[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 1554 Introduced in Senate (IS)]







110th CONGRESS
  1st Session
                                S. 1554

To comprehensively address challenges relating to energy independence, 
      air pollution, and climate change facing the United States.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              June 6, 2007

 Ms. Collins (for herself and Mr. Lieberman) introduced the following 
  bill; which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
To comprehensively address challenges relating to energy independence, 
      air pollution, and climate change facing the United States.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Energy 
Independence, Clean Air, and Climate Security Act of 2007''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
  TITLE I--ENERGY INDEPENDENCE THROUGH TRANSPORTATION FUEL EFFICIENCY

             Subtitle A--Automobile Fuel Economy Standards

Sec. 101. Short title.
Sec. 102. Average fuel economy standards for passenger automobiles and 
                            light trucks.
Sec. 103. Passenger car program reform.
Sec. 104. Work trucks.
Sec. 105. Light trucks.
Sec. 106. Ensuring safety of passenger automobiles and light trucks.
Sec. 107. Onboard fuel economy indicators and devices.
Sec. 108. Secretary of Transportation to certify benefits.
Sec. 109. Credit trading program.
Sec. 110. Report to Congress.
Sec. 111. Labels for fuel economy and greenhouse gas emissions.
                 Subtitle B--Improving Fuel Efficiency

Sec. 121. Helping consumers to purchase more fuel-efficient 
                            automobiles.
Sec. 122. Transit-oriented development corridors.
Sec. 123. Energy-efficient motor vehicle manufacturing credit.
Sec. 124. Fuel efficiency standards for replacement tires.
Sec. 125. Fuel economy for heavy duty trucks.
Sec. 126. Idling reduction tax credit.
Sec. 127. Repeal of preemption of State law relating to automobile fuel 
                            economy standards.
Sec. 128. Federal fleet requirements.
         TITLE II--ENERGY INDEPENDENCE THROUGH RENEWABLE FUELS

                    Subtitle A--Advanced Clean Fuels

Sec. 201. Definitions.
Sec. 202. Advanced clean fuel program.
Sec. 203. Voluntary renewable fuels labeling program.
Sec. 204. Water quality protection.
                  Subtitle B--Assistance and Research

Sec. 211. Small ethanol producer credit expansion for producers of 
                            sucrose and ethanol.
Sec. 212. Research and development in support of low-carbon fuels.
                       TITLE III--CLEAN POWER ACT

Sec. 301. Short title.
Sec. 302. Electric energy generation emission reductions.
Sec. 303. Savings clause.
Sec. 304. Acid precipitation research program.
Sec. 305. Authorization of appropriations for deposition monitoring.
Sec. 306. Technical amendments.
             TITLE IV--REDUCING HEATING AND ELECTRIC BILLS

Sec. 401. Weatherization assistance.
Sec. 402. Energy Star programs.
Sec. 403. Renewable electricity production credit.
Sec. 404. Efficiency resource standard.
Sec. 405. Federal renewable portfolio standard.
   TITLE V--SAVING TAXPAYERS MONEY THROUGH ELIMINATION OF TAX BREAKS

Sec. 501. Repeal of certain tax provisions for oil industry.
                   TITLE VI--CLIMATE CHANGE RESEARCH

Sec. 601. Short title.
Sec. 602. Abrupt climate change research program.
Sec. 603. Authorization of appropriations.

  TITLE I--ENERGY INDEPENDENCE THROUGH TRANSPORTATION FUEL EFFICIENCY

             Subtitle A--Automobile Fuel Economy Standards

SEC. 101. SHORT TITLE.

    This subtitle may be cited as the ``Fuel Economy Improvement Act''.

SEC. 102. AVERAGE FUEL ECONOMY STANDARDS FOR PASSENGER AUTOMOBILES AND 
              LIGHT TRUCKS.

    (a) Increased Standards.--Section 32902 of title 49, United States 
Code, is amended--
            (1) in subsection (a)--
                    (A) by striking ``Non-Passenger Automobiles.--'' 
                and inserting ``Prescription of Standards by 
                Regulation.--''; and
                    (B) by striking ``(except passenger automobiles)'' 
                and inserting ``(except passenger automobiles and light 
                trucks)''; and
            (2) by amending subsection (b) to read as follows:
    ``(b) Standards for Passenger Automobiles and Light Trucks.--
            ``(1) In general.--The Secretary of Transportation, in 
        consultation with the Administrator of the Environmental 
        Protection Agency, shall prescribe average fuel economy 
        standards for passenger automobiles and light trucks 
        manufactured by a manufacturer in each model year beginning 
        with model year 2010 in order to achieve a combined average 
        fuel economy standard for passenger automobiles and light 
        trucks--
                    ``(A) of at least 35 miles per gallon beginning in 
                model year 2019 (or such other number of miles per 
                gallon as the Secretary may prescribe under subsection 
                (c)); and
                    ``(B) of at least 45 miles per gallon beginning in 
                model year 2030 (or such other number of miles per 
                gallon as the Secretary may prescribe under subsection 
                (c)).
            ``(2) Elimination of suv loophole.--Beginning not later 
        than model year 2013, the regulations prescribed under this 
        section may not make any distinction between passenger 
        automobiles and light trucks.
            ``(3) Progress toward standard required.--In prescribing 
        average fuel economy standards under paragraph (1), the 
        Secretary shall prescribe appropriate annual fuel economy 
        standard increases for passenger automobiles and light trucks 
        that--
                    ``(A) increase the applicable average fuel economy 
                standard ratably beginning with model year 2010 and 
                ending with model year 2019;
                    ``(B) require that each manufacturer achieve--
                            ``(i) a fuel economy standard for passenger 
                        automobiles manufactured by that manufacturer 
                        of at least 29.5 miles per gallon not later 
                        than model year 2010; and
                            ``(ii) a fuel economy standard for light 
                        trucks manufactured by that manufacturer of at 
                        least 23.5 miles per gallon not later than 
                        model year 2010.
            ``(4) Fuel economy baseline for passenger automobiles.--
        Notwithstanding the maximum feasible average fuel economy level 
        established by regulations prescribed under subsection (c), the 
        minimum fleet wide average fuel economy standard for passenger 
        automobiles manufactured by a manufacturer in a model year for 
        that manufacturer's domestic fleet and foreign fleet, as 
        calculated under section 32904 as in effect before the date of 
        the enactment of the Fuel Economy Improvement Act, shall be the 
        greater of--
                    ``(A) 27.5 miles per gallon; or
                    ``(B) 92 percent of the average fuel economy 
                projected by the Secretary for the combined domestic 
                and foreign fleets manufactured by all manufacturers in 
                that model year.
            ``(5) Deadline for regulations.--The Secretary shall 
        promulgate the regulations required by paragraphs (1) and (2) 
        in final form not later than 18 months after the date of the 
        enactment of the Fuel Economy Improvement Act.''.

SEC. 103. PASSENGER CAR PROGRAM REFORM.

    Section 32902(c) of title 49, United States Code, is amended to 
read as follows:
    ``(c) Amending Passenger Automobile Standards.--Not later than 18 
months before the beginning of each model year, the Secretary of 
Transportation may prescribe regulations amending a standard prescribed 
under subsection (b) for a model year to a level that the Secretary 
determines to be the maximum feasible average fuel economy level for 
that model year. Section 553 of title 5 shall apply to a proceeding to 
amend any standard prescribed under subsection (b). Any interested 
person may make an oral presentation and a transcript shall be taken of 
that presentation. The Secretary may prescribe separate standards for 
different classes of passenger automobiles.''.

SEC. 104. WORK TRUCKS.

    (a) Definition of Work Truck.--Section 32901(a) of title 49, United 
States Code, is amended by adding at the end the following:
            ``(18) `work truck' means an automobile that the Secretary 
        determines by regulation--
                    ``(A) is rated at between 8,500 and 10,000 pounds 
                gross vehicle weight; and
                    ``(B) is not a medium-duty passenger vehicle (as 
                defined in section 86.1803-01 of title 40, Code of 
                Federal Regulations).''.
    (b) Rulemaking.--The Secretary of Transportation--
            (1) shall issue proposed regulations implementing the 
        amendment made by subsection (a) not later than 1 year after 
        the date of the enactment of this Act; and
            (2) shall issue final regulations implementing the 
        amendment made by subsection (a) not later than 18 months after 
        the date of the enactment of this Act.
    (c) Fuel Economy Standards for Work Trucks.--Section 32902 of title 
49, United States Code, is amended--
            (1) by redesignating subsections (f), (g), (h), (i), and 
        (j) as subsections (g), (h), (i), (j), and (k), respectively;
            (2) by inserting after subsection (e) the following:
    ``(f) Work Trucks.--The Secretary of Transportation, in 
consultation with the Administrator of the Environmental Protection 
Agency, shall prescribe standards to achieve the maximum feasible fuel 
economy for work trucks manufactured by a manufacturer in each model 
year beginning with model year 2013.'';
            (3) in subsection (i), as redesignated, by striking ``and 
        (g) of this section'' and inserting ``(f), and (h)''; and
            (4) in subsection (k), as redesignated, by striking ``or 
        (g) of this section'' and inserting ``(f), or (h)''.

SEC. 105. LIGHT TRUCKS.

    (a) Definition.--
            (1) In general.--Section 32901(a) of title 49, United 
        States Code, is amended--
                    (A) by redesignating paragraphs (12), (13), (14), 
                (15), and (16) as paragraphs (13) (14), (15), (16), and 
                (17), respectively; and
                    (B) by inserting after paragraph (11) the 
                following:
            ``(12) `light truck' means an automobile that the Secretary 
        determines by regulation--
                    ``(A) is manufactured primarily for transporting 
                not more than 10 individuals;
                    ``(B) is rated at not more than 10,000 pounds gross 
                vehicle weight;
                    ``(C) is not a passenger automobile; and
                    ``(D) is not a work truck.''.
            (2) Rulemaking.--The Secretary of Transportation--
                    (A) shall issue proposed regulations implementing 
                the amendment made by paragraph (1) not later than 1 
                year after the date of the enactment of this Act; and
                    (B) shall issue final regulations implementing the 
                amendment not later than 18 months after the date of 
                the enactment of this Act.
            (3) Effective date.--Regulations prescribed under paragraph 
        (1) shall apply beginning with model year 2010.
    (b) Applicability of Existing Standards.--This section does not 
affect the application of section 32902 of title 49, United States 
Code, to passenger automobiles or non-passenger automobiles 
manufactured before model year 2010.
    (c) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary of Transportation $25,000,000 for each of 
the fiscal years 2009 through 2021 to carry out the provisions of 
chapter 329 of title 49, United States Code, as amended by this Act.

SEC. 106. ENSURING SAFETY OF PASSENGER AUTOMOBILES AND LIGHT TRUCKS.

    (a) In General.--The Secretary of Transportation shall exercise the 
authority given the Secretary under Federal law to ensure that--
            (1) passenger automobiles and light trucks (as such terms 
        are defined in section 32901 of title 49, United States Code) 
        are safe;
            (2) progress is made in improving the overall safety of 
        passenger automobiles and light trucks; and
            (3) progress is made in maximizing United States 
        employment.
    (b) Vehicle Safety.--Subchapter II of chapter 301 of title 49, 
United States Code, is amended by adding at the end the following:
``Sec. 30129. Vehicle compatibility and aggressivity reduction standard
    ``(a) Standards.--The Secretary of Transportation shall issue a 
motor vehicle safety standard to reduce vehicle incompatibility and 
aggressivity between passenger vehicles and non-passenger vehicles. The 
standard shall address characteristics necessary to ensure better 
management of crash forces in multiple vehicle frontal and side impact 
crashes between different types, sizes, and weights of vehicles with a 
gross vehicle weight of 10,000 pounds or less in order to decrease 
occupant deaths and injuries.
    ``(b) Consumer Information.--The Secretary shall develop and 
implement a public information side and frontal compatibility crash 
test program with vehicle ratings based on risks to occupants, risks to 
other motorists, and combined risks by vehicle make and model.''.
    (c) Rulemaking.--
            (1) In general.--The Secretary of Transportation shall 
        issue--
                    (A) a notice of a proposed rulemaking to implement 
                section 30129 of title 49, United States Code, not 
                later than January 1, 2010; and
                    (B) a final rule to implement such section not 
                later than December 31, 2011.
            (2) Effective date.--Any requirement imposed under the 
        final rule issued under paragraph (1)(B) shall become fully 
        effective not later than September 1, 2013.
    (d) Conforming Amendment.--The chapter analysis for chapter 301 of 
title 49, United States Code, is amended by inserting after the item 
relating to section 30128 the following:

``30129. Vehicle compatibility and aggressivity reduction standard.''.

SEC. 107. ONBOARD FUEL ECONOMY INDICATORS AND DEVICES.

    (a) In General.--Chapter 329 of title 49, United States Code, is 
amended by adding at the end the following:
``Sec. 32920. Fuel economy indicators and devices
    ``(a) In General.--The Secretary of Transportation, in consultation 
with the Administrator of the Environmental Protection Agency, shall 
prescribe a fuel economy standard for passenger automobiles and light 
trucks manufactured by a manufacturer in each model year beginning with 
model year 2014 that requires each such automobile and light truck to 
be equipped with--
            ``(1) an onboard electronic instrument that provides real-
        time and cumulative fuel economy data;
            ``(2) an onboard electronic instrument that signals a 
        driver when inadequate tire pressure may be affecting fuel 
        economy; and
            ``(3) a device that will allow drivers to place the 
        automobile or light truck in a mode that will automatically 
        produce greater fuel economy.
    ``(b) Exception.--Subsection (a) shall not apply to any vehicle 
that is not subject to an average fuel economy standard under section 
32902(b).
    ``(c) Enforcement.--Subchapter IV of chapter 301 shall apply to a 
fuel economy standard prescribed under subsection (a) to the same 
extent and in the same manner as if that standard were a motor vehicle 
safety standard under chapter 301.''.
    (b) Conforming Amendment.--The chapter analysis for chapter 329 of 
title 49, United States Code, is amended by inserting after the item 
relating to section 32919 the following:

``32920. Fuel economy indicators and devices.''.

SEC. 108. SECRETARY OF TRANSPORTATION TO CERTIFY BENEFITS.

    Beginning with model year 2010, the Secretary of Transportation, in 
consultation with the Administrator of the Environmental Protection 
Agency, shall annually determine and certify to Congress the reduction 
in United States consumption of gasoline and petroleum distillates used 
for vehicle fuel and the reduction in greenhouse gas emissions during 
the most recent year that are attributable to the implementation of the 
average fuel economy standards imposed under section 32902 of title 49, 
United States Code, as a result of the amendments made by this Act.

SEC. 109. CREDIT TRADING PROGRAM.

    Section 32903 of title 49, United States Code, is amended--
            (1) by striking ``passenger'' each place it appears;
            (2) by striking ``section 32902(b)-(d) of this title'' each 
        place it appears and inserting ``subsection (a), (c), or (d) of 
        section 32902'';
            (3) in subsection (a)(2), by striking ``clause (1) of this 
        subsection'' and inserting ``paragraph (1)''; and
            (4) by amending subsection (e) to read as follows:
    ``(e) Credit Trading Among Manufacturers.--The Secretary of 
Transportation may establish, by regulation, a corporate average fuel 
economy credit trading program to allow manufacturers whose automobiles 
exceed the average fuel economy standards prescribed under section 
32902 to earn credits to be sold to manufacturers whose automobiles 
fail to achieve the prescribed standards.''.

SEC. 110. REPORT TO CONGRESS.

    Not later than December 31, 2014, the Secretary of Transportation 
shall submit to Congress a report on the progress made by the 
automobile manufacturing industry towards meeting the 35 miles per 
gallon average fuel economy standard required under section 32902(b)(1) 
of title 49, United States Code.

SEC. 111. LABELS FOR FUEL ECONOMY AND GREENHOUSE GAS EMISSIONS.

    Section 32908 of title 49, United States Code, is amended--
            (1) in subsection (a)(1), by striking ``of this title'' and 
        inserting ``and a light truck manufactured by a manufacturer in 
        a model year after model year 2010; and'';
            (2) in subsection (b)--
                    (A) in paragraph (1)--
                            (i) by striking ``(1)'' and inserting the 
                        following:
            ``(1) In general.--'';
                            (ii) by moving subparagraphs (A) through 
                        (F) 2 ems to the right;
                            (iii) by redesignating subparagraph (F) as 
                        subparagraph (H); and
                            (iv) by inserting after subparagraph (E) 
                        the following:
            ``(F) a label (or a logo imprinted on a label required 
        under this paragraph) that--
                    ``(i) reflects the performance of an automobile 
                based upon criteria developed by the Administrator to 
                reflect the fuel economy and greenhouse gas and other 
                emissions consequences of operating the automobile over 
                its likely useful life;
                    ``(ii) permits consumers to compare performance 
                results under clause (i) among all passenger 
                automobiles and light duty trucks; and
                    ``(iii) is designed to encourage the manufacture 
                and sale of passenger automobiles and light trucks that 
                meet or exceed applicable fuel economy standards under 
                section 32902.
            ``(G) a fuelstar under paragraph (5).'';
                    (B) in paragraph (2)--
                            (i) by striking ``(2)'' and inserting the 
                        following:
            ``(2) Requirements for compliance.--''; and
                            (ii) by moving the text 2 ems to the right;
                    (C) in paragraph (3)--
                            (i) by striking ``(3)'' and inserting the 
                        following:
            ``(3) Dedicated automobiles.--''; and
                            (ii) by moving the text 2 ems to the right; 
                        and
                    (D) by adding at the end the following:
            ``(4) Green label program.--
                    ``(A) Marketing analysis.--Not later than 2 years 
                after the date of the enactment of the Fuel Economy 
                Improvement Act, the Administrator shall complete a 
                study of social marketing strategies with the goal of 
                maximizing consumer understanding of point-of-sale 
                labels or logos described in paragraph (1)(F).
                    ``(B) Eligibility.--Not later than 3 years after 
                the date described in subparagraph (A), the 
                Administrator shall issue requirements for the label or 
                logo required under paragraph (1)(F) to ensure that a 
                passenger automobile or light truck is not eligible for 
                the label or logo unless it--
                            ``(i) meets or exceeds the applicable fuel 
                        economy standard; or
                            ``(ii) will have the lowest greenhouse gas 
                        emissions over the useful life of the vehicle 
                        of all vehicles in the vehicle class to which 
                        it belongs in that model year.
                    ``(C) Criteria.--In developing criteria for the 
                label or logo described in paragraph (1)(F), the 
                Administrator shall consider--
                            ``(i) the recyclability of the automobile;
                            ``(ii) any other pollutants or harmful 
                        byproducts related to the automobile, which may 
                        include those generated during manufacture of 
                        the automobile, those issued during use of the 
                        automobile, or those generated after the 
                        automobile ceases to be operated; and
                            ``(iii) other appropriate factors
            ``(5) Fuelstar program.--
                    ``(A) In general.--The Secretary of Transportation 
                shall establish a program, which shall be known as the 
                `Fuelstar Program', under which stars shall be 
                imprinted on or attached to the label required under 
                paragraph (1).
                    ``(B) Green stars.--Under the Fuelstar Program, a 
                manufacturer may include on the label maintained on an 
                automobile under paragraph (1)--
                            ``(i) 1 green star for any automobile that 
                        meets the average fuel economy standard for the 
                        model year under section 32902; and
                            ``(ii) 1 additional green star for each 2 
                        miles per gallon by which the automobile 
                        exceeds such standard.
                    ``(C) Gold stars.--Under the Fuelstar Program, a 
                manufacturer may include a gold star on the label 
                required under paragraph (1) on--
                            ``(i) a passenger automobile with a fuel 
                        economy of at least 50 miles per gallon; and
                            ``(ii) a light truck with a fuel economy of 
                        at least 37 miles per gallon.''.

                 Subtitle B--Improving Fuel Efficiency

SEC. 121. HELPING CONSUMERS TO PURCHASE MORE FUEL-EFFICIENT 
              AUTOMOBILES.

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

SEC. 122. TRANSIT-ORIENTED DEVELOPMENT CORRIDORS.

    (a) Definitions.--In this section, the following definitions apply:
            (1) Definitions from title 49, united states code.--The 
        terms ``capital project'', ``local governmental authority'', 
        ``mass transportation'', and ``urbanized area'' have the 
        meanings such terms have under section 5302 of title 49, United 
        States Code.
            (2) State.--The term ``State'' means a State of the United 
        States, the District of Columbia, Puerto Rico, the Northern 
        Mariana Islands, Guam, American Samoa, and the United States 
        Virgin Islands.
            (3) Transit-oriented development corridor.--The term 
        ``transit-oriented development corridor'' means rights-of-way 
        for fixed-guideway mass transportation facilities, including 
        commercial development that is connected with any such facility 
        physically and functionally.
    (b) In General.--In consultation with State transportation 
departments and metropolitan planning organizations, the Secretary of 
Transportation shall designate, in urbanized areas, at least 20 
transit-oriented development corridors by 2015 and 50 transit-oriented 
development corridors by 2025.
    (c) Transit Grants.--The Secretary of Transportation shall award 
grants to a State or local governmental authority to construct or 
improve transit facilities, bicycle transportation facilities, and 
pedestrian walkways in a transit-oriented development corridor, 
including capital projects.
    (d) Research and Development.--In order to support effective 
deployment of grants and incentives under this section, the Secretary 
of Transportation shall establish a transit-oriented development 
corridors research and development program for the conduct of research 
on best practices and performance criteria for transit-oriented 
development corridors.
    (e) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section $500,000,000 for each of fiscal 
years 2007 through 2016, of which $2,000,000 per fiscal year is 
authorized for the research and development program under subsection 
(d).

