[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 826 Introduced in Senate (IS)]

111th CONGRESS
  1st Session
                                 S. 826

          To promote renewable energy, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                April 3 (legislative day, April 2), 2009

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

_______________________________________________________________________

                                 A BILL


 
          To promote renewable energy, and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``American Renewable Energy Act of 
2009''.

SEC. 2. RENEWABLE ELECTRICITY STANDARD.

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

``SEC. 610. RENEWABLE ELECTRICITY STANDARD.

    ``(a) Definitions.--In this section:
            ``(1) Base quantity of electricity.--
                    ``(A) In general.--The term `base quantity of 
                electricity' means the total quantity of electricity 
                sold by an electric utility to electric consumers in a 
                calendar year.
                    ``(B) Exclusions.--The term `base quantity of 
                electricity' does not include electricity generated by 
                a hydroelectric facility (including a pumped storage 
                facility but excluding incremental hydropower).
            ``(2) Distributed generation facility.--The term 
        `distributed generation facility' means a facility at a 
        customer site.
            ``(3) Existing renewable energy.--Except as provided in 
        paragraph (7)(B), the term `existing renewable energy' means 
        electric energy generated at a facility (including a 
        distributed generation facility) placed in service prior to 
        January 1, 2001, from solar, wind, or geothermal energy, ocean 
        energy, biomass (as defined by the Secretary of the Interior), 
        municipal solid waste, or landfill gas.
            ``(4) Geothermal energy.--The term `geothermal energy' 
        means energy derived from a geothermal deposit (within the 
        meaning of section 613(e)(2) of the Internal Revenue Code of 
        1986).
            ``(5) Incremental geothermal production.--
                    ``(A) In general.--The term `incremental geothermal 
                production' means, for any year, the excess of--
                            ``(i) the total kilowatt hours of 
                        electricity produced from a facility (including 
                        a distributed generation facility) using 
                        geothermal energy; over
                            ``(ii) the average number of kilowatt hours 
                        produced annually at the facility for 5 of the 
                        previous 7 calendar years before the date of 
                        enactment of this section after eliminating the 
                        highest and the lowest kilowatt hour production 
                        years in that 7-year period.
                    ``(B) Special rule.--A facility described in 
                subparagraph (A) that was placed in service at least 7 
                years before the date of enactment of this section 
                shall, commencing with the year in which that date of 
                enactment occurs, reduce the amount calculated under 
                subparagraph (A)(ii) each year, on a cumulative basis, 
                by the average percentage decrease in the annual 
                kilowatt hour production for the 7-year period 
                described in subparagraph (A)(ii) with such cumulative 
                sum, but not to exceed 30 percent.
            ``(6) Incremental hydropower.--
                    ``(A) In general.--The term `incremental 
                hydropower' means additional energy generated as a 
                result of efficiency improvements or capacity additions 
                made on or after--
                            ``(i) January 1, 2001; or
                            ``(ii) the effective commencement date of 
                        an existing applicable State renewable 
                        portfolio standard program at a hydroelectric 
                        facility that was placed in service before that 
                        date.
                    ``(B) Exclusion.--The term `incremental hydropower' 
                does not include additional energy generated as a 
                result of operational changes not directly associated 
                with efficiency improvements or capacity additions.
                    ``(C) Measurement and certification.--Efficiency 
                improvements and capacity additions referred to in 
                subparagraph (B) shall be--
                            ``(i) measured on the basis of the same 
                        water flow information used to determine a 
                        historic average annual generation baseline for 
                        the hydroelectric facility; and
                            ``(ii) certified by the Secretary or the 
                        Federal Energy Regulatory Commission.
            ``(7) New renewable energy.--The term `new renewable 
        energy' means--
                    ``(A) electric energy generated at a facility 
                (including a distributed generation facility) placed in 
                service on or after January 1, 2001, from--
                            ``(i) solar, wind, geothermal, or ocean 
                        energy;
                            ``(ii) biomass (as defined by the Secretary 
                        of the Interior);
                            ``(iii) landfill gas;
                            ``(iv) municipal solid waste;
                            ``(v) incremental hydropower; or
                            ``(vi) hydropower that has been certified 
                        by the Low Impact Hydropower Institute; and
                    ``(B) for electric energy generated at a facility 
                (including a distributed generation facility) placed in 
                service before the date of enactment of this section--
                            ``(i) the additional energy above the 
                        average generation during the 3-year period 
                        ending on the date of enactment of this section 
                        at the facility from--
                                    ``(I) solar, wind, or ocean energy;
                                    ``(II) landfill gas;
                                    ``(III) municipal solid waste;
                                    ``(IV) incremental hydropower; or
                                    ``(V) incremental geothermal 
                                production; and
                            ``(ii) the electric energy derived from 
                        biomass (as defined by the Secretary of the 
                        Interior).
            ``(8) Ocean energy.--The term `ocean energy' includes 
        current, wave, tidal, and thermal energy.
    ``(b) Renewable Electricity Requirement.--
            ``(1) Requirement.--
                    ``(A) In general.--Subject to subparagraph (B), 
                each electric utility that sells electricity to 
                electric consumers shall obtain a percentage of the 
                base quantity of electricity the electric utility sells 
                to electric consumers in any calendar year from new 
                renewable energy or existing renewable energy.
                    ``(B) Percentage.--The percentage obtained in a 
                calendar year under subparagraph (A) shall not be less 
                than the amount specified in the following table:

