[Congressional Record Volume 153, Number 60 (Monday, April 16, 2007)]
[Senate]
[Pages S4480-S4507]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
By Mr. HATCH (for himself and Mr. Bennett):
S. 1110. A bill to amend the Reclamation Projects Authorization and
Adjustment Act of 1992 to provide for the conjunctive use of surface
and ground water in Juab County, Utah; to the Committee on Energy and
Natural Resources.
Mr. HATCH. Mr. President, I rise today to reinforce the importance of
water resource development projects in Juab County, UT, by introducing
the Juab County Surface and Ground Water Study and Development Act of
2007, S. 1110. This legislation would amend the Reclamation Projects
Authorization and Adjustment Act of 2005 to include Juab County.
Juab County's inclusion in that Act would allow the County to use
Central Utah Project funds to complete water resource development
projects, thus enabling the County to better utilize their existing
water resources. I hope that by passing this legislation, we will
ensure that farmers, ranchers, and other citizens of Juab County will
have a reliable water supply and a buffer in times of drought.
Under the original plan for the Bonneville Unit of the Central Unit
Project, several counties in central Utah, including Juab, were to
receive supplemental water through an irrigation and drainage delivery
system. Over the years, however, many central Utah Counties have
elected not to participate in the plan and no longer pay the requisite
taxes to the Central Utah Water Conservancy District, the political
division of the State of Utah established to manage Central Utah
Project activities in Utah.
Juab County, on the other hand, remained active in the Central Utah
Water Conservatory District's efforts and has paid millions in property
taxes to the District in hopes of benefitting from its membership.
Currently, most of the water allocated to the Bonneville Unit of the
Central Utah Project is planned for use in Wasatch, Salt Lake, and Utah
Counties. This legislation would simply ensure that the citizens of
Juab County can benefit from the system that they have financially
supported for so many years.
I urge my colleagues to support this bill.
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. 1110
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Juab County Surface and
Ground Water Study and Development Act of 2007''.
SEC. 2. CONJUNCTIVE USE OF SURFACE AND GROUND WATER, CENTRAL
UTAH PROJECT.
Section 202(a)(2) of the Reclamation Projects Authorization
and Adjustment Act of 1992 (Public Law 102-575; 106 Stat.
4609) is amended by inserting ``Juab,'' after ``Davis,''.
______
By Mr. WYDEN:
S. 1111. A bill to amend the Internal Revenue Code of 1986 to make
the Federal income tax system simpler, fairer, and more fiscally
responsible, and for other purposes; to the Committee on Finance.
Mr. WYDEN. Mr. President, I have come to the floor to talk a bit
about taxes. Millions of Americans are scrambling today to file their
taxes, trying to pull together their 1040 forms and ``schedule this''
and ``form that'' and are plowing through shoe boxes and filing
cabinets trying to find the receipts they accumulated all through this
year.
Millions of our citizens have to calculate their taxes twice to find
out the hard way that they have been ensnared in the alternative
minimum tax and that they have to pay a much larger burden than they
had expected. I believe there is a better way for our country to handle
taxes, one where most Americans do not have to fear tax day, do not
have to shell out billions of dollars in order to file their taxes, do
not have to worry about getting crushed by the alternative minimum tax
that years ago, when it was created, was not supposed to clobber
middle-class folks in the Pacific Northwest and across the country.
Today I am introducing the Fair Flat Tax Act, along with my colleague
in the other body, Congressman Rahm Emanuel of Illinois. What we are
doing in our fair flat tax legislation is offering the country a
proposal that offers the administrative simplicity of a flat tax with
the sense of fairness and progressivity that our country has always
wanted in our tax system.
The tax reform proposal we have developed is simpler because it is
easier to understand and use. Our legislation will include a simplified
1040 form, one page, 30 lines for every individual taxpayer.
The folks at Money magazine, the financial publication, took this
one-page 1040 form, and they were able to fill out their taxes in 15
minutes.
We also make the tax system flatter by collapsing the current system
of six individual tax brackets down to three brackets of 15, 25 and 35
percent. We create a flat corporate rate of 35 percent.
The plan is fairer because we do more to make it possible for middle-
class folks to get ahead. We are able to give a tax cut to millions of
middle-class families because we eliminate scores and scores of
special-interest tax breaks, close those loopholes, that, in effect,
drain the country of revenue and never find their way to helping the
middle class.
We make a radical statement about tax law in our legislation. We say
something is out of whack when the cop who is walking the beat in this
country pays a lot higher tax rate than the person who makes all their
money in the stock market. I wish to make it clear: we want everybody
to get ahead, we want everybody to do well, we never want to penalize
success. But let's make it possible for all Americans to share the
American dream and not just the fortunate few.
Under the current Federal Tax Code, all income is not treated fairly.
My colleague in the other body, Congressman Emanuel, and I would change
that. We are not interested in soaking investors. We believe in
markets. We believe in creating wealth. But we want everybody to be
able to share in that wealth, and under the Fair Flat Tax, they would
be able to do it.
The Fair Flat Tax adopts the flat tax idea to provide real relief to
the middle class through fewer exclusions, exemptions, deductions
deferrals, credits and special rates for certain favored businesses,
very often, breaks that have been added to the Tax Code because those
powerful interests have lobbyists that the middle-class folks we
represent do not.
We triple the standard deduction for single filers from $5,000 to
$15,000 and from $10,000 to $30,000 for married couples. As a result,
the vast majority of Americans would be better off claiming the
standard deduction than having to itemize their deductions, so their
filing will be simplified. We do keep the key deductions most used by
middle-income folks across the country. We keep the deduction for
mortgage interest and charity. We keep the credits for children, for
education, and earned income.
Nobody would have to calculate their taxes twice under the Fair Flat
Tax Act. Our proposal eliminates the individual alternative minimum tax
which could ensnare as many as 100 million taxpayers by the end of the
decade. We eliminate an estimated $20 billion each year in special
breaks for special interests.
Eliminating those breaks would sustain current benefits for our men
and women in uniform, our veterans, our elderly, and our disabled, as
well as those tax incentives that promote savings and help our families
pay for medical care and for education.
I think an especially important feature of the Fair Flat Tax Act is
it corrects one of the most glaring inequities in the current tax
system; and that is regressive State and local taxes. Under current
law, low- and middle-income taxpayers get hit with a double whammy.
Compared to wealthier folks, they pay more of their income in State and
local taxes. Poor families pay more than 11 percent and middle-income
families pay about 10 percent of their
[[Page S4481]]
income in State and local taxes, while the wealthier pay only about 5
percent.
Because many low- and middle-income taxpayers do not itemize, they
get no credit on their Federal form for paying State and local taxes.
In fact, two-thirds of the Federal tax deduction for State and local
taxes goes to those with incomes above $100,000 a year. Under the Fair
Flat Tax Act, for the first time, the Federal Code would look at the
entire picture of one's taxes, at an individual's combined Federal,
State, and local tax burden, and give a credit to low- and middle-
income individuals to correct for regressive State and local taxes.
Repealing some individual tax credits, deductions, and exclusions
from income--along with eliminating some of those special interest
favors in the corporate Tax Code--enables larger standard deductions
and broader middle-class tax relief.
What this means is that, according to the Congressional Research
Service, under our legislation, the vast majority of taxpayers would
see their taxes go down. The Congressional Research Service has advised
us that on average, middle-class families and individuals with wage and
salary incomes up to $150,000 would see tax relief. Let me repeat that.
We are talking about on average, tax relief for middle-class families
and families with wage and salary incomes up to approximately $150,000.
Middle-class folks in our country would get a tax break.
The legislation also makes concrete progress toward deficit
reduction. Certainly, there is a long way to go to stop the
hemorrhaging in the Federal budget, but this legislation makes a decent
start by allowing us to start lowering the Federal deficit in 2011. It
is essentially a revenue-neutral kind of system. But certainly, as we
look to the future, this is going to allow us to start lowering the
Federal deficit.
I also point out, by simplifying the Code, there are going to be
other benefits. For example, we have heard a great deal about the tax
gap in the Finance and Budget Committees. It is one of the most serious
problems our country faces as it relates to finance in America. Upwards
of $300 billion of money that is owed to our government is not
collected. Given the fact we have a system today where people are able
to flout the rules, change the system, why not go to a simpler system
that makes it harder for individuals to cheat and easier for the IRS to
catch those who do?
If you look at what I have proposed, the Fair Flat Tax Act--a 1040
form that is only 30 lines long--it is going to be a lot harder to
cheat the system under a proposal such as this, and it is going to be a
lot easier for the IRS to catch those who try to take advantage of
something such as this.
I believe the Fair Flat Tax Act can make a significant contribution
in helping this country collect those taxes that are owed and raise a
significant amount of revenue from a source that does not increase
taxes. What we are proposing with our fair flat tax legislation is a
win for everybody except those who would try to rip off the system.
I am introducing the Fair Flat Tax Act of 2007 today to provide
Americans a plan based on common sense principles that can make the Tax
Code work better. We are going to have a system that is simpler and we
are going to have a system that is fairer because it closes scores of
those special interest loopholes. It gets rid of the despised
alternative minimum tax, and it gives everybody a chance to get ahead
in America.
It is not about class warfare. It is not about pitting one group
against another. It is about giving everybody the opportunity to be a
winner and to get ahead to provide for their family and ensure that
when they are successful, their success can allow them to do well
financially.
I do think it is important to make sure those who work for a wage get
fair treatment. That has not been the case today. I want investors to
do well. We all look to the stock market as a major barometer of
economic prosperity in our country. But let's make sure everybody has
an opportunity to get ahead. Something is seriously wrong when somebody
who works for a wage gets hit with a lot higher tax rate than somebody
who makes their money as an investor.
I hope we can go forward in a bipartisan way on the issue of tax
reform. I am extremely disappointed the Bush administration has not
chosen to follow up on tax reform. I think it is especially
unfortunate, given the fact the President had a commission that had a
number of good ideas as it relates to tax reform. I certainly did not
agree with all of them, but let me talk about one example of how the
Congress could work with the Bush administration in a bipartisan way.
I have shown this fair flat tax form I am proposing for a reason; and
that is, because I think it is an ideal way for the administration and
Democrats and Republicans to work together. My form is 30 lines long--
30 lines long--and you can fill it out in under an hour. The
President's commission had a form that is maybe six, seven lines
longer--just a handful of additional lines. For purposes of Government
work, there is virtually no difference between the simplified form I am
proposing and what the President's commission has called for. We could
get Democrats and Republicans together to work on tax reform and come
up with a simplified form in a matter of days.
There is very little difference between what I am proposing and what
came out of the President's commission.
But what is going to be important is that the President reach out to
Democrats and Republicans in the Congress and say: Look, I want to work
with you on simplifying the Tax Code. I want to work with you to hold
down rates for everybody by closing out some of those special interest
breaks. I want to see everybody have an opportunity to get ahead.
That certainly is what President Reagan did in 1986, when he worked
with another tall fellow who served on the Senate Finance Committee,
our former colleague Senator Bill Bradley. I went to school on a
basketball scholarship. My jump shot is not quite as good as Bill
Bradley's, but I sure know the value of bipartisan teamwork.
So today, the day before taxes are owed, I want to renew my offer to
the Bush administration to work with them on the issue of tax reform.
It is a natural for bipartisan leadership. We have a model; and that
is, the reform of 1986, where, again, they simplified the system. They
cleaned out the clutter. They got rid of some of those special interest
loopholes. They held down rates for everybody. It was good for our
country. We can do that again.
The fair flat tax legislation I am introducing today provides an
opportunity for Democrats and Republicans to come together to fix the
Tax Code in 2007, the way Democrats and Republicans did back in 1986,
when the late President Reagan and Bill Bradley came together and led a
bipartisan effort.
I think it is time to do that again. Most people clean out their
attic every 20 years or so. We ought to clean the Tax Code every 20
years as well. I think we know how to proceed. The question is whether
there is political will. I urge the Bush administration to work with
Democrats and Republicans in the Congress because the current tax
system, which has subjected our citizens to so much hassle and
bureaucracy over the last few months, does not have to be that way.
There is an alternative. I have presented one. The President's
commission has presented one. Democrats and Republicans working
together can do better.
I urge the President to look to the Congress, leaders of both
political parties, to move forward on tax reform in the days ahead.
Mr. President, 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. 1111
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE; TABLE OF
CONTENTS.
(a) Short Title.--This Act may be cited as the ``Fair Flat
Tax Act of 2007''.
(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in this Act an amendment or repeal is
expressed in terms of an amendment to, or repeal of, a
section or other provision, the reference shall be considered
to be made to a section or other provision of the Internal
Revenue Code of 1986.
[[Page S4482]]
(c) Table of Contents.--The table of contents for this Act
is as follows:
Sec. 1. Short title; amendment of 1986 Code; table of contents.
Sec. 2. Purpose.
TITLE I--INDIVIDUAL INCOME TAX REFORMS
Sec. 101. 3 progressive individual income tax rates for all forms of
income.
Sec. 102. Health care standard deduction.
Sec. 103. Increase in basic standard deduction.
Sec. 104. Refundable credit for State and local income, sales, and real
and personal property taxes.
Sec. 105. Earned income child credit and earned income credit for
childless taxpayers.
Sec. 106. Repeal of individual alternative minimum tax.
Sec. 107. Termination of various exclusions, exemptions, deductions,
and credits.
TITLE II--CORPORATE AND BUSINESS INCOME TAX REFORMS
Sec. 201. Corporate flat tax.
Sec. 202. Treatment of travel on corporate aircraft.
Sec. 203. Termination of various preferential treatments.
Sec. 204. Elimination of tax expenditures that subsidize inefficiencies
in the health care system.
Sec. 205. Pass-through business entity transparency.
Sec. 206. Modification of effective date of leasing provisions of the
American Jobs Creation Act of 2004.
Sec. 207. Revaluation of LIFO inventories of large integrated oil
companies.
Sec. 208. Modifications of foreign tax credit rules applicable to large
integrated oil companies which are dual capacity
taxpayers.
Sec. 209. Repeal of lower of cost or market value of inventory rule.
Sec. 210. Reinstitution of per country foreign tax credit.
Sec. 211. Application of rules treating inverted corporations as
domestic corporations to certain transactions occurring
after March 20, 2002.
TITLE III--OTHER PROVISIONS
Subtitle A--Improvements in Tax Compliance
Sec. 301. Information reporting on payments to corporations.
Sec. 302. Broker reporting of customer's basis in securities
transactions.
Sec. 303. Additional reporting requirements by regulation.
Sec. 304. Increase in information return penalties.
Sec. 305. E-filing requirement for certain large organizations.
Sec. 306. Implementation of standards clarifying when employee leasing
companies can be held liable for their clients' Federal
employment taxes.
Sec. 307. Modification of collection due process procedures for
employment tax liabilities.
Sec. 308. Expansion of IRS access to information in National Directory
of New Hires for tax administration purposes.
Sec. 309. Disclosure of prisoner return information to Federal Bureau
of Prisons.
Sec. 310. Modification of criminal penalties for willful failures
involving tax payments and filing requirements.
Sec. 311. Understatement of taxpayer liability by return preparers.
Sec. 312. Penalties for failure to file certain returns electronically.
Sec. 313. Penalty for filing erroneous refund claims.
Subtitle B--Requiring Economic Substance
Sec. 321. Clarification of economic substance doctrine.
Sec. 322. Penalty for understatements attributable to transactions
lacking economic substance, etc.
Sec. 323. Denial of deduction for interest on underpayments
attributable to noneconomic substance transactions.
Subtitle C--Miscellaneous
Sec. 331. Denial of deduction for punitive damages.
TITLE IV--TECHNICAL AND CONFORMING AMENDMENTS; SUNSET
Sec. 401. Technical and conforming amendments.
Sec. 402. Sunset.
SEC. 2. PURPOSE.
The purpose of this Act is to amend the Internal Revenue
Code of 1986--
(1) to make the Federal individual income tax system
simpler, fairer, and more transparent by--
(A) recognizing the overall Federal, State, and local tax
burden on individual Americans, especially the regressive
nature of State and local taxes, and providing a Federal
income tax credit for State and local income, sales, and
property taxes,
(B) providing for an earned income tax credit for childless
taxpayers and a new earned income child credit,
(C) repealing the individual alternative minimum tax,
(D) increasing the basic standard deduction and maintaining
itemized deductions for principal residence mortgage interest
and charitable contributions,
(E) reducing the number of exclusions, exemptions,
deductions, and credits, and
(F) treating all income equally,
(2) to make the Federal corporate income tax rate a flat 35
percent and eliminate special tax preferences that favor
particular types of businesses or activities, and
(3) to partially offset the Federal budget deficit through
the increased fiscal responsibility resulting from these
reforms.
TITLE I--INDIVIDUAL INCOME TAX REFORMS
SEC. 101. 3 PROGRESSIVE INDIVIDUAL INCOME TAX RATES FOR ALL
FORMS OF INCOME.
(a) Married Individuals Filing Joint Returns and Surviving
Spouses.--The table contained in section 1(a) is amended to
read as follows:
The tax is:e income is:
15% of taxable income. ................................................
Over $30,000 but not over $120,000.....................................
$4,500, plus 25% of the excess over $30,000
$27,000, plus 35% of the excess over $120,000''........................
(b) Heads of Households.--The table contained in section
1(b) is amended to read as follows:
The tax is:e income is:
15% of taxable income. ................................................
Over $16,000 but not over $105,000.....................................
$2,400, plus 25% of the excess over $16,000
$24,650, plus 35% of the excess over $105,000''........................
(c) Unmarried Individuals (Other Than Surviving Spouses and
Heads of Households).--The table contained in section 1(c) is
amended to read as follows:
The tax is:e income is:
15% of taxable income. ................................................
$2,250, plus 25% of the excess over $15,000 ...........................
$13,500, plus 35% of the excess over $60,000''.........................