SEC. 123. ENERGY-EFFICIENT MOTOR VEHICLE MANUFACTURING CREDIT.

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

``SEC. 30D. ENERGY EFFICIENT MOTOR VEHICLES MANUFACTURING CREDIT.

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

``Model year ending in                                       Percentage
  taxable year:                                               increase:
        2010...................................................      5 
        2011...................................................     10 
        2012...................................................     15 
        2013...................................................     20 
        2014...................................................   27.5 
        2015...................................................     35 
        2016...................................................   42.5 
        2017...................................................     50.
    ``(d) Eligible Components R&D Credit.--For purposes of this 
section, the eligible R&D credit for any taxable year is equal to 30 
percent of the research and development costs paid or incurred by an 
eligible taxpayer for such taxable year with respect to eligible 
components used or to be used in the manufacture of energy efficient 
motor vehicles.
    ``(e) Limitation.--
            ``(1) Initial investment credit and fuel economy 
        achievement credit.--Subject to paragraph (2), the aggregate 
        amount of initial investment credits and fuel economy 
        achievement credits allowed under subsection (a) for any 
        taxable year beginning in a calendar year after 2007 shall be 
        allocated by the Secretary among all eligible taxpayers--
                    ``(A) based on each eligible taxpayer's percentage 
                of the total qualified investment of all such 
                taxpayers, and
                    ``(B) such that such aggregate amount does not 
                exceed--
                            ``(i) $1,000,000,000, plus
                            ``(ii) any amount of credit unallocated 
                        during any preceding calendar year.
            ``(2) Eligible components r&d credit.--Of the dollar amount 
        available for allocation under paragraph (1) for any taxable 
        year, 10 percent of such amount shall be allocated in the same 
        manner by the Secretary among all eligible taxpayers with 
        respect to the eligible components R&D credit.
    ``(f) Qualified Investment.--For purposes of this section--
            ``(1) In general.--The qualified investment for any taxable 
        year is equal to the incremental costs incurred during such 
        taxable year--
                    ``(A) to re-equip or expand any manufacturing 
                facility of the eligible taxpayer to produce energy 
                efficient motor vehicles or to produce eligible 
                components, and
                    ``(B) for engineering integration of such vehicles 
                and components as described in subsection (h).
            ``(2) Attribution rules.--In the event a facility of the 
        eligible taxpayer produces both energy efficient motor vehicles 
        and conventional motor vehicles, or eligible and non-eligible 
        components, only the qualified investment attributable to 
        production of energy efficient motor vehicles and the research 
        and development costs attributable to eligible components shall 
        be taken into account.
    ``(g) Energy Efficient Motor Vehicles and Eligible Components.--For 
purposes of this section--
            ``(1) Energy efficient motor vehicle.--The term `energy 
        efficient motor vehicle' means--
                    ``(A) any new advanced lean burn technology motor 
                vehicle (as defined in section 30B(c)(3) determined 
                without regard to subparagraph (A)(iv)(II) thereof or 
                the weight limitation under subparagraph (A)(iv)(I) 
                thereof),
                    ``(B) any new qualified hybrid motor vehicle (as 
                defined in section 30B(d)(3)(A) determined without 
                regard to subparagraph (A)(ii)(II) thereof, the weight 
                limitation under subparagraph (A)(ii)(I) thereof, and 
                subparagraph (A)(iv) thereof), or
                    ``(C) any other new technology motor vehicle 
                identified by the Secretary as offering a substantial 
                increase in fuel economy.
            ``(2) Eligible components.--The term `eligible component' 
        means any component inherent to any energy efficient motor 
        vehicle, including--
                    ``(A) with respect to any gasoline-electric new 
                qualified hybrid motor vehicle--
                            ``(i) electric motor or generator,
                            ``(ii) power split device,
                            ``(iii) power control unit,
                            ``(iv) power controls,
                            ``(v) integrated starter generator, or
                            ``(vi) battery,
                    ``(B) with respect to any new advanced lean burn 
                technology motor vehicle--
                            ``(i) diesel engine,
                            ``(ii) turbocharger,
                            ``(iii) fuel injection system, or
                            ``(iv) after-treatment system, such as a 
                        particle filter or NOx absorber, and
                    ``(C) with respect to any energy efficient motor 
                vehicle, any other component approved by the Secretary.
    ``(h) Engineering Integration Costs.--For purposes of subsection 
(f)(1)(B), costs for engineering integration are costs incurred prior 
to the market introduction of energy efficient vehicles for engineering 
tasks related to--
            ``(1) incorporating eligible components into the design of 
        energy efficient motor vehicles, and
            ``(2) designing new tooling and equipment for production 
        facilities which produce eligible components or energy 
        efficient motor vehicles.
    ``(i) Eligible Taxpayer.--For purposes of this section, the term 
`eligible taxpayer' means, with respect to any taxable year, any 
taxpayer if more than 25 percent of the taxpayer's gross receipts for 
the taxable year is derived from the manufacture of motor vehicles or 
any component parts of such vehicles.
    ``(j) Limitation Based on Amount of Tax.--The credit allowed under 
subsection (a) for the taxable year shall not exceed the excess of--
            ``(1) the sum of--
                    ``(A) the regular tax liability (as defined in 
                section 26(b)) for such taxable year, plus
                    ``(B) the tax imposed by section 55 for such 
                taxable year, over
            ``(2) the sum of the credits allowable under subpart A and 
        sections 27, 30, 30B, and 30C for the taxable year.
    ``(k) Reduction in Basis.--For purposes of this subtitle, if a 
credit is allowed under this section for any expenditure with respect 
to any property, the increase in the basis of such property which would 
(but for this paragraph) result from such expenditure shall be reduced 
by the amount of the credit so allowed.
    ``(l) No Double Benefit.--
            ``(1) Coordination with other deductions and credits.--The 
        amount of any deduction or other credit allowable under this 
        chapter for any cost taken into account in determining the 
        amount of the credit under subsection (a) shall be reduced by 
        the amount of such credit attributable to such cost.
            ``(2) Research and development costs.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), any amount described in subsection 
                (d) taken into account in determining the amount of the 
                credit under subsection (a) for any taxable year shall 
                not be taken into account for purposes of determining 
                the credit under section 41 for such taxable year.
                    ``(B) Costs taken into account in determining base 
                period research expenses.--Any amounts described in 
                subsection (d) taken into account in determining the 
                amount of the credit under subsection (a) for any 
                taxable year which are qualified research expenses 
                (within the meaning of section 41(b)) shall be taken 
                into account in determining base period research 
                expenses for purposes of applying section 41 to 
                subsequent taxable years.
    ``(m) Business Carryovers Allowed.--If the credit allowable under 
subsection (a) for a taxable year exceeds the limitation under 
subsection (j) for such taxable year, such excess (to the extent of the 
credit allowable with respect to property subject to the allowance for 
depreciation) shall be allowed as a credit carryback and carryforward 
under rules similar to the rules of section 39.
    ``(n) Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Definitions.--Any term which is used in this section 
        and in chapter 329 of title 49, United States Code, shall have 
        the meaning given such term by such chapter.
            ``(2) Special rules.--Rules similar to the rules of 
        paragraphs (4) and (5) of section 179A(e) and paragraphs (1) 
        and (2) of section 41(f) shall apply.
    ``(o) Election Not To Take Credit.--No credit shall be allowed 
under subsection (a) for any property if the taxpayer elects not to 
have this section apply to such property.
    ``(p) Regulations.--The Secretary shall prescribe such regulations 
as necessary to carry out the provisions of this section.
    ``(q) Termination.--This section shall not apply to any qualified 
investment made after December 31, 2017.''.
    (b) Conforming Amendments.--
            (1) Section 1016(a) of such Code is amended by striking 
        ``and'' at the end of paragraph (36), by striking the period at 
        the end of paragraph (37) and inserting ``, and'', and by 
        adding at the end the following new paragraph:
            ``(38) to the extent provided in section 30D(k).''.
            (2) Section 6501(m) of such Code is amended by inserting 
        ``30D(o),'' after ``30C(e)(5),''.
            (3) The table of sections for subpart B of part IV of 
        subchapter A of chapter 1 of such Code is amended by inserting 
        after the item relating to section 30C the following new item:

``Sec. 30D. Energy efficient motor vehicles manufacturing credit.''.
    (c) Effective Date.--The amendments made by this subsection shall 
apply to amounts incurred in taxable years beginning after December 31, 
2007.

SEC. 124. FUEL EFFICIENCY STANDARDS FOR REPLACEMENT TIRES.

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

SEC. 125. FUEL ECONOMY FOR HEAVY DUTY TRUCKS.

    Part C of subtitle VI of title 49, United States Code, is amended 
by inserting after chapter 329 the following:

     ``CHAPTER 330--HEAVY DUTY MOTOR VEHICLE FUEL ECONOMY STANDARDS

     ``Chapter 330--Heavy Duty Motor Vehicle Fuel Economy Standards

``Sec.
``33001. Purpose and policy.
``33002. Definition.
``33003. Testing and assessment.
``33004. Standards.
``33005. Authorization of appropriations.
``Sec. 33001. Purpose and policy
    ``The purpose of this chapter is to reduce petroleum consumption by 
heavy duty motor vehicles.
``Sec. 33002. Definition
    ``In this chapter, the term `heavy duty motor vehicle'--
            ``(1) means a vehicle having a gross vehicle weight rating 
        of at least 10,000 pounds that is driven or drawn by mechanical 
        power and manufactured primarily for use on public streets, 
        roads, and highways; and
            ``(2) does not include a vehicle operated only on a rail 
        line.
``Sec. 33003. Testing and assessment
    ``(a) In General.--The Administrator of the Environmental 
Protection Agency (referred to in this section as the `Administrator') 
shall develop and coordinate a national testing and assessment program 
to--
            ``(1) calculate the fuel economy of heavy duty motor 
        vehicles; and
            ``(2) assess the fuel economy that heavy duty motor 
        vehicles could attain through available technology.
    ``(b) Testing.--Not later than 18 months after the date of the 
enactment of this chapter, the Administrator shall design and implement 
a national testing program to calculate the fuel economy of heavy duty 
motor vehicles that is modeled on the fuel economy program established 
under chapter 329.
    ``(c) Assessment.--The Administrator shall consult with the 
Secretary of Transportation regarding the assessment of available 
technologies to enhance the fuel economy of heavy duty motor vehicles 
to ensure that vehicle use and needs are appropriately considered.
    ``(d) Reports to Congress.--
            ``(1) Initial report.--Not later than 2 years after the 
        date of the enactment of this chapter, the Administrator shall 
        submit a report to Congress regarding the results of the 
        assessment of available technologies to improve the fuel 
        economy of heavy duty motor vehicles.
            ``(2) Biennial reports.--Not less frequently than once 
        every 2 years, the Administrator shall submit a report to 
        Congress that addresses the fuel economy of heavy duty 
        vehicles.
``Sec. 33004. Standards
    ``(a) In General.--Not later than 18 months after the completion of 
the testing and assessments under section 33003 and not later than 18 
months before the beginning of a model year, the Secretary of 
Transportation shall prescribe by regulation average fuel economy 
standards for heavy duty motor vehicles manufactured for such model 
year. Each standard shall be the maximum feasible average fuel economy 
level that the Secretary determines that manufacturers can achieve for 
that model year. The Secretary may prescribe separate standards for 
different classes of heavy duty motor vehicles.
    ``(b) Considerations and Consultation.--In determining maximum 
feasible average fuel economy, the Secretary shall consider--
            ``(1) relevant available heavy duty motor vehicle fuel 
        consumption information;
            ``(2) technological feasibility;
            ``(3) economic practicability;
            ``(4) the desirability of reducing United States dependence 
        on oil;
            ``(5) the effects of average fuel economy standards on 
        vehicle safety;
            ``(6) the effects of average fuel economy standards on 
        levels of employment and competitiveness of the heavy duty 
        motor vehicle manufacturing industry; and
            ``(7) the extent to which the standard will carry out the 
        purpose described in section 33001.
    ``(c) Cooperation.--The Secretary may advise, assist, and cooperate 
with departments, agencies, and instrumentalities of the Federal 
Government, States, and other public and private agencies in developing 
fuel economy standards for heavy duty motor vehicles.
    ``(d) 5-Year Plan for Testing Standards.--
            ``(1) In general.--The Secretary shall establish, 
        periodically review, and continually update a 5-year plan for 
        testing fuel economy standards prescribed under this chapter 
        for heavy duty motor vehicles.
            ``(2) Priorities.--In establishing testing priorities, the 
        Secretary shall consider appropriate factors that are 
        consistent with the purpose described in section 33001 and the 
        Secretary's other duties and powers under this chapter.
``Sec. 33005. Authorization of appropriations
    ``There are authorized to be appropriated, for each of the fiscal 
years 2008 through 2013, such sums as may be necessary to carry out 
this chapter.''.

SEC. 126. IDLING REDUCTION TAX CREDIT.

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

``SEC. 45O. IDLING REDUCTION CREDIT.

    ``(a) General Rule.--For purposes of section 38, the idling 
reduction tax credit determined under this section for the taxable year 
is an amount equal to 50 percent of the amount paid or incurred for the 
purchase and installation of each qualifying idling reduction device or 
qualifying idle reduction infrastructure placed in service by the 
taxpayer during the taxable year.
    ``(b) Limitation.--The maximum amount allowed as a credit under 
subsection (a) shall not exceed $3,500 per device or per 
infrastructure.
    ``(c) Definitions.--For purposes of subsection (a)--
            ``(1) Qualifying idling reduction device.--The term 
        `qualifying idling reduction device' means any device or system 
        of devices which--
                    ``(A) is installed on a heavy-duty diesel-powered 
                on-highway vehicle,
                    ``(B) is designed to provide to such 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 either--
                            ``(i) an all electric unit, such as a 
                        battery powered unit or from grid-supplied 
                        electricity, or
                            ``(ii) a dual fuel unit powered by diesel 
                        or other fuels, and capable of providing such 
                        services from grid-supplied electricity or on-
                        truck batteries alone,
                    ``(C) the original use of which commences with the 
                taxpayer,
                    ``(D) is acquired for use by the taxpayer and not 
                for resale, and
                    ``(E) is certified by the Secretary of Energy, in 
                consultation with the Administrator of the 
                Environmental Protection Agency and the Secretary of 
                Transportation, to reduce long-duration idling of such 
                vehicle at a motor vehicle rest stop or other location 
                where such vehicles are temporarily parked or remain 
                stationary.
            ``(2) Heavy-duty diesel-powered on-highway vehicle.--The 
        term `heavy-duty diesel-powered on-highway vehicle' means any 
        vehicle, machine, tractor, trailer, or semi-trailer propelled 
        or drawn by mechanical power and used upon the highways in the 
        transportation of passengers or property, or any combination 
        thereof determined by the Federal Highway Administration.
            ``(3) Long-duration idling.--The term `long-duration 
        idling' means the operation of a main drive engine, for a 
        period greater than 15 consecutive minutes, where the main 
        drive engine is not engaged in gear. Such term does not apply 
        to routine stoppages associated with traffic movement or 
        congestion.
            ``(4) Qualifying idle reduction infrastructure.--The term 
        `qualifying idle reduction infrastructure' means either--
                    ``(A) off-truck equipment to supply electric power, 
                including electric receptacles, boxes, wiring, conduit, 
                and other connections to one truck space, or
                    ``(B) off-truck equipment that directly provides 
                air conditioning, heating, electric power, and other 
                connections and services to one truck space.
    ``(d) No Double Benefit.--For purposes of this section--
            ``(1) Reduction in basis.--If a credit is determined under 
        this section with respect to any property by reason of 
        expenditures described in subsection (a), the basis of such 
        property shall be reduced by the amount of the credit so 
        determined.
            ``(2) Other deductions and credits.--No deduction or credit 
        shall be allowed under any other provision of this chapter with 
        respect to the amount of the credit determined under this 
        section.
    ``(e) Election Not To Claim Credit.--This section shall not apply 
to a taxpayer for any taxable year if such taxpayer elects to have this 
section not apply for such taxable year.''.
    (b) Credit To Be Part of General Business Credit.--Subsection (b) 
of section 38 of the Internal Revenue Code of 1986 (relating to general 
business credit) is amended by striking ``plus'' at the end of 
paragraph (30), by striking the period at the end of paragraph (31) and 
inserting ``, plus'' , and by adding at the end the following new 
paragraph:
            ``(32) the idling reduction tax credit determined under 
        section 45O(a).''.
    (c) Conforming Amendments.--
            (1) The table of sections for subpart D of part IV of 
        subchapter A of chapter 1 of the Internal Revenue Code of 1986 
        is amended by inserting after the item relating to section 45N 
        the following new item:

``Sec. 45O. Idling reduction credit.''.
            (2) Section 1016(a) of such Code is amended by striking 
        ``and'' at the end of paragraph (36), by striking the period at 
        the end of paragraph (37) and inserting ``, and'', and by 
        adding at the end the following:
            ``(38) in the case of a facility with respect to which a 
        credit was allowed under section 45O, to the extent provided in 
        section 45O(d)(1).''.
            (3) Section 6501(m) of such Code is amended by inserting 
        ``45O(e),'' after ``45D(c)(4),''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2006.
    (e) Determination of Certification Standards by Secretary of Energy 
for Certifying Idling Reduction Devices.--Not later than 6 months after 
the date of the enactment of this Act and in order to reduce air 
pollution and fuel consumption, the Secretary of Energy, in 
consultation with the Administrator of the Environmental Protection 
Agency and the Secretary of Transportation, shall publish the standards 
under which the Secretary, in consultation with the Administrator of 
the Environmental Protection Agency and the Secretary of 
Transportation, will, for purposes of section 45O of the Internal 
Revenue Code of 1986 (as added by this section), certify the idling 
reduction devices and idling reduction infrastructure which will reduce 
long-duration idling of vehicles at motor vehicle rest stops or other 
locations where such vehicles are temporarily parked or remain 
stationary in order to reduce air pollution and fuel consumption.

SEC. 127. REPEAL OF PREEMPTION OF STATE LAW RELATING TO AUTOMOBILE FUEL 
              ECONOMY STANDARDS.

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

SEC. 128. FEDERAL FLEET REQUIREMENTS.

    (a) Regulations.--
            (1) In general.--The Secretary of Energy shall issue 
        regulations for Federal fleets subject to the Energy Policy Act 
        of 1992 (42 U.S.C. 13201 et seq.) requiring that not later than 
        fiscal year 2016 each Federal agency achieve at least a 30 
        percent reduction in petroleum consumption, as calculated from 
        the baseline established by the Secretary for fiscal year 2005.
            (2) Requirement.--Beginning not later than fiscal year 
        2016, of the Federal vehicles required to be alternative fueled 
        vehicles under title V of the Energy Policy Act of 1992 (42 
        U.S.C. 13251 et seq.), at least 30 percent shall be hybrid 
        motor vehicles (including plug-in hybrid motor vehicles) or new 
        advanced lean burn technology motor vehicles (as defined in 
        section 30B(c)(3) of the Internal Revenue Code of 1986).
    (b) Inclusion of Electric Drive in Energy Policy Act of 1992.--
Section 508(a) of the Energy Policy Act of 1992 (42 U.S.C. 13258(a)) is 
amended--
            (1) by striking ``The Secretary'' and inserting the 
        following:
            ``(1) Allocation.--The Secretary''; and
            (2) by adding at the end the following:
            ``(2) Electric vehicles.--Not later than January 31, 2009, 
        the Secretary shall--
                    ``(A) allocate credit in an amount to be determined 
                by the Secretary for--
                            ``(i) acquisition of--
                                    ``(I) a light-duty hybrid motor 
                                vehicle;
                                    ``(II) a plug-in hybrid motor 
                                vehicle;
                                    ``(III) a fuel cell electric 
                                vehicle;
                                    ``(IV) a medium- or heavy-duty 
                                hybrid motor vehicle;
                                    ``(V) a neighborhood electric 
                                vehicle; or
                                    ``(VI) a medium- or heavy-duty 
                                dedicated vehicle; and
                            ``(ii) investment in qualified alternative 
                        fuel infrastructure or nonroad equipment, as 
                        determined by the Secretary; and
                    ``(B) allocate more than 1, but not more than 5, 
                credits for investment in an emerging technology 
                relating to any vehicle described in subparagraph (A) 
                to encourage--
                            ``(i) a reduction in petroleum demand;
                            ``(ii) technological advancement; and
                            ``(iii) environmental safety.''.
    (c) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section, and the amendments made by 
subsection (b), $10,000,000 for the period of fiscal years 2008 through 
2013.

         TITLE II--ENERGY INDEPENDENCE THROUGH RENEWABLE FUELS

                    Subtitle A--Advanced Clean Fuels

SEC. 201. DEFINITIONS.

