[Congressional Record Volume 151, Number 84 (Wednesday, June 22, 2005)]
[Senate]
[Pages S7078-S7197]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                           TEXT OF AMENDMENTS

  SA 841. Mrs. FEINSTEIN (for herself, Ms. Snowe, Mr. Reed, Mr. 
Sessions, Mr. Kennedy, Ms. Collins, Mr. Dodd, Mrs. Boxer, Mrs. Clinton, 
Mr. Lieberman, Ms. Cantwell, Mr. Kerry, Mr. Schumer, Mrs. Murray, and 
Mr. Carper) proposed an amendment to the bill H.R. 6, to ensure jobs 
for our future with secure, affordable, and reliable energy; as 
follows:
       On page 311, after line 24, add the following:
       ``(3)(A) The Commission shall not approve an application 
     for the authorization under this section of the siting, 
     construction, expansion, or operation of facilities located 
     onshore or in State waters for the import of natural gas from 
     a foreign country or the export of natural gas to a foreign 
     country without the approval of the Governor of the State in 
     which the facility would be located. Subject to subparagraph 
     (B), if the Governor fails to submit to the Commission an 
     approval or disapproval not later than 45 days after the 
     issuance of the final environmental impact statement on the 
     proposed project, the approval shall be conclusively 
     presumed. If the Governor notifies the Commission that an 
     application, which would otherwise be approved under this 
     paragraph, is inconsistent with State programs relating to 
     environmental protection, land and water use, public health 
     and safety, and coastal zone management, the Commission shall 
     condition the license granted so as to make the license 
     consistent with the State programs.
       ``(B) In the case of a project not approved before June 22, 
     2005, and for which the final environmental impact statement 
     was issued more than 15 days before the date of enactment of 
     this subsection, this paragraph shall apply, except that the 
     Governor of the State shall submit the approval or 
     disapproval of the Governor not later than 30 days after the 
     date of enactment of this subsection, or approval shall be 
     conclusively presumed. If the Governor disapproves the 
     project within that period, neither the Commission nor any 
     other Federal agency shall take any further action to approve 
     the project or the construction or operation of the 
     project.''.
       On page 312, line 1, strike ``(3)'' and insert ``(4)''.
       On page 312, line 24, strike ``(4)'' and insert ``(5)''.
                                 ______
                                 
  SA 842. Ms. STABENOW submitted an amendment intended to be proposed 
by her to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:
       On page 755, after line 25, add the following:

     SEC. 13__. STUDY OF MARITIME HERITAGE IN MICHIGAN.

       (a) Definitions.--In this section:
       (1) Secretary.--The term ``Secretary'' means the Secretary 
     of the Interior, acting through the National Park Service 
     Midwest Regional Office.
       (2) State.--The term ``State'' means the State of Michigan.

[[Page S7079]]

       (3) Study area.--The term ``study area'' means the State of 
     Michigan.
       (b) Study.--
       (1) In general.--The Secretary, in consultation with the 
     State, the State historic preservation officer, local 
     historical societies, State and local economic development, 
     tourism, and parks and recreation offices, and other 
     appropriate agencies and organizations, shall conduct a 
     special resource study of the study area to determine--
       (A) the potential economic and tourism benefits of 
     preserving State maritime heritage resources;
       (B) suitable and feasible options for long-term protection 
     of significant State maritime heritage resources; and
       (C) the manner in which the public can best learn about and 
     experience State maritime heritage resources.
       (2) Requirements.--In conducting the study under paragraph 
     (1), the Secretary shall--
       (A) review Federal, State, and local maritime resource 
     inventories and studies to establish the context, breadth, 
     and potential for interpretation and preservation of State 
     maritime heritage resources;
       (B) examine the potential economic and tourism impacts of 
     protecting State maritime heritage resources;
       (C) recommend management alternatives that would be most 
     effective for long-term resource protection and providing for 
     public enjoyment of State maritime heritage resources;
       (D) address how to assist regional, State, and local 
     partners in efforts to increase public awareness of and 
     access to the State maritime heritage resources;
       (E) identify sources of financial and technical assistance 
     available to communities for the conservation and 
     interpretation of State maritime heritage resources; and
       (F) address ways in which to link appropriate national 
     parks, State parks, waterways, monuments, parkways, 
     communities, national and State historic sites, and regional 
     or local heritage areas and sites into a Michigan Maritime 
     Heritage Destination Network.
       (3) Report.--Not later than 18 months after the date on 
     which funds are made available to carry out the study under 
     paragraph (1), the Secretary shall submit to the Committee on 
     Resources of the House of Representatives and the Committee 
     on Energy and Natural Resources of the Senate a report that 
     describes--
       (A) the results of the study; and
       (B) any findings and recommendations of the Secretary.
       (c) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $500,000.
                                 ______
                                 
  SA 843. Mr. WYDEN submitted an amendment intended to be proposed by 
him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:
       At the appropriate place insert the following:

     SEC. __. TREATMENT OF ELECTRONIC WASTE AS A QUALIFIED 
                   RECYCLABLE MATERIAL FOR THE QUALIFIED 
                   RECYCLABLE EQUIPMENT CREDIT.

       (a) In General.--Section 45M(c)(2) of the Internal Revenue 
     Code of 1986 (relating to credit for qualified recycling 
     equipment), as added by title XV, is amended by inserting 
     ``or electronic waste (including any cathode ray tube, flat 
     panel screen, or similar video display device with a screen 
     size greater than 4 inches measured diagonally, or a central 
     processing unit)'' after ``aluminum''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2005.
                                 ______
                                 
  SA 844. Mr. KERRY (for himself, Mr. Biden, Mrs. Feinstein, and Ms. 
Snowe) submitted an amendment intended to be proposed by him to the 
bill H.R. 6, to ensure jobs for our future with secure, affordable, and 
reliable energy; which was ordered to lie on the table; as follows:
       On page 768, after line 20, add the following:

                        TITLE XV--CLIMATE CHANGE

     SEC. 1501. SENSE OF SENATE REGARDING THE NEED FOR THE UNITED 
                   STATES TO ADDRESS GLOBAL CLIMATE CHANGE.

       (a) Findings.--The Senate finds that--
       (1) there is a scientific consensus, as established by the 
     Intergovernmental Panel on Climate Change and confirmed by 
     the National Academy of Sciences, that the continued buildup 
     of anthropogenic greenhouse gases in the atmosphere threatens 
     the stability of the global climate;
       (2) there are significant long-term risks to the economy, 
     the environment, and the security of the United States from 
     the temperature increases and climatic disruptions that are 
     projected to result from increased greenhouse gas 
     concentrations;
       (3) the United States, as the largest economy in the world, 
     is currently the largest greenhouse gas emitter;
       (4) the greenhouse gas emissions of the United States are 
     projected to continue to rise;
       (5) the greenhouse gas emissions of developing countries 
     are rising more rapidly than the emissions of the United 
     States and will soon surpass the greenhouse gas emissions of 
     the United States and other developed countries;
       (6) reducing greenhouse gas emissions to the levels 
     necessary to avoid serious climatic disruption requires the 
     introduction of new energy technologies and other practices, 
     the use of which results in low or no emissions of greenhouse 
     gases or in the capture and storage of greenhouse gases;
       (7) the development and sale of such technologies in the 
     United States and internationally presents significant 
     economic opportunities for workers and businesses in the 
     United States;
       (8) such technologies can enhance energy security by 
     reducing reliance on imported oil, diversifying energy 
     sources, and reducing the vulnerability of energy delivery 
     infrastructure;
       (9) other industrialized countries are undertaking measures 
     to reduce greenhouse gas emissions, which provide industries 
     in those countries with a competitive advantage in the 
     growing global market for such technologies;
       (10) efforts to limit emissions growth in developing 
     countries in a manner that is consistent with the development 
     needs of the developing countries could establish significant 
     markets for such technologies and contribute to international 
     efforts to address climate change;
       (11) the United States is a party to the United Nations 
     Framework Convention on Climate Change adopted in May 1992, 
     and entered into force in 1994 (referred to in this section 
     as the ``Convention'');
       (12) the Convention sets a long-term objective of 
     stabilization of greenhouse gas concentrations in the 
     atmosphere at a level that would prevent dangerous 
     anthropogenic interference with the climate system;
       (13) the Convention establishes that parties bear common 
     but differentiated responsibilities for efforts to achieve 
     the objective of stabilization of greenhouse gas 
     concentrations;
       (14) the Kyoto Protocol was entered into force on February 
     16, 2005, but the United States is not, nor is likely to be, 
     a party to the Protocol;
       (15) the parties to the Kyoto Protocol will begin 
     discussion in 2005 about possible future agreements;
       (16) an effective global effort to address climate change 
     must provide for commitments and action by all countries that 
     are major emitters of greenhouse gases, whether developed or 
     developing, and the widely varying circumstances among the 
     developed and developing countries may require that such 
     commitments and action vary; and
       (17) the United States has the capability to lead the 
     effort against global climate change.
       (b) Sense of the Senate.--It is the sense of the Senate 
     that the United States should act to reduce the health, 
     environmental, and economic risks posed by global climate 
     change and foster sustained economic growth through a new 
     generation of technologies by--
       (1) participating in international negotiations under the 
     Convention with the objective of securing United States 
     participation in fair and binding agreements that--
       (A) advance and protect the economic interests of the 
     United States;
       (B) establish mitigation commitments by all countries that 
     are major emitters of greenhouse gases, consistent with the 
     principle of common but differentiated responsibilities;
       (C) establish flexible international mechanisms to minimize 
     the cost of efforts by participating countries; and
       (D) achieve a significant long-term reduction in global 
     greenhouse gas emissions;
       (2) enacting and implementing effective and comprehensive 
     national policies to achieve significant long-term reductions 
     in greenhouse gas emissions in the United States; and
       (3) establishing a bipartisan Senate observer group, the 
     members of which shall be designated by the majority leader 
     and minority leader of the Senate, to--
       (A) monitor any international negotiations on climate 
     change; and
       (B) ensure that the advice and consent function of the 
     Senate is exercised in a manner to facilitate timely 
     consideration of any future applicable treaty submitted to 
     the Senate.
                                 ______
                                 
  SA 845. Ms. STABENOW (for herself and Mrs. Boxer) submitted an 
amendment intended to be proposed by her to the bill H.R. 6, to ensure 
jobs for our future with secure, affordable, and reliable energy; which 
was ordered to lie on the table; as follows:
       At the end of the bill, add the following:

   TITLE XV--ANTI-CONSUMER GASOLINE PRICING AND MARKETING PRACTICES 
                             INVESTIGATION

     SEC. 1501. INVESTIGATION BY FEDERAL TRADE COMMISSION.

       Not later than 60 days after the date of enactment of this 
     Act, the Federal Trade Commission shall conduct an 
     investigation and report to Congress on whether the increase 
     in gasoline prices is the result of market manipulation and 
     whether there is price gouging with respect to gasoline. The 
     investigation shall include an analysis of manipulation and 
     price gouging on both the national and regional levels.
                                 ______
                                 
  SA 846. Mr. BAUCUS submitted an amendment intended to be proposed by

[[Page S7080]]

him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:
       On page 296, after line 25, add the following:

     SEC. 347. LEASE EXCHANGES ON THE ROCKY MOUNTAIN FRONT.

       (a) Findings.--Congress finds that--
       (1) the Rocky Mountain Front in the State of Montana, 
     bordered by Glacier National Park, wilderness, and the 
     Blackfeet Indian Reservation, is--
       (A) 1 of the last intact wild places in the lower 48 
     states;
       (B) home to prized populations of elk, deer, bighorn sheep, 
     grizzly bears, multiple bird species, and other fish and 
     wildlife; and
       (C) highly valued by the local community and the State of 
     Montana as a vital recreation, hunting, and fishing 
     destination;
       (2) the Badger-Two Medicine area of the Front is sacred 
     ground to the Blackfeet Indian Tribe;.
       (3) past attempts to carry out oil and gas development in 
     the Front have met with limited or no success and as of the 
     date of enactment of this Act it has been more than a decade 
     since any development activity actually occurred in the 
     Front; and
       (4) in order to promote and enhance the recovery of the 
     domestic oil and gas reserves of the United States in the 
     most efficient manner possible, Congress should encourage 
     holders of leases in the Front to cancel the leases in 
     exchange for incentives to carry out oil and gas production 
     activities in more readily available and appropriate areas.
       (b) Definitions.--In this section:
       (1) Badger-two medicine area.--The term ``Badger-Two 
     Medicine Area'' means the Forest Service land located in--
       (A) T. 31 N., R. 12-13 W.;
       (B) T. 30 N., R. 11-13 W.;
       (C) T. 29 N., R. 10-16 W.; and
       (D) T. 28 N., R. 10-14 W.
       (2) Blackleaf area.--The term ``Blackleaf Area'' means the 
     Federal land owned by the Forest Service and Bureau of Land 
     Management that is located in--
       (A) T. 27 N., R. 9 W.;
       (B) T. 26 N., R. 9-10 W.;
       (C) T. 25 N., R. 8-10 W.; and
       (D) T. 24 N., R. 8-9 W.
       (3) Eligible lessee.--The term ``eligible lessee'' means a 
     lessee under a nonproducing lease.
       (4) Nonproducing lease.--The term ``nonproducing lease'' 
     means a Federal oil or gas lease that is--
       (A) in existence and in good standing on the date of 
     enactment of this Act; and
       (B) located in the Badger-Two Medicine Area or the 
     Blackleaf Area.
       (5) Secretary.--The term ``Secretary'' means the Secretary 
     of the Interior.
       (6) State.--The term ``State'' means the State of Montana.
       (c) Opportunities for Cancellation Nonproducing Leases.--
       (1) In general.--An eligible lessee may elect to cancel a 
     nonproducing lease in exchange for either--
       (A) oil and gas lease tracts of comparable value in the 
     State;
       (B) the issuance of bidding, royalty, or rental credits for 
     Federal onshore oil and gas leases in the State equal to the 
     fair market value of the nonproducing lease; or
       (C) a tax credit under subsection (e).
       (2) Implementing regulations and valuation of nonproducing 
     leases.--For the purpose of evaluating either of the options 
     in subparagraph (A) or (B) of paragraph (1), the Secretary 
     shall, not later than 180 days after the date of enactment of 
     this Act--
       (A) issue--
       (i) regulations establishing a methodology for determining 
     the fair market value of nonproducing leases, including 
     consideration of established standards and practices in the 
     oil and gas industry; and
       (ii) such other regulations as are necessary to carry out 
     this section; and
       (B) identify suitable lease tracts available in the State 
     for exchange under paragraph (1).
       (3) Effect of cancellation of nonproducing lease.--A 
     nonproducing lease canceled for any reason, including under 
     this Act, shall be permanently withdrawn from future oil and 
     gas leasing activity.
       (4) Suspension of leases in the badger-two medicine area.--
     To facilitate consideration of the options under paragraph 
     (1), the terms of nonproducing leases in the Badger-Two 
     Medicine Area shall be suspended for a 3-year period 
     beginning on the date of enactment of this Act.
       (5) Sunset.--The authority provided under this subsection 
     terminates on December 31, 2009.
       (d) Grants to Support Sustainable Economic Development.--
       (1) In general.--Out of any funds in the Treasury not 
     otherwise appropriated, the Secretary shall use $5,000,000 to 
     make a grant in that amount to Teton County, Montana.
       (2) Use of grant funds.--The grant recipient shall use the 
     grant funds to support sustainable economic development in 
     Teton County.
       (e) Tax Credit.--
       (1) In general.--In the case of an eligible lessee who 
     makes an election under subsection (c), there shall be 
     allowed as a credit against the tax imposed by chapter 1 of 
     the Internal Revenue Code of 1986 for the taxable year an 
     amount equal to the fair market value of a nonproducing lease 
     which is canceled pursuant to this section.
       (2) Carryforward of unused credit.--If the credit allowable 
     under paragraph (1) for any taxable year exceeds the 
     limitation imposed by section 26(a) of the Internal Revenue 
     Code of 1986 for such taxable year reduced by the sum of the 
     credits allowable under subpart A of part IV of chapter 1 of 
     such Code, such excess shall be carried to the succeeding 
     taxable year and added to the credit allowable under 
     paragraph (1) for such taxable year.
       (3) Valuation of lease.--For purposes of this subsection, 
     the fair market value of a nonproducing lease shall be 
     determined by the Secretary of the Treasury in consultation 
     with the Secretary of the Interior, based on the regulation 
     under subsection (c)(2).
       (f) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as are necessary to carry out 
     this section.
                                 ______
                                 
  SA 847. Mr. BAUCUS submitted an amendment intended to be proposed by 
him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       On page 767, line 5, strike ``and''.
       On page 767, line 15, strike the period and insert ``; 
     and''.
       On page 767, between lines 15 and 16, insert the following:
       (E) a project to produce energy and clean fuels, using 
     appropriate coal liquefaction technology, from Western 
     bituminous or subbituminous coal that is--
       (i) owned by a State government; or
       (ii) from private and tribal coal resources.
                                 ______
                                 
  SA 848. Mr. BINGAMAN submitted an amendment intended to be proposed 
by him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       On page 353, strike lines 19 through 24 and insert the 
     following:
     on Indian land;
       ``(C) provide low-interest loans to Indian tribes and 
     tribal energy resource development organizations for use in 
     the promotion of energy resource development on Indian land 
     and integration of energy resources; and
       ``(D) provide grants and technical assistance to an 
     appropriate tribal environmental organization, as determined 
     by the Secretary, that represents multiple Indian tribes to 
     establish a national resource center to develop tribal 
     capacity to establish and carry out tribal environmental 
     programs in support of energy-related programs and activities 
     under this title, including--
       ``(i) training programs for tribal environmental officials, 
     program managers, and other governmental representatives;
       ``(ii) the development of model environmental policies and 
     tribal laws, including tribal environmental review codes, and 
     the creation and maintenance of a clearinghouse of best 
     environmental management practices; and
       ``(iii) recommended standards for reviewing the 
     implementation of tribal environmental laws and policies 
     within tribal judicial or other tribal appeals systems.
                                 ______
                                 
  SA 849. Mr. FRIST submitted an amendment intended to be proposed by 
him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       After title XV (as agreed to) add the following:

                     TITLE XVI--REPEAL OF DEATH TAX

     SEC. 1601. REPEAL OF DEATH AND GENERATION-SKIPPING TRANSFER 
                   TAXES ACCELERATED TO 2006.

       (a) Death Tax Repeal.--
       (1) In general.--Section 2210 of the Internal Revenue Code 
     of 1986 (relating to termination) is amended--
       (A) by striking ``December 31, 2009'' and inserting 
     ``December 31, 2005'' both places it appears,
       (B) by striking ``January 1, 2010'' in subsection (b) and 
     inserting ``January 1, 2006'', and
       (C) by striking ``December 31, 2020'' in subsection (b)(1) 
     and inserting ``December 31, 2015''.
       (2) Generation-skipping transfer tax repeal.--Section 2664 
     of such Code (relating to termination) is amended by striking 
     ``December 31, 2009'' and inserting ``December 31, 2005''.
       (3) Conforming amendments.--
       (A) The table contained in section 2010(c) of such Code is 
     amended--
       (i) by inserting a period after ``$1,500,000'', and
       (ii) by striking the last 2 items.
       (B) Section 1014(f) of such Code is amended by striking 
     ``December 31, 2009'' and inserting ``December 31, 2005''.
       (C) Section 1022 of such Code is amended--
       (i) by striking ``December 31, 2009'' in subsection (a)(1) 
     and inserting ``December 31, 2005'',
       (ii) in subsection (d)(4)(A)--

       (I) by striking ``2010'' and inserting ``2005'', and
       (II) by striking ``2009'' in clause (ii) and inserting 
     ``2005'', and

       (iii) by striking ``december 31, 2009'' and inserting 
     ``december 31, 2005''.
       (D) The table contained in section 2001(c)(2)(B) of such 
     Code is amended--

[[Page S7081]]

       (i) by inserting a period after ``47 percent'', and
       (ii) by striking the last 2 items.
       (E) Section 2001(c)(2)(A) of such Code is amended by 
     striking ``2010'' and inserting ``2005''.
       (F) The item in the table of sections for part II of 
     subchapter O of chapter 1 of such Code relating to section 
     1022 is amended by striking ``December 31, 2009'' and 
     inserting ``December 31, 2005''.
       (G) Section 501(d) of the Economic Growth and Tax Relief 
     Reconciliation Act of 2001 (Public Law 107-16) is amended by 
     striking ``December 31, 2009'' and inserting ``December 31, 
     2005''.
       (H) Paragraph (3) of section 511(f) of the Economic Growth 
     and Tax Relief Reconciliation Act of 2001 (Public Law 107-16) 
     is amended by striking ``December 31, 2009'' and inserting 
     ``December 31, 2005''.
       (I) Paragraph (2) of section 521(e) of the Economic Growth 
     and Tax Relief Reconciliation Act of 2001 (Public Law 107-16) 
     is amended by striking ``December 31, 2009'' and inserting 
     ``December 31, 2005''.
       (J) Subsection (f) of section 542 of the Economic Growth 
     and Tax Relief Reconciliation Act of 2001 (Public Law 107-16) 
     is amended by striking ``December 31, 2009'' each place it 
     appears and inserting ``December 31, 2005''.
       (4) Effective Date.--The amendments made by this subsection 
     shall apply to estates of decedents dying, gifts made, and 
     generation skipping transfers after December 31, 2005.
       (b) Permanent Repeal of Death Taxes.--Section 901 of the 
     Economic Growth and Tax Relief Reconciliation Act of 2001 is 
     amended by striking ``this Act'' and all that follows through 
     ``2010.'' in subsection (a) and inserting ``this Act (other 
     than title V) shall not apply to taxable, plan, or limitation 
     years beginning after December 31, 2010.'', and by striking 
     ``, estates, gifts, and transfers'' in subsection (b).
                                 ______
                                 
  SA 850. Mr. DORGAN submitted an amendment intended to be proposed by 
him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; as follows:
       Beginning on page 602, strike line 5 and all that follows 
     through page 603, line 7, and insert the following:

     SEC. 1107. NATIONAL POWER PLANT OPERATIONS TECHNOLOGY AND 
                   EDUCATIONAL CENTER.

       (a) Establishment.--The Secretary shall support the 
     establishment of a National Power Plant Operations Technology 
     and Education Center (referred to in this section as the 
     ``Center''), to address the need for training and educating 
     certified operators and technicians for the electric power 
     industry.
       (b) Location of Center.--The Secretary shall support the 
     establishment of the Center at an institution of higher 
     education that has--
       (1) expertise in providing degree programs in electric 
     power generation, transmission, and distribution 
     technologies;
       (2) expertise in providing onsite and Internet-based 
     training; and
       (3) demonstrated responsiveness to workforce and training 
     requirements in the electric power industry.
       (c) Training and Continuing Education.--
       (1) In general.--The Center shall provide training and 
     continuing education in electric power generation, 
     transmission, and distribution technologies and operations.
       (2) Location.--The Center shall carry out training and 
     education activities under paragraph (1)--
       (A) at the Center; and
       (B) through Internet-based information technologies that 
     allow for learning at remote sites.
                                 ______
                                 
  SA 851. Mr. OBAMA submitted an amendment intended to be proposed by 
him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       On page 424, between lines 7 and 8, insert the following:

     SEC. 706. JOINT FLEXIBLE FUEL/HYBRID VEHICLE 
                   COMMERCIALIZATION INITIATIVE.

       (a) Definitions.--In this section:
       (1) Eligible entity.--The term eligible entity means--
       (A) a for-profit corporation;
       (B) a nonprofit corporation; or
       (C) an institution of higher education.
       (2) Program.--The term ``program'' means the applied 
     research program established under subsection (b).
       (b) Establishment.--The Secretary shall establish an 
     applied research program to improve technologies for the 
     commercialization of--
       (1) a combination hybrid/flexible fuel vehicle; or
       (2) a plug-in hybrid/flexible fuel vehicle.
       (c) Grants.--In carrying out the program, the Secretary 
     shall provide grants that give preference to proposals that--
       (1) achieve the greatest reduction in miles per gallon of 
     petroleum fuel consumption;
       (2) achieve not less than 250 miles per gallon of petroleum 
     fuel consumption; and
       (3) have the greatest potential of commercialization to the 
     general public within 5 years.
       (d) Verification.--Not later than 90 days after the date of 
     enactment of this Act, the Secretary shall publish in the 
     Federal Register procedures to verify--
       (1) the hybrid/flexible fuel vehicle technologies to be 
     demonstrated; and
       (2) that grants are administered in accordance with this 
     section.
       (e) Report.--Not later than 260 days after the date of 
     enactment of this Act, and annually thereafter, the Secretary 
     shall submit to Congress a report that--
       (1) identifies the grant recipients;
       (2) describes the technologies to be funded under the 
     program;
       (3) assesses the feasibility of the technologies described 
     in paragraph (2) in meeting the goals described in subsection 
     (c);
       (4) identifies applications submitted for the program that 
     were not funded; and
       (5) makes recommendations for Federal legislation to 
     achieve commercialization of the technology demonstrated.
       (f) Authorization of Appropriations.--There are authorized 
     to be appropriated to carry out this section, to remain 
     available until expended--
       (1) $3,000,000 for fiscal year 2005;
       (2) $7,000,000 for fiscal year 2006;
       (3) $10,000,000 for fiscal year 2007; and
       (4) $20,000,000 for fiscal year 2008.

     SEC. 707. DESIGNATION OF FUEL ECONOMY PENALTIES FOR FUEL 
                   ECONOMY RESEARCH.

       (a) In General.--Chapter 329 of title 49, United States 
     Code, is amended by inserting after section 32915 the 
     following new section:

     ``Sec. 32915A. Use of Civil Penalties For Fuel Economy 
       Research

       ``(a) Establishment of Account.--Not later than 180 days 
     after the date of enactment of the Energy Policy Act of 2005, 
     the Secretary of the Treasury shall establish an account in 
     the Treasury of the United States consisting of--
       ``(1) such amounts as are collected as civil penalties 
     imposed under section 32912 of this title after the date of 
     enactment of the Energy Policy Act of 2005;
       ``(2) such amounts as were collected as civil penalties 
     imposed under section 32912 of this title before the date of 
     enactment of the Energy Policy Act of 2005 and that remain 
     unobligated on such date;
       ``(3) such amounts as may be appropriated to the account; 
     and
       ``(4) any interest earned on investment of amounts in the 
     account.
       ``(b) Expenditures From Account.--On request by the 
     Secretary of Transportation, the Secretary of the Treasury 
     shall transfer from the account established under subsection 
     (a) to the Secretary of Transportation, without further 
     appropriation, such amounts as the Secretary of 
     Transportation determines are necessary to carry out the 
     flexible fuel/hybrid vehicle commercialization initiative 
     established under section 706 of the Energy Policy Act of 
     2005.
       ``(c) Investment of Amounts.--
       ``(1) In general.--The Secretary of the Treasury shall 
     invest such portion of the account as is not, in the judgment 
     of the Secretary of the Treasury, required to meet current 
     withdrawals.
       ``(2) Interest-bearing obligations.--Investments may be 
     made only in interest-bearing obligations of the United 
     States.
       ``(3) Credits to account.--The interest on, and the 
     proceeds from the sale or redemption of, any obligations held 
     in the account shall be credited to and form a part of the 
     account.
       ``(d) Transfers of Amounts.--
       ``(1) In general.--The amounts required to be transferred 
     to the account under this section shall be transferred at 
     least monthly from the general fund of the Treasury to the 
     account on the basis of estimates made by the Secretary of 
     the Treasury.
       ``(2) Adjustments.--Proper adjustment shall be made in 
     amounts subsequently transferred to the extent prior 
     estimates were in excess of or less than the amounts required 
     to be transferred.''.
       (b) Conforming Amendment.--The analysis for chapter 329 of 
     title 49, United States Code, is amended by inserting after 
     the item relating to section 32915 the following:

``32915A. Use of Civil Penalties For Fuel Economy Research.''.
                                 ______
                                 
  SA 852. Mrs. LINCOLN (for herself and Mr. Santorum) submitted an 
amendment intended to be proposed by her to the bill H.R. 6, to ensure 
jobs for our future with secure, affordable, and reliable energy; which 
was ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC. __. RENEWABLE LIQUID FUELS EXCISE TAX CREDIT.

       (a) In General.--Subchapter B of chapter 65 of the Internal 
     Revenue Code of 1986 (relating to rules of special 
     application) is amended by inserting after section 6426 the 
     following new section:

     ``SEC. 6426A. CREDIT FOR RENEWABLE LIQUID FUELS.

       ``(a) Allowance of Credits.--There shall be allowed as a 
     credit against the tax imposed by section 4081 an amount 
     equal to the renewable liquid mixture credit.
       ``(b) Renewable Liquid Mixture Credit.--
       ``(1) In general.--For purposes of this section, the 
     renewable liquid mixture credit is the product of the 
     applicable amount and the number of gallons of renewable 
     liquid used by the taxpayer in producing any renewable liquid 
     mixture for sale or use in a trade or business of the 
     taxpayer.

[[Page S7082]]

       ``(2) Applicable amount.--For purposes of this section, the 
     applicable amount is $0.75.
       ``(3) Renewable liquid mixture.--For purposes of this 
     section, the term `renewable liquid mixture' means a mixture 
     of renewable liquid and taxable fuel which--
       ``(A) is sold by the taxpayer producing such mixture to any 
     person for use as a fuel or feedstock, or
       ``(B) is used as a fuel or feedstock by the taxpayer 
     producing such mixture.
     For purposes of subparagraph (A), a mixture produced by any 
     person at a refinery prior to a taxable event which includes 
     renewable liquid shall be treated as sold at the time of its 
     removal from the refinery (and only at such time) or sold to 
     another person for use as a fuel or feedstock.
       ``(c) Other Definitions.--For purposes of this subsection:
       ``(1) Renewable liquid.--The term `renewable liquid' means 
     liquid fuels derived from waste and byproduct streams 
     including; agricultural byproducts and wastes, aqua-culture 
     products produced from waste streams, food processing plant 
     byproducts, municipal solid and semi-solid waste streams, 
     industrial waste streams, automotive scrap waste streams, and 
     as further provided by regulations.
       ``(2) Taxable fuel.--The term `taxable fuel' has the 
     meaning given such term by section 4083(a)(1).
       ``(3) Feedstock.--The term `feedstock' means any precursor 
     material subject to further processing to make a 
     petrochemical, solvent, or other fuel which has the effect of 
     displacing conventional fuels, or products produced from 
     conventional fuels.
       ``(4) Additional definitions.--Any term used in this 
     section which is also used in section 40B shall have the 
     meaning given such term by section 40B.
       ``(d) Certification for Renewable Liquid Fuel.--No credit 
     shall be allowed under this section unless the taxpayer 
     obtains a certification (in such form and manner as 
     prescribed by the Secretary) from the producer of the 
     renewable liquid fuel, which identifies the product produced.
       ``(e) Mixture Not Used as Fuel, Etc.--
       ``(1) Imposition of tax.--If--
       ``(A) any credit was determined under this section with 
     respect to renewable liquid used in the production of any 
     renewable liquid mixture, and
       ``(B) any person--
       ``(i) separates the renewable liquid from the mixture, or
       ``(ii) without separation, uses the mixture other than as a 
     fuel,
     then there is hereby imposed on such person a tax equal to 
     the product of the applicable amount and the number of 
     gallons of such renewable liquid.
       ``(2) Applicable laws.--All provisions of law, including 
     penalties, shall, insofar as applicable and not inconsistent 
     with this section, apply in respect of any tax imposed under 
     paragraph (1) as if such tax were imposed by section 4081 and 
     not by this section.
       ``(f) Coordination With Exemption From Excise Tax.--Rules 
     similar to the rules under section 40 (c) shall apply for 
     purposes of this section.
       ``(g) Termination.--This section shall not apply to any 
     sale, use, or removal for any period after December 31, 
     2010.''.
       (b) Registration Requirement.--Section 4101(a)(1) of the 
     Internal Revenue Code of 1986 (relating to registration), as 
     amended by this Act, is amended by inserting ``and every 
     person producing or importing renewable liquid as defined in 
     section 6426A(c)(1)'' before ``shall register with the 
     Secretary''.
       (c) Payments.--Section 6427 of the Internal Revenue Code of 
     1986 is amended by inserting after subsection (f) the 
     following new subsection:
       ``(g) Renewable Liquid Used to Produce Mixture.--
       ``(1) Used to produce a mixture.--If any person produces a 
     mixture described in section 6426A in such person's trade or 
     business, the Secretary shall pay (without interest) to such 
     person an amount equal to the renewable liquid mixture credit 
     with respect to such mixture.
       ``(2) Coordination with other repayment provisions.--No 
     amount shall be payable under paragraph (1) with respect to 
     any mixture with respect to which an amount is allowed as a 
     credit under section 6426A.
       ``(3) Termination.--This subsection shall not apply with 
     respect to any renewable liquid fuel mixture (as defined in 
     section 6426A(b)(3) sold or used after December 31, 2010.''.
       (d) Conforming Amendment.--The last sentence of section 
     9503(b)(1) of the Internal Revenue Code of 1986 is amended by 
     striking ``section 6426'' and inserting ``sections 6426 and 
     6426A''.
       (e) Clerical Amendment.--The table of sections for 
     subchapter B of chapter 65 of the Internal Revenue Code of 
     1986 is amended by inserting after the item relating to 
     section 6426 the following new item:

``Sec. 6426A. Credit for renewable liquid fuels.''.
       (f) Effective Dates.--
       (1) In general.--Except as otherwise provided in this 
     subsection, the amendments made by this section shall apply 
     to fuel sold or used on or after January 1, 2005.
       (2) Registration requirement.--The amendment made by 
     subsection (b) shall take effect on the date of the enactment 
     of this Act.

     SEC. __. RENEWABLE LIQUID INCOME 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 inserting after 
     section 40A the following new section:

     ``SEC. 40B. RENEWABLE LIQUID USED AS FUEL.

       ``(a) General Rule.--For purposes of section 38, the 
     renewable liquid credit determined under this section for the 
     taxable year is an amount equal to the sum of--
       ``(1) the renewable liquid mixture credit, plus
       ``(2) the renewable liquid credit.
       ``(b) Definition of Renewable Liquid Mixture Credit and 
     Renewable Liquid Credit.--For purposes of this section--
       ``(1) Renewable liquid mixture credit.--
       ``(A) In general.--The renewable liquid mixture credit of 
     any taxpayer for any taxable year is $0.75 for each gallon of 
     renewable liquid fuel used by the taxpayer in the production 
     of a qualified renewable liquid fuel mixture.
       ``(B) Qualified renewable liquid mixture.--The term 
     `qualified renewable liquid mixture' means a mixture of 
     renewable liquid and taxable fuel (as defined in section 
     4083(a)(1)), which--
       ``(i) is sold by the taxpayer producing such a mixture to 
     any person for use as a fuel or feedstock, or
       ``(ii) is used as a fuel or feedstock by the taxpayer 
     producing such mixture.
       ``(C) Sale or use must be in trade or business, etc.--
     Renewable liquid used in the production of a qualified 
     renewable liquid fuel mixture shall be taken into account--
       ``(i) only if the sale or use described in subparagraph (B) 
     is in a trade or business of the taxpayer, and
       ``(ii) for the taxable year in which such sale or use 
     occurs.
       ``(2) Renewable liquid credit.--
       ``(A) In general.--The renewable liquid credit of any 
     taxpayer for any taxable year is $0.75 for each gallon of 
     renewable liquid which is not in a mixture with taxable fuel 
     and which during the taxable year--
       ``(i) is used by the taxpayer as a fuel or feedstock in a 
     trade or business, or
       ``(ii) is sold by the taxpayer at retail to a person and 
     placed in the fuel tank of such person's vehicle.
       ``(B) User credit not to apply to renewable liquid sold at 
     retail.--No credit shall be allowed under subparagraph (A)(i) 
     with respect to any renewable liquid which was sold in a 
     retail sale described in subparagraph (A)(ii).
       ``(c) Certification for Renewable Liquid.--No credit shall 
     be allowed under this section unless the taxpayer obtains a 
     certification (in such form and manner as prescribed by the 
     Secretary) from the producer or importer of the renewable 
     liquid fuel which identifies the product produced and 
     percentage of renewable liquid fuel in the product.
       ``(d) Coordination With Credit Against Excise Tax.--The 
     amount of the credit determined under this section with 
     respect to any renewable liquid fuel shall be properly 
     reduced to take into account any benefit provided with 
     respect to such renewable liquid fuel solely by reason of the 
     application of section 6426A or 6427(g).
       ``(e) Definitions and Special Rules.--For purposes of this 
     section, the term `renewable liquid' means liquid fuels 
     derived from waste and byproduct streams including; 
     agricultural byproducts and wastes, agriculture materials 
     produced from waste streams, food processing plant 
     byproducts, municipal solid and semi-solid waste streams, 
     industrial waste streams, automotive scrap waste streams, as 
     further provided by regulations.
       ``(f) Mixture or Renewable Liquid Not Used as a Fuel, 
     Etc.--
       ``(1) Mixtures.--If--
       ``(A) any credit was determined under this section with 
     respect to renewable liquid used in the production of any 
     qualified renewable liquid mixture, and
       ``(B) any person--
       ``(i) separates the renewable liquid from the mixture, or
       ``(ii) without separation, uses the mixture other than as a 
     fuel,
     then there is hereby imposed on such person a tax equal to 
     the product of the rate applicable under subsection (b)(1)(A) 
     and the number of gallons of such renewable liquid in such 
     mixture.
       ``(2) Renewable liquid.--If--
       ``(A) any credit was determined under this section with 
     respect to the retail sale of any renewable liquid, and
       ``(B) any person mixes such renewable liquid or uses such 
     renewable liquid other than as a fuel, then there is hereby 
     imposed on such person a tax equal to the product of the rate 
     applicable under subsection (b)(2)(A) and the number of 
     gallons of such renewable liquid.
       ``(3) Applicable laws.--All provisions of law, including 
     penalties, shall, insofar as applicable and not inconsistent 
     with this section, apply in respect of any tax imposed under 
     subparagraph (A) or (B) as if such tax were imposed by 
     section 4081 and not by this chapter.
       ``(g) Pass-Thru in the Case of Estates and Trusts.--Under 
     regulations prescribed by the Secretary, rules similar to the 
     rules of subsection (d) of section 52 shall apply.
       ``(h) Termination.--This section shall not apply to any 
     sale or use after December 31, 2010.''.
       (b) Credit Treated as Part of General Business Credit.--
     Section 38(b) of the Internal Revenue Code of 1986 (relating 
     to current year business credit), as amended by this Act, is 
     amended by striking ``plus'' at the

[[Page S7083]]

     end of paragraph (23), by striking the period at the end of 
     paragraph (24), and inserting ``, plus'', and by inserting 
     after paragraph (24) the following new paragraph:
       ``(25) The renewable liquid credit determined under section 
     40B.''.
       (c) Clerical Amendment.--The table of sections for subpart 
     D of part IV of subchapter A of chapter I of the Internal 
     Revenue Code of 1986 is amended by inserting after the item 
     relating to section 40A the following new item:

``Sec. 40B. Renewable liquid used as fuel.''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to fuel produced, and sold as used, on or after 
     January 1, 2005.
                                 ______
                                 
  SA 853. Mr. STEVENS submitted an amendment intended to be proposed by 
him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       At the appropriate place insert the following:

     SEC. __. TAX-EXEMPT TREATMENT OF CERTAIN BONDS ISSUED BY 
                   CERTAIN JOINT ACTION AGENCIES.

       (a) In General.--For purposes of the Internal Revenue Code 
     of 1986, with respect to the issuance of any bond by any 
     joint action agency described in subsection (b), if such bond 
     satisfies the requirements of subsection (c) then--
       (1) such bond shall be treated as issued by a political 
     subdivision for purposes of section 103 of such Code, and
       (2) the sale of power by such agency to its members shall 
     not result in such bond being treated as a private activity 
     bond under section 141 of such Code.
       (b) Agency Described.--An agency is described in this 
     subsection if such agency is established under State law on 
     or after December 31, 2000, and before August 1, 2005, for 
     the purpose of participating in the design, construction, 
     operation, and maintenance of 1 or more generating or 
     transmission facilities and is treated under such law as a 
     public utility.
       (c) Bond Requirements.--A bond issued as part of an issue 
     satisfies the requirements of this subsection if--
       (1) such issue satisfies the requirements of section 
     147(f)(2) of the Internal Revenue Code of 1986 (relating to 
     public approval),
       (2) such issue receives an allocation of the issuance 
     limitation described in paragraph (3) by the governmental 
     unit approving such issue under paragraph (1),
       (3) the aggregate face amount of the bonds issued pursuant 
     to such issue, when added to the aggregate face amount of 
     bonds previously issued by all agencies described in 
     subsection (b), does not exceed $1,000,000,000, and
       (4) any bond issued pursuant to such issue is issued after 
     the date of the enactment of this Act and before January 1, 
     2011.
                                 ______
                                 
  SA 854. Mr. STEVENS submitted an amendment intended to be proposed by 
him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       At the appropriate place, insert the following:

     SEC. __. EXPANSION OF RESOURCES TO WAVE, CURRENT, TIDAL, AND 
                   OCEAN THERMAL ENERGY.

       (a) In General.--Section 45(c)(1) of the Internal Revenue 
     Code of 1986 (defining qualified energy resources), as 
     amended by this Act, is amended by striking ``and'' at the 
     end of subparagraph (H), by striking the period at the end of 
     subparagraph (I) and inserting ``, and'', and by adding at 
     the end the following new subparagraph:
       ``(J) wave, current, tidal, and ocean thermal energy.''
       (b) Definition of Resources.--Section 45(c) of such Code, 
     as amended by this Act, is amended by adding at the end the 
     following new paragraph:
       ``(9) Wave, current, tidal, and ocean thermal energy.--The 
     term `wave, current, tidal, and ocean thermal energy' means 
     electricity produced from any of the following:
       ``(A) Free flowing ocean water derived from tidal currents, 
     ocean currents, waves, or estuary currents.
       ``(B) Ocean thermal energy.
       ``(C) Free flowing water in rivers, lakes, man made 
     channels, or streams.''
       (c) Facilities.--Section 45(d) of such Code, as amended by 
     this Act, is amended by adding at the end the following new 
     paragraph:
       ``(10) Wave, current, tidal, and ocean thermal facility.--
     In the case of a facility using resources described in 
     subparagraph (A), (B), or (C) of subsection (c)(9) to produce 
     electricity, the term `qualified facility' means any facility 
     owned by the taxpayer which is originally placed in service 
     after the date of the enactment of this paragraph and before 
     January 1, 2010, but such term shall not include a facility 
     which includes impoundment structures.''
                                 ______
                                 
  SA 855. Mr. STEVENS submitted an amendment intended to be proposed by 
him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       At the appropriate place, insert the following:

     SEC. __. DEFINITION OF BIODIESEL.

       (a) In General.--Paragraph (1) of section 40A(d) of the 
     Internal Revenue Code of 1986 (defining biodiesel) is amended 
     by adding at the end the following new flush sentence:

     ``Such term also includes long chain fatty acids from animal 
     products produced under the regulatory authority of the Food 
     and Drug Administration.''
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.
                                 ______
                                 
  SA 856. Mr. STEVENS submitted an amendment intended to be proposed by 
him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       At the appropriate place, insert the following:

     SEC. __. SMALL IRRIGATION POWER.

       (a) In General.--Section 45(c)(5) of the Internal Revenue 
     Code of 1986 (defining small irrigation power) is amended by 
     adding at the end the following flush sentence:

     ``Such term includes power generated at FERC project numbers 
     1051, 10440, 11393, 11077, and 11588.''
       (b) Effective Date.--The amendment made by this section 
     shall apply to sales after the date of the enactment of this 
     Act, in taxable years ending after such date.
                                 ______
                                 
  SA 857. Mr. BURR submitted an amendment intended to be proposed by 
him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       On page 160, before line 1, insert the following:

     SEC. 220. IMPROVING MOTOR FUEL SUPPLY AND DISTRIBUTION.

       (a) Limiting Number of Boutique Fuels.--Section 
     211(c)(4)(C) of the Clean Air Act (42 U.S.C. 7545(c)(4)(C)) 
     (as amended by section 228) is amended by adding at the end 
     the following:
       ``(iii)(I) The Administrator shall have no authority, when 
     considering a State implementation plan or a State 
     implementation plan revision, to approve under this paragraph 
     any fuel included in such plan or revision if the effect of 
     such approval would be to increase the total number of fuels 
     approved under this paragraph as of January 1, 2005 in all 
     State implementation plans.
       ``(II) The Administrator, in consultation with the 
     Secretary of Energy, shall determine the total number of 
     fuels approved under this paragraph as of January 1, 2005, in 
     all State implementation plans and shall publish a list of 
     such fuels, including the states and Petroleum Administration 
     for Defense District in which they are used, in the Federal 
     Register no later than 90 days after enactment.
       ``(III) The Administrator shall remove a fuel from the list 
     published under subclause (II) if a fuel ceases to be 
     included in a State implementation plan or if a fuel in a 
     State implementation plan is identical to a Federal fuel 
     formulation implemented by the Administrator, but the 
     Administrator shall not reduce the total number of fuels 
     authorized under the list published under subclause (II).
       ``(IV) Subclause (I) shall not apply to approval by the 
     Administrator of a control or prohibition respecting any new 
     fuel under this paragraph in a State's implementation plan or 
     a revision to that State's implementation plan after the date 
     of enactment of this Act if the fuel, as of the date of 
     consideration by the Administrator--

       ``(aa) would replace completely a fuel on the list 
     published under subclause (II);
       ``(bb) has been approved in at least one State 
     implementation plan in the applicable Petroleum 
     Administration for Defense District; or
       ``(cc) is a fuel that differs from the Federal conventional 
     gasoline specifications under subsection (k)(8) only with 
     respect to the requirement of a summertime Reid Vapor 
     Pressure of 7.0 or 7.8 pounds per square inch.

       ``(V) Nothing in this clause shall be construed to have any 
     effect regarding any available authority of States to require 
     the use of any fuel additive registered in accordance with 
     subsection (b), including any fuel additive registered in 
     accordance with subsection (b) after the enactment of this 
     subclause.
       ``(VI) In this clause:

       ``(aa) The term `control or prohibition respecting a new 
     fuel' means a control or prohibition on the formulation, 
     composition, or emissions characteristics of a fuel that 
     would require the increase or decrease of a constituent in 
     gasoline or diesel fuel.
       ``(bb) The term `fuel' means gasoline, diesel fuel, and any 
     other liquid petroleum product commercially known as gasoline 
     and diesel fuel for use in highway and non-road motor 
     vehicles.''.

       (b) Temporary Waivers During Supply Emergencies.--Section 
     211(c)(4) of the Clean Air Act (42 U.S.C. 7545(c)(4)) is 
     amended by adding at the end the following:
       ``(D) Temporary waivers during supply emergencies.--The 
     Administrator may temporarily waive a control or prohibition 
     with respect to the use of a fuel or fuel additive required 
     or regulated by the Administrator under subsection (c), (h), 
     (i), (k), or (m), or prescribed in an applicable 
     implementation

[[Page S7084]]

     plan under section 110 that is approved by the Administrator 
     under subparagraph (c)(4)(C)(i), if, after consultation with 
     and concurrence by the Secretary of Energy, the Administrator 
     determines that--
       ``(i) an extreme and unusual fuel or fuel additive supply 
     circumstance exists in a State or region that prevents the 
     distribution of an adequate supply of the fuel or fuel 
     additive to consumers;
       ``(ii) the extreme and unusual fuel or fuel additive supply 
     circumstance is the result of a natural disaster, an act of 
     God, a pipeline or refinery equipment failure, or another 
     event that could not reasonably have been foreseen or 
     prevented and not a lack of prudent planning on the part of 
     the suppliers of the fuel or fuel additive to the State or 
     region; and
       ``(iii) it is in the public interest to grant the waiver.
       ``(E) Requirements for waiver.--
       ``(i) Definition of motor fuel distribution system.--In 
     this subparagraph, the term `motor fuel distribution system' 
     has the meaning given the term by the Administrator, by 
     regulation.
       ``(ii) Requirements.--A waiver under subparagraph (D) shall 
     be permitted only if--
       ``(I) the waiver applies to the smallest geographic area 
     necessary to address the extreme and unusual fuel or fuel 
     additive supply circumstance;
       ``(II) the waiver is effective for a period of 15 calendar 
     days or, if the Administrator determines that a shorter or 
     longer waiver period is adequate, for the shortest 
     practicable time period necessary to permit the correction of 
     the extreme and unusual fuel or fuel additive supply 
     circumstances and to mitigate impact on air quality;
       ``(III) the waiver permits a transitional period, the 
     duration of which shall be determined by the Administrator, 
     after the termination of the temporary waiver to permit 
     wholesalers and retailers to blend down wholesale and retail 
     inventory;
       ``(IV) the waiver applies to all persons in the motor fuel 
     distribution system; and
       ``(V) the Administrator has given public notice regarding 
     consideration by the Administrator of, and, if applicable, 
     the granting of, a waiver to all parties in the motor fuel 
     distribution system, State and local regulators, public 
     interest groups, and consumers in the State or region to be 
     covered by the waiver.
       ``(F) Affect on waiver authority.--Nothing in subparagraph 
     (D)--
       ``(i) limits or otherwise affects the application of any 
     other waiver authority of the Administrator under this 
     section or a regulation promulgated pursuant to this section; 
     or
       ``(ii) subjects any State or person to an enforcement 
     action, penalties, or liability solely arising from actions 
     taken pursuant to the issuance of a waiver under subparagraph 
     (D).''.
                                 ______
                                 
  SA 858. Mr. SALAZAR submitted an amendment intended to be proposed by 
him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       Beginning on page 290, strike line 6 and all that follows 
     through page 296, line 25, and insert the following:

     SEC. 346. OIL SHALE.

       (a) Declaration of Policy.--Congress declares that it is 
     the policy of the United States that--
       (1) United States oil shale and tar sands are strategically 
     important domestic resources that should be developed through 
     methods that help reduce the growing dependence of the United 
     States on politically and economically unstable sources of 
     foreign oil imports;
       (2) the development of oil shale and tar sands, for 
     research and commercial development, should be conducted in 
     an economically feasible and environmentally sound manner, 
     using practices that minimize impacts;
       (3) development should occur at a deliberate pace, with an 
     emphasis on sustainability, to benefit the United States 
     while taking into account affected States and communities; 
     and
       (4) the Secretary of the Interior should work toward 
     developing a commercial leasing program for oil shale and tar 
     sands so that such a program can be implemented when 
     production technologies are commercially viable.
       (b) Leasing Program.--
       (1) Research and development.--
       (A) In general.--In accordance with section 21 of the 
     Mineral Leasing Act (30 U.S.C. 241) and any other applicable 
     law, except as provided in this section, not later than 1 
     year after the date of enactment of this Act, from land 
     otherwise available for leasing, the Secretary of the 
     Interior (referred to in this section as the ``Secretary'') 
     shall, for a period determined by the Secretary, make 
     available for leasing such land as the Secretary considers to 
     be necessary to conduct research and development activities 
     with respect to innovative technologies for the recovery of 
     shale oil from oil shale resources on public land.
       (B) Application.--The Secretary may offer to lease the land 
     to persons that submit an application for the lease, if the 
     Secretary determines that there is no competitive interest in 
     the land.
       (C) Administration.--In carrying out this paragraph, the 
     Secretary shall--
       (i) provide for environmentally sound research and 
     development of oil shale;
       (ii) provide for an appropriate return to the public, as 
     determined by the Secretary;
       (iii) before carrying out any activity that will disturb 
     the surface of land, provide for an adequate bond, surety, or 
     other financial arrangement to ensure reclamation;
       (iv) provide for a primary lease term of 10 years, after 
     which the lease term may be extended if the Secretary 
     determines that diligent research and development activities 
     are occurring on the land leased;
       (v) require the owner or operator of a project under this 
     subsection, within such period as the Secretary may 
     determine--

       (I) to submit a plan of operations;
       (II) to develop an environmental protection plan; and
       (III) to undertake diligent research and development 
     activities;

       (vi) ensure that leases under this section are not larger 
     than necessary to conduct research and development activities 
     under an application under subparagraph (B);
       (vii) provide for consultation with affected State and 
     local governments; and
       (viii) provide for such requirements as the Secretary 
     determines to be in the public interest.
       (2) Commercial leasing.--Prior to conducting commercial 
     leasing, the Secretary shall carry out--
       (A) the programmatic environmental impact statement 
     required under subsection (c); and
       (B) the analysis required under subsection (d).
       (3) Moneys received.--Any moneys received from a leasing 
     activity under this subsection shall be paid in accordance 
     with section 35 of the Mineral Leasing Act (30 U.S.C. 191).
       (c) Programmatic Environmental Impact Statement.--Not later 
     than 18 months after the date of enactment of this Act, in 
     accordance with section 102(2)(C) of the National 
     Environmental Policy Act of 1969 (42 U.S.C. 4332(2)(C)), the 
     Secretary shall complete a programmatic environmental impact 
     statement that analyzes potential leasing for commercial 
     development of oil shale resources on public land.
       (d) Analysis of Potential Leasing Program.--
       (1) In general.--Not later than 18 months after the date of 
     enactment of this Act, the Secretary shall submit to Congress 
     a report (including recommendations) analyzing a potential 
     leasing program for the commercial development of oil shale 
     on public land.
       (2) Inclusions.--The report under paragraph (1) shall 
     include--
       (A) an analysis of technologies and research and 
     development programs for the production of oil and other 
     materials from oil shale and tar sands in existence on the 
     date on which the report is prepared;
       (B) an analysis of--
       (i) whether leases under the program should be issued on a 
     competitive basis;
       (ii) the term of the leases;
       (iii) the maximum size of the leases;
       (iv) the use and distribution of bonus bid lease payments;
       (v) the royalty rate to be applied, including whether a 
     sliding scale royalty rate should be used;
       (vi) whether an opportunity should be provided to convert 
     research and development leases into leases for commercial 
     development, including the terms and conditions that should 
     apply to the conversion;
       (vii) the maximum number of leases and maximum acreage to 
     be leased under the leasing program to an individual; and
       (viii) any infrastructure required to support oil shale 
     development in industry and communities;
       (C) an identification of events that should serve as a 
     precursor to commercial leasing, including development of 
     environmentally and commercially viable technologies, and the 
     completion of land use planning and environmental reviews; 
     and
       (D) an analysis, developed in conjunction with the 
     appropriate State water resource agencies, of the demand for, 
     and availability of, water with respect to the development of 
     oil shale and tar sands.
       (3) Public participation.--In preparing the report under 
     this subsection, the Secretary shall provide notice to, and 
     solicit comment from--
       (A) the public;
       (B) representatives of local governments;
       (C) representatives of industry; and
       (D) other interested parties.
       (4) Participation by certain states.--In preparing the 
     report under this subsection, the Secretary shall--
       (A) provide notice to, and solicit comment from, the 
     Governors of the States of Colorado, Utah, and Wyoming; and
       (B) incorporate into the report submitted to Congress under 
     paragraph (1) any response of the Secretary to those 
     comments.
       (e) Oil Shale and Tar Sands Task Force.--
       (1) Establishment.--The Secretary of Energy, in cooperation 
     with the Secretary of the Interior, shall establish an Oil 
     Shale and Tar Sands Task Force to develop a program to 
     coordinate and accelerate the commercial development of oil 
     shale and tar sands in an integrated manner.
       (2) Composition.--The Task Force shall be composed of--
       (A) the Secretary of Energy (or the designee of the 
     Secretary of Energy);

[[Page S7085]]

       (B) the Secretary of Defense (or the designee of the 
     Secretary of Defense);
       (C) the Secretary of the Interior (or the designee of the 
     Secretary of the Interior);
       (D) the Governors of the affected States; and
       (E) representatives of local governments in affected areas.
       (3) Development of a 5-year plan.--
       (A) In general.--The Task Force shall formulate a 5-year 
     plan to promote the development of oil shale and tar sands by 
     industry.
       (B) Components.--In formulating the plan, the Task Force 
     shall--
       (i) identify public actions that are required to stimulate 
     prudent development of oil shale and tar sands by industry;
       (ii) analyze the costs and benefits of those actions;
       (iii) make recommendations concerning specific actions that 
     should be taken to stimulate prudent development of oil shale 
     and tar sands by industry, including economic, investment, 
     tax, technology, research and development, infrastructure, 
     environmental, education, and socio-economic actions;
       (iv) consult with representatives of industry and other 
     stakeholders;
       (v) provide notice and opportunity for public comment on 
     the plan;
       (vi) identify oil shale and tar sands technologies that--

       (I) are ready for pilot plant and semiworks development; 
     and
       (II) have a high probability of leading to advanced 
     technology for first- or second-generation commercial 
     production; and

       (vii) assess the availability of water from the Green River 
     Formation to meet the needs of the oil shale and tar sands 
     industry.
       (4) National program office.--The Task Force shall analyze 
     and make recommendations regarding the need for a national 
     program office to administer the plan.
       (5) Partnership.--The Task Force shall recommend whether to 
     initiate a partnership with Alberta, Canada, for purposes of 
     sharing information relating to the development and 
     production of oil from tar sands.
       (6) Reports.--
       (A) Initial report.--Not later than 180 days after the date 
     of enactment of this Act, the Task Force shall submit to the 
     President and Congress a report that describes the analysis 
     and recommendations of the Task Force and contains the 5-year 
     plan.
       (B) Subsequent reports.--The Secretary of Energy shall 
     provide an annual report describing the progress in carrying 
     out the plan for each of the 5 years following submission of 
     the report provided for in subparagraph (A).
       (f) Mineral Leasing Act Amendments.--Section 21(a) of the 
     Mineral Leasing Act (30 U.S.C. 241(a)) is amended--
       (1) by designating the first, second, and third sentences 
     as paragraphs (1), (2), and (3), respectively; and
       (2) in paragraph (3) (as designated by paragraph (1))--
       (A) by striking ``rate of 50 cents per acre'' and inserting 
     ``rate of $2.00 per acre''; and
       (B) in the last proviso--
       (i) by striking ``That not more than one lease shall be 
     granted under this section to any'' and inserting ``That 
     no''; and
       (ii) by striking ``except that with respect to leases for'' 
     and inserting ``shall acquire or hold more than 25,000 acres 
     of oil shale leases in the United States. For''.
       (g) Cost-Shared Demonstration Technologies.--
       (1) Identification.--The Secretary of Energy shall identify 
     technologies for the development of oil shale and tar sands 
     that--
       (A) are ready for demonstration at a commercially-
     representative scale; and
       (B) have a high probability of leading to commercial 
     production.
       (2) Assistance.--For each technology identified under 
     paragraph (1), the Secretary of Energy may provide--
       (A) technical assistance;
       (B) assistance in meeting environmental and regulatory 
     requirements; and
       (C) cost-sharing assistance in accordance with section 
     1002.
       (h) Technical Assistance.--
       (1) In general.--The Secretary of Energy shall provide 
     technical assistance to private industry for the purpose of 
     overcoming technical challenges to the development of oil 
     shale and tar sands technologies for application in the 
     United States.
       (2) Administration.--The Secretary of Energy may provide 
     technical assistance under this section on a fee-for-service 
     or cost-shared basis in accordance with section 1002 through 
     individual agreements, cooperative research and development 
     agreements, partnerships, or other approaches.
       (i) National Oil Shale Assessment.--
       (1) Assessment.--
       (A) In general.--The Secretary shall carry out a national 
     assessment of oil shale resources for the purposes of 
     evaluating and mapping oil shale deposits, in the geographic 
     areas described in subparagraph (B).
       (B) Geographic areas.--The geographic areas referred to in 
     subparagraph (A), listed in the order in which the Secretary 
     shall assign priority, are--
       (i) the Green River Region of the States of Colorado, Utah, 
     and Wyoming;
       (ii) the Devonian oil shales of the eastern United States; 
     and
       (iii) any remaining area in the central and western United 
     States (including the State of Alaska) that contains oil 
     shale, as determined by the Secretary.
       (2) Use of state surveys and universities.--In carrying out 
     the assessment under paragraph (1), the Secretary may request 
     assistance from any State-administered geological survey or 
     university.
       (j) State Water Rights.--Nothing in this section preempts 
     or affects any State water law or interstate compact relating 
     to water.
       (k) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as are necessary to carry out 
     this section.
                                 ______
                                 
  SA 859. Mr. WARNER submitted an amendment intended to be proposed by 
him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       On page 160, before line 1, insert the following:

     SEC. 220. TREATMENT OF NUCLEAR ENERGY.

       For the purposes of any renewable standard established by 
     this title or an amendment made by this title, nuclear energy 
     shall be considered to be a renewable form of energy.
                                 ______
                                 
  SA 860. Mr. WARNER submitted an amendment intended to be proposed by 
him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       On page 310, after line 25, add the following:

     SEC. 372. OUTER CONTINENTAL SHELF REVENUE SHARING FOR 
                   NONMORATORIA COASTAL PRODUCING STATES.

       (a) In General.--The Outer Continental Shelf Lands Act (43 
     U.S.C. 1331 et seq.) is amended by adding at the end the 
     following:

     ``SEC. 32. OUTER CONTINENTAL SHELF REVENUE SHARING FOR 
                   NONMORATORIA COASTAL PRODUCING STATES.

       ``(a) Definitions.--In this section:
       ``(1) Coastal political subdivision.--The term `coastal 
     political subdivision' means a political subdivision of a 
     producing State, all or part of which lies within the 
     boundaries of the coastal zone of the producing State that 
     are identified in the coastal zone management program for the 
     producing State under the Coastal Zone Management Act of 1972 
     (16 U.S.C. 1451 et seq.), as in effect on the date of 
     enactment of this section.
       ``(2) Coastal population.--The term `coastal population' 
     means the population, as determined by the most recent 
     official data of the Census Bureau, of each political 
     subdivision, any part of which lies within the designated 
     coastal boundary of a State (as defined in a coastal zone 
     management program of the State under the Coastal Zone 
     Management Act of 1972 (16 U.S.C. 1451 et seq.)).
       ``(3) Coastal state.--The term `coastal State' has the 
     meaning given the term in section 304 of the Coastal Zone 
     Management Act of 1972 (16 U.S.C. 1453).
       ``(4) Coastline.--The term `coastline' has the meaning 
     given the term in section 2 of the Submerged Lands Act (43 
     U.S.C. 1301).
       ``(5) Distance.--The term `distance' means the minimum 
     great circle distance, measured in statute miles.
       ``(6) Leased tract.--The term `leased tract' means a tract 
     that is subject to a lease under section 6 or 8 for the 
     purpose of drilling for, developing, and producing oil or 
     natural gas resources.
       ``(7) Political subdivision.--The term `political 
     subdivision' means the local political jurisdiction 
     immediately below the level of State government, including 
     counties, parishes, and boroughs.
       ``(8) Producing state.--
       ``(A) In general.--The term `producing State' means a 
     coastal State that has a coastal seaward boundary within 200 
     miles of the geographic center of a leased tract within any 
     area of the outer Continental Shelf.
       ``(B) Inclusion.--The term `producing State' includes any 
     State that begins production on a leased tract on or after 
     the date of enactment of this section, regardless of whether 
     the leased tract was on any date subject to a leasing 
     moratorium.
       ``(9) Qualified outer continental shelf revenues.--
       ``(A) In general.--The term `qualified Outer Continental 
     Shelf revenues' means all amounts received by the United 
     States from each leased tract or portion of a leased tract--
       ``(i) lying--

       ``(I) seaward of the zone covered by section 8(g); or
       ``(II) within the zone covered by section 8(g), but to 
     which section 8(g) does not apply; and

       ``(ii) the geographic center of which lies within 200 miles 
     of any part of the coastline of any coastal State.
       ``(B) Inclusions.--The term `qualified Outer Continental 
     Shelf revenues' includes bonus bids, rents, royalties 
     (including payments for royalty taken in kind and sold), net 
     profit share payments, and related late-payment interest from 
     natural gas and oil leases issued under this Act.
       ``(10) Transferred amount.--The term `transferred amount' 
     means the amount transferred to the Secretary under 
     subsection (b)(1) to make payments to producing States and 
     coastal political subdivisions under this section for a 
     fiscal year.
       ``(b) Payments to Producing States and Coastal Political 
     Subdivisions.--

[[Page S7086]]

       ``(1) Transfer of amounts.--From qualified Outer 
     Continental Shelf revenues deposited in the Treasury under 
     this Act for a fiscal year, the Secretary of the Treasury 
     shall transfer to the Secretary to make payments to producing 
     States and coastal political subdivisions under this 
     section--
       ``(A) for each of fiscal years 2006 through 2010, 
     $500,000,000; and
       ``(B) for fiscal year 2011 and each subsequent fiscal year, 
     an amount equal to 50 percent of qualified Outer Continental 
     Shelf revenues received for a fiscal year.
       ``(2) Disbursement.--During each fiscal year, the Secretary 
     shall, subject to the availability of appropriations for 
     purposes of paragraph (1)(A), and without further 
     appropriation for purposes of paragraph (1)(B), disburse to 
     each producing State for which the Secretary has approved a 
     plan under subsection (c), and to coastal political 
     subdivisions under paragraph (4), the funds allocated to the 
     producing State or coastal political subdivision under this 
     section for the fiscal year.
       ``(3) Allocation among producing states.--
       ``(A) In general.--The transferred amount shall be 
     allocated to each producing State based on the ratio that--
       ``(i) the amount of qualified outer Continental Shelf 
     revenues generated off the coastline of the producing State; 
     bears to
       ``(ii) the amount of qualified outer Continental Shelf 
     revenues generated off the coastline of all producing States.
       ``(B) Qualified outer continental shelf revenues.--
       ``(i) Fiscal years 2006 through 2008.--For each of fiscal 
     years 2006 through 2008, a calculation of a payment under 
     this subsection shall be based on qualified outer Continental 
     Shelf revenues received during fiscal year 2005.
       ``(ii) Fiscal years 2009 through 2010.--For each of fiscal 
     years 2009 through 2010, a calculation of a payment under 
     this subsection shall be based on qualified outer Continental 
     Shelf revenues received during fiscal year 2008.
       ``(iii) Fiscal year 2011 and thereafter.--Beginning in 
     fiscal year 2011, a calculation of a payment under this 
     subsection for each fiscal year during a 2-year fiscal year 
     period shall be based on qualified outer Continental Shelf 
     revenues received during the fiscal year preceding the first 
     fiscal year of the 2-year fiscal year period.
       ``(C) Multiple producing states.--If more than 1 producing 
     State is located within 200 miles of any portion of a leased 
     tract, the amount allocated to each producing State for the 
     leased tract shall be inversely proportional to the distance 
     between--
       ``(i) the nearest point on the coastline of the producing 
     State; and
       ``(ii) the geographic center of the leased tract.
       ``(D) Minimum allocation.--An amount allocated to a 
     producing State under this paragraph shall be not less than 1 
     percent of the transferred amount.
       ``(4) Payments to coastal political subdivisions.--
       ``(A) In general.--The Secretary shall pay 35 percent of 
     the amount allocated under paragraph (3) to the coastal 
     political subdivisions in the producing State.
       ``(B) Formula.--Of the amount paid by the Secretary to 
     coastal political subdivisions under subparagraph (A)--
       ``(i) 25 percent shall be allocated to each coastal 
     political subdivision in the proportion that--

       ``(I) the coastal population of the coastal political 
     subdivision; bears to
       ``(II) the coastal population of all coastal political 
     subdivisions in the producing State;

       ``(ii) 25 percent shall be allocated to each coastal 
     political subdivision in the proportion that--

       ``(I) the number of miles of coastline of the coastal 
     political subdivision; bears to
       ``(II) the number of miles of coastline of all coastal 
     political subdivisions in the producing State; and

       ``(iii) 50 percent shall be allocated in amounts that are 
     inversely proportional to the respective distances between 
     the points in each coastal political subdivision that are 
     closest to the geographic center of each leased tract, as 
     determined by the Secretary.
       ``(C) Exception for louisiana.--For the purposes of 
     subparagraph (B)(ii), the coastline for coastal political 
     subdivisions in the State of Louisiana without a coastline 
     shall be the average length of the coastline of all other 
     coastal political subdivisions in the State of Louisiana.
       ``(D) Exception for alaska.--For the purposes of carrying 
     out subparagraph (B)(iii) in the State of Alaska, the amount 
     allocated shall be divided equally among the 2 coastal 
     political subdivisions that are closest to the geographic 
     center of a leased tract.
       ``(5) No approved plan.--
       ``(A) In general.--Subject to subparagraph (B) and except 
     as provided in subparagraph (C), if any amount allocated to a 
     producing State or coastal political subdivision under 
     paragraph (3) or (4) is not disbursed because the producing 
     State does not have in effect a plan that has been approved 
     by the Secretary under subsection (c), the Secretary shall 
     allocate the undisbursed amount equally among all other 
     producing States.
       ``(B) Retention of allocation.--The Secretary shall hold in 
     escrow an undisbursed amount described in subparagraph (A) 
     until the date that the final appeal regarding the 
     disapproval of a plan submitted under subsection (c) is 
     decided.
       ``(C) Waiver.--The Secretary may waive the requirements of 
     subparagraph (A) with respect to an allocated share of a 
     producing State and hold the allocable share in escrow if the 
     Secretary determines that the producing State is making a 
     good faith effort to develop and submit, or update, a plan in 
     accordance with subsection (c).
       ``(c) Coastal Impact Assistance Plan.--
       ``(1) Submission of state plan.--
       ``(A) In general.--Not later than July 1, 2008, the 
     Governor of a producing State shall submit to the Secretary a 
     coastal impact assistance plan.
       ``(B) Public participation.--In carrying out subparagraph 
     (A), the Governor shall solicit local input and provide for 
     public participation in the development of the plan.
       ``(2) Approval.--
       ``(A) In general.--The Secretary shall approve a plan of a 
     producing State submitted under paragraph (1) before 
     disbursing any amount to the producing State, or to a coastal 
     political subdivision located in the producing State, under 
     this section.
       ``(B) Components.--The Secretary shall approve a plan 
     submitted under paragraph (1) if--
       ``(i) the Secretary determines that the plan is consistent 
     with the uses described in subsection (d); and
       ``(ii) the plan contains--

       ``(I) the name of the State agency that will have the 
     authority to represent and act on behalf of the producing 
     State in dealing with the Secretary for purposes of this 
     section;
       ``(II) a program for the implementation of the plan that 
     describes how the amounts provided under this section to the 
     producing State will be used;
       ``(III) for each coastal political subdivision that 
     receives an amount under this section--

       ``(aa) the name of a contact person; and
       ``(bb) a description of how the coastal political 
     subdivision will use amounts provided under this section;

       ``(IV) a certification by the Governor that ample 
     opportunity has been provided for public participation in the 
     development and revision of the plan; and
       ``(V) a description of measures that will be taken to 
     determine the availability of assistance from other relevant 
     Federal resources and programs.

       ``(3) Amendment to a plan.--Any amendment to a plan 
     submitted under paragraph (1) shall be--
       ``(A) developed in accordance with this subsection; and
       ``(B) submitted to the Secretary for approval or 
     disapproval under paragraph (4).
       ``(4) Procedure.--Except as provided in subparagraph (B), 
     not later than 90 days after the date on which a plan or 
     amendment to a plan is submitted under paragraph (1) or (3), 
     the Secretary shall approve or disapprove the plan or 
     amendment.
       ``(d) Authorized Uses.--
       ``(1) Fiscal years 2006 through 2010.--A producing State or 
     coastal political subdivision shall use any amount 
     transferred under subsection (b)(1)(A) that is distributed to 
     the producing State or coastal political subdivision, 
     including any amount deposited in a trust fund that is 
     administered by the State or coastal political subdivision 
     and dedicated to a use consistent with this section, in 
     accordance with all applicable Federal and State law, only 
     for 1 or more of the following purposes:
       ``(A) Projects and activities for the conservation, 
     protection, or restoration of coastal areas, including 
     wetland.
       ``(B) Mitigation of damage to fish, wildlife, or natural 
     resources.
       ``(C) Planning assistance and the administrative costs of 
     complying with this section.
       ``(D) Implementation of a federally-approved marine, 
     coastal, or comprehensive conservation management plan.
       ``(E) Mitigation of the impact of outer Continental Shelf 
     activities through funding of onshore infrastructure, 
     education, health care, and public service needs.
       ``(2) Fiscal year 2011 and thereafter.--A producing State 
     or coastal political subdivision shall use at least 25 
     percent of any amount transferred under subsection (b)(1)(B) 
     that is distributed to the producing State or coastal 
     political subdivision, including any amount deposited in a 
     trust fund that is administered by the State or coastal 
     political subdivision and dedicated to a use consistent with 
     this section, for 1 or more of the purposes described in 
     paragraph (1).
       ``(3) Compliance with authorized uses.--If the Secretary 
     determines that any expenditure made by a producing State or 
     coastal political subdivision is not consistent with this 
     subsection, the Secretary shall not disburse any additional 
     amount under this section to the producing State or the 
     coastal political subdivision until all amounts obligated for 
     unauthorized uses have been repaid or reobligated for 
     authorized uses.''.
       (b) Establishment of Seaward Lateral Boundaries for Coastal 
     States.--Section 4(a)(2)(A) of the Outer Continental Shelf 
     Lands Act (43 U.S.C. 1333(a)(2)(A)) is amended--
       (1) by inserting ``(i)'' after ``(A)'';
       (2) in the first sentence--
       (A) by striking ``President shall'' and inserting 
     ``Secretary shall by regulation''; and
       (B) by inserting before the period at the end the 
     following: ``not later than 180 days after the date of 
     enactment of the Stewardship for Our Coasts and Opportunities 
     for Reliable Energy Act''; and
       (3) by adding at the end the following:

[[Page S7087]]

       ``(i)(I) For purposes of this Act (including determining 
     boundaries to authorize leasing and preleasing activities and 
     any attributing revenues under this Act and calculating 
     payments to producing States and coastal political 
     subdivisions under section 32), the Secretary shall delineate 
     the lateral boundaries between coastal States in areas of the 
     outer Continental shelf under exclusive Federal jurisdiction, 
     to the extent of the exclusive economic zone of the United 
     States, in accordance with article 15 of the United Nations 
     Convention on the Law of the Sea of December 10, 1982.
       ``(II) This clause shall not affect any right or title to 
     Federal submerged land on the outer Continental Shelf.''.
       (c) Option to Petition for Leasing Within Certain Areas on 
     the Outer Continental Shelf.--Section 12 of the Outer 
     Continental Shelf Lands Act (43 U.S.C. 1341) is amended by 
     adding at the end the following:
       ``(g) Leasing Within the Seaward Lateral Boundaries of 
     Coastal States.--
       ``(1) Definition of affected area.--In this subsection, the 
     term `affected area' means any area located--
       ``(A) in the areas of northern, central, and southern 
     California and the areas of Oregon and Washington;
       ``(B) in the north, middle, or south planning area of the 
     Atlantic Ocean;
       ``(C) in the eastern Gulf of Mexico planning area and 
     lying--
       ``(i) south of 26 degrees north latitude; and
       ``(ii) east of 86 degrees west longitude; or
       ``(D) in the Straits of Florida.
       ``(2) Restrictions on leasing.--The Secretary shall not 
     offer for offshore leasing, preleasing, or any related 
     activity--
       ``(A) any area located on the outer Continental Shelf that, 
     as of the date of enactment of this subsection, is designated 
     as a marine sanctuary under the Marine Protection, Research, 
     and Sanctuaries Act of 1972 (33 U.S.C. 1401 et seq.); or
       ``(B) except as provided in paragraphs (3) and (4), during 
     the period beginning on the date of enactment of this 
     subsection and ending on June 30, 2012, any affected area.
       ``(3) Resource assessments.--
       ``(A) In general.--Beginning on the date on which the 
     Secretary delineates seaward lateral boundaries under section 
     4(a)(2)(A)(ii), a Governor of a State in which an affected 
     area is located, with the consent of the legislature of the 
     State, may submit to the Secretary a petition requesting a 
     resource assessment of any area within the seaward lateral 
     boundary of the State.
       ``(B) Eligible resources.--A petition for a resource 
     assessment under subparagraph (A) may be for--
       ``(i) oil and gas leasing;
       ``(ii) gas-only leasing; or
       ``(iii) any other energy source leasing, including 
     renewable energy leasing.
       ``(C) Action by secretary.--Not later than 90 days after 
     receipt of a petition under subparagraph (A), the Secretary 
     shall approve the petition, unless the Secretary determines 
     that a resource assessment of the area would create an 
     unreasonable risk of harm to the marine, human, or coastal 
     environment of the State.
       ``(D) Failure to act.--If the Secretary fails to approve or 
     deny a petition in accordance with subparagraph (C)--
       ``(i) the petition shall be considered to be approved; and
       ``(ii) a resource assessment of any appropriate area shall 
     be carried out as soon as practicable.
       ``(E) Submission to state.--As soon as practicable after 
     the date on which a petition is approved under subparagraph 
     (C) or (D), the Secretary shall--
       ``(i) complete the resource assessment for the area; and
       ``(ii) submit the completed resource assessment to the 
     State.
       ``(4) Petition for leasing.--
       ``(A) In general.--On receipt of a resource assessment 
     under paragraph (3)(E)(ii), the Governor of a State in which 
     an affected area is located, with the consent of the 
     legislature of the State, may submit to the Secretary a 
     petition requesting that the Secretary make available any 
     land that is within the seaward lateral boundaries of the 
     State (as established under section 4(a)(2)(A)(ii)) and that 
     is greater than 20 miles from the coastline of the State for 
     the conduct of offshore leasing, pre-leasing, or related 
     activities with respect to--
       ``(i) oil and gas leasing;
       ``(ii) gas-only leasing; or
       ``(iii) any other energy source leasing, including 
     renewable energy leasing.
       ``(B) Action by secretary.--Not later than 90 days after 
     receipt of a petition under subparagraph (A), the Secretary 
     shall approve the petition, unless the Secretary determines 
     that leasing the area would create an unreasonable risk of 
     harm to the marine, human, or coastal environment of the 
     State.
       ``(C) Failure to act.--If the Secretary fails to approve or 
     deny a petition in accordance with subparagraph (B)--
       ``(i) the petition shall be considered to be approved; and
       ``(ii) any appropriate area shall be made available for oil 
     and gas leasing, gas-only leasing, or any other energy source 
     leasing, including renewable energy leasing.
       ``(5) Revenue sharing.--
       ``(A) In general.--Beginning on the date on which 
     production begins in an area under this subsection, the State 
     shall, without further appropriation, share in any qualified 
     outer Continental Shelf revenues of the production under 
     section 32.
       ``(B) Applicable law.--
       ``(i) In general.--Except as provided in clause (ii), a 
     State shall not be required to comply with subsections (c) 
     and (d) of section 32 to share in qualified outer Continental 
     Shelf revenues under subparagraph (A).
       ``(ii) Exception.--Of any qualified outer Continental Shelf 
     revenues received by a State (including a political 
     subdivision of a State) under subparagraph (A), at least 25 
     percent shall be used for 1 or more of the purposes described 
     in section 32(d)(1).
       ``(6) Effect.--Nothing in this subsection affects any right 
     relating to an area described in paragraph (1) or (2) under a 
     lease that was in existence on the day before the date of 
     enactment of this subsection.''.
       (d) Alternate Energy-Related Uses on the Outer Continental 
     Shelf.--
       (1) Amendment to outer continental shelf lands act.--
     Section 8 of the Outer Continental Shelf Lands Act (43 U.S.C. 
     1337) is amended by adding at the end the following:
       ``(p) Leases, Easements, or Rights-of-Way for Energy and 
     Related Purposes.--
       ``(1) In general.--The Secretary, in consultation with the 
     Secretary of the Department in which the Coast Guard is 
     operating and other relevant departments and agencies of the 
     Federal Government, may grant a lease, easement, or right-of-
     way on the outer Continental Shelf for activities not 
     otherwise authorized under this Act, the Deepwater Port Act 
     of 1974 (33 U.S.C. 1501 et seq.), the Ocean Thermal Energy 
     Conversion Act of 1980 (42 U.S.C. 9101 et seq.), or other 
     applicable law, if those activities--
       ``(A) support exploration, development, production, 
     transportation, or storage of oil, natural gas, or other 
     minerals;
       ``(B) produce or support production, transportation, or 
     transmission of energy from sources other than oil and gas; 
     or
       ``(C) use, for energy-related or marine-related purposes, 
     facilities in use on or before the date of enactment of this 
     subsection for activities authorized under this Act.
       ``(2) Payments.--
       ``(A) In general.--The Secretary shall establish, by rule 
     or agreement with the party to which the easement or right-
     of-way is granted under this subsection, reasonable forms of 
     payment for the easement or right-of-way, including a fee, 
     rental, bonus, or other payment.
       ``(B) Assessment.--A payment under subparagraph (A) shall 
     not be assessed on the basis of throughput or production.
       ``(C) Payments to states.--If a lease, easement, right-of-
     way, license, or permit under this subsection covers a 
     specific tract of, or regards a facility located on, the 
     outer Continental Shelf and is not an easement or right-of-
     way for transmission or transportation of energy, minerals, 
     or other natural resources, the Secretary shall pay 50 
     percent of any amount received from the holder of the lease, 
     easement, right-of-way, license, or permit to the State off 
     the shore of which the geographic center of the area covered 
     by the lease, easement, right-of-way, license, permit, or 
     facility is located.
       ``(3) Consultation.--Before exercising authority under this 
     subsection, the Secretary shall consult with the Secretary of 
     Defense and other appropriate agencies concerning issues 
     related to national security and navigational obstruction.
       ``(4) Competitive or noncompetitive basis.--
       ``(A) In general.--The Secretary may issue a lease, 
     easement, or right-of-way under paragraph (1) on a 
     competitive or noncompetitive basis.
       ``(B) Considerations.--In determining whether a lease, 
     easement, or right-of-way shall be granted competitively or 
     noncompetitively, the Secretary shall consider such factors 
     as--
       ``(i) prevention of waste and conservation of natural 
     resources;
       ``(ii) the economic viability of an energy project;
       ``(iii) protection of the environment;
       ``(iv) the national interest and national security;
       ``(v) human safety;
       ``(vi) protection of correlative rights; and
       ``(vii) potential return for the lease, easement, or right-
     of-way.
       ``(5) Regulations.--Not later than 270 days after the date 
     of enactment of this subsection, the Secretary, in 
     consultation with the Secretary of the Department in which 
     the Coast Guard is operating and other relevant agencies of 
     the Federal Government and affected States, shall issue any 
     necessary regulations to ensure--
       ``(A) safety;
       ``(B) protection of the environment;
       ``(C) prevention of waste;
       ``(D) conservation of the natural resources of the outer 
     Continental Shelf;
       ``(E) protection of national security interests; and
       ``(F) protection of correlative rights in the outer 
     Continental Shelf.
       ``(6) Security.--The Secretary shall require the holder of 
     a lease, easement, or right-of-way granted under this 
     subsection--
       ``(A) to furnish a surety bond or other form of security, 
     as prescribed by the Secretary; and
       ``(B) to comply with such other requirements as the 
     Secretary considers necessary to protect the interests of the 
     United States.
       ``(7) Effect of subsection.--Nothing in this subsection 
     displaces, supersedes, limits,

[[Page S7088]]

     or modifies the jurisdiction, responsibility, or authority of 
     any Federal or State agency under any other Federal law.
       ``(8) Applicability.--This subsection does not apply to any 
     area on the outer Continental Shelf designated as a National 
     Marine Sanctuary.''.
       (2) Conforming amendment.--Section 8 of the Outer 
     Continental Shelf Lands Act (43 U.S.C. 1337) is amended by 
     striking the section heading and inserting the following: 
     ``LEASES, EASEMENTS, AND RIGHTS-OF-WAY ON THE OUTER 
     CONTINENTAL SHELF.--''.
       (3) Savings provision.--Nothing in the amendment made by 
     paragraph (1) requires any resubmittal of documents 
     previously submitted or any reauthorization of actions 
     previously authorized, with respect to any project--
       (A) for which offshore test facilities have been 
     constructed before the date of enactment of this Act; or
       (B) for which a request for proposals has been issued by a 
     public authority.
       (e) Regulations.--
       (1) In general.--The Secretary of the Interior shall issue 
     such regulations as are necessary to carry out this section 
     and the amendments made by this section, including 
     regulations establishing procedures for entering into gas-
     only leases.
       (2) Gas-only leases.--In issuing regulations establishing 
     procedures for entering into gas-only leases, the Secretary 
     shall--
       (A) ensure that gas-only leases under the Outer Continental 
     Shelf Lands Act (43 U.S.C. 1331 et seq.) are not available in 
     a State that (as of the day before the date of enactment of 
     this Act) did not contain an affected area (as defined in 
     section 9(a) of that Act (as amended by subsection (d)(1)); 
     and
       (B) define ``natural gas'' as--
       (i) unmixed natural gas; or
       (ii) any mixture of natural or artificial gas (including 
     compressed or liquefied petroleum gas) and condensate 
     recovered from natural gas.
                                 ______
                                 
  SA 861. Mr. DODD submitted an amendment intended to be proposed by 
him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; as follows:

       On page 755, after line 25, add the following:

     SEC. 13__. EFFECT OF ELECTRICAL CONTAMINANTS ON RELIABILITY 
                   OF ENERGY PRODUCTION SYSTEMS.

       Not later than 180 days after the date of enactment of this 
     Act, the Secretary shall enter into a contract with the 
     National Academy of Sciences under which the National Academy 
     of Sciences shall determine the effect that electrical 
     contaminants (such as tin whiskers) may have on the 
     reliability of energy production systems, including nuclear 
     energy.
                                 ______
                                 
  SA 862. Mr. LAUTENBERG submitted an amendment intended to be proposed 
by him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       At the end of the bill, add the following:

                  TITLE XV--ANTI-COMPETITIVE PRACTICES

     SEC. 1501. SHORT TITLE.

       This title may be cited as the ``OPEC Accountability Act''.

     SEC. 1502. FINDINGS.

       Congress makes the following findings:
       (1) Gasoline prices have nearly doubled since January, 
     2002, with oil recently trading at more than $58 per barrel 
     for the first time ever.
       (2) Rising gasoline prices have placed an inordinate burden 
     on American families.
       (3) High gasoline prices have hindered and will continue to 
     hinder economic recovery.
       (4) The Organization of Petroleum Exporting Countries 
     (OPEC) has formed a cartel and engaged in anti-competitive 
     practices to manipulate the price of oil, keeping it 
     artificially high.
       (5) Six member nations of OPEC--Indonesia, Kuwait, Nigeria, 
     Qatar, the United Arab Emirates and Venezuela--are also 
     members of the World Trade Organization.
       (6) The agreement among OPEC member nations to limit oil 
     exports is an illegal prohibition or restriction on the 
     exportation or sale for export of a product under Article XI 
     of the GATT 1994.
       (7) The export quotas and resulting high prices harm 
     American families, undermine the American economy, impede 
     American and foreign commerce, and are contrary to the 
     national interests of the United States.

     SEC. 1503. ACTIONS TO CURB CERTAIN CARTEL ANTI-COMPETITIVE 
                   PRACTICES.

       (a) Definitions.--In this title:
       (1) GATT 1994.--The term ``GATT 1994'' has the meaning 
     given such term in section 2(1)(B) of the Uruguay Round 
     Agreements Act (19 U.S.C. 3501(1)(B)).
       (2) Understanding on rules and procedures governing the 
     settlement of disputes.--The term ``Understanding on Rules 
     and Procedures Governing the Settlement of Disputes'' means 
     the agreement described in section 101(d)(16) of the Uruguay 
     Round Agreements Act (19 U.S.C. 3511(d)(16)).
       (3) World trade organization.--
       (A) In general.--The term ``World Trade Organization'' 
     means the organization established pursuant to the WTO 
     Agreement.
       (B) WTO agreement.--The term ``WTO Agreement'' means the 
     Agreement Establishing The World Trade Organization entered 
     into on April 15, 1994.
       (b) Action by President.--
       (1) In general.--Notwithstanding any other provision of 
     law, the President shall, not later than 15 days after the 
     date of enactment of this Act, initiate consultations with 
     the countries described in paragraph (2) to seek the 
     elimination by those countries of any action that--
       (A) limits the production or distribution of oil, natural 
     gas, or any other petroleum product,
       (B) sets or maintains the price of oil, natural gas, or any 
     petroleum product, or
       (C) otherwise is an action in restraint of trade with 
     respect to oil, natural gas, or any petroleum product, when 
     such action constitutes an act, policy, or practice that is 
     unjustifiable and burdens and restricts United States 
     commerce.
       (2) Countries described.--The countries described in this 
     paragraph are the following:
       (A) Indonesia.
       (B) Kuwait.
       (C) Nigeria.
       (D) Qatar.
       (E) The United Arab Emirates.
       (F) Venezuela.
       (c) Initiation of WTO Dispute Proceedings.--If the 
     consultations described in subsection (b) are not successful 
     with respect to any country described in subsection (b)(2), 
     not later than 60 days after the date of enactment of this 
     Act, the United States Trade Representative shall, unless the 
     President submits a certification and report described in 
     subsection (d), institute proceedings pursuant to the 
     Understanding on Rules and Procedures Governing the 
     Settlement of Disputes with respect to that country and shall 
     take appropriate action with respect to that country under 
     the trade remedy laws of the United States.
       (d) Certification Described.--
       (1) In general.--The certification described in this 
     subsection means a certification submitted by the President 
     to Congress not later than 30 days after the date of 
     enactment of this Act, stating that instituting proceedings 
     described in subsection (c) would--
       (A) harm the national security interest of the United 
     States; or
       (B) harm the economic interests of the United States.
       (2) Report.--A certification submitted under this 
     subsection shall be accompanied by a report that includes an 
     explanation regarding how and why taking the action described 
     in subsection (c) with respect to a country described 
     subsection (b)(2) would not be in the national security 
     interest or economic interest of the United States. The 
     report may be provided on a classified basis if disclosure 
     would threaten the national security of the United States.
                                 ______
                                 
  SA 863. Mr. LAUTENBERG (for himself, Mr. Durbin, Mr. Dorgan, and Mr. 
Levin) submitted an amendment intended to be proposed by him to the 
bill H.R. 6, to ensure jobs for our future with secure, affordable, and 
reliable energy; which was ordered to lie on the table; as follows:

       At the end, add the following:

                  TITLE __--ANTI-COMPETITIVE PRACTICES

     SEC. __. SHORT TITLE.

       This title may be cited as the ``OPEC Accountability Act''.

     SEC. 1502. FINDINGS.

       Congress makes the following findings:
       (1) Gasoline prices have nearly doubled since January, 
     2002, with oil recently trading at more than $58 per barrel 
     for the first time ever.
       (2) Rising gasoline prices have placed an inordinate burden 
     on American families.
       (3) High gasoline prices have hindered and will continue to 
     hinder economic recovery.
       (4) The Organization of Petroleum Exporting Countries 
     (OPEC) has formed a cartel and engaged in anti-competitive 
     practices to manipulate the price of oil, keeping it 
     artificially high.
       (5) Six member nations of OPEC--Indonesia, Kuwait, Nigeria, 
     Qatar, the United Arab Emirates and Venezuela--are also 
     members of the World Trade Organization.
       (6) The agreement among OPEC member nations to limit oil 
     exports is an illegal prohibition or restriction on the 
     exportation or sale for export of a product under Article XI 
     of the GATT 1994.
       (7) The export quotas and resulting high prices harm 
     American families, undermine the American economy, impede 
     American and foreign commerce, and are contrary to the 
     national interests of the United States.

     SEC. 1503. ACTIONS TO CURB CERTAIN CARTEL ANTI-COMPETITIVE 
                   PRACTICES.

       (a) Definitions.--In this title:
       (1) GATT 1994.--The term ``GATT 1994'' has the meaning 
     given such term in section 2(1)(B) of the Uruguay Round 
     Agreements Act (19 U.S.C. 3501(1)(B)).
       (2) Understanding on rules and procedures governing the 
     settlement of disputes.--The term ``Understanding on Rules 
     and Procedures Governing the Settlement of Disputes'' means 
     the agreement described in section 101(d)(16) of the Uruguay 
     Round Agreements Act (19 U.S.C. 3511(d)(16)).
       (3) World trade organization.--
       (A) In general.--The term ``World Trade Organization'' 
     means the organization established pursuant to the WTO 
     Agreement.

[[Page S7089]]

       (B) WTO agreement.--The term ``WTO Agreement'' means the 
     Agreement Establishing The World Trade Organization entered 
     into on April 15, 1994.
       (b) Action by President.--
       (1) In general.--Notwithstanding any other provision of 
     law, the President shall, not later than 15 days after the 
     date of enactment of this Act, initiate consultations with 
     the countries described in paragraph (2) to seek the 
     elimination by those countries of any action that--
       (A) limits the production or distribution of oil, natural 
     gas, or any other petroleum product,
       (B) sets or maintains the price of oil, natural gas, or any 
     petroleum product, or
       (C) otherwise is an action in restraint of trade with 
     respect to oil, natural gas, or any petroleum product, when 
     such action constitutes an act, policy, or practice that is 
     unjustifiable and burdens and restricts United States 
     commerce.
       (2) Countries described.--The countries described in this 
     paragraph are the following:
       (A) Indonesia.
       (B) Kuwait.
       (C) Nigeria.
       (D) Qatar.
       (E) The United Arab Emirates.
       (F) Venezuela.
       (c) Initiation of WTO Dispute Proceedings.--If the 
     consultations described in subsection (b) are not successful 
     with respect to any country described in subsection (b)(2), 
     the United States Trade Representative shall, not later than 
     60 days after the date of enactment of this Act, institute 
     proceedings pursuant to the Understanding on Rules and 
     Procedures Governing the Settlement of Disputes with respect 
     to that country and shall take appropriate action with 
     respect to that country under the trade remedy laws of the 
     United States.
                                 ______
                                 
  SA 864. Mr. LEVIN (for himself, Ms. Collins, Mr. Wyden, and Mr. 
Schumer) submitted an amendment intended to be proposed by him to the 
bill H.R. 6, to ensure jobs for our future with secure, affordable, and 
reliable energy; as follows:

       On page 208, line 12, strike ``The Secretary shall'' and 
     insert the following:
       (1) In general.--The Secretary shall

       On page 208, between lines 20 and 21, insert the following:
       (2) Procedures.--
       (A) In general.--The Secretary shall develop, with an 
     opportunity for public comment, procedures to obtain oil for 
     the Reserve with the intent of maximizing the overall 
     domestic supply of crude oil (including quantities stored in 
     private sector inventories) and minimizing the costs to the 
     Department of the Interior and the Department of Energy of 
     acquiring such oil (including foregone revenues to the 
     Treasury when oil for the Reserve is obtained through the 
     royalty-in-kind program), consistent with national security.
       (B) Considerations.--The procedures shall provide that, for 
     purposes of determining whether to acquire oil for the 
     Reserve or defer deliveries of oil, the Secretary shall take 
     into account--
       (i) current and future prices, supplies, and inventories of 
     oil;
       (ii) national security; and
       (iii) other factors that the Secretary determines to be 
     appropriate.
       (C) Review of requests for deferrals of scheduled 
     deliveries.--The procedures shall include procedures and 
     criteria for the review of requests for the deferrals of 
     scheduled deliveries.
       (D) Deadlines.--The Secretary shall--
       (i) propose the procedures required under this paragraph 
     not later than 120 days after the date of enactment of this 
     Act;
       (ii) promulgate the procedures not later than 180 days 
     after the date of enactment of this Act; and
       (iii) comply with the procedures in acquiring oil for 
     Reserve effective beginning on the date that is 180 days 
     after the date of enactment of this Act.
                                 ______
                                 
  SA 865. Mr. FEINGOLD (for himself and Mr. Brownback) submitted an 
amendment intended to be proposed by him to the bill H.R. 6, to ensure 
jobs for our future with secure, affordable, and reliable energy; which 
was ordered to lie on the table; as follows:

       On page 706, between lines 20 and 21, insert the following:

     SEC. 1278. CONSUMER PROTECTION, FAIR COMPETITION, AND 
                   FINANCIAL INTEGRITY.

       Section 204 of the Federal Power Act (16 U.S.C. 824c) is 
     amended by adding at the end the following:
       ``(i)(1) In this subsection, the terms `affiliate', 
     `associate company', and `public-utility company' have the 
     meanings given those terms in section 1272 of the Energy 
     Policy Act of 2005.
       ``(2)(A) Not later than 1 year after the date of enactment 
     of this subsection, the Commission shall issue regulations to 
     regulate transactions between public-utility companies and 
     affiliates and associate companies of the public-utility 
     companies.
       ``(B) At a minimum, the regulations under subparagraph (A) 
     shall require, with respect to a transaction between a 
     public-utility company and an affiliate or associate company 
     of the public-utility company, that--
       ``(i) any business activity other than public-utility 
     company business shall be conducted through 1 or more 
     affiliates or associate companies, which shall be 
     independent, separate, and distinct entities from the public-
     utility company;
       ``(ii) the affiliate or associate company shall--
       ``(I) maintain separate books, accounts, memoranda, and 
     other records; and
       ``(II) prepare separate financial statements;
       ``(iii)(I) the public-utility company shall conduct the 
     transaction in a manner that is consistent with the 
     transactions among nonaffiliated and nonassociated companies; 
     and
       ``(II) the public-utility company shall not use its status 
     as a monopoly franchise to confer on its affiliate, or 
     associate company, any unfair competitive advantage;
       ``(iv) the public-utility company shall not declare or pay 
     any dividend on any security of the public-utility company in 
     contravention of such regulations as the Commission considers 
     appropriate to protect the financial integrity of the public-
     utility company;
       ``(v) the public-utility company shall have at least 1 
     independent director on its board of directors;
       ``(vi) the affiliate or associate company shall not 
     structure its governance nor shall it acquire any loan, loan 
     guarantee, or other indebtedness in a manner that would 
     permit creditors to have recourse against the tangible or 
     intangible assets of the public-utility company;
       ``(vii) the public-utility company shall not--
       ``(I) commingle any tangible or intangible assets or 
     liabilities of the public-utility company with any assets or 
     liabilities of an affiliate, or associate company, of the 
     public-utility company; or
       ``(II) pledge or encumber any assets of the public-utility 
     company on behalf of an affiliate, or associate company, of 
     the public-utility company;
       ``(viii)(I) the public-utility company shall not cross-
     subsidize or shift costs from an affiliate, or associate 
     company, of the public-utility company to the public-utility 
     company; and
       ``(II) the public-utility company shall disclose and fully 
     value, at the market value or other value specified by the 
     Commission, any tangible or intangible assets or services by 
     the public-utility company that, directly or indirectly, are 
     transferred to, or otherwise provided for the benefit of, an 
     affiliate, or associate company of the public-utility 
     company; and
       ``(ix) electricity and natural gas consumers and 
     investors--
       ``(I) shall be protected against the financial risks of 
     public-utility company diversification and transactions with 
     and among affiliates and associate companies of public-
     utility companies; and
       ``(II) shall not be subject to rates or charges that are 
     not reasonably related to the provision of electricity or 
     natural gas service.
       ``(3) This subsection does not preclude or deny the right 
     of any State or political subdivision of a State to adopt and 
     enforce standards for the corporate and financial separation 
     of public-utility companies that are more stringent than 
     those provided under the regulations issued under paragraph 
     (2).
       ``(4) It shall be unlawful for a public-utility company to 
     enter into or take any action in the performance of any 
     transaction with any affiliate, or associate company, of a 
     public-utility company in violation of the regulations issued 
     under paragraph (2).''.
                                 ______
                                 
  SA 866. Mr. BINGAMAN (for himself, Mr. Specter, Mr. Domenici, Mr. 
Alexander, Ms. Cantwell, Mr. Lieberman, Mr. Lautenberg, Mr. McCain, Mr. 
Jeffords, Mr. Kerry, Ms. Snowe, Ms. Collins, and Mrs. Boxer) submitted 
an amendment intended to be proposed by him to the bill H.R. 6, to 
ensure jobs for our future with secure, affordable, and reliable 
energy; which was ordered to lie on the table; as follows:

       At the end of title XVI, add the following:

     SEC. 16__. SENSE OF THE SENATE ON CLIMATE CHANGE.

       (a) Findings.--Congress finds that--
       (1) greenhouse gases accumulating in the atmosphere are 
     causing average temperatures to rise at a rate outside the 
     range of natural variability and are posing a substantial 
     risk of rising sea-levels, altered patterns of atmospheric 
     and oceanic circulation, and increased frequency and severity 
     of floods and droughts;
       (2) there is a growing scientific consensus that human 
     activity is a substantial cause of greenhouse gas 
     accumulation in the atmosphere; and
       (3) mandatory steps will be required to slow or stop the 
     growth of greenhouse gas emissions into the atmosphere.
       (b) Sense of the Senate.--It is the sense of the Senate 
     that, before the end of the first session of the 109th 
     Congress, Congress should enact a comprehensive and effective 
     national program of mandatory, market-based limits on 
     emissions of greenhouse gases that slow, stop, and reverse 
     the growth of such emissions at a rate and in a manner that--
       (1) will not significantly harm the United States economy; 
     and
       (2) will encourage comparable action by other nations that 
     are major trading partners and key contributors to global 
     emissions.

[[Page S7090]]

                                 ______
                                 
  SA 867. Mr. BINGAMAN submitted an amendment intended to be proposed 
by him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       On page 437, after line 22, add the following:

     SEC. 7__. IMPACTS OF USE OF SPECIAL FUEL FORMULATIONS.

       In determining whether to approve an application by a State 
     for the use of a new gasoline blend or other fuel formulation 
     under the Clean Air Act (42 U.S.C. 7401 et seq.), the 
     Administrator of the Environmental Protection Agency, in 
     consultation with the Secretary, shall take into 
     consideration impacts that the use of the blend or 
     formulation would have on the supply, demand, and pricing of 
     gasoline and other fuels.
                                 ______
                                 
  SA 868. Mr. BINGAMAN submitted an amendment intended to be proposed 
by him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       At the end of the bill, add the following:

              TITLE XV--ACTIONS TO ADDRESS GLOBAL CLIMATE

     SEC. 1501. SHORT TITLE.

       This title may be cited as the ``Climate and Economy 
     Insurance Act of 2005''.

                     Subtitle A--Domestic Programs

     SEC. 1511. PURPOSE.

       The purpose of this subtitle is to reduce greenhouse gas 
     emissions intensity in the United States, beginning in 
     calendar year 2010, through an emissions trading system 
     designed to achieve emissions reductions at the lowest 
     practicable cost to the United States.

     SEC. 1512. DEFINITIONS.

       In this subtitle:
       (1) Carbon dioxide equivalent.--The term ``carbon dioxide 
     equivalent'' means--
       (A) for each covered fuel, the quantity of carbon dioxide 
     that would be emitted into the atmosphere as a result of 
     complete combustion of a certain quantity of the covered 
     fuel, to be determined for the type of covered fuel by the 
     Secretary; and
       (B) for each greenhouse gas (other than carbon dioxide) the 
     quantity of carbon dioxide that would have an effect on 
     global warming equal to the effect of a certain quantity of 
     the greenhouse gas, as determined by the Secretary, taking 
     into consideration global warming potentials.
       (2) Covered fuel.--The term ``covered fuel'' means--
       (A) coal;
       (B) petroleum products;
       (C) natural gas;
       (D) natural gas liquids; and
       (E) any other fuel derived from fossil hydrocarbons 
     (including bitumen and kerogen).
       (3) Covered greenhouse gas emissions.--
       (A) In general.--The term ``covered greenhouse gas 
     emissions'' means--
       (i) the carbon dioxide emissions from combustion of covered 
     fuel carried out in the United States; and
       (ii) nonfuel-related greenhouse gas emissions in the United 
     States, determined in accordance with section 1515(b)(2).
       (B) Units.--Quantities of covered greenhouse gas emissions 
     shall be measured and expressed in units of metric tons of 
     carbon dioxide equivalent.
       (4) Emissions intensity.--The term ``emissions intensity'' 
     means, for any calendar year, the quotient obtained by 
     dividing--
       (A) covered greenhouse gas emissions; by
       (B) the forecasted GDP for that calendar year.
       (5) Forecasted gdp.--The term ``forecasted GDP'' means the 
     predicted amount of the gross domestic product of the United 
     States, based on the most current projection used by the 
     Energy Information Administration of the Department of Energy 
     on the date on which the prediction is made.
       (6) Greenhouse gas.--The term ``greenhouse gas'' means--
       (A) carbon dioxide;
       (B) methane;
       (C) nitrous oxide;
       (D) hydrofluorocarbons;
       (E) perfluorocarbons; and
       (F) sulfur hexafluoride.
       (7) Initial allocation period.--The term ``initial 
     allocation period'' means the period beginning January 1, 
     2010, and ending December 31, 2019.
       (8) Nonfuel regulated entity.--The term ``nonfuel regulated 
     entity'' means--
       (A) the owner or operator of a facility that manufactures 
     hydrofluorocarbons, perfluorocarbons, sulfur hexafluoride, or 
     nitrous oxide;
       (B) an importer of hydrofluorocarbons, perfluorocarbons, 
     sulfur hexafluoride, or nitrous oxide;
       (C) the owner or operator of a facility that emits nitrous 
     oxide associated with the manufacture of adipic acid or 
     nitric acid;
       (D) the owner or operator of a facility that produces 
     cement or lime;
       (E) the owner or operator of an aluminum smelter;
       (F) the owner or operator of an underground coal mine that 
     emitted more than 35,000,000 cubic feet of methane during 
     2004 or any subsequent calendar year; and
       (G) the owner or operator of facility that emits 
     hydrofluorocarbon-23 as a byproduct of 
     hydrochlorofluorocarbon-22 production.
       (9) Offset project.--The term ``offset project'' means any 
     project to reduce or sequester, during the initial allocation 
     period, any greenhouse gas emission that is not a covered 
     greenhouse gas emission.
       (10) Petroleum product.--The term ``petroleum product'' 
     means--
       (A) a refined petroleum product;
       (B) residual fuel oil;
       (C) petroleum coke; or
       (D) a liquefied petroleum gas.
       (11) Regulated entity.--The term ``regulated entity'' 
     means--
       (A) a regulated fuel distributor; or
       (B) a nonfuel regulated entity.
       (12) Regulated fuel distributor.--The term ``regulated fuel 
     distributor'' means--
       (A) the owner or operator of--
       (i) a natural gas pipeline;
       (ii) a petroleum refinery;
       (iii) a coal mine that produces more than 10,000 short tons 
     during 2004 or any subsequent calendar year; or
       (iv) a natural gas processing plant;
       (B) an importer of--
       (i) petroleum products;
       (ii) coal;
       (iii) coke; or
       (iv) natural gas liquids; or
       (C) any other entity the Secretary determines under section 
     1515(b)(3)(A)(ii) to be subject to section 1515.
       (13) Safety valve price.--The term ``safety valve price'' 
     means--
       (A) for 2010, $7 per metric ton of carbon dioxide 
     equivalent; and
       (B) for each subsequent calendar year, the safety valve 
     price established for the preceding calendar year increased 
     by 5 percent, unless a different rate of increase is 
     established for the calendar year under section 1521.
       (14) Secretary.--The term ``Secretary'' means the Secretary 
     of Energy, unless the President designates another officer of 
     the Executive Branch to carry out a function under this 
     subtitle.
       (15) Subsequent allocation period.--The term ``subsequent 
     allocation period'' means--
       (A) the 5-year period beginning January 1, 2020, and ending 
     December 31, 2024; and
       (B) each subsequent 5-year period.

     SEC. 1513. QUANTITY OF ANNUAL GREENHOUSE GAS ALLOWANCES.

       (a) Initial Allocation Period.--
       (1) In general.--Not later than December 31, 2006, the 
     Secretary shall--
       (A) make a projection with respect to emissions intensity 
     for 2009, using--
       (i) the Energy Information Administration's most current 
     projections of covered greenhouse gas emissions for 2009; and
       (ii) the forecasted GDP for 2009;
       (B) determine the emissions intensity target for 2010 by 
     calculating a 2.4 percent reduction from the projected 
     emissions intensity for 2009;
       (C) in accordance with paragraph (2), determine the 
     emissions intensity target for each calendar year of the 
     initial allocation period after 2010; and
       (D) in accordance with paragraph (3), issue the total 
     number of allowances for each calendar year during the 
     initial allocation period.
       (2) Emissions intensity targets after 2010.--For each 
     calendar year during the initial allocation period after 
     2010, the emissions intensity target shall be the emissions 
     intensity target established for the preceding calendar year 
     reduced by 2.4 percent.
       (3) Total allowances.--For each calendar year during the 
     initial allocation period, the quantity of allowances to be 
     issued shall be equal to the product obtained by 
     multiplying--
       (A) the emissions intensity target established for the 
     calendar year; and
       (B) the forecasted GDP for the calendar year.
       (b) Subsequent Allocation Periods.--
       (1) In general.--Not later than the date that is 4 years 
     before the beginning of each subsequent allocation period, 
     the Secretary shall--
       (A) except as directed under section 1521, determine the 
     emissions intensity target for each calendar year during that 
     subsequent allocation period, in accordance with paragraph 
     (2); and
       (B) issue the total number of allowances for each calendar 
     year of the subsequent allocation period, in accordance with 
     paragraph (3).
       (2) Emissions intensity targets.--For each calendar year 
     during a subsequent allocation period, the emissions 
     intensity target shall be the emissions intensity target 
     established for the preceding calendar year reduced by 2.8 
     percent.
       (3) Total allowances.--For each calendar year during a 
     subsequent allocation period, the quantity of allowances to 
     be issued shall be equal to the product obtained by 
     multiplying--
       (A) the emissions intensity target established for the 
     calendar year; and
       (B) the forecasted GDP for the calendar year.
       (c) Administrative Requirements.--
       (1) Denomination.--Allowances issued by the Secretary under 
     this section shall be denominated in units of metric tons of 
     carbon dioxide equivalent.
       (2) Period of use.--An allowance issued by the Secretary 
     under this section may be used during--
       (A) the calendar year for which the allowance is issued; or
       (B) any subsequent calendar year.

[[Page S7091]]

       (3) Serial numbers.--The Secretary shall--
       (A) assign a unique serial number to each allowance issued 
     under this subtitle; and
       (B) retire the serial number of an allowance on the date on 
     which the allowance is submitted under section 1515.
       (4) Nature of allowances.--An allowance shall not be 
     considered to be a property right.

     SEC. 1514. ALLOCATION AND AUCTION OF GREENHOUSE GAS 
                   ALLOWANCES.

       (a) Allocation of Allowances.--
       (1) In general.--Not later than the date that is 3 years 
     before the beginning of the initial allocation period, and 
     each subsequent allocation period, the Secretary shall 
     allocate for each calendar year during the allocation period 
     a quantity of allowances in accordance with this subsection.
       (2) Quantity.--The total quantity of allowances available 
     to be allocated for each calendar year of an allocation 
     period shall be the product obtained by multiplying--
       (A) the total quantity of allowances issued for the 
     calendar year under subsection (a)(3) or (b)(3) of section 
     1513; and
       (B) the allocation percentage for the calendar year under 
     subsection (c).
       (3) Allowance allocation rulemaking.--
       (A) In general.--The Secretary shall establish, by rule, 
     and submit to Congress procedures for allocating allowances 
     to regulated entities and affected nonregulated entities for 
     the initial allocation period.
       (B) Effective date.--A rule under subparagraph (A) shall 
     take effect, unless disapproved under the congressional 
     review procedures under section 1521(d), not later than 180 
     days after the date on which the rule is submitted to 
     Congress.
       (C) Requirements.--
       (i) Initial allocation period.--The Secretary shall 
     promulgate rules under subparagraph (A) for the initial 
     allocation period not later than 18 months after the date of 
     enactment of this Act.
       (ii) Subsequent allocation periods.--The Secretary shall 
     promulgate rules under subparagraph (A) for each subsequent 
     allocation period not later than __ months before the 
     beginning of the period.
       (4) Distribution to regulated and nonregulated entities.--
     The procedures established under paragraph (3) shall--
       (A) provide for the allocation of allowances to regulated 
     entities and affected nonregulated entities within each 
     fossil-fuel sector (petroleum, natural gas, natural gas 
     liquids, and coal) and to the sector consisting of nonfuel 
     regulated entities based on the share of each sector of 
     covered greenhouse gas emissions for the most recent year for 
     which data are available;
       (B) prescribe criteria for the allocation of allowances to 
     regulated entities within each sector and nonregulated 
     affected entities using products produced in each sector 
     based on the following factors:
       (i) Historical or updated greenhouse gas emissions.
       (ii) Mitigation of significant and disproportionate 
     burdens.
       (iii) Avoiding windfalls.
       (iv) Administrative simplicity.
       (v) Mitigating barriers to entry; and
       (C) prescribe requirements for reporting by regulated 
     entities and affected nonregulated entities of information 
     necessary for allocation of allowances, including the forms 
     and schedules for submission of reports.
       (5) Definition of affected nonregulated entity.--For 
     purposes of this subsection, the term ``affected nonregulated 
     entity'' means any entity, other than a regulated entity, 
     that the Secretary determines is likely to sustain a 
     significant and disproportionate economic burden by reason of 
     the implementation of this title.
       (6) Distribution of allowances to organizations assisting 
     workers.--The Secretary shall distribute 1 percent of the 
     allowances available for allocation under this section in any 
     calendar year to organizations (including recognized 
     representatives of workers affected by programs under this 
     subtitle) that provide retraining, educational support, or 
     other assistance to workers affected by programs under this 
     subtitle.
       (7) Cost of allowances.--The Secretary shall distribute 
     allowances under this subsection at no cost to the recipient 
     of the allowance.
       (b) Auction of Allowances.--
       (1) In general.--The Secretary shall establish, by rule, a 
     procedure for the auction of a quantity of allowances during 
     each calendar year in accordance with paragraph (2).
       (2) Base quantity.--The base quantity of allowances to be 
     auctioned during a calendar year shall be the product 
     obtained by multiplying--
       (A) the total number of allowances for the calendar year 
     under subsection (a)(3) or (b)(3) of section 1513; and
       (B) the auction percentage for the calendar year under 
     subsection (c).
       (3) Schedule.--The auction of allowances shall be held on 
     the following schedule:
       (A) In 2007, the Secretary shall auction--
       (i) \1/2\ of the allowances available for auction for 2010; 
     and
       (ii) \1/2\ of the allowances available for auction for 
     2011.
       (B) In 2008, the Secretary shall auction \1/2\ of the 
     allowances available for auction for 2012.
       (C) In 2009, the Secretary shall auction \1/2\ of the 
     allowances available for auction for 2013.
       (D) In 2010 and each subsequent calendar year, the 
     Secretary shall auction--
       (i) \1/2\ of the allowances available for auction for that 
     calendar year; and
       (ii) \1/2\ of the allowances available for auction for the 
     calendar year that is 4 years after that calendar year.
       (4) Undistributed allowances.--In an auction held during 
     any calendar year, the Secretary shall auction any allowance 
     that was--
       (A) available for allocation under subsection (a) for the 
     calendar year, but not distributed; or
       (B) available during the preceding calendar year for an 
     offset or early reduction activity under section 1519 or 
     1520, but not distributed during that calendar year.
       (c) Available Percentages.--Except as directed under 
     section 1521, the percentage of the total quantity of 
     allowances for each calendar year to be available for 
     allocation, auction, offset projects, and early reduction 
     projects shall be determined in accordance with the following 
     table:
       

 
----------------------------------------------------------------------------------------------------------------
                                                                                        Percentage Available for
    Year    Allocation Percentage       Auction Percentage       Percentage Available       Early Reduction
                                                                for Offset Allowances          Allowances
----------------------------------------------------------------------------------------------------------------
 
 
2010-------91.0---------------------5.0-------------------------3----------------------1------------------------
 
----------------------------------------------------------------------------------------------------------------
2011       91.0                     5.0                         3                      1
 
----------------------------------------------------------------------------------------------------------------
2012       91.0                     5.0                         3                      1
 
----------------------------------------------------------------------------------------------------------------
2013       90.5                     5.5                         3                      1
 
----------------------------------------------------------------------------------------------------------------
2014       90.0                     6.0                         3                      1
 
----------------------------------------------------------------------------------------------------------------
2015       90.5                     6.5                         3                      1
 
----------------------------------------------------------------------------------------------------------------
2016       89.0                     7.0                         3                      1
 
----------------------------------------------------------------------------------------------------------------
2017       88.5                     7.5                         3                      1
 
----------------------------------------------------------------------------------------------------------------
2018       88.0                     8.0                         3                      1
 
----------------------------------------------------------------------------------------------------------------
2019       87.5                     8.5                         3                      1
 
----------------------------------------------------------------------------------------------------------------
2020 and   87.0                     10                          3                      __
 thereaft
 er
 
----------------------------------------------------------------------------------------------------------------

     SEC. 1515. SUBMISSION OF ALLOWANCES.

       (a) Requirements.--
       (1) Regulated fuel distributors.--
       (A) In general.--For calendar year 2010 and each calendar 
     year thereafter, each regulated fuel distributor shall submit 
     to the Secretary a number of allowances equal to

[[Page S7092]]

     the carbon dioxide equivalent of the quantity of covered 
     fuel, determined in accordance with subsection (b)(1), for 
     the regulated fuel distributor.
       (B) Natural gas pipelines.--For calendar year 2010 and each 
     calendar year thereafter, for any regulated fuel distributor 
     that is a natural gas pipeline, each natural gas shipper on 
     the pipeline shall submit to the owner or operator of the 
     pipeline a number of allowances (or an equivalent payment of 
     the safety valve price) equal to the carbon dioxide 
     equivalent of the quantities of natural gas received by the 
     pipeline from the shipper (excluding any amount received by 
     the pipeline from the shipper at an interconnection of 
     another pipeline).
       (2) Nonfuel regulated entities.--For 2010 and each calendar 
     year thereafter, each nonfuel regulated entity shall submit 
     to the Secretary a number of allowances equal to the carbon 
     dioxide equivalent of the quantity of nonfuel-related 
     greenhouse gas, determined in accordance with subsection 
     (b)(2), for the nonfuel regulated entity.
       (b) Regulated Quantities.--
       (1) Covered fuels.--For purposes of subsection (a)(1), the 
     quantity of covered fuel shall be equal to--
       (A) for a petroleum refinery located in the United States, 
     the quantity of petroleum products refined, produced, or 
     consumed at the refinery;
       (B) for a natural gas pipeline in the United States, the 
     quantity of natural gas received by the pipeline for 
     transport, excluding any natural gas received at an 
     interconnection with another natural gas pipeline;
       (C) for a natural gas processing plant located in the 
     United States, the quantity of natural gas liquids produced 
     at the plant;
       (D) for a coal mine located in the United States, the 
     quantity of coal produced at the mine; and
       (E) for an importer of coal, petroleum products, or natural 
     gas liquids into the United States, the quantity of coal, 
     petroleum products, or natural gas liquids imported into the 
     United States.
       (2) Nonfuel-related greenhouse gases.--For purposes of 
     subsection (a)(2), the quantity of nonfuel-related greenhouse 
     gas shall be equal to--
       (A) for a manufacturer or importer of hydrofluorocarbons, 
     perfluorocarbons, sulfur hexafluoride, or nitrous oxide, the 
     quantity of hydrofluorocarbons, perfluorocarbons, sulfur 
     hexafluoride, or nitrous oxide produced or imported by the 
     manufacturer or importer;
       (B) for an underground coal mine, the quantity of methane 
     emitted by the coal mine;
       (C) for a facility that manufactures adipic acid or nitric 
     acid, the quantity of nitrous oxide emitted by the facility;
       (D) for a facility that produces cement or lime, the 
     quantity of carbon dioxide emitted by the facility as a 
     result of the calcination process;
       (E) for an aluminum smelter, the sum of--
       (i) the quantity of carbon dioxide emitted by the smelter; 
     and
       (ii) the quantity of perfluorocarbons emitted by the 
     smelter; and
       (F) for a facility that produces hydrochlorofluorocarbon-
     22, the quantity of hydrofluorocarbon-23 emitted by the 
     facility.
       (3) Adjustments.--
       (A) Regulated fuel distributors.--
       (i) Modification.--The Secretary may modify, by rule, a 
     quantity of covered fuels under paragraph (1) if the 
     Secretary determines that the modification is necessary to 
     ensure that--

       (I) allowances are submitted for all units of covered fuel; 
     and
       (II) allowances are not submitted for the same quantity of 
     covered fuel by more than 1 regulated fuel distributor.

       (ii) Extension.--The Secretary may extend, by rule, the 
     requirement to submit allowances under subsection (a)(1) to 
     an entity that is not a regulated fuel distributor if the 
     Secretary determines that the extension is necessary to 
     ensure that allowances are submitted for all covered fuels.
       (B) Nonfuel regulated entities.--The Secretary may modify, 
     by rule, a quantity of nonfuel-related greenhouse gases under 
     paragraph (2) if the Secretary determines the modification is 
     necessary to ensure that allowances are not submitted for the 
     same volume of nonfuel-related greenhouse gas by more than 1 
     regulated entity.
       (c) Deadline for Submission.--Any entity required to submit 
     an allowance to the Secretary under this section shall submit 
     the allowance not later than March 31 of the calendar year 
     following the calendar year during which the allowance is 
     required to be submitted.
       (d) Regulations.--The Secretary shall promulgate such 
     regulations as the Secretary determines to be necessary or 
     appropriate to--
       (1) identify and register each regulated entity that is 
     required to submit an allowance under this section; and
       (2) require the submission of reports and otherwise obtain 
     any information the Secretary determines to be necessary to 
     calculate or verify the compliance of a regulated entity with 
     any requirement under this section.
       (e) Exemption Authority for Non-fuel Regulated Entities.--
       (1) In general.--Except as provided in paragraph (2), the 
     Secretary may exempt from the requirements of this subtitle 
     an entity that emits, manufactures, or imports nonfuel-
     related greenhouse gases for any period during which the 
     Secretary determines, after providing an opportunity for 
     public comment, that measuring or estimating the quantity of 
     greenhouse gases emitted, manufactured, or imported by the 
     entity is not feasible.
       (2) Exclusion.--The Secretary may not exempt a regulated 
     fuel distributor from the requirements of this subtitle under 
     paragraph (1).
       (f) Retirement of Allowances.--
       (1) In general.--Any person or entity that is not subject 
     to this subtitle may submit to the Secretary an allowance for 
     retirement at any time.
       (2) Action by secretary.--On receipt of an allowance under 
     paragraph (1), the Secretary--
       (A) shall accept the allowance; and
       (B) shall not allocate, auction, or otherwise reissue the 
     allowance.

     SEC. 1516. SAFETY VALVE.

       The Secretary shall accept from a regulated entity a 
     payment of the applicable safety valve price for a calendar 
     year in lieu of submission of an allowance under section 1515 
     for that calendar year.

     SEC. 1517. ALLOWANCE TRADING SYSTEM.

       (a) In General.--The Secretary shall establish, by rule, a 
     trading system under which allowances and credits may be 
     sold, exchanged, purchased, or transferred by any person or 
     entity.
       (b) Transparency.--
       (1) In general.--The trading system under subsection (a) 
     shall include such provisions as the Secretary considers to 
     be appropriate to--
       (A) facilitate price transparency and public participation 
     in the market for allowances and credits; and
       (B) protect buyers and sellers of allowances and credits, 
     and the public, from the adverse effects of collusion and 
     other anticompetitive behaviors.
       (2) Authority to obtain information.--The Secretary may 
     obtain any information the Secretary considers to be 
     necessary to carry out this section from any person or entity 
     that buys, sells, exchanges, or otherwise transfers an 
     allowance or credit.

     SEC. 1518. CREDITS FOR GEOLOGIC SEQUESTRATION, FEEDSTOCKS, 
                   AND EXPORTS.

       (a) Establishment.--
       (1) In general.--The Secretary shall establish, by rule, a 
     program under which the Secretary distributes credits to 
     entities in accordance with this section.
       (2) Sequestration.--If the Secretary determines, based on 
     information submitted under section 1522(c), that an entity 
     has carried out long-term sequestration of carbon dioxide 
     from the combustion of covered fuels in a geologic formation, 
     the Secretary shall distribute to that entity, for 2010 and 
     each subsequent calendar year, a quantity of credits equal to 
     the quantity of carbon dioxide sequestered by the entity 
     during that year, as determined by the Secretary.
       (3) Exporters of covered fuel.--If the Secretary determines 
     that an entity has exported covered fuel, the Secretary shall 
     distribute to that entity, for 2010 and each subsequent 
     calendar year, a quantity of credits equal to the quantity of 
     covered fuel exported by the entity during that year, 
     measured in carbon dioxide equivalents.
       (4) Use of fuels as feedstocks.--If the Secretary 
     determines that an entity has used a covered fuel as a 
     feedstock so that the carbon dioxide associated with the 
     covered fuel will not be emitted, the Secretary shall 
     distribute to that entity, for 2010 and each subsequent 
     calendar year, a quantity of credits equal to the quantity of 
     covered fuel used as feedstock by the entity during that 
     year, measured in carbon dioxide equivalents.
       (5) Non-carbon-dioxide greenhouse gases.--If the Secretary 
     determines that an entity has destroyed hydrofluorocarbons, 
     perfluorocarbons, sulfur hexafluoride, or nitrous oxide so 
     that the hydrofluorocarbons, perfluorocarbons, sulfur 
     hexafluoride, or nitrous oxide will not be emitted, the 
     Secretary shall distribute to that entity, for 2010 and each 
     subsequent calendar year, a quantity of credits equal to the 
     quantity of hydrofluorocarbons, perfluorocarbons, sulfur 
     hexafluoride, or nitrous oxide destroyed by the entity during 
     that year, measured in carbon dioxide equivalents.
       (6) Other exporters.--If the Secretary determines that an 
     entity has exported hydrofluorocarbons, perfluorocarbons, 
     sulfur hexafluoride, or nitrous oxide, the Secretary shall 
     distribute to that entity, for 2010 and each subsequent 
     calendar year, a quantity of credits equal to the volume of 
     hydrofluorocarbons, perfluorocarbons, sulfur hexafluoride, or 
     nitrous oxide exported by the entity during that year, 
     measured in carbon dioxide equivalents.
       (b) Nature of Credits.--A credit distributed by the 
     Secretary under this section--
       (1) is tradable and bankable;
       (2) may be submitted by a regulated entity in lieu of an 
     allowance under section 1515; and
       (3) is not a property right.

     SEC. 1519. OFFSET PROJECT PILOT PROGRAM.

       (a) Establishment.--The Secretary shall establish, by rule, 
     a pilot program under which the Secretary distributes 
     allowances to entities that carry out offset projects that 
     meet the requirements of section 1522(c).
       (b) Available Allowances.--The total quantity of allowances 
     distributed under subsection (a) may not exceed the product 
     obtained by multiplying--

[[Page S7093]]

       (1) the total number of allowances issued for the calendar 
     year under subsection (a)(3) or (b)(3) of section 1513; and
       (2) the percentage available for offset allowances for the 
     calendar year under section 1514(c).
       (c) Ineligible Offset Projects.--An offset project shall 
     not be eligible to receive an allowance under subsection (a) 
     if the offset project--
       (1) is carried out in the United States; and
       (2) reduces or geologically sequesters covered greenhouse 
     gas emissions.
       (d) International Offset Projects.--
       (1) In general.--The Secretary may distribute allowances 
     under subsection (a) to an offset project carried out in a 
     foreign country.
       (2) Foreign credits.--An allowance or credit issued by a 
     foreign country for an offset project described in paragraph 
     (1) shall not be submitted to meet a requirement under 
     section 1515.

     SEC. 1520. EARLY REDUCTION ALLOWANCES.

       (a) Establishment.--The Secretary shall establish, by rule, 
     a program under which the Secretary distributes to any entity 
     that carries out a project to reduce or sequester greenhouse 
     gas emissions before the initial allocation period a quantity 
     of allowances that reflects the actual emissions reductions 
     or net sequestration of the project, as determined by the 
     Secretary.
       (b) Available Allowances.--The total quantity of allowances 
     distributed under subsection (a) may not exceed the product 
     obtained by multiplying--
       (1) the total number of allowances issued for the calendar 
     year under subsection (a)(3) of section 1513; and
       (2) the percentage available for early reduction allowances 
     for the calendar year under section 1514(c).
       (c) Eligibility.--The Secretary may distribute allowances 
     for early reduction projects only to an entity that has 
     reported the reduced or sequestered greenhouse gas emissions 
     under--
       (1) the Voluntary Reporting of Greenhouse Gases Program of 
     the Energy Information Administration under section 1605(b) 
     of the Energy Policy Act of 1992 (42 U.S.C. 13385(b));
       (2) the Climate Leaders Program of the Environmental 
     Protection Agency; or
       (3) a State-administered or privately-administered registry 
     that includes early reduction actions not covered under the 
     programs described in paragraphs (1) and (2).

     SEC. 1521. CONGRESSIONAL REVIEW.

       (a) Interagency Review.--
       (1) In general.--Not later than January 15, 2014, and every 
     5 years thereafter, the President shall establish an 
     interagency group to review and make recommendations relating 
     to--
       (A) each program under this subtitle; and
       (B) any similar program of a foreign country described in 
     paragraph (2).
       (2) Countries to be reviewed.--An interagency group 
     established under paragraph (1) shall review actions and 
     programs relating to greenhouse gas emissions of--
       (A) each member country of the Organisation for Economic 
     Co-operation and Development;
       (B) China;
       (C) India;
       (D) Brazil;
       (E) Mexico;
       (F) Russia; and
       (G) Ukraine.
       (3) Inclusions.--A review under paragraph (1) shall--
       (A) for the countries described in paragraph (2), analyze 
     whether the countries that contribute at least 75 percent of 
     aggregate greenhouse gas emissions have taken action that--
       (i) in the case of member countries of the Organisation for 
     Economic Co-Operation and Development, is comparable to that 
     of the United States; and
       (ii) in the case of China, India, Brazil, Mexico, Russia, 
     and Ukraine, is significant, contemporaneous, and equitable 
     compared to action taken by the United States;
       (B) analyze whether each of the 5 largest trading partners 
     of the United States, as of the date on which the review is 
     conducted, has taken action with respect to greenhouse gas 
     emissions that is comparable to action taken by the United 
     States;
       (C) analyze whether the programs established under this 
     subtitle have contributed to an increase in electricity 
     imports from Canada or Mexico; and
       (D) make recommendations with respect to whether--
       (i) the rate of reduction of emissions intensity under 
     subsection (a)(2) or (b)(2) of section 1513 should be 
     modified; and
       (ii) the rate of increase of the safety valve price should 
     be modified.
       (4) Supplementary review elements.--A review under 
     paragraph (1) may include an analysis of--
       (A) the feasibility of regulating owners or operators of 
     entities that--
       (i) emit nonfuel-related greenhouse gases; and
       (ii) that are not subject to this subtitle;
       (B) whether the percentage of allowances for any calendar 
     year that are auctioned under section 1514(c) should be 
     modified.
       (5) National research council reports.--The President may 
     request such reports from the National Research Council as 
     the President determines to be necessary and appropriate to 
     support the interagency review process under this subsection.
       (b) Report.--
       (1) In general.--Not later than January 15, 2015, and every 
     5 years thereafter, the President shall submit to the House 
     of Representatives and the Senate a report describing any 
     recommendation of the President with respect to changes in 
     the programs under this subtitle.
       (2) Recommendations.--A recommendation under paragraph (1) 
     shall take into consideration the results of the most recent 
     interagency review under subsection (a).
       (c) Congressional Action.--
       (1) Consideration.--Not later than September 30 of any 
     calendar year during which a report is to be submitted under 
     subsection (b), the House of Representatives and the Senate 
     may consider a joint resolution, in accordance with paragraph 
     (2), that--
       (A) amends subsection (a)(2) or (b)(2) of section 1513;
       (B) modifies the safety valve price; or
       (C) modifies the percentage of allowances to be allocated 
     under section 1514(c).
       (2) Requirements.--A joint resolution considered under 
     paragraph (1) shall--
       (A) be introduced during the 45-day period beginning on the 
     date on which a report is required to be submitted under 
     subsection (b); and
       (B) after the resolving clause and ``That'', contain only 1 
     or more of the following:
       (i) ``, effective beginning January 1, 2015, section 
     1513(a)(2) of the Climate and Economy Insurance Act of 2005 
     is amended by striking `2.4' and inserting `_____'.''.
       (ii) ``, effective beginning _____, section 1513(b)(2) of 
     the Climate and Economy Insurance Act of 2005 is amended by 
     striking `2.8' and inserting `_____'.''.
       (iii) ``, effective beginning _____, section 1512(13)(B) of 
     the Climate and Economy Insurance Act of 2005 is amended by 
     striking `5 percent' and inserting `___ percent'.''.
       (iv) ``the table under section 1514(c) of the Climate and 
     Economy Insurance Act of 2005 is amended by striking the line 
     relating to calendar year 2020 and thereafter and inserting 
     the following:
       

 
----------------------------------------------------------------------------------------------------------------
                                                                                            Percentage Available
       `Year          Allocation Percentage    Auction Percentage    Percentage Available   for Early Reduction
                                                                    for Offset Allowances        Allowances
----------------------------------------------------------------------------------------------------------------
 
 
2020 and thereafter--__----------------------__---------------------__---------------------__'.''---------------
 
----------------------------------------------------------------------------------------------------------------

       (3) Applicable law.--Subsections (b) through (g) of section 
     802 of title 5, United States Code, shall apply to any joint 
     resolution under this subsection.
       (d) Review of Allocation Rules.--
       (1) Effectiveness of allocation rule.--A rule prescribed 
     under section 1514(a)(3)(A) shall not take effect if, not 
     later than 180 days after the date on which the rule is 
     submitted to Congress, a joint resolution described in 
     paragraph (2) is enacted.
       (2) Requirements.--A joint resolution considered under 
     paragraph (1) shall--
       (A) be introduced during the 45-day period beginning on the 
     date on which a rule is required to be submitted under 
     section 1514(a)(3); and
       (B) after the resolving clause, contain the following: 
     ``That the rule submitted by the Secretary of Energy on _____ 
     under section 1514(a)(3) of the Climate and Economy Insurance 
     Act of 2005 is disapproved.''.
       (3) Applicable law.--Subsections (b) through (g) of section 
     802 of title 5, United States Code, shall apply to any joint 
     resolution under this subsection.

