.C. 7607) is amended--
                    (A) in subsection (a), by striking ``, or section 
                306'' and inserting ``section 306, or title VII'';
                    (B) in subsection (b)(1)--
                            (i) by striking ``section 111,,'' and 
                        inserting ``section 111,'';
                            (ii) by striking ``section 120,'' each 
                        place it appears and inserting ``section 120, 
                        any action under title VII,''; and
                            (iii) by striking ``112,,'' and inserting 
                        ``112,''; and
                    (C) in subsection (d)(1)--
                            (i) by striking subparagraph (S);
                            (ii) by redesignating the second 
                        subparagraph (N) and subparagraphs (O) through 
                        (R) as subparagraphs (O), (P), (Q), (R), and 
                        (S), respectively;
                            (iii) by redesignating subparagraphs (T) 
                        and (U) as subparagraphs (U) and (V), 
                        respectively; and
                            (iv) by inserting after subparagraph (S) 
                        (as redesignated by clause (ii)) the following:
                    ``(T) the promulgation or revision of any 
                regulation under title VII,''.
            (4) Unavailability of emissions data.--Section 412(d) of 
        the Clean Air Act (42 U.S.C. 7651k(d)) is amended in the first 
        sentence--
                    (A) by inserting ``or title VII'' after ``under 
                subsection (a)''; and
                    (B) by inserting ``or title VII'' after ``this 
                title''.

            Subtitle B--Climate Change Research Initiatives

SEC. 711. RESEARCH GRANTS THROUGH NATIONAL SCIENCE FOUNDATION.

    Section 105 of the Global Change Research Act of 1990 (15 U.S.C. 
2935) is amended--
            (1) by redesignating subsection (c) as subsection (d); and
            (2) by inserting after subsection (b) the following:
    ``(c) Research Grants.--
            ``(1) List of priority research areas.--The Committee shall 
        develop a list of priority areas for research and development 
        on climate change that are not being adequately addressed by 
        Federal agencies.
            ``(2) Transmission of list.--The Director of the Office of 
        Science and Technology Policy shall submit the list developed 
        under paragraph (1) to the National Science Foundation.
            ``(3) Authorization of appropriations.--There are 
        authorized to be appropriated to the National Science 
        Foundation such sums as are necessary to carry out this 
        subsection, to be made available through the Science and 
        Technology Policy Institute, for research in the priority 
        areas.''.

SEC. 712. ABRUPT CLIMATE CHANGE RESEARCH.

    (a) In General.--The Secretary of Commerce, acting through the 
National Oceanic and Atmospheric Administration, shall carry out a 
program of scientific research on abrupt climate change designed to 
provide timely warnings of the potential likelihood, magnitude, and 
consequences of, and measures to avoid, abrupt human-induced climate 
change.
    (b) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary of Commerce such sums as are necessary to 
carry out this section.

SEC. 713. DEVELOPMENT OF NEW MEASUREMENT TECHNOLOGIES.

    (a) In General.--The Administrator of the Environmental Protection 
Agency shall carry out a program to develop, with technical assistance 
from appropriate Federal agencies, innovative standards and measurement 
technologies to calculate greenhouse gas emissions or reductions for 
which no accurate, reliable, low-cost measurement technology exists.
    (b) Administration.--The program shall include technologies 
(including remote sensing technologies) to measure carbon changes and 
other greenhouse gas emissions and reductions from agriculture, 
forestry, wetlands, and other land use practices.
    (c) Authorization of Appropriations.--There are authorized to be 
appropriated to the Administrator such sums as are necessary to carry 
out this section.

SEC. 714. TECHNOLOGY DEVELOPMENT AND DIFFUSION.

    (a) In General.--The Director of the National Institute of 
Standards and Technology, acting through the Manufacturing Extension 
Partnership program, may develop a program to promote the use, by small 
manufacturers, of technologies and techniques that result in reduced 
emissions of greenhouse gases or increased sequestration of greenhouse 
gases.
    (b) Authorization of Appropriations.--There are authorized to be 
appropriated to the Director of the National Institute of Standards and 
Technology such sums as are necessary to carry out this section.

SEC. 715. PUBLIC LAND.

    (a) In General.--Not later than 3 years after the date of enactment 
of this Act, the Secretary of Agriculture and the Secretary of the 
Interior shall prepare a joint assessment or separate assessments 
setting forth recommendations for increased sequestration of greenhouse 
gases and reduction of greenhouse gas emissions on public land that 
is--
            (1) managed forestland;
            (2) managed rangeland or grassland; or
            (3) protected land, including national parks and designated 
        wilderness areas.
    (b) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary of Agriculture and the Secretary of the 
Interior such sums as are necessary to carry out this section.

