[Congressional Record Volume 152, Number 30 (Thursday, March 9, 2006)]
[Senate]
[Pages S1968-S1971]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. BAUCUS:
  S. 2398. A bill to establish an Advanced Research Projects 
Administration-Energy to initiate high risk, innovative energy research 
to improve the energy security of the United States, to extend certain 
energy tax incentives, and for other purposes; to the Committee on 
Finance.
  Mr. BAUCUS. Mr. President, in the years when I first began to serve 
in Congress, America faced severe problems with supplies of oil. For 
years, long gas lines, frustration, and questions about the security of 
our oil supply drove the public debate.
  Thirty years have passed. And, frankly, things have not changed all 
that much. We still use gasoline and coal at staggering rates. And we 
are still concerned about the security of our oil supply. We do not 
have lines at gas stations. But last year, prices rose to levels 
unimaginable just a few years ago.
  Prices for gasoline, heating oil, electricity, and natural gas have 
soared in recent years, hitting working families hard. In the past few 
weeks, we have seen a terrorist attack on Saudi Arabian oil facilities.
  We have seen oil workers kidnapped in Nigeria. We have seen 
Venezuelan President Hugo Chavez threaten that he would cut off our 
supply of oil from his country. And we have seen some question whether 
Iran's role as an oil supplier keeps other countries from properly 
addressing Iran's threat to nuclear proliferation.
  Energy provides one of America's greatest challenges for the 21st 
century. Our economy has been dependent on oil and coal for about 100 
years. And since World War II, natural gas has become part of the 
equation. Will we continue this dependency for the next 100 years?
  The cost of energy will profoundly affect the future competitiveness 
of the American economy. As the Chinese and Indian economies grow, so 
will their demand for energy. And that will add further upward pressure 
to energy prices.
  To respond to the challenges of the new world economy, I am 
introducing legislation in seven key areas to build a foundation for a 
more competitive America. We must improve education, health care, trade 
law enforcement, the tax code, and savings. And we must bring a greater 
focus to energy research and development. Today, I introduce the Energy 
Competitiveness Act of 2006.
  We are trapped in an energy box. It is a box characterized by high 
imports, ever-increasing prices for oil and natural gas, and 
environmental danger. We must experiment with ways to break out of that 
box. To break out, we need an energy research effort modeled after the 
Manhattan Project, or the Apollo mission to the moon.
  America has a brilliant record of gathering the best minds. We meet 
challenges that may at first seem to be impossible. During World War 
II, the Manhattan Project brought together brilliant physicists and 
engineers to build an atomic bomb in 3 short years. And after President
  Kennedy described his vision to a joint session of Congress in May of 
1961, the Apollo space program put a man on the moon in just 8 years.
  Looking back, these achievements were stunning. Both projects started 
out with no guarantee of success. Each could have ended in utter 
failure. Yet because of the talent, ingenuity, and focus of creative 
minds, they both succeeded.
  Breaking out of the energy box poses a similar challenge. Success is 
not guaranteed. But we have got to give it our best shot.
  Today I am introducing the Energy Competitiveness Act of 2006. My 
legislation would create a new energy research agency. It would extend 
key alternative energy tax relief. It would help our Nation face the 
challenges of a newly competitive global economy. It would help to move 
us into a new energy future.
  We have the greatest research scientists on the planet. We have the 
most technically talented workforce in the world. But we do not have 
the vigor that we need in energy research. Energy research is a 
backwater, compared to other research efforts in biotechnology, 
medicine, computers, and defense-oriented projects.
  With the Manhattan Project and the Apollo space program, America 
proved that we can gather the best talent for a focused mission and 
succeed. It is time that we begin a similar effort on energy.
  We need to create a new agency to initiate cutting-edge, innovative 
energy research and development aimed at taking us to a new energy 
future. Doing so is essential to our effort to improve our economic 
competitiveness.
  The new agency is modeled on DARPA--the Defense Advanced Research 
Projects Agency--in the Department of Defense. Among the revolutionary 
technologies that DARPA has developed are the internet and stealth 
technology for aircraft. DARPA has been a tremendous success.
  The National Academy of Sciences, the National Academy of 
Engineering, and the Institute of Medicine joined to form the Committee 
on Prospering in the Global Economy of the 21st Century. Norm Augustine 
chaired the Committee. Based on DARPA's achievements, last fall, the 
Committee recommended the creation of an ARPA-E: Advanced Research 
Projects Agency--Energy.
  This was one of a number of recommendations that the Committee made 
in its impressive report on the future competitive challenges that 
America faces. The Committee recommended that ARPA-E be designed to

