[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6385 Introduced in House (IH)]







110th CONGRESS
  2d Session
                                H. R. 6385

 To provide a large-scale national effort to improve the state of our 
    national security, economy and environment by providing market 
   incentives to produce and deploy alternative energy solutions and 
                 reduce our dependence on foreign oil.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             June 26, 2008

  Mr. Kirk (for himself, Mrs. Biggert, and Mr. Shays) introduced the 
following bill; which was referred to the Committee on Ways and Means, 
and in addition to the Committees on Science and Technology, Energy and 
 Commerce, Education and Labor, Rules, Natural Resources, Agriculture, 
    Armed Services, 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 provide a large-scale national effort to improve the state of our 
    national security, economy and environment by providing market 
   incentives to produce and deploy alternative energy solutions and 
                 reduce our dependence on foreign oil.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE, ETC.

    (a) Short Title.--This Act may be cited as the ``Apollo Energy 
Independence Act of 2008''.
    (b) Amendment of 1986 Code.--Except as otherwise expressly 
provided, whenever in this Act an amendment or repeal is expressed in 
terms of an amendment to, or repeal of, a section or other provision, 
the reference shall be considered to be made to a section or other 
provision of the Internal Revenue Code of 1986.
    (c) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title, etc.
Sec. 2. Findings.
Sec. 3. Purposes.
   TITLE I--ENHANCING DEVELOPMENT OF ALTERNATIVE AND RENEWABLE ENERGY

Sec. 101. Renewable energy credit made permanent.
Sec. 102. Production credit for electricity produced from marine 
                            renewables.
Sec. 103. Energy credit.
Sec. 104. New clean renewable energy bonds.
Sec. 105. Advanced Nuclear Power Production.
Sec. 106. Loan guarantees for construction of advanced nuclear 
                            facilities.
                 TITLE II--IMPROVING ENERGY EFFICIENCY

Sec. 201. Make permanent the tax credit for residential energy-
                            efficient property.
Sec. 202. Make permanent the energy efficiency credit for existing 
                            homes.
Sec. 203. Make permanent the energy efficiency commercial buildings 
                            deduction.
Sec. 204. Make permanent the credit for production of energy-efficient 
                            appliances.
TITLE III--ENHANCING PRODUCTION AND DEPLOYMENT OF ALTERNATIVE VEHICLES 
                               AND FUELS

Sec. 301. Consumer incentives to purchase advanced technology vehicles.
Sec. 302. Advanced technology motor vehicles manufacturing credit.
Sec. 303. Production tax credit for any commercial vehicle that attains 
                            an EPA fuel economy standard of 100 mpg.
Sec. 304. Credit for production of cellulosic biofuel.
Sec. 305. Establish a permanent production tax credit for hydrogen 
                            fuels.
Sec. 306. Rate of credit for alternative fuel vehicle refueling 
                            property increased from 30 to 60 percent.
Sec. 307. Use of CAFE penalties to support the Clean Cities Initiative.
Sec. 308. Exclusion from heavy truck tax for idling reduction units and 
                            advanced insulation.
Sec. 309. Advanced hydrogen storage technologies.
Sec. 310. Plug-in electric drive vehicle technology program.
         TITLE IV--REDUCING CONSUMER ENERGY AND GASOLINE COSTS

Sec. 401. Refundable employer credit for providing tax-free transit 
                            passes to employees.
Sec. 402. Reduction in number of boutique fuels.
Sec. 403. Green schools grant program.
Sec. 404. Extension and greening of qualified zone academy bonds.
Sec. 405. Study on the reduction of energy costs in public schools.
Sec. 406. Ethanol.
                            TITLE V--OFFSETS

Sec. 501. FY09 cost.
Sec. 502. Conservation of resources fees.
Sec. 503. Reduction in payment acres for direct and counter-cyclical 
                            payments under Department of Agriculture 
                            commodity programs.
Sec. 504. Reduction in maximum amount of direct, counter-cyclical, and 
                            ACRE payments paid to producers under 
                            Department of Agriculture commodity 
                            programs.
Sec. 505. Consolidation of military exchange stores system.
Sec. 506. Revised pricing structure for depot-level activities of the 
                            Department of Defense.
Sec. 507. Restrict Universal Service Fund support to 2 connections per 
                            household.
Sec. 508. Improve Treasury payment transaction integrity.
Sec. 509. Modernize Treasury cash investment practices.
Sec. 510. Food Safety and Inspection Service user fees.

SEC. 2. FINDINGS.

    The Congress finds the following:
            (1) The United States is the world's largest per-capita oil 
        consumer and is projected to remain such through at least 2030.
            (2) Crude oil prices increased by more than 400 percent in 
        the past 10 years.
            (3) The retail price of gasoline increased by nearly 200 
        percent in the past 10 years.
            (4) The retail price of electricity increased by 30 percent 
        in the past 10 years.
            (5) On June 10, 2008, the national average cost of gasoline 
        surpassed a record $4.00 per gallon.
            (6) Foreign oil accounts for 23.5 percent of United States 
        energy consumption. This represents the largest component of 
        American's energy profile.
            (7) The United States is the world's largest oil importer, 
        spending over $500 billion per year on foreign oil.
            (8) 62 percent of the proved world oil reserves reside in 
        countries considered ``not free'' by leading human rights 
        organizations.
            (9) Oil revenues to dictatorial nations help provide 
        funding for state-sponsored terrorism against America and her 
        allies; the acquisition of weapons of mass destruction; and the 
        sustainability of corrupt political systems which continue to 
        subjugate their citizenry.
            (10) America's dependence on oil is a threat to our 
        national security, economic prosperity and environmental 
        sustainability.
            (11) The $20 billion NASA Apollo program was the first and 
        most comprehensive national effort to achieve technological 
        advancement in the history of our Nation. Between 1963 and 
        1972, the United States spent $19.5 billion to realize one of 
        her most prestigious accomplishments--landing on the moon.

SEC. 3. PURPOSES.

    The purposes of this Act are--
            (1) to establish long-term market incentives in order to 
        spur development, deployment and demand of renewable and 
        alternative energy, vehicles and fuel; and
            (2) to provide resources on the scale of the NASA Apollo 
        program, to achieve preeminence in efficient and alternative 
        energy consumption for the United States and to develop 
        America's capability to live and work without dependence on 
        foreign oil.

   TITLE I--ENHANCING DEVELOPMENT OF ALTERNATIVE AND RENEWABLE ENERGY

SEC. 101. RENEWABLE ENERGY CREDIT MADE PERMANENT.

    (a) In General.--Subsection (d) of section 45 of the Internal 
Revenue Code of 1986 (relating to qualified facilities) is amended--
            (1) by striking ``and before January 1, 2009'' each place 
        it occurs,
            (2) by striking ``, and before January 1, 2009'' in 
        paragraphs (1) and (2)(A)(i),
            (3) by striking ``before January 1, 2009'' in paragraphs 
        (2)(A)(ii) and (3)(A)(ii) and inserting ``January 1, 2019'', 
        and
            (4) by striking ``January 1, 2006'' in paragraph (4) and 
        inserting ``January 1, 2019''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to electricity produced and sold after December 31, 2008, in 
taxable years ending after such date.

SEC. 102. PRODUCTION CREDIT FOR ELECTRICITY PRODUCED FROM MARINE 
              RENEWABLES.

    (a) In General.--Paragraph (1) of section 45(c) is amended by 
striking ``and'' at the end of subparagraph (G), by striking the period 
at the end of subparagraph (H) and inserting ``, and'', and by adding 
at the end the following new subparagraph:
                    ``(I) marine and hydrokinetic renewable energy.''.
    (b) Marine Renewables.--Subsection (c) of section 45 is amended by 
adding at the end the following new paragraph:
            ``(10) Marine and hydrokinetic renewable energy.--
                    ``(A) In general.--The term `marine and 
                hydrokinetic renewable energy' means energy derived 
                from--
                            ``(i) waves, tides, and currents in oceans, 
                        estuaries, and tidal areas,
                            ``(ii) free flowing water in rivers, lakes, 
                        and streams,
                            ``(iii) free flowing water in an irrigation 
                        system, canal, or other man-made channel, 
                        including projects that utilize nonmechanical 
                        structures to accelerate the flow of water for 
                        electric power production purposes, or
                            ``(iv) differentials in ocean temperature 
                        (ocean thermal energy conversion).
                    ``(B) Exceptions.--Such term shall not include any 
                energy which is derived from any source which utilizes 
                a dam, diversionary structure (except as provided in 
                subparagraph (A)(iii)), or impoundment for electric 
                power production purposes.''.
    (c) Definition of Facility.--Subsection (d) of section 45 is 
amended by adding at the end the following new paragraph:
            ``(11) Marine and hydrokinetic renewable energy 
        facilities.--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--
                    ``(A) which has a nameplate capacity rating of at 
                least 150 kilowatts, and
                    ``(B) which is originally placed in service on or 
                after the date of the enactment of this paragraph.''.
    (d) Credit Rate.--Subparagraph (A) of section 45(b)(4) is amended 
by striking ``or (9)'' and inserting ``(9), or (11)''.
    (e) Coordination With Small Irrigation Power.--Paragraph (5) of 
section 45(d) is amended by striking ``January 1, 2009'' and inserting 
``the date of the enactment of paragraph (11)''.
    (f) Effective Date.--The amendments made by this section shall 
apply to electricity produced and sold after the date of the enactment 
of this Act, in taxable years ending after such date.

SEC. 103. ENERGY CREDIT.