(d) Married Individuals Filing Separate Returns.--The table
contained in section 1(d) is amended to read as follows:
The tax is:e income is:
15% of taxable income. ................................................
$2,250, plus 25% of the excess over $15,000 ...........................
$13,500, plus 35% of the excess over $60,000''.........................
(e) Conforming Amendments to Inflation Adjustment.--Section
1(f) is amended--
(1) by striking ``1993''in paragraph (1) and inserting
``2008'',
(2) by striking ``except as provided in paragraph (8)'' in
paragraph (2)(A),
(3) by striking ``1992'' in paragraph (3)(B) and inserting
``2007'',
(4) by striking paragraphs (7) and (8), and
(5) by striking ``Phaseout of Marriage Penalty in 15-
Percent Bracket;'' in the heading thereof.
(f) Repeal of Rate Differential for Capital Gains and
Dividends.--
(1) Repeal of 2003 rate reduction.--Section 303 of the Jobs
and Growth Tax Relief Reconciliation Act of 2003 is amended
by striking ``December 3, 2008'' and inserting ``December 31,
2007''.
(2) Termination of pre-2003 capital gain rate
differential.--Section 1(h) is amended (after the application
of paragraph (1)) by adding at the end the following new
paragraph:
``(13) Termination.--This section shall not apply to
taxable years beginning after December 31, 2007.''.
(g) Additional Conforming Amendments.--
(1) Section 1 is amended by striking subsection (i).
(2) The Internal Revenue Code of 1986 is amended by
striking ``calendar year 1992'' each place it appears and
inserting ``calendar year 2007''.
(3) Section 1445(e)(1) (after the application of subsection
(g)(1)) is amended by striking ``(or, to the extent provided
in regulations, 20 percent)''.
(h) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2007.
SEC. 102. HEALTH CARE STANDARD DEDUCTION.
(a) In General.--Section 62(a) (defining adjusted gross
income) is amended by inserting after paragraph (21) the
following new paragraph:
``(22) Individual shared responsibility payments.--
``(A) In general.--In the case of a taxpayer with gross
income for the taxable year exceeding 100 percent of the
poverty line (adjusted for the size of the family involved)
for the calendar year in which such taxable year begins and
who is enrolled in a HAPI plan under the Healthy Americans
Act, the deduction allowable under section 213 by reason of
subsection (d)(1)(D) thereof (determined without regard to
any income limitation under subsection (a) thereof) in an
amount equal to the applicable fraction times, in the case
of--
``(i) coverage of an individual, $6,025,
``(ii) coverage of a married couple or domestic partnership
(as determined by a State) without dependent children,
$12,050,
``(iii) coverage of an unmarried individual with 1 or more
dependent children, $8,610, plus $2,000 for each dependent
child, and
``(iv) coverage of a married couple or domestic partnership
(as determined by a State) with 1 or more dependent children,
$15,210, plus $2,000 for each dependent child.
``(B) Applicable fraction.--For purposes of subparagraph
(A), the applicable fraction is the fraction (not to exceed
1)--
``(i) the numerator of which is the gross income of the
taxpayer for the taxable year expressed as a percentage of
the poverty line
[[Page S4483]]
(adjusted for the size of the family involved) minus such
poverty line for the calendar year in which such taxable year
begins, and
``(ii) the denominator of which is 400 percent of the
poverty line (adjusted for the size of the family involved)
minus such poverty line.
``(C) Phaseout of deduction amount.--
``(i) In general.--The amount otherwise determined under
subparagraph (A) for any taxable year shall be reduced by the
amount determined under clause (ii).
``(ii) Amount of reduction.--The amount determined under
this clause shall be the amount which bears the same ratio to
the amount determined under subparagraph (A) as--
``(I) the excess of the taxpayer's modified adjusted gross
income for such taxable year, over $62,500 ($125,000 in the
case of a joint return), bears to
``(II) $62,500 ($125,000 in the case of a joint return).
Any amount determined under this clause which is not a
multiple of $1,000 shall be rounded to the next lowest
$1,000.
``(D) Inflation adjustment.--In the case of any taxable
year beginning in a calendar year after 2009, each dollar
amount contained in subparagraph (A) and subparagraph
(C)(ii)(I) shall be increased by an amount equal to such
dollar amount, multiplied by the cost-of-living adjustment
determined under section 1(f)(3) for the calendar year in
which the taxable year begins, determined by substituting
`calendar year 2008' for `calendar year 1992' in subparagraph
(B) thereof. Any increase determined under the preceding
sentence shall be rounded to the nearest multiple of $50
($1,000 in the case of the dollar amount contained in
subparagraph (C)(ii)(I)).
``(E) Determination of modified adjusted gross income.--
``(i) In general.--For purposes of this paragraph, the term
`modified adjusted gross income' means adjusted gross
income--
``(ii) determined without regard to this section and
sections 86, 135, 137, 199, 221, 222, 911, 931, and 933, and
``(iii) increased by--
``(I) the amount of interest received or accrued during the
taxable year which is exempt from tax under this title, and
``(II) the amount of any social security benefits (as
defined in section 86(d)) received or accrued during the
taxable year.
``(F) Poverty line.--For purposes of this paragraph, the
term `poverty line' has the meaning given such term in
section 673(2) of the Community Health Services Block Grant
Act (42 U.S.C. 9902(2)), including any revision required by
such section.''.
(b) Conforming Amendment.--Section 213(d)(1)(D) is amended
by inserting ``amounts paid under section 3421 and'' after
``including''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2007.
SEC. 103. INCREASE IN BASIC STANDARD DEDUCTION.
(a) In General.--Paragraph (2) of section 63(c) (defining
standard deduction) is amended to read as follows:
``(2) Basic standard deduction.--For purposes of paragraph
(1), the basic standard deduction is--
``(A) 200 percent of the dollar amount in effect under
subparagraph (C) for the taxable year in the case of--
``(i) a joint return, or
``(ii) a surviving spouse (as defined in section 2(a)),
``(B) $26,250 in the case of a head of household (as
defined in section 2(b)), reduced by any deduction allowed
under section 62(a)(22) for such taxable year, or
``(C) $15,000 in any other case, reduced by any deduction
allowed under section 62(a)(22) for such taxable year.''.
(b) Conforming Amendment to Inflation Adjustment.--Section
63(c)(4)(B)(i) is amended by striking ``(2)(B), (2)(C), or''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2007.
SEC. 104. REFUNDABLE CREDIT FOR STATE AND LOCAL INCOME,
SALES, AND REAL AND PERSONAL PROPERTY TAXES.
(a) General Rule.--Subpart C of part IV of subchapter A of
chapter 1 (relating to refundable credits) is amended by
redesignating section 36 as section 37 and by inserting after
section 35 the following new section:
``SEC. 36. CREDIT FOR STATE AND LOCAL INCOME, SALES, AND REAL
AND PERSONAL PROPERTY TAXES.
``(a) Allowance of Credit.--In the case of an individual,
there shall be allowed as a credit against the tax imposed by
this subtitle for the taxable year an amount equal to 10
percent of the qualified State and local taxes paid by the
taxpayer for such year.
``(b) Qualified State and Local Taxes.--For purposes of
this section, the term `qualified State and local taxes'
means--
``(1) State and local income taxes,
``(2) State and local general sales taxes,
``(3) State and local real property taxes, and
``(4) State and local personal property taxes.
``(c) Definitions and Special Rules.--For purposes of this
section--
``(1) State or local taxes.--A State or local tax includes
only a tax imposed by a State, a possession of the United
States, or a political subdivision of any of the foregoing,
or by the District of Columbia.
``(2) General sales taxes.--
``(A) In general.--The term `general sales tax' means a tax
imposed at one rate with respect to the sale at retail of a
broad range of classes of items.
``(B) Application of rules.--Rules similar to the rules
under subparagraphs (C), (D), (E), (F), (G), and (H) of
section 164(b)(5) shall apply.
``(3) Personal property taxes.--The term `personal property
tax' means an ad valorem tax which is imposed on an annual
basis in respect of personal property.
``(4) Application of rules to property taxes.--Rules
similar to the rules of subsections (c) and (d) of section
164 shall apply.
``(5) No credit for married individuals filing separate
returns.--If the taxpayer is a married individual (within the
meaning of section 7703), this section shall apply only if
the taxpayer and the taxpayer's spouse file a joint return
for the taxable year.
``(6) Denial of credit to dependents.--No credit shall be
allowed under this section to any individual with respect to
whom a deduction under section 151 is allowable to another
taxpayer for a taxable year beginning in the calendar year in
which such individual's taxable year begins.
``(7) Denial of double benefit.--Any amount taken into
account in determining the credit allowable under this
section may not be taken into account in determining any
credit or deduction under any other provision of this
chapter.''.
(b) Technical Amendments.--
(1) Paragraph (2) of section 1324(b) of title 31, United
States Code, is amended by inserting ``or from section 36 of
such Code'' before the period at the end.
(2) The table of sections for subpart C of part IV of
subchapter A of chapter 1 is amended by striking the item
relating to section 36 and inserting the following:
``Sec. 36. Credit for state and local income, sales, and real and
personal property taxes
``Sec. 37. Overpayments of tax''.
(c) Report Regarding Use of Credit by Renters.--Not later
than 180 days after the date of the enactment of this Act,
the Secretary of the Treasury shall report to the Committee
on Finance of the Senate and the Committee on Ways and Means
of the House of Representatives recommendations regarding the
treatment of a portion of rental payments in a manner similar
to real property taxes under section 36 of the Internal
Revenue Code of 1986 (as added by this section).
(d) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2007.
SEC. 105. EARNED INCOME CHILD CREDIT AND EARNED INCOME CREDIT
FOR CHILDLESS TAXPAYERS.
(a) In General.--Subsection (a) of section 32 (relating to
earned income) is amended to read as follows:
``(a) Allowance of Earned Income Child Credit and Earned
Income Credit.--
``(1) In general.--There shall be allowed as a credit
against the tax imposed by this subtitle for the taxable
year--
``(A) in the case of any eligible individual with 1 or more
qualifying children, an amount equal to the earned income
child credit amount, and
``(B) in the case of any eligible individual with no
qualifying children, an amount equal to the earned income
credit amount.
``(2) Earned income child credit amount.--For purposes of
this section, the earned income child credit amount is equal
to the sum of--
``(A) the credit percentage of so much of the taxpayer's
earned income for the taxable year as does not exceed the
earned income limit amount, plus
``(B) the supplemental child credit amount determined under
subsection (n) for such taxable year.
``(3) Earned income credit amount.--For purposes of this
section, the earned income credit amount is equal to the
credit percentage of so much of the taxpayer's earned income
for the taxable year as does not exceed the earned income
limit amount.
``(4) Limitation.--The amount of the credit allowable to a
taxpayer under paragraph (2)(A) or (3) for any taxable year
shall not exceed the excess (if any) of--
``(A) the credit percentage of the earned income amount,
over
``(B) the phaseout percentage of so much of the adjusted
gross income (or, if greater, the earned income) of the
taxpayer for the taxable year as exceeds the phaseout
amount.''.
(b) Supplemental Child Credit Amount.--Section 32 is
amended by adding at the end the following new subsection:
``(n) Supplemental Child Credit Amount.--
``(1) In general.--For purposes of subsection (a)(2)(B),
the supplemental child credit amount for any taxable year is
equal to the lesser of--
``(A) the credit which would be allowed under section 24
for such taxable year without regard to the limitation under
section 24(b)(3) with respect to any qualifying child as
defined under subsection (c)(3), or
``(B) the amount by which the aggregate amount of credits
allowed by subpart A for such taxable year would increase if
the limitation imposed by section 24(b)(3) were increased by
the excess (if any) of--
``(i) 15 percent of so much of the taxpayer's earned income
which is taken into account in computing taxable income for
the taxable year as exceeds $10,000, or
``(ii) in the case of a taxpayer with 3 or more qualifying
children (as so defined), the excess (if any) of--
[[Page S4484]]
``(I) the taxpayer's social security taxes for the taxable
year, over
``(II) the credit allowed under this section for the
taxable year.
The amount of the credit allowed under this subsection shall
not be treated as a credit allowed under subpart A and shall
reduce the amount of credit otherwise allowable under section
24(a) without regard to section 24(b)(3).
``(2) Social security taxes.--For purposes of paragraph
(1)--
``(A) In general.--The term `social security taxes' means,
with respect to any taxpayer for any taxable year--
``(i) the amount of the taxes imposed by section 3101 and
3201(a) on amounts received by the taxpayer during the
calendar year in which the taxable year begins,
``(ii) 50 percent of the taxes imposed by section 1401 on
the self-employment income of the taxpayer for the taxable
year, and
``(iii) 50 percent of the taxes imposed by section
3211(a)(1) on amounts received by the taxpayer during the
calendar year in which the taxable year begins.
``(B) Coordination with special refund of social security
taxes.--The term `social security taxes' shall not include
any taxes to the extent the taxpayer is entitled to a special
refund of such taxes under section 6413(c).
``(C) Special rule.--Any amounts paid pursuant to an
agreement under section 3121(l) (relating to agreements
entered into by American employers with respect to foreign
affiliates) which are equivalent to the taxes referred to in
subparagraph (A)(i) shall be treated as taxes referred to in
such paragraph.
``(3) Inflation adjustment.--In the case of any taxable
year beginning in a calendar year after 2007, the $10,000
amount contained in paragraph (1)(B) shall be increased by an
amount equal to--
``(A) such dollar amount, multiplied by
``(B) the cost-of-living adjustment determined under
section 1(f)(3) for the calendar year in which the taxable
year begins, determined by substituting `calendar year 2000'
for `calendar year 1992' in subparagraph (B) thereof.
``Any increase determined under the preceding sentence
shall be rounded to the nearest multiple of $50.''.
(c) Conforming Amendment.--Section 24(d) is amended by
adding at the end the following new paragraph:
``(4) Termination.--This subsection shall not apply with
respect to any taxable year beginning after December 31,
2007.''.
(d) Certain Treatment of Earned Income Made Permanent.--
Clause (vi) of section 32(c)(2)(B) is amended to read as
follows:
``(vi) a taxpayer may elect to treat amounts excluded from
gross income by reason of section 112 as earned income.''.
(e) Repeal of Disqualified Investment Income Test.--
Subsection (i) of section 32 is repealed.
(f) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2007.
SEC. 106. REPEAL OF INDIVIDUAL ALTERNATIVE MINIMUM TAX.
(a) In General.--Section 55(a) (relating to alternative
minimum tax imposed) is amended by adding at the end the
following new flush sentence:
``For purposes of this title, the tentative minimum tax on
any taxpayer other than a corporation for any taxable year
beginning after December 31, 2007, shall be zero.''.
(b) Modification of Limitation on Use of Credit for Prior
Year Minimum Tax Liability.--Subsection (c) of section 53
(relating to credit for prior year minimum tax liability) is
amended to read as follows:
``(c) Limitation.--
``(1) In general.--Except as provided in paragraph (2), the
credit allowable under subsection (a) for any taxable year
shall not exceed the excess (if any) of--
``(A) the regular tax liability of the taxpayer for such
taxable year reduced by the sum of the credits allowable
under subparts A, B, D, E, and F of this part, over
``(B) the tentative minimum tax for the taxable year.
``(2) Taxable years beginning after 2007.--In the case of
any taxable year beginning after 2007, the credit allowable
under subsection (a) to a taxpayer other than a corporation
for any taxable year shall not exceed 90 percent of the
regular tax liability of the taxpayer for such taxable year
reduced by the sum of the credits allowable under subparts A,
B, D, E, and F of this part.''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2007.
SEC. 107. TERMINATION OF VARIOUS EXCLUSIONS, EXEMPTIONS,
DEDUCTIONS, AND CREDITS.
(a) In General.--Subchapter C of chapter 90 (relating to
provisions affecting more than one subtitle) is amended by
adding at the end the following new section:
``SEC. 7875. TERMINATION OF CERTAIN PROVISIONS.
``The following provisions shall not apply to taxable years
beginning after December 31, 2007:
``(1) Section 67 (relating to 2-percent floor on
miscellaneous itemized deductions).
``(2) Section 74(c) (relating to exclusion of certain
employee achievement awards).
``(3) Section 79 (relating to exclusion of group-term life
insurance purchased for employees).
``(4) Section 119 (relating to exclusion of meals or
lodging furnished for the convenience of the employer).
``(5) Section 125 (relating to exclusion of cafeteria plan
benefits).
``(6) Section 132 (relating to certain fringe benefits),
except with respect to subsection (a)(5) thereof (relating to
exclusion of qualified transportation fringe).
``(7) Section 163(h)(4)(A)(i)(II) (relating to definition
of qualified residence).
``(8) Section 165(d) (relating to deduction for wagering
losses).
``(9) Section 217 (relating to deduction for moving
expenses).
``(10) Section 454 (relating to deferral of tax on
obligations issued at discount).
``(11) Section 501(c)(9) (relating to tax-exempt status of
voluntary employees' beneficiary associations).
``(12) Section 911 (relating to exclusion of earned income
of citizens or residents of the United States living abroad).
``(13) Section 912 (relating to exemption for certain
allowances).''.
(b) Conforming Amendment.--The table of sections for
subchapter C of chapter 90 is amended by adding at the end
the following new item:
``Sec. 7875. Termination of certain provisions''.
TITLE II--CORPORATE AND BUSINESS INCOME TAX REFORMS
SEC. 201. CORPORATE FLAT TAX.
(a) In General.--Subsection (b) of section 11 (relating to
tax imposed) is amended to read as follows:
``(b) Amount of Tax.--The amount of tax imposed by
subsection (a) shall be equal to 35 percent of the taxable
income.''.
(b) Conforming Amendments.--
(1) Section 280C(c)(3)(B)(ii)(II) is amended by striking
``maximum rate of tax under section 11(b)(1)'' and inserting
``rate of tax under section 11(b)''.