[[Page S1969]]

conduct transformative, out-of-the-box energy research.
  My bill proposes that ARPA-E be a small agency with a total of 250 
people. A minimum of 180 of them would be technical staff.
  A director of the agency and four deputies would lead ARPA-E. I 
propose that ARPA-E be funded at $300 million in fiscal year 2007, $600 
million in 2008, $1.1 billion in 2009, $1.5 billion in 2010, and $2.0 
billion in 2011.
  We would require that the staff have a technical background. The 
agency would use the Experimental Personnel Authority designed for 
DARPA. That authority authorizes higher salaries than for typical 
Federal employees, and faster hiring, so that the agency could get to 
work quickly.
  To keep the intense, innovative focus that we want, technical staff 
would be limited to 3 to 4 years at the agency. Managers would be 
limited to 4 to 6 years. The director could give both groups extended 
terms of employment if the director so chose.
  For contracts, the agency would use the DARPA procedure. That 
procedure allows more flexible contracting arrangements than are 
normally possible under the Federal Acquisition Regulations. To ensure 
that ARPA-E would conduct innovative research, 75 percent of research 
projects initiated by ARPA-E would not be peer reviewed.
  The ARPA-E would be authorized to award cash prizes to encourage and 
accelerate energy research accomplishments.
  Finally, the bill would require a report by the end of fiscal year 
2007 on whether ARPA-E would need its own energy research lab.
  The Energy Competitiveness Act would also increase our commitment to 
develop promising energy technologies. In the Energy Policy Act of 
2005, last year's Energy bill, we established several important 
incentives to foster new forms of energy production and to encourage 
conservation.
  America's investment in alternative energy and conservation lags well 
behind that of other developed countries. The 2005 Energy bill put us 
on the right track by expanding the tax credit for electricity from 
renewable resources. It created incentives for coal gasification 
technologies. It encouraged investment in refineries that can handle 
North American feedstocks. And it established tax credits for energy-
efficient buildings and equipment.
  Unfortunately, these provisions are either short-term or capped at 
insufficient levels. The Energy Competitiveness Act that I introduce 
today would bolster the first steps made in 2005. The bill that I 
introduce today would extend these important provisions and increase 
the amount of tax incentives available.
  The bill would extend through 2010 the tax credit for electricity 
produced from wind, biomass, geothermal, and other renewable sources. 
It would also increase the volume caps on Clean Renewable Energy Bonds 
and coal gasification tax credits.
  The bill would make permanent enhanced depreciation for new refining 
capacity that is capable of refining non-conventional feedstocks.
  North America has abundant energy resources that could ease our 
demand for oil from the Mideast. But today, many of our refineries are 
incapable of processing heavier feedstocks, such as oil from shale or 
tar sands. Making this provision permanent would provide the needed 
certainty for long-term investments in capital intensive refining 
projects.
  The Energy Competitiveness Act that I introduce today would encourage 
businesses to purchase alternative fuel and electric vehicles. And it 
would extend through 2010 many of the incentives from the 2005 bill 
that promote investment in energy-efficient buildings and equipment.