    (a) Extension of Credit.--
            (1) Solar energy property.--Paragraphs (2)(A)(i)(II) and 
        (3)(A)(ii) of section 48(a) are each amended by striking ``but 
        only with respect to periods ending before January 1, 2009''.
            (2) Fuel cell property.--Paragraph (1) of section 48(c) is 
        amended by striking subparagraph (E).
            (3) Microturbine property.--Paragraph (2) of section 48(c) 
        is amended by striking subparagraph (E).
    (b) Allowance of Energy Credit Against Alternative Minimum Tax.--
Subparagraph (B) of section 38(c)(4) is amended by striking ``and'' at 
the end of clause (iii), by redesignating clause (iv) as clause (v), 
and by inserting after clause (iii) the following new clause:
                            ``(iv) the credit determined under section 
                        46 to the extent that such credit is 
                        attributable to the energy credit determined 
                        under section 48, and''.
    (c) Energy Credit for Combined Heat and Power System Property.--
            (1) In general.--Section 48(a)(3)(A) (defining energy 
        property) 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) combined heat and power system 
                        property,''.
            (2) Combined heat and power system property.--Section 48 is 
        amended by adding at the end the following new subsection:
    ``(d) Combined Heat and Power System Property.--For purposes of 
subsection (a)(3)(A)(v)--
            ``(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 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), and
                    ``(C) the energy efficiency percentage of which 
                exceeds 60 percent.
            ``(2) Limitation.--
                    ``(A) In general.--In the case of combined heat and 
                power system property with an electrical capacity in 
                excess of the applicable capacity placed in service 
                during the taxable year, the credit under subsection 
                (a)(1) (determined without regard to this paragraph) 
                for such year shall be equal to the amount which bears 
                the same ratio to such credit as the applicable 
                capacity bears to the capacity of such property.
                    ``(B) Applicable capacity.--For purposes of 
                subparagraph (A), the term `applicable capacity' means 
                15 megawatts or a mechanical energy capacity of more 
                than 20,000 horsepower or an equivalent combination of 
                electrical and mechanical energy capacities.
                    ``(C) Maximum capacity.--The term `combined heat 
                and power system property' shall not include any 
                property comprising a system if such system has a 
                capacity in excess of 50 megawatts or a mechanical 
                energy capacity in excess of 67,000 horsepower or an 
                equivalent combination of electrical and mechanical 
                energy capacities.
            ``(3) 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 
                        lower heating value of the fuel sources for the 
                        system.
                    ``(B) Determinations made on btu basis.--The energy 
                efficiency percentage and the percentages under 
                paragraph (1)(B) 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.
            ``(4) Systems using biomass.--If a system is designed to 
        use biomass (within the meaning of paragraphs (2) and (3) of 
        section 45(c) without regard to the last sentence of paragraph 
        (3)(A)) for at least 90 percent of the energy source--
                    ``(A) paragraph (1)(C) 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 
                paragraph) as the energy efficiency percentage of such 
                system bears to 60 percent.''.
    (d) Increase of Credit Limitation for Fuel Cell Property.--
Subparagraph (B) of section 48(c)(1) is amended by striking ``$500'' 
and inserting ``$1,500''.
    (e) Public Utility Property Taken Into Account.--
            (1) In general.--Paragraph (3) of section 48(a) is amended 
        by striking the second sentence thereof.
            (2) Conforming amendments.--
                    (A) Paragraph (1) of section 48(c) is amended by 
                striking subparagraph (D) and redesignating 
                subparagraph (E) as subparagraph (D).
                    (B) Paragraph (2) of section 48(c) is amended by 
                striking subparagraph (D) and redesignating 
                subparagraph (E) as subparagraph (D).
    (f) Effective Date.--
            (1) In general.--Except as otherwise provided in this 
        subsection, the amendments made by this section shall take 
        effect on the date of the enactment of this Act.
            (2) Allowance against alternative minimum tax.--The 
        amendments made by subsection (b) shall apply to credits 
        determined under section 46 of the Internal Revenue Code of 
        1986 in taxable years beginning after the date of the enactment 
        of this Act and to carrybacks of such credits.
            (3) Combined heat and power and fuel cell property.--The 
        amendments made by subsections (c) and (d) shall apply to 
        periods after the date of the enactment of this Act, in taxable 
        years ending after such date, under rules similar to the rules 
        of section 48(m) of the Internal Revenue Code of 1986 (as in 
        effect on the day before the date of the enactment of the 
        Revenue Reconciliation Act of 1990).
            (4)  Public utility property.--The amendments made by 
        subsection (e) shall apply to periods after February 13, 2008, 
        in taxable years ending after such date, under rules similar to 
        the rules of section 48(m) of the Internal Revenue Code of 1986 
        (as in effect on the day before the date of the enactment of 
        the Revenue Reconciliation Act of 1990).

SEC. 104. NEW CLEAN RENEWABLE ENERGY BONDS.

    (a) Conforming Amendments.--
            (1) Section 54A(d)(1) is amended by inserting ``and a new 
        clean renewable energy bond,'' after ``qualified forestry 
        conservation bond''.
            (2) Section 54A(d)(2)(C) is amended by inserting ``or 
        54C(e)'' after ``54B(e)''.
    (b) In General.--Subpart I of part IV of subchapter A of chapter 1 
is amended by adding at the end the following new section:

``SEC. 54C. NEW CLEAN RENEWABLE ENERGY BONDS.

    ``(a) New Clean Renewable Energy Bond.--For purposes of this 
subpart, the term `new clean renewable energy bond' means any bond 
issued as part of an issue if--
            ``(1) 100 percent of the available project proceeds of such 
        issue are to be used for a qualified clean renewable energy 
        purpose,
            ``(2) the bond is issued by a qualified issuer, and
            ``(3) the issuer designates such bond for purposes of this 
        section.
    ``(b) Reduced Credit Amount.--The annual credit determined under 
section 54A(b) with respect to any new clean renewable energy bond 
shall be 70 percent of the amount so determined without regard to this 
subsection.
    ``(c) Limitation on Amount of Bonds Designated.--
            ``(1) In general.--The maximum aggregate face amount of 
        bonds which may be designated under subsection (a) by any 
        issuer shall not exceed the limitation amount allocated under 
        this subsection to such issuer.
            ``(2) National limitation on amount of bonds designated.--
        There is a national new clean renewable energy bond limitation 
        of $2,000,000,000 which shall be allocated by the Secretary as 
        provided in paragraph (3), except that--
                    ``(A) not more than 33\1/3\ percent thereof may be 
                allocated to qualified projects of public power 
                providers,
                    ``(B) not more than 33\1/3\ percent thereof may be 
                allocated to qualified projects of governmental bodies, 
                and
                    ``(C) not more than 33\1/3\ percent thereof may be 
                allocated to qualified projects of cooperative electric 
                companies.
            ``(3) Method of allocation.--
                    ``(A) Allocation among public power providers.--
                After the Secretary determines the qualified projects 
                of public power providers which are appropriate for 
                receiving an allocation of the national new clean 
                renewable energy bond limitation, the Secretary shall, 
                to the maximum extent practicable, make allocations 
                among such projects in such manner that the amount 
                allocated to each such project bears the same ratio to 
                the cost of such project as the limitation under 
                paragraph (2)(A) bears to the cost of all such 
                projects.
                    ``(B) Allocation among governmental bodies and 
                cooperative electric companies.--The Secretary shall 
                make allocations of the amount of the national new 
                clean renewable energy bond limitation described in 
                paragraphs (2)(B) and (2)(C) among qualified projects 
                of governmental bodies and cooperative electric 
                companies, respectively, in such manner as the 
                Secretary determines appropriate.
    ``(d) Definitions.--For purposes of this section--
            ``(1) Qualified renewable energy facility.--The term 
        `qualified renewable energy facility' means a qualified 
        facility (as determined under section 45(d) without regard to 
        paragraphs (8) and (10) thereof and to any placed in service 
        date) owned by a public power provider, a governmental body, or 
        a cooperative electric company.
            ``(2) Public power provider.--The term `public power 
        provider' 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 the enactment of this paragraph).
            ``(3) Governmental body.--The term `governmental body' 
        means any State or Indian tribal government, or any political 
        subdivision thereof.
            ``(4) Cooperative electric company.--The term `cooperative 
        electric company' means a mutual or cooperative electric 
        company described in section 501(c)(12) or section 
        1381(a)(2)(C).
            ``(5) Clean renewable energy bond lender.--The term `clean 
        renewable energy bond lender' means a lender which is a 
        cooperative which is owned by, or has outstanding loans to, 100 
        or more cooperative electric companies and is in existence on 
        February 1, 2002, and shall include any affiliated entity which 
        is controlled by such lender.
            ``(6) Qualified issuer.--The term `qualified issuer' means 
        a public power provider, a cooperative electric company, a 
        governmental body, a clean renewable energy bond lender, or a 
        not-for-profit electric utility which has received a loan or 
        loan guarantee under the Rural Electrification Act.
    ``(e) Qualified Clean Renewable Energy Purpose.--For purposes of 
this section, the term `qualified clean renewable energy purpose' means 
capital expenditures incurred by public power providers or cooperative 
electric companies for one or more qualified renewable energy 
facilities.''.
    (c) Clerical Amendment.--The table of sections for subpart I of 
part IV of subchapter A of chapter 1 is amended by adding at the end 
the following new item:

``Sec. 54C. New clean renewable energy bonds.''.
    (d) Application of Certain Labor Standards on Projects Financed 
Under Tax Credit Bonds.--Subchapter IV of chapter 31 of title 40, 
United States Code, shall apply to projects financed with the proceeds 
of any new clean renewable energy bonds (as defined in section 54C of 
the Internal Revenue Code of 1986).
    (e) Effective Dates.--The amendments made by this section shall 
apply to obligations issued after the date of the enactment of this 
Act.

SEC. 105. ADVANCED NUCLEAR POWER PRODUCTION.

    (a) Increase in Rate.--Section 45J(a)(1) is amended by striking 
``1.8 cents'' and inserting ``2.25 cents''.
    (b) Increase in National Limitation.--Section 45J(b)(2) is amended 
by striking ``6,000 megawatts'' and inserting ``12,000 megawatts''.
    (c) Increase in Annual Limitation.--Section 45J(c)(1) is amended by 
striking ``$125,000,000'' and inserting ``$160,000,000''.
    (d) Extension of Placed in Service Date.--Section 45J(d)(1)(B) is 
amended by striking ``and before January 1, 2021''.
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SEC. 106. LOAN GUARANTEES FOR CONSTRUCTION OF ADVANCED NUCLEAR 
              FACILITIES.

    Section 1702(c) of the Energy Policy Act of 2005 (42 U.S.C. 
16512(c)) is amended by inserting ``, except that 100 percent of the 
project cost may be guaranteed in the case of an advanced nuclear 
energy facility'' after ``guarantee is issued''.

                 TITLE II--IMPROVING ENERGY EFFICIENCY

SEC. 201. MAKE PERMANENT THE TAX CREDIT FOR RESIDENTIAL ENERGY-
              EFFICIENT PROPERTY.

    Section 25D is amended by striking subsection (g).

SEC. 202. MAKE PERMANENT THE ENERGY EFFICIENCY CREDIT FOR EXISTING 
              HOMES.

    Section 25C is amended by striking subsection (g).

SEC. 203. MAKE PERMANENT THE ENERGY EFFICIENCY COMMERCIAL BUILDINGS 
              DEDUCTION.

    Section 179D is amended by striking subsection (h).

SEC. 204. MAKE PERMANENT THE CREDIT FOR PRODUCTION OF ENERGY-EFFICIENT 
              APPLIANCES.

    (a) In General.--Paragraph (1) of section 45M(b) is amended to read 
as follows:
            ``(1) In general.--For purposes of subsection (a), the 
        applicable amount in the case of dishwashers, clothes washers, 
        and refrigerators (as the case may be) which meet the 
        requirements of the Energy Star program in effect for the 
        calendar year in which such appliance is manufactured is--
                    ``(A) in the case of dishwashers, the energy 
                savings amount,
                    ``(B) in the case of clothes washers, $100, and
                    ``(C) in the case of refrigerators--
                            ``(i) which consume at least 15 percent but 
                        not more than 20 percent less kilowatt hours 
                        per year than the 2001 energy conservation 
                        standards, $75,
                            ``(ii) which consumes at least 20 percent 
                        but not more than 25 percent less kilowatt 
                        hours per year than the 2001 energy 
                        conservation standards, $125, and
                            ``(iii) which consumes at least 25 percent 
                        less kilowatt hours per year than the 2001 
                        energy conservation standards, $175.''.
    (b) Effective Date.--The amendment made by this section applies to 
taxable years beginning after December 31, 2007.