                                                         Minimum annual
``Calendar years:                                           percentage:
        2010...................................................      2 
        2011...................................................      3 
        2012...................................................      4 
        2013...................................................      5 
        2014...................................................      6 
        2015...................................................      7 
        2016...................................................      8 
        2017...................................................      9 
        2018...................................................     11 
        2019...................................................     13 
        2020...................................................     15 
        2021...................................................     17 
        2022...................................................     19 
        2023...................................................     21 
        2024...................................................     23 
        2025...................................................     25.
            ``(2) Means of compliance.--An electric utility shall meet 
        the requirements of paragraph (1) by--
                    ``(A) submitting to the Secretary renewable energy 
                credits issued under subsection (c);
                    ``(B) making alternative compliance payments to the 
                Secretary at the rate of 2 cents per kilowatt hour (as 
                adjusted for inflation under subsection (g)); or
                    ``(C) conducting a combination of activities 
                described in subparagraphs (A) and (B).
            ``(3) Green jobs.--In carrying out this section, the 
        Secretary shall, to the maximum extent practicable, provide an 
        additional incentive to electric utilities that, in meeting the 
        requirements of paragraph (1), also--
                    ``(A) create jobs that pay a living wage that 
                supports a family;
                    ``(B) provide health insurance benefits to 
                employees; and
                    ``(C) comply with all Federal labor and 
                environmental laws (including regulations).
    ``(c) Renewable Energy Credit Trading Program.--
            ``(1) In general.--Not later than December 31, 2010, the 
        Secretary shall establish a renewable energy credit trading 
        program under which electric utilities shall submit to the 
        Secretary renewable energy credits to certify the compliance of 
        the electric utilities with respect to obligations under 
        subsection (b)(1).
            ``(2) Administration.--As part of the program, the 
        Secretary shall--
                    ``(A) issue tradeable renewable energy credits to 
                generators of electric energy from new renewable 
                energy;
                    ``(B) issue nontradeable renewable energy credits 
                to generators of electric energy from existing 
                renewable energy;
                    ``(C) issue renewable energy credits to electric 
                utilities associated with State renewable portfolio 
                standard compliance mechanisms pursuant to subsection 
                (h);
                    ``(D) subject to subparagraph (E), ensure that a 
                kilowatt hour, including the associated renewable 
                energy credit, shall be used only once for purposes of 
                compliance with this section;
                    ``(E) allow double credits for generation from 
                facilities on Indian land, and triple credits for 
                generation from small renewable distributed generators 
                (meaning those no larger than 1 megawatt); and
                    ``(F) ensure that, with respect to a purchaser 
                that, as of the date of enactment of this section, has 
                a purchase agreement from a renewable energy facility 
                placed in service before that date (other than a 
                biomass energy facility), the credit associated with 
                the generation of renewable energy under the contract 
                is issued to the purchaser of the electric energy.
            ``(3) Duration.--A credit described in subparagraph (A) or 
        (B) of paragraph (2) may only be used for compliance with this 
        section during the 3-year period beginning on the date of 
        issuance of the credit.
            ``(4) Transfers.--An electric utility that holds credits in 
        excess of the quantity of credits needed to comply with 
        subsection (b) may transfer the credits to another electric 
        utility in the same utility holding company system.
            ``(5) Delegation of market function.--The Secretary may 
        delegate to an appropriate entity that establishes markets the 
        administration of a national tradeable renewable energy credit 
        market for purposes of creating a transparent national market 
        for the sale or trade of renewable energy credits.
    ``(d) Enforcement.--
            ``(1) Civil penalties.--Any electric utility that fails to 
        meet the compliance requirements of subsection (b) shall be 
        subject to a civil penalty.
            ``(2) Amount of penalty.--Subject to paragraph (3), the 
        amount of the civil penalty shall be equal to the product 
        obtained by multiplying--
                    ``(A) the number of kilowatt-hours of electric 
                energy sold to electric consumers in violation of 
                subsection (b); by
                    ``(B) the greater of--
                            ``(i) 2 cents (adjusted for inflation under 
                        subsection (g)); or
                            ``(ii) 200 percent of the average market 
                        value of renewable energy credits during the 
                        year in which the violation occurred.
            ``(3) Mitigation or waiver.--
                    ``(A) In general.--The Secretary may mitigate or 
                waive a civil penalty under this subsection if the 
                electric utility is unable to comply with subsection 
                (b) due to a reason outside of the reasonable control 
                of the electric utility.