  We are seeing exciting new efforts in America to strengthen our 
energy competitiveness.
  We need to build on this foundation by creating an aggressive energy 
research agency that will push the limits of new technology and 
discover alternative energy sources.
  America has massive coal reserves. So coal gasification is receiving 
greater attention. Gasification involves breaking down coal under heat 
and pressure to create synthetic natural gas. We must address the 
environmental issues. But if this technology can be improved, then 
America will be able to take a huge step toward energy independence.
  There are exciting developments in wind energy. In Montana, the 
Judith Gap Wind Farm has been generating power at full capacity for 
several weeks. The farm includes 90 wind turbines. Each turbine can 
produce enough electricity for roughly 400 homes.
  The entire farm can produce the electricity needed to supply 300,000 
customers. Montana was one of nine States that put in place more than 
100 megawatts of wind power generation in 2005. And my State ranks in 
the top 15 States in the Nation for wind power capacity.
  Fusion is another possible area where aggressive research could lead 
to huge payoffs. Continuing research will help us to determine whether 
energy production through fusion is a practical option.
  Ethanol is also gaining as an alternative energy option. In 2005, 
Americans invested more than $850 million in ethanol plants. Ford Motor 
Company has plans for producing 250,000 vehicles in 2006 that will be 
able to use several different types of fuel, including ethanol.
  Brazil, with the help of ethanol, expects to become energy 
independent this year. Ethanol accounts for 20 percent of Brazil's fuel 
transport market. Seven out of every 10 cars in Brazil can run on 
ethanol, gasoline, or a mixture of both.
  In Iceland, all electricity generation is from renewable sources. 
Iceland is now taking the next step, and has started an initiative to 
replace the use of fossil fuels with hydrogen by 2050.
  To achieve this, in 1999, Icelanders founded a public-private 
partnership called Icelandic New Energy. This partnership is the main 
driver in hydrogen energy research and implementation in Iceland. 
Public hydrogen-fueled buses began service in December of last year.
  And experiments continue with hydrogen-driven consumer motorcycles, 
small cars, and fishing boats.
  We live in a much larger and more complex nation than Iceland or 
Brazil. But we can share their vision of a future fueled by alternative 
energy and improved conservation.
  There are also exciting developments in nanotechnology, solar power, 
energy-efficient materials, biomass, and green buildings.
  All of these are examples of possible directions for our Nation's 
energy future. But we need a more aggressive and focused research and 
development effort to push these alternatives. And we need an effort to 
create scientific breakthroughs to supplement existing technologies.
  We have got to give it our best shot. As President Franklin Roosevelt 
said, we must conduct ``bold, persistent experimentation.''
  Our economic security is at stake. Our ability to compete in the new 
world economy is at stake.
  ARPA-E will help us move forward on existing technologies. It will 
help us to find new technologies that are not even imaginable today. 
And the tax incentives will keep us on the right track until more 
dramatic breakthroughs occur.
  I urge my colleagues to look closely at this legislation.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 2398