TITLE III--ENHANCING PRODUCTION AND DEPLOYMENT OF ALTERNATIVE VEHICLES 
                               AND FUELS

SEC. 301. CONSUMER INCENTIVES TO PURCHASE ADVANCED TECHNOLOGY VEHICLES.

    (a)  New Qualified Hybrid Motor Vehicles.--
            (1) Extension of alternative vehicle credit.--Subsection 
        (i) of section 30B of the Internal Revenue Code of 1986, as 
        amended by subsection (b), is amended by striking paragraph 
        (3).
            (2) Increase in credit amount.--Subparagraph (A) of section 
        30B(d)(2) of such Code is amended by striking ``the sum of'' 
        and inserting ``150 percent of the sum of''.
    (b) Elimination on Number of New Qualified Hybrid and Advanced Lean 
Burn Technology Vehicles Eligible for Alternative Motor Vehicle 
Credit.--
            (1) In general.--Section 30B of the Internal Revenue Code 
        of 1986 is amended by striking subsection (f) and by 
        redesignating subsections (g) through (j) as subsections (f) 
        through (i), respectively.
            (2) Conforming amendments.--
                    (A) Paragraphs (4) and (6) of section 30B(h) of the 
                Internal Revenue Code of 1986 are each amended by 
                striking ``(determined without regard to subsection 
                (g))'' and inserting ``determined without regard to 
                subsection (f))''.
                    (B) Section 38(b)(25) of such Code is amended by 
                striking ``section 30B(g)(1)'' and inserting ``section 
                30B(f)(1)''.
                    (C) Section 55(c)(2) of such Code is amended by 
                striking ``section 30B(g)(2)'' and inserting ``section 
                30B(f)(2)''.
                    (D) Section 1016(a)(36) of such Code is amended by 
                striking ``section 30B(h)(4)'' and inserting ``section 
                30B(g)(4)''.
                    (E) Section 6501(m) of such Code is amended by 
                striking ``section 30B(h)(9)'' and inserting ``section 
                30B(g)(9)''.
    (c) Credit for New Qualified Plug-in Electric Drive Motor 
Vehicles.--
            (1) In general.--Subpart B of part IV of subchapter A of 
        chapter 1 is amended by adding at the end the following new 
        section:

``SEC. 30D. NEW QUALIFIED PLUG-IN ELECTRIC DRIVE MOTOR VEHICLES.

    ``(a) Allowance of Credit.--There shall be allowed as a credit 
against the tax imposed by this chapter for the taxable year an amount 
equal to the sum of the credit amounts determined under subsection (b) 
with respect to each new qualified plug-in electric drive motor vehicle 
placed in service by the taxpayer during the taxable year.
    ``(b) Per Vehicle Dollar Limitation.--
            ``(1) In general.--The amount determined under this 
        subsection with respect to any new qualified plug-in electric 
        drive motor vehicle is the sum of the amounts determined under 
        paragraphs (2) and (3) with respect to such vehicle.
            ``(2) Base amount.--The amount determined under this 
        paragraph is $3,000.
            ``(3) Battery capacity.--In the case of a vehicle which 
        draws propulsion energy from a battery with not less than 5 
        kilowatt hours of capacity, the amount determined under this 
        paragraph is $200, plus $400 for each kilowatt hour of capacity 
        in excess of 5 kilowatt hours. The amount determined under this 
        paragraph shall not exceed $4,000.
    ``(c) Application With Other Credits.--
            ``(1) Business credit treated as part of general business 
        credit.--So much of the credit which would be allowed under 
        subsection (a) for any taxable year (determined without regard 
        to this subsection) that is attributable to property of a 
        character subject to an allowance for depreciation shall be 
        treated as a credit listed in section 38(b) for such taxable 
        year (and not allowed under subsection (a)).
            ``(2) Personal credit.--
                    ``(A) In general.--For purposes of this title, the 
                credit allowed under subsection (a) for any taxable 
                year (determined after application of paragraph (1)) 
                shall be treated as a credit allowable under subpart A 
                for such taxable year.
                    ``(B) Limitation based on amount of tax.--In the 
                case of a taxable year to which section 26(a)(2) does 
                not apply, the credit allowed under subsection (a) for 
                any taxable year (determined after application of 
                paragraph (1)) shall not exceed the excess of--
                            ``(i) the sum of the regular tax liability 
                        (as defined in section 26(b)) plus the tax 
                        imposed by section 55, over
                            ``(ii) the sum of the credits allowable 
                        under subpart A (other than this section and 
                        sections 23 and 25D) and section 27 for the 
                        taxable year.
    ``(d) New Qualified Plug-In Electric Drive Motor Vehicle.--For 
purposes of this section--
            ``(1) In general.--The term `new qualified plug-in electric 
        drive motor vehicle' means a motor vehicle (as defined in 
        section 30(c)(2))--
                    ``(A) the original use of which commences with the 
                taxpayer,
                    ``(B) which is acquired for use or lease by the 
                taxpayer and not for resale,
                    ``(C) which is made by a manufacturer, and
                    ``(D) which is propelled to a significant extent by 
                an electric motor which draws electricity from a 
                battery which--
                            ``(i) has a capacity of not less than 2.5 
                        kilowatt hours, and
                            ``(ii) is capable of being recharged from 
                        an external source of electricity.
            ``(2) Exception.--The term `new qualified plug-in electric 
        drive motor vehicle' is limited to vehicles meeting relevant 
        Federal safety and emissions standards for on-road use.
            ``(3) Other terms.--The terms `passenger automobile', 
        `light truck', and `manufacturer' have the meanings given such 
        terms in regulations prescribed by the Administrator of the 
        Environmental Protection Agency for purposes of the 
        administration of title II of the Clean Air Act (42 U.S.C. 7521 
        et seq.).
            ``(4) Battery capacity.--The term `capacity' means, with 
        respect to any battery, the quantity of electricity which the 
        battery is capable of storing, expressed in kilowatt hours, as 
        measured from a 100 percent state of charge to a 0 percent 
        state of charge.
    ``(e) Special Rules.--
            ``(1) Basis reduction.--The basis of any property for which 
        a credit is allowable under subsection (a) shall be reduced by 
        the amount of such credit (determined without regard to 
        subsection (c)).
            ``(2) Recapture.--The Secretary shall, by regulations, 
        provide for recapturing the benefit of any credit allowable 
        under subsection (a) with respect to any property which ceases 
        to be property eligible for such credit.
            ``(3) Property used outside united states, etc., not 
        qualified.--No credit shall be allowed under subsection (a) 
        with respect to any property referred to in section 50(b)(1) or 
        with respect to the portion of the cost of any property taken 
        into account under section 179.
            ``(4) Election not to take credit.--No credit shall be 
        allowed under subsection (a) for any vehicle if the taxpayer 
        elects to not have this section apply to such vehicle.
            ``(5) Property used by tax-exempt entity; interaction with 
        air quality and motor vehicle safety standards.--Rules similar 
        to the rules of paragraphs (6) and (10) of section 30B(h) shall 
        apply for purposes of this section.''.
            (2) Coordination with alternative motor vehicle credit.--
        Section 30B(d)(3) is amended by adding at the end the following 
        new subparagraph:
                    ``(D) Exclusion of plug-in vehicles.--Any vehicle 
                with respect to which a credit is allowable under 
                section 30D (determined without regard to subsection 
                (c) thereof) shall not be taken into account under this 
                section.''.
            (3) Credit made part of general business credit.--Section 
        38(b) is amended--
                    (A) by striking ``and'' each place it appears at 
                the end of any paragraph,
                    (B) by striking ``plus'' each place it appears at 
                the end of any paragraph,
                    (C) by striking the period at the end of paragraph 
                (31) and inserting ``, plus'', and
                    (D) by adding at the end the following new 
                paragraph:
            ``(32) the portion of the new qualified plug-in electric 
        drive motor vehicle credit to which section 30D(c)(1) 
        applies.''.
            (4) Conforming amendments.--
                    (A)(i) Section 24(b)(3)(B), as amended by section 
                104, is amended by striking ``and 25D'' and inserting 
                ``25D, and 30D''.
                    (ii) Section 25(e)(1)(C)(ii) is amended by 
                inserting ``30D,'' after ``25D,''.
                    (iii) Section 25B(g)(2), as amended by section 104, 
                is amended by striking ``and 25D'' and inserting ``, 
                25D, and 30D''.
                    (iv) Section 26(a)(1), as amended by section 104, 
                is amended by striking ``and 25D'' and inserting ``25D, 
                and 30D''.
                    (v) Section 1400C(d)(2) is amended by striking 
                ``and 25D'' and inserting ``25D, and 30D''.
                    (B) Section 1016(a) is amended by striking ``and'' 
                at the end of paragraph (35), by striking the period at 
                the end of paragraph (36) and inserting ``, and'', and 
                by adding at the end the following new paragraph:
            ``(37) to the extent provided in section 30D(e)(1).''.
                    (C) Section 6501(m) is amended by inserting 
                ``30D(f)(4),'' after ``30C(e)(5),''.
                    (D) The table of sections for subpart B of part IV 
                of subchapter A of chapter 1 is amended by adding at 
                the end the following new item:

``Sec. 30D. New qualified plug-in electric drive motor vehicles.''.
            (5) Treatment of alternative motor vehicle credit as a 
        personal credit.--
                    (A) In general.--Paragraph (2) of section 30B(g) is 
                amended to read as follows:
            ``(2) Personal credit.--The credit allowed under subsection 
        (a) for any taxable year (after application of paragraph (1)) 
        shall be treated as a credit allowable under subpart A for such 
        taxable year.''.
                    (B) Conforming amendments.--
                            (i) Subparagraph (A) of section 30C(d)(2) 
                        is amended by striking ``sections 27, 30, and 
                        30B'' and inserting ``sections 27 and 30''.
                            (ii) Paragraph (3) of section 55(c) is 
                        amended by striking ``30B(g)(2),''.
            (6) Effective date.--
                    (A) In general.--Except as otherwise provided in 
                this subsection, the amendments made by this section 
                shall apply to taxable years beginning after December 
                31, 2008.
                    (B) Treatment of alternative motor vehicle credit 
                as personal credit.--The amendments made by paragraph 
                (5) shall apply to taxable years beginning after 
                December 31, 2007.
    (d) Flexible Fuel Vehicle Credit.--
            (1) In general.--Subpart B of part IV of subchapter A of 
        chapter 1 of the Internal Revenue Code of 1986 (relating to 
        foreign tax credit, etc.), as amended by this Act, is amended 
        by adding at the end the following new section:

``SEC. 30E. FLEXIBLE FUEL VEHICLE CREDIT.