(2) Sections 860E(e)(2)(B), 860E(e)(6)(A)(ii),
860K(d)(2)(A)(ii), 860K(e)(1)(B)(ii), 1446(b)(2)(B), and
7874(e)(1)(B) are each amended by striking ``highest rate of
tax specified in section 11(b)(1)'' and inserting ``rate of
tax specified in section 11(b)''.
(3) Section 904(b)(3)(D)(ii) is amended by striking
``(determined without regard to the last sentence of section
11(b)(1))''.
(4) Section 962 is amended by striking subsection (c) and
by redesignating subsection (d) as subsection (c).
(5) Section 1201(a) is amended by striking ``(determined
without regard to the last 2 sentences of section
11(b)(1))''.
(6) Section 1561(a) is amended--
(A) by striking paragraph (1) and by redesignating
paragraphs (2), (3), and (4) as paragraphs (1), (2), and (3),
respectively,
(B) by striking ``The amounts specified in paragraph (1),
the'' and inserting ``The'',
(C) by striking ``paragraph (2)'' and inserting ``paragraph
(1)'',
(D) by striking ``paragraph (3)'' both places it appears
and inserting ``paragraph (2)'',
(E) by striking ``paragraph (4)'' and inserting ``paragraph
(3)'', and
(F) by striking the fourth sentence.
(7) Subsection (b) of section 1561 is amended to read as
follows:
``(b) Certain Short Taxable Years.--If a corporation has a
short taxable year which does not include a December 31 and
is a component member of a controlled group of corporations
with respect to such taxable year, then for purposes of this
subtitle, the amount to be used in computing the accumulated
earnings credit under section 535(c)(2) and (3) of such
corporation for such taxable year shall be the amount
specified in subsection (a)(1) divided by the number of
corporations which are component members of such group on the
last day of such taxable year. For purposes of the preceding
sentence, section 1563(b) shall be applied as if such last
day were substituted for December 31.''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2007.
SEC. 202. TREATMENT OF TRAVEL ON CORPORATE AIRCRAFT.
(a) In General.--Section 162 (relating to trade or business
expenses) is amended by redesignating subsection (q) as
subsection (r) and by inserting after subsection (p) the
following new subsection:
``(q) Treatment of Travel on Corporate Aircraft.--The rate
at which an amount allowable as a deduction under this
chapter for the use of an aircraft owned by the taxpayer is
determined shall not exceed the rate at which an amount paid
or included in income by an employee of such taxpayer for the
personal use of such aircraft is determined.''.
(b) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2007.
SEC. 203. TERMINATION OF VARIOUS PREFERENTIAL TREATMENTS.
(a) In General.--Section 7875, as added by section 107, is
amended--
(1) by inserting ``(or transactions in the case of sections
referred to in paragraphs (21), (22), (23), (24), and (27))''
after ``taxable years beginning'', and
(2) by adding at the end the following new paragraphs:
``(14) Section 43 (relating to enhanced oil recovery
credit).
``(15) Section 263(c) (relating to intangible drilling and
development costs in the case of oil and gas wells and
geothermal wells).
``(16) Section 382(l)(5) (relating to exception from net
operating loss limitations for corporations in bankruptcy
proceeding).
``(17) Section 451(i) (relating to special rules for sales
or dispositions to implement
[[Page S4485]]
Federal Energy Regulatory Commission or State electric
restructuring policy).
``(18) Section 453A (relating to special rules for
nondealers), but only with respect to the dollar limitation
under subsection (b)(1) thereof and subsection (b)(3) thereof
(relating to exception for personal use and farm property).
``(19) Section 460(e)(1) (relating to special rules for
long-term home construction contracts or other short-term
construction contracts).
``(20) Section 613A (relating to percentage depletion in
case of oil and gas wells).
``(21) Section 616 (relating to development costs).
``(22) Sections 861(a)(6), 862(a)(6), 863(b)(2), 863(b)(3),
and 865(b) (relating to inventory property sales source rule
exception).''.
(b) Full Tax Rate on Nuclear Decommissioning Reserve
Fund.--Subparagraph (B) of section 468A(e)(2) is amended to
read as follows:
``(B) Rate of tax.--For purposes of subparagraph (A), the
rate set forth in this subparagraph is 35 percent.''.
(c) Deferral of Active Income of Controlled Foreign
Corporations.--Section 952 (relating to subpart F income
defined) is amended by adding at the end the following new
subsection:
``(e) Special Application of Subpart.--
``(1) In general.--For taxable years beginning after
December 31, 2007, notwithstanding any other provision of
this subpart, the term `subpart F income' means, in the case
of any controlled foreign corporation, the income of such
corporation derived from any foreign country.
``(2) Applicable rules.--Rules similar to the rules under
the last sentence of subsection (a) and subsection (d) shall
apply to this subsection.''.
(d) Deferral of Active Financing Income.--Section
953(e)(10) is amended--
(1) by striking ``January 1, 2009'' and inserting ``January
1, 2008'', and
(2) by striking ``December 31, 2008'' and inserting
``December 31, 2007''.
(e) Depreciation on Equipment in Excess of Alternative
Depreciation System.--Section 168(g)(1) (relating to
alternative depreciation system) is amended by striking
``and'' at the end of subparagraph (D), by adding ``and'' at
the end of subparagraph (E), and by inserting after
subparagraph (E) the following new subparagraph:
``(F) notwithstanding subsection (a), any tangible property
placed in service after December 31, 2007,''.
(f) Effective Date.--The amendments made by subsections
(b), (c), and (d) shall apply to taxable years beginning
after December 31, 2007.
SEC. 204. ELIMINATION OF TAX EXPENDITURES THAT SUBSIDIZE
INEFFICIENCIES IN THE HEALTH CARE SYSTEM.
Not later than 180 days after the date of the enactment of
this Act, the Secretary of the Treasury shall report to the
Committee on Finance of the Senate and the Committee on Ways
and Means of the House of Representatives recommendations
regarding the elimination of Federal tax incentives which
subsidize inefficiencies in the health care system and if
eliminated would result in Federal budget savings of not less
than $10,000,000,000 annually.
SEC. 205. PASS-THROUGH BUSINESS ENTITY TRANSPARENCY.
Not later than 90 days after the date of the enactment of
this Act, the Secretary of the Treasury shall report to the
Committee on Finance of the Senate and the Committee on Ways
and Means of the House of Representatives regarding the
implementation of additional reporting requirements with
respect to any pass-through entity with the goal of the
reduction of tax avoidance through the use of such entities,
In addition, the Secretary shall develop procedures to share
such report data with State revenue agencies under the
disclosure requirements of section 6103(d) of the Internal
Revenue Code of 1986.
SEC. 206. MODIFICATION OF EFFECTIVE DATE OF LEASING
PROVISIONS OF THE AMERICAN JOBS CREATION ACT OF
2004.
(a) Leases to Foreign Entities.--Section 849(b) of the
American Jobs Creation Act of 2004 is amended by adding at
the end the following new paragraph:
``(5) Leases to foreign entities.--In the case of tax-
exempt use property leased to a tax-exempt entity which is a
foreign person or entity, the amendments made by this part
shall apply to taxable years beginning after December 31,
2006, with respect to leases entered into on or before March
12, 2004.''.
(b) Effective Date.--The amendment made by this section
shall take effect as if included in the enactment of the
American Jobs Creation Act of 2004.
SEC. 207. REVALUATION OF LIFO INVENTORIES OF LARGE INTEGRATED
OIL COMPANIES.
(a) General Rule.--Notwithstanding any other provision of
law, if a taxpayer is an applicable integrated oil company
for its last taxable year ending in calendar year 2006, the
taxpayer shall--
(1) increase, effective as of the close of such taxable
year, the value of each historic LIFO layer of inventories of
crude oil, natural gas, or any other petroleum product
(within the meaning of section 4611) by the layer adjustment
amount, and
(2) decrease its cost of goods sold for such taxable year
by the aggregate amount of the increases under paragraph (1).
If the aggregate amount of the increases under paragraph (1)
exceed the taxpayer's cost of goods sold for such taxable
year, the taxpayer's gross income for such taxable year shall
be increased by the amount of such excess.
(b) Layer Adjustment Amount.--For purposes of this
section--
(1) In general.--The term ``layer adjustment amount''
means, with respect to any historic LIFO layer, the product
of--
(A) $18.75, and
(B) the number of barrels of crude oil (or in the case of
natural gas or other petroleum products, the number of
barrel-of-oil equivalents) represented by the layer.
(2) Barrel-of-oil equivalent.--The term ``barrel-of-oil
equivalent'' has the meaning given such term by section
29(d)(5) (as in effect before its redesignation by the Energy
Tax Incentives Act of 2005).
(c) Application of Requirement.--
(1) No change in method of accounting.--Any adjustment
required by this section shall not be treated as a change in
method of accounting.
(2) Underpayments of estimated tax.--No addition to the tax
shall be made under section 6655 of the Internal Revenue Code
of 1986 (relating to failure by corporation to pay estimated
tax) with respect to any underpayment of an installment
required to be paid with respect to the taxable year
described in subsection (a) to the extent such underpayment
was created or increased by this section.
(d) Applicable Integrated Oil Company.--For purposes of
this section, the term ``applicable integrated oil company''
means an integrated oil company (as defined in section
291(b)(4) of the Internal Revenue Code of 1986) which has an
average daily worldwide production of crude oil of at least
500,000 barrels for the taxable year and which had gross
receipts in excess of $1,000,000,000 for its last taxable
year ending during calendar year 2006. For purposes of this
subsection all persons treated as a single employer under
subsections (a) and (b) of section 52 of the Internal Revenue
Code of 1986 shall be treated as 1 person and, in the case of
a short taxable year, the rule under section 448(c)(3)(B)
shall apply.
SEC. 208. MODIFICATIONS OF FOREIGN TAX CREDIT RULES
APPLICABLE TO LARGE INTEGRATED OIL COMPANIES
WHICH ARE DUAL CAPACITY TAXPAYERS.
(a) In General.--Section 901 (relating to credit for taxes
of foreign countries and of possessions of the United States)
is amended by redesignating subsection (n) as subsection (o)
and by inserting after subsection (l) the following new
subsection:
``(m) Special Rules Relating to Large Integrated Oil
Companies Which Are Dual Capacity Taxpayers.--
``(1) General rule.--Notwithstanding any other provision of
this chapter, any amount paid or accrued by a dual capacity
taxpayer which is a large integrated oil company to a foreign
country or possession of the United States for any period
shall not be considered a tax--
``(A) if, for such period, the foreign country or
possession does not impose a generally applicable income tax,
or
``(B) to the extent such amount exceeds the amount
(determined in accordance with regulations) which--
``(i) is paid by such dual capacity taxpayer pursuant to
the generally applicable income tax imposed by the country or
possession, or
``(ii) would be paid if the generally applicable income tax
imposed by the country or possession were applicable to such
dual capacity taxpayer.
Nothing in this paragraph shall be construed to imply the
proper treatment of any such amount not in excess of the
amount determined under subparagraph (B).
``(2) Dual capacity taxpayer.--For purposes of this
subsection, the term `dual capacity taxpayer' means, with
respect to any foreign country or possession of the United
States, a person who--
``(A) is subject to a levy of such country or possession,
and
``(B) receives (or will receive) directly or indirectly a
specific economic benefit (as determined in accordance with
regulations) from such country or possession.
``(3) Generally applicable income tax.--For purposes of
this subsection--
``(A) In general.--The term `generally applicable income
tax' means an income tax (or a series of income taxes) which
is generally imposed under the laws of a foreign country or
possession on income derived from the conduct of a trade or
business within such country or possession.
``(B) Exceptions.--Such term shall not include a tax unless
it has substantial application, by its terms and in practice,
to--
``(i) persons who are not dual capacity taxpayers, and
``(ii) persons who are citizens or residents of the foreign
country or possession.
``(4) Large integrated oil company.--For purposes of this
subsection, the term `large integrated oil company' means,
with respect to any taxable year, an integrated oil company
(as defined in section 291(b)(4)) which--
``(A) had gross receipts in excess of $1,000,000,000 for
such taxable year, and
``(B) has an average daily worldwide production of crude
oil of at least 500,000 barrels for such taxable year.''
(b) Effective Date.--
(1) In general.--The amendments made by this section shall
apply to taxes paid or accrued in taxable years beginning
after the date of the enactment of this Act.
[[Page S4486]]
(2) Contrary treaty obligations upheld.--The amendments
made by this section shall not apply to the extent contrary
to any treaty obligation of the United States.
SEC. 209. REPEAL OF LOWER OF COST OR MARKET VALUE OF
INVENTORY RULE.
(a) In General.--Subsection (a) of section 471 (relating to
general rules for inventories) is amended to read as follows:
``(a) General Rule.--Whenever in the opinion of the
Secretary the use of inventories is necessary in order
clearly to determine the income of the taxpayer, inventories
shall be valued at cost.''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after the date of the
enactment of this Act.
SEC. 210. REINSTITUTION OF PER COUNTRY FOREIGN TAX CREDIT.
(a) In General.--Subsection (a) of section 904 (relating to
limitation on credit) is amended to read as follows:
``(a) Limitation.--The amount of the credit in respect of
the tax paid or accrued to any foreign country or possession
of the United States shall not exceed the same proportion of
the tax against which such credit is taken which the
taxpayer's taxable income from sources within such country or
possession (but not in excess of the taxpayer's entire
taxable income) bears to such taxpayer's entire taxable
income for the same taxable year.''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after December 31,
2007.
SEC. 211. APPLICATION OF RULES TREATING INVERTED CORPORATIONS
AS DOMESTIC CORPORATIONS TO CERTAIN
TRANSACTIONS OCCURRING AFTER MARCH 20, 2002.
(a) In General.--Section 7874(b) (relating to inverted
corporations treated as domestic corporations) is amended to
read as follows:
``(b) Inverted Corporations Treated as Domestic
Corporations.--
``(1) In general.--Notwithstanding section 7701(a)(4), a
foreign corporation shall be treated for purposes of this
title as a domestic corporation if such corporation would be
a surrogate foreign corporation if subsection (a)(2) were
applied by substituting `80 percent' for `60 percent'.
``(2) Special rule for certain transactions occurring after
march 20, 2002.--
``(A) In general.--If--
``(i) paragraph (1) does not apply to a foreign
corporation, but
``(ii) paragraph (1) would apply to such corporation if, in
addition to the substitution under paragraph (1), subsection
(a)(2) were applied by substituting `March 20, 2002' for
`March 4, 2003' each place it appears,
then paragraph (1) shall apply to such corporation but only
with respect to taxable years of such corporation beginning
after December 31, 2006.
``(B) Special rules.--Subject to such rules as the
Secretary may prescribe, in the case of a corporation to
which paragraph (1) applies by reason of this paragraph--
``(i) the corporation shall be treated, as of the close of
its last taxable year beginning before January 1, 2007, as
having transferred all of its assets, liabilities, and
earnings and profits to a domestic corporation in a
transaction with respect to which no tax is imposed under
this title,
``(ii) the bases of the assets transferred in the
transaction to the domestic corporation shall be the same as
the bases of the assets in the hands of the foreign
corporation, subject to any adjustments under this title for
built-in losses,
``(iii) the basis of the stock of any shareholder in the
domestic corporation shall be the same as the basis of the
stock of the shareholder in the foreign corporation for which
it is treated as exchanged, and
``(iv) the transfer of any earnings and profits by reason
of clause (i) shall be disregarded in determining any deemed
dividend or foreign tax creditable to the domestic
corporation with respect to such transfer.
``(C) Regulations.--The Secretary may prescribe such
regulations as may be necessary or appropriate to carry out
this paragraph, including regulations to prevent the
avoidance of the purposes of this paragraph.''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after December 31,
2006.
TITLE III--OTHER PROVISIONS
Subtitle A--Improvements in Tax Compliance
SEC. 301. INFORMATION REPORTING ON PAYMENTS TO CORPORATIONS.
(a) In General.--Section 6041(a) (relating to payments of
$600 or more) is amended by inserting ``(including any
corporation other than a corporation exempt from taxation)''
after ``another person''.
(b) Effective Date.--The amendment made by this section
shall apply to payments made after December 31, 2007.
SEC. 302. BROKER REPORTING OF CUSTOMER'S BASIS IN SECURITIES
TRANSACTIONS.
(a) In General.--Section 6045 (relating to returns of
brokers) is amended by adding at the end the following new
subsection:
``(g) Additional Information Required in the Case of
Securities Transactions.--
``(1) In general.--If a broker is otherwise required to
make a return under subsection (a) with respect to any
applicable security, the broker shall include in such return
the information described in paragraph (2).
``(2) Additional information required.--
``(A) In general.--The information required under paragraph
(1) to be shown on a return with respect to an applicable
security of a customer shall include for each reported
applicable security the customer's adjusted basis in such
security.
``(B) Exemption from requirement.--The Secretary shall
issue such regulations or guidance as necessary concerning
the application of the requirement under subparagraph (A) in
cases in which a broker in making a return does not have
sufficient information to meet such requirement with respect
to the reported applicable security. Such regulations or
guidance may--
``(i) require such other information related to such
adjusted basis as the Secretary may prescribe, and
``(ii) exempt classes of cases in which the broker does not
have sufficient information to meet either the requirement
under subparagraph (A) or the requirement under clause (i).
``(3) Information transfers.--To the extent provided in
regulations, there shall be such exchanges of information
between brokers as such regulations may require for purposes
of enabling such brokers to meet the requirements of this
subsection.
``(4) Definitions.--For purposes of this subsection, the
term `applicable security' means any--
``(A) security described in subparagraph (A) or (C) of
section 475(c)(2),
``(B) interest in a regulated investment company (as
defined in section 851), or
``(C) other financial instrument designated in regulations
prescribed by the Secretary.''.
(b) Determination of Basis of Certain Securities by FIFO
Method.--Section 1012 (relating to basis of property--cost)
is amended by adding at the end the following new sentence:
``Except to the extent provided in regulations, the basis of
any applicable security reportable under section 6045 (by
reason of subsection (g) thereof) shall be determined on a
first-in, first-out method.''.