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Energy 
     Competitiveness Act of 2006''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents.

       TITLE I--ADVANCED RESEARCH PROJECTS ADMINISTRATION-ENERGY

Sec. 101. Advanced Research Projects Administration-Energy.

                    TITLE II--ENERGY TAX INCENTIVES

            Subtitle A--Energy Infrastructure Tax Incentives

Sec. 201. Extension of credit for electricity produced from certain 
              renewable resources.
Sec. 202. Extension and expansion of credit to holders of clean 
              renewable energy bonds.
Sec. 203. Extension and expansion of qualifying advanced coal project 
              credit.

[[Page S1970]]

Sec. 204. Extension and expansion of qualifying gasification project 
              credit.

               Subtitle B--Domestic Fossil Fuel Security

Sec. 211. Extension of election to expense certain refineries.

       Subtitle C--Conservation and Energy Efficiency Provisions

Sec. 221. Extension of energy efficient commercial buildings deduction.
Sec. 222. Extension of new energy efficient home credit.
Sec. 223. Extension of residential energy efficient property credit.
Sec. 224. Extension of credit for business installation of qualified 
              fuel cells and stationary microturbine power plants.
Sec. 225. Extension of business solar investment tax credit.

         Subtitle D--Alternative Fuels and Vehicles Incentives

Sec. 231. Extension of excise tax provisions and income tax credit for 
              biodiesel and alternative fuels.
Sec. 232. Exception from depreciation limitation for certain 
              alternative and electric passenger automobiles.

       TITLE I--ADVANCED RESEARCH PROJECTS ADMINISTRATION-ENERGY

     SEC. 101. ADVANCED RESEARCH PROJECTS ADMINISTRATION-ENERGY.

       (a) Establishment.--There is established the Advanced 
     Research Projects Administration-Energy (referred to in this 
     section as ``ARPA-E'').
       (b) Goals.--The goals of ARPA-E are to reduce the quantity 
     of energy the United States imports from foreign sources and 
     to improve the competitiveness of the United States economy 
     by--
       (1) promoting revolutionary changes in the critical 
     technologies that would promote energy competitiveness;
       (2) turning cutting-edge science and engineering into 
     technologies for energy and environmental application; and
       (3) accelerating innovation in energy and the environment 
     for both traditional and alternative energy sources and in 
     energy efficiency mechanisms to--
       (A) reduce energy use;
       (B) decrease the reliance of the United States on foreign 
     energy sources; and
       (C) improve energy competitiveness.
       (c) Director.--
       (1) In general.--ARPA-E shall be headed by a Director 
     (referred to in this section as the ``Director'') appointed 
     by the President.
       (2) Positions at level v.--Section 5316 of title 5, United 
     States Code, is amended by adding at the end the following:
       ``Director, Advanced Research Projects Administration-
     Energy.''.
       (d) Duties.--
       (1) In general.--In carrying out this section, the Director 
     shall award competitive grants, cooperative agreements, or 
     contracts to institutions of higher education, companies, or 
     consortia of such entities (which may include federally 
     funded research and development centers) to achieve the goal 
     described in subsection (b) through acceleration of--
       (A) energy-related research;
       (B) development of resultant techniques, processes, and 
     technologies, and related testing and evaluation; and
       (C) demonstration and commercial application of the most 
     promising technologies and research applications.
       (2) Small-business concerns.--The Director shall carry out 
     programs established under this section, to the maximum 
     extent practicable, in a manner that is similar to the Small 
     Business Innovation Research Program established under 
     section 9 of the Small Business Act (15 U.S.C. 638) to ensure 
     that small-business concerns are fully able to participate in 
     the programs.
       (e) Personnel.--
       (1) Program managers.--
       (A) Appointment.--The Director shall appoint employees to 
     serve as program managers for each of the programs that are 
     established to carry out the duties of ARPA-E under this 
     section.
       (B) Duties.--Program managers shall be responsible for--
       (i) establishing research and development goals for the 
     program, as well as publicizing goals of the program to the 
     public and private sectors;
       (ii) soliciting applications for specific areas of 
     particular promise, especially areas for which the private 
     sector cannot or will not provide funding;
       (iii) selecting research projects for support under the 
     program from among applications submitted to ARPA-E, based 
     on--

       (I) the scientific and technical merit of the proposed 
     projects;
       (II) the demonstrated capabilities of the applicants to 
     successfully carry out the proposed research project; and
       (III) such other criteria as are established by the 
     Director; and