    ``(a) Allowance of Credit.--There shall be allowed as a credit 
against the tax imposed by this chapter for the taxable year an amount 
equal to the GEM flexible fuel vehicle credit.
    ``(b) GEM Flexible Fuel Vehicle Credit.--
            ``(1) In general.--For the purposes of subsection (a), the 
        GEM flexible fuel vehicle credit determined under this 
        subsection for the taxable year is the credit amount determined 
        under paragraph (2) with respect to a GEM flexible fuel vehicle 
        placed in service by the taxpayer during the taxable year.
            ``(2) Credit amount.--In the case of a new qualified GEM 
        flexible fuel vehicle which is a passenger automobile or light 
        truck and which has a gross vehicle weight rating of not more 
        than 8,500 pounds, the amount shall be $1,000.
    ``(c) Definitions.--For purposes of this section--
            ``(1) Gem flexible fuel vehicle.--The term `GEM flexible 
        fuel vehicle' means a motor vehicle warrantied by its 
        manufacturer to operate on any combination of gasoline, E85, 
        M85, biodiesel, and hydrogen and its blends.
            ``(2) E85.--The term `E85' means a fuel blend containing 85 
        percent ethanol and 15 percent gasoline by volume.
            ``(3) M85.--The term `M85' means a fuel blend containing 85 
        percent methanol and 15 percent gasoline by volume.''.
            (2) Clerical amendment.--The table of sections for subpart 
        B of part IV of subchapter A of chapter 1 of the Internal 
        Revenue Code of 1986 (relating to foreign tax credit, etc.), is 
        amended by adding at the end the following new item:

``Sec. 30E. Flexible fuel vehicle credit.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to property placed in service after December 31, 2006, in taxable 
years ending after such date.

SEC. 302. ADVANCED TECHNOLOGY MOTOR VEHICLES MANUFACTURING CREDIT.

    (a) In General.--Subpart B of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to foreign tax credit, 
etc.) is amended by adding at the end the following new section:

``SEC. 30F. ADVANCED TECHNOLOGY MOTOR VEHICLES MANUFACTURING CREDIT.

    ``(a) Credit Allowed.--There shall be allowed as a credit against 
the tax imposed by this chapter for the taxable year an amount equal to 
the sum of--
            ``(1) in the case of a qualified investment of an eligible 
        taxpayer for such taxable year relating to new qualified plug-
        in electric drive motor vehicles, hybrid and clean burning 
        vehicles, GEM flexible fuel vehicles, and fuel cell vehicles, 
        50 percent of so much of such qualified investment as does not 
        exceed $150,000,000, and
            ``(2) in the case of any other qualified investment of an 
        eligible taxpayer for such taxable year, 35 percent of so much 
        of such qualified investment as does not exceed $50,000,000.
    ``(b) Qualified Investment.--For purposes of this section--
            ``(1) In general.--The qualified investment for any taxable 
        year is equal to the incremental costs incurred during such 
        taxable year--
                    ``(A) to re-equip, expand, or establish any 
                manufacturing facility of the eligible taxpayer to 
                produce advanced technology motor vehicles or to 
                produce eligible components,
                    ``(B) for engineering integration of such vehicles 
                and components as described in subsection (d), and
                    ``(C) for research and development related to 
                advanced technology motor vehicles and eligible 
                components.
            ``(2) Attribution rules.--In the event a facility of the 
        eligible taxpayer produces both advanced technology motor 
        vehicles and conventional motor vehicles, or eligible and non-
        eligible components, only the qualified investment attributable 
        to production of advanced technology motor vehicles and 
        eligible components shall be taken into account.
    ``(c) Advanced Technology Motor Vehicles and Eligible Components.--
For purposes of this section--
            ``(1) Advanced technology motor vehicle.--The term 
        `advanced technology motor vehicle' means--
                    ``(A) any new advanced lean burn technology motor 
                vehicle (as defined in section 30B(c)(3)),
                    ``(B) any new qualified hybrid motor vehicle (as 
                defined in section 30B(d)(3)(A) and determined without 
                regard to any gross vehicle weight rating),
                    ``(C) any new qualified plug-in electric drive 
                motor vehicle (as defined in section 30D),
                    ``(D) any new GEM flexible fuel vehicle, or
                    ``(E) any new fuel cell vehicle.
            ``(2) New fuel cell vehicle.--For purposes of this section, 
        the term `new fuel cell vehicle' means an on-road or nonroad 
        vehicle that utilizes a fuel cell for propulsion or in 
        combination with an on-board battery system (as defined in 
        section 803 of the Energy Policy Act of 2005 (42 U.S.C. 
        16152)).
            ``(3) Eligible components.--The term `eligible component' 
        means any component inherent to any advanced technology motor 
        vehicle, including--
                    ``(A) with respect to any gasoline or diesel-
                electric new qualified hybrid motor vehicle--
                            ``(i) electric motor or generator,
                            ``(ii) power split device,
                            ``(iii) power control unit,
                            ``(iv) power controls,
                            ``(v) integrated starter generator, or
                            ``(vi) battery,
                    ``(B) with respect to any hydraulic new qualified 
                hybrid motor vehicle--
                            ``(i) hydraulic accumulator vessel,
                            ``(ii) hydraulic pump, or
                            ``(iii) hydraulic pump-motor assembly,
                    ``(C) with respect to any new advanced lean burn 
                technology motor vehicle--
                            ``(i) diesel engine,
                            ``(ii) turbocharger,
                            ``(iii) fuel injection system, or
                            ``(iv) after-treatment system, such as a 
                        particle filter or NOx absorber,
                    ``(D) with respect to any new qualified plug-in 
                electric drive motor vehicle--
                            ``(i) battery,
                            ``(ii) electric motor or generator,
                            ``(iii) any power control unit which is 
                        designed specifically for use in a new 
                        qualified plug-in electric drive motor vehicle, 
                        and
                    ``(E) with respect to any advanced technology motor 
                vehicle, any other component submitted for approval by 
                the Secretary.
    ``(d) Engineering Integration Costs.--For purposes of subsection 
(b)(1)(B), costs for engineering integration are costs incurred prior 
to the market introduction of advanced technology vehicles for 
engineering tasks related to--
            ``(1) establishing functional, structural, and performance 
        requirements for component and subsystems to meet overall 
        vehicle objectives for a specific application,
            ``(2) designing interfaces for components and subsystems 
        with mating systems within a specific vehicle application,
            ``(3) designing cost effective, efficient, and reliable 
        manufacturing processes to produce components and subsystems 
        for a specific vehicle application, and
            ``(4) validating functionality and performance of 
        components and subsystems for a specific vehicle application.
    ``(e) Eligible Taxpayer.--For purposes of this section, the term 
`eligible taxpayer' means any taxpayer if more than 50 percent of its 
gross receipts for the taxable year is derived from the manufacture of 
motor vehicles or any component parts of such vehicles.
    ``(f) Limitation Based on Amount of Tax.--The credit allowed under 
subsection (a) for the taxable year shall not exceed the excess of--
            ``(1) the sum of--
                    ``(A) the regular tax liability (as defined in 
                section 26(b)) for such taxable year, plus
                    ``(B) the tax imposed by section 55 for such 
                taxable year and any prior taxable year beginning after 
                1986 and not taken into account under section 53 for 
                any prior taxable year, over
            ``(2) the sum of the credits allowable under subpart A and 
        sections 27, 30, and 30B for the taxable year.
    ``(g) Reduction in Basis.--For purposes of this subtitle, if a 
credit is allowed under this section for any expenditure with respect 
to any property, the increase in the basis of such property which would 
(but for this paragraph) result from such expenditure shall be reduced 
by the amount of the credit so allowed.
    ``(h) No Double Benefit.--
            ``(1) Coordination with other deductions and credits.--
        Except as provided in paragraph (2), the amount of any 
        deduction or other credit allowable under this chapter for any 
        cost taken into account in determining the amount of the credit 
        under subsection (a) shall be reduced by the amount of such 
        credit attributable to such cost.
            ``(2) Research and development costs.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), any amount described in subsection 
                (b)(1)(C) taken into account in determining the amount 
                of the credit under subsection (a) for any taxable year 
                shall not be taken into account for purposes of 
                determining the credit under section 41 for such 
                taxable year.
                    ``(B) Costs taken into account in determining base 
                period research expenses.--Any amounts described in 
                subsection (b)(1)(C) taken into account in determining 
                the amount of the credit under subsection (a) for any 
                taxable year which are qualified research expenses 
                (within the meaning of section 41(b)) shall be taken 
                into account in determining base period research 
                expenses for purposes of applying section 41 to 
                subsequent taxable years.
    ``(i) Business Carryovers Allowed.--If the credit allowable under 
subsection (a) for a taxable year exceeds the limitation under 
subsection (f) for such taxable year, such excess (to the extent of the 
credit allowable with respect to property subject to the allowance for 
depreciation) shall be allowed as a credit carryback and carryforward 
under rules similar to the rules of section 39.
    ``(j) Special Rules.--For purposes of this section, rules similar 
to the rules of paragraphs (4) and (5) of section 179A(e) and 
paragraphs (1) and (2) of section 41(f) shall apply.
    ``(k) Election Not to Take Credit.--No credit shall be allowed 
under subsection (a) for any property if the taxpayer elects not to 
have this section apply to such property.
    ``(l) Regulations.--The Secretary shall prescribe such regulations 
as necessary to carry out the provisions of this section.''.
    (b) Conforming Amendments.--
            (1) Section 1016(a) of the Internal Revenue Code of 1986 is 
        amended by striking ``and'' at the end of paragraph (36), by 
        striking the period at the end of paragraph (37) and inserting 
        ``, and'', and by adding at the end the following new 
        paragraph:
            ``(38) to the extent provided in section 30F(g).''.
            (2) Section 6501(m) of such Code is amended by inserting 
        ``30F(k),'' after ``30C(e)(5),''.
            (3) The table of sections for subpart B of part IV of 
        subchapter A of chapter 1 of such Code is amended by inserting 
        after the item relating to section 30E the following new item:

``Sec. 30F. Advanced technology motor vehicles manufacturing credit.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to amounts incurred in taxable years beginning after December 31, 
2006.

SEC. 303. PRODUCTION TAX CREDIT FOR ANY COMMERCIAL VEHICLE THAT ATTAINS 
              AN EPA FUEL ECONOMY STANDARD OF 100 MPG.

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

``SEC. 45Q. VEHICLES ATTAINING EPA FUEL ECONOMY STANDARD OF 100 MPG.