                    ``(B) Reduction.--The Secretary shall reduce the 
                amount of any penalty determined under paragraph (2) by 
                an amount paid by the electric utility to a State for 
                failure to comply with the requirement of a State 
                renewable energy program if the State requirement is 
                greater than the applicable requirement of subsection 
                (b).
            ``(4) Procedure for assessing penalty.--The Secretary shall 
        assess a civil penalty under this subsection in accordance with 
        the procedures prescribed by section 333(d) of the Energy 
        Policy and Conservation Act (42 U.S.C. 6303(d)).
    ``(e) State Renewable Energy Account Program.--
            ``(1) In general.--There is established in the Treasury a 
        State renewable energy account program.
            ``(2) Deposits.--All money collected by the Secretary from 
        alternative compliance payments and the assessment of civil 
        penalties under this section shall be deposited into the 
        renewable energy account established pursuant to this 
        subsection.
            ``(3) Use.--Subject to appropriations, proceeds deposited 
        in the State renewable energy account shall be used by the 
        Secretary to carry out a program to provide grants to the State 
        agency responsible for developing State energy conservation 
        plans under section 362 of the Energy Policy and Conservation 
        Act (42 U.S.C. 6322) for the purposes of promoting renewable 
        energy production, including programs that promote technologies 
        that reduce the use of electricity at customer sites, such as 
        solar water heating.
            ``(4) Administration.--The Secretary may issue guidelines 
        and criteria for grants awarded under this subsection.
            ``(5) Records.--State energy offices receiving grants under 
        this section shall maintain such records and evidence of 
        compliance as the Secretary may require.
            ``(6) Preference.--In allocating funds under this 
        subsection, the Secretary shall give preference--
                    ``(A) to States in regions that have a 
                disproportionately small share of economically 
                sustainable renewable energy generation capacity; and
                    ``(B) to State programs to stimulate or enhance 
                innovative renewable energy technologies.
    ``(f) Exemptions.--During any calendar year, this section shall not 
apply to an electric utility--
            ``(1) that sold less than 4,000,000 megawatt-hours of 
        electric energy to electric consumers during the preceding 
        calendar year; or
            ``(2) in Hawaii.
    ``(g) Inflation Adjustment.--Not later than December 31 of each 
year beginning in 2010, the Secretary shall adjust for United States 
dollar inflation from January 1, 2010 (as measured by the Consumer 
Price Index)--
            ``(1) the price of a renewable energy credit under 
        subsection (c)(2); and
            ``(2) the amount of the civil penalty per kilowatt-hour 
        under subsection (d)(2).
    ``(h) State Programs.--
            ``(1) In general.--Subject to paragraph (2), nothing in 
        this section diminishes any authority of a State or political 
        subdivision of a State to adopt or enforce any law or 
        regulation respecting renewable energy.
            ``(2) Compliance.--Except as provided in subsection (d)(3), 
        no such law or regulation shall relieve any person of any 
        requirement otherwise applicable under this section.
            ``(3) Coordination.--The Secretary, in consultation with 
        States having such renewable energy programs, shall, to the 
        maximum extent practicable, facilitate coordination between the 
        Federal program and State programs.
            ``(4) Regulations.--
                    ``(A) In general.--The Secretary, in consultation 
                with States, shall promulgate regulations to ensure 
                that an electric utility subject to the requirements of 
                this section that is also subject to a State renewable 
                energy standard receives renewable energy credits in 
                relation to equivalent quantities of renewable energy 
                associated with compliance mechanisms, other than the 
                generation or purchase of renewable energy by the 
                electric utility, including the acquisition of 
                certificates or credits and the payment of taxes, fees, 
                surcharges, or other financial compliance mechanisms by 
                the electric utility or a customer of the electric 
                utility, directly associated with the generation or 
                purchase of renewable energy.
                    ``(B) Prohibition on double counting.--The 
                regulations promulgated under this paragraph shall 
                ensure that a kilowatt hour associated with a renewable 
                energy credit issued pursuant to this subsection shall 
                not be used for compliance with this section more than 
                once.
    ``(i) Recovery of Costs.--
            ``(1) In general.--The Commission shall issue and enforce 
        such regulations as are necessary to ensure that an electric 
        utility recovers all prudently incurred costs associated with 
        compliance with this section.
            ``(2) Applicable law.--A regulation under paragraph (1) 
        shall be enforceable in accordance with the provisions of law 
        applicable to enforcement of regulations under the Federal 
        Power Act (16 U.S.C. 791a et seq.).
    ``(j) Wind Energy Development Study.--The Secretary, in 
consultation with appropriate Federal and State agencies, shall 
conduct, and submit to Congress a report describing the results of, a 
study on methods to increase transmission line capacity for wind energy 
development.
    ``(k) Regulations.--Not later than 1 year after the date of 
enactment of this section, the Secretary shall promulgate regulations 
implementing this section.
    ``(l) Termination of Authority.--This section and the authority 
provided by this section terminate on December 31, 2040.''.
    (b) Table of Contents Amendment.--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. 609. Rural and remote communities electrification grants.
``Sec. 610. Renewable electricity standard.''.