     SEC. 1522. MONITORING AND REPORTING.

       (a) In General.--The Secretary shall require, by rule, that 
     a regulated entity shall perform such monitoring and submit 
     such reports as the Secretary determines to be necessary to 
     carry out this subtitle.
       (b) Submission of Information.--The Secretary shall 
     establish, by rule, any procedure the Secretary determines to 
     be necessary to ensure the completeness, consistency, 
     transparency, and accuracy of reports under subsection (a), 
     including--
       (1) accounting and reporting standards for covered 
     greenhouse gas emissions;
       (2) standardized methods of calculating covered greenhouse 
     gas emissions in specific

[[Page S7094]]

     industries from other information the Secretary determines to 
     be available and reliable, such as energy consumption data, 
     materials consumption data, production data, or other 
     relevant activity data;
       (3) if the Secretary determines that a method described in 
     paragraph (2) is not feasible for a regulated entity, a 
     standardized method of estimating covered greenhouse gas 
     emissions of the regulated entity;
       (4) a method of avoiding double counting of covered 
     greenhouse gas emissions;
       (5) a procedure to prevent a regulated entity from avoiding 
     the requirements of this subtitle by--
       (A) reorganization into multiple entities; or
       (B) outsourcing the operations or activities of the 
     regulated entity with respect to covered greenhouse gas 
     emissions; and
       (6) a procedure for the verification of data relating to 
     covered greenhouse gas emissions by--
       (A) regulated entities; and
       (B) independent verification organizations.
       (c) Determining Eligibility for Credits, Offset Allowances, 
     and Early Reduction Allowances.--
       (1) In general.--An entity shall provide the Secretary with 
     the information described in paragraph (2) in connection with 
     any application to receive--
       (A) a credit under section 1518(a)(2);
       (B) an allowance under section 1519; or
       (C) an early reduction allowance under section 1520 
     (unless, and to the extent, the Secretary determines that 
     providing such information is not feasible for the entity).
       (2) Required information.--
       (A) Greenhouse gas emissions reduction.--In the case of a 
     greenhouse gas emissions reduction, the entity shall provide 
     the Secretary with information verifying that, as determined 
     by the Secretary--
       (i) the entity has achieved an actual reduction in 
     greenhouse gas emissions--

       (I) relative to historic emissions levels of the entity; 
     and
       (II) taking into consideration any increase in other 
     greenhouse gas emissions of the entity; and

       (ii) if the reduction exceeds the net reduction of direct 
     greenhouse gas emissions of the entity, the entity reported a 
     reduction that was adjusted so as not to exceed the net 
     reduction.
       (B) Greenhouse gas sequestration.--In the case of a 
     greenhouse gas sequestration, the entity shall provide the 
     Secretary with information verifying that, as determined by 
     the Secretary, the entity has achieved actual increases in 
     net sequestration, taking into account the total use of 
     materials and energy by the entity in carrying out the 
     sequestration.

     SEC. 1523. ENFORCEMENT.

       (a) Failure to Submit Allowances.--
       (1) Payment to secretary.--A regulated entity that fails to 
     submit an allowance (or the safety valve price in lieu of an 
     allowance) for a calendar year not later than March 31 of the 
     following calendar year shall pay to the Secretary, for each 
     allowance the regulated entity failed to submit, an amount 
     equal to the product obtained by multiplying--
       (A) the safety valve price for that calendar year; and
       (B) 3.
       (2) Failure to pay.--A regulated entity that fails to make 
     a payment to the Secretary under paragraph (1) by December 31 
     of the calendar year following the calendar year for which 
     the payment is due shall be subject to subsection (b) or (c), 
     or both.
       (b) Civil Enforcement.--
       (1) Penalty.--A person that the Secretary determines to be 
     in violation of this subtitle shall be subject to a civil 
     penalty of not more than $25,000 for each day during which 
     the entity is in violation, in addition to any amount 
     required under subsection (a)(1).
       (2) Injunction.--The Secretary may bring a civil action for 
     a temporary or permanent injunction against any person 
     described in paragraph (1).
       (c) Criminal Penalties.--A person that willfully fails to 
     comply with this subtitle shall be subject to a fine under 
     title 18, United States Code, or imprisonment for not to 
     exceed 5 years, or both.

     SEC. 1524. JUDICIAL REVIEW.

       (a) In General.--Except as provided in subsection (b), 
     section 336(b) of the Energy Policy and Conservation Act (42 
     U.S.C. 6306(b)) shall apply to a review of any rule issued 
     under this subtitle in the same manner, and to the same 
     extent, that that section applies to a rule issued under 
     sections 323, 324, and 325 of that Act (42 U.S.C. 6293, 6294, 
     6295).
       (b) Exception.--A petition for review of a rule under this 
     subtitle shall be filed in the United States Court of Appeals 
     for the District of Columbia.

     SEC. 1525. ADMINISTRATIVE PROVISIONS.

       (a) Rules and Orders.--The Secretary may issue such rules 
     and orders as the Secretary determines to be necessary or 
     appropriate to carry out this subtitle.
       (b) Data.--
       (1) In general.--In carrying out this subtitle, the 
     Secretary may use any authority provided under section 11 of 
     the Energy Supply and Environmental Coordination Act of 1974 
     (15 U.S.C. 796).
       (2) Definition of energy information.--For the purposes of 
     carrying out this subtitle, the definition of the term 
     ``energy information'' under section 11 of the Energy Supply 
     and Environmental Coordination Act of 1974 (15 U.S.C. 796) 
     shall be considered to include any information the Secretary 
     determines to be necessary or appropriate to carry out this 
     subtitle.

     SEC. 1526. CLIMATE CHANGE ADAPTATION AND EARLY TECHNOLOGY 
                   DEPLOYMENT.

       (a) Trust Fund.--
       (1) Establishment.--There is established in the Treasury a 
     trust fund, to be known as the ``Climate Change Trust Fund'' 
     (referred to in this section as the ``Trust Fund'').
       (2) Deposits.--The Secretary shall deposit into the Trust 
     Fund any funds received by the Secretary under section 
     1514(b) or 1516.
       (3) Maximum cumulative amount.--Not more than 
     $50,000,000,000 may be deposited into the Trust Fund.
       (b) Distribution.--Beginning in fiscal year 2008, the 
     Secretary shall transfer any funds deposited into the Trust 
     Fund during the previous fiscal year as follows:
       (1) Climate change adaptation.--25 percent of the funds 
     shall be transferred as follows:
       (A) Conservation of coastal wetlands.--
       (i) In general.--Subject to clause (ii), 13 percent shall 
     be transferred to the Secretary of the Interior for purposes 
     of making payments to producing states under section 31 of 
     the Outer Continental Shelf Lands Act (43 U.S.C. 1356a) (as 
     amended by section 371).
       (ii) Limitation.--Not more than 10 percent of the amounts 
     received by a producing State or a coastal political 
     subdivision during any fiscal year shall be used to carry out 
     subparagraphs (C) and (E) of section 31(d)(1) of that Act (43 
     U.S.C. 1356a) (as amended by section 371).
       (B) Wildlife conservation.--12 percent shall be transferred 
     to the wildlife conservation and restoration account within 
     the Federal aid to wildlife restoration fund established 
     under section 3 of the Pittman-Robertson Wildlife Restoration 
     Act (16 U.S.C. 669b) (also known as the ``Federal Aid in 
     Wildlife Restoration Act'').
       (2) Zero- or low-carbon energy technologies.--40 percent of 
     the funds shall be transferred to the Secretary to carry out 
     the zero- or low-carbon energy technologies program under 
     subsection (c).
       (3) Advanced energy technologies incentive program.--25 
     percent of the funds shall be transferred as follows:
       (A) Advanced coal technologies.--20 percent shall be 
     transferred to the Secretary to carry out the advanced coal 
     and sequestration technologies program under subsection (d).
       (B) Cellulosic Biomass.--5 percent shall be transferred to 
     the Secretary to carry out--
       (i) the cellulosic biomass ethanol and municipal solid 
     waste loan guarantee program under section 212(c) of the 
     Clean Air Act (as added by section 206);
       (ii) the cellulosic biomass ethanol conversion assistance 
     program under section 212(f) of that Act (as added by section 
     206); and
       (iii) the fuel from cellulosic biomass program under 
     subsection (e).
       (4) Advanced technology vehicles.--10 percent shall be 
     transferred to the Secretary to carry out the advanced 
     technology vehicles manufacturing incentive program under 
     subsection (f).
       (c) Zero- or Low-Carbon Energy Technologies Deployment.--
       (1) Definitions.--In this subsection:
       (A) Energy savings.--The term ``energy savings'' means 
     megawatt-hours of electricity or million British thermal 
     units of natural gas saved by a product, in comparison to 
     projected energy consumption under the energy efficiency 
     standard applicable to the product.
       (B) High-efficiency consumer product.--The term ``high-
     efficiency consumer product'' means a covered product to 
     which an energy conservation standard applies under section 
     325 of the Energy Policy and Conservation Act (42 U.S.C. 
     6295), if the energy efficiency of the product exceeds the 
     energy efficiency required under the standard.
       (C) Zero- or low-carbon generation.--The term ``zero- or 
     low-carbon generation'' means generation of electricity by an 
     electric generation unit that--
       (i) emits no carbon dioxide into the atmosphere, or is 
     fossil-fuel fired and emits into the atmosphere not more than 
     250 pounds of carbon dioxide per megawatt-hour (after 
     adjustment for any carbon dioxide from the unit that is 
     geologically sequestered); and
       (ii) was placed into commercial service after the date of 
     enactment of this Act.
       (2) Financial incentives program.--During each fiscal year 
     beginning on or after October 1, 2006, the Secretary shall 
     competitively award financial incentives under this 
     subsection in the following technology categories:
       (A) Production of electricity from new zero- or low-carbon 
     generation.
       (B) Manufacture of high-efficiency consumer products.
       (3) Requirements.--
       (A) In general.--The Secretary shall make awards under this 
     subsection to producers of new zero- or low-carbon generation 
     and to manufacturers of high-efficiency consumer products--
       (i) in the case of producers of new zero- or low-carbon 
     generation, based on the bid of each producer in terms of 
     dollars per megawatt-hour of electricity generated; and
       (ii) in the case of manufacturers of high-efficiency 
     consumer products, based on the bid of each manufacturer in 
     terms of dollars per megawatt-hour or million British thermal 
     units saved.
       (B) Acceptance of bids.--

[[Page S7095]]

       (i) In general.--In making awards under this subsection, 
     the Secretary shall--

       (I) solicit bids for reverse auction from appropriate 
     producers and manufacturers, as determined by the Secretary; 
     and
       (II) award financial incentives to the producers and 
     manufacturers that submit the lowest bids that meet the 
     requirements established by the Secretary.

       (ii) Factors for conversion.--

       (I) In general.--For the purpose of assessing bids under 
     clause (i), the Secretary shall specify a factor for 
     converting megawatt-hours of electricity and million British 
     thermal units of natural gas to common units.
       (II) Requirement.--The conversion factor shall be based on 
     the relative greenhouse gas emission benefits of electricity 
     and natural gas conservation.

       (C) Ineligible units.--A new unit for the generation of 
     electricity that uses renewable energy resources shall not be 
     eligible to receive an award under this subsection if the 
     unit receives renewable energy credits under a Federal 
     renewable portfolio standard.
       (4) Forms of awards.--
       (A) Zero- and low-carbon generators.--An award for zero- or 
     low-carbon generation under this subsection shall be in the 
     form of a contract to provide a production payment for each 
     year during the first 10 years of commercial service of the 
     generation unit in an amount equal to the product obtained by 
     multiplying--
       (i) the amount bid by the producer of the zero- or low-
     carbon generation; and
       (ii) the megawatt-hours estimated to be generated by the 
     zero- or low-carbon generation unit each year.
       (B) high-efficiency consumer products.--An award for a 
     high-efficiency consumer product under this subsection shall 
     be in the form of a lump sum payment in an amount equal to 
     the product obtained by multiplying--
       (i) the amount bid by the manufacturer of the high-
     efficiency consumer product; and
       (ii) the energy savings during the projected useful life of 
     the high-efficiency consumer product, not to exceed 10 years, 
     as determined under rules issued by the Secretary.
       (d) Advanced Coal and Sequestration Technologies Program.--
       (1) Advanced coal technologies.--
       (A) Definition of advanced coal generation technology.--In 
     this paragraph, the term ``advanced coal generation 
     technology'' means integrated gasification combined cycle or 
     other advanced coal-fueled power plant technologies that--
       (i) have a minimum of 50 percent coal heat input on an 
     annual basis;
       (ii) provide a technical pathway for carbon capture and 
     storage; and
       (iii) provide a technical pathway for co-production of a 
     hydrogen slip-stream.
       (B) Deployment incentives.--
       (i) In general.--The Secretary shall use \1/2\ of the funds 
     provided to carry out this subsection during each fiscal year 
     to provide Federal financial incentives to facilitate the 
     deployment of not more than 20 gigawatts of advanced coal 
     generation technologies.
       (ii) Administration.--In providing incentives under clause 
     (i), the Secretary shall--

       (I) provide appropriate incentives for regulated investor-
     owned utilities, municipal utilities, electric cooperatives, 
     and independent power producers, as determined by the 
     Secretary; and
       (II) ensure that a range of the domestic coal types is 
     employed in the facilities that receive incentives under this 
     subparagraph.

       (C) Funding priorities.--
       (i) Projects using certain coals.--In providing incentives 
     under this paragraph, the Secretary shall set aside not less 
     than 25 percent of any funds made available to carry out this 
     paragraph for projects using lower rank coals, such as 
     subbituminous coal and lignite.
       (ii) Sequestration activities.--After the Secretary has 
     made awards for 2000 megawatts of capacity under this 
     paragraph, the Secretary shall give priority to projects that 
     will capture and sequester emissions of carbon dioxide, as 
     determined by the Secretary.
       (D) Distribution of funds.--A project that receives an 
     award under this paragraph may elect 1 of the following 
     Federal financial incentives:
       (i) A loan guarantee under section 1403(b).
       (ii) A cost-sharing grant for not more than 50 percent of 
     the cost of the project.
       (iii) Production payments of not more than 1.5 cents per 
     kilowatt-hour of electric output during the first 10 years of 
     commercial service of the project.
       (E) Limitation.--A project may not receive an award under 
     this subsection if the project receives an award under 
     subsection (c).
       (2) Sequestration.--
       (A) In general.--The Secretary shall use \1/2\ of the funds 
     provided to carry out this subsection during each fiscal year 
     for large-scale geologic carbon storage demonstration 
     projects that use carbon dioxide captured from facilities for 
     the generation of electricity using coal gasification or 
     other advanced coal combustion processes, including 
     facilities that receive assistance under paragraph (1).
       (B) Project capital and operating costs.--The Secretary 
     shall provide assistance under this paragraph to reimburse 
     the project owner for a percentage of the incremental project 
     capital and operating costs of the project that are 
     attributable to carbon capture and sequestration, as the 
     Secretary determines to be appropriate.
       (e) Fuel from Cellulosic Biomass.--
       (1) In general.--The Secretary shall provide deployment 
     incentives under this subsection to encourage a variety of 
     projects to produce transportation fuels from cellulosic 
     biomass, relying on different feedstocks in different regions 
     of the United States.
       (2) Project eligibility.--Incentives under this paragraph 
     shall be provided on a competitive basis to projects that 
     produce fuels that--
       (A) meet United States fuel and emissions specifications;
       (B) help diversify domestic transportation energy supplies; 
     and
       (C) improve or maintain air, water, soil, and habitat 
     quality.
       (3) Incentives.--Incentives under this subsection may 
     consist of--
       (A) additional loan guarantees under section 1403(b) for 
     the construction of production facilities and supporting 
     infrastructure; or
       (B) production payments through a reverse auction in 
     accordance with paragraph (4).
       (4) Reverse auction.--
       (A) In general.--In providing incentives under this 
     subsection, the Secretary shall--
       (i) prescribe rules under which producers of fuel from 
     cellulosic biomass may bid for production payments under 
     paragraph (3)(B); and
       (ii) solicit bids from producers of different classes of 
     transportation fuel, as the Secretary determines to be 
     appropriate.
       (B) Requirement.--The rules under subparagraph (A) shall 
     require that incentives shall be provided to the producers 
     that submit the lowest bid (in terms of cents per gallon) for 
     each class of transportation fuel from which the Secretary 
     solicits a bid.
       (f) Advanced Technology Vehicles Manufacturing Incentive 
     Program.--
       (1) Definitions.--In this subsection:
       (A) Advanced lean burn technology motor vehicle.--The term 
     ``advanced lean burn technology motor vehicle'' means a 
     passenger automobile or a light truck with an internal 
     combustion engine that--
       (i) is designed to operate primarily using more air than is 
     necessary for complete combustion of the fuel;
       (ii) incorporates direct injection; and
       (iii) achieves at least 125 percent of the 2002 model year 
     city fuel economy of vehicles in the same size class as the 
     vehicle.
       (B) Advanced technology vehicle.--The term ``advanced 
     technology vehicle'' means a light duty motor vehicle that--
       (i) is a hybrid motor vehicle or an advanced lean burn 
     technology motor vehicle; and
       (ii) meets the following performance criteria:

       (I) Except as provided in paragraph (3)(A)(ii), the Tier II 
     Bin 5 emission standard established in regulations prescribed 
     by the Administrator of the Environmental Protection Agency 
     under section 202(i) of the Clean Air Act (42 U.S.C. 
     7521(i)), or a lower numbered bin.
       (II) At least 125 percent of the base year city fuel 
     economy for the weight class of the vehicle.

       (C) Engineering integration costs.--The term ``engineering 
     integration costs'' includes the cost of engineering tasks 
     relating to--
       (i) incorporating qualifying components into the design of 
     advanced technology vehicles; and
       (ii) designing new tooling and equipment for production 
     facilities that produce qualifying components or advanced 
     technology vehicles.
       (D) Hybrid motor vehicle.--The term ``hybrid motor 
     vehicle'' means a motor vehicle that draws propulsion energy 
     from onboard sources of stored energy that are--
       (i) an internal combustion or heat engine using combustible 
     fuel; and
       (ii) a rechargeable energy storage system.
       (E) Qualifying components.--The term ``qualifying 
     components'' means components that the Secretary determines 
     to be--
       (i) specially designed for advanced technology vehicles; 
     and
       (ii) installed for the purpose of meeting the performance 
     requirements of advanced technology vehicles.
       (2) Manufacturer facility conversion awards.--The Secretary 
     shall provide facility conversion funding awards under this 
     subsection to automobile manufacturers and component 
     suppliers to pay 30 percent of the cost of--
       (A) re-equipping or expanding an existing manufacturing 
     facility to produce--
       (i) qualifying advanced technology vehicles; or
       (ii) qualifying components; and
       (B) engineering integration of qualifying vehicles and 
     qualifying components.
       (3) Period of availability.--
       (A) Phase i.--
       (i) In general.--An award under paragraph (2) shall apply 
     to--

       (I) facilities and equipment placed in service before 
     January 1, 2014; and
       (II) engineering integration costs incurred during the 
     period beginning on the date of enactment of this Act and 
     ending on December 31, 2013.

       (ii) Transition standard for light duty diesel-powered 
     vehicles.--For purposes of making an award under clause (i), 
     the term ``advanced technology vehicle'' includes a diesel-
     powered or diesel-hybrid light duty vehicle that--

       (I) has a weight greater than 6,000 pounds; and

[[Page S7096]]

       (II) meets the Tier II Bin 8 emission standard established 
     in regulations prescribed by the Administrator of the 
     Environmental Protection Agency under section 202(i) of the 
     Clean Air Act (42 U.S.C. 7521(i)), or a lower numbered bin.

       (B) Phase ii.--If the Secretary determines under paragraph 
     (4) that the program under this subsection has resulted in a 
     substantial improvement in the ability of automobile 
     manufacturers to produce light duty vehicles with improved 
     fuel economy, the Secretary shall continue to make awards 
     under paragraph (2) that shall apply to--
       (i) facilities and equipment placed in service before 
     January 1, 2021; and
       (ii) engineering integration costs incurred during the 
     period beginning on January 1, 2014, and ending on December 
     31, 2020.
       (4) Determination of improvement.--
       (A) In general.--Not later than January 1, 2013, the 
     Secretary shall determine, after providing notice and an 
     opportunity for public comment, whether the program under 
     this subsection has resulted in a substantial improvement in 
     the ability of automobile manufacturers to produce light duty 
     vehicles with improved fuel economy.
       (B) Effect on manufacturers.--In preparing the 
     determination under subparagraph (A), the Secretary shall 
     enter into an agreement with the National Academy of Sciences 
     to analyze the effect of the program under this subsection on 
     automobile manufacturers.

     SEC. 1527. EFFECT OF SUBTITLE.

       Nothing in this subtitle affects the authority of Congress 
     to limit, terminate, or change the value of an allowance or 
     credit issued under this subtitle.

                   Subtitle B--International Programs

     SEC. 1531. PURPOSES.

     The purposes of this subtitle are--
       (1) to strengthen the cooperation of the United States with 
     developing countries in addressing critical energy needs and 
     global climate change;
       (2) to promote sustainable economic development, increase 
     access to modern energy services, reduce greenhouse gas 
     emissions, and strengthen energy security and independence in 
     developing countries through the deployment of clean energy 
     technologies;
       (3) to facilitate the export of clean energy technologies 
     to developing countries;
       (4) to reduce the trade deficit of the United States 
     through the export of United States energy technologies and 
     technological expertise;
       (5) to retain and create manufacturing and related service 
     jobs in the United States;
       (6) to integrate the objectives described in paragraphs (1) 
     through (5) in a manner consistent with interests of the 
     United States, into the foreign policy of the United States;
       (7) to authorize funds for clean energy development 
     activities in developing countries; and
       (8) to ensure that activities funded under part C of title 
     VII of the Global Environmental Protection Assistance Act of 
     1989 (as added by section 1532) contribute to economic 
     growth, poverty reduction, good governance, the rule of law, 
     property rights, and environmental protection.

     SEC. 1532. CLEAN ENERGY TECHNOLOGY DEPLOYMENT IN DEVELOPING 
                   COUNTRIES.

       Title VII of the Global Environmental Protection Assistance 
     Act of 1989 (Public Law 101-240; 103 Stat. 2521) is amended 
     by adding at the end the following:

  ``PART C--CLEAN ENERGY TECHNOLOGY DEPLOYMENT IN DEVELOPING COUNTRIES

     ``SEC. 731. DEFINITIONS.

       ``In this part:
       ``(1) Clean energy technology.--The term `clean energy 
     technology' means an energy supply or end-use technology 
     that, over its lifecycle and compared to a similar technology 
     already in commercial use in any developing country--
       ``(A) is reliable, affordable, economically viable, 
     socially acceptable, and compatible with the needs and norms 
     of the host country;
       ``(B) results in--
       ``(i) reduced emissions of greenhouse gases; or
       ``(ii) increased geological sequestration; and
       ``(C) may--
       ``(i) substantially lower emissions of air pollutants; and
       ``(ii) generate substantially smaller or less hazardous 
     quantities of solid or liquid waste.
       ``(2) Department.--The term `Department' means the 
     Department of State.
       ``(3) Developing country.--
       ``(A) In general.--The term `developing country' means any 
     country not listed in Annex I of the United Nations Framework 
     Convention on Climate Change, done at New York on May 9, 
     1992.
       ``(B) Inclusion.--The term `developing country' may include 
     a country with an economy in transition, as determined by the 
     Secretary.
       ``(4) Geological sequestration.--The term `geological 
     sequestration' means the capture and long-term storage in a 
     geological formation of a greenhouse gas from an energy 
     producing facility, which prevents the release of greenhouse 
     gases into the atmosphere.
       ``(5) Interagency working group.--The term `Interagency 
     Working Group' means the Interagency Working Group on Clean 
     Energy Technology Exports established under section 
     732(b)(1)(A).
       ``(6) Qualifying project.--The term `qualifying project' 
     means a project meeting the criteria established under 
     section 735(b).
       ``(7) Secretary.--The term `Secretary' means the Secretary 
     of State.
       ``(8) Strategy.--The term `Strategy' means the strategy 
     established under section 733.
       ``(9) Task force.--The term `Task Force' means the Task 
     Force on International Clean Energy Cooperation established 
     under section 732(a).
       ``(10) United states.--The term `United States', when used 
     in a geographical sense, means all of the States.

     ``SEC. 732. ORGANIZATION.

       ``(a) Task Force.--
       ``(1) Establishment.--Not later than 90 days after the date 
     of enactment of this part, the President shall establish a 
     Task Force on International Clean Energy Cooperation.
       ``(2) Composition.--The Task Force shall be composed of--
       ``(A) the Secretary and the Secretary of Energy, who shall 
     serve jointly as Co-Chairpersons; and
       ``(B) representatives, appointed by the head of the 
     respective Federal agency, of--
       ``(i) the Department of Commerce;
       ``(ii) the Department of the Treasury;
       ``(iii) the Environmental Protection Agency;
       ``(iv) the United States Agency for International 
     Development;
       ``(v) the Export-Import Bank;
       ``(vi) the Overseas Private Investment Corporation;
       ``(vii) the Trade and Development Agency;
       ``(viii) the Small Business Administration;
       ``(ix) the Office of United States Trade Representative; 
     and
       ``(x) other Federal agencies, as determined by the 
     President.
       ``(3) Duties.--
       ``(A) Lead agency.--The Task Force shall act as the lead 
     agency in the development and implementation of strategy 
     under section 733.
       ``(B) Coordination and implementation.--The Task Force 
     shall support the coordination and implementation of programs 
     under sections 1331, 1332, and 1608 of the Energy Policy Act 
     of 1992 (42 U.S.C. 13361, 13362, 13387).
       ``(4) Termination.--The Task Force, including any working 
     group established by the Task Force, shall terminate on 
     January 1, 2016.
       ``(b) Working Groups.--
       ``(1) Establishment.--The Task Force--
       ``(A) shall establish an Interagency Working Group on Clean 
     Energy Technology Exports; and
       ``(B) may establish other working groups as necessary to 
     carry out this part.
       ``(2) Composition of interagency working group.--The 
     Interagency Working Group shall be composed of--
       ``(A) the Secretary of Energy, the Secretary of Commerce, 
     and the Administrator of the United States Agency for 
     International Development, who shall jointly serve as Co-
     Chairpersons; and
       ``(B) other members, as determined by the Task Force.
       ``(c) Interagency Center.--
       ``(1) Establishment.--There is established an Interagency 
     Center in the Office of International Energy Market 
     Development of the Department of Energy.
       ``(2) Duties.--The Interagency Center shall--
       ``(A) assist the Interagency Working Group in carrying out 
     this part; and
       ``(B) perform such other duties as are determined to be 
     appropriate by the Secretary of Energy.

     ``SEC. 733. STRATEGY.

       ``(a) Initial Strategy.--
       ``(1) In general.--Not later than 1 year after the date of 
     enactment of this part, the Task Force shall develop and 
     submit to the President a Strategy to--
       ``(A) support the development and implementation of 
     programs and policies in developing countries to promote the 
     adoption of clean energy technologies and energy efficiency 
     technologies and strategies, with an emphasis on those 
     developing countries that are expected to experience the most 
     significant growth in energy production and use over the next 
     20 years;
       ``(B) open and expand clean energy technology markets and 
     facilitate the export of clean energy technology to 
     developing countries, in a manner consistent with the subsidy 
     codes of the World Trade Organization;
       ``(C) integrate into the foreign policy objectives of the 
     United States the promotion of--
       ``(i) clean energy technology deployment and reduced 
     greenhouse gas emissions in developing countries; and
       ``(ii) clean energy technology exports;
       ``(D) establish a pilot program that provides financial 
     assistance for qualifying projects; and
       ``(E) develop financial mechanisms and instruments 
     (including securities that mitigate the political and foreign 
     exchange risks of uses that are consistent with the foreign 
     policy of the United States by combining the private sector 
     market and government enhancements) that--
       ``(i) are cost-effective; and
       ``(ii) facilitate private capital investment in clean 
     energy technology projects in developing countries.
       ``(2) Transmission to congress.--On receiving the Strategy 
     from the Task Force

[[Page S7097]]

     under paragraph (1), the President shall transmit to Congress 
     the Strategy.
       ``(b) Updates.--
       ``(1) In general.--Not later than 2 years after the date of 
     submission of the initial Strategy under subsection (a)(1), 
     and every 2 years thereafter--
       ``(A) the Task Force shall--
       ``(i) review and update the Strategy; and
       ``(ii) report the results of the review and update to the 
     President; and
       ``(B) the President shall submit to Congress a report on 
     the Strategy.
       ``(2) Inclusions.--The report shall include--
       ``(A) the updated Strategy;
       ``(B) a description of the assistance provided under this 
     part;
       ``(C) the results of the pilot projects carried out under 
     this part, including a comparative analysis of the relative 
     merits of each pilot project;
       ``(D) the activities and progress reported by developing 
     countries to the Department under section 736(b)(2); and
       ``(E) the activities and progress reported towards meeting 
     the goals established under section 736(b)(2).
       ``(c) Content.--In developing, updating, and submitting a 
     report on the Strategy, the Task Force shall--
       ``(1) assess--
       ``(A) energy trends, energy needs, and potential energy 
     resource bases in developing countries; and
       ``(B) the implications of the trends and needs for domestic 
     and global economic and security interests;
       ``(2) analyze technology, policy, and market opportunities 
     for international development, demonstration, and deployment 
     of clean energy technologies and strategies;
       ``(3) examine relevant trade, tax, finance, international, 
     and other policy issues to assess what policies, in the 
     United States and in developing countries, would help open 
     markets and improve clean energy technology exports of the 
     United States in support of--
       ``(A) enhancing energy innovation and cooperation, 
     including energy sector and market reform, capacity building, 
     and financing measures;
       ``(B) improving energy end-use efficiency technologies 
     (including buildings and facilities) and vehicle, industrial, 
     and co-generation technology initiatives; and
       ``(C) promoting energy supply technologies, including 
     fossil, nuclear, and renewable technology initiatives;
       ``(4) investigate issues associated with building capacity 
     to deploy clean energy technology in developing countries, 
     including--
       ``(A) energy-sector reform;
       ``(B) creation of open, transparent, and competitive 
     markets for clean energy technologies;
       ``(C) the availability of trained personnel to deploy and 
     maintain clean energy technology; and
       ``(D) demonstration and cost-buydown mechanisms to promote 
     first adoption of clean energy technology;
       ``(5) establish priorities for promoting the diffusion and 
     adoption of clean energy technologies and strategies in 
     developing countries, taking into account economic and 
     security interests of the United States and opportunities for 
     the export of technology of the United States;
       ``(6) identify the means of integrating the priorities 
     established under paragraph (5) into bilateral, multilateral, 
     and assistance activities and commitments of the United 
     States;
       ``(7) establish methodologies for the measurement, 
     monitoring, verification, and reporting under section 
     736(b)(2) of the greenhouse gas emission impacts of clean 
     energy projects and policies in developing countries;
       ``(8) establish a registry that is accessible to the public 
     through electronic means (including through the Internet) in 
     which information reported under section 736(b)(2) shall be 
     collected;
       ``(9) make recommendations to the heads of appropriate 
     Federal agencies on ways to streamline Federal programs and 
     policies to improve the role of the agencies in the 
     international development, demonstration, and deployment of 
     clean energy technology;
       ``(10) make assessments and recommendations regarding the 
     distinct technological, market, regional, and stakeholder 
     challenges necessary to deploy clean energy technology;
       ``(11) recommend conditions and criteria that will help 
     ensure that funds provided by the United States promote sound 
     energy policies in developing countries while simultaneously 
     opening their markets and exporting clean energy technology 
     of the United States;
       ``(12) establish an advisory committee, composed of 
     representatives of the private sector and other interested 
     groups, on the export and deployment of clean energy 
     technology;
       ``(13) establish a coordinated mechanism for disseminating 
     information to the private sector and the public on clean 
     energy technologies and clean energy technology transfer 
     opportunities; and
       ``(14) monitor the progress of each Federal agency in 
     promoting the purposes of this part, in accordance with--
       ``(A) the 5-year strategic plan submitted to Congress in 
     October 2002; and
       ``(B) other applicable law.
       ``(d) Ongoing Activities.--Existing activities and 
     interagency management efforts underway by Task Force members 
     shall be recognized as contributing to the initial Strategy.

     ``SEC. 734. CLEAN ENERGY ASSISTANCE TO DEVELOPING COUNTRIES.

       ``(a) In General.--Subject to section 736, the Secretary 
     may provide assistance to developing countries for activities 
     that are consistent with the priorities established in the 
     Strategy.
       ``(b) Assistance.--The assistance may be provided through--
       ``(1) the Millennium Challenge Corporation established 
     under section 604(a) of the Millennium Challenge Act of 2003 
     (22 U.S.C. 7703(a));
       ``(2) the Global Village Energy Partnership; and
       ``(3) other international assistance programs or activities 
     of--
       ``(A) the Department;
       ``(B) the United States Agency for International 
     Development; and
       ``(C) other Federal agencies.
       ``(c) Eligible Activities.--The activities supported under 
     this section include--
       ``(1) development of national action plans and policies 
     to--
       ``(A) facilitate the provision of clean energy services and 
     the adoption of energy efficiency measures;
       ``(B) identify linkages between the use of clean energy 
     technologies and the provision of agricultural, 
     transportation, water, health, educational, and other 
     development-related services; and
       ``(C) integrate the use of clean energy technologies into 
     national strategies for economic growth, poverty reduction, 
     and sustainable development;
       ``(2) strengthening of public and private sector capacity 
     to--
       ``(A) assess clean energy needs and options;
       ``(B) identify opportunities to reduce, avoid, or sequester 
     greenhouse gas emissions;
       ``(C) establish enabling policy frameworks;
       ``(D) develop and access financing mechanisms; and
       ``(E) monitor progress in implementing clean energy and 
     greenhouse gas reduction strategies;
       ``(3) enactment and implementation of market-favoring 
     measures to promote commercial-based energy service provision 
     and to improve the governance, efficiency, and financial 
     performance of the energy sector; and
       ``(4) development and use of innovative public and private 
     mechanisms to catalyze and leverage financing for clean 
     energy technologies, including use of the development credit 
     authority of the United States Agency for International 
     Development and credit enhancements through the Export-Import 
     Bank and the Overseas Private Investment Corporation.

     ``SEC. 735. PILOT PROGRAM FOR DEMONSTRATION PROJECTS.

       ``(a) In General.--Not later than 2 years after the date of 
     enactment of this part, the Secretary of Energy and the 
     Administrator of the United States Agency for International 
     Development, in consultation with the Secretary, shall, by 
     regulation, establish a pilot program that provides financial 
     assistance for qualifying projects consistent with the 
     Strategy and the performance criteria established under 
     section 736.
       ``(b) Qualifying Projects.--To be qualified to receive 
     assistance under this section, a project shall--
       ``(1) be a project--
       ``(A) to construct an energy production facility in a 
     developing country for the production of energy to be 
     consumed in the developing country; or
       ``(B) to improve the efficiency of energy use in a 
     developing country;
       ``(2) be a project that--
       ``(A) is submitted by a firm of the United States to the 
     Secretary in accordance with procedures established by the 
     Secretary by regulation;
       ``(B) meets the requirements of section 1608(k) of the 
     Energy Policy Act of 1992 (42 U.S.C. 13387(k));
       ``(C) uses technology that has been successfully developed 
     or deployed in the United States; and
       ``(D) is selected by the Secretary without regard to the 
     developing country in which the project is located, with 
     notice of the selection published in the Federal Register; 
     and
       ``(3) when deployed, result in a greenhouse gas emission 
     reduction (when compared to the technology that would 
     otherwise be deployed) of at least--
       ``(A) in the case of a unit or energy-efficiency measure 
     placed in service during the period beginning on the date of 
     enactment of this part and ending on December 31, 2009, 20 
     percentage points;
       ``(B) in the case of a unit or energy-efficiency measure 
     placed in service during the period beginning on January 1, 
     2010, and ending on December 31, 2019, 40 percentage points; 
     and
       ``(C) in the case of a unit or energy-efficiency measure 
     placed in service after December 31, 2019, 60 percentage 
     points.
       ``(c) Financial Assistance.--
       ``(1) In general.--For each qualifying project selected by 
     the Secretary to participate in the pilot program, the 
     Secretary shall make a loan or loan guarantee available for 
     not more than 50 percent of the total cost of the project.
       ``(2) Interest rate.--The interest rate on a loan made 
     under this subsection shall be

[[Page S7098]]

     equal to the current average yield on outstanding obligations 
     of the United States with remaining periods of maturity 
     comparable to the maturity of the loan.
       ``(3) Host country contribution.--To be eligible for a loan 
     or loan guarantee for a project in a host country under this 
     subsection, the host country shall--
       ``(A) make at least a 10 percent contribution toward the 
     total cost of the project; and
       ``(B) verify to the Secretary (using the methodology 
     established under section 733(c)(7)) the quantity of annual 
     greenhouse gas emissions reduced, avoided, or sequestered as 
     a result of the deployment of the project.
       ``(4) Capacity building research.--
       ``(A) In general.--A proposal made for a qualifying project 
     may include a research component intended to build 
     technological capacity within the host country.
       ``(B) Research.--To be eligible for a loan or loan 
     guarantee under this paragraph, the research shall--
       ``(i) be related to the technology being deployed; and
       ``(ii) involve--

       ``(I) an institution in the host country; and
       ``(II) a participant from the United States that is an 
     industrial entity, an institution of higher education, or a 
     National Laboratory.

       ``(C) Host country contribution.--To be eligible for a loan 
     or loan guarantee for research in a host country under this 
     paragraph, the host country shall make at least a 50 percent 
     contribution toward the total cost of the research.
       ``(5) Grants.--
       ``(A) In general.--The Secretary, in consultation with the 
     Secretary of Energy and the Administrator of the United 
     States Agency for International Development, may, at the 
     request of the United States ambassador to a host country, 
     make grants to help address and overcome specific, urgent, 
     and unforeseen obstacles in the implementation of a 
     qualifying project.
       ``(B) Maximum amount.--The total amount of a grant made for 
     a qualifying project under this paragraph may not exceed 
     $1,000,000.

     ``SEC. 736. PERFORMANCE CRITERIA FOR MAJOR ENERGY CONSUMERS.

       ``(a) Identification of Major Energy Consumers.--Not later 
     than 1 year after the date of enactment of this part, the 
     Task Force shall identify those developing countries that, by 
     virtue of present and projected energy consumption, represent 
     the predominant share of energy use among developing 
     countries.
       ``(b) Performance Criteria.--As a condition of accepting 
     assistance provided under sections 734 and 735, any 
     developing country identified under subsection (a) shall--
       ``(1) meet the eligibility criteria established under 
     section 607 of the Millennium Challenge Act of 2003 (22 
     U.S.C. 7706), notwithstanding the eligibility of the 
     developing country as a candidate country under section 606 
     of that Act (22 U.S.C. 7705); and
       ``(2) agree to establish and report on progress in meeting 
     specific goals for reduced energy-related greenhouse gas 
     emissions and specific goals for--
       ``(A) increased access to clean energy services among 
     unserved and underserved populations;
       ``(B) increased use of renewable energy resources;
       ``(C) increased use of lower greenhouse gas-emitting fossil 
     fuel-burning technologies;
       ``(D) more efficient production and use of energy;
       ``(E) greater reliance on advanced energy technologies;
       ``(F) the sustainable use of traditional energy resources; 
     or
       ``(G) other goals for improving energy-related 
     environmental performance, including the reduction or 
     avoidance of local air and water quality and solid waste 
     contaminants.

     ``SEC. 737. AUTHORIZATION OF APPROPRIATIONS.

       ``There are authorized to be appropriated such sums as are 
     necessary to carry out this part for each of fiscal years 
     2006 through 2015.''.
                                 ______
                                 
  SA 869. Mr. BYRD (for himself, Mrs. Lincoln, Mr. Rockefeller, Mr. 
Harkin, and Mr. Pryor) proposed an amendment to the bill H.R. 6, to 
ensure jobs for our future with secure, affordable, and reliable 
energy; as follows:

       At the appropriate place insert the following:

     SEC. __. INCOME TAX EXCLUSION FOR CERTAIN FUEL COSTS OF RURAL 
                   CARPOOLS.

       (a) In General.--Section 132(f)(1) of the Internal Revenue 
     Code of 1986 (defining qualified transportation fringe) is 
     amended by adding at the end the following new subparagraph:
       ``(D) Fuel expenses for a highway vehicle of any employee 
     who meets the rural carpool requirements of paragraph (8).''.
       (b) Limitation on Exclusion.--Section 132(f)(2) of such 
     Code (relating to limitation on exclusion) is amended by 
     striking ``and'' at the end of subparagraph (A), by striking 
     the period at the end of subparagraph (B) and inserting ``, 
     and'', and by adding at the end the following new 
     subparagraph:
       ``(C) $50 per month in the case of the benefit described in 
     subparagraph (D).''.
       (c) Rural Carpool Requirements.--Section 132(f) of such 
     Code is amended by adding at the end the following new 
     paragraph:
       ``(8) Requirements for employees participating in rural 
     carpools.--
       ``(A) In general.--The requirements of this paragraph are 
     met if an employee--
       ``(i) is an employee of an employer described in 
     subparagraph (B),
       ``(ii) certifies to such employer that--

       ``(I) such employee resides in a rural area (as defined by 
     the Bureau of the Census),
       ``(II) such employee is not eligible to claim any qualified 
     transportation fringe described in subparagraph (A) or (B) of 
     paragraph (1) if provided by such employer,
       ``(III) such employee uses the employee's highway vehicle 
     when traveling between the employee's residence and place of 
     employment, and
       ``(IV) for at least 75 percent of the total mileage of such 
     travel, the employee is accompanied by 1 or more employees of 
     such employer, and

       ``(iii) agrees to notify such employer when any subclause 
     of clause (ii) no longer applies.
       ``(B) Employer described.--An employer is described in this 
     subparagraph if the business premises of such employer which 
     serve as the place of employment of the employee are located 
     in an area which is not accessible by a transit system 
     designed primarily to provide daily work trips within a local 
     commuting area.''.
       (d) No Exclusion for Employment Taxes.--Section 3121(a)(20) 
     of such Code (defining wages) is amended by inserting 
     ``(except by reason of subsection (f)(1)(D) thereof)'' after 
     ``or 132''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to expenses incurred on and after the date of the 
     enactment of this Act and before January 1, 2007.
                                 ______
                                 
  SA 870. Mrs. BOXER submitted an amendment intended to be proposed by 
her to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; as follows:

       At the appropriate place, insert the following:
       Amendment to be proposed by Mrs. Boxer.

     SEC.  . FINAL ACTION ON REFUNDS FOR EXCESSIVE CHARGES.

       (a) Findings.--Congress finds that--
       (1) The state of California experienced an energy crisis;
       (2) FERC issued an order requiring a refund of the portion 
     of charges on the sale of electric energy that was unjust or 
     unreasonable during that crisis;
       (3) As of the date of enactment of this act, none of the 
     refunds ordered to date have been received by the state of 
     California; and
       (4) the Commission has ruled that the state of California 
     is entitled to approximately $3 billion in refunds; the state 
     of California maintains that that $8.9 billion in refunds is 
     owed.
       (b) FERC shall--
       (1) seek to conclude its investigation into the unjust or 
     unreasonable charges incurred by California during the 2000-
     2001 electricity crisis as soon as possible;
       (2) seek to ensure that refunds the Commission determines 
     are owed to the State of California are paid to the state of 
     California; and
       (3) submit to Congress a report by December 31, 2005 
     describing the actions taken by the Commission to date under 
     this section and timetables for further actions.
                                 ______
                                 
  SA 871. Mr. REID (for himself and Mr. Ensign) submitted an amendment 
intended to be proposed by him to the bill H.R. 6, to ensure jobs for 
our future with secure, affordable, and reliable energy; which was 
ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

     ``SECTION  . WHISTLEBLOWER PROTECTION FOR EMPLOYEES OF THE 
                   DEPARTMENT OF ENERGY AND THE NUCLEAR REGULATORY 
                   COMMISSION.

       (a) Definition of Employer--Section 211(a)(2) of the Energy 
     Reorganization Act of 1974 (42 U.S.C. 5851(a)(2)) is 
     amended--
       (1) in subparagraph (C), by striking `and' at the end;
       (2) in subparagraph (D), by striking `that is indemnified' 
     and all that follows through `12344.'; and
       (3) by adding at the end the following:
       `(E) the Department of Energy.'.
       (b) De Novo Judicial Determination--Section 211(b) of the 
     Energy Reorganization Act of 1974 (42 U.S.C. 5851 (b)) is 
     amended by adding at the end the following:
       `(4) De Novo Judicial Determination--If the Secretary does 
     not issue a final decision within 180 days after the filing 
     of a complaint under paragraph (1) and the Secretary does not 
     show that the delay is caused by the bad faith of the 
     claimant, the claimant may bring a civil action in United 
     States district court for a determination of the claim by the 
     court de novo.'.
                                 ______
                                 
  SA 872. Mr. MARTINEZ (for himself and Mr. Johnson) submitted an 
amendment intended to be proposed by him to the bill H.R. 6, to ensure 
jobs for our future with secure, affordable, and reliable energy; which 
was ordered to lie on the table; as follows:

       Beginning on page 692, strike line 20 and all that follows 
     through page 693, line 13, and insert the following:
       (3) Electric consumer; electric utility.--
       (A) In general.--The terms ``electric consumer'' and 
     ``electric utility'' have the meanings given those terms in 
     section 3 of the Public Utility Regulatory Policies Act of 
     1978 (16 U.S.C. 2602).

[[Page S7099]]

       (B) Exclusion.--The term ``electric utility'' does not 
     include any financial institution (as defined in section 509 
     of the Gramm-Leach-Bliley Act (15 U.S.C. 6809)).
       (b) Privacy.--
       (1) Rules.--The Commission may issue rules protecting the 
     privacy of electric consumers from disclosure by an electric 
     utility of consumer information obtained in connection with 
     the sale or delivery of electric energy to electric 
     consumers.
       (2) Effect of rules.--Rules issued under paragraph (1) 
     shall not affect, alter, limit, interfere with, or otherwise 
     regulate the provision of information by an electric utility 
     to a consumer reporting agency (as defined in section 603 of 
     the Fair Credit Reporting Act (15 U.S.C. 1681a)).
       (c) Slamming.--The Commission may issue rules prohibiting 
     the change of selection of an electric utility except with 
     the informed consent of the electric consumer or if approved 
     by the appropriate State regulatory authority.
       (d) Cramming.--The Commission may issue rules prohibiting 
     the sale of goods and services by an electric utility to an 
     electric consumer unless expressly authorized by law or the 
     electric consumer.
                                 ______
                                 
  SA 873. Mr. SUNUNU (for himself and Mr. Wyden) submitted an amendment 
intended to be proposed by him to the bill H.R. 6, to ensure jobs for 
our future with secure, affordable, and reliable energy; which was 
ordered to lie on the table; as follows:

       Beginning on page 756, strike line 1 and all that follows 
     through page 768, line 20.
                                 ______
                                 
  SA 874. Mr. SUNUNU submitted an amendment intended to be proposed by 
him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       Beginning on page 328, strike line 13 and all that follows 
     through page 342, line 19.
                                 ______
                                 
  SA 875. Mr. SUNUNU submitted an amendment intended to be proposed by 
him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       Beginning on page 503, strike line 10 and all that follows 
     through page 523, line 13.
                                 ______
                                 
  SA 876. Mr. INOUYE (for himself and Mr. Akaka) submitted an amendment 
intended to be proposed by him to the bill H.R. 6, to ensure jobs for 
our future with secure, affordable, and reliable energy; which was 
ordered to lie on the table; as follows:

       At the appropriate place insert the following:

     SEC. __. EXCEPTION FROM VOLUME CAP FOR CERTAIN COOLING 
                   FACILITIES.

       (a) In General.--Section 146 of the Internal Revenue Code 
     of 1986 (relating to volume cap) is amended by redesignating 
     subsections (i) through (n) as subsections (j) through (o), 
     respectively, and by inserting after subsection (h) the 
     following:
       ``(i) Exception for facilities used to cool structures with 
     ocean water, etc..--
       ``(1) In general.--Only for purposes of this section, the 
     term `private activity bond' shall not include any exempt 
     facility bond described in section 142(a)(9) which is issued 
     as part of an issue to finance any project which is designed 
     to access deep water renewable thermal energy for district 
     cooling to provide building air conditioning (including any 
     distribution piping, pumping, and chiller facilities).
       ``(2) Limitation.--Paragraph (1) shall apply only to bonds 
     with a face amount of not more than $75,000,000 with respect 
     to any project described in such paragraph.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to projects placed in service after the date of 
     enactment of this Act and before July 1, 2008.
                                 ______
                                 
  SA 877. Mr. VITTER submitted an amendment intended to be proposed by 
him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       On page 327, after line 21, add the following:

     SEC. 390. DEEPWATER PORTS.

       Section 4(c) of the Deepwater Port Act of 1974 (33 U.S.C. 
     1503(c)) is amended by striking paragraphs (8) and (9) and 
     inserting the following:
       ``(8) the Governor of each adjacent coastal State under 
     section 9 approves, or is presumed to approve, the issuance 
     of the license; and
       ``(9) as of the date on which the application for a license 
     is submitted, the adjacent coastal State to which the 
     deepwater port is to be directly connected by pipeline has 
     developed, or is making reasonable progress toward 
     developing, as determined in accordance with section 9(c), an 
     approved coastal zone management program under the Coastal 
     Zone Management Act of 1972 (16 U.S.C. 1451 et seq.).''.
                                 ______
                                 
  SA 878. Mr. KYL submitted an amendment intended to be proposed by him 
to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       On page 635, line 17, strike ``$100,000,000'' and insert 
     ``$500,000,000''.
                                 ______
                                 
  SA 879. Mr. KYL submitted an amendment intended to be proposed by him 
to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       On page 635, line 17, strike ``$100,000,000'' and insert 
     ``$1,000,000,000''.
                                 ______
                                 
  SA 880. Mr. KYL submitted an amendment intended to be proposed by him 
to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       At the appropriate place in subtitle A of title II, insert 
     the following:

     SEC. 2__. STATE EXEMPTION FROM SEASONALITY REQUIREMENTS.

       Section 211(o)(6) of the Clean Air Act (as amended by 
     section 205) is amended in subparagraph (F) by adding before 
     the period at the end the following: ``or any State that 
     receives over 50 percent of its fuel from a State that 
     receives a waiver under that section''.
                                 ______
                                 
  SA 881. Mr. PRYOR submitted an amendment intended to be proposed by 
him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       At the appropriate place, insert the following:

     SEC. __. WEATHERIZATION ASSISTANCE CREDIT.

       (a) In General.--Subpart D of Part III of subchapter A of 
     chapter 1 of the Internal Revenue Code of 1986 (relating to 
     business related credits), as amended by this Act, is amended 
     by inserting after section 45N the following new section:

     ``SEC. 45O. WEATHERIZATION ASSISTANCE CREDIT.

       ``(a) General Rule.--For purposes of section 38, in the 
     case of a utility, the amount of the weatherization 
     assistance credit determined under this section for the 
     taxable year shall be an amount equal to 20 percent of the 
     qualified weatherization assistance expenses.
       ``(b) Definitions.--For purposes of this section:
       ``(1) Weatherization assistance expenses.--The term 
     `weatherization assistance expenses' means amounts--
       ``(A) paid by the taxpayer--
       ``(i) to an entity that is described in section 415(b)(2) 
     of the Energy Conservation and Production Act (42 U.S.C. 
     6865(b)(2)), that receives funds from the Department of 
     Energy Weatherization Assistance Program as such an entity, 
     and that uses the taxpayer's amounts for the installation of 
     energy efficiency improvements in residences of low-income 
     individuals for purposes of section 415(a)(2) of the Energy 
     Conservation and Production Act (42 U.S.C. 6865(a)(2)), as 
     administered by the Department of Energy, or
       ``(ii) to a State weatherization agency for use by such 
     agency in its program that enhances or extends the Department 
     of Energy's program described in subparagraph (A), and
       ``(B) certified to the taxpayer by a State weatherization 
     agency as paid to one or more entities described in 
     subparagraph (A)(i) or to such agency described in 
     subparagraph (A)(ii).
       ``(2) Qualified weatherization assistance expenses.--The 
     term `qualified weatherization assistance expenses' means--
       ``(A) with respect to the first 5 taxable years ending 
     after the date of enactment of this section, the 
     weatherization assistance expenses for each such year, and
       ``(B) with respect to a taxable year after the fifth 
     taxable year ending after the date of enactment of this 
     section, the excess (if any) of the weatherization assistance 
     expenses for such year over the weatherization assistance 
     expenses for the fifth taxable year preceding such year.
       ``(3) Utility.--The term `utility' means a corporation that 
     is engaged in the sale of electric energy or gas and is 
     described in section 7701(a)(33)(A).
       ``(4) State weatherization agency.--The term `State 
     weatherization agency' means the department, agency, board, 
     or other entity of a State that is authorized by such State 
     to administer the weatherization program described in section 
     415 of the Energy Conservation and Production Act (42 U.S.C. 
     6865).
       ``(c) Regulations.--The Secretary shall prescribe 
     regulations necessary to carry out the purposes of this 
     section.''.
       (b) Credit Treated as Part of General Business Credit.--
     Section 38(b) of the Internal Revenue Code of 1986 (relating 
     to current year business credit), as amended by this Act, is 
     amended by striking ``plus'' at the end of paragraph (23), 
     striking the period at the end of paragraph (24), and 
     inserting ``, plus'' and by inserting after paragraph (24) 
     the following new paragraph:
       ``(25) the weatherization assistance credit determined 
     under section 45O(a).''.
       (c) Conforming Amendment.--The table of sections for 
     Subpart D of Part III of subchapter A of chapter 1 of the 
     Internal Revenue Code of 1986 (relating to business related 
     credits), as amended by this Act, is

[[Page S7100]]

     amended by adding after the item relating to section 45N the 
     following new item:

``45O. Weatherization assistance credit.''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to weatherization assistance expenses (within the 
     meaning of section 45O of the Internal Revenue Code of 1986) 
     paid or incurred in taxable years ending after the date of 
     enactment of this Act.
                                 ______
                                 
  SA 882. Mr. DODD (for himself and Mr. Lieberman) submitted an 
amendment intended to be proposed by him to the bill H.R. 6, to ensure 
jobs for our future with secure, affordable, and reliable energy; which 
was ordered to lie on the table; as follows:

       On page 659, between lines 3 and 4, insert the following:

     SEC. 1243. SENSE OF THE SENATE REGARDING LOCATIONAL INSTALLED 
                   CAPACITY MECHANISM.

       (a) Findings.--The Senate finds that--
       (1) as of the date of enactment of this Act, the States of 
     New England have been litigating a proposal to develop and 
     implement a specific type of locational installed capacity 
     mechanism in New England before the Federal Energy Regulatory 
     Commission; and
       (2) the Governors of those States have objected to the 
     proposed locational installed capacity mechanism of the 
     Commission because the Governors believe that the mechanism--
       (A) does not provide any assurance that needed generation 
     will be built in the right place at the right time;
       (B) is not linked to any long-term commitment from 
     generators to provide energy;
       (C) is extremely expensive for the region; and
       (D) does not recognize efforts by the States of New England 
     to propose alternative solutions through the creation of a 
     regional State commission.
       (b) Sense of the Senate.--It is the sense of the Senate 
     that the Federal Energy Regulatory Commission should suspend 
     the pending locational installed capacity proceeding and 
     allow the States of New England to propose alternatives to 
     the locational installed capacity mechanism that have less 
     regional economic impact and more certainty of providing the 
     necessary generation capacity and reliability.
                                 ______
                                 
  SA 883. Mr. BINGAMAN submitted an amendment intended to be proposed 
by him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       On page 310, strike line 25 and insert the following:
     repaid or reobligated for authorized uses.
       ``(3) Limitation.--Not more than 23 percent of amounts 
     received by a producing State or coastal political 
     subdivision for any 1 fiscal year shall be used for the 
     purposes described in subparagraphs (C) and (E) of paragraph 
     (1).''.
                                 ______
                                 
  SA 884. Mr. ROCKEFELLER (for himself, Mr. Bingaman, and Mr. Bunning) 
submitted an amendment intended to be proposed by him to the bill H.R. 
6, to ensure jobs for our future with secure, affordable, and reliable 
energy; which was ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC. __. CREDIT FOR INTANGIBLE DRILLING COSTS.

       (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), as amended by this Act, is amended 
     by adding at the end the following new section:

     ``SEC. 45O. INTANGIBLE DRILLING COSTS CREDIT.

       ``(a) In General.--For purposes of section 38, the 
     intangible drilling costs credit for the taxable year is an 
     amount equal to 15 percent of the intangible drilling costs 
     (within the meaning of section 263(c)) paid or incurred 
     during the taxable year in connection with each qualifying 
     natural gas well.
       ``(b) Limitation.--The aggregate amount of credit allowed 
     under this section for all taxable years shall not exceed 
     $50,000 with respect to any qualifying natural gas well.
       ``(c) Qualifying Natural Gas Well.--For purposes of this 
     section, the term `qualifying natural gas well' means a 
     natural gas well--
       ``(1) which is placed in service before the date that is 3 
     years after the date of the enactment of this section,
       ``(2) which produces a qualified fuel (as defined in 
     section 29(c)), and
       ``(3) the basis of which is $200,000 or greater.
       ``(d) Denial of Double Benefit.--No deduction shall be 
     allowed under section 263(c) for any cost for which a credit 
     is allowed under this section.''.
       (b) Credit Treated as Part of General Business Credit.--
     Section 38(b) of the Internal Revenue Code of 1986 (relating 
     to general business credit), as amended by this Act, is 
     amended by striking ``plus'' at the end of paragraph (23), by 
     striking the period at the end of paragraph (24) and 
     inserting ``, plus'', and by adding at the end the following 
     new paragraph:
       ``(25) the intangible drill costs credit determined under 
     section 45O.''.
       (c) No Carryback of Credit.--Section 39 of the Internal 
     Revenue Code of 1986 (relating to carryback and carryforward 
     of unused credit) is amended by adding at the end the 
     following new subsection:
       ``(e) Special Rule for Intangible Drilling Costs Credit.--
     No portion of the unused credit which is attributable to the 
     intangible drilling costs credit under section 45O may be 
     taken into account under section 38(a)(3).''.
       (d) Clerical Amendment.--The table of sections for subpart 
     D of part IV of subchapter A of chapter 1 of the Internal 
     Revenue Code of 1986, as amended by this Act, is amended by 
     inserting after the item relating to section 45N the 
     following new item:

``Sec. 45O. Intangible drilling costs credit.''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.
                                 ______
                                 
  SA 885. Ms. CANTWELL (for herself, Mr. Graham, Mrs. Murray, Mr. 
Smith, Mr. Bingaman, and Mr. Coleman) submitted an amendment intended 
to be proposed by her to the bill H.R. 6, to ensure jobs for our future 
with secure, affordable, and reliable energy; which was ordered to lie 
on the table; as follows:

       At the appropriate place, insert the following:

     SEC. __. THREE-YEAR APPLICABLE RECOVERY PERIOD FOR 
                   DEPRECIATION OF QUALIFIED ENERGY MANAGEMENT 
                   DEVICES.

       (a) In General.--Section 168(e)(3)(A) (defining 3-year 
     property) is amended by striking ``and'' at the end of clause 
     (ii), by striking the period at the end of clause (iii) and 
     inserting ``, and'', and by adding at the end the following 
     new clause:
       ``(iv) any qualified energy management device.''.
       (b) Definition of Qualified Energy Management Device.--
     Section 168(i) (relating to definitions and special rules), 
     as amended by this Act, is amended by inserting at the end 
     the following new paragraph:
       ``(17) Qualified energy management device.--
       ``(A) In general.--The term `qualified energy management 
     device' means any energy management device which is placed in 
     service before January 1, 2009, by a taxpayer who is a 
     supplier of electric energy or a provider of electric energy 
     services.
       ``(B) Energy management device.--For purposes of 
     subparagraph (A), the term `energy management device' means 
     any meter or metering device which is used by the taxpayer--
       ``(i) to measure and record electricity usage data on a 
     time-differentiated basis in at least 4 separate time 
     segments per day, and
       ``(ii) to provide such data on at least a monthly basis to 
     both consumers and the taxpayer.''.
       (c) Alternative System.--The table contained in section 
     168(g)(3)(B) is amended by inserting after the item relating 
     to subparagraph (A)(iii) the following:

``(A)(iv).........................................................20''.
       (d) Effective Date.--The amendments made by this section 
     (other than subsection (e)) shall apply to property placed in 
     service after December 31, 2005, in taxable years ending 
     after such date.
       (e) Freeze of Interest Suspension Rules With Respect to 
     Listed Transactions.--
       (1) In general.--Paragraph (2) of section 903(d) of the 
     American Jobs Creation Act of 2004 is amended to read as 
     follows:
       ``(2) Exception for reportable or listed transactions.--
       ``(A) In general.--The amendments made by subsection (c) 
     shall apply with respect to interest accruing after October 
     3, 2004.
       ``(B) Special rule for certain listed transactions.--
       ``(i) In general.--Except as provided in clause (ii) or 
     (iii), in the case of any listed transaction, the amendments 
     made by subsection (c) shall also apply with respect to 
     interest accruing on or before October 3, 2004.
       ``(ii) Participants in settlement initiatives.--Clause (i) 
     shall not apply to a listed transaction if, as of May 9, 
     2005--

       ``(I) the taxpayer is participating in a published 
     settlement initiative which is offered by the Secretary of 
     the Treasury or his delegate to a group of similarly situated 
     taxpayers claiming benefits from the listed transaction, or
       ``(II) the taxpayer has entered into a settlement agreement 
     pursuant to such an initiative with respect to the tax 
     liability arising in connection with the listed transaction.

     Subclause (I) shall not apply to the taxpayer if, after May 
     9, 2005, the taxpayer withdraws from, or terminates, 
     participation in the initiative or the Secretary or his 
     delegate determines that a settlement agreement will not be 
     reached pursuant to the initiative within a reasonable period 
     of time.
       ``(iii) Closed transactions.--Clause (i) shall not apply to 
     a listed transaction if, as of May 9, 2005--

       ``(I) the assessment of all Federal income taxes for the 
     taxable year in which the tax liability to which the interest 
     relates arose is prevented by the operation of any law or 
     rule of law, or

[[Page S7101]]

       ``(II) a closing agreement under section 7121 has been 
     entered into with respect to the tax liability arising in 
     connection with the listed transaction.''.

       (2) Effective date.--The amendment made by this subsection 
     shall take effect as if included in the provisions of the 
     American Jobs Creation Act of 2004 to which it relates.
                                 ______
                                 
  SA 886. Mr. COCHRAN submitted an amendment intended to be proposed by 
him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       On page 159, after line 23, add the following:

     SEC. 211. WASTE-DERIVED ETHANOL AND BIODIESEL.

       Section 312(f)(1) of the Energy Policy Act of 1992 (42 
     U.S.C. 13220(f)(1)) is amended--
       (1) by striking ```biodiesel' means'' and inserting the 
     following: ```biodiesel'--
       ``(A) means''; and
       (2) in subparagraph (A) (as designated by paragraph (1)) by 
     striking ``and'' at the end and inserting the following:
       ``(B) includes ethanol and biodiesel derived from--
       ``(i) animal wastes, including poultry fats and poultry 
     wastes, and other waste materials; or
       ``(ii) municipal solid waste and sludges and oils derived 
     from wastewater and the treatment of wastewater; and''.
                                 ______
                                 
  SA 887. Mr. CHAMBLISS submitted an amendment intended to be proposed 
by him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       At the appropriate place, insert:

     SEC. __. ARBITRAGE RULES NOT TO APPLY TO PREPAYMENTS FOR 
                   NATURAL GAS.

       (a) In General.--Section 148(b) of the Internal Revenue 
     Code of 1986 (relating to higher yielding investments) is 
     amended by adding at the end the following new paragraph:
       ``(4) Safe harbor for prepaid natural gas.--
       ``(A) In general.--The term `investment-type property' does 
     not include a prepayment under a qualified natural gas supply 
     contract.
       ``(B) Qualified natural gas supply contract.--For purposes 
     of this paragraph, the term `qualified natural gas supply 
     contract' means any contract to acquire natural gas for 
     resale by or for a utility owned by a governmental unit if 
     the amount of gas permitted to be acquired under the contract 
     for the utility during any year does not exceed the sum of--
       ``(i) the annual average amount during the testing period 
     of natural gas purchased (other than for resale) by customers 
     of such utility who are located within the service area of 
     such utility, and
       ``(ii) the amount of natural gas to be used to transport 
     the prepaid natural gas to the utility during such year.
       ``(C) Natural gas used to generate electricity.--Natural 
     gas used to generate electricity shall be taken into account 
     in determining the average under subparagraph (B)(i)--
       ``(i) only if the electricity is generated by a utility 
     owned by a governmental unit, and
       ``(ii) only to the extent that the electricity is sold 
     (other than for resale) to customers of such utility who are 
     located within the service area of such utility.
       ``(D) Adjustments for changes in customer base.--
       ``(i) New business customers.--If--

       ``(I) after the close of the testing period and before the 
     date of issuance of the issue, the utility owned by a 
     governmental unit enters into a contract to supply natural 
     gas (other than for resale) for use by a business at a 
     property within the service area of such utility, and
       ``(II) the utility did not supply natural gas to such 
     property during the testing period or the ratable amount of 
     natural gas to be supplied under the contract is 
     significantly greater than the ratable amount of gas supplied 
     to such property during the testing period,

     then a contract shall not fail to be treated as a qualified 
     natural gas supply contract by reason of supplying the 
     additional natural gas under the contract referred to in 
     subclause (I).
       ``(ii) Overall limitation.--The average under subparagraph 
     (B)(i) shall not exceed the annual amount of natural gas 
     reasonably expected to be purchased (other than for resale) 
     by persons who are located within the service area of such 
     utility and who, as of the date of issuance of the issue, are 
     customers of such utility.
       ``(E) Ruling requests.--The Secretary may increase the 
     average under subparagraph (B)(i) for any period if the 
     utility owned by the governmental unit establishes to the 
     satisfaction of the Secretary that, based on objective 
     evidence of growth in natural gas consumption or population, 
     such average would otherwise be insufficient for such period.
       ``(F) Adjustment for natural gas otherwise on hand.--
       ``(i) In general.--The amount otherwise permitted to be 
     acquired under the contract for any period shall be reduced 
     by--

       ``(I) the applicable share of natural gas held by the 
     utility on the date of issuance of the issue, and
       ``(II) the natural gas (not taken into account under 
     subclause (I)) which the utility has a right to acquire 
     during such period (determined as of the date of issuance of 
     the issue).

       ``(ii) Applicable share.--For purposes of clause (i), the 
     term `applicable share' means, with respect to any period, 
     the natural gas allocable to such period if the gas were 
     allocated ratably over the period to which the prepayment 
     relates.
       ``(G) Intentional acts.--Subparagraph (A) shall cease to 
     apply to any issue if the utility owned by the governmental 
     unit engages in any intentional act to render the volume of 
     natural gas acquired by such prepayment to be in excess of 
     the sum of--
       ``(i) the amount of natural gas needed (other than for 
     resale) by customers of such utility who are located within 
     the service area of such utility, and
       ``(ii) the amount of natural gas used to transport such 
     natural gas to the utility.
       ``(H) Testing period.--For purposes of this paragraph, the 
     term `testing period' means, with respect to an issue, the 
     most recent 5 calendar years ending before the date of 
     issuance of the issue.
       ``(I) Service area.--For purposes of this paragraph, the 
     service area of a utility owned by a governmental unit shall 
     be comprised of--
       ``(i) any area throughout which such utility provided at 
     all times during the testing period--

       ``(I) in the case of a natural gas utility, natural gas 
     transmission or distribution services, and
       ``(II) in the case of an electric utility, electricity 
     distribution services,

       ``(ii) any area within a county contiguous to the area 
     described in clause (i) in which retail customers of such 
     utility are located if such area is not also served by 
     another utility providing natural gas or electricity 
     services, as the case may be, and
       ``(iii) any area recognized as the service area of such 
     utility under State or Federal law.''.
       (b) Private Loan Financing Test Not To Apply to Prepayments 
     for Natural Gas.--Section 141(c)(2) of the Internal Revenue 
     Code of 1986 (providing exceptions to the private loan 
     financing test) is amended by striking ``or'' at the end of 
     subparagraph (A), by striking the period at the end of 
     subparagraph (B) and inserting ``, or'', and by adding at the 
     end the following new subparagraph:
       ``(C) is a qualified natural gas supply contract (as 
     defined in section 148(b)(4)).''.
       (c) Conforming Amendment.--Section 141(d) of the Internal 
     Revenue Code of 1986 is amended by adding at the end the 
     following new paragraph:
       ``(7) Exception for qualified electric and natural gas 
     supply contracts.--The term `nongovernmental output property' 
     shall not include any contract for the prepayment of 
     electricity or natural gas which is not investment property 
     under section 148(b)(2).''.
       (d) Effective Date.--The amendment made by this section 
     shall apply to obligations issued after December 31, 2005.
                                 ______
                                 
  SA 888. Mr. INHOFE submitted an amendment intended to be proposed by 
him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       At the end of title XV, add the following:

     SEC. 15__. STATE INCENTIVES FOR USE OF CLEAN COAL TECHNOLOGY.

       (a) Definitions.--In this section:
       (1) Compliance facility.--The term ``compliance facility'' 
     means any facility that--
       (A)(i) is designed, constructed, or installed, and used, at 
     a coal-fired electric generation unit for the primary purpose 
     of complying with acid rain control requirements established 
     by title IV of Public Law 101-549 (commonly known as the 
     ``Clean Air Act Amendments of 1990'') (42 U.S.C. 7651 et 
     seq.); and
       (ii) controls or limits emissions of sulfur or nitrogen 
     compounds resulting from the combustion of coal through the 
     removal or reduction of those compounds before, during, or 
     after the combustion of the coal, but before the combustion 
     products are emitted into the atmosphere;
       (B)(i) removes sulfur compounds from coal before the 
     combustion of the coal; and
       (ii) is located off the premises of the electric generation 
     facility at which the coal processed by the compliance 
     facility is burned;
       (C) includes a flue gas desulfurization system connected to 
     a coal-fired electric generation unit; or
       (D) includes facilities or equipment acquired, constructed, 
     or installed, and used, at a coal-fired electric generating 
     unit primarily for the purpose of handling--
       (i) the byproducts produced by the compliance facility; or
       (ii) other coal combustion byproducts produced by the 
     electric generation unit in or to which the compliance 
     facility is incorporated or connected.
       (2) Electric utility.--The term ``electric utility'' means 
     any person (including any municipality) that generates, 
     transmits, or distributes electric energy through the use of 
     a coal-fired generating unit that contains, is attached to, 
     or is used in conjunction with a compliance facility.
       (b) Credits.--A State may provide to an electric utility a 
     credit against any tax or fee owed to the State under a State 
     law, in an amount calculated in accordance with a

[[Page S7102]]

     formula to be determined by the State, for the use of coal 
     mined from deposits in the State that is burned in a coal-
     fired electric generation unit that is owned or operated by 
     the electric utility that receives the credit.
       (c) Effect on Interstate Commerce.--Action taken by a State 
     in accordance with this section--
       (1) shall be considered to be a reasonable regulation of 
     commerce as of the effective date of the action; and
       (2) shall not be considered to impose an undue burden on 
     interstate commerce or to otherwise impair, restrain, or 
     discriminate against interstate commerce.
                                 ______
                                 
  SA 889. Ms. SNOWE (for herself and Mr. Stevens) submitted an 
amendment intended to be proposed by her to the bill H.R. 6, to ensure 
jobs for our future with secure, affordable, and reliable energy; which 
was ordered to lie on the table; as follows:

  (The bill will be printed in a future edition of the Record.)
                                 ______
                                 
  SA 890. Mr. SMITH submitted an amendment intended to be proposed by 
him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       On page [154], strike line [24], and insert the following:
       ``Solar Energy Property.--Clause (i)''.
       On page [155] lines [2 through 3], strike ``for use in a 
     structure''.
                                 ______
                                 
  SA 891. Mr. DOMENICI (for himself, Mr. Bingaman, Ms. Landrieu, Mr. 
Vitter, Mr. Lott, Mr. Cochran, and Mrs. Hutchison) submitted an 
amendment intended to be proposed by him to the bill H.R. 6, to ensure 
jobs for our future with secure, affordable, and reliable energy; which 
was ordered to lie on the table; as follows:

       Beginning on page 297, strike line 2 and all that follows 
     through page 310, line 25, and insert the following:

     SEC. 371. COASTAL IMPACT ASSISTANCE PROGRAM.

       Section 31 of the Outer Continental Shelf Lands Act (43 
     U.S.C. 1356a) is amended to read as follows:

     ``SEC. 31. COASTAL IMPACT ASSISTANCE PROGRAM.

       ``(a) Definitions.--In this section:
       ``(1) Coastal political subdivision.--The term `coastal 
     political subdivision' means a political subdivision of a 
     coastal State any part of which political subdivision is--
       ``(A) within the coastal zone (as defined in section 304 of 
     the Coastal Zone Management Act of 1972 (16 U.S.C. 1453)) of 
     the coastal State as of the date of enactment of the Energy 
     Policy Act of 2005; and
       ``(B) not more than 200 nautical miles from the geographic 
     center of any leased tract.
       ``(2) Coastal population.--The term `coastal population' 
     means the population, as determined by the most recent 
     official data of the Census Bureau, of each political 
     subdivision any part of which lies within the designated 
     coastal boundary of a State (as defined in a State's coastal 
     zone management program under the Coastal Zone Management Act 
     of 1972 (16 U.S.C. 1451 et seq.)).
       ``(3) Coastal state.--The term `coastal State' has the 
     meaning given the term in section 304 of the Coastal Zone 
     Management Act of 1972 (16 U.S.C. 1453).
       ``(4) Coastline.--The term `coastline' has the meaning 
     given the term `coast line' in section 2 of the Submerged 
     Lands Act (43 U.S.C. 1301).
       ``(5) Distance.--The term `distance' means the minimum 
     great circle distance, measured in statute miles.
       ``(6) Leased tract.--The term `leased tract' means a tract 
     that is subject to a lease under section 6 or 8 for the 
     purpose of drilling for, developing, and producing oil or 
     natural gas resources.
       ``(7) Leasing moratoria.--The term `leasing moratoria' 
     means the prohibitions on preleasing, leasing, and related 
     activities on any geographic area of the outer Continental 
     Shelf as contained in sections 107 through 109 of division E 
     of the Consolidated Appropriations Act, 2005 (Public Law 108-
     447; 118 Stat. 3063).
       ``(8) Political subdivision.--The term `political 
     subdivision' means the local political jurisdiction 
     immediately below the level of State government, including 
     counties, parishes, and boroughs.
       ``(9) Producing state.--
       ``(A) In general.--The term `producing State' means a 
     coastal State that has a coastal seaward boundary within 200 
     nautical miles of the geographic center of a leased tract 
     within any area of the outer Continental Shelf.
       ``(B) Exclusion.--The term `producing State' does not 
     include a producing State, a majority of the coastline of 
     which is subject to leasing moratoria, unless production was 
     occurring on January 1, 2005, from a lease within 10 nautical 
     miles of the coastline of that State.
       ``(10) Qualified outer continental shelf revenues.--
       ``(A) In general.--The term `qualified Outer Continental 
     Shelf revenues' means all amounts received by the United 
     States from each leased tract or portion of a leased tract--
       ``(i) lying--

       ``(I) seaward of the zone covered by section 8(g); or
       ``(II) within that zone, but to which section 8(g) does not 
     apply; and

       ``(ii) the geographic center of which lies within a 
     distance of 200 nautical miles from any part of the coastline 
     of any coastal State.
       ``(B) Inclusions.--The term `qualified Outer Continental 
     Shelf revenues' includes bonus bids, rents, royalties 
     (including payments for royalty taken in kind and sold), net 
     profit share payments, and related late-payment interest from 
     natural gas and oil leases issued under this Act.
       ``(C) Exclusion.--The term `qualified Outer Continental 
     Shelf revenues' does not include any revenues from a leased 
     tract or portion of a leased tract that is located in a 
     geographic area subject to a leasing moratorium on January 1, 
     2005, unless the lease was in production on January 1, 2005.
       ``(b) Payments to Producing States and Coastal Political 
     Subdivisions.--
       ``(1) In general.--The Secretary shall, without further 
     appropriation, disburse to producing States and coastal 
     political subdivisions in accordance with this section 
     $250,000,000 for each of fiscal years 2007 through 2010.
       ``(2) Disbursement.--In each fiscal year, the Secretary 
     shall disburse to each producing State for which the 
     Secretary has approved a plan under subsection (c), and to 
     coastal political subdivisions under paragraph (4), such 
     funds as are allocated to the producing State or coastal 
     political subdivision, respectively, under this section for 
     the fiscal year.
       ``(3) Allocation among producing states.--
       ``(A) In general.--Except as provided in subparagraph (C) 
     and subject to subparagraph (D), the amounts available under 
     paragraph (1) shall be allocated to each producing State 
     based on the ratio that--
       ``(i) the amount of qualified outer Continental Shelf 
     revenues generated off the coastline of the producing State; 
     bears to
       ``(ii) the amount of qualified outer Continental Shelf 
     revenues generated off the coastline of all producing States.
       ``(B) Amount of outer continental shelf revenues.--For 
     purposes of subparagraph (A)--
       ``(i) the amount of qualified outer Continental Shelf 
     revenues for each of fiscal years 2007 and 2008 shall be 
     determined using qualified outer Continental Shelf revenues 
     received for fiscal year 2006; and
       ``(ii) the amount of qualified outer Continental Shelf 
     revenues for each of fiscal years 2009 and 2010 shall be 
     determined using qualified outer Continental Shelf revenues 
     received for fiscal year 2008.
       ``(C) Multiple producing states.--In a case in which more 
     than 1 producing State is located within 200 nautical miles 
     of any portion of a leased tract, the amount allocated to 
     each producing State for the leased tract shall be inversely 
     proportional to the distance between--
       ``(i) the nearest point on the coastline of the producing 
     State; and
       ``(ii) the geographic center of the leased tract.
       ``(D) Minimum allocation.--The amount allocated to a 
     producing State under subparagraph (A) shall be at least 1 
     percent of the amounts available under paragraph (1).
       ``(4) Payments to coastal political subdivisions.--
       ``(A) In general.--The Secretary shall pay 35 percent of 
     the allocable share of each producing State, as determined 
     under paragraph (3) to the coastal political subdivisions in 
     the producing State.
       ``(B) Formula.--Of the amount paid by the Secretary to 
     coastal political subdivisions under subparagraph (A)--
       ``(i) 25 percent shall be allocated to each coastal 
     political subdivision in the proportion that--

       ``(I) the coastal population of the coastal political 
     subdivision; bears to
       ``(II) the coastal population of all coastal political 
     subdivisions in the producing State;

       ``(ii) 25 percent shall be allocated to each coastal 
     political subdivision in the proportion that--

       ``(I) the number of miles of coastline of the coastal 
     political subdivision; bears to
       ``(II) the number of miles of coastline of all coastal 
     political subdivisions in the producing State; and

       ``(iii) 50 percent shall be allocated in amounts that are 
     inversely proportional to the respective distances between 
     the points in each coastal political subdivision that are 
     closest to the geographic center of each leased tract, as 
     determined by the Secretary.
       ``(C) Exception for the state of louisiana.--For the 
     purposes of subparagraph (B)(ii), the coastline for coastal 
     political subdivisions in the State of Louisiana without a 
     coastline shall be considered to be \1/3\ the average length 
     of the coastline of all coastal political subdivisions with a 
     coastline in the State of Louisiana.
       ``(D) Exception for the state of alaska.--For the purposes 
     of carrying out subparagraph (B)(iii) in the State of Alaska, 
     the amounts allocated shall be divided equally among the 2 
     coastal political subdivisions that are closest to the 
     geographic center of a leased tract.
       ``(E) Exclusion of certain leased tracts.--For purposes of 
     subparagraph (B)(iii), a leased tract or portion of a leased 
     tract shall be excluded if the tract or portion of a leased 
     tract is located in a geographic

[[Page S7103]]

     area subject to a leasing moratorium on January 1, 2005, 
     unless the lease was in production on that date.
       ``(6) No approved plan.--
       ``(A) In general.--Subject to subparagraph (B) and except 
     as provided in subparagraph (C), in a case in which any 
     amount allocated to a producing State or coastal political 
     subdivision under paragraph (4) or (5) is not disbursed 
     because the producing State does not have in effect a plan 
     that has been approved by the Secretary under subsection (c), 
     the Secretary shall allocate the undisbursed amount equally 
     among all other producing States.
       ``(B) Retention of allocation.--The Secretary shall hold in 
     escrow an undisbursed amount described in subparagraph (A) 
     until such date as the final appeal regarding the disapproval 
     of a plan submitted under subsection (c) is decided.
       ``(C) Waiver.--The Secretary may waive subparagraph (A) 
     with respect to an allocated share of a producing State and 
     hold the allocable share in escrow if the Secretary 
     determines that the producing State is making a good faith 
     effort to develop and submit, or update, a plan in accordance 
     with subsection (c).
       ``(c) Coastal Impact Assistance Plan.--
       ``(1) Submission of state plans.--
       ``(A) In general.--Not later than July 1, 2008, the 
     Governor of a producing State shall submit to the Secretary a 
     coastal impact assistance plan.
       ``(B) Public participation.--In carrying out subparagraph 
     (A), the Governor shall solicit local input and provide for 
     public participation in the development of the plan.
       ``(2) Approval.--
       ``(A) In general.--The Secretary shall approve a plan of a 
     producing State submitted under paragraph (1) before 
     disbursing any amount to the producing State, or to a coastal 
     political subdivision located in the producing State, under 
     this section.
       ``(B) Components.--The Secretary shall approve a plan 
     submitted under paragraph (1) if--
       ``(i) the Secretary determines that the plan is consistent 
     with the uses described in subsection (d); and
       ``(ii) the plan contains--

       ``(I) the name of the State agency that will have the 
     authority to represent and act on behalf of the producing 
     State in dealing with the Secretary for purposes of this 
     section;
       ``(II) a program for the implementation of the plan that 
     describes how the amounts provided under this section to the 
     producing State will be used;
       ``(III) for each coastal political subdivision that 
     receives an amount under this section--

       ``(aa) the name of a contact person; and
       ``(bb) a description of how the coastal political 
     subdivision will use amounts provided under this section;

       ``(IV) a certification by the Governor that ample 
     opportunity has been provided for public participation in the 
     development and revision of the plan; and
       ``(V) a description of measures that will be taken to 
     determine the availability of assistance from other relevant 
     Federal resources and programs.

       ``(3) Amendment.--Any amendment to a plan submitted under 
     paragraph (1) shall be--
       ``(A) developed in accordance with this subsection; and
       ``(B) submitted to the Secretary for approval or 
     disapproval under paragraph (4).
       ``(4) Procedure.--Not later than 90 days after the date on 
     which a plan or amendment to a plan is submitted under 
     paragraph (1) or (3), the Secretary shall approve or 
     disapprove the plan or amendment.
       ``(d) Authorized Uses.--
       ``(1) In general.--A producing State or coastal political 
     subdivision shall use all amounts received under this 
     section, including any amount deposited in a trust fund that 
     is administered by the State or coastal political subdivision 
     and dedicated to uses consistent with this section, in 
     accordance with all applicable Federal and State law, only 
     for 1 or more of the following purposes:
       ``(A) Projects and activities for the conservation, 
     protection, or restoration of coastal areas, including 
     wetland.
       ``(B) Mitigation of damage to fish, wildlife, or natural 
     resources.
       ``(C) Planning assistance and the administrative costs of 
     complying with this section.
       ``(D) Implementation of a federally-approved marine, 
     coastal, or comprehensive conservation management plan.
       ``(E) Mitigation of the impact of outer Continental Shelf 
     activities through funding of onshore infrastructure projects 
     and public service needs.
       ``(2) Compliance with authorized uses.--If the Secretary 
     determines that any expenditure made by a producing State or 
     coastal political subdivision is not consistent with this 
     subsection, the Secretary shall not disburse any additional 
     amount under this section to the producing State or the 
     coastal political subdivision until such time as all amounts 
     obligated for unauthorized uses have been repaid or 
     reobligated for authorized uses.
       ``(3) Limitation.--Not more than 23 percent of amounts 
     received by a producing State or coastal political 
     subdivision for any 1 fiscal year shall be used for the 
     purposes described subparagraphs (C) and (E) of paragraph 
     (1).''.
                                 ______
                                 
  SA 892. Mr. SALAZAR submitted an amendment intended to be proposed by 
him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       On page 342, strike lines 3 through 10 and insert the 
     following:
       (a) Project.--
       (1) In general.--Subject to the availability of 
     appropriations, the Secretary shall carry out a project to 
     demonstrate production of energy from coal mined in the 
     western United States using integrated gasification combined 
     cycle technology (referred to in this section as the 
     ``demonstration project'').
       (2) Components.--The demonstration project--
       (A) may include repowering of facilities in existence on 
     the date of enactment of this Act;
       (B) shall be designed to ensure the capability--
       (i) to remove and sequester carbon dioxide; and
       (ii) to accommodate a variety of types of coal (including 
     subbituminous and bituminous coal up to 13,000 Btu/lb) mined 
     in the western United States; and
       (C) shall be carried out to test and evaluate integrated 
     gasification combined cycle technology using coals mined in 
     the western United States to assess the operation of--
       (i) coal feed systems;
       (ii) syngas cooling;
       (iii) operating pressures;
       (iv) carbon dioxide capture; and
       (v) such other commercial designs and innovations as may be 
     determined by the Secretary.
                                 ______
                                 
  SA 893. Mr. BAUCUS submitted an amendment intended to be proposed by 
him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       On page 53, line 8, strike the quotation marks and the 
     final period and insert the following:
       ``(3) The Secretary, the Administrator of the Environmental 
     Protection Agency, and the Administrator of the Small 
     Business Administration, as a part of the outreach to small 
     business concerns regarding the Energy Star Program required 
     by this subsection, may enter into cooperative agreements 
     with qualified resource partners (including the National 
     Center for Appropriate Technology) to establish, maintain, 
     and promote a Small Business Energy Clearinghouse (in this 
     subsection referred to as the `Clearinghouse'). The Secretary 
     and the Administrators shall ensure that the Clearinghouse 
     provides a centralized resource where small business concerns 
     may access, telephonically and electronically, technical 
     information and advice to help increase energy efficiency and 
     reduce energy costs.
       ``(4) There are authorized to be appropriated such sums as 
     may be necessary to carry out this subsection, to remain 
     available until expended.''.
                                 ______
                                 
  SA 894. Mr. SALAZAR submitted an amendment intended to be proposed by 
him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       At the appropriate place, insert the following:

     SEC. __. PAYMENT TO CERTAIN ULTIMATE VENDORS OF EXCISE TAX 
                   REFUND FOR BIODIESEL MIXTURES SOLD FOR 
                   NONTAXABLE PURPOSES.

       (a) In General.--Section 6427(l) of the Internal Revenue 
     Code of 1986 (relating to nontaxable uses of diesel fuel and 
     kerosene), as amended by this Act, is amended by adding at 
     the end the following new paragraph:
       ``(7) Refunds for biodiesel mixtures.--With respect to 
     diesel fuel used in any biodiesel mixture, if the ultimate 
     purchaser of such mixture waives (at such time and in such 
     form and manner as the Secretary shall prescribe) the right 
     to payment under paragraph (1) and assigns such right to the 
     ultimate vendor, then the Secretary shall pay the amount 
     which would be paid under paragraph (1) to such ultimate 
     vendor, but only if such ultimate vendor--
       ``(A) is registered under section 4101, and
       ``(B) meets the requirements of subparagraph (A), (B), or 
     (D) of section 6416(a)(1).''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to any biodiesel mixture sold after the date of 
     the enactment of this Act.
                                 ______
                                 
  SA 895. Ms. CANTWELL submitted an amendment intended to be proposed 
by her to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       On page 696, lines 24 and 25, strike ``unlawful on the 
     grounds that it is unjust and unreasonable'' and insert ``not 
     permitted under a rate schedule (or contract under such a 
     schedule) or is otherwise unlawful on the grounds that the 
     contract is unjust and unreasonable or contrary to the public 
     interest''.
                                 ______
                                 
  SA 896. Ms. CANTWELL submitted an amendment intended to be proposed 
by her to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:


[[Page S7104]]


       On page 424, after line 16, insert the following:

     SEC. 712. UPDATED FUEL ECONOMY LABELING PROCEDURES.

       (a) In General.--The Administrator of the Environmental 
     Protection Agency shall, as appropriate and in consultation 
     with the Administrator of the National Highway Traffic Safety 
     Administration, update and revise the process used to 
     determine fuel economy values for labeling purposes as set 
     forth in sections 600.209-85 and 600.209.95 (40 C.F.R. 
     600.209-85 and 600.209.95) to take into consideration current 
     factors such as speed limits, acceleration rates, braking, 
     variations in weather and temperature, vehicle load, use of 
     air conditioning, driving patterns, and the use of other fuel 
     consuming features. The Administrator shall use existing 
     emissions test cycles and, or, updated adjustment factors to 
     implement the requirements of this subsection.
       (b) Deadline.--The Administrator of the Environmental 
     Protection Agency shall promulgate a notice of proposed 
     rulemaking by December 31, 2005, and a final rule within 18 
     months after the date on which the Administrator issues the 
     notice.
       (c) Report.--Three years after issuing the final rule 
     required by subsection (b) and every 3 years thereafter the 
     Administrator of the Environmental Protection Agency shall 
     reconsider the fuel economy labeling procedures required 
     under subsection (a) to determine if the changes in the 
     factors require revisiting the process. The administrator 
     shall report to the Senate Committee on Commerce, Science and 
     Transportation and to the House of Representatives Committee 
     on Energy and Commerce on the outcome of the reconsideration 
     process.
                                 ______
                                 
  SA 897. Ms. CANTWELL submitted an amendment intended to be proposed 
by her to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       On page 684, between lines 5 and 6, insert the following:

     SEC. 1255. SMART ENERGY DEPLOYMENT.

       Not later than 1 year after the date of enactment of this 
     Act and annually thereafter, the Secretary shall submit to 
     Congress a report that--
       (1) describes the status of the implementation by the 
     States of the amendments made by sections 1251 and 1254;
       (2) contains a list of preapproved systems and equipment 
     eligible to meet the standards established under the 
     amendments made by sections 1251 and 1254; and
       (3) describes--
       (A) the public benefits that have been derived from net 
     metering and interconnection standards; and
       (B) any barriers to further deployment of net metering and 
     interconnection technologies.
                                 ______
                                 
  SA 898. Mr. LEVIN (for himself and Ms. Stabenow) submitted an 
amendment intended to be proposed by him to the bill H.R. 6, to ensure 
jobs for our future with secure, affordable, and reliable energy; which 
was ordered to lie on the table; as follows:

       On page 523, between lines 13 and 14, insert the following:

     SEC. 958. WESTERN MICHIGAN DEMONSTRATION PROJECT.

       (a) In General.--Not later than 2 years after the date of 
     enactment of this Act, the Administrator of the Environmental 
     Protection Agency (referred to in this section as the 
     ``Administrator''), in consultation with the State of 
     Michigan and affected local officials, shall conduct a 
     demonstration project to address the effect of transported 
     ozone and ozone precursors in southwestern Michigan.
       (b) Included Areas.--The demonstration project shall 
     address projected nonattainment areas in southwestern 
     Michigan that include counties with design values for ozone 
     of less than .095 based on air quality data for--
       (1) the period of calendar years 2000 through 2002; or
       (2) the most current 3-year period for which those data are 
     available.
       (c) Assessment.--The Administrator shall assess any 
     difficulties an area described in subsection (b) may 
     experience in meeting the 8-hour national ambient air quality 
     standard for ozone under the Clean Air Act (42 U.S.C. 7401 et 
     seq.) because of the effect of transported ozone or ozone 
     precursors into the area.
       (d) State and Local Involvement.--The Administrator shall 
     cooperate with State and local officials to determine--
       (1) the extent of ozone and ozone precursor transport 
     described in subsection (c);
       (2) to assess alternatives to achieve compliance with the 
     8-hour standard described in subsection (c) other than 
     through local controls; and
       (3) to determine the timeframe in which that compliance 
     could be achieved.
       (e) Nonattainment Status.--
       (1) In general.--Until such date as the demonstration 
     project under this section is complete, the Administrator 
     shall not--
       (A) designate or classify any area described in subsection 
     (b) as a nonattainment area under section 181 of the Clean 
     Air Act (42 U.S.C. 7511); or
       (B) impose on such an area any requirement or sanction that 
     might otherwise apply as a result of the area being so 
     designated or classified.
       (2) Current designation.--Any designation or classification 
     of an area described in subsection (b) as a nonattainment 
     area that is in effect as of the date of enactment of this 
     Act shall be of no force or effect on and after that date.
                                 ______
                                 
  SA 899. Mr. ENZI submitted an amendment intended to be proposed by 
him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       On page 296, after line 25, add the following:

     SEC. 34__. REINSTATEMENT OF LEASES.

       Notwithstanding section 31(d)(2)(B) of the Mineral Leasing 
     Act (30 U.S.C. 188(d)(2)(B)), the Secretary may reinstate any 
     oil and gas lease issued under that Act that was terminated 
     for failure of a lessee to pay the full amount of rental on 
     or before the anniversary date of the lease, during the 
     period beginning on September 1, 2001, and ending on the date 
     that is 60 days after the date of enactment of this Act, if, 
     not later than 120 days after the date of enactment of this 
     Act, the lessee--
       (1) files a petition for reinstatement of the lease;
       (2) complies with the conditions of section 31(e) of the 
     Mineral Leasing Act (30 U.S.C. 188(e)); and
       (3) certifies that the lessee did not receive a notice of 
     termination by the date that was 13 months before the date of 
     termination.
                                 ______
                                 
  SA 900. Mr. INHOFE submitted an amendment intended to be proposed by 
him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       At the appropriate place, insert the following:

     SEC. __. RATEPAYER PROTECTION.

       (a) Study of Effects of Utility Actions to Reduce Carbon 
     Dioxide Emissions on Disadvantaged Individuals.--
       (1) Definitions.--In this subsection:
       (A) Disadvantaged individual.--The term ``disadvantaged 
     individual'' means--
       (i) an individual with a disability, as defined in section 
     3 of the Americans with Disabilities Act of 1990 (42 U.S.C. 
     12102);
       (ii) a member of a family whose income does not exceed the 
     poverty line, as defined in section 673 of the Community 
     Services Block Grant Act (42 U.S.C. 9902);
       (iii) an individual who belongs to a minority group;
       (iv) a senior citizen; and
       (v) other disadvantaged individuals.
       (B) Utility.--The term ``utility'' means any for-profit 
     organization that--
       (i) provides retail customers with electricity services; 
     and
       (ii) is regulated, either by price or terms of service, by 
     1 or more State utility or public service commissions.
       (2) Study.--Not later than 30 days after the date of 
     enactment of this Act, the Congressional Budget Office, in 
     consultation with other appropriate organizations, shall 
     initiate a study to determine the effect on disadvantaged 
     individuals of actions taken or considered, or likely to be 
     taken or considered, by utilities to reduce the carbon 
     dioxide emissions of the utilities.
       (3) Report.--
       (A) In general.--Not later than 1 year after the date of 
     enactment of this Act, the Congressional Budget Office shall 
     submit to Congress a report that specifically describes the 
     results of the study, including the economic costs to 
     disadvantaged individuals of actions by utilities intended to 
     reduce carbon dioxide emissions.
       (B) Review period.--Congress shall have 180 days after the 
     date of receipt by Congress of the report described in 
     subparagraph (B) to review the report.
       (C) Effective date.--If the Congressional Budget Office 
     determines that there would be an additional economic burden 
     on any of the classes of disadvantaged individuals if the 
     costs of actions by utilities intended to reduce carbon 
     dioxide emissions were recovered from ratepayers, the 
     amendment made by section 3 shall take effect on the day 
     after the end of the review period described in subparagraph 
     (B).
       (b) Payments to Electric Generating Units.--
       (1) In general.--Beginning in calendar year 2008 and each 
     subsequent calendar year, any electric generating unit that 
     incurs any costs in complying with the requirements of that 
     title shall submit to the Commissioner of the Federal Energy 
     Regulatory Commission (referred to in this subsection as the 
     ``Commissioner'') a statement of the total costs incurred by 
     the electric generating unit for the calendar year.
       (2) Approved costs.--The Commissioner shall--
       (A) review any costs submitted under paragraph (1);
       (B) approve or disapprove the submitted costs as 
     legitimate; and
       (C) determine the total amount of approved costs submitted 
     by all electric generating utilities.
       (3) Average costs.--The Commissioner shall determine--

[[Page S7105]]

       (A) the total megawatts of electricity produced from all 
     electric generating units for the calendar year; and
       (B) the average cost per megawatt incurred in complying 
     with any carbon reduction mandates of this Act by dividing--
       (i) the total costs approved under paragraph (2)(C); by
       (ii) the total megawatts determined under subparagraph (A).
       (4) Payments to commissioner.--Each electric generating 
     unit shall submit to the Commissioner a payment in an amount 
     equal to the product obtained by multiplying--
       (A) the average cost per megawatt determined by the 
     Commissioner under paragraph (3)(B); and
       (B) the total megawatts of electricity produced by the 
     electric generating unit during a calendar year, as 
     determined by the Commissioner.
       (5) Reimbursement of costs.--The Commissioner shall provide 
     to each electric generating unit that submitted costs under 
     paragraph (1) that were approved under paragraph (2) an 
     amount to reimburse the electric generating unit for any 
     costs of complying with any carbon reduction mandates of this 
     Act paid by the electric generating unit in excess of the 
     amount required to be paid by the electric generating unit 
     under paragraph (4).
       (6) Regulations.--The Commissioner shall issue regulations 
     to carry out this subsection, including provisions that 
     establish--
       (A) criteria for determining the legitimacy of costs under 
     paragraph (2);
       (B) a deadline and other appropriate conditions for 
     payments required under paragraph (4); and
       (C) procedures for the provision of reimbursement payments 
     under paragraph (5).
       (c) Utility Actions to Reduce Carbon Dioxide Emissions.--
     The National Climate Program Act (15 U.S.C. 2901 et seq.) is 
     amended by adding at the end the following:

     ``SEC. 9. UTILITY ACTIONS TO REDUCE CARBON DIOXIDE EMISSIONS.

       ``(a) Definition of Utility.--In this section, the term 
     `utility' means any organization that--
       ``(1) provides retail customers with electricity services; 
     and
       ``(2) is regulated, either by price or terms of service, by 
     1 or more State utility or public service commissions.
       ``(b) Ratepayer Protections.--
       ``(1) In general.--No utility may recover from ratepayers 
     any costs, expenses, fees, or other outlays incurred for the 
     stated purpose by the utility to reduce carbon dioxide 
     emissions.
       ``(2) Prohibition on certain commission actions.--No State 
     utility commission, public service commission, or similar 
     entity may compel ratepayers to pay the costs, expenses, 
     fees, or other outlays incurred for the stated purpose by a 
     utility to reduce carbon dioxide emissions.
       ``(c) Shareholder Obligations Unaffected.--Nothing in this 
     section prevents the shareholders of, or other parties 
     associated with (other than ratepayers), a utility from 
     paying for any action by the utility to reduce carbon dioxide 
     emissions.''.
                                 ______
                                 
  SA 901. Ms. SNOWE (for herself and Mr. Burns) submitted an amendment 
intended to be proposed by her to the bill H.R. 6, to ensure jobs for 
our future with secure, affordable, and reliable energy; which was 
ordered to lie on the table; as follows:

       On page 52, line 24, strike ``efficiency; and'' and all 
     that follows through page 53, line 8 and insert the 
     following: ``efficiency;
       ``(C) understanding and accessing Federal procurement 
     opportunities with regard to Energy Star technologies and 
     products; and
       ``(D) identifying financing options for energy efficiency 
     upgrades.
       ``(2) The Secretary, the Administrator of the Environmental 
     Protection Agency, and the Administrator of the Small 
     Business Administration shall--
       ``(A) make program information available to small business 
     concerns directly through the district offices and resource 
     partners of the Small Business Administration, including 
     small business development centers, women's business centers, 
     and the Service Corps of Retired Executives (SCORE), and 
     through other Federal agencies, including the Federal 
     Emergency Management Agency and the Department of 
     Agriculture; and
       ``(B) coordinate assistance with the Secretary of Commerce 
     for manufacturing-related efforts, including the 
     Manufacturing Extension Partnership Program.
       ``(3) The Secretary, on a cost shared basis in cooperation 
     with the Administrator of the Environmental Protection 
     Agency, shall provide to the Small Business Administration 
     all advertising, marketing, and other written materials 
     necessary for the dissemination of information under 
     paragraph (2).
       ``(4) The Secretary, the Administrator of the Environmental 
     Protection Agency, and the Administrator of the Small 
     Business Administration, as a part of the outreach to small 
     business concerns regarding the Energy Star Program required 
     by this subsection, may enter into cooperative agreements 
     with qualified resource partners (including the National 
     Center for Appropriate Technology) to establish, maintain, 
     and promote a Small Business Energy Clearinghouse (in this 
     subsection referred to as the `Clearinghouse'). The Secretary 
     and the Administrators shall ensure that the Clearinghouse 
     provides a centralized resource where small business concerns 
     may access, telephonically and electronically, technical 
     information and advice to help increase energy efficiency and 
     reduce energy costs.
       ``(5) There are authorized to be appropriated such sums as 
     may be necessary to carry out this subsection, to remain 
     available until expended.''.
                                 ______
                                 
  SA 902. Mr. DURBIN submitted an amendment intended to be proposed by 
him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       On page 424, line 9, strike ``SEC. 711'' and insert the 
     following:

     SEC. 711. SHORT TITLE.

       This subtitle may be cited as the ``Automobile Fuel 
     Efficiency Improvements Act of 2005''.

     SEC. 712. PHASED INCREASES IN FUEL ECONOMY STANDARDS.

       (a) Passenger Automobiles.--
       (1) Minimum standards.--Section 32902(b) of title 49, 
     United States Code, is amended to read as follows:
       ``(b) Passenger Automobiles.--Except as otherwise provided 
     under this section, the average fuel economy standard for 
     passenger automobiles manufactured by a manufacturer in a 
     model year--
       ``(1) after model year 1984 and before model year 2008 
     shall be 25 miles per gallon;
       ``(2) after model year 2007 and before model year 2011 
     shall be 28 miles per gallon;
       ``(3) after model year 2010 and before model year 2014 
     shall be 32 miles per gallon;
       ``(4) after model year 2013 and before model year 2017 
     shall be 36 miles per gallon; and
       ``(5) after model year 2016 shall be 40 miles per 
     gallon.''.
       (2) Higher standards set by regulation.--Section 32902(c) 
     of title 49, United States Code, is amended--
       (A) by striking paragraph (2); and
       (B) in paragraph (1)--
       (i) by striking ``Subject to paragraph (2) of this 
     subsection, the'' and inserting ``The'';
       (ii) by striking ``amending the standard'' and inserting 
     ``increasing the standard otherwise applicable''; and
       (iii) by striking ``Section 553'' and inserting the 
     following:
       ``(2) Section 553''.
       (b) Non-passenger Automobiles.--Section 32902(a) of title 
     49, United States Code, is amended--
       (1) by striking ``At least 18 months before each model 
     year,'' and inserting the following:
       ``(1) The average fuel economy standard applicable for 
     automobiles (except passenger automobiles) manufactured by a 
     manufacturer in a model year--
       ``(A) after model year 1984 and before model year 2008 
     shall be 17 miles per gallon;
       ``(B) after model year 2007 and before model year 2011 
     shall be 19 miles per gallon;
       ``(C) after model year 2010 and before model year 2014 
     shall be 21.5 miles per gallon;
       ``(D) after model year 2013 and before model year 2017 
     shall be 24.5 miles per gallon; and
       ``(E) after model year 2016 shall be 27.5 miles per gallon, 
     except as provided under paragraph (2).
       ``(2) At least 18 months before the beginning of each model 
     year after model year 2017,''; and
       (2) by adding at the end the following:
       ``(3) If the Secretary does not increase the average fuel 
     economy standard applicable under paragraph (1)(E) or (2), or 
     applicable to any class under paragraph (2), within 24 months 
     after the latest increase in the standard applicable under 
     paragraph (1)(E) or (2), the Secretary, not later than 90 
     days after the expiration of the 24-month period, shall 
     submit to Congress a report containing an explanation of the 
     reasons for not increasing the standard.''.

     SEC. 713. INCREASED INCLUSIVENESS OF DEFINITIONS OF 
                   AUTOMOBILE AND PASSENGER AUTOMOBILE.

       (a) Automobile.--
       (1) In general.--Section 32901(a)(3) of title 49, United 
     States Code, is amended--
       (A) by striking ``6,000 pounds'' each place it appears and 
     inserting ``12,000 pounds''; and
       (B) in subparagraph (B)--
       (i) by striking ``10,000 pounds'' and inserting ``14,000 
     pounds''; and
       (ii) in clause (ii), by striking ``an average fuel economy 
     standard'' and all that follows through ``conservation or''.
       (2) Special rule.--Section 32908(a)(1) of such title is 
     amended by striking ``8,500 pounds'' and inserting ``14,000 
     pounds''.
       (b) Passenger Automobile.--Section 32901(a)(16) of such 
     title is amended to read as follows:
       ``(16) `passenger automobile'--
       ``(A) means, except as provided in subparagraph (B), an 
     automobile having a gross vehicle weight of 12,000 pounds or 
     less that is designed to be used principally for the 
     transportation of persons; but
       ``(B) does not include--
       ``(i) a vehicle that has a primary load carrying device or 
     container attached;
       ``(ii) a vehicle that has a seating capacity of more than 
     12 persons;
       ``(iii) a vehicle that has a seating capacity of more than 
     9 persons behind the driver's seat; or
       ``(iv) a vehicle that is equipped with a cargo area of at 
     least 6 feet in interior length that does not extend beyond 
     the frame of the vehicle and is an open area or is designed 
     for

[[Page S7106]]

     use as an open area but is enclosed by a cap and is not 
     readily accessible directly from the passenger 
     compartment.''.
       (c) Applicability.--The amendments made by this section 
     shall apply with respect to automobiles manufactured for 
     model years beginning after the date of enactment of this 
     Act.

     SEC. 714. CIVIL PENALTIES.

       (a) Increased Penalty for Violations of Fuel Economy 
     Standards.--Section 32912(b) of title 49, United States Code, 
     is amended--
       (1) by inserting ``(1)'' before ``Except as provided'';
       (2) by striking ``$5'' and inserting ``the dollar amount 
     applicable under paragraph (2)'';
       (3) by redesignating paragraphs (1), (2), and (3) as 
     subparagraphs (A), (B), and (C), respectively; and
       (4) by adding at the end the following:
       ``(2)(A) The dollar amount referred to in paragraph (1) is 
     $10, as increased from time to time under subparagraph (B).
       ``(B) Effective on October 1 of each year, the dollar 
     amount applicable under subparagraph (A) shall be increased 
     by the percentage (rounded to the nearest one-tenth of one 
     percent) by which the price index for July of such year 
     exceeds the price index for July of the preceding year. The 
     amount calculated under the preceding sentence shall be 
     rounded to the nearest $0.10.
       ``(C) In this paragraph, the term `price index' means the 
     Consumer Price Index for all-urban consumers published 
     monthly by the Department of Labor.''.
       (b) Conforming Amendment.--Section 32912(c)(1) of title 49, 
     United States Code, is amended--
       (1) by striking subparagraph (B); and
       (2) by redesignating subparagraphs (C) and (D) as 
     subparagraphs (B) and (C), respectively.
       (c) Applicability.--The amendments made by subsection (a) 
     shall apply with respect to automobiles manufactured for 
     model years beginning after the date of enactment of this 
     Act.

     SEC. 715. STANDARDS FOR EXECUTIVE AGENCY AUTOMOBILES.

       Section 32917 of title 49, United States Code, is amended--
       (1) in subsection (b)--
       (A) by amending paragraph (1) to read as follows:
       ``(1) The President shall prescribe regulations that 
     require automobiles leased for at least 60 consecutive days 
     or bought by executive agencies in a fiscal year to achieve--
       ``(A) in the case of non-passenger automobiles, a fleet 
     average fuel economy for that year of at least the average 
     fuel economy standard applicable under section 32902(a) of 
     this title for the model year that includes January 1 of that 
     fiscal year; and
       ``(B) in the case of passenger automobiles, a fleet average 
     fuel economy for that year of at least the average fuel 
     economy standard applicable under subsection (b) or (c) of 
     section 32902 of this title for such model year.'';
       (B) in paragraph (2)--

       (i) by striking ``Fleet average fuel economy is--'' and 
     inserting ``For the purposes of paragraph (1), the fleet 
     average fuel economy of non-passenger or passenger 
     automobiles in a fiscal year is--'';
       (ii) in subparagraph (A), by striking ``passenger 
     automobiles leased for at least 60 consecutive days or bought 
     by executive agencies in a'' and inserting ``the non-
     passenger automobiles or passenger automobiles, respectively, 
     that are leased for at least 60 consecutive days or bought by 
     executive agencies in such''; and
       (iii) in subparagraph (B), by inserting ``such'' after 
     ``the number of''; and

       (2) by adding at the end the following:
       ``(c) Minimum Number of Exceptionally Fuel-Efficient 
     Vehicles.--The President shall prescribe regulations that 
     require that--
       ``(1) at least 20 percent of the passenger automobiles 
     leased for at least 60 consecutive days or bought by 
     executive agencies in a fiscal year have a vehicle fuel 
     economy rating that is at least 5 miles per gallon higher 
     than the average fuel economy standard applicable to the 
     automobile under subsection (b) or (c) of section 32902 of 
     this title for the model year that includes January 1 of that 
     fiscal year; and
       ``(2) beginning in fiscal year 2011, at least 10,000 
     vehicles in the fleet of automobiles used by executive 
     agencies in a fiscal year have a vehicle fuel economy that is 
     at least 5 miles per gallon higher than the average fuel 
     economy standards applicable to such automobiles under 
     section 32902 of this title for the model year that includes 
     January 1 of that fiscal year.''.

     SEC. 716.

                                 ______
                                 
  SA 903. Mr. DURBIN submitted an amendment intended to be proposed by 
him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       Beginning on page, 469, strike line 10 and all that follows 
     through page 470, line 20, and insert the following:
       (d) Industry Alliance.--Not later than 90 days after the 
     date of enactment of this Act, the Secretary shall 
     competitively select an Industry Alliance to represent 
     participants who are private, for-profit firms representing 
     large and small businesses that, as a group, are broadly 
     representative of United States solid state lighting 
     research, development, infrastructure, and manufacturing 
     expertise as a whole.
       (e) Research.--
       (1) Grants.--The Secretary shall carry out the research 
     activities of the Initiative through competitively awarded 
     grants to--
       (A) researchers, including Industry Alliance participants;
       (B) small businesses;
       (C) National Laboratories; and
       (D) institutions of higher education.
       (2) Industry alliance.--The Secretary shall annually 
     solicit from the Industry Alliance--
       (A) comments to identify solid-state lighting technology 
     needs;
       (B) an assessment of the progress of the research 
     activities of the Initiative; and
       (C) assistance in annually updating solid-state lighting 
     technology roadmaps.
       (3) Availability to public.--The information and roadmaps 
     under paragraph (2) shall be available to the public.
       (f) Development, Demonstration, and Commercial 
     Application.--
       (1) In general.--The Secretary shall carry out a 
     development, demonstration, and commercial application 
     program for the Initiative through competitively selected 
     awards.
       (2) Preference.--In making the awards, the Secretary may 
     give preference to participants in the Industry Alliance, 
     including making at least 1 award to a small business entity.
                                 ______
                                 
  SA 904. Mr. ALEXANDER submitted an amendment intended to be proposed 
by him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       At the appropriate place, insert the following:

     SEC. __. RENEWABLE ENERGY EQUIPMENT CREDIT.

       (a) In General.--Section 25D of the Internal Revenue Code 
     of 1986, as added by section 1527 of this Act, is amended to 
     read as follows:

     ``SEC. 25D. RENEWABLE ENERGY EQUIPMENT CREDITS.

       ``(a) Allowance of Credit.--In the case of an individual, 
     there shall be allowed as a credit against the tax imposed by 
     this chapter for the taxable year an amount equal to 30 
     percent of so much of the qualified photovoltaic property 
     expenditures or qualified solar heating property expenditures 
     made by the taxpayer during such year as do not exceed 
     $7,500.
       ``(b) Definitions.--For purposes of this section--
       ``(1) Property expenditure.--
       ``(A) In general.--The term `property expenditure' means 
     any expenditure for a property.
       ``(B) Inclusions.--
       ``(i) Labor costs.--The term `property expenditure' 
     includes the cost of any labor that is properly allocable to 
     the onsite preparation, assembly, or original installation of 
     the property described in paragraph (2) or (3), including the 
     cost of piping or wiring to interconnect such property to the 
     dwelling unit.
       ``(ii) Solar panels.--No expenditure relating to a solar 
     panel or other property installed as a roof (or portion 
     thereof) shall fail to be treated as a property expenditure 
     solely because it constitutes a structural component of the 
     structure on which it is installed.
       ``(2) Qualified photovoltaic property expenditure.--The 
     term `qualified photovoltaic property expenditure' means any 
     property expenditure for property which uses solar energy to 
     generate electricity for use in a dwelling unit through the 
     photovoltaic effect.
       ``(3) Qualified solar heating property expenditure.--
       ``(A) In general.--The term `qualified solar heating 
     property expenditure' means any property expenditure for 
     property which uses solar energy to heat or cool (or provide 
     hot water for use in) a dwelling unit.
       ``(B) Exclusion.--The term `qualified solar heating 
     property expenditure' does not include an expenditure for 
     property which uses solar energy to heat or cool a swimming 
     pool.
       ``(c) Special Rules.--
       ``(1) Joint occupancy.--In the case of any dwelling unit 
     which is jointly occupied and used during any calendar year 
     as a residence by 2 or more individuals, the following shall 
     apply separately with respect to qualified solar heating 
     property expenditures and qualified photovoltaic property 
     expenditures:
       ``(A) The amount of the credit allowable under subsection 
     (a) by reason of expenditures made during such calendar year 
     by any of such individuals with respect to such dwelling unit 
     shall be determined by treating all of such individuals as 1 
     taxpayer whose taxable year is such calendar year.
       ``(B) There shall be allowable with respect to such 
     expenditures to each of such individuals, a credit under 
     subsection (a) for the taxable year in which such calendar 
     year ends in an amount which bears the same ratio to the 
     amount determined under subparagraph (A) as the amount of 
     such expenditures made by such individual during such 
     calendar year bears to the aggregate of such expenditures 
     made by all of such individuals during such calendar year.
       ``(2) Tenant-stockholder in cooperative housing 
     corporation.--In the case of an individual who is a tenant-
     stockholder (as defined in section 216) in a cooperative 
     housing

[[Page S7107]]

     corporation (as defined in that section), the individual 
     shall be treated as having made such individual's tenant-
     stockholder's proportionate share (as defined in section 
     216(b)(3)) of any expenditures of such corporation.
       ``(3) Condominiums.--
       ``(A) In general.--In the case of an individual who is a 
     member of a condominium management association with respect 
     to a condominium which such individual owns, such individual 
     shall be treated as having made such individual's 
     proportionate share of any expenditures of such association.
       ``(B) Management association.--For purposes of this 
     paragraph, the term `condominium management association' 
     means an organization which meets the requirements of 
     paragraph (1) of section 528(c) (other than subparagraph (E) 
     thereof) with respect to a condominium project substantially 
     all of the units of which are used as residences.
       ``(4) Amount of expenditure.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     an expenditure with respect to an item shall be treated as 
     made when the original installation of the item is completed.
       ``(B) Expenditures in connection with building 
     construction.--In the case of an expenditure in connection 
     with the construction or reconstruction of a structure, such 
     expenditure shall be treated as made when the original use of 
     the constructed or reconstructed structure by the taxpayer 
     begins.
       ``(C) Amount.--
       ``(i) In general.--The amount of any expenditure shall be 
     the cost of the expenditure.
       ``(ii) Subsidized energy financing.--For purposes of 
     determining the amount of expenditures, there shall not be 
     taken into account expenditures which are made from 
     subsidized energy financing (as defined in section 
     48(a)(5)(A)).
       ``(d) Basis Adjustments.--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 subsection) result 
     from such expenditure shall be reduced by the amount of the 
     credit so allowed.
       ``(e) Limitations.--No credit shall be allowed under this 
     section for an item of property unless--
       ``(1) in the case of solar heating property, the property 
     meets all applicable health and safety standards and 
     requirements imposed by any State or local permitting 
     authority, and
       ``(2) in the case of a photovoltaic property, the property 
     meets all appropriate fire and electric code requirements.
       ``(f) Termination.--This section shall not apply to 
     expenditures made after December 31, 2010.''.
       (b) Production Tax Credit for Utility-Scale Solar.--
     Paragraph (4) of section 45(d) of the Internal Revenue Code 
     of 1986 (relating to qualified facilities) is amended to read 
     as follows:
       ``(4) Geothermal or solar energy facility.--In the case of 
     a facility using geothermal or solar energy to produce 
     electricity, the term `qualified facility' means any facility 
     owned by the taxpayer which is originally placed in service 
     after December 31, 2005, and before December 31, 2010.''.
       (c) Conforming Amendments.--
       (1) Section 1016(a)(36) of the Internal revenue Code of 
     1986, as added by section 1527 of this Act, is amended to 
     read as follows:
       ``(36) to the extent provided in section 25D(d), in the 
     case of amounts with respect to which a credit has been 
     allowed under section 25D.''.
       (2) The item relating to section 25D in the table of 
     sections for subpart A of part IV of subchapter A of chapter 
     1 of such Code, as added by section 1527 of this Act, is 
     amended to read as follows:

``Sec. 25D. Renewable energy equipment credits.''.

       (d) Effective Date.--The amendments made by this section 
     (other than subsection (e)) shall apply to property placed in 
     service after December 31, 2005, in taxable years ending 
     after such date.
       (e) Reduction in Period By Which Renewable Energy 
     Production Credit Extended.--Section 45(d) of the Internal 
     Revenue Code of 1986 (relating to qualified facilities), as 
     amended by section 1501, is amended by striking ``2009'' each 
     place it appears in paragraphs (1) through (7) and inserting 
     ``2008''.
                                 ______
                                 
  SA 905. Mr. ALEXANDER submitted an amendment intended to be proposed 
by him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       At the appropriate place, insert the following:

     SEC. __. RENEWABLE ENERGY EQUIPMENT CREDIT.

       (a) In General.--Section 25D of the Internal Revenue Code 
     of 1986, as added by section 1527 of this Act, is amended to 
     read as follows:

     ``SEC. 25D. RENEWABLE ENERGY EQUIPMENT CREDITS.

       ``(a) Allowance of Credit.--In the case of an individual, 
     there shall be allowed as a credit against the tax imposed by 
     this chapter for the taxable year an amount equal to 30 
     percent of so much of the qualified photovoltaic property 
     expenditures or qualified solar heating property expenditures 
     made by the taxpayer during such year as do not exceed 
     $7,500.
       ``(b) Definitions.--For purposes of this section--
       ``(1) Property expenditure.--
       ``(A) In general.--The term `property expenditure' means 
     any expenditure for a property.
       ``(B) Inclusions.--
       ``(i) Labor costs.--The term `property expenditure' 
     includes the cost of any labor that is properly allocable to 
     the onsite preparation, assembly, or original installation of 
     the property described in paragraph (2) or (3), including the 
     cost of piping or wiring to interconnect such property to the 
     dwelling unit.
       ``(ii) Solar panels.--No expenditure relating to a solar 
     panel or other property installed as a roof (or portion 
     thereof) shall fail to be treated as a property expenditure 
     solely because it constitutes a structural component of the 
     structure on which it is installed.
       ``(2) Qualified photovoltaic property expenditure.--The 
     term `qualified photovoltaic property expenditure' means any 
     property expenditure for property which uses solar energy to 
     generate electricity for use in a dwelling unit through the 
     photovoltaic effect.
       ``(3) Qualified solar heating property expenditure.--
       ``(A) In general.--The term `qualified solar heating 
     property expenditure' means any property expenditure for 
     property which uses solar energy to heat or cool (or provide 
     hot water for use in) a dwelling unit.
       ``(B) Exclusion.--The term `qualified solar heating 
     property expenditure' does not include an expenditure for 
     property which uses solar energy to heat or cool a swimming 
     pool.
       ``(c) Special Rules.--
       ``(1) Joint occupancy.--In the case of any dwelling unit 
     which is jointly occupied and used during any calendar year 
     as a residence by 2 or more individuals, the following shall 
     apply separately with respect to qualified solar heating 
     property expenditures and qualified photovoltaic property 
     expenditures:
       ``(A) The amount of the credit allowable under subsection 
     (a) by reason of expenditures made during such calendar year 
     by any of such individuals with respect to such dwelling unit 
     shall be determined by treating all of such individuals as 1 
     taxpayer whose taxable year is such calendar year.
       ``(B) There shall be allowable with respect to such 
     expenditures to each of such individuals, a credit under 
     subsection (a) for the taxable year in which such calendar 
     year ends in an amount which bears the same ratio to the 
     amount determined under subparagraph (A) as the amount of 
     such expenditures made by such individual during such 
     calendar year bears to the aggregate of such expenditures 
     made by all of such individuals during such calendar year.
       ``(2) Tenant-stockholder in cooperative housing 
     corporation.--In the case of an individual who is a tenant-
     stockholder (as defined in section 216) in a cooperative 
     housing corporation (as defined in that section), the 
     individual shall be treated as having made such individual's 
     tenant-stockholder's proportionate share (as defined in 
     section 216(b)(3)) of any expenditures of such corporation.
       ``(3) Condominiums.--
       ``(A) In general.--In the case of an individual who is a 
     member of a condominium management association with respect 
     to a condominium which such individual owns, such individual 
     shall be treated as having made such individual's 
     proportionate share of any expenditures of such association.
       ``(B) Management association.--For purposes of this 
     paragraph, the term `condominium management association' 
     means an organization which meets the requirements of 
     paragraph (1) of section 528(c) (other than subparagraph (E) 
     thereof) with respect to a condominium project substantially 
     all of the units of which are used as residences.
       ``(4) Amount of expenditure.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     an expenditure with respect to an item shall be treated as 
     made when the original installation of the item is completed.
       ``(B) Expenditures in connection with building 
     construction.--In the case of an expenditure in connection 
     with the construction or reconstruction of a structure, such 
     expenditure shall be treated as made when the original use of 
     the constructed or reconstructed structure by the taxpayer 
     begins.
       ``(C) Amount.--
       ``(i) In general.--The amount of any expenditure shall be 
     the cost of the expenditure.
       ``(ii) Subsidized energy financing.--For purposes of 
     determining the amount of expenditures, there shall not be 
     taken into account expenditures which are made from 
     subsidized energy financing (as defined in section 
     48(a)(5)(A)).
       ``(d) Basis Adjustments.--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 subsection) result 
     from such expenditure shall be reduced by the amount of the 
     credit so allowed.
       ``(e) Limitations.--No credit shall be allowed under this 
     section for an item of property unless--

[[Page S7108]]

       ``(1) in the case of solar heating property, the property 
     meets all applicable health and safety standards and 
     requirements imposed by any State or local permitting 
     authority, and
       ``(2) in the case of a photovoltaic property, the property 
     meets all appropriate fire and electric code requirements.
       ``(f) Termination.--This section shall not apply to 
     expenditures made after December 31, 2010.''.
       (b) Production Tax Credit for Utility-Scale Solar.--
     Paragraph (4) of section 45(d) of the Internal Revenue Code 
     of 1986 (relating to qualified facilities) is amended to read 
     as follows:
       ``(4) Geothermal or solar energy facility.--In the case of 
     a facility using geothermal or solar energy to produce 
     electricity, the term `qualified facility' means any facility 
     owned by the taxpayer which is originally placed in service 
     after December 31, 2005, and before December 31, 2010.''.
       (c) Conforming Amendments.--
       (1) Section 1016(a)(36) of the Internal revenue Code of 
     1986, as added by section 1527 of this Act, is amended to 
     read as follows:
       ``(36) to the extent provided in section 25D(d), in the 
     case of amounts with respect to which a credit has been 
     allowed under section 25D.''.
       (2) The item relating to section 25D in the table of 
     sections for subpart A of part IV of subchapter A of chapter 
     1 of such Code, as added by section 1527 of this Act, is 
     amended to read as follows:

``Sec. 25D. Renewable energy equipment credits.''.

       (d) Effective Date.--The amendments made by this section 
     (other than subsection (e)) shall apply to property placed in 
     service after December 31, 2005, in taxable years ending 
     after such date.
       (e) Reduction in Period by Which Renewable Energy 
     Production Credit Extended.--Section 45(d) of the Internal 
     Revenue Code of 1986 (relating to qualified facilities), as 
     amended by this Act, is amended by striking ``2008'' each 
     place it appears in paragraphs (1) through (7) and inserting 
     ``2007''.
                                 ______
                                 
  SA 906. Mr. ALEXANDER submitted an amendment intended to be proposed 
by him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       On page 327, after line 21, add the following:

     SEC. 390. GAS-ONLY LEASES; STATE REQUESTS TO EXAMINE ENERGY 
                   AREAS.

       (a) Gas-Only Leases.--Section 8 of the Outer Continental 
     Shelf Lands Act (43 U.S.C. 1337) (as amended by section 321) 
     is amended by adding at the end the following:
       ``(q) Gas-Only Leases.--
       ``(1) In general.--The Secretary may issue a lease under 
     this section beginning in the 2007-2012 plan period that 
     authorizes development and production only of gas and 
     associated condensate in accordance with regulations issued 
     under paragraph (2).
       ``(2) Regulations.--Not later than October 1, 2006, the 
     Secretary shall issue regulations that, for purposes of this 
     section--
       ``(A) define natural gas so that the definition--
       ``(i) includes--

       ``(I) hydrocarbons and other substances in a gaseous state 
     at atmospheric pressure and a temperature of 60 degrees 
     Fahrenheit;
       ``(II) liquids that condense from natural gas in the 
     process of treatment, dehydration, decompression, or 
     compression prior to the point for measuring volume and 
     quality of the production established by the Minerals 
     Management Service; and
       ``(III) natural gas liquefied for transportation; and

       ``(ii) excludes crude oil;
       ``(B) provide that gas-only leases shall contain the same 
     rights and obligations established for oil and gas leases;
       ``(C) provide that, in reviewing the adequacy of bids for 
     gas-only leases, the Minerals Management Service shall 
     exclude the value of any crude oil estimated to be discovered 
     within the boundaries of the leasing area;
       ``(D) provide for cancellation of a gas-only lease, with 
     payment of the fair value of the lease rights canceled, if 
     the Secretary determines that any natural gas discovered 
     within the boundaries of the leasing area cannot be produced 
     without causing an unacceptable waste of crude oil discovered 
     in association with the natural gas; and
       ``(E) provide that, at the request and with the consent of 
     the Governor of the State adjacent to the lease area, as 
     determined under section 18(i)(2)(B)(i), and with the consent 
     of the lessee, an existing gas-only lease may be converted, 
     without an increase in the rental or royalty rate and without 
     further payment in the nature of a lease bonus, to a lease 
     under subsection (b), in accordance with a process, to be 
     established by the Secretary, that requires--
       ``(i) consultation by the Secretary with the Governor of 
     the State and the lessee with respect to the operating 
     conditions of the lease, taking into consideration 
     environmental resource conservation and recovery, economic 
     factors, and other factors, as the Secretary determines to be 
     relevant; and
       ``(ii) compliance with the National Environmental Policy 
     Act of 1969 (42 U.S.C. 4321 et seq.).
       ``(3) Effect of other laws.--Any Federal law (including 
     regulations) that applies to an oil and gas lease on the 
     Outer Continental Shelf shall apply to a gas-only lease 
     issued under this subsection.''.
       (b) State Requests to Examine Energy Areas.--Section 18 of 
     the Outer Continental Shelf Lands Act (43 U.S.C. 1344) is 
     amended by adding at the end the following:
       ``(i) State requests to examine energy areas.--
       ``(1) Definitions.--In this subsection:
       ``(A) Lease.--The term `lease' includes a gas-only lease 
     under section 8(q).
       ``(B) Moratorium area.--The term `moratorium area' means--
       ``(i) any area withdrawn from disposition by leasing by the 
     memorandum entitled `Memorandum on Withdrawal of Certain 
     Areas of the United States Outer Continental Shelf from 
     Leasing Disposition' (34 Weekly Comp. Pres. Doc. 1111 (June 
     12, 1998)); and
       ``(ii) any area of the outer Continental Shelf as to which 
     Congress has denied the use of appropriated funds or other 
     means for preleasing, leasing, or related activities.
       ``(2) Resource estimates.--
       ``(A) Requests.--At any time, the Governor of an affected 
     State, acting on behalf of the State, may request the 
     Secretary to provide a current estimate of proven and 
     potential gas, or oil and gas, resources in any moratorium 
     area (or any part of the moratorium area the Governor 
     identifies) adjacent to, or lying seaward of the coastline 
     of, that State.
       ``(B) Response of secretary.--Not later than 45 days after 
     the date on which the Governor of a State requests an 
     estimate under subparagraph (A), the Secretary shall 
     provide--
       ``(i) a delineation of the lateral boundaries between the 
     coastal States, in accordance with--

       ``(I) any judicial decree or interstate compact delineating 
     lateral offshore boundaries between coastal States:
       ``(II) any principles of domestic and international law 
     governing the delineation of lateral offshore boundaries; and
       ``(III) to the maximum extent practicable, existing lease 
     boundaries and block lines based on the official protraction 
     diagrams of the Secretary;

       ``(ii) a current inventory of proven and potential gas, or 
     oil and gas, resources in any moratorium areas within the 
     area off the shore of a State, in accordance with the lateral 
     boundaries delineated under clause (i), as requested by the 
     Governor; and
       ``(iii) an explanation of the planning processes that could 
     lead to the leasing, exploration, development, and production 
     of the gas, or oil and gas, resources within the area 
     identified.
       ``(3) Making certain areas available for leasing.--
       ``(A) Petition.--
       ``(i) In general.--On consideration of the information 
     received from the Secretary, the Governor (acting on behalf 
     of the State of the Governor) may submit to the Secretary a 
     petition requesting that the Secretary make available for 
     leasing any portion of a moratorium area off the coast of the 
     State, in accordance with the lateral boundaries delineated 
     under paragraph (2)(B)(i).
       ``(ii) Contents.--In a petition under clause (i), a 
     Governor may request that an area described in that clause be 
     made available for leasing under subsection (b) or (q), or 
     both, of section 8.
       ``(B) Action by secretary.--Not later than 90 days after 
     the date of receipt of a petition under subparagraph (A), the 
     Secretary shall approve the petition unless the Secretary 
     determines that leasing in the affected area presents a 
     significant likelihood of incidents associated with the 
     development of resources that would cause serious harm or 
     damage to the marine resources of the area or of an adjacent 
     State.
       ``(C) Failure to act.--If the Secretary fails to approve or 
     deny a petition in accordance with subparagraph (B), the 
     petition shall be considered to be approved as of the date 
     that is 90 days after the date of receipt of the petition.
       ``(D) Treatment.--Notwithstanding any other provision of 
     this section, not later than 180 days after the date on which 
     a petition is approved, or considered to be approved, under 
     subparagraph (B) or (C), the Secretary shall--
       ``(i) treat the petition of the Governor under subparagraph 
     (A) as a proposed revision to a leasing program under this 
     section; and
       ``(ii) except as provided in subparagraph (E), expedite the 
     revision of the 5-year outer Continental Shelf oil and gas 
     leasing program in effect as of that date to include any 
     lease sale for any area covered by the petition.
       ``(E) Inclusion in subsequent plans.--
       ``(i) In general.--If there are fewer than 18 months 
     remaining in the 5-year outer Continental Shelf oil and gas 
     leasing program described in subparagraph (D)(ii), the 
     Secretary, without consultation with any State, shall include 
     the areas covered by the petition in lease sales under the 
     subsequent 5-year outer Continental Shelf oil and gas leasing 
     program.
       ``(ii) Environmental assessment.--Before modifying a 5-Year 
     Outer Continental Shelf Oil and Gas Leasing Program under 
     clause (i), the Secretary shall complete an environmental 
     assessment that describes any anticipated environmental 
     effect of leasing in the area under the petition.