(c) Effective Date.--The amendments made by this section
shall apply to sales and transfers occurring after December
31, 2007, with respect to securities acquired before, on, or
after such date.
SEC. 303. ADDITIONAL REPORTING REQUIREMENTS BY REGULATION.
The Secretary of the Treasury is authorized to issue
regulations under which with respect to payments made after
December 31, 2007--
(1) any merchant acquiring bank is required to annually
report to the Secretary the gross reimbursement payments made
to merchants in a calendar year, unless the benefit of such
reporting does not justify the cost of compliance, as
determined by the Secretary,
(2) any contractor receiving payments of $600 or more in a
calendar year from a particular business is required to
furnish such business the contractor's certified taxpayer
identification number or be subject to withholding on such
payments at a flat rate percentage selected by the
contractor, and
(3) any Federal, State, or local government is required to
report to the Secretary any non-wage payment to procure
property and services, other than payments of interest,
payments for real property, payments to tax-exempt entities
or foreign governments, intergovernmental payments, and
payments made pursuant to a classified or confidential
contract.
SEC. 304. INCREASE IN INFORMATION RETURN PENALTIES.
(a) Failure to File Correct Information Returns.--
(1) In general.--Section 6721(a)(1) is amended--
(A) by striking ``$50'' and inserting ``$250'', and
(B) by striking ``$250,000'' and inserting ``$3,000,000''.
(2) Reduction where correction in specified period.--
(A) Correction within 30 days.--Section 6721(b)(1) is
amended--
(i) by striking ``$15'' and inserting ``$50'',
(ii) by striking ``$50'' and inserting ``$250'', and
(iii) by striking ``$75,000'' and inserting ``$500,000''.
(B) Failures corrected on or before august 1.--Section
6721(b)(2) is amended--
(i) by striking ``$30'' and inserting ``$100'',
(ii) by striking ``$50'' and inserting ``$250'', and
(iii) by striking ``$150,000'' and inserting
``$1,500,000''.
(3) Lower limitation for persons with gross receipts of not
more than $5,000,000.--Section 6721(d)(1) is amended--
(A) in subparagraph (A)--
(i) by striking ``$100,000'' and inserting ``$1,000,000'',
and
(ii) by striking ``$250,000'' and inserting ``$3,000,000'',
(B) in subparagraph (B)--
(i) by striking ``$25,000'' and inserting ``$175,000'', and
(ii) by striking ``$75,000'' and inserting ``$500,000'',
and
(C) in subparagraph (C)--
(i) by striking ``$50,000'' and inserting ``$500,000'', and
(ii) by striking ``$150,000'' and inserting ``$1,500,000''.
(4) Penalty in case of intentional disregard.--Section
6721(e) is amended--
(A) by striking ``$100'' in paragraph (2) and inserting
``$500'',
(B) by striking ``$250,000'' in paragraph (3)(A) and
inserting ``$3,000,000''.
[[Page S4487]]
(b) Failure to Furnish Correct Payee Statements.--
(1) In general.--Section 6722(a) is amended--
(A) by striking ``$50'' and inserting ``$250'', and
(B) by striking ``$100,000'' and inserting ``$1,000,000''.
(2) Penalty in case of intentional disregard.--Section
6722(c) is amended--
(A) by striking ``$100'' in paragraph (1) and inserting
``$500'', and
(B) by striking ``$100,000'' in paragraph (2)(A) and
inserting ``$1,000,000''.
(c) Failure to Comply With Other Information Reporting
Requirements.--Section 6723 is amended--
(1) by striking ``$50'' and inserting ``$250'', and
(2) by striking ``$100,000'' and inserting ``$1,000,000''.
(d) Effective Date.--The amendments made by this section
shall apply with respect to information returns required to
be filed on or after January 1, 2008.
SEC. 305. E-FILING REQUIREMENT FOR CERTAIN LARGE
ORGANIZATIONS.
(a) In General.--The first sentence of section 6011(e)(2)
is amended to read as follows: ``In prescribing regulations
under paragraph (1), the Secretary shall take into account
(among other relevant factors) the ability of the taxpayer to
comply at reasonable cost with the requirements of such
regulations.''.
(b) Conforming Amendment.--Section 6724 is amended by
striking subsection (c).
(c) Effective Date.--The amendments made by this section
shall apply to taxable years ending on or after December 31,
2008.
SEC. 306. IMPLEMENTATION OF STANDARDS CLARIFYING WHEN
EMPLOYEE LEASING COMPANIES CAN BE HELD LIABLE
FOR THEIR CLIENTS' FEDERAL EMPLOYMENT TAXES.
With respect to employment tax returns required to be filed
with respect to wages paid on or after January 1, 2008, the
Secretary of the Treasury shall issue regulations
establishing--
(1) standards for holding employee leasing companies
jointly and severally liable with their clients for Federal
employment taxes under chapters 21, 22, 23, and 24 of the
Internal Revenue Code of 1986, and
(2) standards for holding such companies solely liable for
such taxes.
SEC. 307. MODIFICATION OF COLLECTION DUE PROCESS PROCEDURES
FOR EMPLOYMENT TAX LIABILITIES.
(a) In General.--Section 6330(f) (relating to jeopardy and
State refund collection) is amended--
(1) by striking ``; or'' at the end of paragraph (1) and
inserting a comma,
(2) by adding ``or'' at the end of paragraph (2), and
(3) by inserting after paragraph (2) the following new
paragraph:
``(3) the Secretary has served a disqualified employment
tax levy,''.
(b) Disqualified Employment Tax Levy.--Section 6330
(relating to notice and opportunity for hearing before levy)
is amended by adding at the end the following new subsection:
``(h) Disqualified Employment Tax Levy.--For purposes of
subsection (f), a disqualified employment tax levy is any
levy in connection with the collection of employment taxes
for any taxable period if the person subject to the levy (or
any predecessor thereof) requested a hearing under this
section with respect to unpaid employment taxes arising in
the most recent 2-year period before the beginning of the
taxable period with respect to which the levy is served. For
purposes of the preceding sentence, the term `employment
taxes' means any taxes under chapter 21, 22, 23, or 24.''.
(c) Effective Date.--The amendments made by this section
shall apply to levies served on or after January 1, 2008.
SEC. 308. EXPANSION OF IRS ACCESS TO INFORMATION IN NATIONAL
DIRECTORY OF NEW HIRES FOR TAX ADMINISTRATION
PURPOSES.
(a) In General.--Paragraph (3) of section 453(j) of the
Social Security Act (42 U.S.C. 653(j)) is amended to read as
follows:
``(3) Administration of federal tax laws.--The Secretary of
the Treasury shall have access to the information in the
National Directory of New Hires for purposes of administering
the Internal Revenue Code of 1986.''.
(b) Effective Date.--The amendment made by this section
shall take effect on the date of the enactment of this Act.
SEC. 309. DISCLOSURE OF PRISONER RETURN INFORMATION TO
FEDERAL BUREAU OF PRISONS.
(a) Disclosure.--
(1) In general.--Subsection (l) of section 6103 (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:
``(22) Disclosure of return information of prisoners to
federal bureau of prisons.--
``(A) In general.--Under such procedures as the Secretary
may prescribe, the Secretary may disclose return information
with respect to persons incarcerated in Federal prisons whom
the Secretary believes filed or facilitated the filing of
false or fraudulent returns to the head of the Federal Bureau
of Prisons if the Secretary determines that such disclosure
is necessary to permit effective tax administration.
``(B) Disclosure by agency to employees.--The head of the
Federal Bureau of Prisons may redisclose information received
under subparagraph (A)--
``(i) only to those officers and employees of the Bureau
who are personally and directly engaged in taking
administrative actions to address violations of
administrative rules and regulations of the prison facility,
and
``(ii) solely for the purposes described in subparagraph
(C).
``(C) Restriction on use of disclosed information.--Return
information disclosed under this paragraph may be used only
for the purposes of--
``(i) preventing the filing of false or fraudulent returns;
and
``(ii) taking administrative actions against individuals
who have filed or attempted to file false or fraudulent
returns.''.
(2) Procedures and record keeping related to disclosure.--
Subsection (p)(4) of section 6103 is amended--
(A) by striking ``(14), or (17)'' in the matter before
subparagraph (A) and inserting ``(14), (17), or (22)'', and
(B) by striking ``(9), or (16)'' in subparagraph (F)(i) and
inserting ``(9), (16), or (22)''.
(3) Evaluation by treasury inspector general for tax
administration.--Paragraph (3) of section 7803(d) 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) not later than 3 years after the date of the
enactment of section 6103(l)(22), submit a written report to
Congress on the implementation of such section.''.
(b) Annual Reports.--
(1) In general.--The Secretary of the Treasury shall submit
to Congress and make publicly available an annual report on
the filing of false and fraudulent returns by individuals
incarcerated in Federal and State prisons.
(2) Contents of report.--The report submitted under
paragraph (1) shall contain statistics on the number of false
or fraudulent returns associated with each Federal and State
prison and such other information that the Secretary
determines is appropriate.
(3) Exchange of information.--For the purpose of gathering
information necessary for the reports required under
paragraph (1), the Secretary of the Treasury shall enter into
agreements with the head of the Federal Bureau of Prisons and
the heads of State agencies charged with responsibility for
administration of State prisons under which the head of the
Bureau or Agency provides to the Secretary not less
frequently than annually the names and other identifying
information of prisoners incarcerated at each facility
administered by the Bureau or Agency.
(c) Effective Date.--The amendments made by this section
shall apply to disclosures on or after January 1, 2008.
SEC. 310. MODIFICATION OF CRIMINAL PENALTIES FOR WILLFUL
FAILURES INVOLVING TAX PAYMENTS AND FILING
REQUIREMENTS.
(a) Increase in Penalty for Attempt to Evade or Defeat
Tax.--Section 7201 (relating to attempt to evade or defeat
tax) is amended--
(1) by striking ``$100,000'' and inserting ``$500,000'',
(2) by striking ``$500,000'' and inserting ``$1,000,000'',
and
(3) by striking ``5 years'' and inserting ``10 years''.
(b) Modification of Penalties for Willful Failure to File
Return, Supply Information, or Pay Tax.--
(1) In general.--Section 7203 (relating to willful failure
to file return, supply information, or pay tax) 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) `$250,000 ($500,000' for `$50,000 ($100,000', and
``(C) `5 years' for `1 year'.
``(2) Failure described.--A failure described in this
paragraph is--
``(A) a failure to make a return described in subsection
(a) for any 3 taxable years occurring during any period of 5
consecutive taxable years if the aggregate tax liability for
such period is not less than $50,000, or
``(B) a failure to make a return if the tax liability
giving rise to the requirement to make such return is
attributable to an activity which is a felony under any State
or Federal law.''.
(2) Penalty may be applied in addition to other
penalties.--Section 7204 (relating to fraudulent statement or
failure to make statement to employees) is amended by
striking ``the penalty provided in section 6674'' and
inserting ``the penalties provided in sections 6674 and
7203(b)''.
(c) Fraud and False Statements.--Section 7206 (relating to
fraud and false statements) is amended--
(1) by striking ``$100,000'' and inserting ``$500,000'',
(2) by striking ``$500,000'' and inserting ``$1,000,000'',
and
(3) by striking ``3 years'' and inserting ``5 years''.
[[Page S4488]]
(d) Increase in Monetary Limitation for Underpayment or
Overpayment of Tax Due to Fraud.--Section 7206 (relating to
fraud and false statements), as amended by subsection (a)(3),
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.''.
(e) 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. 311. UNDERSTATEMENT OF TAXPAYER LIABILITY BY RETURN
PREPARERS.
(a) Application of Return Preparer Penalties to All Tax
Returns.--
(1) Definition of tax return preparer.--Paragraph (36) of
section 7701(a) (relating to income tax preparer) is
amended--
(A) by striking ``income'' each place it appears in the
heading and the text, and
(B) in subparagraph (A), by striking ``subtitle A'' each
place it appears and inserting ``this title''.
(2) Conforming amendments.--
(A)(i) Section 6060 is amended by striking ``INCOME TAX
RETURN PREPARERS'' in the heading and inserting ``TAX RETURN
PREPARERS''.
(ii) Section 6060(a) is amended--
(I) by striking ``an income tax return preparer'' each
place it appears and inserting ``a tax return preparer'',
(II) by striking ``each income tax return preparer'' and
inserting ``each tax return preparer'', and
(III) by striking ``another income tax return preparer''
and inserting ``another tax return preparer''.
(iii) The item relating to section 6060 in the table of
sections for subpart F of part III of subchapter A of chapter
61 is amended by striking ``income tax return preparers'' and
inserting ``tax return preparers''.
(iv) Subpart F of part III of subchapter A of chapter 61 is
amended by striking ``Income Tax Return Preparers'' in the
heading and inserting ``Tax Return Preparers''.
(v) The item relating to subpart F in the table of subparts
for part III of subchapter A of chapter 61 is amended by
striking ``income tax return preparers'' and inserting ``tax
return preparers''.
(B) Section 6103(k)(5) is amended--
(i) by striking ``income tax return preparer'' each place
it appears and inserting ``tax return preparer'', and
(ii) by striking ``income tax return preparers'' each place
it appears and inserting ``tax return preparers''.
(C)(i) Section 6107 is amended--
(I) by striking ``INCOME TAX RETURN PREPARER'' in the
heading and inserting ``TAX RETURN PREPARER'',
(II) by striking ``an income tax return preparer'' each
place it appears in subsections (a) and (b) and inserting ``a
tax return preparer'',
(III) by striking ``Income Tax Return Preparer'' in the
heading for subsection (b) and inserting ``Tax Return
Preparer'', and
(IV) in subsection (c), by striking ``income tax return
preparers'' and inserting ``tax return preparers''.
(ii) The item relating to section 6107 in the table of
sections for subchapter B of chapter 61 is amended by
striking ``Income tax return preparer'' and inserting ``Tax
return preparer''.
(D) Section 6109(a)(4) is amended--
(i) by striking ``an income tax return preparer'' and
inserting ``a tax return preparer'', and
(ii) by striking ``income return preparer'' in the heading
and inserting ``tax return preparer''.
(E) Section 6503(k)(4) is amended by striking ``Income tax
return preparers'' and inserting ``Tax return preparers''.
(F)(i) Section 6694 is amended--
(I) by striking ``INCOME TAX RETURN PREPARER'' in the
heading and inserting ``TAX RETURN PREPARER'',
(II) by striking ``an income tax return preparer'' each
place it appears and inserting ``a tax return preparer'',
(III) in subsection (c)(2), by striking ``the income tax
return preparer'' and inserting ``the tax return preparer'',
(IV) in subsection (e), by striking ``subtitle A'' and
inserting ``this title'', and
(V) in subsection (f), by striking ``income tax return
preparer'' and inserting ``tax return preparer''.
(ii) The item relating to section 6694 in the table of
sections for part I of subchapter B of chapter 68 is amended
by striking ``income tax return preparer'' and inserting
``tax return preparer''.
(G)(i) Section 6695 is amended--
(I) by striking ``INCOME'' in the heading, and
(II) by striking ``an income tax return preparer'' each
place it appears and inserting ``a tax return preparer''.
(ii) Section 6695(f) is amended--
(I) by striking ``subtitle A'' and inserting ``this
title'', and
(II) by striking ``the income tax return preparer'' and
inserting ``the tax return preparer''.
(iii) The item relating to section 6695 in the table of
sections for part I of subchapter B of chapter 68 is amended
by striking ``income''.
(H) Section 6696(e) is amended by striking ``subtitle A''
each place it appears and inserting ``this title''.
(I)(i) Section 7407 is amended--
(I) by striking ``INCOME TAX RETURN PREPARERS'' in the
heading and inserting ``TAX RETURN PREPARERS'',
(II) by striking ``an income tax return preparer'' each
place it appears and inserting ``a tax return preparer'',
(III) by striking ``income tax preparer'' both places it
appears in subsection (a) and inserting ``tax return
preparer'', and
(IV) by striking ``income tax return'' in subsection (a)
and inserting ``tax return''.
(ii) The item relating to section 7407 in the table of
sections for subchapter A of chapter 76 is amended by
striking ``income tax return preparers'' and inserting ``tax
return preparers''.
(J)(i) Section 7427 is amended--
(I) by striking ``INCOME TAX RETURN PREPARERS'' in the
heading and inserting ``TAX RETURN PREPARERS'', and
(II) by striking ``an income tax return preparer'' and
inserting ``a tax return preparer''.
(ii) The item relating to section 7427 in the table of
sections for subchapter B of chapter 76 is amended to read as
follows:
``Sec. 7427. Tax return preparers.''.
(b) Modification of Penalty for Understatement of
Taxpayer's Liability by Tax Return Preparer.--Subsections (a)
and (b) of section 6694 are amended to read as follows:
``(a) Understatement Due to Unreasonable Positions.--
``(1) In general.--Any tax return preparer who prepares any
return or claim for refund with respect to which any part of
an understatement of liability is due to a position described
in paragraph (2) shall pay a penalty with respect to each
such return or claim in an amount equal to the greater of--
``(A) $1,000, or
``(B) 50 percent of the income derived (or to be derived)
by the tax return preparer with respect to the return or
claim.
``(2) Unreasonable position.--A position is described in
this paragraph if--
``(A) the tax return preparer knew (or reasonably should
have known) of the position,
``(B) there was not a reasonable belief that the position
would more likely than not be sustained on its merits, and
``(C)(i) the position was not disclosed as provided in
section 6662(d)(2)(B)(ii), or
``(ii) there was no reasonable basis for the position.
``(3) Reasonable cause exception.--No penalty shall be
imposed under this subsection if it is shown that there is
reasonable cause for the understatement and the tax return
preparer acted in good faith.