    Section 211(o)(1) of the Clean Air Act (42 U.S.C. 7545(o)(1)) is 
amended--
            (1) by redesignating subparagraphs (A) through (D) as 
        subparagraphs (C), (P), (L), and (M), respectively;
            (2) by inserting before subparagraph (C) (as redesignated 
        by paragraph (1)) the following:
                    ``(A) Academy.--The term `Academy' means the 
                National Academy of Sciences.
                    ``(B) Adverse lifecycle impact.--The term `adverse 
                lifecycle impact' means, with respect to increases in 
                the volume of renewable fuel sold or dispensed to 
                consumers in the United States for a calendar year, 
                that the increases, as determined by the Administrator, 
                would reasonably be anticipated--
                            ``(i) to result in an inconsistency or 
                        material interference with the implementation 
                        of or compliance with any Federal environmental 
                        law (including a regulation);
                            ``(ii) to result in a material increase 
                        in--
                                    ``(I) air pollution, including 
                                global warming pollution;
                                    ``(II) water pollution; or
                                    ``(III) human exposure to 
                                pesticides;
                            ``(iii) to result in a substantial increase 
                        in deforestation on a global or national scale;
                            ``(iv) to result in a substantial adverse 
                        effect on land conservation and wildlife 
                        habitat;
                            ``(v) to result in any other substantial 
                        adverse effect on the environment;
                            ``(vi) to result in a substantial adverse 
                        effect on food or feed production or prices, as 
                        determined in consultation with the Secretary 
                        of Agriculture;
                            ``(vii) to result in a substantial adverse 
                        effect on long-term agricultural productivity, 
                        including effects on soils and water resources, 
                        as determined in consultation with the 
                        Secretary of Agriculture; or
                            ``(viii) not to increase the supply of 
                        clean, domestic energy;'';
            (3) in subparagraph (C) (as redesignated by paragraph (1)), 
        by striking clause (viii) and inserting the following:
                            ``(viii) separated food waste, yard waste, 
                        and lawn debris recovered from municipal solid 
                        waste.'';
            (4) by inserting after subparagraph (C) (as redesignated by 
        paragraph (1)) the following:
                    ``(D) Conventional transportation fuel.--The term 
                `conventional transportation fuel' means any fossil-
                fuel-based transportation fuel used in the United 
                States as of the date of enactment of the Energy 
                Independence, Clean Air, and Climate Security Act of 
                2007.
                    ``(E) Ecosystem conversion.--The term `ecosystem 
                conversion' means an alteration of an ecologically 
                significant native habitat (including modification of 
                hydrology and dominant vegetative and other species) to 
                an extent at which the native habitat no longer 
                supports most dominant native species or ecological 
                processes.
                    ``(F) Firewise zone.--The term `firewise zone' 
                means the immediate vicinity of a building or other 
                area regularly occupied by individuals, or any public 
                infrastructure, that is at risk of wildfire.
                    ``(G) Fuel emission baseline.--The term `fuel 
                emission baseline' means the average lifecycle 
                greenhouse gas emissions per unit of energy of the 
                fossil fuel component of conventional transportation 
                fuels in commerce in the United States in calendar year 
                2008, as determined by the Administrator under 
                paragraph (11).
                    ``(H) Fuel provider.--
                            ``(i) In general.--The term `fuel provider' 
                        means an obligated party (as described in 
                        section 80.1106 of title 40, Code of Federal 
                        Regulations (or a successor regulation)).
                            ``(ii) Inclusions.--The term `fuel 
                        provider' includes, as the Administrator 
                        determines to be appropriate, an individual or 
                        entity that produces, blends, or imports 
                        gasoline or any other transportation fuel in 
                        commerce in, or into, the United States.
                    ``(I) Greenhouse gas.--The term `greenhouse gas' 
                means any of--
                            ``(i) carbon dioxide;
                            ``(ii) methane;
                            ``(iii) nitrous oxide;
                            ``(iv) hydrofluorocarbons;
                            ``(v) perfluorocarbons; and
                            ``(vi) sulfur hexafluoride.
                    ``(J) Lifecycle greenhouse gas emissions.--The term 
                `lifecycle greenhouse gas emissions' means, with 
                respect to a transportation fuel, the aggregate 
                quantity of greenhouse gases emitted, directly or 
                indirectly, during production, feedstock production or 
                extraction, distribution, marketing, and use of the 
                transportation fuel, or waste disposal relating to the 
                transportation fuel, as determined by the Administrator 
                under paragraph (11)(B).
                    ``(K) Native habitat.--
                            ``(i) In general.--The term `native 
                        habitat' means dynamic groupings of native 
                        plant and animal communities that--
                                    ``(I) occur together on a landscape 
                                or in water; and
                                    ``(II) are connected through--
                                            ``(aa) similar ecological 
                                        processes;
                                            ``(bb) underlying 
                                        environmental features, such as 
                                        geology; or
                                            ``(cc) environmental 
                                        gradients, such as elevation.
                            ``(ii) Exclusion.--The term `native 
                        habitat' does not include land that is or has 
                        been under agricultural production.'';
            (5) in clause (i) of subparagraph (L) (as redesignated by 
        paragraph (1)), by striking ``The term'' and inserting ``Except 
        as otherwise provided in this subsection, the term'';
            (6) by inserting after subparagraph (M) (as redesignated by 
        paragraph (1)) the following:
                    ``(N) Technically infeasible.--The term 
                `technically infeasible', with respect to compliance 
                with a standard or requirement under this subsection, 
                means that adequate technology or infrastructure is not 
                reasonably anticipated to exist within a sufficient 
                time to permit compliance with the standard or 
                requirement.
                    ``(O) Transportation fuel.--The term 
                `transportation fuel' means fuel used to power motor 
                vehicles, nonroad engines, or aircraft.''.

SEC. 202. ADVANCED CLEAN FUEL PROGRAM.

    (a) Advanced Clean Fuel Performance Standard.--Section 211(o) of 
the Clean Air Act (42 U.S.C. 7545(o)) is amended by adding at the end 
the following:
            ``(11) Advanced clean fuel performance standard.--
                    ``(A) Definitions.--In this paragraph:
                            ``(i) National interest land.--The term 
                        `national interest land' includes land that is 
                        within the National Wildlife Refuge System, the 
                        National Park System, a National Monument, the 
                        National Wilderness Preservation System, the 
                        National Landscape Conservation System, or the 
                        National Forest System, that is Bureau of Land 
                        Management land protected by statute, 
                        proclamation, or regulation from commercial 
                        timber activities, or that is endangered or 
                        threatened species habitat, an old-growth 
                        forest, or an inventoried roadless area.
                            ``(ii) Phase ii renewable fuel.--The term 
                        `phase II renewable fuel' means renewable fuel 
                        the lifecycle greenhouse gas emissions of which 
                        are 50 percent to 74 percent lower than the 
                        fuel emission baseline.
                            ``(iii) Phase iii renewable fuel.--The term 
                        `phase III renewable fuel' means renewable fuel 
                        the lifecycle greenhouse gas emissions of which 
                        are at least 75 percent lower than the fuel 
                        emission baseline.
                            ``(iv) Renewable biomass.--
                                    ``(I) In general.--The term 
                                `renewable biomass' means any organic 
                                matter that is available on a renewable 
                                or recurring basis.
                                    ``(II) Inclusions.--The term 
                                `renewable biomass' includes--
                                            ``(aa) renewable plant 
                                        material, including--

                                                    ``(AA) feed grains;

                                                    ``(BB) other 
                                                agricultural 
                                                commodities;

                                                    ``(CC) other plants 
                                                and trees grown for 
                                                energy production; and

                                                    ``(DD) algae; and

                                            ``(bb) waste material, 
                                        including--

                                                    ``(AA) crop 
                                                residue;

                                                    ``(BB) other 
                                                vegetative waste 
                                                material (including 
                                                wood waste and wood 
                                                residues);

                                                    ``(CC) animal waste 
                                                and byproducts 
                                                (including fats, oils, 
                                                greases, and manure); 
                                                and

                                                    ``(DD) separated 
                                                food waste, yard waste, 
                                                and lawn debris 
                                                recovered from 
                                                municipal solid waste.

                                    ``(III) Exclusions.--The term 
                                `renewable biomass' does not include 
                                biomass derived from--
                                            ``(aa) land on which 
                                        ecosystem conversion has 
                                        occurred after the date of 
                                        enactment of the Energy 
                                        Independence, Clean Air, and 
                                        Climate Security Act of 2007, 
                                        as determined by the 
                                        Administrator;
                                            ``(bb) land enrolled in the 
                                        conservation reserve program 
                                        established under subchapter B 
                                        of chapter 1 of subtitle D of 
                                        title XII of the Food Security 
                                        Act of 1985 (16 U.S.C. 3831 et 
                                        seq.) or the wetlands reserve 
                                        program established under 
                                        subchapter C of chapter 1 of 
                                        subtitle D of title XII of the 
                                        Food Security Act of 1985 (16 
                                        U.S.C. 3837 et seq.), unless 
                                        the biomass is produced in a 
                                        manner consistent with all 
                                        applicable guidelines, and 
                                        terms and conditions of any 
                                        applicable contract, under the 
                                        program;
                                            ``(cc) any national 
                                        interest land (other than land 
                                        in a firewise zone), except for 
                                        harvest residue, mill waste, or 
                                        pre-commercial thinnings 
                                        derived from national interest 
                                        land assigned to timber 
                                        production;
                                            ``(dd) recyclable 
                                        postconsumer waste paper;
                                            ``(ee) painted, treated, or 
                                        pressurized wood;
                                            ``(ff) wood contaminated 
                                        with plastic or metals; or
                                            ``(gg) any material 
                                        produced, harvested, acquired, 
                                        transported, or processed 
                                        pursuant to an exemption from 
                                        otherwise applicable Federal 
                                        environmental laws (including 
                                        regulations).
                            ``(v) Renewable fuel.--
                                    ``(I) In general.--The term 
                                `renewable fuel' means transportation 
                                fuel that is not an ether and that--
                                            ``(aa)(AA) is produced from 
                                        renewable biomass; or
                                            ``(BB) is natural gas 
                                        produced from a biogas source, 
                                        including a landfill, sewage 
                                        waste treatment plant, feedlot, 
                                        or other place where decaying 
                                        organic material is found;
                                            ``(bb) is used to replace 
                                        or reduce the quantity of 
                                        fossil fuel present in a fuel 
                                        mixture used for 
                                        transportation; and
                                            ``(cc) has lifecycle 
                                        greenhouse gas emissions that 
                                        are at least 20 percent lower 
                                        than the fuel emission 
                                        baseline.
                                    ``(II) Inclusion.--The term 
                                `renewable fuel' includes fuel meeting 
                                the criteria in subclause (I) that is--
                                            ``(aa) cellulosic biomass 
                                        ethanol and waste derived 
                                        ethanol;
                                            ``(bb) biodiesel (as 
                                        defined in section 312(f) of 
                                        the Energy Policy Act of 1992 
                                        (42 U.S.C. 13220(f))) and any 
                                        blending components derived 
                                        from renewable fuel (provided 
                                        that only the renewable fuel 
                                        portion of any such blending 
                                        component shall be considered 
                                        part of the applicable volume 
                                        under the renewable fuel 
                                        program established by this 
                                        subsection); or
                                            ``(cc) fuel produced from 
                                        pyrolysis or thermal conversion 
                                        of renewable biomass.
                    ``(B) Standard.--
                            ``(i) In general.--Not later than January 
                        1, 2010, the Administrator shall, by 
                        regulation--
                                    ``(I) establish a methodology for 
                                use in determining the lifecycle 
                                greenhouse gas emissions of 
                                transportation fuel in commerce, 
                                including--
                                            ``(aa) conventional 
                                        transportation fuel; and
                                            ``(bb) renewable fuel;
                                    ``(II) determine the fuel emission 
                                baseline;
                                    ``(III) establish a transportation 
                                fuel certification and marketing 
                                process--
                                            ``(aa) to certify fuels 
                                        that qualify as renewable fuel 
                                        under this paragraph;
                                            ``(bb) to determine the 
                                        lifecycle greenhouse gas 
                                        emissions of conventional 
                                        transportation fuels and 
                                        renewable fuels being sold or 
                                        introduced into commerce in the 
                                        United States; and
                                            ``(cc) to label and market 
                                        conventional transportation 
                                        fuel and renewable fuel in a 
                                        manner that indicates--

                                                    ``(AA) the status 
                                                of the fuel as 
                                                conventional 
                                                transportation fuel or 
                                                renewable fuel; and

                                                    ``(BB) the 
                                                lifecycle greenhouse 
                                                gas emissions of the 
                                                fuel; and

                                    ``(IV) in accordance with clause 
                                (ii), establish a requirement 
                                applicable to each fuel provider to 
                                reduce the average lifecycle greenhouse 
                                gas emissions per unit of energy of the 
                                aggregate quantity of transportation 
                                fuel produced, blended, or imported by 
                                the fuel provider to a level that is, 
                                to the maximum extent practicable--
                                            ``(aa) by not later than 
                                        calendar year 2011, at least 
                                        equal to or less than the fuel 
                                        emission baseline;
                                            ``(bb) by not later than 
                                        calendar year 2015, 5 percent 
                                        less than the fuel emission 
                                        baseline; and
                                            ``(cc) by not later than 
                                        calendar year 2020, 10 percent 
                                        less than the fuel emission 
                                        baseline.
                            ``(ii) Maximum reductions.--
                                    ``(I) In general.--In determining 
                                the maximum practicable level of 
                                reduction under clause (i)(IV), the 
                                Administrator shall--
                                            ``(aa) take into 
                                        consideration the results of 
                                        the applicable study carried 
                                        out under paragraph (12); and
                                            ``(bb) determine whether a 
                                        level of reduction--

                                                    ``(AA) is 
                                                technically infeasible; 
                                                or

                                                    ``(BB) would result 
                                                in 1 or more adverse 
                                                lifecycle impacts that 
                                                cannot be adequately 
                                                mitigated through 
                                                regulatory or 
                                                nonregulatory measures 
                                                under subclause (II).

                                    ``(II) Mitigation.--
                                            ``(aa) In general.--For the 
                                        purpose of making a 
                                        determination under subclause 
                                        (I)(bb)(BB), the Administrator, 
                                        in consultation with the heads 
                                        of other appropriate Federal 
                                        agencies, shall use the 
                                        existing authorities of the 
                                        Administrator to mitigate, to 
                                        the maximum extent practicable, 
                                        using regulatory or 
                                        nonregulatory approaches as the 
                                        Administrator determines to be 
                                        appropriate, adverse lifecycle 
                                        impacts in accordance with a 
                                        schedule that ensures that 
                                        mitigation measures are in 
                                        place by a date sufficient to 
                                        avoid adverse lifecycle 
                                        impacts.
                                            ``(bb) Air quality 
                                        impacts.--For the purpose of 
                                        this subclause, in the case of 
                                        any air quality-related adverse 
                                        lifecycle impact resulting from 
                                        emissions from motor vehicles 
                                        using renewable fuel, the 
                                        Administrator shall ensure, by 
                                        regulation promulgated under 
                                        this title, that gasoline 
                                        containing renewable fuel does 
                                        not result in--

                                                    ``(AA) average per-
                                                gallon motor vehicle 
                                                emissions (measured on 
                                                a mass basis) of air 
                                                pollutants in excess of 
                                                those emissions 
                                                attributable to 
                                                gasoline sold or 
                                                introduced into 
                                                commerce in the United 
                                                States in calendar year 
                                                2007; or

                                                    ``(BB) a violation 
                                                of any motor vehicle 
                                                emission or fuel 
                                                content limitation 
                                                under any other 
                                                provision of this Act.

                            ``(iii) Calendar year 2025 and 
                        thereafter.--For calendar year 2025, and each 
                        fifth calendar year thereafter, the 
                        Administrator, in consultation with the 
                        Secretary of Agriculture and the Secretary of 
                        Energy, shall revise the applicable performance 
                        standard to require that each fuel provider 
                        shall additionally reduce, to the maximum 
                        extent practicable, the average lifecycle 
                        greenhouse gas emissions per unit of energy of 
                        the aggregate quantity of transportation fuel 
                        introduced by the fuel provider into commerce 
                        in the United States.
                            ``(iv) Revision of regulations.--In 
                        accordance with the purposes of the Energy 
                        Independence, Clean Air, and Climate Security 
                        Act of 2007 , the Administrator may, as 
                        appropriate, revise the regulations promulgated 
                        under clause (i) as necessary to reflect or 
                        respond to changes in the transportation fuel 
                        market or other relevant circumstances.
                            ``(v) Method of calculation.--In 
                        calculating the lifecycle greenhouse gas 
                        emissions of hydrogen or electricity (when used 
                        as a transportation fuel) pursuant to clause 
                        (i)(I), the Administrator shall--
                                    ``(I) include emissions resulting 
                                from the production of the hydrogen or 
                                electricity; and
                                    ``(II) consider to be equivalent to 
                                the energy delivered by 1 gallon of 
                                ethanol the energy delivered by--
                                            ``(aa) 6.4 kilowatt-hours 
                                        of electricity;
                                            ``(bb) 132 standard cubic 
                                        feet of hydrogen; or
                                            ``(cc) 1.25 gallons of 
                                        liquid hydrogen.
                    ``(C) Election to participate.--An electricity 
                provider may elect to participate in the program under 
                this section if the electricity provider--
                            ``(i) provides and separately tracks 
                        electricity for transportation through a meter 
                        that--
                                    ``(I) measures the electricity used 
                                for transportation separately from 
                                electricity used for other purposes; 
                                and
                                    ``(II) allows for load management 
                                and time-of-use rates; and
                            ``(ii) generates more than 15 percent of 
                        the electricity sold by the electricity 
                        provider from renewable energy sources.
                    ``(D) Credits.--
                            ``(i) In general.--The regulations 
                        promulgated to carry out this paragraph shall 
                        permit fuel providers to receive credits for 
                        achieving, during a calendar year, greater 
                        reductions in lifecycle greenhouse gas 
                        emissions of the fuel produced, blended, or 
                        imported by the fuel provider than are required 
                        under subparagraph (B)(i)(IV).
                            ``(ii) Method of calculation.--The number 
                        of credits received by a fuel provider as 
                        described clause (i) for a calendar year shall 
                        be calculated by multiplying--
                                    ``(I) the aggregate quantity of 
                                fuel produced, distributed, or imported 
                                by the fuel provider in the calendar 
                                year; and
                                    ``(II) the difference between--
                                            ``(aa) the lifecycle 
                                        greenhouse gas emissions of 
                                        that quantity of fuel; and
                                            ``(bb) the maximum 
                                        lifecycle greenhouse gas 
                                        emissions of that quantity of 
                                        fuel permitted for the calendar 
                                        year under subparagraph 
                                        (B)(i)(VI).
                    ``(E) Compliance.--Each fuel provider subject to 
                this paragraph shall demonstrate compliance with this 
                paragraph, including, as necessary, through the use of 
                credits banked or purchased.
                    ``(F) No effect on state authority or more 
                stringent requirements.--Nothing in this subsection--
                            ``(i) affects the authority of a State to 
                        establish, or to maintain in effect, any 
                        transportation fuel performance standard or 
                        other similar standard that is more stringent 
                        than a standard established under this 
                        paragraph; or
                            ``(ii) supercedes or otherwise affects any 
                        more stringent requirement under any other 
                        provision of this Act.''.
    (b) Advanced Clean Fuel Volume Standard.--Section 211(o)(2) of the 
Clean Air Act (42 U.S.C. 7545(o)(2)) is amended--
            (1) in subparagraph (B)--
                    (A) by striking the subparagraph designation and 
                heading and all that follows through ``For the 
                purpose'' and inserting the following:
                    ``(B) Applicable volume.--For the purpose''; and
                    (B) by striking clauses (ii) through (iv); and
            (2) by adding at the end the following:
                    ``(C) Advanced clean fuel volume standard.--
                            ``(i) Definition of renewable fuel.--In 
                        this subparagraph, the term `renewable fuel' 
                        has the meaning given the term in paragraph 
                        (11).
                            ``(ii) Increase in renewable fuel volume.--
                                    ``(I) In general.--Unless, based on 
                                the results of the study carried out 
                                under paragraph (12), the Administrator 
                                determines that the total applicable 
                                volume of renewable fuel specified in 
                                clause (iii) for a calendar year would 
                                be technically infeasible, or would 
                                result in 1 or more adverse lifecycle 
                                impacts that cannot be adequately 
                                mitigated under subclause (V), the 
                                Administrator shall promulgate 
                                regulations that require the aggregate 
                                quantity of transportation fuel sold or 
                                introduced into commerce in the United 
                                States to contain such volume of 
                                renewable fuel as the Administrator 
                                determines will result in the total 
                                minimum volume for the calendar year 
                                specified in clause (iii).
                                    ``(II) Increase.--If the 
                                Administrator makes a determination 
                                under subclause (I), the Administrator 
                                may promulgate regulations that require 
                                such increase in the aggregate quantity 
                                of transportation fuel sold or 
                                introduced into commerce in the United 
                                States as the Administrator determines 
                                to be appropriate, with respect to the 
                                determination under subclause (I).
                                    ``(III) Schedule of regulations.--
                                In implementing subclauses (I) and 
                                (II), the Administrator shall--
                                            ``(aa) not later than 
                                        January 1, 2010, promulgate 
                                        regulations establishing any 
                                        total applicable volume 
                                        requirements for calendar years 
                                        2011 through 2013; and
                                            ``(bb) not later than 
                                        January 1, 2013, and every 3 
                                        years thereafter, promulgate 
                                        regulations establishing any 
                                        total applicable volume 
                                        requirements for the 3-
                                        calendar-year period beginning 
                                        with the calendar year after 
                                        the calendar year in which the 
                                        regulations are promulgated.
                                    ``(IV) Effective date.--The 
                                regulations promulgated under 
                                subclauses (I) and (II) shall take 
                                effect not sooner than 1 year after the 
                                date of promulgation of the 
                                regulations.
                                    ``(V) Mitigation.--
                                            ``(aa) In general.--For 
                                        purposes of this clause, the 
                                        Administrator, in consultation 
                                        with the heads of other 
                                        appropriate Federal agencies, 
                                        shall use the existing 
                                        authorities of the 
                                        Administrator to mitigate, to 
                                        the maximum extent practicable, 
                                        using regulatory or 
                                        nonregulatory approaches as the 
                                        Administrator determines to be 
                                        appropriate, adverse lifecycle 
                                        impacts in accordance with a 
                                        schedule that ensures that 
                                        mitigation measures are in 
                                        place by a date sufficient to 
                                        avoid adverse lifecycle 
                                        impacts.
                                            ``(bb) Air quality 
                                        impacts.--For the purpose of 
                                        this subclause, in the case of 
                                        any air quality-related adverse 
                                        lifecycle impact resulting from 
                                        emissions from motor vehicles 
                                        using renewable fuel, the 
                                        Administrator shall ensure, by 
                                        regulation, that gasoline 
                                        containing renewable fuel does 
                                        not result in--

                                                    ``(AA) average per 
                                                gallon motor vehicle 
                                                emissions (measured on 
                                                a mass basis) of air 
                                                pollutants in excess of 
                                                the quantity of those 
                                                emissions attributable 
                                                to gasoline sold or 
                                                introduced into 
                                                commerce in the United 
                                                States during calendar 
                                                year 2007; or

                                                    ``(BB) a violation 
                                                of any motor vehicle 
                                                emission or fuel 
                                                content limitation 
                                                under any other 
                                                provision of this Act.