[[Page S7109]]

       ``(F) Spending limitations.--Any Federal spending 
     limitation with respect to preleasing, leasing, or a related 
     activity in an area made available for leasing under this 
     paragraph shall terminate as of the date on which the 
     petition of the Governor relating to the area is approved, or 
     considered to be approved, under subparagraph (B) or (C).
       ``(G) Coastal zone management.--For purposes of title III 
     of the Coastal Zone Management Act of 1972 (16 U.S.C. 1451 et 
     seq.), any activity relating to leasing and subsequent 
     production in an area made available for leasing under this 
     paragraph shall--
       ``(i) if the leased area is located more than 20 miles 
     offshore of an adjacent State (or the boundaries of the State 
     as delineated under paragraph (2)(B)), be considered by the 
     Secretary of Commerce to be necessary to the interest of 
     national security and be carried out notwithstanding the 
     objection of a State to a consistency certification under 
     that Act; or
       ``(ii) if the leased area is located not greater than 20 
     miles offshore of an adjacent State, be subject to section 
     307(c) of that Act (16 U.S.C. 1456(c)).
       ``(4) Revenue sharing.--
       ``(A) Bonus bids.--If the Governor of a State requests the 
     Secretary to allow gas, or oil or natural gas, leasing in the 
     moratorium area and the Secretary allows that leasing, the 
     State shall, without further appropriation or action, receive 
     25 percent of any bonus bid paid for leasing rights in the 
     area.
       ``(B) Post leasing revenues.--In addition to bonus bids 
     under subparagraph (A), a State described in subparagraph (A) 
     shall receive 25 percent of--
       ``(i) any lease rental minimum royalty;
       ``(ii) any royalty proceeds from a sale of royalties taken 
     in kind by the Secretary; and
       ``(iii) any other revenues from a bidding system under 
     section 8.
       ``(C) Conservation royalties.--After making distributions 
     in accordance with subparagraphs (A) and (B), and in 
     accordance with section 31, the Secretary, in coordination 
     with the Governor of a State, shall, without further 
     appropriation or action, distribute a conservation royalty of 
     12.5 percent of Federal royalty revenues in an area leased 
     under this section, not to exceed $1,250,000,000 for any 
     year, to 1 or more of the following:
       ``(i) The Coastal and Estuary Habitat Restoration Trust 
     Fund.
       ``(ii) The wildlife restoration fund established under 
     section 3 of the Pittman-Robertson Wildlife Restoration Act 
     (16 U.S.C. 669b).
       ``(iii) The Land and Water Conservation Fund to provide 
     financial assistance to States under section 6 of that Act 
     (16 U.S.C. 460l-8).
       ``(5) Application.--This subsection shall not apply to--
       ``(A) any area designated as a national marine sanctuary or 
     a national wildlife refuge;
       ``(B) the Lease Sale 181 planning area;
       ``(C) any area not included in the outer Continental Shelf;
       ``(D) the Great Lakes, as defined in section 118(a)(3) of 
     the Federal Water Pollution Control Act (33 U.S.C. 
     1268(a)(3)); or
       ``(E) the eastern coast of the State of Florida.''.
                                 ______
                                 
  SA 907. Mr. ALEXANDER submitted an amendment intended to be proposed 
by him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       On page 327, after line 21, add the following:

     SEC. 390. GAS-ONLY LEASES; STATE REQUESTS TO EXAMINE ENERGY 
                   AREAS.

       (a) Gas-Only Leases.--Section 8 of the Outer Continental 
     Shelf Lands Act (43 U.S.C. 1337) (as amended by section 321) 
     is amended by adding at the end the following:
       ``(q) Gas-Only Leases.--
       ``(1) In general.--The Secretary may issue a lease under 
     this section beginning in the 2007-2012 plan period that 
     authorizes development and production only of gas and 
     associated condensate in accordance with regulations issued 
     under paragraph (2).
       ``(2) Regulations.--Not later than October 1, 2006, the 
     Secretary shall issue regulations that, for purposes of this 
     section--
       ``(A) define natural gas so that the definition--
       ``(i) includes--

       ``(I) hydrocarbons and other substances in a gaseous state 
     at atmospheric pressure and a temperature of 60 degrees 
     Fahrenheit;
       ``(II) liquids that condense from natural gas in the 
     process of treatment, dehydration, decompression, or 
     compression prior to the point for measuring volume and 
     quality of the production established by the Minerals 
     Management Service; and
       ``(III) natural gas liquefied for transportation; and

       ``(ii) excludes crude oil;
       ``(B) provide that gas-only leases shall contain the same 
     rights and obligations established for oil and gas leases;
       ``(C) provide that, in reviewing the adequacy of bids for 
     gas-only leases, the Minerals Management Service shall 
     exclude the value of any crude oil estimated to be discovered 
     within the boundaries of the leasing area;
       ``(D) provide for cancellation of a gas-only lease, with 
     payment of the fair value of the lease rights canceled, if 
     the Secretary determines that any natural gas discovered 
     within the boundaries of the leasing area cannot be produced 
     without causing an unacceptable waste of crude oil discovered 
     in association with the natural gas; and
       ``(E) provide that, at the request and with the consent of 
     the Governor of the State adjacent to the lease area, as 
     determined under section 18(i)(2)(B)(i), and with the consent 
     of the lessee, an existing gas-only lease may be converted, 
     without an increase in the rental or royalty rate and without 
     further payment in the nature of a lease bonus, to a lease 
     under subsection (b), in accordance with a process, to be 
     established by the Secretary, that requires--
       ``(i) consultation by the Secretary with the Governor of 
     the State and the lessee with respect to the operating 
     conditions of the lease, taking into consideration 
     environmental resource conservation and recovery, economic 
     factors, and other factors, as the Secretary determines to be 
     relevant; and
       ``(ii) compliance with the National Environmental Policy 
     Act of 1969 (42 U.S.C. 4321 et seq.).
       ``(3) Effect of other laws.--Any Federal law (including 
     regulations) that applies to an oil and gas lease on the 
     Outer Continental Shelf shall apply to a gas-only lease 
     issued under this subsection.''.
       (b) State Requests to Examine Energy Areas.--Section 18 of 
     the Outer Continental Shelf Lands Act (43 U.S.C. 1344) is 
     amended by adding at the end the following:
       ``(i) State requests to examine energy areas.--
       ``(1) Definitions.--In this subsection:
       ``(A) Lease.--The term `lease' includes a gas-only lease 
     under section 8(q).
       ``(B) Moratorium area.--The term `moratorium area' means--
       ``(i) any area withdrawn from disposition by leasing by the 
     memorandum entitled `Memorandum on Withdrawal of Certain 
     Areas of the United States Outer Continental Shelf from 
     Leasing Disposition' (34 Weekly Comp. Pres. Doc. 1111 (June 
     12, 1998)); and
       ``(ii) any area of the outer Continental Shelf as to which 
     Congress has denied the use of appropriated funds or other 
     means for preleasing, leasing, or related activities.
       ``(2) Resource estimates.--
       ``(A) Requests.--At any time, the Governor of an affected 
     State, acting on behalf of the State, may request the 
     Secretary to provide a current estimate of proven and 
     potential gas, or oil and gas, resources in any moratorium 
     area (or any part of the moratorium area the Governor 
     identifies) adjacent to, or lying seaward of the coastline 
     of, that State.
       ``(B) Response of secretary.--Not later than 45 days after 
     the date on which the Governor of a State requests an 
     estimate under subparagraph (A), the Secretary shall 
     provide--
       ``(i) a delineation of the lateral boundaries between the 
     coastal States, in accordance with--

       ``(I) any judicial decree or interstate compact delineating 
     lateral offshore boundaries between coastal States:
       ``(II) any principles of domestic and international law 
     governing the delineation of lateral offshore boundaries; and
       ``(III) to the maximum extent practicable, existing lease 
     boundaries and block lines based on the official protraction 
     diagrams of the Secretary;

       ``(ii) a current inventory of proven and potential gas, or 
     oil and gas, resources in any moratorium areas within the 
     area off the shore of a State, in accordance with the lateral 
     boundaries delineated under clause (i), as requested by the 
     Governor; and
       ``(iii) an explanation of the planning processes that could 
     lead to the leasing, exploration, development, and production 
     of the gas, or oil and gas, resources within the area 
     identified.
       ``(3) Making certain areas available for leasing.--
       ``(A) Petition.--
       ``(i) In general.--On consideration of the information 
     received from the Secretary, the Governor (acting on behalf 
     of the State of the Governor) may submit to the Secretary a 
     petition requesting that the Secretary make available for 
     leasing any portion of a moratorium area off the coast of the 
     State, in accordance with the lateral boundaries delineated 
     under paragraph (2)(B)(i).
       ``(ii) Contents.--In a petition under clause (i), a 
     Governor may request that an area described in that clause be 
     made available for leasing under subsection (b) or (q), or 
     both, of section 8.
       ``(B) Action by secretary.--Not later than 90 days after 
     the date of receipt of a petition under subparagraph (A), the 
     Secretary shall approve the petition unless the Secretary 
     determines that leasing in the affected area presents a 
     significant likelihood of incidents associated with the 
     development of resources that would cause serious harm or 
     damage to the marine resources of the area or of an adjacent 
     State.
       ``(C) Failure to act.--If the Secretary fails to approve or 
     deny a petition in accordance with subparagraph (B), the 
     petition shall be considered to be approved as of the date 
     that is 90 days after the date of receipt of the petition.
       ``(D) Treatment.--Notwithstanding any other provision of 
     this section, not later than 180 days after the date on which 
     a petition is approved, or considered to be approved, under 
     subparagraph (B) or (C), the Secretary shall--

[[Page S7110]]

       ``(i) treat the petition of the Governor under subparagraph 
     (A) as a proposed revision to a leasing program under this 
     section; and
       ``(ii) except as provided in subparagraph (E), expedite the 
     revision of the 5-year outer Continental Shelf oil and gas 
     leasing program in effect as of that date to include any 
     lease sale for any area covered by the petition.
       ``(E) Inclusion in subsequent plans.--
       ``(i) In general.--If there are fewer than 18 months 
     remaining in the 5-year outer Continental Shelf oil and gas 
     leasing program described in subparagraph (D)(ii), the 
     Secretary, without consultation with any State, shall include 
     the areas covered by the petition in lease sales under the 
     subsequent 5-year outer Continental Shelf oil and gas leasing 
     program.
       ``(ii) Environmental assessment.--Before modifying a 5-Year 
     Outer Continental Shelf Oil and Gas Leasing Program under 
     clause (i), the Secretary shall complete an environmental 
     assessment that describes any anticipated environmental 
     effect of leasing in the area under the petition.
       ``(F) Spending limitations.--Any Federal spending 
     limitation with respect to preleasing, leasing, or a related 
     activity in an area made available for leasing under this 
     paragraph shall terminate as of the date on which the 
     petition of the Governor relating to the area is approved, or 
     considered to be approved, under subparagraph (B) or (C).
       ``(G) Coastal zone management.--For purposes of title III 
     of the Coastal Zone Management Act of 1972 (16 U.S.C. 1451 et 
     seq.), any activity relating to leasing and subsequent 
     production in an area made available for leasing under this 
     paragraph shall--
       ``(i) if the leased area is located more than 20 miles 
     offshore of an adjacent State (or the boundaries of the State 
     as delineated under paragraph (2)(B)), be considered by the 
     Secretary of Commerce to be necessary to the interest of 
     national security and be carried out notwithstanding the 
     objection of a State to a consistency certification under 
     that Act; or
       ``(ii) if the leased area is located not greater than 20 
     miles offshore of an adjacent State, be subject to section 
     307(c) of that Act (16 U.S.C. 1456(c)).
       ``(4) Revenue sharing.--
       ``(A) Bonus bids.--If the Governor of a State requests the 
     Secretary to allow gas, or oil or natural gas, leasing in the 
     moratorium area and the Secretary allows that leasing, the 
     State shall, without further appropriation or action, receive 
     25 percent of any bonus bid paid for leasing rights in the 
     area.
       ``(B) Post leasing revenues.--In addition to bonus bids 
     under subparagraph (A), a State described in subparagraph (A) 
     shall receive 25 percent of--
       ``(i) any lease rental minimum royalty;
       ``(ii) any royalty proceeds from a sale of royalties taken 
     in kind by the Secretary; and
       ``(iii) any other revenues from a bidding system under 
     section 8.
       ``(C) Conservation royalties.--After making distributions 
     in accordance with subparagraphs (A) and (B), and in 
     accordance with section 31, the Secretary, in coordination 
     with the Governor of a State, shall, without further 
     appropriation or action, distribute a conservation royalty of 
     12.5 percent of Federal royalty revenues in an area leased 
     under this section, not to exceed $1,250,000,000 for any 
     year, to 1 or more of the following:
       ``(i) The Coastal and Estuary Habitat Restoration Trust 
     Fund.
       ``(ii) The wildlife restoration fund established under 
     section 3 of the Pittman-Robertson Wildlife Restoration Act 
     (16 U.S.C. 669b).
       ``(iii) The Land and Water Conservation Fund to provide 
     financial assistance to States under section 6 of that Act 
     (16 U.S.C. 460l-8).
       ``(5) Application.--This subsection shall not apply to--
       ``(A) any area designated as a national marine sanctuary or 
     a national wildlife refuge;
       ``(B) the Lease Sale 181 planning area;
       ``(C) any area not included in the outer Continental Shelf;
       ``(D) the Great Lakes, as defined in section 118(a)(3) of 
     the Federal Water Pollution Control Act (33 U.S.C. 
     1268(a)(3)); or
       ``(E) the eastern coast of the State of Florida.''.
       (c) Great Lakes Oil and Gas Drilling Ban.--No Federal or 
     State permit or lease shall be issued for new oil and gas 
     slant, directional, or offshore drilling in or under 1 or 
     more of the Great Lakes (as defined in section 118(a)(3) of 
     the Federal Water Pollution Control Act (33 U.S.C. 
     1268(a)(3))).
                                 ______
                                 
  SA 908. Mr. ALEXANDER submitted an amendment intended to be proposed 
by him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       At the appropriate place, insert the following:

     SEC. __. ADVANCED TECHNOLOGY MOTOR VEHICLES MANUFACTURING 
                   CREDIT.

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

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

       ``(a) Credit Allowed.--
       ``(1) In general.--There shall be allowed as a credit 
     against the tax imposed by this chapter for the taxable year 
     an amount equal to 35 percent of the qualified investment of 
     an eligible taxpayer for such taxable year.
       ``(2) Limitation.--The credit allowed under subsection (a) 
     for any taxable year shall not exceed $25,000,000.
       ``(b) Eligible Taxpayer.--For purposes of this section, the 
     term `eligible taxpayer' means any taxpayer if more than 50 
     percent of its gross receipts from manufacturing (as 
     determined under section 199) for the taxable year is derived 
     from the manufacture of motor vehicles or any component parts 
     of such vehicles.
       ``(c) 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 a manufacturing facility of the 
     eligible taxpayer to produce advanced technology motor 
     vehicles or to produce eligible components,
       ``(B) for engineering integration of such vehicles and 
     components as described in subsection (e), and
       ``(C) for research and development related to advanced 
     technology motor vehicles and eligible components.
       ``(2) Attribution rules.--In the event a facility of the 
     taxpayer produces both advanced technology motor vehicles and 
     conventional motor vehicles, or eligible and non-eligible 
     components, only the qualified investment attributable to 
     production of advanced technology motor vehicles and eligible 
     components shall be taken into account.
       ``(d) Advanced Technology Motor Vehicles and Eligible 
     Components.--For purposes of this section--
       ``(1) Advanced technology motor vehicle.--The term 
     `advanced technology motor vehicle' means--
       ``(A) any new advanced lean burn technology motor vehicle 
     (as defined in section 30B(c)(3)), or
       ``(B) any new qualified hybrid motor vehicle (as defined in 
     section 30B(d)(2)(A) and determined without regard to any 
     gross vehicle weight rating).
       ``(2) Eligible components.--The term `eligible component' 
     means any component inherent to any advanced technology motor 
     vehicle, including--
       ``(A) with respect to any gasoline or diesel-electric new 
     qualified hybrid motor vehicle--
       ``(i) electric motor or generator,
       ``(ii) power split device,
       ``(iii) power control unit,
       ``(iv) power controls,
       ``(v) integrated starter generator, or
       ``(vi) battery,
       ``(B) with respect to any hydraulic new qualified hybrid 
     motor vehicle--
       ``(i) hydraulic accumulator vessel,
       ``(ii) hydraulic pump, or
       ``(iii) hydraulic pump-motor assembly,
       ``(C) with respect to any new advanced lean burn technology 
     motor vehicle--
       ``(i) diesel engine,
       ``(ii) turbocharger,
       ``(iii) fuel injection system, or
       ``(iv) after-treatment system, such as a particle filter or 
     NOx absorber, and
       ``(D) with respect to any advanced technology motor 
     vehicle, any other component submitted for approval by the 
     Secretary.
       ``(e) Engineering Integration Costs.--For purposes of 
     subsection (c)(1)(B), costs for engineering integration are 
     costs incurred prior to the market introduction of advanced 
     technology vehicles for engineering tasks related to--
       ``(1) establishing functional, structural, and performance 
     requirements for component and subsystems to meet overall 
     vehicle objectives for a specific application,
       ``(2) designing interfaces for components and subsystems 
     with mating systems within a specific vehicle application,
       ``(3) designing cost effective, efficient, and reliable 
     manufacturing processes to produce components and subsystems 
     for a specific vehicle application, and
       ``(4) validating functionality and performance of 
     components and subsystems for a specific vehicle application.
       ``(f) Limitation Based on Amount of Tax.--The credit 
     allowed under subsection (a) for the taxable year shall not 
     exceed the excess of--
       ``(1) the sum of--
       ``(A) the regular tax liability (as defined in section 
     26(b)) for such taxable year, plus
       ``(B) the tax imposed by section 55 for such taxable year 
     and any prior taxable year beginning after 1986 and not taken 
     into account under section 53 for any prior taxable year, 
     over
       ``(2) the sum of the credits allowable under subpart A and 
     sections 27, 30, and 30B for the taxable year.
       ``(g) Reduction in Basis.--For purposes of this subtitle, 
     if a credit is allowed under this section for any expenditure 
     with respect to any property, the increase in the basis of 
     such property which would (but for this paragraph) result 
     from such expenditure shall be reduced by the amount of the 
     credit so allowed.
       ``(h) No Double Benefit.--
       ``(1) Coordination with other deductions and credits.--
     Except as provided in paragraph (2), the amount of any 
     deduction or other credit allowable under this chapter for 
     any cost taken into account in determining the amount of the 
     credit under subsection (a)

[[Page S7111]]

     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 (c)(1)(C) taken into 
     account in determining the amount of the credit under 
     subsection (a) for any taxable year shall not be taken into 
     account for purposes of determining the credit under section 
     41 for such taxable year.
       ``(B) Costs taken into account in determining base period 
     research expenses.--Any amounts described in subsection 
     (c)(1)(C) taken into account in determining the amount of the 
     credit under subsection (a) for any taxable year which are 
     qualified research expenses (within the meaning of section 
     41(b)) shall be taken into account in determining base period 
     research expenses for purposes of applying section 41 to 
     subsequent taxable years.
       ``(i) Business Carryovers Allowed.--If the credit allowable 
     under subsection (a) for a taxable year exceeds the 
     limitation under subsection (f) for such taxable year, such 
     excess (to the extent of the credit allowable with respect to 
     property subject to the allowance for depreciation) shall be 
     allowed as a credit carryback and carryforward under rules 
     similar to the rules of section 39.
       ``(j) Special Rules.--For purposes of this section, rules 
     similar to the rules of paragraphs (4) and (5) of section 
     179A(e) and paragraphs (1) and (2) of section 41(f) shall 
     apply
       ``(k) Election Not to Take Credit.--No credit shall be 
     allowed under subsection (a) for any property if the taxpayer 
     elects not to have this section apply to such property.
       ``(l) Regulations.--The Secretary shall prescribe such 
     regulations as necessary to carry out the provisions of this 
     section.
       ``(m) Termination.--This section shall not apply to any 
     qualified investment after December 31, 2010.''.
       (b) Conforming Amendments.--
       (1) Section 1016(a), as amended by this Act, is amended by 
     striking ``and'' at the end of paragraph (39), by striking 
     the period at the end of paragraph (40) and inserting ``, 
     and'', and by adding at the end the following new paragraph:
       ``(41) to the extent provided in section 30D(g).''.
       (2) Section 6501(m), as amended by this Act, is amended by 
     inserting ``30D(k),'' after ``30C(j),''.
       (3) The table of sections for subpart B of part IV of 
     subchapter A of chapter 1, as amended by this Act, is amended 
     by inserting after the item relating to section 30C the 
     following new item:

``Sec. 30D. Advanced technology motor vehicles manufacturing credit.''.

       (c) Effective Date.--The amendments made by this section 
     (other than subsection (d)) shall apply to amounts incurred 
     in taxable years beginning after December 31, 2006.
       (d) Reduction in Period by Which Renewable Energy 
     Production Credit Extended.--Section 45(d) of the Internal 
     Revenue Code of 1986 (relating to qualified facilities), as 
     amended by section 1501, is amended by striking ``2009'' each 
     place it appears in paragraphs (1) through (7) and inserting 
     ``2008''.
                                 ______
                                 
  SA 909. Mr. ALEXANDER (for himself, Mr. Warner, Ms. Landrieu, Mr. 
McCain, Mr. Allen, Mr. Voinovich, and Mr. Brownback) submitted an 
amendment intended to be proposed by him to the bill H.R. 6, to ensure 
jobs for our future with secure, affordable, and reliable energy; which 
was ordered to lie on the table; as follows:
       On page 697, between lines 6 and 7, insert the following:

     SEC. 1270A. LOCAL CONTROL FOR SITING OF WINDMILS.

       (a) Local Notification.--Prior to the Federal Energy 
     Regulatory Commission issuing to any wind turbine project its 
     Exempt-Wholesale Generator Status, Market-Based Rate 
     Authority, or Qualified Facility rate schedule, the wind 
     project shall complete its Local Notification Process.
       (b) Local Notification Process.--
       (1) In this section, the term ``Local Authorities'' means 
     the governing body, and the senior executive of the body, at 
     the lowest level of government that possesses authority under 
     State law to carry out this Act.
       (2) Applicant shall notify in writing the Local Authorities 
     on the day of the filing of such Market-Based Rate 
     application or Federal Energy Regulatory Commission Form 
     number 556 (or a successor form) at the Federal Energy 
     Regulatory Commission. Evidence of such notification shall be 
     submitted to the Federal Energy Regulatory Commission.
       (3) The Federal Energy Regulatory Commission shall notify 
     in writing the Local Authorities within 10 days of the filing 
     of such Market-Based Rate application or Federal Energy 
     Regulatory Commission Form number 556 (or a successor form) 
     at the Federal Energy Regulatory Commission.
       (4) The Federal Energy Regulatory Commission shall not 
     issue to the project Market-Based Rate Authority, Exempt 
     Wholesaler Generator Status, or Qualified Facility rate 
     schedule, until 180 days after the date on which the Federal 
     Energy Regulatory Commission notifies the Local Authorities 
     under paragraph (3).
       (c) Highly Scenic Area and Federal Land.--
       (1)(A) A Highly Scenic Area is--
       (i) any area listed as an official United Nations 
     Educational, Scientific, and Cultural Organization World 
     Heritage Site, as supported by the Department of the 
     Interior, the National Park Service, and the International 
     Council on Monuments and Sites;
       (ii) land designated as a National Park;
       (iii) a National Lakeshore;
       (iv) a National Seashore;
       (v) a National Wildlife Refuge that is adjacent to an 
     ocean;
       (vi) a National Military Park;
       (vii) the Flint Hills National Wildlife Reserve;
       (viii) the Tallgrass Prairie National Preserve; or
       (ix) the Flint Hills Tallgrass Prairie Preserve or the 
     Konza Prairie in the State of Kansas.
       (B) The term ``Highly Scenic Area'' does not include--
       (i) any coastal wildlife refuge located in the State of 
     Louisiana; or
       (ii) any area in the State of Alaska.
       (2) A Qualified Wind Project is any wind-turbine project 
     located--
       (A)(i) in a Highly Scenic Area; or
       (ii) within 20 miles of the boundaries of an area described 
     in subparagraph (A), (B), (C), (D), or (F) of paragraph (1); 
     or
       (B) within 20 miles off the coast of a National Wildlife 
     Refuge that is adjacent to an ocean.
       (3) Prior to the Federal Energy Regulatory Commission 
     issuing to a Qualified Wind Project its Exempt-Wholesale 
     Generator Status, Market-Based Rate Authority, or Qualified 
     Facility rate schedule, an environmental impact statement 
     shall be conducted and completed by the lead agency in 
     accordance with the National Environmental Policy Act of 1969 
     (42 U.S.C. 4321 et seq.). If no lead agency is designated, 
     the lead agency shall be the Department of the Interior.
       (4) The environmental impact statement determination shall 
     be issued within 12 months of the date of application.
       (5) Such environmental impact statement review shall 
     include a cumulative impacts analysis addressing visual 
     impacts and avian mortality analysis of a Qualified Wind 
     Project.
       (6) A Qualified Wind Project shall not be eligible for any 
     Federal tax subsidy.
       (d) Effective Date.--
       (1) This section shall expire 10 years after the date of 
     enactment of this Act.
       (2) Nothing in this section shall prevent or discourage 
     environmental review of any wind projects or any Qualified 
     Wind Project on a State or local level.
       (e) Effect of Section.--Nothing in this section shall apply 
     to a project that, as of the date of enactment of this Act--
       (1) is generating energy; or
       (2) has been issued a permit by the Federal Energy 
     Regulatory Commission.
                                 ______
                                 
  SA 910. Mr. THOMAS submitted an amendment intended to be proposed by 
him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       At the appropriate place insert the following:

     SEC. __. COMPARABLE ALLOCATIONS OF CAPACITY FOR INTEGRATED 
                   GASIFICATION COMBINED CYCLE PROJECTS AMONG 
                   MAJOR TYPES OF COAL FEEDSTOCKS.

       (a) In General.--Section 48A(e)(2)(A) of the Internal 
     Revenue Code of 1986, as added by this Act, is amended by 
     striking ``certify capacity'' and inserting ``certify 
     capacity in relatively equal amounts''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect as if included in the amendment made by 
     section 1506(b) of this Act.
                                 ______
                                 
  SA 911. Mr. INHOFE (for himself and Mr. Cornyn) submitted an 
amendment intended to be proposed by him to the bill H.R. 6, to ensure 
jobs for our future with secure, affordable, and reliable energy; which 
was ordered to lie on the table; as follows:

       On page 523, between line 13 and 14, insert the following:

     SEC. 95__. HEAVY OIL RESEARCH, DEVELOPMENT, AND 
                   DEMONSTRATION.

       (a) Findings.--Congress finds that--
       (1) the continued imbalance between the oil consumption and 
     conventional crude oil reserves of the United States has 
     resulted in unacceptable dependency on foreign oil supplies;
       (2) national energy security requires rapid development of 
     alternative hydrocarbon resources that are both commercially 
     recoverable and compatible with the infrastructure for 
     petroleum processing, distribution, and use in existence as 
     of the date of enactment of this Act;
       (3) the Western Hemisphere contains the largest resources 
     of heavy oil and natural bitumen in the world, but no in-
     depth assessment of domestic heavy oil has been completed 
     since 1987;
       (4) an up-to-date, in-depth assessment of domestic heavy 
     oil would be of high value to energy policymakers and 
     industry and could provide insights into formulation of 
     policies, initiatives, and technology for more efficient 
     development of that large domestic resource;
       (5) resources of heavy oil and bitumen in the United States 
     and Canada known as of

[[Page S7112]]

     the date of enactment of this Act alone could supply crude 
     oil demand in both countries for well over 100 years;
       (6) the States of Alabama, Alaska, Kentucky, Louisiana, 
     Missouri, Oklahoma, Texas, and Utah have significant deposits 
     of heavy oil and bitumen;
       (7) emerging technologies for in situ production of heavy 
     oil and bitumen have been verified experimentally in both 
     Canada and the United States and have been employed 
     successfully in the field in Canada;
       (8) Canadian operations have received substantial 
     government subsidies and United States production should 
     receive similar financial support;
       (9) potential environmental impacts from in situ production 
     of heavy oil and bitumen appear more manageable than impacts 
     from other processes for unconventional oil extraction;
       (10) testing as of the date of enactment of this Act 
     indicates that in some cases, heavy hydrocarbon production 
     technologies can be combined with cogeneration facilities to 
     reduce recovery costs and produce electricity economically; 
     and
       (11) current testing indicates that emerging acoustic 
     agglomeration technologies are capable of converting heavy 
     oil production and refinery wastes into materials capable of 
     use in recycling, production, or refining processes, or other 
     reuse to produce electricity, thermal energy, chemicals, 
     liquid fuels, or hydrogen.
       (b) Program.--
       (1) In general.--The Secretary shall establish a program 
     for research, development, and commercial demonstration of 
     technologies for in situ production of heavy oil and natural 
     bitumen.
       (2) Assessment.--In carrying out the program, the Secretary 
     shall first update the technical and economic assessment of 
     domestic heavy oil resources prepared in 1987 by the 
     Interstate Oil and Gas Compact Commission to cover--
       (A) the entire continent of North America; and
       (B) all unconventional oil resources, including heavy oil, 
     tar sands, and oil shale.
       (c) Administration.--The program shall--
       (1) focus initially on technologies and domestic resources 
     most likely to result in significant commercial production in 
     the near future, including technologies that combine heavy 
     oil recovery with electric power generation; and
       (2) include research necessary--
       (A) to ensure that refinery processes are capable of 
     providing conventional petroleum products from the crude oils 
     derived from heavy oil and bitumen production; and
       (B) to assist in recycling and reuse of associated 
     production and refinery wastes.
       (d) Cost Sharing.--Cost sharing shall not be required under 
     the program.
       (e) Authorization of Appropriations.--
       (1) In general.--There is authorized to be appropriated to 
     the Secretary to carry out this section $50,000,000 for each 
     of fiscal years 2006 through 2010.
       (2) Assessment set-aside.--Of the amount authorized to be 
     applied under paragraph (1) for fiscal year 2006, $1,000,000 
     shall be provided to the Interstate Oil and Gas Compact 
     Commission for use in updating and expanding the assessment 
     described in subsection (b)(2).
                                 ______
                                 
  SA 912. Mr. INHOFE submitted an amendment intended to be proposed by 
him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       At the appropriate place insert the following:

     SEC. __. ENHANCED OIL RECOVERY INCENTIVES FOR THE PRODUCTION 
                   OF OIL FROM SHALE.

       (a) In General.--Section 43(c) of the Internal Revenue Code 
     of 1986, as amended by this Act, is amended by adding at the 
     end the following:
       ``(7) Application of section to qualified oil shale well 
     projects.--
       ``(A) In general.--For purposes of this section, the 
     taxpayer's qualified oil shale well project costs for any 
     taxable year shall be treated in the same manner as if they 
     were qualified enhanced oil recovery costs.
       ``(B) Qualified oil shale well project costs.--For purposes 
     of this paragraph, the term `qualified oil shale well project 
     costs' shall be the costs determined under paragraph (1) by 
     substituting `qualified oil shale well project' for 
     `qualified enhanced oil recovery project' each place it 
     appears.
       ``(C) Qualified oil shale well project.--For purposes of 
     this paragraph, the term `qualified oil shale well project' 
     means any project--
       ``(i) which involves the construction and operation of a 
     well to produce oil in naturally liquid form from shale, and
       ``(ii) which is located within the United States.
       ``(D) Phase-out not to apply.--Subsection (b) shall not 
     apply to any qualified oil shale well project.
       ``(E) Termination.--This paragraph shall not apply to 
     qualified oil well shale project costs paid or incurred after 
     December 31, 2010.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to costs paid or incurred in taxable years ending 
     after December 31, 2005.
                                 ______
                                 
  SA 913. Mr. GRASSLEY submitted an amendment intended to be proposed 
by him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       At the appropriate place insert the following:

     SEC. __. BIODIESEL B20 TREATED AS ALTERNATIVE FUEL FOR 
                   VEHICLE REFUELING PROPERTY CREDIT.

       (a) In General.--Section 30C(c)(1) of the Internal Revenue 
     Code of 1986, as added by this Act, is amended by inserting 
     ``or any qualified biodiesel mixture (as defined in section 
     40A(b)(1)(B)) containing at least 20 percent biodiesel'' 
     after ``hydrogen''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to property placed in service after December 31, 
     2005, in taxable years ending after such date.
                                 ______
                                 
  SA 914. Ms. LANDRIEU (for herself and Mr. Shelby) submitted an 
amendment intended to be proposed by him to the bill H.R. 6, to ensure 
jobs for our future with secure, affordable, and reliable energy; which 
was ordered to lie on the table; as follows:

       On page 310, after line 25, add the following:

     SEC. 372. REPORT ON SHARING OUTER CONTINENTAL SHELF REVENUES.

       Not later than 180 days after the date of enactment of this 
     Act, the Secretary of the Interior shall submit to the 
     Committee on Appropriations of the Senate and the Committee 
     on Appropriations of the House of Representatives a report on 
     alternatives and recommendations of the Secretary for 
     formulas for sharing revenues produced from leasing land on 
     the outer Continental Shelf.
                                 ______
                                 
  SA 915. Ms. LANDRIEU submitted an amendment intended to be proposed 
by him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       Beginning on page 326, strike line 22 and all that follows 
     through page 327, line 1, and insert the following:
       (c) Purposes.--The purposes of the forums shall be to 
     identify and develop best practices for addressing the issues 
     and challenges associated with liquefied natural gas imports 
     and to provide to Congress a report on the proceedings that 
     identifies policy recommendations and issues raised during 
     the forums and otherwise under this section.
       (d) Report.--The Comptroller General of the United States 
     shall submit to Congress a report describing the proceedings 
     of the forums, including an analysis of the following:
       (1) The necessary level of security for liquefied natural 
     gas plants.
       (2) Costs to State and local governments with respect to 
     increased security for liquefied natural gas plants.
       (3) The necessary infrastructure adjustments for liquefied 
     natural gas plants.
       (4) Costs to State and local governments with resect to 
     infrastructure adjustments for liquefied natural gas plants.
       (5) Potential environmental impacts of liquefied natural 
     gas plants.
       (6) Costs to State and local governments of mitigating 
     environmental impacts of liquefied natural gas plants.
       (7) The necessary improvements in emergency evacuation, 
     health care, and firefighting capacities for States and 
     communities that host liquefied natural gas plants.
       (8) Potential revenue mechanisms to allow State and local 
     entities to recover the costs of hosting liquefied natural 
     gas plants.
       (e) Authorization of Appropriations.--There * * *
                                 ______
                                 
  SA 916. Mr. JEFFORDS (for himself and Mr. Lautenberg) submitted an 
amendment intended to be proposed by him to the bill H.R. 6, to ensure 
jobs for our future with secure, affordable, and reliable energy; which 
was ordered to lie on the table; as follows:

       On page 130, between lines 6 and 7, insert the following:

     SEC. 202. LEAKING UNDERGROUND STORAGE TANKS.

       Section 210 and the amendments made by section 210 shall 
     have no force or effect.
                                 ______
                                 
  SA 917. Mr. JEFFORDS submitted an amendment intended to be proposed 
by him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       On page 122, between lines 14 and 15, insert the following:

     SEC. 152. ANNUAL REPORT ON MILITARY COST OF SECURING UNITED 
                   STATES ACCESS TO FOREIGN OIL.

       Not later than December 31, 2005, and annually thereafter, 
     the Secretary of Energy shall, in consultation with the 
     Secretary of Defense and the Secretary of State, submit to 
     Congress a report containing an estimate of the total annual 
     military cost, both financially and with respect to military 
     personnel, of securing United States access to foreign 
     sources of oil.
                                 ______
                                 
  SA 918. Mr. CORZINE submitted an amendment intended to be proposed by 
him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:


[[Page S7113]]


       At the end of title XVI, add the following:

              Subtitle C--National Greenhouse Gas Database

     SEC. 1621. PURPOSE.

       The purpose of this subtitle is to establish a greenhouse 
     gas inventory, reductions registry, and information system 
     that--
       (1) are complete, consistent, transparent, and accurate;
       (2) will create reliable and accurate data that can be used 
     by public and private entities to design efficient and 
     effective greenhouse gas emission reduction strategies; and
       (3) will acknowledge and encourage greenhouse gas emission 
     reductions.

     SEC. 1622. DEFINITIONS.

       In this subtitle:
       (1) Administrator.--The term ``Administrator'' means the 
     Administrator of the Environmental Protection Agency.
       (2) Baseline.--The term ``baseline'' means the historic 
     greenhouse gas emission levels of an entity, as adjusted 
     upward by the designated agency to reflect actual reductions 
     that are verified in accordance with--
       (A) regulations issued under section 1624(c)(1); and
       (B) relevant standards and methods developed under this 
     subtitle.
       (3) Database.--The term ``database'' means the National 
     Greenhouse Gas Database established under section 1624.
       (4) Designated agency.--The term ``designated agency'' 
     means a department or agency to which responsibility for a 
     function or program is assigned under the memorandum of 
     agreement entered into under section 1623(a).
       (5) Direct emissions.--The term ``direct emissions'' means 
     greenhouse gas emissions by an entity from a facility that is 
     owned or controlled by that entity.
       (6) Entity.--The term ``entity'' means--
       (A) a person located in the United States; or
       (B) a public or private entity, to the extent that the 
     entity operates in the United States.
       (7) Facility.--The term ``facility'' means--
       (A) all buildings, structures, or installations located on 
     any 1 or more contiguous or adjacent properties of an entity 
     in the United States; and
       (B) a fleet of 20 or more motor vehicles under the common 
     control of an entity.
       (8) Greenhouse gas.--The term ``greenhouse gas'' means--
       (A) carbon dioxide;
       (B) methane;
       (C) nitrous oxide;
       (D) hydrofluorocarbons;
       (E) perfluorocarbons;
       (F) sulfur hexafluoride; and
       (G) any other anthropogenic, climate-forcing emission with 
     significant ascertainable global warming potential, as--
       (i) recommended by the National Academy of Sciences under 
     section 1627(b)(3); and
       (ii) determined in regulations issued under section 
     1624(c)(1) (or revisions to the regulations) to be 
     appropriate and practicable for coverage under this subtitle.
       (9) Indirect emissions.--The term ``indirect emissions'' 
     means greenhouse gas emissions that--
       (A) are a result of the activities of an entity; but
       (B)(i) are emitted from a facility owned or controlled by 
     another entity; and
       (ii) are not reported as direct emissions by the entity the 
     activities of which resulted in the emissions.
       (10) Registry.--The term ``registry'' means the registry of 
     greenhouse gas emission reductions established as a component 
     of the database under section 1624(b)(2).
       (11) Sequestration.--
       (A) In general.--The term ``sequestration'' means the 
     capture, long-term separation, isolation, or removal of 
     greenhouse gases from the atmosphere.
       (B) Inclusions.--The term ``sequestration'' includes--
       (i) soil carbon sequestration;
       (ii) agricultural and conservation practices;
       (iii) reforestation;
       (iv) forest preservation;
       (v) maintenance of an underground reservoir; and
       (vi) any other appropriate biological or geological method 
     of capture, isolation, or removal of greenhouse gases from 
     the atmosphere, as determined by the Administrator.

     SEC. 1623. ESTABLISHMENT OF MEMORANDUM OF AGREEMENT.

       (a) In General.--Not later than 1 year after the date of 
     enactment of this Act, the President, acting through the 
     Director of the Office of National Climate Change Policy, 
     shall direct the Secretary, the Secretary of Commerce, the 
     Secretary of Agriculture, the Secretary of Transportation, 
     and the Administrator to enter into a memorandum of agreement 
     under which those heads of Federal agencies will--
       (1) recognize and maintain statutory and regulatory 
     authorities, functions, and programs that--
       (A) are established as of the date of enactment of this Act 
     under other law;
       (B) provide for the collection of data relating to 
     greenhouse gas emissions and effects; and
       (C) are necessary for the operation of the database;
       (2)(A) distribute additional responsibilities and 
     activities identified under this subtitle to Federal 
     departments or agencies in accordance with the missions and 
     expertise of those departments and agencies; and
       (B) maximize the use of available resources of those 
     departments and agencies; and
       (3) provide for the comprehensive collection and analysis 
     of data on greenhouse gas emissions relating to product use 
     (including the use of fossil fuels and energy-consuming 
     appliances and vehicles).
       (b) Minimum Requirements.--The memorandum of agreement 
     entered into under subsection (a) shall, at a minimum, retain 
     the following functions for the designated agencies:
       (1) Department of energy.--The Secretary shall be primarily 
     responsible for developing, maintaining, and verifying the 
     registry and the emission reductions reported under section 
     1605(b) of the Energy Policy Act of 1992 (42 U.S.C. 
     13385(b)).
       (2) Department of commerce.--The Secretary of Commerce 
     shall be primarily responsible for the development of--
       (A) measurement standards for the monitoring of emissions; 
     and
       (B) verification technologies and methods to ensure the 
     maintenance of a consistent and technically accurate record 
     of emissions, emission reductions, and atmospheric 
     concentrations of greenhouse gases for the database.
       (3) Environmental protection agency.--The Administrator 
     shall be primarily responsible for--
       (A) emissions monitoring, measurement, verification, and 
     data collection under this subtitle and title IV (relating to 
     acid deposition control) and title VIII of the Clean Air Act 
     (42 U.S.C. 7651 et seq.), including mobile source emissions 
     information from implementation of the corporate average fuel 
     economy program under chapter 329 of title 49, United States 
     Code; and
       (B) responsibilities of the Environmental Protection Agency 
     relating to completion of the national inventory for 
     compliance with the United Nations Framework Convention on 
     Climate Change, done at New York on May 9, 1992.
       (4) Department of agriculture.--The Secretary of 
     Agriculture shall be primarily responsible for--
       (A) developing measurement techniques for--
       (i) soil carbon sequestration; and
       (ii) forest preservation and reforestation activities; and
       (B) providing technical advice relating to biological 
     carbon sequestration measurement and verification standards 
     for measuring greenhouse gas emission reductions or offsets.
       (c) Draft Memorandum of Agreement.--Not later than 15 
     months after the date of enactment of this Act, the 
     President, acting through the Director of the Office of 
     National Climate Change Policy, shall publish in the Federal 
     Register, and solicit comments on, a draft version of the 
     memorandum of agreement described in subsection (a).
       (d) No Judicial Review.--The final version of the 
     memorandum of agreement shall not be subject to judicial 
     review.

     SEC. 1624. NATIONAL GREENHOUSE GAS DATABASE.

       (a) Establishment.--As soon as practicable after the date 
     of enactment of this Act, the designated agencies, in 
     consultation with the private sector and nongovernmental 
     organizations, shall jointly establish, operate, and maintain 
     a database, to be known as the ``National Greenhouse Gas 
     Database'', to collect, verify, and analyze information on 
     greenhouse gas emissions by entities.
       (b) National Greenhouse Gas Database Components.--The 
     database shall consist of--
       (1) an inventory of greenhouse gas emissions; and
       (2) a registry of greenhouse gas emission reductions.
       (c) Comprehensive System.--
       (1) In general.--Not later than 2 years after the date of 
     enactment of this Act, the designated agencies shall jointly 
     promulgate regulations to implement a comprehensive system 
     for greenhouse gas emissions reporting, inventorying, and 
     reductions registration.
       (2) Requirements.--The designated agencies shall ensure, to 
     the maximum extent practicable, that--
       (A) the comprehensive system described in paragraph (1) is 
     designed to--
       (i) maximize completeness, transparency, and accuracy of 
     information reported; and
       (ii) minimize costs incurred by entities in measuring and 
     reporting greenhouse gas emissions; and
       (B) the regulations issued under paragraph (1) establish 
     procedures and protocols necessary--
       (i) to prevent the reporting of some or all of the same 
     greenhouse gas emissions or emission reductions by more than 
     1 reporting entity;
       (ii) to provide for corrections to errors in data submitted 
     to the database;
       (iii) to provide for adjustment to data by reporting 
     entities that have had a significant organizational change 
     (including mergers, acquisitions, and divestiture), in order 
     to maintain comparability among data in the database over 
     time;
       (iv) to provide for adjustments to reflect new technologies 
     or methods for measuring or calculating greenhouse gas 
     emissions; and
       (v) to account for changes in registration of ownership of 
     emission reductions resulting from a voluntary private 
     transaction between reporting entities.
       (3) Baseline identification and protection.--Through 
     regulations issued under

[[Page S7114]]

     paragraph (1), the designated agencies shall develop and 
     implement a system that provides--
       (A) for the provision of unique serial numbers to identify 
     the verified emission reductions made by an entity relative 
     to the baseline of the entity;
       (B) for the tracking of the reductions associated with the 
     serial numbers; and
       (C) that the reductions may be applied, as determined to be 
     appropriate by any Act of Congress enacted after the date of 
     enactment of this Act, toward a Federal requirement under 
     such an Act that is imposed on the entity for the purpose of 
     reducing greenhouse gas emissions.

     SEC. 1625. GREENHOUSE GAS REDUCTION REPORTING.

       (a) In General.--An entity that participates in the 
     registry shall meet the requirements described in subsection 
     (b).
       (b) Requirements.--
       (1) In general.--The requirements referred to in subsection 
     (a) are that an entity (other than an entity described in 
     paragraph (2)) shall--
       (A) establish a baseline (including all of the entity's 
     greenhouse gas emissions on an entity-wide basis); and
       (B) submit the report described in subsection (c)(1).
       (2) Requirements applicable to entities entering into 
     certain agreements.--An entity that enters into an agreement 
     with a participant in the registry for the purpose of a 
     carbon sequestration project shall not be required to comply 
     with the requirements specified in paragraph (1) unless that 
     entity is required to comply with the requirements by reason 
     of an activity other than the agreement.
       (c) Reports.--
       (1) Required report.--Not later than April 1 of the third 
     calendar year that begins after the date of enactment of this 
     Act, and not later than April 1 of each calendar year 
     thereafter, subject to paragraph (3), an entity described in 
     subsection (a) shall submit to each appropriate designated 
     agency a report that describes, for the preceding calendar 
     year, the entity-wide greenhouse gas emissions (as reported 
     at the facility level), including--
       (A) the total quantity of each greenhouse gas emitted, 
     expressed in terms of mass and in terms of the quantity of 
     carbon dioxide equivalent;
       (B) an estimate of the greenhouse gas emissions from fossil 
     fuel combusted by products manufactured and sold by the 
     entity in the previous calendar year, determined over the 
     average lifetime of those products; and
       (C) such other categories of emissions as the designated 
     agency determines in the regulations issued under section 
     1624(c)(1) may be practicable and useful for the purposes of 
     this subtitle, such as--
       (i) direct emissions from stationary sources;
       (ii) indirect emissions from imported electricity, heat, 
     and steam;
       (iii) process and fugitive emissions; and
       (iv) production or importation of greenhouse gases.
       (2) Voluntary reporting.--An entity described in subsection 
     (a) may (along with establishing a baseline and reporting 
     reductions under this section)--
       (A) submit a report described in paragraph (1) before the 
     date specified in that paragraph for the purposes of 
     achieving and commoditizing greenhouse gas reductions through 
     use of the registry; and
       (B) submit to any designated agency, for inclusion in the 
     registry, information that has been verified in accordance 
     with regulations issued under section 1624(c)(1) and that 
     relates to--
       (i) with respect to the calendar year preceding the 
     calendar year in which the information is submitted, and with 
     respect to any greenhouse gas emitted by the entity--

       (I) project reductions from facilities owned or controlled 
     by the reporting entity in the United States;
       (II) transfers of project reductions to and from any other 
     entity;
       (III) project reductions and transfers of project 
     reductions outside the United States;
       (IV) other indirect emissions that are not required to be 
     reported under paragraph (1); and
       (V) product use phase emissions;

       (ii) with respect to greenhouse gas emission reduction 
     activities of the entity that have been carried out during or 
     after 1990, verified in accordance with regulations issued 
     under section 1624(c)(1), and submitted to 1 or more 
     designated agencies before the date that is 4 years after the 
     date of enactment of this Act, any greenhouse gas emission 
     reductions that have been reported or submitted by an entity 
     under--

       (I) section 1605(b) of the Energy Policy Act of 1992 (42 
     U.S.C. 13385(b)); or
       (II) any other Federal or State voluntary greenhouse gas 
     reduction program; and

       (iii) any project or activity for the reduction of 
     greenhouse gas emissions or sequestration of a greenhouse gas 
     that is carried out by the entity, including a project or 
     activity relating to--

       (I) fuel switching;
       (II) energy efficiency improvements;
       (III) use of renewable energy;
       (IV) use of combined heat and power systems;
       (V) management of cropland, grassland, or grazing land;
       (VI) a forestry activity that increases forest carbon 
     stocks or reduces forest carbon emissions;
       (VII) carbon capture and storage;
       (VIII) methane recovery;
       (IX) greenhouse gas offset investment; and
       (X) any other practice for achieving greenhouse gas 
     reductions as recognized by 1 or more designated agencies.

       (3) Exemptions from reporting.--
       (A) In general.--If the Director of the Office of National 
     Climate Change Policy determines under section 1628(b) that 
     the reporting requirements under paragraph (1) shall apply to 
     all entities (other than entities exempted by this 
     paragraph), regardless of participation or nonparticipation 
     in the registry, an entity shall be required to submit 
     reports under paragraph (1) only if, in any calendar year 
     after the date of enactment of this Act--
       (i) the total greenhouse gas emissions of at least 1 
     facility owned by the entity exceeds 10,000 metric tons of 
     carbon dioxide equivalent (or such greater quantity as may be 
     established by a designated agency by regulation); or
       (ii)(I) the total quantity of greenhouse gases produced, 
     distributed, or imported by the entity exceeds 10,000 metric 
     tons of carbon dioxide equivalent (or such greater quantity 
     as may be established by a designated agency by regulation); 
     and
       (II) the entity is not a feedlot or other farming operation 
     (as defined in section 101 of title 11, United States Code).
       (B) Entities already reporting.--
       (i) In general.--An entity that, as of the date of 
     enactment of this Act, is required to report carbon dioxide 
     emissions data to a Federal agency shall not be required to 
     re-report that data for the purposes of this subtitle.
       (ii) Review of participation.--For the purpose of section 
     1628, emissions reported under clause (i) shall be considered 
     to be reported by the entity to the registry.
       (4) Provision of verification information by reporting 
     entities.--Each entity that submits a report under this 
     subsection shall provide information sufficient for each 
     designated agency to which the report is submitted to verify, 
     in accordance with measurement and verification methods and 
     standards developed under section 1626, that the greenhouse 
     gas report of the reporting entity--
       (A) has been accurately reported; and
       (B) in the case of each voluntary report under paragraph 
     (2), represents--
       (i) actual reductions in direct greenhouse gas emissions--

       (I) relative to historic emission levels of the entity; and
       (II) net of any increases in--

       (aa) direct emissions; and
       (bb) indirect emissions described in paragraph (1)(C)(ii); 
     or
       (ii) actual increases in net sequestration.
       (5) Failure to submit report.--An entity that participates 
     or has participated in the registry and that fails to submit 
     a report required under this subsection shall be prohibited 
     from including emission reductions reported to the registry 
     in the calculation of the baseline of the entity in future 
     years.
       (6) Independent third-party verification.--To meet the 
     requirements of this section and section 1626, a entity that 
     is required to submit a report under this section may--
       (A) obtain independent third-party verification; and
       (B) present the results of the third-party verification to 
     each appropriate designated agency.
       (7) Availability of data.--
       (A) In general.--The designated agencies shall ensure, to 
     the maximum extent practicable, that information in the 
     database is--
       (i) published;
       (ii) accessible to the public; and
       (iii) made available in electronic format on the Internet.
       (B) Exception.--Subparagraph (A) shall not apply in any 
     case in which the designated agencies determine that 
     publishing or otherwise making available information 
     described in that subparagraph poses a risk to national 
     security.
       (8) Data infrastructure.--The designated agencies shall 
     ensure, to the maximum extent practicable, that the database 
     uses, and is integrated with, Federal, State, and regional 
     greenhouse gas data collection and reporting systems in 
     effect as of the date of enactment of this Act.
       (9) Additional issues to be considered.--In promulgating 
     the regulations under section 1624(c)(1) and implementing the 
     database, the designated agencies shall take into 
     consideration a broad range of issues involved in 
     establishing an effective database, including--
       (A) the appropriate units for reporting each greenhouse 
     gas;
       (B) the data and information systems and measures necessary 
     to identify, track, and verify greenhouse gas emission 
     reductions in a manner that will encourage the development of 
     private sector trading and exchanges;
       (C) the greenhouse gas reduction and sequestration methods 
     and standards applied in other countries, as applicable or 
     relevant;
       (D) the extent to which available fossil fuels, greenhouse 
     gas emissions, and greenhouse gas production and importation 
     data are adequate to implement the database;
       (E) the differences in, and potential uniqueness of, the 
     facilities, operations, and business and other relevant 
     practices of persons and entities in the private and public

[[Page S7115]]

     sectors that may be expected to participate in the registry; 
     and
       (F) the need of the registry to maintain valid and reliable 
     information on baselines of entities so that, in the event of 
     any future action by Congress to require entities, 
     individually or collectively, to reduce greenhouse gas 
     emissions, Congress will be able--
       (i) to take into account that information; and
       (ii) to avoid enacting legislation that penalizes entities 
     for achieving and reporting reductions.
       (d) Annual Report.--The designated agencies shall jointly 
     publish an annual report that--
       (1) describes the total greenhouse gas emissions and 
     emission reductions reported to the database during the year 
     covered by the report;
       (2) provides entity-by-entity and sector-by-sector analyses 
     of the emissions and emission reductions reported;
       (3) describes the atmospheric concentrations of greenhouse 
     gases; and
       (4) provides a comparison of current and past atmospheric 
     concentrations of greenhouse gases.

     SEC. 1626. MEASUREMENT AND VERIFICATION.

       (a) Standards.--
       (1) In general.--Not later than 1 year after the date of 
     enactment of this Act, the designated agencies shall jointly 
     develop comprehensive measurement and verification methods 
     and standards to ensure a consistent and technically accurate 
     record of greenhouse gas emissions, emission reductions, 
     sequestration, and atmospheric concentrations for use in the 
     registry.
       (2) Requirements.--The methods and standards developed 
     under paragraph (1) shall address the need for--
       (A) standardized measurement and verification practices for 
     reports made by all entities participating in the registry, 
     taking into account--
       (i) protocols and standards in use by entities desiring to 
     participate in the registry as of the date of development of 
     the methods and standards under paragraph (1);
       (ii) boundary issues, such as leakage and shifted use;
       (iii) avoidance of double counting of greenhouse gas 
     emissions and emission reductions; and
       (iv) such other factors as the designated agencies 
     determine to be appropriate;
       (B) measurement and verification of actions taken to 
     reduce, avoid, or sequester greenhouse gas emissions;
       (C) in coordination with the Secretary of Agriculture, 
     measurement of the results of the use of carbon sequestration 
     and carbon recapture technologies, including--
       (i) organic soil carbon sequestration practices; and
       (ii) forest preservation and reforestation activities that 
     adequately address the issues of permanence, leakage, and 
     verification;
       (D) such other measurement and verification standards as 
     the Secretary of Commerce, the Secretary of Agriculture, the 
     Administrator, and the Secretary determine to be appropriate; 
     and
       (E) other factors that, as determined by the designated 
     agencies, will allow entities to adequately establish a fair 
     and reliable measurement and reporting system.
       (b) Review and Revision.--The designated agencies shall 
     periodically review, and revise as necessary, the methods and 
     standards developed under subsection (a).
       (c) Public Participation.--The Secretary of Commerce 
     shall--
       (1) make available to the public for comment, in draft form 
     and for a period of at least 90 days, the methods and 
     standards developed under subsection (a); and
       (2) after the 90-day period referred to in paragraph (1), 
     in coordination with the Secretary, the Secretary of 
     Agriculture, and the Administrator, adopt the methods and 
     standards developed under subsection (a) for use in 
     implementing the database.
       (d) Experts and Consultants.--
       (1) In general.--The designated agencies may obtain the 
     services of experts and consultants in the private and 
     nonprofit sectors in accordance with section 3109 of title 5, 
     United States Code, in the areas of greenhouse gas 
     measurement, certification, and emission trading.
       (2) Available arrangements.--In obtaining any service 
     described in paragraph (1), the designated agencies may use 
     any available grant, contract, cooperative agreement, or 
     other arrangement authorized by law.

     SEC. 1627. INDEPENDENT REVIEWS.

       (a) In General.--Not later than 5 years after the date of 
     enactment of this Act, and every 3 years thereafter, the 
     Comptroller General of the United States shall submit to 
     Congress a report that--
       (1) describes the efficacy of the implementation and 
     operation of the database; and
       (2) includes any recommendations for improvements to this 
     subtitle and programs carried out under this subtitle--
       (A) to achieve a consistent and technically accurate record 
     of greenhouse gas emissions, emission reductions, and 
     atmospheric concentrations; and
       (B) to achieve the purposes of this subtitle.
       (b) Review of Scientific Methods.--The designated agencies 
     shall enter into an agreement with the National Academy of 
     Sciences under which the National Academy of Sciences shall--
       (1) review the scientific methods and standards used by the 
     designated agencies in implementing this subtitle;
       (2) not later than 4 years after the date of enactment of 
     this Act, submit to Congress a report that describes any 
     recommendations for improving--
       (A) those methods and standards; and
       (B) related elements of the programs, and structure of the 
     database, established by this subtitle; and
       (3) regularly review and update as appropriate the list of 
     anthropogenic climate-forcing emissions with significant 
     global warming potential described in section 1622(8)(G).

     SEC. 1628. REVIEW OF PARTICIPATION.

       (a) In General.--Not later than 5 years after the date of 
     enactment of this Act, the Director of the Office of National 
     Climate Change Policy shall determine whether the reports 
     submitted to the registry under section 1625(c)(1) represent 
     less than 60 percent of the national aggregate anthropogenic 
     greenhouse gas emissions.
       (b) Increased Applicability of Requirements.--If the 
     Director of the Office of National Climate Change Policy 
     determines under subsection (a) that less than 60 percent of 
     the aggregate national anthropogenic greenhouse gas emissions 
     are being reported to the registry--
       (1) the reporting requirements under section 1625(c)(1) 
     shall apply to all entities (except entities exempted under 
     section 1625(c)(3)), regardless of any participation or 
     nonparticipation by the entities in the registry; and
       (2) each entity shall submit a report described in section 
     1625(c)(1)--
       (A) not later than the earlier of--
       (i) April 30 of the calendar year immediately following the 
     year in which the Director of the Office of National Climate 
     Change Policy makes the determination under subsection (a); 
     or
       (ii) the date that is 1 year after the date on which the 
     Director of the Office of National Climate Change Policy 
     makes the determination under subsection (a); and
       (B) annually thereafter.
       (c) Resolution of Disapproval.--For the purposes of this 
     section, the determination of the Director of the Office of 
     National Climate Change Policy under subsection (a) shall be 
     considered to be a major rule (as defined in section 804(2) 
     of title 5, United States Code) subject to the congressional 
     disapproval procedure under section 802 of title 5, United 
     States Code.

     SEC. 1629. ENFORCEMENT.

       If an entity that is required to report greenhouse gas 
     emissions under section 1625(c)(1) or 1628 fails to comply 
     with that requirement, the Attorney General may, at the 
     request of the designated agencies, bring a civil action in 
     United States district court against the entity to impose on 
     the entity a civil penalty of not more than $25,000 for each 
     day for which the entity fails to comply with that 
     requirement.

     SEC. 1630. REPORT ON STATUTORY CHANGES AND HARMONIZATION.

       Not later than 3 years after the date of enactment of this 
     Act, the President shall submit to Congress a report that 
     describes any modifications to this subtitle or any other 
     provision of law that are necessary to improve the accuracy 
     or operation of the database and related programs under this 
     subtitle.

     SEC. 1631. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated such sums as are 
     necessary to carry out this subtitle.
                                 ______
                                 
  SA 919. Mr. HARKIN (for himself, Mr. Lugar, Mr. Obama, Mr. Coleman, 
and Mr. Bayh) submitted an amendment intended to be proposed by him to 
the bill H.R. 6, to ensure jobs for our future with secure, affordable, 
and reliable energy; which was ordered to lie on the table; as follows:

       On page 493, between lines 19 and 20, insert the following:

     SEC. 9__. BIOMASS RESEARCH AND DEVELOPMENT.

       (a) Definitions.--Section 303 of the Biomass Research and 
     Development Act of 2000 (Public Law 106-224; 7 U.S.C. 8101 
     note) is amended--
       (1) by striking paragraphs (2), (9), and (10);
       (2) by redesignating paragraphs (3), (4), (5), (6), (7), 
     and (8) as paragraphs (4), (5), (7), (8), (9), and (10), 
     respectively;
       (3) by inserting after paragraph (1) the following:
       ``(2) Biobased fuel.--The term `biobased fuel' means any 
     transportation fuel produced from biomass.
       ``(3) Biobased product.--The term `biobased product' means 
     an industrial product (including chemicals, materials, and 
     polymers) produced from biomass, or a commercial or 
     industrial product (including animal feed and electric power) 
     derived in connection with the conversion of biomass to 
     fuel.'';
       (4) by inserting after paragraph (5) (as redesignated by 
     paragraph (2)) the following:
       ``(6) Demonstration.--The term `demonstration' means 
     demonstration of technology in a pilot plant or semi-works 
     scale facility.''; and
       (5) by striking paragraph (9) (as redesignated by paragraph 
     (2)) and inserting the following:
       ``(9) National laboratory.--The term `National Laboratory' 
     means any of the following laboratories owned by the 
     Department:
       ``(A) Ames Laboratory.
       ``(B) Argonne National Laboratory.

[[Page S7116]]

       ``(C) Brookhaven National Laboratory.
       ``(D) Fermi National Accelerator Laboratory.
       ``(E) Idaho National Laboratory.
       ``(F) Lawrence Berkeley National Laboratory.
       ``(G) Lawrence Livermore National Laboratory.
       ``(H) Los Alamos National Laboratory.
       ``(I) National Energy Technology Laboratory.
       ``(J) National Renewable Energy Laboratory.
       ``(K) Oak Ridge National Laboratory.
       ``(L) Pacific Northwest National Laboratory.
       ``(M) Princeton Plasma Physics Laboratory.
       ``(N) Sandia National Laboratories.
       ``(O) Stanford Linear Accelerator Center.
       ``(P) Thomas Jefferson National Accelerator Facility.''.
       (b) Cooperation and Coordination in Biomass Research and 
     Development.--Section 304 of the Biomass Research and 
     Development Act of 2000 (Public Law 106-224; 7 U.S.C. 8101 
     note) is amended--
       (1) in subsections (a) and (d), by striking ``industrial 
     products'' each place it appears and inserting ``fuels and 
     biobased products'';
       (2) by striking subsections (b) and (c); and
       (3) by redesignating subsection (d) as subsection (b).
       (c) Biomass Research and Development Board.--Section 305 of 
     the Biomass Research and Development Act of 2000 (Public Law 
     106-224; 7 U.S.C. 8101 note) is amended--
       (1) in subsections (a) and (c), by striking ``industrial 
     products'' each place it appears and inserting ``fuels and 
     biobased products'';
       (2) in subsection (b)--
       (A) in paragraph (1), by striking ``304(d)(1)(B)'' and 
     inserting ``304(b)(1)(B)''; and
       (B) in paragraph (2), by striking ``304(d)(1)(A)'' and 
     inserting ``304(b)(1)(A)''; and
       (3) in subsection (c)--
       (A) in paragraph (1)(B), by striking ``and'' at the end;
       (B) in paragraph (2), by striking the period at the end and 
     inserting a semicolon; and
       (C) by adding at the end the following:
       ``(3) ensure that--
       ``(A) solicitations are open and competitive with awards 
     made annually; and
       ``(B) objectives and evaluation criteria of the 
     solicitations are clearly stated and minimally prescriptive, 
     with no areas of special interest; and
       ``(4) ensure that the panel of scientific and technical 
     peers assembled under section 307(c)(2)(C) to review 
     proposals is composed predominantly of independent experts 
     selected from outside the Departments of Agriculture and 
     Energy.''.
       (d) Biomass Research and Development Technical Advisory 
     Committee.--Section 306 of the Biomass Research and 
     Development Act of 2000 (Public Law 106-224; 7 U.S.C. 8101 
     note) is amended--
       (1) in subsection (b)(1)--
       (A) in subparagraph (A), by striking ``biobased industrial 
     products'' and inserting ``biofuels'';
       (B) by redesignating subparagraphs (B) through (J) as 
     subparagraphs (C) through (K), respectively;
       (C) by inserting after subparagraph (A) the following:
       ``(B) an individual affiliated with the biobased industrial 
     and commercial products industry;'';
       (D) in subparagraph (F) (as redesignated by subparagraph 
     (B)) by striking ``an individual'' and inserting ``2 
     individuals'';
       (E) in subparagraphs (C), (D), (G), and (I) (as 
     redesignated by subparagraph (B)) by striking ``industrial 
     products'' each place it appears and inserting ``fuels and 
     biobased products''; and
       (F) in subparagraph (H) (as redesignated by subparagraph 
     (B)), by inserting ``and environmental'' before ``analysis'';
       (2) in subsection (c)(2)--
       (A) in subparagraph (A), by striking ``goals'' and 
     inserting ``objectives, purposes, and considerations'';
       (B) by redesignating subparagraphs (B) and (C) as 
     subparagraphs (C) and (D), respectively;
       (C) by inserting after subparagraph (A) the following:
       ``(B) solicitations are open and competitive with awards 
     made annually and that objectives and evaluation criteria of 
     the solicitations are clearly stated and minimally 
     prescriptive, with no areas of special interest;''; and
       (D) in subparagraph (C) (as redesignated by subparagraph 
     (B)) by inserting ``predominantly from outside the 
     Departments of Agriculture and Energy'' after ``technical 
     peers''.
       (e) Biomass Research and Development Initiative.--Section 
     307 of the Biomass Research and Development Act of 2000 
     (Public Law 106-224; 7 U.S.C. 8101 note) is amended--
       (1) in subsection (a), by striking ``research on biobased 
     industrial products'' and inserting ``research on, and 
     development and demonstration of, biobased fuels and biobased 
     products, and the methods, practices and technologies, 
     biotechnology, for their production''; and
       (2) by striking subsections (b) through (e) and inserting 
     the following:
       ``(b) Agencies.--
       ``(1) Agriculture.--The Secretary of Agriculture, through 
     the point of contact of the Department of Agriculture and in 
     consultation with the Board, shall provide, or enter into, 
     grants, contracts, and financial assistance under this 
     section through the Cooperative State Research, Education, 
     and Extension Service of the Department of Agriculture.
       ``(2) Energy.--The Secretary of Energy, though the point of 
     contact of the Department of Energy and in consultation with 
     the Board, shall provide, or enter into, grants, contracts, 
     and financial assistance under this section through the 
     appropriate agency, as determined by the Secretary of Energy.
       ``(c) Objectives.--The objectives of the Initiative are to 
     develop--
       ``(1) technologies and processes necessary for abundant 
     commercial production of biobased fuels at prices competitive 
     with fossil fuels;
       ``(2) high-value biobased products--
       ``(A) to enhance the economic viability of biobased fuels 
     and power; and
       ``(B) as substitutes for petroleum-based feedstocks and 
     products; and
       ``(3) a diversity of sustainable domestic sources of 
     biomass for conversion to biobased fuels and biobased 
     products.
       ``(d) Purposes.--The purposes of the Initiative are--
       ``(1) to increase the energy security of the United States;
       ``(2) to create jobs and enhance the economic development 
     of the rural economy;
       ``(3) to enhance the environment and public health; and
       ``(4) to diversify markets for raw agricultural and 
     forestry products.
       ``(e) Technical Areas.--To advance the objectives and 
     purposes of the Initiative, the Secretary of Agriculture and 
     the Secretary of Energy, in consultation with the 
     Administrator of the Environmental Protection Agency and 
     heads of other appropriate departments and agencies (referred 
     to in this section as the `Secretaries'), shall direct 
     research and development toward--
       ``(1) feedstock production through the development of crops 
     and cropping systems relevant to production of raw materials 
     for conversion to biobased fuels and biobased products, 
     including--
       ``(A) development of advanced and dedicated crops with 
     desired features, including enhanced productivity, broader 
     site range, low requirements for chemical inputs, and 
     enhanced processing;
       ``(B) advanced crop production methods to achieve the 
     features described in subparagraph (A);
       ``(C) feedstock harvest, handling, transport, and storage; 
     and
       ``(D) strategies for integrating feedstock production into 
     existing managed land;
       ``(2) overcoming recalcitrance of cellulosic biomass 
     through developing technologies for converting cellulosic 
     biomass into intermediates that can subsequently be converted 
     into biobased fuels and biobased products, including--
       ``(A) pretreatment in combination with enzymatic or 
     microbial hydrolysis; and
       ``(B) thermochemical approaches, including gasification and 
     pyrolysis;
       ``(3) product diversification through technologies relevant 
     to production of a range of biobased products (including 
     chemicals, animal feeds, and cogenerated power) that 
     eventually can increase the feasibility of fuel production in 
     a biorefinery, including--
       ``(A) catalytic processing, including thermochemical fuel 
     production;
       ``(B) metabolic engineering, enzyme engineering, and 
     fermentation systems for biological production of desired 
     products or cogeneration of power;
       ``(C) product recovery;
       ``(D) power production technologies; and
       ``(E) integration into existing biomass processing 
     facilities, including starch ethanol plants, paper mills, and 
     power plants; and
       ``(4) analysis that provides strategic guidance for the 
     application of biomass technologies in accordance with 
     realization of societal benefits in improved sustainability 
     and environmental quality, cost effectiveness, security, and 
     rural economic development, usually featuring system-wide 
     approaches.
       ``(f) Additional Considerations.--Within the technical 
     areas described in subsection (e), and in addition to 
     advancing the purposes described in subsection (d) and the 
     objectives described in subsection (c), the Secretaries shall 
     support research and development--
       ``(1) to create continuously expanding opportunities for 
     participants in existing biofuels production by seeking 
     synergies and continuity with current technologies and 
     practices, including the use of dried distillers grains as a 
     bridge feedstock;
       ``(2) to maximize the environmental, economic, and social 
     benefits of production of biobased fuels and biobased 
     products on a large scale through life-cycle economic and 
     environmental analysis and other means; and
       ``(3) to assess the potential of Federal land and land 
     management programs as feedstock resources for biobased fuels 
     and biobased products, consistent with the integrity of soil 
     and water resources and with other environmental 
     considerations.
       ``(g) Eligible Entities.--To be eligible for a grant, 
     contract, or assistance under this section, an applicant 
     shall be--
       ``(1) an institution of higher education;
       ``(2) a national laboratory;
       ``(3) a Federal research agency;
       ``(4) a State research agency;
       ``(5) a private sector entity;

[[Page S7117]]

       ``(6) a nonprofit organization; or
       ``(7) a consortium of 2 of more entities described in 
     paragraphs (1) through (6).
       ``(h) Administration.--
       ``(1) In general.--After consultation with the Board, the 
     points of contact shall--
       ``(A) publish annually 1 or more joint requests for 
     proposals for grants, contracts, and assistance under this 
     section;
       ``(B) establish a priority in grants, contracts, and 
     assistance under this section for research that advances the 
     objectives, purposes, and additional considerations of this 
     title;
       ``(C) require that grants, contracts, and assistance under 
     this section be awarded competitively, on the basis of merit, 
     after the establishment of procedures that provide for 
     scientific peer review by an independent panel of scientific 
     and technical peers; and
       ``(D) give some preference to applications that--
       ``(i) involve a consortia of experts from multiple 
     institutions;
       ``(ii) encourage the integration of disciplines and 
     application of the best technical resources; and
       ``(iii) increase the geographic diversity of demonstration 
     projects.
       ``(2) Distribution of funding by technical area.--Of the 
     funds authorized to be appropriated for activities described 
     in this section, funds shall be distributed for each fiscal 
     year so as to achieve an approximate distribution of--
       ``(A) 20 percent of the funds to carry out activities for 
     feedstock production under subsection (e)(1);
       ``(B) 45 percent of the funds to carry out activities for 
     overcoming recalcitrance of cellulosic biomass under 
     subsection (e)(2);
       ``(C) 30 percent of the funds to carry out activities for 
     product diversification under subsection (e)(3); and
       ``(D) 5 percent of the funds to carry out activities for 
     strategic guidance under subsection (e)(4).
       ``(3) Distribution of funding within each technical area.--
     Within each technical area described in paragraphs (1) 
     through (3) of subsection (e), funds shall be distributed for 
     each fiscal year so as to achieve an approximate distribution 
     of--
       ``(A) 15 percent of the funds for applied fundamentals;
       ``(B) 35 percent of the funds for innovation; and
       ``(C) 50 percent of the funds for demonstration.
       ``(4) Matching funds.--
       ``(A) In general.--A minimum 20 percent funding match shall 
     be required for demonstration projects under this title.
       ``(B) Commercial applications.--A minimum of 50 percent 
     funding match shall be required for commercial application 
     projects under this title.
       ``(5) Technology and information transfer to agricultural 
     users.--
       ``(A) In general.--The Administrator of the Cooperative 
     State Research, Education, and Extension Service and the 
     Chief of the Natural Resources Conservation Service shall 
     ensure that applicable research results and technologies from 
     the Initiative are adapted, made available, and disseminated 
     through those services, as appropriate.
       ``(B) Report.--Not later than 2 years after the date of 
     enactment of this paragraph, and every 2 years thereafter, 
     the Administrator of the Cooperative State Research, 
     Education, and Extension Service and the Chief of the Natural 
     Resources Conservation Service shall submit to the committees 
     of Congress with jurisdiction over the Initiative a report 
     describing the activities conducted by the services under 
     this subsection.''.
       (f) Reports.--Section 309 of the Biomass Research and 
     Development Act of 2000 (Public Law 106-224; 7 U.S.C. 8101 
     note) is amended--
       (1) in subsection (a)--
       (A) in paragraph (2), by striking ``industrial product'' 
     and inserting ``fuels and biobased products''; and
       (B) in paragraph (3), by striking ``industrial products'' 
     each place it appears and inserting ``fuels and biobased 
     products'';
       (2) by redesignating subsection (b) as subsection (c);
       (3) by inserting after subsection (a) the following:
       ``(b) Assessment Report and Strategic Plan.--Not later than 
     1 year after the date of enactment of the Energy Policy Act 
     of 2005, the Secretary and the Secretary of Energy shall 
     jointly submit to Congress a report that--
       ``(1) describes the status and progress of current research 
     and development efforts in both the Federal Government and 
     private sector in achieving the objectives, purposes, and 
     considerations of this title, specifically addressing each of 
     the technical areas identified in section 307(e);
       ``(2) describes the actions taken to implement the 
     improvements directed by this title; and
       ``(3) outlines a strategic plan for achieving the 
     objectives, purposes, and considerations of this title.''; 
     and
       (4) in subsection (c) (as redesignated by paragraph (2))--
       (A) in paragraph (1)--
       (i) in subparagraph (A), by striking ``purposes described 
     in section 307(b)'' and inserting ``objectives, purposes, and 
     additional considerations described in subsections (c) 
     through (f) of section 307'';
       (ii) in subparagraph (B), by striking ``and'' at the end;
       (iii) by redesignating subparagraph (C) as subparagraph 
     (D); and
       (iv) by inserting after subparagraph (B) the following:
       ``(C) achieves the distribution of funds described in 
     paragraphs (2) and (3) of section 307(h); and''; and
       (B) in paragraph (2), by striking ``industrial products'' 
     and inserting ``fuels and biobased products''.
       (g) Authorization of Appropriations.--Section 310(b) of the 
     Biomass Research and Development Act of 2000 (Public Law 106-
     224; 7 U.S.C. 8101 note) is amended by striking ``title 
     $54,000,000 for each of fiscal years 2002 through 2007'' and 
     inserting``title $200,000,000 for fiscal year 2006 and each 
     fiscal year thereafter''.
       (h) Hydrogen Intermediate Fuels Research Program.--
       (1) In general.--The Secretary shall conduct a research, 
     development, and demonstration program focused on the 
     economic production and use of hydrogen from biofuels, with 
     emphasis on the rural transportation and rural electrical 
     generation sectors.
       (2) Transportation sector objectives.--
       (A) In general.--As part of the program conducted under 
     paragraph (1), the Secretary, in coordination with the 
     Secretary of Agriculture, shall conduct a 3-year program of 
     research, development, and demonstration on the use of 
     ethanol and other low-cost transportable renewable feedstocks 
     as intermediate fuels for the safe, energy efficient, and 
     cost-effective transportation of hydrogen.
       (B) Goals.--The goals of the program shall include--
       (i) demonstrating the cost-effective conversion of ethanol 
     or other low-cost transportable renewable feedstocks to pure 
     hydrogen suitable for eventual use fuel cells, using existing 
     commercial reforming technology or modest modifications of 
     existing technology to reform ethanol or other low-cost 
     transportable renewable feedstocks into hydrogen;
       (ii) converting at least 1 commercially available internal 
     combustion engine hybrid electric passenger vehicle to 
     operate on hydrogen;
       (iii) installing and operating an ethanol reformer or 
     reformer for another low-cost transportable renewable 
     feedstock (including onsite hydrogen compression, storage, 
     and dispensing) at the facilities of a fleet operator not 
     later than 1 year after the date of the commencement of the 
     program;
       (iv) operating the 1 or more hydrogen internal combustion 
     engine hybrid electric vehicles for a period of 2 years; and
       (v) collecting emissions and fuel economy data on the 1 or 
     more hydrogen-powered vehicles over various operating and 
     environmental conditions.
       (3) Electrical generation sector objectives.--The 
     objectives of the program conducted under paragraph (1) in 
     the rural electrical generation sector shall be to--
       (A) design, develop, and test low-cost gasification 
     equipment to convert biomass to hydrogen at regional rural 
     cooperatives, or at businesses owned by farmers, close to 
     agricultural operations to minimize the cost of biomass 
     transportation to large central gasification plants;
       (B) demonstrate low-cost electrical generation at such 
     rural cooperatives or farmer-owned businesses, using 
     renewable hydrogen derived from biomass in either fuel cell 
     generators, or, as an interim cost reduction option, in 
     conventional internal combustion engine gensets;
       (C) determine the economic return to cooperatives or other 
     businesses owned by farmers of producing hydrogen from 
     biomass and selling electricity compared to agricultural 
     economic returns from producing and selling conventional 
     crops alone;
       (D) evaluate the crop yield and long-term soil 
     sustainability of growing and harvesting of feedstocks for 
     biomass gasification, and
       (E) demonstrate the use of a portion of the biomass-derived 
     hydrogen in various agricultural vehicles to reduce--
       (i) dependence on imported fossil fuel; and
       (ii) environmental impacts.
       (4) Authorization of appropriations.--There is authorized 
     to be appropriated to carry out this subsection--
       (A) $5,000,000 to carry out paragraph (2); and
       (B) $5,000,000 to carry out paragraph (3).

     SEC. 9__. PRODUCTION INCENTIVES FOR CELLULOSIC BIOFUELS.

       (a) Purpose.--The purpose of this section is to--
       (1) accelerate deployment and commercialization of 
     biofuels;
       (2) deliver the first 1,000,000,000 gallons in annual 
     cellulosic biofuels production by 2015;
       (3) ensure biofuels produced after 2015 are cost 
     competitive with gasoline and diesel; and
       (4) ensure that small feedstock producers and rural small 
     businesses are full participants in the development of the 
     cellulosic biofuels industry.
       (b) Definitions.--In this section:
       (1) Cellulosic biofuels.--The term ``cellulosic biofuels'' 
     means any fuel that is produced from cellulosic feedstocks.
       (2) Eligible entity.--The term ``eligible entity'' means a 
     producer of fuel from cellulosic biofuels the production 
     facility of which--
       (A) is located in the United States;
       (B) meets all applicable Federal and State permitting 
     requirements;

[[Page S7118]]

       (C) is to begin production of cellulosic biofuels not later 
     than 3 years after the date of the reverse auction in which 
     the producer participates; and
       (D) meets any financial criteria established by the 
     Secretary.
       (3) Secretary.--The term ``Secretary'' means the Secretary 
     of Agriculture.
       (c) Program.--
       (1) Establishment.--The Secretary, in consultation with the 
     Secretary of Energy, the Secretary of Defense, and the 
     Administrator of the Environmental Protection Agency, shall 
     establish an incentive program for the production of 
     cellulosic biofuels.
       (2) Basis of incentives.--Under the program, the Secretary 
     shall award production incentives on a per gallon basis of 
     cellulosic biofuels from eligible entities, through--
       (A) set payments per gallon of cellulosic biofuels produced 
     in an amount determined by the Secretary, until initiation of 
     the first reverse auction; and
       (B) reverse auction thereafter.
       (3) First reverse auction.--The first reverse auction shall 
     be held on the earlier of--
       (A) not later than 1 year after the first year of annual 
     production in the United States of 100,000,000 gallons of 
     cellulosic biofuels, as determined by the Secretary; or
       (B) not later than 3 years after the date of enactment of 
     this Act.
       (4) Reverse auction procedure.--
       (A) In general.--On initiation of the first reverse 
     auction, and each year thereafter until the earlier of the 
     first year of annual production in the United States of 
     1,000,000,000 gallons of cellulosic biofuels, as determined 
     by the Secretary, or 10 years after the date of enactment of 
     this Act, the Secretary shall conduct a reverse auction at 
     which--
       (i) the Secretary shall solicit bids from eligible 
     entities;
       (ii) eligible entities shall submit--

       (I) a desired level of production incentive on a per gallon 
     basis; and
       (II) an estimated annual production amount in gallons; and

       (iii) the Secretary shall issue awards for the production 
     amount submitted, beginning with the eligible entity 
     submitting the bid for the lowest level of production 
     incentive on a per gallon basis, until the amount of funds 
     available for the reverse auction is committed.
       (B) Amount of incentive received.--An eligible entity 
     selected by the Secretary through a reverse auction shall 
     receive the amount of performance incentive requested in the 
     auction for each gallon produced and sold by the entity 
     during the first 6 years of operation.
       (d) Limitations.--Awards under this section shall be 
     limited to--
       (1) a per gallon amount determined by the Secretary during 
     the first 4 years of the program;
       (2) a declining per gallon cap over the remaining lifetime 
     of the program, to be established by the Secretary so that 
     cellulosic biofuels produced after the first year of annual 
     cellulosic biofuels production in the United States in excess 
     of 1,000,000,000 gallons are cost competitive with gasoline 
     and diesel;
       (3) not more than 25 percent of the funds committed within 
     each reverse auction to any 1 project;
       (4) not more than $100,000,000 in any 1 year; and
       (5) not more than $1,000,000,000 over the lifetime of the 
     program.
       (e) Priority.--In selecting a project under the program, 
     the Secretary shall give priority to projects that--
       (1) demonstrate outstanding potential for local and 
     regional economic development;
       (2) include agricultural producers or cooperatives of 
     agricultural producers as equity partners in the ventures; 
     and
       (3) have a strategic agreement in place to fairly reward 
     feedstock suppliers.
       (f) Authorizations of Appropriations.--There is authorized 
     to be appropriated to carry out this section $250,000,000.

     SEC. 9__. PROCUREMENT OF BIOBASED PRODUCTS.

       (a) Federal Procurement.--
       (1) Definition of procuring agency.--Section 9001 of the 
     Farm Security and Rural Investment Act of 2002 (7 U.S.C. 
     8101) is amended--
       (A) by redesignating paragraphs (4), (5), and (6) as 
     paragraphs (5), (6), and (7), respectively; and
       (B) by inserting after paragraph (3) the following:
       ``(4) Procuring agency.--The term `procuring agency' 
     means--
       ``(A) any Federal agency that is using Federal funds for 
     procurement; or
       ``(B) any person contracting with any Federal agency with 
     respect to work performed under the contract.''.
       (2) Procurement.--Section 9002 of the Farm Security and 
     Rural Investment Act of 2002 (7 U.S.C. 8102) is amended--
       (A) by striking ``Federal agency'' each place it appears 
     (other than in subsections (f) and (g)) and inserting 
     ``procuring agency'';
       (B) in subsection (c)(2)--
       (i) by striking ``(2)'' and all that follows through 
     ``Notwithstanding'' and inserting the following:
       ``(2) Flexibility.--Notwithstanding'';
       (ii) by striking ``an agency'' and inserting ``a procuring 
     agency''; and
       (iii) by striking ``the agency'' and inserting ``the 
     procuring agency'';
       (C) in subsection (d), by striking ``procured by Federal 
     agencies'' and inserting ``procured by procuring agencies''; 
     and
       (D) in subsection (f), by striking ``Federal agencies'' and 
     inserting ``procuring agencies'' .
       (b) Capitol Complex Procurement.--Section 9002 of the Farm 
     Security and Rural Investment Act of 2002 (7 U.S.C. 8102) (as 
     amended by subsection (a)(2)) is amended--
       (1) by redesignating subsection (j) as subsection (k); and
       (2) by inserting after subsection (i) the following:
       ``(j) Inclusion.--Not later than 90 days after the date of 
     enactment of the Energy Policy Act of 2005, the Architect of 
     the Capitol, the Sergeant of Arms of the Senate, and the 
     Chief Administrative Officer of the House of Representatives 
     shall issue regulations that apply the requirements of this 
     section to procurement for the Capitol Complex.''.
       (c) Education.--
       (1) In general.--The Architect of the Capitol shall 
     establish in the Capitol Complex a program of public 
     education regarding use by the Architect of the Capitol of 
     biobased products.
       (2) Purposes.--The purposes of the program shall be--
       (A) to establish the Capitol Complex as a showcase for the 
     existence and benefits of biobased products; and
       (B) to provide access to further information on biobased 
     products to occupants and visitors.
       (d) Regulations.--Requirements issued under the amendments 
     made by subsection (b) shall be made in accordance with 
     regulations issued by the Committee on Rules and 
     Administration of the Senate and the Committee on House 
     Administration of the House of Representatives.

     SEC. 9__. SMALL BUSINESS BIOPRODUCT MARKETING AND 
                   CERTIFICATION GRANTS.

       (a) In General.--Using amounts made available under 
     subsection (g), the Secretary of Agriculture (referred to in 
     this section as the ``Secretary'') shall make available on a 
     competitive basis grants to eligible entities described in 
     subsection (b) for the biobased product marketing and 
     certification purposes described in subsection (c).
       (b) Eligible Entities.--An entity eligible for a grant 
     under this section is any manufacturer of biobased products 
     that--
       (1) has fewer than 50 employees;
       (2) proposes to use the grant for the biobased product 
     marketing and certification purposes described in subsection 
     (c); and
       (3) has not previously received a grant under this section.
       (c) Biobased Product Marketing and Certification Grant 
     Purposes.--A grant made under this section shall be used--
       (1) to plan activities and working capital for marketing of 
     biobased products; and
       (2) to provide private sector cost sharing for the 
     certification of biobased products.
       (d) Matching Funds.--
       (1) In general.--Grant recipients shall provide matching 
     non-Federal funds equal to the amount of the grant received.
       (2) Expenditure.--Matching funds shall be expended in 
     advance of grant funding, so that for every dollar of grant 
     that is advanced, an equal amount of matching funds shall 
     have been funded prior to submitting the request for 
     reimbursement.
       (e) Amount.--A grant made under this section shall not 
     exceed $100,000.
       (f) Administration.--The Secretary shall establish such 
     administrative requirements for grants under this section, 
     including requirements for applications for the grants, as 
     the Secretary considers appropriate.
       (g) Authorizations of Appropriations.--There are authorized 
     to be appropriated to make grants under this section--
       (1) $1,000,000 for fiscal year 2006; and
       (2) such sums as are necessary for fiscal year 2007 and 
     each subsequent fiscal year.

     SEC. 9__. REGIONAL BIOECONOMY DEVELOPMENT GRANTS.

       (a) In General.--Using amounts made available under 
     subsection (g), the Secretary of Agriculture (referred to in 
     this section as the ``Secretary'') shall make available on a 
     competitive basis grants to eligible entities described in 
     subsection (b) for the purposes described in subsection (c).
       (b) Eligible Entities.--An entity eligible for a grant 
     under this section is any regional bioeconomy development 
     association, agricultural or energy trade association, or 
     Land Grant institution that--
       (1) proposes to use the grant for the purposes described in 
     subsection (c); and
       (2) has not previously received a grant under this section.
       (c) Regional Bioeconomy Development Association Grant 
     Purposes.--A grant made under this section shall be used to 
     support and promote the growth and development of the 
     bioeconomy within the region served by the eligible entity, 
     through coordination, education, outreach, and other 
     endeavors by the eligible entity.
       (d) Matching Funds.--
       (1) In general.--Grant recipients shall provide matching 
     non-Federal funds equal to the amount of the grant received.
       (2) Expenditure.--Matching funds shall be expended in 
     advance of grant funding, so that for every dollar of grant 
     that is advanced, an equal amount of matching funds shall 
     have been funded prior to submitting the request for 
     reimbursement.
       (e) Administration.--The Secretary shall establish such 
     administrative requirements

[[Page S7119]]

     for grants under this section, including requirements for 
     applications for the grants, as the Secretary considers 
     appropriate.
       (f) Amount.--A grant made under this section shall not 
     exceed $500,000.
       (g) Authorizations of Appropriations.--There are authorized 
     to be appropriated to make grants under this section--
       (1) $1,000,000 for fiscal year 2006; and
       (2) such sums as are necessary for fiscal year 2007 and 
     each subsequent fiscal year.

     SEC. 9__. PREPROCESSING AND HARVESTING DEMONSTRATION GRANTS.

       (a) In General.--The Secretary of Agriculture (referred to 
     in this section as the ``Secretary'') shall make grants 
     available on a competitive basis to enterprises owned by 
     agricultural producers, for the purposes of demonstrating 
     cost-effective, cellulosic biomass innovations in--
       (1) preprocessing of feedstocks, including cleaning, 
     separating and sorting, mixing or blending, and chemical or 
     biochemical treatments, to add value and lower the cost of 
     feedstock processing at a biorefinery; or
       (2) 1-pass or other efficient, multiple crop harvesting 
     techniques.
       (b) Limitations on Grants.--
       (1) Number of grants.--Not more than 5 demonstration 
     projects per fiscal year shall be funded under this section.
       (2) Non-federal cost share.--The non-Federal cost share of 
     a project under this section shall be not less than 20 
     percent, as determined by the Secretary.
       (c) Condition of Grant.--To be eligible for a grant for a 
     project under this section, a recipient of a grant or a 
     participating entity shall agree to use the material 
     harvested under the project--
       (1) to produce ethanol; or
       (2) for another energy purpose, such as the generation of 
     heat or electricity.
       (d) Authorization for Appropriations.--There is authorized 
     to be appropriated to carry out this section $5,000,000 for 
     each of fiscal years 2006 through 2010.

     SEC. 9__. SENSE OF THE SENATE.

       It is the sense of the Senate that Congress should amend 
     the Federal tax code to encourage investment in, and 
     production and use of, biobased fuels and biobased products 
     through--
       (1) an investment tax credit for the construction or 
     modification of facilities for the production of fuels from 
     cellulose biomass, to drive private capital towards new 
     biorefinery projects in a manner that allows participation by 
     smaller farms and cooperatives; and
       (2) an investment tax credit to small manufacturers of 
     biobased products to lower the capital costs of starting and 
     maintaining a biobased business.

     SEC. 9__. EDUCATION AND OUTREACH.

       (a) In General.--The Secretary of Agriculture shall 
     establish, within the Department of Agriculture or through an 
     independent contracting entity, a program of education and 
     outreach on biobased fuels and biobased products consisting 
     of--
       (1) training and technical assistance programs for 
     feedstock producers to promote producer ownership, 
     investment, and participation in the operation of processing 
     facilities; and
       (2) public education and outreach to familiarize consumers 
     with the biobased fuels and biobased products.
       (b) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this title $1,000,000 for 
     each of fiscal years 2006 through 2010.

     SEC. 9__. REPORTS.

       (a) Biobased Product Potential.--Not later than 1 year 
     after the date of enactment of this Act, the Secretary of 
     Agriculture (referred to in this section as the 
     ``Secretary'') shall submit to the Committee on Agriculture 
     of the House of Representatives and the Committee on 
     Agriculture, Nutrition, and Forestry of the Senate a report 
     that--
       (1) describes the economic potential for the United States 
     of the widespread production and use of commercial and 
     industrial biobased products through calendar year 2025; and
       (2) as the maximum extent practicable, identifies the 
     economic potential by product area.
       (b) Analysis of Economic Indicators.--Not later than 2 
     years after the date of enactment of this Act, and every 2 
     years thereafter, the Secretary shall submit to Congress an 
     analysis of economic indicators of the biobased economy 
     during the 2-year period preceding the analysis.
                                 ______
                                 
  SA 920. Mr. HARKIN submitted an amendment intended to be proposed by 
him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       On page 489, between lines 20 and 21, insert the following:

     SEC. 9__. HYDROGEN INTERMEDIATE FUELS RESEARCH PROGRAM.

       (a) In General.--The Secretary, in coordination with the 
     Secretary of Agriculture, shall carry out a 3-year program of 
     research, development, and demonstration on the use of 
     ethanol and other low-cost transportable renewable feedstocks 
     as intermediate fuels for the safe, energy efficient, and 
     cost-effective transportation of hydrogen.
       (b) Goals.--The goals of the program shall include--
       (1) demonstrating the cost-effective conversion of ethanol 
     or other low-cost transportable renewable feedstocks to pure 
     hydrogen suitable for eventual use in fuel cells;
       (2) using existing commercial reforming technology or 
     modest modifications of existing technology to reform ethanol 
     or other low-cost transportable renewable feedstocks into 
     hydrogen;
       (3) converting at least 1 commercially available internal 
     combustion engine hybrid electric passenger vehicle to 
     operate on hydrogen;
       (4) not later than 1 year after the date on which the 
     program begins, installing and operating an ethanol reformer, 
     or reformer for another low-cost transportable renewable 
     feedstock (including onsite hydrogen compression, storage, 
     and dispensing), at the facilities of a fleet operator;
       (5) operating the 1 or more vehicles described in paragraph 
     (3) for a period of at least 2 years; and
       (6) collecting emissions and fuel economy data on the 1 or 
     more vehicles described in paragraph (3) in various operating 
     and environmental conditions.
       (c) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $5,000,000.
                                 ______
                                 
  SA 921. Mr. HARKIN submitted an amendment intended to be proposed by 
him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       At the appropriate place, insert the following:

     SEC. __. APPLICATION OF SECTION 45 CREDIT TO AGRICULTURAL 
                   COOPERATIVES.

       (a) In General.--Section 45(e) of the Internal Revenue Code 
     of 1986 (relating to definitions and special rules) is 
     amended by adding at the end the following:
       ``(10) Allocation of credit to patrons of agricultural 
     cooperative.--
       ``(A) Election to allocate.--
       ``(i) In general.--In the case of an eligible cooperative 
     organization, any portion of the credit determined under 
     subsection (a) for the taxable year may, at the election of 
     the organization, be apportioned among patrons of the 
     organization on the basis of the amount of business done by 
     the patrons during the taxable year.
       ``(ii) Form and effect of election.--An election under 
     clause (i) for any taxable year shall be made on a timely 
     filed return for such year. Such election, once made, shall 
     be irrevocable for such taxable year.
       ``(B) Treatment of organizations and patrons.--The amount 
     of the credit apportioned to any patrons under subparagraph 
     (A)--
       ``(i) shall not be included in the amount determined under 
     subsection (a) with respect to the organization for the 
     taxable year, and
       ``(ii) shall be included in the amount determined under 
     subsection (a) for the taxable year of the patrons with or 
     within which the taxable year of the organization ends.
       ``(C) Special rules for decrease in credits for taxable 
     year.--If the amount of the credit of a cooperative 
     organization determined under subsection (a) for a taxable 
     year is less than the amount of such credit shown on the 
     return of the cooperative organization for such year, an 
     amount equal to the excess of--
       ``(i) such reduction, over
       ``(ii) the amount not apportioned to such patrons under 
     subparagraph (A) for the taxable year, shall be treated as an 
     increase in tax imposed by this chapter on the organization. 
     Such increase shall not be treated as tax imposed by this 
     chapter for purposes of determining the amount of any credit 
     under this subpart or subpart A, B, E, or G.
       ``(D) Eligible cooperative defined.--For purposes of this 
     section the term `eligible cooperative' means a cooperative 
     organization described in section 1381(a) which is owned more 
     than 50 percent by agricultural producers or by entities 
     owned by agricultural producers. For this purpose an entity 
     owned by an agricultural producer is one that is more than 50 
     percent owned by agricultural producers.
       ``(E) Written notice to patrons.--If any portion of the 
     credit available under subsection (a) is allocated to patrons 
     under subparagraph (A), the eligible cooperative shall 
     provide any patron receiving an allocation written notice of 
     the amount of the allocation. Such notice shall be provided 
     before the date on which the return described in subparagraph 
     (B)(ii) is due.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years ending after the date of the 
     enactment of this Act.
                                 ______
                                 
  SA 922. Mr. HARKIN submitted an amendment intended to be proposed by 
him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       On page 159, after line 23, add the following:

     SEC. 212. REQUIREMENT TO EQUIP AUTOMOBILES FOR FLEXIBLE FUEL 
                   OPERATION.

       (a) Requirement To Equip Automobiles for Flexible Fuel 
     Operation.--
       (1) In general.--Chapter 329 of title 49, United States 
     Code, is amended by inserting after section 32902 the 
     following:

[[Page S7120]]

     ``Sec. 32902A. Requirement to equip automobiles for flexible 
       fuel operation

       ``(a) Definition.--In this section, the term `flexible fuel 
     operation' means the capability to operate using gasoline and 
     1 or more alternative fuels, including--
       ``(1) ethanol and other alternative fuels in blends of at 
     least 85 percent alternative fuel by volume; and
       ``(2) electricity from an external charging source 
     sufficient to power the vehicle for at least 20 miles of 
     driving.
       ``(b) Requirement.--
       ``(1) In general.--An automobile that is manufactured by a 
     manufacturer for a model year after model year 2008 and is 
     capable of operating on gasoline shall also be capable of 
     flexible fuel operation in accordance with the schedule in 
     paragraph (2).
       ``(2) Schedule.--For each manufacturer described in 
     paragraph (1), the schedule shall be--
       ``(A) in the case of model year 2009, 10 percent of the 
     automobiles manufactured by the manufacturer; and
       ``(B) in the case of each subsequent model year, the 
     percent established for the preceding model year increased by 
     10 percent, to a maximum of 50 percent.''.
       (2) Technical amendment.--The table of sections for chapter 
     329 of title 49, United States Code, is amended by inserting 
     after the item relating to section 32902 the following:

``32902A. Requirement to equip automobiles for flexible fuel 
              operation.''.

       (b) Activities to Promote the Use of Certain Alternative 
     Fuels.--The Secretary of Transportation shall carry out 
     activities to promote the use of a mixture containing at 
     least 85 percent of ethanol by volume with gasoline to power 
     motor vehicles in the United States.
                                 ______
                                 
  SA 923. Mr. INOUYE submitted an amendment intended to be proposed by 
him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       Beginning on page 202, strike line 18 and all that follows 
     through page 203, line 3, and insert the following:
       (A) will be no less protective than the fishway initially 
     prescribed by the Secretary;
       (B) will protect Indian land or tribal fishery resources 
     for which the Secretary has a legal responsibility; and
       (C) will either--
       (i) cost significantly less to implement; or
       (ii) result in improved operation of the project works for 
     electricity production, as compared to the fishway initially 
     determined to be necessary by the Secretary.
                                 ______
                                 
  SA 924. Mr. INOUYE submitted an amendment intended to be proposed by 
him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       On page 200, strike lines 8 through 21 and insert the 
     following:
     the Secretary determines, based on substantial evidence 
     provided by the license applicant, any other party to the 
     proceeding, or otherwise available to the Secretary--
       (A) that the alternative condition--
       (i) provides for the adequate protection and use of the 
     reservation;
       (ii) will protect Indian land and tribal fishery resources 
     for which the Secretary has a legal responsibility; and
       (B) that the proposed alternative condition will--
       (i) cost significantly less to implement; or
       (ii) result in improved operation of the project works for 
     electricity production, as compared to the condition 
     initially determined to be necessary by the Secretary.
                                 ______
                                 
  SA 925. Mr. BOND (for himself, Mr. Levin, Ms. Stabenow, and Mr. 
Voinovich) submitted an amendment intended to be proposed by him to the 
bill H.R. 6, to ensure jobs for our future with secure, affordable, and 
reliable energy; which was ordered to lie on the table; as follows:

       Strike subtitle B of title VII, and insert the following:

                   Subtitle B--Automobile Efficiency

                CHAPTER 1--MAXIMUM AVERAGE FUEL ECONOMY

     SEC. 711. REVISED CONSIDERATIONS FOR DECISIONS ON MAXIMUM 
                   FEASIBLE AVERAGE FUEL ECONOMY.

       Section 32902(f) of title 49, United States Code, is 
     amended to read as follows:
       ``(f) Considerations for Decisions on Maximum Feasible 
     Average Fuel Economy.--When deciding maximum feasible average 
     fuel economy under this section, the Secretary of 
     Transportation shall consider the following matters:
       ``(1) Technological feasibility.
       ``(2) Economic practicability.
       ``(3) The effect of other motor vehicle standards of the 
     Government on fuel economy.
       ``(4) The need of the United States to conserve energy.
       ``(5) The desirability of reducing United States dependence 
     on imported oil.
       ``(6) The effects of the average fuel economy standards on 
     motor vehicle and passenger safety.
       ``(7) The effects of increased fuel economy on air quality.
       ``(8) The adverse effects of average fuel economy standards 
     on the relative competitiveness of manufacturers.
       ``(9) The effects of compliance with average fuel economy 
     standards on levels of employment in the United States.
       ``(10) The cost and lead time necessary for the 
     introduction of the necessary new technologies.
       ``(11) The potential for advanced technology vehicles, such 
     as hybrid and fuel cell vehicles, to contribute to the 
     achievement of significant reductions in fuel consumption.
       ``(12) The extent to which the necessity for vehicle 
     manufacturers to incur near-term costs to comply with the 
     average fuel economy standards adversely affects the 
     availability of resources for the development of advanced 
     technology for the propulsion of motor vehicles.
       ``(13) The report of the National Research Council that is 
     entitled `Effectiveness and Impact of Corporate Average Fuel 
     Economy Standards', issued in January 2002.''.

     SEC. 712. INCREASED FUEL ECONOMY STANDARDS.

       (a) New Regulations Required.--
       (1) Non-passenger automobiles.--
       (A) Requirement for new regulations.--The Secretary of 
     Transportation shall issue, under section 32902 of title 49, 
     United States Code, new regulations setting forth increased 
     average fuel economy standards for non-passenger automobiles. 
     The regulations shall be determined on the basis of the 
     maximum feasible average fuel economy levels for the non-
     passenger automobiles, taking into consideration the matters 
     set forth in subsection (f) of such section. The new 
     regulations under this paragraph shall apply for model years 
     after the 2007 model year, subject to subsection (b).
       (B) Time for issuing regulations.--The Secretary of 
     Transportation shall issue the final regulations under 
     subparagraph (A) not later than April 1, 2006.
       (2) Passenger automobiles.--
       (A) Requirement for new regulations.--The Secretary of 
     Transportation shall issue, under section 32902 of title 49, 
     United States Code, new regulations setting forth increased 
     average fuel economy standards for passenger automobiles. The 
     regulations shall be determined on the basis of the maximum 
     feasible average fuel economy levels for the passenger 
     automobiles, taking into consideration the matters set forth 
     in subsection (f) of such section.
       (B) Time for issuing regulations.--The Secretary of 
     Transportation shall issue the final regulations under 
     subparagraph (A) not later than 2\1/2\ years after the date 
     of the enactment of this Act.
       (b) Phased Increases.--The regulations issued pursuant to 
     subsection (a) shall specify standards that take effect 
     successively over several vehicle model years not exceeding 
     15 vehicle model years.
       (c) Clarification of Authority To Amend Passenger 
     Automobile Standard.--Section 32902(b) of title 49, United 
     States Code, is amended by inserting before the period at the 
     end the following: ``or such other number as the Secretary 
     prescribes under subsection (c)''.
       (d) Environmental Assessment.--When issuing final 
     regulations setting forth increased average fuel economy 
     standards under section 32902(a) or section 32902(c) of title 
     49, United States Code, the Secretary of Transportation shall 
     also issue an environmental assessment of the effects of the 
     increased standards on the environment under the National 
     Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.).
       (e) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Secretary of Transportation 
     $5,000,000 for each of fiscal years 2006 through 2010 for 
     carrying out this section and for administering the 
     regulations issued pursuant to this section.

     SEC. 713. EXPEDITED PROCEDURES FOR CONGRESSIONAL INCREASE IN 
                   FUEL ECONOMY STANDARDS.

       (a) Condition for Applicability.--If the Secretary of 
     Transportation fails to issue final regulations with respect 
     to non-passenger automobiles under section 712, or fails to 
     issue final regulations with respect to passenger automobiles 
     under such section, on or before the date by which such final 
     regulations are required by such section to be issued, 
     respectively, then this section shall apply with respect to a 
     bill described in subsection (b).
       (b) Bill.--A bill referred to in this subsection is a bill 
     that satisfies the following requirements:
       (1) Introduction.--The bill is introduced by one or more 
     Members of Congress not later than 60 days after the date 
     referred to in subsection (a).
       (2) Title.--The title of the bill is as follows: ``A bill 
     to establish new average fuel economy standards for certain 
     motor vehicles.''.
       (3) Text.--The bill provides after the enacting clause only 
     the text specified in subparagraph (A) or (B) or any 
     provision described in subparagraph (C), as follows:
       (A) Non-passenger automobiles.--In the case of a bill 
     relating to a failure timely to issue final regulations 
     relating to non-passenger automobiles, the following text:
     ``That, section 32902 of title 49, United States Code, is 
     amended by adding at the end the following new subsection:

[[Page S7121]]

       `` `(_) Non-passenger automobiles.--The average fuel 
     economy standard for non-passenger automobiles manufactured 
     by a manufacturer in a model year after model year __ shall 
     be __ miles per gallon.' '', the first blank space being 
     filled in with a subsection designation, the second blank 
     space being filled in with the number of a year, and the 
     third blank space being filled in with a number.
       (B) Passenger automobiles.--In the case of a bill relating 
     to a failure timely to issue final regulations relating to 
     passenger automobiles, the following text:
     ``That, section 32902(b) of title 49, United States Code, is 
     amended to read as follows:
       `` `(b) Passenger Automobiles.--Except as provided in this 
     section, the average fuel economy standard for passenger 
     automobiles manufactured by a manufacturer in a model year 
     after model year __ shall be __ miles per gallon.' '', the 
     first blank space being filled in with the number of a year 
     and the second blank space being filled in with a number.
       (C) Substitute text.--Any text substituted by an amendment 
     that is in order under subsection (c)(3).
       (c) Expedited Procedures.--A bill described in subsection 
     (b) shall be considered in a House of Congress in accordance 
     with the procedures provided for the consideration of joint 
     resolutions in paragraphs (3) through (8) of section 8066(c) 
     of the Department of Defense Appropriations Act, 1985 (as 
     contained in section 101(h) of Public Law 98-473; 98 Stat. 
     1936), with the following exceptions:
       (1) References to resolution.--The references in such 
     paragraphs to a resolution shall be deemed to refer to the 
     bill described in subsection (b).
       (2) Committees of jurisdiction.--The committees to which 
     the bill is referred under this subsection shall--
       (A) in the Senate, be the Committee on Commerce, Science, 
     and Transportation; and
       (B) in the House of Representatives, be the Committee on 
     Energy and Commerce.
       (3) Amendments.--
       (A) Amendments in order.--Only four amendments to the bill 
     are in order in each House, as follows:
       (i) Two amendments proposed by the majority leader of that 
     House.
       (ii) Two amendments proposed by the minority leader of that 
     House.
       (B) Form and content.--To be in order under subparagraph 
     (A), an amendment shall propose to strike all after the 
     enacting clause and substitute text that only includes the 
     same text as is proposed to be stricken except for one or 
     more different numbers in the text.
       (C) Debate, et cetera.--Subparagraph (B) of section 
     8066(c)(5) of the Department of Defense Appropriations Act, 
     1985 (98 Stat. 1936) shall apply to the consideration of each 
     amendment proposed under this paragraph in the same manner as 
     such subparagraph (B) applies to debatable motions.

     SEC. 714. EXTENSION OF MAXIMUM FUEL ECONOMY INCREASE FOR 
                   ALTERNATIVE FUELED VEHICLES.

       (a) Manufacturing Incentives.--Section 32905 of title 49, 
     United States Code, is amended--
       (1) in subsections (b) and (d), by striking ``1993-2004'' 
     and inserting ``1993-2008'';
       (2) in subsection (f), by striking ``2001'' and inserting 
     ``2007''; and
       (3) in subsection (f)(1), by striking ``2004'' and 
     inserting ``2008''.
       (b) Extension of Maximum Fuel Economy Increase.--Section 
     32906(a)(1) of title 49, United States Code, is amended--
       (1) in subparagraph (A), by striking ``1993-2004'' and 
     inserting ``1993 through 2008''; and
       (2) in subparagraph (B), by striking ``2005-2008'' and 
     inserting ``2009 through 2012''.

                   CHAPTER 2--ADVANCED CLEAN VEHICLES

     SEC. 721. HYBRID VEHICLES RESEARCH AND DEVELOPMENT.

       (a) Rechargeable Energy Storage Systems and Other 
     Technologies.--The Secretary of Energy shall accelerate 
     research and development directed toward the improvement of 
     batteries and other rechargeable energy storage systems, 
     power electronics, hybrid systems integration, and other 
     technologies for use in hybrid vehicles.
       (b) Authorization of Appropriations.--Funds are hereby 
     authorized to be appropriated for each of fiscal years 2006, 
     2007, and 2008 in the amount $50,000,000 for research and 
     development activities under this section.

     SEC. 722. DIESEL FUELED VEHICLES RESEARCH AND DEVELOPMENT.

       (a) Diesel Combustion and After Treatment Technologies.--
     The Secretary of Energy shall accelerate research and 
     development directed toward the improvement of diesel 
     combustion and after treatment technologies for use in diesel 
     fueled motor vehicles.
       (b) Goals.--The Secretary shall carry out subsection (a) 
     with a view to achieving the following goals:
       (1) Compliance with certain emission standards by 2010.--
     Developing and demonstrating diesel technologies that, not 
     later than 2010, meet the following standards:
       (A) Tier-2 emission standards.--The tier 2 emission 
     standards.
       (B) Heavy-duty emission standards of 2007.--The heavy-duty 
     emission standards of 2007.
       (2) Post-2010 highly efficient technologies.--Developing 
     the next generation of low emissions, high efficiency diesel 
     engine technologies, including homogeneous charge compression 
     ignition technology.
       (c) Authorization of Appropriations.--Funds are hereby 
     authorized to be appropriated for each of fiscal years 2006, 
     2007, and 2008 in the amount of $75,000,000 for research and 
     development of advanced combustion engines and advanced 
     fuels.

     SEC. 723. PROCUREMENT OF ALTERNATIVE FUELED PASSENGER 
                   AUTOMOBILES.

       (a) Vehicle Fleets Not Covered by Requirement in Energy 
     Policy Act of 1992.--The head of each agency of the executive 
     branch shall coordinate with the Administrator of General 
     Services to ensure that only alternative fueled vehicles are 
     procured by or for each agency fleet of passenger automobiles 
     that is not in a fleet of vehicles to which section 303 of 
     the Energy Policy Act of 1992 (42 U.S.C. 13212) applies.
       (b) Waiver Authority.--The head of an agency, in 
     consultation with the Administrator, may waive the 
     applicability of the policy regarding the procurement of 
     alternative fueled vehicles in subsection (a) to--
       (1) the procurement for such agency of any vehicles 
     described in subparagraphs (A) through (F) of section 
     303(b)(3) of the Energy Policy Act of 1992 (42 U.S.C. 
     13212(b)(3)); or
       (2) a procurement of vehicles for such agency if the 
     procurement of alternative fueled vehicles cannot meet the 
     requirements of the agency for vehicles due to insufficient 
     availability of the alternative fuel used to power such 
     vehicles.
       (c) Applicability to Procurements After Fiscal Year 2005.--
     This subsection applies with respect to procurements of 
     alternative fueled vehicles in fiscal year 2006 and 
     subsequent fiscal years.

     SEC. 724. PROCUREMENT OF HYBRID LIGHT DUTY TRUCKS.

       (a) Vehicle Fleets Not Covered by Requirement in Energy 
     Policy Act of 1992.--
       (1) Hybrid vehicles.--The head of each agency of the 
     executive branch shall coordinate with the Administrator of 
     General Services to ensure that only hybrid vehicles are 
     procured by or for each agency fleet of light duty trucks 
     that is not in a fleet of vehicles to which section 303 of 
     the Energy Policy Act of 1992 (42 U.S.C. 13212) applies.
       (2) Waiver authority.--The head of an agency, in 
     consultation with the Administrator, may waive the 
     applicability of the policy regarding the procurement of 
     hybrid vehicles in paragraph (1) to that agency to the extent 
     that the head of that agency determines necessary--
       (A) to meet specific requirements of the agency for 
     capabilities of light duty trucks;
       (B) to procure vehicles consistent with the standards 
     applicable to the procurement of fleet vehicles for the 
     Federal Government;
       (C) to adjust to limitations on the commercial availability 
     of light duty trucks that are hybrid vehicles; or
       (D) to avoid the necessity of procuring a hybrid vehicle 
     for the agency when each of the hybrid vehicles available for 
     meeting the requirements of the agency has a cost to the 
     United States that exceeds the costs of comparable nonhybrid 
     vehicles by a factor that is significantly higher than the 
     difference between--
       (i) the real cost of the hybrid vehicle to retail 
     purchasers, taking into account the benefit of any tax 
     incentives available to retail purchasers for the purchase of 
     the hybrid vehicle; and
       (ii) the costs of the comparable nonhybrid vehicles to 
     retail purchasers.
       (3) Applicability to procurements after fiscal year 2005.--
     This subsection applies with respect to procurements of light 
     duty trucks in fiscal year 2006 and subsequent fiscal years.
       (b) Inapplicability to Department of Defense.--This section 
     does not apply to the Department of Defense, which is subject 
     to comparable requirements under section 318 of the National 
     Defense Authorization Act for Fiscal Year 2002 (Public Law 
     107-107; 115 Stat. 1055; 10 U.S.C. 2302 note).

     SEC. 725. DEFINITIONS.

       In this chapter:
       (1) Alternative fueled vehicle.--The term ``alternative 
     fueled vehicle'' means--
       (A) an alternative fueled vehicle, as defined in section 
     301(3) of the Energy Policy Act of 1992 (42 U.S.C. 13211(3));
       (B) a motor vehicle that operates on a blend of fuel that 
     is at least 20 percent (by volume) biodiesel, as defined in 
     section 312(f) of the Energy Policy Act of 1992 (42 U.S.C. 
     13220(f)); and
       (C) a motor vehicle that operates on a blend of fuel that 
     is at least 20 percent (by volume) bioderived hydrocarbons 
     (including aliphatic compounds) produced from agricultural 
     and animal waste.
       (2) Heavy-duty emission standards of 2007.--The term 
     ``heavy-duty emission standards of 2007'' means the motor 
     vehicle emission standards promulgated by the Administrator 
     of the Environmental Protection Agency on January 18, 2001, 
     under section 202 of the Clean Air Act to apply to heavy-duty 
     vehicles of model years beginning with the 2007 vehicle model 
     year.
       (3) Hybrid vehicle.--The term ``hybrid vehicle'' means--
       (A) a motor vehicle that draws propulsion energy from on 
     board sources of stored energy that are both--
       (i) an internal combustion or heat engine using combustible 
     fuel; and
       (ii) a rechargeable energy storage system; and
       (B) any other vehicle that is defined as a hybrid vehicle 
     in regulations prescribed by

[[Page S7122]]

     the Secretary of Energy for the administration of title III 
     of the Energy Policy Act of 1992.
       (4) Motor vehicle.--The term ``motor vehicle'' means any 
     vehicle that is manufactured primarily for use on public 
     streets, roads, and highways (not including a vehicle 
     operated exclusively on a rail or rails) and that has at 
     least four wheels.
       (5) Tier 2 emission standards defined.--The term ``tier 2 
     emission standards'' means the motor vehicle emission 
     standards promulgated by the Administrator of the 
     Environmental Protection Agency on February 10, 2000, under 
     section 202 of the Clean Air Act (42 U.S.C. 7521) to apply to 
     passenger automobiles, light trucks, and larger passenger 
     vehicles of model years after the 2003 vehicle model year.
       (6) Terms defined in epa regulations.--The terms 
     ``passenger automobile'' and ``light truck'' have the 
     meanings given such terms in regulations prescribed by the 
     Administrator of the Environmental Protection Agency for 
     purposes of the administration of title II of the Clean Air 
     Act (42 U.S.C. 7521 et seq.).
                                 ______
                                 
  SA 926. Mr. OBAMA submitted an amendment intended to be proposed by 
him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       At the appropriate place insert the following:
       Of the amounts authorized within this section, no less than 
     $10 million shall be for a project, administered through the 
     Chicago Operations Office, to demonstrate the viability of 
     new mercury removal technology on commercial scale coal-fired 
     electrical generation, where such generation is located in a 
     highly populated urban area, and where the technology has 
     undergone a successful field test sanctioned by the 
     Department, and has been demonstrated to have no adverse 
     effect on the performance or efficiency of existing emissions 
     control equipment or other plant commercial operations. The 
     expenditures under this section shall be shared in accordance 
     with section 1002.
                                 ______
                                 
  SA 927. Mr. LEVIN submitted an amendment intended to be proposed by 
him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; as follows:

       On page 755, after line 25, add the following:

     SEC. 13__. FUEL CELL AND HYDROGEN TECHNOLOGY STUDY.

       (a) Findings.--Congress finds that--
       (1) according to the National Academy of Sciences, 
     ``Greenhouse gases are accumulating in Earth's atmosphere as 
     a result of human activities, causing surface air 
     temperatures and subsurface ocean temperatures to rise . . . 
     Human-induced warming and associated sea level rises are 
     expected to continue through the 21st century.'';
       (2) in 2001, the Intergovernmental Panel on Climate Change 
     (IPCC) concluded that the average temperature of the Earth 
     can be expected to rise between 2.5 and 10.4 degrees 
     Fahrenheit in this century and ``there is new and stronger 
     evidence that most of the warming observed over the last 50 
     years is attributable to human activities'';
       (3) the National Academy of Sciences has stated that ``the 
     IPCC's conclusion that most of the observed warming of the 
     last 50 years is likely to have been due to the increase of 
     greenhouse gas concentrations accurately reflects the current 
     thinking of the scientific community on this issue'' and that 
     ``there is general agreement that the observed warming is 
     real and particularly strong within the past twenty years'';
       (4) a significant Federal investment toward the development 
     of fuel cell technologies and the transition from petroleum 
     to hydrogen in vehicles could significantly contribute to the 
     reduction of carbon dioxide emissions by reducing fuel 
     consumption;
       (5) a massive infusion of resources and leadership from the 
     Federal Government would be needed to create the necessary 
     fuel cell technologies that provide alternatives to petroleum 
     and the more efficient use of energy; and
       (6) the Federal Government would need to commit to 
     developing, in conjunction with private industry and 
     academia, advanced vehicle technologies and the necessary 
     hydrogen infrastructure to provide alternatives to petroleum.
       (b) Study.--
       (1) In general.--As soon as practicable after the date of 
     enactment of this Act, the Secretary shall enter into a 
     contract with the National Academy of Sciences and the 
     National Research Council to carry out a study of fuel cell 
     technologies that provides a budget roadmap for the 
     development of fuel cell technologies and the transition from 
     petroleum to hydrogen in a significant percentage of the 
     vehicles sold by 2020.
       (2) Requirements.--In carrying out the study, the National 
     Academy of Sciences and the National Research Council shall--
       (A) establish as a goal the maximum percentage practicable 
     of vehicles that the National Academy of Sciences and the 
     National Research Council determines can be fueled by 
     hydrogen by 2020;
       (B) determine the amount of Federal and private funding 
     required to meet the goal established under subparagraph (A);
       (C) determine what actions are required to meet the goal 
     established under subparagraph (A);
       (D) examine the need for expanded and enhanced Federal 
     research and development programs, changes in regulations, 
     grant programs, partnerships between the Federal Government 
     and industry, private sector investments, infrastructure 
     investments by the Federal Government and industry, 
     educational and public information initiatives, and Federal 
     and State tax incentives to meet the goal established under 
     subparagraph (A);
       (E) consider whether other technologies would be less 
     expensive or could be more quickly implemented than fuel cell 
     technologies to achieve significant reductions in carbon 
     dioxide emissions;
       (F) take into account any reports relating to fuel cell 
     technologies and hydrogen-fueled vehicles, including--
       (i) the report prepared by the National Academy of 
     Engineering and the National Research Council in 2004 
     entitled ``Hydrogen Economy: Opportunities, Costs, Barriers, 
     and R&D Needs''; and
       (ii) the report prepared by the U.S. Fuel Cell Council in 
     2003 entitled ``Fuel Cells and Hydrogen: The Path Forward'';
       (G) consider the challenges, difficulties, and potential 
     barriers to meeting the goal established under subparagraph 
     (A); and
       (H) with respect to the budget roadmap--
       (i) specify the amount of funding required on an annual 
     basis from the Federal Government and industry to carry out 
     the budget roadmap; and
       (ii) specify the advantages and disadvantages to moving 
     toward the transition to hydrogen in vehicles in accordance 
     with the timeline established by the budget roadmap.
                                 ______
                                 
  SA 928. Mr. LEVIN (for himself and Mr. Alexander) submitted an 
amendment intended to be proposed by him to the bill H.R. 6, to ensure 
jobs for our future with secure, affordable, and reliable energy; which 
was ordered to lie on the table; as follows:

       At the end add the following:

  TITLE XVII--TAX INCENTIVES FOR ALTERNATIVE MOTOR VEHICLES AND FUELS

     SEC. 1700. AMENDMENT OF 1986 CODE.

       Except as otherwise expressly provided, whenever in this 
     title an amendment or repeal is expressed in terms of an 
     amendment to, or repeal of, a section or other provision, the 
     reference shall be considered to be made to a section or 
     other provision of the Internal Revenue Code of 1986.

                       Subtitle A--Tax Incentives

     SEC. 1701. ALTERNATIVE MOTOR VEHICLE CREDIT.

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

     ``SEC. 30B. ALTERNATIVE MOTOR VEHICLE CREDIT.

       ``(a) Allowance of Credit.--There shall be allowed as a 
     credit against the tax imposed by this chapter for the 
     taxable year an amount equal to the sum of--
       ``(1) the new qualified fuel cell motor vehicle credit 
     determined under subsection (b),
       ``(2) the new advanced lean burn technology motor vehicle 
     credit determined under subsection (c),
       ``(3) the new qualified hybrid motor vehicle credit 
     determined under subsection (d), and
       ``(4) the new qualified alternative fuel motor vehicle 
     credit determined under subsection (e).
       ``(b) New Qualified Fuel Cell Motor Vehicle Credit.--
       ``(1) In general.--For purposes of subsection (a), the new 
     qualified fuel cell motor vehicle credit determined under 
     this subsection with respect to a new qualified fuel cell 
     motor vehicle placed in service by the taxpayer during the 
     taxable year is--
       ``(A) $8,000 if such vehicle has a gross vehicle weight 
     rating of not more than 8,500 pounds,
       ``(B) $10,000, if such vehicle has a gross vehicle weight 
     rating of more than 8,500 pounds but not more than 14,000 
     pounds,
       ``(C) $20,000, if such vehicle has a gross vehicle weight 
     rating of more than 14,000 pounds but not more than 26,000 
     pounds, and
       ``(D) $40,000, if such vehicle has a gross vehicle weight 
     rating of more than 26,000 pounds.
       ``(2) Increase for fuel efficiency.--
       ``(A) In general.--The amount determined under paragraph 
     (1)(A) with respect to a new qualified fuel cell motor 
     vehicle which is a passenger automobile or light truck shall 
     be increased by--
       ``(i) $1,000, if such vehicle achieves at least 150 percent 
     but less than 175 percent of the 2002 model year city fuel 
     economy,
       ``(ii) $1,500, if such vehicle achieves at least 175 
     percent but less than 200 percent of the 2002 model year city 
     fuel economy,
       ``(iii) $2,000, if such vehicle achieves at least 200 
     percent but less than 225 percent of the 2002 model year city 
     fuel economy,
       ``(iv) $2,500, if such vehicle achieves at least 225 
     percent but less than 250 percent of the 2002 model year city 
     fuel economy,
       ``(v) $3,000, if such vehicle achieves at least 250 percent 
     but less than 275 percent of the 2002 model year city fuel 
     economy,
       ``(vi) $3,500, if such vehicle achieves at least 275 
     percent but less than 300 percent of the 2002 model year city 
     fuel economy, and
       ``(vii) $4,000, if such vehicle achieves at least 300 
     percent of the 2002 model year city fuel economy.
       ``(B) 2002 model year city fuel economy.--For purposes of 
     subparagraph (A), the 2002

[[Page S7123]]

     model year city fuel economy with respect to a vehicle shall 
     be determined in accordance with the following tables:
       ``(i) In the case of a passenger automobile:
``If vehicle inertia weight clThe 2002 model year city fuel economy is:
1,500 or 1,750 lbs............................................45.2 mpg 
  2,000 lbs...............................................39.6 mpg ....

  2,250 lbs...............................................35.2 mpg ....

  2,500 lbs...............................................31.7 mpg ....

  2,750 lbs...............................................28.8 mpg ....

  3,000 lbs...............................................26.4 mpg ....

  3,500 lbs...............................................22.6 mpg ....

  4,000 lbs...............................................19.8 mpg ....

  4,500 lbs...............................................17.6 mpg ....

  5,000 lbs...............................................15.9 mpg ....

  5,500 lbs...............................................14.4 mpg ....

  6,000 lbs...............................................13.2 mpg ....

  6,500 lbs...............................................12.2 mpg ....

  7,000 to 8,500 lbs......................................11.3 mpg.....

       ``(ii) In the case of a light truck:

``If vehicle inertia weight clThe 2002 model year city fuel economy is:
1,500 or 1,750 lbs............................................39.4 mpg 
  2,000 lbs...............................................35.2 mpg ....

  2,250 lbs...............................................31.8 mpg ....

  2,500 lbs...............................................29.0 mpg ....

  2,750 lbs...............................................26.8 mpg ....

  3,000 lbs...............................................24.9 mpg ....

  3,500 lbs...............................................21.8 mpg ....

  4,000 lbs...............................................19.4 mpg ....

  4,500 lbs...............................................17.6 mpg ....

  5,000 lbs...............................................16.1 mpg ....

  5,500 lbs...............................................14.8 mpg ....

  6,000 lbs...............................................13.7 mpg ....

  6,500 lbs...............................................12.8 mpg ....

  7,000 to 8,500 lbs......................................12.1 mpg.....

       ``(C) Vehicle inertia weight class.--For purposes of 
     subparagraph (B), the term `vehicle inertia weight class' has 
     the same meaning as when defined in regulations prescribed by 
     the Administrator of the Environmental Protection Agency for 
     purposes of the administration of title II of the Clean Air 
     Act (42 U.S.C. 7521 et seq.).
       ``(3) New qualified fuel cell motor vehicle.--For purposes 
     of this subsection, the term `new qualified fuel cell motor 
     vehicle' means a motor vehicle--
       ``(A) which is propelled by power derived from 1 or more 
     cells which convert chemical energy directly into electricity 
     by combining oxygen with hydrogen fuel which is stored on 
     board the vehicle in any form and may or may not require 
     reformation prior to use,
       ``(B) which, in the case of a passenger automobile or light 
     truck, has received on or after the date of the enactment of 
     this section a certificate that such vehicle meets or exceeds 
     the Bin 5 Tier II emission level established in regulations 
     prescribed by the Administrator of the Environmental 
     Protection Agency under section 202(i) of the Clean Air Act 
     for that make and model year vehicle,
       ``(C) the original use of which commences with the 
     taxpayer,
       ``(D) which is acquired for use or lease by the taxpayer 
     and not for resale, and
       ``(E) which is made by a manufacturer.
       ``(c) New Advanced Lean Burn Technology Motor Vehicle 
     Credit.--
       ``(1) In general.--For purposes of subsection (a), the new 
     advanced lean burn technology motor vehicle credit determined 
     under this subsection with respect to a new advanced lean 
     burn technology motor vehicle placed in service by the 
     taxpayer during the taxable year is the credit amount 
     determined under paragraph (2).
       ``(2) Credit amount.--
       ``(A) Fuel economy.--
       ``(i) In general.--The credit amount determined under this 
     paragraph shall be determined in accordance with the 
     following table:
``In the case of a vehicle which achieves a fuel economy (expressed as 
  a percentage of the 2002 model year city fuel eThe credit amount is--
At least 125 percent but less than 150 percent...................$600  
At least 150 percent but less than 175 percent.................$1,100  
At least 175 percent but less than 200 percent.................$1,600  
At least 200 percent but less than 225 percent.................$2,100  
At least 225 percent but less than 250 percent.................$2,600  
At least 250 percent............................................$3,100.
       ``(ii) 2002 model year city fuel economy.--For purposes of 
     clause (i), the 2002 model year city fuel economy with 
     respect to a vehicle shall be determined on a gasoline gallon 
     equivalent basis as determined by the Administrator of the 
     Environmental Protection Agency using the tables provided in 
     subsection (b)(2)(B) with respect to such vehicle.
       ``(B) Conservation credit.--The amount determined under 
     subparagraph (A) with respect to a new advanced lean burn 
     technology motor vehicle shall be increased by the 
     conservation credit amount determined in accordance with the 
     following table:
``In the case of a vehicle which achieves a lifetime fuel savings 
  (expressed in gallons of gasoline)The conservation credit amount is--
  At least 1,200 but less than 1,800.........................$700  ....

  At least 1,800 but less than 2,400.......................$1,200  ....

  At least 2,400 but less than 3,000.......................$1,700  ....

  At least 3,000............................................$2,200.....

       ``(C) Option to use like vehicle.--At the option of the 
     vehicle manufacturer, the increase for fuel efficiency and 
     conservation credit may be calculated by comparing the new 
     qualified advanced lean burn technology motor vehicle to a 
     like vehicle.
       ``(3) New advanced lean burn technology motor vehicle.--For 
     purposes of this subsection, the term `new advanced lean burn 
     technology motor vehicle' means a passenger automobile or a 
     light truck--
       ``(A) with an internal combustion engine which--
       ``(i) is designed to operate primarily using more air than 
     is necessary for complete combustion of the fuel,
       ``(ii) incorporates direct injection,
       ``(iii) achieves at least 125 percent of the 2002 model 
     year city fuel economy,
       ``(iv) for 2004 and later model vehicles, has received a 
     certificate that such vehicle meets or exceeds--

       ``(I) in the case of a vehicle having a gross vehicle 
     weight rating of 6,000 pounds or less, 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, and
       ``(II) in the case of a vehicle having a gross vehicle 
     weight rating of more than 6,000 pounds but not more than 
     8,500 pounds, the Bin 8 Tier II emission standard which is so 
     established.

       ``(B) the original use of which commences with the 
     taxpayer,
       ``(C) which is acquired for use or lease by the taxpayer 
     and not for resale, and
       ``(D) which is made by a manufacturer.
       ``(4) Like vehicle.--The term `like vehicle' for a new 
     qualified advanced lean burn technology motor vehicle derived 
     from a conventional production vehicle produced in the same 
     model year means a model that is equivalent in the following 
     areas:
       ``(A) Body style (2-door or 4-door),
       ``(B) Transmission (automatic or manual),
       ``(C) Acceleration performance ( 0.05 seconds).
       ``(D) Drivetrain (2-wheel drive or 4-wheel drive).
       ``(E) Certification by the Administrator of the 
     Environmental Protection Agency.
       ``(5) Lifetime fuel savings.--For purposes of this 
     subsection, the term `lifetime fuel savings' means, in the 
     case of any new advanced lean burn technology motor vehicle, 
     an amount equal to the excess (if any) of--
       ``(A) 120,000 divided by the 2002 model year city fuel 
     economy for the vehicle inertia weight class, over
       ``(B) 120,000 divided by the city fuel economy for such 
     vehicle.
       ``(d) New Qualified Hybrid Motor Vehicle Credit.--
       ``(1) In general.--For purposes of subsection (a), the new 
     qualified hybrid motor vehicle credit determined under this 
     subsection with respect to a new qualified hybrid motor 
     vehicle placed in service by the taxpayer during the taxable 
     year is the credit amount determined under paragraph (2) or 
     (3).
       ``(2) Credit amount for lighter vehicles.--In the case of a 
     new qualified hybrid motor vehicle which is a passenger 
     automobile, medium duty passenger vehicle, or light truck, 
     the credit amount determined under this paragraph is equal to 
     the sum of following amounts:
       ``(A) Fuel economy.--The amount which would be determined 
     under subsection (c)(2)(A) if such vehicle were a vehicle 
     referred to in such subsection.
       ``(B) Conservation credit.--The amount which would be 
     determined under subsection (c)(2)(B) if such vehicle were a 
     vehicle referred to in such subsection.
       ``(iii) Option to use like vehicle.--For purposes of clause 
     (i), at the option of the vehicle manufacturer, the increase 
     for fuel efficiency and conservation credit may be calculated 
     by comparing the new qualified hybrid motor vehicle to a like 
     vehicle (as defined in subsection (c)(4)).
       ``(3) Credit amount for heavier vehicles.--
       ``(A) In general.--In the case of a new qualified hybrid 
     motor vehicle which is a heavy duty hybrid motor vehicle, the 
     credit amount determined under this paragraph is an amount 
     equal to the applicable percentage of the incremental cost of 
     such vehicle

[[Page S7124]]

     placed in service by the taxpayer during the taxable year.
       ``(B) Incremental cost.--For purposes of this paragraph, 
     the incremental cost of any heavy duty hybrid motor vehicle 
     is equal to the amount of the excess of the manufacturer's 
     suggested retail price for such vehicle over such price for a 
     comparable gasoline or diesel fuel motor vehicle of the same 
     model, to the extent such amount does not exceed--
       ``(i) $7,500, if such vehicle has a gross vehicle weight 
     rating of more than 8,500 pounds but not more than 14,000 
     pounds,
       ``(ii) $15,000, if such vehicle has a gross vehicle weight 
     rating of more than 14,000 pounds but not more than 26,000 
     pounds, and
       ``(iii) $30,000, if such vehicle has a gross vehicle weight 
     rating of more than 26,000 pounds.
       ``(C) Applicable percentage.--For purposes of subparagraph 
     (A), the applicable percentage shall be determined in 
     accordance with the following table:

``If percent increase in fuel economy of hybrid over comparable vehicle 
  is:                                     The applicable percentage is:
At least 30 but less than 40 percent........................20 percent.
At least 40 but less than 50 percent                        30 percent.
At least 50 percent.........................................40 percent.