       (iv) monitoring the progress of projects supported under 
     the program.
       (2) Other personnel.--
       (A) In general.--Subject to subparagraph (B), the Director 
     shall appoint such employees as are necessary to carry out 
     the duties of ARPA-E under this section.
       (B) Limitations.--The Director shall appoint not more than 
     250 employees to carry out the duties of ARPA-E under this 
     section, including not less than 180 technical staff, of 
     which--
       (i) not less than 20 staff shall be senior technical 
     managers (including program managers designated under 
     paragraph (1)); and
       (ii) not less than 80 staff shall be technical program 
     managers.
       (3) Experimental personnel authority.--In appointing 
     personnel for ARPA-E, the Director shall have the hiring and 
     management authorities described in section 1101 of the Strom 
     Thurmond National Defense Authorization Act for Fiscal Year 
     1999 (Public Law 105-261; 5 U.S.C. 3104 note).
       (4) Maximum duration of employment.--
       (A) Program managers and senior technical managers.--
       (i) In general.--Subject to clause (ii), a program manager 
     and a senior technical manager appointed under this 
     subsection shall serve for a term not to exceed 4 years after 
     the date of appointment.
       (ii) Extensions.--The Director may extend the term of 
     employment of a program manager or a senior technical manager 
     appointed under this subsection for not more than 4 years 
     through 1 or more 2-year terms.
       (B) Technical program managers.--A technical program 
     manager appointed under this subsection shall serve for a 
     term not to exceed 6 years after the date of appointment.
       (5) Location.--The office of an officer or employee of 
     ARPA-E shall not be located in the headquarters of the 
     Department of Energy.
       (f) Transactions Other Than Contracts and Grants.--
       (1) In general.--To carry out projects through ARPA-E, the 
     Director may enter into transactions (other than contracts, 
     cooperative agreements, and grants) to carry out advanced 
     research projects under this section under similar terms and 
     conditions as the authority is exercised under section 646(g) 
     of the Department of Energy Organization Act (42 U.S.C. 
     7256(g)).
       (2) Peer review.--Peer review shall not be required for 75 
     percent of the research projects carried out by the Director 
     under this section.
       (g) Prizes for Advanced Technology Achievements.--The 
     Director may carry out a program to award cash prizes in 
     recognition of outstanding achievements in basic, advanced, 
     and applied research, technology development, and prototype 
     development that have the potential for application to the 
     performance of the mission of ARPA-E under similar terms and 
     conditions as the authority is exercised under section 1008 
     of the Energy Policy Act of 2005 (42 U.S.C. 16396).
       (h) Coordination of Activities.--The Director--
       (1) shall ensure that the activities of ARPA-E are 
     coordinated with activities of Department of Energy offices 
     and outside agencies; and
       (2) may carry out projects jointly with other agencies.
       (i) Report.--Not later than September 30, 2007, the 
     Director shall submit to Congress a report on the activities 
     of ARPA-E under this section, including a recommendation on 
     whether ARPA-E needs an energy research laboratory.
       (j) Authorization of Appropriations.--There are authorized 
     to be appropriated to carry out this section--
       (1) $300,000,000 for fiscal year 2007;
       (2) $600,000,000 for fiscal year 2008;
       (3) $1,100,000,000 for fiscal year 2009;
       (4) $1,500,000,000 for fiscal year 2010; and
       (5) $2,000,000,000 for fiscal year 2011.

                    TITLE II--ENERGY TAX INCENTIVES

            Subtitle A--Energy Infrastructure Tax Incentives

     SEC. 201. EXTENSION OF CREDIT FOR ELECTRICITY PRODUCED FROM 
                   CERTAIN RENEWABLE RESOURCES.

       Section 45(d) of the Internal Revenue Code of 1986 
     (relating to qualified facilities) is amended by striking 
     ``2008'' each place it appears and inserting ``2011''.

     SEC. 202. EXTENSION AND EXPANSION OF CREDIT TO HOLDERS OF 
                   CLEAN RENEWABLE ENERGY BONDS.

       (a) In General.--Section 54(m) of the Internal Revenue Code 
     of 1986 (relating to termination) is amended by striking 
     ``2007'' and inserting ``2010''.
       (b) Annual Volume Cap for Bonds Issued During Extension 
     Period.--Paragraph (1) of section 54(f) of the Internal 
     Revenue Code of 1986 (relating to limitation on amount of 
     bonds designated) is amended to read as follows:
       ``(1) National limitation.--
       ``(A) Initial national limitation.--With respect to bonds 
     issued after December 31, 2005, and before January 1, 2008, 
     there is a national clean renewable energy bond limitation of 
     $800,000,000.
       ``(B) Annual national limitation.--With respect to bonds 
     issued after December 31, 2007, and before January 1, 2011, 
     there is a national clean renewable energy bond limitation 
     for each calendar year of $800,000,000.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to bonds issued after the date of the enactment 
     of this Act.