SEC. 3. REDUCING BARRIERS TO SUPPLY CHAIN MANUFACTURING OF RENEWABLE 
              ENERGY EQUIPMENT.

    (a) Authorization of Appropriations.--There is authorized to be 
appropriated $50,000,000 for the Hollings Manufacturing Partnership 
Program, established under section 25 of the National Institute of 
Standards and Technology Act (15 U.S.C. 278k).
    (b) Use of Funds.--Amounts appropriated pursuant to subsection (a) 
shall be used to implement a strategy for reducing barriers to supply 
chain manufacturing of renewable energy equipment.

SEC. 4. WIND ENERGY SYSTEMS.

    Section 14 of the Wind Energy Systems Act of 1980 (42 U.S.C. 9213) 
is amended to read as follows:

``SEC. 14. AUTHORIZATION OF APPROPRIATIONS.

    ``(a) In General.--There are authorized to be appropriated to the 
Secretary to carry out wind energy research, development, and 
deployment through the Energy Efficiency and Renewable Energy Office of 
the Department of Energy in accordance with this section--
            ``(1) $275,000,000 for fiscal year 2010;
            ``(2) $446,000,000 for fiscal year 2011;
            ``(3) $602,000,000 for fiscal year 2012;
            ``(4) $698,000,000 for fiscal year 2013; and
            ``(5) $794,500,000 for fiscal year 2014.
    ``(b) Wind Turbine Technology and Reliability.--Of amounts made 
available under subsection (a), the Secretary shall use for land-based 
wind turbine technology and reliability--
            ``(1) $30,000,000 for fiscal year 2010;
            ``(2) $50,000,000 for fiscal year 2011;
            ``(3) $70,000,000 for fiscal year 2012;
            ``(4) $80,000,000 for fiscal year 2013; and
            ``(5) $100,000,000 for fiscal year 2014.
    ``(c) Wind Energy System Integration and Transmission 
Development.--Of amounts made available under subsection (a), the 
Secretary shall use for wind energy system integration and transmission 
development--
            ``(1) $20,000,000 for fiscal year 2010;
            ``(2) $25,000,000 for fiscal year 2011;
            ``(3) $30,000,000 for fiscal year 2012;
            ``(4) $35,000,000 for fiscal year 2013; and
            ``(5) $40,000,000 for fiscal year 2014.
    ``(d) Advanced Wind Energy Blades.--Of amounts made available under 
subsection (a), the Secretary shall use for advanced wind blade design, 
materials, and manufacturing processes--
            ``(1) $50,000,000 for fiscal year 2010;
            ``(2) $65,000,000 for fiscal year 2011;
            ``(3) $75,000,000 for fiscal year 2012;
            ``(4) $80,000,000 for fiscal year 2013; and
            ``(5) $85,000,000 for fiscal year 2014.
    ``(e) Offshore Wind.--Of amounts made available under subsection 
(a), the Secretary shall use for accelerating the design, development, 
testing, and deployment of advanced offshore wind technology and 
supporting construction, operations, and maintenance infrastructure--
            ``(1) $100,000,000 for fiscal year 2010;
            ``(2) $200,000,000 for fiscal year 2011;
            ``(3) $300,000,000 for fiscal year 2012;
            ``(4) $350,000,000 for fiscal year 2013; and