       ``(4) New qualified hybrid motor vehicle.--For purposes of 
     this subsection--
       ``(A) In general.--The term `new qualified hybrid motor 
     vehicle' means a motor vehicle--
       ``(i) which draws propulsion energy from onboard sources of 
     stored energy which are both--

       ``(I) an internal combustion or heat engine using 
     consumable fuel, and
       ``(II) a rechargeable energy storage system,

       ``(ii) which, in the case of a passenger automobile, medium 
     duty passenger vehicle, or light truck--

       ``(I) having a gross vehicle weight rating of 6,000 pounds 
     or less, has received a certificate that such vehicle meets 
     or exceeds the Bin 5 Tier II emission level established in 
     regulations prescribed by the Administrator of the 
     Environmental Protection Agency under section 202(i) of the 
     Clean Air Act for that make and model year vehicle,
       ``(II) having a gross vehicle weight rating of more than 
     6,000 pounds but not more than 8,500 pounds, has received a 
     certificate that such vehicle meets or exceeds the Bin 8 Tier 
     II emission standard which is so established,
       ``(III) has received a certificate of conformity under the 
     Clean Air Act and meets or exceeds the equivalent qualifying 
     California low emission vehicle standard under section 
     243(e)(2) of the Clean Air Act for that make and model year, 
     and
       ``(IV) has a maximum available power of at least 5 percent,

       ``(iii) which, in the case of a heavy duty hybrid motor 
     vehicle--

       ``(I) having a gross vehicle weight rating of more than 
     8,500 but not more than 14,000 pounds, has a maximum 
     available power of at least 10 percent, and
       ``(II) having a gross vehicle weight rating of more than 
     14,000 pounds, has a maximum available power of at least 15 
     percent,

       ``(iv) the original use of which commences with the 
     taxpayer,
       ``(v) which is acquired for use or lease by the taxpayer 
     and not for resale, and
       ``(vi) which is made by a manufacturer.
       ``(B) Consumable fuel.--For purposes of subparagraph 
     (A)(i)(I), the term `consumable fuel' means any solid, 
     liquid, or gaseous matter which releases energy when consumed 
     by an auxiliary power unit.
       ``(C) Maximum available power.--
       ``(i) Passenger automobile, medium duty passenger vehicle, 
     or light truck.--For purposes of subparagraph (A)(ii)(II), 
     the term `maximum available power' means the maximum power 
     available from the rechargeable energy storage system, during 
     a standard 10 second pulse power or equivalent test, divided 
     by such maximum power and the SAE net power of the heat 
     engine.
       ``(ii) Heavy duty hybrid motor vehicle.--For purposes of 
     subparagraph (A)(iii), the term `maximum available power' 
     means the maximum power available from the rechargeable 
     energy storage system, during a standard 10 second pulse 
     power or equivalent test, divided by the vehicle's total 
     traction power. The term `total traction power' means the sum 
     of the peak power from the rechargeable energy storage system 
     and the heat engine peak power of the vehicle, except that if 
     such storage system is the sole means by which the vehicle 
     can be driven, the total traction power is the peak power of 
     such storage system.
       ``(4) Heavy duty hybrid motor vehicle.--For purposes of 
     this subsection, the term `heavy duty hybrid motor vehicle' 
     means a new qualified hybrid motor vehicle which has a gross 
     vehicle weight rating of more than 8,500 pounds. Such term 
     does not include a medium duty passenger vehicle.
       ``(e) New Qualified Alternative Fuel Motor Vehicle 
     Credit.--
       ``(1) Allowance of credit.--Except as provided in paragraph 
     (5), the new qualified alternative fuel motor vehicle credit 
     determined under this subsection is an amount equal to the 
     applicable percentage of the incremental cost of any new 
     qualified alternative fuel motor vehicle placed in service by 
     the taxpayer during the taxable year.
       ``(2) Applicable percentage.--For purposes of paragraph 
     (1), the applicable percentage with respect to any new 
     qualified alternative fuel motor vehicle is--
       ``(A) 50 percent, plus
       ``(B) 30 percent, if such vehicle--
       ``(i) has received a certificate of conformity under the 
     Clean Air Act and meets or exceeds the most stringent 
     standard available for certification under the Clean Air Act 
     for that make and model year vehicle (other than a zero 
     emission standard), or
       ``(ii) has received an order certifying the vehicle as 
     meeting the same requirements as vehicles which may be sold 
     or leased in California and meets or exceeds the most 
     stringent standard available for certification under the 
     State laws of California (enacted in accordance with a waiver 
     granted under section 209(b) of the Clean Air Act) for that 
     make and model year vehicle (other than a zero emission 
     standard).

     For purposes of the preceding sentence, in the case of any 
     new qualified alternative fuel motor vehicle which weighs 
     more than 14,000 pounds gross vehicle weight rating, the most 
     stringent standard available shall be such standard available 
     for certification on the date of the enactment of the Energy 
     Tax Incentives Act.
       ``(3) Incremental cost.--For purposes of this subsection, 
     the incremental cost of any new qualified alternative fuel 
     motor vehicle is equal to the amount of the excess of the 
     manufacturer's suggested retail price for such vehicle over 
     such price for a gasoline or diesel fuel motor vehicle of the 
     same model, to the extent such amount does not exceed--
       ``(A) $5,000, if such vehicle has a gross vehicle weight 
     rating of not more than 8,500 pounds,
       ``(B) $10,000, if such vehicle has a gross vehicle weight 
     rating of more than 8,500 pounds but not more than 14,000 
     pounds,
       ``(C) $25,000, if such vehicle has a gross vehicle weight 
     rating of more than 14,000 pounds but not more than 26,000 
     pounds, and
       ``(D) $40,000, if such vehicle has a gross vehicle weight 
     rating of more than 26,000 pounds.
       ``(4) New qualified alternative fuel motor vehicle.--For 
     purposes of this subsection--
       ``(A) In general.--The term `new qualified alternative fuel 
     motor vehicle' means any motor vehicle--
       ``(i) which is only capable of operating on an alternative 
     fuel,
       ``(ii) the original use of which commences with the 
     taxpayer,
       ``(iii) which is acquired by the taxpayer for use or lease, 
     but not for resale, and
       ``(iv) which is made by a manufacturer.
       ``(B) Alternative fuel.--The term `alternative fuel' means 
     compressed natural gas, liquefied natural gas, liquefied 
     petroleum gas, hydrogen, and any liquid at least 85 percent 
     of the volume of which consists of methanol.
       ``(5) Credit for mixed-fuel vehicles.--
       ``(A) In general.--In the case of a mixed-fuel vehicle 
     placed in service by the taxpayer during the taxable year, 
     the credit determined under this subsection is an amount 
     equal to--
       ``(i) in the case of a 75/25 mixed-fuel vehicle, 70 percent 
     of the credit which would have been allowed under this 
     subsection if such vehicle was a qualified alternative fuel 
     motor vehicle, and
       ``(ii) in the case of a 90/10 mixed-fuel vehicle, 90 
     percent of the credit which would have been allowed under 
     this subsection if such vehicle was a qualified alternative 
     fuel motor vehicle.
       ``(B) Mixed-fuel vehicle.--For purposes of this subsection, 
     the term `mixed-fuel vehicle' means any motor vehicle 
     described in subparagraph (C) or (D) of paragraph (3), 
     which--
       ``(i) is certified by the manufacturer as being able to 
     perform efficiently in normal operation on a combination of 
     an alternative fuel and a petroleum-based fuel,
       ``(ii) either--

       ``(I) has received a certificate of conformity under the 
     Clean Air Act, or
       ``(II) has received an order certifying the vehicle as 
     meeting the same requirements as vehicles which may be sold 
     or leased in California and meets or exceeds the low emission 
     vehicle standard under section 88.105-94 of title 40, Code of 
     Federal Regulations, for that make and model year vehicle,

       ``(iii) the original use of which commences with the 
     taxpayer,
       ``(iv) which is acquired by the taxpayer for use or lease, 
     but not for resale, and
       ``(v) which is made by a manufacturer.
       ``(C) 75/25 mixed-fuel vehicle.--For purposes of this 
     subsection, the term `75/25 mixed-fuel vehicle' means a 
     mixed-fuel vehicle which operates using at least 75 percent 
     alternative fuel and not more than 25 percent petroleum-based 
     fuel.
       ``(D) 90/10 mixed-fuel vehicle.--For purposes of this 
     subsection, the term `90/10 mixed-fuel vehicle' means a 
     mixed-fuel vehicle which operates using at least 90 percent 
     alternative fuel and not more than 10 percent petroleum-based 
     fuel.
       ``(f) Limitation on Number of New Qualified Hybrid and 
     Advanced Lean-burn Technology Vehicles Eligible for Credit.--
       ``(1) In general.--In the case of a qualified vehicle sold 
     during the phaseout period, only the applicable percentage of 
     the credit otherwise allowable under subsection (c) or (d) 
     shall be allowed.
       ``(2) Phaseout period.--For purposes of this subsection, 
     the phaseout period is the period beginning with the second 
     calendar quarter following the calendar quarter which 
     includes the first date on which the number of qualified 
     vehicles manufactured by the

[[Page S7125]]

     manufacturer of the vehicle referred to in paragraph (1) sold 
     for use in the United States after the date of the enactment 
     of this section is at least 80,000.
       ``(3) Applicable percentage.--For purposes of paragraph 
     (1), the applicable percentage is--
       ``(A) 50 percent for the first 2 calendar quarters of the 
     phaseout period,
       ``(B) 25 percent for the 3d and 4th calendar quarters of 
     the phaseout period, and
       ``(C) 0 percent for each calendar quarter thereafter.
       ``(4) Controlled groups.--
       ``(A) In general.--For purposes of this subsection, all 
     persons treated as a single employer under subsection (a) or 
     (b) of section 52 or subsection (m) or (o) of section 414 
     shall be treated as a single manufacturer.
       ``(B) Inclusion of foreign corporations.--For purposes of 
     subparagraph (A), in applying subsections (a) and (b) of 
     section 52 to this section, section 1563 shall be applied 
     without regard to subsection (b)(2)(C) thereof.
       ``(5) Qualified vehicle.--For purposes of this subsection, 
     the term `qualified vehicle' means any new qualified hybrid 
     motor vehicle and any new advanced lean burn technology motor 
     vehicle.
       ``(g) Application With Other Credits.--The credit allowed 
     under subsection (a) for any taxable year shall not exceed 
     the excess (if any) of--
       ``(1) the regular tax for the taxable year reduced by the 
     sum of the credits allowable under subpart A and sections 27, 
     29, and 30, over
       ``(2) the tentative minimum tax for the taxable year.
       ``(h) Other Definitions and Special Rules.--For purposes of 
     this section--
       ``(1) Motor vehicle.--The term `motor vehicle' has the 
     meaning given such term by section 30(c)(2).
       ``(2) City fuel economy.--The city fuel economy with 
     respect to any vehicle shall be measured in a manner which is 
     substantially similar to the manner city fuel economy is 
     measured in accordance with procedures under part 600 of 
     subchapter Q of chapter I of title 40, Code of Federal 
     Regulations, as in effect on the date of the enactment of 
     this section.
       ``(3) Other terms.--The terms `automobile', `passenger 
     automobile', `medium duty passenger vehicle', `light truck', 
     and `manufacturer' have the meanings given such terms in 
     regulations prescribed by the Administrator of the 
     Environmental Protection Agency for purposes of the 
     administration of title II of the Clean Air Act (42 U.S.C. 
     7521 et seq.).
       ``(4)  Reduction in basis.--For purposes of this subtitle, 
     the basis of any property for which a credit is allowable 
     under subsection (a) shall be reduced by the amount of such 
     credit so allowed (determined without regard to subsection 
     (e)).
       ``(5) No double benefit.--The amount of any deduction or 
     other credit allowable under this chapter--
       ``(A) for any incremental cost taken into account in 
     computing the amount of the credit determined under 
     subsection (e) shall be reduced by the amount of such credit 
     attributable to such cost, and
       ``(B) with respect to a vehicle described under subsection 
     (b), (c), or (d) shall be reduced by the amount of credit 
     allowed under subsection (a) for such vehicle for the taxable 
     year.
       ``(6) Property used by tax-exempt entity.--In the case of a 
     vehicle whose use is described in paragraph (3) or (4) of 
     section 50(b) and which is not subject to a lease, the person 
     who sold such vehicle to the person or entity using such 
     vehicle shall be treated as the taxpayer that placed such 
     vehicle in service, but only if such person clearly discloses 
     to such person or entity in a document the amount of any 
     credit allowable under subsection (a) with respect to such 
     vehicle (determined without regard to subsection (g)).
       ``(7) Property used outside united states, etc., not 
     qualified.--No credit shall be allowable under subsection (a) 
     with respect to any property referred to in section 50(b)(1) 
     or with respect to the portion of the cost of any property 
     taken into account under section 179.
       ``(8) Recapture.--The Secretary shall, by regulations, 
     provide for recapturing the benefit of any credit allowable 
     under subsection (a) with respect to any property which 
     ceases to be property eligible for such credit (including 
     recapture in the case of a lease period of less than the 
     economic life of a vehicle).
       ``(9) Election to not take credit.--No credit shall be 
     allowed under subsection (a) for any vehicle if the taxpayer 
     elects to not have this section apply to such vehicle.
       ``(10) Carryback and carryforward allowed.--
       ``(A) In general.--If the credit allowable under subsection 
     (a) for a taxable year exceeds the amount of the limitation 
     under subsection (g) for such taxable year (in this paragraph 
     referred to as the `unused credit year'), such excess shall 
     be a credit carryback to each of the 3 taxable years 
     preceding the unused credit year and a credit carryforward to 
     each of the 20 taxable years following the unused credit 
     year, except that no excess may be carried to a taxable year 
     beginning before the date of the enactment of this section. 
     The preceding sentence shall not apply to any credit 
     carryback if such credit carryback is attributable to 
     property for which a deduction for depreciation is not 
     allowable.
       ``(B) Rules.--Rules similar to the rules of section 39 
     shall apply with respect to the credit carryback and credit 
     carryforward under subparagraph (A).
       ``(11) Interaction with air quality and motor vehicle 
     safety standards.--Unless otherwise provided in this section, 
     a motor vehicle shall not be considered eligible for a credit 
     under this section unless such vehicle is in compliance 
     with--
       ``(A) the applicable provisions of the Clean Air Act for 
     the applicable make and model year of the vehicle (or 
     applicable air quality provisions of State law in the case of 
     a State which has adopted such provision under a waiver under 
     section 209(b) of the Clean Air Act), and
       ``(B) the motor vehicle safety provisions of sections 30101 
     through 30169 of title 49, United States Code.
       ``(g) Regulations.--
       ``(1) In general.--Except as provided in paragraph (2), the 
     Secretary shall promulgate such regulations as necessary to 
     carry out the provisions of this section.
       ``(2) Coordination in prescription of certain 
     regulations.--The Secretary of the Treasury, in coordination 
     with the Secretary of Transportation and the Administrator of 
     the Environmental Protection Agency, shall prescribe such 
     regulations as necessary to determine whether a motor vehicle 
     meets the requirements to be eligible for a credit under this 
     section.
       ``(h) Termination.--This section shall not apply to any 
     property purchased after--
       ``(1) in the case of a new qualified fuel cell motor 
     vehicle (as described in subsection (b)), December 31, 2015,
       ``(2) in the case of a new advanced lean burn technology 
     motor vehicle (as described in subsection (c)) or a new 
     qualified hybrid motor vehicle (as described in subsection 
     (d)), December 31, 2009, and
       ``(3) in the case of a new qualified alternative fuel 
     vehicle (as described in subsection (e)), December 31, 
     2010.''.
       (b) Conforming Amendments.--
       (1) Section 1016(a), as amended by this Act, is amended by 
     striking ``and'' at the end of paragraph (35), by striking 
     the period at the end of paragraph (36) and inserting ``, 
     and'', and by adding at the end the following new paragraph:
       ``(37) to the extent provided in section 30B(h)(4).''.
       (2) Section 55(c)(2), as amended by this Act, is amended by 
     inserting ``30B(g),'' after ``30(b)(2),''.
       (3) Section 6501(m) is amended by inserting ``30B(h)(9),'' 
     after ``30(d)(4),''.
       (4) The table of sections for subpart B of part IV of 
     subchapter A of chapter 1 is amended by inserting after the 
     item relating to section 30A the following new item:

``Sec. 30B. Alternative motor vehicle credit.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after the date of 
     the enactment of this Act, in taxable years ending after such 
     date.
       (d) Sticker Information Required at Retail Sale.--
       (1) In general.--The Secretary of the Treasury shall issue 
     regulations under which each qualified vehicle sold at retail 
     shall display a notice--
       (A) that such vehicle is a qualified vehicle, and
       (B) that the buyer may not benefit from the credit allowed 
     under section 30B of the Internal Revenue Code of 1986 if 
     such buyer has insufficient tax liability.
       (2) Qualified vehicle.--For purposes of paragraph (1), the 
     term ``qualified vehicle'' means a vehicle with respect to 
     which a credit is allowed under section 30B of the Internal 
     Revenue Code of 1986.
       (e) Nonapplication of Section.--Notwithstanding any other 
     provision of this Act, the provisions of, and amendments made 
     by, section 1531 of this Act shall be null and void.

     SEC. 1702. CREDIT FOR INSTALLATION OF ALTERNATIVE FUEL 
                   REFUELING STATIONS.

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

     ``SEC. 30C. ALTERNATIVE FUEL VEHICLE REFUELING PROPERTY 
                   CREDIT.

       ``(a) Credit Allowed.--There shall be allowed as a credit 
     against the tax imposed by this chapter for the taxable year 
     an amount equal to 50 percent of the cost of any qualified 
     alternative fuel vehicle refueling property placed in service 
     by the taxpayer during the taxable year.
       ``(b) Limitation.--The credit allowed under subsection (a) 
     with respect to any alternative fuel vehicle refueling 
     property shall not exceed--
       ``(1) $50,000 in the case of a property of a character 
     subject to an allowance for depreciation, and
       ``(2) $1,000 in any other case.
       ``(c) Qualified Alternative Fuel Vehicle Refueling 
     Property.--For purposes of this section--
       ``(1) In general.--Except as provided in paragraph (2), the 
     term `qualified alternative fuel vehicle refueling property' 
     has the meaning given to such term by section 179A(d), but 
     only with respect to any fuel at least 85 percent of the 
     volume of which consists of ethanol, natural gas, compressed 
     natural gas, liquefied natural gas, liquefied petroleum gas, 
     and hydrogen.

[[Page S7126]]

       ``(2) Residential property.--In the case of any property 
     installed on property which is used as the principal 
     residence (within the meaning of section 121) of the 
     taxpayer, paragraph (1) of section 179A(d) shall not apply.
       ``(d) Application With Other Credits.--The credit allowed 
     under subsection (a) for any taxable year shall not exceed 
     the excess (if any) of--
       ``(1) the regular tax for the taxable year reduced by the 
     sum of the credits allowable under subpart A and sections 27, 
     29, 30, and 30B, over
       ``(2) the tentative minimum tax for the taxable year.
       ``(e) Carryforward Allowed.--
       ``(1) In general.--If the credit amount allowable under 
     subsection (a) for a taxable year exceeds the amount of the 
     limitation under subsection (d) for such taxable year, such 
     excess shall be allowed as a credit carryforward for each of 
     the 20 taxable years following the unused credit year.
       ``(2) Rules.--Rules similar to the rules of section 39 
     shall apply with respect to the credit carryforward under 
     paragraph (1).
       ``(f) Special Rules.--For purposes of this section--
       ``(1) Basis reduction.--The basis of any property shall be 
     reduced by the portion of the cost of such property taken 
     into account under subsection (a).
       ``(2) No double benefit.--No deduction shall be allowed 
     under section 179A with respect to any property with respect 
     to which a credit is allowed under subsection (a).
       ``(3) Property used by tax-exempt entity.--In the case of 
     any qualified alternative fuel vehicle refueling property the 
     use of which is described in paragraph (3) or (4) of section 
     50(b) and which is not subject to a lease, the person who 
     sold such property to the person or entity using such 
     property shall be treated as the taxpayer that placed such 
     property in service, but only if such person clearly 
     discloses to such person or entity in a document the amount 
     of any credit allowable under subsection (a) with respect to 
     such property (determined without regard to subsection (d)).
       ``(4) Property used outside united states not qualified.--
     No credit shall be allowable under subsection (a) with 
     respect to any property referred to in section 50(b)(1) or 
     with respect to the portion of the cost of any property taken 
     into account under section 179.
       ``(5) 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.
       ``(6) Recapture rules.--Rules similar to the rules of 
     section 179A(e)(4) shall apply.
       ``(g) Regulations.--The Secretary shall prescribe such 
     regulations as necessary to carry out the provisions of this 
     section.
       ``(h) Termination.--This section shall not apply to any 
     property placed in service--
       ``(1) in the case of property relating to hydrogen, after 
     December 31, 2014, and
       ``(2) in the case of any other property, after December 31, 
     2009.''.
       (b) Modifications to Extension of Deduction for Certain 
     Refueling Property.--
       (1) Increase in deduction for hydrogen infrastructure.--
     Section 179A(b)(2)(A)(i) is amended by inserting ``($200,000 
     in the case of property relating to hydrogen)'' after 
     ``$100,000''.
       (2) Extension of deduction.--Subsection (f) of section 179A 
     is amended to read as follows:
       ``(f) Termination.--This section shall not apply to any 
     property placed in service--
       ``(1) in the case of property relating to hydrogen, after 
     December 31, 2014, and
       ``(2) in the case of any other property, after December 31, 
     2009.''.
       (c) Incentive for Production of Hydrogen at Qualified 
     Clean-fuel Vehicle Refueling Property.--Section 179A(d) 
     (defining qualified clean-fuel vehicle refueling property) is 
     amended by adding at the end the following new flush 
     sentence:
     ``In the case of clean-burning fuel which is hydrogen 
     produced from another clean-burning fuel, paragraph (3)(A) 
     shall be applied by substituting `production, storage, or 
     dispensing' for `storage or dispensing' both places it 
     appears.''.
       (d) Conforming Amendments.--
       (1) Section 1016(a), as amended by this Act, 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 30C(f).''.
       (2) Section 55(c)(2), as amended by this Act, is amended by 
     inserting ``30C(e),'' after ``30B(e),''.
       (3) Section 6501(m) is amended by inserting ``30C(f)(5),'' 
     after ``30B(f)(9),''.
       (4) The table of sections for subpart B of part IV of 
     subchapter A of chapter 1, as amended by this Act, is amended 
     by inserting after the item relating to section 30B the 
     following new item:

``Sec. 30C. Clean-fuel vehicle refueling property credit.''.

       (e) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after December 31, 
     2005, in taxable years ending after such date.
       (f) Nonapplication of Section.--Notwithstanding any other 
     provision of this Act, the provisions of, and amendments made 
     by, section 1533 of this Act shall be null and void.

     SEC. 1703. ADVANCED TECHNOLOGY MOTOR VEHICLES MANUFACTURING 
                   CREDIT.

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

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

       ``(a) Credit Allowed.--There shall be allowed as a credit 
     against the tax imposed by this chapter for the taxable year 
     an amount equal to 35 percent of so much of the qualified 
     investment of an eligible taxpayer for such taxable year as 
     does not exceed $25,000,000.
       ``(b) Qualified Investment.--For purposes of this section--
       ``(1) In general.--The qualified investment for any taxable 
     year is equal to the incremental costs incurred during such 
     taxable year--
       ``(A) to re-equip or expand any manufacturing facility of 
     the eligible taxpayer to produce advanced technology motor 
     vehicles or to produce eligible components,
       ``(B) for engineering integration of such vehicles and 
     components as described in subsection (d), and
       ``(C) for research and development related to advanced 
     technology motor vehicles and eligible components.
       ``(2) Attribution rules.--In the event a facility of the 
     eligible taxpayer produces both advanced technology motor 
     vehicles and conventional motor vehicles, or eligible and 
     non-eligible components, only the qualified investment 
     attributable to production of advanced technology motor 
     vehicles and eligible components shall be taken into account.
       ``(c) Advanced Technology Motor Vehicles and Eligible 
     Components.--For purposes of this section--
       ``(1) Advanced technology motor vehicle.--The term 
     `advanced technology motor vehicle' means--
       ``(A) any new advanced lean burn technology motor vehicle 
     (as defined in section 30B(c)(3)), or
       ``(B) any new qualified hybrid motor vehicle (as defined in 
     section 30B(d)(2)(A) and determined without regard to any 
     gross vehicle weight rating).
       ``(2) Eligible components.--The term `eligible component' 
     means any component inherent to any advanced technology motor 
     vehicle, including--
       ``(A) with respect to any gasoline or diesel-electric new 
     qualified hybrid motor vehicle--
       ``(i) electric motor or generator,
       ``(ii) power split device,
       ``(iii) power control unit,
       ``(iv) power controls,
       ``(v) integrated starter generator, or
       ``(vi) battery,
       ``(B) with respect to any hydraulic new qualified hybrid 
     motor vehicle--
       ``(i) hydraulic accumulator vessel,
       ``(ii) hydraulic pump, or
       ``(iii) hydraulic pump-motor assembly,
       ``(C) with respect to any new advanced lean burn technology 
     motor vehicle--
       ``(i) diesel engine,
       ``(ii) turbocharger,
       ``(iii) fuel injection system, or
       ``(iv) after-treatment system, such as a particle filter or 
     NOx absorber, and
       ``(D) with respect to any advanced technology motor 
     vehicle, any other component submitted for approval by the 
     Secretary.
       ``(d) Engineering Integration Costs.--For purposes of 
     subsection (b)(1)(B), costs for engineering integration are 
     costs incurred prior to the market introduction of advanced 
     technology vehicles for engineering tasks related to--
       ``(1) establishing functional, structural, and performance 
     requirements for component and subsystems to meet overall 
     vehicle objectives for a specific application,
       ``(2) designing interfaces for components and subsystems 
     with mating systems within a specific vehicle application,
       ``(3) designing cost effective, efficient, and reliable 
     manufacturing processes to produce components and subsystems 
     for a specific vehicle application, and
       ``(4) validating functionality and performance of 
     components and subsystems for a specific vehicle application.
       ``(e) Eligible Taxpayer.--For purposes of this section, the 
     term `eligible taxpayer' means any taxpayer if more than 50 
     percent of its gross receipts for the taxable year is derived 
     from the manufacture of motor vehicles or any component parts 
     of such vehicles.
       ``(f) Limitation Based on Amount of Tax.--The credit 
     allowed under subsection (a) for the taxable year shall not 
     exceed the excess of--
       ``(1) the sum of--
       ``(A) the regular tax liability (as defined in section 
     26(b)) for such taxable year, plus
       ``(B) the tax imposed by section 55 for such taxable year 
     and any prior taxable year beginning after 1986 and not taken 
     into account under section 53 for any prior taxable year, 
     over
       ``(2) the sum of the credits allowable under subpart A and 
     sections 27, 30, and 30B for the taxable year.
       ``(g) Reduction in Basis.--For purposes of this subtitle, 
     if a credit is allowed under this section for any expenditure 
     with respect to any property, the increase in the basis of 
     such property which would (but for this paragraph) result 
     from such expenditure shall be reduced by the amount of the 
     credit so allowed.
       ``(h) No Double Benefit.--
       ``(1) Coordination with other deductions and credits.--
     Except as provided in paragraph (2), the amount of any 
     deduction or other credit allowable under this chapter for

[[Page S7127]]

     any cost taken into account in determining the amount of the 
     credit under subsection (a) shall be reduced by the amount of 
     such credit attributable to such cost.
       ``(2) Research and development costs.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     any amount described in subsection (b)(1)(C) taken into 
     account in determining the amount of the credit under 
     subsection (a) for any taxable year shall not be taken into 
     account for purposes of determining the credit under section 
     41 for such taxable year.
       ``(B) Costs taken into account in determining base period 
     research expenses.--Any amounts described in subsection 
     (b)(1)(C) taken into account in determining the amount of the 
     credit under subsection (a) for any taxable year which are 
     qualified research expenses (within the meaning of section 
     41(b)) shall be taken into account in determining base period 
     research expenses for purposes of applying section 41 to 
     subsequent taxable years.
       ``(i) Business Carryovers Allowed.--If the credit allowable 
     under subsection (a) for a taxable year exceeds the 
     limitation under subsection (f) for such taxable year, such 
     excess (to the extent of the credit allowable with respect to 
     property subject to the allowance for depreciation) shall be 
     allowed as a credit carryback and carryforward under rules 
     similar to the rules of section 39.
       ``(j) Special Rules.--For purposes of this section, rules 
     similar to the rules of paragraphs (4) and (5) of section 
     179A(e) and paragraphs (1) and (2) of section 41(f) shall 
     apply
       ``(k) Election Not To Take Credit.--No credit shall be 
     allowed under subsection (a) for any property if the taxpayer 
     elects not to have this section apply to such property.
       ``(l) Regulations.--The Secretary shall prescribe such 
     regulations as necessary to carry out the provisions of this 
     section.
       ``(m) Termination.--This section shall not apply to any 
     qualified investment after December 31, 2010.''.
       (b) Conforming Amendments.--
       (1) Section 1016(a), as amended by this Act, is amended by 
     striking ``and'' at the end of paragraph (39), by striking 
     the period at the end of paragraph (40) and inserting ``, 
     and'', and by adding at the end the following new paragraph:
       ``(41) to the extent provided in section 30D(g).''.
       (2) Section 6501(m), as amended by this Act, is amended by 
     inserting ``30D(k),'' after ``30C(j),''.
       (3) The table of sections for subpart B of part IV of 
     subchapter A of chapter 1, as amended by this Act, is amended 
     by inserting after the item relating to section 30C the 
     following new item:

``Sec. 30D. Advanced technology motor vehicles manufacturing credit.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to amounts incurred in taxable years beginning 
     after December 31, 2005.

                 Subtitle B--Revenue Offset Provisions

  PART I--REDUCTION IN EXTENSION OF RENEWABLE ELECTRICITY PRODUCTION 
                                 CREDIT

     SEC. 1705. EXTENSION OF RENEWABLE ELECTRICITY PRODUCTION 
                   CREDIT THROUGH 2007.

       Paragraphs (1), (2), (3), (5), (6), (7), (9), and (10) of 
     section 45(d) of the Internal Revenue Code of 1986, as 
     amended by title XV, are amended by striking ``2009'' each 
     place it appears and inserting ``2008''.

                      PART II--GENERAL PROVISIONS

     SEC. 1711. TREATMENT OF CONTINGENT PAYMENT CONVERTIBLE DEBT 
                   INSTRUMENTS.

       (a) In General.--Section 1275(d) (relating to regulation 
     authority) is amended--
       (1) by striking ``The Secretary'' and inserting the 
     following:
       ``(1) In general.--The Secretary'', and
       (2) by adding at the end the following new paragraph:
       ``(2) Treatment of contingent payment convertible debt.--
       ``(A) In general.--In the case of a debt instrument which--
       ``(i) is convertible into stock of the issuing corporation, 
     into stock or debt of a related party (within the meaning of 
     section 267(b) or 707(b)(1)), or into cash or other property 
     in an amount equal to the approximate value of such stock or 
     debt, and
       ``(ii) provides for contingent payments,

     any regulations which require original issue discount to be 
     determined by reference to the comparable yield of a 
     noncontingent fixed-rate debt instrument shall be applied as 
     if the regulations require that such comparable yield be 
     determined by reference to a noncontingent fixed-rate debt 
     instrument which is convertible into stock.
       ``(B) Special rule.--For purposes of subparagraph (A), the 
     comparable yield shall be determined without taking into 
     account the yield resulting from the conversion of a debt 
     instrument into stock.''.
       (b) Cross Reference.--Section 163(e)(6) (relating to cross 
     references) is amended by adding at the end the following:
     ``For the treatment of contingent payment convertible debt, 
     see section 1275(d)(2).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to debt instruments issued on or after the date 
     of the enactment of this Act.

     SEC. 1712. FRIVOLOUS TAX SUBMISSIONS.

       (a) Civil Penalties.--Section 6702 is amended to read as 
     follows:

     ``SEC. 6702. FRIVOLOUS TAX SUBMISSIONS.

       ``(a) Civil Penalty for Frivolous Tax Returns.--A person 
     shall pay a penalty of $5,000 if--
       ``(1) such person files what purports to be a return of a 
     tax imposed by this title but which--
       ``(A) does not contain information on which the substantial 
     correctness of the self-assessment may be judged, or
       ``(B) contains information that on its face indicates that 
     the self-assessment is substantially incorrect; and
       ``(2) the conduct referred to in paragraph (1)--
       ``(A) is based on a position which the Secretary has 
     identified as frivolous under subsection (c), or
       ``(B) reflects a desire to delay or impede the 
     administration of Federal tax laws.
       ``(b) Civil Penalty for Specified Frivolous Submissions.--
       ``(1) Imposition of penalty.--Except as provided in 
     paragraph (3), any person who submits a specified frivolous 
     submission shall pay a penalty of $5,000.
       ``(2) Specified frivolous submission.--For purposes of this 
     section--
       ``(A) Specified frivolous submission.--The term `specified 
     frivolous submission' means a specified submission if any 
     portion of such submission--
       ``(i) is based on a position which the Secretary has 
     identified as frivolous under subsection (c), or
       ``(ii) reflects a desire to delay or impede the 
     administration of Federal tax laws.
       ``(B) Specified submission.--The term `specified 
     submission' means--
       ``(i) a request for a hearing under--

       ``(I) section 6320 (relating to notice and opportunity for 
     hearing upon filing of notice of lien), or
       ``(II) section 6330 (relating to notice and opportunity for 
     hearing before levy), and

       ``(ii) an application under--

       ``(I) section 6159 (relating to agreements for payment of 
     tax liability in installments),
       ``(II) section 7122 (relating to compromises), or
       ``(III) section 7811 (relating to taxpayer assistance 
     orders).

       ``(3) Opportunity to withdraw submission.--If the Secretary 
     provides a person with notice that a submission is a 
     specified frivolous submission and such person withdraws such 
     submission within 30 days after such notice, the penalty 
     imposed under paragraph (1) shall not apply with respect to 
     such submission.
       ``(c) Listing of Frivolous Positions.--The Secretary shall 
     prescribe (and periodically revise) a list of positions which 
     the Secretary has identified as being frivolous for purposes 
     of this subsection. The Secretary shall not include in such 
     list any position that the Secretary determines meets the 
     requirement of section 6662(d)(2)(B)(ii)(II).
       ``(d) Reduction of Penalty.--The Secretary may reduce the 
     amount of any penalty imposed under this section if the 
     Secretary determines that such reduction would promote 
     compliance with and administration of the Federal tax laws.
       ``(e) Penalties in Addition to Other Penalties.--The 
     penalties imposed by this section shall be in addition to any 
     other penalty provided by law.''.
       (b) Treatment of Frivolous Requests for Hearings Before 
     Levy.--
       (1) Frivolous requests disregarded.--Section 6330 (relating 
     to notice and opportunity for hearing before levy) is amended 
     by adding at the end the following new subsection:
       ``(g) Frivolous Requests for Hearing, Etc.--Notwithstanding 
     any other provision of this section, if the Secretary 
     determines that any portion of a request for a hearing under 
     this section or section 6320 meets the requirement of clause 
     (i) or (ii) of section 6702(b)(2)(A), then the Secretary may 
     treat such portion as if it were never submitted and such 
     portion shall not be subject to any further administrative or 
     judicial review.''.
       (2) Preclusion from raising frivolous issues at hearing.--
     Section 6330(c)(4) is amended--
       (A) by striking ``(A)'' and inserting ``(A)(i)'';
       (B) by striking ``(B)'' and inserting ``(ii)'';
       (C) by striking the period at the end of the first sentence 
     and inserting ``; or''; and
       (D) by inserting after subparagraph (A)(ii) (as so 
     redesignated) the following:
       ``(B) the issue meets the requirement of clause (i) or (ii) 
     of section 6702(b)(2)(A).''.
       (3) Statement of grounds.--Section 6330(b)(1) is amended by 
     striking ``under subsection (a)(3)(B)'' and inserting ``in 
     writing under subsection (a)(3)(B) and states the grounds for 
     the requested hearing''.
       (c) Treatment of Frivolous Requests for Hearings Upon 
     Filing of Notice of Lien.--Section 6320 is amended--
       (1) in subsection (b)(1), by striking ``under subsection 
     (a)(3)(B)'' and inserting ``in writing under subsection 
     (a)(3)(B) and states the grounds for the requested hearing'', 
     and
       (2) in subsection (c), by striking ``and (e)'' and 
     inserting ``(e), and (g)''.
       (d) Treatment of Frivolous Applications for Offers-in-
     Compromise and Installment Agreements.--Section 7122 is 
     amended by adding at the end the following new subsection:
       ``(e) Frivolous Submissions, Etc.--Notwithstanding any 
     other provision of this section, if the Secretary determines 
     that any portion of an application for an offer-in-compromise 
     or installment agreement submitted under this section or 
     section 6159 meets the requirement of clause (i) or (ii) of 
     section 6702(b)(2)(A), then the Secretary may treat

[[Page S7128]]

     such portion as if it were never submitted and such portion 
     shall not be subject to any further administrative or 
     judicial review.''.
       (e) Clerical Amendment.--The table of sections for part I 
     of subchapter B of chapter 68 is amended by striking the item 
     relating to section 6702 and inserting the following new 
     item:

``Sec. 6702. Frivolous tax submissions.''.
       (f) Effective Date.--The amendments made by this section 
     shall apply to submissions made and issues raised after the 
     date on which the Secretary first prescribes a list under 
     section 6702(c) of the Internal Revenue Code of 1986, as 
     amended by subsection (a).

     SEC. 1713. INCREASE IN CERTAIN CRIMINAL PENALTIES.

       (a) In General.--Section 7206 (relating to fraud and false 
     statements) is amended--
       (1) by striking ``Any person who--'' and inserting ``(a) In 
     General.--Any person who--'', and
       (2) by adding at the end the following new subsection:
       ``(b) Increase in Monetary Limitation for Underpayment or 
     Overpayment of Tax Due to Fraud.--If any portion of any 
     underpayment (as defined in section 6664(a)) or overpayment 
     (as defined in section 6401(a)) of tax required to be shown 
     on a return is attributable to fraudulent action described in 
     subsection (a), the applicable dollar amount under subsection 
     (a) shall in no event be less than an amount equal to such 
     portion. A rule similar to the rule under section 6663(b) 
     shall apply for purposes of determining the portion so 
     attributable.''.
       (b) Increase in Penalties.--
       (1) Attempt to evade or defeat tax.--Section 7201 is 
     amended--
       (A) by striking ``$100,000'' and inserting ``$500,000'',
       (B) by striking ``$500,000'' and inserting ``$1,000,000'', 
     and
       (C) by striking ``5 years'' and inserting ``10 years''.
       (2) Willful failure to file return, supply information, or 
     pay tax.--Section 7203 is amended--
       (A) in the first sentence--
       (i) by striking ``Any person'' and inserting the following:
       ``(a) In General.--Any person'', and
       (ii) by striking ``$25,000'' and inserting ``$50,000'',
       (B) in the third sentence, by striking ``section'' and 
     inserting ``subsection'', and
       (C) by adding at the end the following new subsection:
       ``(b) Aggravated Failure To File.--
       ``(1) In general.--In the case of any failure described in 
     paragraph (2), the first sentence of subsection (a) shall be 
     applied by substituting--
       ``(A) `felony' for `misdemeanor',
       ``(B) `$500,000 ($1,000,000' for `$25,000 ($100,000', and
       ``(C) `10 years' for `1 year'.
       ``(2) Failure described.--A failure described in this 
     paragraph is a failure to make a return described in 
     subsection (a) for a period of 3 or more consecutive taxable 
     years and the aggregated tax liability for such period is at 
     least $100,000.''.
       (3) Fraud and false statements.--Section 7206(a) (as 
     redesignated by subsection (a)) is amended--
       (A) by striking ``$100,000'' and inserting ``$500,000'',
       (B) by striking ``$500,000'' and inserting ``$1,000,000'', 
     and
       (C) by striking ``3 years'' and inserting ``5 years''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to actions, and failures to act, occurring after 
     the date of the enactment of this Act.

     SEC. 1714. DOUBLING OF CERTAIN PENALTIES, FINES, AND INTEREST 
                   ON UNDERPAYMENTS RELATED TO CERTAIN OFFSHORE 
                   FINANCIAL ARRANGEMENTS.

       (a) Determination of Penalty.--
       (1) In general.--Notwithstanding any other provision of 
     law, in the case of an applicable taxpayer--
       (A) the determination as to whether any interest or 
     applicable penalty is to be imposed with respect to any 
     arrangement described in paragraph (2), or to any 
     underpayment of Federal income tax attributable to items 
     arising in connection with any such arrangement, shall be 
     made without regard to the rules of subsections (b), (c), and 
     (d) of section 6664 of the Internal Revenue Code of 1986, and
       (B) if any such interest or applicable penalty is imposed, 
     the amount of such interest or penalty shall be equal to 
     twice that determined without regard to this section.
       (2) Applicable taxpayer.--For purposes of this subsection--
       (A) In general.--The term ``applicable taxpayer'' means a 
     taxpayer which--
       (i) has underreported its United States income tax 
     liability with respect to any item which directly or 
     indirectly involves--

       (I) any financial arrangement which in any manner relies on 
     the use of offshore payment mechanisms (including credit, 
     debit, or charge cards) issued by banks or other entities in 
     foreign jurisdictions, or
       (II) any offshore financial arrangement (including any 
     arrangement with foreign banks, financial institutions, 
     corporations, partnerships, trusts, or other entities), and

       (ii) has not signed a closing agreement pursuant to the 
     Voluntary Offshore Compliance Initiative established by the 
     Department of the Treasury under Revenue Procedure 2003-11 or 
     voluntarily disclosed its participation in such arrangement 
     by notifying the Internal Revenue Service of such arrangement 
     prior to the issue being raised by the Internal Revenue 
     Service during an examination.
       (B) Authority to waive.--The Secretary of the Treasury or 
     the Secretary's delegate may waive the application of 
     paragraph (1) to any taxpayer if the Secretary or the 
     Secretary's delegate determines that the use of such offshore 
     payment mechanisms is incidental to the transaction and, in 
     addition, in the case of a trade or business, such use is 
     conducted in the ordinary course of the trade or business of 
     the taxpayer.
       (C) Issues raised.--For purposes of subparagraph (A)(ii), 
     an item shall be treated as an issue raised during an 
     examination if the individual examining the return--
       (i) communicates to the taxpayer knowledge about the 
     specific item, or
       (ii) has made a request to the taxpayer for information and 
     the taxpayer could not make a complete response to that 
     request without giving the examiner knowledge of the specific 
     item.
       (b) Definitions and Rules.--For purposes of this section--
       (1) Applicable penalty.--The term ``applicable penalty'' 
     means any penalty, addition to tax, or fine imposed under 
     chapter 68 of the Internal Revenue Code of 1986.
       (2) Fees and expenses.--The Secretary of the Treasury may 
     retain and use an amount not in excess of 25 percent of all 
     additional interest, penalties, additions to tax, and fines 
     collected under this section to be used for enforcement and 
     collection activities of the Internal Revenue Service. The 
     Secretary shall keep adequate records regarding amounts so 
     retained and used. The amount credited as paid by any 
     taxpayer shall be determined without regard to this 
     paragraph.
       (c) Report by Secretary.--The Secretary shall each year 
     conduct a study and report to Congress on the implementation 
     of this section during the preceding year, including 
     statistics on the number of taxpayers affected by such 
     implementation and the amount of interest and applicable 
     penalties asserted, waived, and assessed during such 
     preceding year.
       (d) Effective Date.--The provisions of this section shall 
     apply to interest, penalties, additions to tax, and fines 
     with respect to any taxable year if, as of the date of the 
     enactment of this Act, the assessment of any tax, penalty, or 
     interest with respect to such taxable year is not prevented 
     by the operation of any law or rule of law.

     SEC. 1715. MODIFICATION OF INTERACTION BETWEEN SUBPART F AND 
                   PASSIVE FOREIGN INVESTMENT COMPANY RULES.

       (a) Limitation on Exception From PFIC Rules for United 
     States Shareholders of Controlled Foreign Corporations.--
     Paragraph (2) of section 1297(e) (relating to passive foreign 
     investment company) is amended by adding at the end the 
     following flush sentence:
       ``Such term shall not include any period if the earning of 
     subpart F income by such corporation during such period would 
     result in only a remote likelihood of an inclusion in gross 
     income under section 951(a)(1)(A)(i).''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years of controlled foreign 
     corporations beginning after March 2, 2005, and to taxable 
     years of United States shareholders with or within which such 
     taxable years of controlled foreign corporations end.

     SEC. 1716. DECLARATION BY CHIEF EXECUTIVE OFFICER RELATING TO 
                   FEDERAL ANNUAL CORPORATE INCOME TAX RETURN.

       (a) In General.--The Federal annual tax return of a 
     corporation with respect to income shall also include a 
     declaration signed by the chief executive officer of such 
     corporation (or other such officer of the corporation as the 
     Secretary of the Treasury may designate if the corporation 
     does not have a chief executive officer), under penalties of 
     perjury, that the corporation has in place processes and 
     procedures that ensure that such return complies with the 
     Internal Revenue Code of 1986 and that the chief executive 
     officer was provided reasonable assurance of the accuracy of 
     all material aspects of such return. The preceding sentence 
     shall not apply to any return of a regulated investment 
     company (within the meaning of section 851 of such Code).
       (b) Effective Date.--This section shall apply to Federal 
     annual tax returns for taxable years ending after the date of 
     the enactment of this Act.

     SEC. 1717. TREASURY REGULATIONS ON FOREIGN TAX CREDIT.

       (a) In General.--Section 901 (relating to taxes of foreign 
     countries and of possessions of United States) is amended by 
     redesignating subsection (m) as subsection (n) and by 
     inserting after subsection (l) the following new subsection:
       ``(m) Regulations.--The Secretary may prescribe regulations 
     disallowing a credit under subsection (a) for all or a 
     portion of any foreign tax, or allocating a foreign tax among 
     2 or more persons, in cases where the foreign tax is imposed 
     on any person in respect of income of another person or in 
     other cases involving the inappropriate separation of the 
     foreign tax from the related foreign income.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to transactions entered into after the date of 
     the enactment of this Act.

     SEC. 1718. WHISTLEBLOWER REFORMS.

       (a) In General.--Section 7623 (relating to expenses of 
     detection of underpayments and fraud, etc.) is amended--

[[Page S7129]]

       (1) by striking ``The Secretary'' and inserting ``(a) In 
     General.--The Secretary'',
       (2) by striking ``and'' at the end of paragraph (1) and 
     inserting ``or'',
       (3) by striking ``(other than interest)'', and
       (4) by adding at the end the following new subsections:
       ``(b) Awards to Whistleblowers.--
       ``(1) In general.--If the Secretary proceeds with any 
     administrative or judicial action described in subsection (a) 
     based on information brought to the Secretary's attention by 
     an individual, such individual shall, subject to paragraph 
     (2), receive as an award at least 15 percent but not more 
     than 30 percent of the collected proceeds (including 
     penalties, interest, additions to tax, and additional 
     amounts) resulting from the action (including any related 
     actions) or from any settlement in response to such action. 
     The determination of the amount of such award by the 
     Whistleblower Office shall depend upon the extent to which 
     the individual substantially contributed to such action.
       ``(2) Award in case of less substantial contribution.--
       ``(A) In general.--In the event the action described in 
     paragraph (1) is one which the Whistleblower Office 
     determines to be based principally on disclosures of specific 
     allegations (other than information provided by the 
     individual described in paragraph (1)) resulting from a 
     judicial or administrative hearing, from a governmental 
     report, hearing, audit, or investigation, or from the news 
     media, the Whistleblower Office may award such sums as it 
     considers appropriate, but in no case more than 10 percent of 
     the collected proceeds (including penalties, interest, 
     additions to tax, and additional amounts) resulting from the 
     action (including any related actions) or from any settlement 
     in response to such action, taking into account the 
     significance of the individual's information and the role of 
     such individual and any legal representative of such 
     individual in contributing to such action.
       ``(B) Nonapplication of paragraph where individual is 
     original source of information.--Subparagraph (A) shall not 
     apply if the information resulting in the initiation of the 
     action described in paragraph (1) was originally provided by 
     the individual described in paragraph (1).
       ``(3) Reduction in or denial of award.--If the 
     Whistleblower Office determines that the claim for an award 
     under paragraph (1) or (2) is brought by an individual who 
     planned and initiated the actions that led to the 
     underpayment of tax or actions described in subsection 
     (a)(2), then the Whistleblower Office may appropriately 
     reduce such award. If such individual is convicted of 
     criminal conduct arising from the role described in the 
     preceding sentence, the Whistleblower Office shall deny any 
     award.
       ``(4) Appeal of award determination.--Any determination 
     regarding an award under paragraph (1), (2), or (3) shall be 
     subject to the filing by the individual described in such 
     paragraph of a petition for review with the Tax Court under 
     rules similar to the rules under section 7463 (without regard 
     to the amount in dispute) and such review shall be subject to 
     the rules under section 7461(b)(1).
       ``(5) Application of this subsection.--This subsection 
     shall apply with respect to any action--
       ``(A) against any taxpayer, but in the case of any 
     individual, only if such individual's gross income exceeds 
     $200,000 for any taxable year subject to such action, and
       ``(B) if the tax, penalties, interest, additions to tax, 
     and additional amounts in dispute exceed $20,000.
       ``(6) Additional rules.--
       ``(A) No contract necessary.--No contract with the Internal 
     Revenue Service is necessary for any individual to receive an 
     award under this subsection.
       ``(B) Representation.--Any individual described in 
     paragraph (1) or (2) may be represented by counsel.
       ``(C) Award not subject to individual alternative minimum 
     tax.--No award received under this subsection shall be 
     included in gross income for purposes of determining 
     alternative minimum taxable income.
       ``(c) Whistleblower Office.--
       ``(1) In general.--There is established in the Internal 
     Revenue Service an office to be known as the `Whistleblower 
     Office' which--
       ``(A) shall at all times operate at the direction of the 
     Commissioner and coordinate and consult with other divisions 
     in the Internal Revenue Service as directed by the 
     Commissioner,
       ``(B) shall analyze information received from any 
     individual described in subsection (b) and either investigate 
     the matter itself or assign it to the appropriate Internal 
     Revenue Service office,
       ``(C) shall monitor any action taken with respect to such 
     matter,
       ``(D) shall inform such individual that it has accepted the 
     individual's information for further review,
       ``(E) may require such individual and any legal 
     representative of such individual to not disclose any 
     information so provided,
       ``(F) in its sole discretion, may ask for additional 
     assistance from such individual or any legal representative 
     of such individual, and
       ``(G) shall determine the amount to be awarded to such 
     individual under subsection (b).
       ``(2) Funding for office.--There is authorized to be 
     appropriated $10,000,000 for each fiscal year for the 
     Whistleblower Office. These funds shall be used to maintain 
     the Whistleblower Office and also to reimburse other Internal 
     Revenue Service offices for related costs, such as costs of 
     investigation and collection.
       ``(3) Request for assistance.--
       ``(A) In general.--Any assistance requested under paragraph 
     (1)(F) shall be under the direction and control of the 
     Whistleblower Office or the office assigned to investigate 
     the matter under subparagraph (A). To the extent the 
     disclosure of any returns or return information to the 
     individual or legal representative is required for the 
     performance of such assistance, such disclosure shall be 
     pursuant to a contract entered into between the Secretary and 
     the recipients of such disclosure subject to section 6103(n). 
     No individual or legal representative whose assistance is so 
     requested may by reason of such request represent himself or 
     herself as an employee of the Federal Government.
       ``(B) Funding of assistance.--From the amounts available 
     for expenditure under subsection (b), the Whistleblower 
     Office may, with the agreement of the individual described in 
     subsection (b), reimburse the costs incurred by any legal 
     representative of such individual in providing assistance 
     described in subparagraph (A).
       ``(d) Report by Secretary.--The Secretary shall each year 
     conduct a study and report to Congress on the use of this 
     section, including--
       ``(1) an analysis of the use of this section during the 
     preceding year and the results of such use, and
       ``(2) any legislative or administrative recommendations 
     regarding the provisions of this section and its 
     application.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to information provided on or after the date of 
     the enactment of this Act.

     SEC. 1719. DENIAL OF DEDUCTION FOR CERTAIN FINES, PENALTIES, 
                   AND OTHER AMOUNTS.

       (a) In General.--Subsection (f) of section 162 (relating to 
     trade or business expenses) is amended to read as follows:
       ``(f) Fines, Penalties, and Other Amounts.--
       ``(1) In general.--Except as provided in paragraph (2), no 
     deduction otherwise allowable shall be allowed under this 
     chapter for any amount paid or incurred (whether by suit, 
     agreement, or otherwise) to, or at the direction of, a 
     government or entity described in paragraph (4) in relation 
     to the violation of any law or the investigation or inquiry 
     by such government or entity into the potential violation of 
     any law.
       ``(2) Exception for amounts constituting restitution.--
     Paragraph (1) shall not apply to any amount which--
       ``(A) the taxpayer establishes constitutes restitution 
     (including remediation of property) for damage or harm caused 
     by or which may be caused by the violation of any law or the 
     potential violation of any law, and
       ``(B) is identified as restitution in the court order or 
     settlement agreement.
     Identification pursuant to subparagraph (B) alone shall not 
     satisfy the requirement under subparagraph (A). This 
     paragraph shall not apply to any amount paid or incurred as 
     reimbursement to the government or entity for the costs of 
     any investigation or litigation.
       ``(3) Exception for amounts paid or incurred as the result 
     of certain court orders.--Paragraph (1) shall not apply to 
     any amount paid or incurred by order of a court in a suit in 
     which no government or entity described in paragraph (4) is a 
     party.
       ``(4) Certain nongovernmental regulatory entities.--An 
     entity is described in this paragraph if it is--
       ``(A) a nongovernmental entity which exercises self-
     regulatory powers (including imposing sanctions) in 
     connection with a qualified board or exchange (as defined in 
     section 1256(g)(7)), or
       ``(B) to the extent provided in regulations, a 
     nongovernmental entity which exercises self-regulatory powers 
     (including imposing sanctions) as part of performing an 
     essential governmental function.
       ``(5) Exception for taxes due.--Paragraph (1) shall not 
     apply to any amount paid or incurred as taxes due.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to amounts paid or incurred on or after the date 
     of the enactment of this Act, except that such amendment 
     shall not apply to amounts paid or incurred under any binding 
     order or agreement entered into before such date. Such 
     exception shall not apply to an order or agreement requiring 
     court approval unless the approval was obtained before such 
     date.

     SEC. 1720. FREEZE OF INTEREST SUSPENSION RULES WITH RESPECT 
                   TO LISTED TRANSACTIONS.

       (a) In General.--Paragraph (2) of section 903(d) of the 
     American Jobs Creation Act of 2005 is amended to read as 
     follows:
       ``(2) Exception for reportable or listed transactions.--
       ``(A) In general.--The amendments made by subsection (c) 
     shall apply with respect to interest accruing after October 
     3, 2004.
       ``(B) Special rule for certain listed transactions.--
       ``(i) In general.--Except as provided in clause (ii) or 
     (iii), in the case of any listed transaction, the amendments 
     made by subsection (c) shall also apply with respect to 
     interest accruing on or before October 3, 2004.
       ``(ii) Participants in settlement initiatives.--Clause (i) 
     shall not apply to a listed transaction if, as of May 9, 
     2005--

[[Page S7130]]

       ``(I) the taxpayer is participating in a published 
     settlement initiative which is offered by the Secretary of 
     the Treasury or his delegate to a group of similarly situated 
     taxpayers claiming benefits from the listed transaction, or
       ``(II) the taxpayer has entered into a settlement agreement 
     pursuant to such an initiative with respect to the tax 
     liability arising in connection with the listed transaction.

     Subclause (I) shall not apply to the taxpayer if, after May 
     9, 2005, the taxpayer withdraws from, or terminates, 
     participation in the initiative or the Secretary or his 
     delegate determines that a settlement agreement will not be 
     reached pursuant to the initiative within a reasonable period 
     of time.
       ``(iii) Closed transactions.--Clause (i) shall not apply to 
     a listed transaction if, as of May 9, 2005--

       ``(I) the assessment of all Federal income taxes for the 
     taxable year in which the tax liability to which the interest 
     relates arose is prevented by the operation of any law or 
     rule of law, or
       ``(II) a closing agreement under section 7121 has been 
     entered into with respect to the tax liability arising in 
     connection with the listed transaction.''.

       (b) Effective Date.--The amendment made by this section 
     shall take effect as if included in the provisions of the 
     American Jobs Creation Act of 2004 to which it relates.

     SEC. 1721. MODIFICATIONS OF EFFECTIVE DATES OF LEASING 
                   PROVISIONS OF THE AMERICAN JOBS CREATION ACT OF 
                   2004.

       (a) Repeal of Exception for Qualified Transportation 
     Property.--Section 849(b) of the American Jobs Creation Act 
     of 2004 is amended by striking paragraphs (1) and (2) and by 
     redesignating paragraphs (3) and (4) as paragraphs (1) and 
     (2).
       (b) Effective Date.--The amendments made by this section 
     shall take effect as if included in the enactment of the 
     American Jobs Creation Act of 2004.

     SEC. 1722. IMPOSITION OF MARK-TO-MARKET TAX ON INDIVIDUALS 
                   WHO EXPATRIATE.

       (a) In General.--Subpart A of part II of subchapter N of 
     chapter 1 is amended by inserting after section 877 the 
     following new section:

     ``SEC. 877A. TAX RESPONSIBILITIES OF EXPATRIATION.

       ``(a) General Rules.--For purposes of this subtitle--
       ``(1) Mark to market.--Except as provided in subsections 
     (d) and (f), all property of a covered expatriate to whom 
     this section applies shall be treated as sold on the day 
     before the expatriation date for its fair market value.
       ``(2) Recognition of gain or loss.--In the case of any sale 
     under paragraph (1)--
       ``(A) notwithstanding any other provision of this title, 
     any gain arising from such sale shall be taken into account 
     for the taxable year of the sale, and
       ``(B) any loss arising from such sale shall be taken into 
     account for the taxable year of the sale to the extent 
     otherwise provided by this title, except that section 1091 
     shall not apply to any such loss.

     Proper adjustment shall be made in the amount of any gain or 
     loss subsequently realized for gain or loss taken into 
     account under the preceding sentence.
       ``(3) Exclusion for certain gain.--
       ``(A) In general.--The amount which, but for this 
     paragraph, would be includible in the gross income of any 
     individual by reason of this section shall be reduced (but 
     not below zero) by $600,000. For purposes of this paragraph, 
     allocable expatriation gain taken into account under 
     subsection (f)(2) shall be treated in the same manner as an 
     amount required to be includible in gross income.
       ``(B) Cost-of-living adjustment.--
       ``(i) In general.--In the case of an expatriation date 
     occurring in any calendar year after 2005, the $600,000 
     amount under subparagraph (A) shall be increased by an amount 
     equal to--

       ``(I) such dollar amount, multiplied by
       ``(II) the cost-of-living adjustment determined under 
     section 1(f)(3) for such calendar year, determined by 
     substituting `calendar year 2004' for `calendar year 1992' in 
     subparagraph (B) thereof.

       ``(ii) Rounding rules.--If any amount after adjustment 
     under clause (i) is not a multiple of $1,000, such amount 
     shall be rounded to the next lower multiple of $1,000.
       ``(4) Election to continue to be taxed as united states 
     citizen.--
       ``(A) In general.--If a covered expatriate elects the 
     application of this paragraph--
       ``(i) this section (other than this paragraph and 
     subsection (i)) shall not apply to the expatriate, but
       ``(ii) in the case of property to which this section would 
     apply but for such election, the expatriate shall be subject 
     to tax under this title in the same manner as if the 
     individual were a United States citizen.
       ``(B) Requirements.--Subparagraph (A) shall not apply to an 
     individual unless the individual--
       ``(i) provides security for payment of tax in such form and 
     manner, and in such amount, as the Secretary may require,
       ``(ii) consents to the waiver of any right of the 
     individual under any treaty of the United States which would 
     preclude assessment or collection of any tax which may be 
     imposed by reason of this paragraph, and
       ``(iii) complies with such other requirements as the 
     Secretary may prescribe.
       ``(C) Election.--An election under subparagraph (A) shall 
     apply to all property to which this section would apply but 
     for the election and, once made, shall be irrevocable. Such 
     election shall also apply to property the basis of which is 
     determined in whole or in part by reference to the property 
     with respect to which the election was made.
       ``(b) Election To Defer Tax.--
       ``(1) In general.--If the taxpayer elects the application 
     of this subsection with respect to any property treated as 
     sold by reason of subsection (a), the payment of the 
     additional tax attributable to such property shall be 
     postponed until the due date of the return for the taxable 
     year in which such property is disposed of (or, in the case 
     of property disposed of in a transaction in which gain is not 
     recognized in whole or in part, until such other date as the 
     Secretary may prescribe).
       ``(2) Determination of tax with respect to property.--For 
     purposes of paragraph (1), the additional tax attributable to 
     any property is an amount which bears the same ratio to the 
     additional tax imposed by this chapter for the taxable year 
     solely by reason of subsection (a) as the gain taken into 
     account under subsection (a) with respect to such property 
     bears to the total gain taken into account under subsection 
     (a) with respect to all property to which subsection (a) 
     applies.
       ``(3) Termination of postponement.--No tax may be postponed 
     under this subsection later than the due date for the return 
     of tax imposed by this chapter for the taxable year which 
     includes the date of death of the expatriate (or, if earlier, 
     the time that the security provided with respect to the 
     property fails to meet the requirements of paragraph (4), 
     unless the taxpayer corrects such failure within the time 
     specified by the Secretary).
       ``(4) Security.--
       ``(A) In general.--No election may be made under paragraph 
     (1) with respect to any property unless adequate security is 
     provided to the Secretary with respect to such property.
       ``(B) Adequate security.--For purposes of subparagraph (A), 
     security with respect to any property shall be treated as 
     adequate security if--
       ``(i) it is a bond in an amount equal to the deferred tax 
     amount under paragraph (2) for the property, or
       ``(ii) the taxpayer otherwise establishes to the 
     satisfaction of the Secretary that the security is adequate.
       ``(5) Waiver of certain rights.--No election may be made 
     under paragraph (1) unless the taxpayer consents to the 
     waiver of any right under any treaty of the United States 
     which would preclude assessment or collection of any tax 
     imposed by reason of this section.
       ``(6) Elections.--An election under paragraph (1) shall 
     only apply to property described in the election and, once 
     made, is irrevocable. An election may be made under paragraph 
     (1) with respect to an interest in a trust with respect to 
     which gain is required to be recognized under subsection 
     (f)(1).
       ``(7) Interest.--For purposes of section 6601--
       ``(A) the last date for the payment of tax shall be 
     determined without regard to the election under this 
     subsection, and
       ``(B) section 6621(a)(2) shall be applied by substituting 
     `5 percentage points' for `3 percentage points' in 
     subparagraph (B) thereof.
       ``(c) Covered Expatriate.--For purposes of this section--
       ``(1) In general.--Except as provided in paragraph (2), the 
     term `covered expatriate' means an expatriate.
       ``(2) Exceptions.--An individual shall not be treated as a 
     covered expatriate if--
       ``(A) the individual--
       ``(i) became at birth a citizen of the United States and a 
     citizen of another country and, as of the expatriation date, 
     continues to be a citizen of, and is taxed as a resident of, 
     such other country, and
       ``(ii) has not been a resident of the United States (as 
     defined in section 7701(b)(1)(A)(ii)) during the 5 taxable 
     years ending with the taxable year during which the 
     expatriation date occurs, or
       ``(B)(i) the individual's relinquishment of United States 
     citizenship occurs before such individual attains age 18\1/
     2\, and
       ``(ii) the individual has been a resident of the United 
     States (as so defined) for not more than 5 taxable years 
     before the date of relinquishment.
       ``(d) Exempt Property; Special Rules for Pension Plans.--
       ``(1) Exempt property.--This section shall not apply to the 
     following:
       ``(A) United states real property interests.--Any United 
     States real property interest (as defined in section 
     897(c)(1)), other than stock of a United States real property 
     holding corporation which does not, on the day before the 
     expatriation date, meet the requirements of section 
     897(c)(2).
       ``(B) Specified property.--Any property or interest in 
     property not described in subparagraph (A) which the 
     Secretary specifies in regulations.
       ``(2) Special rules for certain retirement plans.--
       ``(A) In general.--If a covered expatriate holds on the day 
     before the expatriation date any interest in a retirement 
     plan to which this paragraph applies--
       ``(i) such interest shall not be treated as sold for 
     purposes of subsection (a)(1), but
       ``(ii) an amount equal to the present value of the 
     expatriate's nonforfeitable accrued benefit shall be treated 
     as having been received by such individual on such date as a 
     distribution under the plan.

[[Page S7131]]

       ``(B) Treatment of subsequent distributions.--In the case 
     of any distribution on or after the expatriation date to or 
     on behalf of the covered expatriate from a plan from which 
     the expatriate was treated as receiving a distribution under 
     subparagraph (A), the amount otherwise includible in gross 
     income by reason of the subsequent distribution shall be 
     reduced by the excess of the amount includible in gross 
     income under subparagraph (A) over any portion of such amount 
     to which this subparagraph previously applied.
       ``(C) Treatment of subsequent distributions by plan.--For 
     purposes of this title, a retirement plan to which this 
     paragraph applies, and any person acting on the plan's 
     behalf, shall treat any subsequent distribution described in 
     subparagraph (B) in the same manner as such distribution 
     would be treated without regard to this paragraph.
       ``(D) Applicable plans.--This paragraph shall apply to--
       ``(i) any qualified retirement plan (as defined in section 
     4974(c)),
       ``(ii) an eligible deferred compensation plan (as defined 
     in section 457(b)) of an eligible employer described in 
     section 457(e)(1)(A), and
       ``(iii) to the extent provided in regulations, any foreign 
     pension plan or similar retirement arrangements or programs.
       ``(e) Definitions.--For purposes of this section--
       ``(1) Expatriate.--The term `expatriate' means--
       ``(A) any United States citizen who relinquishes 
     citizenship, and
       ``(B) any long-term resident of the United States who--
       ``(i) ceases to be a lawful permanent resident of the 
     United States (within the meaning of section 7701(b)(6)), or
       ``(ii) commences to be treated as a resident of a foreign 
     country under the provisions of a tax treaty between the 
     United States and the foreign country and who does not waive 
     the benefits of such treaty applicable to residents of the 
     foreign country.
       ``(2) Expatriation date.--The term `expatriation date' 
     means--
       ``(A) the date an individual relinquishes United States 
     citizenship, or
       ``(B) in the case of a long-term resident of the United 
     States, the date of the event described in clause (i) or (ii) 
     of paragraph (1)(B).
       ``(3) Relinquishment of citizenship.--A citizen shall be 
     treated as relinquishing United States citizenship on the 
     earliest of--
       ``(A) the date the individual renounces such individual's 
     United States nationality before a diplomatic or consular 
     officer of the United States pursuant to paragraph (5) of 
     section 349(a) of the Immigration and Nationality Act (8 
     U.S.C. 1481(a)(5)),
       ``(B) the date the individual furnishes to the United 
     States Department of State a signed statement of voluntary 
     relinquishment of United States nationality confirming the 
     performance of an act of expatriation specified in paragraph 
     (1), (2), (3), or (4) of section 349(a) of the Immigration 
     and Nationality Act (8 U.S.C. 1481(a)(1)-(4)),
       ``(C) the date the United States Department of State issues 
     to the individual a certificate of loss of nationality, or
       ``(D) the date a court of the United States cancels a 
     naturalized citizen's certificate of naturalization.

     Subparagraph (A) or (B) shall not apply to any individual 
     unless the renunciation or voluntary relinquishment is 
     subsequently approved by the issuance to the individual of a 
     certificate of loss of nationality by the United States 
     Department of State.
       ``(4) Long-term resident.--The term `long-term resident' 
     has the meaning given to such term by section 877(e)(2).
       ``(f) Special Rules Applicable to Beneficiaries' Interests 
     in Trust.--
       ``(1) In general.--Except as provided in paragraph (2), if 
     an individual is determined under paragraph (3) to hold an 
     interest in a trust on the day before the expatriation date--
       ``(A) the individual shall not be treated as having sold 
     such interest,
       ``(B) such interest shall be treated as a separate share in 
     the trust, and
       ``(C)(i) such separate share shall be treated as a separate 
     trust consisting of the assets allocable to such share,
       ``(ii) the separate trust shall be treated as having sold 
     its assets on the day before the expatriation date for their 
     fair market value and as having distributed all of its assets 
     to the individual as of such time, and
       ``(iii) the individual shall be treated as having 
     recontributed the assets to the separate trust.

     Subsection (a)(2) shall apply to any income, gain, or loss of 
     the individual arising from a distribution described in 
     subparagraph (C)(ii). In determining the amount of such 
     distribution, proper adjustments shall be made for 
     liabilities of the trust allocable to an individual's share 
     in the trust.
       ``(2) Special rules for interests in qualified trusts.--
       ``(A) In general.--If the trust interest described in 
     paragraph (1) is an interest in a qualified trust--
       ``(i) paragraph (1) and subsection (a) shall not apply, and
       ``(ii) in addition to any other tax imposed by this title, 
     there is hereby imposed on each distribution with respect to 
     such interest a tax in the amount determined under 
     subparagraph (B).
       ``(B) Amount of tax.--The amount of tax under subparagraph 
     (A)(ii) shall be equal to the lesser of--
       ``(i) the highest rate of tax imposed by section 1(e) for 
     the taxable year which includes the day before the 
     expatriation date, multiplied by the amount of the 
     distribution, or
       ``(ii) the balance in the deferred tax account immediately 
     before the distribution determined without regard to any 
     increases under subparagraph (C)(ii) after the 30th day 
     preceding the distribution.
       ``(C) Deferred tax account.--For purposes of subparagraph 
     (B)(ii)--
       ``(i) Opening balance.--The opening balance in a deferred 
     tax account with respect to any trust interest is an amount 
     equal to the tax which would have been imposed on the 
     allocable expatriation gain with respect to the trust 
     interest if such gain had been included in gross income under 
     subsection (a).
       ``(ii) Increase for interest.--The balance in the deferred 
     tax account shall be increased by the amount of interest 
     determined (on the balance in the account at the time the 
     interest accrues), for periods after the 90th day after the 
     expatriation date, by using the rates and method applicable 
     under section 6621 for underpayments of tax for such periods, 
     except that section 6621(a)(2) shall be applied by 
     substituting `5 percentage points' for `3 percentage points' 
     in subparagraph (B) thereof.
       ``(iii) Decrease for taxes previously paid.--The balance in 
     the tax deferred account shall be reduced--

       ``(I) by the amount of taxes imposed by subparagraph (A) on 
     any distribution to the person holding the trust interest, 
     and
       ``(II) in the case of a person holding a nonvested 
     interest, to the extent provided in regulations, by the 
     amount of taxes imposed by subparagraph (A) on distributions 
     from the trust with respect to nonvested interests not held 
     by such person.

       ``(D) Allocable expatriation gain.--For purposes of this 
     paragraph, the allocable expatriation gain with respect to 
     any beneficiary's interest in a trust is the amount of gain 
     which would be allocable to such beneficiary's vested and 
     nonvested interests in the trust if the beneficiary held 
     directly all assets allocable to such interests.
       ``(E) Tax deducted and withheld.--
       ``(i) In general.--The tax imposed by subparagraph (A)(ii) 
     shall be deducted and withheld by the trustees from the 
     distribution to which it relates.
       ``(ii) Exception where failure to waive treaty rights.--If 
     an amount may not be deducted and withheld under clause (i) 
     by reason of the distributee failing to waive any treaty 
     right with respect to such distribution--

       ``(I) the tax imposed by subparagraph (A)(ii) shall be 
     imposed on the trust and each trustee shall be personally 
     liable for the amount of such tax, and
       ``(II) any other beneficiary of the trust shall be entitled 
     to recover from the distributee the amount of such tax 
     imposed on the other beneficiary.

       ``(F) Disposition.--If a trust ceases to be a qualified 
     trust at any time, a covered expatriate disposes of an 
     interest in a qualified trust, or a covered expatriate 
     holding an interest in a qualified trust dies, then, in lieu 
     of the tax imposed by subparagraph (A)(ii), there is hereby 
     imposed a tax equal to the lesser of--
       ``(i) the tax determined under paragraph (1) as if the day 
     before the expatriation date were the date of such cessation, 
     disposition, or death, whichever is applicable, or
       ``(ii) the balance in the tax deferred account immediately 
     before such date.
     Such tax shall be imposed on the trust and each trustee shall 
     be personally liable for the amount of such tax and any other 
     beneficiary of the trust shall be entitled to recover from 
     the covered expatriate or the estate the amount of such tax 
     imposed on the other beneficiary.
       ``(G) Definitions and special rules.--For purposes of this 
     paragraph--
       ``(i) Qualified trust.--The term `qualified trust' means a 
     trust which is described in section 7701(a)(30)(E).
       ``(ii) Vested interest.--The term `vested interest' means 
     any interest which, as of the day before the expatriation 
     date, is vested in the beneficiary.
       ``(iii) Nonvested interest.--The term `nonvested interest' 
     means, with respect to any beneficiary, any interest in a 
     trust which is not a vested interest. Such interest shall be 
     determined by assuming the maximum exercise of discretion in 
     favor of the beneficiary and the occurrence of all 
     contingencies in favor of the beneficiary.
       ``(iv) Adjustments.--The Secretary may provide for such 
     adjustments to the bases of assets in a trust or a deferred 
     tax account, and the timing of such adjustments, in order to 
     ensure that gain is taxed only once.
       ``(v) Coordination with retirement plan rules.--This 
     subsection shall not apply to an interest in a trust which is 
     part of a retirement plan to which subsection (d)(2) applies.
       ``(3) Determination of beneficiaries' interest in trust.--
       ``(A) Determinations under paragraph (1).--For purposes of 
     paragraph (1), a beneficiary's interest in a trust shall be 
     based upon all relevant facts and circumstances, including 
     the terms of the trust instrument

[[Page S7132]]

     and any letter of wishes or similar document, historical 
     patterns of trust distributions, and the existence of and 
     functions performed by a trust protector or any similar 
     adviser.
       ``(B) Other determinations.--For purposes of this section--
       ``(i) Constructive ownership.--If a beneficiary of a trust 
     is a corporation, partnership, trust, or estate, the 
     shareholders, partners, or beneficiaries shall be deemed to 
     be the trust beneficiaries for purposes of this section.
       ``(ii) Taxpayer return position.--A taxpayer shall clearly 
     indicate on its income tax return--

       ``(I) the methodology used to determine that taxpayer's 
     trust interest under this section, and
       ``(II) if the taxpayer knows (or has reason to know) that 
     any other beneficiary of such trust is using a different 
     methodology to determine such beneficiary's trust interest 
     under this section.

       ``(g) Termination of Deferrals, etc.--In the case of any 
     covered expatriate, notwithstanding any other provision of 
     this title--
       ``(1) any period during which recognition of income or gain 
     is deferred shall terminate on the day before the 
     expatriation date, and
       ``(2) any extension of time for payment of tax shall cease 
     to apply on the day before the expatriation date and the 
     unpaid portion of such tax shall be due and payable at the 
     time and in the manner prescribed by the Secretary.
       ``(h) Imposition of Tentative Tax.--
       ``(1) In general.--If an individual is required to include 
     any amount in gross income under subsection (a) for any 
     taxable year, there is hereby imposed, immediately before the 
     expatriation date, a tax in an amount equal to the amount of 
     tax which would be imposed if the taxable year were a short 
     taxable year ending on the expatriation date.
       ``(2) Due date.--The due date for any tax imposed by 
     paragraph (1) shall be the 90th day after the expatriation 
     date.
       ``(3) Treatment of tax.--Any tax paid under paragraph (1) 
     shall be treated as a payment of the tax imposed by this 
     chapter for the taxable year to which subsection (a) applies.
       ``(4) Deferral of tax.--The provisions of subsection (b) 
     shall apply to the tax imposed by this subsection to the 
     extent attributable to gain includible in gross income by 
     reason of this section.
       ``(i) Special Liens for Deferred Tax Amounts.--
       ``(1) Imposition of lien.--
       ``(A) In general.--If a covered expatriate makes an 
     election under subsection (a)(4) or (b) which results in the 
     deferral of any tax imposed by reason of subsection (a), the 
     deferred amount (including any interest, additional amount, 
     addition to tax, assessable penalty, and costs attributable 
     to the deferred amount) shall be a lien in favor of the 
     United States on all property of the expatriate located in 
     the United States (without regard to whether this section 
     applies to the property).
       ``(B) Deferred amount.--For purposes of this subsection, 
     the deferred amount is the amount of the increase in the 
     covered expatriate's income tax which, but for the election 
     under subsection (a)(4) or (b), would have occurred by reason 
     of this section for the taxable year including the 
     expatriation date.
       ``(2) Period of lien.--The lien imposed by this subsection 
     shall arise on the expatriation date and continue until--
       ``(A) the liability for tax by reason of this section is 
     satisfied or has become unenforceable by reason of lapse of 
     time, or
       ``(B) it is established to the satisfaction of the 
     Secretary that no further tax liability may arise by reason 
     of this section.
       ``(3) Certain rules apply.--The rules set forth in 
     paragraphs (1), (3), and (4) of section 6324A(d) shall apply 
     with respect to the lien imposed by this subsection as if it 
     were a lien imposed by section 6324A.
       ``(j) Regulations.--The Secretary shall prescribe such 
     regulations as may be necessary or appropriate to carry out 
     the purposes of this section.''.
       (b) Inclusion in Income of Gifts and Bequests Received by 
     United States Citizens and Residents From Expatriates.--
     Section 102 (relating to gifts, etc. not included in gross 
     income) is amended by adding at the end the following new 
     subsection:
       ``(d) Gifts and Inheritances From Covered Expatriates.--
       ``(1) In general.--Subsection (a) shall not exclude from 
     gross income the value of any property acquired by gift, 
     bequest, devise, or inheritance from a covered expatriate 
     after the expatriation date. For purposes of this subsection, 
     any term used in this subsection which is also used in 
     section 877A shall have the same meaning as when used in 
     section 877A.
       ``(2) Exceptions for transfers otherwise subject to estate 
     or gift tax.--Paragraph (1) shall not apply to any property 
     if either--
       ``(A) the gift, bequest, devise, or inheritance is--
       ``(i) shown on a timely filed return of tax imposed by 
     chapter 12 as a taxable gift by the covered expatriate, or
       ``(ii) included in the gross estate of the covered 
     expatriate for purposes of chapter 11 and shown on a timely 
     filed return of tax imposed by chapter 11 of the estate of 
     the covered expatriate, or
       ``(B) no such return was timely filed but no such return 
     would have been required to be filed even if the covered 
     expatriate were a citizen or long-term resident of the United 
     States.''.
       (c) Definition of Termination of United States 
     Citizenship.--Section 7701(a) is amended by adding at the end 
     the following new paragraph:
       ``(49) Termination of united states citizenship.--
       ``(A) In general.--An individual shall not cease to be 
     treated as a United States citizen before the date on which 
     the individual's citizenship is treated as relinquished under 
     section 877A(e)(3).
       ``(B) Dual citizens.--Under regulations prescribed by the 
     Secretary, subparagraph (A) shall not apply to an individual 
     who became at birth a citizen of the United States and a 
     citizen of another country.''.
       (d) Ineligibility for Visa or Admission to United States.--
       (1) In general.--Section 212(a)(10)(E) of the Immigration 
     and Nationality Act (8 U.S.C. 1182(a)(10)(E)) is amended to 
     read as follows:
       ``(E) Former citizens not in compliance with expatriation 
     revenue provisions.--Any alien who is a former citizen of the 
     United States who relinquishes United States citizenship 
     (within the meaning of section 877A(e)(3) of the Internal 
     Revenue Code of 1986) and who is not in compliance with 
     section 877A of such Code (relating to expatriation).''.
       (2) Availability of information.--
       (A) In general.--Section 6103(l) (relating to disclosure of 
     returns and return information for purposes other than tax 
     administration) is amended by adding at the end the following 
     new paragraph:
       ``(21) Disclosure to deny visa or admission to certain 
     expatriates.--Upon written request of the Attorney General or 
     the Attorney General's delegate, the Secretary shall disclose 
     whether an individual is in compliance with section 877A (and 
     if not in compliance, any items of noncompliance) to officers 
     and employees of the Federal agency responsible for 
     administering section 212(a)(10)(E) of the Immigration and 
     Nationality Act solely for the purpose of, and to the extent 
     necessary in, administering such section 212(a)(10)(E).''.
       (B) Safeguards.--Section 6103(p)(4) (relating to 
     safeguards) is amended by striking ``or (20)'' each place it 
     appears and inserting ``(20), or (21)''.
       (3) Effective dates.--The amendments made by this 
     subsection shall apply to individuals who relinquish United 
     States citizenship on or after the date of the enactment of 
     this Act.
       (e) Conforming Amendments.--
       (1) Section 877 is amended by adding at the end the 
     following new subsection:
       ``(h) Application.--This section shall not apply to an 
     expatriate (as defined in section 877A(e)) whose expatriation 
     date (as so defined) occurs on or after the date of the 
     enactment of the Safe, Accountable, Flexible, and Efficient 
     Transportation Equity Act of 2005.''.
       (2) Section 2107 is amended by adding at the end the 
     following new subsection:
       ``(f) Application.--This section shall not apply to any 
     expatriate subject to section 877A.''.
       (3) Section 2501(a)(3) is amended by adding at the end the 
     following new subparagraph:
       ``(C) Application.--This paragraph shall not apply to any 
     expatriate subject to section 877A.''.
       (f) Clerical Amendment.--The table of sections for subpart 
     A of part II of subchapter N of chapter 1 is amended by 
     inserting after the item relating to section 877 the 
     following new item:

``Sec. 877A. Tax responsibilities of expatriation.''.

       (g) Effective Date.--
       (1) In general.--Except as provided in this subsection, the 
     amendments made by this section shall apply to expatriates 
     (within the meaning of section 877A(e) of the Internal 
     Revenue Code of 1986, as added by this section) whose 
     expatriation date (as so defined) occurs on or after the date 
     of the enactment of this Act.
       (2) Gifts and bequests.--Section 102(d) of the Internal 
     Revenue Code of 1986 (as added by subsection (b)) shall apply 
     to gifts and bequests received on or after the date of the 
     enactment of this Act, from an individual or the estate of an 
     individual whose expatriation date (as so defined) occurs 
     after such date.
       (3) Due date for tentative tax.--The due date under section 
     877A(h)(2) of the Internal Revenue Code of 1986, as added by 
     this section, shall in no event occur before the 90th day 
     after the date of the enactment of this Act.

     SEC. 1723. DISALLOWANCE OF DEDUCTION FOR PUNITIVE DAMAGES.

       (a) Disallowance of Deduction.--
       (1) In general.--Section 162(g) (relating to treble damage 
     payments under the antitrust laws) is amended--
       (A) by redesignating paragraphs (1) and (2) as 
     subparagraphs (A) and (B), respectively,
       (B) by striking ``If'' and inserting:
       ``(1) Treble damages.--If'', and
       (C) by adding at the end the following new paragraph:
       ``(2) Punitive damages.--No deduction shall be allowed 
     under this chapter for any amount paid or incurred for 
     punitive damages in connection with any judgment in, or 
     settlement of, any action. This paragraph shall not apply to 
     punitive damages described in section 104(c).''.

[[Page S7133]]

       (2) Conforming amendment.--The heading for section 162(g) 
     is amended by inserting ``or Punitive Damages'' after 
     ``Laws''.
       (b) Inclusion in Income of Punitive Damages Paid by Insurer 
     or Otherwise.--
       (1) In general.--Part II of subchapter B of chapter 1 
     (relating to items specifically included in gross income) is 
     amended by adding at the end the following new section:

     ``SEC. 91. PUNITIVE DAMAGES COMPENSATED BY INSURANCE OR 
                   OTHERWISE.

       ``Gross income shall include any amount paid to or on 
     behalf of a taxpayer as insurance or otherwise by reason of 
     the taxpayer's liability (or agreement) to pay punitive 
     damages.''.
       (2) Reporting requirements.--Section 6041 (relating to 
     information at source) is amended by adding at the end the 
     following new subsection:
       ``(f) Section To Apply to Punitive Damages Compensation.--
     This section shall apply to payments by a person to or on 
     behalf of another person as insurance or otherwise by reason 
     of the other person's liability (or agreement) to pay 
     punitive damages.''.
       (3) Conforming amendment.--The table of sections for part 
     II of subchapter B of chapter 1 is amended by adding at the 
     end the following new item:

``Sec. 91. Punitive damages compensated by insurance or otherwise.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to damages paid or incurred on or after the date 
     of the enactment of this Act.

     SEC. 1724. APPLICATION OF EARNINGS STRIPPING RULES TO 
                   PARTNERS WHICH ARE C CORPORATIONS.

       (a) In General.--Section 163(j) (relating to limitation on 
     deduction for interest on certain indebtedness) is amended by 
     redesignating paragraph (8) as paragraph (9) and by inserting 
     after paragraph (7) the following new paragraph:
       ``(8) Allocations to certain corporate partners.--If a C 
     corporation is a partner in a partnership--
       ``(A) the corporation's allocable share of indebtedness and 
     interest income of the partnership shall be taken into 
     account in applying this subsection to the corporation, and
       ``(B) if a deduction is not disallowed under this 
     subsection with respect to any interest expense of the 
     partnership, this subsection shall be applied separately in 
     determining whether a deduction is allowable to the 
     corporation with respect to the corporation's allocable share 
     of such interest expense.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning on or after the date 
     of the enactment of this Act.

     SEC. 1725. PROHIBITION ON DEFERRAL OF GAIN FROM THE EXERCISE 
                   OF STOCK OPTIONS AND RESTRICTED STOCK GAINS 
                   THROUGH DEFERRED COMPENSATION ARRANGEMENTS.

       (a) In General.--Section 83 (relating to property 
     transferred in connection with performance of services) is 
     amending by adding at the end the following new subsection:
       ``(i) Prohibition on Additional Deferral Through Deferred 
     Compensation Arrangements.--If a taxpayer exchanges--
       ``(1) an option to purchase employer securities--
       ``(A) to which subsection (a) applies, or
       ``(B) which is described in subsection (e)(3), or
       ``(2) employer securities or any other property based on 
     employer securities transferred to the taxpayer,

     for a right to receive future payments, then, notwithstanding 
     any other provision of this title, there shall be included in 
     gross income for the taxable year of the exchange an amount 
     equal to the present value of such right (or such other 
     amount as the Secretary may by regulations specify). For 
     purposes of this subsection, the term `employer securities' 
     includes any security issued by the employer.''.
       (b) Controlled Group Rules.--Section 414(t)(2) is amended 
     by inserting ``83(i),'' after ``79,''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to any exchange after the date of the enactment 
     of this Act.

     SEC. 1726. LIMITATION OF EMPLOYER DEDUCTION FOR CERTAIN 
                   ENTERTAINMENT EXPENSES.

       (a) In General.--Paragraph (2) of section 274(e) (relating 
     to expenses treated as compensation) is amended to read as 
     follows:
       ``(2) Expenses treated as compensation.--Expenses for 
     goods, services, and facilities, to the extent that the 
     expenses do not exceed the amount of the expenses which are 
     treated by the taxpayer, with respect to the recipient of the 
     entertainment, amusement, or recreation, as compensation to 
     an employee on the taxpayer's return of tax under this 
     chapter and as wages to such employee for purposes of chapter 
     24 (relating to withholding of income tax at source on 
     wages).''.
       (b) Persons Not Employees.--Paragraph (9) of section 274(e) 
     is amended by striking ``to the extent that the expenses are 
     includible in the gross income'' and inserting ``to the 
     extent that the expenses do not exceed the amount of the 
     expenses which are includible in the gross income''.
       (c) Effective Date.--The amendment made by this section 
     shall apply to expenses incurred after the date of the 
     enactment of this Act.

     SEC. 1727. INCREASE IN PENALTY FOR BAD CHECKS AND MONEY 
                   ORDERS.

       (a) In General.--Section 6657 (relating to bad checks) is 
     amended--
       (1) by striking ``$750'' and inserting ``$1,250'', and
       (2) by striking ``$15'' and inserting ``$25''.
       (b) Effective Date.--The amendments made by this section 
     apply to checks or money orders received after the date of 
     the enactment of this Act.

     SEC. 1728. ELIMINATION OF DOUBLE DEDUCTION ON MINING 
                   EXPLORATION AND DEVELOPMENT COSTS UNDER THE 
                   MINIMUM TAX.

       (a) In General.--Section 57(a)(1) (relating to depletion) 
     is amended by striking ``for the taxable year)'' and 
     inserting ``for the taxable year and determined without 
     regard to so much of the basis as is attributable to mining 
     exploration and development costs described in section 616 or 
     617 for which a deduction is allowable for any taxable year 
     under this part).''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment this Act.

PART III--IMPROVEMENTS IN EFFICIENCY AND SAFEGUARDS IN INTERNAL REVENUE 
                           SERVICE COLLECTION

     SEC. 1731. WAIVER OF USER FEE FOR INSTALLMENT AGREEMENTS 
                   USING AUTOMATED WITHDRAWALS.

       (a) In General.--Section 6159 (relating to agreements for 
     payment of tax liability in installments) is amended by 
     redesignating subsection (e) as subsection (f) and by 
     inserting after subsection (d) the following:
       ``(e) Waiver of User Fees for Installment Agreements Using 
     Automated Withdrawals.--In the case of a taxpayer who enters 
     into an installment agreement in which automated installment 
     payments are agreed to, the Secretary shall waive the fee (if 
     any) for entering into the installment agreement.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to agreements entered into on or after the date 
     which is 180 days after the date of the enactment of this 
     Act.

     SEC. 1732. TERMINATION OF INSTALLMENT AGREEMENTS.

       (a) In General.--Section 6159(b)(4) (relating to failure to 
     pay an installment or any other tax liability when due or to 
     provide requested financial information) is amended by 
     striking ``or'' at the end of subparagraph (B), by 
     redesignating subparagraph (C) as subparagraph (E), and by 
     inserting after subparagraph (B) the following:
       ``(C) to make a Federal tax deposit under section 6302 at 
     the time such deposit is required to be made,
       ``(D) to file a return of tax imposed under this title by 
     its due date (including extensions), or''.
       (b) Conforming Amendment.--The heading for section 
     6159(b)(4) is amended by striking ``Failure to pay an 
     installment or any other tax liability when due or to provide 
     requested financial information'' and inserting ``Failure to 
     make payments or deposits or file returns when due or to 
     provide requested financial information''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to failures occurring on or after the date of the 
     enactment of this Act.

     SEC. 1733. OFFICE OF CHIEF COUNSEL REVIEW OF OFFERS-IN-
                   COMPROMISE.

       (a) In General.--Section 7122(b) (relating to record) is 
     amended by striking ``Whenever a compromise'' and all that 
     follows through ``his delegate'' and inserting ``If the 
     Secretary determines that an opinion of the General Counsel 
     for the Department of the Treasury, or the Counsel's 
     delegate, is required with respect to a compromise, there 
     shall be placed on file in the office of the Secretary such 
     opinion''.
       (b) Conforming Amendments.--Section 7122(b) is amended by 
     striking the second and third sentences.
       (c) Effective Date.--The amendments made by this section 
     shall apply to offers-in-compromise submitted or pending on 
     or after the date of the enactment of this Act.

     SEC. 1734. PARTIAL PAYMENTS REQUIRED WITH SUBMISSION OF 
                   OFFERS-IN-COMPROMISE.

       (a) In General.--Section 7122 (relating to compromises), as 
     amended by this Act, is amended by redesignating subsections 
     (c), (d), and (e) as subsections (d), (e), and (f), 
     respectively, and by inserting after subsection (b) the 
     following new subsection:
       ``(c) Rules for Submission of Offers-in-compromise.--
       ``(1) Partial payment required with submission.--
       ``(A) Lump-sum offers.--
       ``(i) In general.--The submission of any lump-sum offer-in-
     compromise shall be accompanied by the payment of 20 percent 
     of amount of such offer.
       ``(ii) Lump-sum offer-in-compromise.--For purposes of this 
     section, the term `lump-sum offer-in-compromise' means any 
     offer of payments made in 5 or fewer installments.
       ``(B) Periodic payment offers.--The submission of any 
     periodic payment offer-in-compromise shall be accompanied by 
     the payment of the amount of the first proposed installment 
     and each proposed installment due during the period such 
     offer is being evaluated for acceptance and has not been 
     rejected by the Secretary. Any failure to make a payment 
     required under the preceding sentence shall be deemed a 
     withdrawal of the offer-in-compromise.
       ``(2) Rules of application.--
       ``(A) Use of payment.--The application of any payment made 
     under this subsection to

[[Page S7134]]

     the assessed tax or other amounts imposed under this title 
     with respect to such tax may be specified by the taxpayer.
       ``(B) No user fee imposed.--Any user fee which would 
     otherwise be imposed under this section shall not be imposed 
     on any offer-in-compromise accompanied by a payment required 
     under this subsection.''.
       (b) Additional Rules Relating to Treatment of Offers.--
       (1) Unprocessable offer if payment requirements are not 
     met.--Paragraph (3) of section 7122(d) (relating to standards 
     for evaluation of offers), as redesignated by subsection (a), 
     is amended by striking ``; and'' at the end of subparagraph 
     (A) and inserting a comma, by striking the period at the end 
     of subparagraph (B) and inserting ``, and'', and by adding at 
     the end the following new subparagraph:
       ``(C) any offer-in-compromise which does not meet the 
     requirements of subsection (c) shall be returned to the 
     taxpayer as unprocessable.''.
       (2) Deemed acceptance of offer not rejected within certain 
     period.--Section 7122, as amended by subsection (a), is 
     amended by adding at the end the following new subsection:
       ``(g) Deemed Acceptance of Offer Not Rejected Within 
     Certain Period.--Any offer-in-compromise submitted under this 
     section shall be deemed to be accepted by the Secretary if 
     such offer is not rejected by the Secretary before the date 
     which is 24 months after the date of the submission of such 
     offer (12 months for offers-in-compromise submitted after the 
     date which is 5 years after the date of the enactment of this 
     subsection). For purposes of the preceding sentence, any 
     period during which any tax liability which is the subject of 
     such offer-in-compromise is in dispute in any judicial 
     proceeding shall not be taken in to account in determining 
     the expiration of the 24-month period (or 12-month period, if 
     applicable).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to offers-in-compromise submitted on and after 
     the date which is 60 days after the date of the enactment of 
     this Act.

     SEC. 1735. JOINT TASK FORCE ON OFFERS-IN-COMPROMISE.

       (a) In General.--The Secretary of the Treasury shall 
     establish a joint task force--
       (1) to review the Internal Revenue Service's determinations 
     with respect to offers-in-compromise, including offers which 
     raise equitable, public policy, or economic hardship grounds 
     for compromise of a tax liability under section 7122 of the 
     Internal Revenue Code of 1986,
       (2) to review the extent to which the Internal Revenue 
     Service has used its authority to resolve longstanding cases 
     by forgoing penalties and interest which have accumulated as 
     a result of delay in determining the taxpayer's liability,
       (3) to provide recommendations as to whether the Internal 
     Revenue Service's evaluation of offers-in-compromise should 
     include--
       (A) the taxpayer's compliance history,
       (B) errors by the Internal Revenue Service with respect to 
     the underlying tax, and
       (C) wrongful acts by a third party which gave rise to the 
     liability, and
       (4) to annually report to the Committee on Finance of the 
     Senate and the Committee on Ways and Means of the House of 
     Representatives (beginning in 2006) regarding such review and 
     recommendations.
       (b) Members of Joint Task Force.--The membership of the 
     joint task force under subsection (a) shall consist of 1 
     representative each from the Department of the Treasury, the 
     Internal Revenue Service Oversight Board, the Office of the 
     Chief Counsel for the Internal Revenue Service, the Office of 
     the Taxpayer Advocate, the Office of Appeals, and the 
     division of the Internal Revenue Service charged with 
     operating the offer-in-compromise program.
       (c) Report of National Taxpayer Advocate.--
       (1) In general.--Clause (ii) of section 7803(c)(2)(B) 
     (relating to annual reports) is amended by striking ``and'' 
     at the end of subclause (X), by redesignating subclause (XI) 
     as subclause (XII), and by inserting after subclause (X) the 
     following new subclause:

       ``(XI) include a list of the factors taxpayers have raised 
     to support their claims for offers-in-compromise relief, the 
     number of such offers submitted, accepted, and rejected, the 
     number of such offers appealed, the period during which 
     review of such offers have remained pending, and the efforts 
     the Internal Revenue Service has made to correctly identify 
     such offers, including the training of employees in 
     identifying and evaluating such offers.''.

       (2) Effective date.--The amendment made by paragraph (1) 
     shall apply to reports in calendar year 2006 and thereafter.
                                 ______
                                 
  SA 929. Mr. LEVIN (for himself and Mr. Bayh) submitted an amendment 
intended to be proposed by him to the bill H.R. 6, to ensure jobs for 
our future with secure, affordable, and reliable energy; which was 
ordered to lie on the table; as follows:

       At the end add the following:

  TITLE XVII--TAX INCENTIVES FOR ALTERNATIVE MOTOR VEHICLES AND FUELS

     SEC. 1700. AMENDMENT OF 1986 CODE.

       Except as otherwise expressly provided, whenever in this 
     title an amendment or repeal is expressed in terms of an 
     amendment to, or repeal of, a section or other provision, the 
     reference shall be considered to be made to a section or 
     other provision of the Internal Revenue Code of 1986.

                       Subtitle A--Tax Incentives

     SEC. 1701. ALTERNATIVE MOTOR VEHICLE CREDIT.

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

     ``SEC. 30B. ALTERNATIVE MOTOR VEHICLE CREDIT.

       ``(a) Allowance of Credit.--There shall be allowed as a 
     credit against the tax imposed by this chapter for the 
     taxable year an amount equal to the sum of--
       ``(1) the new qualified fuel cell motor vehicle credit 
     determined under subsection (b),
       ``(2) the new advanced lean burn technology motor vehicle 
     credit determined under subsection (c),
       ``(3) the new qualified hybrid motor vehicle credit 
     determined under subsection (d), and
       ``(4) the new qualified alternative fuel motor vehicle 
     credit determined under subsection (e).
       ``(b) New Qualified Fuel Cell Motor Vehicle Credit.--
       ``(1) In general.--For purposes of subsection (a), the new 
     qualified fuel cell motor vehicle credit determined under 
     this subsection with respect to a new qualified fuel cell 
     motor vehicle placed in service by the taxpayer during the 
     taxable year is--
       ``(A) $8,000 if such vehicle has a gross vehicle weight 
     rating of not more than 8,500 pounds,
       ``(B) $10,000, if such vehicle has a gross vehicle weight 
     rating of more than 8,500 pounds but not more than 14,000 
     pounds,
       ``(C) $20,000, if such vehicle has a gross vehicle weight 
     rating of more than 14,000 pounds but not more than 26,000 
     pounds, and
       ``(D) $40,000, if such vehicle has a gross vehicle weight 
     rating of more than 26,000 pounds.
       ``(2) Increase for fuel efficiency.--
       ``(A) In general.--The amount determined under paragraph 
     (1)(A) with respect to a new qualified fuel cell motor 
     vehicle which is a passenger automobile or light truck shall 
     be increased by--
       ``(i) $1,000, if such vehicle achieves at least 150 percent 
     but less than 175 percent of the 2002 model year city fuel 
     economy,
       ``(ii) $1,500, if such vehicle achieves at least 175 
     percent but less than 200 percent of the 2002 model year city 
     fuel economy,
       ``(iii) $2,000, if such vehicle achieves at least 200 
     percent but less than 225 percent of the 2002 model year city 
     fuel economy,
       ``(iv) $2,500, if such vehicle achieves at least 225 
     percent but less than 250 percent of the 2002 model year city 
     fuel economy,
       ``(v) $3,000, if such vehicle achieves at least 250 percent 
     but less than 275 percent of the 2002 model year city fuel 
     economy,
       ``(vi) $3,500, if such vehicle achieves at least 275 
     percent but less than 300 percent of the 2002 model year city 
     fuel economy, and
       ``(vii) $4,000, if such vehicle achieves at least 300 
     percent of the 2002 model year city fuel economy.
       ``(B) 2002 model year city fuel economy.--For purposes of 
     subparagraph (A), the 2002 model year city fuel economy with 
     respect to a vehicle shall be determined in accordance with 
     the following tables:
       ``(i) In the case of a passenger automobile:
``If vehicle inertia weight clThe 2002 model year city fuel economy is:
1,500 or 1,750 lbs.............................................45.2 mpg
2,000 lbs......................................................39.6 mpg
2,250 lbs......................................................35.2 mpg
2,500 lbs......................................................31.7 mpg
2,750 lbs......................................................28.8 mpg
3,000 lbs......................................................26.4 mpg
3,500 lbs......................................................22.6 mpg
4,000 lbs......................................................19.8 mpg
4,500 lbs......................................................17.6 mpg
5,000 lbs......................................................15.9 mpg
5,500 lbs......................................................14.4 mpg
6,000 lbs......................................................13.2 mpg
6,500 lbs......................................................12.2 mpg
7,000 to 8,500 lbs............................................11.3 mpg.
       ``(ii) In the case of a light truck:

``If vehicle inertia weight clThe 2002 model year city fuel economy is:
1,500 or 1,750 lbs............................................39.4 mpg 
2,000 lbs......................................................35.2 mpg
2,250 lbs......................................................31.8 mpg
2,500 lbs......................................................29.0 mpg
2,750 lbs......................................................26.8 mpg
3,000 lbs......................................................24.9 mpg
3,500 lbs......................................................21.8 mpg
4,000 lbs......................................................19.4 mpg
4,500 lbs......................................................17.6 mpg
5,000 lbs......................................................16.1 mpg
5,500 lbs......................................................14.8 mpg
6,000 lbs......................................................13.7 mpg
6,500 lbs......................................................12.8 mpg
7,000 to 8,500 lbs............................................12.1 mpg.
       ``(C) Vehicle inertia weight class.--For purposes of 
     subparagraph (B), the term `vehicle insertia weight class' 
     has the same meaning as when defined in regulations 
     prescribed by the Administrator of the Environmental 
     Protection Agency for purposes of the administration of title 
     II of the Clean Air Act (42 U.S.C. 7521 et seq.).
       ``(3) New qualified fuel cell motor vehicle.--For purposes 
     of this subsection, the term `new qualified fuel cell motor 
     vehicle' means a motor vehicle--
       ``(A) which is propelled by power derived from 1 or more 
     cells which convert chemical energy directly into electricity 
     by combining oxygen with hydrogen fuel which is

[[Page S7135]]

     stored on board the vehicle in any form and may or may not 
     require reformation prior to use,
       ``(B) which, in the case of a passenger automobile or light 
     truck, has received on or after the date of the enactment of 
     this section a certificate that such vehicle meets or exceeds 
     the Bin 5 Tier II emission level established in regulations 
     prescribed by the Administrator of the Environmental 
     Protection Agency under section 202(i) of the Clean Air Act 
     for that make and model year vehicle,
       ``(C) the original use of which commences with the 
     taxpayer,
       ``(D) which is acquired for use or lease by the taxpayer 
     and not for resale, and
       ``(E) which is made by a manufacturer.
       ``(c) New Advanced Lean Burn Technology Motor Vehicle 
     Credit.--
       ``(1) In general.--For purposes of subsection (a), the new 
     advanced lean burn technology motor vehicle credit determined 
     under this subsection with respect to a new advanced lean 
     burn technology motor vehicle placed in service by the 
     taxpayer during the taxable year is the credit amount 
     determined under paragraph (2).
       ``(2) Credit amount.--
       ``(A) Fuel economy.--
       ``(i) In general.--The credit amount determined under this 
     paragraph shall be determined in accordance with the 
     following table:
``In the case of a vehicle which achieves a fuel economy (expressed as 
  a percentage of the 2002 model year city fuel eThe credit amount is--
At least 125 percent but less than 150 percent.....................$600
At least 150 percent but less than 175 percent...................$1,100
At least 175 percent but less than 200 percent...................$1,600
At least 200 percent but less than 225 percent...................$2,100
At least 225 percent but less than 250 percent...................$2,600
At least 250 percent............................................$3,100.
       ``(ii) 2002 model year city fuel economy.--For purposes of 
     clause (i), the 2002 model year city fuel economy with 
     respect to a vehicle shall be determined on a gasoline gallon 
     equivalent basis as determined by the Administrator of the 
     Environmental Protection Agency using the tables provided in 
     subsection (b)(2)(B) with respect to such vehicle.
       ``(B) Conservation credit.--The amount determined under 
     subparagraph (A) with respect to a new advanced lean burn 
     technology motor vehicle shall be increased by the 
     conservation credit amount determined in accordance with the 
     following table:
``In the case of a vehicle which achieves a lifetime fuel savings 
  (expressed in gallons of gasoline) The conservation credit amountis--
At least 1,200 but less than 1,800.................................$700
At least 1,800 but less than 2,400...............................$1,200
At least 2,400 but less than 3,000...............................$1,700
At least 3,000..................................................$2,200.
       ``(C) Option to use like vehicle.--At the option of the 
     vehicle manufacturer, the increase for fuel efficiency and 
     conservation credit may be calculated by comparing the new 
     qualified advanced lean burn technology motor vehicle to a 
     like vehicle.
       ``(3) New advanced lean burn technology motor vehicle.--For 
     purposes of this subsection, the term `new advanced lean burn 
     technology motor vehicle' means a passenger automobile or a 
     light truck--
       ``(A) with an internal combustion engine which--
       ``(i) is designed to operate primarily using more air than 
     is necessary for complete combustion of the fuel,
       ``(ii) incorporates direct injection,
       ``(iii) achieves at least 125 percent of the 2002 model 
     year city fuel economy,
       ``(iv) for 2004 and later model vehicles, has received a 
     certificate that such vehicle meets or exceeds--

       ``(I) in the case of a vehicle having a gross vehicle 
     weight rating of 6,000 pounds or less, 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, and
       ``(II) in the case of a vehicle having a gross vehicle 
     weight rating of more than 6,000 pounds but not more than 
     8,500 pounds, the Bin 8 Tier II emission standard which is so 
     established.

       ``(B) the original use of which commences with the 
     taxpayer,
       ``(C) which is acquired for use or lease by the taxpayer 
     and not for resale, and
       ``(D) which is made by a manufacturer.
       ``(4) Like vehicle.--The term `like vehicle' for a new 
     qualified advanced lean burn technology motor vehicle derived 
     from a conventional production vehicle produced in the same 
     model year means a model that is equivalent in the following 
     areas:
       ``(A) Body style (2-door or 4-door),
       ``(B) Transmission (automatic or manual),
       ``(C) Acceleration performance ( 0.05 seconds).
       ``(D) Drivetrain (2-wheel drive or 4-wheel drive).
       ``(E) Certification by the Administrator of the 
     Environmental Protection Agency.
       ``(5) Lifetime fuel savings.--For purposes of this 
     subsection, the term `lifetime fuel savings' means, in the 
     case of any new advanced lean burn technology motor vehicle, 
     an amount equal to the excess (if any) of--
       ``(A) 120,000 divided by the 2002 model year city fuel 
     economy for the vehicle inertia weight class, over
       ``(B) 120,000 divided by the city fuel economy for such 
     vehicle.
       ``(d) New Qualified Hybrid Motor Vehicle Credit.--
       ``(1) In general.--For purposes of subsection (a), the new 
     qualified hybrid motor vehicle credit determined under this 
     subsection with respect to a new qualified hybrid motor 
     vehicle placed in service by the taxpayer during the taxable 
     year is the credit amount determined under paragraph (2) or 
     (3).
       ``(2) Credit amount for lighter vehicles.--In the case of a 
     new qualified hybrid motor vehicle which is a passenger 
     automobile, medium duty passenger vehicle, or light truck, 
     the credit amount determined under this paragraph is equal to 
     the sum of following amounts:
       ``(A) Fuel economy.--The amount which would be determined 
     under subsection (c)(2)(A) if such vehicle were a vehicle 
     referred to in such subsection.
       ``(B) Conservation credit.--The amount which would be 
     determined under subsection (c)(2)(B) if such vehicle were a 
     vehicle referred to in such subsection.
       ``(iii) Option to use like vehicle.--For purposes of clause 
     (i), at the option of the vehicle manufacturer, the increase 
     for fuel efficiency and conservation credit may be calculated 
     by comparing the new qualified hybrid motor vehicle to a like 
     vehicle (as defined in subsection (c)(4)).
       ``(3) Credit amount for heavier vehicles.--
       ``(A) In general.--In the case of a new qualified hybrid 
     motor vehicle which is a heavy duty hybrid motor vehicle, the 
     credit amount determined under this paragraph is an amount 
     equal to the applicable percentage of the incremental cost of 
     such vehicle placed in service by the taxpayer during the 
     taxable year.
       ``(B) Incremental cost.--For purposes of this paragraph, 
     the incremental cost of any heavy duty hybrid motor vehicle 
     is equal to the amount of the excess of the manufacturer's 
     suggested retail price for such vehicle over such price for a 
     comparable gasoline or diesel fuel motor vehicle of the same 
     model, to the extent such amount does not exceed--
       ``(i) $7,500, if such vehicle has a gross vehicle weight 
     rating of more than 8,500 pounds but not more than 14,000 
     pounds,
       ``(ii) $15,000, if such vehicle has a gross vehicle weight 
     rating of more than 14,000 pounds but not more than 26,000 
     pounds, and
       ``(iii) $30,000, if such vehicle has a gross vehicle weight 
     rating of more than 26,000 pounds.
       ``(C) Applicable percentage.--For purposes of subparagraph 
     (A), the applicable percentage shall be determined in 
     accordance with the following table:

``If percent increase in fuel economy of hybrid over comparable vehicle 
  is:                                     The applicable percentage is:
At least 30 but less than 40 percent........................20 percent.
At least 40 but less than 50 percent........................30 percent.
At least 50 percent.........................................40 percent.
       ``(4) New qualified hybrid motor vehicle.--For purposes of 
     this subsection--
       ``(A) In general.--The term `new qualified hybrid motor 
     vehicle' means a motor vehicle--
       ``(i) which draws propulsion energy from onboard sources of 
     stored energy which are both--

       ``(I) an internal combustion or heat engine using 
     consumable fuel, and
       ``(II) a rechargeable energy storage system,

       ``(ii) which, in the case of a passenger automobile, medium 
     duty passenger vehicle, or light truck--

       ``(I) having a gross vehicle weight rating of 6,000 pounds 
     or less, has received a certificate that such vehicle meets 
     or exceeds the Bin 5 Tier II emission level established in 
     regulations prescribed by the Administrator of the 
     Environmental Protection Agency under section 202(i) of the 
     Clean Air Act for that make and model year vehicle,
       ``(II) having a gross vehicle weight rating of more than 
     6,000 pounds but not more than 8,500 pounds, has received a 
     certificate that such vehicle meets or exceeds the Bin 8 Tier 
     II emission standard which is so established,
       ``(III) has received a certificate of conformity under the 
     Clean Air Act and meets or exceeds the equivalent qualifying 
     California low emission vehicle standard under section 
     243(e)(2) of the Clean Air Act for that make and model year, 
     and
       ``(IV) has a maximum available power of at least 5 percent,

       ``(iii) which, in the case of a heavy duty hybrid motor 
     vehicle--

       ``(I) having a gross vehicle weight rating of more than 
     8,500 but not more than 14,000 pounds, has a maximum 
     available power of at least 10 percent, and
       ``(II) having a gross vehicle weight rating of more than 
     14,000 pounds, has a maximum available power of at least 15 
     percent,

       ``(iv) the original use of which commences with the 
     taxpayer,
       ``(v) which is acquired for use or lease by the taxpayer 
     and not for resale, and
       ``(vi) which is made by a manufacturer.
       ``(B) Consumable fuel.--For purposes of subparagraph 
     (A)(i)(I), the term `consumable

[[Page S7136]]

     fuel' means any solid, liquid, or gaseous matter which 
     releases energy when consumed by an auxiliary power unit.
       ``(C) Maximum available power.--
       ``(i) Passenger automobile, medium duty passenger vehicle, 
     or light truck.--For purposes of subparagraph (A)(ii)(II), 
     the term `maximum available power' means the maximum power 
     available from the rechargeable energy storage system, during 
     a standard 10 second pulse power or equivalent test, divided 
     by such maximum power and the SAE net power of the heat 
     engine.
       ``(ii) Heavy duty hybrid motor vehicle.--For purposes of 
     subparagraph (A)(iii), the term `maximum available power' 
     means the maximum power available from the rechargeable 
     energy storage system, during a standard 10 second pulse 
     power or equivalent test, divided by the vehicle's total 
     traction power. The term `total traction power' means the sum 
     of the peak power from the rechargeable energy storage system 
     and the heat engine peak power of the vehicle, except that if 
     such storage system is the sole means by which the vehicle 
     can be driven, the total traction power is the peak power of 
     such storage system.
       ``(4) Heavy duty hybrid motor vehicle.--For purposes of 
     this subsection, the term `heavy duty hybrid motor vehicle' 
     means a new qualified hybrid motor vehicle which has a gross 
     vehicle weight rating of more than 8,500 pounds. Such term 
     does not include a medium duty passenger vehicle.
       ``(e) New Qualified Alternative Fuel Motor Vehicle 
     Credit.--
       ``(1) Allowance of credit.--Except as provided in paragraph 
     (5), the new qualified alternative fuel motor vehicle credit 
     determined under this subsection is an amount equal to the 
     applicable percentage of the incremental cost of any new 
     qualified alternative fuel motor vehicle placed in service by 
     the taxpayer during the taxable year.
       ``(2) Applicable percentage.--For purposes of paragraph 
     (1), the applicable percentage with respect to any new 
     qualified alternative fuel motor vehicle is--
       ``(A) 50 percent, plus
       ``(B) 30 percent, if such vehicle--
       ``(i) has received a certificate of conformity under the 
     Clean Air Act and meets or exceeds the most stringent 
     standard available for certification under the Clean Air Act 
     for that make and model year vehicle (other than a zero 
     emission standard), or
       ``(ii) has received an order certifying the vehicle as 
     meeting the same requirements as vehicles which may be sold 
     or leased in California and meets or exceeds the most 
     stringent standard available for certification under the 
     State laws of California (enacted in accordance with a waiver 
     granted under section 209(b) of the Clean Air Act) for that 
     make and model year vehicle (other than a zero emission 
     standard).
     For purposes of the preceding sentence, in the case of any 
     new qualified alternative fuel motor vehicle which weighs 
     more than 14,000 pounds gross vehicle weight rating, the most 
     stringent standard available shall be such standard available 
     for certification on the date of the enactment of the Energy 
     Tax Incentives Act.
       ``(3) Incremental cost.--For purposes of this subsection, 
     the incremental cost of any new qualified alternative fuel 
     motor vehicle is equal to the amount of the excess of the 
     manufacturer's suggested retail price for such vehicle over 
     such price for a gasoline or diesel fuel motor vehicle of the 
     same model, to the extent such amount does not exceed--
       ``(A) $5,000, if such vehicle has a gross vehicle weight 
     rating of not more than 8,500 pounds,
       ``(B) $10,000, if such vehicle has a gross vehicle weight 
     rating of more than 8,500 pounds but not more than 14,000 
     pounds,
       ``(C) $25,000, if such vehicle has a gross vehicle weight 
     rating of more than 14,000 pounds but not more than 26,000 
     pounds, and
       ``(D) $40,000, if such vehicle has a gross vehicle weight 
     rating of more than 26,000 pounds.
       ``(4) New qualified alternative fuel motor vehicle.--For 
     purposes of this subsection--
       ``(A) In general.--The term `new qualified alternative fuel 
     motor vehicle' means any motor vehicle--
       ``(i) which is only capable of operating on an alternative 
     fuel,
       ``(ii) the original use of which commences with the 
     taxpayer,
       ``(iii) which is acquired by the taxpayer for use or lease, 
     but not for resale, and
       ``(iv) which is made by a manufacturer.
       ``(B) Alternative fuel.--The term `alternative fuel' means 
     compressed natural gas, liquefied natural gas, liquefied 
     petroleum gas, hydrogen, and any liquid at least 85 percent 
     of the volume of which consists of methanol.
       ``(5) Credit for mixed-fuel vehicles.--
       ``(A) In general.--In the case of a mixed-fuel vehicle 
     placed in service by the taxpayer during the taxable year, 
     the credit determined under this subsection is an amount 
     equal to--
       ``(i) in the case of a 75/25 mixed-fuel vehicle, 70 percent 
     of the credit which would have been allowed under this 
     subsection if such vehicle was a qualified alternative fuel 
     motor vehicle, and
       ``(ii) in the case of a 90/10 mixed-fuel vehicle, 90 
     percent of the credit which would have been allowed under 
     this subsection if such vehicle was a qualified alternative 
     fuel motor vehicle.
       ``(B) Mixed-fuel vehicle.--For purposes of this subsection, 
     the term `mixed-fuel vehicle' means any motor vehicle 
     described in subparagraph (C) or (D) of paragraph (3), 
     which--
       ``(i) is certified by the manufacturer as being able to 
     perform efficiently in normal operation on a combination of 
     an alternative fuel and a petroleum-based fuel,
       ``(ii) either--

       ``(I) has received a certificate of conformity under the 
     Clean Air Act, or
       ``(II) has received an order certifying the vehicle as 
     meeting the same requirements as vehicles which may be sold 
     or leased in California and meets or exceeds the low emission 
     vehicle standard under section 88.105-94 of title 40, Code of 
     Federal Regulations, for that make and model year vehicle,

       ``(iii) the original use of which commences with the 
     taxpayer,
       ``(iv) which is acquired by the taxpayer for use or lease, 
     but not for resale, and
       ``(v) which is made by a manufacturer.
       ``(C) 75/25 mixed-fuel vehicle.--For purposes of this 
     subsection, the term `75/25 mixed-fuel vehicle' means a 
     mixed-fuel vehicle which operates using at least 75 percent 
     alternative fuel and not more than 25 percent petroleum-based 
     fuel.
       ``(D) 90/10 mixed-fuel vehicle.--For purposes of this 
     subsection, the term `90/10 mixed-fuel vehicle' means a 
     mixed-fuel vehicle which operates using at least 90 percent 
     alternative fuel and not more than 10 percent petroleum-based 
     fuel.
       ``(f) Limitation on Number of New Qualified Hybrid and 
     Advanced Lean-burn Technology Vehicles Eligible for Credit.--
       ``(1) In general.--In the case of a qualified vehicle sold 
     during the phaseout period, only the applicable percentage of 
     the credit otherwise allowable under subsection (c) or (d) 
     shall be allowed.
       ``(2) Phaseout period.--For purposes of this subsection, 
     the phaseout period is the period beginning with the second 
     calendar quarter following the calendar quarter which 
     includes the first date on which the number of qualified 
     vehicles manufactured by the manufacturer of the vehicle 
     referred to in paragraph (1) sold for use in the United 
     States after the date of the enactment of this section is at 
     least 80,000.
       ``(3) Applicable percentage.--For purposes of paragraph 
     (1), the applicable percentage is--
       ``(A) 50 percent for the first 2 calendar quarters of the 
     phaseout period,
       ``(B) 25 percent for the 3d and 4th calendar quarters of 
     the phaseout period, and
       ``(C) 0 percent for each calendar quarter thereafter.
       ``(4) Controlled groups.--
       ``(A) In general.--For purposes of this subsection, all 
     persons treated as a single employer under subsection (a) or 
     (b) of section 52 or subsection (m) or (o) of section 414 
     shall be treated as a single manufacturer.
       ``(B) Inclusion of foreign corporations.--For purposes of 
     subparagraph (A), in applying subsections (a) and (b) of 
     section 52 to this section, section 1563 shall be applied 
     without regard to subsection (b)(2)(C) thereof.
       ``(5) Qualified vehicle.--For purposes of this subsection, 
     the term `qualified vehicle' means any new qualified hybrid 
     motor vehicle and any new advanced lean burn technology motor 
     vehicle.
       ``(g) Application With Other Credits.--The credit allowed 
     under subsection (a) for any taxable year shall not exceed 
     the excess (if any) of--
       ``(1) the regular tax for the taxable year reduced by the 
     sum of the credits allowable under subpart A and sections 27, 
     29, and 30, over
       ``(2) the tentative minimum tax for the taxable year.
       ``(h) Other Definitions and Special Rules.--For purposes of 
     this section--
       ``(1) Motor vehicle.--The term `motor vehicle' has the 
     meaning given such term by section 30(c)(2).
       ``(2) City fuel economy.--The city fuel economy with 
     respect to any vehicle shall be measured in a manner which is 
     substantially similar to the manner city fuel economy is 
     measured in accordance with procedures under part 600 of 
     subchapter Q of chapter I of title 40, Code of Federal 
     Regulations, as in effect on the date of the enactment of 
     this section.
       ``(3) Other terms.--The terms `automobile', `passenger 
     automobile', `medium duty passenger vehicle', `light truck', 
     and `manufacturer' have the meanings given such terms in 
     regulations prescribed by the Administrator of the 
     Environmental Protection Agency for purposes of the 
     administration of title II of the Clean Air Act (42 U.S.C. 
     7521 et seq.).
       ``(4)  Reduction in basis.--For purposes of this subtitle, 
     the basis of any property for which a credit is allowable 
     under subsection (a) shall be reduced by the amount of such 
     credit so allowed (determined without regard to subsection 
     (e)).
       ``(5) No double benefit.--The amount of any deduction or 
     other credit allowable under this chapter--
       ``(A) for any incremental cost taken into account in 
     computing the amount of the credit determined under 
     subsection (e) shall be reduced by the amount of such credit 
     attributable to such cost, and
       ``(B) with respect to a vehicle described under subsection 
     (b), (c), or (d) shall be reduced by the amount of credit 
     allowed under subsection (a) for such vehicle for the taxable 
     year.

[[Page S7137]]

       ``(6) Property used by tax-exempt entity.--In the case of a 
     vehicle whose use is described in paragraph (3) or (4) of 
     section 50(b) and which is not subject to a lease, the person 
     who sold such vehicle to the person or entity using such 
     vehicle shall be treated as the taxpayer that placed such 
     vehicle in service, but only if such person clearly discloses 
     to such person or entity in a document the amount of any 
     credit allowable under subsection (a) with respect to such 
     vehicle (determined without regard to subsection (g)).
       ``(7) Property used outside united states, etc., not 
     qualified.--No credit shall be allowable under subsection (a) 
     with respect to any property referred to in section 50(b)(1) 
     or with respect to the portion of the cost of any property 
     taken into account under section 179.
       ``(8) Recapture.--The Secretary shall, by regulations, 
     provide for recapturing the benefit of any credit allowable 
     under subsection (a) with respect to any property which 
     ceases to be property eligible for such credit (including 
     recapture in the case of a lease period of less than the 
     economic life of a vehicle).
       ``(9) Election to not take credit.--No credit shall be 
     allowed under subsection (a) for any vehicle if the taxpayer 
     elects to not have this section apply to such vehicle.
       ``(10) Carryback and carryforward allowed.--
       ``(A) In general.--If the credit allowable under subsection 
     (a) for a taxable year exceeds the amount of the limitation 
     under subsection (g) for such taxable year (in this paragraph 
     referred to as the `unused credit year'), such excess shall 
     be a credit carryback to each of the 3 taxable years 
     preceding the unused credit year and a credit carryforward to 
     each of the 20 taxable years following the unused credit 
     year, except that no excess may be carried to a taxable year 
     beginning before the date of the enactment of this section. 
     The preceding sentence shall not apply to any credit 
     carryback if such credit carryback is attributable to 
     property for which a deduction for depreciation is not 
     allowable.
       ``(B) Rules.--Rules similar to the rules of section 39 
     shall apply with respect to the credit carryback and credit 
     carryforward under subparagraph (A).
       ``(11) Interaction with air quality and motor vehicle 
     safety standards.--Unless otherwise provided in this section, 
     a motor vehicle shall not be considered eligible for a credit 
     under this section unless such vehicle is in compliance 
     with--
       ``(A) the applicable provisions of the Clean Air Act for 
     the applicable make and model year of the vehicle (or 
     applicable air quality provisions of State law in the case of 
     a State which has adopted such provision under a waiver under 
     section 209(b) of the Clean Air Act), and
       ``(B) the motor vehicle safety provisions of sections 30101 
     through 30169 of title 49, United States Code.
       ``(g) Regulations.--
       ``(1) In general.--Except as provided in paragraph (2), the 
     Secretary shall promulgate such regulations as necessary to 
     carry out the provisions of this section.
       ``(2) Coordination in prescription of certain 
     regulations.--The Secretary of the Treasury, in coordination 
     with the Secretary of Transportation and the Administrator of 
     the Environmental Protection Agency, shall prescribe such 
     regulations as necessary to determine whether a motor vehicle 
     meets the requirements to be eligible for a credit under this 
     section.
       ``(h) Termination.--This section shall not apply to any 
     property purchased after--
       ``(1) in the case of a new qualified fuel cell motor 
     vehicle (as described in subsection (b)), December 31, 2015,
       ``(2) in the case of a new advanced lean burn technology 
     motor vehicle (as described in subsection (c)) or a new 
     qualified hybrid motor vehicle (as described in subsection 
     (d)), December 31, 2009, and
       ``(3) in the case of a new qualified alternative fuel 
     vehicle (as described in subsection (e)), December 31, 
     2010.''.
       (b) Conforming Amendments.--
       (1) Section 1016(a), as amended by this Act, is amended by 
     striking ``and'' at the end of paragraph (35), by striking 
     the period at the end of paragraph (36) and inserting ``, 
     and'', and by adding at the end the following new paragraph:
       ``(37) to the extent provided in section 30B(h)(4).''.
       (2) Section 55(c)(2), as amended by this Act, is amended by 
     inserting ``30B(g),'' after ``30(b)(2),''.
       (3) Section 6501(m) is amended by inserting ``30B(h)(9),'' 
     after ``30(d)(4),''.
       (4) The table of sections for subpart B of part IV of 
     subchapter A of chapter 1 is amended by inserting after the 
     item relating to section 30A the following new item:

``Sec. 30B. Alternative motor vehicle credit.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after the date of 
     the enactment of this Act, in taxable years ending after such 
     date.
       (d) Sticker Information Required at Retail Sale.--
       (1) In general.--The Secretary of the Treasury shall issue 
     regulations under which each qualified vehicle sold at retail 
     shall display a notice--
       (A) that such vehicle is a qualified vehicle, and
       (B) that the buyer may not benefit from the credit allowed 
     under section 30B of the Internal Revenue Code of 1986 if 
     such buyer has insufficient tax liability.
       (2) Qualified vehicle.--For purposes of paragraph (1), the 
     term ``qualified vehicle'' means a vehicle with respect to 
     which a credit is allowed under section 30B of the Internal 
     Revenue Code of 1986.
       (e) Nonapplication of Section .--Notwithstanding any other 
     provision of this Act, the provisions of, and amendments made 
     by, section 1531 of this Act shall be null and void.

     SEC. 1702. CREDIT FOR INSTALLATION OF ALTERNATIVE FUEL 
                   REFUELING STATIONS.

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

     ``SEC. 30C. ALTERNATIVE FUEL VEHICLE REFUELING PROPERTY 
                   CREDIT.

       ``(a) Credit Allowed.--There shall be allowed as a credit 
     against the tax imposed by this chapter for the taxable year 
     an amount equal to 50 percent of the cost of any qualified 
     alternative fuel vehicle refueling property placed in service 
     by the taxpayer during the taxable year.
       ``(b) Limitation.--The credit allowed under subsection (a) 
     with respect to any alternative fuel vehicle refueling 
     property shall not exceed--
       ``(1) $50,000 in the case of a property of a character 
     subject to an allowance for depreciation, and
       ``(2) $1,000 in any other case.
       ``(c) Qualified Alternative Fuel Vehicle Refueling 
     Property.--For purposes of this section--
       ``(1) In general.--Except as provided in paragraph (2), the 
     term `qualified alternative fuel vehicle refueling property' 
     has the meaning given to such term by section 179A(d), but 
     only with respect to any fuel at least 85 percent of the 
     volume of which consists of ethanol, natural gas, compressed 
     natural gas, liquefied natural gas, liquefied petroleum gas, 
     and hydrogen.
       ``(2) Residential property.--In the case of any property 
     installed on property which is used as the principal 
     residence (within the meaning of section 121) of the 
     taxpayer, paragraph (1) of section 179A(d) shall not apply.
       ``(d) Application With Other Credits.--The credit allowed 
     under subsection (a) for any taxable year shall not exceed 
     the excess (if any) of--
       ``(1) the regular tax for the taxable year reduced by the 
     sum of the credits allowable under subpart A and sections 27, 
     29, 30, and 30B, over
       ``(2) the tentative minimum tax for the taxable year.
       ``(e) Carryforward Allowed.--
       ``(1) In general.--If the credit amount allowable under 
     subsection (a) for a taxable year exceeds the amount of the 
     limitation under subsection (d) for such taxable year, such 
     excess shall be allowed as a credit carryforward for each of 
     the 20 taxable years following the unused credit year.
       ``(2) Rules.--Rules similar to the rules of section 39 
     shall apply with respect to the credit carryforward under 
     paragraph (1).
       ``(f) Special Rules.--For purposes of this section--
       ``(1) Basis reduction.--The basis of any property shall be 
     reduced by the portion of the cost of such property taken 
     into account under subsection (a).
       ``(2) No double benefit.--No deduction shall be allowed 
     under section 179A with respect to any property with respect 
     to which a credit is allowed under subsection (a).
       ``(3) Property used by tax-exempt entity.--In the case of 
     any qualified alternative fuel vehicle refueling property the 
     use of which is described in paragraph (3) or (4) of section 
     50(b) and which is not subject to a lease, the person who 
     sold such property to the person or entity using such 
     property shall be treated as the taxpayer that placed such 
     property in service, but only if such person clearly 
     discloses to such person or entity in a document the amount 
     of any credit allowable under subsection (a) with respect to 
     such property (determined without regard to subsection (d)).
       ``(4) Property used outside united states not qualified.--
     No credit shall be allowable under subsection (a) with 
     respect to any property referred to in section 50(b)(1) or 
     with respect to the portion of the cost of any property taken 
     into account under section 179.
       ``(5) 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.
       ``(6) Recapture rules.--Rules similar to the rules of 
     section 179A(e)(4) shall apply.
       ``(g) Regulations.--The Secretary shall prescribe such 
     regulations as necessary to carry out the provisions of this 
     section.
       ``(h) Termination.--This section shall not apply to any 
     property placed in service--
       ``(1) in the case of property relating to hydrogen, after 
     December 31, 2014, and
       ``(2) in the case of any other property, after December 31, 
     2009.''.
       (b) Modifications to Extension of Deduction for Certain 
     Refueling Property.--
       (1) Increase in deduction for hydrogen infrastructure.--
     Section 179A(b)(2)(A)(i) is amended by inserting ``($200,000 
     in the case of property relating to hydrogen)'' after 
     ``$100,000''.

[[Page S7138]]

       (2) Extension of deduction.--Subsection (f) of section 179A 
     is amended to read as follows:
       ``(f) Termination.--This section shall not apply to any 
     property placed in service--
       ``(1) in the case of property relating to hydrogen, after 
     December 31, 2014, and
       ``(2) in the case of any other property, after December 31, 
     2009.''.
       (c) Incentive for Production of Hydrogen at Qualified 
     Clean-fuel Vehicle Refueling Property.--Section 179A(d) 
     (defining qualified clean-fuel vehicle refueling property) is 
     amended by adding at the end the following new flush 
     sentence:
     ``In the case of clean-burning fuel which is hydrogen 
     produced from another clean-burning fuel, paragraph (3)(A) 
     shall be applied by substituting `production, storage, or 
     dispensing' for `storage or dispensing' both places it 
     appears.''.
       (d) Conforming Amendments.--
       (1) Section 1016(a), as amended by this Act, 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 30C(f).''.
       (2) Section 55(c)(2), as amended by this Act, is amended by 
     inserting ``30C(e),'' after ``30B(e),''.
       (3) Section 6501(m) is amended by inserting ``30C(f)(5),'' 
     after ``30B(f)(9),''.
       (4) The table of sections for subpart B of part IV of 
     subchapter A of chapter 1, as amended by this Act, is amended 
     by inserting after the item relating to section 30B the 
     following new item:

``Sec. 30C. Clean-fuel vehicle refueling property credit.''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after December 31, 
     2005, in taxable years ending after such date.
       (f) Nonapplication of Section.--Notwithstanding any other 
     provision of this Act, the provisions of, and amendments made 
     by, section 1533 of this Act shall be null and void.

     SEC. 1703. ADVANCED TECHNOLOGY MOTOR VEHICLES MANUFACTURING 
                   CREDIT.