    ``(a) Allowance of Credit.--There shall be allowed as a credit 
against the tax imposed by this chapter for the taxable year an amount 
equal to 50 percent of the cost of manufacturing any motor vehicle 
placed in service by the taxpayer during the taxable year that achieves 
a fuel economy standard of 100 miles per gallon, as determined by the 
Administrator of the Environmental Protection Agency.
    ``(b) Limitation.--No credit shall be allowed under subsection (a) 
to the taxpayer after the 5th taxable year beginning after the taxable 
year in which the taxpayer manufacturers the first motor vehicle 
described in subsection (a).
    ``(c) Definitions and Special Rules.--
            ``(1) In general.--For purposes of this section, rules 
        similar to the rules of section 30B(h) shall apply.
            ``(2) Controlled groups.--
                    ``(A) In general.--For purposes of this section, 
                all persons treated as a single employer under 
                subsection (a) or (b) of section 52 or subsection (m) 
                or (o) of section 414 shall be treated as a single 
                manufacturer.
                    ``(B) Inclusion of foreign corporations.--For 
                purposes of subparagraph (A), in applying subsections 
                (a) and (b) of section 52 to this section, section 1563 
                shall be applied without regard to subsection (b)(2)(C) 
                thereof.
            ``(3) Motor vehicle.--For purposes of this section, the 
        term `motor vehicle' means any vehicle which is manufactured 
        primarily for use on public streets, roads, and highways (not 
        including a vehicle operated exclusively on a rail or rails) 
        and which has at least 4 wheels.
            ``(4) Denial of double benefit.--The amount of any 
        deduction or other credit allowable under this chapter for any 
        cost taken into account in determining the amount of the credit 
        under subsection (a) shall be reduced by the amount of such 
        credit attributable to such cost.''.
    (b) Credit Made Part of General Business Credit.--Section 38(b) is 
amended--
            (1) by striking the period at the end of paragraph (32) and 
        inserting ``, plus'', and
            (2) by adding at the end the following new paragraph:
            ``(33) the credit to which section 30G applies.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SEC. 304. CREDIT FOR PRODUCTION OF CELLULOSIC BIOFUEL.

    (a) In General.--Subsection (a) of section 40 is amended by 
striking ``plus'' at the end of paragraph (1), by striking ``plus'' at 
the end of paragraph (2), by striking the period at the end of 
paragraph (3) and inserting ``, plus'', and by adding at the end the 
following new paragraph:
            ``(4) the cellulosic biofuel producer credit.''.
    (b) Cellulosic Biofuel Producer Credit.--
            (1) In general.--Subsection (b) of section 40 is amended by 
        adding at the end the following new paragraph:
            ``(6) Cellulosic biofuel producer credit.--
                    ``(A) In general.--The cellulosic biofuel producer 
                credit of any taxpayer is an amount equal to the 
                applicable amount for each gallon of qualified 
                cellulosic biofuel production.
                    ``(B) Applicable amount.--For purposes of 
                subparagraph (A), the applicable amount means $1.01, 
                except that such amount shall, in the case of 
                cellulosic biofuel which is alcohol, be reduced by the 
                sum of--
                            ``(i) the amount of the credit in effect 
                        for such alcohol under subsection (b)(1) 
                        (without regard to subsection (b)(3)) at the 
                        time of the qualified cellulosic biofuel 
                        production, plus
                            ``(ii) in the case of ethanol, the amount 
                        of the credit in effect under subsection (b)(4) 
                        at the time of such production.
                    ``(C) Qualified cellulosic biofuel production.--For 
                purposes of this section, the term `qualified 
                cellulosic biofuel production' means any cellulosic 
                biofuel which is produced by the taxpayer, and which 
                during the taxable year--
                            ``(i) is sold by the taxpayer to another 
                        person--
                                    ``(I) for use by such other person 
                                in the production of a qualified 
                                cellulosic biofuel mixture in such 
                                other person's trade or business (other 
                                than casual off-farm production),
                                    ``(II) for use by such other person 
                                as a fuel in a trade or business, or
                                    ``(III) who sells such cellulosic 
                                biofuel at retail to another person and 
                                places such cellulosic biofuel in the 
                                fuel tank of such other person, or
                            ``(ii) is used or sold by the taxpayer for 
                        any purpose described in clause (i).
                The qualified cellulosic biofuel production of any 
                taxpayer for any taxable year shall not include any 
                alcohol which is purchased by the taxpayer and with 
                respect to which such producer increases the proof of 
                the alcohol by additional distillation.
                    ``(D) Qualified cellulosic biofuel mixture.--For 
                purposes of this paragraph, the term `qualified 
                cellulosic biofuel mixture' means a mixture of 
                cellulosic biofuel and gasoline or of cellulosic 
                biofuel and a special fuel which--
                            ``(i) is sold by the person producing such 
                        mixture to any person for use as a fuel, or
                            ``(ii) is used as a fuel by the person 
                        producing such mixture.
                    ``(E) Cellulosic biofuel.--For purposes of this 
                paragraph--
                            ``(i) In general.--The term `cellulosic 
                        biofuel' means any liquid fuel which--
                                    ``(I) is produced from any 
                                lignocellulosic or hemicellulosic 
                                matter that is available on a renewable 
                                or recurring basis, and
                                    ``(II) meets the registration 
                                requirements for fuels and fuel 
                                additives established by the 
                                Environmental Protection Agency under 
                                section 211 of the Clean Air Act (42 
                                U.S.C. 7545).
                            ``(ii) Exclusion of low-proof alcohol.--
                        Such term shall not include any alcohol with a 
                        proof of less than 150. The determination of 
                        the proof of any alcohol shall be made without 
                        regard to any added denaturants.
                    ``(F) Allocation of cellulosic biofuel producer 
                credit to patrons of cooperative.--Rules similar to the 
                rules under subsection (g)(6) shall apply for purposes 
                of this paragraph.
                    ``(G) Registration requirement.--No credit shall be 
                determined under this paragraph with respect to any 
                taxpayer unless such taxpayer is registered with the 
                Secretary as a producer of cellulosic biofuel under 
                section 4101.
                    ``(H) Application of paragraph.--This paragraph 
                shall apply with respect to qualified cellulosic 
                biofuel production after December 31, 2008.''.
            (2) Termination date not to apply.--Subsection (e) of 
        section 40 is amended--
                    (A) by inserting ``or subsection (b)(6)(H)'' after 
                ``by reason of paragraph (1)'' in paragraph (2), and
                    (B) by adding at the end the following new 
                paragraph:
            ``(3) Exception for cellulosic biofuel producer credit.--
        Paragraph (1) shall not apply to the portion of the credit 
        allowed under this section by reason of subsection (a)(4).''.
            (3) Conforming amendments.--
                    (A) Paragraph (1) of section 4101(a) is amended--
                            (i) by striking ``and every person'' and 
                        inserting ``, every person'', and
                            (ii) by inserting ``, and every person 
                        producing cellulosic biofuel (as defined in 
                        section 40(b)(6)(E))'' after ``section 
                        6426(b)(4)(A))''.
                    (B) The heading of section 40, and the item 
                relating to such section in the table of sections for 
                subpart D of part IV of subchapter A of chapter 1, are 
                each amended by inserting ``, etc.,'' after 
                ``Alcohol''.
    (c) Biofuel Not Used as a Fuel, etc.--
            (1) In general.--Paragraph (3) of section 40(d) is amended 
        by redesignating subparagraph (D) as subparagraph (E) and by 
        inserting after subparagraph (C) the following new 
        subparagraph:
                    ``(D) Cellulosic biofuel producer credit.--If--
                            ``(i) any credit is allowed under 
                        subsection (a)(4), and
                            ``(ii) any person does not use such fuel 
                        for a purpose described in subsection 
                        (b)(6)(C),
                then there is hereby imposed on such person a tax equal 
                to the applicable amount (as defined in subsection 
                (b)(6)(B)) for each gallon of such cellulosic 
                biofuel.''.
            (2) Conforming amendments.--
                    (A) Subparagraph (C) of section 40(d)(3) is amended 
                by striking ``Producer'' in the heading and inserting 
                ``Small ethanol producer''.
                    (B) Subparagraph (E) of section 40(d)(3), as 
                redesignated by paragraph (1), is amended by striking 
                ``or (C)'' and inserting ``(C), or (D)''.
    (d) Biofuel Produced in the United States.--Section 40(d) is 
amended by adding at the end the following new paragraph:
            ``(6) Special rule for cellulosic biofuel producer 
        credit.--No cellulosic biofuel producer credit shall be 
        determined under subsection (a) with respect to any cellulosic 
        biofuel unless such cellulosic biofuel is produced in the 
        United States and used as a fuel in the United States. For 
        purposes of this subsection, the term `United States' includes 
        any possession of the United States.''.
    (e) Waiver of Credit Limit for Cellulosic Biofuel Production by 
Small Ethanol Producers.--Section 40(b)(4)(C) is amended by inserting 
``(determined without regard to any qualified cellulosic biofuel 
production)'' after ``15,000,000 gallons''.
    (f) Denial of Double Benefit.--
            (1) Biodiesel.--Paragraph (1) of section 40A(d) is amended 
        by adding at the end the following new flush sentence:
        ``Such term shall not include any liquid with respect to which 
        a credit may be determined under section 40.''.
            (2) Renewable diesel.--Paragraph (3) of section 40A(f) is 
        amended by adding at the end the following new flush sentence:
        ``Such term shall not include any liquid with respect to which 
        a credit may be determined under section 40.''.
    (g) Effective Date.--The amendments made by this section shall 
apply to fuel produced after December 31, 2008.

SEC. 305. ESTABLISH A PERMANENT PRODUCTION TAX CREDIT FOR HYDROGEN 
              FUELS.

    (a) Hydrogen Infrastructure and Fuel Costs.--
            (1) In general.--Subpart B of part IV of subchapter A of 
        chapter 1 of the Internal Revenue Code of 1986 (relating to 
        foreign tax credit, etc.) is amended by adding at the end the 
        following new section:

``SEC. 30G. HYDROGEN INFRASTRUCTURE AND FUEL COSTS.