``(b) Understatement Due to Willful or Reckless Conduct.--
``(1) In general.--Any tax return preparer who prepares any
return or claim for refund with respect to which any part of
an understatement of liability is due to a conduct described
in paragraph (2) shall pay a penalty with respect to each
such return or claim in an amount equal to the greater of--
``(A) $5,000, or
``(B) 50 percent of the income derived (or to be derived)
by the tax return preparer with respect to the return or
claim.
``(2) Willful or reckless conduct.--Conduct described in
this paragraph is conduct by the tax return preparer which
is--
``(A) a willful attempt in any manner to understate the
liability for tax on the return or claim, or
``(B) a reckless or intentional disregard of rules or
regulations.
``(3) Reduction in penalty.--The amount of any penalty
payable by any person by reason of this subsection for any
return or claim for refund shall be reduced by the amount of
the penalty paid by such person by reason of subsection
(a).''.
(c) Effective Date.--The amendments made by this section
shall apply to returns prepared after the date of the
enactment of this Act.
SEC. 312. PENALTIES FOR FAILURE TO FILE CERTAIN RETURNS
ELECTRONICALLY.
(a) In General.--Part I of subchapter A of chapter 68
(relating to additions to the tax, additional amounts, and
assessable penalties) is amended by inserting after section
6652 the following new section:
``SEC. 6652A. FAILURE TO FILE CERTAIN RETURNS ELECTRONICALLY.
``(a) In General.--If a person fails to file a return
described in section 6651 or 6652(c)(1) in electronic form as
required under section 6011(e)--
``(1) such failure shall be treated as a failure to file
such return (even if filed in a form other than electronic
form), and
``(2) the penalty imposed under section 6651 or 6652(c),
whichever is appropriate, shall be equal to the greater of--
``(A) the amount of the penalty under such section,
determined without regard to this section, or
``(B) the amount determined under subsection (b).
``(b) Amount of Penalty.--
[[Page S4489]]
``(1) In general.--Except as provided in paragraphs (2) and
(3), the penalty determined under this subsection is equal to
$40 for each day during which a failure described under
subsection (a) continues. The maximum penalty under this
paragraph on failures with respect to any 1 return shall not
exceed the lesser of $20,000 or 10 percent of the gross
receipts of the taxpayer for the year.
``(2) Increased penalties for taxpayers with gross receipts
between $1,000,000 and $100,000,000.--
``(A) Taxpayers with gross receipts between $1,000,000 and
$25,000,000.--In the case of a taxpayer having gross receipts
exceeding $1,000,000 but not exceeding $25,000,000 for any
year--
``(i) the first sentence of paragraph (1) shall be applied
by substituting `$200' for `$40', and
``(ii) in lieu of applying the second sentence of paragraph
(1), the maximum penalty under paragraph (1) shall not exceed
$100,000.
``(B) Taxpayers with gross receipts over $25,000,000.--
Except as provided in paragraph (3), in the case of a
taxpayer having gross receipts exceeding $25,000,000 for any
year--
``(i) the first sentence of paragraph (1) shall be applied
by substituting `$500' for `$40', and
``(ii) in lieu of applying the second sentence of paragraph
(1), the maximum penalty under paragraph (1) shall not exceed
$250,000.
``(3) Increased penalties for certain taxpayers with gross
receipts exceeding $100,000,000.--In the case of a return
described in section 6651--
``(A) Taxpayers with gross receipts between $100,000,000
and $250,000,000.--In the case of a taxpayer having gross
receipts exceeding $100,000,000 but not exceeding
$250,000,000 for any year--
``(i) the amount of the penalty determined under this
subsection shall equal the sum of--
``(I) $50,000, plus
``(II) $1,000 for each day during which such failure
continues (twice such amount for each day such failure
continues after the first such 60 days), and
``(ii) the maximum amount under clause (i)(II) on failures
with respect to any 1 return shall not exceed $200,000.
``(B) Taxpayers with gross receipts over $250,000,000.--In
the case of a taxpayer having gross receipts exceeding
$250,000,000 for any year--
``(i) the amount of the penalty determined under this
subsection shall equal the sum of--
``(I) $250,000, plus
``(II) $2,500 for each day during which such failure
continues (twice such amount for each day such failure
continues after the first such 60 days), and
``(ii) the maximum amount under clause (i)(II) on failures
with respect to any 1 return shall not exceed $250,000.
``(C) Exception for certain returns.--Subparagraphs (A) and
(B) shall not apply to any return of tax imposed under
section 511.''.
(b) Clerical Amendment.--The table of sections for part I
of subchapter A of chapter 68 is amended by inserting after
the item relating to section 6652 the following new item:
``Sec. 6652A. Failure to file certain returns electronically.''.
(c) Effective Date.--The amendments made by this section
shall apply to returns required to be filed on or after
January 1, 2008.
SEC. 313. PENALTY FOR FILING ERRONEOUS REFUND CLAIMS.
(a) In General.--Part I of subchapter B of chapter 68
(relating to assessable penalties) is amended by inserting
after section 6675 the following new section:
``SEC. 6676. ERRONEOUS CLAIM FOR REFUND OR CREDIT.
``(a) Civil Penalty.--If a claim for refund or credit with
respect to income tax (other than a claim for a refund or
credit relating to the earned income credit under section 32)
is made for an excessive amount, unless it is shown that the
claim for such excessive amount has a reasonable basis, the
person making such claim shall be liable for a penalty in an
amount equal to 20 percent of the excessive amount.
``(b) Excessive Amount.--For purposes of this section, the
term `excessive amount' means in the case of any person the
amount by which the amount of the claim for refund or credit
for any taxable year exceeds the amount of such claim
allowable under this title for such taxable year.
``(c) Coordination With Other Penalties.--This section
shall not apply to any portion of the excessive amount of a
claim for refund or credit on which a penalty is imposed
under part II of subchapter A of chapter 68.''.
(b) Conforming Amendment.--The table of sections for part I
of subchapter B of chapter 68 is amended by inserting after
the item relating to section 6675 the following new item:
``Sec. 6676. Erroneous claim for refund or credit.''.
(c) Effective Date.--The amendments made by this section
shall apply to any claim--
(1) filed or submitted after the date of the enactment of
this Act, or
(2) filed or submitted prior to such date but not withdrawn
before the date which is 30 days after such date of
enactment.
Subtitle B--Requiring Economic Substance
SEC. 321. CLARIFICATION OF ECONOMIC SUBSTANCE DOCTRINE.
(a) In General.--Section 7701 is amended by redesignating
subsection (p) as subsection (q) and by inserting after
subsection (o) the following new subsection:
``(p) 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.''.
[[Page S4490]]
(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. 322. 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 a
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(p)(1)) for the transaction giving
rise to the claimed benefit or the transaction was not
respected under section 7701(p)(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 first letter of proposed
deficiency which allows the taxpayer an opportunity for
administrative review in the Internal 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
6707A(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. 323. 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''
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.
Subtitle C--Miscellaneous
SEC. 331. DENIAL 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:
``(h) 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.
TITLE IV--TECHNICAL AND CONFORMING AMENDMENTS; SUNSET
SEC. 401. TECHNICAL AND CONFORMING AMENDMENTS.
The Secretary of the Treasury or the Secretary's delegate
shall not later than 90 days after the date of the enactment
of this Act, submit to the Committee on Ways and Means of the
House of Representatives and the Committee on Finance of the
Senate a draft of any technical and conforming changes in the
Internal Revenue Code of 1986 which are necessary to reflect
throughout such Code the purposes of the provisions of, and
amendments made by, this Act.
SEC. 402. SUNSET.
(a) In General.--All provisions of, and amendments made by,
this Act shall not apply to taxable years beginning after
December 31, 2012.
(b) Application of Code.--The Internal Revenue Code of 1986
shall be applied and administered to taxable years described
in subsection (a) as if the provisions of, and amendments
made by, this Act had never been enacted.
______
By Mrs. FEINSTEIN (for herself and Mrs. Boxer):
S. 1112. A bill to allow for the renegotiation of the payment
schedule of contracts between the Secretary of the Interior and the
Redwood Valley County Water District, and for other purposes; to the
Committee on Energy and Natural Resources.
Mrs. FEINSTEIN. Mr. President, I rise today to introduce the Redwood
[[Page S4491]]
Valley County Water District Loan Renegotiation Act of 2007. I am
pleased that Senator Boxer is a cosponsor of this bill.
This bill seeks to remove roadblocks to the implementation of 1988
legislation that requires the Secretary of the Interior to renegotiate
debts owed by the Redwood Valley County Water District to the United
States. Enactment of this bill is necessary so that Redwood Valley can
obtain a reliable water supply.
In 1983, the Redwood Valley County Water District completed a project
which supplied water to a rural agricultural community near Ukiah, CA.
Two Bureau of Reclamation loans totaling $7.3 million contributed to
the financing of this project.
Unfortunately, the District was unable to repay these loans. This
occurred for several reasons: The projected water use in the original
feasibility study, developed by the District and reviewed by the
Bureau, was seriously flawed; the District's ability to raise necessary
revenues was compromised by a judicially imposed moratorium on new
hook-ups; and concerns for endangered species reduced the District's
potential water supply allotment by 33 percent.
As a result, in 1988 Congress passed Section 15 of Public Law 100-516
which indefinitely suspended the District's obligations to repay these
Bureau loans and ordered the Secretary of Interior to renegotiate the
loans. This loan renegotiation has yet to take place and now the
District finds that its water supply is highly uncertain.
In 2000 in a report on Redwood Valley, the Bureau of Reclamation
recognized these changed conditions, and concluded that the District
needs a reliable water supply before it can solve its current financial
dilemma.
The District recently identified two potential new projects, either
of which could prove a reliable water source. No government funds will
be sought for these projects. The District intends to rely on private
financing, a strategy that the Bureau of Reclamation is encouraging.
However, before the District can secure private financing for new
projects, it must renegotiate the existing loans to provide for their
repayment subsequent to the repayment of the new loans.
The existing loans are an impediment to the District's attempts to
upgrade elements of its existing plant. As an example, the District
unsuccessfully sought private financing to build a 100 kW solar panel
project. This project would have enabled the District to cut its energy
costs and to qualify for energy rebates.
Significantly, this legislation requires the District to repay to the
United States the currently suspended loans once the District's new
loans have been paid.
The only difference between this bill and S. 3189, which I introduced
last year, is to clarify that no renegotiations are required to trigger
the District's obligations to repay the loans and the Secretary of
Interior ``shall reschedule the payments due'' once the District has
satisfied its additional financial obligations.
The proposed water projects will enable the District to generate
adequate revenues to allow the District to repay both its new private
loans and its original loans from the United States. By providing a
workable and reasonable solution to a longstanding problem, this
legislation creates a win-win solution for taxpayers of the United
States and the rate payers of the Redwood Valley County Water District.
I urge my colleagues to support this bill and 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. 1112
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. RENEGOTIATION OF PAYMENT SCHEDULE.
Section 15 of Public Law 100-516 (102 Stat. 2573) is
amended as follows:
(1) By amending paragraph (2) of subsection (a) to read as
follows:
``(2) If, as of January 1, 2006, the Secretary of the
Interior and the Redwood Valley County Water District have
not renegotiated the schedule of payment, the District may
enter into such additional non-Federal obligations as are
necessary to finance procurement of dedicated water rights
and improvements necessary to store and convey those rights
to provide for the District's water needs. The Secretary
shall reschedule the payments due under loans numbered 14-06-
200-8423A and 14-06-200-8423A Amendatory and said payments
shall commence when such additional obligations have been
financially satisfied by the District. The date of the
initial payment owed by the District to the United States
shall be regarded as the start of the District's repayment
period and the time upon which any interest shall first be
computed and assessed under section 5 of the Small
Reclamation Projects Act of 1956 (43 U.S.C. 422a et seq.).''.
(2) By striking subsection (c).
______
By Mrs. FEINSTEIN (for herself and Mr. Specter):
S. 1114. A bill to reiterate the exclusivity of the Foreign
Intelligence Surveillance Act of 1978 as the sole authority to permit
the conduct of electronic surveillance, to modernize surveillance
authorities, and for other purposes; to the Committee on the Judiciary.
Mrs. FEINSTEIN. Mr. President, I rise today to re-introduce
legislation from the last Congress that would bring all electronic
surveillance of terrorists under the color of law and would modernize
the rules for conducting such surveillance. I am pleased that Senator
Specter, the Ranking Member of the Judiciary Committee, has co-
sponsored this legislation.
We all agree that the President and the Intelligence Community should
have all the tools they need to find the terrorists before they have a
chance to strike us again. This cannot be said too many times in too
many ways.
We also agree, though, that these intelligence tools can and should
be used in a way that protects the constitutional and privacy rights of
all Americans. That is the balance that this legislation attempts to
strike.
Nowhere is this more at issue than in electronic surveillance, where
government officials record the content of Americans' phone and
electronic communications. This important means of obtaining critical
counterterrorism information is at the same time a significant,
constitutionally recognized intrusion into Americans' privacy rights.
It is worth reminding ourselves of this. We have recently focused on
the use of National Security Letters, through which the FBI
inappropriately obtained telephone records of at least hundreds of
Americans. Electronic surveillance goes far beyond records and collects
the actual content--the words spoken over the phone or typed in email.
It is also worth reminding ourselves of why this legislation is
necessary, as it has been several months before this was the top
legislative issue before the Senate.
For more than five years since September 11, 2001, the National
Security Agency collected the content of calls from or to United States
persons--citizens and permanent residents--without a court order as is
required by the Foreign Intelligence Surveillance Act of 1978 (FISA).
This surveillance was done without notifying and seeking
authorization from the congressional intelligence committees. The
President and Vice President have very closely restricted disclosure of
information about what they call the ``Terrorist Surveillance
Program.''
Until this surveillance came to light through an article in The New
York Times in December 2005, only eight members of Congress were
briefed on it. Even after the article came out, the White House refused
to brief the members of the House and Senate Intelligence Committees
for several months.
Even now, the Intelligence Committee does not have all the
information it needs to carry out its Constitutional oversight duties.
Throughout 2006, the Judiciary Committee debated various bills to
authorize or prohibit electronic surveillance outside of FISA. The bill
that Senator Specter and I authored last year, which is being re-
introduced today, was reported out of Judiciary on a bipartisan vote on
September 13, 2006. The Senate, however, took no legislative action
prior to adjournment.
Then, on January 17, 2007, Attorney General Alberto Gonzales notified
the chairman and ranking member of the Senate Judiciary Committee that
the FISA Court had authorized the Terrorist Surveillance Program. Since
January, the program has proceeded
[[Page S4492]]
under Court supervision, as is required by FISA.
I was pleased that the Administration submitted the TSP to the FISA
Court, and that the Court had found a way to issue an order approving
this surveillance. I was pleased, but not surprised.
I had maintained throughout the legislative debate last year that it
would not take many changes for the TSP to fit under the confines of
FISA. All it took was the willingness of the Administration to follow
legal process.
Members may ask, given the recent developments, why legislation is
now necessary. There are two reasons.
The first is that the Senate should enact this bill is because this
Administration has never conceded the point that it cannot conduct
electronic surveillance outside of the law. It has put the TSP under
FISA Court review, but it asserts that it has the right not to do so.
Future Administrations, if not enjoined, may take the same view.
I disagree with this legal analysis.
Secondly, the Director of the National Security Agency, the Director
of the FBI, and the Attorney General have said on many occasions that
FISA is outdated and in need of modernization. The current FISA process
is too bureaucratic, too slow to initiate electronic surveillance from
the time a suspected terrorist's phone or email account is identified.
This bill addresses those concerns by providing new flexibility and
additional resources to speed the FISA process and allow for the more
timely collection of valuable intelligence.
Allow me to summarize the legislation. The bill: re-iterates that
FISA is the exclusive means for conducting electronic surveillance for
intelligence purposes.
Specifies that FISA's requirements cannot be written off through
contorted interpretations of other statutes. The Administration's
tortured argument with respect to the Authorization for the 2001 Use of
Military Force (AUMF) notwithstanding, this legislation would specify
that FISA's language can only be undone by a specific and direct Act of
Congress.
Requires that Congress, through the Intelligence Committees, be fully
briefed on the Terrorist Surveillance Program and any related
surveillance programs.
Requires the Supreme Court to review, on an expedited basis, the
constitutionality of the Terrorist Surveillance Program.
Streamlines the current ``emergency procedures'' in FISA. Currently,
the Attorney General can authorize surveillance prior to a Court order
for 72 hours in an emergency. This legislation would extend the time
to one week, which should remove any doubt as to whether Court approval
can be sought and obtained in time. The bill also allows the Attorney
General to delegate his authority to initiate electronic surveillance
in an emergency to specific supervisory officials at the NSA and FBI.
Authorizes additional personnel to expedite the writing, submission,
and review of FISA applications. Specifically, additional FISA Court
judges and staff are authorized, as are additional positions at the
Department of Justice, FBI, and NSA.
Extends the existing FISA authority--for 15 days of warrantless
surveillance following a declaration of war--to any 30-day period
following an authorization for the use of military force or a national
emergency following a terrorist attack.
Allows the National Security Agency to take full advantage of its
capabilities to collect intelligence on foreign communications.
While foreign-to-foreign communications are not covered now by FISA's
requirements, the NSA can only conduct surveillance on these calls if
it can be sure, in advance, that a telephone call of email won't
transit the United States or unexpectedly end here. In the age of cell
phones and the global telecommunications system, this a priori
certification is very difficult to make. This legislation therefore
specifies that in such inadvertent collection cases, the NSA must
minimize the data, but that it has not violated the law.
Finally, the legislation clarifies that FISA court orders for
electronic surveillance must be individualized to a particular target
that the government has probable cause to believe is a foreign power or
an agent of a foreign power.
From the briefings I have received as a member of the Intelligence
Committee and the hearings held in Judiciary, I am convinced that the
Terrorist Surveillance Program is an important anti-terrorism tool that
should be continued.