                            ``(iii) Total advanced clean fuel volume.--
                                    ``(I) Calendar years 2011 through 
                                2025.--For the purpose of clause (ii), 
                                the total applicable volumes for any of 
                                calendar years 2011 through 2025 
                                (including the minimum additional 
                                volumes required under subparagraph 
                                (B)) shall be determined in accordance 
                                with the following table:


 
------------------------------------------------------------------------
                                      Total        Total        Total
                                    applicable   volume of    volume of
                                    volume of     phase II    phase III
          Calendar year             renewable    renewable    renewable
                                     fuel (in     fuel (in     fuel (in
                                   billions of  billions of  billions of
                                     gallons)     gallons)     gallons)
------------------------------------------------------------------------
2011.............................         12.0            0            0
2012.............................         14.0          0.5         0.25
2013.............................         16.0          0.5         0.25
2014.............................         18.0          1.5         0.75
2015.............................         20.0          1.5         0.75
2016.............................         22.0          3.0          1.5
2017.............................         24.0          3.0          1.5
2018.............................         26.0          5.0          2.5
2019.............................         28.0          5.0          2.5
2020.............................         30.0          8.0          4.0
2021.............................         31.0          8.0          4.0
2022.............................         32.0         11.0          6.0
2023.............................         33.0         11.0          6.0
2024.............................         34.0         11.0          6.0
2025.............................         35.0         13.0         8.0.
------------------------------------------------------------------------

                                    ``(II) Calendar year 2026 and 
                                thereafter.--Subject to clause (iv), 
                                for the purposes of clause (ii), the 
                                total applicable volume for calendar 
                                year 2026 and each calendar year 
                                thereafter shall be determined by the 
                                Administrator, in consultation with the 
                                Secretary of Agriculture and the 
                                Secretary of Energy, based on a review 
                                of the implementation of this 
                                subparagraph and subparagraph (B) 
                                during calendar years 2011 through 
                                2025, including a review of--
                                            ``(aa) the impact of 
                                        renewable fuel, phase II 
                                        renewable fuel, and phase III 
                                        renewable fuel on the 
                                        environment of the United 
                                        States and the world; and
                                            ``(bb) the impact of the 
                                        use of renewable fuel, phase II 
                                        renewable fuel, and phase III 
                                        renewable fuel on other 
                                        factors, including job 
                                        creation, rural economic 
                                        development, domestic energy 
                                        production, and the energy 
                                        security of the United States.
                                    ``(III) Revision of regulations.--
                                In accordance with the purposes of the 
                                Energy Independence, Clean Air, and 
                                Climate Security Act of 2007 , the 
                                Administrator may, as appropriate, 
                                revise the regulations promulgated 
                                pursuant to clause (i) as the 
                                Administrator determines to be 
                                necessary to reflect or respond to--
                                            ``(aa) changes in the 
                                        transportation fuel market; or
                                            ``(bb) other relevant 
                                        circumstances.
                            ``(iv) Calculation of total advanced clean 
                        fuel volume.--For the purpose of clause 
                        (iii)(II), the total applicable volume for 
                        calendar year 2026 and each calendar year 
                        thereafter shall be equal to the product 
                        obtained by multiplying--
                                    ``(I) the number of gallons of 
                                gasoline that the Administrator 
                                estimates will be sold or introduced 
                                into commerce in the calendar year; and
                                    ``(II) the ratio that, as 
                                applicable--
                                            ``(aa) 35,000,000,000 
                                        gallons of renewable fuel 
                                        (including up to 13,000,000,000 
                                        gallons of phase II renewable 
                                        fuel and up to 8,000,000,000 
                                        gallons of phase III renewable 
                                        fuel); bears to
                                            ``(bb) the number of 
                                        gallons of conventional 
                                        transportation fuel sold or 
                                        introduced into commerce in 
                                        calendar year 2025.
                            ``(v) No effect on more stringent 
                        requirements.--Nothing in this subparagraph 
                        supercedes or otherwise affects any more 
                        stringent requirement under any other provision 
                        of this Act.''.
    (c) Study.--Section 211(o) of the Clean Air Act (42 U.S.C. 7545(o)) 
(as amended by subsection (a)) is amended by adding at the end the 
following:
            ``(12) Study on effects of increase in renewable fuel 
        volume.--
                    ``(A) In general.--The Administrator shall offer to 
                enter into an agreement with the Academy under which 
                the Academy shall periodically carry out, and submit to 
                Congress and the Administrator a report on the results 
                of, a study to determine whether the total applicable 
                volume of renewable fuel specified in paragraph 
                (2)(C)(iii) or the advanced clean fuel performance 
                standards specified in paragraph (11)(B) for any 
                calendar year would reasonably be anticipated--
                            ``(i) to result in 1 or more adverse 
                        lifecycle impacts; or
                            ``(ii) to be technically infeasible.
                    ``(B) Schedule of studies.--In implementing 
                subparagraph (A), the Administrator shall--
                            ``(i) not later than 90 days after the date 
                        of enactment of this paragraph, offer to enter 
                        into an agreement with the Academy under which 
                        the Academy shall conduct the study described 
                        in subparagraph (A) with respect to calendar 
                        years 2011 through 2013; and
                            ``(ii) not later than 3 years after the 
                        deadline specified in clause (i), and every 3 
                        years thereafter, offer to enter into an 
                        agreement with the Academy under which the 
                        Academy shall conduct the study described in 
                        subparagraph (A) with respect to the 3-
                        calendar-year period following the most recent 
                        3-calendar-year period studied by the Academy 
                        under this paragraph.
                    ``(C) Initial study of analytical methods.--The 
                first study conducted under this paragraph shall 
                include an identification and development of analytical 
                methods for use--
                            ``(i) in determining the lifecycle 
                        greenhouse gas emissions of conventional 
                        transportation fuel and renewable fuel; and
                            ``(ii) in assessing the impacts of 
                        increasing volumes of renewable fuel in the 
                        transportation fuel supply on--
                                    ``(I) the environment of the United 
                                States and the world, taking into 
                                consideration potential additional 
                                warming of the oceans and surface of 
                                Earth as a result of changes in land 
                                use and cover; and
                                    ``(II) food and feedstock supply 
                                and prices.''.
    (d) Opt-In Areas Under Reformulated Gasoline Program.--Section 
211(k)(6)(B) of the Clean Air Act (42 U.S.C. 7545(k)(6)(B)) is 
amended--
            (1) in the subparagraph heading, by striking ``Ozone 
        transport region'' and inserting ``Additional opt-in areas''; 
        and
            (2) in clause (i)(I)--
                    (A) by striking ``in the ozone transport region 
                established by section 184(a)''; and
                    (B) by striking ``(other than an area classified as 
                a marginal, moderate, serious, or severe ozone 
                nonattainment area under subpart 2 of part D of title 
                I)''.

SEC. 203. VOLUNTARY RENEWABLE FUELS LABELING PROGRAM.

    Section 211(o) of the Clean Air Act (42 U.S.C. 7545(o)) (as amended 
by section 202(c)) is amended by adding at the end the following:
            ``(13) Voluntary renewable fuels labeling program.--
                    ``(A) Definitions.--In this paragraph:
                            ``(i) Program.--The term `Program' means 
                        the Voluntary Renewable Fuels Labeling Program 
                        established under subparagraph (B).
                            ``(ii) Renewable fuel.--The term `renewable 
                        fuel' has the meaning given the term in 
                        paragraph (11).
                            ``(iii) Voluntary management practice.--The 
                        term `voluntary management practice' means a 
                        practice that protects the ecological values 
                        (including water, soil, and biological 
                        diversity) of a landscape used to produce 
                        renewable biomass.
                    ``(B) Establishment.--The Administrator shall 
                establish a program, to be modeled on the Energy Star 
                Program, to promote consumer awareness of renewable 
                fuels that meet the requirements of subparagraph (C).
                    ``(C) Requirements.--The Program shall provide 
                authorization to applicable entities for the use of a 
                unique label for any renewable fuel that--
                            ``(i) has a lifecycle greenhouse gas 
                        emission rate that is at least 50 percent lower 
                        than the fuel emission baseline; and
                            ``(ii) complies with applicable voluntary 
                        management practices established under 
                        subparagraph (D)(i).
                    ``(D) Voluntary management practices, terms, and 
                procedures.--In carrying out the Program, the 
                Administrator shall establish--
                            ``(i) voluntary management practices for 
                        use in determining the eligibility of a 
                        renewable fuel for a unique renewable fuel 
                        label under the Program;
                            ``(ii) terms governing the use of a unique 
                        renewable fuel label; and
                            ``(iii) procedures for--
                                    ``(I) designating a renewable fuel 
                                to be eligible for a unique renewable 
                                fuel label;
                                    ``(II) verifying the values 
                                reported by producers of renewable 
                                fuel; and
                                    ``(III) monitoring compliance with 
                                the voluntary management practices 
                                established under clause (i).
                    ``(E) Label information.--The label to be applied 
                to each qualifying renewable fuel under the Program 
                shall indicate the lifecycle greenhouse gas emission 
                rate of the renewable fuel.
                    ``(F) Advisory committee.--
                            ``(i) Establishment.--The Administrator 
                        shall establish an independent advisory 
                        committee to assist the Administrator in 
                        carrying out the Program.
                            ``(ii) Duties.--Not less frequently than 
                        once every 2 years, the advisory committee 
                        shall provide recommendations to the 
                        Administrator for updates and improvements to 
                        the Program, including recommendations relating 
                        to the voluntary management practices 
                        established under subparagraph (D)(i).''.

SEC. 204. WATER QUALITY PROTECTION.

    Section 211(c)(1) of the Clean Air Act (42 U.S.C. 7545(c)(1)) is 
amended--
            (1) by striking ``nonroad vehicle (A) if in the judgment of 
        the Administrator'' and inserting the following: ``nonroad 
        vehicle--
                    ``(A) if, in the judgment of the Administrator, any 
                fuel or fuel additive or'';
            (2) by striking ``, or (B) if'' and inserting the 
        following: ``; or
                    ``(B) if''; and
            (3) in subparagraph (A), by striking ``air pollution 
        which'' and inserting ``air pollution or water pollution 
        (including any degradation in the quality of groundwater) 
        that''.

                  Subtitle B--Assistance and Research

SEC. 211. SMALL ETHANOL PRODUCER CREDIT EXPANSION FOR PRODUCERS OF 
              SUCROSE AND ETHANOL.

    (a) In General.--Subparagraph (C) of section 40(b)(4) of the 
Internal Revenue Code of 1986 (relating to small ethanol producer 
credit) is amended by inserting ``(30,000,000 gallons for any sucrose 
or cellulosic ethanol producer)'' after ``15,000,000 gallons''.
    (b) Sucrose or Cellulosic Ethanol Producer.--Section 40(b)(4) of 
the Internal Revenue Code of 1986 is amended by adding at the end the 
following new subparagraph:
                    ``(E) Sucrose or cellulosic ethanol producer.--
                            ``(i) In general.--For purposes of this 
                        paragraph, the term `sucrose or cellulosic 
                        ethanol producer' means a producer of ethanol 
                        using sucrose feedstock or a producer of 
                        cellulosic biomass ethanol (as defined in 
                        section 168(l)(3)).
                            ``(ii) Sucrose feedstock.--For purposes of 
                        clause (i), the term `sucrose feedstock' means 
                        any raw sugar, refined sugar, or sugar 
                        equivalents (including juice and extract). Such 
                        term does not include any molasses, beet thick 
                        juice, or other similar products as determined 
                        by the Secretary.''.
    (c) Conforming Amendments.--
            (1) Section 40(g)(2) of the Internal Revenue Code of 1986 
        is amended by striking ``15,000,000 gallon limitation'' and 
        inserting ``15,000,000 and 30,000,000 gallon limitations''.
            (2) Section 40(g)(5)(B) of such Code is amended by striking 
        ``15,000,000 gallons'' and inserting ``the gallon limitation 
        under subsection (b)(4)(C)''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SEC. 212. RESEARCH AND DEVELOPMENT IN SUPPORT OF LOW-CARBON FUELS.

    (a) Declaration of Policy.--Congress declares that, in order to 
achieve maximum reductions in greenhouse gas emissions, enhance 
national security, and ensure the protection of wildlife habitat, 
biodiversity, water quality, air quality, and rural and regional 
economies throughout the lifecycle of each low-carbon fuel, it is 
necessary and desirable to undertake a combination of basic and applied 
research, as well as technology development and demonstration, 
involving the colleges and universities of the United States, in 
partnership with the Federal Government, State governments, and the 
private sector.
    (b) Purpose.--The purpose of this section is to provide for 
research support to facilitate the development of sustainable markets 
and technologies to produce and use woody biomass and other low-carbon 
fuels for the production of thermal and electric energy, biofuels, and 
bioproducts.
    (c) Grant Program.--The Administrator shall establish a program to 
provide to eligible entities (as identified by the Administrator) 
grants for use in--
            (1) providing financial support for not more than 4 nor 
        less than 6 demonstration facilities that--
                    (A) use woody biomass to deploy advanced 
                technologies for production of thermal and electric 
                energy, biofuels, and bioproducts; and
                    (B) are targeted at regional feedstocks and 
                markets;
            (2) conducting targeted research for the development of 
        cellulosic ethanol and other liquid fuels from woody or other 
        biomass that may be used in transportation or stationary 
        applications, such as industrial processes or industrial, 
        commercial, and residential heating;
            (3) conducting research into the best scientifically-based 
        and periodically-updated methods of assessing and certifying 
        the impacts of each low-carbon fuel with respect to--
                    (A) the reduction in lifecycle greenhouse gas 
                emissions of each fuel as compared to--
                            (i) the fuel emission baseline; and
                            (ii) the greenhouse gas emissions of other 
                        sectors, such as the agricultural, industrial, 
                        and manufacturing sectors;
                    (B) the contribution of the fuel toward enhancing 
                the energy security of the United States by displacing 
                imported petroleum and petroleum products;
                    (C) any impacts of the fuel on wildlife habitat, 
                biodiversity, water quality, and air quality; and
                    (D) any effect of the fuel with respect to rural 
                and regional economies;
            (4) conducting research to determine to what extent the use 
        of low-carbon fuels in the transportation sector would impact 
        greenhouse gas emissions in other sectors, such as the 
        agricultural, industrial, and manufacturing sectors;
            (5) conducting research for the development of the supply 
        infrastructure that may provide renewable biomass feedstocks in 
        a consistent, predictable, and environmentally-sustainable 
        manner;
            (6) conducting research for the development of supply 
        infrastructure that may provide renewable low-carbon fuels in a 
        consistent, predictable, and environmentally-sustainable 
        manner; and
            (7) conducting policy research on the global movement of 
        low-carbon fuels in a consistent, predictable, and 
        environmentally-sustainable manner.
    (d) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section--
            (1) $45,000,000 for fiscal year 2009;
            (2) $50,000,000 for fiscal year 2010;
            (3) $55,000,000 for fiscal year 2011;
            (4) $60,000,000 for fiscal year 2012; and
            (5) $65,000,000 for fiscal year 2013.

                       TITLE III--CLEAN POWER ACT

SEC. 301. SHORT TITLE.

    This title may be cited as the ``Clean Power Act of 2007''.

SEC. 302. ELECTRIC ENERGY GENERATION EMISSION REDUCTIONS.

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

      ``TITLE VII--ELECTRIC ENERGY GENERATION EMISSION REDUCTIONS

``Sec. 701. Findings.
``Sec. 702. Purposes.
``Sec. 703. Definitions.
``Sec. 704. Emission limitations.
``Sec. 705. Emission allowances.
``Sec. 706. Permitting and trading of emission allowances.
``Sec. 707. Emission allowance allocation.
``Sec. 708. Mercury emission limitations.
``Sec. 709. Other hazardous air pollutants.
``Sec. 710. Effect of failure to promulgate regulations.
``Sec. 711. Prohibitions.
``Sec. 712. Modernization of electricity generating facilities.
``Sec. 713. Relationship to other law.

``SEC. 701. FINDINGS.

    ``Congress finds that--
            ``(1) public health and the environment continue to suffer 
        as a result of pollution emitted by powerplants across the 
        United States, despite the success of Public Law 101-549 
        (commonly known as the `Clean Air Act Amendments of 1990') (42 
        U.S.C. 7401 et seq.) in reducing emissions;
            ``(2) according to the most reliable scientific knowledge, 
        acid rain precursors must be significantly reduced for the 
        ecosystems of the Northeast and Southeast to recover from the 
        ecological harm caused by acid deposition;
            ``(3) because lakes and sediments across the United States 
        are being contaminated by mercury emitted by powerplants, there 
        is an increasing risk of mercury poisoning of aquatic habitats 
        and fish-consuming human populations;
            ``(4)(A) electricity generation accounts for approximately 
        40 percent of the total emissions in the United States of 
        carbon dioxide, a major greenhouse gas causing global warming; 
        and
            ``(B) the quantity of carbon dioxide in the atmosphere is 
        growing without constraint and well beyond the international 
        commitments of the United States;
            ``(5) the cumulative impact of powerplant emissions on 
        public and environmental health must be addressed swiftly by 
        reducing those harmful emissions to levels that are less 
        threatening; and
            ``(6)(A) the atmosphere is a public resource; and
            ``(B) emission allowances, representing permission to use 
        that resource for disposal of air pollution from electricity 
        generation, should be allocated to promote public purposes, 
        including--
                    ``(i) protecting electricity consumers from adverse 
                economic impacts;
                    ``(ii) providing transition assistance to adversely 
                affected employees, communities, and industries; and
                    ``(iii) promoting clean energy resources and energy 
                efficiency.

``SEC. 702. PURPOSES.

    ``The purposes of this title are--
            ``(1) to alleviate the environmental and public health 
        damage caused by emissions of sulfur dioxide, nitrogen oxides, 
        carbon dioxide, and mercury resulting from the combustion of 
        fossil fuels in the generation of electric and thermal energy;
            ``(2) to reduce by 2012 the annual national emissions from 
        electricity generating facilities to not more than--
                    ``(A) 2,250,000 tons of sulfur dioxide;
                    ``(B) 1,510,000 tons of nitrogen oxides; and
                    ``(C) 2,050,000,000 tons of carbon dioxide;
            ``(3) to reduce by 2011 the annual national emissions of 
        mercury from electricity generating facilities to not more than 
        5 tons;
            ``(4) to effectuate the reductions described in paragraphs 
        (2) and (3) by--
                    ``(A) requiring electricity generating facilities 
                to comply with specified emission limitations by 
                specified deadlines; and
                    ``(B) allowing electricity generating facilities to 
                meet the emission limitations (other than the emission 
                limitation for mercury) through an alternative method 
                of compliance consisting of an emission allowance and 
                transfer system; and
            ``(5) to encourage energy conservation, use of renewable 
        and clean alternative technologies, and pollution prevention as 
        long-range strategies, consistent with this title, for reducing 
        air pollution and other adverse impacts of energy generation 
        and use.

``SEC. 703. DEFINITIONS.