            ``(5) $400,000,000 for fiscal year 2014.
    ``(f) Wind Powering America Program.--Of the amounts made available 
under subsection (a), the Secretary shall use for and support the Wind 
Powering America program outreach and technical assistance activities--
            ``(1) $15,000,000 for fiscal year 2010;
            ``(2) $25,000,000 for fiscal year 2011;
            ``(3) $35,000,000 for fiscal year 2012;
            ``(4) $40,000,000 for fiscal year 2013; and
            ``(5) $45,000,000 for fiscal year 2014.
    ``(g) Wind Energy Technical Training and Workforce Development.--Of 
the amounts made available under subsection (a), the Secretary shall 
use for and support the establishment of technical training programs 
with community colleges and technical schools--
            ``(1) $40,000,000 for fiscal year 2010;
            ``(2) $55,000,000 for fiscal year 2011;
            ``(3) $60,000,000 for fiscal year 2012;
            ``(4) $75,000,000 for fiscal year 2013; and
            ``(5) $80,000,000 for fiscal year 2014.
    ``(h) Wind Energy Teaching Training and Curricula.--Of amounts made 
available under subsection (a), the Secretary shall use for and support 
establishment of wind education, teaching training, and curricula 
development programs at kindergarten through grade 12 levels--
            ``(1) $4,000,000 for fiscal year 2010;
            ``(2) $5,000,000 for fiscal year 2011;
            ``(3) $6,000,000 for fiscal year 2012;
            ``(4) $7,000,000 for fiscal year 2013; and
            ``(5) $8,000,000 for fiscal year 2014.
    ``(i) Wind Resource Modeling and Wind Farm Efficiency Assessment.--
Of amounts made available under subsection (a), the Secretary shall use 
for wind resource modeling and wind farm efficiency assessment--
            ``(1) $5,000,000 for fiscal year 2010;
            ``(2) $6,000,000 for fiscal year 2011;
            ``(3) $7,000,000 for fiscal year 2012;
            ``(4) $8,000,000 for fiscal year 2013; and
            ``(5) $10,000,000 for fiscal year 2014.
    ``(j) Wind Energy Siting.--Of amounts made available under 
subsection (a), the Secretary shall use for wind energy siting, 
including funding for public education on siting issues, studies on 
sound emissions and health effects, enhanced ground data modeling 
verification, and the creation of a national wind siting database--
            ``(1) $6,000,000 for fiscal year 2010;
            ``(2) $8,000,000 for fiscal year 2011;
            ``(3) $10,000,000 for fiscal year 2012;
            ``(4) $13,000,000 for fiscal year 2013; and
            ``(5) $16,000,000 for fiscal year 2014.
    ``(k) Small Wind Energy Systems.--Of amounts made available under 
subsection (a), the Secretary shall use for testing, demonstrating, and 
deploying small wind energy systems in rural school applications--
            ``(1) $5,000,000 for fiscal year 2010;
            ``(2) $7,000,000 for fiscal year 2011;
            ``(3) $9,000,000 for fiscal year 2012;
            ``(4) $10,000,000 for fiscal year 2013; and
            ``(5) $10,500,000 for fiscal year 2014.''.