     SEC. 203. EXTENSION AND EXPANSION OF QUALIFYING ADVANCED COAL 
                   PROJECT CREDIT.

       (a) In General.--Section 48A(d)(3)(A) of the Internal 
     Revenue Code of 1986 (relating to aggregate credits) is 
     amended by striking ``$1,300,000,000'' and inserting 
     ``$1,800,000,000''.
       (b) Authorization of Additional Integrated Gasification 
     Combined Cycle Projects.--Subparagraph (B) of section 
     48A(d)(3) of te Internal Revenue Code of 1986 (relating to 
     aggregate credits) is amended to read as follows:

[[Page S1971]]

       ``(B) Particular projects.--Of the dollar amount in 
     subparagraph (A), the Secretary is authorized to certify--
       ``(i) $800,000,000 for integrated gasification combined 
     cycle projects the application for which is submitted during 
     the period described in paragraph (2)(A)(i),
       ``(ii) $500,000,000 for projects which use other advanced 
     coal-based generation technologies the application for which 
     is submitted during the period described in paragraph 
     (2)(A)(i), and
       ``(iii) $500,000,000 for integrated gasification combined 
     cycle projects the application for which is submitted during 
     the period described in paragraph (2)(A)(ii).''.
       (c) Application Period for Additional Projects.--
     Subparagraph (A) of section 48A(d)(2) of the Internal Revenue 
     Code of 1986 (relating to certification) is amended to read 
     as follows:
       ``(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--
       ``(i) for an allocation from the dollar amount specified in 
     clause (i) or (ii) of paragraph (3)(A) during the 3-year 
     period beginning on the date the Secretary establishes the 
     program under paragraph (1), and
       ``(ii) for an allocation from the dollar amount specified 
     in paragraph (3)(A)(iii) during the 3-year period beginning 
     at the termination of the period described in clause (i).''.
       (d) Effective Date.--The amendments made by this section 
     shall take effect as if included in the amendments made by 
     section 1307 of the Energy Policy Act of 2005.

     SEC. 204. EXTENSION AND EXPANSION OF QUALIFYING GASIFICATION 
                   PROJECT CREDIT.

       (a) In General.--Section 48B(d)(1) of the Internal Revenue 
     Code of 1986 (relating to qualifying gasification project 
     program) is amended by striking ``$350,000,000'' and 
     inserting ``$850,000,000''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect as if included in the amendments made by 
     section 1307 of the Energy Policy Act of 2005.

               Subtitle B--Domestic Fossil Fuel Security

     SEC. 211. EXTENSION OF ELECTION TO EXPENSE CERTAIN 
                   REFINERIES.

       (a) In General.--Section 179C(c)(1) of the Internal Revenue 
     Code of 1986 (defining qualified refinery property) is 
     amended--
       (1) by striking ``and before January 1, 2012'' in 
     subparagraph (B) and inserting ``and, in the case of any 
     qualified refinery described in subsection (d)(1), before 
     January 1, 2012'', and
       (2) by inserting ``if described in subsection (d)(1)'' 
     after ``of which'' in subparagraph (F)(i).
       (b) Conforming Amendment.--Subsection (d) of section 179C 
     of the Internal Revenue Code of 1986 is amended to read as 
     follows:
       ``(d) Qualified Refinery.--For purposes of this section, 
     the term `qualified refinery' means any refinery located in 
     the United States which is designed to serve the primary 
     purpose of processing liquid fuel from--
       ``(1) crude oil, or
       ``(2) qualified fuels (as defined in section 45K(c)).''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect as if included in the amendment made by 
     section 1323(a) of the Energy Policy Act of 2005.