It is also clear from the January FISA Court ruling that the
Terrorist Surveillance Program can be conducted within the confines of
FISA. It is appropriate now for Congress to re-iterate that this is the
appropriate arrangement.
This is by no means an issue that has been overtaken by events. The
Administration continues to support a view of plenary authority in
which it can conduct electronic surveillance in violation of FISA. The
NSA and the FBI continue to labor under a process that was formed 29
years ago, prior to fundamental changes in the telecommunications
system.
I urge the Senate to act to ensure that the law is followed and
privacy rights upheld, and to provide the Intelligence Community the
tools it needs to continue to make us safe.
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. 1114
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 ``Foreign
Intelligence Surveillance Improvement and Enhancement Act of
2007''.
(b) Table of Contents.--The table of contents for this Act
is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
TITLE I--CONSTRUCTION OF FOREIGN INTELLIGENCE SURVEILLANCE AUTHORITY
Sec. 101. Reiteration of chapters 119, 121, and 206 of title 18, United
States Code, and Foreign Intelligence Surveillance Act of
1978 as exclusive means by which domestic electronic
surveillance may be conducted.
Sec. 102. Specific authorization required for any repeal or
modification of title I of the Foreign Intelligence
Surveillance Act of 1978.
Sec. 103. Information for Congress on the terrorist surveillance
program and similar programs.
Sec. 104. Supreme Court review of the Terrorist Surveillance Program.
TITLE II--APPLICATIONS AND PROCEDURES FOR ELECTRONIC SURVEILLANCE FOR
FOREIGN INTELLIGENCE PURPOSES
Sec. 201. Extension of period for applications for orders for emergency
electronic surveillance.
Sec. 202. Additional authority for emergency electronic surveillance.
Sec. 203. Foreign Intelligence Surveillance Court matters.
Sec. 204. Document management system for applications for orders
approving electronic surveillance.
Sec. 205. Additional personnel for preparation and consideration of
applications for orders approving electronic
surveillance.
Sec. 206. Training of Federal Bureau of Investigation and National
Security Agency personnel in foreign intelligence
surveillance matters.
Sec. 207. Enhancement of electronic surveillance authority in wartime.
TITLE III--CLARIFICATIONS TO THE FOREIGN INTELLIGENCE SURVEILLANCE ACT
OF 1978
Sec. 301. Acquisition of foreign-foreign communications.
Sec. 302. Individualized FISA orders.
TITLE IV--OTHER MATTERS
Sec. 401. Authorization of appropriations.
Sec. 402. Effective date.
SEC. 2. DEFINITIONS.
In this Act:
(1) Congressional intelligence committees.--The term
``congressional intelligence committees'' means--
(A) the Select Committee on Intelligence of the Senate; and
(B) the Permanent Select Committee on Intelligence of the
House of Representatives.
(2) Foreign intelligence surveillance court.--The term
``Foreign Intelligence Surveillance Court'' means the court
established by section 103(a) of the Foreign Intelligence
Surveillance Act of 1978 (50 U.S.C. 1803(a)).
(3) United states person.--The term ``United States
person'' has the meaning given such term in section 101(i) of
the Foreign Intelligence Surveillance Act of 1978 (50 U.S.C.
1801(i)).
[[Page S4493]]
TITLE I--CONSTRUCTION OF FOREIGN INTELLIGENCE SURVEILLANCE AUTHORITY
SEC. 101. REITERATION OF CHAPTERS 119, 121, AND 206 OF TITLE
18, UNITED STATES CODE, AND FOREIGN
INTELLIGENCE SURVEILLANCE ACT OF 1978 AS
EXCLUSIVE MEANS BY WHICH DOMESTIC ELECTRONIC
SURVEILLANCE MAY BE CONDUCTED.
(a) Exclusive Means.--Notwithstanding any other provision
of law, chapters 119, 121, and 206 of title 18, United States
Code, and the Foreign Intelligence Surveillance Act of 1978
(50 U.S.C. 1801 et seq.) shall be the exclusive means by
which electronic surveillance (as that term is defined in
section 101(f) of the Foreign Intelligence Surveillance Act
of 1978 (50 U.S.C. 1801(f)) may be conducted.
(b) Amendment to Foreign Intelligence Surveillance Act of
1978.--Section 109(a) of the Foreign Intelligence
Surveillance Act of 1978 (50 U.S.C. 1809(a)) is amended by
striking ``authorized by statute'' each place it appears and
inserting ``authorized by this title or chapter 119, 121, or
206 of title 18, United States Code''.
(c) Amendment to Title 18, United States Code.--Section
2511(2)(a)(ii)(B) of title 18, United States Code, is amended
by striking ``statutory requirements'' and inserting
``requirements under the Foreign Intelligence Surveillance
Act of 1978 (50 U.S.C. 1801 et seq.), this chapter, or
chapters 121 or 206 of this title''.
SEC. 102. SPECIFIC AUTHORIZATION REQUIRED FOR ANY REPEAL OR
MODIFICATION OF TITLE I OF THE FOREIGN
INTELLIGENCE SURVEILLANCE ACT OF 1978.
(a) In General.--Title I of the Foreign Intelligence
Surveillance Act of 1978 (50 U.S.C. 1801 et seq.) is amended
by inserting after section 109 the following new section:
``SPECIFIC AUTHORIZATION REQUIRED FOR ANY REPEAL OR MODIFICATION OF
TITLE
``Sec. 109A. No provision of law shall be construed to
implicitly repeal or modify this title or any provision
thereof, nor shall any provision of law be deemed to repeal
or modify this title in any manner unless such provision of
law, if enacted after the date of the enactment of the
Foreign Intelligence Surveillance Improvement and Enhancement
Act of 2007, expressly amends or otherwise specifically cites
this title.''.
(b) Clerical Amendment.--The table of contents for that Act
is amended by inserting after the item relating to section
109 the following new item:
``Sec. 109A. Specific authorization required for any repeal or
modification of title.''.
SEC. 103. INFORMATION FOR CONGRESS ON THE TERRORIST
SURVEILLANCE PROGRAM AND SIMILAR PROGRAMS.
As soon as practicable after the date of the enactment of
this Act, but not later than seven days after such date, the
President shall brief and inform each member of the
congressional intelligence committees on the following:
(1) The Terrorist Surveillance Program of the National
Security Agency.
(2) Any program which involves, whether in part or in
whole, the electronic surveillance of United States persons
in the United States for foreign intelligence purposes, and
which is conducted by any department, agency, or other
element of the United States Government, or by any entity at
the direction of a department, agency, or other element of
the United States Government, without fully complying with
the procedures set forth in the Foreign Intelligence
Surveillance Act of 1978 (50 U.S.C. 1801 et seq.) or chapter
119, 121, or 206 of title 18, United States Code.
SEC. 104. SUPREME COURT REVIEW OF THE TERRORIST SURVEILLANCE
PROGRAM.
(a) In General.--Upon petition by the United States or any
party to the underlying proceedings, the Supreme Court of the
United States shall review a final decision on the merits
concerning the constitutionality of the Terrorist
Surveillance Program in at least one case that is pending in
the courts of the United States on the date of enactment of
this Act.
(b) Expedited Consideration.--It shall be the duty of the
Supreme Court of the United States to advance on the docket
and to expedite to the greatest possible extent the
disposition of any matter brought under subsection (a).
(c) Definition.--In this section, the term ``Terrorist
Surveillance Program'' means the program identified by the
President on December 17, 2005, to intercept international
communications into and out of the United States of persons
linked to al Qaeda or related terrorist organizations.
TITLE II--APPLICATIONS AND PROCEDURES FOR ELECTRONIC SURVEILLANCE FOR
FOREIGN INTELLIGENCE PURPOSES
SEC. 201. EXTENSION OF PERIOD FOR APPLICATIONS FOR ORDERS FOR
EMERGENCY ELECTRONIC SURVEILLANCE.
Section 105(f) of the Foreign Intelligence Surveillance Act
of 1978 (50 U.S.C. 1805(f)) is amended by striking ``72
hours'' both places it appears and inserting ``168 hours''.
SEC. 202. ADDITIONAL AUTHORITY FOR EMERGENCY ELECTRONIC
SURVEILLANCE.
Section 105 of the Foreign Intelligence Surveillance Act of
1978 (50 U.S.C. 1805) is amended--
(1) by redesignating subsections (g), (h), (i), and (j) as
subsections (h), (i), (j), and (k), respectively; and
(2) by inserting after subsection (f) the following new
subsection (g):
``(g)(1)(A) Notwithstanding any other provision of this
title and subject to the provisions of this subsection, the
Attorney General may, with the concurrence of the Director of
National Intelligence, appoint appropriate supervisory or
executive personnel within the Federal Bureau of
Investigation and the National Security Agency to authorize
electronic surveillance on a United States person in the
United States on an emergency basis pursuant to the
provisions of this subsection.
``(B) For purposes of this subsection, an intelligence
agent or employee acting under the supervision of a
supervisor or executive appointed under subparagraph (A) may
conduct emergency electronic surveillance under this
subsection if such supervisor or executive reasonably
determines that--
``(i) an emergency situation exists with respect to the
employment of electronic surveillance to obtain foreign
intelligence information before an order authorizing such
surveillance can with due diligence be obtained; and
``(ii) the factual basis exists for the issuance of an
order approving such surveillance under this title.
``(2) The supervisors and executives appointed by the
Attorney General under paragraph (1) may only be officials as
follows:
``(A) In the case of the Federal Bureau of Investigation,
officials at or above the level of Special Agent in Charge.
``(B) In the case of the National Security Agency,
officials at or above the level of head of branch of the
National Security Agency.
``(3) A supervisor or executive responsible for the
emergency employment of electronic surveillance under this
subsection shall submit to the Attorney General a request for
approval of the surveillance within 24 hours of the
commencement of the surveillance. The request shall set forth
the ground for the belief specified in paragraph (1),
together with such other information as the Attorney General
shall require.
``(4)(A) The review of a request under paragraph (3) shall
be completed by the official concerned under that paragraph
as soon as practicable, but not more than 72 hours after the
commencement of the electronic surveillance concerned under
paragraph (1).
``(B)(i) If the official concerned determines that the
electronic surveillance does not meet the requirements of
paragraph (1), the surveillance shall terminate immediately
and may not be recommenced by any supervisor or executive
appointed under paragraph (1), or any agent or employee
acting under the supervision of such supervisor or executive,
absent additional facts or changes in circumstances that lead
a supervisor or executive appointed under paragraph (1) to
reasonably believe that the requirements of paragraph (1) are
satisfied.
``(ii) In the event of a determination under clause (i),
the Attorney General shall not be required, under section
106(j), to notify any United States person of the fact that
the electronic surveillance covered by such determination was
conducted before the termination of the surveillance under
that clause. However, the official making such determination
shall notify the court established by section 103(a) of such
determination, and shall also provide notice of such
determination in the first report that is submitted under
section 108(a) after such determination is made.
``(C) If the official concerned determines that the
surveillance meets the requirements of subsection (f), the
surveillance may continue, subject to the requirements of
paragraph (5).
``(5)(A) An application in accordance with this title shall
be made to a judge having jurisdiction under section 103 as
soon as practicable but not more than 168 hours after the
commencement of electronic surveillance under paragraph (1).
``(B) In the absence of a judicial order approving
electronic surveillance commenced under paragraph (1), the
surveillance shall terminate at the earlier of--
``(i) when the information sought is obtained;
``(ii) when the application under subparagraph (A) for an
order approving the surveillance is denied; or
``(iii) 168 hours after the commencement of the
surveillance, unless an application under subparagraph (A) is
pending, in which case the surveillance may continue for up
to an additional 24 hours while the judge has the application
under advisement.
``(C) If an application under subparagraph (A) for an order
approving electronic surveillance commenced under paragraph
(1) is denied, or in any other case in which the surveillance
is terminated and no order approving the surveillance is
issued by a court, the use of information obtained or
evidence derived from the surveillance shall be governed by
the provisions of subsection (f).
``(D) The denial of an application submitted under
subparagraph (A) may be reviewed as provided in section 103.
``(6) Any person who engages in the emergency employment of
electronic surveillance under paragraph (1) shall follow the
minimization procedures otherwise required by this title for
the issuance of a judicial order approving the conduct of
electronic surveillance.
``(7) Not later than 30 days after appointing supervisors
and executives under paragraph (1) to authorize the exercise
of authority in
[[Page S4494]]
that paragraph, the Attorney General, in consultation with
the Director of National Intelligence, shall submit to the
court established by section 103(a), the Select Committee on
Intelligence of the Senate, and the Permanent Select
Committee on Intelligence of the House of Representatives,
and bring up to date as required, a report that--
``(A) identifies the number of supervisors and executives
who have been so appointed and the positions held by such
supervisors and executives; and
``(B) sets forth guidelines or other directives that
describe the responsibilities of such supervisors and
executives under this subsection.''.
SEC. 203. FOREIGN INTELLIGENCE SURVEILLANCE COURT MATTERS.
(a) Authority for Additional Judges.--Section 103(a) of the
Foreign Intelligence Surveillance Act of 1978 (50 U.S.C.
1803(a)) is amended--
(1) by inserting ``(1)'' after ``(a)'';
(2) in paragraph (1), as so designated, by inserting ``at
least'' before ``seven of the United States judicial
circuits'';
(3) by designating the second sentence as paragraph (4) and
indenting such paragraph, as so designated, two ems from the
left margin; and
(4) by inserting after paragraph (1), as so designated, the
following new paragraph:
``(2) In addition to the judges designated under paragraph
(1), the Chief Justice of the United States may designate as
judges of the court established by paragraph (1) such judges
appointed under Article III of the Constitution of the United
States as the Chief Justice determines appropriate in order
to provide for the prompt and timely consideration under
section 105 of applications under section 104 for electronic
surveillance under this title. Any judge designated under
this paragraph shall be designated publicly.''.
(b) Consideration of Emergency Applications.--Such section
is further amended by inserting after paragraph (2), as added
by subsection (a)(4) of this section, the following new
paragraph:
``(3) A judge of the court shall make a determination to
approve, deny, or seek modification of an application
submitted pursuant to section subsection (f) or (g) of
section 105 not later than 24 hours after the receipt of such
application by the court.''.
SEC. 204. DOCUMENT MANAGEMENT SYSTEM FOR APPLICATIONS FOR
ORDERS APPROVING ELECTRONIC SURVEILLANCE.
(a) System Required.--The Attorney General shall, in
consultation with the Director of the Federal Bureau of
Investigation, the Director of the National Security Agency,
and the Foreign Intelligence Surveillance Court, develop and
implement a secure, classified document management system
that permits the prompt preparation, modification, and review
by appropriate personnel of the Department of Justice, the
Federal Bureau of Investigation, the National Security
Agency, and other applicable elements of the United States
Government of applications under section 104 of the Foreign
Intelligence Surveillance Act of 1978 (50 U.S.C. 1804) before
their submittal to the Foreign Intelligence Surveillance
Court.
(b) Scope of System.--The document management system
required by subsection (a) shall--
(1) permit and facilitate the prompt submittal of
applications to the Foreign Intelligence Surveillance Court
under section 104 or 105(g)(5) of the Foreign Intelligence
Surveillance Act of 1978 (50 U.S.C. 1804 and 1805(g)(5)); and
(2) permit and facilitate the prompt transmittal of rulings
of the Foreign Intelligence Surveillance Court to personnel
submitting applications described in paragraph (1).
SEC. 205. ADDITIONAL PERSONNEL FOR PREPARATION AND
CONSIDERATION OF APPLICATIONS FOR ORDERS
APPROVING ELECTRONIC SURVEILLANCE.
(a) Office of Intelligence Policy and Review.--
(1) Additional personnel.--The Office of Intelligence
Policy and Review of the Department of Justice is hereby
authorized such additional personnel as may be necessary to
carry out the prompt and timely preparation, modification,
and review of applications under section 104 of the Foreign
Intelligence Surveillance Act of 1978 (50 U.S.C. 1804) for
orders under section 105 of that Act (50 U.S.C. 1805)
approving electronic surveillance for foreign intelligence
purposes.
(2) Assignment.--The Attorney General shall assign
personnel authorized by paragraph (1) to and among
appropriate offices of the National Security Agency in order
that such personnel may directly assist personnel of the
Agency in preparing applications described in that paragraph.
(b) Federal Bureau of Investigation.--
(1) Additional legal and other personnel.--The National
Security Branch of the Federal Bureau of Investigation is
hereby authorized such additional legal and other personnel
as may be necessary to carry out the prompt and timely
preparation of applications under section 104 of the Foreign
Intelligence Surveillance Act of 1978 (50 U.S.C. 1804) for
orders under section 105 of that Act (50 U.S.C. 1805)
approving electronic surveillance for foreign intelligence
purposes.
(2) Assignment.--The Director of the Federal Bureau of
Investigation shall assign personnel authorized by paragraph
(1) to and among the field offices of the Federal Bureau of
Investigation in order that such personnel may directly
assist personnel of the Bureau in such field offices in
preparing applications described in that paragraph.
(c) Additional Legal and Other Personnel for National
Security Agency.--The National Security Agency is hereby
authorized such additional legal and other personnel as may
be necessary to carry out the prompt and timely preparation
of applications under section 104 of the Foreign Intelligence
Surveillance Act of 1978 (50 U.S.C. 1804) for orders under
section 105 of that Act (50 U.S.C. 1805) approving electronic
surveillance for foreign intelligence purposes.
(d) Additional Legal and Other Personnel for Foreign
Intelligence Surveillance Court.--There is hereby authorized
for the Foreign Intelligence Surveillance Court such
additional staff personnel as may be necessary to facilitate
the prompt and timely consideration by that Court of
applications under section 104 of the Foreign Intelligence
Surveillance Act of 1978 (50 U.S.C. 1804) for orders under
section 105 of that Act (50 U.S.C. 1805) approving electronic
surveillance for foreign intelligence purposes. Personnel
authorized by this paragraph shall perform such duties
relating to the consideration of such applications as that
Court shall direct.