SEC. 5. TEMPORARY REMOVAL OF CERTAIN TAX RESTRICTIONS TO PROMOTE 
              EXPANSION OF CAPITAL FOR WIND FARM INVESTMENT.

    (a) Exemption From Passive Loss Rules.--
            (1) In general.--Section 469(c) of the Internal Revenue 
        Code of 1986 (defining passive activity) is amended by adding 
        at the end the following new paragraph:
            ``(8) Certain renewable energy facilities.--The term 
        `passive activity' shall not include any trade or business 
        involving ownership of 1 or more facilities described in 
        section 45(d)(1).''.
            (2) Effective date.--The amendment made by this subsection 
        shall apply to taxable years beginning after December 31, 2008.
    (b) Application of At-Risk Rules.--
            (1) In general.--Section 465(b)(6) of the Internal Revenue 
        Code of 1986 (relating to qualified nonrecourse financing 
        treated as amount at risk) is amended--
                    (A) by inserting ``or renewable energy property'' 
                after ``real property'' each place it appears in 
                subparagraphs (A) and (B)(i), and
                    (B) by adding at the end the following new 
                subparagraph:
                    ``(F) Renewable energy property.--The term 
                `renewable energy property' means property described in 
                section 45(d)(1).''.
            (2) Effective date.--The amendments made by this subsection 
        shall apply to losses incurred after December 31, 2008, with 
        respect to property placed in service by the taxpayer after 
        such date.
    (c) Treatment of Income and Gains From Wind Energy as Qualifying 
Income for Publicly Traded Partnerships.--
            (1) In general.--Section 7704(d) of the Internal Revenue 
        Code of 1986 (defining qualifying income) is amended--
                    (A) by inserting ``wind energy,'' after 
                ``fertilizer,'' in paragraph (1)(E), and
                    (B) by adding at the end the following new 
                paragraph:
            ``(6) Wind energy.--For purposes of paragraph (1)(E), 
        income and gains from wind energy include amounts realized from 
        the sale of renewable energy credits, pollution allowances, and 
        other environmental attributes.''.
            (2) Effective date.--The amendments made by this subsection 
        shall apply on the date of enactment of this Act.
    (d) Sunset.--The amendments made by this section shall not apply to 
taxable years beginning after December 31, 2010. The Internal Revenue 
Code of 1986 shall be applied and administered to taxable years 
described in the preceding sentence as if such amendments had never 
been enacted.
    (e) Anti-Abuse Rules.--The Secretary of Treasury or the Secretary's 
designee shall prescribe such rules as are necessary to prevent the 
abuse of the purposes of the amendments made by this section.
                                 <all>