    ``(a) Allowance of Credit.--There shall be allowed as a credit 
against the tax imposed by this chapter for the taxable year an amount 
equal to the sum of--
            ``(1) the hydrogen infrastructure costs credit determined 
        under subsection (b), and
            ``(2) the hydrogen fuel costs credit determined under 
        subsection (c).
    ``(b) Hydrogen Infrastructure Costs Credit.--
            ``(1) In general.--For purposes of subsection (a), the 
        hydrogen infrastructure costs credit determined under this 
        subsection with respect to each eligible hydrogen production 
        and distribution facility of the taxpayer is an amount equal to 
        30 percent of so much of the infrastructure costs for the 
        taxable year as does not exceed $200,000 with respect to such 
        facility.
            ``(2) Eligible hydrogen production and distribution 
        facility.--For purposes of this subsection, the term `eligible 
        hydrogen production and distribution facility' means a hydrogen 
        production and distribution facility which is placed in service 
        after December 31, 2005.
    ``(c) Hydrogen Fuel Costs Credit.--
            ``(1) In general.--For purposes of subsection (a), the 
        hydrogen fuel costs credit determined under this subsection 
        with respect to each eligible hydrogen device of the taxpayer 
        is an amount equal to the qualified hydrogen expenditure 
        amounts with respect to such device.
            ``(2) Qualified hydrogen expenditure amount.--For purposes 
        of this subsection--
                    ``(A) In general.--The term `qualified hydrogen 
                expenditure amount' means, with respect to each 
                eligible hydrogen energy conversion device of the 
                taxpayer with a production capacity of not more than 25 
                kilowatts of electricity, the lesser of--
                            ``(i) 30 percent of the amount paid or 
                        incurred by the taxpayer during the taxable 
                        year for hydrogen which is consumed by such 
                        device, and
                            ``(ii) $2,000.
                In the case of any device which is not owned by the 
                taxpayer at all times during the taxable year, the 
                $2,000 amount in clause (ii) shall be reduced by an 
                amount which bears the same ratio to $2,000 as the 
                portion of the year which such device is not owned by 
                the taxpayer bears to the entire year.
                    ``(B) Higher limitation for devices with more 
                production capacity.--In the case of any eligible 
                hydrogen energy conversion device with a production 
                capacity of--
                            ``(i) more than 25 but less than 100 
                        kilowatts of electricity, subparagraph (A) 
                        shall be applied by substituting `$4,000' for 
                        `$2,000' each place it appears, and
                            ``(ii) not less than 100 kilowatts of 
                        electricity, subparagraph (A) shall be applied 
                        by substituting `$6,000' for `$2,000' each 
                        place it appears.
            ``(3) Eligible hydrogen energy conversion devices.--For 
        purposes of this subsection--
                    ``(A) In general.--The term `eligible hydrogen 
                energy conversion device' means, with respect to any 
                taxpayer, any hydrogen energy conversion device which--
                            ``(i) is placed in service after December 
                        31, 2004, and
                            ``(ii) is wholly owned by the taxpayer 
                        during the taxable year.
                If an owner of a device (determined without regard to 
                this subparagraph) provides to the primary user of such 
                device a written statement that such user shall be 
                treated as the owner of such device for purposes of 
                this section, then such user (and not such owner) shall 
                be so treated.
                    ``(B) Hydrogen energy conversion device.--The term 
                `hydrogen energy conversion device' means--
                            ``(i) any electrochemical device which 
                        converts hydrogen into electricity, and
                            ``(ii) any combustion engine which burns 
                        hydrogen as a fuel.
    ``(d) Reduction in Basis.--For purposes of this subtitle, if a 
credit is allowed under this section for any expenditure with respect 
to any property, the increase in the basis of such property which would 
(but for this paragraph) result from such expenditure shall be reduced 
by the amount of the credit so allowed.
    ``(e) Application With Other Credits.--
            ``(1) Business credit treated as part of general business 
        credit.--So much of the credit which would be allowed under 
        subsection (a) for any taxable year (determined without regard 
        to this subsection) that is attributable to amounts which (but 
        for subsection (g) would be allowed as a deduction under 
        section 162 shall be treated as a credit listed in section 
        38(b) for such taxable year (and not allowed under subsection 
        (a)).
            ``(2) Personal credit.--The credit allowed under subsection 
        (a) (after the application of paragraph (1)) for any taxable 
        year shall not exceed the excess (if any) of--
                    ``(A) the regular tax liability (as defined in 
                section 26(b)) reduced by the sum of the credits 
                allowable under subpart A and sections 27, 30, 30B, and 
                30C, over
                    ``(B) the tentative minimum tax for the taxable 
                year.
    ``(f) Denial of Double Benefit.--The amount of any deduction or 
other credit allowable under this chapter for any cost taken into 
account in determining the amount of the credit under subsection (a) 
shall be reduced by the amount of such credit attributable to such 
cost.
    ``(g) Recapture.--The Secretary shall, by regulations, provided for 
recapturing the benefit of any credit allowable under subsection (a) 
with respect to any property which ceases to be property eligible for 
such credit.
    ``(h) Election Not To Take Credit.--No credit shall be allowed 
under subsection (a) for any property if the taxpayer elects not to 
have this section apply to such property.
    ``(i) Regulations.--The Secretary shall prescribe such regulations 
as necessary to carry out the provisions of this section.''.
            (2) Conforming amendments.--
                    (A) Section 38(b) of the Internal Revenue Code of 
                1986 is amended by striking ``plus'' at the end of 
                paragraph (32), by striking the period at the end of 
                paragraph (33) and inserting ``plus'', and by adding at 
                the end the following new paragraph:
            ``(34) the portion of the hydrogen infrastructure and fuel 
        credit to which section 30D(e)(1) applies.''.
                    (B) Section 55(c)(3) of such Code is amended by 
                inserting ``30D(e)(2),'' after ``30C(d)(2),''.
                    (C) Section 1016(a) of such Code is amended by 
                striking ``and'' at the end of paragraph (37), by 
                striking the period at the end of paragraph (38) and 
                inserting ``, and'', and by adding at the end the 
                following new paragraph:
            ``(39) to the extent provided in section 30G(d).''.
                    (D) Section 6501(m) of such Code is amended by 
                inserting ``30D(h),'' after ``30C(e)(5),''.
                    (E) The table of sections for subpart B of part IV 
                of subchapter A of chapter 1 of such Code is amended by 
                inserting after the item relating to section 30C the 
                following new item:

``Sec. 30G. Hydrogen infrastructure and fuel costs.''.
            (3) Effective date.--The amendments made by this section 
        shall apply to amounts paid or incurred after December 31, 
        2007, in taxable years ending after such date.

SEC. 306. RATE OF CREDIT FOR ALTERNATIVE FUEL VEHICLE REFUELING 
              PROPERTY INCREASED FROM 30 TO 60 PERCENT.

    (a) In General.--Subsection (a) of section 30C of such Code is 
amended by striking ``30 percent'' and inserting ``60 percent''.
    (b) Repeal of Termination.--Section 30C of such Code is amended by 
striking subsection (q).
    (c) Effective Date.--The amendments made by this section shall 
apply to property placed in service after the date of the enactment of 
this Act.

SEC. 307. USE OF CAFE PENALTIES TO SUPPORT THE CLEAN CITIES INITIATIVE.

    Section 32912 of title 49, United States Code, is amended by adding 
at the end the following:
    ``(e) Petroleum Reduction Trust Fund.--(1) There is established in 
the Treasury of the United States a trust fund, to be known as the 
Petroleum Reduction Trust Fund, consisting of such amounts as are 
deposited into the Trust Fund under paragraph (2) and any interest 
earned on investment of amounts in the Trust Fund.
    ``(2) The Secretary of Transportation shall remit 90 percent of the 
amount collected in civil penalties under this section to the Trust 
Fund.
    ``(3) The Secretary of Energy may obligate such sums as are 
available in the Trust Fund for the Clean Cities grant program to 
increase the number of locations at which consumers may purchase fuel 
containing ethanol, biodiesel, and other alternative fuels.''.

SEC. 308. EXCLUSION FROM HEAVY TRUCK TAX FOR IDLING REDUCTION UNITS AND 
              ADVANCED INSULATION.

    (a) In General.--Section 4053 is amended by adding at the end the 
following new paragraphs:
            ``(9) Idling reduction device.--Any device or system of 
        devices which
                    ``(A) is designed to provide to a vehicle those 
                services (such as heat, air conditioning, or 
                electricity) that would otherwise require the operation 
                of the main drive engine while the vehicle is 
                temporarily parked or remains stationary using one or 
                more devices affixed to a tractor, and
                    ``(B) is certified by the Secretary of Energy, in 
                consultation with the Administrator of the 
                Environmental Protection Agency and the Secretary of 
                Transportation, to reduce idling of such vehicle at a 
                motor vehicle rest stop or other location where such 
                vehicles are temporarily parked or remain stationary.
            ``(10) Advanced insulation.--Any insulation that has an R 
        value of not less than R35 per inch.''.
    (b) Maintenance of Trust Funds Deposits; Amounts Appropriated to 
Trust Fund Treated as Taxes.--
            (1) In general.--There is hereby appropriated (out of any 
        money in the Treasury not otherwise appropriated) to the 
        Highway Trust Fund which would (but for this subsection) 
        receive reduced revenues as a result of the amendment made by 
        subsection (a) an amount equal to such reduction in revenues. 
        Amounts appropriated by the preceding sentence to any trust 
        fund--
                    (A) shall be transferred from the general fund at 
                such times and in such manner as to replicate to the 
                extent possible the transfers which would have occurred 
                had subsection (a) not been enacted, and
                    (B) shall be treated for all purposes of Federal 
                law as taxes received under section 4051 of the 
                Internal Revenue Code of 1986.
    (c) Effective Date.--The amendment made by this section shall apply 
to sales or installations after the date of the enactment of this Act.

SEC. 309. ADVANCED HYDROGEN STORAGE TECHNOLOGIES.

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

SEC. 310. PLUG-IN ELECTRIC DRIVE VEHICLE TECHNOLOGY PROGRAM.