    ``In this title:
            ``(1) Covered pollutant.--The term `covered pollutant' 
        means--
                    ``(A) sulfur dioxide;
                    ``(B) any nitrogen oxide;
                    ``(C) carbon dioxide; and
                    ``(D) mercury.
            ``(2) Electricity generating facility.--The term 
        `electricity generating facility' means an electric or thermal 
        electricity generating unit, a combination of such units, or a 
        combination of 1 or more such units and 1 or more combustion 
        devices, that--
                    ``(A) has a nameplate capacity of 15 megawatts or 
                more (or the equivalent in thermal energy generation, 
                determined in accordance with a methodology developed 
                by the Administrator);
                    ``(B) generates electric energy, for sale, through 
                combustion of fossil fuel; and
                    ``(C) emits a covered pollutant into the 
                atmosphere.
            ``(3) Electricity intensive product.--The term `electricity 
        intensive product' means a product with respect to which the 
        cost of electricity consumed in the production of the product 
        represents more than 5 percent of the value of the product.
            ``(4) Emission allowance.--The term `emission allowance' 
        means a limited authorization to emit in accordance with this 
        title--
                    ``(A) 1 ton of sulfur dioxide;
                    ``(B) 1 ton of nitrogen oxides; or
                    ``(C) 1 ton of carbon dioxide.
            ``(5) Energy efficiency project.--The term `energy 
        efficiency project' means any specific action (other than 
        ownership or operation of an energy efficient building) 
        commenced after the date of enactment of this title--
                    ``(A) at a facility (other than an electricity 
                generating facility), that verifiably reduces the 
                annual electricity or natural gas consumption per unit 
                output of the facility, as compared with the annual 
                electricity or natural gas consumption per unit output 
                that would be expected in the absence of an allocation 
                of emission allowances (as determined by the 
                Administrator); or
                    ``(B) by an entity that is primarily engaged in the 
                transmission and distribution of electricity, that 
                significantly improves the efficiency of that type of 
                entity, as compared with standards for efficiency 
                developed by the Administrator, in consultation with 
                the Secretary of Energy, after the date of enactment of 
                this title.
            ``(6) Energy efficient building.--The term `energy 
        efficient building' means a residential building or commercial 
        building completed after the date of enactment of this title 
        for which the projected lifetime consumption of electricity or 
        natural gas for heating, cooling, and ventilation is at least 
        30 percent less than the lifetime consumption of a typical new 
        residential building or commercial building, as determined by 
        the Administrator (in consultation with the Secretary of 
        Energy)--
                    ``(A) on a State or regional basis; and
                    ``(B) taking into consideration--
                            ``(i) applicable building codes; and
                            ``(ii) consumption levels achieved in 
                        practice by new residential buildings or 
                        commercial buildings in the absence of an 
                        allocation of emission allowances.
            ``(7) Energy efficient product.--The term `energy efficient 
        product' means a product manufactured after the date of 
        enactment of this title that has an expected lifetime 
        electricity or natural gas consumption that--
                    ``(A) is less than the average lifetime electricity 
                or natural gas consumption for that type of product; 
                and
                    ``(B) does not exceed the lesser of--
                            ``(i) the maximum energy consumption that 
                        qualifies for the applicable Energy Star label 
                        for that type of product; or
                            ``(ii) the average energy consumption of 
                        the most efficient 25 percent of that type of 
                        product manufactured in the same year.
            ``(8) Lifetime.--The term `lifetime' means--
                    ``(A) in the case of a residential building that is 
                an energy efficient building, 30 years;
                    ``(B) in the case of a commercial building that is 
                an energy efficient building, 15 years; and
                    ``(C) in the case of an energy efficient product, a 
                period determined by the Administrator to be the 
                average life of that type of energy efficient product.
            ``(9) Mercury.--The term `mercury' includes any mercury 
        compound.
            ``(10) New clean fossil fuel-fired electricity generating 
        unit.--The term `new clean fossil fuel-fired electricity 
        generating unit' means a unit that--
                    ``(A) has been in operation for 10 years or less; 
                and
                    ``(B) is--
                            ``(i) a natural gas fired generator that--
                                    ``(I) has an energy conversion 
                                efficiency of at least 55 percent; and
                                    ``(II) uses best available control 
                                technology (as defined in section 169);
                            ``(ii) a generator that--
                                    ``(I) uses integrated gasification 
                                combined cycle technology;
                                    ``(II) uses best available control 
                                technology (as defined in section 169); 
                                and
                                    ``(III) has an energy conversion 
                                efficiency of at least 45 percent; or
                            ``(iii) a fuel cell operating on fuel 
                        derived from a nonrenewable source of energy.
            ``(11) Nonwestern region.--The term `nonwestern region' 
        means the area of the States that is not included in the 
        western region.
            ``(12) Renewable electricity generating unit.--The term 
        `renewable electricity generating unit' means a unit that--
                    ``(A) has been in operation for 10 years or less; 
                and
                    ``(B) generates electric energy by means of--
                            ``(i) wind;
                            ``(ii) biomass;
                            ``(iii) landfill gas;
                            ``(iv) a geothermal, solar thermal, or 
                        photovoltaic source; or
                            ``(v) a fuel cell operating on fuel derived 
                        from a renewable source of energy.
            ``(13) Small business concern.--The term `small business 
        concern' has the meaning given the term in section 3 of the 
        Small Business Act (15 U.S.C. 632).
            ``(14) Small electricity generating facility.--The term 
        `small electricity generating facility' means an electric or 
        thermal electricity generating unit, or combination of units, 
        that--
                    ``(A) has a nameplate capacity of less than 15 
                megawatts (or the equivalent in thermal energy 
                generation, determined in accordance with a methodology 
                developed by the Administrator);
                    ``(B) generates electric energy, for sale, through 
                combustion of fossil fuel; and
                    ``(C) emits a covered pollutant into the 
                atmosphere.
            ``(15) Western region.--The term `western region' means the 
        area comprising the States of Arizona, California, Colorado, 
        Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, 
        and Wyoming.

``SEC. 704. EMISSION LIMITATIONS.

    ``(a) In General.--Subject to subsections (b) and (c), the 
Administrator shall promulgate regulations to ensure that, during 2012 
and each year thereafter (in the case of each covered pollutant other 
than carbon dioxide), and during 2022 and each year thereafter (in the 
case of carbon dioxide), the total annual emissions of covered 
pollutants from all electricity generating facilities located in all 
States does not exceed--
            ``(1) in the case of sulfur dioxide--
                    ``(A) 275,000 tons in the western region; or
                    ``(B) 1,975,000 tons in the nonwestern region;
            ``(2) in the case of nitrogen oxides, 1,510,000 tons;
            ``(3) in the case of carbon dioxide, 2,050,000,000 tons; or
            ``(4) in the case of mercury, 5 tons.
    ``(b) Excess Emissions Based on Unused Allowances.--The regulations 
promulgated under subsection (a) shall authorize emissions of covered 
pollutants in excess of the national emission limitations established 
under that subsection for a year to the extent that the number of tons 
of the excess emissions is less than or equal to the number of emission 
allowances that are--
            ``(1) used in the year; but
            ``(2) allocated for any previous year under section 707.
    ``(c) Reductions.--For 2012 (or 2022, in the case of carbon 
dioxide) and each year thereafter, the quantity of emissions specified 
for each covered pollutant in subsection (a) shall be reduced by the 
sum of--
            ``(1) the number of tons of the covered pollutant that were 
        emitted by small electricity generating facilities in the 
        second preceding year; and
            ``(2) any number of tons of reductions in emissions of the 
        covered pollutant required under section 705(h).

``SEC. 705. EMISSION ALLOWANCES.

    ``(a) Creation and Allocation.--
            ``(1) In general.--For 2012 (or 2022, in the case of carbon 
        dioxide) and each year thereafter, subject to paragraph (2), 
        there are created, and the Administrator shall allocate in 
        accordance with section 707, emission allowances as follows:
                    ``(A) In the case of sulfur dioxide--
                            ``(i) 275,000 emission allowances for each 
                        year for use in the western region; and
                            ``(ii) 1,975,000 emission allowances for 
                        each year for use in the nonwestern region.
                    ``(B) In the case of nitrogen oxides, 1,510,000 
                emission allowances for each year.
                    ``(C) In the case of carbon dioxide, 2,050,000,000 
                emission allowances for each year.
            ``(2) Reductions.--For 2012 (or 2022, in the case of carbon 
        dioxide) and each year thereafter, the number of emission 
        allowances specified for each covered pollutant in paragraph 
        (1) shall be reduced by a number equal to the sum of--
                    ``(A) the number of tons of the covered pollutant 
                that were emitted by small electricity generating 
                facilities in the second preceding year; and
                    ``(B) any number of tons of reductions in emissions 
                of the covered pollutant required under subsection (h).
    ``(b) Nature of Emission Allowances.--
            ``(1) Not a property right.--An emission allowance 
        allocated by the Administrator under subsection (a) is not a 
        property right.
            ``(2) No limit on authority to terminate or limit.--Nothing 
        in this title or any other provision of law limits the 
        authority of the United States to terminate or limit an 
        emission allowance.
            ``(3) Tracking and transfer of emission allowances.--
                    ``(A) In general.--Not later than 1 year after the 
                date of enactment of this title, the Administrator 
                shall promulgate regulations to establish an emission 
                allowance tracking and transfer system for emission 
                allowances of sulfur dioxide, nitrogen oxides, and 
                carbon dioxide.
                    ``(B) Requirements.--The emission allowance 
                tracking and transfer system established under 
                subparagraph (A) shall--
                            ``(i) incorporate the requirements of 
                        subsections (b) and (d) of section 412 (except 
                        that written certification by the transferee 
                        shall not be necessary to effect a transfer); 
                        and
                            ``(ii) permit any entity--
                                    ``(I) to buy, sell, or hold an 
                                emission allowance; and
                                    ``(II) to permanently retire an 
                                unused emission allowance.
                    ``(C) Proceeds of transfers.--Proceeds from the 
                transfer of emission allowances by any person to which 
                the emission allowances have been allocated--
                            ``(i) shall not constitute funds of the 
                        United States; and
                            ``(ii) shall not be available to meet any 
                        obligations of the United States.
    ``(c) Identification and Use.--
            ``(1) In general.--Each emission allowance allocated by the 
        Administrator shall bear a unique serial number, including--
                    ``(A) an identifier of the covered pollutant to 
                which the emission allowance pertains; and
                    ``(B) the first year for which the allowance may be 
                used.
            ``(2) Sulfur dioxide emission allowances.--In the case of 
        sulfur dioxide emission allowances, the Administrator shall 
        ensure that the emission allowances allocated to electricity 
        generating facilities in the western region are distinguishable 
        from emission allowances allocated to electricity generating 
        facilities in the nonwestern region.
            ``(3) Year of use.--Each emission allowance may be used in 
        the year for which the emission allowance is allocated or in 
        any subsequent year.
    ``(d) Annual Submission of Emission Allowances.--
            ``(1) In general.--On or before April 1, 2013 (or April 1, 
        2023, in the case of carbon dioxide), and April 1 of each year 
        thereafter, the owner or operator of each electricity 
        generating facility shall submit to the Administrator 1 
        emission allowance for the applicable covered pollutant (other 
        than mercury) for each ton of sulfur dioxide, nitrogen oxides, 
        or carbon dioxide emitted by the electricity generating 
        facility during the previous calendar year.
            ``(2) Special rule for ozone exceedances.--
                    ``(A) Identification of facilities contributing to 
                nonattainment.--Not later than December 31, 2013, and 
                the end of each 3-year period thereafter, each State, 
                consistent with the obligations of the State under 
                section 110(a)(2)(D), shall identify the electricity 
                generating facilities in the State and in other States 
                that are significantly contributing (as determined 
                based on guidance issued by the Administrator) to 
                nonattainment of the national ambient air quality 
                standard for ozone in the State.
                    ``(B) Submission of additional allowances.--In 2012 
                and each year thereafter, on petition from a State or a 
                person demonstrating that the control measures in 
                effect at an electricity generating facility that is 
                identified under subparagraph (A) as significantly 
                contributing to nonattainment of the national ambient 
                air quality standard for ozone in a State during the 
                previous year are inadequate to prevent the significant 
                contribution described in subparagraph (A), the 
                Administrator, if the Administrator determines that the 
                electricity generating facility is inadequately 
                controlled for nitrogen oxides, may require that the 
                electricity generating facility submit 3 nitrogen oxide 
                emission allowances for each ton of nitrogen oxides 
                emitted by the electricity generating facility during 
                any period of an exceedance of the national ambient air 
                quality standard for ozone in the State during the 
                previous year.
            ``(3) Regional limitations for sulfur dioxide.--The 
        Administrator shall not allow--
                    ``(A) the use of sulfur dioxide emission allowances 
                allocated for the western region to meet the 
                obligations under this subsection of electricity 
                generating facilities in the nonwestern region; or
                    ``(B) the use of sulfur dioxide emission allowances 
                allocated for the nonwestern region to meet the 
                obligations under this subsection of electricity 
                generating facilities in the western region.
    ``(e) Emission Verification, Monitoring, and Recordkeeping.--
            ``(1) In general.--The Administrator shall ensure that 
        Federal regulations, in combination with any applicable State 
        regulations, are adequate to verify, monitor, and document 
        emissions of covered pollutants from electricity generating 
        facilities.
            ``(2) Inventory of emissions from small electricity 
        generating facilities.--On or before July 1, 2008, the 
        Administrator, in cooperation with State agencies, shall 
        complete, and on an annual basis update, a comprehensive 
        inventory of emissions of sulfur dioxide, nitrogen oxides, 
        carbon dioxide, and particulate matter from small electricity 
        generating facilities.
            ``(3) Monitoring information.--
                    ``(A) In general.--Not later than 180 days after 
                the date of enactment of this title, the Administrator 
                shall promulgate regulations to require each 
                electricity generating facility to submit to the 
                Administrator--
                            ``(i) not later than April 1 of each year, 
                        verifiable information on covered pollutants 
                        emitted by the electricity generating facility 
                        in the previous year, expressed in--
                                    ``(I) tons of covered pollutants; 
                                and
                                    ``(II) tons of covered pollutants 
                                per megawatt hour of energy (or the 
                                equivalent thermal energy) generated; 
                                and
                            ``(ii) as part of the first submission 
                        under clause (i), verifiable information on 
                        covered pollutants emitted by the electricity 
                        generating facility in 2002, 2003, and 2004, if 
                        the electricity generating facility was 
                        required to report that information in those 
                        years.
                    ``(B) Source of information.--Information submitted 
                under subparagraph (A) shall be obtained using a 
                continuous emission monitoring system (as defined in 
                section 402).
                    ``(C) Availability to the public.--The information 
                described in subparagraph (A) shall be made available 
                to the public--
                            ``(i) in the case of the first year in 
                        which the information is required to be 
                        submitted under that subparagraph, not later 
                        than 18 months after the date of enactment of 
                        this title; and
                            ``(ii) in the case of each year thereafter, 
                        not later than April 1 of the year.
            ``(4) Ambient air quality monitoring for sulfur dioxide and 
        hazardous air pollutants.--
                    ``(A) In general.--Beginning January 1, 2008, each 
                coal-fired electricity generating facility with an 
                aggregate generating capacity of 50 megawatts or more 
                shall, in accordance with guidelines issued by the 
                Administrator, commence ambient air quality monitoring 
                within a 30-mile radius of the coal-fired electricity 
                generating facility for the purpose of measuring 
                maximum concentrations of sulfur dioxide and hazardous 
                air pollutants emitted by the coal-fired electricity 
                generating facility.
                    ``(B) Location of monitoring points.--Monitoring 
                under subparagraph (A) shall include monitoring at not 
                fewer than 2 points--
                            ``(i) that are at ground level and within 3 
                        miles of the coal-fired electricity generating 
                        facility;
                            ``(ii) at which the concentration of 
                        pollutants being monitored is expected to be 
                        the greatest; and
                            ``(iii) at which the monitoring shall be 
                        the most frequent.
                    ``(C) Frequency of monitoring of sulfur dioxide.--
                Monitoring of sulfur dioxide under subparagraph (A) 
                shall be carried out on a continuous basis and averaged 
                over 5-minute periods.
                    ``(D) Availability to the public.--The results of 
                the monitoring under subparagraph (A) shall be made 
                available to the public.
    ``(f) Excess Emission Penalty.--
            ``(1) In general.--Subject to paragraph (2), section 411 
        shall be applicable to an owner or operator of an electricity 
        generating facility.
            ``(2) Calculation of penalty.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the penalty for failure to submit 
                emission allowances for covered pollutants as required 
                under subsection (d) shall be equal to 3 times the 
                product obtained by multiplying--
                            ``(i) as applicable--
                                    ``(I) the number of tons emitted in 
                                excess of the emission limitation 
                                requirement applicable to the 
                                electricity generating facility; or
                                    ``(II) the number of emission 
                                allowances that the owner or operator 
                                failed to submit; and
                            ``(ii) the average annual market price of 
                        emission allowances (as determined by the 
                        Administrator).
                    ``(B) Mercury.--In the case of mercury, the penalty 
                shall be equal to 3 times the product obtained by 
                multiplying--
                            ``(i) the number of grams emitted in excess 
                        of the emission limitation requirement for 
                        mercury applicable to the electricity 
                        generating facility; and
                            ``(ii) the average cost of mercury controls 
                        at electricity generating units that have a 
                        nameplate capacity of 15 megawatts or more in 
                        all States (as determined by the 
                        Administrator).
    ``(g) Significant Adverse Local Impacts.--
            ``(1) In general.--If the Administrator determines that 
        emissions of an electricity generating facility may reasonably 
        be anticipated to cause or contribute to a significant adverse 
        impact on an area (including endangerment of public health, 
        contribution to acid deposition in a sensitive receptor area, 
        and other degradation of the environment), the Administrator 
        shall limit the emissions of the electricity generating 
        facility as necessary to avoid that impact.
            ``(2) Violation.--Notwithstanding the availability of 
        emission allowances, it shall be a violation of this Act for 
        any electricity generating facility to exceed any limitation on 
        emissions established under paragraph (1).
    ``(h) Additional Reductions.--
            ``(1) Protection of public health or welfare or the 
        environment.--If the Administrator determines that the emission 
        levels necessary to achieve the national emission limitations 
        established under section 704 are not reasonably anticipated to 
        protect public health or welfare or the environment (including 
        protection of children, pregnant women, minority or low-income 
        communities, and other sensitive populations), the 
        Administrator may require reductions in emissions from 
        electricity generating facilities in addition to the reductions 
        required under the other provisions of this title.
            ``(2) Emission allowance trading.--
                    ``(A) Studies.--
                            ``(i) In general.--In 2015 and at the end 
                        of each 3-year period thereafter, the 
                        Administrator shall complete a study of the 
                        impacts of the emission allowance trading 
                        authorized under this title.
                            ``(ii) Required assessment.--The study 
                        shall include an assessment of ambient air 
                        quality in areas surrounding electricity 
                        generating facilities that participate in 
                        emission allowance trading, including a 
                        comparison between--
                                    ``(I) the ambient air quality in 
                                those areas; and
                                    ``(II) the national average ambient 
                                air quality.
                    ``(B) Limitation on emissions.--If the 
                Administrator determines, based on the results of a 
                study under subparagraph (A), that adverse local 
                impacts result from emission allowance trading, the 
                Administrator may require reductions in emissions from 
                electricity generating facilities in addition to the 
                reductions required under the other provisions of this 
                title.
    ``(i) Use of Certain Other Emission Allowances.--
            ``(1) In general.--Subject to paragraph (2), emission 
        allowances or other emission trading instruments created under 
        title I or IV for sulfur dioxide or nitrogen oxides shall not 
        be valid for submission under subsection (d).
            ``(2) Emission allowances placed in reserve.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), an emission allowance described in 
                paragraph (1) that was placed in reserve under section 
                404(a)(2) or 405 or through regulations implementing 
                controls on nitrogen oxides, because an affected unit 
                emitted fewer tons of sulfur dioxide or nitrogen oxides 
                than were permitted under an emission limitation 
                imposed under title I or IV before the date of 
                enactment of this title, shall be considered to be 
                equivalent to \1/4\ of an emission allowance created by 
                subsection (a) for sulfur dioxide or nitrogen oxides, 
                respectively.
                    ``(B) Emission allowances resulting from 
                achievement of new source performance standards.--If an 
                emission allowance described in subparagraph (A) was 
                created and placed in reserve during the period of 2001 
                through 2009 by the owner or operator of an electricity 
                generating facility through the application of 
                pollution control technology that resulted in the 
                achievement and maintenance by the electricity 
                generating facility of the applicable standards of 
                performance required of new sources under section 111, 
                the emission allowance shall be valid for submission 
                under subsection (d).

``SEC. 706. PERMITTING AND TRADING OF EMISSION ALLOWANCES.

    ``(a) In General.--Not later than 1 year after the date of 
enactment of this title, the Administrator shall promulgate regulations 
to establish a permitting and emission allowance trading compliance 
program to implement the limitations on emissions of covered pollutants 
from electricity generating facilities established under section 704.
    ``(b) Emission Allowance Trading With Facilities Other Than 
Electricity Generating Facilities.--
            ``(1) In general.--Subject to paragraph (2) and section 
        705(i), the regulations promulgated to establish the program 
        under subsection (a) shall prohibit use of emission allowances 
        generated from other emission control programs for the purpose 
        of demonstrating compliance with the limitations on emissions 
        of covered pollutants from electricity generating facilities 
        established under section 704.
            ``(2) Exception for certain carbon dioxide emission control 
        programs.--The prohibition described in paragraph (1) shall not 
        apply in the case of carbon dioxide emission allowances 
        generated from an emission control program that limits total 
        carbon dioxide emissions from the entirety of any industrial 
        sector.
    ``(c) Methodology.--The program established under subsection (a) 
shall clearly identify the methodology for the allocation of emission 
allowances, including standards for measuring annual electricity 
generation and energy efficiency as the standards relate to emissions.

``SEC. 707. EMISSION ALLOWANCE ALLOCATION.