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

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

       ``(a) Credit Allowed.--There shall be allowed as a credit 
     against the tax imposed by this chapter for the taxable year 
     an amount equal to 35 percent of so much of the qualified 
     investment of an eligible taxpayer for such taxable year as 
     does not exceed $25,000,000.
       ``(b) Qualified Investment.--For purposes of this section--
       ``(1) In general.--The qualified investment for any taxable 
     year is equal to the incremental costs incurred during such 
     taxable year--
       ``(A) to re-equip or expand any manufacturing facility of 
     the eligible taxpayer to produce advanced technology motor 
     vehicles or to produce eligible components,
       ``(B) for engineering integration of such vehicles and 
     components as described in subsection (d), and
       ``(C) for research and development related to advanced 
     technology motor vehicles and eligible components.
       ``(2) Attribution rules.--In the event a facility of the 
     eligible taxpayer produces both advanced technology motor 
     vehicles and conventional motor vehicles, or eligible and 
     non-eligible components, only the qualified investment 
     attributable to production of advanced technology motor 
     vehicles and eligible components shall be taken into account.
       ``(c) Advanced Technology Motor Vehicles and Eligible 
     Components.--For purposes of this section--
       ``(1) Advanced technology motor vehicle.--The term 
     `advanced technology motor vehicle' means--
       ``(A) any new advanced lean burn technology motor vehicle 
     (as defined in section 30B(c)(3)), or
       ``(B) any new qualified hybrid motor vehicle (as defined in 
     section 30B(d)(2)(A) and determined without regard to any 
     gross vehicle weight rating).
       ``(2) Eligible components.--The term `eligible component' 
     means any component inherent to any advanced technology motor 
     vehicle, including--
       ``(A) with respect to any gasoline or diesel-electric new 
     qualified hybrid motor vehicle--
       ``(i) electric motor or generator,
       ``(ii) power split device,
       ``(iii) power control unit,
       ``(iv) power controls,
       ``(v) integrated starter generator, or
       ``(vi) battery,
       ``(B) with respect to any hydraulic new qualified hybrid 
     motor vehicle--
       ``(i) hydraulic accumulator vessel,
       ``(ii) hydraulic pump, or
       ``(iii) hydraulic pump-motor assembly,
       ``(C) with respect to any new advanced lean burn technology 
     motor vehicle--
       ``(i) diesel engine,
       ``(ii) turbocharger,
       ``(iii) fuel injection system, or
       ``(iv) after-treatment system, such as a particle filter or 
     NOx absorber, and
       ``(D) with respect to any advanced technology motor 
     vehicle, any other component submitted for approval by the 
     Secretary.
       ``(d) Engineering Integration Costs.--For purposes of 
     subsection (b)(1)(B), costs for engineering integration are 
     costs incurred prior to the market introduction of advanced 
     technology vehicles for engineering tasks related to--
       ``(1) establishing functional, structural, and performance 
     requirements for component and subsystems to meet overall 
     vehicle objectives for a specific application,
       ``(2) designing interfaces for components and subsystems 
     with mating systems within a specific vehicle application,
       ``(3) designing cost effective, efficient, and reliable 
     manufacturing processes to produce components and subsystems 
     for a specific vehicle application, and
       ``(4) validating functionality and performance of 
     components and subsystems for a specific vehicle application.
       ``(e) Eligible Taxpayer.--For purposes of this section, the 
     term `eligible taxpayer' means any taxpayer if more than 50 
     percent of its gross receipts for the taxable year is derived 
     from the manufacture of motor vehicles or any component parts 
     of such vehicles.
       ``(f) Limitation Based on Amount of Tax.--The credit 
     allowed under subsection (a) for the taxable year shall not 
     exceed the excess of--
       ``(1) the sum of--
       ``(A) the regular tax liability (as defined in section 
     26(b)) for such taxable year, plus
       ``(B) the tax imposed by section 55 for such taxable year 
     and any prior taxable year beginning after 1986 and not taken 
     into account under section 53 for any prior taxable year, 
     over
       ``(2) the sum of the credits allowable under subpart A and 
     sections 27, 30, and 30B for the taxable year.
       ``(g) Reduction in Basis.--For purposes of this subtitle, 
     if a credit is allowed under this section for any expenditure 
     with respect to any property, the increase in the basis of 
     such property which would (but for this paragraph) result 
     from such expenditure shall be reduced by the amount of the 
     credit so allowed.
       ``(h) No Double Benefit.--
       ``(1) Coordination with other deductions and credits.--
     Except as provided in paragraph (2), the amount of any 
     deduction or other credit allowable under this chapter for 
     any cost taken into account in determining the amount of the 
     credit under subsection (a) shall be reduced by the amount of 
     such credit attributable to such cost.
       ``(2) Research and development costs.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     any amount described in subsection (b)(1)(C) taken into 
     account in determining the amount of the credit under 
     subsection (a) for any taxable year shall not be taken into 
     account for purposes of determining the credit under section 
     41 for such taxable year.
       ``(B) Costs taken into account in determining base period 
     research expenses.--Any amounts described in subsection 
     (b)(1)(C) taken into account in determining the amount of the 
     credit under subsection (a) for any taxable year which are 
     qualified research expenses (within the meaning of section 
     41(b)) shall be taken into account in determining base period 
     research expenses for purposes of applying section 41 to 
     subsequent taxable years.
       ``(i) Business Carryovers Allowed.--If the credit allowable 
     under subsection (a) for a taxable year exceeds the 
     limitation under subsection (f) for such taxable year, such 
     excess (to the extent of the credit allowable with respect to 
     property subject to the allowance for depreciation) shall be 
     allowed as a credit carryback and carryforward under rules 
     similar to the rules of section 39.
       ``(j) Special Rules.--For purposes of this section, rules 
     similar to the rules of paragraphs (4) and (5) of section 
     179A(e) and paragraphs (1) and (2) of section 41(f) shall 
     apply
       ``(k) Election Not to Take Credit.--No credit shall be 
     allowed under subsection (a) for any property if the taxpayer 
     elects not to have this section apply to such property.
       ``(l) Regulations.--The Secretary shall prescribe such 
     regulations as necessary to carry out the provisions of this 
     section.
       ``(m) Termination.--This section shall not apply to any 
     qualified investment after December 31, 2010.''.
       (b) Conforming Amendments.--
       (1) Section 1016(a), as amended by this Act, is amended by 
     striking ``and'' at the end of paragraph (39), by striking 
     the period at the end of paragraph (40) and inserting ``, 
     and'', and by adding at the end the following new paragraph:
       ``(41) to the extent provided in section 30D(g).''.
       (2) Section 6501(m), as amended by this Act, is amended by 
     inserting ``30D(k),'' after ``30C(j),''.
       (3) The table of sections for subpart B of part IV of 
     subchapter A of chapter 1, as amended by this Act, is amended 
     by inserting after the item relating to section 30C the 
     following new item:

``Sec. 30D. Advanced technology motor vehicles manufacturing credit.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to amounts incurred in taxable years beginning 
     after December 31, 2005.

                 Subtitle B--Revenue Offset Provisions

                       PART I--GENERAL PROVISIONS

     SEC. 1711. TREATMENT OF CONTINGENT PAYMENT CONVERTIBLE DEBT 
                   INSTRUMENTS.

       (a) In General.--Section 1275(d) (relating to regulation 
     authority) is amended--
       (1) by striking ``The Secretary'' and inserting the 
     following:

[[Page S7139]]

       ``(1) In general.--The Secretary'', and
       (2) by adding at the end the following new paragraph:
       ``(2) Treatment of contingent payment convertible debt.--
       ``(A) In general.--In the case of a debt instrument which--
       ``(i) is convertible into stock of the issuing corporation, 
     into stock or debt of a related party (within the meaning of 
     section 267(b) or 707(b)(1)), or into cash or other property 
     in an amount equal to the approximate value of such stock or 
     debt, and
       ``(ii) provides for contingent payments,
     any regulations which require original issue discount to be 
     determined by reference to the comparable yield of a 
     noncontingent fixed-rate debt instrument shall be applied as 
     if the regulations require that such comparable yield be 
     determined by reference to a noncontingent fixed-rate debt 
     instrument which is convertible into stock.
       ``(B) Special rule.--For purposes of subparagraph (A), the 
     comparable yield shall be determined without taking into 
     account the yield resulting from the conversion of a debt 
     instrument into stock.''.
       (b) Cross Reference.--Section 163(e)(6) (relating to cross 
     references) is amended by adding at the end the following:
     ``For the treatment of contingent payment convertible debt, 
     see section 1275(d)(2).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to debt instruments issued on or after the date 
     of the enactment of this Act.

     SEC. 1712. FRIVOLOUS TAX SUBMISSIONS.

       (a) Civil Penalties.--Section 6702 is amended to read as 
     follows:

     ``SEC. 6702. FRIVOLOUS TAX SUBMISSIONS.

       ``(a) Civil Penalty for Frivolous Tax Returns.--A person 
     shall pay a penalty of $5,000 if--
       ``(1) such person files what purports to be a return of a 
     tax imposed by this title but which--
       ``(A) does not contain information on which the substantial 
     correctness of the self-assessment may be judged, or
       ``(B) contains information that on its face indicates that 
     the self-assessment is substantially incorrect; and
       ``(2) the conduct referred to in paragraph (1)--
       ``(A) is based on a position which the Secretary has 
     identified as frivolous under subsection (c), or
       ``(B) reflects a desire to delay or impede the 
     administration of Federal tax laws.
       ``(b) Civil Penalty for Specified Frivolous Submissions.--
       ``(1) Imposition of penalty.--Except as provided in 
     paragraph (3), any person who submits a specified frivolous 
     submission shall pay a penalty of $5,000.
       ``(2) Specified frivolous submission.--For purposes of this 
     section--
       ``(A) Specified frivolous submission.--The term `specified 
     frivolous submission' means a specified submission if any 
     portion of such submission--
       ``(i) is based on a position which the Secretary has 
     identified as frivolous under subsection (c), or
       ``(ii) reflects a desire to delay or impede the 
     administration of Federal tax laws.
       ``(B) Specified submission.--The term `specified 
     submission' means--
       ``(i) a request for a hearing under--

       ``(I) section 6320 (relating to notice and opportunity for 
     hearing upon filing of notice of lien), or
       ``(II) section 6330 (relating to notice and opportunity for 
     hearing before levy), and

       ``(ii) an application under--

       ``(I) section 6159 (relating to agreements for payment of 
     tax liability in installments),
       ``(II) section 7122 (relating to compromises), or
       ``(III) section 7811 (relating to taxpayer assistance 
     orders).

       ``(3) Opportunity to withdraw submission.--If the Secretary 
     provides a person with notice that a submission is a 
     specified frivolous submission and such person withdraws such 
     submission within 30 days after such notice, the penalty 
     imposed under paragraph (1) shall not apply with respect to 
     such submission.
       ``(c) Listing of Frivolous Positions.--The Secretary shall 
     prescribe (and periodically revise) a list of positions which 
     the Secretary has identified as being frivolous for purposes 
     of this subsection. The Secretary shall not include in such 
     list any position that the Secretary determines meets the 
     requirement of section 6662(d)(2)(B)(ii)(II).
       ``(d) Reduction of Penalty.--The Secretary may reduce the 
     amount of any penalty imposed under this section if the 
     Secretary determines that such reduction would promote 
     compliance with and administration of the Federal tax laws.
       ``(e) Penalties in Addition to Other Penalties.--The 
     penalties imposed by this section shall be in addition to any 
     other penalty provided by law.''.
       (b) Treatment of Frivolous Requests for Hearings Before 
     Levy.--
       (1) Frivolous requests disregarded.--Section 6330 (relating 
     to notice and opportunity for hearing before levy) is amended 
     by adding at the end the following new subsection:
       ``(g) Frivolous Requests for Hearing, Etc.--Notwithstanding 
     any other provision of this section, if the Secretary 
     determines that any portion of a request for a hearing under 
     this section or section 6320 meets the requirement of clause 
     (i) or (ii) of section 6702(b)(2)(A), then the Secretary may 
     treat such portion as if it were never submitted and such 
     portion shall not be subject to any further administrative or 
     judicial review.''.
       (2) Preclusion from raising frivolous issues at hearing.--
     Section 6330(c)(4) is amended--
       (A) by striking ``(A)'' and inserting ``(A)(i)'';
       (B) by striking ``(B)'' and inserting ``(ii)'';
       (C) by striking the period at the end of the first sentence 
     and inserting ``; or''; and
       (D) by inserting after subparagraph (A)(ii) (as so 
     redesignated) the following:
       ``(B) the issue meets the requirement of clause (i) or (ii) 
     of section 6702(b)(2)(A).''.
       (3) Statement of grounds.--Section 6330(b)(1) is amended by 
     striking ``under subsection (a)(3)(B)'' and inserting ``in 
     writing under subsection (a)(3)(B) and states the grounds for 
     the requested hearing''.
       (c) Treatment of Frivolous Requests for Hearings Upon 
     Filing of Notice of Lien.--Section 6320 is amended--
       (1) in subsection (b)(1), by striking ``under subsection 
     (a)(3)(B)'' and inserting ``in writing under subsection 
     (a)(3)(B) and states the grounds for the requested hearing'', 
     and
       (2) in subsection (c), by striking ``and (e)'' and 
     inserting ``(e), and (g)''.
       (d) Treatment of Frivolous Applications for Offers-in-
     Compromise and Installment Agreements.--Section 7122 is 
     amended by adding at the end the following new subsection:
       ``(e) Frivolous Submissions, Etc.--Notwithstanding any 
     other provision of this section, if the Secretary determines 
     that any portion of an application for an offer-in-compromise 
     or installment agreement submitted under this section or 
     section 6159 meets the requirement of clause (i) or (ii) of 
     section 6702(b)(2)(A), then the Secretary may treat such 
     portion as if it were never submitted and such portion shall 
     not be subject to any further administrative or judicial 
     review.''.
       (e) Clerical Amendment.--The table of sections for part I 
     of subchapter B of chapter 68 is amended by striking the item 
     relating to section 6702 and inserting the following new 
     item:

``Sec. 6702. Frivolous tax submissions.''.
       (f) Effective Date.--The amendments made by this section 
     shall apply to submissions made and issues raised after the 
     date on which the Secretary first prescribes a list under 
     section 6702(c) of the Internal Revenue Code of 1986, as 
     amended by subsection (a).

     SEC. 1713. INCREASE IN CERTAIN CRIMINAL PENALTIES.

       (a) In General.--Section 7206 (relating to fraud and false 
     statements) is amended--
       (1) by striking ``Any person who--'' and inserting ``(a) In 
     General.--Any person who--'', and
       (2) by adding at the end the following new subsection:
       ``(b) Increase in Monetary Limitation for Underpayment or 
     Overpayment of Tax Due to Fraud.--If any portion of any 
     underpayment (as defined in section 6664(a)) or overpayment 
     (as defined in section 6401(a)) of tax required to be shown 
     on a return is attributable to fraudulent action described in 
     subsection (a), the applicable dollar amount under subsection 
     (a) shall in no event be less than an amount equal to such 
     portion. A rule similar to the rule under section 6663(b) 
     shall apply for purposes of determining the portion so 
     attributable.''.
       (b) Increase in Penalties.--
       (1) Attempt to evade or defeat tax.--Section 7201 is 
     amended--
       (A) by striking ``$100,000'' and inserting ``$500,000'',
       (B) by striking ``$500,000'' and inserting ``$1,000,000'', 
     and
       (C) by striking ``5 years'' and inserting ``10 years''.
       (2) Willful failure to file return, supply information, or 
     pay tax.--Section 7203 is amended--
       (A) in the first sentence--
       (i) by striking ``Any person'' and inserting the following:
       ``(a) In General.--Any person'', and
       (ii) by striking ``$25,000'' and inserting ``$50,000'',
       (B) in the third sentence, by striking ``section'' and 
     inserting ``subsection'', and
       (C) by adding at the end the following new subsection:
       ``(b) Aggravated Failure To File.--
       ``(1) In general.--In the case of any failure described in 
     paragraph (2), the first sentence of subsection (a) shall be 
     applied by substituting--
       ``(A) `felony' for `misdemeanor',
       ``(B) `$500,000 ($1,000,000' for `$25,000 ($100,000', and
       ``(C) `10 years' for `1 year'.
       ``(2) Failure described.--A failure described in this 
     paragraph is a failure to make a return described in 
     subsection (a) for a period of 3 or more consecutive taxable 
     years and the aggregated tax liability for such period is at 
     least $100,000.''.
       (3) Fraud and false statements.--Section 7206(a) (as 
     redesignated by subsection (a)) is amended--
       (A) by striking ``$100,000'' and inserting ``$500,000'',
       (B) by striking ``$500,000'' and inserting ``$1,000,000'', 
     and
       (C) by striking ``3 years'' and inserting ``5 years''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to actions, and failures to act, occurring after 
     the date of the enactment of this Act.

[[Page S7140]]

     SEC. 1714. DOUBLING OF CERTAIN PENALTIES, FINES, AND INTEREST 
                   ON UNDERPAYMENTS RELATED TO CERTAIN OFFSHORE 
                   FINANCIAL ARRANGEMENTS.

       (a) Determination of Penalty.--
       (1) In general.--Notwithstanding any other provision of 
     law, in the case of an applicable taxpayer--
       (A) the determination as to whether any interest or 
     applicable penalty is to be imposed with respect to any 
     arrangement described in paragraph (2), or to any 
     underpayment of Federal income tax attributable to items 
     arising in connection with any such arrangement, shall be 
     made without regard to the rules of subsections (b), (c), and 
     (d) of section 6664 of the Internal Revenue Code of 1986, and
       (B) if any such interest or applicable penalty is imposed, 
     the amount of such interest or penalty shall be equal to 
     twice that determined without regard to this section.
       (2) Applicable taxpayer.--For purposes of this subsection--
       (A) In general.--The term ``applicable taxpayer'' means a 
     taxpayer which--
       (i) has underreported its United States income tax 
     liability with respect to any item which directly or 
     indirectly involves--

       (I) any financial arrangement which in any manner relies on 
     the use of offshore payment mechanisms (including credit, 
     debit, or charge cards) issued by banks or other entities in 
     foreign jurisdictions, or
       (II) any offshore financial arrangement (including any 
     arrangement with foreign banks, financial institutions, 
     corporations, partnerships, trusts, or other entities), and

       (ii) has not signed a closing agreement pursuant to the 
     Voluntary Offshore Compliance Initiative established by the 
     Department of the Treasury under Revenue Procedure 2003-11 or 
     voluntarily disclosed its participation in such arrangement 
     by notifying the Internal Revenue Service of such arrangement 
     prior to the issue being raised by the Internal Revenue 
     Service during an examination.
       (B) Authority to waive.--The Secretary of the Treasury or 
     the Secretary's delegate may waive the application of 
     paragraph (1) to any taxpayer if the Secretary or the 
     Secretary's delegate determines that the use of such offshore 
     payment mechanisms is incidental to the transaction and, in 
     addition, in the case of a trade or business, such use is 
     conducted in the ordinary course of the trade or business of 
     the taxpayer.
       (C) Issues raised.--For purposes of subparagraph (A)(ii), 
     an item shall be treated as an issue raised during an 
     examination if the individual examining the return--
       (i) communicates to the taxpayer knowledge about the 
     specific item, or
       (ii) has made a request to the taxpayer for information and 
     the taxpayer could not make a complete response to that 
     request without giving the examiner knowledge of the specific 
     item.
       (b) Definitions and Rules.--For purposes of this section--
       (1) Applicable penalty.--The term ``applicable penalty'' 
     means any penalty, addition to tax, or fine imposed under 
     chapter 68 of the Internal Revenue Code of 1986.
       (2) Fees and expenses.--The Secretary of the Treasury may 
     retain and use an amount not in excess of 25 percent of all 
     additional interest, penalties, additions to tax, and fines 
     collected under this section to be used for enforcement and 
     collection activities of the Internal Revenue Service. The 
     Secretary shall keep adequate records regarding amounts so 
     retained and used. The amount credited as paid by any 
     taxpayer shall be determined without regard to this 
     paragraph.
       (c) Report by Secretary.--The Secretary shall each year 
     conduct a study and report to Congress on the implementation 
     of this section during the preceding year, including 
     statistics on the number of taxpayers affected by such 
     implementation and the amount of interest and applicable 
     penalties asserted, waived, and assessed during such 
     preceding year.
       (d) Effective Date.--The provisions of this section shall 
     apply to interest, penalties, additions to tax, and fines 
     with respect to any taxable year if, as of the date of the 
     enactment of this Act, the assessment of any tax, penalty, or 
     interest with respect to such taxable year is not prevented 
     by the operation of any law or rule of law.

     SEC. 1715. MODIFICATION OF INTERACTION BETWEEN SUBPART F AND 
                   PASSIVE FOREIGN INVESTMENT COMPANY RULES.

       (a) Limitation on Exception From PFIC Rules for United 
     States Shareholders of Controlled Foreign Corporations.--
     Paragraph (2) of section 1297(e) (relating to passive foreign 
     investment company) is amended by adding at the end the 
     following flush sentence:
     ``Such term shall not include any period if the earning of 
     subpart F income by such corporation during such period would 
     result in only a remote likelihood of an inclusion in gross 
     income under section 951(a)(1)(A)(i).''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years of controlled foreign 
     corporations beginning after March 2, 2005, and to taxable 
     years of United States shareholders with or within which such 
     taxable years of controlled foreign corporations end.

     SEC. 1716. DECLARATION BY CHIEF EXECUTIVE OFFICER RELATING TO 
                   FEDERAL ANNUAL CORPORATE INCOME TAX RETURN.

       (a) In General.--The Federal annual tax return of a 
     corporation with respect to income shall also include a 
     declaration signed by the chief executive officer of such 
     corporation (or other such officer of the corporation as the 
     Secretary of the Treasury may designate if the corporation 
     does not have a chief executive officer), under penalties of 
     perjury, that the corporation has in place processes and 
     procedures that ensure that such return complies with the 
     Internal Revenue Code of 1986 and that the chief executive 
     officer was provided reasonable assurance of the accuracy of 
     all material aspects of such return. The preceding sentence 
     shall not apply to any return of a regulated investment 
     company (within the meaning of section 851 of such Code).
       (b) Effective Date.--This section shall apply to Federal 
     annual tax returns for taxable years ending after the date of 
     the enactment of this Act.

     SEC. 1717. TREASURY REGULATIONS ON FOREIGN TAX CREDIT.

       (a) In General.--Section 901 (relating to taxes of foreign 
     countries and of possessions of United States) is amended by 
     redesignating subsection (m) as subsection (n) and by 
     inserting after subsection (l) the following new subsection:
       ``(m) Regulations.--The Secretary may prescribe regulations 
     disallowing a credit under subsection (a) for all or a 
     portion of any foreign tax, or allocating a foreign tax among 
     2 or more persons, in cases where the foreign tax is imposed 
     on any person in respect of income of another person or in 
     other cases involving the inappropriate separation of the 
     foreign tax from the related foreign income.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to transactions entered into after the date of 
     the enactment of this Act.

     SEC. 1718. WHISTLEBLOWER REFORMS.

       (a) In General.--Section 7623 (relating to expenses of 
     detection of underpayments and fraud, etc.) is amended--
       (1) by striking ``The Secretary'' and inserting ``(a) In 
     General.--The Secretary'',
       (2) by striking ``and'' at the end of paragraph (1) and 
     inserting ``or'',
       (3) by striking ``(other than interest)'', and
       (4) by adding at the end the following new subsections:
       ``(b) Awards to Whistleblowers.--
       ``(1) In general.--If the Secretary proceeds with any 
     administrative or judicial action described in subsection (a) 
     based on information brought to the Secretary's attention by 
     an individual, such individual shall, subject to paragraph 
     (2), receive as an award at least 15 percent but not more 
     than 30 percent of the collected proceeds (including 
     penalties, interest, additions to tax, and additional 
     amounts) resulting from the action (including any related 
     actions) or from any settlement in response to such action. 
     The determination of the amount of such award by the 
     Whistleblower Office shall depend upon the extent to which 
     the individual substantially contributed to such action.
       ``(2) Award in case of less substantial contribution.--
       ``(A) In general.--In the event the action described in 
     paragraph (1) is one which the Whistleblower Office 
     determines to be based principally on disclosures of specific 
     allegations (other than information provided by the 
     individual described in paragraph (1)) resulting from a 
     judicial or administrative hearing, from a governmental 
     report, hearing, audit, or investigation, or from the news 
     media, the Whistleblower Office may award such sums as it 
     considers appropriate, but in no case more than 10 percent of 
     the collected proceeds (including penalties, interest, 
     additions to tax, and additional amounts) resulting from the 
     action (including any related actions) or from any settlement 
     in response to such action, taking into account the 
     significance of the individual's information and the role of 
     such individual and any legal representative of such 
     individual in contributing to such action.
       ``(B) Nonapplication of paragraph where individual is 
     original source of information.--Subparagraph (A) shall not 
     apply if the information resulting in the initiation of the 
     action described in paragraph (1) was originally provided by 
     the individual described in paragraph (1).
       ``(3) Reduction in or denial of award.--If the 
     Whistleblower Office determines that the claim for an award 
     under paragraph (1) or (2) is brought by an individual who 
     planned and initiated the actions that led to the 
     underpayment of tax or actions described in subsection 
     (a)(2), then the Whistleblower Office may appropriately 
     reduce such award. If such individual is convicted of 
     criminal conduct arising from the role described in the 
     preceding sentence, the Whistleblower Office shall deny any 
     award.
       ``(4) Appeal of award determination.--Any determination 
     regarding an award under paragraph (1), (2), or (3) shall be 
     subject to the filing by the individual described in such 
     paragraph of a petition for review with the Tax Court under 
     rules similar to the rules under section 7463 (without regard 
     to the amount in dispute) and such review shall be subject to 
     the rules under section 7461(b)(1).
       ``(5) Application of this subsection.--This subsection 
     shall apply with respect to any action--
       ``(A) against any taxpayer, but in the case of any 
     individual, only if such individual's gross income exceeds 
     $200,000 for any taxable year subject to such action, and
       ``(B) if the tax, penalties, interest, additions to tax, 
     and additional amounts in dispute exceed $20,000.
       ``(6) Additional rules.--
       ``(A) No contract necessary.--No contract with the Internal 
     Revenue Service is

[[Page S7141]]

     necessary for any individual to receive an award under this 
     subsection.
       ``(B) Representation.--Any individual described in 
     paragraph (1) or (2) may be represented by counsel.
       ``(C) Award not subject to individual alternative minimum 
     tax.--No award received under this subsection shall be 
     included in gross income for purposes of determining 
     alternative minimum taxable income.
       ``(c) Whistleblower Office.--
       ``(1) In general.--There is established in the Internal 
     Revenue Service an office to be known as the `Whistleblower 
     Office' which--
       ``(A) shall at all times operate at the direction of the 
     Commissioner and coordinate and consult with other divisions 
     in the Internal Revenue Service as directed by the 
     Commissioner,
       ``(B) shall analyze information received from any 
     individual described in subsection (b) and either investigate 
     the matter itself or assign it to the appropriate Internal 
     Revenue Service office,
       ``(C) shall monitor any action taken with respect to such 
     matter,
       ``(D) shall inform such individual that it has accepted the 
     individual's information for further review,
       ``(E) may require such individual and any legal 
     representative of such individual to not disclose any 
     information so provided,
       ``(F) in its sole discretion, may ask for additional 
     assistance from such individual or any legal representative 
     of such individual, and
       ``(G) shall determine the amount to be awarded to such 
     individual under subsection (b).
       ``(2) Funding for office.--There is authorized to be 
     appropriated $10,000,000 for each fiscal year for the 
     Whistleblower Office. These funds shall be used to maintain 
     the Whistleblower Office and also to reimburse other Internal 
     Revenue Service offices for related costs, such as costs of 
     investigation and collection.
       ``(3) Request for assistance.--
       ``(A) In general.--Any assistance requested under paragraph 
     (1)(F) shall be under the direction and control of the 
     Whistleblower Office or the office assigned to investigate 
     the matter under subparagraph (A). To the extent the 
     disclosure of any returns or return information to the 
     individual or legal representative is required for the 
     performance of such assistance, such disclosure shall be 
     pursuant to a contract entered into between the Secretary and 
     the recipients of such disclosure subject to section 6103(n). 
     No individual or legal representative whose assistance is so 
     requested may by reason of such request represent himself or 
     herself as an employee of the Federal Government.
       ``(B) Funding of assistance.--From the amounts available 
     for expenditure under subsection (b), the Whistleblower 
     Office may, with the agreement of the individual described in 
     subsection (b), reimburse the costs incurred by any legal 
     representative of such individual in providing assistance 
     described in subparagraph (A).
       ``(d) Report by Secretary.--The Secretary shall each year 
     conduct a study and report to Congress on the use of this 
     section, including--
       ``(1) an analysis of the use of this section during the 
     preceding year and the results of such use, and
       ``(2) any legislative or administrative recommendations 
     regarding the provisions of this section and its 
     application.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to information provided on or after the date of 
     the enactment of this Act.

     SEC. 1719. DENIAL OF DEDUCTION FOR CERTAIN FINES, PENALTIES, 
                   AND OTHER AMOUNTS.

       (a) In General.--Subsection (f) of section 162 (relating to 
     trade or business expenses) is amended to read as follows:
       ``(f) Fines, Penalties, and Other Amounts.--
       ``(1) In general.--Except as provided in paragraph (2), no 
     deduction otherwise allowable shall be allowed under this 
     chapter for any amount paid or incurred (whether by suit, 
     agreement, or otherwise) to, or at the direction of, a 
     government or entity described in paragraph (4) in relation 
     to the violation of any law or the investigation or inquiry 
     by such government or entity into the potential violation of 
     any law.
       ``(2) Exception for amounts constituting restitution.--
     Paragraph (1) shall not apply to any amount which--
       ``(A) the taxpayer establishes constitutes restitution 
     (including remediation of property) for damage or harm caused 
     by or which may be caused by the violation of any law or the 
     potential violation of any law, and
       ``(B) is identified as restitution in the court order or 
     settlement agreement.
     Identification pursuant to subparagraph (B) alone shall not 
     satisfy the requirement under subparagraph (A). This 
     paragraph shall not apply to any amount paid or incurred as 
     reimbursement to the government or entity for the costs of 
     any investigation or litigation.
       ``(3) Exception for amounts paid or incurred as the result 
     of certain court orders.--Paragraph (1) shall not apply to 
     any amount paid or incurred by order of a court in a suit in 
     which no government or entity described in paragraph (4) is a 
     party.
       ``(4) Certain nongovernmental regulatory entities.--An 
     entity is described in this paragraph if it is--
       ``(A) a nongovernmental entity which exercises self-
     regulatory powers (including imposing sanctions) in 
     connection with a qualified board or exchange (as defined in 
     section 1256(g)(7)), or
       ``(B) to the extent provided in regulations, a 
     nongovernmental entity which exercises self-regulatory powers 
     (including imposing sanctions) as part of performing an 
     essential governmental function.
       ``(5) Exception for taxes due.--Paragraph (1) shall not 
     apply to any amount paid or incurred as taxes due.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to amounts paid or incurred on or after the date 
     of the enactment of this Act, except that such amendment 
     shall not apply to amounts paid or incurred under any binding 
     order or agreement entered into before such date. Such 
     exception shall not apply to an order or agreement requiring 
     court approval unless the approval was obtained before such 
     date.

     SEC. 1720. FREEZE OF INTEREST SUSPENSION RULES WITH RESPECT 
                   TO LISTED TRANSACTIONS.

       (a) In General.--Paragraph (2) of section 903(d) of the 
     American Jobs Creation Act of 2005 is amended to read as 
     follows:
       ``(2) Exception for reportable or listed transactions.--
       ``(A) In general.--The amendments made by subsection (c) 
     shall apply with respect to interest accruing after October 
     3, 2004.
       ``(B) Special rule for certain listed transactions.--
       ``(i) In general.--Except as provided in clause (ii) or 
     (iii), in the case of any listed transaction, the amendments 
     made by subsection (c) shall also apply with respect to 
     interest accruing on or before October 3, 2004.
       ``(ii) Participants in settlement initiatives.--Clause (i) 
     shall not apply to a listed transaction if, as of May 9, 
     2005--

       ``(I) the taxpayer is participating in a published 
     settlement initiative which is offered by the Secretary of 
     the Treasury or his delegate to a group of similarly situated 
     taxpayers claiming benefits from the listed transaction, or
       ``(II) the taxpayer has entered into a settlement agreement 
     pursuant to such an initiative with respect to the tax 
     liability arising in connection with the listed transaction.

     Subclause (I) shall not apply to the taxpayer if, after May 
     9, 2005, the taxpayer withdraws from, or terminates, 
     participation in the initiative or the Secretary or his 
     delegate determines that a settlement agreement will not be 
     reached pursuant to the initiative within a reasonable period 
     of time.
       ``(iii) Closed transactions.--Clause (i) shall not apply to 
     a listed transaction if, as of May 9, 2005--

       ``(I) the assessment of all Federal income taxes for the 
     taxable year in which the tax liability to which the interest 
     relates arose is prevented by the operation of any law or 
     rule of law, or
       ``(II) a closing agreement under section 7121 has been 
     entered into with respect to the tax liability arising in 
     connection with the listed transaction.''.

       (b) Effective Date.--The amendment made by this section 
     shall take effect as if included in the provisions of the 
     American Jobs Creation Act of 2004 to which it relates.

     SEC. 1721. MODIFICATIONS OF EFFECTIVE DATES OF LEASING 
                   PROVISIONS OF THE AMERICAN JOBS CREATION ACT OF 
                   2004.

       (a) Repeal of Exception for Qualified Transportation 
     Property.--Section 849(b) of the American Jobs Creation Act 
     of 2004 is amended by striking paragraphs (1) and (2) and by 
     redesignating paragraphs (3) and (4) as paragraphs (1) and 
     (2).
       (b) Effective Date.--The amendments made by this section 
     shall take effect as if included in the enactment of the 
     American Jobs Creation Act of 2004.

     SEC. 1722. IMPOSITION OF MARK-TO-MARKET TAX ON INDIVIDUALS 
                   WHO EXPATRIATE.

       (a) In General.--Subpart A of part II of subchapter N of 
     chapter 1 is amended by inserting after section 877 the 
     following new section:

     ``SEC. 877A. TAX RESPONSIBILITIES OF EXPATRIATION.

       ``(a) General Rules.--For purposes of this subtitle--
       ``(1) Mark to market.--Except as provided in subsections 
     (d) and (f), all property of a covered expatriate to whom 
     this section applies shall be treated as sold on the day 
     before the expatriation date for its fair market value.
       ``(2) Recognition of gain or loss.--In the case of any sale 
     under paragraph (1)--
       ``(A) notwithstanding any other provision of this title, 
     any gain arising from such sale shall be taken into account 
     for the taxable year of the sale, and
       ``(B) any loss arising from such sale shall be taken into 
     account for the taxable year of the sale to the extent 
     otherwise provided by this title, except that section 1091 
     shall not apply to any such loss.

     Proper adjustment shall be made in the amount of any gain or 
     loss subsequently realized for gain or loss taken into 
     account under the preceding sentence.
       ``(3) Exclusion for certain gain.--
       ``(A) In general.--The amount which, but for this 
     paragraph, would be includible in the gross income of any 
     individual by reason of this section shall be reduced (but 
     not below zero) by $600,000. For purposes of this paragraph, 
     allocable expatriation gain taken into account under 
     subsection (f)(2) shall be

[[Page S7142]]

     treated in the same manner as an amount required to be 
     includible in gross income.
       ``(B) Cost-of-living adjustment.--
       ``(i) In general.--In the case of an expatriation date 
     occurring in any calendar year after 2005, the $600,000 
     amount under subparagraph (A) shall be increased by an amount 
     equal to--

       ``(I) such dollar amount, multiplied by
       ``(II) the cost-of-living adjustment determined under 
     section 1(f)(3) for such calendar year, determined by 
     substituting `calendar year 2004' for `calendar year 1992' in 
     subparagraph (B) thereof.

       ``(ii) Rounding rules.--If any amount after adjustment 
     under clause (i) is not a multiple of $1,000, such amount 
     shall be rounded to the next lower multiple of $1,000.
       ``(4) Election to continue to be taxed as united states 
     citizen.--
       ``(A) In general.--If a covered expatriate elects the 
     application of this paragraph--
       ``(i) this section (other than this paragraph and 
     subsection (i)) shall not apply to the expatriate, but
       ``(ii) in the case of property to which this section would 
     apply but for such election, the expatriate shall be subject 
     to tax under this title in the same manner as if the 
     individual were a United States citizen.
       ``(B) Requirements.--Subparagraph (A) shall not apply to an 
     individual unless the individual--
       ``(i) provides security for payment of tax in such form and 
     manner, and in such amount, as the Secretary may require,
       ``(ii) consents to the waiver of any right of the 
     individual under any treaty of the United States which would 
     preclude assessment or collection of any tax which may be 
     imposed by reason of this paragraph, and
       ``(iii) complies with such other requirements as the 
     Secretary may prescribe.
       ``(C) Election.--An election under subparagraph (A) shall 
     apply to all property to which this section would apply but 
     for the election and, once made, shall be irrevocable. Such 
     election shall also apply to property the basis of which is 
     determined in whole or in part by reference to the property 
     with respect to which the election was made.
       ``(b) Election To Defer Tax.--
       ``(1) In general.--If the taxpayer elects the application 
     of this subsection with respect to any property treated as 
     sold by reason of subsection (a), the payment of the 
     additional tax attributable to such property shall be 
     postponed until the due date of the return for the taxable 
     year in which such property is disposed of (or, in the case 
     of property disposed of in a transaction in which gain is not 
     recognized in whole or in part, until such other date as the 
     Secretary may prescribe).
       ``(2) Determination of tax with respect to property.--For 
     purposes of paragraph (1), the additional tax attributable to 
     any property is an amount which bears the same ratio to the 
     additional tax imposed by this chapter for the taxable year 
     solely by reason of subsection (a) as the gain taken into 
     account under subsection (a) with respect to such property 
     bears to the total gain taken into account under subsection 
     (a) with respect to all property to which subsection (a) 
     applies.
       ``(3) Termination of postponement.--No tax may be postponed 
     under this subsection later than the due date for the return 
     of tax imposed by this chapter for the taxable year which 
     includes the date of death of the expatriate (or, if earlier, 
     the time that the security provided with respect to the 
     property fails to meet the requirements of paragraph (4), 
     unless the taxpayer corrects such failure within the time 
     specified by the Secretary).
       ``(4) Security.--
       ``(A) In general.--No election may be made under paragraph 
     (1) with respect to any property unless adequate security is 
     provided to the Secretary with respect to such property.
       ``(B) Adequate security.--For purposes of subparagraph (A), 
     security with respect to any property shall be treated as 
     adequate security if--
       ``(i) it is a bond in an amount equal to the deferred tax 
     amount under paragraph (2) for the property, or
       ``(ii) the taxpayer otherwise establishes to the 
     satisfaction of the Secretary that the security is adequate.
       ``(5) Waiver of certain rights.--No election may be made 
     under paragraph (1) unless the taxpayer consents to the 
     waiver of any right under any treaty of the United States 
     which would preclude assessment or collection of any tax 
     imposed by reason of this section.
       ``(6) Elections.--An election under paragraph (1) shall 
     only apply to property described in the election and, once 
     made, is irrevocable. An election may be made under paragraph 
     (1) with respect to an interest in a trust with respect to 
     which gain is required to be recognized under subsection 
     (f)(1).
       ``(7) Interest.--For purposes of section 6601--
       ``(A) the last date for the payment of tax shall be 
     determined without regard to the election under this 
     subsection, and
       ``(B) section 6621(a)(2) shall be applied by substituting 
     `5 percentage points' for `3 percentage points' in 
     subparagraph (B) thereof.
       ``(c) Covered Expatriate.--For purposes of this section--
       ``(1) In general.--Except as provided in paragraph (2), the 
     term `covered expatriate' means an expatriate.
       ``(2) Exceptions.--An individual shall not be treated as a 
     covered expatriate if--
       ``(A) the individual--
       ``(i) became at birth a citizen of the United States and a 
     citizen of another country and, as of the expatriation date, 
     continues to be a citizen of, and is taxed as a resident of, 
     such other country, and
       ``(ii) has not been a resident of the United States (as 
     defined in section 7701(b)(1)(A)(ii)) during the 5 taxable 
     years ending with the taxable year during which the 
     expatriation date occurs, or
       ``(B)(i) the individual's relinquishment of United States 
     citizenship occurs before such individual attains age 18\1/
     2\, and
       ``(ii) the individual has been a resident of the United 
     States (as so defined) for not more than 5 taxable years 
     before the date of relinquishment.
       ``(d) Exempt Property; Special Rules for Pension Plans.--
       ``(1) Exempt property.--This section shall not apply to the 
     following:
       ``(A) United states real property interests.--Any United 
     States real property interest (as defined in section 
     897(c)(1)), other than stock of a United States real property 
     holding corporation which does not, on the day before the 
     expatriation date, meet the requirements of section 
     897(c)(2).
       ``(B) Specified property.--Any property or interest in 
     property not described in subparagraph (A) which the 
     Secretary specifies in regulations.
       ``(2) Special rules for certain retirement plans.--
       ``(A) In general.--If a covered expatriate holds on the day 
     before the expatriation date any interest in a retirement 
     plan to which this paragraph applies--
       ``(i) such interest shall not be treated as sold for 
     purposes of subsection (a)(1), but
       ``(ii) an amount equal to the present value of the 
     expatriate's nonforfeitable accrued benefit shall be treated 
     as having been received by such individual on such date as a 
     distribution under the plan.
       ``(B) Treatment of subsequent distributions.--In the case 
     of any distribution on or after the expatriation date to or 
     on behalf of the covered expatriate from a plan from which 
     the expatriate was treated as receiving a distribution under 
     subparagraph (A), the amount otherwise includible in gross 
     income by reason of the subsequent distribution shall be 
     reduced by the excess of the amount includible in gross 
     income under subparagraph (A) over any portion of such amount 
     to which this subparagraph previously applied.
       ``(C) Treatment of subsequent distributions by plan.--For 
     purposes of this title, a retirement plan to which this 
     paragraph applies, and any person acting on the plan's 
     behalf, shall treat any subsequent distribution described in 
     subparagraph (B) in the same manner as such distribution 
     would be treated without regard to this paragraph.
       ``(D) Applicable plans.--This paragraph shall apply to--
       ``(i) any qualified retirement plan (as defined in section 
     4974(c)),
       ``(ii) an eligible deferred compensation plan (as defined 
     in section 457(b)) of an eligible employer described in 
     section 457(e)(1)(A), and
       ``(iii) to the extent provided in regulations, any foreign 
     pension plan or similar retirement arrangements or programs.
       ``(e) Definitions.--For purposes of this section--
       ``(1) Expatriate.--The term `expatriate' means--
       ``(A) any United States citizen who relinquishes 
     citizenship, and
       ``(B) any long-term resident of the United States who--
       ``(i) ceases to be a lawful permanent resident of the 
     United States (within the meaning of section 7701(b)(6)), or
       ``(ii) commences to be treated as a resident of a foreign 
     country under the provisions of a tax treaty between the 
     United States and the foreign country and who does not waive 
     the benefits of such treaty applicable to residents of the 
     foreign country.
       ``(2) Expatriation date.--The term `expatriation date' 
     means--
       ``(A) the date an individual relinquishes United States 
     citizenship, or
       ``(B) in the case of a long-term resident of the United 
     States, the date of the event described in clause (i) or (ii) 
     of paragraph (1)(B).
       ``(3) Relinquishment of citizenship.--A citizen shall be 
     treated as relinquishing United States citizenship on the 
     earliest of--
       ``(A) the date the individual renounces such individual's 
     United States nationality before a diplomatic or consular 
     officer of the United States pursuant to paragraph (5) of 
     section 349(a) of the Immigration and Nationality Act (8 
     U.S.C. 1481(a)(5)),
       ``(B) the date the individual furnishes to the United 
     States Department of State a signed statement of voluntary 
     relinquishment of United States nationality confirming the 
     performance of an act of expatriation specified in paragraph 
     (1), (2), (3), or (4) of section 349(a) of the Immigration 
     and Nationality Act (8 U.S.C. 1481(a)(1)-(4)),
       ``(C) the date the United States Department of State issues 
     to the individual a certificate of loss of nationality, or
       ``(D) the date a court of the United States cancels a 
     naturalized citizen's certificate of naturalization.

     Subparagraph (A) or (B) shall not apply to any individual 
     unless the renunciation or voluntary relinquishment is 
     subsequently approved by the issuance to the individual of a 
     certificate of loss of nationality by the United States 
     Department of State.

[[Page S7143]]

       ``(4) Long-term resident.--The term `long-term resident' 
     has the meaning given to such term by section 877(e)(2).
       ``(f) Special Rules Applicable to Beneficiaries' Interests 
     in Trust.--
       ``(1) In general.--Except as provided in paragraph (2), if 
     an individual is determined under paragraph (3) to hold an 
     interest in a trust on the day before the expatriation date--
       ``(A) the individual shall not be treated as having sold 
     such interest,
       ``(B) such interest shall be treated as a separate share in 
     the trust, and
       ``(C)(i) such separate share shall be treated as a separate 
     trust consisting of the assets allocable to such share,
       ``(ii) the separate trust shall be treated as having sold 
     its assets on the day before the expatriation date for their 
     fair market value and as having distributed all of its assets 
     to the individual as of such time, and
       ``(iii) the individual shall be treated as having 
     recontributed the assets to the separate trust.

     Subsection (a)(2) shall apply to any income, gain, or loss of 
     the individual arising from a distribution described in 
     subparagraph (C)(ii). In determining the amount of such 
     distribution, proper adjustments shall be made for 
     liabilities of the trust allocable to an individual's share 
     in the trust.
       ``(2) Special rules for interests in qualified trusts.--
       ``(A) In general.--If the trust interest described in 
     paragraph (1) is an interest in a qualified trust--
       ``(i) paragraph (1) and subsection (a) shall not apply, and
       ``(ii) in addition to any other tax imposed by this title, 
     there is hereby imposed on each distribution with respect to 
     such interest a tax in the amount determined under 
     subparagraph (B).
       ``(B) Amount of tax.--The amount of tax under subparagraph 
     (A)(ii) shall be equal to the lesser of--
       ``(i) the highest rate of tax imposed by section 1(e) for 
     the taxable year which includes the day before the 
     expatriation date, multiplied by the amount of the 
     distribution, or
       ``(ii) the balance in the deferred tax account immediately 
     before the distribution determined without regard to any 
     increases under subparagraph (C)(ii) after the 30th day 
     preceding the distribution.
       ``(C) Deferred tax account.--For purposes of subparagraph 
     (B)(ii)--
       ``(i) Opening balance.--The opening balance in a deferred 
     tax account with respect to any trust interest is an amount 
     equal to the tax which would have been imposed on the 
     allocable expatriation gain with respect to the trust 
     interest if such gain had been included in gross income under 
     subsection (a).
       ``(ii) Increase for interest.--The balance in the deferred 
     tax account shall be increased by the amount of interest 
     determined (on the balance in the account at the time the 
     interest accrues), for periods after the 90th day after the 
     expatriation date, by using the rates and method applicable 
     under section 6621 for underpayments of tax for such periods, 
     except that section 6621(a)(2) shall be applied by 
     substituting `5 percentage points' for `3 percentage points' 
     in subparagraph (B) thereof.
       ``(iii) Decrease for taxes previously paid.--The balance in 
     the tax deferred account shall be reduced--

       ``(I) by the amount of taxes imposed by subparagraph (A) on 
     any distribution to the person holding the trust interest, 
     and
       ``(II) in the case of a person holding a nonvested 
     interest, to the extent provided in regulations, by the 
     amount of taxes imposed by subparagraph (A) on distributions 
     from the trust with respect to nonvested interests not held 
     by such person.

       ``(D) Allocable expatriation gain.--For purposes of this 
     paragraph, the allocable expatriation gain with respect to 
     any beneficiary's interest in a trust is the amount of gain 
     which would be allocable to such beneficiary's vested and 
     nonvested interests in the trust if the beneficiary held 
     directly all assets allocable to such interests.
       ``(E) Tax deducted and withheld.--
       ``(i) In general.--The tax imposed by subparagraph (A)(ii) 
     shall be deducted and withheld by the trustees from the 
     distribution to which it relates.
       ``(ii) Exception where failure to waive treaty rights.--If 
     an amount may not be deducted and withheld under clause (i) 
     by reason of the distributee failing to waive any treaty 
     right with respect to such distribution--

       ``(I) the tax imposed by subparagraph (A)(ii) shall be 
     imposed on the trust and each trustee shall be personally 
     liable for the amount of such tax, and
       ``(II) any other beneficiary of the trust shall be entitled 
     to recover from the distributee the amount of such tax 
     imposed on the other beneficiary.

       ``(F) Disposition.--If a trust ceases to be a qualified 
     trust at any time, a covered expatriate disposes of an 
     interest in a qualified trust, or a covered expatriate 
     holding an interest in a qualified trust dies, then, in lieu 
     of the tax imposed by subparagraph (A)(ii), there is hereby 
     imposed a tax equal to the lesser of--
       ``(i) the tax determined under paragraph (1) as if the day 
     before the expatriation date were the date of such cessation, 
     disposition, or death, whichever is applicable, or
       ``(ii) the balance in the tax deferred account immediately 
     before such date.

     Such tax shall be imposed on the trust and each trustee shall 
     be personally liable for the amount of such tax and any other 
     beneficiary of the trust shall be entitled to recover from 
     the covered expatriate or the estate the amount of such tax 
     imposed on the other beneficiary.
       ``(G) Definitions and special rules.--For purposes of this 
     paragraph--
       ``(i) Qualified trust.--The term `qualified trust' means a 
     trust which is described in section 7701(a)(30)(E).
       ``(ii) Vested interest.--The term `vested interest' means 
     any interest which, as of the day before the expatriation 
     date, is vested in the beneficiary.
       ``(iii) Nonvested interest.--The term `nonvested interest' 
     means, with respect to any beneficiary, any interest in a 
     trust which is not a vested interest. Such interest shall be 
     determined by assuming the maximum exercise of discretion in 
     favor of the beneficiary and the occurrence of all 
     contingencies in favor of the beneficiary.
       ``(iv) Adjustments.--The Secretary may provide for such 
     adjustments to the bases of assets in a trust or a deferred 
     tax account, and the timing of such adjustments, in order to 
     ensure that gain is taxed only once.
       ``(v) Coordination with retirement plan rules.--This 
     subsection shall not apply to an interest in a trust which is 
     part of a retirement plan to which subsection (d)(2) applies.
       ``(3) Determination of beneficiaries' interest in trust.--
       ``(A) Determinations under paragraph (1).--For purposes of 
     paragraph (1), a beneficiary's interest in a trust shall be 
     based upon all relevant facts and circumstances, including 
     the terms of the trust instrument and any letter of wishes or 
     similar document, historical patterns of trust distributions, 
     and the existence of and functions performed by a trust 
     protector or any similar adviser.
       ``(B) Other determinations.--For purposes of this section--
       ``(i) Constructive ownership.--If a beneficiary of a trust 
     is a corporation, partnership, trust, or estate, the 
     shareholders, partners, or beneficiaries shall be deemed to 
     be the trust beneficiaries for purposes of this section.
       ``(ii) Taxpayer return position.--A taxpayer shall clearly 
     indicate on its income tax return--

       ``(I) the methodology used to determine that taxpayer's 
     trust interest under this section, and
       ``(II) if the taxpayer knows (or has reason to know) that 
     any other beneficiary of such trust is using a different 
     methodology to determine such beneficiary's trust interest 
     under this section.

       ``(g) Termination of Deferrals, etc.--In the case of any 
     covered expatriate, notwithstanding any other provision of 
     this title--
       ``(1) any period during which recognition of income or gain 
     is deferred shall terminate on the day before the 
     expatriation date, and
       ``(2) any extension of time for payment of tax shall cease 
     to apply on the day before the expatriation date and the 
     unpaid portion of such tax shall be due and payable at the 
     time and in the manner prescribed by the Secretary.
       ``(h) Imposition of Tentative Tax.--
       ``(1) In general.--If an individual is required to include 
     any amount in gross income under subsection (a) for any 
     taxable year, there is hereby imposed, immediately before the 
     expatriation date, a tax in an amount equal to the amount of 
     tax which would be imposed if the taxable year were a short 
     taxable year ending on the expatriation date.
       ``(2) Due date.--The due date for any tax imposed by 
     paragraph (1) shall be the 90th day after the expatriation 
     date.
       ``(3) Treatment of tax.--Any tax paid under paragraph (1) 
     shall be treated as a payment of the tax imposed by this 
     chapter for the taxable year to which subsection (a) applies.
       ``(4) Deferral of tax.--The provisions of subsection (b) 
     shall apply to the tax imposed by this subsection to the 
     extent attributable to gain includible in gross income by 
     reason of this section.
       ``(i) Special Liens for Deferred Tax Amounts.--
       ``(1) Imposition of lien.--
       ``(A) In general.--If a covered expatriate makes an 
     election under subsection (a)(4) or (b) which results in the 
     deferral of any tax imposed by reason of subsection (a), the 
     deferred amount (including any interest, additional amount, 
     addition to tax, assessable penalty, and costs attributable 
     to the deferred amount) shall be a lien in favor of the 
     United States on all property of the expatriate located in 
     the United States (without regard to whether this section 
     applies to the property).
       ``(B) Deferred amount.--For purposes of this subsection, 
     the deferred amount is the amount of the increase in the 
     covered expatriate's income tax which, but for the election 
     under subsection (a)(4) or (b), would have occurred by reason 
     of this section for the taxable year including the 
     expatriation date.
       ``(2) Period of lien.--The lien imposed by this subsection 
     shall arise on the expatriation date and continue until--
       ``(A) the liability for tax by reason of this section is 
     satisfied or has become unenforceable by reason of lapse of 
     time, or
       ``(B) it is established to the satisfaction of the 
     Secretary that no further tax liability may arise by reason 
     of this section.

[[Page S7144]]

       ``(3) Certain rules apply.--The rules set forth in 
     paragraphs (1), (3), and (4) of section 6324A(d) shall apply 
     with respect to the lien imposed by this subsection as if it 
     were a lien imposed by section 6324A.
       ``(j) Regulations.--The Secretary shall prescribe such 
     regulations as may be necessary or appropriate to carry out 
     the purposes of this section.''.
       (b) Inclusion in Income of Gifts and Bequests Received by 
     United States Citizens and Residents From Expatriates.--
     Section 102 (relating to gifts, etc. not included in gross 
     income) is amended by adding at the end the following new 
     subsection:
       ``(d) Gifts and Inheritances From Covered Expatriates.--
       ``(1) In general.--Subsection (a) shall not exclude from 
     gross income the value of any property acquired by gift, 
     bequest, devise, or inheritance from a covered expatriate 
     after the expatriation date. For purposes of this subsection, 
     any term used in this subsection which is also used in 
     section 877A shall have the same meaning as when used in 
     section 877A.
       ``(2) Exceptions for transfers otherwise subject to estate 
     or gift tax.--Paragraph (1) shall not apply to any property 
     if either--
       ``(A) the gift, bequest, devise, or inheritance is--
       ``(i) shown on a timely filed return of tax imposed by 
     chapter 12 as a taxable gift by the covered expatriate, or
       ``(ii) included in the gross estate of the covered 
     expatriate for purposes of chapter 11 and shown on a timely 
     filed return of tax imposed by chapter 11 of the estate of 
     the covered expatriate, or
       ``(B) no such return was timely filed but no such return 
     would have been required to be filed even if the covered 
     expatriate were a citizen or long-term resident of the United 
     States.''.
       (c) Definition of Termination of United States 
     Citizenship.--Section 7701(a) is amended by adding at the end 
     the following new paragraph:
       ``(49) Termination of united states citizenship.--
       ``(A) In general.--An individual shall not cease to be 
     treated as a United States citizen before the date on which 
     the individual's citizenship is treated as relinquished under 
     section 877A(e)(3).
       ``(B) Dual citizens.--Under regulations prescribed by the 
     Secretary, subparagraph (A) shall not apply to an individual 
     who became at birth a citizen of the United States and a 
     citizen of another country.''.
       (d) Ineligibility for Visa or Admission to United States.--
       (1) In general.--Section 212(a)(10)(E) of the Immigration 
     and Nationality Act (8 U.S.C. 1182(a)(10)(E)) is amended to 
     read as follows:
       ``(E) Former citizens not in compliance with expatriation 
     revenue provisions.--Any alien who is a former citizen of the 
     United States who relinquishes United States citizenship 
     (within the meaning of section 877A(e)(3) of the Internal 
     Revenue Code of 1986) and who is not in compliance with 
     section 877A of such Code (relating to expatriation).''.
       (2) Availability of information.--
       (A) In general.--Section 6103(l) (relating to disclosure of 
     returns and return information for purposes other than tax 
     administration) is amended by adding at the end the following 
     new paragraph:
       ``(21) Disclosure to deny visa or admission to certain 
     expatriates.--Upon written request of the Attorney General or 
     the Attorney General's delegate, the Secretary shall disclose 
     whether an individual is in compliance with section 877A (and 
     if not in compliance, any items of noncompliance) to officers 
     and employees of the Federal agency responsible for 
     administering section 212(a)(10)(E) of the Immigration and 
     Nationality Act solely for the purpose of, and to the extent 
     necessary in, administering such section 212(a)(10)(E).''.
       (B) Safeguards.--Section 6103(p)(4) (relating to 
     safeguards) is amended by striking ``or (20)'' each place it 
     appears and inserting ``(20), or (21)''.
       (3) Effective dates.--The amendments made by this 
     subsection shall apply to individuals who relinquish United 
     States citizenship on or after the date of the enactment of 
     this Act.
       (e) Conforming Amendments.--
       (1) Section 877 is amended by adding at the end the 
     following new subsection:
       ``(h) Application.--This section shall not apply to an 
     expatriate (as defined in section 877A(e)) whose expatriation 
     date (as so defined) occurs on or after the date of the 
     enactment of the Safe, Accountable, Flexible, and Efficient 
     Transportation Equity Act of 2005.''.
       (2) Section 2107 is amended by adding at the end the 
     following new subsection:
       ``(f) Application.--This section shall not apply to any 
     expatriate subject to section 877A.''.
       (3) Section 2501(a)(3) is amended by adding at the end the 
     following new subparagraph:
       ``(C) Application.--This paragraph shall not apply to any 
     expatriate subject to section 877A.''.
       (f) Clerical Amendment.--The table of sections for subpart 
     A of part II of subchapter N of chapter 1 is amended by 
     inserting after the item relating to section 877 the 
     following new item:

``Sec. 877A. Tax responsibilities of expatriation.''.

       (g) Effective Date.--
       (1) In general.--Except as provided in this subsection, the 
     amendments made by this section shall apply to expatriates 
     (within the meaning of section 877A(e) of the Internal 
     Revenue Code of 1986, as added by this section) whose 
     expatriation date (as so defined) occurs on or after the date 
     of the enactment of this Act.
       (2) Gifts and bequests.--Section 102(d) of the Internal 
     Revenue Code of 1986 (as added by subsection (b)) shall apply 
     to gifts and bequests received on or after the date of the 
     enactment of this Act, from an individual or the estate of an 
     individual whose expatriation date (as so defined) occurs 
     after such date.
       (3) Due date for tentative tax.--The due date under section 
     877A(h)(2) of the Internal Revenue Code of 1986, as added by 
     this section, shall in no event occur before the 90th day 
     after the date of the enactment of this Act.

     SEC. 1723. DISALLOWANCE OF DEDUCTION FOR PUNITIVE DAMAGES.

       (a) Disallowance of Deduction.--
       (1) In general.--Section 162(g) (relating to treble damage 
     payments under the antitrust laws) is amended--
       (A) by redesignating paragraphs (1) and (2) as 
     subparagraphs (A) and (B), respectively,
       (B) by striking ``If'' and inserting:
       ``(1) Treble damages.--If'', and
       (C) by adding at the end the following new paragraph:
       ``(2) Punitive damages.--No deduction shall be allowed 
     under this chapter for any amount paid or incurred for 
     punitive damages in connection with any judgment in, or 
     settlement of, any action. This paragraph shall not apply to 
     punitive damages described in section 104(c).''.
       (2) Conforming amendment.--The heading for section 162(g) 
     is amended by inserting ``or Punitive Damages'' after 
     ``Laws''.
       (b) Inclusion in Income of Punitive Damages Paid by Insurer 
     or Otherwise.--
       (1) In general.--Part II of subchapter B of chapter 1 
     (relating to items specifically included in gross income) is 
     amended by adding at the end the following new section:

     ``SEC. 91. PUNITIVE DAMAGES COMPENSATED BY INSURANCE OR 
                   OTHERWISE.

       ``Gross income shall include any amount paid to or on 
     behalf of a taxpayer as insurance or otherwise by reason of 
     the taxpayer's liability (or agreement) to pay punitive 
     damages.''.
       (2) Reporting requirements.--Section 6041 (relating to 
     information at source) is amended by adding at the end the 
     following new subsection:
       ``(f) Section To Apply to Punitive Damages Compensation.--
     This section shall apply to payments by a person to or on 
     behalf of another person as insurance or otherwise by reason 
     of the other person's liability (or agreement) to pay 
     punitive damages.''.
       (3) Conforming amendment.--The table of sections for part 
     II of subchapter B of chapter 1 is amended by adding at the 
     end the following new item:

``Sec. 91. Punitive damages compensated by insurance or otherwise.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to damages paid or incurred on or after the date 
     of the enactment of this Act.

     SEC. 1724. APPLICATION OF EARNINGS STRIPPING RULES TO 
                   PARTNERS WHICH ARE C CORPORATIONS.

       (a) In General.--Section 163(j) (relating to limitation on 
     deduction for interest on certain indebtedness) is amended by 
     redesignating paragraph (8) as paragraph (9) and by inserting 
     after paragraph (7) the following new paragraph:
       ``(8) Allocations to certain corporate partners.--If a C 
     corporation is a partner in a partnership--
       ``(A) the corporation's allocable share of indebtedness and 
     interest income of the partnership shall be taken into 
     account in applying this subsection to the corporation, and
       ``(B) if a deduction is not disallowed under this 
     subsection with respect to any interest expense of the 
     partnership, this subsection shall be applied separately in 
     determining whether a deduction is allowable to the 
     corporation with respect to the corporation's allocable share 
     of such interest expense.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning on or after the date 
     of the enactment of this Act.

     SEC. 1725. PROHIBITION ON DEFERRAL OF GAIN FROM THE EXERCISE 
                   OF STOCK OPTIONS AND RESTRICTED STOCK GAINS 
                   THROUGH DEFERRED COMPENSATION ARRANGEMENTS.

       (a) In General.--Section 83 (relating to property 
     transferred in connection with performance of services) is 
     amending by adding at the end the following new subsection:
       ``(i) Prohibition on Additional Deferral Through Deferred 
     Compensation Arrangements.--If a taxpayer exchanges--
       ``(1) an option to purchase employer securities--
       ``(A) to which subsection (a) applies, or
       ``(B) which is described in subsection (e)(3), or
       ``(2) employer securities or any other property based on 
     employer securities transferred to the taxpayer,

     for a right to receive future payments, then, notwithstanding 
     any other provision of this title, there shall be included in 
     gross income for the taxable year of the exchange an amount 
     equal to the present value of such right (or such other 
     amount as the Secretary may by regulations specify). For 
     purposes of this subsection, the term `employer securities' 
     includes any security issued by the employer.''.

[[Page S7145]]

       (b) Controlled Group Rules.--Section 414(t)(2) is amended 
     by inserting ``83(i),'' after ``79,''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to any exchange after the date of the enactment 
     of this Act.

     SEC. 1726. LIMITATION OF EMPLOYER DEDUCTION FOR CERTAIN 
                   ENTERTAINMENT EXPENSES.

       (a) In General.--Paragraph (2) of section 274(e) (relating 
     to expenses treated as compensation) is amended to read as 
     follows:
       ``(2) Expenses treated as compensation.--Expenses for 
     goods, services, and facilities, to the extent that the 
     expenses do not exceed the amount of the expenses which are 
     treated by the taxpayer, with respect to the recipient of the 
     entertainment, amusement, or recreation, as compensation to 
     an employee on the taxpayer's return of tax under this 
     chapter and as wages to such employee for purposes of chapter 
     24 (relating to withholding of income tax at source on 
     wages).''.
       (b) Persons Not Employees.--Paragraph (9) of section 274(e) 
     is amended by striking ``to the extent that the expenses are 
     includible in the gross income'' and inserting ``to the 
     extent that the expenses do not exceed the amount of the 
     expenses which are includible in the gross income''.
       (c) Effective Date.--The amendment made by this section 
     shall apply to expenses incurred after the date of the 
     enactment of this Act.

     SEC. 1727. INCREASE IN PENALTY FOR BAD CHECKS AND MONEY 
                   ORDERS.

       (a) In General.--Section 6657 (relating to bad checks) is 
     amended--
       (1) by striking ``$750'' and inserting ``$1,250'', and
       (2) by striking ``$15'' and inserting ``$25''.
       (b) Effective Date.--The amendments made by this section 
     apply to checks or money orders received after the date of 
     the enactment of this Act.

     SEC. 1728. ELIMINATION OF DOUBLE DEDUCTION ON MINING 
                   EXPLORATION AND DEVELOPMENT COSTS UNDER THE 
                   MINIMUM TAX.

       (a) In General.--Section 57(a)(1) (relating to depletion) 
     is amended by striking ``for the taxable year)'' and 
     inserting ``for the taxable year and determined without 
     regard to so much of the basis as is attributable to mining 
     exploration and development costs described in section 616 or 
     617 for which a deduction is allowable for any taxable year 
     under this part).''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment this Act.

PART II--IMPROVEMENTS IN EFFICIENCY AND SAFEGUARDS IN INTERNAL REVENUE 
                           SERVICE COLLECTION

     SEC. 1731. WAIVER OF USER FEE FOR INSTALLMENT AGREEMENTS 
                   USING AUTOMATED WITHDRAWALS.

       (a) In General.--Section 6159 (relating to agreements for 
     payment of tax liability in installments) is amended by 
     redesignating subsection (e) as subsection (f) and by 
     inserting after subsection (d) the following:
       ``(e) Waiver of User Fees for Installment Agreements Using 
     Automated Withdrawals.--In the case of a taxpayer who enters 
     into an installment agreement in which automated installment 
     payments are agreed to, the Secretary shall waive the fee (if 
     any) for entering into the installment agreement.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to agreements entered into on or after the date 
     which is 180 days after the date of the enactment of this 
     Act.

     SEC. 1732. TERMINATION OF INSTALLMENT AGREEMENTS.

       (a) In General.--Section 6159(b)(4) (relating to failure to 
     pay an installment or any other tax liability when due or to 
     provide requested financial information) is amended by 
     striking ``or'' at the end of subparagraph (B), by 
     redesignating subparagraph (C) as subparagraph (E), and by 
     inserting after subparagraph (B) the following:
       ``(C) to make a Federal tax deposit under section 6302 at 
     the time such deposit is required to be made,
       ``(D) to file a return of tax imposed under this title by 
     its due date (including extensions), or''.
       (b) Conforming Amendment.--The heading for section 
     6159(b)(4) is amended by striking ``Failure to pay an 
     installment or any other tax liability when due or to provide 
     requested financial information'' and inserting ``Failure to 
     make payments or deposits or file returns when due or to 
     provide requested financial information''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to failures occurring on or after the date of the 
     enactment of this Act.

     SEC. 1733. OFFICE OF CHIEF COUNSEL REVIEW OF OFFERS-IN-
                   COMPROMISE.

       (a) In General.--Section 7122(b) (relating to record) is 
     amended by striking ``Whenever a compromise'' and all that 
     follows through ``his delegate'' and inserting ``If the 
     Secretary determines that an opinion of the General Counsel 
     for the Department of the Treasury, or the Counsel's 
     delegate, is required with respect to a compromise, there 
     shall be placed on file in the office of the Secretary such 
     opinion''.
       (b) Conforming Amendments.--Section 7122(b) is amended by 
     striking the second and third sentences.
       (c) Effective Date.--The amendments made by this section 
     shall apply to offers-in-compromise submitted or pending on 
     or after the date of the enactment of this Act.

     SEC. 1734. PARTIAL PAYMENTS REQUIRED WITH SUBMISSION OF 
                   OFFERS-IN-COMPROMISE.

       (a) In General.--Section 7122 (relating to compromises), as 
     amended by this Act, is amended by redesignating subsections 
     (c), (d), and (e) as subsections (d), (e), and (f), 
     respectively, and by inserting after subsection (b) the 
     following new subsection:
       ``(c) Rules for Submission of Offers-in-compromise.--
       ``(1) Partial payment required with submission.--
       ``(A) Lump-sum offers.--
       ``(i) In general.--The submission of any lump-sum offer-in-
     compromise shall be accompanied by the payment of 20 percent 
     of amount of such offer.
       ``(ii) Lump-sum offer-in-compromise.--For purposes of this 
     section, the term `lump-sum offer-in-compromise' means any 
     offer of payments made in 5 or fewer installments.
       ``(B) Periodic payment offers.--The submission of any 
     periodic payment offer-in-compromise shall be accompanied by 
     the payment of the amount of the first proposed installment 
     and each proposed installment due during the period such 
     offer is being evaluated for acceptance and has not been 
     rejected by the Secretary. Any failure to make a payment 
     required under the preceding sentence shall be deemed a 
     withdrawal of the offer-in-compromise.
       ``(2) Rules of application.--
       ``(A) Use of payment.--The application of any payment made 
     under this subsection to the assessed tax or other amounts 
     imposed under this title with respect to such tax may be 
     specified by the taxpayer.
       ``(B) No user fee imposed.--Any user fee which would 
     otherwise be imposed under this section shall not be imposed 
     on any offer-in-compromise accompanied by a payment required 
     under this subsection.''.
       (b) Additional Rules Relating to Treatment of Offers.--
       (1) Unprocessable offer if payment requirements are not 
     met.--Paragraph (3) of section 7122(d) (relating to standards 
     for evaluation of offers), as redesignated by subsection (a), 
     is amended by striking ``; and'' at the end of subparagraph 
     (A) and inserting a comma, by striking the period at the end 
     of subparagraph (B) and inserting ``, and'', and by adding at 
     the end the following new subparagraph:
       ``(C) any offer-in-compromise which does not meet the 
     requirements of subsection (c) shall be returned to the 
     taxpayer as unprocessable.''.
       (2) Deemed acceptance of offer not rejected within certain 
     period.--Section 7122, as amended by subsection (a), is 
     amended by adding at the end the following new subsection:
       ``(g) Deemed Acceptance of Offer Not Rejected Within 
     Certain Period.--Any offer-in-compromise submitted under this 
     section shall be deemed to be accepted by the Secretary if 
     such offer is not rejected by the Secretary before the date 
     which is 24 months after the date of the submission of such 
     offer (12 months for offers-in-compromise submitted after the 
     date which is 5 years after the date of the enactment of this 
     subsection). For purposes of the preceding sentence, any 
     period during which any tax liability which is the subject of 
     such offer-in-compromise is in dispute in any judicial 
     proceeding shall not be taken in to account in determining 
     the expiration of the 24-month period (or 12-month period, if 
     applicable).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to offers-in-compromise submitted on and after 
     the date which is 60 days after the date of the enactment of 
     this Act.

     SEC. 1735. JOINT TASK FORCE ON OFFERS-IN-COMPROMISE.

       (a) In General.--The Secretary of the Treasury shall 
     establish a joint task force--
       (1) to review the Internal Revenue Service's determinations 
     with respect to offers-in-compromise, including offers which 
     raise equitable, public policy, or economic hardship grounds 
     for compromise of a tax liability under section 7122 of the 
     Internal Revenue Code of 1986,
       (2) to review the extent to which the Internal Revenue 
     Service has used its authority to resolve longstanding cases 
     by forgoing penalties and interest which have accumulated as 
     a result of delay in determining the taxpayer's liability,
       (3) to provide recommendations as to whether the Internal 
     Revenue Service's evaluation of offers-in-compromise should 
     include--
       (A) the taxpayer's compliance history,
       (B) errors by the Internal Revenue Service with respect to 
     the underlying tax, and
       (C) wrongful acts by a third party which gave rise to the 
     liability, and
       (4) to annually report to the Committee on Finance of the 
     Senate and the Committee on Ways and Means of the House of 
     Representatives (beginning in 2006) regarding such review and 
     recommendations.
       (b) Members of Joint Task Force.--The membership of the 
     joint task force under subsection (a) shall consist of 1 
     representative each from the Department of the Treasury, the 
     Internal Revenue Service Oversight Board, the Office of the 
     Chief Counsel for the Internal Revenue Service, the Office of 
     the Taxpayer Advocate, the Office of Appeals, and the 
     division of the Internal Revenue Service charged with 
     operating the offer-in-compromise program.

[[Page S7146]]

       (c) Report of National Taxpayer Advocate.--
       (1) In general.--Clause (ii) of section 7803(c)(2)(B) 
     (relating to annual reports) is amended by striking ``and'' 
     at the end of subclause (X), by redesignating subclause (XI) 
     as subclause (XII), and by inserting after subclause (X) the 
     following new subclause:

       ``(XI) include a list of the factors taxpayers have raised 
     to support their claims for offers-in-compromise relief, the 
     number of such offers submitted, accepted, and rejected, the 
     number of such offers appealed, the period during which 
     review of such offers have remained pending, and the efforts 
     the Internal Revenue Service has made to correctly identify 
     such offers, including the training of employees in 
     identifying and evaluating such offers.''.

       (2) Effective date.--The amendment made by paragraph (1) 
     shall apply to reports in calendar year 2006 and thereafter.
                                 ______
                                 
  SA 930. Mr. LEVIN (for himself and Mr. Bayh) submitted an amendment 
intended to be proposed by him to the bill H.R. 6, to ensure jobs for 
our future with secure, affordable, and reliable energy; which was 
ordered to lie on the table; as follows:

       At the end add the following:

  TITLE XVII--TAX INCENTIVES FOR ALTERNATIVE MOTOR VEHICLES AND FUELS

     SEC. 1700. AMENDMENT OF 1986 CODE.

       Except as otherwise expressly provided, whenever in this 
     title an amendment or repeal is expressed in terms of an 
     amendment to, or repeal of, a section or other provision, the 
     reference shall be considered to be made to a section or 
     other provision of the Internal Revenue Code of 1986.

                       Subtitle A--Tax Incentives

     SEC. 1701. ALTERNATIVE MOTOR VEHICLE CREDIT.

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

     ``SEC. 30B. ALTERNATIVE MOTOR VEHICLE CREDIT.

       ``(a) Allowance of Credit.--There shall be allowed as a 
     credit against the tax imposed by this chapter for the 
     taxable year an amount equal to the sum of--
       ``(1) the new qualified fuel cell motor vehicle credit 
     determined under subsection (b),
       ``(2) the new advanced lean burn technology motor vehicle 
     credit determined under subsection (c),
       ``(3) the new qualified hybrid motor vehicle credit 
     determined under subsection (d), and
       ``(4) the new qualified alternative fuel motor vehicle 
     credit determined under subsection (e).
       ``(b) New Qualified Fuel Cell Motor Vehicle Credit.--
       ``(1) In general.--For purposes of subsection (a), the new 
     qualified fuel cell motor vehicle credit determined under 
     this subsection with respect to a new qualified fuel cell 
     motor vehicle placed in service by the taxpayer during the 
     taxable year is--
       ``(A) $8,000 if such vehicle has a gross vehicle weight 
     rating of not more than 8,500 pounds,
       ``(B) $10,000, if such vehicle has a gross vehicle weight 
     rating of more than 8,500 pounds but not more than 14,000 
     pounds,
       ``(C) $20,000, if such vehicle has a gross vehicle weight 
     rating of more than 14,000 pounds but not more than 26,000 
     pounds, and
       ``(D) $40,000, if such vehicle has a gross vehicle weight 
     rating of more than 26,000 pounds.
       ``(2) Increase for fuel efficiency.--
       ``(A) In general.--The amount determined under paragraph 
     (1)(A) with respect to a new qualified fuel cell motor 
     vehicle which is a passenger automobile or light truck shall 
     be increased by--
       ``(i) $1,000, if such vehicle achieves at least 150 percent 
     but less than 175 percent of the 2002 model year city fuel 
     economy,
       ``(ii) $1,500, if such vehicle achieves at least 175 
     percent but less than 200 percent of the 2002 model year city 
     fuel economy,
       ``(iii) $2,000, if such vehicle achieves at least 200 
     percent but less than 225 percent of the 2002 model year city 
     fuel economy,
       ``(iv) $2,500, if such vehicle achieves at least 225 
     percent but less than 250 percent of the 2002 model year city 
     fuel economy,
       ``(v) $3,000, if such vehicle achieves at least 250 percent 
     but less than 275 percent of the 2002 model year city fuel 
     economy,
       ``(vi) $3,500, if such vehicle achieves at least 275 
     percent but less than 300 percent of the 2002 model year city 
     fuel economy, and
       ``(vii) $4,000, if such vehicle achieves at least 300 
     percent of the 2002 model year city fuel economy.
       ``(B) 2002 model year city fuel economy.--For purposes of 
     subparagraph (A), the 2002 model year city fuel economy with 
     respect to a vehicle shall be determined in accordance with 
     the following tables:
       ``(i) In the case of a passenger automobile:

``If vehicle inertia weight clThe 2002 model year city fuel economy is:
1,500 or 1,750 lbs.............................................45.2 mpg
2,000 lbs......................................................39.6 mpg
2,250 lbs......................................................35.2 mpg
2,500 lbs......................................................31.7 mpg
2,750 lbs......................................................28.8 mpg
3,000 lbs......................................................26.4 mpg
3,500 lbs......................................................22.6 mpg
4,000 lbs......................................................19.8 mpg
4,500 lbs......................................................17.6 mpg
5,000 lbs......................................................15.9 mpg
5,500 lbs.....................................................14.4 mpg 
6,000 lbs.....................................................13.2 mpg 
6,500 lbs.....................................................12.2 mpg 
7,000 to 8,500 lbs............................................11.3 mpg.

       ``(ii) In the case of a light truck:

``If vehicle inertia weight clThe 2002 model year city fuel economy is:
511,500 or 1,750 lbs...........................................39.4 mpg
2,000 lbs......................................................35.2 mpg
2,250 lbs......................................................31.8 mpg
2,500 lbs......................................................29.0 mpg
2,750 lbs......................................................26.8 mpg
3,000 lbs......................................................24.9 mpg
3,500 lbs......................................................21.8 mpg
4,000 lbs......................................................19.4 mpg
4,500 lbs......................................................17.6 mpg
5,000 lbs......................................................16.1 mpg
5,500 lbs......................................................14.8 mpg
16,000 lbs.....................................................13.7 mpg
6,500 lbs......................................................12.8 mpg
7,000 to 8,500 lbs............................................12.1 mpg.

       ``(C) Vehicle inertia weight class.--For purposes of 
     subparagraph (B), the term `vehicle inertia weight class' has 
     the same meaning as when defined in regulations prescribed by 
     the Administrator of the Environmental Protection Agency for 
     purposes of the administration of title II of the Clean Air 
     Act (42 U.S.C. 7521 et seq.).
       ``(3) New qualified fuel cell motor vehicle.--For purposes 
     of this subsection, the term `new qualified fuel cell motor 
     vehicle' means a motor vehicle--
       ``(A) which is propelled by power derived from 1 or more 
     cells which convert chemical energy directly into electricity 
     by combining oxygen with hydrogen fuel which is stored on 
     board the vehicle in any form and may or may not require 
     reformation prior to use,
       ``(B) which, in the case of a passenger automobile or light 
     truck, has received on or after the date of the enactment of 
     this section a certificate that such vehicle meets or exceeds 
     the Bin 5 Tier II emission level established in regulations 
     prescribed by the Administrator of the Environmental 
     Protection Agency under section 202(i) of the Clean Air Act 
     for that make and model year vehicle,
       ``(C) the original use of which commences with the 
     taxpayer,
       ``(D) which is acquired for use or lease by the taxpayer 
     and not for resale, and
       ``(E) which is made by a manufacturer.
       ``(c) New Advanced Lean Burn Technology Motor Vehicle 
     Credit.--
       ``(1) In general.--For purposes of subsection (a), the new 
     advanced lean burn technology motor vehicle credit determined 
     under this subsection with respect to a new advanced lean 
     burn technology motor vehicle placed in service by the 
     taxpayer during the taxable year is the credit amount 
     determined under paragraph (2).
       ``(2) Credit amount.--
       ``(A) Fuel economy.--
       ``(i) In general.--The credit amount determined under this 
     paragraph shall be determined in accordance with the 
     following table:
``In the case of a vehicle which achieves a fuel economy (expressed as 
  a percentage of the 2002 model year city fuel eThe credit amount is--
At least 125 percent but less than 150 percent.....................$600
At least 150 percent but less than 175 percent...................$1,100
At least 175 percent but less than 200 percent...................$1,600
At least 200 percent but less than 225 percent...................$2,100
At least 225 percent but less than 250 percent...................$2,600
At least 250 percent............................................$3,100.

       ``(ii) 2002 model year city fuel economy.--For purposes of 
     clause (i), the 2002 model year city fuel economy with 
     respect to a vehicle shall be determined on a gasoline gallon 
     equivalent basis as determined by the Administrator of the 
     Environmental Protection Agency using the tables provided in 
     subsection (b)(2)(B) with respect to such vehicle.
       ``(B) Conservation credit.--The amount determined under 
     subparagraph (A) with respect to a new advanced lean burn 
     technology motor vehicle shall be increased by

[[Page S7147]]

     the conservation credit amount determined in accordance with 
     the following table:

``In the case of a vehicle which achieves a lifetime fuel savings 
  (expressed in gallons of gasoline)The conservation credit amount is--
At least 1,200 but less than 1,800.................................$700
At least 1,800 but less than 2,400...............................$1,200
At least 2,400 but less than 3,000...............................$1,700
At least 3,000..................................................$2,200.
       ``(C) Option to use like vehicle.--At the option of the 
     vehicle manufacturer, the increase for fuel efficiency and 
     conservation credit may be calculated by comparing the new 
     qualified advanced lean burn technology motor vehicle to a 
     like vehicle.
       ``(3) New advanced lean burn technology motor vehicle.--For 
     purposes of this subsection, the term `new advanced lean burn 
     technology motor vehicle' means a passenger automobile or a 
     light truck--
       ``(A) with an internal combustion engine which--
       ``(i) is designed to operate primarily using more air than 
     is necessary for complete combustion of the fuel,
       ``(ii) incorporates direct injection,
       ``(iii) achieves at least 125 percent of the 2002 model 
     year city fuel economy,
       ``(iv) for 2004 and later model vehicles, has received a 
     certificate that such vehicle meets or exceeds--

       ``(I) in the case of a vehicle having a gross vehicle 
     weight rating of 6,000 pounds or less, 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, and
       ``(II) in the case of a vehicle having a gross vehicle 
     weight rating of more than 6,000 pounds but not more than 
     8,500 pounds, the Bin 8 Tier II emission standard which is so 
     established.

       ``(B) the original use of which commences with the 
     taxpayer,
       ``(C) which is acquired for use or lease by the taxpayer 
     and not for resale, and
       ``(D) which is made by a manufacturer.
       ``(4) Like vehicle.--The term `like vehicle' for a new 
     qualified advanced lean burn technology motor vehicle derived 
     from a conventional production vehicle produced in the same 
     model year means a model that is equivalent in the following 
     areas:
       ``(A) Body style (2-door or 4-door),
       ``(B) Transmission (automatic or manual),
       ``(C) Acceleration performance ( 0.05 seconds).
       ``(D) Drivetrain (2-wheel drive or 4-wheel drive).
       ``(E) Certification by the Administrator of the 
     Environmental Protection Agency.
       ``(5) Lifetime fuel savings.--For purposes of this 
     subsection, the term `lifetime fuel savings' means, in the 
     case of any new advanced lean burn technology motor vehicle, 
     an amount equal to the excess (if any) of--
       ``(A) 120,000 divided by the 2002 model year city fuel 
     economy for the vehicle inertia weight class, over
       ``(B) 120,000 divided by the city fuel economy for such 
     vehicle.
       ``(d) New Qualified Hybrid Motor Vehicle Credit.--
       ``(1) In general.--For purposes of subsection (a), the new 
     qualified hybrid motor vehicle credit determined under this 
     subsection with respect to a new qualified hybrid motor 
     vehicle placed in service by the taxpayer during the taxable 
     year is the credit amount determined under paragraph (2) or 
     (3).
       ``(2) Credit amount for lighter vehicles.--In the case of a 
     new qualified hybrid motor vehicle which is a passenger 
     automobile, medium duty passenger vehicle, or light truck, 
     the credit amount determined under this paragraph is equal to 
     the sum of following amounts:
       ``(A) Fuel economy.--The amount which would be determined 
     under subsection (c)(2)(A) if such vehicle were a vehicle 
     referred to in such subsection.
       ``(B) Conservation credit.--The amount which would be 
     determined under subsection (c)(2)(B) if such vehicle were a 
     vehicle referred to in such subsection.
       ``(iii) Option to use like vehicle.--For purposes of clause 
     (i), at the option of the vehicle manufacturer, the increase 
     for fuel efficiency and conservation credit may be calculated 
     by comparing the new qualified hybrid motor vehicle to a like 
     vehicle (as defined in subsection (c)(4)).
       ``(3) Credit amount for heavier vehicles.--
       ``(A) In general.--In the case of a new qualified hybrid 
     motor vehicle which is a heavy duty hybrid motor vehicle, the 
     credit amount determined under this paragraph is an amount 
     equal to the applicable percentage of the incremental cost of 
     such vehicle placed in service by the taxpayer during the 
     taxable year.
       ``(B) Incremental cost.--For purposes of this paragraph, 
     the incremental cost of any heavy duty hybrid motor vehicle 
     is equal to the amount of the excess of the manufacturer's 
     suggested retail price for such vehicle over such price for a 
     comparable gasoline or diesel fuel motor vehicle of the same 
     model, to the extent such amount does not exceed--
       ``(i) $7,500, if such vehicle has a gross vehicle weight 
     rating of more than 8,500 pounds but not more than 14,000 
     pounds,
       ``(ii) $15,000, if such vehicle has a gross vehicle weight 
     rating of more than 14,000 pounds but not more than 26,000 
     pounds, and
       ``(iii) $30,000, if such vehicle has a gross vehicle weight 
     rating of more than 26,000 pounds.
       ``(C) Applicable percentage.--For purposes of subparagraph 
     (A), the applicable percentage shall be determined in 
     accordance with the following table:

``If percent increase in fuel economy of hybrid over comparable vehicle 
  is:                                     The applicable percentage is:
At least 30 but less than 40 percent........................20 percent.
At least 40 but less than 50 percent........................30 percent.
At least 50 percent.........................................40 percent.

       ``(4) New qualified hybrid motor vehicle.--For purposes of 
     this subsection--
       ``(A) In general.--The term `new qualified hybrid motor 
     vehicle' means a motor vehicle--
       ``(i) which draws propulsion energy from onboard sources of 
     stored energy which are both--

       ``(I) an internal combustion or heat engine using 
     consumable fuel, and
       ``(II) a rechargeable energy storage system,

       ``(ii) which, in the case of a passenger automobile, medium 
     duty passenger vehicle, or light truck--

       ``(I) having a gross vehicle weight rating of 6,000 pounds 
     or less, has received a certificate that such vehicle meets 
     or exceeds the Bin 5 Tier II emission level established in 
     regulations prescribed by the Administrator of the 
     Environmental Protection Agency under section 202(i) of the 
     Clean Air Act for that make and model year vehicle,
       ``(II) having a gross vehicle weight rating of more than 
     6,000 pounds but not more than 8,500 pounds, has received a 
     certificate that such vehicle meets or exceeds the Bin 8 Tier 
     II emission standard which is so established,
       ``(III) has received a certificate of conformity under the 
     Clean Air Act and meets or exceeds the equivalent qualifying 
     California low emission vehicle standard under section 
     243(e)(2) of the Clean Air Act for that make and model year, 
     and
       ``(IV) has a maximum available power of at least 5 percent,

       ``(iii) which, in the case of a heavy duty hybrid motor 
     vehicle--

       ``(I) having a gross vehicle weight rating of more than 
     8,500 but not more than 14,000 pounds, has a maximum 
     available power of at least 10 percent, and
       ``(II) having a gross vehicle weight rating of more than 
     14,000 pounds, has a maximum available power of at least 15 
     percent,

       ``(iv) the original use of which commences with the 
     taxpayer,
       ``(v) which is acquired for use or lease by the taxpayer 
     and not for resale, and
       ``(vi) which is made by a manufacturer.
       ``(B) Consumable fuel.--For purposes of subparagraph 
     (A)(i)(I), the term `consumable fuel' means any solid, 
     liquid, or gaseous matter which releases energy when consumed 
     by an auxiliary power unit.
       ``(C) Maximum available power.--
       ``(i) Passenger automobile, medium duty passenger vehicle, 
     or light truck.--For purposes of subparagraph (A)(ii)(II), 
     the term `maximum available power' means the maximum power 
     available from the rechargeable energy storage system, during 
     a standard 10 second pulse power or equivalent test, divided 
     by such maximum power and the SAE net power of the heat 
     engine.
       ``(ii) Heavy duty hybrid motor vehicle.--For purposes of 
     subparagraph (A)(iii), the term `maximum available power' 
     means the maximum power available from the rechargeable 
     energy storage system, during a standard 10 second pulse 
     power or equivalent test, divided by the vehicle's total 
     traction power. The term `total traction power' means the sum 
     of the peak power from the rechargeable energy storage system 
     and the heat engine peak power of the vehicle, except that if 
     such storage system is the sole means by which the vehicle 
     can be driven, the total traction power is the peak power of 
     such storage system.
       ``(4) Heavy duty hybrid motor vehicle.--For purposes of 
     this subsection, the term `heavy duty hybrid motor vehicle' 
     means a new qualified hybrid motor vehicle which has a gross 
     vehicle weight rating of more than 8,500 pounds. Such term 
     does not include a medium duty passenger vehicle.
       ``(e) New Qualified Alternative Fuel Motor Vehicle 
     Credit.--
       ``(1) Allowance of credit.--Except as provided in paragraph 
     (5), the new qualified alternative fuel motor vehicle credit 
     determined under this subsection is an amount equal to the 
     applicable percentage of the incremental cost of any new 
     qualified alternative fuel motor vehicle placed in service by 
     the taxpayer during the taxable year.
       ``(2) Applicable percentage.--For purposes of paragraph 
     (1), the applicable percentage with respect to any new 
     qualified alternative fuel motor vehicle is--
       ``(A) 50 percent, plus
       ``(B) 30 percent, if such vehicle--
       ``(i) has received a certificate of conformity under the 
     Clean Air Act and meets or exceeds the most stringent 
     standard available for certification under the Clean Air Act 
     for that make and model year vehicle (other than a zero 
     emission standard), or
       ``(ii) has received an order certifying the vehicle as 
     meeting the same requirements as vehicles which may be sold 
     or leased in California and meets or exceeds the most 
     stringent standard available for certification under the 
     State laws of California (enacted in accordance with a waiver 
     granted under section 209(b) of the Clean Air Act) for that

[[Page S7148]]

     make and model year vehicle (other than a zero emission 
     standard).

     For purposes of the preceding sentence, in the case of any 
     new qualified alternative fuel motor vehicle which weighs 
     more than 14,000 pounds gross vehicle weight rating, the most 
     stringent standard available shall be such standard available 
     for certification on the date of the enactment of the Energy 
     Tax Incentives Act.
       ``(3) Incremental cost.--For purposes of this subsection, 
     the incremental cost of any new qualified alternative fuel 
     motor vehicle is equal to the amount of the excess of the 
     manufacturer's suggested retail price for such vehicle over 
     such price for a gasoline or diesel fuel motor vehicle of the 
     same model, to the extent such amount does not exceed--
       ``(A) $5,000, if such vehicle has a gross vehicle weight 
     rating of not more than 8,500 pounds,
       ``(B) $10,000, if such vehicle has a gross vehicle weight 
     rating of more than 8,500 pounds but not more than 14,000 
     pounds,
       ``(C) $25,000, if such vehicle has a gross vehicle weight 
     rating of more than 14,000 pounds but not more than 26,000 
     pounds, and
       ``(D) $40,000, if such vehicle has a gross vehicle weight 
     rating of more than 26,000 pounds.
       ``(4) New qualified alternative fuel motor vehicle.--For 
     purposes of this subsection--
       ``(A) In general.--The term `new qualified alternative fuel 
     motor vehicle' means any motor vehicle--
       ``(i) which is only capable of operating on an alternative 
     fuel,
       ``(ii) the original use of which commences with the 
     taxpayer,
       ``(iii) which is acquired by the taxpayer for use or lease, 
     but not for resale, and
       ``(iv) which is made by a manufacturer.
       ``(B) Alternative fuel.--The term `alternative fuel' means 
     compressed natural gas, liquefied natural gas, liquefied 
     petroleum gas, hydrogen, and any liquid at least 85 percent 
     of the volume of which consists of methanol.
       ``(5) Credit for mixed-fuel vehicles.--
       ``(A) In general.--In the case of a mixed-fuel vehicle 
     placed in service by the taxpayer during the taxable year, 
     the credit determined under this subsection is an amount 
     equal to--
       ``(i) in the case of a 75/25 mixed-fuel vehicle, 70 percent 
     of the credit which would have been allowed under this 
     subsection if such vehicle was a qualified alternative fuel 
     motor vehicle, and
       ``(ii) in the case of a 90/10 mixed-fuel vehicle, 90 
     percent of the credit which would have been allowed under 
     this subsection if such vehicle was a qualified alternative 
     fuel motor vehicle.
       ``(B) Mixed-fuel vehicle.--For purposes of this subsection, 
     the term `mixed-fuel vehicle' means any motor vehicle 
     described in subparagraph (C) or (D) of paragraph (3), 
     which--
       ``(i) is certified by the manufacturer as being able to 
     perform efficiently in normal operation on a combination of 
     an alternative fuel and a petroleum-based fuel,
       ``(ii) either--

       ``(I) has received a certificate of conformity under the 
     Clean Air Act, or
       ``(II) has received an order certifying the vehicle as 
     meeting the same requirements as vehicles which may be sold 
     or leased in California and meets or exceeds the low emission 
     vehicle standard under section 88.105-94 of title 40, Code of 
     Federal Regulations, for that make and model year vehicle,

       ``(iii) the original use of which commences with the 
     taxpayer,
       ``(iv) which is acquired by the taxpayer for use or lease, 
     but not for resale, and
       ``(v) which is made by a manufacturer.
       ``(C) 75/25 mixed-fuel vehicle.--For purposes of this 
     subsection, the term `75/25 mixed-fuel vehicle' means a 
     mixed-fuel vehicle which operates using at least 75 percent 
     alternative fuel and not more than 25 percent petroleum-based 
     fuel.
       ``(D) 90/10 mixed-fuel vehicle.--For purposes of this 
     subsection, the term `90/10 mixed-fuel vehicle' means a 
     mixed-fuel vehicle which operates using at least 90 percent 
     alternative fuel and not more than 10 percent petroleum-based 
     fuel.
       ``(f) Limitation on Number of New Qualified Hybrid and 
     Advanced Lean-burn Technology Vehicles Eligible for Credit.--
       ``(1) In general.--In the case of a qualified vehicle sold 
     during the phaseout period, only the applicable percentage of 
     the credit otherwise allowable under subsection (c) or (d) 
     shall be allowed.
       ``(2) Phaseout period.--For purposes of this subsection, 
     the phaseout period is the period beginning with the second 
     calendar quarter following the calendar quarter which 
     includes the first date on which the number of qualified 
     vehicles manufactured by the manufacturer of the vehicle 
     referred to in paragraph (1) sold for use in the United 
     States after the date of the enactment of this section is at 
     least 80,000.
       ``(3) Applicable percentage.--For purposes of paragraph 
     (1), the applicable percentage is--
       ``(A) 50 percent for the first 2 calendar quarters of the 
     phaseout period,
       ``(B) 25 percent for the 3d and 4th calendar quarters of 
     the phaseout period, and
       ``(C) 0 percent for each calendar quarter thereafter.
       ``(4) Controlled groups.--
       ``(A) In general.--For purposes of this subsection, all 
     persons treated as a single employer under subsection (a) or 
     (b) of section 52 or subsection (m) or (o) of section 414 
     shall be treated as a single manufacturer.
       ``(B) Inclusion of foreign corporations.--For purposes of 
     subparagraph (A), in applying subsections (a) and (b) of 
     section 52 to this section, section 1563 shall be applied 
     without regard to subsection (b)(2)(C) thereof.
       ``(5) Qualified vehicle.--For purposes of this subsection, 
     the term `qualified vehicle' means any new qualified hybrid 
     motor vehicle and any new advanced lean burn technology motor 
     vehicle.
       ``(g) Application With Other Credits.--The credit allowed 
     under subsection (a) for any taxable year shall not exceed 
     the excess (if any) of--
       ``(1) the regular tax for the taxable year reduced by the 
     sum of the credits allowable under subpart A and sections 27, 
     29, and 30, over
       ``(2) the tentative minimum tax for the taxable year.
       ``(h) Other Definitions and Special Rules.--For purposes of 
     this section--
       ``(1) Motor vehicle.--The term `motor vehicle' has the 
     meaning given such term by section 30(c)(2).
       ``(2) City fuel economy.--The city fuel economy with 
     respect to any vehicle shall be measured in a manner which is 
     substantially similar to the manner city fuel economy is 
     measured in accordance with procedures under part 600 of 
     subchapter Q of chapter I of title 40, Code of Federal 
     Regulations, as in effect on the date of the enactment of 
     this section.
       ``(3) Other terms.--The terms `automobile', `passenger 
     automobile', `medium duty passenger vehicle', `light truck', 
     and `manufacturer' have the meanings given such terms in 
     regulations prescribed by the Administrator of the 
     Environmental Protection Agency for purposes of the 
     administration of title II of the Clean Air Act (42 U.S.C. 
     7521 et seq.).
       ``(4)  Reduction in basis.--For purposes of this subtitle, 
     the basis of any property for which a credit is allowable 
     under subsection (a) shall be reduced by the amount of such 
     credit so allowed (determined without regard to subsection 
     (e)).
       ``(5) No double benefit.--The amount of any deduction or 
     other credit allowable under this chapter--
       ``(A) for any incremental cost taken into account in 
     computing the amount of the credit determined under 
     subsection (e) shall be reduced by the amount of such credit 
     attributable to such cost, and
       ``(B) with respect to a vehicle described under subsection 
     (b), (c), or (d) shall be reduced by the amount of credit 
     allowed under subsection (a) for such vehicle for the taxable 
     year.
       ``(6) Property used by tax-exempt entity.--In the case of a 
     vehicle whose use is described in paragraph (3) or (4) of 
     section 50(b) and which is not subject to a lease, the person 
     who sold such vehicle to the person or entity using such 
     vehicle shall be treated as the taxpayer that placed such 
     vehicle in service, but only if such person clearly discloses 
     to such person or entity in a document the amount of any 
     credit allowable under subsection (a) with respect to such 
     vehicle (determined without regard to subsection (g)).
       ``(7) Property used outside united states, etc., not 
     qualified.--No credit shall be allowable under subsection (a) 
     with respect to any property referred to in section 50(b)(1) 
     or with respect to the portion of the cost of any property 
     taken into account under section 179.
       ``(8) Recapture.--The Secretary shall, by regulations, 
     provide for recapturing the benefit of any credit allowable 
     under subsection (a) with respect to any property which 
     ceases to be property eligible for such credit (including 
     recapture in the case of a lease period of less than the 
     economic life of a vehicle).
       ``(9) Election to not take credit.--No credit shall be 
     allowed under subsection (a) for any vehicle if the taxpayer 
     elects to not have this section apply to such vehicle.
       ``(10) Carryback and carryforward allowed.--
       ``(A) In general.--If the credit allowable under subsection 
     (a) for a taxable year exceeds the amount of the limitation 
     under subsection (g) for such taxable year (in this paragraph 
     referred to as the `unused credit year'), such excess shall 
     be a credit carryback to each of the 3 taxable years 
     preceding the unused credit year and a credit carryforward to 
     each of the 20 taxable years following the unused credit 
     year, except that no excess may be carried to a taxable year 
     beginning before the date of the enactment of this section. 
     The preceding sentence shall not apply to any credit 
     carryback if such credit carryback is attributable to 
     property for which a deduction for depreciation is not 
     allowable.
       ``(B) Rules.--Rules similar to the rules of section 39 
     shall apply with respect to the credit carryback and credit 
     carryforward under subparagraph (A).
       ``(11) Interaction with air quality and motor vehicle 
     safety standards.--Unless otherwise provided in this section, 
     a motor vehicle shall not be considered eligible for a credit 
     under this section unless such vehicle is in compliance 
     with--
       ``(A) the applicable provisions of the Clean Air Act for 
     the applicable make and model year of the vehicle (or 
     applicable air quality provisions of State law in the case of 
     a State which has adopted such provision under a

[[Page S7149]]

     waiver under section 209(b) of the Clean Air Act), and
       ``(B) the motor vehicle safety provisions of sections 30101 
     through 30169 of title 49, United States Code.
       ``(g) Regulations.--
       ``(1) In general.--Except as provided in paragraph (2), the 
     Secretary shall promulgate such regulations as necessary to 
     carry out the provisions of this section.
       ``(2) Coordination in prescription of certain 
     regulations.--The Secretary of the Treasury, in coordination 
     with the Secretary of Transportation and the Administrator of 
     the Environmental Protection Agency, shall prescribe such 
     regulations as necessary to determine whether a motor vehicle 
     meets the requirements to be eligible for a credit under this 
     section.
       ``(h) Termination.--This section shall not apply to any 
     property purchased after--
       ``(1) in the case of a new qualified fuel cell motor 
     vehicle (as described in subsection (b)), December 31, 2015,
       ``(2) in the case of a new advanced lean burn technology 
     motor vehicle (as described in subsection (c)) or a new 
     qualified hybrid motor vehicle (as described in subsection 
     (d)), December 31, 2009, and
       ``(3) in the case of a new qualified alternative fuel 
     vehicle (as described in subsection (e)), December 31, 
     2010.''.
       (b) Conforming Amendments.--
       (1) Section 1016(a), as amended by this Act, is amended by 
     striking ``and'' at the end of paragraph (35), by striking 
     the period at the end of paragraph (36) and inserting ``, 
     and'', and by adding at the end the following new paragraph:
       ``(37) to the extent provided in section 30B(h)(4).''.
       (2) Section 55(c)(2), as amended by this Act, is amended by 
     inserting ``30B(g),'' after ``30(b)(2),''.
       (3) Section 6501(m) is amended by inserting ``30B(h)(9),'' 
     after ``30(d)(4),''.
       (4) The table of sections for subpart B of part IV of 
     subchapter A of chapter 1 is amended by inserting after the 
     item relating to section 30A the following new item:

``Sec. 30B. Alternative motor vehicle credit.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after the date of 
     the enactment of this Act, in taxable years ending after such 
     date.
       (d) Sticker Information Required at Retail Sale.--
       (1) In general.--The Secretary of the Treasury shall issue 
     regulations under which each qualified vehicle sold at retail 
     shall display a notice--
       (A) that such vehicle is a qualified vehicle, and
       (B) that the buyer may not benefit from the credit allowed 
     under section 30B of the Internal Revenue Code of 1986 if 
     such buyer has insufficient tax liability.
       (2) Qualified vehicle.--For purposes of paragraph (1), the 
     term ``qualified vehicle'' means a vehicle with respect to 
     which a credit is allowed under section 30B of the Internal 
     Revenue Code of 1986.
       (e) Nonapplication of Section .--Notwithstanding any other 
     provision of this Act, the provisions of, and amendments made 
     by, section 1531 of this Act shall be null and void.

     SEC. 1702. CREDIT FOR INSTALLATION OF ALTERNATIVE FUEL 
                   REFUELING STATIONS.

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

     ``SEC. 30C. ALTERNATIVE FUEL VEHICLE REFUELING PROPERTY 
                   CREDIT.

       ``(a) Credit Allowed.--There shall be allowed as a credit 
     against the tax imposed by this chapter for the taxable year 
     an amount equal to 50 percent of the cost of any qualified 
     alternative fuel vehicle refueling property placed in service 
     by the taxpayer during the taxable year.
       ``(b) Limitation.--The credit allowed under subsection (a) 
     with respect to any alternative fuel vehicle refueling 
     property shall not exceed--
       ``(1) $50,000 in the case of a property of a character 
     subject to an allowance for depreciation, and
       ``(2) $1,000 in any other case.
       ``(c) Qualified Alternative Fuel Vehicle Refueling 
     Property.--For purposes of this section--
       ``(1) In general.--Except as provided in paragraph (2), the 
     term `qualified alternative fuel vehicle refueling property' 
     has the meaning given to such term by section 179A(d), but 
     only with respect to any fuel at least 85 percent of the 
     volume of which consists of ethanol, natural gas, compressed 
     natural gas, liquefied natural gas, liquefied petroleum gas, 
     and hydrogen.
       ``(2) Residential property.--In the case of any property 
     installed on property which is used as the principal 
     residence (within the meaning of section 121) of the 
     taxpayer, paragraph (1) of section 179A(d) shall not apply.
       ``(d) Application With Other Credits.--The credit allowed 
     under subsection (a) for any taxable year shall not exceed 
     the excess (if any) of--
       ``(1) the regular tax for the taxable year reduced by the 
     sum of the credits allowable under subpart A and sections 27, 
     29, 30, and 30B, over
       ``(2) the tentative minimum tax for the taxable year.
       ``(e) Carryforward Allowed.--
       ``(1) In general.--If the credit amount allowable under 
     subsection (a) for a taxable year exceeds the amount of the 
     limitation under subsection (d) for such taxable year, such 
     excess shall be allowed as a credit carryforward for each of 
     the 20 taxable years following the unused credit year.
       ``(2) Rules.--Rules similar to the rules of section 39 
     shall apply with respect to the credit carryforward under 
     paragraph (1).
       ``(f) Special Rules.--For purposes of this section--
       ``(1) Basis reduction.--The basis of any property shall be 
     reduced by the portion of the cost of such property taken 
     into account under subsection (a).
       ``(2) No double benefit.--No deduction shall be allowed 
     under section 179A with respect to any property with respect 
     to which a credit is allowed under subsection (a).
       ``(3) Property used by tax-exempt entity.--In the case of 
     any qualified alternative fuel vehicle refueling property the 
     use of which is described in paragraph (3) or (4) of section 
     50(b) and which is not subject to a lease, the person who 
     sold such property to the person or entity using such 
     property shall be treated as the taxpayer that placed such 
     property in service, but only if such person clearly 
     discloses to such person or entity in a document the amount 
     of any credit allowable under subsection (a) with respect to 
     such property (determined without regard to subsection (d)).
       ``(4) Property used outside united states not qualified.--
     No credit shall be allowable under subsection (a) with 
     respect to any property referred to in section 50(b)(1) or 
     with respect to the portion of the cost of any property taken 
     into account under section 179.
       ``(5) 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.
       ``(6) Recapture rules.--Rules similar to the rules of 
     section 179A(e)(4) shall apply.
       ``(g) Regulations.--The Secretary shall prescribe such 
     regulations as necessary to carry out the provisions of this 
     section.
       ``(h) Termination.--This section shall not apply to any 
     property placed in service--
       ``(1) in the case of property relating to hydrogen, after 
     December 31, 2014, and
       ``(2) in the case of any other property, after December 31, 
     2009.''.
       (b) Modifications to Extension of Deduction for Certain 
     Refueling Property.--
       (1) Increase in deduction for hydrogen infrastructure.--
     Section 179A(b)(2)(A)(i) is amended by inserting ``($200,000 
     in the case of property relating to hydrogen)'' after 
     ``$100,000''.
       (2) Extension of deduction.--Subsection (f) of section 179A 
     is amended to read as follows:
       ``(f) Termination.--This section shall not apply to any 
     property placed in service--
       ``(1) in the case of property relating to hydrogen, after 
     December 31, 2014, and
       ``(2) in the case of any other property, after December 31, 
     2009.''.
       (c) Incentive for Production of Hydrogen at Qualified 
     Clean-fuel Vehicle Refueling Property.--Section 179A(d) 
     (defining qualified clean-fuel vehicle refueling property) is 
     amended by adding at the end the following new flush 
     sentence:

     ``In the case of clean-burning fuel which is hydrogen 
     produced from another clean-burning fuel, paragraph (3)(A) 
     shall be applied by substituting `production, storage, or 
     dispensing' for `storage or dispensing' both places it 
     appears.''.
       (d) Conforming Amendments.--
       (1) Section 1016(a), as amended by this Act, 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 30C(f).''.
       (2) Section 55(c)(2), as amended by this Act, is amended by 
     inserting ``30C(e),'' after ``30B(e),''.
       (3) Section 6501(m) is amended by inserting ``30C(f)(5),'' 
     after ``30B(f)(9),''.
       (4) The table of sections for subpart B of part IV of 
     subchapter A of chapter 1, as amended by this Act, is amended 
     by inserting after the item relating to section 30B the 
     following new item:

``Sec. 30C. Clean-fuel vehicle refueling property credit.''.

       (e) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after December 31, 
     2005, in taxable years ending after such date.
       (f) Nonapplication of Section.--Notwithstanding any other 
     provision of this Act, the provisions of, and amendments made 
     by, section 1533 of this Act shall be null and void.

                 Subtitle B--Revenue Offset Provisions

                       PART I--GENERAL PROVISIONS

     SEC. 1711. TREATMENT OF CONTINGENT PAYMENT CONVERTIBLE DEBT 
                   INSTRUMENTS.

       (a) In General.--Section 1275(d) (relating to regulation 
     authority) is amended--
       (1) by striking ``The Secretary'' and inserting the 
     following:
       ``(1) In general.--The Secretary'', and
       (2) by adding at the end the following new paragraph:
       ``(2) Treatment of contingent payment convertible debt.--
       ``(A) In general.--In the case of a debt instrument which--

[[Page S7150]]

       ``(i) is convertible into stock of the issuing corporation, 
     into stock or debt of a related party (within the meaning of 
     section 267(b) or 707(b)(1)), or into cash or other property 
     in an amount equal to the approximate value of such stock or 
     debt, and
       ``(ii) provides for contingent payments,

     any regulations which require original issue discount to be 
     determined by reference to the comparable yield of a 
     noncontingent fixed-rate debt instrument shall be applied as 
     if the regulations require that such comparable yield be 
     determined by reference to a noncontingent fixed-rate debt 
     instrument which is convertible into stock.
       ``(B) Special rule.--For purposes of subparagraph (A), the 
     comparable yield shall be determined without taking into 
     account the yield resulting from the conversion of a debt 
     instrument into stock.''.
       (b) Cross Reference.--Section 163(e)(6) (relating to cross 
     references) is amended by adding at the end the following:
     ``For the treatment of contingent payment convertible debt, 
     see section 1275(d)(2).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to debt instruments issued on or after the date 
     of the enactment of this Act.

     SEC. 1712. FRIVOLOUS TAX SUBMISSIONS.

       (a) Civil Penalties.--Section 6702 is amended to read as 
     follows:

     ``SEC. 6702. FRIVOLOUS TAX SUBMISSIONS.

       ``(a) Civil Penalty for Frivolous Tax Returns.--A person 
     shall pay a penalty of $5,000 if--
       ``(1) such person files what purports to be a return of a 
     tax imposed by this title but which--
       ``(A) does not contain information on which the substantial 
     correctness of the self-assessment may be judged, or
       ``(B) contains information that on its face indicates that 
     the self-assessment is substantially incorrect; and
       ``(2) the conduct referred to in paragraph (1)--
       ``(A) is based on a position which the Secretary has 
     identified as frivolous under subsection (c), or
       ``(B) reflects a desire to delay or impede the 
     administration of Federal tax laws.
       ``(b) Civil Penalty for Specified Frivolous Submissions.--
       ``(1) Imposition of penalty.--Except as provided in 
     paragraph (3), any person who submits a specified frivolous 
     submission shall pay a penalty of $5,000.
       ``(2) Specified frivolous submission.--For purposes of this 
     section--
       ``(A) Specified frivolous submission.--The term `specified 
     frivolous submission' means a specified submission if any 
     portion of such submission--
       ``(i) is based on a position which the Secretary has 
     identified as frivolous under subsection (c), or
       ``(ii) reflects a desire to delay or impede the 
     administration of Federal tax laws.
       ``(B) Specified submission.--The term `specified 
     submission' means--
       ``(i) a request for a hearing under--

       ``(I) section 6320 (relating to notice and opportunity for 
     hearing upon filing of notice of lien), or
       ``(II) section 6330 (relating to notice and opportunity for 
     hearing before levy), and

       ``(ii) an application under--

       ``(I) section 6159 (relating to agreements for payment of 
     tax liability in installments),
       ``(II) section 7122 (relating to compromises), or
       ``(III) section 7811 (relating to taxpayer assistance 
     orders).

       ``(3) Opportunity to withdraw submission.--If the Secretary 
     provides a person with notice that a submission is a 
     specified frivolous submission and such person withdraws such 
     submission within 30 days after such notice, the penalty 
     imposed under paragraph (1) shall not apply with respect to 
     such submission.
       ``(c) Listing of Frivolous Positions.--The Secretary shall 
     prescribe (and periodically revise) a list of positions which 
     the Secretary has identified as being frivolous for purposes 
     of this subsection. The Secretary shall not include in such 
     list any position that the Secretary determines meets the 
     requirement of section 6662(d)(2)(B)(ii)(II).
       ``(d) Reduction of Penalty.--The Secretary may reduce the 
     amount of any penalty imposed under this section if the 
     Secretary determines that such reduction would promote 
     compliance with and administration of the Federal tax laws.
       ``(e) Penalties in Addition to Other Penalties.--The 
     penalties imposed by this section shall be in addition to any 
     other penalty provided by law.''.
       (b) Treatment of Frivolous Requests for Hearings Before 
     Levy.--
       (1) Frivolous requests disregarded.--Section 6330 (relating 
     to notice and opportunity for hearing before levy) is amended 
     by adding at the end the following new subsection:
       ``(g) Frivolous Requests for Hearing, Etc.--Notwithstanding 
     any other provision of this section, if the Secretary 
     determines that any portion of a request for a hearing under 
     this section or section 6320 meets the requirement of clause 
     (i) or (ii) of section 6702(b)(2)(A), then the Secretary may 
     treat such portion as if it were never submitted and such 
     portion shall not be subject to any further administrative or 
     judicial review.''.
       (2) Preclusion from raising frivolous issues at hearing.--
     Section 6330(c)(4) is amended--
       (A) by striking ``(A)'' and inserting ``(A)(i)'';
       (B) by striking ``(B)'' and inserting ``(ii)'';
       (C) by striking the period at the end of the first sentence 
     and inserting ``; or''; and
       (D) by inserting after subparagraph (A)(ii) (as so 
     redesignated) the following:
       ``(B) the issue meets the requirement of clause (i) or (ii) 
     of section 6702(b)(2)(A).''.
       (3) Statement of grounds.--Section 6330(b)(1) is amended by 
     striking ``under subsection (a)(3)(B)'' and inserting ``in 
     writing under subsection (a)(3)(B) and states the grounds for 
     the requested hearing''.
       (c) Treatment of Frivolous Requests for Hearings Upon 
     Filing of Notice of Lien.--Section 6320 is amended--
       (1) in subsection (b)(1), by striking ``under subsection 
     (a)(3)(B)'' and inserting ``in writing under subsection 
     (a)(3)(B) and states the grounds for the requested hearing'', 
     and
       (2) in subsection (c), by striking ``and (e)'' and 
     inserting ``(e), and (g)''.
       (d) Treatment of Frivolous Applications for Offers-in-
     Compromise and Installment Agreements.--Section 7122 is 
     amended by adding at the end the following new subsection:
       ``(e) Frivolous Submissions, Etc.--Notwithstanding any 
     other provision of this section, if the Secretary determines 
     that any portion of an application for an offer-in-compromise 
     or installment agreement submitted under this section or 
     section 6159 meets the requirement of clause (i) or (ii) of 
     section 6702(b)(2)(A), then the Secretary may treat such 
     portion as if it were never submitted and such portion shall 
     not be subject to any further administrative or judicial 
     review.''.
       (e) Clerical Amendment.--The table of sections for part I 
     of subchapter B of chapter 68 is amended by striking the item 
     relating to section 6702 and inserting the following new 
     item:

``Sec. 6702. Frivolous tax submissions.''.

       (f) Effective Date.--The amendments made by this section 
     shall apply to submissions made and issues raised after the 
     date on which the Secretary first prescribes a list under 
     section 6702(c) of the Internal Revenue Code of 1986, as 
     amended by subsection (a).

     SEC. 1713. INCREASE IN CERTAIN CRIMINAL PENALTIES.

       (a) In General.--Section 7206 (relating to fraud and false 
     statements) is amended--
       (1) by striking ``Any person who--'' and inserting ``(a) In 
     General.--Any person who--'', and
       (2) by adding at the end the following new subsection:
       ``(b) Increase in Monetary Limitation for Underpayment or 
     Overpayment of Tax Due to Fraud.--If any portion of any 
     underpayment (as defined in section 6664(a)) or overpayment 
     (as defined in section 6401(a)) of tax required to be shown 
     on a return is attributable to fraudulent action described in 
     subsection (a), the applicable dollar amount under subsection 
     (a) shall in no event be less than an amount equal to such 
     portion. A rule similar to the rule under section 6663(b) 
     shall apply for purposes of determining the portion so 
     attributable.''.
       (b) Increase in Penalties.--
       (1) Attempt to evade or defeat tax.--Section 7201 is 
     amended--
       (A) by striking ``$100,000'' and inserting ``$500,000'',
       (B) by striking ``$500,000'' and inserting ``$1,000,000'', 
     and
       (C) by striking ``5 years'' and inserting ``10 years''.
       (2) Willful failure to file return, supply information, or 
     pay tax.--Section 7203 is amended--
       (A) in the first sentence--
       (i) by striking ``Any person'' and inserting the following:
       ``(a) In General.--Any person'', and
       (ii) by striking ``$25,000'' and inserting ``$50,000'',
       (B) in the third sentence, by striking ``section'' and 
     inserting ``subsection'', and
       (C) by adding at the end the following new subsection:
       ``(b) Aggravated Failure To File.--
       ``(1) In general.--In the case of any failure described in 
     paragraph (2), the first sentence of subsection (a) shall be 
     applied by substituting--
       ``(A) `felony' for `misdemeanor',
       ``(B) `$500,000 ($1,000,000' for `$25,000 ($100,000', and
       ``(C) `10 years' for `1 year'.
       ``(2) Failure described.--A failure described in this 
     paragraph is a failure to make a return described in 
     subsection (a) for a period of 3 or more consecutive taxable 
     years and the aggregated tax liability for such period is at 
     least $100,000.''.
       (3) Fraud and false statements.--Section 7206(a) (as 
     redesignated by subsection (a)) is amended--
       (A) by striking ``$100,000'' and inserting ``$500,000'',
       (B) by striking ``$500,000'' and inserting ``$1,000,000'', 
     and
       (C) by striking ``3 years'' and inserting ``5 years''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to actions, and failures to act, occurring after 
     the date of the enactment of this Act.

     SEC. 1714. DOUBLING OF CERTAIN PENALTIES, FINES, AND INTEREST 
                   ON UNDERPAYMENTS RELATED TO CERTAIN OFFSHORE 
                   FINANCIAL ARRANGEMENTS.

       (a) Determination of Penalty.--
       (1) In general.--Notwithstanding any other provision of 
     law, in the case of an applicable taxpayer--

[[Page S7151]]

       (A) the determination as to whether any interest or 
     applicable penalty is to be imposed with respect to any 
     arrangement described in paragraph (2), or to any 
     underpayment of Federal income tax attributable to items 
     arising in connection with any such arrangement, shall be 
     made without regard to the rules of subsections (b), (c), and 
     (d) of section 6664 of the Internal Revenue Code of 1986, and
       (B) if any such interest or applicable penalty is imposed, 
     the amount of such interest or penalty shall be equal to 
     twice that determined without regard to this section.
       (2) Applicable taxpayer.--For purposes of this subsection--
       (A) In general.--The term ``applicable taxpayer'' means a 
     taxpayer which--
       (i) has underreported its United States income tax 
     liability with respect to any item which directly or 
     indirectly involves--

       (I) any financial arrangement which in any manner relies on 
     the use of offshore payment mechanisms (including credit, 
     debit, or charge cards) issued by banks or other entities in 
     foreign jurisdictions, or
       (II) any offshore financial arrangement (including any 
     arrangement with foreign banks, financial institutions, 
     corporations, partnerships, trusts, or other entities), and

       (ii) has not signed a closing agreement pursuant to the 
     Voluntary Offshore Compliance Initiative established by the 
     Department of the Treasury under Revenue Procedure 2003-11 or 
     voluntarily disclosed its participation in such arrangement 
     by notifying the Internal Revenue Service of such arrangement 
     prior to the issue being raised by the Internal Revenue 
     Service during an examination.
       (B) Authority to waive.--The Secretary of the Treasury or 
     the Secretary's delegate may waive the application of 
     paragraph (1) to any taxpayer if the Secretary or the 
     Secretary's delegate determines that the use of such offshore 
     payment mechanisms is incidental to the transaction and, in 
     addition, in the case of a trade or business, such use is 
     conducted in the ordinary course of the trade or business of 
     the taxpayer.
       (C) Issues raised.--For purposes of subparagraph (A)(ii), 
     an item shall be treated as an issue raised during an 
     examination if the individual examining the return--
       (i) communicates to the taxpayer knowledge about the 
     specific item, or
       (ii) has made a request to the taxpayer for information and 
     the taxpayer could not make a complete response to that 
     request without giving the examiner knowledge of the specific 
     item.
       (b) Definitions and Rules.--For purposes of this section--
       (1) Applicable penalty.--The term ``applicable penalty'' 
     means any penalty, addition to tax, or fine imposed under 
     chapter 68 of the Internal Revenue Code of 1986.
       (2) Fees and expenses.--The Secretary of the Treasury may 
     retain and use an amount not in excess of 25 percent of all 
     additional interest, penalties, additions to tax, and fines 
     collected under this section to be used for enforcement and 
     collection activities of the Internal Revenue Service. The 
     Secretary shall keep adequate records regarding amounts so 
     retained and used. The amount credited as paid by any 
     taxpayer shall be determined without regard to this 
     paragraph.
       (c) Report by Secretary.--The Secretary shall each year 
     conduct a study and report to Congress on the implementation 
     of this section during the preceding year, including 
     statistics on the number of taxpayers affected by such 
     implementation and the amount of interest and applicable 
     penalties asserted, waived, and assessed during such 
     preceding year.
       (d) Effective Date.--The provisions of this section shall 
     apply to interest, penalties, additions to tax, and fines 
     with respect to any taxable year if, as of the date of the 
     enactment of this Act, the assessment of any tax, penalty, or 
     interest with respect to such taxable year is not prevented 
     by the operation of any law or rule of law.

     SEC. 1715. MODIFICATION OF INTERACTION BETWEEN SUBPART F AND 
                   PASSIVE FOREIGN INVESTMENT COMPANY RULES.

       (a) Limitation on Exception From PFIC Rules for United 
     States Shareholders of Controlled Foreign Corporations.--
     Paragraph (2) of section 1297(e) (relating to passive foreign 
     investment company) is amended by adding at the end the 
     following flush sentence:
     ``Such term shall not include any period if the earning of 
     subpart F income by such corporation during such period would 
     result in only a remote likelihood of an inclusion in gross 
     income under section 951(a)(1)(A)(i).''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years of controlled foreign 
     corporations beginning after March 2, 2005, and to taxable 
     years of United States shareholders with or within which such 
     taxable years of controlled foreign corporations end.

     SEC. 1716. DECLARATION BY CHIEF EXECUTIVE OFFICER RELATING TO 
                   FEDERAL ANNUAL CORPORATE INCOME TAX RETURN.

       (a) In General.--The Federal annual tax return of a 
     corporation with respect to income shall also include a 
     declaration signed by the chief executive officer of such 
     corporation (or other such officer of the corporation as the 
     Secretary of the Treasury may designate if the corporation 
     does not have a chief executive officer), under penalties of 
     perjury, that the corporation has in place processes and 
     procedures that ensure that such return complies with the 
     Internal Revenue Code of 1986 and that the chief executive 
     officer was provided reasonable assurance of the accuracy of 
     all material aspects of such return. The preceding sentence 
     shall not apply to any return of a regulated investment 
     company (within the meaning of section 851 of such Code).
       (b) Effective Date.--This section shall apply to Federal 
     annual tax returns for taxable years ending after the date of 
     the enactment of this Act.

     SEC. 1717. TREASURY REGULATIONS ON FOREIGN TAX CREDIT.

       (a) In General.--Section 901 (relating to taxes of foreign 
     countries and of possessions of United States) is amended by 
     redesignating subsection (m) as subsection (n) and by 
     inserting after subsection (l) the following new subsection:
       ``(m) Regulations.--The Secretary may prescribe regulations 
     disallowing a credit under subsection (a) for all or a 
     portion of any foreign tax, or allocating a foreign tax among 
     2 or more persons, in cases where the foreign tax is imposed 
     on any person in respect of income of another person or in 
     other cases involving the inappropriate separation of the 
     foreign tax from the related foreign income.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to transactions entered into after the date of 
     the enactment of this Act.

     SEC. 1718. WHISTLEBLOWER REFORMS.

       (a) In General.--Section 7623 (relating to expenses of 
     detection of underpayments and fraud, etc.) is amended--
       (1) by striking ``The Secretary'' and inserting ``(a) In 
     General.--The Secretary'',
       (2) by striking ``and'' at the end of paragraph (1) and 
     inserting ``or'',
       (3) by striking ``(other than interest)'', and
       (4) by adding at the end the following new subsections:
       ``(b) Awards to Whistleblowers.--
       ``(1) In general.--If the Secretary proceeds with any 
     administrative or judicial action described in subsection (a) 
     based on information brought to the Secretary's attention by 
     an individual, such individual shall, subject to paragraph 
     (2), receive as an award at least 15 percent but not more 
     than 30 percent of the collected proceeds (including 
     penalties, interest, additions to tax, and additional 
     amounts) resulting from the action (including any related 
     actions) or from any settlement in response to such action. 
     The determination of the amount of such award by the 
     Whistleblower Office shall depend upon the extent to which 
     the individual substantially contributed to such action.
       ``(2) Award in case of less substantial contribution.--
       ``(A) In general.--In the event the action described in 
     paragraph (1) is one which the Whistleblower Office 
     determines to be based principally on disclosures of specific 
     allegations (other than information provided by the 
     individual described in paragraph (1)) resulting from a 
     judicial or administrative hearing, from a governmental 
     report, hearing, audit, or investigation, or from the news 
     media, the Whistleblower Office may award such sums as it 
     considers appropriate, but in no case more than 10 percent of 
     the collected proceeds (including penalties, interest, 
     additions to tax, and additional amounts) resulting from the 
     action (including any related actions) or from any settlement 
     in response to such action, taking into account the 
     significance of the individual's information and the role of 
     such individual and any legal representative of such 
     individual in contributing to such action.
       ``(B) Nonapplication of paragraph where individual is 
     original source of information.--Subparagraph (A) shall not 
     apply if the information resulting in the initiation of the 
     action described in paragraph (1) was originally provided by 
     the individual described in paragraph (1).
       ``(3) Reduction in or denial of award.--If the 
     Whistleblower Office determines that the claim for an award 
     under paragraph (1) or (2) is brought by an individual who 
     planned and initiated the actions that led to the 
     underpayment of tax or actions described in subsection 
     (a)(2), then the Whistleblower Office may appropriately 
     reduce such award. If such individual is convicted of 
     criminal conduct arising from the role described in the 
     preceding sentence, the Whistleblower Office shall deny any 
     award.
       ``(4) Appeal of award determination.--Any determination 
     regarding an award under paragraph (1), (2), or (3) shall be 
     subject to the filing by the individual described in such 
     paragraph of a petition for review with the Tax Court under 
     rules similar to the rules under section 7463 (without regard 
     to the amount in dispute) and such review shall be subject to 
     the rules under section 7461(b)(1).
       ``(5) Application of this subsection.--This subsection 
     shall apply with respect to any action--
       ``(A) against any taxpayer, but in the case of any 
     individual, only if such individual's gross income exceeds 
     $200,000 for any taxable year subject to such action, and
       ``(B) if the tax, penalties, interest, additions to tax, 
     and additional amounts in dispute exceed $20,000.
       ``(6) Additional rules.--
       ``(A) No contract necessary.--No contract with the Internal 
     Revenue Service is necessary for any individual to receive an 
     award under this subsection.
       ``(B) Representation.--Any individual described in 
     paragraph (1) or (2) may be represented by counsel.
       ``(C) Award not subject to individual alternative minimum 
     tax.--No award received

[[Page S7152]]

     under this subsection shall be included in gross income for 
     purposes of determining alternative minimum taxable income.
       ``(c) Whistleblower Office.--
       ``(1) In general.--There is established in the Internal 
     Revenue Service an office to be known as the `Whistleblower 
     Office' which--
       ``(A) shall at all times operate at the direction of the 
     Commissioner and coordinate and consult with other divisions 
     in the Internal Revenue Service as directed by the 
     Commissioner,
       ``(B) shall analyze information received from any 
     individual described in subsection (b) and either investigate 
     the matter itself or assign it to the appropriate Internal 
     Revenue Service office,
       ``(C) shall monitor any action taken with respect to such 
     matter,
       ``(D) shall inform such individual that it has accepted the 
     individual's information for further review,
       ``(E) may require such individual and any legal 
     representative of such individual to not disclose any 
     information so provided,
       ``(F) in its sole discretion, may ask for additional 
     assistance from such individual or any legal representative 
     of such individual, and
       ``(G) shall determine the amount to be awarded to such 
     individual under subsection (b).
       ``(2) Funding for office.--There is authorized to be 
     appropriated $10,000,000 for each fiscal year for the 
     Whistleblower Office. These funds shall be used to maintain 
     the Whistleblower Office and also to reimburse other Internal 
     Revenue Service offices for related costs, such as costs of 
     investigation and collection.
       ``(3) Request for assistance.--
       ``(A) In general.--Any assistance requested under paragraph 
     (1)(F) shall be under the direction and control of the 
     Whistleblower Office or the office assigned to investigate 
     the matter under subparagraph (A). To the extent the 
     disclosure of any returns or return information to the 
     individual or legal representative is required for the 
     performance of such assistance, such disclosure shall be 
     pursuant to a contract entered into between the Secretary and 
     the recipients of such disclosure subject to section 6103(n). 
     No individual or legal representative whose assistance is so 
     requested may by reason of such request represent himself or 
     herself as an employee of the Federal Government.
       ``(B) Funding of assistance.--From the amounts available 
     for expenditure under subsection (b), the Whistleblower 
     Office may, with the agreement of the individual described in 
     subsection (b), reimburse the costs incurred by any legal 
     representative of such individual in providing assistance 
     described in subparagraph (A).
       ``(d) Report by Secretary.--The Secretary shall each year 
     conduct a study and report to Congress on the use of this 
     section, including--
       ``(1) an analysis of the use of this section during the 
     preceding year and the results of such use, and
       ``(2) any legislative or administrative recommendations 
     regarding the provisions of this section and its 
     application.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to information provided on or after the date of 
     the enactment of this Act.

     SEC. 1719. DENIAL OF DEDUCTION FOR CERTAIN FINES, PENALTIES, 
                   AND OTHER AMOUNTS.

       (a) In General.--Subsection (f) of section 162 (relating to 
     trade or business expenses) is amended to read as follows:
       ``(f) Fines, Penalties, and Other Amounts.--
       ``(1) In general.--Except as provided in paragraph (2), no 
     deduction otherwise allowable shall be allowed under this 
     chapter for any amount paid or incurred (whether by suit, 
     agreement, or otherwise) to, or at the direction of, a 
     government or entity described in paragraph (4) in relation 
     to the violation of any law or the investigation or inquiry 
     by such government or entity into the potential violation of 
     any law.
       ``(2) Exception for amounts constituting restitution.--
     Paragraph (1) shall not apply to any amount which--
       ``(A) the taxpayer establishes constitutes restitution 
     (including remediation of property) for damage or harm caused 
     by or which may be caused by the violation of any law or the 
     potential violation of any law, and
       ``(B) is identified as restitution in the court order or 
     settlement agreement.
     Identification pursuant to subparagraph (B) alone shall not 
     satisfy the requirement under subparagraph (A). This 
     paragraph shall not apply to any amount paid or incurred as 
     reimbursement to the government or entity for the costs of 
     any investigation or litigation.
       ``(3) Exception for amounts paid or incurred as the result 
     of certain court orders.--Paragraph (1) shall not apply to 
     any amount paid or incurred by order of a court in a suit in 
     which no government or entity described in paragraph (4) is a 
     party.
       ``(4) Certain nongovernmental regulatory entities.--An 
     entity is described in this paragraph if it is--
       ``(A) a nongovernmental entity which exercises self-
     regulatory powers (including imposing sanctions) in 
     connection with a qualified board or exchange (as defined in 
     section 1256(g)(7)), or
       ``(B) to the extent provided in regulations, a 
     nongovernmental entity which exercises self-regulatory powers 
     (including imposing sanctions) as part of performing an 
     essential governmental function.
       ``(5) Exception for taxes due.--Paragraph (1) shall not 
     apply to any amount paid or incurred as taxes due.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to amounts paid or incurred on or after the date 
     of the enactment of this Act, except that such amendment 
     shall not apply to amounts paid or incurred under any binding 
     order or agreement entered into before such date. Such 
     exception shall not apply to an order or agreement requiring 
     court approval unless the approval was obtained before such 
     date.

     SEC. 1720. FREEZE OF INTEREST SUSPENSION RULES WITH RESPECT 
                   TO LISTED TRANSACTIONS.

       (a) In General.--Paragraph (2) of section 903(d) of the 
     American Jobs Creation Act of 2005 is amended to read as 
     follows:
       ``(2) Exception for reportable or listed transactions.--
       ``(A) In general.--The amendments made by subsection (c) 
     shall apply with respect to interest accruing after October 
     3, 2004.
       ``(B) Special rule for certain listed transactions.--
       ``(i) In general.--Except as provided in clause (ii) or 
     (iii), in the case of any listed transaction, the amendments 
     made by subsection (c) shall also apply with respect to 
     interest accruing on or before October 3, 2004.
       ``(ii) Participants in settlement initiatives.--Clause (i) 
     shall not apply to a listed transaction if, as of May 9, 
     2005--

       ``(I) the taxpayer is participating in a published 
     settlement initiative which is offered by the Secretary of 
     the Treasury or his delegate to a group of similarly situated 
     taxpayers claiming benefits from the listed transaction, or
       ``(II) the taxpayer has entered into a settlement agreement 
     pursuant to such an initiative with respect to the tax 
     liability arising in connection with the listed transaction.