(e) Supplement Not Supplant.--The personnel authorized by
this section are in addition to any other personnel
authorized by law.
SEC. 206. TRAINING OF FEDERAL BUREAU OF INVESTIGATION AND
NATIONAL SECURITY AGENCY PERSONNEL IN FOREIGN
INTELLIGENCE SURVEILLANCE MATTERS.
The Director of the Federal Bureau of Investigation and the
Director of the National Security Agency shall each, in
consultation with the Attorney General--
(1) develop regulations to establish procedures for
conducting and seeking approval of electronic surveillance on
an emergency basis, and for preparing and properly submitting
and receiving applications and orders, under sections 104 and
105 of the Foreign Intelligence Surveillance Act of 1978 (50
U.S.C. 1804 and 1805); and
(2) prescribe related training for the personnel of the
applicable agency.
SEC. 207. ENHANCEMENT OF ELECTRONIC SURVEILLANCE AUTHORITY IN
WARTIME.
Section 111 of the Foreign Intelligence Surveillance Act of
1978 (50 U.S.C. 1811) is amended by striking ``fifteen
calendar days following a declaration of war by the
Congress.'' and inserting ``30 calendar days following any of
the following:
``(1) A declaration of war by the Congress.
``(2) An authorization for the use of military force within
the meaning of section 2(c)(2) of the War Powers Resolution
(50 U.S.C. 1541(c)(2)).
``(3) A national emergency created by attack upon the
United States, its territories or possessions, or the Armed
Forces within the meaning of section 2(c)(3) of the War
Powers Resolution (50 U.S.C. 1541(c)(3)).''.
TITLE III--CLARIFICATIONS TO THE FOREIGN INTELLIGENCE SURVEILLANCE ACT
OF 1978
SEC. 301. ACQUISITION OF FOREIGN-FOREIGN COMMUNICATIONS.
(a) In General.--Notwithstanding any other provision of
this Act or the Foreign Intelligence Surveillance Act of 1978
(50 U.S.C. 1801 et seq.), no court order shall be required
for the acquisition through electronic surveillance of the
contents of any communication between one person who is not
located within the United States and another person who is
not located within the United States for the purpose of
collecting foreign intelligence information even if such
communication passes through, or the surveillance device is
located within, the United States.
(b) Treatment of Intercepted Communications Involving
Domestic Party.--If surveillance conducted as described in
subsection (a) inadvertently collects a communication in
which at least one party is within the United States, the
contents of such communications shall be handled in
accordance with the minimization procedures set forth in
section 101(h)(4) of the Foreign Intelligence Surveillance
Act of 1978 (50 U.S.C. 1801(h)(4)).
(c) Definitions.--In this section, the terms ``contents'',
``electronic surveillance'', and ``foreign intelligence
information'' have the meaning given such terms in section
101 of the Foreign Intelligence Surveillance Act of 1978 (50
U.S.C. 1801).
SEC. 302. INDIVIDUALIZED FISA ORDERS.
Any order issued pursuant to section 105 of the Foreign
Intelligence Surveillance Act of 1978 (50 U.S.C. 1805)
authorizing electronic surveillance shall be supported by an
individualized or particularized finding of probable cause to
believe the target of the electronic surveillance is a
foreign power or an agent of a foreign power.
TITLE IV--OTHER MATTERS
SEC. 401. AUTHORIZATION OF APPROPRIATIONS.
There is authorized to be appropriated such sums as may be
necessary to carry out this Act and the amendments made by
this Act.
SEC. 402. EFFECTIVE DATE.
Except as provided in section 103, this Act, and the
amendments made by this Act, shall take effect on the date
that is 30 days after the date of the enactment of this Act.
______
By Mr. BINGAMAN (for himself, Mr. Domenici, Mr. Dorgan, Mr.
[[Page S4495]]
Lugar, Mr. Akaka, Ms. Murkowski, and Mr. Craig):
S. 1115. A bill to promote the efficient use of oil, natural gas, and
electricity, reduce oil consumption, and heighten energy efficiency
standards for consumer products and industrial equipment, and for other
purposes; to the Committee on Energy and Natural Resources.
Mr. BINGAMAN. Mr. President, I rise to introduce a comprehensive
Energy efficiency bill. I am pleased to have the Ranking Member of the
Energy Committee, the senior Senator from New Mexico, as my co-sponsor,
along with Senator Dorgan, Senator Lugar, Senator Akaka, Senator
Murkowski and Senator Craig.
Energy efficiency can be viewed as the Nation's largest energy
resource. Due to actions taken to increase efficiency since the 1973
oil crisis, we now save more energy each year than we get from any
single energy supply resource, including oil.
When the Energy Policy Act of 2005 was signed into law in August of
2005, it included a strong package of energy efficiency initiatives.
However, just a month later, when hurricanes devastated our Nation's
primary oil and gas supply region and many of us recognized that we
needed to enact additional and more aggressive efficiency measures.
During the last 2 years, gasoline, natural gas, and electricity
prices have reached all-time high levels. These price increases cost
American families and businesses over $300 billion dollars each year.
In the 2006 elections, voters sent us a clear message that they wanted
Congress to address high energy prices and also to provide solutions to
climate change. Energy efficiency policies can alleviate both of these
problems.
Our bill includes provisions that will improve efficiency in
vehicles, buildings, appliances and industrial equipment. The
legislation is also intended to motivate States and utilities to
recognize energy efficiency as a resource and to remove current
disincentives to programs that will benefit utility customers while
reducing demand for electricity and natural gas.
Improving our energy productivity through efficiency has multiple
benefits--it lowers the costs of consumers' energy bills; decreases the
vulnerability of the economy to energy price shocks from natural
disasters or problems with foreign sources of supply; provides
environmental benefits such as lower air pollution and reduced
greenhouse gas emissions. Moreover, energy efficiency investments help
build local jobs and improve state economies.
The bill we are introducing today includes initiatives in six key
areas: Promoting the development and use of advanced lighting
technologies; Expediting new efficiency standards for appliances and
industrial equipment; Promoting high efficiency vehicles, advanced
batteries and energy storage; Setting aggressive goals for reducing
gasoline consumption and improving overall energy productivity in the
U.S.; Promoting Federal leadership in energy efficiency and renewable
energy; and Assisting States, local governments and utilities in energy
efficiency efforts.
In addition to the Energy Efficiency Promotion Act, I want to
emphasize that other Senate committees are working on complementary
efficiency initiatives, including the energy efficiency tax provisions
we are developing in the Finance Committee and CAFE standards
legislation in the Commerce Committee.
Finally, for the information on my colleagues, this bill is the 4th
in a quartet of Energy bills that will be taken up by the Energy and
Natural Resources Committee in the next few weeks. These bills are: S.
987, the Biofuels for Energy Security and Transportation Act; S. 731,
the National Carbon Dioxide Storage Capacity Assessment Act; and S. 962
the Department of Energy Carbon Capture and Storage R D&D Act. We are
working diligently to meet the Majority Leader's timetable for floor
action on Energy legislation. I encourage Senators with questions or
concerns about any of these bills to let me know so that we can try to
address issues in a timely manner.
I have included at the end of my statement a preliminary estimate of
the energy savings that would result from the implementation of the
programs in this bill. I request that this estimate be printed in the
Record.
There being no objection the material was ordered to be printed as
follows.
Energy Saving Estimate for the Energy Efficiency Promotion Act
Potential savings from the appliance efficiency standards
included in Titles I and II: Electricity--At least 50 billion
kilowatt hours per year, or enough to power roughly 4.8
million typical U.S. households; Natural gas--170 million
therms per year or enough to heat about a quarter million
typical U.S. homes; Water--At least 560 million gallons per
day, or about 1.3 percent of total daily potable water usage;
and Dollars--More than $12 billion in net present benefits
for consumers.
Potential Savings From Federal Government Leadership in Efficiency--
Title V
The Federal Government consumed 1.1 quadrillion Btus or
``quads'' of energy during Fiscal Year 2005. The Federal
energy bill for Fiscal Year 2005 increased by 24 percent
compared to Fiscal Year 2004.
About 30 percent of the Federal energy use is in standard
buildings and about 60 percent is energy used by vehicles and
equipment. Although savings can not be estimated at this
time--the legislation requires the Federal Government to
achieve a 30 percent reduction in energy usage per square
foot by 2015 and to reduce its use of gasoline in fleet
vehicles by 30 percent in Fiscal Year 2016.
Potential Savings From Electric and Gas Utility Efficiency Programs--
Title VI
Assuming all State utility regulatory commissions and
nonregulated utilities adopt the energy efficiency policies
and cost-effective energy efficiency programs recommended in
this bill, the estimate cumulative potential energy savings
by 2020 would be 7.8 quads and the energy cost savings would
be $12 billion.
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. 1115
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
Efficiency Promotion Act of 2007''.
(b) Table of Contents.--The table of contents of this Act
is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Definition of Secretary.
TITLE I--PROMOTING ADVANCED LIGHTING TECHNOLOGIES
Sec. 101. Accelerated procurement of energy efficient lighting.
Sec. 102. Incandescent reflector lamp efficiency standards.
Sec. 103. Bright Tomorrow Lighting Prizes.
Sec. 104. Sense of Senate concerning efficient lighting standards.
TITLE II--EXPEDITING NEW ENERGY EFFICIENCY STANDARDS
Sec. 201. Definition of energy conservation standard.
Sec. 202. Regional standards for heating and cooling products.
Sec. 203. Furnace fan rulemaking.
Sec. 204. Expedited rulemakings.
Sec. 205. Preemption limitation.
Sec. 206. Energy efficiency labeling for consumer products.
Sec. 207. Residential boiler efficiency standards.
Sec. 208. Technical corrections.
Sec. 209. Electric motor efficiency standards.
Sec. 210. Energy standards for home appliances.
Sec. 211. Improved energy efficiency for appliances and buildings in
cold climates.
Sec. 212. Deployment of new technologies for high-efficiency consumer
products.
TITLE III--PROMOTING HIGH EFFICIENCY VEHICLES, ADVANCED BATTERIES, AND
ENERGY STORAGE
Sec. 301. Lightweight materials research and development.
Sec. 302. Loan guarantees for fuel-efficient automobile parts
manufacturers.
Sec. 303. Advanced technology vehicles manufacturing incentive program.
Sec. 304. Energy storage competitiveness.
TITLE IV--SETTING ENERGY EFFICIENCY GOALS
Sec. 401. National goals for energy savings in transportation.
Sec. 402. National energy efficiency improvement goals.
Sec. 403. Nationwide media campaign to increase energy efficiency.
TITLE V--PROMOTING FEDERAL LEADERSHIP IN ENERGY EFFICIENCY AND
RENEWABLE ENERGY
Sec. 501. Federal fleet conservation requirements.
Sec. 502. Federal requirement to purchase electricity generated by
renewable energy.
[[Page S4496]]
Sec. 503. Energy savings performance contracts.
Sec. 504. Energy management requirements for Federal buildings.
Sec. 505. Combined heat and power and district energy installations at
Federal sites.
Sec. 506. Federal building energy efficiency performance standards.
Sec. 507. Application of International Energy Conservation Code to
public and assisted housing.
TITLE VI--ASSISTING STATE AND LOCAL GOVERNMENTS IN ENERGY EFFICIENCY
Sec. 601. Weatherization assistance for low-income persons.
Sec. 602. State energy conservation plans.
Sec. 603. Utility energy efficiency programs.
Sec. 604. Energy efficiency and demand response program assistance.
Sec. 605. Energy and environmental block grant.
Sec. 606. Energy sustainability and efficiency grants for institutions
of higher education.
Sec. 607. Workforce training.
Sec. 608. Assistance to States to reduce school bus idling.
SEC. 2. DEFINITION OF SECRETARY.
In this Act, the term ``Secretary'' means the Secretary of
Energy.
TITLE I--PROMOTING ADVANCED LIGHTING TECHNOLOGIES
SEC. 101. ACCELERATED PROCUREMENT OF ENERGY EFFICIENT
LIGHTING.
Section 553 of the National Energy Conservation Policy Act
(42 U.S.C. 8259b) is amended by adding the following:
``(f) Accelerated Procurement of Energy Efficient
Lighting.--
``(1) In general.--Not later than October 1, 2010, in
accordance with guidelines issued by the Secretary, all
general purpose lighting in Federal buildings shall be Energy
Star products or products designated under the Federal Energy
Management Program.
``(2) Guidelines.--Not later than 180 days after the date
of enactment of this subsection, the Secretary shall issue
guidelines to carry out this subsection.''.
SEC. 102. INCANDESCENT REFLECTOR LAMP EFFICIENCY STANDARDS.
(a) Definitions.--Section 321 of the Energy Policy and
Conservation Act (42 U.S.C. 6291) is amended--
(1) in paragraph (30)(C)(ii)--
(A) in the matter preceding subclause (I)--
(i) by striking ``or similar bulb shapes (excluding ER or
BR)'' and inserting ``ER, BR, BPAR, or similar bulb shapes'';
and
(ii) by striking ``2.75'' and inserting ``2.25''; and
(B) by striking ``is either--'' and all that follows
through subclause (II) and inserting ``has a rated wattage
that is 40 watts or higher''; and
(2) by adding at the end the following:
``(52) BPAR incandescent reflector lamp.--The term `BPAR
incandescent reflector lamp' means a reflector lamp as shown
in figure C78.21-278 on page 32 of ANSI C78.21-2003.
``(53) BR incandescent reflector lamp; br30; br40.--
``(A) BR incandescent reflector lamp.--The term `BR
incandescent reflector lamp' means a reflector lamp that
has--
``(i) a bulged section below the major diameter of the bulb
and above the approximate baseline of the bulb, as shown in
figure 1 (RB) on page 7 of ANSI C79.1-1994, incorporated by
reference in section 430.22 of title 10, Code of Federal
Regulations (as in effect on the date of enactment of this
paragraph); and
``(ii) a finished size and shape shown in ANSI C78.21-1989,
including the referenced reflective characteristics in part 7
of ANSI C78.21-1989, incorporated by reference in section
430.22 of title 10, Code of Federal Regulations (as in effect
on the date of enactment of this paragraph).
``(B) BR30.--The term `BR30' means a BR incandescent
reflector lamp with a diameter of 30/8ths of an inch.
``(C) BR40.--The term `BR40' means a BR incandescent
reflector lamp with a diameter of 40/8ths of an inch.
``(54) ER incandescent reflector lamp; er30; er40.--
``(A) ER incandescent reflector lamp.--The term `ER
incandescent reflector lamp' means a reflector lamp that
has--
``(i) an elliptical section below the major diameter of the
bulb and above the approximate baseline of the bulb, as shown
in figure 1 (RE) on page 7 of ANSI C79.1-1994, incorporated
by reference in section 430.22 of title 10, Code of Federal
Regulations (as in effect on the date of enactment of this
paragraph); and
``(ii) a finished size and shape shown in ANSI C78.21-1989,
incorporated by reference in section 430.22 of title 10, Code
of Federal Regulations (as in effect on the date of enactment
of this paragraph).
``(B) ER30.--The term `ER30' means an ER incandescent
reflector lamp with a diameter of 30/8ths of an inch.
``(C) ER40.--The term `ER40' means an ER incandescent
reflector lamp with a diameter of 40/8ths of an inch.
``(55) R20 incandescent reflector lamp.--The term `R20
incandescent reflector lamp' means a reflector lamp that has
a face diameter of approximately 2.5 inches, as shown in
figure 1(R) on page 7 of ANSI C79.1-1994.''.''.
(b) Standards for Fluorescent Lamps and Incandescent
Reflector Lamps.--Section 325(i) of the Energy Policy and
Conservation Act (42 U.S.C. 6925(i)) is amended by striking
paragraph (1) and inserting the following:
``(1) Standards.--
``(A) Definition of effective date.--In this paragraph
(other than subparagraph (D)), the term `effective date'
means, with respect to each type of lamp specified in a table
contained in subparagraph (B), the last day of the period of
months corresponding to that type of lamp (as specified in
the table) that follows October 24, 1992.
``(B) Minimum standards.--Each of the following general
service fluorescent lamps and incandescent reflector lamps
manufactured after the effective date specified in the tables
contained in this paragraph shall meet or exceed the
following lamp efficacy and CRI standards:
``FLUORESCENT LAMPS
----------------------------------------------------------------------------------------------------------------
Minimum Effective Date
Lamp Type Nominal Lamp Minimum CRI Average Lamp (Period of
Wattage Efficacy (LPW) Months)
----------------------------------------------------------------------------------------------------------------
4-foot medium bi-pin............................ >35 W 69 75.0 36
35 W 45 75.0 36
2-foot U-shaped................................. >35 W 69 68.0 36
35 W 45 64.0 36
8-foot slimline................................. 65 W 69 80.0 18
65 W 45 80.0 18
8-foot high output.............................. >100 W 69 80.0 18
100 W 45 80.0 18
----------------------------------------------------------------------------------------------------------------
``INCANDESCENT REFLECTOR LAMPS
------------------------------------------------------------------------
Minimum Effective Date
Nominal Lamp Wattage Average Lamp (Period of
Efficacy (LPW) Months)
------------------------------------------------------------------------
40-50.................................. 10.5 36
51-66.................................. 11.0 36
67-85.................................. 12.5 36
86-115................................. 14.0 36
116-155................................. 14.5 36
156-205................................. 15.0 36
------------------------------------------------------------------------
``(C) Exemptions.--The standards specified in subparagraph
(B) shall not apply to the following types of incandescent
reflector lamps:
``(i) Lamps rated at 50 watts or less that are ER30, BR30,
BR40, or ER40 lamps.
``(ii) Lamps rated at 65 watts that are BR30, BR40, or ER40
lamps.
``(iii) R20 incandescent reflector lamps rated 45 watts or
less.