    ``(a) Allocation to Electricity Consumers.--
            ``(1) In general.--For 2012 (or 2022, in the case of carbon 
        dioxide) and each year thereafter, after making allocations of 
        emission allowances under subsections (b) through (g), the 
        Administrator shall allocate the remaining emission allowances 
        created by section 705(a) for the year for each covered 
        pollutant other than mercury to households served by 
        electricity.
            ``(2) Allocation among households.--The allocation to each 
        household shall reflect--
                    ``(A) the number of persons residing in the 
                household; and
                    ``(B) the ratio that--
                            ``(i) the quantity of the residential 
                        electricity consumption of the State in which 
                        the household is located; bears to
                            ``(ii) the quantity of the residential 
                        electricity consumption of all States.
            ``(3) Regulations.--Not later than 1 year after the date of 
        enactment of this title, the Administrator shall promulgate 
        regulations making appropriate arrangements for the allocation 
        of emission allowances to households under this subsection, 
        including as necessary the appointment of 1 or more trustees--
                    ``(A) to receive the emission allowances for the 
                benefit of the households;
                    ``(B) to obtain fair market value for the emission 
                allowances; and
                    ``(C) to distribute the proceeds to the 
                beneficiaries.
    ``(b) Allocation for Transition Assistance.--
            ``(1) In general.--For 2012 and each year thereafter 
        through 2021 (or, for 2022 and each year thereafter through 
        2031, in the case of carbon dioxide), the Administrator shall 
        allocate the percentage specified in paragraph (2) of the 
        emission allowances created by section 705(a) for the year for 
        each covered pollutant other than mercury in the following 
        manner:
                    ``(A) 80 percent shall be allocated to provide 
                transition assistance to--
                            ``(i) dislocated workers (as defined in 
                        section 101 of the Workforce Investment Act of 
                        1998 (29 U.S.C. 2801)) whose employment has 
                        been terminated or who have been laid off as a 
                        result of the emission reductions required by 
                        this title;
                            ``(ii) communities that have experienced 
                        disproportionate adverse economic impacts as a 
                        result of the emission reductions required by 
                        this title; and
                            ``(iii) small business concerns that have 
                        experienced disproportionate adverse economic 
                        impacts as a result of high electricity prices.
                    ``(B) 20 percent shall be allocated to producers of 
                electricity intensive products in a number equal to the 
                product obtained by multiplying--
                            ``(i) the ratio that--
                                    ``(I) the quantity of each 
                                electricity intensive product produced 
                                by each producer in the previous year; 
                                bears to
                                    ``(II) the quantity of the 
                                electricity intensive product produced 
                                by all producers in the previous year;
                            ``(ii) the average quantity of electricity 
                        used in producing the electricity intensive 
                        product by producers that use the most energy 
                        efficient process for producing the electricity 
                        intensive product; and
                            ``(iii) with respect to the previous year, 
                        the national average quantity (expressed in 
                        tons) of emissions of each such pollutant per 
                        megawatt hour of electricity generated by 
                        electricity generating facilities in all 
                        States.
            ``(2) Specified percentages.--The percentages referred to 
        in paragraph (1) are--
                    ``(A) in the case of 2012 (or 2022, with respect to 
                carbon dioxide), 6 percent;
                    ``(B) in the case of 2013 (or 2023, with respect to 
                carbon dioxide), 5.5 percent;
                    ``(C) in the case of 2014 (or 2024, with respect to 
                carbon dioxide), 5 percent;
                    ``(D) in the case of 2015 (or 2025, with respect to 
                carbon dioxide), 4.5 percent;
                    ``(E) in the case of 2016 (or 2026, with respect to 
                carbon dioxide), 4 percent;
                    ``(F) in the case of 2017 (or 2027, with respect to 
                carbon dioxide), 3.5 percent;
                    ``(G) in the case of 2018 (or 2028, with respect to 
                carbon dioxide), 3 percent;
                    ``(H) in the case of 2019 (or 2029, with respect to 
                carbon dioxide), 2.5 percent;
                    ``(I) in the case of 2020 (or 2030, with respect to 
                carbon dioxide), 2 percent; and
                    ``(J) in the case of 2021 (or 2031, with respect to 
                carbon dioxide), 1.5 percent.
            ``(3) Regulations for allocation for transition assistance 
        to dislocated workers and communities.--
                    ``(A) In general.--Not later than 1 year after the 
                date of enactment of this title, the Administrator 
                shall promulgate regulations making appropriate 
                arrangements for the distribution of emission 
                allowances under paragraph (1)(A), including as 
                necessary the appointment of 1 or more trustees--
                            ``(i) to receive the emission allowances 
                        allocated under paragraph (1)(A) for the 
                        benefit of the dislocated workers and 
                        communities;
                            ``(ii) to obtain fair market value for the 
                        emission allowances; and
                            ``(iii) to apply the proceeds to providing 
                        transition assistance to the dislocated workers 
                        and communities.
                    ``(B) Form of transition assistance.--Transition 
                assistance under paragraph (1)(A) may take the form 
                of--
                            ``(i) grants to employers, employer 
                        associations, and representatives of 
                        employees--
                                    ``(I) to provide training, 
                                adjustment assistance, and employment 
                                services to dislocated workers; and
                                    ``(II) to make income-maintenance 
                                and needs-related payments to 
                                dislocated workers; and
                            ``(ii) grants to States and local 
                        governments to assist communities in attracting 
                        new employers or providing essential local 
                        government services.
    ``(c) Allocation to Renewable Electricity Generating Units, 
Efficiency Projects, and Cleaner Energy Sources.--For 2012 (or 2022, in 
the case of carbon dioxide) and each year thereafter, the Administrator 
shall allocate not more than 20 percent of the emission allowances 
created by section 705(a) for the year for each covered pollutant other 
than mercury--
            ``(1) to owners and operators of renewable electricity 
        generating units, in a number equal to the product obtained by 
        multiplying--
                    ``(A) the number of megawatt hours of electricity 
                generated in the previous year by each renewable 
                electricity generating unit; and
                    ``(B) with respect to the previous year, the 
                national average quantity (expressed in tons) of 
                emissions of each such pollutant per megawatt hour of 
                electricity generated by electricity generating 
                facilities in all States;
            ``(2) to owners and operators of energy efficient 
        buildings, producers of energy efficient products, and entities 
        that carry out energy efficient projects, in a number equal to 
        the product obtained by multiplying--
                    ``(A) the number of megawatt hours of electricity 
                or cubic feet of natural gas saved in the previous year 
                as a result of each energy efficient building, energy 
                efficient product, or energy efficiency project; and
                    ``(B) with respect to the previous year, the 
                national average quantity (expressed in tons) of 
                emissions of each such pollutant per, as appropriate--
                            ``(i) megawatt hour of electricity 
                        generated by electricity generating facilities 
                        in all States; or
                            ``(ii) cubic foot of natural gas burned for 
                        a purpose other than generation of electricity 
                        in all States;
            ``(3) to owners and operators of new clean fossil fuel-
        fired electricity generating units, in a number equal to the 
        product obtained by multiplying--
                    ``(A) the number of megawatt hours of electricity 
                generated in the previous year by each new clean fossil 
                fuel-fired electricity generating unit; and
                    ``(B) with respect to the previous year, \1/2\ of 
                the national average quantity (expressed in tons) of 
                emissions of each such pollutant per megawatt hour of 
                electricity generated by electricity generating 
                facilities in all States; and
            ``(4) to owners and operators of combined heat and power 
        electricity generating facilities, in a number equal to the 
        product obtained by multiplying--
                    ``(A) the number of British thermal units of 
                thermal energy produced and put to productive use in 
                the previous year by each combined heat and power 
                electricity generating facility; and
                    ``(B) with respect to the previous year, the 
                national average quantity (expressed in tons) of 
                emissions of each such pollutant per British thermal 
                unit of thermal energy generated by electricity 
                generating facilities in all States.
    ``(d) Transition Assistance to Electricity Generating Facilities.--
            ``(1) In general.--For 2012 and each year thereafter 
        through 2021 (or for 2022 and each year thereafter through 
        2031, in the case of carbon dioxide), the Administrator shall 
        allocate the percentage specified in paragraph (2) of the 
        emission allowances created by section 705(a) for the year for 
        each covered pollutant other than mercury to the owners or 
        operators of electricity generating facilities in the ratio 
        that--
                    ``(A) the quantity of electricity generated by each 
                electricity generating facility in 2003; bears to
                    ``(B) the quantity of electricity generated by all 
                electricity generating facilities in 2003.
            ``(2) Specified percentages.--The percentages referred to 
        in paragraph (1) are--
                    ``(A) in the case of 2012 (or 2022, with respect to 
                carbon dioxide), 10 percent;
                    ``(B) in the case of 2013 (or 2023, with respect to 
                carbon dioxide), 9 percent;
                    ``(C) in the case of 2014 (or 2024, with respect to 
                carbon dioxide), 8 percent;
                    ``(D) in the case of 2015 (or 2025, with respect to 
                carbon dioxide), 7 percent;
                    ``(E) in the case of 2016 (or 2026, with respect to 
                carbon dioxide), 6 percent;
                    ``(F) in the case of 2017 (or 2027, with respect to 
                carbon dioxide), 5 percent;
                    ``(G) in the case of 2018 (or 2028, with respect to 
                carbon dioxide), 4 percent;
                    ``(H) in the case of 2019 (or 2029, with respect to 
                carbon dioxide), 3 percent;
                    ``(I) in the case of 2020 (or 2030, with respect to 
                carbon dioxide), 2 percent; and
                    ``(J) in the case of 2021 (or 2031, with respect to 
                carbon dioxide), 1 percent.
    ``(e) Allocation To Encourage Biological Carbon Sequestration.--
            ``(1) In general.--For 2022 and each year thereafter, the 
        Administrator shall allocate, on a competitive basis and in 
        accordance with paragraphs (2) and (3), not more than 0.075 
        percent of the carbon dioxide emission allowances created by 
        section 705(a) for the year for the purposes of--
                    ``(A) carrying out projects to reduce net carbon 
                dioxide emissions through biological carbon dioxide 
                sequestration in the United States that--
                            ``(i) result in benefits to watersheds and 
                        fish and wildlife habitats; and
                            ``(ii) are conducted in accordance with 
                        project reporting, monitoring, and verification 
                        guidelines based on--
                                    ``(I) measurement of increases in 
                                carbon storage in excess of the carbon 
                                storage that would have occurred in the 
                                absence of such a project;
                                    ``(II) comprehensive carbon 
                                accounting that--
                                            ``(aa) reflects net 
                                        increases in carbon reservoirs; 
                                        and
                                            ``(bb) takes into account 
                                        any carbon emissions resulting 
                                        from disturbance of carbon 
                                        reservoirs in existence as of 
                                        the date of commencement of the 
                                        project;
                                    ``(III) adjustments to account 
                                for--
                                            ``(aa) emissions of carbon 
                                        that may result at other 
                                        locations as a result of the 
                                        impact of the project on timber 
                                        supplies; or
                                            ``(bb) potential 
                                        displacement of carbon 
                                        emissions to other land owned 
                                        by the entity that carries out 
                                        the project; and
                                    ``(IV) adjustments to reflect the 
                                expected carbon storage over various 
                                time periods, taking into account the 
                                likely duration of the storage of the 
                                carbon stored in a carbon reservoir; 
                                and
                    ``(B) conducting accurate inventories of carbon 
                sinks.
            ``(2) Carbon inventory.--The Administrator, in consultation 
        with the Secretary of Agriculture, shall allocate not more than 
        \1/3\ of the emission allowances described in paragraph (1) to 
        not more than 5 State or multistate land or forest management 
        agencies or nonprofit entities that--
                    ``(A) have a primary goal of land conservation; and
                    ``(B) submit to the Administrator proposals for 
                projects--
                            ``(i) to demonstrate and assess the 
                        potential for the development and use of carbon 
                        inventorying and accounting systems;
                            ``(ii) to improve the standards relating 
                        to, and the identification of, incremental 
                        carbon sequestration in forests, agricultural 
                        soil, grassland, or rangeland; or
                            ``(iii) to assist in development of a 
                        national biological carbon storage baseline or 
                        inventory.
            ``(3) Revolving loan program.--The Administrator shall 
        allocate not more than \2/3\ of the emission allowances 
        described in paragraph (1) to States, based on proposals 
        submitted by States to conduct programs under which each State 
        shall--
                    ``(A) use the value of the emission allowances to 
                establish a State revolving loan fund to provide loans 
                to owners of nonindustrial private forest land in the 
                State to carry out forest and forest soil carbon 
                sequestration activities that will achieve the purposes 
                specified in paragraph (2)(B); and
                    ``(B) for 2013 and each year thereafter, contribute 
                to the program of the State an amount equal to 25 
                percent of the value of the emission allowances 
                received under this paragraph for the year in cash, in-
                kind services, or technical assistance.
            ``(4) Use of emission allowances.--An entity that receives 
        an allocation of emission allowances under this subsection may 
        use the proceeds from the sale or other transfer of the 
        emission allowances only for the purpose of carrying out 
        activities described in this subsection.
            ``(5) Recommendations concerning carbon dioxide emission 
        allowances.--
                    ``(A) In general.--Not later than 4 years after the 
                date of enactment of this title, the Administrator, in 
                consultation with the Secretary of Agriculture, shall 
                submit to Congress recommendations for establishing a 
                system under which entities that receive grants or 
                loans under this section may be allocated carbon 
                dioxide emission allowances created by section 705(a) 
                for incremental carbon sequestration in forests, 
                agricultural soils, rangeland, or grassland.
                    ``(B) Guidelines.--The recommendations shall 
                include recommendations for development, reporting, 
                monitoring, and verification guidelines for quantifying 
                net carbon sequestration from land use projects that 
                address the elements specified in paragraph (1)(A).
    ``(f) Allocation To Encourage Geological Carbon Sequestration.--
            ``(1) In general.--For 2022 and each year thereafter, the 
        Administrator shall allocate not more than 1.5 percent of the 
        carbon dioxide emission allowances created by section 705(a) to 
        entities that carry out geological sequestration of carbon 
        dioxide produced by an electric generating facility in 
        accordance with requirements established by the Administrator--
                    ``(A) to ensure the permanence of the 
                sequestration; and
                    ``(B) to ensure that the sequestration will not 
                cause or contribute to significant adverse effects on 
                the environment.
            ``(2) Number of emission allowances.--For 2022 and each 
        year thereafter, the Administrator shall allocate to each 
        entity described in paragraph (1) a number of emission 
        allowances that is equal to the number of tons of carbon 
        dioxide produced by the electric generating facility during the 
        previous year that is geologically sequestered as described in 
        paragraph (1).
            ``(3) Use of emission allowances.--An entity that receives 
        an allocation of emission allowances under this subsection may 
        use the proceeds from the sale or other transfer of the 
        emission allowances only for the purpose of carrying out 
        activities described in this subsection.
    ``(g) Allocation for Fish and Wildlife Habitat.--
            ``(1) In general.--For 2022 and each calendar year 
        thereafter, the Administrator shall allocate at least 2 percent 
        of the carbon dioxide emission allowances created by section 
        705(a) for the year for the purpose of mitigating the impacts 
        of climate change on fish and wildlife habitat in accordance 
        with this subsection.
            ``(2) Wildlife restoration fund.--
                    ``(A) In general.--For each calendar year, the 
                Administrator shall transfer an amount equal to not 
                less than 70 percent of the value of emission 
                allowances allocated under paragraph (1) to the Federal 
                aid to wildlife restoration fund established under 
                section 3(a)(1) of the Pittman-Robertson Wildlife 
                Restoration Act (16 U.S.C. 669b(a)(1))--
                            ``(i) to carry out climate change impact 
                        mitigation actions pursuant to comprehensive 
                        wildlife conservation strategies; and
                            ``(ii) to provide relevant information, 
                        training, monitoring, and other assistance to 
                        develop climate change impact mitigation and 
                        adaptation plans and integrate the plans into 
                        State comprehensive wildlife conservation 
                        strategies.
                    ``(B) Availability.--Amounts transferred to the 
                Federal aid to wildlife restoration fund under this 
                paragraph shall--
                            ``(i) be available, without further 
                        appropriation, for obligation and expenditure; 
                        and
                            ``(ii) remain available until expended.
            ``(3) Protection of natural resources.--
                    ``(A) In general.--For each calendar year, the 
                Administrator, in consultation with the Secretary of 
                Agriculture, the Secretary of Commerce, the Chief of 
                Engineers, and State and national wildlife conservation 
                organizations, shall transfer an amount equal to not 
                more than 30 percent of the value of emission 
                allowances allocated under paragraph (1) to the 
                Secretary of the Interior for use in carrying out 
                Federal and State programs and projects--
                            ``(i) to protect natural communities that 
                        are most vulnerable to climate change;
                            ``(ii) to restore and protect natural 
                        resources that directly guard against damages 
                        from climate change events; and
                            ``(iii) to restore and protect ecosystem 
                        services that are most vulnerable to climate 
                        change.
                    ``(B) Administration.--Amounts transferred to the 
                Secretary of the Interior under this paragraph shall--
                            ``(i) be available, without further 
                        appropriation, for obligation and expenditure;
                            ``(ii) remain available until expended;
                            ``(iii)(I) be obligated not later than 2 
                        years after the date of transfer; or
                            ``(II) if the amounts are not obligated in 
                        accordance with subclause (I), be transferred 
                        to the Federal aid to wildlife restoration fund 
                        for use in accordance with paragraph (2); and
                            ``(iv) supplement, and not supplant, the 
                        amount of Federal, State, and local funds 
                        otherwise expended to carry out programs and 
                        projects described in subparagraph (A).
                    ``(C) Programs and projects.--Programs and projects 
                for which funds may be used under this paragraph 
                include--
                            ``(i) Federal programs and projects--
                                    ``(I) to identify Federal land and 
                                water at greatest risk of being damaged 
                                or depleted by climate change;
                                    ``(II) to monitor Federal land and 
                                water to allow for early detection of 
                                impacts;
                                    ``(III) to develop adaptation 
                                strategies to minimize the damage; and
                                    ``(IV) to restore and protect 
                                Federal land and water at the greatest 
                                risk of being damaged or depleted by 
                                climate change;
                            ``(ii) Federal programs and projects to 
                        identify climate change risks and develop 
                        adaptation strategies for natural grassland, 
                        wetlands, migratory corridors, and other 
                        habitats vulnerable to climate change on 
                        private land enrolled in--
                                    ``(I) the wetlands reserve program 
                                established under subchapter C of 
                                chapter 1 of subtitle D of title XII of 
                                the Food Security Act of 1985 (16 
                                U.S.C. 3837 et seq.);
                                    ``(II) the grassland reserve 
                                program established under subchapter C 
                                of chapter 2 of subtitle D of title XII 
                                of that Act (16 U.S.C. 3838n et seq.); 
                                and
                                    ``(III) the wildlife habitat 
                                incentive program established under 
                                section 1240N of that Act (16 U.S.C. 
                                3839bb-1);
                            ``(iii) programs and projects under the 
                        North American Wetlands Conservation Act (16 
                        U.S.C. 4401 et seq.), the North American Bird 
                        Conservation Initiative, and the Neotropical 
                        Migratory Bird Conservation Act (16 U.S.C. 6101 
                        et seq.) to protect habitat for migratory birds 
                        that are vulnerable to climate change impacts;
                            ``(iv) programs and projects--
                                    ``(I) to identify coastal and 
                                marine resources (such as coastal 
                                wetlands, coral reefs, submerged 
                                aquatic vegetation, shellfish beds, and 
                                other coastal or marine ecosystems) at 
                                the greatest risk of being damaged by 
                                climate change;
                                    ``(II) to monitor those resources 
                                to allow for early detection of 
                                impacts;
                                    ``(III) to develop adaptation 
                                strategies;
                                    ``(IV) to protect and restore those 
                                resources; and
                                    ``(V) to integrate climate change 
                                adaptation requirements into State 
                                plans developed under the coastal zone 
                                management program established under 
                                the Coastal Zone Management Act of 1972 
                                (16 U.S.C. 1451 et seq.), the national 
                                estuary program established under 
                                section 320 of the Federal Water 
                                Pollution Control Act (33 U.S.C. 1330), 
                                the Coastal and Estuarine Land 
                                Conservation Program established under 
                                the fourth proviso of the matter under 
                                the heading `PROCUREMENT, acquisition, 
                                and construction (including transfers 
                                of funds') of title II of the 
                                Departments of Commerce, Justice, and 
                                State, the Judiciary, and Related 
                                Agencies Appropriations Act, 2002 (16 
                                U.S.C. 1456d), or other comparable 
                                State programs;
                            ``(v) programs and projects to conserve 
                        habitat for endangered species and species of 
                        conservation concern that are vulnerable to the 
                        impact of climate change;
                            ``(vi) programs and projects under the 
                        Forest Legacy Program established under section 
                        7 of the Cooperative Forestry Assistance Act 
                        (16 U.S.C. 2103c), to support State efforts to 
                        protect environmentally sensitive forest land 
                        through conservation easements to provide 
                        refuges for wildlife;
                            ``(vii) other Federal or State programs and 
                        projects identified by the heads of agencies 
                        described in subparagraph (A) as high 
                        priorities--
                                    ``(I) to protect natural 
                                communities that are most vulnerable to 
                                climate change;
                                    ``(II) to restore and protect 
                                natural resources that directly guard 
                                against damages from climate change 
                                events; and
                                    ``(III) to restore and protect 
                                ecosystem services that are most 
                                vulnerable to climate change;
                            ``(viii) to address climate change in 
                        Federal land use planning and plan 
                        implementation and to integrate climate change 
                        adaptation strategies into--
                                    ``(I) comprehensive conservation 
                                plans prepared under section 4(e) of 
                                the National Wildlife Refuge System 
                                Administration Act of 1966 (16 U.S.C. 
                                668dd(e));
                                    ``(II) general management plans for 
                                units of the National Park System;
                                    ``(III) resource management plans 
                                of the Bureau of Land Management; and
                                    ``(IV) land and resource management 
                                plans under the Forest and Rangeland 
                                Renewable Resources Planning Act of 
                                1974 (16 U.S.C. 1600 et seq.) and the 
                                National Forest Management Act of 1976 
                                (16 U.S.C. 1600 et seq.); and
                            ``(ix) projects to promote sharing of 
                        information on climate change wildlife impacts 
                        and mitigation strategies across agencies, 
                        including funding efforts to strengthen and 
                        restore habitat that improves the ability of 
                        fish and wildlife to adapt successfully to 
                        climate change through the Wildlife 
                        Conservation and Restoration Account 
                        established by section 3(a)(2) of the Pittman-
                        Robertson Wildlife Restoration Act (16 U.S.C. 
                        669b(a)(2)).

``SEC. 708. MERCURY EMISSION LIMITATIONS.