     Subclause (I) shall not apply to the taxpayer if, after May 
     9, 2005, the taxpayer withdraws from, or terminates, 
     participation in the initiative or the Secretary or his 
     delegate determines that a settlement agreement will not be 
     reached pursuant to the initiative within a reasonable period 
     of time.
       ``(iii) Closed transactions.--Clause (i) shall not apply to 
     a listed transaction if, as of May 9, 2005--

       ``(I) the assessment of all Federal income taxes for the 
     taxable year in which the tax liability to which the interest 
     relates arose is prevented by the operation of any law or 
     rule of law, or
       ``(II) a closing agreement under section 7121 has been 
     entered into with respect to the tax liability arising in 
     connection with the listed transaction.''.

       (b) Effective Date.--The amendment made by this section 
     shall take effect as if included in the provisions of the 
     American Jobs Creation Act of 2004 to which it relates.

     SEC. 1721. MODIFICATIONS OF EFFECTIVE DATES OF LEASING 
                   PROVISIONS OF THE AMERICAN JOBS CREATION ACT OF 
                   2004.

       (a) Repeal of Exception for Qualified Transportation 
     Property.--Section 849(b) of the American Jobs Creation Act 
     of 2004 is amended by striking paragraphs (1) and (2) and by 
     redesignating paragraphs (3) and (4) as paragraphs (1) and 
     (2).
       (b) Effective Date.--The amendments made by this section 
     shall take effect as if included in the enactment of the 
     American Jobs Creation Act of 2004.

     SEC. 1722. IMPOSITION OF MARK-TO-MARKET TAX ON INDIVIDUALS 
                   WHO EXPATRIATE.

       (a) In General.--Subpart A of part II of subchapter N of 
     chapter 1 is amended by inserting after section 877 the 
     following new section:

     ``SEC. 877A. TAX RESPONSIBILITIES OF EXPATRIATION.

       ``(a) General Rules.--For purposes of this subtitle--
       ``(1) Mark to market.--Except as provided in subsections 
     (d) and (f), all property of a covered expatriate to whom 
     this section applies shall be treated as sold on the day 
     before the expatriation date for its fair market value.
       ``(2) Recognition of gain or loss.--In the case of any sale 
     under paragraph (1)--
       ``(A) notwithstanding any other provision of this title, 
     any gain arising from such sale shall be taken into account 
     for the taxable year of the sale, and
       ``(B) any loss arising from such sale shall be taken into 
     account for the taxable year of the sale to the extent 
     otherwise provided by this title, except that section 1091 
     shall not apply to any such loss.
     Proper adjustment shall be made in the amount of any gain or 
     loss subsequently realized for gain or loss taken into 
     account under the preceding sentence.
       ``(3) Exclusion for certain gain.--
       ``(A) In general.--The amount which, but for this 
     paragraph, would be includible in the gross income of any 
     individual by reason of this section shall be reduced (but 
     not below zero) by $600,000. For purposes of this paragraph, 
     allocable expatriation gain taken into account under 
     subsection (f)(2) shall be treated in the same manner as an 
     amount required to be includible in gross income.
       ``(B) Cost-of-living adjustment.--
       ``(i) In general.--In the case of an expatriation date 
     occurring in any calendar year after 2005, the $600,000 
     amount under subparagraph (A) shall be increased by an amount 
     equal to--

[[Page S7153]]

       ``(I) such dollar amount, multiplied by
       ``(II) the cost-of-living adjustment determined under 
     section 1(f)(3) for such calendar year, determined by 
     substituting `calendar year 2004' for `calendar year 1992' in 
     subparagraph (B) thereof.

       ``(ii) Rounding rules.--If any amount after adjustment 
     under clause (i) is not a multiple of $1,000, such amount 
     shall be rounded to the next lower multiple of $1,000.
       ``(4) Election to continue to be taxed as united states 
     citizen.--
       ``(A) In general.--If a covered expatriate elects the 
     application of this paragraph--
       ``(i) this section (other than this paragraph and 
     subsection (i)) shall not apply to the expatriate, but
       ``(ii) in the case of property to which this section would 
     apply but for such election, the expatriate shall be subject 
     to tax under this title in the same manner as if the 
     individual were a United States citizen.
       ``(B) Requirements.--Subparagraph (A) shall not apply to an 
     individual unless the individual--
       ``(i) provides security for payment of tax in such form and 
     manner, and in such amount, as the Secretary may require,
       ``(ii) consents to the waiver of any right of the 
     individual under any treaty of the United States which would 
     preclude assessment or collection of any tax which may be 
     imposed by reason of this paragraph, and
       ``(iii) complies with such other requirements as the 
     Secretary may prescribe.
       ``(C) Election.--An election under subparagraph (A) shall 
     apply to all property to which this section would apply but 
     for the election and, once made, shall be irrevocable. Such 
     election shall also apply to property the basis of which is 
     determined in whole or in part by reference to the property 
     with respect to which the election was made.
       ``(b) Election To Defer Tax.--
       ``(1) In general.--If the taxpayer elects the application 
     of this subsection with respect to any property treated as 
     sold by reason of subsection (a), the payment of the 
     additional tax attributable to such property shall be 
     postponed until the due date of the return for the taxable 
     year in which such property is disposed of (or, in the case 
     of property disposed of in a transaction in which gain is not 
     recognized in whole or in part, until such other date as the 
     Secretary may prescribe).
       ``(2) Determination of tax with respect to property.--For 
     purposes of paragraph (1), the additional tax attributable to 
     any property is an amount which bears the same ratio to the 
     additional tax imposed by this chapter for the taxable year 
     solely by reason of subsection (a) as the gain taken into 
     account under subsection (a) with respect to such property 
     bears to the total gain taken into account under subsection 
     (a) with respect to all property to which subsection (a) 
     applies.
       ``(3) Termination of postponement.--No tax may be postponed 
     under this subsection later than the due date for the return 
     of tax imposed by this chapter for the taxable year which 
     includes the date of death of the expatriate (or, if earlier, 
     the time that the security provided with respect to the 
     property fails to meet the requirements of paragraph (4), 
     unless the taxpayer corrects such failure within the time 
     specified by the Secretary).
       ``(4) Security.--
       ``(A) In general.--No election may be made under paragraph 
     (1) with respect to any property unless adequate security is 
     provided to the Secretary with respect to such property.
       ``(B) Adequate security.--For purposes of subparagraph (A), 
     security with respect to any property shall be treated as 
     adequate security if--
       ``(i) it is a bond in an amount equal to the deferred tax 
     amount under paragraph (2) for the property, or
       ``(ii) the taxpayer otherwise establishes to the 
     satisfaction of the Secretary that the security is adequate.
       ``(5) Waiver of certain rights.--No election may be made 
     under paragraph (1) unless the taxpayer consents to the 
     waiver of any right under any treaty of the United States 
     which would preclude assessment or collection of any tax 
     imposed by reason of this section.
       ``(6) Elections.--An election under paragraph (1) shall 
     only apply to property described in the election and, once 
     made, is irrevocable. An election may be made under paragraph 
     (1) with respect to an interest in a trust with respect to 
     which gain is required to be recognized under subsection 
     (f)(1).
       ``(7) Interest.--For purposes of section 6601--
       ``(A) the last date for the payment of tax shall be 
     determined without regard to the election under this 
     subsection, and
       ``(B) section 6621(a)(2) shall be applied by substituting 
     `5 percentage points' for `3 percentage points' in 
     subparagraph (B) thereof.
       ``(c) Covered Expatriate.--For purposes of this section--
       ``(1) In general.--Except as provided in paragraph (2), the 
     term `covered expatriate' means an expatriate.
       ``(2) Exceptions.--An individual shall not be treated as a 
     covered expatriate if--
       ``(A) the individual--
       ``(i) became at birth a citizen of the United States and a 
     citizen of another country and, as of the expatriation date, 
     continues to be a citizen of, and is taxed as a resident of, 
     such other country, and
       ``(ii) has not been a resident of the United States (as 
     defined in section 7701(b)(1)(A)(ii)) during the 5 taxable 
     years ending with the taxable year during which the 
     expatriation date occurs, or
       ``(B)(i) the individual's relinquishment of United States 
     citizenship occurs before such individual attains age 18\1/
     2\, and
       ``(ii) the individual has been a resident of the United 
     States (as so defined) for not more than 5 taxable years 
     before the date of relinquishment.
       ``(d) Exempt Property; Special Rules for Pension Plans.--
       ``(1) Exempt property.--This section shall not apply to the 
     following:
       ``(A) United states real property interests.--Any United 
     States real property interest (as defined in section 
     897(c)(1)), other than stock of a United States real property 
     holding corporation which does not, on the day before the 
     expatriation date, meet the requirements of section 
     897(c)(2).
       ``(B) Specified property.--Any property or interest in 
     property not described in subparagraph (A) which the 
     Secretary specifies in regulations.
       ``(2) Special rules for certain retirement plans.--
       ``(A) In general.--If a covered expatriate holds on the day 
     before the expatriation date any interest in a retirement 
     plan to which this paragraph applies--
       ``(i) such interest shall not be treated as sold for 
     purposes of subsection (a)(1), but
       ``(ii) an amount equal to the present value of the 
     expatriate's nonforfeitable accrued benefit shall be treated 
     as having been received by such individual on such date as a 
     distribution under the plan.
       ``(B) Treatment of subsequent distributions.--In the case 
     of any distribution on or after the expatriation date to or 
     on behalf of the covered expatriate from a plan from which 
     the expatriate was treated as receiving a distribution under 
     subparagraph (A), the amount otherwise includible in gross 
     income by reason of the subsequent distribution shall be 
     reduced by the excess of the amount includible in gross 
     income under subparagraph (A) over any portion of such amount 
     to which this subparagraph previously applied.
       ``(C) Treatment of subsequent distributions by plan.--For 
     purposes of this title, a retirement plan to which this 
     paragraph applies, and any person acting on the plan's 
     behalf, shall treat any subsequent distribution described in 
     subparagraph (B) in the same manner as such distribution 
     would be treated without regard to this paragraph.
       ``(D) Applicable plans.--This paragraph shall apply to--
       ``(i) any qualified retirement plan (as defined in section 
     4974(c)),
       ``(ii) an eligible deferred compensation plan (as defined 
     in section 457(b)) of an eligible employer described in 
     section 457(e)(1)(A), and
       ``(iii) to the extent provided in regulations, any foreign 
     pension plan or similar retirement arrangements or programs.
       ``(e) Definitions.--For purposes of this section--
       ``(1) Expatriate.--The term `expatriate' means--
       ``(A) any United States citizen who relinquishes 
     citizenship, and
       ``(B) any long-term resident of the United States who--
       ``(i) ceases to be a lawful permanent resident of the 
     United States (within the meaning of section 7701(b)(6)), or
       ``(ii) commences to be treated as a resident of a foreign 
     country under the provisions of a tax treaty between the 
     United States and the foreign country and who does not waive 
     the benefits of such treaty applicable to residents of the 
     foreign country.
       ``(2) Expatriation date.--The term `expatriation date' 
     means--
       ``(A) the date an individual relinquishes United States 
     citizenship, or
       ``(B) in the case of a long-term resident of the United 
     States, the date of the event described in clause (i) or (ii) 
     of paragraph (1)(B).
       ``(3) Relinquishment of citizenship.--A citizen shall be 
     treated as relinquishing United States citizenship on the 
     earliest of--
       ``(A) the date the individual renounces such individual's 
     United States nationality before a diplomatic or consular 
     officer of the United States pursuant to paragraph (5) of 
     section 349(a) of the Immigration and Nationality Act (8 
     U.S.C. 1481(a)(5)),
       ``(B) the date the individual furnishes to the United 
     States Department of State a signed statement of voluntary 
     relinquishment of United States nationality confirming the 
     performance of an act of expatriation specified in paragraph 
     (1), (2), (3), or (4) of section 349(a) of the Immigration 
     and Nationality Act (8 U.S.C. 1481(a)(1)-(4)),
       ``(C) the date the United States Department of State issues 
     to the individual a certificate of loss of nationality, or
       ``(D) the date a court of the United States cancels a 
     naturalized citizen's certificate of naturalization.
     Subparagraph (A) or (B) shall not apply to any individual 
     unless the renunciation or voluntary relinquishment is 
     subsequently approved by the issuance to the individual of a 
     certificate of loss of nationality by the United States 
     Department of State.
       ``(4) Long-term resident.--The term `long-term resident' 
     has the meaning given to such term by section 877(e)(2).
       ``(f) Special Rules Applicable to Beneficiaries' Interests 
     in Trust.--
       ``(1) In general.--Except as provided in paragraph (2), if 
     an individual is determined under paragraph (3) to hold an 
     interest in a

[[Page S7154]]

     trust on the day before the expatriation date--
       ``(A) the individual shall not be treated as having sold 
     such interest,
       ``(B) such interest shall be treated as a separate share in 
     the trust, and
       ``(C)(i) such separate share shall be treated as a separate 
     trust consisting of the assets allocable to such share,
       ``(ii) the separate trust shall be treated as having sold 
     its assets on the day before the expatriation date for their 
     fair market value and as having distributed all of its assets 
     to the individual as of such time, and
       ``(iii) the individual shall be treated as having 
     recontributed the assets to the separate trust.
     Subsection (a)(2) shall apply to any income, gain, or loss of 
     the individual arising from a distribution described in 
     subparagraph (C)(ii). In determining the amount of such 
     distribution, proper adjustments shall be made for 
     liabilities of the trust allocable to an individual's share 
     in the trust.
       ``(2) Special rules for interests in qualified trusts.--
       ``(A) In general.--If the trust interest described in 
     paragraph (1) is an interest in a qualified trust--
       ``(i) paragraph (1) and subsection (a) shall not apply, and
       ``(ii) in addition to any other tax imposed by this title, 
     there is hereby imposed on each distribution with respect to 
     such interest a tax in the amount determined under 
     subparagraph (B).
       ``(B) Amount of tax.--The amount of tax under subparagraph 
     (A)(ii) shall be equal to the lesser of--
       ``(i) the highest rate of tax imposed by section 1(e) for 
     the taxable year which includes the day before the 
     expatriation date, multiplied by the amount of the 
     distribution, or
       ``(ii) the balance in the deferred tax account immediately 
     before the distribution determined without regard to any 
     increases under subparagraph (C)(ii) after the 30th day 
     preceding the distribution.
       ``(C) Deferred tax account.--For purposes of subparagraph 
     (B)(ii)--
       ``(i) Opening balance.--The opening balance in a deferred 
     tax account with respect to any trust interest is an amount 
     equal to the tax which would have been imposed on the 
     allocable expatriation gain with respect to the trust 
     interest if such gain had been included in gross income under 
     subsection (a).
       ``(ii) Increase for interest.--The balance in the deferred 
     tax account shall be increased by the amount of interest 
     determined (on the balance in the account at the time the 
     interest accrues), for periods after the 90th day after the 
     expatriation date, by using the rates and method applicable 
     under section 6621 for underpayments of tax for such periods, 
     except that section 6621(a)(2) shall be applied by 
     substituting `5 percentage points' for `3 percentage points' 
     in subparagraph (B) thereof.
       ``(iii) Decrease for taxes previously paid.--The balance in 
     the tax deferred account shall be reduced--

       ``(I) by the amount of taxes imposed by subparagraph (A) on 
     any distribution to the person holding the trust interest, 
     and
       ``(II) in the case of a person holding a nonvested 
     interest, to the extent provided in regulations, by the 
     amount of taxes imposed by subparagraph (A) on distributions 
     from the trust with respect to nonvested interests not held 
     by such person.

       ``(D) Allocable expatriation gain.--For purposes of this 
     paragraph, the allocable expatriation gain with respect to 
     any beneficiary's interest in a trust is the amount of gain 
     which would be allocable to such beneficiary's vested and 
     nonvested interests in the trust if the beneficiary held 
     directly all assets allocable to such interests.
       ``(E) Tax deducted and withheld.--
       ``(i) In general.--The tax imposed by subparagraph (A)(ii) 
     shall be deducted and withheld by the trustees from the 
     distribution to which it relates.
       ``(ii) Exception where failure to waive treaty rights.--If 
     an amount may not be deducted and withheld under clause (i) 
     by reason of the distributee failing to waive any treaty 
     right with respect to such distribution--

       ``(I) the tax imposed by subparagraph (A)(ii) shall be 
     imposed on the trust and each trustee shall be personally 
     liable for the amount of such tax, and
       ``(II) any other beneficiary of the trust shall be entitled 
     to recover from the distributee the amount of such tax 
     imposed on the other beneficiary.

       ``(F) Disposition.--If a trust ceases to be a qualified 
     trust at any time, a covered expatriate disposes of an 
     interest in a qualified trust, or a covered expatriate 
     holding an interest in a qualified trust dies, then, in lieu 
     of the tax imposed by subparagraph (A)(ii), there is hereby 
     imposed a tax equal to the lesser of--
       ``(i) the tax determined under paragraph (1) as if the day 
     before the expatriation date were the date of such cessation, 
     disposition, or death, whichever is applicable, or
       ``(ii) the balance in the tax deferred account immediately 
     before such date.
     Such tax shall be imposed on the trust and each trustee shall 
     be personally liable for the amount of such tax and any other 
     beneficiary of the trust shall be entitled to recover from 
     the covered expatriate or the estate the amount of such tax 
     imposed on the other beneficiary.
       ``(G) Definitions and special rules.--For purposes of this 
     paragraph--
       ``(i) Qualified trust.--The term `qualified trust' means a 
     trust which is described in section 7701(a)(30)(E).
       ``(ii) Vested interest.--The term `vested interest' means 
     any interest which, as of the day before the expatriation 
     date, is vested in the beneficiary.
       ``(iii) Nonvested interest.--The term `nonvested interest' 
     means, with respect to any beneficiary, any interest in a 
     trust which is not a vested interest. Such interest shall be 
     determined by assuming the maximum exercise of discretion in 
     favor of the beneficiary and the occurrence of all 
     contingencies in favor of the beneficiary.
       ``(iv) Adjustments.--The Secretary may provide for such 
     adjustments to the bases of assets in a trust or a deferred 
     tax account, and the timing of such adjustments, in order to 
     ensure that gain is taxed only once.
       ``(v) Coordination with retirement plan rules.--This 
     subsection shall not apply to an interest in a trust which is 
     part of a retirement plan to which subsection (d)(2) applies.
       ``(3) Determination of beneficiaries' interest in trust.--
       ``(A) Determinations under paragraph (1).--For purposes of 
     paragraph (1), a beneficiary's interest in a trust shall be 
     based upon all relevant facts and circumstances, including 
     the terms of the trust instrument and any letter of wishes or 
     similar document, historical patterns of trust distributions, 
     and the existence of and functions performed by a trust 
     protector or any similar adviser.
       ``(B) Other determinations.--For purposes of this section--
       ``(i) Constructive ownership.--If a beneficiary of a trust 
     is a corporation, partnership, trust, or estate, the 
     shareholders, partners, or beneficiaries shall be deemed to 
     be the trust beneficiaries for purposes of this section.
       ``(ii) Taxpayer return position.--A taxpayer shall clearly 
     indicate on its income tax return--

       ``(I) the methodology used to determine that taxpayer's 
     trust interest under this section, and
       ``(II) if the taxpayer knows (or has reason to know) that 
     any other beneficiary of such trust is using a different 
     methodology to determine such beneficiary's trust interest 
     under this section.

       ``(g) Termination of Deferrals, etc.--In the case of any 
     covered expatriate, notwithstanding any other provision of 
     this title--
       ``(1) any period during which recognition of income or gain 
     is deferred shall terminate on the day before the 
     expatriation date, and
       ``(2) any extension of time for payment of tax shall cease 
     to apply on the day before the expatriation date and the 
     unpaid portion of such tax shall be due and payable at the 
     time and in the manner prescribed by the Secretary.
       ``(h) Imposition of Tentative Tax.--
       ``(1) In general.--If an individual is required to include 
     any amount in gross income under subsection (a) for any 
     taxable year, there is hereby imposed, immediately before the 
     expatriation date, a tax in an amount equal to the amount of 
     tax which would be imposed if the taxable year were a short 
     taxable year ending on the expatriation date.
       ``(2) Due date.--The due date for any tax imposed by 
     paragraph (1) shall be the 90th day after the expatriation 
     date.
       ``(3) Treatment of tax.--Any tax paid under paragraph (1) 
     shall be treated as a payment of the tax imposed by this 
     chapter for the taxable year to which subsection (a) applies.
       ``(4) Deferral of tax.--The provisions of subsection (b) 
     shall apply to the tax imposed by this subsection to the 
     extent attributable to gain includible in gross income by 
     reason of this section.
       ``(i) Special Liens for Deferred Tax Amounts.--
       ``(1) Imposition of lien.--
       ``(A) In general.--If a covered expatriate makes an 
     election under subsection (a)(4) or (b) which results in the 
     deferral of any tax imposed by reason of subsection (a), the 
     deferred amount (including any interest, additional amount, 
     addition to tax, assessable penalty, and costs attributable 
     to the deferred amount) shall be a lien in favor of the 
     United States on all property of the expatriate located in 
     the United States (without regard to whether this section 
     applies to the property).
       ``(B) Deferred amount.--For purposes of this subsection, 
     the deferred amount is the amount of the increase in the 
     covered expatriate's income tax which, but for the election 
     under subsection (a)(4) or (b), would have occurred by reason 
     of this section for the taxable year including the 
     expatriation date.
       ``(2) Period of lien.--The lien imposed by this subsection 
     shall arise on the expatriation date and continue until--
       ``(A) the liability for tax by reason of this section is 
     satisfied or has become unenforceable by reason of lapse of 
     time, or
       ``(B) it is established to the satisfaction of the 
     Secretary that no further tax liability may arise by reason 
     of this section.
       ``(3) Certain rules apply.--The rules set forth in 
     paragraphs (1), (3), and (4) of section 6324A(d) shall apply 
     with respect to the lien imposed by this subsection as if it 
     were a lien imposed by section 6324A.

[[Page S7155]]

       ``(j) Regulations.--The Secretary shall prescribe such 
     regulations as may be necessary or appropriate to carry out 
     the purposes of this section.''.
       (b) Inclusion in Income of Gifts and Bequests Received by 
     United States Citizens and Residents From Expatriates.--
     Section 102 (relating to gifts, etc. not included in gross 
     income) is amended by adding at the end the following new 
     subsection:
       ``(d) Gifts and Inheritances From Covered Expatriates.--
       ``(1) In general.--Subsection (a) shall not exclude from 
     gross income the value of any property acquired by gift, 
     bequest, devise, or inheritance from a covered expatriate 
     after the expatriation date. For purposes of this subsection, 
     any term used in this subsection which is also used in 
     section 877A shall have the same meaning as when used in 
     section 877A.
       ``(2) Exceptions for transfers otherwise subject to estate 
     or gift tax.--Paragraph (1) shall not apply to any property 
     if either--
       ``(A) the gift, bequest, devise, or inheritance is--
       ``(i) shown on a timely filed return of tax imposed by 
     chapter 12 as a taxable gift by the covered expatriate, or
       ``(ii) included in the gross estate of the covered 
     expatriate for purposes of chapter 11 and shown on a timely 
     filed return of tax imposed by chapter 11 of the estate of 
     the covered expatriate, or
       ``(B) no such return was timely filed but no such return 
     would have been required to be filed even if the covered 
     expatriate were a citizen or long-term resident of the United 
     States.''.
       (c) Definition of Termination of United States 
     Citizenship.--Section 7701(a) is amended by adding at the end 
     the following new paragraph:
       ``(49) Termination of united states citizenship.--
       ``(A) In general.--An individual shall not cease to be 
     treated as a United States citizen before the date on which 
     the individual's citizenship is treated as relinquished under 
     section 877A(e)(3).
       ``(B) Dual citizens.--Under regulations prescribed by the 
     Secretary, subparagraph (A) shall not apply to an individual 
     who became at birth a citizen of the United States and a 
     citizen of another country.''.
       (d) Ineligibility for Visa or Admission to United States.--
       (1) In general.--Section 212(a)(10)(E) of the Immigration 
     and Nationality Act (8 U.S.C. 1182(a)(10)(E)) is amended to 
     read as follows:
       ``(E) Former citizens not in compliance with expatriation 
     revenue provisions.--Any alien who is a former citizen of the 
     United States who relinquishes United States citizenship 
     (within the meaning of section 877A(e)(3) of the Internal 
     Revenue Code of 1986) and who is not in compliance with 
     section 877A of such Code (relating to expatriation).''.
       (2) Availability of information.--
       (A) In general.--Section 6103(l) (relating to disclosure of 
     returns and return information for purposes other than tax 
     administration) is amended by adding at the end the following 
     new paragraph:
       ``(21) Disclosure to deny visa or admission to certain 
     expatriates.--Upon written request of the Attorney General or 
     the Attorney General's delegate, the Secretary shall disclose 
     whether an individual is in compliance with section 877A (and 
     if not in compliance, any items of noncompliance) to officers 
     and employees of the Federal agency responsible for 
     administering section 212(a)(10)(E) of the Immigration and 
     Nationality Act solely for the purpose of, and to the extent 
     necessary in, administering such section 212(a)(10)(E).''.
       (B) Safeguards.--Section 6103(p)(4) (relating to 
     safeguards) is amended by striking ``or (20)'' each place it 
     appears and inserting ``(20), or (21)''.
       (3) Effective dates.--The amendments made by this 
     subsection shall apply to individuals who relinquish United 
     States citizenship on or after the date of the enactment of 
     this Act.
       (e) Conforming Amendments.--
       (1) Section 877 is amended by adding at the end the 
     following new subsection:
       ``(h) Application.--This section shall not apply to an 
     expatriate (as defined in section 877A(e)) whose expatriation 
     date (as so defined) occurs on or after the date of the 
     enactment of the Safe, Accountable, Flexible, and Efficient 
     Transportation Equity Act of 2005.''.
       (2) Section 2107 is amended by adding at the end the 
     following new subsection:
       ``(f) Application.--This section shall not apply to any 
     expatriate subject to section 877A.''.
       (3) Section 2501(a)(3) is amended by adding at the end the 
     following new subparagraph:
       ``(C) Application.--This paragraph shall not apply to any 
     expatriate subject to section 877A.''.
       (f) Clerical Amendment.--The table of sections for subpart 
     A of part II of subchapter N of chapter 1 is amended by 
     inserting after the item relating to section 877 the 
     following new item:

``Sec. 877A. Tax responsibilities of expatriation.''.
       (g) Effective Date.--
       (1) In general.--Except as provided in this subsection, the 
     amendments made by this section shall apply to expatriates 
     (within the meaning of section 877A(e) of the Internal 
     Revenue Code of 1986, as added by this section) whose 
     expatriation date (as so defined) occurs on or after the date 
     of the enactment of this Act.
       (2) Gifts and bequests.--Section 102(d) of the Internal 
     Revenue Code of 1986 (as added by subsection (b)) shall apply 
     to gifts and bequests received on or after the date of the 
     enactment of this Act, from an individual or the estate of an 
     individual whose expatriation date (as so defined) occurs 
     after such date.
       (3) Due date for tentative tax.--The due date under section 
     877A(h)(2) of the Internal Revenue Code of 1986, as added by 
     this section, shall in no event occur before the 90th day 
     after the date of the enactment of this Act.

     SEC. 1723. DISALLOWANCE OF DEDUCTION FOR PUNITIVE DAMAGES.

       (a) Disallowance of Deduction.--
       (1) In general.--Section 162(g) (relating to treble damage 
     payments under the antitrust laws) is amended--
       (A) by redesignating paragraphs (1) and (2) as 
     subparagraphs (A) and (B), respectively,
       (B) by striking ``If'' and inserting:
       ``(1) Treble damages.--If'', and
       (C) by adding at the end the following new paragraph:
       ``(2) Punitive damages.--No deduction shall be allowed 
     under this chapter for any amount paid or incurred for 
     punitive damages in connection with any judgment in, or 
     settlement of, any action. This paragraph shall not apply to 
     punitive damages described in section 104(c).''.
       (2) Conforming amendment.--The heading for section 162(g) 
     is amended by inserting ``or Punitive Damages'' after 
     ``Laws''.
       (b) Inclusion in Income of Punitive Damages Paid by Insurer 
     or Otherwise.--
       (1) In general.--Part II of subchapter B of chapter 1 
     (relating to items specifically included in gross income) is 
     amended by adding at the end the following new section:

     ``SEC. 91. PUNITIVE DAMAGES COMPENSATED BY INSURANCE OR 
                   OTHERWISE.

       ``Gross income shall include any amount paid to or on 
     behalf of a taxpayer as insurance or otherwise by reason of 
     the taxpayer's liability (or agreement) to pay punitive 
     damages.''.
       (2) Reporting requirements.--Section 6041 (relating to 
     information at source) is amended by adding at the end the 
     following new subsection:
       ``(f) Section To Apply to Punitive Damages Compensation.--
     This section shall apply to payments by a person to or on 
     behalf of another person as insurance or otherwise by reason 
     of the other person's liability (or agreement) to pay 
     punitive damages.''.
       (3) Conforming amendment.--The table of sections for part 
     II of subchapter B of chapter 1 is amended by adding at the 
     end the following new item:

``Sec. 91. Punitive damages compensated by insurance or otherwise.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to damages paid or incurred on or after the date 
     of the enactment of this Act.

     SEC. 1724. APPLICATION OF EARNINGS STRIPPING RULES TO 
                   PARTNERS WHICH ARE C CORPORATIONS.

       (a) In General.--Section 163(j) (relating to limitation on 
     deduction for interest on certain indebtedness) is amended by 
     redesignating paragraph (8) as paragraph (9) and by inserting 
     after paragraph (7) the following new paragraph:
       ``(8) Allocations to certain corporate partners.--If a C 
     corporation is a partner in a partnership--
       ``(A) the corporation's allocable share of indebtedness and 
     interest income of the partnership shall be taken into 
     account in applying this subsection to the corporation, and
       ``(B) if a deduction is not disallowed under this 
     subsection with respect to any interest expense of the 
     partnership, this subsection shall be applied separately in 
     determining whether a deduction is allowable to the 
     corporation with respect to the corporation's allocable share 
     of such interest expense.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning on or after the date 
     of the enactment of this Act.

     SEC. 1725. PROHIBITION ON DEFERRAL OF GAIN FROM THE EXERCISE 
                   OF STOCK OPTIONS AND RESTRICTED STOCK GAINS 
                   THROUGH DEFERRED COMPENSATION ARRANGEMENTS.

       (a) In General.--Section 83 (relating to property 
     transferred in connection with performance of services) is 
     amending by adding at the end the following new subsection:
       ``(i) Prohibition on Additional Deferral Through Deferred 
     Compensation Arrangements.--If a taxpayer exchanges--
       ``(1) an option to purchase employer securities--
       ``(A) to which subsection (a) applies, or
       ``(B) which is described in subsection (e)(3), or
       ``(2) employer securities or any other property based on 
     employer securities transferred to the taxpayer,
     for a right to receive future payments, then, notwithstanding 
     any other provision of this title, there shall be included in 
     gross income for the taxable year of the exchange an amount 
     equal to the present value of such right (or such other 
     amount as the Secretary may by regulations specify). For 
     purposes of this subsection, the term `employer securities' 
     includes any security issued by the employer.''.
       (b) Controlled Group Rules.--Section 414(t)(2) is amended 
     by inserting ``83(i),'' after ``79,''.

[[Page S7156]]

       (c) Effective Date.--The amendments made by this section 
     shall apply to any exchange after the date of the enactment 
     of this Act.

     SEC. 1726. LIMITATION OF EMPLOYER DEDUCTION FOR CERTAIN 
                   ENTERTAINMENT EXPENSES.

       (a) In General.--Paragraph (2) of section 274(e) (relating 
     to expenses treated as compensation) is amended to read as 
     follows:
       ``(2) Expenses treated as compensation.--Expenses for 
     goods, services, and facilities, to the extent that the 
     expenses do not exceed the amount of the expenses which are 
     treated by the taxpayer, with respect to the recipient of the 
     entertainment, amusement, or recreation, as compensation to 
     an employee on the taxpayer's return of tax under this 
     chapter and as wages to such employee for purposes of chapter 
     24 (relating to withholding of income tax at source on 
     wages).''.
       (b) Persons Not Employees.--Paragraph (9) of section 274(e) 
     is amended by striking ``to the extent that the expenses are 
     includible in the gross income'' and inserting ``to the 
     extent that the expenses do not exceed the amount of the 
     expenses which are includible in the gross income''.
       (c) Effective Date.--The amendment made by this section 
     shall apply to expenses incurred after the date of the 
     enactment of this Act.

     SEC. 1727. INCREASE IN PENALTY FOR BAD CHECKS AND MONEY 
                   ORDERS.

       (a) In General.--Section 6657 (relating to bad checks) is 
     amended--
       (1) by striking ``$750'' and inserting ``$1,250'', and
       (2) by striking ``$15'' and inserting ``$25''.
       (b) Effective Date.--The amendments made by this section 
     apply to checks or money orders received after the date of 
     the enactment of this Act.

     SEC. 1728. ELIMINATION OF DOUBLE DEDUCTION ON MINING 
                   EXPLORATION AND DEVELOPMENT COSTS UNDER THE 
                   MINIMUM TAX.

       (a) In General.--Section 57(a)(1) (relating to depletion) 
     is amended by striking ``for the taxable year)'' and 
     inserting ``for the taxable year and determined without 
     regard to so much of the basis as is attributable to mining 
     exploration and development costs described in section 616 or 
     617 for which a deduction is allowable for any taxable year 
     under this part).''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment this Act.

PART II--IMPROVEMENTS IN EFFICIENCY AND SAFEGUARDS IN INTERNAL REVENUE 
                           SERVICE COLLECTION

     SEC. 1731. WAIVER OF USER FEE FOR INSTALLMENT AGREEMENTS 
                   USING AUTOMATED WITHDRAWALS.

       (a) In General.--Section 6159 (relating to agreements for 
     payment of tax liability in installments) is amended by 
     redesignating subsection (e) as subsection (f) and by 
     inserting after subsection (d) the following:
       ``(e) Waiver of User Fees for Installment Agreements Using 
     Automated Withdrawals.--In the case of a taxpayer who enters 
     into an installment agreement in which automated installment 
     payments are agreed to, the Secretary shall waive the fee (if 
     any) for entering into the installment agreement.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to agreements entered into on or after the date 
     which is 180 days after the date of the enactment of this 
     Act.

     SEC. 1732. TERMINATION OF INSTALLMENT AGREEMENTS.

       (a) In General.--Section 6159(b)(4) (relating to failure to 
     pay an installment or any other tax liability when due or to 
     provide requested financial information) is amended by 
     striking ``or'' at the end of subparagraph (B), by 
     redesignating subparagraph (C) as subparagraph (E), and by 
     inserting after subparagraph (B) the following:
       ``(C) to make a Federal tax deposit under section 6302 at 
     the time such deposit is required to be made,
       ``(D) to file a return of tax imposed under this title by 
     its due date (including extensions), or''.
       (b) Conforming Amendment.--The heading for section 
     6159(b)(4) is amended by striking ``Failure to pay an 
     installment or any other tax liability when due or to provide 
     requested financial information'' and inserting ``Failure to 
     make payments or deposits or file returns when due or to 
     provide requested financial information''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to failures occurring on or after the date of the 
     enactment of this Act.

     SEC. 1733. OFFICE OF CHIEF COUNSEL REVIEW OF OFFERS-IN-
                   COMPROMISE.

       (a) In General.--Section 7122(b) (relating to record) is 
     amended by striking ``Whenever a compromise'' and all that 
     follows through ``his delegate'' and inserting ``If the 
     Secretary determines that an opinion of the General Counsel 
     for the Department of the Treasury, or the Counsel's 
     delegate, is required with respect to a compromise, there 
     shall be placed on file in the office of the Secretary such 
     opinion''.
       (b) Conforming Amendments.--Section 7122(b) is amended by 
     striking the second and third sentences.
       (c) Effective Date.--The amendments made by this section 
     shall apply to offers-in-compromise submitted or pending on 
     or after the date of the enactment of this Act.

     SEC. 1734. PARTIAL PAYMENTS REQUIRED WITH SUBMISSION OF 
                   OFFERS-IN-COMPROMISE.

       (a) In General.--Section 7122 (relating to compromises), as 
     amended by this Act, is amended by redesignating subsections 
     (c), (d), and (e) as subsections (d), (e), and (f), 
     respectively, and by inserting after subsection (b) the 
     following new subsection:
       ``(c) Rules for Submission of Offers-in-compromise.--
       ``(1) Partial payment required with submission.--
       ``(A) Lump-sum offers.--
       ``(i) In general.--The submission of any lump-sum offer-in-
     compromise shall be accompanied by the payment of 20 percent 
     of amount of such offer.
       ``(ii) Lump-sum offer-in-compromise.--For purposes of this 
     section, the term `lump-sum offer-in-compromise' means any 
     offer of payments made in 5 or fewer installments.
       ``(B) Periodic payment offers.--The submission of any 
     periodic payment offer-in-compromise shall be accompanied by 
     the payment of the amount of the first proposed installment 
     and each proposed installment due during the period such 
     offer is being evaluated for acceptance and has not been 
     rejected by the Secretary. Any failure to make a payment 
     required under the preceding sentence shall be deemed a 
     withdrawal of the offer-in-compromise.
       ``(2) Rules of application.--
       ``(A) Use of payment.--The application of any payment made 
     under this subsection to the assessed tax or other amounts 
     imposed under this title with respect to such tax may be 
     specified by the taxpayer.
       ``(B) No user fee imposed.--Any user fee which would 
     otherwise be imposed under this section shall not be imposed 
     on any offer-in-compromise accompanied by a payment required 
     under this subsection.''.
       (b) Additional Rules Relating to Treatment of Offers.--
       (1) Unprocessable offer if payment requirements are not 
     met.--Paragraph (3) of section 7122(d) (relating to standards 
     for evaluation of offers), as redesignated by subsection (a), 
     is amended by striking ``; and'' at the end of subparagraph 
     (A) and inserting a comma, by striking the period at the end 
     of subparagraph (B) and inserting ``, and'', and by adding at 
     the end the following new subparagraph:
       ``(C) any offer-in-compromise which does not meet the 
     requirements of subsection (c) shall be returned to the 
     taxpayer as unprocessable.''.
       (2) Deemed acceptance of offer not rejected within certain 
     period.--Section 7122, as amended by subsection (a), is 
     amended by adding at the end the following new subsection:
       ``(g) Deemed Acceptance of Offer Not Rejected Within 
     Certain Period.--Any offer-in-compromise submitted under this 
     section shall be deemed to be accepted by the Secretary if 
     such offer is not rejected by the Secretary before the date 
     which is 24 months after the date of the submission of such 
     offer (12 months for offers-in-compromise submitted after the 
     date which is 5 years after the date of the enactment of this 
     subsection). For purposes of the preceding sentence, any 
     period during which any tax liability which is the subject of 
     such offer-in-compromise is in dispute in any judicial 
     proceeding shall not be taken in to account in determining 
     the expiration of the 24-month period (or 12-month period, if 
     applicable).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to offers-in-compromise submitted on and after 
     the date which is 60 days after the date of the enactment of 
     this Act.

     SEC. 1735. JOINT TASK FORCE ON OFFERS-IN-COMPROMISE.

       (a) In General.--The Secretary of the Treasury shall 
     establish a joint task force--
       (1) to review the Internal Revenue Service's determinations 
     with respect to offers-in-compromise, including offers which 
     raise equitable, public policy, or economic hardship grounds 
     for compromise of a tax liability under section 7122 of the 
     Internal Revenue Code of 1986,
       (2) to review the extent to which the Internal Revenue 
     Service has used its authority to resolve longstanding cases 
     by forgoing penalties and interest which have accumulated as 
     a result of delay in determining the taxpayer's liability,
       (3) to provide recommendations as to whether the Internal 
     Revenue Service's evaluation of offers-in-compromise should 
     include--
       (A) the taxpayer's compliance history,
       (B) errors by the Internal Revenue Service with respect to 
     the underlying tax, and
       (C) wrongful acts by a third party which gave rise to the 
     liability, and
       (4) to annually report to the Committee on Finance of the 
     Senate and the Committee on Ways and Means of the House of 
     Representatives (beginning in 2006) regarding such review and 
     recommendations.
       (b) Members of Joint Task Force.--The membership of the 
     joint task force under subsection (a) shall consist of 1 
     representative each from the Department of the Treasury, the 
     Internal Revenue Service Oversight Board, the Office of the 
     Chief Counsel for the Internal Revenue Service, the Office of 
     the Taxpayer Advocate, the Office of Appeals, and the 
     division of the Internal Revenue Service charged with 
     operating the offer-in-compromise program.
       (c) Report of National Taxpayer Advocate.--
       (1) In general.--Clause (ii) of section 7803(c)(2)(B) 
     (relating to annual reports) is amended by striking ``and'' 
     at the end of subclause (X), by redesignating subclause (XI) 
     as

[[Page S7157]]

     subclause (XII), and by inserting after subclause (X) the 
     following new subclause:

       ``(XI) include a list of the factors taxpayers have raised 
     to support their claims for offers-in-compromise relief, the 
     number of such offers submitted, accepted, and rejected, the 
     number of such offers appealed, the period during which 
     review of such offers have remained pending, and the efforts 
     the Internal Revenue Service has made to correctly identify 
     such offers, including the training of employees in 
     identifying and evaluating such offers.''.

       (2) Effective date.--The amendment made by paragraph (1) 
     shall apply to reports in calendar year 2006 and thereafter.
                                 ______
                                 
  SA 931. Mr. LEVIN (for himself and Mr. Bayh) submitted an amendment 
intended to be proposed by him to the bill H.R. 6, To ensure jobs for 
our future with secure, affordable, and reliable energy; which was 
ordered to lie on the table; as follows:

       At the end add the following:

  TITLE XVII--TAX INCENTIVES FOR ALTERNATIVE MOTOR VEHICLES AND FUELS

     SEC. 1700. AMENDMENT OF 1986 CODE.

       Except as otherwise expressly provided, whenever in this 
     title an amendment or repeal is expressed in terms of an 
     amendment to, or repeal of, a section or other provision, the 
     reference shall be considered to be made to a section or 
     other provision of the Internal Revenue Code of 1986.

                       Subtitle A--Tax Incentives

     SEC. 1701. ALTERNATIVE MOTOR VEHICLE CREDIT.

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

     ``SEC. 30B. ALTERNATIVE MOTOR VEHICLE CREDIT.

       ``(a) Allowance of Credit.--There shall be allowed as a 
     credit against the tax imposed by this chapter for the 
     taxable year an amount equal to the sum of--
       ``(1) the new qualified fuel cell motor vehicle credit 
     determined under subsection (b),
       ``(2) the new advanced lean burn technology motor vehicle 
     credit determined under subsection (c),
       ``(3) the new qualified hybrid motor vehicle credit 
     determined under subsection (d), and
       ``(4) the new qualified alternative fuel motor vehicle 
     credit determined under subsection (e).
       ``(b) New Qualified Fuel Cell Motor Vehicle Credit.--
       ``(1) In general.--For purposes of subsection (a), the new 
     qualified fuel cell motor vehicle credit determined under 
     this subsection with respect to a new qualified fuel cell 
     motor vehicle placed in service by the taxpayer during the 
     taxable year is--
       ``(A) $8,000 if such vehicle has a gross vehicle weight 
     rating of not more than 8,500 pounds,
       ``(B) $10,000, if such vehicle has a gross vehicle weight 
     rating of more than 8,500 pounds but not more than 14,000 
     pounds,
       ``(C) $20,000, if such vehicle has a gross vehicle weight 
     rating of more than 14,000 pounds but not more than 26,000 
     pounds, and
       ``(D) $40,000, if such vehicle has a gross vehicle weight 
     rating of more than 26,000 pounds.
       ``(2) Increase for fuel efficiency.--
       ``(A) In general.--The amount determined under paragraph 
     (1)(A) with respect to a new qualified fuel cell motor 
     vehicle which is a passenger automobile or light truck shall 
     be increased by--
       ``(i) $1,000, if such vehicle achieves at least 150 percent 
     but less than 175 percent of the 2002 model year city fuel 
     economy,
       ``(ii) $1,500, if such vehicle achieves at least 175 
     percent but less than 200 percent of the 2002 model year city 
     fuel economy,
       ``(iii) $2,000, if such vehicle achieves at least 200 
     percent but less than 225 percent of the 2002 model year city 
     fuel economy,
       ``(iv) $2,500, if such vehicle achieves at least 225 
     percent but less than 250 percent of the 2002 model year city 
     fuel economy,
       ``(v) $3,000, if such vehicle achieves at least 250 percent 
     but less than 275 percent of the 2002 model year city fuel 
     economy,
       ``(vi) $3,500, if such vehicle achieves at least 275 
     percent but less than 300 percent of the 2002 model year city 
     fuel economy, and
       ``(vii) $4,000, if such vehicle achieves at least 300 
     percent of the 2002 model year city fuel economy.
       ``(B) 2002 model year city fuel economy.--For purposes of 
     subparagraph (A), the 2002 model year city fuel economy with 
     respect to a vehicle shall be determined in accordance with 
     the following tables:
       ``(i) In the case of a passenger automobile:
``If vehicle inertia weight clThe 2002 model year city fuel economy is:
1,500 or 1,750 lbs.............................................45.2 mpg
2,000 lbs......................................................39.6 mpg
2,250 lbs......................................................35.2 mpg
2,500 lbs......................................................31.7 mpg
2,750 lbs......................................................28.8 mpg
3,000 lbs......................................................26.4 mpg
3,500 lbs......................................................22.6 mpg
4,000 lbs......................................................19.8 mpg
4,500 lbs......................................................17.6 mpg
5,000 lbs......................................................15.9 mpg
5,500 lbs......................................................14.4 mpg
6,000 lbs......................................................13.2 mpg
6,500 lbs......................................................12.2 mpg
7,000 to 8,500 lbs............................................11.3 mpg.
       ``(ii) In the case of a light truck:

``If vehicle inertia weight clThe 2002 model year city fuel economy is:
1,500 or 1,750 lbs.............................................39.4 mpg
2,000 lbs......................................................35.2 mpg
2,250 lbs......................................................31.8 mpg
2,500 lbs......................................................29.0 mpg
2,750 lbs......................................................26.8 mpg
3,000 lbs......................................................24.9 mpg
3,500 lbs......................................................21.8 mpg
4,000 lbs......................................................19.4 mpg
4,500 lbs......................................................17.6 mpg
5,000 lbs......................................................16.1 mpg
5,500 lbs......................................................14.8 mpg
6,000 lbs......................................................13.7 mpg
6,500 lbs......................................................12.8 mpg
7,000 to 8,500 lbs............................................12.1 mpg.
       ``(C) Vehicle inertia weight class.--For purposes of 
     subparagraph (B), the term `vehicle inertia weight class' has 
     the same meaning as when defined in regulations prescribed by 
     the Administrator of the Environmental Protection Agency for 
     purposes of the administration of title II of the Clean Air 
     Act (42 U.S.C. 7521 et seq.).
       ``(3) New qualified fuel cell motor vehicle.--For purposes 
     of this subsection, the term `new qualified fuel cell motor 
     vehicle' means a motor vehicle--
       ``(A) which is propelled by power derived from 1 or more 
     cells which convert chemical energy directly into electricity 
     by combining oxygen with hydrogen fuel which is stored on 
     board the vehicle in any form and may or may not require 
     reformation prior to use,
       ``(B) which, in the case of a passenger automobile or light 
     truck, has received on or after the date of the enactment of 
     this section a certificate that such vehicle meets or exceeds 
     the Bin 5 Tier II emission level established in regulations 
     prescribed by the Administrator of the Environmental 
     Protection Agency under section 202(i) of the Clean Air Act 
     for that make and model year vehicle,
       ``(C) the original use of which commences with the 
     taxpayer,
       ``(D) which is acquired for use or lease by the taxpayer 
     and not for resale, and
       ``(E) which is made by a manufacturer.
       ``(c) New Advanced Lean Burn Technology Motor Vehicle 
     Credit.--
       ``(1) In general.--For purposes of subsection (a), the new 
     advanced lean burn technology motor vehicle credit determined 
     under this subsection with respect to a new advanced lean 
     burn technology motor vehicle placed in service by the 
     taxpayer during the taxable year is the credit amount 
     determined under paragraph (2).
       ``(2) Credit amount.--
       ``(A) Fuel economy.--
       ``(i) In general.--The credit amount determined under this 
     paragraph shall be determined in accordance with the 
     following table:
``In the case of a vehicle which achieves a fuel economy (expressed as 
  a percentage of the 2002 model year city fuel eThe credit amount is--
At least 125 percent but less than 150 percent...................$600  
At least 150 percent but less than 175 percent...................$1,100
At least 175 percent but less than 200 percent...................$1,600
At least 200 percent but less than 225 percent...................$2,100
At least 225 percent but less than 250 percent...................$2,600
At least 250 percent............................................$3,100.
       ``(ii) 2002 model year city fuel economy.--For purposes of 
     clause (i), the 2002 model year city fuel economy with 
     respect to a vehicle shall be determined on a gasoline gallon 
     equivalent basis as determined by the Administrator of the 
     Environmental Protection Agency using the tables provided in 
     subsection (b)(2)(B) with respect to such vehicle.
       ``(B) Conservation credit.--The amount determined under 
     subparagraph (A) with respect to a new advanced lean burn 
     technology motor vehicle shall be increased by the 
     conservation credit amount determined in accordance with the 
     following table:
``In the case of a vehicle which achieves a lifetime fuel savings 
  (expressed in gallons of gasoline) The conservation credit amountis--
At least 1,200 but less than 1,800...............................$700  
At least 1,800 but less than 2,400.............................$1,200  
At least 2,400 but less than 3,000.............................$1,700  
At least 3,000..................................................$2,200.
       ``(C) Option to use like vehicle.--At the option of the 
     vehicle manufacturer, the increase for fuel efficiency and 
     conservation credit may be calculated by comparing the new 
     qualified advanced lean burn technology motor vehicle to a 
     like vehicle.
       ``(3) New advanced lean burn technology motor vehicle.--For 
     purposes of this subsection, the term `new advanced lean burn 
     technology motor vehicle' means a passenger automobile or a 
     light truck--
       ``(A) with an internal combustion engine which--
       ``(i) is designed to operate primarily using more air than 
     is necessary for complete combustion of the fuel,
       ``(ii) incorporates direct injection,
       ``(iii) achieves at least 125 percent of the 2002 model 
     year city fuel economy,
       ``(iv) for 2004 and later model vehicles, has received a 
     certificate that such vehicle meets or exceeds--

       ``(I) in the case of a vehicle having a gross vehicle 
     weight rating of 6,000 pounds or less,

[[Page S7158]]

     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, and
       ``(II) in the case of a vehicle having a gross vehicle 
     weight rating of more than 6,000 pounds but not more than 
     8,500 pounds, the Bin 8 Tier II emission standard which is so 
     established.

       ``(B) the original use of which commences with the 
     taxpayer,
       ``(C) which is acquired for use or lease by the taxpayer 
     and not for resale, and
       ``(D) which is made by a manufacturer.
       ``(4) Like vehicle.--The term `like vehicle' for a new 
     qualified advanced lean burn technology motor vehicle derived 
     from a conventional production vehicle produced in the same 
     model year means a model that is equivalent in the following 
     areas:
       ``(A) Body style (2-door or 4-door),
       ``(B) Transmission (automatic or manual),
       ``(C) Acceleration performance ( 0.05 seconds).
       ``(D) Drivetrain (2-wheel drive or 4-wheel drive).
       ``(E) Certification by the Administrator of the 
     Environmental Protection Agency.
       ``(5) Lifetime fuel savings.--For purposes of this 
     subsection, the term `lifetime fuel savings' means, in the 
     case of any new advanced lean burn technology motor vehicle, 
     an amount equal to the excess (if any) of--
       ``(A) 120,000 divided by the 2002 model year city fuel 
     economy for the vehicle inertia weight class, over
       ``(B) 120,000 divided by the city fuel economy for such 
     vehicle.
       ``(d) New Qualified Hybrid Motor Vehicle Credit.--
       ``(1) In general.--For purposes of subsection (a), the new 
     qualified hybrid motor vehicle credit determined under this 
     subsection with respect to a new qualified hybrid motor 
     vehicle placed in service by the taxpayer during the taxable 
     year is the credit amount determined under paragraph (2) or 
     (3).
       ``(2) Credit amount for lighter vehicles.--In the case of a 
     new qualified hybrid motor vehicle which is a passenger 
     automobile, medium duty passenger vehicle, or light truck, 
     the credit amount determined under this paragraph is equal to 
     the sum of following amounts:
       ``(A) Fuel economy.--The amount which would be determined 
     under subsection (c)(2)(A) if such vehicle were a vehicle 
     referred to in such subsection.
       ``(B) Conservation credit.--The amount which would be 
     determined under subsection (c)(2)(B) if such vehicle were a 
     vehicle referred to in such subsection.
       ``(iii) Option to use like vehicle.--For purposes of clause 
     (i), at the option of the vehicle manufacturer, the increase 
     for fuel efficiency and conservation credit may be calculated 
     by comparing the new qualified hybrid motor vehicle to a like 
     vehicle (as defined in subsection (c)(4)).
       ``(3) Credit amount for heavier vehicles.--
       ``(A) In general.--In the case of a new qualified hybrid 
     motor vehicle which is a heavy duty hybrid motor vehicle, the 
     credit amount determined under this paragraph is an amount 
     equal to the applicable percentage of the incremental cost of 
     such vehicle placed in service by the taxpayer during the 
     taxable year.
       ``(B) Incremental cost.--For purposes of this paragraph, 
     the incremental cost of any heavy duty hybrid motor vehicle 
     is equal to the amount of the excess of the manufacturer's 
     suggested retail price for such vehicle over such price for a 
     comparable gasoline or diesel fuel motor vehicle of the same 
     model, to the extent such amount does not exceed--
       ``(i) $7,500, if such vehicle has a gross vehicle weight 
     rating of more than 8,500 pounds but not more than 14,000 
     pounds,
       ``(ii) $15,000, if such vehicle has a gross vehicle weight 
     rating of more than 14,000 pounds but not more than 26,000 
     pounds, and
       ``(iii) $30,000, if such vehicle has a gross vehicle weight 
     rating of more than 26,000 pounds.
       ``(C) Applicable percentage.--For purposes of subparagraph 
     (A), the applicable percentage shall be determined in 
     accordance with the following table:

``If percent increase in fuel economy of hybrid over comparable vehicle 
  is:                                     The applicable percentage is:
At least 30 but less than 40 percent........................20 percent.
At least 40 but less than 50 percent........................30 percent.
At least 50 percent.........................................40 percent.
       ``(4) New qualified hybrid motor vehicle.--For purposes of 
     this subsection--
       ``(A) In general.--The term `new qualified hybrid motor 
     vehicle' means a motor vehicle--
       ``(i) which draws propulsion energy from onboard sources of 
     stored energy which are both--

       ``(I) an internal combustion or heat engine using 
     consumable fuel, and
       ``(II) a rechargeable energy storage system,

       ``(ii) which, in the case of a passenger automobile, medium 
     duty passenger vehicle, or light truck--

       ``(I) having a gross vehicle weight rating of 6,000 pounds 
     or less, has received a certificate that such vehicle meets 
     or exceeds the Bin 5 Tier II emission level established in 
     regulations prescribed by the Administrator of the 
     Environmental Protection Agency under section 202(i) of the 
     Clean Air Act for that make and model year vehicle,
       ``(II) having a gross vehicle weight rating of more than 
     6,000 pounds but not more than 8,500 pounds, has received a 
     certificate that such vehicle meets or exceeds the Bin 8 Tier 
     II emission standard which is so established,
       ``(III) has received a certificate of conformity under the 
     Clean Air Act and meets or exceeds the equivalent qualifying 
     California low emission vehicle standard under section 
     243(e)(2) of the Clean Air Act for that make and model year, 
     and
       ``(IV) has a maximum available power of at least 5 percent,

       ``(iii) which, in the case of a heavy duty hybrid motor 
     vehicle--

       ``(I) having a gross vehicle weight rating of more than 
     8,500 but not more than 14,000 pounds, has a maximum 
     available power of at least 10 percent, and
       ``(II) having a gross vehicle weight rating of more than 
     14,000 pounds, has a maximum available power of at least 15 
     percent,

       ``(iv) the original use of which commences with the 
     taxpayer,
       ``(v) which is acquired for use or lease by the taxpayer 
     and not for resale, and
       ``(vi) which is made by a manufacturer.
       ``(B) Consumable fuel.--For purposes of subparagraph 
     (A)(i)(I), the term `consumable fuel' means any solid, 
     liquid, or gaseous matter which releases energy when consumed 
     by an auxiliary power unit.
       ``(C) Maximum available power.--
       ``(i) Passenger automobile, medium duty passenger vehicle, 
     or light truck.--For purposes of subparagraph (A)(ii)(II), 
     the term `maximum available power' means the maximum power 
     available from the rechargeable energy storage system, during 
     a standard 10 second pulse power or equivalent test, divided 
     by such maximum power and the SAE net power of the heat 
     engine.
       ``(ii) Heavy duty hybrid motor vehicle.--For purposes of 
     subparagraph (A)(iii), the term `maximum available power' 
     means the maximum power available from the rechargeable 
     energy storage system, during a standard 10 second pulse 
     power or equivalent test, divided by the vehicle's total 
     traction power. The term `total traction power' means the sum 
     of the peak power from the rechargeable energy storage system 
     and the heat engine peak power of the vehicle, except that if 
     such storage system is the sole means by which the vehicle 
     can be driven, the total traction power is the peak power of 
     such storage system.
       ``(4) Heavy duty hybrid motor vehicle.--For purposes of 
     this subsection, the term `heavy duty hybrid motor vehicle' 
     means a new qualified hybrid motor vehicle which has a gross 
     vehicle weight rating of more than 8,500 pounds. Such term 
     does not include a medium duty passenger vehicle.
       ``(e) New Qualified Alternative Fuel Motor Vehicle 
     Credit.--
       ``(1) Allowance of credit.--Except as provided in paragraph 
     (5), the new qualified alternative fuel motor vehicle credit 
     determined under this subsection is an amount equal to the 
     applicable percentage of the incremental cost of any new 
     qualified alternative fuel motor vehicle placed in service by 
     the taxpayer during the taxable year.
       ``(2) Applicable percentage.--For purposes of paragraph 
     (1), the applicable percentage with respect to any new 
     qualified alternative fuel motor vehicle is--
       ``(A) 50 percent, plus
       ``(B) 30 percent, if such vehicle--
       ``(i) has received a certificate of conformity under the 
     Clean Air Act and meets or exceeds the most stringent 
     standard available for certification under the Clean Air Act 
     for that make and model year vehicle (other than a zero 
     emission standard), or
       ``(ii) has received an order certifying the vehicle as 
     meeting the same requirements as vehicles which may be sold 
     or leased in California and meets or exceeds the most 
     stringent standard available for certification under the 
     State laws of California (enacted in accordance with a waiver 
     granted under section 209(b) of the Clean Air Act) for that 
     make and model year vehicle (other than a zero emission 
     standard).
     For purposes of the preceding sentence, in the case of any 
     new qualified alternative fuel motor vehicle which weighs 
     more than 14,000 pounds gross vehicle weight rating, the most 
     stringent standard available shall be such standard available 
     for certification on the date of the enactment of the Energy 
     Tax Incentives Act.
       ``(3) Incremental cost.--For purposes of this subsection, 
     the incremental cost of any new qualified alternative fuel 
     motor vehicle is equal to the amount of the excess of the 
     manufacturer's suggested retail price for such vehicle over 
     such price for a gasoline or diesel fuel motor vehicle of the 
     same model, to the extent such amount does not exceed--
       ``(A) $5,000, if such vehicle has a gross vehicle weight 
     rating of not more than 8,500 pounds,
       ``(B) $10,000, if such vehicle has a gross vehicle weight 
     rating of more than 8,500 pounds but not more than 14,000 
     pounds,
       ``(C) $25,000, if such vehicle has a gross vehicle weight 
     rating of more than 14,000 pounds but not more than 26,000 
     pounds, and
       ``(D) $40,000, if such vehicle has a gross vehicle weight 
     rating of more than 26,000 pounds.
       ``(4) New qualified alternative fuel motor vehicle.--For 
     purposes of this subsection--
       ``(A) In general.--The term `new qualified alternative fuel 
     motor vehicle' means any motor vehicle--

[[Page S7159]]

       ``(i) which is only capable of operating on an alternative 
     fuel,
       ``(ii) the original use of which commences with the 
     taxpayer,
       ``(iii) which is acquired by the taxpayer for use or lease, 
     but not for resale, and
       ``(iv) which is made by a manufacturer.
       ``(B) Alternative fuel.--The term `alternative fuel' means 
     compressed natural gas, liquefied natural gas, liquefied 
     petroleum gas, hydrogen, and any liquid at least 85 percent 
     of the volume of which consists of methanol.
       ``(5) Credit for mixed-fuel vehicles.--
       ``(A) In general.--In the case of a mixed-fuel vehicle 
     placed in service by the taxpayer during the taxable year, 
     the credit determined under this subsection is an amount 
     equal to--
       ``(i) in the case of a 75/25 mixed-fuel vehicle, 70 percent 
     of the credit which would have been allowed under this 
     subsection if such vehicle was a qualified alternative fuel 
     motor vehicle, and
       ``(ii) in the case of a 90/10 mixed-fuel vehicle, 90 
     percent of the credit which would have been allowed under 
     this subsection if such vehicle was a qualified alternative 
     fuel motor vehicle.
       ``(B) Mixed-fuel vehicle.--For purposes of this subsection, 
     the term `mixed-fuel vehicle' means any motor vehicle 
     described in subparagraph (C) or (D) of paragraph (3), 
     which--
       ``(i) is certified by the manufacturer as being able to 
     perform efficiently in normal operation on a combination of 
     an alternative fuel and a petroleum-based fuel,
       ``(ii) either--

       ``(I) has received a certificate of conformity under the 
     Clean Air Act, or
       ``(II) has received an order certifying the vehicle as 
     meeting the same requirements as vehicles which may be sold 
     or leased in California and meets or exceeds the low emission 
     vehicle standard under section 88.105-94 of title 40, Code of 
     Federal Regulations, for that make and model year vehicle,

       ``(iii) the original use of which commences with the 
     taxpayer,
       ``(iv) which is acquired by the taxpayer for use or lease, 
     but not for resale, and
       ``(v) which is made by a manufacturer.
       ``(C) 75/25 mixed-fuel vehicle.--For purposes of this 
     subsection, the term `75/25 mixed-fuel vehicle' means a 
     mixed-fuel vehicle which operates using at least 75 percent 
     alternative fuel and not more than 25 percent petroleum-based 
     fuel.
       ``(D) 90/10 mixed-fuel vehicle.--For purposes of this 
     subsection, the term `90/10 mixed-fuel vehicle' means a 
     mixed-fuel vehicle which operates using at least 90 percent 
     alternative fuel and not more than 10 percent petroleum-based 
     fuel.
       ``(f) Limitation on Number of New Qualified Hybrid and 
     Advanced Lean-burn Technology Vehicles Eligible for Credit.--
       ``(1) In general.--In the case of a qualified vehicle sold 
     during the phaseout period, only the applicable percentage of 
     the credit otherwise allowable under subsection (c) or (d) 
     shall be allowed.
       ``(2) Phaseout period.--For purposes of this subsection, 
     the phaseout period is the period beginning with the second 
     calendar quarter following the calendar quarter which 
     includes the first date on which the number of qualified 
     vehicles manufactured by the manufacturer of the vehicle 
     referred to in paragraph (1) sold for use in the United 
     States after the date of the enactment of this section is at 
     least 80,000.
       ``(3) Applicable percentage.--For purposes of paragraph 
     (1), the applicable percentage is--
       ``(A) 50 percent for the first 2 calendar quarters of the 
     phaseout period,
       ``(B) 25 percent for the 3d and 4th calendar quarters of 
     the phaseout period, and
       ``(C) 0 percent for each calendar quarter thereafter.
       ``(4) Controlled groups.--
       ``(A) In general.--For purposes of this subsection, all 
     persons treated as a single employer under subsection (a) or 
     (b) of section 52 or subsection (m) or (o) of section 414 
     shall be treated as a single manufacturer.
       ``(B) Inclusion of foreign corporations.--For purposes of 
     subparagraph (A), in applying subsections (a) and (b) of 
     section 52 to this section, section 1563 shall be applied 
     without regard to subsection (b)(2)(C) thereof.
       ``(5) Qualified vehicle.--For purposes of this subsection, 
     the term `qualified vehicle' means any new qualified hybrid 
     motor vehicle and any new advanced lean burn technology motor 
     vehicle.
       ``(g) Application With Other Credits.--The credit allowed 
     under subsection (a) for any taxable year shall not exceed 
     the excess (if any) of--
       ``(1) the regular tax for the taxable year reduced by the 
     sum of the credits allowable under subpart A and sections 27, 
     29, and 30, over
       ``(2) the tentative minimum tax for the taxable year.
       ``(h) Other Definitions and Special Rules.--For purposes of 
     this section--
       ``(1) Motor vehicle.--The term `motor vehicle' has the 
     meaning given such term by section 30(c)(2).
       ``(2) City fuel economy.--The city fuel economy with 
     respect to any vehicle shall be measured in a manner which is 
     substantially similar to the manner city fuel economy is 
     measured in accordance with procedures under part 600 of 
     subchapter Q of chapter I of title 40, Code of Federal 
     Regulations, as in effect on the date of the enactment of 
     this section.
       ``(3) Other terms.--The terms `automobile', `passenger 
     automobile', `medium duty passenger vehicle', `light truck', 
     and `manufacturer' have the meanings given such terms in 
     regulations prescribed by the Administrator of the 
     Environmental Protection Agency for purposes of the 
     administration of title II of the Clean Air Act (42 U.S.C. 
     7521 et seq.).
       ``(4)  Reduction in basis.--For purposes of this subtitle, 
     the basis of any property for which a credit is allowable 
     under subsection (a) shall be reduced by the amount of such 
     credit so allowed (determined without regard to subsection 
     (e)).
       ``(5) No double benefit.--The amount of any deduction or 
     other credit allowable under this chapter--
       ``(A) for any incremental cost taken into account in 
     computing the amount of the credit determined under 
     subsection (e) shall be reduced by the amount of such credit 
     attributable to such cost, and
       ``(B) with respect to a vehicle described under subsection 
     (b), (c), or (d) shall be reduced by the amount of credit 
     allowed under subsection (a) for such vehicle for the taxable 
     year.
       ``(6) Property used by tax-exempt entity.--In the case of a 
     vehicle whose use is described in paragraph (3) or (4) of 
     section 50(b) and which is not subject to a lease, the person 
     who sold such vehicle to the person or entity using such 
     vehicle shall be treated as the taxpayer that placed such 
     vehicle in service, but only if such person clearly discloses 
     to such person or entity in a document the amount of any 
     credit allowable under subsection (a) with respect to such 
     vehicle (determined without regard to subsection (g)).
       ``(7) Property used outside united states, etc., not 
     qualified.--No credit shall be allowable under subsection (a) 
     with respect to any property referred to in section 50(b)(1) 
     or with respect to the portion of the cost of any property 
     taken into account under section 179.
       ``(8) Recapture.--The Secretary shall, by regulations, 
     provide for recapturing the benefit of any credit allowable 
     under subsection (a) with respect to any property which 
     ceases to be property eligible for such credit (including 
     recapture in the case of a lease period of less than the 
     economic life of a vehicle).
       ``(9) Election to not take credit.--No credit shall be 
     allowed under subsection (a) for any vehicle if the taxpayer 
     elects to not have this section apply to such vehicle.
       ``(10) Carryback and carryforward allowed.--
       ``(A) In general.--If the credit allowable under subsection 
     (a) for a taxable year exceeds the amount of the limitation 
     under subsection (g) for such taxable year (in this paragraph 
     referred to as the `unused credit year'), such excess shall 
     be a credit carryback to each of the 3 taxable years 
     preceding the unused credit year and a credit carryforward to 
     each of the 20 taxable years following the unused credit 
     year, except that no excess may be carried to a taxable year 
     beginning before the date of the enactment of this section. 
     The preceding sentence shall not apply to any credit 
     carryback if such credit carryback is attributable to 
     property for which a deduction for depreciation is not 
     allowable.
       ``(B) Rules.--Rules similar to the rules of section 39 
     shall apply with respect to the credit carryback and credit 
     carryforward under subparagraph (A).
       ``(11) Interaction with air quality and motor vehicle 
     safety standards.--Unless otherwise provided in this section, 
     a motor vehicle shall not be considered eligible for a credit 
     under this section unless such vehicle is in compliance 
     with--
       ``(A) the applicable provisions of the Clean Air Act for 
     the applicable make and model year of the vehicle (or 
     applicable air quality provisions of State law in the case of 
     a State which has adopted such provision under a waiver under 
     section 209(b) of the Clean Air Act), and
       ``(B) the motor vehicle safety provisions of sections 30101 
     through 30169 of title 49, United States Code.
       ``(g) Regulations.--
       ``(1) In general.--Except as provided in paragraph (2), the 
     Secretary shall promulgate such regulations as necessary to 
     carry out the provisions of this section.
       ``(2) Coordination in prescription of certain 
     regulations.--The Secretary of the Treasury, in coordination 
     with the Secretary of Transportation and the Administrator of 
     the Environmental Protection Agency, shall prescribe such 
     regulations as necessary to determine whether a motor vehicle 
     meets the requirements to be eligible for a credit under this 
     section.
       ``(h) Termination.--This section shall not apply to any 
     property purchased after--
       ``(1) in the case of a new qualified fuel cell motor 
     vehicle (as described in subsection (b)), December 31, 2015,
       ``(2) in the case of a new advanced lean burn technology 
     motor vehicle (as described in subsection (c)) or a new 
     qualified hybrid motor vehicle (as described in subsection 
     (d)), December 31, 2009, and
       ``(3) in the case of a new qualified alternative fuel 
     vehicle (as described in subsection (e)), December 31, 
     2010.''.
       (b) Conforming Amendments.--
       (1) Section 1016(a), as amended by this Act, is amended by 
     striking ``and'' at the end of paragraph (35), by striking 
     the period at the end of paragraph (36) and inserting ``, 
     and'',

[[Page S7160]]

     and by adding at the end the following new paragraph:
       ``(37) to the extent provided in section 30B(h)(4).''.
       (2) Section 55(c)(2), as amended by this Act, is amended by 
     inserting ``30B(g),'' after ``30(b)(2),''.
       (3) Section 6501(m) is amended by inserting ``30B(h)(9),'' 
     after ``30(d)(4),''.
       (4) The table of sections for subpart B of part IV of 
     subchapter A of chapter 1 is amended by inserting after the 
     item relating to section 30A the following new item:

``Sec. 30B. Alternative motor vehicle credit.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after the date of 
     the enactment of this Act, in taxable years ending after such 
     date.
       (d) Sticker Information Required at Retail Sale.--
       (1) In general.--The Secretary of the Treasury shall issue 
     regulations under which each qualified vehicle sold at retail 
     shall display a notice--
       (A) that such vehicle is a qualified vehicle, and
       (B) that the buyer may not benefit from the credit allowed 
     under section 30B of the Internal Revenue Code of 1986 if 
     such buyer has insufficient tax liability.
       (2) Qualified vehicle.--For purposes of paragraph (1), the 
     term ``qualified vehicle'' means a vehicle with respect to 
     which a credit is allowed under section 30B of the Internal 
     Revenue Code of 1986.
       (e) Nonapplication of Section .--Notwithstanding any other 
     provision of this Act, the provisions of, and amendments made 
     by, section 1531 of this Act shall be null and void.

     SEC. 1702. CREDIT FOR INSTALLATION OF ALTERNATIVE FUEL 
                   REFUELING STATIONS.

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

     ``SEC. 30C. ALTERNATIVE FUEL VEHICLE REFUELING PROPERTY 
                   CREDIT.

       ``(a) Credit Allowed.--There shall be allowed as a credit 
     against the tax imposed by this chapter for the taxable year 
     an amount equal to 50 percent of the cost of any qualified 
     alternative fuel vehicle refueling property placed in service 
     by the taxpayer during the taxable year.
       ``(b) Limitation.--The credit allowed under subsection (a) 
     with respect to any alternative fuel vehicle refueling 
     property shall not exceed--
       ``(1) $50,000 in the case of a property of a character 
     subject to an allowance for depreciation, and
       ``(2) $1,000 in any other case.
       ``(c) Qualified Alternative Fuel Vehicle Refueling 
     Property.--For purposes of this section--
       ``(1) In general.--Except as provided in paragraph (2), the 
     term `qualified alternative fuel vehicle refueling property' 
     has the meaning given to such term by section 179A(d), but 
     only with respect to any fuel at least 85 percent of the 
     volume of which consists of ethanol, natural gas, compressed 
     natural gas, liquefied natural gas, liquefied petroleum gas, 
     and hydrogen.
       ``(2) Residential property.--In the case of any property 
     installed on property which is used as the principal 
     residence (within the meaning of section 121) of the 
     taxpayer, paragraph (1) of section 179A(d) shall not apply.
       ``(d) Application With Other Credits.--The credit allowed 
     under subsection (a) for any taxable year shall not exceed 
     the excess (if any) of--
       ``(1) the regular tax for the taxable year reduced by the 
     sum of the credits allowable under subpart A and sections 27, 
     29, 30, and 30B, over
       ``(2) the tentative minimum tax for the taxable year.
       ``(e) Carryforward Allowed.--
       ``(1) In general.--If the credit amount allowable under 
     subsection (a) for a taxable year exceeds the amount of the 
     limitation under subsection (d) for such taxable year, such 
     excess shall be allowed as a credit carryforward for each of 
     the 20 taxable years following the unused credit year.
       ``(2) Rules.--Rules similar to the rules of section 39 
     shall apply with respect to the credit carryforward under 
     paragraph (1).
       ``(f) Special Rules.--For purposes of this section--
       ``(1) Basis reduction.--The basis of any property shall be 
     reduced by the portion of the cost of such property taken 
     into account under subsection (a).
       ``(2) No double benefit.--No deduction shall be allowed 
     under section 179A with respect to any property with respect 
     to which a credit is allowed under subsection (a).
       ``(3) Property used by tax-exempt entity.--In the case of 
     any qualified alternative fuel vehicle refueling property the 
     use of which is described in paragraph (3) or (4) of section 
     50(b) and which is not subject to a lease, the person who 
     sold such property to the person or entity using such 
     property shall be treated as the taxpayer that placed such 
     property in service, but only if such person clearly 
     discloses to such person or entity in a document the amount 
     of any credit allowable under subsection (a) with respect to 
     such property (determined without regard to subsection (d)).
       ``(4) Property used outside united states not qualified.--
     No credit shall be allowable under subsection (a) with 
     respect to any property referred to in section 50(b)(1) or 
     with respect to the portion of the cost of any property taken 
     into account under section 179.
       ``(5) 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.
       ``(6) Recapture rules.--Rules similar to the rules of 
     section 179A(e)(4) shall apply.
       ``(g) Regulations.--The Secretary shall prescribe such 
     regulations as necessary to carry out the provisions of this 
     section.
       ``(h) Termination.--This section shall not apply to any 
     property placed in service--
       ``(1) in the case of property relating to hydrogen, after 
     December 31, 2014, and
       ``(2) in the case of any other property, after December 31, 
     2009.''.
       (b) Modifications to Extension of Deduction for Certain 
     Refueling Property.--
       (1) Increase in deduction for hydrogen infrastructure.--
     Section 179A(b)(2)(A)(i) is amended by inserting ``($200,000 
     in the case of property relating to hydrogen)'' after 
     ``$100,000''.
       (2) Extension of deduction.--Subsection (f) of section 179A 
     is amended to read as follows:
       ``(f) Termination.--This section shall not apply to any 
     property placed in service--
       ``(1) in the case of property relating to hydrogen, after 
     December 31, 2014, and
       ``(2) in the case of any other property, after December 31, 
     2009.''.
       (c) Incentive for Production of Hydrogen at Qualified 
     Clean-fuel Vehicle Refueling Property.--Section 179A(d) 
     (defining qualified clean-fuel vehicle refueling property) is 
     amended by adding at the end the following new flush 
     sentence:
     ``In the case of clean-burning fuel which is hydrogen 
     produced from another clean-burning fuel, paragraph (3)(A) 
     shall be applied by substituting `production, storage, or 
     dispensing' for `storage or dispensing' both places it 
     appears.''.
       (d) Conforming Amendments.--
       (1) Section 1016(a), as amended by this Act, 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 30C(f).''.
       (2) Section 55(c)(2), as amended by this Act, is amended by 
     inserting ``30C(e),'' after ``30B(e),''.
       (3) Section 6501(m) is amended by inserting ``30C(f)(5),'' 
     after ``30B(f)(9),''.
       (4) The table of sections for subpart B of part IV of 
     subchapter A of chapter 1, as amended by this Act, is amended 
     by inserting after the item relating to section 30B the 
     following new item:

``Sec. 30C. Clean-fuel vehicle refueling property credit.''.

       (e) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after December 31, 
     2005, in taxable years ending after such date.
       (f) Nonapplication of Section.--Notwithstanding any other 
     provision of this Act, the provisions of, and amendments made 
     by, section 1533 of this Act shall be null and void.
                                 ______
                                 
  SA 932. Mr. LEVIN (for himself and Mr. Bayh) submitted an amendment 
intended to be proposed by him to the bill H.R. 6, to ensure jobs for 
our future with secure, afforadable, and reliable energy; which was 
ordered to lie on the table; as follows:

       At the end add the following:

  TITLE XVII--TAX INCENTIVES FOR ALTERNATIVE MOTOR VEHICLES AND FUELS

     SEC. 1700. AMENDMENT OF 1986 CODE.

       Except as otherwise expressly provided, whenever in this 
     title an amendment or repeal is expressed in terms of an 
     amendment to, or repeal of, a section or other provision, the 
     reference shall be considered to be made to a section or 
     other provision of the Internal Revenue Code of 1986.

                       Subtitle A--Tax Incentives

     SEC. 1703. ADVANCED TECHNOLOGY MOTOR VEHICLES MANUFACTURING 
                   CREDIT.

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

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

       ``(a) Credit Allowed.--There shall be allowed as a credit 
     against the tax imposed by this chapter for the taxable year 
     an amount equal to 35 percent of so much of the qualified 
     investment of an eligible taxpayer for such taxable year as 
     does not exceed $25,000,000.
       ``(b) Qualified Investment.--For purposes of this section--
       ``(1) In general.--The qualified investment for any taxable 
     year is equal to the incremental costs incurred during such 
     taxable year--
       ``(A) to re-equip or expand any manufacturing facility of 
     the eligible taxpayer to produce advanced technology motor 
     vehicles or to produce eligible components,
       ``(B) for engineering integration of such vehicles and 
     components as described in subsection (d), and
       ``(C) for research and development related to advanced 
     technology motor vehicles and eligible components.
       ``(2) Attribution rules.--In the event a facility of the 
     eligible taxpayer produces both

[[Page S7161]]

     advanced technology motor vehicles and conventional motor 
     vehicles, or eligible and non-eligible components, only the 
     qualified investment attributable to production of advanced 
     technology motor vehicles and eligible components shall be 
     taken into account.
       ``(c) Advanced Technology Motor Vehicles and Eligible 
     Components.--For purposes of this section--
       ``(1) Advanced technology motor vehicle.--The term 
     `advanced technology motor vehicle' means--
       ``(A) any new advanced lean burn technology motor vehicle 
     (as defined in section 30B(c)(3)), or
       ``(B) any new qualified hybrid motor vehicle (as defined in 
     section 30B(d)(2)(A) and determined without regard to any 
     gross vehicle weight rating).
       ``(2) Eligible components.--The term `eligible component' 
     means any component inherent to any advanced technology motor 
     vehicle, including--
       ``(A) with respect to any gasoline or diesel-electric new 
     qualified hybrid motor vehicle--
       ``(i) electric motor or generator,
       ``(ii) power split device,
       ``(iii) power control unit,
       ``(iv) power controls,
       ``(v) integrated starter generator, or
       ``(vi) battery,
       ``(B) with respect to any hydraulic new qualified hybrid 
     motor vehicle--
       ``(i) hydraulic accumulator vessel,
       ``(ii) hydraulic pump, or
       ``(iii) hydraulic pump-motor assembly,
       ``(C) with respect to any new advanced lean burn technology 
     motor vehicle--
       ``(i) diesel engine,
       ``(ii) turbocharger,
       ``(iii) fuel injection system, or
       ``(iv) after-treatment system, such as a particle filter or 
     NOx absorber, and
       ``(D) with respect to any advanced technology motor 
     vehicle, any other component submitted for approval by the 
     Secretary.
       ``(d) Engineering Integration Costs.--For purposes of 
     subsection (b)(1)(B), costs for engineering integration are 
     costs incurred prior to the market introduction of advanced 
     technology vehicles for engineering tasks related to--
       ``(1) establishing functional, structural, and performance 
     requirements for component and subsystems to meet overall 
     vehicle objectives for a specific application,
       ``(2) designing interfaces for components and subsystems 
     with mating systems within a specific vehicle application,
       ``(3) designing cost effective, efficient, and reliable 
     manufacturing processes to produce components and subsystems 
     for a specific vehicle application, and
       ``(4) validating functionality and performance of 
     components and subsystems for a specific vehicle application.
       ``(e) Eligible Taxpayer.--For purposes of this section, the 
     term `eligible taxpayer' means any taxpayer if more than 50 
     percent of its gross receipts for the taxable year is derived 
     from the manufacture of motor vehicles or any component parts 
     of such vehicles.
       ``(f) Limitation Based on Amount of Tax.--The credit 
     allowed under subsection (a) for the taxable year shall not 
     exceed the excess of--
       ``(1) the sum of--
       ``(A) the regular tax liability (as defined in section 
     26(b)) for such taxable year, plus
       ``(B) the tax imposed by section 55 for such taxable year 
     and any prior taxable year beginning after 1986 and not taken 
     into account under section 53 for any prior taxable year, 
     over
       ``(2) the sum of the credits allowable under subpart A and 
     sections 27, 30, and 30B for the taxable year.
       ``(g) Reduction in Basis.--For purposes of this subtitle, 
     if a credit is allowed under this section for any expenditure 
     with respect to any property, the increase in the basis of 
     such property which would (but for this paragraph) result 
     from such expenditure shall be reduced by the amount of the 
     credit so allowed.
       ``(h) No Double Benefit.--
       ``(1) Coordination with other deductions and credits.--
     Except as provided in paragraph (2), the amount of any 
     deduction or other credit allowable under this chapter for 
     any cost taken into account in determining the amount of the 
     credit under subsection (a) shall be reduced by the amount of 
     such credit attributable to such cost.
       ``(2) Research and development costs.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     any amount described in subsection (b)(1)(C) taken into 
     account in determining the amount of the credit under 
     subsection (a) for any taxable year shall not be taken into 
     account for purposes of determining the credit under section 
     41 for such taxable year.
       ``(B) Costs taken into account in determining base period 
     research expenses.--Any amounts described in subsection 
     (b)(1)(C) taken into account in determining the amount of the 
     credit under subsection (a) for any taxable year which are 
     qualified research expenses (within the meaning of section 
     41(b)) shall be taken into account in determining base period 
     research expenses for purposes of applying section 41 to 
     subsequent taxable years.
       ``(i) Business Carryovers Allowed.--If the credit allowable 
     under subsection (a) for a taxable year exceeds the 
     limitation under subsection (f) for such taxable year, such 
     excess (to the extent of the credit allowable with respect to 
     property subject to the allowance for depreciation) shall be 
     allowed as a credit carryback and carryforward under rules 
     similar to the rules of section 39.
       ``(j) Special Rules.--For purposes of this section, rules 
     similar to the rules of paragraphs (4) and (5) of section 
     179A(e) and paragraphs (1) and (2) of section 41(f) shall 
     apply
       ``(k) Election Not to Take Credit.--No credit shall be 
     allowed under subsection (a) for any property if the taxpayer 
     elects not to have this section apply to such property.
       ``(l) Regulations.--The Secretary shall prescribe such 
     regulations as necessary to carry out the provisions of this 
     section.
       ``(m) Termination.--This section shall not apply to any 
     qualified investment after December 31, 2010.''.
       (b) Conforming Amendments.--
       (1) Section 1016(a), as amended by this Act, is amended by 
     striking ``and'' at the end of paragraph (39), by striking 
     the period at the end of paragraph (40) and inserting ``, 
     and'', and by adding at the end the following new paragraph:
       ``(41) to the extent provided in section 30D(g).''.
       (2) Section 6501(m), as amended by this Act, is amended by 
     inserting ``30D(k),'' after ``30C(j),''.
       (3) The table of sections for subpart B of part IV of 
     subchapter A of chapter 1, as amended by this Act, is amended 
     by inserting after the item relating to section 30C the 
     following new item:

``Sec. 30D. Advanced technology motor vehicles manufacturing credit.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to amounts incurred in taxable years beginning 
     after December 31, 2005.

                 Subtitle B--Revenue Offset Provisions

                       PART I--GENERAL PROVISIONS

     SEC. 1711. TREATMENT OF CONTINGENT PAYMENT CONVERTIBLE DEBT 
                   INSTRUMENTS.

       (a) In General.--Section 1275(d) (relating to regulation 
     authority) is amended--
       (1) by striking ``The Secretary'' and inserting the 
     following:
       ``(1) In general.--The Secretary'', and
       (2) by adding at the end the following new paragraph:
       ``(2) Treatment of contingent payment convertible debt.--
       ``(A) In general.--In the case of a debt instrument which--
       ``(i) is convertible into stock of the issuing corporation, 
     into stock or debt of a related party (within the meaning of 
     section 267(b) or 707(b)(1)), or into cash or other property 
     in an amount equal to the approximate value of such stock or 
     debt, and
       ``(ii) provides for contingent payments,
     any regulations which require original issue discount to be 
     determined by reference to the comparable yield of a 
     noncontingent fixed-rate debt instrument shall be applied as 
     if the regulations require that such comparable yield be 
     determined by reference to a noncontingent fixed-rate debt 
     instrument which is convertible into stock.
       ``(B) Special rule.--For purposes of subparagraph (A), the 
     comparable yield shall be determined without taking into 
     account the yield resulting from the conversion of a debt 
     instrument into stock.''.
       (b) Cross Reference.--Section 163(e)(6) (relating to cross 
     references) is amended by adding at the end the following:
     ``For the treatment of contingent payment convertible debt, 
     see section 1275(d)(2).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to debt instruments issued on or after the date 
     of the enactment of this Act.

     SEC. 1712. FRIVOLOUS TAX SUBMISSIONS.

       (a) Civil Penalties.--Section 6702 is amended to read as 
     follows:

     ``SEC. 6702. FRIVOLOUS TAX SUBMISSIONS.

       ``(a) Civil Penalty for Frivolous Tax Returns.--A person 
     shall pay a penalty of $5,000 if--
       ``(1) such person files what purports to be a return of a 
     tax imposed by this title but which--
       ``(A) does not contain information on which the substantial 
     correctness of the self-assessment may be judged, or
       ``(B) contains information that on its face indicates that 
     the self-assessment is substantially incorrect; and
       ``(2) the conduct referred to in paragraph (1)--
       ``(A) is based on a position which the Secretary has 
     identified as frivolous under subsection (c), or
       ``(B) reflects a desire to delay or impede the 
     administration of Federal tax laws.
       ``(b) Civil Penalty for Specified Frivolous Submissions.--
       ``(1) Imposition of penalty.--Except as provided in 
     paragraph (3), any person who submits a specified frivolous 
     submission shall pay a penalty of $5,000.
       ``(2) Specified frivolous submission.--For purposes of this 
     section--
       ``(A) Specified frivolous submission.--The term `specified 
     frivolous submission' means a specified submission if any 
     portion of such submission--
       ``(i) is based on a position which the Secretary has 
     identified as frivolous under subsection (c), or
       ``(ii) reflects a desire to delay or impede the 
     administration of Federal tax laws.
       ``(B) Specified submission.--The term `specified 
     submission' means--

[[Page S7162]]

       ``(i) a request for a hearing under--

       ``(I) section 6320 (relating to notice and opportunity for 
     hearing upon filing of notice of lien), or
       ``(II) section 6330 (relating to notice and opportunity for 
     hearing before levy), and

       ``(ii) an application under--

       ``(I) section 6159 (relating to agreements for payment of 
     tax liability in installments),
       ``(II) section 7122 (relating to compromises), or
       ``(III) section 7811 (relating to taxpayer assistance 
     orders).

       ``(3) Opportunity to withdraw submission.--If the Secretary 
     provides a person with notice that a submission is a 
     specified frivolous submission and such person withdraws such 
     submission within 30 days after such notice, the penalty 
     imposed under paragraph (1) shall not apply with respect to 
     such submission.
       ``(c) Listing of Frivolous Positions.--The Secretary shall 
     prescribe (and periodically revise) a list of positions which 
     the Secretary has identified as being frivolous for purposes 
     of this subsection. The Secretary shall not include in such 
     list any position that the Secretary determines meets the 
     requirement of section 6662(d)(2)(B)(ii)(II).
       ``(d) Reduction of Penalty.--The Secretary may reduce the 
     amount of any penalty imposed under this section if the 
     Secretary determines that such reduction would promote 
     compliance with and administration of the Federal tax laws.
       ``(e) Penalties in Addition to Other Penalties.--The 
     penalties imposed by this section shall be in addition to any 
     other penalty provided by law.''.
       (b) Treatment of Frivolous Requests for Hearings Before 
     Levy.--
       (1) Frivolous requests disregarded.--Section 6330 (relating 
     to notice and opportunity for hearing before levy) is amended 
     by adding at the end the following new subsection:
       ``(g) Frivolous Requests for Hearing, Etc.--Notwithstanding 
     any other provision of this section, if the Secretary 
     determines that any portion of a request for a hearing under 
     this section or section 6320 meets the requirement of clause 
     (i) or (ii) of section 6702(b)(2)(A), then the Secretary may 
     treat such portion as if it were never submitted and such 
     portion shall not be subject to any further administrative or 
     judicial review.''.
       (2) Preclusion from raising frivolous issues at hearing.--
     Section 6330(c)(4) is amended--
       (A) by striking ``(A)'' and inserting ``(A)(i)'';
       (B) by striking ``(B)'' and inserting ``(ii)'';
       (C) by striking the period at the end of the first sentence 
     and inserting ``; or''; and
       (D) by inserting after subparagraph (A)(ii) (as so 
     redesignated) the following:
       ``(B) the issue meets the requirement of clause (i) or (ii) 
     of section 6702(b)(2)(A).''.
       (3) Statement of grounds.--Section 6330(b)(1) is amended by 
     striking ``under subsection (a)(3)(B)'' and inserting ``in 
     writing under subsection (a)(3)(B) and states the grounds for 
     the requested hearing''.
       (c) Treatment of Frivolous Requests for Hearings Upon 
     Filing of Notice of Lien.--Section 6320 is amended--
       (1) in subsection (b)(1), by striking ``under subsection 
     (a)(3)(B)'' and inserting ``in writing under subsection 
     (a)(3)(B) and states the grounds for the requested hearing'', 
     and
       (2) in subsection (c), by striking ``and (e)'' and 
     inserting ``(e), and (g)''.
       (d) Treatment of Frivolous Applications for Offers-in-
     Compromise and Installment Agreements.--Section 7122 is 
     amended by adding at the end the following new subsection:
       ``(e) Frivolous Submissions, Etc.--Notwithstanding any 
     other provision of this section, if the Secretary determines 
     that any portion of an application for an offer-in-compromise 
     or installment agreement submitted under this section or 
     section 6159 meets the requirement of clause (i) or (ii) of 
     section 6702(b)(2)(A), then the Secretary may treat such 
     portion as if it were never submitted and such portion shall 
     not be subject to any further administrative or judicial 
     review.''.
       (e) Clerical Amendment.--The table of sections for part I 
     of subchapter B of chapter 68 is amended by striking the item 
     relating to section 6702 and inserting the following new 
     item:

``Sec. 6702. Frivolous tax submissions.''.

       (f) Effective Date.--The amendments made by this section 
     shall apply to submissions made and issues raised after the 
     date on which the Secretary first prescribes a list under 
     section 6702(c) of the Internal Revenue Code of 1986, as 
     amended by subsection (a).

     SEC. 1713. INCREASE IN CERTAIN CRIMINAL PENALTIES.

       (a) In General.--Section 7206 (relating to fraud and false 
     statements) is amended--
       (1) by striking ``Any person who--'' and inserting ``(a) In 
     General.--Any person who--'', and
       (2) by adding at the end the following new subsection:
       ``(b) Increase in Monetary Limitation for Underpayment or 
     Overpayment of Tax Due to Fraud.--If any portion of any 
     underpayment (as defined in section 6664(a)) or overpayment 
     (as defined in section 6401(a)) of tax required to be shown 
     on a return is attributable to fraudulent action described in 
     subsection (a), the applicable dollar amount under subsection 
     (a) shall in no event be less than an amount equal to such 
     portion. A rule similar to the rule under section 6663(b) 
     shall apply for purposes of determining the portion so 
     attributable.''.
       (b) Increase in Penalties.--
       (1) Attempt to evade or defeat tax.--Section 7201 is 
     amended--
       (A) by striking ``$100,000'' and inserting ``$500,000'',
       (B) by striking ``$500,000'' and inserting ``$1,000,000'', 
     and
       (C) by striking ``5 years'' and inserting ``10 years''.
       (2) Willful failure to file return, supply information, or 
     pay tax.--Section 7203 is amended--
       (A) in the first sentence--
       (i) by striking ``Any person'' and inserting the following:
       ``(a) In General.--Any person'', and
       (ii) by striking ``$25,000'' and inserting ``$50,000'',
       (B) in the third sentence, by striking ``section'' and 
     inserting ``subsection'', and
       (C) by adding at the end the following new subsection:
       ``(b) Aggravated Failure To File.--
       ``(1) In general.--In the case of any failure described in 
     paragraph (2), the first sentence of subsection (a) shall be 
     applied by substituting--
       ``(A) `felony' for `misdemeanor',
       ``(B) `$500,000 ($1,000,000' for `$25,000 ($100,000', and
       ``(C) `10 years' for `1 year'.
       ``(2) Failure described.--A failure described in this 
     paragraph is a failure to make a return described in 
     subsection (a) for a period of 3 or more consecutive taxable 
     years and the aggregated tax liability for such period is at 
     least $100,000.''.
       (3) Fraud and false statements.--Section 7206(a) (as 
     redesignated by subsection (a)) is amended--
       (A) by striking ``$100,000'' and inserting ``$500,000'',
       (B) by striking ``$500,000'' and inserting ``$1,000,000'', 
     and
       (C) by striking ``3 years'' and inserting ``5 years''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to actions, and failures to act, occurring after 
     the date of the enactment of this Act.

     SEC. 1714. DOUBLING OF CERTAIN PENALTIES, FINES, AND INTEREST 
                   ON UNDERPAYMENTS RELATED TO CERTAIN OFFSHORE 
                   FINANCIAL ARRANGEMENTS.

       (a) Determination of Penalty.--
       (1) In general.--Notwithstanding any other provision of 
     law, in the case of an applicable taxpayer--
       (A) the determination as to whether any interest or 
     applicable penalty is to be imposed with respect to any 
     arrangement described in paragraph (2), or to any 
     underpayment of Federal income tax attributable to items 
     arising in connection with any such arrangement, shall be 
     made without regard to the rules of subsections (b), (c), and 
     (d) of section 6664 of the Internal Revenue Code of 1986, and
       (B) if any such interest or applicable penalty is imposed, 
     the amount of such interest or penalty shall be equal to 
     twice that determined without regard to this section.
       (2) Applicable taxpayer.--For purposes of this subsection--
       (A) In general.--The term ``applicable taxpayer'' means a 
     taxpayer which--
       (i) has underreported its United States income tax 
     liability with respect to any item which directly or 
     indirectly involves--

       (I) any financial arrangement which in any manner relies on 
     the use of offshore payment mechanisms (including credit, 
     debit, or charge cards) issued by banks or other entities in 
     foreign jurisdictions, or
       (II) any offshore financial arrangement (including any 
     arrangement with foreign banks, financial institutions, 
     corporations, partnerships, trusts, or other entities), and

       (ii) has not signed a closing agreement pursuant to the 
     Voluntary Offshore Compliance Initiative established by the 
     Department of the Treasury under Revenue Procedure 2003-11 or 
     voluntarily disclosed its participation in such arrangement 
     by notifying the Internal Revenue Service of such arrangement 
     prior to the issue being raised by the Internal Revenue 
     Service during an examination.
       (B) Authority to waive.--The Secretary of the Treasury or 
     the Secretary's delegate may waive the application of 
     paragraph (1) to any taxpayer if the Secretary or the 
     Secretary's delegate determines that the use of such offshore 
     payment mechanisms is incidental to the transaction and, in 
     addition, in the case of a trade or business, such use is 
     conducted in the ordinary course of the trade or business of 
     the taxpayer.
       (C) Issues raised.--For purposes of subparagraph (A)(ii), 
     an item shall be treated as an issue raised during an 
     examination if the individual examining the return--
       (i) communicates to the taxpayer knowledge about the 
     specific item, or
       (ii) has made a request to the taxpayer for information and 
     the taxpayer could not make a complete response to that 
     request without giving the examiner knowledge of the specific 
     item.
       (b) Definitions and Rules.--For purposes of this section--
       (1) Applicable penalty.--The term ``applicable penalty'' 
     means any penalty, addition to tax, or fine imposed under 
     chapter 68 of the Internal Revenue Code of 1986.
       (2) Fees and expenses.--The Secretary of the Treasury may 
     retain and use an amount not in excess of 25 percent of all 
     additional interest, penalties, additions to tax, and fines 
     collected under this section to be used for enforcement and 
     collection activities of the Internal Revenue Service. The 
     Secretary

[[Page S7163]]

     shall keep adequate records regarding amounts so retained and 
     used. The amount credited as paid by any taxpayer shall be 
     determined without regard to this paragraph.
       (c) Report by Secretary.--The Secretary shall each year 
     conduct a study and report to Congress on the implementation 
     of this section during the preceding year, including 
     statistics on the number of taxpayers affected by such 
     implementation and the amount of interest and applicable 
     penalties asserted, waived, and assessed during such 
     preceding year.
       (d) Effective Date.--The provisions of this section shall 
     apply to interest, penalties, additions to tax, and fines 
     with respect to any taxable year if, as of the date of the 
     enactment of this Act, the assessment of any tax, penalty, or 
     interest with respect to such taxable year is not prevented 
     by the operation of any law or rule of law.

     SEC. 1715. MODIFICATION OF INTERACTION BETWEEN SUBPART F AND 
                   PASSIVE FOREIGN INVESTMENT COMPANY RULES.

       (a) Limitation on Exception From PFIC Rules for United 
     States Shareholders of Controlled Foreign Corporations.--
     Paragraph (2) of section 1297(e) (relating to passive foreign 
     investment company) is amended by adding at the end the 
     following flush sentence:
     ``Such term shall not include any period if the earning of 
     subpart F income by such corporation during such period would 
     result in only a remote likelihood of an inclusion in gross 
     income under section 951(a)(1)(A)(i).''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years of controlled foreign 
     corporations beginning after March 2, 2005, and to taxable 
     years of United States shareholders with or within which such 
     taxable years of controlled foreign corporations end.

     SEC. 1716. DECLARATION BY CHIEF EXECUTIVE OFFICER RELATING TO 
                   FEDERAL ANNUAL CORPORATE INCOME TAX RETURN.

       (a) In General.--The Federal annual tax return of a 
     corporation with respect to income shall also include a 
     declaration signed by the chief executive officer of such 
     corporation (or other such officer of the corporation as the 
     Secretary of the Treasury may designate if the corporation 
     does not have a chief executive officer), under penalties of 
     perjury, that the corporation has in place processes and 
     procedures that ensure that such return complies with the 
     Internal Revenue Code of 1986 and that the chief executive 
     officer was provided reasonable assurance of the accuracy of 
     all material aspects of such return. The preceding sentence 
     shall not apply to any return of a regulated investment 
     company (within the meaning of section 851 of such Code).
       (b) Effective Date.--This section shall apply to Federal 
     annual tax returns for taxable years ending after the date of 
     the enactment of this Act.

     SEC. 1717. TREASURY REGULATIONS ON FOREIGN TAX CREDIT.

       (a) In General.--Section 901 (relating to taxes of foreign 
     countries and of possessions of United States) is amended by 
     redesignating subsection (m) as subsection (n) and by 
     inserting after subsection (l) the following new subsection:
       ``(m) Regulations.--The Secretary may prescribe regulations 
     disallowing a credit under subsection (a) for all or a 
     portion of any foreign tax, or allocating a foreign tax among 
     2 or more persons, in cases where the foreign tax is imposed 
     on any person in respect of income of another person or in 
     other cases involving the inappropriate separation of the 
     foreign tax from the related foreign income.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to transactions entered into after the date of 
     the enactment of this Act.

     SEC. 1718. WHISTLEBLOWER REFORMS.

       (a) In General.--Section 7623 (relating to expenses of 
     detection of underpayments and fraud, etc.) is amended--
       (1) by striking ``The Secretary'' and inserting ``(a) In 
     General.--The Secretary'',
       (2) by striking ``and'' at the end of paragraph (1) and 
     inserting ``or'',
       (3) by striking ``(other than interest)'', and
       (4) by adding at the end the following new subsections:
       ``(b) Awards to Whistleblowers.--
       ``(1) In general.--If the Secretary proceeds with any 
     administrative or judicial action described in subsection (a) 
     based on information brought to the Secretary's attention by 
     an individual, such individual shall, subject to paragraph 
     (2), receive as an award at least 15 percent but not more 
     than 30 percent of the collected proceeds (including 
     penalties, interest, additions to tax, and additional 
     amounts) resulting from the action (including any related 
     actions) or from any settlement in response to such action. 
     The determination of the amount of such award by the 
     Whistleblower Office shall depend upon the extent to which 
     the individual substantially contributed to such action.
       ``(2) Award in case of less substantial contribution.--
       ``(A) In general.--In the event the action described in 
     paragraph (1) is one which the Whistleblower Office 
     determines to be based principally on disclosures of specific 
     allegations (other than information provided by the 
     individual described in paragraph (1)) resulting from a 
     judicial or administrative hearing, from a governmental 
     report, hearing, audit, or investigation, or from the news 
     media, the Whistleblower Office may award such sums as it 
     considers appropriate, but in no case more than 10 percent of 
     the collected proceeds (including penalties, interest, 
     additions to tax, and additional amounts) resulting from the 
     action (including any related actions) or from any settlement 
     in response to such action, taking into account the 
     significance of the individual's information and the role of 
     such individual and any legal representative of such 
     individual in contributing to such action.
       ``(B) Nonapplication of paragraph where individual is 
     original source of information.--Subparagraph (A) shall not 
     apply if the information resulting in the initiation of the 
     action described in paragraph (1) was originally provided by 
     the individual described in paragraph (1).
       ``(3) Reduction in or denial of award.--If the 
     Whistleblower Office determines that the claim for an award 
     under paragraph (1) or (2) is brought by an individual who 
     planned and initiated the actions that led to the 
     underpayment of tax or actions described in subsection 
     (a)(2), then the Whistleblower Office may appropriately 
     reduce such award. If such individual is convicted of 
     criminal conduct arising from the role described in the 
     preceding sentence, the Whistleblower Office shall deny any 
     award.
       ``(4) Appeal of award determination.--Any determination 
     regarding an award under paragraph (1), (2), or (3) shall be 
     subject to the filing by the individual described in such 
     paragraph of a petition for review with the Tax Court under 
     rules similar to the rules under section 7463 (without regard 
     to the amount in dispute) and such review shall be subject to 
     the rules under section 7461(b)(1).
       ``(5) Application of this subsection.--This subsection 
     shall apply with respect to any action--
       ``(A) against any taxpayer, but in the case of any 
     individual, only if such individual's gross income exceeds 
     $200,000 for any taxable year subject to such action, and
       ``(B) if the tax, penalties, interest, additions to tax, 
     and additional amounts in dispute exceed $20,000.
       ``(6) Additional rules.--
       ``(A) No contract necessary.--No contract with the Internal 
     Revenue Service is necessary for any individual to receive an 
     award under this subsection.
       ``(B) Representation.--Any individual described in 
     paragraph (1) or (2) may be represented by counsel.
       ``(C) Award not subject to individual alternative minimum 
     tax.--No award received under this subsection shall be 
     included in gross income for purposes of determining 
     alternative minimum taxable income.
       ``(c) Whistleblower Office.--
       ``(1) In general.--There is established in the Internal 
     Revenue Service an office to be known as the `Whistleblower 
     Office' which--
       ``(A) shall at all times operate at the direction of the 
     Commissioner and coordinate and consult with other divisions 
     in the Internal Revenue Service as directed by the 
     Commissioner,
       ``(B) shall analyze information received from any 
     individual described in subsection (b) and either investigate 
     the matter itself or assign it to the appropriate Internal 
     Revenue Service office,
       ``(C) shall monitor any action taken with respect to such 
     matter,
       ``(D) shall inform such individual that it has accepted the 
     individual's information for further review,
       ``(E) may require such individual and any legal 
     representative of such individual to not disclose any 
     information so provided,
       ``(F) in its sole discretion, may ask for additional 
     assistance from such individual or any legal representative 
     of such individual, and
       ``(G) shall determine the amount to be awarded to such 
     individual under subsection (b).
       ``(2) Funding for office.--There is authorized to be 
     appropriated $10,000,000 for each fiscal year for the 
     Whistleblower Office. These funds shall be used to maintain 
     the Whistleblower Office and also to reimburse other Internal 
     Revenue Service offices for related costs, such as costs of 
     investigation and collection.
       ``(3) Request for assistance.--
       ``(A) In general.--Any assistance requested under paragraph 
     (1)(F) shall be under the direction and control of the 
     Whistleblower Office or the office assigned to investigate 
     the matter under subparagraph (A). To the extent the 
     disclosure of any returns or return information to the 
     individual or legal representative is required for the 
     performance of such assistance, such disclosure shall be 
     pursuant to a contract entered into between the Secretary and 
     the recipients of such disclosure subject to section 6103(n). 
     No individual or legal representative whose assistance is so 
     requested may by reason of such request represent himself or 
     herself as an employee of the Federal Government.
       ``(B) Funding of assistance.--From the amounts available 
     for expenditure under subsection (b), the Whistleblower 
     Office may, with the agreement of the individual described in 
     subsection (b), reimburse the costs incurred by any legal 
     representative of such individual in providing assistance 
     described in subparagraph (A).
       ``(d) Report by Secretary.--The Secretary shall each year 
     conduct a study and report to Congress on the use of this 
     section, including--
       ``(1) an analysis of the use of this section during the 
     preceding year and the results of such use, and

[[Page S7164]]

       ``(2) any legislative or administrative recommendations 
     regarding the provisions of this section and its 
     application.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to information provided on or after the date of 
     the enactment of this Act.

     SEC. 1719. DENIAL OF DEDUCTION FOR CERTAIN FINES, PENALTIES, 
                   AND OTHER AMOUNTS.

       (a) In General.--Subsection (f) of section 162 (relating to 
     trade or business expenses) is amended to read as follows:
       ``(f) Fines, Penalties, and Other Amounts.--
       ``(1) In general.--Except as provided in paragraph (2), no 
     deduction otherwise allowable shall be allowed under this 
     chapter for any amount paid or incurred (whether by suit, 
     agreement, or otherwise) to, or at the direction of, a 
     government or entity described in paragraph (4) in relation 
     to the violation of any law or the investigation or inquiry 
     by such government or entity into the potential violation of 
     any law.
       ``(2) Exception for amounts constituting restitution.--
     Paragraph (1) shall not apply to any amount which--
       ``(A) the taxpayer establishes constitutes restitution 
     (including remediation of property) for damage or harm caused 
     by or which may be caused by the violation of any law or the 
     potential violation of any law, and
       ``(B) is identified as restitution in the court order or 
     settlement agreement.
     Identification pursuant to subparagraph (B) alone shall not 
     satisfy the requirement under subparagraph (A). This 
     paragraph shall not apply to any amount paid or incurred as 
     reimbursement to the government or entity for the costs of 
     any investigation or litigation.
       ``(3) Exception for amounts paid or incurred as the result 
     of certain court orders.--Paragraph (1) shall not apply to 
     any amount paid or incurred by order of a court in a suit in 
     which no government or entity described in paragraph (4) is a 
     party.
       ``(4) Certain nongovernmental regulatory entities.--An 
     entity is described in this paragraph if it is--
       ``(A) a nongovernmental entity which exercises self-
     regulatory powers (including imposing sanctions) in 
     connection with a qualified board or exchange (as defined in 
     section 1256(g)(7)), or
       ``(B) to the extent provided in regulations, a 
     nongovernmental entity which exercises self-regulatory powers 
     (including imposing sanctions) as part of performing an 
     essential governmental function.
       ``(5) Exception for taxes due.--Paragraph (1) shall not 
     apply to any amount paid or incurred as taxes due.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to amounts paid or incurred on or after the date 
     of the enactment of this Act, except that such amendment 
     shall not apply to amounts paid or incurred under any binding 
     order or agreement entered into before such date. Such 
     exception shall not apply to an order or agreement requiring 
     court approval unless the approval was obtained before such 
     date.

     SEC. 1720. FREEZE OF INTEREST SUSPENSION RULES WITH RESPECT 
                   TO LISTED TRANSACTIONS.

       (a) In General.--Paragraph (2) of section 903(d) of the 
     American Jobs Creation Act of 2005 is amended to read as 
     follows:
       ``(2) Exception for reportable or listed transactions.--
       ``(A) In general.--The amendments made by subsection (c) 
     shall apply with respect to interest accruing after October 
     3, 2004.
       ``(B) Special rule for certain listed transactions.--
       ``(i) In general.--Except as provided in clause (ii) or 
     (iii), in the case of any listed transaction, the amendments 
     made by subsection (c) shall also apply with respect to 
     interest accruing on or before October 3, 2004.
       ``(ii) Participants in settlement initiatives.--Clause (i) 
     shall not apply to a listed transaction if, as of May 9, 
     2005--

       ``(I) the taxpayer is participating in a published 
     settlement initiative which is offered by the Secretary of 
     the Treasury or his delegate to a group of similarly situated 
     taxpayers claiming benefits from the listed transaction, or
       ``(II) the taxpayer has entered into a settlement agreement 
     pursuant to such an initiative with respect to the tax 
     liability arising in connection with the listed transaction.

     Subclause (I) shall not apply to the taxpayer if, after May 
     9, 2005, the taxpayer withdraws from, or terminates, 
     participation in the initiative or the Secretary or his 
     delegate determines that a settlement agreement will not be 
     reached pursuant to the initiative within a reasonable period 
     of time.
       ``(iii) Closed transactions.--Clause (i) shall not apply to 
     a listed transaction if, as of May 9, 2005--

       ``(I) the assessment of all Federal income taxes for the 
     taxable year in which the tax liability to which the interest 
     relates arose is prevented by the operation of any law or 
     rule of law, or
       ``(II) a closing agreement under section 7121 has been 
     entered into with respect to the tax liability arising in 
     connection with the listed transaction.''.

       (b) Effective Date.--The amendment made by this section 
     shall take effect as if included in the provisions of the 
     American Jobs Creation Act of 2004 to which it relates.

     SEC. 1721. MODIFICATIONS OF EFFECTIVE DATES OF LEASING 
                   PROVISIONS OF THE AMERICAN JOBS CREATION ACT OF 
                   2004.

       (a) Repeal of Exception for Qualified Transportation 
     Property.--Section 849(b) of the American Jobs Creation Act 
     of 2004 is amended by striking paragraphs (1) and (2) and by 
     redesignating paragraphs (3) and (4) as paragraphs (1) and 
     (2).
       (b) Effective Date.--The amendments made by this section 
     shall take effect as if included in the enactment of the 
     American Jobs Creation Act of 2004.

     SEC. 1722. IMPOSITION OF MARK-TO-MARKET TAX ON INDIVIDUALS 
                   WHO EXPATRIATE.

       (a) In General.--Subpart A of part II of subchapter N of 
     chapter 1 is amended by inserting after section 877 the 
     following new section:

     ``SEC. 877A. TAX RESPONSIBILITIES OF EXPATRIATION.

       ``(a) General Rules.--For purposes of this subtitle--
       ``(1) Mark to market.--Except as provided in subsections 
     (d) and (f), all property of a covered expatriate to whom 
     this section applies shall be treated as sold on the day 
     before the expatriation date for its fair market value.
       ``(2) Recognition of gain or loss.--In the case of any sale 
     under paragraph (1)--
       ``(A) notwithstanding any other provision of this title, 
     any gain arising from such sale shall be taken into account 
     for the taxable year of the sale, and
       ``(B) any loss arising from such sale shall be taken into 
     account for the taxable year of the sale to the extent 
     otherwise provided by this title, except that section 1091 
     shall not apply to any such loss.
     Proper adjustment shall be made in the amount of any gain or 
     loss subsequently realized for gain or loss taken into 
     account under the preceding sentence.
       ``(3) Exclusion for certain gain.--
       ``(A) In general.--The amount which, but for this 
     paragraph, would be includible in the gross income of any 
     individual by reason of this section shall be reduced (but 
     not below zero) by $600,000. For purposes of this paragraph, 
     allocable expatriation gain taken into account under 
     subsection (f)(2) shall be treated in the same manner as an 
     amount required to be includible in gross income.
       ``(B) Cost-of-living adjustment.--
       ``(i) In general.--In the case of an expatriation date 
     occurring in any calendar year after 2005, the $600,000 
     amount under subparagraph (A) shall be increased by an amount 
     equal to--

       ``(I) such dollar amount, multiplied by
       ``(II) the cost-of-living adjustment determined under 
     section 1(f)(3) for such calendar year, determined by 
     substituting `calendar year 2004' for `calendar year 1992' in 
     subparagraph (B) thereof.

       ``(ii) Rounding rules.--If any amount after adjustment 
     under clause (i) is not a multiple of $1,000, such amount 
     shall be rounded to the next lower multiple of $1,000.
       ``(4) Election to continue to be taxed as united states 
     citizen.--
       ``(A) In general.--If a covered expatriate elects the 
     application of this paragraph--
       ``(i) this section (other than this paragraph and 
     subsection (i)) shall not apply to the expatriate, but
       ``(ii) in the case of property to which this section would 
     apply but for such election, the expatriate shall be subject 
     to tax under this title in the same manner as if the 
     individual were a United States citizen.
       ``(B) Requirements.--Subparagraph (A) shall not apply to an 
     individual unless the individual--
       ``(i) provides security for payment of tax in such form and 
     manner, and in such amount, as the Secretary may require,
       ``(ii) consents to the waiver of any right of the 
     individual under any treaty of the United States which would 
     preclude assessment or collection of any tax which may be 
     imposed by reason of this paragraph, and
       ``(iii) complies with such other requirements as the 
     Secretary may prescribe.
       ``(C) Election.--An election under subparagraph (A) shall 
     apply to all property to which this section would apply but 
     for the election and, once made, shall be irrevocable. Such 
     election shall also apply to property the basis of which is 
     determined in whole or in part by reference to the property 
     with respect to which the election was made.
       ``(b) Election To Defer Tax.--
       ``(1) In general.--If the taxpayer elects the application 
     of this subsection with respect to any property treated as 
     sold by reason of subsection (a), the payment of the 
     additional tax attributable to such property shall be 
     postponed until the due date of the return for the taxable 
     year in which such property is disposed of (or, in the case 
     of property disposed of in a transaction in which gain is not 
     recognized in whole or in part, until such other date as the 
     Secretary may prescribe).
       ``(2) Determination of tax with respect to property.--For 
     purposes of paragraph (1), the additional tax attributable to 
     any property is an amount which bears the same ratio to the 
     additional tax imposed by this chapter for the taxable year 
     solely by reason of subsection (a) as the gain taken into 
     account under subsection (a) with respect to such property 
     bears to the total gain taken into account under subsection 
     (a) with respect to all property to which subsection (a) 
     applies.
       ``(3) Termination of postponement.--No tax may be postponed 
     under this subsection later than the due date for the return 
     of tax imposed by this chapter for the taxable year which 
     includes the date of death of the expatriate (or, if earlier, 
     the time that the security provided with respect to the 
     property fails to meet the requirements of paragraph

[[Page S7165]]

     (4), unless the taxpayer corrects such failure within the 
     time specified by the Secretary).
       ``(4) Security.--
       ``(A) In general.--No election may be made under paragraph 
     (1) with respect to any property unless adequate security is 
     provided to the Secretary with respect to such property.
       ``(B) Adequate security.--For purposes of subparagraph (A), 
     security with respect to any property shall be treated as 
     adequate security if--
       ``(i) it is a bond in an amount equal to the deferred tax 
     amount under paragraph (2) for the property, or
       ``(ii) the taxpayer otherwise establishes to the 
     satisfaction of the Secretary that the security is adequate.
       ``(5) Waiver of certain rights.--No election may be made 
     under paragraph (1) unless the taxpayer consents to the 
     waiver of any right under any treaty of the United States 
     which would preclude assessment or collection of any tax 
     imposed by reason of this section.
       ``(6) Elections.--An election under paragraph (1) shall 
     only apply to property described in the election and, once 
     made, is irrevocable. An election may be made under paragraph 
     (1) with respect to an interest in a trust with respect to 
     which gain is required to be recognized under subsection 
     (f)(1).
       ``(7) Interest.--For purposes of section 6601--
       ``(A) the last date for the payment of tax shall be 
     determined without regard to the election under this 
     subsection, and
       ``(B) section 6621(a)(2) shall be applied by substituting 
     `5 percentage points' for `3 percentage points' in 
     subparagraph (B) thereof.
       ``(c) Covered Expatriate.--For purposes of this section--
       ``(1) In general.--Except as provided in paragraph (2), the 
     term `covered expatriate' means an expatriate.
       ``(2) Exceptions.--An individual shall not be treated as a 
     covered expatriate if--
       ``(A) the individual--
       ``(i) became at birth a citizen of the United States and a 
     citizen of another country and, as of the expatriation date, 
     continues to be a citizen of, and is taxed as a resident of, 
     such other country, and
       ``(ii) has not been a resident of the United States (as 
     defined in section 7701(b)(1)(A)(ii)) during the 5 taxable 
     years ending with the taxable year during which the 
     expatriation date occurs, or
       ``(B)(i) the individual's relinquishment of United States 
     citizenship occurs before such individual attains age 18\1/
     2\, and
       ``(ii) the individual has been a resident of the United 
     States (as so defined) for not more than 5 taxable years 
     before the date of relinquishment.
       ``(d) Exempt Property; Special Rules for Pension Plans.--
       ``(1) Exempt property.--This section shall not apply to the 
     following:
       ``(A) United states real property interests.--Any United 
     States real property interest (as defined in section 
     897(c)(1)), other than stock of a United States real property 
     holding corporation which does not, on the day before the 
     expatriation date, meet the requirements of section 
     897(c)(2).
       ``(B) Specified property.--Any property or interest in 
     property not described in subparagraph (A) which the 
     Secretary specifies in regulations.
       ``(2) Special rules for certain retirement plans.--
       ``(A) In general.--If a covered expatriate holds on the day 
     before the expatriation date any interest in a retirement 
     plan to which this paragraph applies--
       ``(i) such interest shall not be treated as sold for 
     purposes of subsection (a)(1), but
       ``(ii) an amount equal to the present value of the 
     expatriate's nonforfeitable accrued benefit shall be treated 
     as having been received by such individual on such date as a 
     distribution under the plan.
       ``(B) Treatment of subsequent distributions.--In the case 
     of any distribution on or after the expatriation date to or 
     on behalf of the covered expatriate from a plan from which 
     the expatriate was treated as receiving a distribution under 
     subparagraph (A), the amount otherwise includible in gross 
     income by reason of the subsequent distribution shall be 
     reduced by the excess of the amount includible in gross 
     income under subparagraph (A) over any portion of such amount 
     to which this subparagraph previously applied.
       ``(C) Treatment of subsequent distributions by plan.--For 
     purposes of this title, a retirement plan to which this 
     paragraph applies, and any person acting on the plan's 
     behalf, shall treat any subsequent distribution described in 
     subparagraph (B) in the same manner as such distribution 
     would be treated without regard to this paragraph.
       ``(D) Applicable plans.--This paragraph shall apply to--
       ``(i) any qualified retirement plan (as defined in section 
     4974(c)),
       ``(ii) an eligible deferred compensation plan (as defined 
     in section 457(b)) of an eligible employer described in 
     section 457(e)(1)(A), and
       ``(iii) to the extent provided in regulations, any foreign 
     pension plan or similar retirement arrangements or programs.
       ``(e) Definitions.--For purposes of this section--
       ``(1) Expatriate.--The term `expatriate' means--
       ``(A) any United States citizen who relinquishes 
     citizenship, and
       ``(B) any long-term resident of the United States who--
       ``(i) ceases to be a lawful permanent resident of the 
     United States (within the meaning of section 7701(b)(6)), or
       ``(ii) commences to be treated as a resident of a foreign 
     country under the provisions of a tax treaty between the 
     United States and the foreign country and who does not waive 
     the benefits of such treaty applicable to residents of the 
     foreign country.
       ``(2) Expatriation date.--The term `expatriation date' 
     means--
       ``(A) the date an individual relinquishes United States 
     citizenship, or
       ``(B) in the case of a long-term resident of the United 
     States, the date of the event described in clause (i) or (ii) 
     of paragraph (1)(B).
       ``(3) Relinquishment of citizenship.--A citizen shall be 
     treated as relinquishing United States citizenship on the 
     earliest of--
       ``(A) the date the individual renounces such individual's 
     United States nationality before a diplomatic or consular 
     officer of the United States pursuant to paragraph (5) of 
     section 349(a) of the Immigration and Nationality Act (8 
     U.S.C. 1481(a)(5)),
       ``(B) the date the individual furnishes to the United 
     States Department of State a signed statement of voluntary 
     relinquishment of United States nationality confirming the 
     performance of an act of expatriation specified in paragraph 
     (1), (2), (3), or (4) of section 349(a) of the Immigration 
     and Nationality Act (8 U.S.C. 1481(a)(1)-(4)),
       ``(C) the date the United States Department of State issues 
     to the individual a certificate of loss of nationality, or
       ``(D) the date a court of the United States cancels a 
     naturalized citizen's certificate of naturalization.
     Subparagraph (A) or (B) shall not apply to any individual 
     unless the renunciation or voluntary relinquishment is 
     subsequently approved by the issuance to the individual of a 
     certificate of loss of nationality by the United States 
     Department of State.
       ``(4) Long-term resident.--The term `long-term resident' 
     has the meaning given to such term by section 877(e)(2).
       ``(f) Special Rules Applicable to Beneficiaries' Interests 
     in Trust.--
       ``(1) In general.--Except as provided in paragraph (2), if 
     an individual is determined under paragraph (3) to hold an 
     interest in a trust on the day before the expatriation date--
       ``(A) the individual shall not be treated as having sold 
     such interest,
       ``(B) such interest shall be treated as a separate share in 
     the trust, and
       ``(C)(i) such separate share shall be treated as a separate 
     trust consisting of the assets allocable to such share,
       ``(ii) the separate trust shall be treated as having sold 
     its assets on the day before the expatriation date for their 
     fair market value and as having distributed all of its assets 
     to the individual as of such time, and
       ``(iii) the individual shall be treated as having 
     recontributed the assets to the separate trust.
     Subsection (a)(2) shall apply to any income, gain, or loss of 
     the individual arising from a distribution described in 
     subparagraph (C)(ii). In determining the amount of such 
     distribution, proper adjustments shall be made for 
     liabilities of the trust allocable to an individual's share 
     in the trust.
       ``(2) Special rules for interests in qualified trusts.--
       ``(A) In general.--If the trust interest described in 
     paragraph (1) is an interest in a qualified trust--
       ``(i) paragraph (1) and subsection (a) shall not apply, and
       ``(ii) in addition to any other tax imposed by this title, 
     there is hereby imposed on each distribution with respect to 
     such interest a tax in the amount determined under 
     subparagraph (B).
       ``(B) Amount of tax.--The amount of tax under subparagraph 
     (A)(ii) shall be equal to the lesser of--
       ``(i) the highest rate of tax imposed by section 1(e) for 
     the taxable year which includes the day before the 
     expatriation date, multiplied by the amount of the 
     distribution, or
       ``(ii) the balance in the deferred tax account immediately 
     before the distribution determined without regard to any 
     increases under subparagraph (C)(ii) after the 30th day 
     preceding the distribution.
       ``(C) Deferred tax account.--For purposes of subparagraph 
     (B)(ii)--
       ``(i) Opening balance.--The opening balance in a deferred 
     tax account with respect to any trust interest is an amount 
     equal to the tax which would have been imposed on the 
     allocable expatriation gain with respect to the trust 
     interest if such gain had been included in gross income under 
     subsection (a).
       ``(ii) Increase for interest.--The balance in the deferred 
     tax account shall be increased by the amount of interest 
     determined (on the balance in the account at the time the 
     interest accrues), for periods after the 90th day after the 
     expatriation date, by using the rates and method applicable 
     under section 6621 for underpayments of tax for such periods, 
     except that section 6621(a)(2) shall be applied by 
     substituting `5 percentage points' for `3 percentage points' 
     in subparagraph (B) thereof.
       ``(iii) Decrease for taxes previously paid.--The balance in 
     the tax deferred account shall be reduced--

       ``(I) by the amount of taxes imposed by subparagraph (A) on 
     any distribution to the person holding the trust interest, 
     and
       ``(II) in the case of a person holding a nonvested 
     interest, to the extent provided in

[[Page S7166]]

     regulations, by the amount of taxes imposed by subparagraph 
     (A) on distributions from the trust with respect to nonvested 
     interests not held by such person.

       ``(D) Allocable expatriation gain.--For purposes of this 
     paragraph, the allocable expatriation gain with respect to 
     any beneficiary's interest in a trust is the amount of gain 
     which would be allocable to such beneficiary's vested and 
     nonvested interests in the trust if the beneficiary held 
     directly all assets allocable to such interests.
       ``(E) Tax deducted and withheld.--
       ``(i) In general.--The tax imposed by subparagraph (A)(ii) 
     shall be deducted and withheld by the trustees from the 
     distribution to which it relates.
       ``(ii) Exception where failure to waive treaty rights.--If 
     an amount may not be deducted and withheld under clause (i) 
     by reason of the distributee failing to waive any treaty 
     right with respect to such distribution--

       ``(I) the tax imposed by subparagraph (A)(ii) shall be 
     imposed on the trust and each trustee shall be personally 
     liable for the amount of such tax, and
       ``(II) any other beneficiary of the trust shall be entitled 
     to recover from the distributee the amount of such tax 
     imposed on the other beneficiary.

       ``(F) Disposition.--If a trust ceases to be a qualified 
     trust at any time, a covered expatriate disposes of an 
     interest in a qualified trust, or a covered expatriate 
     holding an interest in a qualified trust dies, then, in lieu 
     of the tax imposed by subparagraph (A)(ii), there is hereby 
     imposed a tax equal to the lesser of--
       ``(i) the tax determined under paragraph (1) as if the day 
     before the expatriation date were the date of such cessation, 
     disposition, or death, whichever is applicable, or
       ``(ii) the balance in the tax deferred account immediately 
     before such date.
     Such tax shall be imposed on the trust and each trustee shall 
     be personally liable for the amount of such tax and any other 
     beneficiary of the trust shall be entitled to recover from 
     the covered expatriate or the estate the amount of such tax 
     imposed on the other beneficiary.
       ``(G) Definitions and special rules.--For purposes of this 
     paragraph--
       ``(i) Qualified trust.--The term `qualified trust' means a 
     trust which is described in section 7701(a)(30)(E).
       ``(ii) Vested interest.--The term `vested interest' means 
     any interest which, as of the day before the expatriation 
     date, is vested in the beneficiary.
       ``(iii) Nonvested interest.--The term `nonvested interest' 
     means, with respect to any beneficiary, any interest in a 
     trust which is not a vested interest. Such interest shall be 
     determined by assuming the maximum exercise of discretion in 
     favor of the beneficiary and the occurrence of all 
     contingencies in favor of the beneficiary.
       ``(iv) Adjustments.--The Secretary may provide for such 
     adjustments to the bases of assets in a trust or a deferred 
     tax account, and the timing of such adjustments, in order to 
     ensure that gain is taxed only once.
       ``(v) Coordination with retirement plan rules.--This 
     subsection shall not apply to an interest in a trust which is 
     part of a retirement plan to which subsection (d)(2) applies.
       ``(3) Determination of beneficiaries' interest in trust.--
       ``(A) Determinations under paragraph (1).--For purposes of 
     paragraph (1), a beneficiary's interest in a trust shall be 
     based upon all relevant facts and circumstances, including 
     the terms of the trust instrument and any letter of wishes or 
     similar document, historical patterns of trust distributions, 
     and the existence of and functions performed by a trust 
     protector or any similar adviser.
       ``(B) Other determinations.--For purposes of this section--
       ``(i) Constructive ownership.--If a beneficiary of a trust 
     is a corporation, partnership, trust, or estate, the 
     shareholders, partners, or beneficiaries shall be deemed to 
     be the trust beneficiaries for purposes of this section.
       ``(ii) Taxpayer return position.--A taxpayer shall clearly 
     indicate on its income tax return--

       ``(I) the methodology used to determine that taxpayer's 
     trust interest under this section, and
       ``(II) if the taxpayer knows (or has reason to know) that 
     any other beneficiary of such trust is using a different 
     methodology to determine such beneficiary's trust interest 
     under this section.

       ``(g) Termination of Deferrals, etc.--In the case of any 
     covered expatriate, notwithstanding any other provision of 
     this title--
       ``(1) any period during which recognition of income or gain 
     is deferred shall terminate on the day before the 
     expatriation date, and
       ``(2) any extension of time for payment of tax shall cease 
     to apply on the day before the expatriation date and the 
     unpaid portion of such tax shall be due and payable at the 
     time and in the manner prescribed by the Secretary.
       ``(h) Imposition of Tentative Tax.--
       ``(1) In general.--If an individual is required to include 
     any amount in gross income under subsection (a) for any 
     taxable year, there is hereby imposed, immediately before the 
     expatriation date, a tax in an amount equal to the amount of 
     tax which would be imposed if the taxable year were a short 
     taxable year ending on the expatriation date.
       ``(2) Due date.--The due date for any tax imposed by 
     paragraph (1) shall be the 90th day after the expatriation 
     date.
       ``(3) Treatment of tax.--Any tax paid under paragraph (1) 
     shall be treated as a payment of the tax imposed by this 
     chapter for the taxable year to which subsection (a) applies.
       ``(4) Deferral of tax.--The provisions of subsection (b) 
     shall apply to the tax imposed by this subsection to the 
     extent attributable to gain includible in gross income by 
     reason of this section.
       ``(i) Special Liens for Deferred Tax Amounts.--
       ``(1) Imposition of lien.--
       ``(A) In general.--If a covered expatriate makes an 
     election under subsection (a)(4) or (b) which results in the 
     deferral of any tax imposed by reason of subsection (a), the 
     deferred amount (including any interest, additional amount, 
     addition to tax, assessable penalty, and costs attributable 
     to the deferred amount) shall be a lien in favor of the 
     United States on all property of the expatriate located in 
     the United States (without regard to whether this section 
     applies to the property).
       ``(B) Deferred amount.--For purposes of this subsection, 
     the deferred amount is the amount of the increase in the 
     covered expatriate's income tax which, but for the election 
     under subsection (a)(4) or (b), would have occurred by reason 
     of this section for the taxable year including the 
     expatriation date.
       ``(2) Period of lien.--The lien imposed by this subsection 
     shall arise on the expatriation date and continue until--
       ``(A) the liability for tax by reason of this section is 
     satisfied or has become unenforceable by reason of lapse of 
     time, or
       ``(B) it is established to the satisfaction of the 
     Secretary that no further tax liability may arise by reason 
     of this section.
       ``(3) Certain rules apply.--The rules set forth in 
     paragraphs (1), (3), and (4) of section 6324A(d) shall apply 
     with respect to the lien imposed by this subsection as if it 
     were a lien imposed by section 6324A.
       ``(j) Regulations.--The Secretary shall prescribe such 
     regulations as may be necessary or appropriate to carry out 
     the purposes of this section.''.
       (b) Inclusion in Income of Gifts and Bequests Received by 
     United States Citizens and Residents From Expatriates.--
     Section 102 (relating to gifts, etc. not included in gross 
     income) is amended by adding at the end the following new 
     subsection:
       ``(d) Gifts and Inheritances From Covered Expatriates.--
       ``(1) In general.--Subsection (a) shall not exclude from 
     gross income the value of any property acquired by gift, 
     bequest, devise, or inheritance from a covered expatriate 
     after the expatriation date. For purposes of this subsection, 
     any term used in this subsection which is also used in 
     section 877A shall have the same meaning as when used in 
     section 877A.
       ``(2) Exceptions for transfers otherwise subject to estate 
     or gift tax.--Paragraph (1) shall not apply to any property 
     if either--
       ``(A) the gift, bequest, devise, or inheritance is--
       ``(i) shown on a timely filed return of tax imposed by 
     chapter 12 as a taxable gift by the covered expatriate, or
       ``(ii) included in the gross estate of the covered 
     expatriate for purposes of chapter 11 and shown on a timely 
     filed return of tax imposed by chapter 11 of the estate of 
     the covered expatriate, or
       ``(B) no such return was timely filed but no such return 
     would have been required to be filed even if the covered 
     expatriate were a citizen or long-term resident of the United 
     States.''.
       (c) Definition of Termination of United States 
     Citizenship.--Section 7701(a) is amended by adding at the end 
     the following new paragraph:
       ``(49) Termination of united states citizenship.--
       ``(A) In general.--An individual shall not cease to be 
     treated as a United States citizen before the date on which 
     the individual's citizenship is treated as relinquished under 
     section 877A(e)(3).
       ``(B) Dual citizens.--Under regulations prescribed by the 
     Secretary, subparagraph (A) shall not apply to an individual 
     who became at birth a citizen of the United States and a 
     citizen of another country.''.
       (d) Ineligibility for Visa or Admission to United States.--
       (1) In general.--Section 212(a)(10)(E) of the Immigration 
     and Nationality Act (8 U.S.C. 1182(a)(10)(E)) is amended to 
     read as follows:
       ``(E) Former citizens not in compliance with expatriation 
     revenue provisions.--Any alien who is a former citizen of the 
     United States who relinquishes United States citizenship 
     (within the meaning of section 877A(e)(3) of the Internal 
     Revenue Code of 1986) and who is not in compliance with 
     section 877A of such Code (relating to expatriation).''.
       (2) Availability of information.--
       (A) In general.--Section 6103(l) (relating to disclosure of 
     returns and return information for purposes other than tax 
     administration) is amended by adding at the end the following 
     new paragraph:
       ``(21) Disclosure to deny visa or admission to certain 
     expatriates.--Upon written request of the Attorney General or 
     the Attorney General's delegate, the Secretary shall disclose 
     whether an individual is in

[[Page S7167]]

     compliance with section 877A (and if not in compliance, any 
     items of noncompliance) to officers and employees of the 
     Federal agency responsible for administering section 
     212(a)(10)(E) of the Immigration and Nationality Act solely 
     for the purpose of, and to the extent necessary in, 
     administering such section 212(a)(10)(E).''.
       (B) Safeguards.--Section 6103(p)(4) (relating to 
     safeguards) is amended by striking ``or (20)'' each place it 
     appears and inserting ``(20), or (21)''.
       (3) Effective dates.--The amendments made by this 
     subsection shall apply to individuals who relinquish United 
     States citizenship on or after the date of the enactment of 
     this Act.
       (e) Conforming Amendments.--
       (1) Section 877 is amended by adding at the end the 
     following new subsection:
       ``(h) Application.--This section shall not apply to an 
     expatriate (as defined in section 877A(e)) whose expatriation 
     date (as so defined) occurs on or after the date of the 
     enactment of the Safe, Accountable, Flexible, and Efficient 
     Transportation Equity Act of 2005.''.
       (2) Section 2107 is amended by adding at the end the 
     following new subsection:
       ``(f) Application.--This section shall not apply to any 
     expatriate subject to section 877A.''.
       (3) Section 2501(a)(3) is amended by adding at the end the 
     following new subparagraph:
       ``(C) Application.--This paragraph shall not apply to any 
     expatriate subject to section 877A.''.
       (f) Clerical Amendment.--The table of sections for subpart 
     A of part II of subchapter N of chapter 1 is amended by 
     inserting after the item relating to section 877 the 
     following new item:

``Sec. 877A. Tax responsibilities of expatriation.''.
       (g) Effective Date.--
       (1) In general.--Except as provided in this subsection, the 
     amendments made by this section shall apply to expatriates 
     (within the meaning of section 877A(e) of the Internal 
     Revenue Code of 1986, as added by this section) whose 
     expatriation date (as so defined) occurs on or after the date 
     of the enactment of this Act.
       (2) Gifts and bequests.--Section 102(d) of the Internal 
     Revenue Code of 1986 (as added by subsection (b)) shall apply 
     to gifts and bequests received on or after the date of the 
     enactment of this Act, from an individual or the estate of an 
     individual whose expatriation date (as so defined) occurs 
     after such date.
       (3) Due date for tentative tax.--The due date under section 
     877A(h)(2) of the Internal Revenue Code of 1986, as added by 
     this section, shall in no event occur before the 90th day 
     after the date of the enactment of this Act.