    (a) Battery.--In this section, the term ``battery'' means a device 
or system for the electrochemical storage of energy.
    (b) Program.--The Secretary of Energy shall conduct a program of 
research, development, demonstration, and commercial application on 
technologies needed for the development of plug-in electric drive 
vehicles including--
            (1) high capacity, high efficiency batteries, to--
                    (A) improve battery life, energy storage capacity, 
                and power delivery capacity, and lower cost; and
                    (B) minimize waste and hazardous material 
                production in the entire value chain, including after 
                the end of the useful life of the batteries;
            (2) high efficiency onboard and offboard charging 
        components;
            (3) high power drive train systems for passenger and 
        commercial vehicles and for supporting equipment;
            (4) onboard energy management systems, power trains, and 
        systems integration for plug-in electric drive vehicles, 
        flexible fuel vehicles, and hybrid and lean burn vehicles, 
        including efficient cooling systems and systems that minimize 
        the emissions profile of such vehicles; and
            (5) lightweight materials, including research, development, 
        demonstration, and commercial application to reduce the cost of 
        materials such as steel alloys and carbon fibers.
    (c) Plug-In Electric Drive Vehicle Demonstration Program.--
            (1) Establishment.--The Secretary shall establish a 
        competitive grant pilot demonstration program to provide not 
        more than 25 grants annually to State governments, local 
        governments and public entities, metropolitan transportation 
        authorities, or combinations thereof to carry out a project or 
        projects for demonstration of plug-in electric drive vehicles.
            (2) Applications.--
                    (A) Requirements.--The Secretary shall issue 
                requirements for applying for grants under the 
                demonstration pilot program. The Secretary shall 
                require that applications, at a minimum, include a 
                description of how data will be--
                            (i) collected on the--
                                    (I) performance of the vehicle or 
                                vehicles and the components, including 
                                the battery, energy management, and 
                                charging systems, under various driving 
                                speeds, trip ranges, traffic, and other 
                                driving conditions;
                                    (II) costs of the vehicle or 
                                vehicles, including acquisition, 
                                operating, and maintenance costs, and 
                                how the project or projects will be 
                                self-sustaining after Federal 
                                assistance is completed; and
                                    (III) emissions of the vehicle or 
                                vehicles, including greenhouse gases, 
                                and the amount of petroleum displaced 
                                as a result of the project or projects; 
                                and
                            (ii) summarized for dissemination to the 
                        Department, other grantees, and the public.
                    (B) Partners.--An applicant under subparagraph (A) 
                may carry out a project or projects under the pilot 
                program in partnership with one or more private or 
                nonprofit entities, which may include institutions of 
                higher education, including Historically Black Colleges 
                and Universities, Hispanic Serving Institutions, and 
                other minority-serving institutions.
            (3) Selection criteria.--
                    (A) Preference.--When making awards under this 
                subsection, the Secretary shall consider each 
                applicant's previous experience involving plug-in 
                electric drive vehicles and shall give preference to 
                proposals that--
                            (i) provide the greatest demonstration per 
                        award dollar, with preference increasing as the 
                        number of miles that a plug-in hybrid electric 
                        vehicle can be propelled solely on electric 
                        power under city driving conditions increases; 
                        and
                            (ii) maximize the non-Federal share of 
                        project funding and demonstrate the greatest 
                        likelihood that each project proposed in the 
                        application will be maintained or expanded 
                        after Federal assistance under this subsection 
                        is completed.
                    (B) Breadth of demonstrations.--In awarding grants 
                under this subsection, the Secretary shall ensure the 
                program will demonstrate plug-in electric drive 
                vehicles under various circumstances, including--
                            (i) driving speeds;
                            (ii) trip ranges;
                            (iii) driving conditions;
                            (iv) climate conditions; and
                            (v) topography,
                to optimize understanding and function of plug-in 
                hybrid electric vehicles.
            (4) Pilot project requirements.--
                    (A) Subsequent funding.--An applicant that has 
                received a grant in one year may apply for additional 
                funds in subsequent years, but the Secretary shall not 
                provide more than $10,000,000 in Federal assistance 
                under the pilot program to any applicant for the period 
                encompassing fiscal years 2007 through fiscal year 
                2011.
                    (B) Information.--The Secretary shall establish 
                mechanisms to ensure that the information and knowledge 
                gained by participants in the pilot program are shared 
                among the pilot program participants and are available 
                to other interested parties, including other 
                applicants.
            (5) Award amounts.--The Secretary shall determine grant 
        amounts, but the maximum size of grants shall decline as the 
        cost of producing plug-in electric drive vehicles declines or 
        the cost of converting a hybrid electric vehicle to a plug-in 
        electric drive vehicle declines.
    (d) Cost Sharing.--The Secretary shall carry out the program under 
this section in compliance with section 988(a) through (d) and section 
989 of the Energy Policy Act of 2005 (42 U.S.C. 16352(a) through (d) 
and 16353).
    (e) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary--
            (1) for carrying out subsection (c), $100,000,000 for 
        fiscal year 2008 and such sums as may be necessary for each of 
        the fiscal years 2009 through 2011; and
            (2) for carrying out subsection (d), $50,000,000 for fiscal 
        year 2008 and such sums as may be necessary for each of the 
        fiscal years 2009 through 2011.

         TITLE IV--REDUCING CONSUMER ENERGY AND GASOLINE COSTS

SEC. 401. REFUNDABLE EMPLOYER CREDIT FOR PROVIDING TAX-FREE TRANSIT 
              PASSES TO EMPLOYEES.

    (a) In General.--Subpart C of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to refundable credits) 
is amended by inserting after section 35 the following new section:

``SEC. 35A. EMPLOYERS PROVIDING TAX-FREE TRANSIT PASSES TO EMPLOYEES.

    ``(a) In General.--In the case of an employer, there shall be 
allowed as a credit against the tax imposed by this subtitle for the 
taxable year an amount equal to 50 percent of the amount paid or 
incurred by the taxpayer during the taxable year--
            ``(1) for transit passes provided to employees of such 
        employer, and
            ``(2) as cash reimbursements made to such employees for 
        transit passes purchased by such employees.
    ``(b) Limitation to Tax-Free Transit Passes.--Subsection (a) shall 
apply to a transit pass (or reimbursement) provided to an employee only 
to the extent that the employer reasonably expects that the value of 
such pass (or the amount of such reimbursement) is excludable from such 
employee's income under section 132.
    ``(c) Exclusion of Nontaxpayers.--Subsection (a) shall not apply to 
any employer which is exempt from the tax imposed by this chapter with 
respect to the activity in which the employee is performing services 
for the employer.
    ``(d) Definitions.--Terms used in this section shall have the 
respective meanings given such terms by section 132.''.
    (b) Denial of Double Benefit.--Section 280C of such Code is amended 
by adding at the end the following new subsection:
    ``(g) Employer Credit for Providing Tax-Free Transit Passes to 
Employees.--No deduction shall be allowed for that portion of the 
expenses (otherwise allowable as a deduction) taken into account in 
determining the credit under section 35A for the taxable year which is 
equal to the amount of the credit allowable for such taxable year under 
section 35A(a).''.
    (c) Clerical Amendment.--The table of sections for such subpart C 
is amended by inserting after the item relating to section 35 the 
following new item:

``Sec. 35A. Employers providing tax-free transit passes to 
                            employees.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to transit passes provided after the date of the enactment of 
this Act in taxable years ending after such date.

SEC. 402. REDUCTION IN NUMBER OF BOUTIQUE FUELS.

    Section 211(c)(4)(C) of the Clean Air Act (42 U.S.C. 7545(c)(4)(C)) 
is amended as follows:
            (1) By redesignating the clause (v) added by section 
        1541(b) of the Energy Policy Act of 2005 (Public Law 109-58; 
        119 Stat. 1106) as clause (vi).
            (2) In clause (vi) (as so redesignated)--
                    (A) in subclause (I) by striking ``approved under 
                this paragraph as of September 1, 2004, in all State 
                implementation plans'' and by inserting in lieu there 
                of ``set forth on the list published under subclause 
                (II) (or on the revised list referred to in subclause 
                (III) if the list has been revised)'';
                    (B) by amending subclause (III) to read as follows:
                    ``(III) The Administrator shall, after notice and 
                opportunity for comment, remove a fuel from the list 
                published under subclause (II) if the Administrator 
                determines that such fuel has ceased to be included in 
                any State implementation plan or is identical to a 
                Federal fuel control or prohibition promulgated and 
                implemented by the Administrator. The Administrator 
                shall publish a revised list reflecting the reduction 
                in the number of fuels.''; and
                    (C) by amending subclause (IV) to read as follows:
                                            ``(IV) Subclause (I) shall 
                                        not limit the Administrator's 
                                        authority to approve a control 
                                        or prohibition respecting any 
                                        new fuel under this paragraph 
                                        in a State implementation plan 
                                        or revision to a State 
                                        implementation plan if such new 
                                        fuel completely replaces a fuel 
                                        on the list published under 
                                        subclause (II) (or the revised 
                                        list referred to in subclause 
                                        (III) if the list has been 
                                        revised) and if the 
                                        Administrator, after 
                                        consultation with the Secretary 
                                        of Energy, publishes in the 
                                        Federal Register after notice 
                                        and comment a finding that, in 
                                        the Administrator's judgment, 
                                        such control or prohibition 
                                        respecting such new fuel will 
                                        not cause fuel supply or 
                                        distribution interruptions or 
                                        have a significant adverse 
                                        impact on fuel producibility in 
                                        the affected area or contiguous 
                                        areas.''.

SEC. 403. GREEN SCHOOLS GRANT PROGRAM.

    (a) Establishment.--From the amounts appropriated under subsection 
(c), the Administrator of the Environmental Protection Agency shall 
establish a program to make grants of not more than $10,000 to local 
educational agencies that meet the matching-funds requirement in 
subsection (b) for each green school construction and improvement 
project.
    (b) Matching Funds.--To be eligible to receive a grant under 
subsection (a), a local educational agency shall fund at least 50 
percent of the costs of the project described in subsection (a) with 
non-Federal sources.
    (c) Authorization of Appropriations.--There are authorized to be 
appropriated to the Administrator of the Environmental Protection 
Agency for carrying out this section, $5,000,000 for each of the fiscal 
years 2009 through 2013.
    (d) Definitions.--For purposes of this section--
            (1) the term ``green school construction and improvements'' 
        means construction methods, systems, technologies, or facility 
        improvements that create a healthy learning environment while 
        saving natural resources and money, including--
                    (A) sustainable site improvements;
                    (B) water conservation strategies or systems;
                    (C) energy conservation strategies or systems;
                    (D) sustainable materials, including low-emitting, 
                reused, recycled, regionally harvested, and rapidly 
                renewable materials; and
                    (E) strategies or systems that improve indoor 
                environmental quality, including improvements to 
                acoustics, ventilation, thermal comfort, daylighting, 
                and mold prevention; and
            (2) the term ``local educational agency'' has the meaning 
        given that term in section 9101 of the Elementary and Secondary 
        Education Act of 1965 (20 U.S.C. 7801).

SEC. 404. EXTENSION AND GREENING OF QUALIFIED ZONE ACADEMY BONDS.

    (a) Extension.--Paragraph (1) of 1397E(e) of the Internal Revenue 
Code of 1986 (relating to limitation on amount of bonds designated) is 
amended by striking ``1998, 1999, 2000, 2001, 2002, 2003, 2004, 2005, 
2006, and 2007'' and inserting ``each of calendar years 1998 through 
2012''.
    (b) Greening.--Paragraph (5) of section 1397E(d) of such Code 
(defining qualified purpose) is amended by adding at the end the 
following new sentence:
        ``In the case of bonds issued after the date of the enactment 
        of this sentence, any rehabilitation, repair, or provision of 
        equipment shall be treated as a qualified purpose only if such 
        rehabilitation, repair, or provision, as the case may be, is 
        described in section 403(d) of the Apollo Energy Independence 
        Act of 2008, as in effect on such date.''.
    (c) Effective Date.--The amendment made by subsection (a) shall 
apply to obligations issued after December 31, 2007.

SEC. 405. STUDY ON THE REDUCTION OF ENERGY COSTS IN PUBLIC SCHOOLS.

    (a) Study.--Not later than 3 months after the date of enactment of 
this Act, the Secretary of Energy, in consultation with the Secretary 
of Education, shall conduct a study to evaluate the daily and seasonal 
energy costs in public schools and how such schools can best utilize 
the public school calendar to reduce such energy costs.
    (b) Report.--Not later than 2 years after the commencement of the 
study required by subsection (a), the Secretary of Energy, in 
consultation with the Secretary of Education, shall submit a report to 
each House of Congress containing the results of such study and 
recommendations regarding--
            (1) the optimal time public schools in each State should 
        start and end the school day based on the geographic locations 
        of, and average monthly temperatures and other climate factors 
        in the areas surrounding, such schools; and
            (2) the optimal school calendar for public schools in each 
        State to reduce the energy costs of such schools by at least 5 
        percent each calendar year.
    (c) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary of Energy for carrying out this section, 
$500,000 for fiscal year 2009, and such sums as are necessary for each 
fiscal year thereafter.
    (d) Definition.--For purposes of this section, the term ``public 
school'' has the meaning given such term in section 5145 of the 
Elementary and Secondary Education Act of 1965 (20 U.S.C. 7217d).