SEC. 716. SEA LEVEL RISE FROM POLAR ICE SHEET MELTING.

    (a) In General.--The Secretary of Commerce, acting through the 
National Oceanic and Atmospheric Administration and in cooperation with 
the Administrator of the National Aeronautics and Space Administration, 
shall carry out a program of scientific research to support modeling 
and observations into the potential role of the Greenland, west 
Antarctic, and east Antarctic ice sheets in any future increase in sea 
levels.
    (b) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary of Commerce and the Administrator of the 
National Aeronautics and Space Administration such sums as are 
necessary to carry out this section.

                          TITLE VIII--OFFSETS

             Subtitle A--Denial of Oil and Gas Tax Benefits

SEC. 801. SHORT TITLE.

    This subtitle may be cited as the ``Ending Subsidies for Big Oil 
Act of 2007''.

SEC. 802. DENIAL OF DEDUCTION FOR INCOME ATTRIBUTABLE TO DOMESTIC 
              PRODUCTION OF OIL, NATURAL GAS, OR PRIMARY PRODUCTS 
              THEREOF.

    (a) In General.--Subparagraph (B) of section 199(c)(4) of the 
Internal Revenue Code of 1986 (relating to exceptions) is amended by 
striking ``or'' at the end of clause (ii), by striking the period at 
the end of clause (iii) and inserting ``, or'', and by inserting after 
clause (iii) the following new clause:
                            ``(iv) the sale, exchange, or other 
                        disposition of oil, natural gas, or any primary 
                        product thereof.''.
    (b) Primary Product.--Section 199(c)(4)(B) of such Code is amended 
by adding at the end the following flush sentence:
                ``For purposes of clause (iv), the term `primary 
                product' has the same meaning as when used in section 
                927(a)(2)(C), as in effect before its repeal.''.
    (c) Conforming Amendments.--Section 199(c)(4) of such Code is 
amended--
            (1) in subparagraph (A)(i)(III) by striking ``electricity, 
        natural gas,'' and inserting ``electricity'', and
            (2) in subparagraph (B)(ii) by striking ``electricity, 
        natural gas,'' and inserting ``electricity''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2007.

SEC. 803. 7-YEAR AMORTIZATION OF GEOLOGICAL AND GEOPHYSICAL 
              EXPENDITURES FOR CERTAIN MAJOR INTEGRATED OIL COMPANIES.

    (a) In General.--Subparagraph (A) of section 167(h)(5) of the 
Internal Revenue Code of 1986 (relating to special rule for major 
integrated oil companies) is amended by striking ``5-year'' and 
inserting ``7-year''.
    (b) Effective Date.--The amendment made by this section shall apply 
to amounts paid or incurred after the date of the enactment of this 
Act.

        Subtitle B--Royalties Under Offshore Oil and Gas Leases

SEC. 811. SHORT TITLE.

    This title may be cited as the ``Royalty Relief for American 
Consumers Act of 2007''.

SEC. 812. PRICE THRESHOLDS FOR ROYALTY SUSPENSION PROVISIONS.

    The Secretary of the Interior shall agree to a request by any 
lessee to amend any lease issued for any Central and Western Gulf of 
Mexico tract during the period of January 1, 1998, through December 31, 
1999, to incorporate price thresholds applicable to royalty suspension 
provisions, that are equal to or less than the price thresholds 
described in clauses (v) through (vii) of section 8(a)(3)(C) of the 
Outer Continental Shelf Lands Act (43 U.S.C. 1337(a)(3)(C)). Any 
amended lease shall impose the new or revised price thresholds 
effective October 1, 2006. Existing lease provisions shall prevail 
through September 30, 2006.

SEC. 813. CLARIFICATION OF AUTHORITY TO IMPOSE PRICE THRESHOLDS FOR 
              CERTAIN LEASE SALES.

    Congress reaffirms the authority of the Secretary of the Interior 
under section 8(a)(1)(H) of the Outer Continental Shelf Lands Act (43 
U.S.C. 1337(a)(1)(H)) to vary, based on the price of production from a 
lease, the suspension of royalties under any lease subject to section 
304 of the Outer Continental Shelf Deep Water Royalty Relief Act 
(Public Law 104-58; 43 U.S.C. 1337 note).

SEC. 814. ELIGIBILITY FOR NEW LEASES AND THE TRANSFER OF LEASES; 
              CONSERVATION OF RESOURCES FEES.