    ``(a) In General.--
            ``(1) Regulations.--
                    ``(A) In general.--Not later than 1 year after the 
                date of enactment of this title, the Administrator 
                shall promulgate regulations to establish emission 
                limitations for mercury emissions by coal-fired 
                electricity generating facilities.
                    ``(B) No exceedance of national limitation.--The 
                regulations shall ensure that the national limitation 
                for mercury emissions from each coal-fired electricity 
                generating facility established under section 704(a)(4) 
                is not exceeded.
                    ``(C) Emission limitations for 2011 and 
                thereafter.--In carrying out subparagraph (A), for 2011 
                and each year thereafter, the Administrator shall not--
                            ``(i) subject to subsections (e) and (f) of 
                        section 112, establish limitations on emissions 
                        of mercury from coal-fired electricity 
                        generating facilities that allow emissions in 
                        excess of 2.48 grams of mercury per 1000 
                        megawatt hours; or
                            ``(ii) differentiate between facilities 
                        that burn different types of coal.
            ``(2) Annual review and determination.--
                    ``(A) In general.--Not later than April 1 of each 
                year, the Administrator shall--
                            ``(i) review the total mercury emissions 
                        during the 2 previous years from electricity 
                        generating facilities located in all States; 
                        and
                            ``(ii) determine whether, during the 2 
                        previous years, the total mercury emissions 
                        from facilities described in clause (i) 
                        exceeded the national limitation for mercury 
                        emissions established under section 704(a)(4).
                    ``(B) Exceedance of national limitation.--If the 
                Administrator determines under subparagraph (A)(ii) 
                that, during the 2 previous years, the total mercury 
                emissions from facilities described in subparagraph 
                (A)(i) exceeded the national limitation for mercury 
                emissions established under section 704(a)(4), the 
                Administrator shall, not later than 1 year after the 
                date of the determination, revise the regulations 
                promulgated under paragraph (1) to reduce the emission 
                rates specified in the regulations as necessary to 
                ensure that the national limitation for mercury 
                emissions is not exceeded in any future year.
            ``(3) Compliance flexibility.--
                    ``(A) In general.--Each coal-fired electricity 
                generating facility subject to an emission limitation 
                under this section shall be in compliance with that 
                limitation if that limitation is greater than or equal 
                to the quotient obtained by dividing--
                            ``(i) the total mercury emissions of the 
                        coal-fired electricity generating facility 
                        during each 30-day period; by
                            ``(ii) the quantity of electricity 
                        generated by the coal-fired electricity 
                        generating facility during that period.
                    ``(B) More than 1 unit at a facility.--In any case 
                in which more than 1 coal-fired electricity generating 
                unit at a coal-fired electricity generating facility 
                subject to an emission limitation under this section 
                was operated in 1999 under common ownership or control, 
                compliance with the emission limitation may be 
                determined by averaging the emission rates of all coal-
                fired electricity generating units at the electricity 
                generating facility during each 30-day period.
    ``(b) Prevention of Re-Release.--
            ``(1) Regulations.--Not later than July 1, 2008, the 
        Administrator shall promulgate regulations to ensure that any 
        mercury captured or recovered by emission controls installed at 
        an electricity generating facility is not re-released into the 
        environment.
            ``(2) Required elements.--The regulations shall require--
                    ``(A) daily covers on all active waste disposal 
                units, and permanent covers on all inactive waste 
                disposal units, to prevent the release of mercury into 
                the air;
                    ``(B) monitoring of groundwater to ensure that 
                mercury or mercury compounds do not migrate from the 
                waste disposal unit;
                    ``(C) waste disposal siting requirements and 
                cleanup requirements to protect groundwater and surface 
                water resources;
                    ``(D) elimination of agricultural application of 
                coal combustion wastes; and
                    ``(E) appropriate limitations on mercury emissions 
                from sources or processes that reprocess or use coal 
                combustion waste, including manufacturers of wallboard 
                and cement.

``SEC. 709. OTHER HAZARDOUS AIR POLLUTANTS.

    ``(a) In General.--Not later than January 1, 2008, the 
Administrator shall issue to owners and operators of coal-fired 
electricity generating facilities requests for information under 
section 114 that are of sufficient scope to generate data sufficient to 
support issuance of standards under section 112(d) for hazardous air 
pollutants other than mercury emitted by coal-fired electricity 
generating facilities.
    ``(b) Deadline for Submission of Requested Information.--The 
Administrator shall require each recipient of a request for information 
described in subsection (a) to submit the requested data not later than 
180 days after the date of the request.
    ``(c) Promulgation of Emission Standards.--The Administrator 
shall--
            ``(1) not later than January 1, 2008, propose emission 
        standards under section 112(d) for hazardous air pollutants 
        other than mercury; and
            ``(2) not later than January 1, 2009, promulgate emission 
        standards under section 112(d) for hazardous air pollutants 
        other than mercury.
    ``(d) Prohibition on Excess Emissions.--It shall be unlawful for an 
electricity generating facility subject to standards for hazardous air 
pollutants other than mercury promulgated under subsection (c) to emit, 
after December 31, 2010, any such pollutant in excess of the standards.
    ``(e) Effect on Other Law.--Nothing in this section or section 708 
affects any requirement of subsection (e), (f)(2), or (n)(1)(A) of 
section 112, except that the emission limitations established by 
regulations promulgated under this section shall be deemed to represent 
the maximum achievable control technology for mercury emissions from 
electricity generating units under section 112(d).

``SEC. 710. EFFECT OF FAILURE TO PROMULGATE REGULATIONS.

    ``If the Administrator fails to promulgate regulations to implement 
and enforce the limitations specified in section 704--
            ``(1)(A) each electricity generating facility shall 
        achieve, not later than January 1, 2012 (or January 1, 2022, in 
        the case of carbon dioxide), an annual quantity of emissions 
        that is less than or equal to--
                    ``(i) in the case of nitrogen oxides, 15 percent of 
                the annual emissions by a similar electricity 
                generating facility that has no controls for emissions 
                of nitrogen oxides; and
                    ``(ii) in the case of carbon dioxide, 75 percent of 
                the annual emissions by a similar electricity 
                generating facility that has no controls for emissions 
                of carbon dioxide; and
            ``(B) each electricity generating facility that does not 
        use natural gas as the primary combustion fuel shall achieve, 
        not later than January 1, 2010, an annual quantity of emissions 
        that is less than or equal to--
                    ``(i) in the case of sulfur dioxide, 5 percent of 
                the annual emissions by a similar electricity 
                generating facility that has no controls for emissions 
                of sulfur dioxide; and
                    ``(ii) in the case of mercury, 10 percent of the 
                annual emissions by a similar electricity generating 
                facility that has no controls included specifically for 
                the purpose of controlling emissions of mercury; and
            ``(2) the applicable permit under this Act for each 
        electricity generating facility shall be deemed to incorporate 
        a requirement for achievement of the reduced levels of 
        emissions specified in paragraph (1).

``SEC. 711. PROHIBITIONS.

    ``It shall be unlawful--
            ``(1) for the owner or operator of any electricity 
        generating facility--
                    ``(A) to operate the electricity generating 
                facility in noncompliance with the requirements of this 
                title (including any regulations implementing this 
                title);
                    ``(B) to fail to submit by the required date any 
                emission allowances, or pay any penalty, for which the 
                owner or operator is liable under section 705;
                    ``(C) to fail to provide and comply with any plan 
                to offset excess emissions required under section 
                705(f); or
                    ``(D) to emit mercury in excess of the emission 
                limitations established under section 708; or
            ``(2) for any person to hold, use, or transfer any emission 
        allowance allocated under this title except in accordance with 
        regulations promulgated by the Administrator.

``SEC. 712. MODERNIZATION OF ELECTRICITY GENERATING FACILITIES.

    ``(a) In General.--Beginning on the later of January 1, 2016, or 
the date that is 40 years after the date on which the electricity 
generating facility commences operation, each electricity generating 
facility shall be subject to emission limitations reflecting the 
application of best available control technology on a new major source 
of a similar size and type (as determined by the Administrator) as 
determined in accordance with the procedures specified in part C of 
title I.
    ``(b) Additional Requirements.--The requirements of this section 
shall be in addition to the other requirements of this title.

``SEC. 713. RELATIONSHIP TO OTHER LAW.

    ``(a) In General.--Except as expressly provided in this title, 
nothing in this title--
            ``(1) limits or otherwise affects the application of any 
        other provision of this Act; or
            ``(2) precludes a State from adopting and enforcing any 
        requirement for the control of emissions of air pollutants that 
        is more stringent than the requirements imposed under this 
        title.
    ``(b) Regional Seasonal Emission Controls.--Nothing in this title 
affects any regional seasonal emission control for nitrogen oxides 
established by the Administrator or a State under title I.''.
    (b) Conforming Amendment.--Section 412(a) of the Clean Air Act (42 
U.S.C. 7651k(a)) is amended in the first sentence by striking 
``opacity'' and inserting ``mercury, opacity,''.

SEC. 303. SAVINGS CLAUSE.

    Section 193 of the Clean Air Act (42 U.S.C. 7515) is amended by 
striking ``date of the enactment of the Clean Air Act Amendments of 
1990'' each place it appears and inserting ``date of enactment of the 
Clean Power Act of 2007''.

SEC. 304. ACID PRECIPITATION RESEARCH PROGRAM.

    Section 103(j) of the Clean Air Act (42 U.S.C. 7403(j)) is 
amended--
            (1) in paragraph (3)--
                    (A) in subparagraph (F)(i), by striking ``effects; 
                and'' and inserting ``effects, including an assessment 
                of--
                                    ``(I) acid-neutralizing capacity; 
                                and
                                    ``(II) changes in the number of 
                                water bodies in the sensitive 
                                ecosystems referred to in subparagraph 
                                (G)(ii) with an acid-neutralizing 
                                capacity greater than zero; and''; and
                    (B) by adding at the end the following:
                    ``(G) Sensitive ecosystems.--
                            ``(i) In general.--Beginning in 2008, and 
                        every 4 years thereafter, the report under 
                        subparagraph (E) shall include--
                                    ``(I) an identification of 
                                environmental objectives necessary to 
                                be achieved (and related indicators to 
                                be used in measuring achievement of the 
                                objectives) to adequately protect and 
                                restore sensitive ecosystems; and
                                    ``(II) an assessment of the status 
                                and trends of the environmental 
                                objectives and indicators identified in 
                                previous reports under this paragraph.
                            ``(ii) Sensitive ecosystems to be 
                        addressed.--Sensitive ecosystems to be 
                        addressed under clause (i) include--
                                    ``(I) the Adirondack Mountains, 
                                mid-Appalachian Mountains, Rocky 
                                Mountains, and southern Blue Ridge 
                                Mountains;
                                    ``(II) the Great Lakes, Lake 
                                Champlain, Long Island Sound, and the 
                                Chesapeake Bay; and
                                    ``(III) other sensitive ecosystems, 
                                as determined by the Administrator.
                    ``(H) Acid deposition standards.--Beginning in 
                2008, and every 4 years thereafter, the report under 
                subparagraph (E) shall include a revision of the report 
                under section 404 of Public Law 101-549 (42 U.S.C. 7651 
                note) that includes a reassessment of the health and 
                chemistry of the lakes and streams that were subjects 
                of the original report under that section.''; and
            (2) by adding at the end the following:
            ``(4) Protection of sensitive ecosystems.--
                    ``(A) Determination.--Not later than December 31, 
                2014, the Administrator, taking into consideration the 
                findings and recommendations of the report revisions 
                under paragraph (3)(H), shall determine whether 
                emission reductions under titles IV and VII are 
                sufficient to--
                            ``(i) achieve the necessary reductions 
                        identified under paragraph (3)(F); and
                            ``(ii) ensure achievement of the 
                        environmental objectives identified under 
                        paragraph (3)(G).
                    ``(B) Regulations.--
                            ``(i) In general.--Not later than 2 years 
                        after the Administrator makes a determination 
                        under subparagraph (A) that emission reductions 
                        are not sufficient, the Administrator shall 
                        promulgate regulations to protect the sensitive 
                        ecosystems referred to in paragraph (3)(G)(ii).
                            ``(ii) Contents.--Regulations under clause 
                        (i) shall include modifications to--
                                    ``(I) provisions relating to 
                                nitrogen oxide and sulfur dioxide 
                                emission reductions;
                                    ``(II) provisions relating to 
                                allocations of nitrogen oxide and 
                                sulfur dioxide allowances; and
                                    ``(III) such other provisions as 
                                the Administrator determines to be 
                                necessary.''.

SEC. 305. AUTHORIZATION OF APPROPRIATIONS FOR DEPOSITION MONITORING.

    (a) Operational Support.--In addition to amounts made available 
under any other law, there are authorized to be appropriated for each 
of fiscal years 2008 through 2017--
            (1) for operational support of the National Atmospheric 
        Deposition Program National Trends Network--
                    (A) $2,000,000 to the United States Geological 
                Survey;
                    (B) $600,000 to the Environmental Protection 
                Agency;
                    (C) $600,000 to the National Park Service; and
                    (D) $400,000 to the Forest Service;
            (2) for operational support of the National Atmospheric 
        Deposition Program Mercury Deposition Network--
                    (A) $400,000 to the Environmental Protection 
                Agency;
                    (B) $400,000 to the United States Geological 
                Survey;
                    (C) $100,000 to the National Oceanic and 
                Atmospheric Administration; and
                    (D) $100,000 to the National Park Service;
            (3) for the National Atmospheric Deposition Program 
        Atmospheric Integrated Research Monitoring Network $1,500,000 
        to the National Oceanic and Atmospheric Administration;
            (4) for the Clean Air Status and Trends Network $5,000,000 
        to the Environmental Protection Agency; and
            (5) for the Temporally Integrated Monitoring of Ecosystems 
        and Long-Term Monitoring Program $2,500,000 to the 
        Environmental Protection Agency.
    (b) Modernization.--In addition to amounts made available under any 
other law, there are authorized to be appropriated--
            (1) for equipment and site modernization of the National 
        Atmospheric Deposition Program National Trends Network 
        $6,000,000 to the Environmental Protection Agency;
            (2) for equipment and site modernization and network 
        expansion of the National Atmospheric Deposition Program 
        Mercury Deposition Network $2,000,000 to the Environmental 
        Protection Agency;
            (3) for equipment and site modernization and network 
        expansion of the National Atmospheric Deposition Program 
        Atmospheric Integrated Research Monitoring Network $1,000,000 
        to the National Oceanic and Atmospheric Administration; and
            (4) for equipment and site modernization and network 
        expansion of the Clean Air Status and Trends Network $4,600,000 
        to the Environmental Protection Agency.
    (c) Availability of Amounts.--Each of the amounts appropriated 
under subsection (b) shall remain available until expended.

SEC. 306. TECHNICAL AMENDMENTS.

    Title IV of the Clean Air Act (relating to noise pollution) (42 
U.S.C. 7641 et seq.)--
            (1) is amended by redesignating sections 401 through 403 as 
        sections 801 through 803, respectively; and
            (2) is redesignated as title VIII and moved so as to appear 
        at the end of that Act.

             TITLE IV--REDUCING HEATING AND ELECTRIC BILLS

SEC. 401. WEATHERIZATION ASSISTANCE.

    Section 422 of the Energy Conservation and Production Act (42 
U.S.C. 6872) is amended to read as follows:

``SEC. 422. AUTHORIZATION OF APPROPRIATIONS.

    ``There are authorized to be appropriated to carry out the 
weatherization program under this part--
            ``(1) $1,000,000,000 for fiscal year 2008;
            ``(2) $1,200,000,000 for fiscal year 2009; and
            ``(3) $1,400,000,000 for fiscal year 2010.''.

SEC. 402. ENERGY STAR PROGRAMS.

    There are authorized to be appropriated for use in carrying out the 
Energy Star program under section 324A of the Energy Policy and 
Conservation Act (42 U.S.C. 6294a)--
            (1) to the Administrator of the Environmental Protection 
        Agency, $100,000,000 for each fiscal year; and
            (2) to the Secretary of Energy, $12,000,000 for each fiscal 
        year.

SEC. 403. RENEWABLE ELECTRICITY PRODUCTION CREDIT.

    (a) Extension.--Section 45(d) of the Internal Revenue Code of 1986 
(relating to qualified facilities) is amended--
            (1) by striking ``January 1, 2009'' each place it appears 
        in paragraphs (1), (2), (3), (5), and (7) and inserting 
        ``January 1, 2013'', and
            (2) by striking ``January 1, 2009'' through ``solar 
        energy)'' in paragraph (4) and inserting ``January 1, 2013 
        (January 1, 2011, in the case of a facility using solar 
        energy)''.
    (b) Repeal of Municipal Solid Waste as Qualified Resource.--
            (1) In general.--Paragraph (1) of section 45(c) of the 
        Internal Revenue Code of 1986 is amended by inserting ``and'' 
        at the end of subparagraph (F) and by striking subparagraph 
        (G).
            (2) Conforming amendment.--Subsection (d) of section 45 of 
        such Code is amended by striking paragraph (6).
    (c) Extension of Credit for Residential Energy Efficient 
Property.--Subsection (g) of section 25D of the Internal Revenue Code 
of 1986 (relating to termination) is amended by striking ``December 31, 
2008'' and inserting ``December 31, 2012''.

SEC. 404. EFFICIENCY RESOURCE STANDARD.

    (a) In General.--The Public Utility Regulatory Policies Act of 1978 
is amended by inserting adding after section 609 (7 U.S.C. 918c) at the 
end the following:

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

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


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

    ``(b) Determination of Compliance.--The Secretary shall promulgate 
rules not later than one year after the enactment of this section 
regarding the means to be used to calculate and verify compliance with 
the performance standard established under subsection (a). Each retail 
electric and natural gas supplier subject to this section shall 
calculate its compliance with such standard in accordance with such 
rules. The rules shall include each of the following:
            ``(1) Procedures and standards for defining and measuring 
        electricity savings achieved or obtained by electricity and 
        natural gas suppliers (hereinafter in this section referred to 
        as `electricity and natural gas savings') from customer 
        facility end-uses that occur in a calendar year from all 
        measures in place in that year (including measures implemented 
        in previous years that produce electricity and natural gas 
        savings in such calendar year).
            ``(2) Procedures and standards for verification of 
        electricity and natural gas savings reported by the retail 
        electricity and natural gas supplier.
            ``(3) Requirements for the contents and format of a bi-
        annual report from each retail electricity and natural gas 
        supplier demonstrating its compliance with the requirements of 
        subsection (a). The bi-annual report must include sufficient 
        detail regarding the calculation of electricity and natural gas 
        savings to enable the regulatory authority to verify and 
        enforce compliance with the requirements of this section and 
        the regulations under this section.
    ``(c) Credit and Trading System.--(1) After consultation with the 
Administrator of the Environmental Protection Agency, the Secretary 
shall promulgate rules establishing a nationwide credit and credit 
trading system for electricity and natural gas savings. Under such 
rules the Secretary may certify as credits electricity or natural 
savings achieved by a retail electricity or natural gas supplier in a 
given year in excess of the quantity of electricity or natural gas 
savings required that calendar year for such supplier to meet the 
resource standard, as long as such savings comply with the rules 
established under subsection (b). The Secretary shall also certify as 
credits customer energy savings created by retail electric or natural 
gas suppliers or other entities, as long as such savings comply with 
the rules established under subsection (b). An electricity savings 
credit shall equal one kilowatt hour; a natural gas savings credit 
shall constitute one therm.
    ``(2) The Secretary shall not award credits to any retail 
electricity or natural gas supplier subject to State administration and 
enforcement under subsection (d) unless the Secretary has determined 
that such administration and enforcement are at least equivalent to 
administration and enforcement by the Secretary.
    ``(3) An electricity or natural gas savings credit is not a 
property right. Nothing in this or any other provision of law shall be 
construed to limit the authority of the United States to terminate or 
limit such credits.
    ``(4) A retail electric or natural gas supplier may sell such 
credit to any other entity, and other entities may sell such credits to 
retail electric or natural gas suppliers, in accordance with the 
accounting and verification rules established by the Secretary. Such 
credit may be used by a purchasing retail electricity or natural gas 
supplier for purposes of complying with the resource standards set 
forth in subsection (a).
    ``(5) In order to receive an electricity or natural gas savings 
credit, the recipient of an electricity savings credit shall pay a fee, 
calculated by the Secretary, in an amount that is equal to the 
administrative costs of issuing, recording, monitoring the sale or 
exchange of, and tracking the credit or does not exceed five percent of 
the dollar value of the credit, whichever is lower. The Secretary shall 
retain the fee and use it to pay these administrative costs.
    ``(6) A credit may be counted toward compliance with subsection (a) 
only once. A retail electricity or natural gas supplier may satisfy the 
requirements of subsection (a) through the accumulation of--
            ``(A) electricity or natural gas savings credits obtained 
        by purchase or exchange under paragraph (7);
            ``(B) electricity or natural gas savings credits borrowed 
        against future years under paragraph (8); or
            ``(C) any combination of credits under subparagraphs (A) 
        and (B).
    ``(7) An electricity or natural gas savings credit may be sold or 
exchanged by the entity to whom issued or by any other entity that 
acquires the credit. An energy efficiency credit for any year that is 
not used to satisfy the minimum energy savings requirement of 
subsection (a) for that year may be carried forward for use within the 
next 4 years.
    ``(8) During the first year covered by the standards, a retail 
electricity or natural gas supplier that has reason to believe that it 
will not have sufficient electricity savings credits to comply with 
subsection (a) may--
            ``(A) submit a plan to the Secretary demonstrating that the 
        retail electricity or natural gas supplier will earn sufficient 
        credits within the next two calendar years which, when taken 
        into account, will enable the retail electricity or natural gas 
        supplier to meet the requirements of subsection (a) for the 
        calendar year involved; and
            ``(B) upon the approval of the plan by the Secretary, apply 
        credits that the plan demonstrates will be earned within the 
        next two calendar years to meet the requirements of subsection 
        (a) for the calendar year involved.
    ``(9) Any retail electricity or natural gas supplier may elect to 
comply with the requirements of this section in any calendar year by 
paying a fee of 3 cents per kilowatt hour, and 30 cents per therm, for 
any portion of the electricity or natural gas savings it would be 
obligated to achieve in that year by not later than March 31 of the 
following year. Funds produced from such fees shall be deposited in an 
escrow account established by the Secretary, and shall be distributed 
to the States for their use in creating electricity or natural gas 
savings at customer facilities.
    ``(d) Enforcement of Compliance.--(1) If the State regulatory 
authority with ratemaking jurisdiction over a State-regulated retail 
electricity or natural gas supplier notifies the Secretary that it will 
enforce compliance by such supplier with the performance standards 
under subsection (a) of this section, such State regulatory authority 
shall have the authority to administer and enforce such standards for 
such supplier under State law. If the State regulatory authority does 
not so notify the Secretary, the Secretary shall exercise such 
authority until receiving such notice from the State regulatory 
authority.
    ``(2) Not later than July 1 of the calendar years 2008, 2010, 2012, 
2014, and 2016, each retail electricity and natural gas supplier shall 
submit the compliance report required under subsection (b) to--
            ``(A) the appropriate State regulatory authority, if such 
        authority has notified the Secretary under subsection (d), or
            ``(B) the Secretary to determine and enforce compliance 
        with the standards.
    ``(3) In the case of any retail electricity or natural gas supplier 
for which the Secretary is enforcing compliance with the standards 
under this section, if such supplier fails to comply with such 
standards for two consecutive calendar years, the Secretary shall 
determine the number of kilowatt hours of electricity savings, or 
therms of natural gas savings, by which the supplier has fallen short 
of the standards, and, by order, require such supplier, after notice 
and opportunity for hearing, to deposit in an escrow account to be 
designated by the Secretary an amount equal to 3.5 cents per kilowatt 
hour for each such kilowatt hour, and 35 cents per therm for each such 
therm. The holder of such escrow account shall annually distribute the 
total amount of such account to the States to be used by the States for 
the purpose of achieving customer electricity and natural gas savings. 
Any retail electricity or natural gas supplier required to make such a 
payment may, within 60 calendar days after the issuance of such order, 
bring an action in the United States Court of Appeals for the District 
of Columbia for judicial review of such order. Such court shall have 
jurisdiction to enter a judgment affirming, modifying, or setting aside 
such order or remanding such order in whole or in part to the 
Secretary.
    ``(e) Information Collection.--The Secretary may collect the 
information necessary to verify and audit--
            ``(1) the annual electric energy sales, natural gas sales, 
        electricity savings, and natural gas savings of any entity 
        applying for electricity or natural gas savings credits under 
        this section,
            ``(2) the validity of electricity or natural gas savings 
        credits submitted by a retail electricity or natural gas 
        supplier to the Secretary, and
            ``(3) the quantity of electricity and natural gas sales of 
        all retail electricity and natural gas suppliers.
    ``(f) State Law.--Nothing in this section shall supersede or 
otherwise affect any State or local law requiring or otherwise relating 
to reductions in total annual electricity or natural gas energy 
consumption by or peak power consumption by electric consumers to the 
extent that such State or local law requires more stringent reductions 
than those required under this section. Any retail electricity or 
natural gas supplier that achieves reductions referred to in this 
section in accordance with State requirements shall be entitled to full 
credit under this section for such reductions to the extent that such 
reductions meet the requirements of this section and the regulations 
under this section (including verification and monitoring 
requirements).
    ``(g) Definitions.--For purposes of this section:
            ``(1) The term `retail electricity or natural supplier' 
        means a person that sells electric energy or natural gas to 
        consumers and sold not less than 1,000,000 megawatt-hours of 
        electric energy or 20,000,000 therms of natural gas to 
        consumers for purposes other than resale during the preceding 
        calendar year; except that such term does not include the 
        United States, a State or any political subdivision of a State, 
        or any agency, authority, or instrumentality of any one or more 
        of the foregoing, or a rural electric cooperative.
            ``(2) The term `retail electricity or natural gas 
        supplier's base amount' means the total amount of electric 
        energy or natural gas sold by the retail electricity or natural 
        gas supplier to customers during the most recent calendar year 
        for which information is available.
            ``(3) The term `electricity savings' means reductions in 
        end-use electricity consumption in customer facilities relative 
        to consumption at those same facilities in a base year as 
        defined in rules issued by the Secretary, or in the case of new 
        facilities, relative to reference facilities defined in rules 
        issued by the Secretary, or distributed generation efficiency 
        measures, including fuel cells and combined heat and power 
        (CHP) technologies, that provide electricity only for onsite 
        customer use.
            ``(4) The term `natural gas savings' means reductions in 
        end-use natural gas consumption in customer facilities relative 
        to consumption at those same facilities in a base year as 
        defined in rules issued by the Secretary, or in the case of new 
        facilities, relative to reference facilities defined in rules 
        issued by the Secretary.''.
    (b) Table of Contents.--The table of contents of the Public Utility 
Regulatory Policies Act of 1978 (16 U.S.C. prec. 2601) is amended by 
adding at the end of the items relating to title VI the following:

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

SEC. 405. FEDERAL RENEWABLE PORTFOLIO STANDARD.

    (a) In General.--The Public Utility Regulatory Policies Act of 1978 
(16 U.S.C. 2601 et seq.) (as amended by section 404(a)) is amended by 
adding at the end the following:

``SEC. 611. FEDERAL RENEWABLE PORTFOLIO STANDARD.

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

                                                        Required annual
``Calendar Years:                                           percentage:
                2009 through 2010..........................          1 
                2010 through 2011..........................          2 
                2011 through 2012..........................          4 
                2012 through 2013..........................          6 
                2013 through 2015..........................          8 
                2015 through 2016..........................         10 
                2016 through 2017..........................         12 
                2017 through 2018..........................         14 
                2018 through 2019..........................         16 
                2019 through 2020..........................         18 
                2020 and thereafter........................         20.
    ``(c) Submission of Credits.--(1) A retail electric supplier may 
satisfy the requirements of subsection (a) through the submission of 
renewable energy credits--
            ``(A) issued to the retail electric supplier under 
        subsection (d);
            ``(B) obtained by purchase or exchange under subsection 
        (e); or
            ``(C) borrowed under subsection (f).
    ``(2) A renewable energy credit may be counted toward compliance 
with subsection (a) only once.
    ``(d) Issuance of Credits.--(1) The Secretary shall establish by 
rule, not later than 1 year after the date of enactment of this 
section, a program to issue and monitor the sale or exchange of, and 
track, renewable energy credits.
    ``(2) Under the program established by the Secretary, an entity 
that generates electric energy through the use of a renewable energy 
resource may apply to the Secretary for the issuance of renewable 
energy credits. The application shall indicate--
            ``(A) the type of renewable energy resource used to produce 
        the electricity;
            ``(B) the location where the electric energy was produced; 
        and
            ``(C) any other information the Secretary determines 
        appropriate.
    ``(3)(A) Except as provided in subparagraphs (B), (C), and (D), the 
Secretary shall issue to each entity that generates electric energy one 
renewable energy credit for each kilowatt hour of electric energy the 
entity generates from the date of enactment of this section and in each 
subsequent calendar year through the use of a renewable energy resource 
at an eligible facility.
    ``(B) For incremental hydropower the renewable energy credits shall 
be calculated based on the expected increase in average annual 
generation resulting from the efficiency improvements or capacity 
additions. The number of credits shall be calculated using the same 
water flow information used to determine a historic average annual 
generation baseline for the hydroelectric facility and certified by the 
Secretary or the Federal Energy Regulatory Commission. The calculation 
of the renewable energy credits for incremental hydropower shall not be 
based on any operational changes at the hydroelectric facility not 
directly associated with the efficiency improvements or capacity 
additions.
    ``(C) The Secretary shall issue two renewable energy credits for 
each kilowatt hour of electric energy generated and supplied to the 
grid in that calendar year through the use of a renewable energy 
resource at an eligible facility located on Indian land. For purposes 
of this paragraph, renewable energy generated by biomass cofired with 
other fuels is eligible for two credits only if the biomass was grown 
on such land.
    ``(D) For electric energy resources produced from a generation 
offset, the Secretary shall issue two renewable energy credits for each 
kilowatt hour generated.
    ``(E) To be eligible for a renewable energy credit, the unit of 
electric energy generated through the use of a renewable energy 
resource may be sold or may be used by the generator. If both a 
renewable energy resource and a non-renewable energy resource are used 
to generate the electric energy, the Secretary shall issue renewable 
energy credits based on the proportion of the renewable energy 
resources used. The Secretary shall identify renewable energy credits 
by type and date of generation.
    ``(4) When a generator sells electric energy generated through the 
use of a renewable energy resource to a retail electric supplier under 
a contract subject to section 210 of this Act, the retail electric 
supplier is treated as the generator of the electric energy for the 
purposes of this section or the duration of the contract.
    ``(5) The Secretary shall issue renewable energy credits for 
existing facility offsets to be applied against a retail electric 
supplier's required annual percentage. Such credits are not tradeable 
and may be used only in the calendar year generation actually occurs.
    ``(e) Credit Trading.--A renewable energy credit, may be sold or 
exchanged by the entity to whom issued or by any other entity who 
acquires the renewable energy credit. A renewable energy credit for any 
year that is not used to satisfy the minimum renewable generation 
requirement of subsection (a) for that year may be carried forward for 
use within the next 4 years.
    ``(f) Credit Borrowing.--At any time before the end of calendar 
year 2009, a retail electric supplier that has reason to believe it 
will not have sufficient renewable energy credits to comply with 
subsection (a) may--
            ``(1) submit a plan to the Secretary demonstrating that the 
        retail electric supplier will earn sufficient credits within 
        the next 3 calendar years which, when taken into account, will 
        enable the retail electric supplier to meet the requirements of 
        subsection (a) for calendar year 2009 and the subsequent 
        calendar years involved; and
            ``(2) upon the approval of the plan by the Secretary, apply 
        renewable energy credits that the plan demonstrates will be 
        earned within the next 3 calendar years to meet the 
        requirements of subsection (a) for each calendar year involved.
The retail electric supplier must repay all of the borrowed renewable 
energy credits by submitting an equivalent number of renewable energy 
credits, in addition to those otherwise required under subsection (a), 
by calendar year 2010 or any earlier deadlines specified in the 
approved plan. Failure to repay the borrowed renewable energy credits 
shall subject the retail electric supplier to civil penalties under 
subsection (h) for violation of the requirements of subsection (a) for 
each calendar year involved.
    ``(g) Credit Cost Cap.--The Secretary shall offer renewable energy 
credits for sale at the lesser of 3 cents per kilowatt-hour or 200 
percent of the average market value of renewable credits for the 
applicable compliance period. On January 1 of each year following 
calendar year 2008, the Secretary shall adjust for inflation the price 
charged per credit for such calendar year, based on the Gross Domestic 
Product Implicit Price Deflator.
    ``(h) Enforcement.--The Secretary may bring an action in the 
appropriate United States district court to impose a civil penalty on a 
retail electric supplier that does not comply with subsection (a), 
unless the retail electric supplier was unable to comply with 
subsection (a) for reasons outside of the supplier's reasonable control 
(including weather-related damage, mechanical failure, lack of 
transmission capacity or availability, strikes, lockouts, actions of a 
governmental authority). A retail electric supplier who does not submit 
the required number of renewable energy credits under subsection (a) 
shall be subject to a civil penalty of not more than the greater of 3 
cents or 200 percent of the average market value of credits for the 
compliance period for each renewable energy credit not submitted..
    ``(i) Information Collection.--The Secretary may collect the 
information necessary to verify and audit--
            ``(1) the annual electric energy generation and renewable 
        energy generation of any entity applying for renewable energy 
        credits under this section;
            ``(2) the validity of renewable energy credits submitted by 
        a retail electric supplier to the Secretary; and
            ``(3) the quantity of electricity sales of all retail 
        electric suppliers.
    ``(j) Environmental Savings Clause.--Incremental hydropower shall 
be subject to all applicable environmental laws and licensing and 
regulatory requirements.
    ``(k) Existing Programs.--This section does not preclude a State 
from imposing additional renewable energy requirements in that State, 
including specifying eligible technologies under such State 
requirements.
    ``(l) Definitions.--For purposes of this section:
            ``(1) Biomass.--The term `biomass' means any organic 
        material that is available on a renewable or recurring basis, 
        including dedicated energy crops, trees grown for energy 
        production, wood waste and wood residues, plants (including 
        aquatic plants, grasses, and agricultural crops), residues, 
        fibers, animal wastes and other organic waste materials (but 
        not including unsegregated municipal solid waste (garbage)), 
        and fats and oils, except that with respect to `trees grown for 
        energy production', the term includes only trees that are 
        procured in conformance with sustainable forestry practices 
        recognized in the U.S., including the Sustainable Forestry 
        Initiative, or another forest management system determined to 
        be equivalent by the Secretary in consultation with the 
        Secretary of the Department of Agriculture and the Secretary of 
        the Department of Commerce and that are in excess of those 
        relied upon by an existing forest products manufacturing 
        facility to manufacture forest products, and with respect to 
        material removed from National Forest System lands the term 
        includes only organic material from--
                    ``(A) thinnings from trees that are less than 12 
                inches in diameter;
                    ``(B) slash;
                    ``(C) brush; and
                    ``(D) mill residues.
            ``(2) Eligible facility.--The term `eligible facility' 
        means--
                    ``(A) a facility for the generation of electric 
                energy from a renewable energy resource that is placed 
                in service on or after the date of enactment of this 
                section; or
                    ``(B) a repowering or cofiring increment that is 
                placed in service on or after the date of enactment of 
                this section at a facility for the generation of 
                electric energy from a renewable energy resource that 
                was placed in service before that date.
            ``(3) Eligible renewable energy resource.--The term 
        `renewable energy resource' means solar, wind, ocean, or 
        geothermal energy, biomass (excluding solid waste and paper 
        that is commonly recycled), landfill gas, a generation offset, 
        or incremental hydropower.
            ``(4) Generation offset.--The term `generation offset' 
        means reduced electricity usage metered at a site where a 
        customer consumes energy from a renewable energy technology.
            ``(5) Existing facility offset.--The term `existing 
        facility offset' means renewable energy generated from an 
        existing facility, not classified as an eligible facility, that 
        is owned or under contract, directly or indirectly, to a retail 
        electric supplier on the date of enactment of this section.
            ``(6) Incremental hydropower.--The term `incremental 
        hydropower' means additional generation that is achieved from 
        increased efficiency or additions of capacity on or after the 
        date of enactment of this section or the effective date of the 
        applicable State renewable portfolio standard program, at a 
        hydroelectric facility that was placed in service before that 
        date.
            ``(7) Indian land.--The term `Indian land' means--
                    ``(A) any land within the limits of any Indian 
                reservation, pueblo, or rancheria;
                    ``(B) any land not within the limits of any Indian 
                reservation, pueblo, or rancheria title to which was on 
                the date of enactment of this paragraph either held by 
                the United States for the benefit of any Indian tribe 
                or individual or held by any Indian tribe or individual 
                subject to restriction by the United States against 
                alienation;
                    ``(C) any dependent Indian community; and
                    ``(D) any land conveyed to any Alaska Native 
                corporation under the Alaska Native Claims Settlement 
                Act.
            ``(8) Indian tribe.--The term `Indian tribe' means any 
        Indian tribe, band, nation, or other organized group or 
        community, including any Alaskan Native village or regional or 
        village corporation as defined in or established pursuant to 
        the Alaska Native Claims Settlement Act (43 U.S.C. 1601 et 
        seq.), which is recognized as eligible for the special programs 
        and services provided by the United States to Indians because 
        of their status as Indians.
            ``(9) Renewable energy.--The term `renewable energy' means 
        electric energy generated by a renewable energy resource.
            ``(10) Renewable energy resource.--The term `renewable 
        energy resource' means solar, wind, ocean, geothermal energy, 
        biomass (not including municipal solid waste), landfill gas, a 
        generation offset, or incremental hydropower.
            ``(11) Repowering or cofiring increment.--The term 
        `repowering or cofiring increment' means--
                    ``(A) the additional generation from a modification 
                that is placed in service on or after the date of 
                enactment of this section to expand electricity 
                production at a facility used to generate electric 
                energy from a renewable energy resource or to cofire 
                biomass that was placed in service before the date of 
                enactment of this section, or
                    ``(B) the additional generation above the average 
                generation in the 3 years preceding the date of 
                enactment of this section to expand electricity 
                production at a facility used to generate electric 
                energy from a renewable energy resource or to cofire 
                biomass that was placed in service before the date of 
                enactment of this section.
            ``(12) Retail electric supplier.--The term `retail electric 
        supplier' means a person that sells electric energy to electric 
        consumers and sold not less than 1,000,000 megawatt-hours of 
        electric energy to electric consumers for purposes other than 
        resale during the preceding calendar year; except that such 
        term does not include the United States, a State or any 
        political subdivision of a State, or any agency, authority, or 
        instrumentality of any one or more of the foregoing.
            ``(13) Retail electric supplier's base amount.--The term 
        `retail electric supplier's base amount' means the total amount 
        of electric energy sold by the retail electric supplier to 
        electric customers during the most recent calendar year for 
        which information is available, excluding electric energy 
        generated by--
                    ``(A) an eligible renewable energy resource; or
                    ``(B) a hydroelectric facility.
    ``(m) Sunset.--This section expires December 31, 2030.''.
    (b) Table of Contents.--The table of contents for the Public 
Utilities Regulatory Policies Act of 1978 (16 U.S.C. prec. 2601) (as 
amended by section 404(b)) is amended by adding at the end of the items 
relating to title VI the following:

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

   TITLE V--SAVING TAXPAYERS MONEY THROUGH ELIMINATION OF TAX BREAKS

SEC. 501. REPEAL OF CERTAIN TAX PROVISIONS FOR OIL INDUSTRY.

    (a) Amortization of Geological and Geophysical Expenditures.--
            (1) In general.--Section 167(h) of the Internal Revenue 
        Code of 1986 (relating to amortization of geological and 
        geophysical expenditures) is amended by adding at the end the 
        following new paragraph:
            ``(5) Nonapplication to major integrated oil companies.--
        This subsection shall not apply to any sale during any taxable 
        year by a taxpayer which is--
                    ``(A) an integrated oil company (as defined in 
                section 291(b)(4)) which has an average daily worldwide 
                production of crude oil of at least 500,000 barrels for 
                such taxable year, or
                    ``(B) a related person to such company.''.
            (2) Effective date.--The amendment made by this subsection 
        shall apply to amounts paid or incurred in taxable years 
        beginning after the date of the enactment of this Act.
    (b) Percentage Depletion Allowance for Oil and Gas Properties.--
            (1) In general.--Section 613A is amended by adding at the 
        end the following new subsection:
    ``(f) Nonapplication to Major Integrated Oil Companies.--The 
allowance for percentage depletion shall be zero during any taxable 
year with respect to a taxpayer which is--
            ``(1) an integrated oil company (as defined in section 
        291(b)(4)) which has an average daily worldwide production of 
        crude oil of at least 500,000 barrels for such taxable year, or
            ``(2) a related person to such company.''.
            (2) Effective date.--The amendment made by this subsection 
        shall apply to taxable years beginning after the date of the 
        enactment of this Act.
    (c) Deduction for Intangible Drilling and Development Costs.--
            (1) In general.--Section 263(c) of the Internal Revenue 
        Code of 1986 is amended by adding at the end the following new 
        sentence: ``This subsection shall not apply during any taxable 
        year with respect to a taxpayer which is an integrated oil 
        company (as defined in section 291(b)(4)) which has an average 
        daily worldwide production of crude oil of at least 500,000 
        barrels for such taxable year or a related person to such 
        company.''.
            (2) Effective date.--The amendment made by this subsection 
        shall apply to amounts paid or incurred in taxable years 
        beginning after the date of the enactment of this Act.

                   TITLE VI--CLIMATE CHANGE RESEARCH

SEC. 601. SHORT TITLE.

    This title may be cited as the ``Abrupt Climate Change Research Act 
of 2007''.

SEC. 602. ABRUPT CLIMATE CHANGE RESEARCH PROGRAM.

    (a) Definition of Abrupt Climate Change.--In this section, the term 
``abrupt climate change'' means a change in the climate that occurs so 
rapidly or unexpectedly that human or natural systems have difficulty 
adapting to the climate as changed.
    (b) Establishment of Program.--The Secretary of Commerce shall 
establish within the Office of Oceanic and Atmospheric Research of the 
National Oceanic and Atmospheric Administration, and shall carry out, a 
program of scientific research on abrupt climate change.
    (c) Purposes of Program.--The purposes of the program are--
            (1) to develop a global array of terrestrial and 
        oceanographic indicators of paleoclimate in order to 
        sufficiently identify and describe past instances of abrupt 
        climate change;
            (2) to improve understanding of thresholds and 
        nonlinearities in geophysical systems related to the mechanisms 
        of abrupt climate change;
            (3) to incorporate those mechanisms into advanced 
        geophysical models of climate change; and
            (4) to test the output of those models against an improved 
        global array of records of past abrupt climate changes.

SEC. 603. AUTHORIZATION OF APPROPRIATIONS.

    There is authorized to be appropriated to the Department of 
Commerce to carry out the research program required under section 702 
$10,000,000 for each of fiscal years 2008 through 2013, to remain 
available until expended.
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