SEC. 406. ETHANOL.

    (a) In General.--Subchapter II of chapter 99 of the Harmonized 
Tariff Schedule of the United States is amended by inserting in 
numerical sequence the following new heading:


``     9902.05.40      Ethyl alcohol       Free         Free             Free             On or before 12/  ''.
                        (provided for in                                                   31/2010.......
                        subheadings
                        2207.10.60 and
                        2207.20) or any
                        mixture
                        containing such
                        ethyl alcohol
                        (provided for in
                        heading 2710 or
                        3824) if such
                        ethyl alcohol or
                        mixture is to be
                        used as a fuel or
                        in producing a
                        mixture of
                        gasoline and
                        alcohol, a
                        mixture of a
                        special fuel and
                        alcohol, or any
                        other mixture to
                        be used as fuel
                        (including motor
                        fuel provided for
                        in subheading
                        2710.11.15,
                        2710.19.15 or
                        2710.19.21), or
                        is suitable for
                        any such uses....

    (b) Effective Date.--The amendment made by subsection (a) applies 
with respect to goods entered, or withdrawn from warehouse for 
consumption, on or after the 15th day after the date of the enactment 
of this Act.
    (c) Effect on Heading 9901.00.50.--During the period beginning on 
the effective date under subsection (b) and ending on December 31, 
2010, heading 9901.00.50 of the Harmonized Tariff Schedule of the 
United States is not effective.

                            TITLE V--OFFSETS

SEC. 501. FY09 COST.

    (a) Moratorium on Consideration of Earmarks.--
            (1) In the house.--In the 110th Congress, it shall not be 
        in order to consider a bill, joint resolution, amendment, or 
        conference report containing a congressional earmark, limited 
        tax benefit, or limited tariff benefit (as such terms are 
        defined by clause 9 of rule XXI of the Rules of the House of 
        Representatives).
            (2) Definition.--For purposes of this subsection, the term 
        ``earmark'' shall include congressional earmarks, 
        congressionally directed spending items, limited tax benefits, 
        or limited tariff benefits as those terms are defined by clause 
        9 of rule XXI of the Rules of the House of Representatives and 
        rule XLIV of the Standing Rules of the Senate. Nothing in this 
        subsection shall confine the study of the joint select 
        committee or otherwise limit its recommendations.
    (b) Revision of Concurrent Resolution on the Budget.--
            (1) Upon the enactment of this Act, the chairmen of the 
        Committees on the Budget of the House and the Senate shall 
        reduce the allocation of new budget authority and the outlays 
        flowing therefrom to the Committees on Appropriations of the 
        House and the Senate set forth pursuant to section 302(a) of 
        the Congressional Budget Act of 1974 for fiscal year 2009 by 
        $14.8 billion.
            (2) The chairmen of the Committees on the Budget of the 
        House and the Senate shall make any other necessary and 
        conforming adjustments in the concurrent resolution on the 
        budget for fiscal year 2009.

SEC. 502. CONSERVATION OF RESOURCES FEES.

    (a) Establishment of 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.
    (b) Covered Lease Defined.--In this section the term ``covered 
lease'' means a lease for oil or gas production in the Gulf of Mexico 
that is--
            (1) in existence on the date of enactment of this Act;
            (2) 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
            (3) 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)).
    (c) Royalty Suspension Provisions.--The Secretary of the Interior 
shall agree to a request by any lessee to amend any lease issued for 
Central and Western Gulf of Mexico tracts during the period of January 
1, 1998, through December 31, 1999, to incorporate price thresholds 
applicable to royalty suspension provisions, or amend existing price 
thresholds, in the amount of $34.73 per barrel (2005 dollars) for oil 
and for natural gas of $4.34 per million Btu (2005 dollars).

SEC. 503. REDUCTION IN PAYMENT ACRES FOR DIRECT AND COUNTER-CYCLICAL 
              PAYMENTS UNDER DEPARTMENT OF AGRICULTURE COMMODITY 
              PROGRAMS.

    (a) Program Crops.--Section 1001(11) of the Food, Conservation, and 
Energy Act of 2008 (7 U.S.C. 8702(11)) is amended--
            (1) in subparagraph (A), by striking ``85 percent'' and 
        inserting ``84 percent''; and
            (2) in subparagraph (B), by striking ``83.3 percent'' and 
        inserting ``82.3 percent''.
    (b) Peanuts.--Section 1301(5) of the Food, Conservation, and Energy 
Act of 2008 (7 U.S.C. 8751(5)) is amended--
            (1) in subparagraph (A), by striking ``85 percent'' and 
        inserting ``84 percent''; and
            (2) in subparagraph (B), by striking ``83.3 percent'' and 
        inserting ``82.3 percent''.

SEC. 504. REDUCTION IN MAXIMUM AMOUNT OF DIRECT, COUNTER-CYCLICAL, AND 
              ACRE PAYMENTS PAID TO PRODUCERS UNDER DEPARTMENT OF 
              AGRICULTURE COMMODITY PROGRAMS.

    (a) Program Crops.--Section 1001(b) of the Food Security Act of 
1985 (7 U.S.C. 1308(b)) is amended--
            (1) in paragraph (1)(A), by striking ``$40,000'' and 
        inserting ``$20,000'';
            (2) in paragraph (2), by striking ``$65,000'' and inserting 
        ``$32,500''; and
            (3) in paragraph (3)(A), by striking ``$65,000'' and 
        inserting ``$32,500''.
    (b) Peanuts.--Section 1001(c) of the Food Security Act of 1985 (7 
U.S.C. 1308(b)) is amended--
            (1) in paragraph (1)(A), by striking ``$40,000'' and 
        inserting ``$20,000'';
            (2) in paragraph (2), by striking ``$65,000'' and inserting 
        ``$32,500''; and
            (3) in paragraph (3)(A), by striking ``$65,000'' and 
        inserting ``$32,500''.

SEC. 505. CONSOLIDATION OF MILITARY EXCHANGE STORES SYSTEM.

    (a) Consolidation.--Section 2487(b) of title 10, United States 
Code, is amended--
            (1) by redesignating paragraph (2) as paragraph (3); and
            (2) by inserting after paragraph (1) the following new 
        paragraph:
    ``(2) Not later than two years after the date of the enactment of 
the Apollo Energy Independence Act of 2008, the Secretary of Defense 
shall complete the consolidation of the exchange stores system, 
including the Army and Air Force Exchange Service, the Navy Exchange 
Service Command, and Marine Corps exchanges, into a single 
administrative entity to improve efficiencies and enhance customer 
service.''.
    (b) Operating Costs.--Section 2491(b) of title 10, United States 
Code, is amended by adding at the end the following new sentence: 
``Following consolidation of the exchange stores system, as required by 
section 2487(b) of this title, all operating costs of the exchange 
stores system shall be covered by sales revenues generated by the 
system or other nonappropriated fund instrumentalities of the 
Department of Defense.''.

SEC. 506. REVISED PRICING STRUCTURE FOR DEPOT-LEVEL ACTIVITIES OF THE 
              DEPARTMENT OF DEFENSE.

    (a) Pricing Policy.--Chapter 146 of title 10, United States Code, 
is amended by inserting after section 2470 the following new section:
``Sec. 2471. Depot-level activities of the Department of Defense: 
              pricing policy for services rendered
    ``A depot-level activity of the Department of Defense may charge 
only for the incremental cost of repairs provided by the depot-level 
activity instead of including charges for components (called depot-
level repairables) for labor, materials, and transportation and a share 
of the fixed costs of overhead. Fixed costs, including overhead, shall 
be covered by an annual flat fee to customers.''.
    (b) Clerical Amendment.--The table of sections at the beginning of 
such chapter is amended by inserting after the item relating to section 
2470 the following new item:

``2471. Depot-level activities of the Department of Defense: pricing 
                            policy for services rendered.''.

SEC. 507. RESTRICT UNIVERSAL SERVICE FUND SUPPORT TO 2 CONNECTIONS PER 
              HOUSEHOLD.

    (a) In General.--Section 254(c) of the Communications Act of 1934 
(47 U.S.C. 254(c)) is amended by adding at the end the following new 
paragraph:
            ``(4) Exception.--In carrying out paragraph (1), the 
        Commission shall promulgate regulations to specifically exclude 
        the receipt of universal service support by any eligible 
        telecommunications carrier where such support would provide for 
        more than 2 connections per household.''.
    (b) Disposition of Savings.--
            (1) Savings calculation.--The Commission shall direct the 
        Administrator to determine the amount of the net savings 
        resulting from the implementation of section 254(c)(4) of the 
        Communications Act of 1934 (as added by subsection (a)).
            (2) Remission to the treasury.--The Commission shall direct 
        the Administrator to remit to the Treasury of the United States 
        an amount equivalent to the amount determined under paragraph 
        (1).
            (3) No recalculation.--The Commission shall direct the 
        Administrator to not make any adjustment to the amount of 
        universal service support contributed by telecommunications 
        carriers under section 254(d) of the Communications Act of 1934 
        (47 U.S.C. 254(d)) to take into account the cost savings 
        resulting from section 254(c)(4) of such Act.
    (c) Definitions.--In this section:
            (1) Administrator.--The term ``Administrator'' means the 
        Administrator designated by the Commission to administer 
        Federal universal service support programs pursuant to section 
        254 of the Communications Act of 1934 (47 U.S.C. 254).
            (2) Commission.--The term ``Commission'' means the Federal 
        Communications Commission.

SEC. 508. IMPROVE TREASURY PAYMENT TRANSACTION INTEGRITY.

    Section 1113(k)(1) of the Right to Financial Privacy Act of 1978 
(12 U.S.C. 3413(k)(1)) is amended by inserting ``or for purposes of 
tracing or recovering improper payments and collections by the 
Secretary of the Treasury'' before the period at the end.

SEC. 509. MODERNIZE TREASURY CASH INVESTMENT PRACTICES.

    Section 323 of title 31, United States Code, is amended by adding 
at the end the following new subsection:
    ``(d) Repurchase Market Investments.--In addition to the 
investments authorized under subsection (a), the Secretary may invest 
any part of the operating cash of the Treasury in repurchase 
transactions with acceptable parties in the repurchase market.''.

SEC. 510. FOOD SAFETY AND INSPECTION SERVICE USER FEES.

    The Secretary of Agriculture shall establish and collect user fees 
for inspection services provided under the Federal Meat Inspection Act 
(21 U.S.C. 601 et seq.), the Poultry Products Inspection Act (21 U.S.C. 
451 et seq.), and the Egg Products Inspection Act (21 U.S.C. 1031 et 
seq.).
                                 <all>