    (a) Issuance of New Leases.--
            (1) In general.--The Secretary shall not issue any new 
        lease that authorizes the production of oil or natural gas in 
        the Gulf of Mexico under the Outer Continental Shelf Lands Act 
        (43 U.S.C. 1331 et seq.) to a person described in paragraph (2) 
        unless--
                    (A) the person has renegotiated each covered lease 
                with respect to which the person is a lessee, to modify 
                the payment responsibilities of the person to include 
                price thresholds that are equal to or less than the 
                price thresholds described in clauses (v) through (vii) 
                of section 8(a)(3)(C) of the Outer Continental Shelf 
                Lands Act (43 U.S.C. 1337(a)(3)(C)); or
                    (B) the person has--
                            (i) paid all fees established by the 
                        Secretary under subsection (b) that are due 
                        with respect to each covered lease for which 
                        the person is a lessee; or
                            (ii) entered into an agreement with the 
                        Secretary under which the person is obligated 
                        to pay such fees.
            (2) Persons described.--A person referred to in paragraph 
        (1) is a person that--
                    (A) is a lessee that--
                            (i) holds a covered lease on the date on 
                        which the Secretary considers the issuance of 
                        the new lease; or
                            (ii) was issued a covered lease before the 
                        date of enactment of this Act, but transferred 
                        the covered lease to another person or entity 
                        (including a subsidiary or affiliate of the 
                        lessee) after the date of enactment of this 
                        Act; or
                    (B) any other person or entity who has any direct 
                or indirect interest in, or who derives any benefit 
                from, a covered lease;
            (3) Multiple lessees.--
                    (A) In general.--For purposes of paragraph (1), if 
                there are multiple lessees that own a share of a 
                covered lease, the Secretary may implement separate 
                agreements with any lessee with a share of the covered 
                lease that modifies the payment responsibilities with 
                respect to the share of the lessee to include price 
                thresholds that are equal to or less than the price 
                thresholds described in clauses (v) through (vii) of 
                section 8(a)(3)(C) of the Outer Continental Shelf Lands 
                Act (43 U.S.C. 1337(a)(3)(C)).
                    (B) Treatment of share as covered lease.--Beginning 
                on the effective date of an agreement under 
                subparagraph (A), any share subject to the agreement 
                shall not constitute a covered lease with respect to 
                any lessees that entered into the agreement.
    (b) Conservation of Resources Fees.--
            (1) In general.--Not later than 60 days after the date of 
        enactment of this Act, the Secretary of the Interior by 
        regulation shall establish--
                    (A) a conservation of resources fee for producing 
                Federal oil and gas leases in the Gulf of Mexico; and
                    (B) a conservation of resources fee for 
                nonproducing Federal oil and gas leases in the Gulf of 
                Mexico.
            (2) Producing lease fee terms.--The fee under paragraph 
        (1)(A)--
                    (A) subject to subparagraph (C), shall apply to 
                covered leases that are producing leases;
                    (B) shall be set at $9 per barrel for oil and $1.25 
                per million Btu for gas, respectively, in 2005 dollars; 
                and
                    (C) shall apply only to production of oil or gas 
                occurring--
                            (i) in any calendar year in which the 
                        arithmetic average of the daily closing prices 
                        for light sweet crude oil on the New York 
                        Mercantile Exchange (NYMEX) exceeds $34.73 per 
                        barrel for oil and $4.34 per million Btu for 
                        gas in 2005 dollars; and
                            (ii) on or after October 1, 2006.
            (3) Nonproducing lease fee terms.--The fee under paragraph 
        (1)(B)--
                    (A) subject to subparagraph (C), shall apply to 
                leases that are nonproducing leases;
                    (B) shall be set at $3.75 per acre per year in 2005 
                dollars; and
                    (C) shall apply on and after October 1, 2006.
            (4) Treatment of receipts.--Amounts received by the United 
        States as fees under this subsection shall be treated as 
        offsetting receipts.
    (c) Transfers.--A lessee or any other person who has any direct or 
indirect interest in, or who derives a benefit from, a lease shall not 
be eligible to obtain by sale or other transfer (including through a 
swap, spinoff, servicing, or other agreement) any covered lease, the 
economic benefit of any covered lease, or any other lease for the 
production of oil or natural gas in the Gulf of Mexico under the Outer 
Continental Shelf Lands Act (43 U.S.C. 1331 et seq.), unless--
            (1) the lessee or other person has--
                    (A) renegotiated all covered leases of the lessee 
                or other person; and
                    (B) entered into an agreement with the Secretary to 
                modify the terms of all covered leases of the lessee or 
                other person to include limitations on royalty relief 
                based on market prices that are equal to or less than 
                the price thresholds described in clauses (v) through 
                (vii) of section 8(a)(3)(C) of the Outer Continental 
                Shelf Lands Act (43 U.S.C. 1337(a)(3)(C)); or
            (2) the lessee or other person has--
                    (A) paid all fees established by the Secretary 
                under subsection (b) that are due with respect to each 
                covered lease for which the person is a lessee; or
                    (B) entered into an agreement with the Secretary 
                under which the person is obligated to pay such fees.
    (d) Definitions.--In this section--
            (1) Covered lease.--The term ``covered lease'' means a 
        lease for oil or gas production in the Gulf of Mexico that is--
                    (A) in existence on the date of enactment of this 
                Act;
                    (B) issued by the Department of the Interior under 
                section 304 of the Outer Continental Shelf Deep Water 
                Royalty Relief Act (43 U.S.C. 1337 note; Public Law 
                104-58); and
                    (C) not subject to limitations on royalty relief 
                based on market price that are equal to or less than 
                the price thresholds described in clauses (v) through 
                (vii) of section 8(a)(3)(C) of the Outer Continental 
                Shelf Lands Act (43 U.S.C. 1337(a)(3)(C)).
            (2) Lessee.--The term ``lessee'' includes any person or 
        other entity that controls, is controlled by, or is in or under 
        common control with, a lessee.
            (3) Secretary.--The term ``Secretary'' means the Secretary 
        of the Interior.