       Subtitle C--Conservation and Energy Efficiency Provisions

     SEC. 221. EXTENSION OF ENERGY EFFICIENT COMMERCIAL BUILDINGS 
                   DEDUCTION.

       Section 179D(h) of the Internal Revenue Code of 1986 
     (relating to termination) is amended by striking ``2007'' and 
     inserting ``2010''.

     SEC. 222. EXTENSION OF NEW ENERGY EFFICIENT HOME CREDIT.

       (a) In General.--Subsection (g) of section 45L of the 
     Internal Revenue Code of 1986 (relating to new energy 
     efficient home credit) is amended to read as follows:
       ``(g) Termination.--This section shall not apply to--
       ``(1) any qualified new energy efficient home meeting the 
     energy saving requirements of subsection (c)(1) acquired 
     after December 31, 2010, and
       ``(2) any qualified new energy efficient home meeting the 
     energy saving requirements of paragraph (2) or (3) of 
     subsection (c) acquired after December 31, 2007.''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect as if included in the amendments made by 
     section 1332 of the Energy Policy Act of 2005.

     SEC. 223. EXTENSION OF RESIDENTIAL ENERGY EFFICIENT PROPERTY 
                   CREDIT.

       Section 25D(g) of the Internal Revenue Code of 1986 
     (relating to termination) is amended by striking ``2007'' and 
     inserting ``2010''.

     SEC. 224. EXTENSION OF CREDIT FOR BUSINESS INSTALLATION OF 
                   QUALIFIED FUEL CELLS AND STATIONARY 
                   MICROTURBINE POWER PLANTS.

       Sections 48(c)(1)(E) and 48(c)(2)(E) of the Internal 
     Revenue Code of 1986 (relating to termination) are each 
     amended by striking ``2007'' and inserting ``2010''.

     SEC. 225. EXTENSION OF BUSINESS SOLAR INVESTMENT TAX CREDIT.

       Sections 48(a)(2)(A)(i)(II) and 48(a)(3)(A)(ii) of the 
     Internal Revenue Code of 1986 (relating to termination) are 
     each amended by striking ``2008'' and inserting ``2011''.

         Subtitle D--Alternative Fuels and Vehicles Incentives

     SEC. 231. EXTENSION OF EXCISE TAX PROVISIONS AND INCOME TAX 
                   CREDIT FOR BIODIESEL AND ALTERNATIVE FUELS.

       (a) Biodiesel.--Sections 40A(g), 6426(c)(6), and 
     6427(e)(5)(B) of the Internal Revenue Code of 1986 are each 
     amended by striking ``2008'' and inserting ``2010''.
       (b) Alternative Fuel.--
       (1) Fuels.--Sections 6426(d)(4) and 6427(e)(5)(C) of the 
     Internal Revenue Code of 1986 are each amended by striking 
     ``September 30, 2009'' and inserting ``December 31, 2010''.
       (2) Refueling property.--Section 30C(g) of such Code is 
     amended by striking ``2009'' and inserting ``2010''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on January 1, 2007.

     SEC. 232. EXCEPTION FROM DEPRECIATION LIMITATION FOR CERTAIN 
                   ALTERNATIVE AND ELECTRIC PASSENGER AUTOMOBILES.

       (a) In General.--Paragraph (1) of section 280F(a) of the 
     Internal Revenue Code of 1986 (relating to limitation) is 
     amended by adding at the end the following new subparagraph:
       ``(D) Special rule for certain alternative motor vehicles 
     and qualified electric vehicles.--Subparagraph (A) shall not 
     apply to any motor vehicle for which a credit is allowable 
     under section 30 or 30B.''.
       (b) Conforming Amendment.--Subparagraph (C) of section 
     280F(a)(1) of the Internal Revenue Code of 1986 is amended by 
     striking clause (ii) and by redesignating clause (iii) as 
     clause (ii).
       (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.

                          ____________________