     SEC. 1723. DISALLOWANCE OF DEDUCTION FOR PUNITIVE DAMAGES.

       (a) Disallowance of Deduction.--
       (1) In general.--Section 162(g) (relating to treble damage 
     payments under the antitrust laws) is amended--
       (A) by redesignating paragraphs (1) and (2) as 
     subparagraphs (A) and (B), respectively,
       (B) by striking ``If'' and inserting:
       ``(1) Treble damages.--If'', and
       (C) by adding at the end the following new paragraph:
       ``(2) Punitive damages.--No deduction shall be allowed 
     under this chapter for any amount paid or incurred for 
     punitive damages in connection with any judgment in, or 
     settlement of, any action. This paragraph shall not apply to 
     punitive damages described in section 104(c).''.
       (2) Conforming amendment.--The heading for section 162(g) 
     is amended by inserting ``or Punitive Damages'' after 
     ``Laws''.
       (b) Inclusion in Income of Punitive Damages Paid by Insurer 
     or Otherwise.--
       (1) In general.--Part II of subchapter B of chapter 1 
     (relating to items specifically included in gross income) is 
     amended by adding at the end the following new section:

     ``SEC. 91. PUNITIVE DAMAGES COMPENSATED BY INSURANCE OR 
                   OTHERWISE.

       ``Gross income shall include any amount paid to or on 
     behalf of a taxpayer as insurance or otherwise by reason of 
     the taxpayer's liability (or agreement) to pay punitive 
     damages.''.
       (2) Reporting requirements.--Section 6041 (relating to 
     information at source) is amended by adding at the end the 
     following new subsection:
       ``(f) Section To Apply to Punitive Damages Compensation.--
     This section shall apply to payments by a person to or on 
     behalf of another person as insurance or otherwise by reason 
     of the other person's liability (or agreement) to pay 
     punitive damages.''.
       (3) Conforming amendment.--The table of sections for part 
     II of subchapter B of chapter 1 is amended by adding at the 
     end the following new item:

``Sec. 91. Punitive damages compensated by insurance or otherwise.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to damages paid or incurred on or after the date 
     of the enactment of this Act.

     SEC. 1724. APPLICATION OF EARNINGS STRIPPING RULES TO 
                   PARTNERS WHICH ARE C CORPORATIONS.

       (a) In General.--Section 163(j) (relating to limitation on 
     deduction for interest on certain indebtedness) is amended by 
     redesignating paragraph (8) as paragraph (9) and by inserting 
     after paragraph (7) the following new paragraph:
       ``(8) Allocations to certain corporate partners.--If a C 
     corporation is a partner in a partnership--
       ``(A) the corporation's allocable share of indebtedness and 
     interest income of the partnership shall be taken into 
     account in applying this subsection to the corporation, and
       ``(B) if a deduction is not disallowed under this 
     subsection with respect to any interest expense of the 
     partnership, this subsection shall be applied separately in 
     determining whether a deduction is allowable to the 
     corporation with respect to the corporation's allocable share 
     of such interest expense.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning on or after the date 
     of the enactment of this Act.

     SEC. 1725. PROHIBITION ON DEFERRAL OF GAIN FROM THE EXERCISE 
                   OF STOCK OPTIONS AND RESTRICTED STOCK GAINS 
                   THROUGH DEFERRED COMPENSATION ARRANGEMENTS.

       (a) In General.--Section 83 (relating to property 
     transferred in connection with performance of services) is 
     amending by adding at the end the following new subsection:
       ``(i) Prohibition on Additional Deferral Through Deferred 
     Compensation Arrangements.--If a taxpayer exchanges--
       ``(1) an option to purchase employer securities--
       ``(A) to which subsection (a) applies, or
       ``(B) which is described in subsection (e)(3), or
       ``(2) employer securities or any other property based on 
     employer securities transferred to the taxpayer,
     for a right to receive future payments, then, notwithstanding 
     any other provision of this title, there shall be included in 
     gross income for the taxable year of the exchange an amount 
     equal to the present value of such right (or such other 
     amount as the Secretary may by regulations specify). For 
     purposes of this subsection, the term `employer securities' 
     includes any security issued by the employer.''.
       (b) Controlled Group Rules.--Section 414(t)(2) is amended 
     by inserting ``83(i),'' after ``79,''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to any exchange after the date of the enactment 
     of this Act.

     SEC. 1726. LIMITATION OF EMPLOYER DEDUCTION FOR CERTAIN 
                   ENTERTAINMENT EXPENSES.

       (a) In General.--Paragraph (2) of section 274(e) (relating 
     to expenses treated as compensation) is amended to read as 
     follows:
       ``(2) Expenses treated as compensation.--Expenses for 
     goods, services, and facilities, to the extent that the 
     expenses do not exceed the amount of the expenses which are 
     treated by the taxpayer, with respect to the recipient of the 
     entertainment, amusement, or recreation, as compensation to 
     an employee on the taxpayer's return of tax under this 
     chapter and as wages to such employee for purposes of chapter 
     24 (relating to withholding of income tax at source on 
     wages).''.
       (b) Persons Not Employees.--Paragraph (9) of section 274(e) 
     is amended by striking ``to the extent that the expenses are 
     includible in the gross income'' and inserting ``to the 
     extent that the expenses do not exceed the amount of the 
     expenses which are includible in the gross income''.
       (c) Effective Date.--The amendment made by this section 
     shall apply to expenses incurred after the date of the 
     enactment of this Act.

     SEC. 1727. INCREASE IN PENALTY FOR BAD CHECKS AND MONEY 
                   ORDERS.

       (a) In General.--Section 6657 (relating to bad checks) is 
     amended--
       (1) by striking ``$750'' and inserting ``$1,250'', and
       (2) by striking ``$15'' and inserting ``$25''.
       (b) Effective Date.--The amendments made by this section 
     apply to checks or money orders received after the date of 
     the enactment of this Act.

     SEC. 1728. ELIMINATION OF DOUBLE DEDUCTION ON MINING 
                   EXPLORATION AND DEVELOPMENT COSTS UNDER THE 
                   MINIMUM TAX.

       (a) In General.--Section 57(a)(1) (relating to depletion) 
     is amended by striking ``for the taxable year)'' and 
     inserting ``for the taxable year and determined without 
     regard to so much of the basis as is attributable to mining 
     exploration and development costs described in section 616 or 
     617 for which a deduction is allowable for any taxable year 
     under this part).''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment this Act.

PART II--IMPROVEMENTS IN EFFICIENCY AND SAFEGUARDS IN INTERNAL REVENUE 
                           SERVICE COLLECTION

     SEC. 1731. WAIVER OF USER FEE FOR INSTALLMENT AGREEMENTS 
                   USING AUTOMATED WITHDRAWALS.

       (a) In General.--Section 6159 (relating to agreements for 
     payment of tax liability in installments) is amended by 
     redesignating subsection (e) as subsection (f) and by 
     inserting after subsection (d) the following:
       ``(e) Waiver of User Fees for Installment Agreements Using 
     Automated Withdrawals.--In the case of a taxpayer who enters 
     into an installment agreement in which automated installment 
     payments are agreed to, the Secretary shall waive the fee (if 
     any) for entering into the installment agreement.''.

[[Page S7168]]

       (b) Effective Date.--The amendments made by this section 
     shall apply to agreements entered into on or after the date 
     which is 180 days after the date of the enactment of this 
     Act.

     SEC. 1732. TERMINATION OF INSTALLMENT AGREEMENTS.

       (a) In General.--Section 6159(b)(4) (relating to failure to 
     pay an installment or any other tax liability when due or to 
     provide requested financial information) is amended by 
     striking ``or'' at the end of subparagraph (B), by 
     redesignating subparagraph (C) as subparagraph (E), and by 
     inserting after subparagraph (B) the following:
       ``(C) to make a Federal tax deposit under section 6302 at 
     the time such deposit is required to be made,
       ``(D) to file a return of tax imposed under this title by 
     its due date (including extensions), or''.
       (b) Conforming Amendment.--The heading for section 
     6159(b)(4) is amended by striking ``Failure to pay an 
     installment or any other tax liability when due or to provide 
     requested financial information'' and inserting ``Failure to 
     make payments or deposits or file returns when due or to 
     provide requested financial information''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to failures occurring on or after the date of the 
     enactment of this Act.

     SEC. 1733. OFFICE OF CHIEF COUNSEL REVIEW OF OFFERS-IN-
                   COMPROMISE.

       (a) In General.--Section 7122(b) (relating to record) is 
     amended by striking ``Whenever a compromise'' and all that 
     follows through ``his delegate'' and inserting ``If the 
     Secretary determines that an opinion of the General Counsel 
     for the Department of the Treasury, or the Counsel's 
     delegate, is required with respect to a compromise, there 
     shall be placed on file in the office of the Secretary such 
     opinion''.
       (b) Conforming Amendments.--Section 7122(b) is amended by 
     striking the second and third sentences.
       (c) Effective Date.--The amendments made by this section 
     shall apply to offers-in-compromise submitted or pending on 
     or after the date of the enactment of this Act.

     SEC. 1734. PARTIAL PAYMENTS REQUIRED WITH SUBMISSION OF 
                   OFFERS-IN-COMPROMISE.

       (a) In General.--Section 7122 (relating to compromises), as 
     amended by this Act, is amended by redesignating subsections 
     (c), (d), and (e) as subsections (d), (e), and (f), 
     respectively, and by inserting after subsection (b) the 
     following new subsection:
       ``(c) Rules for Submission of Offers-in-compromise.--
       ``(1) Partial payment required with submission.--
       ``(A) Lump-sum offers.--
       ``(i) In general.--The submission of any lump-sum offer-in-
     compromise shall be accompanied by the payment of 20 percent 
     of amount of such offer.
       ``(ii) Lump-sum offer-in-compromise.--For purposes of this 
     section, the term `lump-sum offer-in-compromise' means any 
     offer of payments made in 5 or fewer installments.
       ``(B) Periodic payment offers.--The submission of any 
     periodic payment offer-in-compromise shall be accompanied by 
     the payment of the amount of the first proposed installment 
     and each proposed installment due during the period such 
     offer is being evaluated for acceptance and has not been 
     rejected by the Secretary. Any failure to make a payment 
     required under the preceding sentence shall be deemed a 
     withdrawal of the offer-in-compromise.
       ``(2) Rules of application.--
       ``(A) Use of payment.--The application of any payment made 
     under this subsection to the assessed tax or other amounts 
     imposed under this title with respect to such tax may be 
     specified by the taxpayer.
       ``(B) No user fee imposed.--Any user fee which would 
     otherwise be imposed under this section shall not be imposed 
     on any offer-in-compromise accompanied by a payment required 
     under this subsection.''.
       (b) Additional Rules Relating to Treatment of Offers.--
       (1) Unprocessable offer if payment requirements are not 
     met.--Paragraph (3) of section 7122(d) (relating to standards 
     for evaluation of offers), as redesignated by subsection (a), 
     is amended by striking ``; and'' at the end of subparagraph 
     (A) and inserting a comma, by striking the period at the end 
     of subparagraph (B) and inserting ``, and'', and by adding at 
     the end the following new subparagraph:
       ``(C) any offer-in-compromise which does not meet the 
     requirements of subsection (c) shall be returned to the 
     taxpayer as unprocessable.''.
       (2) Deemed acceptance of offer not rejected within certain 
     period.--Section 7122, as amended by subsection (a), is 
     amended by adding at the end the following new subsection:
       ``(g) Deemed Acceptance of Offer Not Rejected Within 
     Certain Period.--Any offer-in-compromise submitted under this 
     section shall be deemed to be accepted by the Secretary if 
     such offer is not rejected by the Secretary before the date 
     which is 24 months after the date of the submission of such 
     offer (12 months for offers-in-compromise submitted after the 
     date which is 5 years after the date of the enactment of this 
     subsection). For purposes of the preceding sentence, any 
     period during which any tax liability which is the subject of 
     such offer-in-compromise is in dispute in any judicial 
     proceeding shall not be taken in to account in determining 
     the expiration of the 24-month period (or 12-month period, if 
     applicable).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to offers-in-compromise submitted on and after 
     the date which is 60 days after the date of the enactment of 
     this Act.

     SEC. 1735. JOINT TASK FORCE ON OFFERS-IN-COMPROMISE.

       (a) In General.--The Secretary of the Treasury shall 
     establish a joint task force--
       (1) to review the Internal Revenue Service's determinations 
     with respect to offers-in-compromise, including offers which 
     raise equitable, public policy, or economic hardship grounds 
     for compromise of a tax liability under section 7122 of the 
     Internal Revenue Code of 1986,
       (2) to review the extent to which the Internal Revenue 
     Service has used its authority to resolve longstanding cases 
     by forgoing penalties and interest which have accumulated as 
     a result of delay in determining the taxpayer's liability,
       (3) to provide recommendations as to whether the Internal 
     Revenue Service's evaluation of offers-in-compromise should 
     include--
       (A) the taxpayer's compliance history,
       (B) errors by the Internal Revenue Service with respect to 
     the underlying tax, and
       (C) wrongful acts by a third party which gave rise to the 
     liability, and
       (4) to annually report to the Committee on Finance of the 
     Senate and the Committee on Ways and Means of the House of 
     Representatives (beginning in 2006) regarding such review and 
     recommendations.
       (b) Members of Joint Task Force.--The membership of the 
     joint task force under subsection (a) shall consist of 1 
     representative each from the Department of the Treasury, the 
     Internal Revenue Service Oversight Board, the Office of the 
     Chief Counsel for the Internal Revenue Service, the Office of 
     the Taxpayer Advocate, the Office of Appeals, and the 
     division of the Internal Revenue Service charged with 
     operating the offer-in-compromise program.
       (c) Report of National Taxpayer Advocate.--
       (1) In general.--Clause (ii) of section 7803(c)(2)(B) 
     (relating to annual reports) is amended by striking ``and'' 
     at the end of subclause (X), by redesignating subclause (XI) 
     as subclause (XII), and by inserting after subclause (X) the 
     following new subclause:

       ``(XI) include a list of the factors taxpayers have raised 
     to support their claims for offers-in-compromise relief, the 
     number of such offers submitted, accepted, and rejected, the 
     number of such offers appealed, the period during which 
     review of such offers have remained pending, and the efforts 
     the Internal Revenue Service has made to correctly identify 
     such offers, including the training of employees in 
     identifying and evaluating such offers.''.

       (2) Effective date.--The amendment made by paragraph (1) 
     shall apply to reports in calendar year 2006 and thereafter.
                                 ______
                                 
  SA 933. Mr. GRASSLEY (for himself and Mr. Baucus) submitted an 
amendment intended to be proposed by him to the bill H.R. 6, to ensure 
jobs for our future with secure, affordable, and reliable energy; which 
was ordered to lie on the table; as follows:

       On page 1, strike lines 4 and 5 and insert the following:

     SEC. 1500. SHORT TITLE; AMENDMENT OF 1986 CODE.

       Beginning on page 2, strike line 5 and all that follows 
     through page 3, line 2, and insert the following:

                 Subtitle A--Electricity Infrastructure

       On page 7, lines 6 and 7, strike ``low-head hydroelectric 
     facility or''.
       On page 8, lines 10 and 11, strike ``Low-head hydroelectric 
     facility or nonhydroelectric dam'' and insert 
     ``Nonhydroelectric dam''.
       On page 8, strike lines 18 through 20 and insert the 
     following:
       ``(ii) the facility was placed in service before the date 
     of the enactment of this paragraph and did not produce 
     hydroelectric power on the date of the enactment of this 
     paragraph, and
       Beginning on page 8, line 24, strike ``the installation'' 
     and all that follows through page 9, line 1 and insert 
     ``there is not any enlargement of the diversion structure, or 
     construction or enlargement of a bypass channel,''.
       On page 9, strike lines 5 through 9.
       On page 26, strike lines 14 and 15 and insert the 
     following:
       (2) Section 1397E(c)(2) is amended by inserting ``, and 
     subpart H thereof'' after ``refundable credits''.
       On page 68, lines 8 and 9, strike ``the date of the 
     enactment of this Act'' and insert ``December 31, 2004''.
       On page 73, line 1, strike ``PATRONS'' and insert 
     ``OWNERS''.
       On page 90, strike lines 4 through 7.
       On page 90, line 21, strike ``and, in the case'' and all 
     that follows through line 23.
       On page 107, line 17, insert ``a home inspector certified 
     by the Secretary of Energy as trained to perform an energy 
     inspection for purposes of this section,'' after ``(IPIA),''.
       On page 110, line 22, strike ``(2)'' and insert ``(3)''.
       On page 143, strike lines 1 through 6, and insert the 
     following:
       ``(1) Maximum credit.--The credit allowed under subsection 
     (a) for any taxable year shall not exceed--

[[Page S7169]]

       ``(A) $2,000 with respect to any qualified solar water 
     heating expenditures,
       ``(B) $2,000 with respect to any qualified photovoltaic 
     property expenditures, and
       ``(C) $500 with respect to each kilowatt of capacity of 
     qualified fuel cell property (as defined in section 48(d)(1)) 
     for which qualified fuel cell property expenditures are made,
       On page 149, between lines 6 and 7, insert the following:
       (1) Section 23(c) is amended by striking ``this section and 
     section 1400C'' and inserting ``this section, section 25D, 
     and section 1400C''.
       (2) Section 25(e)(1)(C) is amended by striking ``this 
     section and sections 23 and 1400C'' and inserting ``other 
     than this section, section 23, section 25D, and section 
     1400C''.
       (3) Section 1400C(d) is amended by striking ``this 
     section'' and inserting ``this section and section 25D''.
       On page 149, line 7, strike ``(1)'' and insert ``(4)''.
       On page 149, line 15, strike ``(2)'' and insert ``(5)''.
       On page 149, lined 19 and 20, strike ``Except as provided 
     by paragraph (2), the'' and insert ``The''.
       On page 155, lines 2 and 3, strike ``for use in a 
     structure''.
       On page 155, line 12, insert ``periods'' before ``before''.
       On page 210, between lines 19 and 20, insert the following:
       (b) Written Notice of Election to Allocate Credit to 
     Patrons.--Section 40(g)(6)(A)(ii) (relating to form and 
     effect of election) is amended by adding at the end the 
     following new sentence: ``Such election shall not take effect 
     unless the organization designates the apportionment as such 
     in a written notice mailed to its patrons during the payment 
     period described in section 1382(d).''.
       On page 210, line 20, strike ``(b)'' and insert ``(c)''.
       Beginning on page 228, line 19, strike all through page 
     229, line 2, and insert the following:
       ``(B) within 2 years after the date of such first retail 
     sale, such article is resold by the purchaser or such 
     purchaser makes a substantial nonexempt use of such article,
     then such sale or use of such article by such purchaser shall 
     be treated as the first retail sale of such article for a 
     price equal to its fair market value at the time of such sale 
     or use.
       On page 232, line 21, strike ``and''.
       On page 232, between lines 21 and 22, insert the following:
       (i) by adding at the end the following new sentence: ``For 
     purposes of this subsection, any removal described in section 
     4081(a)(3)(A) shall be treated as a removal from a terminal 
     but only if such terminal is located within a secured area of 
     an airport.''.
                                 ______
                                 
  SA 934. Mr. GREGG submitted an amendment intended to be proposed by 
him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       Beginning on page 28, strike line 16 and all that follows 
     through page 29, line 2, and insert the following:

     SEC. 105. ENERGY SAVINGS PERFORMANCE CONTRACTS.

       (a) Extension.--Section 801(c) of the National Energy 
     Conservation Policy Act (42 U.S.C. 8287(c)) is amended by 
     striking ``2006'' and inserting ``2010''.
       (b) Payment of Costs.--The National Energy Conservation 
     Policy Act is amended by striking section 802 (42 U.S.C. 
     8287a) and inserting the following:

     ``SEC. 802. PAYMENT OF COSTS.

       ``(a) In General.--Notwithstanding any other provision of 
     law, on October 1, 2006, and on each October 1 thereafter 
     through October 1, 2009, out of any funds in the Treasury not 
     otherwise appropriated, the Secretary of the Treasury shall 
     transfer to the Secretary $240,000,000, to remain available 
     until expended.
       ``(b) Use of Funds.--
       ``(1) In general.--The Secretary shall make available 
     amounts described in subsection (a) to Federal agencies 
     entering into contracts under this title to pay for the costs 
     of the contracts.
       ``(2) Obligation.--The full cost of a contract described in 
     paragraph (1) shall be recorded as an obligation of the 
     Federal Government on the date on which the contract is 
     entered into.
       ``(3) Limitation.--A Federal agency may not enter into a 
     contract under this title in a case in which all amounts made 
     available under subsection (a) have already been fully 
     obligated.
       ``(4) No third-party financing.--A contract under this 
     title shall--
       ``(A) include no option for third-party financing; and
       ``(B) use only amounts made available under subsection (a) 
     to cover all costs of the contract.
       ``(5) Federal agencies.--Any amount paid by a Federal 
     agency under any contract entered into under this title may 
     be paid only from funds made available under subsection 
     (a).''.
       ``(c) Conforming change.--The National Energy Conservation 
     Policy Act is amended by striking section 801(a)(2)(D)(ii).
                                 ______
                                 
  SA 935. Mr. BINGAMAN submitted an amendment intended to be proposed 
by him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       On page 437, after line 22, add the following:

     SEC. __. ANALYSIS OF IMPACTS OF USE OF SPECIAL FUEL 
                   FORMULATIONS.

       (a) In General.--The Administrator of the Environmental 
     Protection Agency, in cooperation with the Secretary, heads 
     of other Federal agencies, and States, shall carry out a 
     study--
       (1) to develop a plan to balance the environmental benefits 
     of using special gasoline blends or formulations with the 
     impacts that the use of those blends or formulations has on 
     the supply, demand, and pricing of gasoline and other fuels; 
     and
       (2) to identify any statutory or other changes that would 
     be required to achieve that balance.
       (b) Report.--As soon as practicable after the date of 
     completion of the study under subsection (a), the 
     Administrator of the Environmental Protection Agency shall 
     submit to Congress a report describing the results of the 
     study.
                                 ______
                                 
  SA 936. Mr. BINGAMAN submitted an amendment intended to be proposed 
by him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       On page 437, after line 22, add the following:

     SEC. __. IMPACTS OF USE OF SPECIAL FUEL FORMULATIONS.

       In determining whether to approve an application by a State 
     for the use of a new gasoline blend or other fuel formulation 
     under the Clean Air Act (42 U.S.C. 7401 et seq.), the 
     Administrator of the Environmental Protection Agency shall 
     take into consideration impacts that the use of the blend or 
     formulation would have on the supply, demand, and pricing of 
     gasoline and other fuels.
                                 ______
                                 
  SA 937. Mr. BINGAMAN submitted an amendment intended to be proposed 
by him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       At the appropriate place, insert the following:

     SEC. __. 5-YEAR RECOVERY PERIOD FOR QUALIFIED SOLAR 
                   INDUSTRIAL FACILITIES.

       (a) In General.--Section 168(e)(3)(B) of the Internal 
     Revenue Code of 1986 (relating to 5-year property), as 
     amended by this Act, is amended by striking ``and'' at the 
     end of clause (vi), by striking the period at the end of 
     clause (vii) and inserting ``, and'', and by adding at the 
     end the following new clause:
       ``(viii) any qualified solar industrial facility.''
       (b) Qualified solar industrial facility.--Section 168(i) of 
     the Internal Revenue Code of 1986, as amended by this Act, is 
     amended by adding at the end the following new paragraph:
       ``(18) Qualified solar industrial facility.--
       ``(A) In general.--The term `qualified solar industrial 
     facility' means a facility which is placed in service on or 
     after January 1, 2005, and which uses, as part of an 
     industrial process, solar process energy, but does not 
     include any facility described in section 45(d)(4).
       ``(B) Qualified evaporation and equipment.--The term `solar 
     process energy' includes solar energy utilized for qualified 
     evaporation.
       ``(C) Qualified evaporation.--The term `qualified 
     evaporation' means the evaporation or transpiration of 
     liquids from a solution as part of a process to concentrate 
     such solution in order to extract products from such 
     solution. Such term includes utilizing evaporation ponds to 
     concentrate solutions as part of a mining process, but does 
     not include evaporation used solely to dispose water or other 
     liquids.
       ``(D) Facility.--The term `facility' includes an 
     evaporation pond and all equipment and pipelines used to 
     harvest minerals from the pond and transport such minerals to 
     the point of processing.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to property placed in service in taxable years 
     beginning after the date of the enactment of this Act.
                                 ______
                                 
  SA 938. Mr. CORNYN submitted an amendment intended to be proposed by 
him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       On page 272, between lines 7 and 8, insert the following:

     SEC. 328. KNOWN POTASH LEASING AREA, NEW MEXICO.

       (a) Approval of Application.--
       (1) In general.--Notwithstanding any other provision of 
     law, subject to paragraph (2), the Secretary shall approve an 
     application for a drilling permit in the Known Potash Leasing 
     Area near Carlsbad, New Mexico, as soon as practicable after 
     the date on which the applicant satisfies the general 
     requirements for the application under the Mineral Leasing 
     Act (30 U.S.C. 181 et seq.).

[[Page S7170]]

       (2) Exception.--The Secretary shall not approve an 
     application described in paragraph (1) if the Secretary 
     affirmatively determines, based on credible scientific and 
     technical information relating to the particular geology of 
     the drilling site involved in the permit application--
       (A) that approval of the application would create specific, 
     unreasonable, and immitigable safety risks to potash mining 
     in the immediate vicinity of the oil and gas drilling that is 
     the subject of the application; or
       (B)(i) that approval of the application would permanently 
     waste commercially significant volumes of economically-
     recoverable potash located in the immediate vicinity of the 
     subject application; and
       (ii) that the dollar value of the permanent waste exceeds 
     the estimated net present value of the recoverable oil and 
     gas from the requested drilling site.
       (b) Site Specific Information.--In any determination to 
     deny an application described in subsection (a)(1) based on 
     reasons described in subsection (a)(2), the Secretary shall 
     specify in writing the site-specific scientific and technical 
     geological information on which the denial is based.
       (c) Presumption.--In any case in which an application for a 
     drilling permit relates to a portion of the Known Potash 
     Leasing Area that is barren of potash, or in which potash is 
     not currently being mined, the Secretary shall review the 
     application with the presumption that approval of the 
     application will not create potential adverse impact on 
     potash mining safety or waste of economically-recoverable 
     potash reserves.
                                 ______
                                 
  SA 939. Mr. SANTORUM submitted an amendment intended to be proposed 
by him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:
       At the appropriate place, insert the following:

     SEC. __. CAPITAL IMPROVEMENTS TO EXISTING CLEAN COKE/
                   COGENERATION MANUFACTURING FACILITIES.

       (a) In General.--Paragraph (2) of section 48C(b)(2) of the 
     Internal Revenue Code of 1986 (as added by this Act) is 
     amended by adding at the end the following flush sentence:
     ``Such term shall include any capital improvement to any 
     property which is described in the preceding sentence.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect as if included in the amendments made by 
     section 1511.
                                 ______
                                 
  SA 940. Mr. INHOFE submitted an amendment intended to be proposed by 
him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       Section 211(K)(1)(B) of the Clean Air Act as added by this 
     Act is amended by striking clause (vi) and inserting the 
     following:
       (vi) ``If the Administrator promulgates, by June 1, 2007, 
     final regulations to control hazardous air pollutants from 
     motor vehicles and motor vehicle fuels that achieve greater 
     overall reductions in air toxics from reformulated gasoline 
     than the reductions that would be achieved under subsection 
     (K)(1)(B), then subsections 211(k)(1)(B)(i) through 
     211(k)(1)(v) shall be null and void and regulations 
     promulgated thereunder shall be rescinded and have no further 
     effect.''
                                 ______
                                 
  SA 941. Mrs. BOXER submitted an amendment intended to be proposed by 
her to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       At the appropriate place, insert the following:

     SEC. __. MORATORIUM ON OFFSHORE DRILLING NEAR NATIONAL MARINE 
                   SANCTUARIES.

       Notwithstanding any other provision of this Act or any 
     other law, no offshore drilling shall be permitted in Federal 
     water located within 20 miles of a national marine sanctuary.
                                 ______
                                 
  SA 942. Mrs. BOXER submitted an amendment intended to be proposed by 
her to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       At the appropriate place, insert the following:

     SEC. __. LIABILITY FOR DAMAGE TO COASTAL NATURAL RESOURCES 
                   AND ECOSYSTEMS.

       Notwithstanding any other provision of this Act or any 
     other law, a State that permits offshore drilling in Federal 
     water off the coast of the State shall be liable for any 
     damage caused by that drilling, including damage to coastal 
     and marine natural resources and ecosystems, to a State that 
     does not permit offshore drilling in Federal water off the 
     coast of the State.
                                 ______
                                 
  SA 943. Mrs. BOXER submitted an amendment intended to be proposed by 
her to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       On page 264, line 6, before the period, insert the 
     following: ``(other than Federal waters that are adjacent to 
     the waters of a State that has a moratorium on oil or gas 
     leasing)''.
                                 ______
                                 
  SA 944. Mrs. BOXER submitted an amendment intended to be proposed by 
her to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       On page 264, line 6, before the period, insert the 
     following: ``(other than waters that are within 20 miles of 
     any area located on the outer Continental Shelf that is 
     designated as a marine sanctuary under the Marine Protection, 
     Research, and Sanctuaries Act of 1972 (33 U.S.C. 1401 et 
     seq.))''.
                                 ______
                                 
  SA 945. Mrs. BOXER submitted an amendment intended to be proposed by 
her to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       At the appropriate place, insert the following:

     SEC. __. PROHIBITION ON OFFSHORE DRILLING.

       Notwithstanding any other provision of this Act or any 
     other law, no offshore drilling shall be permitted in Federal 
     water that is adjacent to State water of any State that has 
     in effect a moratorium on offshore drilling.
                                 ______
                                 
  SA 946. Mr. HATCH submitted an amendment intended to be proposed by 
him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       On page 407, between lines 11 and 12, insert the following:

     SEC. 625. SPENT NUCLEAR FUEL MORATORIUM.

       (a) Definitions.--In this section:
       (1) Non-federally-owned, offsite facility.--The term ``non-
     Federally-owned, offsite facility'' means a facility for the 
     storage of nuclear waste that is not on the premises of a 
     private nuclear power plant.
       (2) Spent nuclear fuel.--The term ``spent nuclear fuel'' 
     means a uranium-bearing fuel element that--
       (A) has been used at a nuclear reactor; and
       (B) no longer produces enough energy to sustain a nuclear 
     reaction.
       (b) Moratorium.--
       (1) In general.--Notwithstanding any other provision of law 
     (including regulations, guidelines, and advisories), no spent 
     nuclear fuel or related high level material shall be 
     deposited into, or transported to, a non-Federally-owned, 
     offsite facility.
       (2) Use of federal funds.--No Federal funds shall be used 
     to study, report, or investigate a deposit or transportation 
     described in paragraph (1).
       (c) Studies.--
       (1) Promotion of sites.--
       (A) In general.--As soon as practicable after the date of 
     enactment of this Act, the Secretary shall conduct a study of 
     the feasibility of transporting, maintaining, and storing 
     commercial spent nuclear fuel and related material at 
     facilities of the Department.
       (B) Inclusions.--The study under subparagraph (A) shall 
     include an analysis of whether the Federal Government should 
     take ownership of, and liability for storing and maintaining, 
     commercial spent nuclear fuel and related material at--
       (i) the facilities described in subparagraph (A); or
       (ii) privately-owned nuclear power facilities.
       (2) Feasibility of reprocessing.--
       (A) In general.--As soon as practicable after the date of 
     enactment of this Act, the Secretary shall request that the 
     National Academy of Sciences conduct a study of techniques 
     and technologies available as of the date on which the study 
     is conducted for reprocessing and recycling spent nuclear 
     fuel.
       (B) Recycling program.--
       (i) In general.--The study under subparagraph (A) shall 
     include an analysis of how the Department can carry out a 
     program under which the Department shall recycle commercial 
     spent nuclear fuel in the United States.
       (ii) Inclusions.--The program described in clause (i) shall 
     include--

       (I) an integrated spent fuel recycling plan, including the 
     selection of an advanced reprocessing technology to be used 
     to carry out the recycling; and
       (II) a competitive process under which the Secretary shall 
     select 1 or more sites at which to develop integrated spent 
     fuel recycling facilities (including facilities for 
     reprocessing, preparation of mixed oxide fuel, vitrification 
     of high-level waste products, and temporary process storage).

       (3) Federally-owned facilities.--As soon as practicable 
     after the date of enactment of this Act, the Secretary shall 
     conduct a study of the feasibility of transporting, 
     maintaining, and storing commercial spent nuclear fuel and 
     related material at federally-owned facilities, including 
     facilities controlled by the Department and Department of 
     Defense.
       (d) Report.--Not later than 180 days after the date of 
     enactment of this Act, the Secretary shall submit to the 
     Committee on Appropriations and the Committee on Energy and 
     Natural Resources of the Senate and the

[[Page S7171]]

     Committee on Appropriations and the Committee on Energy and 
     Commerce of the House of Representatives a report describing 
     the findings of the Secretary under each study described in 
     subsection (c).
                                 ______
                                 
  SA 947. Mr. HATCH submitted an amendment intended to be proposed by 
him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       Beginning on page 290, strike line 6 and all that follows 
     through page 296, line 25, and insert the following:

     SEC. 346. OIL SHALE AND TAR SANDS.

       (a) Declaration of Policy.--Congress declares that it is 
     the policy of the United States that--
       (1) United States oil shale and tar sands are strategically 
     important domestic resources that should be developed through 
     methods that help reduce the growing dependence of the United 
     States on politically and economically unstable sources of 
     foreign oil imports;
       (2) the development of oil shale and tar sands, for 
     research and commercial development, should be conducted in 
     an economically feasible and environmentally sound manner, 
     using practices that minimize impacts; and
       (3) development should occur, with an emphasis on 
     sustainability, to benefit the United States while taking 
     into account affected States and communities.
       (b) Leasing Program for Research and Development.--
       (1) In general.--In accordance with section 21 of the 
     Mineral Leasing Act (30 U.S.C. 241) and any other applicable 
     law, except as provided in this section, not later than 1 
     year after the date of enactment of this Act, from land 
     otherwise available for leasing, the Secretary of the 
     Interior (referred to in this section as the ``Secretary'') 
     shall, for a period determined by the Secretary, make 
     available for leasing such land as the Secretary considers to 
     be necessary to conduct research and development activities 
     with respect to technologies for the recovery of shale oil 
     from oil shale resources on public land.
       (2) Administration.--In carrying out this subsection, the 
     Secretary shall provide for--
       (A) research and development of oil shale in accordance 
     with the laws applicable to public land;
       (B) an adequate bond, surety, or other financial 
     arrangement to ensure reclamation;
       (C) appropriate value-for-value oil shale land exchanges 
     that can provide early access to qualified oil shale 
     developers, except that the exchanges shall be favorable to 
     and in the overall best interests of the United States;
       (D) consultation with affected State and local governments; 
     and
       (E) such requirements as the Secretary determines to be in 
     the public interest.
       (c) Programmatic Environmental Impact Statement.--Not later 
     than 18 months after the date of enactment of this Act, in 
     accordance with section 102(2)(C) of the National 
     Environmental Policy Act of 1969 (42 U.S.C. 4332(2)(C)), the 
     Secretary shall complete a programmatic environmental impact 
     statement that analyzes potential leasing for commercial 
     development of oil shale resources on public land.
       (d) Leasing Program.--Not later than 1 year after 
     completion of the 5-year plan required under subsection (e), 
     the Secretary shall establish procedures for conducting a 
     leasing program for the commercial development of oil shale 
     on public land.
       (e) Oil Shale and Tar Sands Task Force.--
       (1) Establishment.--The Secretary of Energy, in cooperation 
     with the Secretary of the Interior, shall establish an Oil 
     Shale and Tar Sands Task Force to develop a program to 
     coordinate and accelerate the commercial development of oil 
     shale and tar sands in an integrated manner.
       (2) Composition.--The Task Force shall be composed of--
       (A) the Secretary of Energy (or the designee of the 
     Secretary of Energy);
       (B) the Secretary of the Interior (or the designee of the 
     Secretary of the Interior);
       (C) the Secretary of Defense (or the designee of the 
     Secretary of Defense);
       (D) the Governors of the affected States; and
       (E) representatives of local governments in affected areas.
       (3) Development of a 5-year plan.--
       (A) In general.--The Task Force shall formulate a 5-year 
     plan to promote the development of oil shale and tar sands.
       (B) Components.--In formulating the plan, the Task Force 
     shall--
       (i) identify public actions that are required to stimulate 
     prudent development of oil shale and tar sands;
       (ii) analyze the costs and benefits of those actions;
       (iii) make recommendations concerning specific actions that 
     should be taken to stimulate prudent development of oil shale 
     and tar sands, including economic, investment, tax, 
     technology, research and development, infrastructure, 
     environmental, education, and socio-economic actions;
       (iv) make recommendations concerning infrastructure (such 
     as roads, utilities, and pipelines) required to support oil 
     shale development in industry and communities;
       (v) consult with representatives of industry and other 
     stakeholders;
       (vi) provide notice and opportunity for public comment on 
     the plan;
       (vii) identify oil shale and tar sands technologies that--

       (I) are ready for pilot plant and semiworks development; 
     and
       (II) have a high probability of leading to advanced 
     technology for first- or second-generation commercial 
     production; and

       (viii) assess the availability of water from the Green 
     River Formation to meet the potential needs of oil shale and 
     tar sands development.
       (4) National program office.--The Task Force shall analyze 
     and make recommendations regarding the need for a national 
     program office.
       (5) Partnership.--The Task Force shall make recommendations 
     with respect to initiating a partnership with Alberta, 
     Canada, for purposes of sharing information relating to the 
     development and production of oil from tar sands.
       (6) Reports.--
       (A) Initial report.--Not later than 180 days after the date 
     of enactment of this Act, the Task Force shall submit to the 
     President and Congress a report that describes the analysis 
     and recommendations of the Task Force and contains the 5-year 
     plan.
       (B) Subsequent reports.--The Secretary of Energy shall 
     provide an annual report describing the progress in carrying 
     out the plan for each of the 5 years following submission of 
     the report provided for in subparagraph (A).
       (f) Mineral Leasing Act Amendments.--Section 21(a) of the 
     Mineral Leasing Act (30 U.S.C. 241(a)) is amended--
       (1) by designating the first, second, and third sentences 
     as paragraphs (1), (2), and (3), respectively; and
       (2) in paragraph (3) (as designated by paragraph (1))--
       (A) by striking ``rate of 50 cents per acre'' and inserting 
     ``rate of $2.00 per acre''; and
       (B) in the last proviso--
       (i) by striking ``That not more than one lease shall be 
     granted under this section to any'' and inserting ``That 
     no''; and
       (ii) by striking ``except that with respect to leases for'' 
     and inserting ``shall acquire or hold more than 50,000 acres 
     of oil shale leases in any 1 State. For''.
       (g) Cost-Shared Demonstration Technologies.--
       (1) Identification.--The Secretary of Energy shall identify 
     technologies for the development of oil shale and tar sands 
     that--
       (A) are ready for demonstration at a commercially-
     representative scale; and
       (B) have a high probability of leading to commercial 
     production.
       (2) Assistance.--For each technology identified under 
     paragraph (1), the Secretary of Energy may provide--
       (A) technical assistance;
       (B) assistance in meeting environmental and regulatory 
     requirements; and
       (C) cost-sharing assistance in accordance with section 
     1002.
       (h) Technical Assistance.--
       (1) In general.--The Secretary of Energy may provide 
     technical assistance for the purpose of overcoming technical 
     challenges to the development of oil shale and tar sands 
     technologies for application in the United States.
       (2) Administration.--The Secretary of Energy may provide 
     technical assistance under this section on a cost-shared 
     basis in accordance with section 1002.
       (i) National Oil Shale Assessment.--
       (1) Assessment.--
       (A) In general.--The Secretary shall carry out a national 
     assessment of oil shale resources for the purposes of 
     evaluating and mapping oil shale deposits, in the geographic 
     areas described in subparagraph (B).
       (B) Geographic areas.--The geographic areas referred to in 
     subparagraph (A), listed in the order in which the Secretary 
     shall assign priority, are--
       (i) the Green River Region of the States of Colorado, Utah, 
     and Wyoming;
       (ii) the Devonian oil shales of the eastern United States; 
     and
       (iii) any remaining area in the central and western United 
     States (including the State of Alaska) that contains oil 
     shale, as determined by the Secretary.
       (2) Use of state surveys and universities.--In carrying out 
     the assessment under paragraph (1), the Secretary may request 
     assistance from any State-administered geological survey or 
     university.
       (j) Procurement of Unconventional Fuel by the Department of 
     Defense.--
       (1) In general.--Chapter 141 of title 10, United States 
     Code, is amended by inserting after section 2398 the 
     following:

     ``Sec. 2398a. Procurement of fuel derived from coal, oil 
       shale, and tar sands

       ``(a) Use of Fuel to Meet Department of Defense Needs.--The 
     Secretary of Defense shall develop a strategy to use fuel 
     produced from coal, oil shale, and tar sands (referred to in 
     this section as a `covered fuel') that are extracted by 
     either mining or in-situ methods and refined in the United 
     States in order to assist in meeting the fuel requirements of 
     the Department of Defense.
       ``(b) Authority to Procure.--The Secretary of Defense may 
     enter into 1 or more contracts or other agreements (that meet 
     the requirements of this section) to procure a covered fuel 
     to meet 1 or more fuel requirements of the Department of 
     Defense.
       ``(c) Clean Fuel Requirements.--A covered fuel may be 
     procured under subsection (b) only if the covered fuel meets 
     such standards for clean fuel produced from domestic

[[Page S7172]]

     sources as the Secretary of Defense shall establish for 
     purposes of this section in consultation with the Office of 
     Strategic Fuel Analysis of the Department of Energy.
       ``(d) Multiyear Contract Authority.--Subject to applicable 
     provisions of appropriations Acts, any contract or other 
     agreement for the procurement of covered fuel under 
     subsection (b) may be for 1 or more years at the election of 
     the Secretary of Defense.
       ``(e) Price Limitations.--(1) Each contract or other 
     agreement for the procurement of covered fuel under 
     subsection (b) shall set forth the maximum price and minimum 
     price to be paid for a unit of covered fuel under the 
     contract or agreement, which prices shall be established by 
     the Secretary of Defense at the time of entry into the 
     contract or agreement.
       ``(2) In establishing under paragraph (1) the maximum price 
     and minimum price to be paid for covered fuel under a 
     contract or agreement under subsection (b), the Secretary 
     shall take into account applicable information on world oil 
     markets from the Department of Energy, including--
       ``(A) global prices for crude oil;
       ``(B) costs of production of the covered fuel from both 
     conventional and unconventional sources; and
       ``(C) returns on investment in the production of the 
     covered fuel.
       ``(f) Fuel Source Analysis.--In order to facilitate the 
     procurement by the Department of Defense of covered fuel 
     under subsection (b), the Secretary of Defense may carry out 
     a comprehensive assessment of current and potential locations 
     in the United States for the supply of covered fuel to the 
     Department.''.
       (2) Clerical amendment.--The table of sections for chapter 
     141 of title 10, United States Code, is amended by inserting 
     after the item relating to section 2398 the following:

``2398a. Procurement of fuel derived from coal, oil shale, and tar 
              sands.''.
       (k) State Water Rights.--Nothing in this section preempts 
     or affects any State water law or interstate compact relating 
     to water.
       (l) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as are necessary to carry out 
     this section.
                                 ______
                                 
  SA 948. Mr. LIEBERMAN (for himself, Mr. Bayh, and Mr. Salazar) 
submitted an amendment intended to be proposed by him to the bill H.R. 
6, to ensure jobs for our future with secure, affordable, and reliable 
energy; which was ordered to lie on the table; as follows:

       Beginning on page 120, strike line 21 and all that follows 
     through page 122, line 14, and insert the following:

                        Subtitle D--Oil Security

     SEC. 151. SHORT TITLE; FINDINGS AND PURPOSES.

       (a) Short Title.--This subtitle may be cited as the ``Oil 
     Security Act''.
       (b) Findings.--Congress finds that--
       (1) the United States is dangerously dependent on oil;
       (2) that dependence threatens the national security, 
     weakens the economy, and harms the environment of the United 
     States;
       (3) the United States currently imports nearly 60 percent 
     of oil needed in the United States, and that ratio is 
     expected to grow to almost 70 percent by 2025 if no actions 
     are taken;
       (4) approximately 2,500,000 barrels of oil per day are 
     imported from countries in the Persian Gulf region;
       (5) that dependence on foreign oil undermines the war on 
     terror by financing both sides of the war;
       (6) in 2004 alone, the United States sent $103,000,000,000 
     to undemocratic countries, some of which use revenues to 
     support terrorism and spread ideology hostile to the United 
     States, as documented by the Council on Foreign Relations;
       (7) terrorists have identified oil as a strategic 
     vulnerability and have ramped up attacks against oil 
     infrastructure worldwide;
       (8) oil imports comprise more than 25 percent of the 
     dangerously high United States trade deficit;
       (9) it is feasible to achieve oil savings of more than 
     2,500,000 barrels per day by 2015 and 10,000,000 barrels per 
     day by 2025;
       (10) those goals can be achieved by establishing a set of 
     flexible policies, including--
       (A) increasing the gasoline-efficiency of cars, trucks, 
     tires, and oil;
       (B) providing economic incentives for companies and 
     consumers to purchase fuel-efficient cars;
       (C) encouraging the use of transit and the reduction of 
     truck idling; and
       (D) increasing production and commercialization of 
     alternative liquid fuels;
       (11) technology available as of the date of enactment of 
     this Act (including popular hybrid-electric vehicle models, 
     the sales of which in the United States increased 136 percent 
     in the first 4 months of 2005 as compared with the same 
     period in 2004) make an oil savings plan eminently 
     achievable; and
       (12) it is urgent, essential, and feasible to implement an 
     action plan to achieve oil savings as soon as practicable 
     because any delay in initiating action will--
       (A) make achieving necessary oil savings more difficult and 
     expensive; and
       (B) increase the risks to the national security, economy, 
     and environment of the United States.
       (c) Purposes.--The purposes of this subtitle are--
       (1) to help instill consumer confidence and acceptable of 
     alternative motor vehicles by lowering the 3 major barriers 
     to confidence and acceptance;
       (2) to enable the accelerated introduction into the 
     marketplace of new motor vehicle technologies without adverse 
     emission impact, while retaining a policy of fuel neutrality 
     in order to foster private innovation and commercialization 
     and allow market forces to decide the technologies and fuels 
     that are consumer-friendly, safe, environmentally-sound, and 
     economic;
       (3) to provide, for a limited time period, financial 
     incentives to encourage consumers nationwide to purchase or 
     lease new fuel cell, hybrid, battery electric, and 
     alternative fuel motor vehicles;
       (4) to increase demand of vehicles described in paragraph 
     (3) so as to make the annual production by manufacturers and 
     retail sale of the vehicles economically and commercially 
     viable for the consumer;
       (5) to promote and expand the use of vehicles described in 
     paragraph (3) throughout the United States; and
       (6) to promote a nationwide diversity of motor vehicle 
     fuels for advanced and hybrid technology and alternatively 
     fueled motor vehicles.

     SEC. 152. MANUFACTURING INCENTIVES FOR ALTERNATIVE FUEL 
                   VEHICLES.

       (a) Advanced Technology Motor Vehicles Program.--
       (1) Definitions.--In this subsection:
       (A) Advanced lean burn technology motor vehicle.--The term 
     ``advanced lean burn technology motor vehicle'' means a motor 
     vehicle with an internal combustion engine that--
       (i) is designed to operate primarily using more air than is 
     necessary for complete combustion of the fuel;
       (ii) incorporates direct injection;
       (iii) achieves at least 125 percent of the 2002 model year 
     city fuel economy; and
       (iv) that, for 2004 and later model vehicles, has received 
     a certificate that the vehicle meets or exceeds--

       (I) in the case of any vehicle having a gross vehicle 
     weight rating of not more than 6,000 pounds, 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 (42 U.S.C. 7521(i)) 
     for that make and model year vehicle; and
       (II) in the case of any vehicle having a gross vehicle 
     weight rating of more than 6,000 pounds but not more than 
     8,500 pounds, the Bin 8 Tier II emission standard as 
     established in accordance with the regulations described in 
     subclause (I).

       (B) Advanced technology motor vehicle.--The term ``advanced 
     technology motor vehicle'' means any advanced lean burn 
     technology motor vehicle or any new qualified hybrid motor 
     vehicle as defined in section 30B(c)(3) of the Internal 
     Revenue Code of 1986 (other than a heavy duty hybrid motor 
     vehicle) that is in compliance with any Environmental 
     Protection Agency emission standard for fine particulate 
     matter for the applicable make and model year of the vehicle, 
     eligible for a credit amount under section 30B(c)(2)(B) of 
     the Internal Revenue Code of 1986.
       (C) Base year.--The term ``base year'' means model year 
     2002.
       (D) Eligible component.--The term ``eligible component'' 
     means any component specially designed for any advanced 
     technology motor vehicle and installed for the purpose of 
     meeting the performance requirements for an advanced 
     technology motor vehicle, including--
       (i) with respect to any gasoline-electric new qualified 
     hybrid motor vehicle--

       (I) an electric motor or generator;
       (II) a power split device;
       (III) a power control unit;
       (IV) power controls;
       (V) an integrated starter generator; or
       (VI) a battery;

       (i) with respect to any advanced lean burn technology motor 
     vehicle--

       (I) a diesel engine;
       (II) a turbocharger;
       (III) a fuel injection system; or
       (IV) an after-treatment system, such as a particle filter 
     or NOx absorber; and

       (iii) any other component submitted for approval by the 
     Secretary.
       (E) Eligible entity.--The term ``eligible entity'' means a 
     manufacturer, 25 percent or more of the gross receipts of 
     which are derived from the manufacture of motor vehicles or 
     any component parts of motor vehicles.
       (F) Engineering integration costs.--The term ``engineering 
     integration costs'' means costs incurred prior to the market 
     introduction of advanced technology vehicles for engineering 
     tasks relating to--
       (i) incorporating eligible components into the design of 
     advanced technology vehicles; and
       (ii) designing new tooling and equipment for production 
     facilities which produce eligible components or advanced 
     technology vehicles.
       (G) Program.--The term ``program'' means the program 
     established under paragraph (2).
       (H) Qualified investment.--
       (i) In general.--The term ``qualified investment'' means--

       (I) the incremental costs incurred to re-equip or expand a 
     manufacturing facility of

[[Page S7173]]

     the eligible taxpayer to produce advanced technology motor 
     vehicles or to produce eligible components; and
       (II) any engineering integration costs associated with the 
     advanced technology motor vehicles or eligible components.

       (2) Establishment.--The Secretary shall establish a program 
     to provide grants, loans, and loan guarantees to eligible 
     entities for qualified investments.
       (3) Requirements.--For an automobile manufacturer to be 
     eligible for a grant, loan, or loan guarantee under the 
     program, the adjusted average fuel economy of the 
     manufacturer for light duty vehicles for the most recent year 
     for which data is available may not be less than the base 
     year average fuel economy of the manufacturer for all of the 
     light duty motor vehicles of the manufacturer.
       (4) Limitation.--The total amounts of grants, loans, and 
     loan guarantees that may be provided to any 1 qualified 
     investment under the program shall be not more than 
     $200,000,000.
       (5) Regulations.--The Secretary shall issue regulations 
     establishing procedures for providing grants, loans, and loan 
     guarantees under the program.
       (6) Authorization of appropriations.--There are authorized 
     to be appropriated such sums as are necessary to carry out 
     this subsection.
       (b) Fuel Economy Calculations.--
       (1) In general.--Section 32905 of title 49, United States 
     Code, is amended--
       (A) in subsections (b) and (d),
       (i) by amending paragraph (1) of each subsection to read as 
     follows:
       ``(1) the number determined by--
       ``(A) subtracting from 1.0 the alternative fuel use factor 
     for the model; and
       ``(B) dividing the difference calculated under subparagraph 
     (A) by the fuel economy measured under section 32904(c) when 
     operating the model on gasoline or diesel fuel; and''; and
       (ii) by amending paragraph (2) of each subsection to read 
     as follows:
       ``(2) the number determined by dividing the alternative 
     fuel use factor for the model by the fuel economy measured 
     under subsection (a) when operating the model on alternative 
     fuel.''; and
       (B) by adding at the end the following:
       ``(h) Determination of Alternative Fuel Use Factor.--
       ``(1) For purposes of subsections (b) and (d), the term 
     `alternative fuel use factor' means, for a model of 
     automobile, the factor determined by the Administrator under 
     paragraph (3).
       ``(2) At the beginning of each calendar year, the Secretary 
     of Transportation shall estimate, by model, the aggregate 
     amount of fuel and the aggregate amount of alternative fuel 
     used to operate all dual fuel automobiles during the most 
     recent 12-month period.
       ``(3) The Administrator shall determine, by regulation, the 
     alternative fuel use factor for each model of dual fueled 
     automobile, on an energy equivalent basis, by calculating the 
     ratio that the amount of alternative fuel used by such model 
     bears to the amount of fuel used by such model.''.
       (2) Applicability of existing standards.--The amendments 
     made by this subsection shall not affect the application of 
     section 32901 of title 49, United States Code, to automobiles 
     manufactured before model year 2007.
       (3) Effective date.--The amendments made by this subsection 
     shall take effect on January 1, 2007.

     SEC. 153. CELLULOSE BIOMASS-TO-FUEL EARLY DEPLOYMENT AND 
                   COMMERCIALIZATION INITIATIVES.

       (a) General Requirements.--
       (1) Definitions.--In this section:
       (A) Cellulose biomass-to-fuel.--The term ``cellulose 
     biomass-to-fuel'' means any fuel that is produced from at 
     least 80 percent cellulosic biomass.
       (B) Commercial-scale plant.--The term ``commercial-scale 
     plant'' means a plant that--
       (i) has a production capacity of greater than 7,000,000 
     gallons per year of cellulose biomass-to-fuel and related 
     products, as measured by energy content; and
       (ii) uses technology that has been successfully tested in a 
     pilot or demonstration project that produced at least 
     1,000,000 gallons per year of cellulose biomass-to-fuel and 
     related products, as measured by energy content.
       (C) Committee.--The term ``Committee'' means the Cellulosic 
     Biomass-to-Fuel Review Committee established under paragraph 
     (4).
       (D) Pre-commercial scale plant.--The term ``pre-commercial 
     scale plant'' means--
       (i) a plant that has a production capacity of less than 
     7,000,000 gallons per year of cellulose biomass-to-fuel and 
     related products, as measured by energy content; or
       (ii) an existing industrial facility--

       (I) that adds equipment to conduct research, development, 
     or demonstration to overcome the recalcitrance of biomass, 
     feedstock development, or co-products development; and
       (II) at which the addition of the equipment increases the 
     production capacity of the facility by less than 7,000,000 
     gallons per year of cellulose biomass-to-fuel and related 
     products, as measured by energy content.

       (E) Production capacity.--For purposes of this section, the 
     production capacity of a plant shall be measured--
       (i) assuming maximum potential output, 24 hours a day, 365 
     days per year; and
       (ii) in terms of gallons of ethanol equivalent, with other 
     fuels converted to this unit of measurement, based on the 
     energy content of the fuels.
       (2) Purpose.--The purpose of this section is to--
       (A) accelerate deployment and commercialization of 
     cellulosic biomass to fuel;
       (B) reduce the oil dependence of the United States; and
       (C) enhance the ability of the United States to produce 
     alternative fuels.
       (3) Establishment.--The Secretary, in consultation with the 
     Secretary of the Treasury, shall establish a cellulose 
     biomass-to-fuels incentives program under subsection (b).
       (4) Cellulose biomass-to-fuel review committee.--The 
     Secretary shall request that the National Academy of Science 
     establish an independent Cellulose Biomass-to-Fuel Review 
     Committee, of which at least \1/2\ of the members shall be 
     experts external to the Department of Agriculture and the 
     Department of Energy.
       (5) Solicitation process.--
       (A) In general.--The Secretary, in consultation with the 
     Committee, shall establish an open and competitive 
     solicitation process to select projects for participation in 
     the cellulose biomass-to-fuel early deployment and 
     commercialization initiative.
       (B) Eligibility determinations.--Eligibility determinations 
     shall be established based on expert peer review of the 
     proposals by the Committee.
       (C) Consistency.--The solicitation shall be consistent from 
     year to year.
       (D) Requirements.--At a minimum, eligible plants shall--
       (i) be located in the United States;
       (ii) meet all applicable Federal and State permitting 
     requirements; and
       (iii) convert cellulose biomass to fuel.
       (E) Financial criteria.--The Secretary may establish such 
     additional financial criteria as the Secretary considers to 
     be appropriate.
       (F) Prioritization.--In selecting projects, the Committee 
     shall prioritize the following goals in the following order:
       (i) Projects demonstrating the potential for significant 
     advances in biomass processing.
       (ii) Projects demonstrating the potential to substantially 
     further scale-sensitive national objectives, including--

       (I) sustainable resource supply;
       (II) reduced greenhouse gas emissions;
       (III) healthier rural economies; and
       (IV) improved strategic security and trade balances.

       (iii) Projects located in local markets that have the 
     greatest need for the facility because of--

       (I) a high level of demand for fuel ethanol or other 
     commercial byproducts of the facility; or
       (II) availability of sufficient quantities of cellulosic 
     biomass.

       (6) Reporting.--Not later than 180 days after the date of 
     enactment of this Act, the Secretary, in consultation with 
     the Committee, shall submit to Congress a report that 
     includes a 10-year plan containing--
       (A) a detailed assessment of whether the aggregate funding 
     levels provided under subsection (b) are appropriate;
       (B) a detailed description of how proposals will be 
     solicited and evaluated, including a list of all activities 
     expected to be carried out; and
       (C) a detailed list of milestones for each biomass and 
     related technology that will be pursued.
       (7) Periodic updates.--Until all incentives committed under 
     subsection (b) have been used, the Secretary, in conjunction 
     with the Secretary of the Treasury, shall annually submit to 
     Congress a report on the activities of the Secretary and the 
     Secretary of the Treasury under this section.
       (b) Cellulosic Biomass Fuels Incentive Program.--
       (1) In general.--
       (A) Establishment of program.--The Secretary, in 
     consultation with the Secretary of the Treasury, shall 
     establish a program for providing incentives to commercial 
     scale cellulose biomass-to-fuels producers.
       (B) In general.--The Secretary may provide loan guarantees 
     and performance incentives to merchant producers of cellulose 
     biomass-to-fuel in the United States to assist the 
     producers--
       (i) to build eligible commercial-ready production 
     facilities; and
       (ii) to produce cellulose biomass-to-fuel in accordance 
     with paragraphs (2) and (3).
       (C) Total value of incentives.--
       (i) In general.--Except as provided in clause (ii), 
     cellulose biomass-to-fuel facilities selected by the 
     Secretary may receive all of the incentives offered under 
     this subsection.
       (ii) Total value.--The total value to the facility of all 
     incentives offered under this subsection shall not exceed the 
     values presented in the following table, in which the 
     ``Facility on line'' dates are expressed in years from the 
     date of enactment of this Act.

[[Page S7174]]



 
----------------------------------------------------------------------------------------------------------------
                                           Total Value of Incentives Over the Life of a Facility: The lesser of:
                                         -----------------------------------------------------------------------
            Facility on line:                 Per million gallons      Percent of total capital    Total dollar
                                                   capacity                      cost                 amount
----------------------------------------------------------------------------------------------------------------
Year 4..................................  $4,600,000................  46%.......................     $80,000,000
----------------------------------------------------------------------------------------------------------------
Year 6..................................  $3,500,000................  35%.......................     $60,000,000
----------------------------------------------------------------------------------------------------------------
Year 10.................................  $1,500,000................  15%.......................     $25,000,000
----------------------------------------------------------------------------------------------------------------

       (D) Authorization of appropriations.--There are authorized 
     to be appropriated to the Secretary such sums as are 
     necessary to carry out this subsection.
       (E) Termination of authority.--The authority of the 
     Secretary and the Secretary of the Treasury to commit to new 
     incentives under paragraphs (2), (3), and (4) shall terminate 
     on the date that is 10 years after the date of enactment of 
     this Act.
       (2) Cellulosic biomass fuel loan guarantees.--
       (A) Establishment of program.--The Secretary shall 
     establish a program to provide guarantees of loans by private 
     institutions for the construction of facilities to process 
     and convert cellulosic biomass into fuel and other commercial 
     byproducts.
       (B) Limitation.--The total amount of all loans guaranteed 
     under this paragraph shall not exceed $2,000,000,000 at any 
     time during the program.
       (C) Requirements.--The Secretary may provide a loan 
     guarantee under this paragraph to an applicant if--
       (i) the prospective earning power of the applicant and the 
     character and value of the security pledged provide a 
     reasonable assurance of repayment of the loan to be 
     guaranteed in accordance with the terms of the loan; and
       (ii) the loan bears interest at a rate determined by the 
     Secretary to be reasonable, taking into account--

       (I) the current average yield on outstanding obligations of 
     the United States with remaining periods of maturity 
     comparable to the loan; and
       (II) the risk profile of the loan.

       (D) Terms and conditions.--The loan agreement for a loan 
     guarantee under this paragraph shall provide that--
       (i) no provision of the loan agreement may be amended or 
     waived without the consent of the Secretary;
       (ii) the loan guarantee shall have a maturity of not more 
     than 20 years; and
       (iii) the recipient of a loan guarantee under this 
     paragraph shall pay the Secretary an amount determined by the 
     Secretary to be sufficient to cover the administrative costs 
     of the Secretary relating to the loan guarantee.
       (E) Eligibility and limitations.--
       (i) In general.--In addition to the overall limitation 
     established under paragraph (1)(C)(ii), the maximum loan 
     guarantee that any project that is begun not later than 4 
     years after the date of establishment of the program under 
     this paragraph may receive shall be the lesser of--

       (I) $5,600,000 per million gallons of capacity;
       (II) 80 percent of the total project debt; or
       (III) $100,000,000 per facility.

       (ii) Schedule.--The Secretary shall establish a schedule of 
     limitations that decrease throughout the period that begins 
     on the date that is 4 year after the date of establishment of 
     the program under this paragraph and ends on the date that is 
     10 years after the date of establishment of the program.
       (F) Full faith and credit.--
       (i) In general.--The full faith and credit of the United 
     States is pledged to the payment of all guarantees issued 
     under this paragraph with respect to principal and interest.
       (ii) Conclusive evidence.--Any guarantee made by the 
     Secretary under this paragraph shall be conclusive evidence 
     of the eligibility of the loan for the guarantee with respect 
     to principal and interest.
       (iii) Incontestable validity.--The validity of the 
     guarantee shall be incontestable in the hands of a holder of 
     the guaranteed loan.
       (G) Allowed uses of funds.--In the event of a performance 
     shortfall, the loan guarantee funds may be used to either pay 
     senior debt or make fixes to increase output or efficiency.
       (3) Cellulosic biomass fuels performance incentives 
     program.--
       (A) Establishment of program.--The Secretary shall 
     establish a program to make available to commercial scale 
     cellulose biomass-to-fuel producers performance incentives on 
     a per gallon basis of cellulose biomass-to-fuel from eligible 
     facilities.
       (B) Incentives.--
       (i) In general.--The program established under subparagraph 
     (A) shall consist of 2 phases.
       (ii) First phase.--

       (I) In general.--During the period that begins on the date 
     of establishment of the program under this paragraph and ends 
     on the date that is 6 years after the date of establishment 
     of the program, performance payments shall be available to 
     all projects participating in the program, subject to the 
     limits established in paragraph (1)(C)(ii).
       (II) Payments.--During the period described in subclause 
     (I), payments shall be made per gallon produced and sold by 
     the facility during the first 6 years of operation.

       (iii) Second phase.--

       (I) In general.--During the period that begins on the date 
     that is 7 years after the date of establishment of the 
     program under this paragraph and ends on the date that is 10 
     years after the date of establishment of the program, 
     performance incentives shall be made available through not 
     less than 2 reverse auctions as described in subclauses (II) 
     through (V).
       (II) Amount of funds.--The Secretary, in coordination with 
     the Secretary of the Treasury, shall establish the amount of 
     funds available for use as performance payments after taking 
     into account other existing and expected liabilities under 
     this subsection.
       (III) Desired amount.--For each reverse auction conducted 
     under this clause, each eligible facility shall request a 
     desired amount of performance incentive on a per gallon 
     basis.
       (IV) Selection of facilities.--The Secretary shall select 
     facilities beginning with the facility that requests the 
     lowest amount of performance incentive on a per gallon basis 
     and continuing until the funds available under subclause (II) 
     for the reverse auction are committed.
       (V) Incentives received.--A facility selected by the 
     Secretary shall receive the amount of performance incentive 
     requested by the facility in the auction for each gallon 
     produced and sold by the facility during the first 6 years of 
     operation.

       (C) Limitations.--
       (i) In general.--In addition to the overall limitation 
     established in paragraph (1)(C)(ii), the value of incentives 
     paid under this subsection for projects that are begun not 
     later than 4 years after the date of establishment of the 
     program under this paragraph shall be limited to the lesser 
     of--

       (I) $0.75 per gallon;
       (II) $4,000,000 per million gallons of capacity; or
       (III) 40 percent of the total capacity cost of the project.

       (ii) Schedule.--The Secretary shall establish a schedule of 
     limitations that decrease throughout the period that begins 
     on the date that is 4 year after the date of establishment of 
     the program under this paragraph and ends on the date that is 
     10 years after the date of establishment of the program.
       (c) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as are necessary to carry out 
     this section.

     SEC. 154. NEAR-TERM VEHICLE TECHNOLOGY PROGRAM.

       (a) Purposes.--The purposes of this section are--
       (1) to enable and promote comprehensive development, 
     demonstration, and commercialization of a wide range of 
     electric drive components, systems, and vehicles--
       (A) in partnership with industry; and
       (B) for a wide range of electric drive components, systems, 
     and vehicles in a wide range of applications using diverse 
     electric drive transportation technologies;
       (2) to make critical public investments in building strong 
     links to private industry, institutions of higher education, 
     National Laboratories, and research institutions to expand 
     innovation, industrial growth, and jobs in the United States;
       (3) to take greater advantage of the existing electric 
     infrastructure for transportation and other on-road and non-
     road mobile sources of emissions--
       (A) that are reported to be over 3,000,000 units today, 
     including electric forklifts, golf carts, and similar non-
     road vehicles; and
       (B) because existing and emerging technologies that connect 
     to the grid greatly enhance the energy security of the United 
     States, reduce dependence on imported oil, and reduce 
     emissions;
       (4) to more quickly advance the widespread 
     commercialization of all types of hybrid electric vehicle 
     technology into all sizes and applications of vehicles 
     leading to commercialization of plug-in hybrid electric 
     vehicles, plug-in hybrid fuel cell vehicles, and eventually 
     to fuel cell vehicles and use of batteries and electric 
     vehicles to provide services back to the grid; and
       (5) to improve the energy efficiency of and reduce the 
     petroleum use of transportation.
       (b) Definitions.--In this section:
       (1) Battery.--The term ``battery'' means an energy story 
     device used in an on-road or non-road vehicle powered in 
     whole or in part using an off-board or on-board source of 
     electricity.

[[Page S7175]]

       (2) Electric drive transportation technology.--The term 
     ``electric drive transportation technology'' means--
       (A) on-road or non-road vehicles that use an electric motor 
     for all or part of their motive power and that may or may not 
     use off-board electricity, including battery electric 
     vehicles, fuel cell vehicles, engine dominant hybrid electric 
     vehicles, plug-in hybrid electric vehicles, plug-in hybrid 
     fuel cell vehicles, and electric rail; or
       (B) equipment related to transportation or mobile sources 
     of air pollution that use an electric motor to replace an 
     internal combustion engine for all or part of the work of the 
     equipment, including corded electric equipment linked to 
     transportation or mobile sources of air pollution.
       (3) Engine dominant hybrid electric vehicle.--The term 
     ``engine dominant hybrid electric vehicle'' means an on-road 
     or non-road vehicle propelled by an internal combustion 
     engine or heat engine using--
       (A) any combustible fuel;
       (B) an on-board, rechargeable storage device; and
       (C) no means of using an off-board source of electricity.
       (4) Fuel cell vehicle.--The term ``fuel cell vehicle'' 
     means an on-road or non-road vehicle that uses a fuel cell 
     (as defined in section 3 of the Spark M. Matsunaga Hydrogen 
     Research, Development, and Demonstration Act of 1990).
       (5) On-road or non-road vehicle.--The term ``on-road or 
     non-road vehicle'' means--
       (A) a light-duty, medium-duty, or heavy-duty motor vehicle; 
     or
       (B) a vehicle or propelled piece of equipment that is 
     primarily intended for use on private or public property 
     other than publicly-owned highways, freeways, streets, and 
     roads.
       (6) Plug-in hybrid electric vehicle.--The term ``plug-in 
     hybrid electric vehicle'' means an on-road or non-road 
     vehicle that is propelled by an internal combustion engine or 
     heat engine using--
       (A) any combustible fuel;
       (B) an on-board, rechargeable storage device; and
       (C) a means of using an off-board source of electricity.
       (7) Plug-in hybrid fuel cell vehicle.--The term ``plug-in 
     hybrid fuel cell vehicle'' means a fuel cell vehicle that 
     also can use a battery supplied by an off-board source of 
     electricity.
       (c) Program.--The Secretary shall conduct a program of 
     research, development, demonstration, and commercial 
     application for electric drive transportation technology, 
     including--
       (1) high capacity, high efficiency lithium and nickel metal 
     hybrid batteries for plug-in hybrid electric vehicles and 
     plug-in hybrid fuel cell vehicles;
       (2) high efficiency on-board and off-board charging 
     components;
       (3) high power drive train systems for passenger and 
     commercial vehicles and for non-road equipment;
       (4) control system development and power train development 
     and integration for plug-in hybrid electric vehicles, plug-in 
     hybrid fuel cell vehicles, and engine dominant hybrid 
     electric vehicles, including--
       (A) development of efficient cooling systems;
       (B) analysis and development of control systems that 
     minimize the emissions profile when clean diesel engines are 
     part of a plug-in hybrid drive system; and
       (C) development of different control systems that optimize 
     for different goals, including--
       (i) battery life;
       (ii) reduction of petroleum consumption;
       (iii) green house gas reduction; and
       (iv) understanding consumer preference for many different 
     control systems will assist or deter widespread applications 
     of the vehicles;
       (5) nanomaterial technology applied to both battery and 
     fuel cell systems;
       (6) large-scale demonstrations, testing, and evaluation of 
     plug-in hybrid electric vehicles in different applications 
     with different batteries and control systems, including--
       (A) military applications;
       (B) paratransit applications;
       (C) mass market passenger and light-duty truck 
     applications;
       (D) private fleet applications; and
       (E) medium- and heavy-duty applications;
       (7) a nationwide education strategy for electric drive 
     transportation technologies providing secondary and high 
     school teaching materials and support for university 
     education focused on electric drive system and component 
     engineering;
       (8) introduction strategies for plug-in hybrid electric 
     vehicles and plug-in hybrid fuel cell vehicles, including--
       (A) examining how best to link the technology to low carbon 
     or renewable energy;
       (B) an improved understanding of potential markets, driving 
     patterns, charging behavior, and consumer acceptance and 
     benefits; and
       (C) working with the Administrator of the Environmental 
     Protection Agency to develop procedures for testing and 
     certification of criteria pollutants, fuel economy, and 
     petroleum use for light-, medium- and heavy-duty vehicle 
     applications, including considering--
       (i) the vehicle and fuel as a system, not just an engine; 
     and
       (ii) nightly off-board charging; and
       (9) advancement of battery and corded electric 
     transportation technologies in mobile source applications 
     by--
       (A) improvement in battery, drive train, and control system 
     technologies; and
       (B) working with industry and the Administrator of the 
     Environmental Protection Agency to--
       (i) understand and inventory markets; and
       (ii) identify and implement methods of removing barriers 
     for existing and emerging applications.
       (d) Goals.--The goals of the electric drive transportation 
     technology program established under subsection (c) shall be 
     to develop, in partnership with industry and institutions of 
     higher education, projects that focus on--
       (1) innovative electric drive technology developed in the 
     United States;
       (2) growth of job opportunities for electric drive design 
     and manufacturing;
       (3) validation of the plug-in hybrid potential through 
     fleet demonstrations; and
       (4) enabling the fuel cell revolution by establishing a 
     mature electric drive technology system that is an integral 
     part of the fuel cell vehicle system.
       (E) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as are necessary to carry out 
     this section.

     SEC. 155. TIRE EFFICIENCY PROGRAM.

       (a) Standards for Tires Manufactured for Interstate 
     Commerce.--Section 30123 of title 49, United States Code, is 
     amended--
       (1) in subsection (b)--
       (A) in the first sentence, by striking ``The Secretary'' 
     and inserting the following:
       ``(1) Uniform quality grading system.--
       ``(A) In general.--The Secretary'';
       (B) in the second sentence, by striking ``The Secretary'' 
     and inserting the following:
       ``(2) Nomenclature and marketing practices.--The 
     Secretary'';
       (C) in the third sentence, by striking ``A tire standard'' 
     and inserting the following:
       ``(3) Effect of standards and regulations.--A tire 
     standard''; and
       (D) in paragraph (1), as designated by subparagraph (A), by 
     adding at the end the following:
       ``(B) Inclusion.--The grading system shall include 
     standards for rating the fuel efficiency of tires designed 
     for use on passenger cars and light trucks.''; and
       (2) by adding at the end the following:
       ``(d) National Tire Efficiency Program.--
       ``(1) Definition.--In this subsection, the term `fuel 
     economy', with respect to a tire, means the extent to which 
     the tire contributes to the fuel economy of the motor vehicle 
     on which the tire is mounted.
       ``(2) Program.--The Secretary shall develop and carry out a 
     national tire fuel efficiency program for tires designed for 
     use on passenger cars and light trucks.
       ``(3) Requirements.--Not later than March 31, 2008, the 
     Secretary shall implement--
       ``(A) policies and procedures for testing and labeling 
     tires for fuel economy to enable tire buyers to make informed 
     purchasing decisions about the fuel economy of tires;
       ``(B) policies and procedures to promote the purchase of 
     energy-efficient replacement tires, including purchase 
     incentives, website listings on the Internet, printed fuel 
     economy guide booklets, and mandatory requirements for tire 
     retailers to provide tire buyers with fuel-efficiency 
     information on tires; and
       ``(C) minimum fuel economy standards for tires, promulgated 
     by the Secretary.
       ``(4) Minimum fuel economy standards.--In promulgating 
     minimum fuel economy standards for tires, the Secretary shall 
     design standards that--
       ``(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) do not adversely affect tire safety;
       ``(D) incorporate the results from--
       ``(i) laboratory testing; and
       ``(ii) to the extent appropriate and available, on-road 
     fleet testing programs conducted by manufacturers; and
       ``(E) do not adversely affect efforts to manage scrap 
     tires.
       ``(5) Applicability.--The policies, procedures, and 
     standards developed under paragraph (3) shall apply to all 
     tire types and models regulated under the uniform tire 
     quality grading standards in section 575.104 of title 49, 
     Code of Federal Regulations (or a successor regulation).
       ``(6) Review.--
       ``(A) In general.--Not less than once every 3 years, the 
     Secretary shall--
       ``(i) review the minimum fuel economy standards in effect 
     for tires under this subsection; and
       ``(ii) subject to subparagraph (B), revise the standards as 
     necessary to ensure compliance with standards under paragraph 
     (4).
       ``(B) Limitation.--The Secretary may not reduce the average 
     fuel economy standards applicable to replacement tires.
       ``(7) No preemption of state law.--Nothing in this section 
     preempts any provision of State law relating to higher fuel 
     economy standards applicable to replacement tires designed 
     for use on passenger cars and light trucks.
       ``(8) Exceptions.--Nothing in this section shall apply to--
       ``(A) a tire or group of tires with the same SKU, plant, 
     and year, for which the volume of tires produced or imported 
     is less than 15,000 annually;

[[Page S7176]]

       ``(B) a deep tread, winter-type snow tire, space-saver 
     tire, or temporary use spare tire;
       ``(C) a tire with a normal rim diameter of 12 inches or 
     less;
       ``(D) a motorcycle tire; or
       ``(E) a tire manufactured specifically for use in an off-
     road motorized recreational vehicle.''.
       (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), when''.
       (c) Time for Implementation.--Beginning not later than 
     March 31, 2008, the Secretary of Transportation shall 
     administer the national tire fuel efficiency program 
     established under section 30123(d) of title 49, United States 
     Code, in accordance with the policies, procedures, and 
     standards developed under section 30123(d)(2) of such title.

     SEC. 156. HEAVY TRUCK IDLING REDUCTION.

       (a) Definitions.--In this section:
       (1) Heavy-duty motor vehicle.--The term ``heavy-duty motor 
     vehicle'' means a vehicle of greater than 10,000 pounds gross 
     vehicle weight that is driven or drawn by mechanical power 
     and manufactured primarily for use on public streets, roads, 
     and highways, but does not include a vehicle operated only on 
     a rail line.
       (2) Idling reduction system.--The term ``idling reduction 
     system'' means a device or system of devices used to reduce 
     long duration idling of a main drive engine in a vehicle.
       (3) Long duration idling.--The term ``long duration 
     idling'' means the operation of a main drive engine of a 
     heavy-duty motor vehicle for a period of more than 5 
     consecutive minutes when the main drive engine is not engaged 
     in gear, except that such term does not include idling as a 
     result of traffic congestion or other impediments to the 
     movement of a heavy-duty motor vehicle.
       (b) Regulations.--Not later than 1 year after the date of 
     enactment of this Act, the Administrator of the Environmental 
     Protection Agency shall, in consultation with the Secretary 
     of Transportation, prescribe regulations that ensure the 
     maximum feasible and cost effective reductions in fuel 
     consumption during long duration idling of heavy-duty motor 
     vehicles. The Administrator shall review the regulations not 
     less frequently than every 3 years and revise the regulations 
     as necessary to ensure the regulations reflect the maximum 
     feasible and cost effective reductions in fuel consumption 
     during long duration idling.
       (c) Air quality.--Not later than 1 year after the date of 
     enactment of this Act, the Administrator of the Environmental 
     Protection Agency shall prescribe regulations that prevent 
     degradation in air quality resulting from the use of idling 
     reduction systems.
       (d) Agreements With States.--Section 111 of title 23, 
     United States Code, is amended by adding at the end the 
     following:
       ``(d) Idling Reduction Facilities in Interstate Rights-of-
     Way.--
       ``(1) In general.--Notwithstanding subsection (a), a State 
     may--
       ``(A) permit electrification or other idling reduction 
     facilities and equipment, for use by motor vehicles used for 
     commercial purposes, to be placed in rest and recreation 
     areas, and in safety rest areas, constructed or located on 
     rights-of-way of the Interstate System in the State, if the 
     idling reduction measures do not--
       ``(i) reduce the existing number of designated truck 
     parking spaces at any given rest or recreation area; or
       ``(ii) preclude the use of the spaces by trucks employing 
     alternative idle reduction technologies; and
       ``(B) charge a fee, or permit the charging of a fee, for 
     the use of a parking space that provides electrification or 
     other idling reduction facilities and equipment.
       ``(2) Purpose of facilities.--The exclusive purpose of the 
     electrification or other idling reduction facilities 
     described in paragraph (1) (or similar technologies) shall be 
     to enable operators of motor vehicles used for commercial 
     purposes--
       ``(A) to reduce idling of a truck while parked in the rest 
     or recreation area; and
       ``(B) to use equipment specifically designed to reduce 
     idling of a truck, or provide alternative power for 
     supporting driver comfort, while parked.''.

     SEC. 157. FUEL EFFICIENCY 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 VEHICLE FUEL ECONOMY STANDARDS

Sec.
33001.  Purpose and policy.
33002.  Definitions.
33003.  Standards.

     ``Sec. 33001. Purpose and policy

       ``The purpose of this chapter is to reduce petroleum 
     consumption by heavy duty motor vehicles.

     ``Sec. 33002. Definitions

       ``In this chapter, `heavy duty motor vehicle'--
       ``(1) means a vehicle of greater than 10,000 pounds gross 
     vehicle weight that is driven or drawn by mechanical power 
     and manufactured primarily for use on public streets, roads, 
     and highways; and
       ``(2) does not include a vehicle operated only on a rail 
     line.

     ``Sec. 33003. Standards

       ``(a) General Requirements.--The Secretary of 
     Transportation shall prescribe heavy duty motor vehicle fuel 
     economy standards. Each standard shall be practicable, meet 
     the need for heavy duty motor vehicle fuel consumption 
     reduction, and be stated in objective terms.
       ``(b) Considerations and Consultation.--When prescribing a 
     heavy duty motor vehicle fuel economy standard under this 
     chapter, the Secretary shall--
       ``(1) consider relevant available heavy duty motor vehicle 
     fuel consumption information;
       ``(2) consider whether a proposed standard is reasonable, 
     practicable, and appropriate for the particular type of heavy 
     duty motor vehicle for which it is prescribed; and
       ``(3) consider the extent to which the standard will carry 
     out section 33001.
       ``(c) Cooperation.--The Secretary may advise, assist, and 
     cooperate with departments, agencies, and instrumentalities 
     of the United States Government, States, and other public and 
     private agencies in developing fuel economy standards for 
     heavy duty motor vehicles.
       ``(d) Effective Dates of Standards.--The Secretary shall 
     specify the effective date and model years of a heavy duty 
     motor vehicle fuel economy standard prescribed under this 
     chapter.
       ``(e) 5-Year Plan for Testing Standards.--The Secretary 
     shall establish, periodically review, and continually update 
     a 5-year plan for testing heavy duty motor vehicle fuel 
     economy standards prescribed under this chapter. In 
     developing the plan and establishing testing priorities, the 
     Secretary shall consider factors the Secretary considers 
     appropriate, consistent with section 33001 and the 
     Secretary's other duties and powers under this chapter.''.

     SEC. 158. FLEXIBLE FUEL VEHICLE STANDARDS.

       (a) Definitions.--In this section:
       (1) Alternative fuel; alternative fuel automobile.--The 
     terms ``alternative fuel'' and ``alternative fuel 
     automobile'' have the meanings given such terms in section 
     32901 of title 49, United States Code.
       (2) Alternative fuel refueling retail outlet.--The term 
     ``alternative fuel refueling retail outlet'' means an 
     establishment--
       (A) equipped to dispense alternative fuel into motor 
     vehicles; and
       (B) at which alternative fuel is sold or offered for sale 
     to the general public for use in motor vehicles without the 
     need to establish an account.
       (3) Flexible fuel vehicles.--The term ``flexible fuel 
     vehicle'' means an alternative fuel vehicle capable of 
     operating using gasoline and 1 or more alternative fuels, 
     including--
       (A) ethanol and methanol in blends up to 85 percent 
     alternative fuel by volume; and
       (B) electricity from an external charging source sufficient 
     to power the vehicle for at least 20 miles of driving.
       (4) Owner or lessor.--The term ``owner or lessor'' means--
       (A) a franchisor who owns, leases, or controls a retail 
     gasoline outlet at which the franchisee is authorized or 
     permitted, under the franchise agreement, to sell alternative 
     fuel;
       (B) a refiner or distributor who owns, leases, or controls 
     a retail gasoline outlet
       (b) Increasing Percentage of Light Duty Vehicles that are 
     Alternative or Flexible Fuel Vehicles.--
       (1) In general.--Of the new light duty vehicles sold in the 
     United States--
       (A) not less than 10 percent manufactured for model year 
     2009 shall be alternative fuel automobiles or flexible fuel 
     vehicles;
       (B) not less than 20 percent manufactured for model year 
     2010 shall be alternative fuel automobiles or flexible fuel 
     vehicles;
       (C) not less than 35 percent manufactured for model year 
     2011 shall be alternative fuel automobiles or flexible fuel 
     vehicles; and
       (D) not less than 50 percent manufactured for model year 
     2012, and each year thereafter, shall be alternative fuel 
     automobiles or flexible fuel vehicles.
       (2) Rulemaking.--Not later than 1 year after the date of 
     enactment of this Act, the Secretary of Transportation shall 
     issue regulations to carry out the provisions of this 
     subsection.
       (c) Alternative Fuel Retail Outlets.--
       (1) Requirement.--Beginning in the year in which 10 percent 
     or more of the registered vehicles in a county are capable of 
     using a designated alternative fuel, each owner or lessor of 
     a retail gasoline outlet with 10 or more vehicle fuel pumps 
     in that county shall offer such designated alternative fuel 
     at not less than 10 percent of such pumps.
       (2) Compliance.--An owner or lessor is in compliance with 
     the requirement under paragraph (1) if the owner or lessor--
       (A) provides alternative fuel at vehicle pumps owned or 
     controlled by the owner or lessor; or
       (B) purchases credits from another owner or lessor who 
     operates more than the minimum required number of alternative 
     fuel pumps.
       (3) Projections.--Not later than July 1st of each year, the 
     Secretary of Energy shall--
       (A) identify the counties in which at least 10 percent of 
     the registered vehicles are expected to be capable of using a 
     designated alternative fuel within the following 18-month 
     period; and
       (B) notify owners and lessors with retail gasoline outlets 
     in the counties identified under subparagraph (A) of the 
     alternative fuel pump requirement under this subsection.

[[Page S7177]]

       (4) Rulemaking.--The Secretary of Energy shall issue 
     regulations to carry out the provisions of this subsection.

     SEC. 159. OIL SAVINGS STUDIES.

       (a) In General.--The Secretary of Transportation shall 
     develop and implement pilot projects the purpose of which is 
     to reduce vehicle miles traveled.
       (b) Highway Congestion Tolling Evaluation Study.--The 
     Secretary of Transportation shall carry out a national 
     evaluation study to determine how technology can best be 
     applied to assess--
       (1) mileage-based road user charges on major highways at 
     peak-commuting times for the purposes of--
       (A) reducing oil usage;
       (B) lessening highway congestion; and
       (C) expanding travel alternatives; and
       (2) the economic impact on users.
       (c) Parking Cash-Out Evaluation Project.--The Secretary of 
     Transportation shall carry out a national evaluation pilot 
     project to assess how offering commuters the option to 
     receive the cash value of their workplace parking place 
     instead of free parking can--
       (1) reduce oil usage;
       (2) lessen highway congestion; and
       (3) promote economic development.
       (d) Authorization of Appropriations.--There are authorized 
     to be appropriated to carry out this section $8,000,000 for 
     each of fiscal years 2006 through 2015.

     SEC. 159A. NATIONWIDE MEDIA CAMPAIGN TO DECREASE OIL 
                   CONSUMPTION.

       (a) In General.--The Secretary of Energy, acting through 
     the Assistant Secretary for Energy Efficiency and Renewable 
     Energy (referred to in this section as the ``Secretary''), 
     shall develop and conduct a national media campaign for the 
     purpose of decreasing oil consumption in the United States 
     over the next decade.
       (b) Contract With Entity.--The Secretary shall carry out 
     subsection (a) directly or through--
       (1) contracts with 1 or more nationally recognized media 
     firms for the development and distribution of monthly 
     television, radio, and newspaper public service 
     announcements; or
       (2) collective agreements with 1 or more nationally 
     recognized institutes, businesses, or nonprofit organizations 
     for the funding, development, and distribution of monthly 
     television, radio, and newspaper public service 
     announcements.
       (c) Use of Funds.--
       (1) In general.--Amounts made available to carry out this 
     section shall be used for the following:
       (A) Advertising costs.--
       (i) The purchase of media time and space.
       (ii) Creative and talent costs.
       (iii) Testing and evaluation of advertising.
       (iv) Evaluation of the effectiveness of the media campaign.
       (v) The negotiated fees for the winning bidder on requests 
     from proposals issued either by the Secretary for purposes 
     otherwise authorized in this section.
       (vi) Entertainment industry outreach, interactive outreach, 
     media projects and activities, public information, news media 
     outreach, and corporate sponsorship and participation.
       (B) Administrative costs.--Operational and management 
     expenses.
       (2) Limitations.--In carrying out this section, the 
     Secretary shall allocate not less than 85 percent of funds 
     made available under subsection (e) for each fiscal year for 
     the advertising functions specified under paragraph (1)(A).
       (d) Reports.--The Secretary shall annually submit to 
     Congress a report that describes--
       (1) the strategy of the national media campaign and whether 
     specific objectives of the campaign were accomplished, 
     including--
       (A) determinations concerning the rate of change of oil 
     consumption, in both absolute and per capita terms; and
       (B) an evaluation that enables consideration whether the 
     media campaign contributed to reduction of oil consumption;
       (2) steps taken to ensure that the national media campaign 
     operates in an effective and efficient manner consistent with 
     the overall strategy and focus of the campaign;
       (3) plans to purchase advertising time and space;
       (4) policies and practices implemented to ensure that 
     Federal funds are used responsibly to purchase advertising 
     time and space and eliminate the potential for waste, fraud, 
     and abuse; and
       (5) all contracts or cooperative agreements entered into 
     with a corporation, partnership, or individual working on 
     behalf of the national media campaign.
       (e) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $100,000,000 for 
     each of fiscal years 2006 through 2010.

     SEC. 159B. OIL SAVINGS TARGET AND ACTION PLAN.

       Not later than 270 days after the date of enactment of this 
     Act, the Director of the Office of Management and Budget 
     (referred to in this section as the ``Director'') shall 
     publish in the Federal Register an action plan consisting 
     of--
       (1) a list of requirements proposed pursuant to section 
     159C that are authorized to be issued under law in effect on 
     the date of enactment of this Act, and this subtitle, that 
     will be sufficient, when taken together, to save from the 
     baseline determined under section 159F, at least--
       (A) 1,000,000 barrels of oil per day during calendar year 
     2015; and
       (B) 2,500,000 barrels per day during calendar year 2020; 
     and
       (2) a Federal Government-wide analysis that analyzes--
       (A) the expected oil savings from the baseline to be 
     accomplished by each requirement; and
       (B) whether all such requirements, taken together, will 
     achieve the oil savings specified in this section.

     SEC. 159C. STANDARDS AND REQUIREMENTS.

       (a) Secretary of Energy.--On or before the date of 
     publication of the action plan under section 159B, the 
     Secretary shall propose regulations establishing each 
     standard or other requirement listed in the action plan that 
     is under the jurisdiction of the Secretary.
       (b) Secretary of Transportation.--On or before the date of 
     publication of the action plan under section 159B, the 
     Secretary of Transportation shall propose regulations 
     establishing each standard or other requirement listed in the 
     action plan that is under the jurisdiction of the Secretary 
     of Transportation.
       (c) Administrator.--On or before the date of publication of 
     the action plan under section 159B, the Administrator shall 
     propose regulations establishing each standard or other 
     requirement listed in the action plan that is under the 
     jurisdiction of the Administrator.
       (d) Final Regulations.--Not later than 18 months after the 
     date of enactment of this Act, the Secretary, the Secretary 
     of Transportation, and the Administrator shall promulgate 
     final regulations described in subsections (a), (b), and (c), 
     respectively.
       (e) Agency Analyses.--Each proposed and final regulation 
     promulgated under this section shall--
       (1) be accompanied by an agency analysis of the oil savings 
     from the baseline determined under section 159F that the 
     regulation will achieve; and
       (2) achieve at least the oil savings required as a result 
     of the regulation under the action plan published under 
     section 159B.

     SEC. 159D. INITIAL EVALUATION.

       (a) In General.--Not later than 2 years after the date of 
     enactment of this Act, the Director of the Office of 
     Management and Budget (referred to in this section as the 
     ``Director'') shall publish in the Federal Register a Federal 
     Government-wide analysis of the oil savings achieved from the 
     baseline established under section 159F.
       (b) Inadequate Oil Savings.--If the oil savings are less 
     than the targets established under section 159B, 
     simultaneously with the analysis required under subsection 
     (a)--
       (1) the Director shall publish a revised action plan that 
     is adequate to achieve the targets; and
       (2) the Secretary of Energy, the Secretary of 
     Transportation, and the Administrator shall propose new or 
     revised regulations under subsections (a), (b), and (c), 
     respectively, of section 159C.
       (c) Final Regulations.--Not later than 180 days after the 
     date on which regulations are proposed under subsection 
     (b)(2), the Secretary of Energy, the Secretary of 
     Transportation, and the Administrator shall promulgate final 
     versions of those regulations.

     SEC. 159E. REVIEW AND UPDATE OF ACTION PLAN.

       (a) Review.--Not later than January 1, 2010, and every 3 
     years thereafter, the Director of the Office of Management 
     and Budget (referred to in this section as the ``Director'') 
     shall publish a report that--
       (1) evaluates the progress achieved in implementing the oil 
     savings targets established under section 159B;
       (2) analyzes the expected oil savings under the standards 
     and requirements established under this subtitle and the 
     amendments made by this subtitle; and
       (3)(A) analyzes the potential to achieve oil savings that 
     are in addition to the savings required by section 159B; and
       (B) if the President determines that it is in the national 
     interest, establishes a higher oil savings target for 
     calendar year 2016 or any subsequent calendar year.
       (b) Inadequate Oil Savings.--If the oil savings are less 
     than the targets established under section 159B, 
     simultaneously with the report required under subsection 
     (a)--
       (1) the Director shall publish a revised action plan that 
     is adequate to achieve the targets; and
       (2) the Secretary of Energy, the Secretary of 
     Transportation, and the Administrator shall propose new or 
     revised regulations under subsections (a), (b), and (c), 
     respectively, of section 159C.
       (c) Final Regulations.--Not later than 180 days after the 
     date on which regulations are proposed under subsection 
     (b)(2), the Secretary of Energy, the Secretary of 
     Transportation, and the Administrator shall promulgate final 
     versions of those regulations.

     SEC. 159F. BASELINE AND ANALYSIS REQUIREMENTS.

       In performing the analyses and promulgating proposed or 
     final regulations to establish standards and other 
     requirements necessary to achieve the oil savings required by 
     this subtitle, the Director of the Office of Management and 
     Budget, the Secretary of Energy, the Secretary of 
     Transportation, and the Administrator shall--
       (1) determine oil savings as the projected reduction in oil 
     consumption from the baseline established by the reference 
     case contained in the report of the Energy Information 
     Administration entitled ``Annual Energy Outlook 2005'';

[[Page S7178]]

       (2) determine the oil savings projections required on an 
     annual basis for each of calendar years 2008 through 2025; 
     and
       (3) account for any overlap among the standards and other 
     requirements to ensure that the projected oil savings from 
     all the promulgated standards and requirements, taken 
     together, are as accurate as practicable.
                                 ______
                                 
  SA 949. Mr. REED submitted an amendment intended to be proposed by 
him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       On page 327, after line 21, insert the following:

     SEC. 3__. COST-SHARING PLAN.

       Section 3 of the Natural Gas Act (15 U.S.C. 717b) (as 
     amended by section 381) is amended by adding at the end the 
     following:
       ``(f)(1) Before issuing an order authorizing an applicant 
     to site, construct, expand, or operate a liquefied natural 
     gas import facility, the Commission shall require the 
     applicant, in cooperation with the Commandant of the Coast 
     Guard and State and local agencies that provide for the 
     safety and security of the liquefied natural gas import 
     facility and any vessels that serve the facility, to develop 
     a cost-sharing plan.
       ``(2) A cost-sharing plan developed under paragraph (1) 
     shall include a description of any direct cost reimbursements 
     that the applicant agrees to provide to any State and local 
     agencies with responsibility for security and safety--
       ``(A) at the liquefied natural gas import facility; and
       ``(B) in proximity to vessels that serve the facility.''.
                                 ______
                                 
  SA 950. Mr. REED submitted an amendment intended to be proposed by 
him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       On page 311, strike lines 19 through 24.
                                 ______
                                 
  SA 951. Mr. REED submitted an amendment intended to be proposed by 
him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       Beginning on page 311, strike line 19 and all that follows 
     through page 312, line 25, and insert the following:
       ``(2)(A) Except as provided in subparagraph (B), the 
     Commission may approve an application for the siting, 
     construction, expansion, or operation of facilities located 
     onshore or in State waters for the import of natural gas from 
     a foreign county or the export of natural gas to a foreign 
     country, in whole or part, with such modifications and upon 
     such terms and conditions as the Commission finds 
     appropriate.
       ``(B) The Commission shall not--
       ``(i) deny an application solely on the basis that the 
     applicant proposes to use the liquefied natural gas import 
     facility exclusively or partially for gas that the applicant 
     or an affiliate of the applicant will supply to the facility; 
     or
       ``(ii) condition an order on--
       ``(I) a requirement that the liquefied natural gas import 
     facility offer service to customers other than the applicant, 
     or any affiliate of the applicant, securing the order;
       ``(II) any regulation of the rates, charges, terms, or 
     conditions of service of the liquefied natural gas import 
     facility; or
       ``(III) a requirement to file with the Commission schedules 
     or contracts related to the rates, charges, terms, or 
     conditions of service of the liquefied natural gas import 
     facility.
       ``(3) An order issued for a liquefied natural gas import 
     facility that also offers service to customers on an * * *
                                 ______
                                 
  SA 952. Mr. SHELBY submitted an amendment intended to be proposed by 
him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       On page 311, after line 24, add the following:
       ``(3)(A) The Governor of a State in which a facility for 
     the import of natural gas from a foreign country (referred to 
     in this paragraph as a `LNG facility') is proposed to be 
     located shall designate a lead State agency.
       ``(B) The Commission shall grant the request of a lead 
     State agency that requests cooperating agency status in 
     accordance with regulations promulgated pursuant to the 
     National Environmental Policy Act (42 U.S.C. 4321 et seq.) 
     with respect to a proposed LNG facility.
       ``(C) The Commission shall promulgate regulations under the 
     National Environmental Policy Act pre-filing process within 
     60 days of enactment of this section.
       ``(D) An applicant seeking Commission approval for an LNG 
     facility shall follow the National Environmental Policy Act 
     pre-filing process to commence at least 7 months prior to the 
     filing of an application for authorization to construct an 
     LNG facility. During this pre-filing process the applicant 
     shall--
       ``(i) list all the relevant Federal and State agencies with 
     corresponding permitting requirements;
       ``(ii) include documents establishing that the applicant 
     has notified the relevant Federal and State agencies of the 
     applicant's intent to file an application with the 
     Commission;
       ``(iii) identify interested persons and organizations that 
     have been contacted about the project; and
       ``(iv) detail stakeholder outreach efforts to date and 
     provide a public participation plan to facilitate stakeholder 
     communications and outreach efforts.
       ``(E) Upon completion of the pre-filing process under the 
     National Environmental Policy Act, the applicant may file its 
     application with the Commission.
       ``(F) A lead State agency may furnish an advisory report to 
     the Commission with respect to an application no later than 
     30 days after the application was filed with the Commission. 
     An advisory report may address siting issues, access to 
     infrastructure, alternative potential locations, safety and 
     security concerns, and access to emergency responders.
       ``(G) Before issuing an order authorizing an applicant to 
     site, construct, expand or operate a liquefied natural gas 
     import facility, the Commission shall review and respond 
     specifically to the issues raised by the lead State agency in 
     the advisory report.
       ``(H) This paragraph shall apply to any application filed 
     after the date of enactment of this paragraph. A lead State 
     agency has 30 days after the date of enactment of this 
     paragraph to file an advisory report related to any 
     applications pending at the Commission as of the date of 
     enactment of this paragraph.
       ``(4)(A) Before issuing an order authorizing an applicant 
     to site, construct, expand, or operate a liquefied natural 
     gas import facility, the Commission shall require the 
     applicant, in cooperation with the Commandant of the Coast 
     Guard and State and local agencies that provide for the 
     safety and security of the liquefied natural gas import 
     facility and any vessels that serve the facility, to develop 
     a cost-sharing plan.
       ``(B) A cost-sharing plan developed under subparagraph (A) 
     shall include a description of any direct cost reimbursements 
     that the applicant agrees to provide to any State and local 
     agencies with responsibility for security and safety--
       ``(i) at the liquefied natural gas import facility; and
       ``(ii) in proximity to vessels that serve the facility.''.
                                 ______
                                 
  SA 953. Mr. DOMENICI submitted an amendment intended to be proposed 
by him to the bill H.R. 6, To ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       On page 11, between lines 10 and 11, insert the following:
       (O) Savannah River National Laboratory.
       On page 11, line 11, strike ``(O)'' and insert ``(P)''.
       On page 11, line 12, strike ``(P)'' and insert ``(Q)''.
       Beginning on page 47, strike line 11 and all that follows 
     through page 49, line 4, and insert the following:

     SEC. 127. STATE BUILDING ENERGY EFFICIENCY CODES INCENTIVES.

       Section 304(e) of the Energy Conservation and Production 
     Act (42 U.S.C. 6833(e)) is amended--
       (1) in paragraph (1), by inserting before the period at the 
     end of the first sentence the following: ``, including 
     increasing and verifying compliance with such codes''; and
       (2) by striking paragraph (2) and inserting the following:
       ``(2) Additional funding shall be provided under this 
     subsection for implementation of a plan to achieve and 
     document at least a 90 percent rate of compliance with 
     residential and commercial building energy efficiency codes, 
     based on energy performance--
       ``(A) to a State that has adopted and is implementing, on a 
     statewide basis--
       ``(i) a residential building energy efficiency code that 
     meets or exceeds the requirements of the 2004 International 
     Energy Conservation Code, or any succeeding version of that 
     code that has received an affirmative determination from the 
     Secretary under subsection (a)(5)(A); and
       ``(ii) a commercial building energy efficiency code that 
     meets or exceeds the requirements of the ASHRAE Standard 
     90.1-2004, or any succeeding version of that standard that 
     has received an affirmative determination from the Secretary 
     under subsection (b)(2)(A); or
       ``(B) in a State in which there is no statewide energy code 
     either for residential buildings or for commercial buildings, 
     to a local government that has adopted and is implementing 
     residential and commercial building energy efficiency codes, 
     as described in subparagraph (A).
       ``(3) Of the amounts made available under this subsection, 
     the Secretary may use $500,000 for each fiscal year to train 
     State and local officials to implement codes described in 
     paragraph (2).
       ``(4)(A) There are authorized to be appropriated to carry 
     out this subsection--
       ``(i) $25,000,000 for each of fiscal years 2006 through 
     2010; and
       ``(ii) such sums as are necessary for fiscal year 2011 and 
     each fiscal year thereafter.
       ``(B) Funding provided to States under paragraph (2) for 
     each fiscal year shall not exceed \1/2\ of the excess of 
     funding under this

[[Page S7179]]

     subsection over $5,000,000 for the fiscal year.''.
       On page 76, lines 9 and 10, strike ``January 1, 2006'' and 
     insert ``January 1, 2007''.
       On page 234, strike lines 23 through 25, and insert the 
     following:
       (20) by striking ``section 104(b) of the Naval Petroleum 
     Reserves Production Act of 1976 (90 Stat. 304; 42 U.S.C. 
     6504)'' and inserting ``section 104(a)''; and
       On page 296, after line 25, add the following:

     SEC. 347. FINGER LAKES WITHDRAWAL.

       All Federal land within the boundary of Finger Lakes 
     National Forest in the State of New York is withdrawn from--
       (1) all forms of entry, appropriation, or disposal under 
     the public land laws; and
       (2) disposition under all laws relating to oil and gas 
     leasing.
       On page 321, line 18, insert ``by the Commission'' after 
     ``request''.
       On page 353, strike lines 19 through 24 and insert the 
     following:

     on Indian land;
       ``(C) provide low-interest loans to Indian tribes and 
     tribal energy resource development organizations for use in 
     the promotion of energy resource development on Indian land 
     and integration of energy resources; and
       ``(D) provide grants and technical assistance to an 
     appropriate tribal environmental organization, as determined 
     by the Secretary, that represents multiple Indian tribes to 
     establish a national resource center to develop tribal 
     capacity to establish and carry out tribal environmental 
     programs in support of energy-related programs and activities 
     under this title, including--
       ``(i) training programs for tribal environmental officials, 
     program managers, and other governmental representatives;
       ``(ii) the development of model environmental policies and 
     tribal laws, including tribal environmental review codes, and 
     the creation and maintenance of a clearinghouse of best 
     environmental management practices; and
       ``(iii) recommended standards for reviewing the 
     implementation of tribal environmental laws and policies 
     within tribal judicial or other tribal appeals systems.
       On page 356, between lines 15 and 16, insert the following:
       ``(C) In providing a grant under this subsection for an 
     activity to provide, or expand the provision of, electricity 
     on Indian land, the Director shall encourage cooperative 
     arrangements between Indian tribes and utilities that provide 
     service to Indian tribes, as the Director determines to be 
     appropriate.
       On page 357, line 6, insert ``(A)'' after ``(2)''.
       On page 357, between lines 16 and 17, insert the following:
       ``(B) In providing a loan guarantee under this subsection 
     for an activity to provide, or expand the provision of, 
     electricity on Indian land, the Secretary of Energy shall 
     encourage cooperative arrangements between Indian tribes and 
     utilities that provide service to Indian tribes, as the 
     Secretary determines to be appropriate.
       On page 488, strike lines 5 through 9 and insert the 
     following:
       (a) Definition of Lignocellulosic Feedstock.--In this 
     section, the term ``lignocellulosic feedstock'' means any 
     portion of a plant or coproduct from conversion, including 
     crops, trees, and agricultural and forest residues not 
     specifically grown for food.
       On page 489, line 3, strike ``cellulosic feedstocks'' and 
     insert ``lignocellulosic feedstocks''.
       On page 489, lines 11 and 12, strike ``cellulosic 
     feedstocks'' and insert ``lignocellulosic feedstocks''.
       On page 503, strike lines 22 through 24.
       On page 504, line 1, strike ``(2)'' and insert ``(1)''.
       On page 504, strike lines 4 through 7 and insert the 
     following:
       (2) For activities under section 955--
       (A) $337,000,000 for fiscal year 2006;
       (B) $364,000,000 for fiscal year 2007; and
       (C) $394,000,000 for fiscal year 2008.
       (3) For activities under section 956--
       (A) $20,000,000 for fiscal year 2006;
       (B) $25,000,000 for fiscal year 2007; and
       (C) $30,000,000 for fiscal year 2008.
       On page 504, line 24, strike ``(b)(2)'' and insert 
     ``(b)(1)''.
       Beginning on page 505, strike lines 17 and all that follows 
     through page 506, line 2.
       On page 506, line 3, strike ``(c)'' and insert ``(b)''.
       On page 506, line 11, strike ``(d)'' and insert ``(c)''.
       Beginning on page 519, strike line 9 and all that follows 
     through page 523, line 6, and insert the following:

     SEC. 955. COAL AND RELATED TECHNOLOGIES PROGRAM.

       (a) In General.--In addition to the programs authorized 
     under title IV, the Secretary shall conduct a program of 
     technology research, development, and demonstration and 
     commercial application for coal and power systems, including 
     programs to facilitate production and generation of coal-
     based power through--
       (1) innovations for existing plants (including mercury 
     removal);
       (2) gasification systems;
       (3) advanced combustion systems;
       (4) turbines for synthesis gas derived from coal;
       (5) carbon capture and sequestration research and 
     development;
       (6) coal-derived chemicals and transportation fuels;
       (7) liquid fuels derived from low rank coal water;
       (8) solid fuels and feedstocks;
       (9) advanced coal-related research;
       (10) advanced separation technologies; and
       (11) fuel cells for the operation of synthesis gas derived 
     from coal.
       (b) Cost and Performance Goals.--
       (1) In general.--In carrying out programs authorized by 
     this section, the Secretary shall identify cost and 
     performance goals for coal-based technologies that would 
     permit the continued cost-competitive use of coal for the 
     production of electricity, chemical feedstocks, and 
     transportation fuels in 2008, 2010, 2012, and 2016, and each 
     calendar year beginning after September 30, 2021.
       (2) Administration.--In establishing the cost and 
     performance goals, the Secretary shall--
       (A) consider activities and studies undertaken as of the 
     date of enactment of this Act by industry in cooperation with 
     the Department in support of the identification of the goals;
       (B) consult with interested entities, including--
       (i) coal producers;
       (ii) industries using coal;
       (iii) organizations that promote coal and advanced coal 
     technologies;
       (iv) environmental organizations;
       (v) organizations representing workers; and
       (vi) organizations representing consumers;
       (C) not later than 120 days after the date of enactment of 
     this Act, publish in the Federal Register proposed draft cost 
     and performance goals for public comments; and
       (D) not later than 180 days after the date of enactment of 
     this Act and every 4 years thereafter, submit to Congress a 
     report describing the final cost and performance goals for 
     the technologies that includes--
       (i) a list of technical milestones; and
       (ii) an explanation of how programs authorized in this 
     section will not duplicate the activities authorized under 
     the Clean Coal Power Initiative authorized under title IV.
       (c) Powder River Basin and Fort Union Lignite Coal Mercury 
     Removal.--
       (1) In general.--In addition to the programs authorized by 
     subsection (a), the Secretary may establish a program to test 
     and develop technologies to control and remove mercury 
     emissions from subbituminous coal mined in the Powder River 
     Basin, and Fort Union lignite coals, that are used for the 
     generation of electricity.
       (2) Efficacy of mercury removal technology.--In carrying 
     out the program under paragraph (1), the Secretary shall 
     examine the efficacy of mercury removal technologies on coals 
     described in that paragraph that are blended with other types 
     of coal.

     SEC. 956. CARBON CAPTURE RESEARCH AND DEVELOPMENT PROGRAM.

       (a) In General.--The Secretary shall carry out a 10-year 
     carbon capture research and development program to develop 
     carbon dioxide capture technologies on combustion-based 
     systems for use--
       (1) in new coal utilization facilities; and
       (2) on the fleet of coal-based units in existence on the 
     date of enactment of this Act.
       (b) Objectives.--The objectives of the program under 
     subsection (a) shall be--
       (1) to develop carbon dioxide capture technologies, 
     including adsorption and absorption techniques and chemical 
     processes, to remove the carbon dioxide from gas streams 
     containing carbon dioxide potentially amenable to 
     sequestration;
       (2) to develop technologies that would directly produce 
     concentrated streams of carbon dioxide potentially amenable 
     to sequestration;
       (3) to increase the efficiency of the overall system to 
     reduce the quantity of carbon dioxide emissions released from 
     the system per megawatt generated; and
       (4) in accordance with the carbon dioxide capture program, 
     to promote a robust carbon sequestration program and continue 
     the work of the Department, in conjunction with the private 
     sector, through regional carbon sequestration partnerships.
       On page 522, between lines 8 and 9, insert the following:
       (d) Fuel Cells.--
       (1) In general.--The Secretary shall conduct a program of 
     research, development, demonstration, and commercial 
     application on fuel cells for low-cost, high-efficiency, 
     fuel-flexible, modular power systems.
       (2) Demonstrations.--The demonstrations referred to in 
     paragraph (1) shall include solid oxide fuel cell technology 
     for commercial, residential, and transportation applications, 
     and distributed generation systems, using improved 
     manufacturing production and processes.
       On page 558, beginning on line 22, strike ``of the Senate'' 
     and all that follows through ``Commerce'' on line 23 and 
     insert ``and the Committee on Foreign Relations of the Senate 
     and the Committee on Energy and Commerce and the Committee on 
     International Relations''.
       On page 595, between lines 4 and 5, insert the following:
       (2) Report on trends.--Not later than 1 year after the date 
     of enactment of this Act, the Secretary shall submit to 
     Congress a report on current trends under paragraph (1), with 
     recommendations (as appropriate) to meet the future labor 
     requirements for the energy technology industries.
       On page 595, line 5, strike ``(2) Report.--As'' and insert 
     the following:
       (3) Report on shortage.--As

[[Page S7180]]

       On page 596, strike line 22 and all that follows through 
     page 597, line 20, and insert the following:

     SEC. 1103. EDUCATIONAL PROGRAMS IN SCIENCE AND MATHEMATICS.

       (a) Science Education Enhancement Fund.--Section 3164 of 
     the Department of Energy Science Education Enhancement Act 
     (42 U.S.C. 7381a) is amended by adding at the end:
       ``(c) Science Education Enhancement Fund.--The Secretary 
     shall use not less than 0.2 percent of the amount made 
     available to the Department for fiscal year 2006 and each 
     fiscal year thereafter to carry out activities authorized by 
     this part.''.
       (b) Authorized Education Activities.--Section 3165 of the 
     Department of Energy Science Education Enhancement Act (42 
     U.S.C. 7381b) is amended by adding at the end the following:
       ``(14) Support competitive events for students under the 
     supervision of teachers, designed to encourage student 
     interest and knowledge in science and mathematics.
       ``(15) Support competitively-awarded, peer-reviewed 
     programs to promote professional development for mathematics 
     teachers and science teachers who teach in grades from 
     kindergarten through grade 12 at Department research and 
     development facilities.
       ``(16) Support summer internships at Department research 
     and development facilities, for mathematics teachers and 
     science teachers who teach in grades from kindergarten 
     through grade 12.
       ``(17) Sponsor and assist in educational and training 
     activities identified as critical skills needs for future 
     workforce development at Department research and development 
     facilities.''.
       (c) Educational Partnerships.--Section 3166(b) of the 
     Department of Energy Science Education Enhancement Act (42 
     U.S.C. 7381c(b)) is amended--
       (1) by striking paragraph (1) and inserting the following:
       ``(1) loaning or transferring equipment to the 
     institution;'';
       (2) in paragraph (5), by striking ``and'' at the end;
       (3) in paragraph (6), by striking the period at the end and 
     inserting ``; and''; and
       (4) by adding at the end the following:
       ``(7) providing funds to educational institutions to hire 
     personnel to facilitate interactions between local school 
     systems, Department research and development facilities, and 
     corporate and governmental entities.''.
       (d) Definition of Department Research and Development 
     Facilities.--Section 3167(3) of the Department of Energy 
     Science Education Enhancement Act (42 U.S.C. 7381d(3)) is 
     amended by striking ``from the Office of Science of the 
     Department of Energy'' and inserting ``by the Department of 
     Energy''.
       (e) Study.--
       (1) In general.--The Secretary shall enter into an 
     arrangement with the National Academy of Public 
     Administration to conduct a study of the priorities, quality, 
     local and regional flexibility, and plans for educational 
     programs at Department research and development facilities.
       (2) Inclusion.--The study shall recommend measures that the 
     Secretary may take to improve Department-wide coordination of 
     educational, workforce development, and critical skills 
     development activities.
       (3) Report.--Not later than 2 years after the date of 
     enactment of this Act, the Secretary shall submit to Congress 
     a report on the results of the study conducted under this 
     subsection.
       On page 599, line 15, insert ``(as amended by section 
     1103(a))'' after ``7381a)''.
       On page 599, line 17, strike ``(c)'' and insert ``(d)''.
       On page 686, line 3, insert ``by the Commission'' after 
     ``request''.
       On page 755, after line 25, add the following:

     SEC. 13__. STUDY OF LINK BETWEEN ENERGY SECURITY AND 
                   INCREASES IN VEHICLE MILES TRAVELED.

       (a) In General.--The Secretary shall enter into an 
     arrangement with the National Academy of Sciences under which 
     the Academy shall conduct a study to assess the implications 
     on energy use and efficiency of land development patterns in 
     the United States.
       (b) Scope.--The study shall consider--
       (1) the correlation, if any, between land development 
     patterns and increases in vehicle miles traveled;
       (2) whether petroleum use in the transportation sector can 
     be reduced through changes in the design of development 
     patterns;
       (3) the potential benefits of--
       (A) information and education programs for State and local 
     officials (including planning officials) on the potential for 
     energy savings through planning, design, development, and 
     infrastructure decisions;
       (B) incorporation of location efficiency models in 
     transportation infrastructure planning and investments; and
       (C) transportation policies and strategies to help 
     transportation planners manage the demand for the number and 
     length of vehicle trips, including trips that increase the 
     viability of other means of travel; and
       (4) such other considerations relating to the study topic 
     as the National Academy of Sciences finds appropriate.
       (c) Report.--Not later than 2 years after the date of 
     enactment of this Act, the National Academy of Sciences shall 
     submit to the Secretary and Congress a report on the study 
     conducted under this section.

     SEC. 13__. STUDY OF AVAILABILITY OF SKILLED WORKERS.

       (a) In General.--The Secretary shall enter into an 
     arrangement with the National Academy of Sciences under which 
     the National Academy of Sciences shall conduct a study of the 
     short-term and long-term availability of skilled workers to 
     meet the energy and mineral security requirements of the 
     United States.
       (b) Inclusions.--The study shall include an analysis of--
       (1) the need for and availability of workers for the oil, 
     gas, and mineral industries;
       (2) the availability of skilled labor at both entry level 
     and more senior levels; and
       (3) recommendations for future actions needed to meet 
     future labor requirements.
       (c) Report.--Not later than 2 years after the date of 
     enactment of this Act, the Secretary shall submit to Congress 
     a report that describes the results of the study.
                                 ______
                                 
  SA 954. Mr. SESSIONS submitted an amendment intended to be proposed 
by him to the bill H.R. 6, To ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       At the appropriate place, insert the following:

     SEC. __. STATE TAXES ON LIQUIFIED NATURAL GAS.

       (a) In General.--
       (1) In general.--A State may impose a tax on the value of 
     any liquified natural gas received by any facility which is 
     authorized by the Federal Energy Regulatory Commission under 
     section 3(d) of the Natural Gas Act (15 U.S.C. 717b(d)) and 
     which is within such State.
       (2) Amount of tax.--The amount of any tax imposed under 
     paragraph (1) shall not be more than 0.25 percent of the 
     value such gas.
       (b) Effect on Interstate Commerce.--Any tax imposed under 
     subsection (a) shall--
       (1) be considered to be a reasonable regulation of 
     commerce; and
       (2) not be considered to impose an undue burden on 
     interstate commerce or to otherwise impair, restrain, or 
     discriminate against interstate commerce.
                                 ______
                                 
  SA 955. Mr. CORZINE submitted an amendment intended to be proposed by 
him to the bill H.R. 6, To ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       Beginning on page 1, line 1, strike ``On page'' and all 
     that follows through page 15, line 24, and insert the 
     following:
       On page 56, between lines 17 and 18, insert the following:

     SEC. 325. OUTER CONTINENTAL SHELF.

       Sections 107, 108, and 109 of division E of the 
     Consolidated Appropriations Act, 2005 (Public Law 108-447; 
     118 Stat. 3063) are amended by striking ``provided in this 
     title'' each place appears and inserting ``made available 
     under this Act or any other Act for any fiscal year''.
                                 ______
                                 
  SA 956. Mr. CORZINE submitted an amendment intended to be proposed by 
him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       On page 10, line 5, insert ``and each State in the same OCS 
     planning area with a coastline'' after ``State''.
                                 ______
                                 
  SA 957. Mr. CORZINE submitted an amendment intended to be proposed by 
him to the bill H.R. 6, To ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       Beginning on page 1, line 1, strike ``On page'' and all 
     that follows through page 15, line 24, and insert the 
     following:
       On page 56, between lines 17 and 18, insert the following:

     SEC. 325. OUTER CONTINENTAL SHELF.

       Sections 107, 108, and 109 of division E of the 
     Consolidated Appropriations Act, 2005 (Public Law 108-447; 
     118 Stat. 3063) are amended by striking ``provided in this 
     title'' each place appears and inserting ``made available 
     under this Act or any other Act for any fiscal year''.
                                 ______
                                 
  SA 958. Mr. LIEBERMAN submitted an amendment intended to be proposed 
by him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       Beginning on page 120, strike line 21 and all that follows 
     through page 122, line 14, and insert the following:

                        Subtitle D--Oil Security

     SEC. 151. SHORT TITLE; FINDINGS AND PURPOSES.

       (a) Short Title.--This subtitle may be cited as the ``Oil 
     Security Act''.
       (b) Findings.--Congress finds that--
       (1) the United States is dangerously dependent on oil;
       (2) that dependence threatens the national security, 
     weakens the economy, and harms the environment of the United 
     States;
       (3) the United States currently imports nearly 60 percent 
     of oil needed in the United

[[Page S7181]]

     States, and that ratio is expected to grow to almost 70 
     percent by 2025 if no actions are taken;
       (4) approximately 2,500,000 barrels of oil per day are 
     imported from countries in the Persian Gulf region;
       (5) that dependence on foreign oil undermines the war on 
     terror by financing both sides of the war;
       (6) in 2004 alone, the United States sent $103,000,000,000 
     to undemocratic countries, some of which use revenues to 
     support terrorism and spread ideology hostile to the United 
     States, as documented by the Council on Foreign Relations;
       (7) terrorists have identified oil as a strategic 
     vulnerability and have ramped up attacks against oil 
     infrastructure worldwide;
       (8) oil imports comprise more than 25 percent of the 
     dangerously high United States trade deficit;
       (9) it is feasible to achieve oil savings of more than 
     2,500,000 barrels per day by 2015 and 10,000,000 barrels per 
     day by 2025;
       (10) those goals can be achieved by establishing a set of 
     flexible policies, including--
       (A) increasing the gasoline-efficiency of cars, trucks, 
     tires, and oil;
       (B) providing economic incentives for companies and 
     consumers to purchase fuel-efficient cars;
       (C) encouraging the use of transit and the reduction of 
     truck idling; and
       (D) increasing production and commercialization of 
     alternative liquid fuels;
       (11) technology available as of the date of enactment of 
     this Act (including popular hybrid-electric vehicle models, 
     the sales of which in the United States increased 136 percent 
     in the first 4 months of 2005 as compared with the same 
     period in 2004) make an oil savings plan eminently 
     achievable; and
       (12) it is urgent, essential, and feasible to implement an 
     action plan to achieve oil savings as soon as practicable 
     because any delay in initiating action will--
       (A) make achieving necessary oil savings more difficult and 
     expensive; and
       (B) increase the risks to the national security, economy, 
     and environment of the United States.
       (c) Purposes.--The purposes of this subtitle are--
       (1) to help instill consumer confidence and acceptable of 
     alternative motor vehicles by lowering the 3 major barriers 
     to confidence and acceptance;
       (2) to enable the accelerated introduction into the 
     marketplace of new motor vehicle technologies without adverse 
     emission impact, while retaining a policy of fuel neutrality 
     in order to foster private innovation and commercialization 
     and allow market forces to decide the technologies and fuels 
     that are consumer-friendly, safe, environmentally-sound, and 
     economic;
       (3) to provide, for a limited time period, financial 
     incentives to encourage consumers nationwide to purchase or 
     lease new fuel cell, hybrid, battery electric, and 
     alternative fuel motor vehicles;
       (4) to increase demand of vehicles described in paragraph 
     (3) so as to make the annual production by manufacturers and 
     retail sale of the vehicles economically and commercially 
     viable for the consumer;
       (5) to promote and expand the use of vehicles described in 
     paragraph (3) throughout the United States; and
       (6) to promote a nationwide diversity of motor vehicle 
     fuels for advanced and hybrid technology and alternatively 
     fueled motor vehicles.

     SEC. 152. MANUFACTURING INCENTIVES FOR ALTERNATIVE FUEL 
                   VEHICLES.

       (a) Advanced Technology Motor Vehicles Manufacturing 
     Credit.--
       (1) In general.--Subpart B of part IV of subchapter A of 
     chapter 1 (relating to foreign tax credit, etc.), as amended 
     by this Act, is amended by adding at the end the following 
     new section:

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

       ``(a) Credit Allowed.--
       ``(1) In general.--There shall be allowed as a credit 
     against the tax imposed by this chapter for the taxable year 
     an amount equal to 33 percent of the qualified investment of 
     an eligible taxpayer for such taxable year.
       ``(2) Limitation.--The credit allowed under subsection (a) 
     for any taxable year shall not exceed $200,000,000.
       ``(b) Eligible Taxpayer.--For purposes of this section, the 
     term `eligible taxpayer' means any taxpayer if more than 25 
     percent of its gross receipts for the taxable year is derived 
     from the manufacture of motor vehicles or any component parts 
     of such vehicles.
       ``(c) 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 a manufacturing facility of the 
     eligible taxpayer to produce advanced technology motor 
     vehicles or to produce eligible components, and
       ``(B) for engineering integration of such vehicles and 
     components as described in subsection (e).
       ``(2) Attribution rules.--In the event a facility of the 
     taxpayer produces both advanced technology motor vehicles and 
     conventional motor vehicles, or eligible and non-eligible 
     components, only the qualified investment attributable to 
     production of advanced technology motor vehicles and eligible 
     components shall be taken into account.
       ``(3) Sustained improvement.--
       ``(A) Definitions.--For purposes of this paragraph--
       ``(i) Adjusted fuel economy.--

       ``(I) In general.--The term `adjusted fuel economy' means 
     the average fuel economy of a manufacturer for all light duty 
     motor vehicles, adjusted as described in subclause (II).
       ``(II) Adjustment.--The fuel economy of each vehicle 
     qualifying for the credit shall be deemed to be equal to the 
     base year average fuel economy for the weight class of the 
     vehicle.

       ``(ii) Base year.--The term `base year' means model year 
     2002.
       ``(B) Eligibility.--For an automobile manufacturer to be 
     eligible for an award under this subsection in a year, the 
     adjusted average fuel economy of the manufacturer for light 
     duty vehicles for the most recent year for which data is 
     available may not be less than the base year average fuel 
     economy of the manufacturer for all of the light duty motor 
     vehicles of the manufacturer.
       ``(d) Advanced Technology Motor Vehicles and Eligible 
     Components.--For purposes of this section--
       ``(1) Advanced technology motor vehicle.--The term 
     `advanced technology motor vehicle' means--
       ``(A) any advanced lean burn technology motor vehicle, or
       ``(B) any new qualified hybrid motor vehicle as defined in 
     section 30B(c)(3) (other than a heavy duty hybrid motor 
     vehicle), eligible for a credit amount under section 
     30B(c)(2)(B),

     which is in compliance with any Environmental Protection 
     Agency emission standard for fine particulate matter for the 
     applicable make and model year of the vehicle.
       ``(2) Advanced lean burn technology motor vehicle.--The 
     term `advanced lean burn technology motor vehicle' means a 
     motor vehicle with an internal combustion engine--
       ``(A) which is designed to operate primarily using more air 
     than is necessary for complete combustion of the fuel,
       ``(B) which incorporates direct injection,
       ``(C) which achieves at least 125 percent of the 2002 model 
     year city fuel economy, and
       ``(D) which, for 2004 and later model vehicles, has 
     received a certificate that such vehicle meets or exceeds--
       ``(i) in the case of any vehicle having a gross vehicle 
     weight rating of not more than 6,000 pounds, 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, and
       ``(ii) in the case of any vehicle having a gross vehicle 
     weight rating of more than 6,000 pounds but not more than 
     8,500 pounds, the Bin 8 Tier II emission standard as so 
     established.
       ``(3) Eligible components.--The term `eligible component' 
     means any component specially designed for any advanced 
     technology motor vehicle and installed for the purpose of 
     meeting the performance requirements for such 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 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) any other component submitted for approval by the 
     Secretary.
       ``(e) Engineering Integration Costs.--For purposes of 
     subsection (c)(1)(B), costs for engineering integration are 
     costs incurred prior to the market introduction of advanced 
     technology vehicles for engineering tasks related to--
       ``(1) incorporating eligible components into the design of 
     advanced technology vehicles, and
       ``(2) designing new tooling and equipment for production 
     facilities which produce eligible components or advanced 
     technology vehicles.
       ``(f) Limitation Based on Amount of Tax.--The credit 
     allowed under subsection (a) for the taxable year shall not 
     exceed the excess of--
       ``(1) the sum of--
       ``(A) the regular tax liability (as defined in section 
     26(b)) for such taxable year, plus
       ``(B) the tax imposed by section 55 for such taxable year, 
     over
       ``(2) the sum of the credits allowable under subpart A and 
     sections 27, 30, 30B, and 30C for the taxable year.
       ``(g) Reduction in Basis.--For purposes of this subtitle, 
     if a credit is allowed under this section for any expenditure 
     with respect to any property, the increase in the basis of 
     such property which would (but for this paragraph) result 
     from such expenditure shall be reduced by the amount of the 
     credit so allowed.
       ``(h) No Double Benefit.--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.

[[Page S7182]]

       ``(i) Business Carryovers Allowed.--If the credit allowable 
     under subsection (a) for a taxable year exceeds the 
     limitation under subsection (f) for such taxable year, such 
     excess (to the extent of the credit allowable with respect to 
     property subject to the allowance for depreciation) shall be 
     allowed as a credit carryback and carryforward under rules 
     similar to the rules of section 39.
       ``(j) Special Rules.--For purposes of this section, rules 
     similar to the rules of paragraphs (4) and (5) of section 
     179A(e) and paragraphs (1) and (2) of section 41(f) shall 
     apply
       ``(k) Election Not To Take Credit.--No credit shall be 
     allowed under subsection (a) for any property if the taxpayer 
     elects not to have this section apply to such property.
       ``(l) Regulations.--The Secretary shall prescribe such 
     regulations as necessary to carry out the provisions of this 
     section.
       ``(m) Termination.--This section shall not apply to any 
     qualified investment after December 31, 2015.''.
       (2) Conforming amendments.--
       (A) Section 1016(a), as amended by this Act, is amended by 
     striking ``and'' at the end of paragraph (32), by striking 
     the period at the end of paragraph (33) and inserting ``, 
     and'', and by adding at the end the following new paragraph:
       ``(34) to the extent provided in section 30D(g).''.
       (B) Section 6501(m), as amended by this Act, is amended by 
     inserting ``30D(k),'' after ``30C(j),''.
       (C) The table of sections for subpart B of part IV of 
     subchapter A of chapter 1, as amended by this Act, is amended 
     by inserting after the item relating to section 30C the 
     following new item:
``Sec. 30D. Advanced technology motor vehicles manufacturing credit.''.