SEC. 815. REPEAL OF CERTAIN TAXPAYER SUBSIDIZED ROYALTY RELIEF FOR THE 
              OIL AND GAS INDUSTRY.

    (a) Repeal of Provisions of Energy Policy Act of 2005.--The 
following provisions of the Energy Policy Act of 2005 (Public Law 109-
58) are repealed:
            (1) Section 344 (42 U.S.C. 15904; relating to incentives 
        for natural gas production from deep wells in shallow waters of 
        the Gulf of Mexico).
            (2) Section 345 (42 U.S.C. 15905; relating to royalty 
        relief for deep water production in the Gulf of Mexico).
            (3) Subsection (i) of section 365 (42 U.S.C. 15924; 
        relating to the prohibition on drilling-related permit 
        application cost recovery fees).
    (b) Provisions Relating to Planning Areas Offshore Alaska.--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'' after ``West longitude''.
    (c) Provisions Relating to Naval Petroleum Reserve in Alaska.--
Section 107 of the Naval Petroleum Reserves Production Act of 1976 (as 
transferred, redesignated, moved, and amended by section 347 of the 
Energy Policy Act of 2005 (119 Stat. 704)) is amended--
            (1) in subsection (i) by striking paragraphs (2) through 
        (6); and
            (2) by striking subsection (k).

     Subtitle C--Strategic Energy Efficiency and Renewable Reserve

SEC. 821. STRATEGIC ENERGY EFFICIENCY AND RENEWABLES RESERVE FOR 
              INVESTMENTS IN RENEWABLE ENERGY AND ENERGY EFFICIENCY.

    (a) In General.--For budgetary purposes, the additional Federal 
receipts by reason of the enactment of this Act shall be held in a 
separate account to be known as the ``Strategic Energy Efficiency and 
Renewables Reserve''. The Strategic Energy Efficiency and Renewables 
Reserve shall be available to offset the cost of subsequent 
legislation--
            (1) to accelerate the use of clean domestic renewable 
        energy resources and alternative fuels;
            (2) to promote the utilization of energy-efficient products 
        and practices and conservation; and
            (3) to increase research, development, and deployment of 
        clean renewable energy and efficiency technologies.
    (b) Procedure for Adjustments.--
            (1) Budget committee chairman.--After the reporting of a 
        bill or joint resolution, or the offering of an amendment 
        thereto or the submission of a conference report thereon, 
        providing funding for the purposes set forth in subsection (a) 
        in excess of the amounts provided for those purposes for fiscal 
        year 2007, the chairman of the Committee on the Budget of the 
        applicable House of Congress shall make the adjustments set 
        forth in paragraph (2) for the amount of new budget authority 
        and outlays in that measure and the outlays flowing from that 
        budget authority.
            (2) Matters to be adjusted.--The adjustments referred to in 
        paragraph (1) are to be made to--
                    (A) the discretionary spending limits, if any, set 
                forth in the appropriate concurrent resolution on the 
                budget;
                    (B) the allocations made pursuant to the 
                appropriate concurrent resolution on the budget 
                pursuant to section 302(a) of the Congressional Budget 
                Act of 1974; and
                    (C) the budget aggregates contained in the 
                appropriate concurrent resolution on the budget as 
                required by section 301(a) of the Congressional Budget 
                Act of 1974.
            (3) Amounts of adjustments.--The adjustments referred to in 
        paragraphs (1) and (2) shall not exceed the receipts estimated 
        by the Congressional Budget Office that are attributable to 
        this Act for the fiscal year in which the adjustments are made.
                                 <all>