       (3) Effective Date.--The amendments made by this subsection 
     shall apply to amounts incurred in taxable years beginning 
     after December 31, 2004.
       (b) Fuel Economy Calculations.--
       (1) In general.--Section 32905 of title 49, United States 
     Code, is amended--
       (A) in subsections (b) and (d),
       (i) by amending paragraph (1) of each subsection to read as 
     follows:
       ``(1) the number determined by--
       ``(A) subtracting from 1.0 the alternative fuel use factor 
     for the model; and
       ``(B) dividing the difference calculated under subparagraph 
     (A) by the fuel economy measured under section 32904(c) when 
     operating the model on gasoline or diesel fuel; and''; and
       (ii) by amending paragraph (2) of each subsection to read 
     as follows:
       ``(2) the number determined by dividing the alternative 
     fuel use factor for the model by the fuel economy measured 
     under subsection (a) when operating the model on alternative 
     fuel.''; and
       (B) by adding at the end the following:
       ``(h) Determination of Alternative Fuel Use Factor.--
       ``(1) For purposes of subsections (b) and (d), the term 
     `alternative fuel use factor' means, for a model of 
     automobile, the factor determined by the Administrator under 
     paragraph (3).
       ``(2) At the beginning of each calendar year, the Secretary 
     of Transportation shall estimate, by model, the aggregate 
     amount of fuel and the aggregate amount of alternative fuel 
     used to operate all dual fuel automobiles during the most 
     recent 12-month period.
       ``(3) The Administrator shall determine, by regulation, the 
     alternative fuel use factor for each model of dual fueled 
     automobile, on an energy equivalent basis, by calculating the 
     ratio that the amount of alternative fuel used by such model 
     bears to the amount of fuel used by such model.''.
       (2) Applicability of existing standards.--The amendments 
     made by this subsection shall not affect the application of 
     section 32901 of title 49, United States Code, to automobiles 
     manufactured before model year 2007.
       (3) Effective date.--The amendments made by this subsection 
     shall take effect on January 1, 2007.

     SEC. 153. CELLULOSE BIOMASS-TO-FUEL EARLY DEPLOYMENT AND 
                   COMMERCIALIZATION INITIATIVES.

       (a) General Requirements.--
       (1) Definitions.--In this section:
       (A) Cellulose biomass-to-fuel.--The term ``cellulose 
     biomass-to-fuel'' means any fuel that is produced from at 
     least 80 percent cellulosic biomass.
       (B) Commercial-scale plant.--The term ``commercial-scale 
     plant'' means a plant that--
       (i) has a production capacity of greater than 7,000,000 
     gallons per year of cellulose biomass-to-fuel and related 
     products, as measured by energy content; and
       (ii) uses technology that has been successfully tested in a 
     pilot or demonstration project that produced at least 
     1,000,000 gallons per year of cellulose biomass-to-fuel and 
     related products, as measured by energy content.
       (C) Committee.--The term ``Committee'' means the Cellulosic 
     Biomass-to-Fuel Review Committee established under paragraph 
     (4).
       (D) Pre-commercial scale plant.--The term ``pre-commercial 
     scale plant'' means--
       (i) a plant that has a production capacity of less than 
     7,000,000 gallons per year of cellulose biomass-to-fuel and 
     related products, as measured by energy content; or
       (ii) an existing industrial facility--

       (I) that adds equipment to conduct research, development, 
     or demonstration to overcome the recalcitrance of biomass, 
     feedstock development, or co-products development; and
       (II) at which the addition of the equipment increases the 
     production capacity of the facility by less than 7,000,000 
     gallons per year of cellulose biomass-to-fuel and related 
     products, as measured by energy content.

       (E) Production capacity.--For purposes of this section, the 
     production capacity of a plant shall be measured--
       (i) assuming maximum potential output, 24 hours a day, 365 
     days per year; and
       (ii) in terms of gallons of ethanol equivalent, with other 
     fuels converted to this unit of measurement, based on the 
     energy content of the fuels.
       (2) Purpose.--The purpose of this section is to--
       (A) accelerate deployment and commercialization of 
     cellulosic biomass to fuel;
       (B) reduce the oil dependence of the United States; and
       (C) enhance the ability of the United States to produce 
     alternative fuels.
       (3) Establishment.--The Secretary, in consultation with the 
     Secretary of the Treasury, shall establish a cellulose 
     biomass-to-fuels incentives program under subsection (b).
       (4) Cellulose biomass-to-fuel review committee.--The 
     Secretary shall request that the National Academy of Science 
     establish an independent Cellulose Biomass-to-Fuel Review 
     Committee, of which at least \1/2\ of the members shall be 
     experts external to the Department of Agriculture and the 
     Department of Energy.
       (5) Solicitation process.--
       (A) In general.--The Secretary, in consultation with the 
     Committee, shall establish an open and competitive 
     solicitation process to select projects for participation in 
     the cellulose biomass-to-fuel early deployment and 
     commercialization initiative.
       (B) Eligibility determinations.--Eligibility determinations 
     shall be established based on expert peer review of the 
     proposals by the Committee.
       (C) Consistency.--The solicitation shall be consistent from 
     year to year.
       (D) Requirements.--At a minimum, eligible plants shall--
       (i) be located in the United States;
       (ii) meet all applicable Federal and State permitting 
     requirements; and
       (iii) convert cellulose biomass to fuel.
       (E) Financial criteria.--The Secretary may establish such 
     additional financial criteria as the Secretary considers to 
     be appropriate.
       (F) Prioritization.--In selecting projects, the Committee 
     shall prioritize the following goals in the following order:
       (i) Projects demonstrating the potential for significant 
     advances in biomass processing.
       (ii) Projects demonstrating the potential to substantially 
     further scale-sensitive national objectives, including--

       (I) sustainable resource supply;
       (II) reduced greenhouse gas emissions;
       (III) healthier rural economies; and
       (IV) improved strategic security and trade balances.

       (iii) Projects located in local markets that have the 
     greatest need for the facility because of--

       (I) a high level of demand for fuel ethanol or other 
     commercial byproducts of the facility; or
       (II) availability of sufficient quantities of cellulosic 
     biomass.

       (6) Reporting.--Not later than 180 days after the date of 
     enactment of this Act, the Secretary, in consultation with 
     the Committee, shall submit to Congress a report that 
     includes a 10-year plan containing--
       (A) a detailed assessment of whether the aggregate funding 
     levels provided under subsection (b) are appropriate;
       (B) a detailed description of how proposals will be 
     solicited and evaluated, including a list of all activities 
     expected to be carried out; and
       (C) a detailed list of milestones for each biomass and 
     related technology that will be pursued.
       (7) Periodic updates.--Until all incentives committed under 
     subsection (b) have been used, the Secretary, in conjunction 
     with the Secretary of the Treasury, shall annually submit to 
     Congress a report on the activities of the Secretary and the 
     Secretary of the Treasury under this section.
       (b) Cellulosic Biomass Fuels Incentive Program.--
       (1) In general.--
       (A) Establishment of program.--The Secretary, in 
     consultation with the Secretary of the Treasury, shall 
     establish a program for providing incentives to commercial 
     scale cellulose biomass-to-fuels producers.
       (B) In general.--The Secretary may provide loan guarantees 
     and performance incentives to merchant producers of cellulose 
     biomass-to-fuel in the United States to assist the 
     producers--
       (i) to build eligible commercial-ready production 
     facilities; and
       (ii) to produce cellulose biomass-to-fuel in accordance 
     with paragraphs (2), (3), and (4).
       (C) Total value of incentives.--
       (i) In general.--Except as provided in clause (ii), 
     cellulose biomass-to-fuel facilities selected by the 
     Secretary may receive all of the incentives offered under 
     this subsection.
       (ii) Total value.--The total value to the facility of all 
     incentives offered under this

[[Page S7183]]

     subsection shall not exceed the values presented in the 
     following table, in which the ``Facility on line'' dates are 
     expressed in years from the date of enactment of this Act.

 
----------------------------------------------------------------------------------------------------------------
                                           Total Value of Incentives Over the Life of a Facility: The lesser of:
                                         -----------------------------------------------------------------------
            Facility on line:                 Per million gallons      Percent of total capital    Total dollar
                                                   capacity                      cost                 amount
----------------------------------------------------------------------------------------------------------------
Year 4..................................  $4,600,000................  46%.......................     $80,000,000
----------------------------------------------------------------------------------------------------------------
Year 6..................................  $3,500,000................  35%.......................     $60,000,000
----------------------------------------------------------------------------------------------------------------
Year 10.................................  $1,500,000................  15%.......................     $25,000,000
----------------------------------------------------------------------------------------------------------------

       (D) Authorization of appropriations.--There are authorized 
     to be appropriated to the Secretary such sums as are 
     necessary to carry out this subsection.
       (E) Termination of authority.--The authority of the 
     Secretary and the Secretary of the Treasury to commit to new 
     incentives under paragraphs (2), (3), and (4) shall terminate 
     on the date that is 10 years after the date of enactment of 
     this Act.
       (2) Cellulosic biomass fuel loan guarantees.--
       (A) Establishment of program.--The Secretary shall 
     establish a program to provide guarantees of loans by private 
     institutions for the construction of facilities to process 
     and convert cellulosic biomass into fuel and other commercial 
     byproducts.
       (B) Limitation.--The total amount of all loans guaranteed 
     under this paragraph shall not exceed $2,000,000,000 at any 
     time during the program.
       (C) Requirements.--The Secretary may provide a loan 
     guarantee under this paragraph to an applicant if--
       (i) the prospective earning power of the applicant and the 
     character and value of the security pledged provide a 
     reasonable assurance of repayment of the loan to be 
     guaranteed in accordance with the terms of the loan; and
       (ii) the loan bears interest at a rate determined by the 
     Secretary to be reasonable, taking into account--

       (I) the current average yield on outstanding obligations of 
     the United States with remaining periods of maturity 
     comparable to the loan; and
       (II) the risk profile of the loan.

       (D) Terms and conditions.--The loan agreement for a loan 
     guarantee under this paragraph shall provide that--
       (i) no provision of the loan agreement may be amended or 
     waived without the consent of the Secretary;
       (ii) the loan guarantee shall have a maturity of not more 
     than 20 years; and
       (iii) the recipient of a loan guarantee under this 
     paragraph shall pay the Secretary an amount determined by the 
     Secretary to be sufficient to cover the administrative costs 
     of the Secretary relating to the loan guarantee.
       (E) Eligibility and limitations.--
       (i) In general.--In addition to the overall limitation 
     established under paragraph (1)(C)(ii), the maximum loan 
     guarantee that any project that is begun not later than 4 
     years after the date of establishment of the program under 
     this paragraph may receive shall be the lesser of--

       (I) $5,600,000 per million gallons of capacity;
       (II) 80 percent of the total project debt; or
       (III) $100,000,000 per facility.

       (ii) Schedule.--The Secretary shall establish a schedule of 
     limitations that decrease throughout the period that begins 
     on the date that is 4 year after the date of establishment of 
     the program under this paragraph and ends on the date that is 
     10 years after the date of establishment of the program.
       (F) Full faith and credit.--
       (i) In general.--The full faith and credit of the United 
     States is pledged to the payment of all guarantees issued 
     under this paragraph with respect to principal and interest.
       (ii) Conclusive evidence.--Any guarantee made by the 
     Secretary under this paragraph shall be conclusive evidence 
     of the eligibility of the loan for the guarantee with respect 
     to principal and interest.
       (iii) Incontestable validity.--The validity of the 
     guarantee shall be incontestable in the hands of a holder of 
     the guaranteed loan.
       (G) Allowed uses of funds.--In the event of a performance 
     shortfall, the loan guarantee funds may be used to either pay 
     senior debt or make fixes to increase output or efficiency.
       (3) Cellulosic biomass fuel tax-exempt financing.--
       (A) Establishment of program.--
       (i) In general.--The Secretary of the Treasury, in 
     coordination with the Secretary, shall establish a tax-exempt 
     financing program specifically for commercial scale cellulose 
     biomass-to-fuel projects.
       (ii) Purpose.--The program established under clause (i) 
     shall provide tax-exempt financing to construct facilities to 
     process and convert cellulosic biomass into fuel and other 
     commercial byproducts.
       (B) Tax code amendments.--
       (i) Treatment as exempt facility bond.--Subsection (a) of 
     section 142 of the Internal Revenue Code of 1986 (relating to 
     exempt facility bond) is amended by striking ``or'' at the 
     end of paragraph (13), by striking the period at the end of 
     paragraph (14) and inserting ``, or'', and by adding at the 
     end the following:
       ``(15) qualified cellulose biomass-to-fuel facilities.''.
       (ii) Qualified cellulose biomass-to-fuel facilities.--
     Section 142 of such Code is amended by adding at the end the 
     following:
       ``(m) Qualified Cellulose Biomass-to-Fuel Facilities.--
       ``(1) In general.--For purposes of subsection (a)(15), the 
     term `qualified cellulose biomass-to-fuel facilities' means 
     any cellulose biomass-to-fuel project approved by the 
     Secretary of Energy, in consultation with the Secretary, 
     under section 1512 of the Energy Policy Act of 2005.
       ``(2) National limitation on amount of tax-exempt financing 
     for facilities.--
       ``(A) National limitation.--There is a national cellulose 
     biomass-to-fuel facilities bond limitation for each calendar 
     year equal to such amount which when added to other 
     incentives offered under section 1512 of such Act to 
     qualified cellulose biomass-to-fuel facilities for such 
     calendar year does not exceed the total value of all such 
     incentives available to all such facilities under section 
     112(b)(1)(C) of such Act for such calendar year.
       ``(B) Enforcement of national limitation.--An issue shall 
     not be treated as an issue described in subsection (a)(15) if 
     the aggregate face amount of bonds issued for any calendar 
     year (when added to the aggregate face amount of bonds 
     previously issued as part of issues described in subsection 
     (a)(15) for such calendar year) exceeds the national 
     cellulose biomass-to-fuel facilities bond limitation for such 
     calendar year.
       ``(C) Allocation by secretary of energy.--The Secretary of 
     Energy, in consultation with the Secretary, shall allocate 
     the amount described in subparagraph (A) among cellulose 
     biomass-to-fuel projects in such manner as the Secretary 
     determines appropriate.''.
       (iii) Effective date.--The amendments made by this 
     subparagraph apply to bonds issued after the date of the 
     enactment of this Act.
       (4) Cellulosic biomass fuels performance incentives 
     program.--
       (A) Establishment of program.--The Secretary shall 
     establish a program to make available to commercial scale 
     cellulose biomass-to-fuel producers performance incentives on 
     a per gallon basis of cellulose biomass-to-fuel from eligible 
     facilities.
       (B) Incentives.--
       (i) In general.--The program established under subparagraph 
     (A) shall consist of 2 phases.
       (ii) First phase.--

       (I) In general.--During the period that begins on the date 
     of establishment of the program under this paragraph and ends 
     on the date that is 6 years after the date of establishment 
     of the program, performance payments shall be available to 
     all projects participating in the program, subject to the 
     limits established in paragraph (1)(C)(ii).
       (II) Payments.--During the period described in subclause 
     (I), payments shall be made per gallon produced and sold by 
     the facility during the first 6 years of operation.

       (iii) Second phase.--

       (I) In general.--During the period that begins on the date 
     that is 7 years after the date of establishment of the 
     program under this paragraph and ends on the date that is 10 
     years after the date of establishment of the program, 
     performance incentives shall be made available through not 
     less than 2 reverse auctions as described in subclauses (II) 
     through (V).
       (II) Amount of funds.--The Secretary, in coordination with 
     the Secretary of the Treasury, shall establish the amount of 
     funds available for use as performance payments after taking 
     into account other existing and expected liabilities under 
     this subsection.
       (III) Desired amount.--For each reverse auction conducted 
     under this clause, each eligible facility shall request a 
     desired amount of performance incentive on a per gallon 
     basis.
       (IV) Selection of facilities.--The Secretary shall select 
     facilities beginning with the facility that requests the 
     lowest amount of performance incentive on a per gallon basis 
     and continuing until the funds available under subclause (II) 
     for the reverse auction are committed.

[[Page S7184]]

       (V) Incentives received.--A facility selected by the 
     Secretary shall receive the amount of performance incentive 
     requested by the facility in the auction for each gallon 
     produced and sold by the facility during the first 6 years of 
     operation.

       (C) Limitations.--
       (i) In general.--In addition to the overall limitation 
     established in paragraph (1)(C)(ii), the value of incentives 
     paid under this subsection for projects that are begun not 
     later than 4 years after the date of establishment of the 
     program under this paragraph shall be limited to the lesser 
     of--

       (I) $0.75 per gallon;
       (II) $4,000,000 per million gallons of capacity; or
       (III) 40 percent of the total capacity cost of the project.

       (ii) Schedule.--The Secretary shall establish a schedule of 
     limitations that decrease throughout the period that begins 
     on the date that is 4 year after the date of establishment of 
     the program under this paragraph and ends on the date that is 
     10 years after the date of establishment of the program.

     SEC. 154. NEAR-TERM VEHICLE TECHNOLOGY PROGRAM.

       (a) Purposes.--The purposes of this section are--
       (1) to enable and promote comprehensive development, 
     demonstration, and commercialization of a wide range of 
     electric drive components, systems, and vehicles--
       (A) in partnership with industry; and
       (B) for a wide range of electric drive components, systems, 
     and vehicles in a wide range of applications using diverse 
     electric drive transportation technologies;
       (2) to make critical public investments in building strong 
     links to private industry, institutions of higher education, 
     National Laboratories, and research institutions to expand 
     innovation, industrial growth, and jobs in the United States;
       (3) to take greater advantage of the existing electric 
     infrastructure for transportation and other on-road and non-
     road mobile sources of emissions--
       (A) that are reported to be over 3,000,000 units today, 
     including electric forklifts, golf carts, and similar non-
     road vehicles; and
       (B) because existing and emerging technologies that connect 
     to the grid greatly enhance the energy security of the United 
     States, reduce dependence on imported oil, and reduce 
     emissions;
       (4) to more quickly advance the widespread 
     commercialization of all types of hybrid electric vehicle 
     technology into all sizes and applications of vehicles 
     leading to commercialization of plug-in hybrid electric 
     vehicles, plug-in hybrid fuel cell vehicles, and eventually 
     to fuel cell vehicles and use of batteries and electric 
     vehicles to provide services back to the grid; and
       (5) to improve the energy efficiency of and reduce the 
     petroleum use of transportation.
       (b) Definitions.--In this section:
       (1) Battery.--The term ``battery'' means an energy story 
     device used in an on-road or non-road vehicle powered in 
     whole or in part using an off-board or on-board source of 
     electricity.
       (2) Electric drive transportation technology.--The term 
     ``electric drive transportation technology'' means--
       (A) on-road or non-road vehicles that use an electric motor 
     for all or part of their motive power and that may or may not 
     use off-board electricity, including battery electric 
     vehicles, fuel cell vehicles, engine dominant hybrid electric 
     vehicles, plug-in hybrid electric vehicles, plug-in hybrid 
     fuel cell vehicles, and electric rail; or
       (B) equipment related to transportation or mobile sources 
     of air pollution that use an electric motor to replace an 
     internal combustion engine for all or part of the work of the 
     equipment, including corded electric equipment linked to 
     transportation or mobile sources of air pollution.
       (3) Engine dominant hybrid electric vehicle.--The term 
     ``engine dominant hybrid electric vehicle'' means an on-road 
     or non-road vehicle propelled by an internal combustion 
     engine or heat engine using--
       (A) any combustible fuel;
       (B) an on-board, rechargeable storage device; and
       (C) no means of using an off-board source of electricity.
       (4) Fuel cell vehicle.--The term ``fuel cell vehicle'' 
     means an on-road or non-road vehicle that uses a fuel cell 
     (as defined in section 3 of the Spark M. Matsunaga Hydrogen 
     Research, Development, and Demonstration Act of 1990).
       (5) On-road or non-road vehicle.--The term ``on-road or 
     non-road vehicle'' means--
       (A) a light-duty, medium-duty, or heavy-duty motor vehicle; 
     or
       (B) a vehicle or propelled piece of equipment that is 
     primarily intended for use on private or public property 
     other than publicly-owned highways, freeways, streets, and 
     roads.
       (6) Plug-in hybrid electric vehicle.--The term ``plug-in 
     hybrid electric vehicle'' means an on-road or non-road 
     vehicle that is propelled by an internal combustion engine or 
     heat engine using--
       (A) any combustible fuel;
       (B) an on-board, rechargeable storage device; and
       (C) a means of using an off-board source of electricity.
       (7) Plug-in hybrid fuel cell vehicle.--The term ``plug-in 
     hybrid fuel cell vehicle'' means a fuel cell vehicle that 
     also can use a battery supplied by an off-board source of 
     electricity.
       (c) Program.--The Secretary shall conduct a program of 
     research, development, demonstration, and commercial 
     application for electric drive transportation technology, 
     including--
       (1) high capacity, high efficiency lithium and nickel metal 
     hybrid batteries for plug-in hybrid electric vehicles and 
     plug-in hybrid fuel cell vehicles;
       (2) high efficiency on-board and off-board charging 
     components;
       (3) high power drive train systems for passenger and 
     commercial vehicles and for non-road equipment;
       (4) control system development and power train development 
     and integration for plug-in hybrid electric vehicles, plug-in 
     hybrid fuel cell vehicles, and engine dominant hybrid 
     electric vehicles, including--
       (A) development of efficient cooling systems;
       (B) analysis and development of control systems that 
     minimize the emissions profile when clean diesel engines are 
     part of a plug-in hybrid drive system; and
       (C) development of different control systems that optimize 
     for different goals, including--
       (i) battery life;
       (ii) reduction of petroleum consumption;
       (iii) green house gas reduction; and
       (iv) understanding consumer preference for many different 
     control systems will assist or deter widespread applications 
     of the vehicles;
       (5) nanomaterial technology applied to both battery and 
     fuel cell systems;
       (6) large-scale demonstrations, testing, and evaluation of 
     plug-in hybrid electric vehicles in different applications 
     with different batteries and control systems, including--
       (A) military applications;
       (B) paratransit applications;
       (C) mass market passenger and light-duty truck 
     applications;
       (D) private fleet applications; and
       (E) medium- and heavy-duty applications;
       (7) a nationwide education strategy for electric drive 
     transportation technologies providing secondary and high 
     school teaching materials and support for university 
     education focused on electric drive system and component 
     engineering;
       (8) introduction strategies for plug-in hybrid electric 
     vehicles and plug-in hybrid fuel cell vehicles, including--
       (A) examining how best to link the technology to low carbon 
     or renewable energy;
       (B) an improved understanding of potential markets, driving 
     patterns, charging behavior, and consumer acceptance and 
     benefits; and
       (C) working with the Administrator of the Environmental 
     Protection Agency to develop procedures for testing and 
     certification of criteria pollutants, fuel economy, and 
     petroleum use for light-, medium- and heavy-duty vehicle 
     applications, including considering--
       (i) the vehicle and fuel as a system, not just an engine; 
     and
       (ii) nightly off-board charging; and
       (9) advancement of battery and corded electric 
     transportation technologies in mobile source applications 
     by--
       (A) improvement in battery, drive train, and control system 
     technologies; and
       (B) working with industry and the Administrator of the 
     Environmental Protection Agency to--
       (i) understand and inventory markets; and
       (ii) identify and implement methods of removing barriers 
     for existing and emerging applications.
       (d) Goals.--The goals of the electric drive transportation 
     technology program established under subsection (c) shall be 
     to develop, in partnership with industry and institutions of 
     higher education, projects that focus on--
       (1) innovative electric drive technology developed in the 
     United States;
       (2) growth of job opportunities for electric drive design 
     and manufacturing;
       (3) validation of the plug-in hybrid potential through 
     fleet demonstrations; and
       (4) enabling the fuel cell revolution by establishing a 
     mature electric drive technology system that is an integral 
     part of the fuel cell vehicle system.
       (e) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as are necessary to carry out 
     this section.

     SEC. 155. TIRE EFFICIENCY PROGRAM.

       (a) Standards for Tires Manufactured for Interstate 
     Commerce.--Section 30123 of title 49, United States Code, is 
     amended--
       (1) in subsection (b)--
       (A) in the first sentence, by striking ``The Secretary'' 
     and inserting the following:
       ``(1) Uniform quality grading system.--
       ``(A) In general.--The Secretary'';
       (B) in the second sentence, by striking ``The Secretary'' 
     and inserting the following:
       ``(2) Nomenclature and marketing practices.--The 
     Secretary'';
       (C) in the third sentence, by striking ``A tire standard'' 
     and inserting the following:
       ``(3) Effect of standards and regulations.--A tire 
     standard''; and
       (D) in paragraph (1), as designated by subparagraph (A), by 
     adding at the end the following:
       ``(B) Inclusion.--The grading system shall include 
     standards for rating the fuel efficiency of tires designed 
     for use on passenger cars and light trucks.''; and
       (2) by adding at the end the following:
       ``(d) National Tire Efficiency Program.--

[[Page S7185]]

       ``(1) Definition.--In this subsection, the term `fuel 
     economy', with respect to a tire, means the extent to which 
     the tire contributes to the fuel economy of the motor vehicle 
     on which the tire is mounted.
       ``(2) Program.--The Secretary shall develop and carry out a 
     national tire fuel efficiency program for tires designed for 
     use on passenger cars and light trucks.
       ``(3) Requirements.--Not later than March 31, 2008, the 
     Secretary shall implement--
       ``(A) policies and procedures for testing and labeling 
     tires for fuel economy to enable tire buyers to make informed 
     purchasing decisions about the fuel economy of tires;
       ``(B) policies and procedures to promote the purchase of 
     energy-efficient replacement tires, including purchase 
     incentives, website listings on the Internet, printed fuel 
     economy guide booklets, and mandatory requirements for tire 
     retailers to provide tire buyers with fuel-efficiency 
     information on tires; and
       ``(C) minimum fuel economy standards for tires, promulgated 
     by the Secretary.
       ``(4) Minimum fuel economy standards.--In promulgating 
     minimum fuel economy standards for tires, the Secretary shall 
     design standards that--
       ``(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) do not adversely affect tire safety;
       ``(D) incorporate the results from--
       ``(i) laboratory testing; and
       ``(ii) to the extent appropriate and available, on-road 
     fleet testing programs conducted by manufacturers; and
       ``(E) do not adversely affect efforts to manage scrap 
     tires.
       ``(5) Applicability.--The policies, procedures, and 
     standards developed under paragraph (3) shall apply to all 
     tire types and models regulated under the uniform tire 
     quality grading standards in section 575.104 of title 49, 
     Code of Federal Regulations (or a successor regulation).
       ``(6) Review.--
       ``(A) In general.--Not less than once every 3 years, the 
     Secretary shall--
       ``(i) review the minimum fuel economy standards in effect 
     for tires under this subsection; and
       ``(ii) subject to subparagraph (B), revise the standards as 
     necessary to ensure compliance with standards under paragraph 
     (4).
       ``(B) Limitation.--The Secretary may not reduce the average 
     fuel economy standards applicable to replacement tires.
       ``(7) No preemption of state law.--Nothing in this section 
     preempts any provision of State law relating to higher fuel 
     economy standards applicable to replacement tires designed 
     for use on passenger cars and light trucks.
       ``(8) Exceptions.--Nothing in this section shall apply to--
       ``(A) a tire or group of tires with the same SKU, plant, 
     and year, for which the volume of tires produced or imported 
     is less than 15,000 annually;
       ``(B) a deep tread, winter-type snow tire, space-saver 
     tire, or temporary use spare tire;
       ``(C) a tire with a normal rim diameter of 12 inches or 
     less;
       ``(D) a motorcycle tire; or
       ``(E) a tire manufactured specifically for use in an off-
     road motorized recreational vehicle.''.
       (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), when''.
       (c) Time for Implementation.--Beginning not later than 
     March 31, 2008, the Secretary of Transportation shall 
     administer the national tire fuel efficiency program 
     established under section 30123(d) of title 49, United States 
     Code, in accordance with the policies, procedures, and 
     standards developed under section 30123(d)(2) of such title.

     SEC. 156. HEAVY TRUCK IDLING REDUCTION.

       (a) Definitions.--In this section:
       (1) Heavy-duty motor vehicle.--The term ``heavy-duty motor 
     vehicle'' means a vehicle of greater than 10,000 pounds gross 
     vehicle weight that is driven or drawn by mechanical power 
     and manufactured primarily for use on public streets, roads, 
     and highways, but does not include a vehicle operated only on 
     a rail line.
       (2) Idling reduction system.--The term ``idling reduction 
     system'' means a device or system of devices used to reduce 
     long duration idling of a main drive engine in a vehicle.
       (3) Long duration idling.--The term ``long duration 
     idling'' means the operation of a main drive engine of a 
     heavy-duty motor vehicle for a period of more than 5 
     consecutive minutes when the main drive engine is not engaged 
     in gear, except that such term does not include idling as a 
     result of traffic congestion or other impediments to the 
     movement of a heavy-duty motor vehicle.
       (b) Regulations.--Not later than 1 year after the date of 
     enactment of this Act, the Administrator of the Environmental 
     Protection Agency shall, in consultation with the Secretary 
     of Transportation, prescribe regulations that ensure the 
     maximum feasible and cost effective reductions in fuel 
     consumption during long duration idling of heavy-duty motor 
     vehicles. The Administrator shall review the regulations not 
     less frequently than every 3 years and revise the regulations 
     as necessary to ensure the regulations reflect the maximum 
     feasible and cost effective reductions in fuel consumption 
     during long duration idling.
       (c) Air quality.--Not later than 1 year after the date of 
     enactment of this Act, the Administrator of the Environmental 
     Protection Agency shall prescribe regulations that prevent 
     degradation in air quality resulting from the use of idling 
     reduction systems.
       (d) Agreements With States.--Section 111 of title 23, 
     United States Code, is amended by adding at the end the 
     following:
       ``(d) Idling Reduction Facilities in Interstate Rights-of-
     Way.--
       ``(1) In general.--Notwithstanding subsection (a), a State 
     may--
       ``(A) permit electrification or other idling reduction 
     facilities and equipment, for use by motor vehicles used for 
     commercial purposes, to be placed in rest and recreation 
     areas, and in safety rest areas, constructed or located on 
     rights-of-way of the Interstate System in the State, if the 
     idling reduction measures do not--
       ``(i) reduce the existing number of designated truck 
     parking spaces at any given rest or recreation area; or
       ``(ii) preclude the use of the spaces by trucks employing 
     alternative idle reduction technologies; and
       ``(B) charge a fee, or permit the charging of a fee, for 
     the use of a parking space that provides electrification or 
     other idling reduction facilities and equipment.
       ``(2) Purpose of facilities.--The exclusive purpose of the 
     electrification or other idling reduction facilities 
     described in paragraph (1) (or similar technologies) shall be 
     to enable operators of motor vehicles used for commercial 
     purposes--
       ``(A) to reduce idling of a truck while parked in the rest 
     or recreation area; and
       ``(B) to use equipment specifically designed to reduce 
     idling of a truck, or provide alternative power for 
     supporting driver comfort, while parked.''.

     SEC. 157. FUEL EFFICIENCY 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 VEHICLE FUEL ECONOMY STANDARDS

Sec.
33001.  Purpose and policy.
33002.  Definitions.
33003.  Standards.

     ``Sec. 33001. Purpose and policy

       ``The purpose of this chapter is to reduce petroleum 
     consumption by heavy duty motor vehicles.

     ``Sec. 33002. Definitions

       ``In this chapter, `heavy duty motor vehicle'--
       ``(1) means a vehicle of greater than 10,000 pounds gross 
     vehicle weight that is driven or drawn by mechanical power 
     and manufactured primarily for use on public streets, roads, 
     and highways; and
       ``(2) does not include a vehicle operated only on a rail 
     line.

     ``Sec. 33003. Standards

       ``(a) General Requirements.--The Secretary of 
     Transportation shall prescribe heavy duty motor vehicle fuel 
     economy standards. Each standard shall be practicable, meet 
     the need for heavy duty motor vehicle fuel consumption 
     reduction, and be stated in objective terms.
       ``(b) Considerations and Consultation.--When prescribing a 
     heavy duty motor vehicle fuel economy standard under this 
     chapter, the Secretary shall--
       ``(1) consider relevant available heavy duty motor vehicle 
     fuel consumption information;
       ``(2) consider whether a proposed standard is reasonable, 
     practicable, and appropriate for the particular type of heavy 
     duty motor vehicle for which it is prescribed; and
       ``(3) consider the extent to which the standard will carry 
     out section 33001.
       ``(c) Cooperation.--The Secretary may advise, assist, and 
     cooperate with departments, agencies, and instrumentalities 
     of the United States Government, States, and other public and 
     private agencies in developing fuel economy standards for 
     heavy duty motor vehicles.
       ``(d) Effective Dates of Standards.--The Secretary shall 
     specify the effective date and model years of a heavy duty 
     motor vehicle fuel economy standard prescribed under this 
     chapter.
       ``(e) 5-Year Plan for Testing Standards.--The Secretary 
     shall establish, periodically review, and continually update 
     a 5-year plan for testing heavy duty motor vehicle fuel 
     economy standards prescribed under this chapter. In 
     developing the plan and establishing testing priorities, the 
     Secretary shall consider factors the Secretary considers 
     appropriate, consistent with section 33001 and the 
     Secretary's other duties and powers under this chapter.''.

     SEC. 158. FLEXIBLE FUEL VEHICLE STANDARDS.

       (a) Definitions.--In this section:
       (1) Alternative fuel; alternative fuel automobile.--The 
     terms ``alternative fuel'' and ``alternative fuel 
     automobile'' have the meanings given such terms in section 
     32901 of title 49, United States Code.
       (2) Alternative fuel refueling retail outlet.--The term 
     ``alternative fuel refueling retail outlet'' means an 
     establishment--
       (A) equipped to dispense alternative fuel into motor 
     vehicles; and
       (B) at which alternative fuel is sold or offered for sale 
     to the general public for use in motor vehicles without the 
     need to establish an account.

[[Page S7186]]

       (3) Flexible fuel vehicles.--The term ``flexible fuel 
     vehicle'' means an alternative fuel vehicle capable of 
     operating using gasoline and 1 or more alternative fuels, 
     including--
       (A) ethanol and methanol in blends up to 85 percent 
     alternative fuel by volume; and
       (B) electricity from an external charging source sufficient 
     to power the vehicle for at least 20 miles of driving.
       (4) Owner or lessor.--The term ``owner or lessor'' means--
       (A) a franchisor who owns, leases, or controls a retail 
     gasoline outlet at which the franchisee is authorized or 
     permitted, under the franchise agreement, to sell alternative 
     fuel;
       (B) a refiner or distributor who owns, leases, or controls 
     a retail gasoline outlet
       (b) Increasing Percentage of Light Duty Vehicles That are 
     Alternative or Flexible Fuel Vehicles.--
       (1) In general.--Of the new light duty vehicles sold in the 
     United States--
       (A) not less than 10 percent manufactured for model year 
     2009 shall be alternative fuel automobiles or flexible fuel 
     vehicles;
       (B) not less than 20 percent manufactured for model year 
     2010 shall be alternative fuel automobiles or flexible fuel 
     vehicles;
       (C) not less than 35 percent manufactured for model year 
     2011 shall be alternative fuel automobiles or flexible fuel 
     vehicles; and
       (D) not less than 50 percent manufactured for model year 
     2012, and each year thereafter, shall be alternative fuel 
     automobiles or flexible fuel vehicles.
       (2) Rulemaking.--Not later than 1 year after the date of 
     enactment of this Act, the Secretary of Transportation shall 
     issue regulations to carry out the provisions of this 
     subsection.
       (c) Alternative Fuel Retail Outlets.--
       (1) Requirement.--Beginning in the year in which 10 percent 
     or more of the registered vehicles in a county are capable of 
     using a designated alternative fuel, each owner or lessor of 
     a retail gasoline outlet with 10 or more vehicle fuel pumps 
     in that county shall offer such designated alternative fuel 
     at not less than 10 percent of such pumps.
       (2) Compliance.--An owner or lessor is in compliance with 
     the requirement under paragraph (1) if the owner or lessor--
       (A) provides alternative fuel at vehicle pumps owned or 
     controlled by the owner or lessor; or
       (B) purchases credits from another owner or lessor who 
     operates more than the minimum required number of alternative 
     fuel pumps.
       (3) Projections.--Not later than July 1st of each year, the 
     Secretary of Energy shall--
       (A) identify the counties in which at least 10 percent of 
     the registered vehicles are expected to be capable of using a 
     designated alternative fuel within the following 18-month 
     period; and
       (B) notify owners and lessors with retail gasoline outlets 
     in the counties identified under subparagraph (A) of the 
     alternative fuel pump requirement under this subsection.
       (4) Rulemaking.--The Secretary of Energy shall issue 
     regulations to carry out the provisions of this subsection.

     SEC. 159. OIL SAVINGS STUDIES.

       (a) In General.--The Secretary of Transportation shall 
     develop and implement pilot projects the purpose of which is 
     to reduce vehicle miles traveled.
       (b) Highway Congestion Tolling Evaluation Study.--The 
     Secretary of Transportation shall carry out a national 
     evaluation study to determine how technology can best be 
     applied to assess--
       (1) mileage-based road user charges on major highways at 
     peak-commuting times for the purposes of--
       (A) reducing oil usage;
       (B) lessening highway congestion; and
       (C) expanding travel alternatives; and
       (2) the economic impact on users.
       (c) Parking Cash-Out Evaluation Project.--The Secretary of 
     Transportation shall carry out a national evaluation pilot 
     project to assess how offering commuters the option to 
     receive the cash value of their workplace parking place 
     instead of free parking can--
       (1) reduce oil usage;
       (2) lessen highway congestion; and
       (3) promote economic development.
       (d) Authorization of Appropriations.--There are authorized 
     to be appropriated to carry out this section $8,000,000 for 
     each of fiscal years 2006 through 2015.

     SEC. 159A. NATIONWIDE MEDIA CAMPAIGN TO DECREASE OIL 
                   CONSUMPTION.

       (a) In General.--The Secretary of Energy, acting through 
     the Assistant Secretary for Energy Efficiency and Renewable 
     Energy (referred to in this section as the ``Secretary''), 
     shall develop and conduct a national media campaign for the 
     purpose of decreasing oil consumption in the United States 
     over the next decade.
       (b) Contract With Entity.--The Secretary shall carry out 
     subsection (a) directly or through--
       (1) contracts with 1 or more nationally recognized media 
     firms for the development and distribution of monthly 
     television, radio, and newspaper public service 
     announcements; or
       (2) collective agreements with 1 or more nationally 
     recognized institutes, businesses, or nonprofit organizations 
     for the funding, development, and distribution of monthly 
     television, radio, and newspaper public service 
     announcements.
       (c) Use of Funds.--
       (1) In general.--Amounts made available to carry out this 
     section shall be used for the following:
       (A) Advertising costs.--
       (i) The purchase of media time and space.
       (ii) Creative and talent costs.
       (iii) Testing and evaluation of advertising.
       (iv) Evaluation of the effectiveness of the media campaign.
       (v) The negotiated fees for the winning bidder on requests 
     from proposals issued either by the Secretary for purposes 
     otherwise authorized in this section.
       (vi) Entertainment industry outreach, interactive outreach, 
     media projects and activities, public information, news media 
     outreach, and corporate sponsorship and participation.
       (B) Administrative costs.--Operational and management 
     expenses.
       (2) Limitations.--In carrying out this section, the 
     Secretary shall allocate not less than 85 percent of funds 
     made available under subsection (e) for each fiscal year for 
     the advertising functions specified under paragraph (1)(A).
       (d) Reports.--The Secretary shall annually submit to 
     Congress a report that describes--
       (1) the strategy of the national media campaign and whether 
     specific objectives of the campaign were accomplished, 
     including--
       (A) determinations concerning the rate of change of oil 
     consumption, in both absolute and per capita terms; and
       (B) an evaluation that enables consideration whether the 
     media campaign contributed to reduction of oil consumption;
       (2) steps taken to ensure that the national media campaign 
     operates in an effective and efficient manner consistent with 
     the overall strategy and focus of the campaign;
       (3) plans to purchase advertising time and space;
       (4) policies and practices implemented to ensure that 
     Federal funds are used responsibly to purchase advertising 
     time and space and eliminate the potential for waste, fraud, 
     and abuse; and
       (5) all contracts or cooperative agreements entered into 
     with a corporation, partnership, or individual working on 
     behalf of the national media campaign.
       (e) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $100,000,000 for 
     each of fiscal years 2006 through 2010.

     SEC. 159B. OIL SAVINGS TARGET AND ACTION PLAN.

       Not later than 270 days after the date of enactment of this 
     Act, the Director of the Office of Management and Budget 
     (referred to in this section as the ``Director'') shall 
     publish in the Federal Register an action plan consisting 
     of--
       (1) a list of requirements proposed pursuant to section 
     159C that are authorized to be issued under law in effect on 
     the date of enactment of this Act, and this subtitle, that 
     will be sufficient, when taken together, to save from the 
     baseline determined under section 159F, at least--
       (A) 1,000,000 barrels of oil per day during calendar year 
     2015; and
       (B) 2,500,000 barrels per day during calendar year 2020; 
     and
       (2) a Federal Government-wide analysis that analyzes--
       (A) the expected oil savings from the baseline to be 
     accomplished by each requirement; and
       (B) whether all such requirements, taken together, will 
     achieve the oil savings specified in this section.

     SEC. 159C. STANDARDS AND REQUIREMENTS.

       (a) Secretary of Energy.--On or before the date of 
     publication of the action plan under section 159B, the 
     Secretary shall propose regulations establishing each 
     standard or other requirement listed in the action plan that 
     is under the jurisdiction of the Secretary.
       (b) Secretary of Transportation.--On or before the date of 
     publication of the action plan under section 159B, the 
     Secretary of Transportation shall propose regulations 
     establishing each standard or other requirement listed in the 
     action plan that is under the jurisdiction of the Secretary 
     of Transportation.
       (c) Administrator.--On or before the date of publication of 
     the action plan under section 159B, the Administrator shall 
     propose regulations establishing each standard or other 
     requirement listed in the action plan that is under the 
     jurisdiction of the Administrator.
       (d) Final Regulations.--Not later than 18 months after the 
     date of enactment of this Act, the Secretary, the Secretary 
     of Transportation, and the Administrator shall promulgate 
     final regulations described in subsections (a), (b), and (c), 
     respectively.
       (e) Agency Analyses.--Each proposed and final regulation 
     promulgated under this section shall--
       (1) be accompanied by an agency analysis of the oil savings 
     from the baseline determined under section 159F that the 
     regulation will achieve; and
       (2) achieve at least the oil savings required as a result 
     of the regulation under the action plan published under 
     section 159B.

     SEC. 159D. INITIAL EVALUATION.

       (a) In General.--Not later than 2 years after the date of 
     enactment of this Act, the Director of the Office of 
     Management and Budget (referred to in this section as the 
     ``Director'') shall publish in the Federal Register a Federal 
     Government-wide analysis of

[[Page S7187]]

     the oil savings achieved from the baseline established under 
     section 159F.
       (b) Inadequate Oil Savings.--If the oil savings are less 
     than the targets established under section 159B, 
     simultaneously with the analysis required under subsection 
     (a)--
       (1) the Director shall publish a revised action plan that 
     is adequate to achieve the targets; and
       (2) the Secretary of Energy, the Secretary of 
     Transportation, and the Administrator shall propose new or 
     revised regulations under subsections (a), (b), and (c), 
     respectively, of section 159C.
       (c) Final Regulations.--Not later than 180 days after the 
     date on which regulations are proposed under subsection 
     (b)(2), the Secretary of Energy, the Secretary of 
     Transportation, and the Administrator shall promulgate final 
     versions of those regulations.

     SEC. 159E. REVIEW AND UPDATE OF ACTION PLAN.

       (a) Review.--Not later than January 1, 2010, and every 3 
     years thereafter, the Director of the Office of Management 
     and Budget (referred to in this section as the ``Director'') 
     shall publish a report that--
       (1) evaluates the progress achieved in implementing the oil 
     savings targets established under section 159B;
       (2) analyzes the expected oil savings under the standards 
     and requirements established under this subtitle and the 
     amendments made by this subtitle; and
       (3)(A) analyzes the potential to achieve oil savings that 
     are in addition to the savings required by section 159B; and
       (B) if the President determines that it is in the national 
     interest, establishes a higher oil savings target for 
     calendar year 2016 or any subsequent calendar year.
       (b) Inadequate Oil Savings.--If the oil savings are less 
     than the targets established under section 159B, 
     simultaneously with the report required under subsection 
     (a)--
       (1) the Director shall publish a revised action plan that 
     is adequate to achieve the targets; and
       (2) the Secretary of Energy, the Secretary of 
     Transportation, and the Administrator shall propose new or 
     revised regulations under subsections (a), (b), and (c), 
     respectively, of section 159C.
       (c) Final Regulations.--Not later than 180 days after the 
     date on which regulations are proposed under subsection 
     (b)(2), the Secretary of Energy, the Secretary of 
     Transportation, and the Administrator shall promulgate final 
     versions of those regulations.

     SEC. 159F. BASELINE AND ANALYSIS REQUIREMENTS.

       In performing the analyses and promulgating proposed or 
     final regulations to establish standards and other 
     requirements necessary to achieve the oil savings required by 
     this subtitle, the Director of the Office of Management and 
     Budget, the Secretary of Energy, the Secretary of 
     Transportation, and the Administrator shall--
       (1) determine oil savings as the projected reduction in oil 
     consumption from the baseline established by the reference 
     case contained in the report of the Energy Information 
     Administration entitled ``Annual Energy Outlook 2005'';
       (2) determine the oil savings projections required on an 
     annual basis for each of calendar years 2008 through 2025; 
     and
       (3) account for any overlap among the standards and other 
     requirements to ensure that the projected oil savings from 
     all the promulgated standards and requirements, taken 
     together, are as accurate as practicable.

     SEC. 160. CLARIFICATION OF ECONOMIC SUBSTANCE DOCTRINE.

       (a) In General.--Section 7701 is amended by redesignating 
     subsection (o) as subsection (p) and by inserting after 
     subsection (n) the following new subsection:
       ``(o) Clarification of Economic Substance Doctrine; Etc.--
       ``(1) General rules.--
       ``(A) In General.--In any case in which a court determines 
     that the economic substance doctrine is relevant for purposes 
     of this title to a transaction (or series of transactions), 
     such transaction (or series of transactions) shall have 
     economic substance only if the requirements of this paragraph 
     are met.
       ``(B) Definition of economic substance.--For purposes of 
     subparagraph (A)--
       ``(i) In general.--A transaction has economic substance 
     only if--
       ``(I) the transaction changes in a meaningful way (apart 
     from Federal tax effects) the taxpayer's economic position, 
     and
       ``(II) the taxpayer has a substantial nontax purpose for 
     entering into such transaction and the transaction is a 
     reasonable means of accomplishing such purpose.

     In applying subclause (II), a purpose of achieving a 
     financial accounting benefit shall not be taken into account 
     in determining whether a transaction has a substantial nontax 
     purpose if the origin of such financial accounting benefit is 
     a reduction of income tax.
       ``(ii) Special rule where taxpayer relies on profit 
     potential.--A transaction shall not be treated as having 
     economic substance by reason of having a potential for profit 
     unless--
       ``(I) the present value of the reasonably expected pre-tax 
     profit from the transaction is substantial in relation to the 
     present value of the expected net tax benefits that would be 
     allowed if the transaction were respected, and
       ``(II) the reasonably expected pre-tax profit from the 
     transaction exceeds a risk-free rate of return.
       ``(C) Treatment of fees and foreign taxes.--Fees and other 
     transaction expenses and foreign taxes shall be taken into 
     account as expenses in determining pre-tax profit under 
     subparagraph (B)(ii).
       ``(2) Special rules for transactions with tax-indifferent 
     parties.--
       ``(A) Special rules for financing transactions.--The form 
     of a transaction which is in substance the borrowing of money 
     or the acquisition of financial capital directly or 
     indirectly from a tax-indifferent party shall not be 
     respected if the present value of the deductions to be 
     claimed with respect to the transaction is substantially 
     in excess of the present value of the anticipated economic 
     returns of the person lending the money or providing the 
     financial capital. A public offering shall be treated as a 
     borrowing, or an acquisition of financial capital, from a 
     tax indifferent party if it is reasonably expected that at 
     least 50 percent of the offering will be placed with tax-
     indifferent parties.
       ``(B) Artificial Income Shifting and Basis Adjustments.--
     The form of a transaction with a tax-indifferent party shall 
     not be respected if--
       ``(i) it results in an allocation of income or gain to the 
     tax indifferent party in excess of such party's economic 
     income or gain, or
       ``(ii) it results in a basis adjustment or shifting of 
     basis on account of overstating the income or gain of the tax 
     indifferent party.
       ``(3) Definitions and Special Rules.--For purposes of this 
     subsection--
       ``(A) Economic Substance Doctrine.--The term `economic 
     substance doctrine' means the common law doctrine under which 
     tax benefits under subtitle A with respect to a transaction 
     are not allowable if the transaction does not have economic 
     substance or lacks a business purpose.
       ``(B) Tax-Indifferent Party.--The term `tax-indifferent 
     party' means any person or entity not subject to tax imposed 
     by subtitle A. A person shall be treated as a tax-indifferent 
     party with respect to a transaction if the items taken into 
     account with respect to the transaction have no substantial 
     impact on such person's liability under subtitle A.
       ``(C) Exception for Personal Transactions of Individuals.--
     In the case of an individual, this subsection shall apply 
     only to transactions entered into in connection with a trade 
     or business or an activity engaged in for the production of 
     income.
       ``(D) Treatment of Lessors.--In applying paragraph 
     (1)(B)(ii) to the lessor of tangible property subject to a 
     lease--
       ``(i) the expected net tax benefits with respect to the 
     leased property shall not include the benefits of--
       ``(I) depreciation,
       ``(II) any tax credit, or
       ``(III) any other deduction as provided in guidance by the 
     Secretary, and
       ``(ii) subclause (II) of paragraph (1)(B)(ii) shall be 
     disregarded in determining whether any of such benefits are 
     allowable.
       ``(4) Other common law doctrines not affected.--Except as 
     specifically provided in this subsection, the provisions of 
     this subsection shall not be construed as altering or 
     supplanting any other rule of law, and the requirements of 
     this subsection shall be construed as being in addition to 
     any such other rule of law.
       ``(5) Regulations.--The Secretary shall prescribe such 
     regulations as may be necessary or appropriate to carry out 
     the purposes of this subsection. Such regulations may include 
     exemptions from the application of this subsection.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to transactions entered into after the date of 
     the enactment of this Act.

     SEC. 5522. PENALTY FOR UNDERSTATEMENTS ATTRIBUTABLE TO 
                   TRANSACTIONS LACKING ECONOMIC SUBSTANCE, ETC.

       (a) In General.--Subchapter A of chapter 68 is amended by 
     inserting after section 6662A the following new section:

     SEC. 6662B. PENALTY FOR UNDERSTATEMENTS ATTRIBUTABLE TO 
                   TRANSACTIONS LACKING ECONOMIC SUBSTANCE, ETC.

       ``(a) Imposition of Penalty.--If a taxpayer has an 
     noneconomic substance transaction understatement for any 
     taxable year, there shall be added to the tax an amount equal 
     to 40 percent of the amount of such understatement.
       ``(b) Reduction of Penalty for Disclosed Transactions.--
     Subsection (a) shall be applied by substituting `20 percent' 
     for `40 percent' with respect to the portion of any 
     noneconomic substance transaction understatement with respect 
     to which the relevant facts affecting the tax treatment of 
     the item are adequately disclosed in the return or a 
     statement attached to the return.
       ``(c) Noneconomic Substance Transaction Understatement.--
     For purposes of this section--
       ``(1) In general.--The term `noneconomic substance 
     transaction understatement' means any amount which would be 
     an understatement under section 6662A(b)(1) if section 6662A 
     were applied by taking into account items attributable to 
     noneconomic substance transactions rather than items to which 
     section 6662A would apply without regard to this paragraph.
       ``(2) Noneconomic substance transaction.--The term 
     `noneconomic substance transaction' means any transaction 
     if--
       ``(A) there is a lack of economic substance (within the 
     meaning of section 7701 (0)(1)) for the transaction giving 
     rise to the claimed benefit or the transaction was not 
     respected under section 7701 (0)(2), or
       ``(B) the transaction fails to meet the requirements of any 
     similar rule of law.
       ``(d) Rules Applicable To Compromise of Penalty.--
       ``(1) In general.--If the 1st letter of proposed deficiency 
     which allows the taxpayer an opportunity for administrative 
     review in the Internal

[[Page S7188]]

     Revenue Service Office of Appeals has been sent with respect 
     to a penalty to which this section applies, only the 
     Commissioner of Internal Revenue may compromise all or any 
     portion of such penalty.
       ``(2) Applicable rules.--The rules of paragraphs (2) and 
     (3) of section 6707A(d) shall apply for purposes of paragraph 
     (1).
       ``(e) Coordination With Other Penalties.--Except as 
     otherwise provided in this part, the penalty imposed by this 
     section shall be in addition to any other penalty imposed by 
     this title.
       ``(f) Cross References.--
       ``(1) For coordination of penalty with understatements 
     under section 6662 and other special rules, see section 
     6662A(e).
       ``(2) For reporting of penalty imposed under this section 
     to the Securities and Exchange Commission, see section 6707 
     A(e).'.
       (b) Coordination With Other Understatements and 
     Penalties.--
       (1) The second sentence of section 6662(d)(2)(A) is amended 
     by inserting ``and without regard to items with respect to 
     which a penalty is imposed by section 6662B'' before the 
     period at the end.
       (2) Subsection (e) of section 6662A is amended.--
       (A) in paragraph (1), by inserting ``and noneconomic 
     substance transaction understatements'' after ``reportable 
     transaction understatements'' both places it appears,
       (B) in paragraph (2)(A), by inserting ``and a noneconomic 
     substance transaction understatement'' after ``reportable 
     transaction understatement'',
       (C) in paragraph (2)(B), by inserting ``6662B or'' before 
     ``6663'',
       (D) in paragraph (2)(C)(i), by inserting ``or section 
     6662B'' before the period at the end,
       (E) in paragraph (2)(C)(ii), by inserting ``and section 
     6662B'' after ``This section'',
       (F) in paragraph (3), by inserting ``or noneconomic 
     substance transaction understatement'' after ``reportable 
     transaction understatement'', and
       (G) by adding at the end the following new paragraph:
       ``(4) Noneconomic substance transaction understatement.--
     For purposes of this subsection, the term `noneconomic 
     substance transaction understatement' has the meaning given 
     such term by section 6662B(c).''.
       (3) Subsection (e) of section 6707A is amended.--
       (A) by striking ``or'' at the end of subparagraph (B), and
       (B) by striking subparagraph (C) and inserting the 
     following new subparagraphs:
       ``(C) is required to pay a penalty under section 6662B with 
     respect to any noneconomic substance transaction, or
       ``(D) is required to pay a penalty under section 6662(h) 
     with respect to any transaction and would (but for section 
     6662A(e)(2)(C)) have been subject to penalty under section 
     6662A at a rate prescribed under section 6662A(c) or under 
     section 6662B,''.
       (c) Clerical Amendment.--The table of sections for part II 
     of subchapter A of chapter 68 is amended by inserting after 
     the item relating to section 6662A the following new item:
       ``Sec. 6662B. Penalty for understatements attributable to 
     transactions lacking economic substance, etc.''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to transactions entered into after the date of 
     the enactment of this Act.

     SEC. 5523. DENIAL OF DEDUCTION FOR INTEREST ON UNDERPAYMENTS 
                   ATTRIBUTABLE TO NONECONOMIC SUBSTANCE 
                   TRANSACTIONS.

       (a) In General.--Section 163(m) (relating to interest on 
     unpaid taxes attributable to nondisclosed reportable 
     transactions) is amended--
       (1) by striking ``attributable'' and all that follows and 
     inserting the following: ``attributable to--
       ``(1) the portion of any reportable transaction 
     understatement (as defined in section 6662A(b)) with respect 
     to which the requirement of section 6664(d)(2)(A) is not met, 
     or
       ``(2) any noneconomic substance transaction understatement 
     (as defined in section 6662B(c))'', and
       (2) by inserting ``and noneconomic substance transactions'' 
     in the heading thereof after `transactions' ''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to transactions after the date of the enactment 
     of this Act in taxable years ending after such date.
                                 ______
                                 
  SA 959. Mr. ROCKEFELLER (for himself, Mr. Bunning, and Mr. Byrd) 
submitted an amendment intended to be proposed by him to the bill H.R. 
6, to ensure jobs for our future with secure, affordable, and reliable 
energy; which was ordered to lie on the table; as follows:

       On page 35 (of title XV as agreed to), strike lines 10 
     through 16, and insert the following:
       ``(A) Application period.--Each applicant for certification 
     under this paragraph shall submit an application meeting the 
     requirements of subparagraph (B). An applicant may only 
     submit an application during the 3-year period beginning on 
     the date the Secretary establishes the program under 
     paragraph (1).
       ``(B) Requirements for applications for certification.--An 
     application under subparagraph (A) shall contain such 
     information as the Secretary may require in order to make a 
     determination to accept or reject an application for 
     certification as meeting the requirements under subsection 
     (e)(1). Any information contained in the application shall be 
     protected as provided in section 552(b)(4) of title 5, United 
     States Code.
       ``(C) Time to act upon applications for certification.--The 
     Secretary shall issue a determination as to whether an 
     applicant has met the requirements under subsection (e)(1) 
     within 60 days following the date of submittal of the 
     application for certification.
       ``(D) Time to meet criteria for certification.--Each 
     applicant for certification shall have 2 years from the date 
     of acceptance by the Secretary of the application during 
     which to provide to the Secretary evidence that the criteria 
     set forth in subsection (e)(2) have been met.
       ``(E) Period of issuance.--An applicant which receives a 
     certification shall have 5 years from the date of issuance of 
     the certification in order to place the project in service 
     and if such project is not placed in service by that time 
     period then the certification shall no longer be valid.''.
       On page 36 (of title XV as agreed to), strike lines 14 
     through 23.
       On page 36 (of title XV as agreed to), line 24, strike 
     ``(6)'' and insert ``(5)''.
       On page 37 (of title XV as agreed to), line 16, strike 
     ``commitment''.
       On page 37, line 17, strike ``(e)(4)(B)'' and insert 
     ``paragraph (2)''.
       On page 37 (of title XV as agreed to), line 19, strike 
     ``(f)(2)(B)(ii)'' and insert ``paragraph (2)(D)''.
       On page 37 (of title XV as agreed to), line 20, strike 
     ``commitment''.
       On page 37, between lines 22 and 23, insert the following:
       ``(C) Reallocation.--If the Secretary determines that 
     megawatts under clause (i) or (ii) of paragraph (3)(B) are 
     available for reallocation pursuant to the requirements set 
     forth in paragraph (2), the Secretary is authorized to 
     conduct an additional program for applications for 
     certification.''.
       On page 38 (of title XV as agreed to), line 7, strike ``or 
     polygeneration''.
       On page 38 (of title XV as agreed to), beginning with line 
     13 strike all through page 39, line 25, and insert the 
     following:
       ``(C) the project, consisting of one or more electric 
     generation units at one site, will have a total nameplate 
     generating capacity of at least 400 megawatts;
       ``(D) the applicant demonstrates that there is a letter of 
     intent signed by an officer of an entity willing to purchase 
     the majority of the output of the project or signed by an 
     officer of a utility indicating that the electricity capacity 
     addition is consistent with that utility's integrated 
     resource plan as approved by the regulatory or governing body 
     that oversees electricity capacity allocations of the 
     utility;
       ``(E) there is evidence of ownership or control of a site 
     of sufficient size to allow the proposed project to be 
     constructed and to operate on a long-term basis; and
       ``(F) the project will be located in the United States.
       ``(2) Requirements for certification.--For the purpose of 
     subsection (d)(2)(D), a project shall be eligible for 
     certification only if the Secretary determines that--
       ``(A) the applicant for certification has received all 
     Federal and State environmental authorizations or reviews 
     necessary to commence construction of the project; and
       ``(B) the applicant for certification, except in the case 
     of a retrofit or repower of an existing electric generation 
     unit, has purchased or entered into a binding contract for 
     the purchase of the main steam turbine or turbines for the 
     project, except that such contract may be contingent upon 
     receipt of a certification under subsection (d)(2).''.
       On page 40 (of title XV as agreed to), strike ``(2)'' and 
     insert ``(3)''.
       On page 40 (of title XV as agreed to), line 4, strike 
     ``subsection (d)(3)(B)(i)'' and insert ``subsection (d)(2)''.
       On page 40 (of title XV as agreed to), beginning with line 
     19, strike all through page 42, line 6.
       On page 42 (of title XV as agreed to), line 18, strike 
     ``the vendor warrants that''.
       On page 44, after line 25, insert the following:
       ``(h) Applicability.--No use of technology (or level of 
     emission reduction solely by reason of the use of the 
     technology), and no achievement of any emission reduction by 
     the demonstration of any technology or performance level, by 
     or at one or more facilities with respect to which a credit 
     is allowed under this section, shall be considered to 
     indicate that the technology or performance level is--
       ``(1) adequately demonstrated for purposes of section 111 
     of the Clean Air Act (42 U.S. C. 7411);
       ``(2) achievable for purposes of section 169 of that Act 
     (42 U.S. C. 7479); or
       ``(3) achievable in practice for purposes of section 171 of 
     such Act (42 U.S.C. 7501).
                                 ______
                                 
  SA 960. Mr. ROCKEFELLER submitted an amendment intended to be 
proposed by him to the bill H.R. 6, to ensure jobs for our future with 
secure, affordable, and reliable energy; which was ordered to lie on 
the table; as follows:
       On page 134, strike lines 1 through 7, and insert the 
     following:
       (2) Renewable energy.--The term ``renewable energy'' means 
     electric energy generated from solar, wind, biomass, landfill 
     gas, ocean (including tidal, wave, current, and thermal), 
     geothermal, municipal solid waste, or new hydroelectric 
     generation capacity achieved from--

[[Page S7189]]

       (A) hydroelectric facilities installed at existing dams 
     subject to all applicable environmental laws and licensing 
     and regulatory requirements that are placed in service on or 
     after the date of enactment of this Act; or
       (B) increased efficiency or addition of new capacity at a 
     hydroelectric project in existence on the date of enactment 
     of this Act.
                                 ______
                                 
  SA 961. Mr. ALEXANDER (for himself, Mr. Warner, Ms. Landrieu, Mr. 
McCain, Mr. Allen, Mr. Voinovich, Mr. Brownback, Mr. Burr, and Mr. 
Bunning) proposed an amendment to the bill H.R. 6, to ensure jobs for 
our future with secure, affordable, and reliable energy; as follows:

       On page 697, between lines 6 and 7, insert the following:

     SEC. 1270A. LOCAL CONTROL FOR SITING OF WINDMILS.

       (a) Local Notification.--Prior to the Federal Energy 
     Regulatory Commission issuing to any wind turbine project its 
     Exempt-Wholesale Generator Status, Market-Based Rate 
     Authority, or Qualified Facility rate schedule, the wind 
     project shall complete its Local Notification Process.
       (b) Local Notification Process.--
       (1) In this section, the term ``Local Authorities'' means 
     the governing body, and the senior executive of the body, at 
     the lowest level of government that possesses authority under 
     State law to carry out this Act.
       (2) Applicant shall notify in writing the Local Authorities 
     on the day of the filing of such Market-Based Rate 
     application or Federal Energy Regulatory Commission Form 
     number 556 (or a successor form) at the Federal Energy 
     Regulatory Commission. Evidence of such notification shall be 
     submitted to the Federal Energy Regulatory Commission.
       (3) The Federal Energy Regulatory Commission shall notify 
     in writing the Local Authorities within 10 days of the filing 
     of such Market-Based Rate application or Federal Energy 
     Regulatory Commission Form number 556 (or a successor form) 
     at the Federal Energy Regulatory Commission.
       (4) The Federal Energy Regulatory Commission shall not 
     issue to the project Market-Based Rate Authority, Exempt 
     Wholesaler Generator Status, or Qualified Facility rate 
     schedule, until 180 days after the date on which the Federal 
     Energy Regulatory Commission notifies the Local Authorities 
     under paragraph (3).
       (c) Highly Scenic Area and Federal Land.--
       (1)(A) A Highly Scenic Area is--
       (i) any area listed as an official United Nations 
     Educational, Scientific, and Cultural Organization World 
     Heritage Site, as supported by the Department of the 
     Interior, the National Park Service, and the International 
     Council on Monuments and Sites;
       (ii) land designated as a National Park;
       (iii) a National Lakeshore;
       (iv) a National Seashore;
       (v) a National Wildlife Refuge that is adjacent to an 
     ocean;
       (vi) a National Military Park;
       (vii) the Flint Hills National Wildlife Reserve;
       (viii) the Tallgrass Prairie National Preserve;
       (ix) White Mountains National Forest; or
       (x) the Flint Hills Tallgrass Prairie Preserve or the Konza 
     Prairie in the State of Kansas.
       (B) The term ``Highly Scenic Area'' does not include--
       (i) the Pueblo de Taos World Heritage Area;
       (ii) any coastal wildlife refuge located in the State of 
     Louisiana; or
       (iii) any area in the State of Alaska.
       (2) A Qualified Wind Project is any wind-turbine project 
     located--
       (A)(i) in a Highly Scenic Area; or
       (ii) within 20 miles of the boundaries of an area described 
     in subparagraph (A), (B), (C), (D), or (F) of paragraph (1); 
     or
       (B) within 20 miles off the coast of a National Wildlife 
     Refuge that is adjacent to an ocean.
       (3) Prior to the Federal Energy Regulatory Commission 
     issuing to a Qualified Wind Project its Exempt-Wholesale 
     Generator Status, Market-Based Rate Authority, or Qualified 
     Facility rate schedule, an environmental impact statement 
     shall be conducted and completed by the lead agency in 
     accordance with the National Environmental Policy Act of 1969 
     (42 U.S.C. 4321 et seq.). If no lead agency is designated, 
     the lead agency shall be the Department of the Interior.
       (4) The environmental impact statement determination shall 
     be issued within 12 months of the date of application.
       (5) Such environmental impact statement review shall 
     include a cumulative impacts analysis addressing visual 
     impacts and avian mortality analysis of a Qualified Wind 
     Project.
       (6) A Qualified Wind Project shall not be eligible for any 
     Federal tax subsidy.
       (d) Effective Date.--
       (1) This section shall expire 10 years after the date of 
     enactment of this Act.
       (2) Nothing in this section shall prevent or discourage 
     environmental review of any wind projects or any Qualified 
     Wind Project on a State or local level.
       (e) Effect of Section.--Nothing in this section shall apply 
     to a project that, as of the date of enactment of this Act--
       (1) is generating energy; or
       (2) has been issued a permit by the Federal Energy 
     Regulatory Commission.
                                 ______
                                 
  SA 962. Mr. JEFFORDS submitted an amendment intended to be proposed 
by him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:
       On page 724, line 12, insert before ``shall enter'' the 
     following: ``, in consultation with the Administrator of the 
     Environmental Protection Agency,''.
       On page 726, line 5, insert ``and the Administrator of the 
     Environmental Protection Agency'' after ``Interior''.
       On page 726, line 10, insert before ``shall report'' the 
     following: ``and the Administrator of the Environmental 
     Protection Agency''; after consulting with states,
       On page 726, line 14, strike ``Secretary's agreement or 
     disagreement'' and insert ``agreement or disagreement of the 
     Secretary of the Interior and the Administrator of the 
     Environmental Protection Agency''.
                                 ______
                                 
  SA 963. Mr. CORZINE submitted an amendment intended to be proposed by 
him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       1. On page 3, strike Line 18, and insert ``the consent of 
     the Governor and State Legislatures of all other states''
       2. On page 7, Line 14, after ``Governor)'' strike ``may'' 
     and insert ``must have the consent of every Governor and 
     State Legislature with a coast that is under the OCS 
     moratoria as of January 1, 2005 in order to''
                                 ______
                                 
  SA 964. Mr. CORZINE submitted an amendment intended to be proposed by 
him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       On page 7, Line 14, after ``Governor)'' strike ``may'' and 
     insert ``must have the consent of every Governor and State 
     Legislature with a coast that is under the OCS moratoria as 
     of January 1, 2005 in order to''
                                 ______
                                 
  SA 965. CORZINE submitted an amendment intended to be proposed by him 
to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       1. On page 14, strike Lines 14 through 17
                                 ______
                                 
  SA 966. Mr. CORZINE submitted an amendment intended to be proposed by 
him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       1. On page 14, strike Lines 4-6
       2. On page 14, strike lines 9-10
       3. On page 14, strike lines 11-17
                                 ______
                                 
  SA 967. Mr. CORZINE submitted an amendment intended to be proposed by 
him to the bill H.R. 6, to ensure jobs for our future with secure, 
affordable, and reliable energy; which was ordered to lie on the table; 
as follows:

       1. On page 14, strike Lines 4 through 17 and insert ``all 
     such funds, to states and to local political subdivisions, 
     shall only be expendable for mitigation measures and 
     environmental restoration projects, fully subject to NEPA 
     review, that specifically repair the adverse impacts of 
     onshore and offshore facilities and operations associated 
     with federal offshore oil and gas leasing, exploration, and 
     development activities''
                                 ______
                                 
  SA 968. Mr. ROCKEFELLER submitted an amendment intended to be 
proposed by him to the bill H.R. 6, to ensure jobs for our future with 
secure, affordable, and reliable energy; which was ordered to lie on 
the table; as follows:

       At the appropriate place, insert the following:

     SEC. __. COALMINE GAS.

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

     ``SEC. 45O. CREDIT FOR CAPTURING COALMINE GAS.

       ``(a) General Rule.--For purposes of section 38, the 
     coalmine gas capture credit for any taxable year is an amount 
     equal to the product of--
       ``(1) the credit amount, and
       ``(2) the qualified credit coalmine gas captured which is 
     attributable to the taxpayer.
       ``(b) Credit Amount.--For purposes of this section, the 
     credit amount is $0.517 per 1,000 cubic feet of qualified 
     coalmine gas captured.
       ``(c) Qualified Coalmine Gas Captured.--For purposes of 
     this section--
       ``(1) In general.--The term `qualified coalmine gas 
     captured' means any coalmine gas which is--
       ``(A) captured or extracted by the taxpayer during the 
     period -beginning after September 30, 2005, and ending before 
     January 1, 2008, -and
       ``(B) utilized as a fuel source or sold by or on behalf of 
     the taxpayer -to an unrelated person during such period.

[[Page S7190]]

       ``(2) Special rule for advanced extraction.--In the case of 
     coalmine gas which is captured in advance of coal mining 
     operations, the credit under subsection (a) shall be allowed 
     only after the date the coal extraction occurs in the 
     immediate area where the coalmine gas was removed.
       ``(3) Noncompliance with pollution laws.--This paragraph 
     shall not apply to the capture or extraction of coalmine gas 
     from coal mining operations with respect to any period in 
     which such coal mining operations are not in compliance with 
     applicable State and Federal pollution prevention, control, 
     and permit requirements.
       ``(4) Definitions.--
       ``(A) Coalmine gas.--For purposes of this paragraph, the 
     term `coalmine gas' means any methane gas which is--
       ``(i) liberated during or as a result of domestic coal 
     mining -operations, or
       ``(ii) extracted up to 10 years in advance of domestic coal 
     ---mining operations as part of a specific plan to mine a 
     coal ----deposit.''.
       (b) Credit Treated as Part of General Business Credit.--
     Section 38(b) of the Internal Revenue Code of 1986, as 
     amended by this Act, is amended by striking ``plus'' at the 
     end of paragraph (24), by striking the period at the end of 
     paragraph (24) and inserting ``, plus'', and by adding at the 
     end the following new paragraph:
       ``(25) the coalmine gas capture credit determined under 
     section 45O.''.
       (c) Clerical Amendment.--The table of sections for subpart 
     D of part IV of subchapter A of chapter 1 of such Code, as 
     amended by this Act, is amended by inserting after section 
     45N the following:

``Sec. 45O. Credit for capturing coalmine gas.''.

       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.
                                 ______
                                 
  SA 969. Mr. ROCKEFELLER submitted an amendment intended to be 
proposed by him to the bill H.R. 6, to ensure jobs for our future with 
secure, affordable, and reliable energy; which was ordered to lie on 
the table; as follows:

       At the appropriate place, insert the following:

     SEC. __. COALMINE GAS.

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

     ``SEC. 45O. CREDIT FOR CAPTURING COALMINE GAS.

       ``(a) General Rule.--For purposes of section 38, the 
     coalmine gas capture credit for any taxable year is an amount 
     equal to the product of--
       ``(1) the credit amount, and
       ``(2) the qualified credit coalmine gas captured which is 
     attributable to the taxpayer.
       ``(b) Credit Amount.--For purposes of this section, the 
     credit amount is $0.517 per 1,000 cubic feet of qualified 
     coalmine gas captured.
       ``(c) Qualified Coalmine Gas Captured.--For purposes of 
     this section--
       ``(1) In general.--The term `qualified coalmine gas 
     captured' means any coalmine gas which is--
       ``(A) captured or extracted by the taxpayer during the 
     period -beginning after September 30, 2005, and ending before 
     January 1, 2008, -and
       ``(B) utilized as a fuel source or sold by or on behalf of 
     the taxpayer -to an unrelated person during such period.
       ``(2) Special rule for advanced extraction.--In the case of 
     coalmine gas which is captured in advance of coal mining 
     operations, the credit under subsection (a) shall be allowed 
     only after the date the coal extraction occurs in the 
     immediate area where the coalmine gas was removed.
       ``(3) Noncompliance with pollution laws.--This paragraph 
     shall not apply to the capture or extraction of coalmine gas 
     from coal mining operations with respect to any period in 
     which such coal mining operations are not in compliance with 
     applicable State and Federal pollution prevention, control, 
     and permit requirements.
       ``(4) Definitions.--
       ``(A) Coalmine gas.--For purposes of this paragraph, the 
     term `coalmine gas' means any methane gas which is--
       ``(i) liberated during or as a result of domestic coal 
     mining -operations, or
       ``(ii) extracted up to 10 years in advance of domestic coal 
     ---mining operations as part of a specific plan to mine a 
     coal ----deposit.''.
       (b) Credit Treated as Part of General Business Credit.--
     Section 38(b) of the Internal Revenue Code of 1986, as 
     amended by this Act, is amended by striking ``plus'' at the 
     end of paragraph (24), by striking the period at the end of 
     paragraph (24) and inserting ``, plus'', and by adding at the 
     end the following new paragraph:
       ``(25) the coalmine gas capture credit determined under 
     section 45O.''.
       (c) Clerical Amendment.--The table of sections for subpart 
     D of part IV of subchapter A of chapter 1 of such Code, as 
     amended by this Act, is amended by inserting after section 
     45N the following:

``Sec. 45O. Credit for capturing coalmine gas.''.

       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.
                                 ______
                                 
  SA 970. Mr. ROCKEFELLER submitted an amendment intended to be 
proposed by him to the bill H.R. 6, to ensure jobs for our future with 
secure, affordable, and reliable energy; which was ordered to lie on 
the table; as follows:

       At the appropriate place, insert the following:

     SEC. __. COALMINE GAS.

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

     ``SEC. 45O. CREDIT FOR CAPTURING COALMINE GAS.

       ``(a) General Rule.--For purposes of section 38, the 
     coalmine gas capture credit for any taxable year is an amount 
     equal to the product of--
       ``(1) the credit amount, and
       ``(2) the qualified credit coalmine gas captured which is 
     attributable to the taxpayer.
       ``(b) Credit Amount.--For purposes of this section, the 
     credit amount is $0.517 per 1,000 cubic feet of qualified 
     coalmine gas captured.
       ``(c) Qualified Coalmine Gas Captured.--For purposes of 
     this section--
       ``(1) In general.--The term `qualified coalmine gas 
     captured' means any coalmine gas which is--
       ``(A) captured or extracted by the taxpayer during the 
     period -beginning after September 30, 2005, and ending before 
     January 1, 2008, -and
       ``(B) utilized as a fuel source or sold by or on behalf of 
     the taxpayer -to an unrelated person during such period.
       ``(2) Special rule for advanced extraction.--In the case of 
     coalmine gas which is captured in advance of coal mining 
     operations, the credit under subsection (a) shall be allowed 
     only after the date the coal extraction occurs in the 
     immediate area where the coalmine gas was removed.
       ``(3) Noncompliance with pollution laws.--This paragraph 
     shall not apply to the capture or extraction of coalmine gas 
     from coal mining operations with respect to any period in 
     which such coal mining operations are not in compliance with 
     applicable State and Federal pollution prevention, control, 
     and permit requirements.
       ``(4) Definitions.--
       ``(A) Coalmine gas.--For purposes of this paragraph, the 
     term `coalmine gas' means any methane gas which is--
       ``(i) liberated during or as a result of domestic coal 
     mining -operations, or
       ``(ii) extracted up to 10 years in advance of domestic coal 
     ---mining operations as part of a specific plan to mine a 
     coal ----deposit.''.
       (b) Credit Treated as Part of General Business Credit.--
     Section 38(b) of the Internal Revenue Code of 1986, as 
     amended by this Act, is amended by striking ``plus'' at the 
     end of paragraph (24), by striking the period at the end of 
     paragraph (24) and inserting ``, plus'', and by adding at the 
     end the following new paragraph:
       ``(25) the coalmine gas capture credit determined under 
     section 45O.''.
       (c) Clerical Amendment.--The table of sections for subpart 
     D of part IV of subchapter A of chapter 1 of such Code, as 
     amended by this Act, is amended by inserting after section 
     45N the following:

``Sec. 45O. Credit for capturing coalmine gas.''.

       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.
                                 ______
                                 
  SA 971. Mr. ROCKEFELLER submitted an amendment intended to be 
proposed by him to the bill H.R. 6, Reserved; which was ordered to lie 
on the table; as follows:

       At the appropriate place, insert the following:

     SEC. __. COALMINE GAS.

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

     ``SEC. 45O. CREDIT FOR CAPTURING COALMINE GAS.

       ``(a) General Rule.--For purposes of section 38, the 
     coalmine gas capture credit for any taxable year is an amount 
     equal to the product of--
       ``(1) the credit amount, and
       ``(2) the qualified credit coalmine gas captured which is 
     attributable to the taxpayer.
       ``(b) Credit Amount.--For purposes of this section, the 
     credit amount is $0.517 per 1,000 cubic feet of qualified 
     coalmine gas captured.
       ``(c) Qualified Coalmine Gas Captured.--For purposes of 
     this section--
       ``(1) In general.--The term `qualified coalmine gas 
     captured' means any coalmine gas which is--
       ``(A) captured or extracted by the taxpayer during the 
     period -beginning after September 30, 2005, and ending before 
     January 1, 2008, -and
       ``(B) utilized as a fuel source or sold by or on behalf of 
     the taxpayer -to an unrelated person during such period.
       ``(2) Special rule for advanced extraction.--In the case of 
     coalmine gas which is

[[Page S7191]]

     captured in advance of coal mining operations, the credit 
     under subsection (a) shall be allowed only after the date the 
     coal extraction occurs in the immediate area where the 
     coalmine gas was removed.
       ``(3) Noncompliance with pollution laws.--This paragraph 
     shall not apply to the capture or extraction of coalmine gas 
     from coal mining operations with respect to any period in 
     which such coal mining operations are not in compliance with 
     applicable State and Federal pollution prevention, control, 
     and permit requirements.
       ``(4) Definitions.--
       ``(A) Coalmine gas.--For purposes of this paragraph, the 
     term `coalmine gas' means any methane gas which is--
       ``(i) liberated during or as a result of domestic coal 
     mining -operations, or
       ``(ii) extracted up to 10 years in advance of domestic coal 
     ---mining operations as part of a specific plan to mine a 
     coal ----deposit.''.
       (b) Credit Treated as Part of General Business Credit.--
     Section 38(b) of the Internal Revenue Code of 1986, as 
     amended by this Act, is amended by striking ``plus'' at the 
     end of paragraph (24), by striking the period at the end of 
     paragraph (24) and inserting ``, plus'', and by adding at the 
     end the following new paragraph:
       ``(25) the coalmine gas capture credit determined under 
     section 45O.''.
       (c) Clerical Amendment.--The table of sections for subpart 
     D of part IV of subchapter A of chapter 1 of such Code, as 
     amended by this Act, is amended by inserting after section 
     45N the following:

``Sec. 45O. Credit for capturing coalmine gas.''.

       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.
                                 ______
                                 
  SA 972. Mr. WARNER (for himself, Mr. Alexander, and Mr. Voinovich) 
proposed an amendment to the bill H.R. 6, to ensure jobs for our future 
with secure, affordable, and reliable energy; as follows:

       On page 327, after line 21, add the following:

     SEC. 390. GAS-ONLY LEASES; STATE REQUESTS TO EXAMINE ENERGY 
                   AREAS.

       (a) Gas-Only Leases.--Section 8 of the Outer Continental 
     Shelf Lands Act (43 U.S.C. 1337) (as amended by section 321) 
     is amended by adding at the end the following:
       ``(q) Gas-Only Leases.--
       ``(1) In general.--The Secretary may issue a lease under 
     this section beginning in the 2007-2012 plan period that 
     authorizes development and production only of gas and 
     associated condensate in accordance with regulations issued 
     under paragraph (2).
       ``(2) Regulations.--Not later than October 1, 2006, the 
     Secretary shall issue regulations that, for purposes of this 
     section--
       ``(A) define natural gas so that the definition--
       ``(i) includes--

       ``(I) hydrocarbons and other substances in a gaseous state 
     at atmospheric pressure and a temperature of 60 degrees 
     Fahrenheit;
       ``(II) liquids that condense from natural gas in the 
     process of treatment, dehydration, decompression, or 
     compression prior to the point for measuring volume and 
     quality of the production established by the Minerals 
     Management Service; and
       ``(III) natural gas liquefied for transportation; and

       ``(ii) excludes crude oil;
       ``(B) provide that gas-only leases shall contain the same 
     rights and obligations established for oil and gas leases;
       ``(C) provide that, in reviewing the adequacy of bids for 
     gas-only leases, the Minerals Management Service shall 
     exclude the value of any crude oil estimated to be discovered 
     within the boundaries of the leasing area;
       ``(D) provide for cancellation of a gas-only lease, with 
     payment of the fair value of the lease rights canceled, if 
     the Secretary determines that any natural gas discovered 
     within the boundaries of the leasing area cannot be produced 
     without causing an unacceptable waste of crude oil discovered 
     in association with the natural gas; and
       ``(E) provide that, at the request and with the consent of 
     the Governor of the State adjacent to the lease area, as 
     determined under section 18(i)(2)(B)(i), and with the consent 
     of the lessee, an existing gas-only lease may be converted, 
     without an increase in the rental or royalty rate and without 
     further payment in the nature of a lease bonus, to a lease 
     under subsection (b), in accordance with a process, to be 
     established by the Secretary, that requires--
       ``(i) consultation by the Secretary with the Governor of 
     the State and the lessee with respect to the operating 
     conditions of the lease, taking into consideration 
     environmental resource conservation and recovery, economic 
     factors, and other factors, as the Secretary determines to be 
     relevant; and
       ``(ii) compliance with the National Environmental Policy 
     Act of 1969 (42 U.S.C. 4321 et seq.).
       ``(3) Effect of other laws.--Any Federal law (including 
     regulations) that applies to an oil and gas lease on the 
     Outer Continental Shelf shall apply to a gas-only lease 
     issued under this subsection.''.
       (b) State Requests to Examine Energy Areas.--Section 18 of 
     the Outer Continental Shelf Lands Act (43 U.S.C. 1344) is 
     amended by adding at the end the following:
       ``(i) State requests to examine energy areas.--
       ``(1) Definitions.--In this subsection:
       ``(A) Lease.--The term `lease' includes a gas-only lease 
     under section 8(q).
       ``(B) Moratorium area.--The term `moratorium area' means--
       ``(i) any area withdrawn from disposition by leasing by the 
     memorandum entitled `Memorandum on Withdrawal of Certain 
     Areas of the United States Outer Continental Shelf from 
     Leasing Disposition' (34 Weekly Comp. Pres. Doc. 1111 (June 
     12, 1998)); and
       ``(ii) any area of the outer Continental Shelf as to which 
     Congress has denied the use of appropriated funds or other 
     means for preleasing, leasing, or related activities.
       ``(2) Resource estimates.--
       ``(A) Requests.--At any time, the Governor of an affected 
     State, acting on behalf of the State, may request the 
     Secretary to provide a current estimate of proven and 
     potential gas, or oil and gas, resources in any moratorium 
     area (or any part of the moratorium area the Governor 
     identifies) adjacent to, or lying seaward of the coastline 
     of, that State.
       ``(B) Response of secretary.--Not later than 45 days after 
     the date on which the Governor of a State requests an 
     estimate under subparagraph (A), the Secretary shall 
     provide--
       ``(i) a delineation of the lateral boundaries between the 
     coastal States, in accordance with--

       ``(I) any judicial decree or interstate compact delineating 
     lateral offshore boundaries between coastal States:
       ``(II) any principles of domestic and international law 
     governing the delineation of lateral offshore boundaries; and
       ``(III) to the maximum extent practicable, existing lease 
     boundaries and block lines based on the official protraction 
     diagrams of the Secretary;

       ``(ii) a current inventory of proven and potential gas, or 
     oil and gas, resources in any moratorium areas within the 
     area off the shore of a State, in accordance with the lateral 
     boundaries delineated under clause (i), as requested by the 
     Governor; and
       ``(iii) an explanation of the planning processes that could 
     lead to the leasing, exploration, development, and production 
     of the gas, or oil and gas, resources within the area 
     identified.
       ``(3) Making certain areas available for leasing.--
       ``(A) Petition.--
       ``(i) In general.--On consideration of the information 
     received from the Secretary, the Governor (acting on behalf 
     of the State of the Governor) may submit to the Secretary a 
     petition requesting that the Secretary make available for 
     leasing any portion of a moratorium area off the coast of the 
     State, in accordance with the lateral boundaries delineated 
     under paragraph (2)(B)(i).
       ``(ii) Contents.--In a petition under clause (i), a 
     Governor may request that an area described in that clause be 
     made available for leasing under subsection (b) or (q), or 
     both, of section 8.
       ``(B) Action by secretary.--Not later than 90 days after 
     the date of receipt of a petition under subparagraph (A), the 
     Secretary shall approve the petition unless the Secretary 
     determines that leasing in the affected area presents a 
     significant likelihood of incidents associated with the 
     development of resources that would cause serious harm or 
     damage to the marine resources of the area or of an adjacent 
     State.
       ``(C) Failure to act.--If the Secretary fails to approve or 
     deny a petition in accordance with subparagraph (B), the 
     petition shall be considered to be approved as of the date 
     that is 90 days after the date of receipt of the petition.
       ``(D) Treatment.--Notwithstanding any other provision of 
     this section, not later than 180 days after the date on which 
     a petition is approved, or considered to be approved, under 
     subparagraph (B) or (C), the Secretary shall--
       ``(i) treat the petition of the Governor under subparagraph 
     (A) as a proposed revision to a leasing program under this 
     section; and
       ``(ii) except as provided in subparagraph (E), expedite the 
     revision of the 5-year outer Continental Shelf oil and gas 
     leasing program in effect as of that date to include any 
     lease sale for any area covered by the petition.
       ``(E) Inclusion in subsequent plans.--
       ``(i) In general.--If there are fewer than 18 months 
     remaining in the 5-year outer Continental Shelf oil and gas 
     leasing program described in subparagraph (D)(ii), the 
     Secretary, without consultation with any State, shall include 
     the areas covered by the petition in lease sales under the 
     subsequent 5-year outer Continental Shelf oil and gas leasing 
     program.
       ``(ii) Environmental assessment.--Before modifying a 5-Year 
     Outer Continental Shelf Oil and Gas Leasing Program under 
     clause (i), the Secretary shall complete an environmental 
     assessment that describes any anticipated environmental 
     effect of leasing in the area under the petition.
       ``(F) Spending limitations.--Any Federal spending 
     limitation with respect to preleasing, leasing, or a related 
     activity in an area made available for leasing under this 
     paragraph shall terminate as of the date on which the 
     petition of the Governor relating to the area is approved, or 
     considered to be approved, under subparagraph (B) or (C).

[[Page S7192]]

       ``(G) Coastal zone management.--For purposes of title III 
     of the Coastal Zone Management Act of 1972 (16 U.S.C. 1451 et 
     seq.), any activity relating to leasing and subsequent 
     production in an area made available for leasing under this 
     paragraph shall--
       ``(i) if the leased area is located more than 20 miles 
     offshore of an adjacent State (or the boundaries of the State 
     as delineated under paragraph (2)(B)), be considered by the 
     Secretary of Commerce to be necessary to the interest of 
     national security and be carried out notwithstanding the 
     objection of a State to a consistency certification under 
     that Act; or
       ``(ii) if the leased area is located not greater than 20 
     miles offshore of an adjacent State, be subject to section 
     307(c) of that Act (16 U.S.C. 1456(c)).
       ``(4) Revenue sharing.--
       ``(A) Bonus bids.--If the Governor of a State requests the 
     Secretary to allow gas, or oil or natural gas, leasing in the 
     moratorium area and the Secretary allows that leasing, the 
     State shall, without further appropriation or action, receive 
     25 percent of any bonus bid paid for leasing rights in the 
     area.
       ``(B) Post leasing revenues.--In addition to bonus bids 
     under subparagraph (A), a State described in subparagraph (A) 
     shall receive 25 percent of--
       ``(i) any lease rental minimum royalty;
       ``(ii) any royalty proceeds from a sale of royalties taken 
     in kind by the Secretary; and
       ``(iii) any other revenues from a bidding system under 
     section 8.
       ``(C) Conservation royalties.--After making distributions 
     in accordance with subparagraphs (A) and (B), and in 
     accordance with section 31, the Secretary, in coordination 
     with the Governor of a State, shall, without further 
     appropriation or action, distribute a conservation royalty of 
     12.5 percent of Federal royalty revenues in an area leased 
     under this section, not to exceed $1,250,000,000 for any 
     year, to 1 or more of the following:
       ``(i) The Coastal and Estuary Habitat Restoration Trust 
     Fund.
       ``(ii) The wildlife restoration fund established under 
     section 3 of the Pittman-Robertson Wildlife Restoration Act 
     (16 U.S.C. 669b).
       ``(iii) The Land and Water Conservation Fund to provide 
     financial assistance to States under section 6 of that Act 
     (16 U.S.C. 460l-8).
       ``(5) Application.--This subsection shall not apply to--
       ``(A) any area designated as a national marine sanctuary or 
     a national wildlife refuge;
       ``(B) the Lease Sale 181 planning area;
       ``(C) any area not included in the outer Continental Shelf;
       ``(D) the Great Lakes, as defined in section 118(a)(3) of 
     the Federal Water Pollution Control Act (33 U.S.C. 
     1268(a)(3));
       ``(E) the eastern coast of the State of Florida; OR
       ``(F) Bristol Bay.''.
       (c) Great Lakes Oil and Gas Drilling Ban.--No Federal or 
     State permit or lease shall be issued for new oil and gas 
     slant, directional, or offshore drilling in or under 1 or 
     more of the Great Lakes (as defined in section 118(a)(3) of 
     the Federal Water Pollution Control Act (33 U.S.C. 
     1268(a)(3))).
                                 ______
                                 
  SA 973. Mr. NELSON of Florida submitted an amendment intended to be 
proposed by him to the bill H.R. 6, to ensure jobs for our future with 
secure, affordable, and reliable energy; which was ordered to lie on 
the table; as follows:

       On page 12, strike line 16 and insert the following:
       ``(5) Prohibition.--No exploration or production activities 
     under this subsection may be carried out within 100 nautical 
     miles of a national park, national seashore, national 
     military park, national marine sanctuary, location listed on 
     the National Register of Historic Places, or State park 
     facility.
       ``(6) Application.--This subsection shall not
                                 ______
                                 
  SA 974. Mr. NELSON of Florida submitted an amendment intended to be 
proposed by him to the bill H.R. 6, to ensure jobs for our future with 
secure, affordable, and reliable energy; which was ordered to lie on 
the table; as follows:

       Beginning on page 11, strike line 3 and all that follows 
     through page 12, line 15 and insert the following:
       ``(4) Use of revenue.--If the Governor of a State requests 
     the Secretary to allow gas, or oil or natural gas, leasing in 
     the moratorium area, and the Secretary allows that leasing, 
     any additional revenue raised by the leasing shall be 
     deposited in the general fund of the Treasury for purposes of 
     deficit reduction.
                                 ______
                                 
  SA 975. Mr. NELSON of Florida submitted an amendment intended to be 
proposed by him to the bill H.R. 6, to ensure jobs for our future with 
secure, affordable, and reliable energy; which was ordered to lie on 
the table; as follows:

       On page 12, strike line 16 and insert the following:
       ``(5) Prohibition.--No exploration or production activities 
     under this subsection may be carried out within 100 nautical 
     miles of a military training area.
       ``(6) Application.--This subsection shall not
                                 ______
                                 
  SA 976. Mr. NELSON of Florida submitted an amendment intended to be 
proposed by him to the bill H.R. 6, to ensure jobs for our future with 
secure, affordable, and reliable energy; which was ordered to lie on 
the table; as follows:

       On page 12, strike line 16 and insert the following:
       ``(5) Liability.--Any person that conducts exploration or 
     production activities in accordance with a gas, or oil or 
     natural gas, lease under this subsection shall be liable for 
     any environmental or economic damages that result from those 
     activities.
       ``(6) Application.--This subsection shall not
                                 ______
                                 
  SA 977. Mr. SNOWE submitted an amendment intended to be proposed to 
amendment SA 825 submitted by Mr. Kerry and intended to be proposed to 
the bill H.R. 6, to ensure jobs for our future with secure, affordable, 
and reliable energy; which was ordered to lie on the table; as follows:

       At the end of the amendment, add the following:
       (f) Authority to Provide Disaster Assistance to Aquaculture 
     Enterprises.--Section 18(b)(1) of the Small Business Act (15 
     U.S.C. 647(b)(1)) is amended--
       (1) by striking ``aquaculture,''; and
       (2) by inserting before the semicolon at the end ``, other 
     than aquaculture''.
                                 ______
                                 
  SA 978. Mr. FRIST (for Mr. Conrad (for himself, Mr. Durbin, and Ms. 
Stabenow)) proposed an amendment to the bill H.R. 6, to ensure jobs for 
our future with secure, affordable, and reliable energy; as follows:



 =========================== NOTE =========================== 

  
  On page S7192, June 22, 2005, under ``SA 978'', the following 
sentence appeared: SA 978. Mr. FRIST (for Mr. Obama (for himself, 
Mr. Durbin, and Ms. Stabenow)).
  
  The online version has been corrected to read: SA 978. Mr. FRIST 
(for Mr. CONRAD (for himself, Mr. Durbin, and Ms. Stabenow)).


 ========================= END NOTE ========================= 

       On page 767, strike lines 6 through 15, and insert the 
     following:
       (D) facilities that--
       (i) generate 1 or more hydrogen-rich and carbon monoxide-
     rich product streams from the gasification of coal or coal 
     waste; and
       (ii) use those streams to facilitate the production of 
     ultra clean premium fuels through the Fischer-Tropsch 
     process.
                                 ______
                                 
  SA 979. Mr. FRIST (for Mr. Hatch (for himself and Mr. Salazar)) 
proposed an amendment to the bill H.R. 6, to ensure jobs for our future 
with secure, affordable, and reliable energy; as follows:

       Beginning on page 290, strike line 6 and all that follows 
     through page 296, line 25, and insert the following:

     SEC. 346. OIL SHALE AND TAR SANDS.

       (a) Declaration of Policy.--Congress declares that it is 
     the policy of the United States that--
       (1) United States oil shale and tar sands are strategically 
     important domestic resources that should be developed through 
     methods that help reduce the growing dependence of the United 
     States on politically and economically unstable sources of 
     foreign oil imports;
       (2) the development of oil shale and tar sands, for 
     research and commercial development, should be conducted in 
     an economically feasible and environmentally sound manner, 
     using practices that minimize impacts;
       (3) development should occur at a deliberate pace, with an 
     emphasis on sustainability, to benefit the United States 
     while taking into account affected States and communities; 
     and
       (4) the Secretary of the Interior should work toward 
     developing a commercial leasing program for oil shale and tar 
     sands so that such a program can be implemented when 
     production technologies are commercially viable.
       (b) Leasing Program.--
       (1) Research and development.--
       (A) In general.--In accordance with section 21 of the 
     Mineral Leasing Act (30 U.S.C. 241) and any other applicable 
     law, except as provided in this section, not later than 1 
     year after the date of enactment of this Act, from land 
     otherwise available for leasing, the Secretary of the 
     Interior (referred to in this section as the ``Secretary'') 
     shall, for a period determined by the Secretary, make 
     available for leasing such land as the Secretary considers to 
     be necessary to conduct research and development activities 
     with respect to innovative technologies for the recovery of 
     shale oil from oil shale resources on public land.
       (B) Application.--The Secretary may offer to lease the land 
     to persons that submit an application for the lease, if the 
     Secretary determines that there is no competitive interest in 
     the land.
       (C) Administration.--In carrying out this paragraph, the 
     Secretary shall--
       (i) provide for environmentally sound research and 
     development of oil shale;
       (ii) provide for an appropriate return to the public, as 
     determined by the Secretary;
       (iii) before carrying out any activity that will disturb 
     the surface of land, provide for an adequate bond, surety, or 
     other financial arrangement to ensure reclamation;

[[Page S7193]]

       (iv) provide for a primary lease term of 10 years, after 
     which the lease term may be extended if the Secretary 
     determines that diligent research and development activities 
     are occurring on the land leased;
       (v) require the owner or operator of a project under this 
     subsection, within such period as the Secretary may 
     determine--

       (I) to submit a plan of operations;
       (II) to develop an environmental protection plan; and
       (III) to undertake diligent research and development 
     activities;

       (vi) ensure that leases under this section are not larger 
     than necessary to conduct research and development activities 
     under an application under subparagraph (B);
       (vii) provide for consultation with affected State and 
     local governments; and
       (viii) provide for such requirements as the Secretary 
     determines to be in the public interest.
       (2) Commercial leasing.--Prior to conducting commercial 
     leasing, the Secretary shall carry out--
       (A) the programmatic environmental impact statement 
     required under subsection (c); and
       (B) the analysis required under subsection (d).
       (3) Moneys received.--Any moneys received from a leasing 
     activity under this subsection shall be paid in accordance 
     with section 35 of the Mineral Leasing Act (30 U.S.C. 191).
       (c) Programmatic Environmental Impact Statement.--Not later 
     than 18 months after the date of enactment of this Act, in 
     accordance with section 102(2)(C) of the National 
     Environmental Policy Act of 1969 (42 U.S.C. 4332(2)(C)), the 
     Secretary shall complete a programmatic environmental impact 
     statement that analyzes potential leasing for commercial 
     development of oil shale resources on public land.
       (d) Analysis of Potential Leasing Program.--
       (1) In general.--Not later than 18 months after the date of 
     enactment of this Act, the Secretary shall submit to Congress 
     a report (including recommendations) analyzing a potential 
     leasing program for the commercial development of oil shale 
     on public land.
       (2) Inclusions.--The report under paragraph (1) shall 
     include--
       (A) an analysis of technologies and research and 
     development programs for the production of oil and other 
     materials from oil shale and tar sands in existence on the 
     date on which the report is prepared;
       (B) an analysis of--
       (i) whether leases under the program should be issued on a 
     competitive basis;
       (ii) the term of the leases;
       (iii) the maximum size of the leases;
       (iv) the use and distribution of bonus bid lease payments;
       (v) the royalty rate to be applied, including whether a 
     sliding scale royalty rate should be used;
       (vi) whether an opportunity should be provided to convert 
     research and development leases into leases for commercial 
     development, including the terms and conditions that should 
     apply to the conversion;
       (vii) the maximum number of leases and maximum acreage to 
     be leased under the leasing program to an individual; and
       (viii) any infrastructure required to support oil shale 
     development in industry and communities;
       (C) an identification of events that should serve as a 
     precursor to commercial leasing, including development of 
     environmentally and commercially viable technologies, and the 
     completion of land use planning and environmental reviews; 
     and
       (D) an analysis, developed in conjunction with the 
     appropriate State water resource agencies, of the demand for, 
     and availability of, water with respect to the development of 
     oil shale and tar sands.
       (3) Public participation.--In preparing the report under 
     this subsection, the Secretary shall provide notice to, and 
     solicit comment from--
       (A) the public;
       (B) representatives of local governments;
       (C) representatives of industry; and
       (D) other interested parties.
       (4) Participation by certain states.--In preparing the 
     report under this subsection, the Secretary shall--
       (A) provide notice to, and solicit comment from, the 
     Governors of the States of Colorado, Utah, and Wyoming; and
       (B) incorporate into the report submitted to Congress under 
     paragraph (1) any response of the Secretary to those 
     comments.
       (e) Oil Shale and Tar Sands Task Force.--
       (1) Establishment.--The Secretary of Energy, in cooperation 
     with the Secretary of the Interior, shall establish an Oil 
     Shale and Tar Sands Task Force to develop a program to 
     coordinate and accelerate the commercial development of oil 
     shale and tar sands in an integrated manner.
       (2) Composition.--The Task Force shall be composed of--
       (A) the Secretary of Energy (or the designee of the 
     Secretary of Energy);
       (B) the Secretary of Defense (or the designee of the 
     Secretary of Defense);
       (C) the Secretary of the Interior (or the designee of the 
     Secretary of the Interior);
       (D) the Governors of the affected States; and
       (E) representatives of local governments in affected areas.
       (3) Development of a 5-year plan.--
       (A) In general.--The Task Force shall formulate a 5-year 
     plan to promote the development of oil shale and tar sands.
       (B) Components.--In formulating the plan, the Task Force 
     shall--
       (i) identify public actions that are required to stimulate 
     prudent development of oil shale and tar sands;
       (ii) analyze the costs and benefits of those actions;
       (iii) make recommendations concerning specific actions that 
     should be taken to stimulate prudent development of oil shale 
     and tar sands, including economic, investment, tax, 
     technology, research and development, infrastructure, 
     environmental, education, and socio-economic actions;
       (iv) consult with representatives of industry and other 
     stakeholders;
       (v) provide notice and opportunity for public comment on 
     the plan;
       (vi) identify oil shale and tar sands technologies that--

       (I) are ready for pilot plant and semiworks development; 
     and
       (II) have a high probability of leading to advanced 
     technology for first- or second-generation commercial 
     production; and

       (vii) assess the availability of water from the Green River 
     Formation to meet the potential needs of oil shale and tar 
     sands development.
       (4) National program office.--The Task Force shall analyze 
     and make recommendations regarding the need for a national 
     program office to administer the plan.
       (5) Partnership.--The Task Force shall recommend whether to 
     initiate a partnership with Alberta, Canada, for purposes of 
     sharing information relating to the development and 
     production of oil from tar sands.
       (6) Reports.--
       (A) Initial report.--Not later than 180 days after the date 
     of enactment of this Act, the Task Force shall submit to the 
     President and Congress a report that describes the analysis 
     and recommendations of the Task Force and contains the 5-year 
     plan.
       (B) Subsequent reports.--The Secretary of Energy shall 
     provide an annual report describing the progress in carrying 
     out the plan for each of the 5 years following submission of 
     the report provided for in subparagraph (A).
       (f) Mineral Leasing Act Amendments.--Section 21(a) of the 
     Mineral Leasing Act (30 U.S.C. 241(a)) is amended--
       (1) by designating the first, second, and third sentences 
     as paragraphs (1), (2), and (3), respectively; and
       (2) in paragraph (3) (as designated by paragraph (1))--
       (A) by striking ``rate of 50 cents per acre'' and inserting 
     ``rate of $2.00 per acre''; and
       (B) in the last proviso--
       (i) by striking ``That not more than one lease shall be 
     granted under this section to any'' and inserting ``That 
     no''; and
       (ii) by striking ``except that with respect to leases for'' 
     and inserting ``shall acquire or hold more than 25,000 acres 
     of oil shale leases in the United States. For''.
       (g) Cost-Shared Demonstration Technologies.--
       (1) Identification.--The Secretary of Energy shall identify 
     technologies for the development of oil shale and tar sands 
     that--
       (A) are ready for demonstration at a commercially-
     representative scale; and
       (B) have a high probability of leading to commercial 
     production.
       (2) Assistance.--For each technology identified under 
     paragraph (1), the Secretary of Energy may provide--
       (A) technical assistance;
       (B) assistance in meeting environmental and regulatory 
     requirements; and
       (C) cost-sharing assistance in accordance with section 
     1002.
       (h) Technical Assistance.--
       (1) In general.--The Secretary of Energy may provide 
     technical assistance for the purpose of overcoming technical 
     challenges to the development of oil shale and tar sands 
     technologies for application in the United States.
       (2) Administration.--The Secretary of Energy may provide 
     technical assistance under this section on a cost-shared 
     basis in accordance with section 1002.
       (i) National Oil Shale Assessment.--
       (1) Assessment.--
       (A) In general.--The Secretary shall carry out a national 
     assessment of oil shale resources for the purposes of 
     evaluating and mapping oil shale deposits, in the geographic 
     areas described in subparagraph (B).
       (B) Geographic areas.--The geographic areas referred to in 
     subparagraph (A), listed in the order in which the Secretary 
     shall assign priority, are--
       (i) the Green River Region of the States of Colorado, Utah, 
     and Wyoming;
       (ii) the Devonian oil shales of the eastern United States; 
     and
       (iii) any remaining area in the central and western United 
     States (including the State of Alaska) that contains oil 
     shale, as determined by the Secretary.
       (2) Use of state surveys and universities.--In carrying out 
     the assessment under paragraph (1), the Secretary may request 
     assistance from any State-administered geological survey or 
     university.
       (j) State Water Rights.--Nothing in this section preempts 
     or affects any State water law or interstate compact relating 
     to water.
       (k) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as are necessary to carry out 
     this section.

[[Page S7194]]

                                 ______
                                 
  SA 980. Mr. FRIST (for Ms. Stabenow (for herself, Mrs. Boxer, and Mr. 
Dorgan)) proposed an amendment to the bill H.R. 6, to ensure jobs for 
our future with secure, affordable, and reliable energy; as follows:

       At the appropriate place, insert the following:

     SEC. __. INVESTIGATION OF GASOLINE PRICES.

       (a) Investigation.--Not later than 90 days after the date 
     of enactment of this Act, the Federal Trade Commission shall 
     conduct an investigation to determine if the price of 
     gasoline is being artificially manipulated by reducing 
     refinery capacity or by any other form of market manipulation 
     or price gouging practices.
       (b) Evaluation and Analysis.--The Secretary shall direct 
     the National Petroleum Council to conduct an evaluation and 
     analysis to determine whether, and to what extent, 
     environmental and other regulations affect new domestic 
     refinery construction and significant expansion of existing 
     refinery capacity.
       (c) Reports to Congress.--
       (1) Investigation.--On completion of the investigation 
     under subsection (a), the Federal Trade Commission shall 
     submit to Congress a report that describes--
       (A) the results of the investigation; and
       (B) any recommendations of the Federal Trade Commission.
       (2) Evaluation and analysis.--On completion of the 
     evaluation and analysis under subsection (b), the Secretary 
     shall submit to Congress a report that describes--
       (A) the results of the evaluation and analysis; and
       (B) any recommendations of the National Petroleum Council.
                                 ______
                                 
  SA 981. Mr. FRIST (for Mr. Kohl (for himself, Mr. DeWine, and Mr. 
Lieberman)) proposed an amendment to the bill H.R. 6, to ensure jobs 
for our future with secure, affordable, and reliable energy; as 
follows:

       On page 53, strike lines 4 through 8 and insert the 
     following:
     Small Business Administration shall make program information 
     available directly to small businesses and through other 
     Federal agencies, including the Federal Emergency Management 
     Agency and the Department of Agriculture, and coordinate 
     assistance with the Secretary of Commerce for manufacturing-
     related efforts, including the Manufacturing Extension 
     Partnership Program.''.
                                 ______
                                 
  SA 982. Mr. FRIST (for Mr. Alexander) proposed an amendment to the 
bill H.R. 6, to ensure jobs for our future with secure, affordable, and 
reliable energy; as follows:

       On page 755, after line 25, add the following:

     SEC. 13__. STUDY OF BEST MANAGEMENT PRACTICES FOR ENERGY 
                   RESEARCH AND DEVELOPMENT PROGRAMS.

       (a) In General.--The Secretary shall enter into an 
     arrangement with the National Academy of Public 
     Administration under which the Academy shall conduct a study 
     to assess management practices for research, development, and 
     demonstration programs at the Department.
       (b) Scope of the Study.--The study shall consider--
       (1) management practices that act as barriers between the 
     Office of Science and offices conducting mission-oriented 
     research;
       (2) recommendations for management practices that would 
     improve coordination and bridge the innovation gap between 
     the Office of Science and offices conducting mission-oriented 
     research;
       (3) the applicability of the management practices used by 
     the Department of Defense Advanced Research Programs Agency 
     to research programs at the Department;
       (4) the advisability of creating an agency within the 
     Department modeled after the Department of Defense Advanced 
     Research Projects Agency;
       (5) recommendations for management practices that could 
     best encourage innovative research and efficiency at the 
     Department; and
       (6) any other relevant considerations.
       (c) Report.--Not later than 18 months after the date of 
     enactment of this Act, the Secretary shall submit to Congress 
     a report on the study conducted under this section.
                                 ______
                                 
  SA 983. Mr. FRIST (for Mr. Jeffords) proposed an amendment to the 
bill H.R. 6, to ensure jobs for our future with secure, affordable, and 
reliable energy; as follows:

       On page 131, line 20, insert ``livestock methane,'' after 
     ``landfill gas,''.
                                 ______
                                 
  SA 984. Mr. FRIST (for Mr. Cornyn) proposed an amendment to the bill 
H.R. 6, to ensure jobs for our future with secure, affordable, and 
reliable energy; as follows:

       On page 517, after line 22, insert the following:

     SEC. 9__. LOW-VOLUME GAS RESERVOIR RESEARCH PROGRAM.

       (a) Definitions of GIS.--In this section, the term ``GIS'' 
     means geographic information systems technology that 
     facilitates the organization and management of data with a 
     geographic component.
       (b) Program.--The Secretary shall establish a program of 
     research, development, demonstration, and commercial 
     application to maximize the productive capacity of marginal 
     wells and reservoirs.
       (c) Data Collection.--Under the program, the Secretary 
     shall collect data on--
       (1) the status and location of marginal wells and gas 
     reservoirs;
       (2) the production capacity of marginal wells and gas 
     reservoirs;
       (3) the location of low-pressure gathering facilities and 
     pipelines; and
       (4) the quantity of natural gas vented or flared in 
     association with crude oil production.
       (d) Analysis.--Under the program, the Secretary shall--
       (1) estimate the remaining producible reserves based on 
     variable pipeline pressures; and
       (2) recommend measures that will enable the continued 
     production of those resources.
       (e) Study.--
       (1) In general.--The Secretary may award a grant to an 
     organization of States that contain significant numbers of 
     marginal oil and natural gas wells to conduct an annual study 
     of low-volume natural gas reservoirs.
       (2) Organization with no gis capabilities.--If an 
     organization receiving a grant under paragraph (1) does not 
     have GIS capabilities, the organization shall contract with 
     an institution of higher education with GIS capabilities.
       (3) State geologists.--The organization receiving a grant 
     under paragraph (1) shall collaborate with the State 
     geologist of each State being studied.
       (f) Public Information.--The Secretary may use the data 
     collected and analyzed under this section to produce maps and 
     literature to disseminate to States to promote conservation 
     of natural gas reserves.
       (g) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Secretary to carry out this 
     section--
       (1) $1,500,000 for fiscal year 2006; and
       (2) $450,000 for each of fiscal years 2007 and 2008.
                                 ______
                                 
  SA 985. Mr. FRIST (for Mrs. Hutchison) proposed an amendment to the 
bill H.R. 6, to ensure jobs for our future with secure, affordable, and 
reliable energy; as follows:

       On page 767, between lines 21 and 22, insert the following:
       (3) Petroleum coke gasification projects.--The Secretary is 
     encouraged to make loan guarantees under this title available 
     for petroleum coke gasification projects.
                                 ______
                                 
  SA 986. Mr. FRIST (for Mr. Jeffords) proposed an amendment to the 
bill H.R. 6, to ensure jobs for our future with secure, affordable, and 
reliable energy; as follows:

       On page 159, after line 23, add the following:

     SEC. ____. RURAL AND REMOTE COMMUNITY ELECTRIFICATION GRANTS.

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

     ``SEC. 609. RURAL AND REMOTE COMMUNITIES ELECTRIFICATION 
                   GRANTS.

       ``(a) Definitions.--In this section:
       ``(1) The term `eligible grantee' means a local government 
     or municipality, peoples' utility district, irrigation 
     district, and cooperative, nonprofit, or limited-dividend 
     association in a rural area.
       ``(2) The term `incremental hydropower' means additional 
     generation achieved from increased efficiency after January 
     1, 2005, at a hydroelectric dam that was placed in service 
     before January 1, 2005.
       ``(3) The term `renewable energy' means electricity 
     generated from--
       ``(A) a renewable energy source; or
       ``(B) hydrogen, other than hydrogen produced from a fossil 
     fuel, that is produced from a renewable energy source.
       ``(4) The term `renewable energy source' means--
       ``(A) wind;
       ``(B) ocean waves;
       ``(C) biomass;
       ``(D) solar
       ``(E) landfill gas;
       ``(F) incremental hydropower;
       ``(G) livestock methane; or
       ``(H) geothermal energy.
       ``(5) The term `rural area' means a city, town, or 
     unincorporated area that has a population of not more than 
     10,000 inhabitants.
       ``(b) Grants.--The Secretary, in consultation with the 
     Secretary of Agriculture and the Secretary of the Interior, 
     may provide grants under this section to eligible grantees 
     for the purpose of--
       ``(1) increasing energy efficiency, siting or upgrading 
     transmission and distribution lines serving rural areas,; or
       ``(2) providing or modernizing electric generation 
     facilities that serve rural areas.
       ``(c) Grant Administration.--(1) The Secretary shall make 
     grants under this section based on a determination of cost-
     effectiveness and the most effective use of the funds to 
     achieve the purposes described in subsection (b).
       ``(2) For each fiscal year, the Secretary shall allocate 
     grant funds under this section equally between the purposes 
     described in paragraphs (1) and (2) of subsection (b).
       ``(3) In making grants for the purposes described in 
     subsection (b)(2), the Secretary

[[Page S7195]]

     shall give preference to renewable energy facilities.
       ``(d) Authorization of Appropriations.--There is authorized 
     to be appropriated to the Secretary to carry out this section 
     $20,000,000 for each of fiscal years 2006 through 2012.''.
                                 ______
                                 
  SA 987. Mr. FRIST (for Mr. Alexander) proposed an amendment to the 
bill H.R. 6, to ensure jobs for our future with secure, affordable, and 
reliable energy; as follows:

       On page 755, after line 25, add the following:

     SEC. 13__. PASSIVE SOLAR TECHNOLOGIES.

       (a) Definition of Passive Solar Technology.--In this 
     section, the term ``passive solar technology'' means a 
     passive solar technology, including daylighting, that--
       (1) is used exclusively to avoid electricity use; and
       (2) can be metered to determine energy savings.
       (b) Study.--The Secretary shall conduct a study to 
     determine--
       (1) the range of levelized costs of avoided electricity for 
     passive solar technologies;
       (2) the quantity of electricity displaced using passive 
     solar technologies in the United States as of the date of 
     enactment of this Act; and
       (3) the projected energy savings from passive solar 
     technologies in 5, 10, 15, 20, and 25 years after the date of 
     enactment of this Act if--
       (A) incentives comparable to the incentives provided for 
     electricity generation technologies were provided for passive 
     solar technologies; and
       (B) no new incentives for passive solar technologies were 
     provided.
       (c) Report.--Not later than 120 days after the date of 
     enactment of this Act, the Secretary shall submit to Congress 
     a report that describes the results of the study under 
     subsection (b).
                                 ______
                                 
  SA 988. Mr. FRIST (for Mr. Harkin) proposed an amendment to the bill 
H.R. 6, to ensure jobs for our future with secure, affordable, and 
reliable energy; as follows:

       On page 489, between lines 20 and 21, insert the following:

     SEC. 9__. HYDROGEN INTERMEDIATE FUELS RESEARCH PROGRAM.

       (a) In General.--The Secretary, in coordination with the 
     Secretary of Agriculture, shall carry out a 3-year program of 
     research, development, and demonstration on the use of 
     ethanol and other low-cost transportable renewable feedstocks 
     as intermediate fuels for the safe, energy efficient, and 
     cost-effective transportation of hydrogen.
       (b) Goals.--The goals of the program shall include--
       (1) demonstrating the cost-effective conversion of ethanol 
     or other low-cost transportable renewable feedstocks to pure 
     hydrogen suitable for eventual use in fuel cells;
       (2) using existing commercial reforming technology or 
     modest modifications of existing technology to reform ethanol 
     or other low-cost transportable renewable feedstocks into 
     hydrogen;
       (3) converting at least 1 commercially available internal 
     combustion engine hybrid electric passenger vehicle to 
     operate on hydrogen;
       (4) not later than 1 year after the date on which the 
     program begins, installing and operating an ethanol reformer, 
     or reformer for another low-cost transportable renewable 
     feedstock (including onsite hydrogen compression, storage, 
     and dispensing), at the facilities of a fleet operator;
       (5) operating the 1 or more vehicles described in paragraph 
     (3) for a period of at least 2 years; and
       (6) collecting emissions and fuel economy data on the 1 or 
     more vehicles described in paragraph (3) in various operating 
     and environmental conditions.
       (c) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $5,000,000.
                                 ______
                                 
  SA 989. Mr. FRIST (for Mr. Domenici) proposed an amendment to the 
bill H.R. 6, to ensure jobs for our future with secure, affordable, and 
reliable energy; as follows:

       On page 11, between lines 10 and 11, insert the following:
       (O) Savannah River National Laboratory.
       On page 11, line 11, strike ``(O)'' and insert ``(P)''.
       On page 11, line 12, strike ``(P)'' and insert ``(Q)''.
       Beginning on page 47, strike line 11 and all that follows 
     through page 49, line 4, and insert the following:

     SEC. 127. STATE BUILDING ENERGY EFFICIENCY CODES INCENTIVES.

       Section 304(e) of the Energy Conservation and Production 
     Act (42 U.S.C. 6833(e)) is amended--
       (1) in paragraph (1), by inserting before the period at the 
     end of the first sentence the following: ``, including 
     increasing and verifying compliance with such codes''; and
       (2) by striking paragraph (2) and inserting the following:
       ``(2) Additional funding shall be provided under this 
     subsection for implementation of a plan to achieve and 
     document at least a 90 percent rate of compliance with 
     residential and commercial building energy efficiency codes, 
     based on energy performance--
       ``(A) to a State that has adopted and is implementing, on a 
     statewide basis--
       ``(i) a residential building energy efficiency code that 
     meets or exceeds the requirements of the 2004 International 
     Energy Conservation Code, or any succeeding version of that 
     code that has received an affirmative determination from the 
     Secretary under subsection (a)(5)(A); and
       ``(ii) a commercial building energy efficiency code that 
     meets or exceeds the requirements of the ASHRAE Standard 
     90.1-2004, or any succeeding version of that standard that 
     has received an affirmative determination from the Secretary 
     under subsection (b)(2)(A); or
       ``(B) in a State in which there is no statewide energy code 
     either for residential buildings or for commercial buildings, 
     to a local government that has adopted and is implementing 
     residential and commercial building energy efficiency codes, 
     as described in subparagraph (A).
       ``(3) Of the amounts made available under this subsection, 
     the Secretary may use $500,000 for each fiscal year to train 
     State and local officials to implement codes described in 
     paragraph (2).
       ``(4)(A) There are authorized to be appropriated to carry 
     out this subsection--
       ``(i) $25,000,000 for each of fiscal years 2006 through 
     2010; and
       ``(ii) such sums as are necessary for fiscal year 2011 and 
     each fiscal year thereafter.
       ``(B) Funding provided to States under paragraph (2) for 
     each fiscal year shall not exceed \1/2\ of the excess of 
     funding under this subsection over $5,000,000 for the fiscal 
     year.''.
       On page 76, lines 9 and 10, strike ``January 1, 2006'' and 
     insert ``January 1, 2007''.
       On page 234, strike lines 23 through 25, and insert the 
     following:
       (20) by striking ``section 104(b) of the Naval Petroleum 
     Reserves Production Act of 1976 (90 Stat. 304; 42 U.S.C. 
     6504)'' and inserting ``section 104(a)''; and
       On page 296, after line 25, add the following:

     SEC. 347. FINGER LAKES WITHDRAWAL.

       All Federal land within the boundary of Finger Lakes 
     National Forest in the State of New York is withdrawn from--
       (1) all forms of entry, appropriation, or disposal under 
     the public land laws; and
       (2) disposition under all laws relating to oil and gas 
     leasing.
       On page 321, line 18, insert ``by the Commission'' after 
     ``request''.
       On page 353, strike lines 19 through 24 and insert the 
     following:

     on Indian land;
       ``(C) provide low-interest loans to Indian tribes and 
     tribal energy resource development organizations for use in 
     the promotion of energy resource development on Indian land 
     and integration of energy resources; and
       ``(D) provide grants and technical assistance to an 
     appropriate tribal environmental organization, as determined 
     by the Secretary, that represents multiple Indian tribes to 
     establish a national resource center to develop tribal 
     capacity to establish and carry out tribal environmental 
     programs in support of energy-related programs and activities 
     under this title, including--
       ``(i) training programs for tribal environmental officials, 
     program managers, and other governmental representatives;
       ``(ii) the development of model environmental policies and 
     tribal laws, including tribal environmental review codes, and 
     the creation and maintenance of a clearinghouse of best 
     environmental management practices; and
       ``(iii) recommended standards for reviewing the 
     implementation of tribal environmental laws and policies 
     within tribal judicial or other tribal appeals systems.
       On page 356, between lines 15 and 16, insert the following:
       ``(C) In providing a grant under this subsection for an 
     activity to provide, or expand the provision of, electricity 
     on Indian land, the Director shall encourage cooperative 
     arrangements between Indian tribes and utilities that provide 
     service to Indian tribes, as the Director determines to be 
     appropriate.
       On page 357, line 6, insert ``(A)'' after ``(2)''.
       On page 357, between lines 16 and 17, insert the following:
       ``(B) In providing a loan guarantee under this subsection 
     for an activity to provide, or expand the provision of, 
     electricity on Indian land, the Secretary of Energy shall 
     encourage cooperative arrangements between Indian tribes and 
     utilities that provide service to Indian tribes, as the 
     Secretary determines to be appropriate.
       On page 488, strike lines 5 through 9 and insert the 
     following:
       (a) Definition of Lignocellulosic Feedstock.--In this 
     section, the term ``lignocellulosic feedstock'' means any 
     portion of a plant or coproduct from conversion, including 
     crops, trees, and agricultural and forest residues not 
     specifically grown for food.
       On page 489, line 3, strike ``cellulosic feedstocks'' and 
     insert ``lignocellulosic feedstocks''.
       On page 489, lines 11 and 12, strike ``cellulosic 
     feedstocks'' and insert ``lignocellulosic feedstocks''.
       On page 503, strike lines 22 through 24.
       On page 504, line 1, strike ``(2)'' and insert ``(1)''.
       On page 504, strike lines 4 through 7 and insert the 
     following:
       (2) For activities under section 955--
       (A) $337,000,000 for fiscal year 2006;
       (B) $364,000,000 for fiscal year 2007; and

[[Page S7196]]

       (C) $394,000,000 for fiscal year 2008.
       (3) For activities under section 956--
       (A) $20,000,000 for fiscal year 2006;
       (B) $25,000,000 for fiscal year 2007; and
       (C) $30,000,000 for fiscal year 2008.
       On page 504, line 24, strike ``(b)(2)'' and insert 
     ``(b)(1)''.
       Beginning on page 505, strike lines 17 and all that follows 
     through page 506, line 2.
       On page 506, line 3, strike ``(c)'' and insert ``(b)''.
       On page 506, line 11, strike ``(d)'' and insert ``(c)''.
       Beginning on page 519, strike line 9 and all that follows 
     through page 523, line 6, and insert the following:

     SEC. 955. COAL AND RELATED TECHNOLOGIES PROGRAM.

       (a) In General.--In addition to the programs authorized 
     under title IV, the Secretary shall conduct a program of 
     technology research, development, and demonstration and 
     commercial application for coal and power systems, including 
     programs to facilitate production and generation of coal-
     based power through--
       (1) innovations for existing plants (including mercury 
     removal);
       (2) gasification systems;
       (3) advanced combustion systems;
       (4) turbines for synthesis gas derived from coal;
       (5) carbon capture and sequestration research and 
     development;
       (6) coal-derived chemicals and transportation fuels;
       (7) liquid fuels derived from low rank coal water;
       (8) solid fuels and feedstocks;
       (9) advanced coal-related research;
       (10) advanced separation technologies; and
       (11) fuel cells for the operation of synthesis gas derived 
     from coal.
       (b) Cost and Performance Goals.--
       (1) In general.--In carrying out programs authorized by 
     this section, the Secretary shall identify cost and 
     performance goals for coal-based technologies that would 
     permit the continued cost-competitive use of coal for the 
     production of electricity, chemical feedstocks, and 
     transportation fuels in 2008, 2010, 2012, and 2016, and each 
     calendar year beginning after September 30, 2021.
       (2) Administration.--In establishing the cost and 
     performance goals, the Secretary shall--
       (A) consider activities and studies undertaken as of the 
     date of enactment of this Act by industry in cooperation with 
     the Department in support of the identification of the goals;
       (B) consult with interested entities, including--
       (i) coal producers;
       (ii) industries using coal;
       (iii) organizations that promote coal and advanced coal 
     technologies;
       (iv) environmental organizations;
       (v) organizations representing workers; and
       (vi) organizations representing consumers;
       (C) not later than 120 days after the date of enactment of 
     this Act, publish in the Federal Register proposed draft cost 
     and performance goals for public comments; and
       (D) not later than 180 days after the date of enactment of 
     this Act and every 4 years thereafter, submit to Congress a 
     report describing the final cost and performance goals for 
     the technologies that includes--
       (i) a list of technical milestones; and
       (ii) an explanation of how programs authorized in this 
     section will not duplicate the activities authorized under 
     the Clean Coal Power Initiative authorized under title IV.
       (c) Powder River Basin and Fort Union Lignite Coal Mercury 
     Removal.--
       (1) In general.--In addition to the programs authorized by 
     subsection (a), the Secretary may establish a program to test 
     and develop technologies to control and remove mercury 
     emissions from subbituminous coal mined in the Powder River 
     Basin, and Fort Union lignite coals, that are used for the 
     generation of electricity.
       (2) Efficacy of mercury removal technology.--In carrying 
     out the program under paragraph (1), the Secretary shall 
     examine the efficacy of mercury removal technologies on coals 
     described in that paragraph that are blended with other types 
     of coal.

     SEC. 956. CARBON CAPTURE RESEARCH AND DEVELOPMENT PROGRAM.

       (a) In General.--The Secretary shall carry out a 10-year 
     carbon capture research and development program to develop 
     carbon dioxide capture technologies on combustion-based 
     systems for use--
       (1) in new coal utilization facilities; and
       (2) on the fleet of coal-based units in existence on the 
     date of enactment of this Act.
       (b) Objectives.--The objectives of the program under 
     subsection (a) shall be--
       (1) to develop carbon dioxide capture technologies, 
     including adsorption and absorption techniques and chemical 
     processes, to remove the carbon dioxide from gas streams 
     containing carbon dioxide potentially amenable to 
     sequestration;
       (2) to develop technologies that would directly produce 
     concentrated streams of carbon dioxide potentially amenable 
     to sequestration;
       (3) to increase the efficiency of the overall system to 
     reduce the quantity of carbon dioxide emissions released from 
     the system per megawatt generated; and
       (4) in accordance with the carbon dioxide capture program, 
     to promote a robust carbon sequestration program and continue 
     the work of the Department, in conjunction with the private 
     sector, through regional carbon sequestration partnerships.
       On page 522, between lines 8 and 9, insert the following:
       (d) Fuel Cells.--
       (1) In general.--The Secretary shall conduct a program of 
     research, development, demonstration, and commercial 
     application on fuel cells for low-cost, high-efficiency, 
     fuel-flexible, modular power systems.
       (2) Demonstrations.--The demonstrations referred to in 
     paragraph (1) shall include solid oxide fuel cell technology 
     for commercial, residential, and transportation applications, 
     and distributed generation systems, using improved 
     manufacturing production and processes.
       On page 558, beginning on line 22, strike ``of the Senate'' 
     and all that follows through ``Commerce'' on line 23 and 
     insert ``and the Committee on Foreign Relations of the Senate 
     and the Committee on Energy and Commerce and the Committee on 
     International Relations''.
       On page 595, between lines 4 and 5, insert the following:
       (2) Report on trends.--Not later than 1 year after the date 
     of enactment of this Act, the Secretary shall submit to 
     Congress a report on current trends under paragraph (1), with 
     recommendations (as appropriate) to meet the future labor 
     requirements for the energy technology industries.
       On page 595, line 5, strike ``(2) Report.--As'' and insert 
     the following:
       (3) Report on shortage.--As
       On page 596, strike line 22 and all that follows through 
     page 597, line 20, and insert the following:

     SEC. 1103. EDUCATIONAL PROGRAMS IN SCIENCE AND MATHEMATICS.

       (a) Science Education Enhancement Fund.--Section 3164 of 
     the Department of Energy Science Education Enhancement Act 
     (42 U.S.C. 7381a) is amended by adding at the end:
       ``(c) Science Education Enhancement Fund.--The Secretary 
     shall use not less than 0.2 percent of the amount made 
     available to the Department for fiscal year 2006 and each 
     fiscal year thereafter to carry out activities authorized by 
     this part.''.
       (b) Authorized Education Activities.--Section 3165 of the 
     Department of Energy Science Education Enhancement Act (42 
     U.S.C. 7381b) is amended by adding at the end the following:
       ``(14) Support competitive events for students under the 
     supervision of teachers, designed to encourage student 
     interest and knowledge in science and mathematics.
       ``(15) Support competitively-awarded, peer-reviewed 
     programs to promote professional development for mathematics 
     teachers and science teachers who teach in grades from 
     kindergarten through grade 12 at Department research and 
     development facilities.
       ``(16) Support summer internships at Department research 
     and development facilities, for mathematics teachers and 
     science teachers who teach in grades from kindergarten 
     through grade 12.
       ``(17) Sponsor and assist in educational and training 
     activities identified as critical skills needs for future 
     workforce development at Department research and development 
     facilities.''.
       (c) Educational Partnerships.--Section 3166(b) of the 
     Department of Energy Science Education Enhancement Act (42 
     U.S.C. 7381c(b)) is amended--
       (1) by striking paragraph (1) and inserting the following:
       ``(1) loaning or transferring equipment to the 
     institution;'';
       (2) in paragraph (5), by striking ``and'' at the end;
       (3) in paragraph (6), by striking the period at the end and 
     inserting ``; and''; and
       (4) by adding at the end the following:
       ``(7) providing funds to educational institutions to hire 
     personnel to facilitate interactions between local school 
     systems, Department research and development facilities, and 
     corporate and governmental entities.''.
       (d) Definition of Department Research and Development 
     Facilities.--Section 3167(3) of the Department of Energy 
     Science Education Enhancement Act (42 U.S.C. 7381d(3)) is 
     amended by striking ``from the Office of Science of the 
     Department of Energy'' and inserting ``by the Department of 
     Energy''.
       (e) Study.--
       (1) In general.--The Secretary shall enter into an 
     arrangement with the National Academy of Public 
     Administration to conduct a study of the priorities, quality, 
     local and regional flexibility, and plans for educational 
     programs at Department research and development facilities.
       (2) Inclusion.--The study shall recommend measures that the 
     Secretary may take to improve Department-wide coordination of 
     educational, workforce development, and critical skills 
     development activities.
       (3) Report.--Not later than 2 years after the date of 
     enactment of this Act, the Secretary shall submit to Congress 
     a report on the results of the study conducted under this 
     subsection.
       On page 599, line 15, insert ``(as amended by section 
     1103(a))'' after ``7381a)''.
       On page 599, line 17, strike ``(c)'' and insert ``(d)''.
       On page 686, line 3, insert ``by the Commission'' after 
     ``request''.
       On page 755, after line 25, add the following:

[[Page S7197]]

     SEC. 13__. STUDY OF LINK BETWEEN ENERGY SECURITY AND 
                   INCREASES IN VEHICLE MILES TRAVELED.

       (a) In General.--The Secretary shall enter into an 
     arrangement with the National Academy of Sciences under which 
     the Academy shall conduct a study to assess the implications 
     on energy use and efficiency of land development patterns in 
     the United States.
       (b) Scope.--The study shall consider--
       (1) the correlation, if any, between land development 
     patterns and increases in vehicle miles traveled;
       (2) whether petroleum use in the transportation sector can 
     be reduced through changes in the design of development 
     patterns;
       (3) the potential benefits of--
       (A) information and education programs for State and local 
     officials (including planning officials) on the potential for 
     energy savings through planning, design, development, and 
     infrastructure decisions;
       (B) incorporation of location efficiency models in 
     transportation infrastructure planning and investments; and
       (C) transportation policies and strategies to help 
     transportation planners manage the demand for the number and 
     length of vehicle trips, including trips that increase the 
     viability of other means of travel; and
       (4) such other considerations relating to the study topic 
     as the National Academy of Sciences finds appropriate.
       (c) Report.--Not later than 2 years after the date of 
     enactment of this Act, the National Academy of Sciences shall 
     submit to the Secretary and Congress a report on the study 
     conducted under this section.

     SEC. 13__. STUDY OF AVAILABILITY OF SKILLED WORKERS.

       (a) In General.--The Secretary shall enter into an 
     arrangement with the National Academy of Sciences under which 
     the National Academy of Sciences shall conduct a study of the 
     short-term and long-term availability of skilled workers to 
     meet the energy and mineral security requirements of the 
     United States.
       (b) Inclusions.--The study shall include an analysis of--
       (1) the need for and availability of workers for the oil, 
     gas, and mineral industries;
       (2) the availability of skilled labor at both entry level 
     and more senior levels; and
       (3) recommendations for future actions needed to meet 
     future labor requirements.
       (c) Report.--Not later than 2 years after the date of 
     enactment of this Act, the Secretary shall submit to Congress 
     a report that describes the results of the study.

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