``(D) Effective dates.--
``(i) ER, br, and bpar lamps.--The standards specified in
subparagraph (B) shall apply with respect to ER incandescent
reflector lamps, BR incandescent reflector lamps, BPAR
incandescent reflector lamps, and similar bulb shapes on and
after January 1, 2008.
``(ii) Lamps between 2.25-2.75 inches in diameter.--The
standards specified in subparagraph (B) shall apply with
respect to incandescent reflector lamps with a diameter of
more than 2.25 inches, but not more than 2.75 inches, on and
after January 1, 2008.''.
SEC. 103. BRIGHT TOMORROW LIGHTING PRIZES.
(a) Establishment.--Not later than 1 year after the date of
enactment of this Act, as part of the program carried out
under section 1008 of the Energy Policy Act of 2005 (42
U.S.C. 16396), the Secretary shall establish and award Bright
Tomorrow Lighting Prizes for solid state lighting in
accordance with this section.
(b) Prize Specifications.--
(1) 60-Watt incandescent replacement lamp prize.--The
Secretary shall award a 60-Watt Incandescent Replacement Lamp
Prize to an entrant that produces a solid-state light package
simultaneously capable of--
(A) producing a luminous flux greater than 900 lumens;
[[Page S4497]]
(B) consuming less than or equal to 10 watts;
(C) having an efficiency greater than 90 lumens per watt;
(D) having a color rendering index greater than 90;
(E) having a correlated color temperature of not less than
2,750, and not more than 3,000, degrees Kelvin;
(F) having a lifetime exceeding 25,000 hours under typical
conditions expected in residential use;
(G) having a light distribution pattern similar to a soft
60-watt incandescent A19 bulb;
(H) having a size and shape similar to a 60-watt
incandescent A19 bulb in accordance with American National
Standards Institute standard C78.20-2003, figure C78.20-211;
(I) using an incandescent bulb power receptacle; and
(J) mass production for a competitive sales commercial
market satisfied by the submission of 10,000 such units equal
to or exceeding the criteria described in subparagraphs (A)
through (I).
(2) PAR type 38 halogen replacement lamp prize.--The
Secretary shall award a Parabolic Aluminized Reflector Type
38 Halogen Replacement Lamp Prize (referred to in this
section as the ``PAR Type 38 Halogen Replacement Lamp
Prize'') to an entrant that produces a solid-state-light
package simultaneously capable of--
(A) producing a luminous flux greater than or equal to
1,350 lumens;
(B) consuming less than or equal to 10 watts;
(C) having an efficiency greater than 90 lumens per watt;
(D) having a color rendering index greater than or equal to
90;
(E) having a correlated color coordinate temperature of not
less than 2,750, and not more than 3,000, degrees Kelvin;
(F) having a lifetime exceeding 25,000 hours under typical
conditions expected in residential use;
(G) having a light distribution pattern similar to a PAR 38
halogen lamp;
(H) having a size and shape that fits within the maximum
dimensions of a PAR 38 halogen lamp in accordance with
American National Standards Institute standard C78-21-2003,
figure C78.21-238;
(I) using a PAR 38 halogen power receptacle; and
(J) mass production for a competitive sales commercial
market satisfied by the submission of 10,000 such units equal
to or exceeding the criteria described in subparagraphs (A)
through (I).
(3) Twenty-first century lamp prize.--The Secretary shall
award a Twenty-First Century Lamp Prize to an entrant that
produces a solid-state-light-light capable of--
(A) producing a light output greater than 1,200 lumens;
(B) having an efficiency greater than 150 lumens per watt;
(C) having a color rendering index greater than 90;
(D) having a color coordinate temperature between 2,800 and
3,000 degrees Kelvin; and
(E) having a lifetime exceeding 25,000 hours.
(c) Private Funds.--The Secretary may accept and use
funding from private sources as part of the prizes awarded
under this section.
(d) Technical Review.--The Secretary shall establish a
technical review committee composed of non-Federal officers
to review entrant data submitted under this section to
determine whether the data meets the prize specifications
described in subsection (b).
(e) Third Party Administration.--The Secretary may
competitively select a third party to administer awards under
this section.
(f) Award Amounts.--Subject to the availability of funds to
carry out this section, the amount of--
(1) the 60-Watt Incandescent Replacement Lamp Prize
described in subsection (b)(1) shall be $10,000,000;
(2) the PAR Type 38 Halogen Replacement Lamp Prize
described in subsection (b)(2) shall be $5,000,000; and
(3) the Twenty-First Century Lamp Prize described in
subsection (b)(3) shall be $5,000,000.
(g) Federal Procurement of Solid-State-Lights.--
(1) 60-watt incandescent replacement.--Subject to paragraph
(3), as soon as practicable after the successful award of the
60-Watt Incandescent Replacement Lamp Prize under subsection
(b)(1), the Secretary (in consultation with the Administrator
of General Services) shall develop governmentwide Federal
purchase guidelines with a goal of replacing the use of 60-
watt incandescent lamps in Federal Government buildings with
a solid-state-light package described in subsection (b)(1) by
not later than the date that is 5 years after the date the
award is made.
(2) PAR 38 halogen replacement lamp replacement.--Subject
to paragraph (3), as soon as practicable after the successful
award of the PAR Type 38 Halogen Replacement Lamp Prize under
subsection (b)(2), the Secretary (in consultation with the
Administrator of General Services) shall develop
governmentwide Federal purchase guidelines with the goal of
replacing the use of PAR 38 halogen lamps in Federal
Government buildings with a solid-state-light package
described in subsection (b)(2) by not later than the date
that is 5 years after the date the award is made.
(3) Waivers.--
(A) In general.--The Secretary or the Administrator of
General Services may waive the application of paragraph (1)
or (2) if the Secretary or Administrator determines that the
return on investment from the purchase of a solid-state-light
package described in paragraph (1) or (2) of subsection (b),
respectively, is cost prohibitive.
(B) Report of waiver.--If the Secretary or Administrator
waives the application of paragraph (1) or (2), the Secretary
or Administrator, respectively, shall submit to Congress an
annual report that describes the waiver and provides a
detailed justification for the waiver.
(h) Bright Light Tomorrow Award Fund.--
(1) Establishment.--There is established in the United
States Treasury a Bright Light Tomorrow permanent fund
without fiscal year limitation to award prizes under
paragraphs (1), (2), and (3) of subsection (b).
(2) Sources of funding.--The fund established under
paragraph (1) shall accept--
(A) fiscal year appropriations; and
(B) private contributions authorized under subsection (c).
(i) Authorization of Appropriations.--There are authorized
to be appropriated such sums as are necessary to carry out
this section.
SEC. 104. SENSE OF SENATE CONCERNING EFFICIENT LIGHTING
STANDARDS.
(a) Findings.--The Senate finds that--
(1) there are approximately 4,000,000,000 screw-based
sockets in the United States that contain traditional,
energy-inefficient, incandescent light bulbs;
(2) incandescent light bulbs are based on technology that
is more than 125 years old;
(3) there are radically more efficient lighting
alternatives in the market, with the promise of even more
choices over the next several years;
(4) national policy can support a rapid substitution of
new, energy-efficient light bulbs for the less efficient
products in widespread use; and,
(5) transforming the United States market to use of more
efficient lighting technologies can--
(A) reduce electric costs in the United States by more than
$18,000,000,000 annually;
(B) save the equivalent electricity that is produced by 80
base load coal-fired power plants; and
(C) reduce fossil fuel related emissions by approximately
158,000,000 tons each year.
(b) Sense of the Senate.--It is the sense of the Senate
that the Senate should--
(1) pass a set of mandatory, technology-neutral standards
to establish firm energy efficiency performance targets for
lighting products;
(2) ensure that the standards become effective within the
next 10 years; and
(3) in developing the standards--
(A) establish the efficiency requirements to ensure that
replacement lamps will provide consumers with the same
quantity of light while using significantly less energy;
(B) ensure that consumers will continue to have multiple
product choices, including energy-saving halogen,
incandescent, compact fluorescent, and LED light bulbs; and
(C) work with industry and key stakeholders on measures
that can assist consumers and businesses in making the
important transition to more efficient lighting.
TITLE II--EXPEDITING NEW ENERGY EFFICIENCY STANDARDS
SEC. 201. DEFINITION OF ENERGY CONSERVATION STANDARD.
Section 321 of the Energy Policy and Conservation Act (42
U.S.C. 6291) is amended by striking paragraph (6) and
inserting the following:
``(6) Energy conservation standard.--
``(A) In general.--The term `energy conservation standard'
means--
``(i) 1 or more performance standards that prescribe a
minimum level of energy efficiency or a maximum quantity of
energy use, and, in the case of a showerhead, faucet, water
closet, urinal, clothes washer, and dishwasher, water use,
for a covered product, determined in accordance with test
procedures prescribed under section 323; and
``(ii) 1 or more design requirements.
``(B) Inclusions.--The term `energy conservation standard'
includes any other requirements that the Secretary may
prescribe under subsections (o) and (r) of section 325.''.
SEC. 202. REGIONAL STANDARDS FOR HEATING AND COOLING
PRODUCTS.
Section 325(o) of the Energy Policy and Conservation Act
(42 U.S.C. 6295(o)) is amended by adding at the end the
following:
``(6) Regional standards for heating and cooling
products.--
``(A) In general.--Notwithstanding any other provision of
this section, the Secretary may establish regional standards
for space heating and air conditioning products.
``(B) Maximum number of regions.--For each space heating
and air conditioning product, the Secretary may establish not
more than 3 regions with differing standards.
``(C) Boundaries of regions.--
``(i) In general.--The Secretary shall establish the
regions so as to achieve the maximum level of energy savings
that are technically feasible and economically justifiable.
``(ii) State boundaries.--Boundaries for a region shall
conform to State borders and only include contiguous States
(other than Alaska and Hawaii, which shall be noncontiguous).
``(D) Factors for establishment.--In deciding whether to
establish 1 or more regional standards for space heating and
air
[[Page S4498]]
conditioning equipment, the Secretary shall consider all of
the factors described in paragraphs (1) through (4).''.
SEC. 203. FURNACE FAN RULEMAKING.
Section 325(f)(3) of the Energy Policy and Conservation Act
(42 U.S.C. 6295(f)(3)) is amended by adding at the end the
following:
``(E) Final rule.--
``(i) In general.--The Secretary shall publish a final rule
to carry out this subsection not later than December 31,
2012.
``(ii) Criteria.--The standards shall meet the criteria
established under subsection (o).''.
SEC. 204. EXPEDITED RULEMAKINGS.
Section 325 of the Energy Policy and Conservation Act (42
U.S.C. 6295) is amended by adding at the end the following:
``(hh) Expedited Rulemaking for Consensus Standards.--
``(1) In general.--The Secretary shall conduct an expedited
rulemaking based on an energy conservation standard or test
procedure recommended by interested persons, if--
``(A) the interested persons (demonstrating significant and
broad support from manufacturers of a covered product,
States, and environmental, energy efficiency, and consumer
advocates) submit a joint comment recommending a consensus
energy conservation standard or test procedure; and
``(B) the Secretary determines that the joint comment
includes evidence that (assuming no other evidence were
considered) provides an adequate basis for determining that
the proposed consensus energy conservation standard or test
procedure proposed in the joint comment complies with the
provisions and criteria of this Act (including subsection o))
that apply to the type or class of covered products covered
by the joint comment.
``(2) Procedure.--
``(A) In general.--Notwithstanding subsection (p) or
section 336(a), if the Secretary receives a joint comment
that meets the criteria described in paragraph (1), the
Secretary shall conduct an expedited rulemaking with respect
to the standard or test procedure proposed in the joint
comment in accordance with this paragraph.
``(B) Advanced notice of proposed rulemaking.--If no
advanced notice of proposed rulemaking has been issued under
subsection (p)(1) with respect to the rulemaking covered by
the joint comment, the requirements of subsection (p) with
respect to the issuance of an advanced notice of proposed
rulemaking shall not apply.
``(C) Publication of determination.--Not later than 60 days
after receipt of a joint comment described in paragraph
(1)(A), the Secretary shall publish a description of a
determination as to whether the proposed standard or test
procedure covered by the joint comment meets the criteria
described in paragraph (1).
``(D) Proposed rule.--
``(i) Publication.--If the Secretary determines that the
proposed consensus standard or test procedure covered by the
joint comment meets the criteria described in paragraph (1),
not later than 30 days after the determination, the Secretary
shall publish a proposed rule proposing the consensus
standard or test procedure covered by the joint comment.
``(ii) Public comment period.--Notwithstanding paragraphs
(2) and (3) of subsection (p), the public comment period for
the proposed rule shall be the 30-day period beginning on the
date of the publication of the proposed rule in the Federal
Register.
``(iii) Public hearing.--Notwithstanding section 336(a),
the Secretary may waive the holding of a public hearing with
respect to the proposed rule.
``(E) Final rule.--Notwithstanding subsection (p)(4), the
Secretary--
``(i) may publish a final rule at any time after the 60-day
period beginning on the date of publication of the proposed
rule in the Federal Register; and
``(ii) shall publish a final rule not later than 120 days
after the date of publication of the proposed rule in the
Federal Register.''.
SEC. 205. PREEMPTION LIMITATION.
Section 327 of the Energy Policy and Conservation Act (42
U.S.C. 6297) is amended--
(1) in subsection (b)--
(A) in paragraph (6), by striking ``or'' at the end;
(B) in paragraph (7), by striking the period at the end and
inserting ``; or''; and
(C) by adding at the end the following:
``(8) is a State regulation for a product for which a
Federal energy conservation standard has not been
established, in that--
``(A) the product is excluded from or not directly affected
by a Federal standard; or
``(B) a rulemaking occurs that ultimately does not
prescribe a Federal energy conservation standard for the
product.''; and
(2) in subsection (c)--
(A) in paragraph (8), by striking the period at the end and
inserting ``; or''; and
(B) by adding at the end the following:
``(9) is a State regulation for a product for which a
Federal energy conservation standard has not been
established, in that--
``(A) the product is excluded from or not directly affected
by a Federal standard; or
``(B) a rulemaking occurs that ultimately does not
prescribe a Federal energy conservation standard for the
product.''.
SEC. 206. ENERGY EFFICIENCY LABELING FOR CONSUMER PRODUCTS.
(a) In General.--Not later than 18 months after the date of
enactment of this Act, the Federal Trade Commission, in
consultation with the Secretary and the Administrator of the
Environmental Protection Agency (acting through the Energy
Star program), shall promulgate regulations to add the
consumer electronics product categories described in
subsection (b) to the Energy Guide labeling program of the
Commission.
(b) Consumer Electronics Product Categories.--The consumer
electronics product categories referred to in subsection (a)
are the following:
(1) Televisions.
(2) Personal computers.
(3) Cable or satellite set-top boxes.
(4) Stand-alone digital video recorder boxes (including
TIVO and similar branded products).
(5) Computer monitors.
(c) Label Placement.--The regulations shall include
specific requirements for each product on the placement of
Energy Guide labels.
(d) Deadline for Labeling.--Not later than 1 year after the
date of promulgation of regulations under subsection (a), the
Commission shall require labeling electronic products
described in subsection (b) in accordance with this section
(including the regulations).
(e) Authority to Include Additional Product Categories.--
The Commission may add additional product categories to the
Energy Guide labeling program if the product categories
include products, as determined by the Commission--
(1) that have an annual energy use in excess of 100
kilowatt hours per year; and
(2) for which there is a significant difference in energy
use between the most and least efficient products.
SEC. 207. RESIDENTIAL BOILER EFFICIENCY STANDARDS.
Section 325(f) of the Energy Policy and Conservation Act
(42 U.S.C. 6295(f)) is amended--
(1) by redesignating paragraph (3) as paragraph (4); and
(2) by inserting after paragraph (2) the following:
``(3) Boilers.--
``(A) In general.--Subject to subparagraphs (B) and (C),
boilers manufactured on or after September 1, 2012, shall
meet the following requirements:
------------------------------------------------------------------------
Minimum
Annual Fuel
Boiler Type Utilization Design Requirements
Efficiency
------------------------------------------------------------------------
Gas Hot Water 82% No Constant Burning
Pilot,
Automatic Means for
Adjusting Water
Temperature
------------------------------------------------------------------------
Gas Steam 80% No Constant Burning
Pilot
------------------------------------------------------------------------
Oil Hot Water 84% Automatic Means for
Adjusting Temperature
------------------------------------------------------------------------
Oil Steam 82% None
------------------------------------------------------------------------
Electric Hot Water None Automatic Means for
Adjusting Temperature
------------------------------------------------------------------------
Electric Steam None None
------------------------------------------------------------------------
``(B) Pilots.--The manufacturer shall not equip gas hot
water or steam boilers with constant-burning pilot lights.
``(C) Automatic means for adjusting water temperature.--
``(i) In general.--The manufacturer shall equip each gas,
oil, and electric hot water boiler (other than a boiler
equipped with tankless domestic water heating coils) with an
automatic means for adjusting the temperature of the water
supplied by the boiler to ensure that an incremental change
in inferred heat load produces a corresponding incremental
change in the temperature of water supplied.
``(ii) Certain boilers.--For a boiler that fires at 1 input
rate, the requirements of this subparagraph may be satisfied
by providing an automatic means that allows the burner or
heating element to fire only when the means has determined
that the inferred heat load cannot be met by the residual
heat of the water in the system.
``(iii) No inferred heat load.--When there is no inferred
heat load with respect to a hot water boiler, the automatic
means described in clauses (i) and (ii) shall limit the
temperature of the water in the boiler to not more than 140
degrees Fahrenheit.
``(iv) Operation.--A boiler described in clause (i) or (ii)
shall be operable only when the automatic means described in
clauses (i), (ii), and (iii) is installed.''.
SEC. 208. TECHNICAL CORRECTIONS.
Section 321(30)(B)(viii) of the Energy Policy and
Conservation Act (42 U.S.C. 6291(30)(B)(viii)) is amended by
striking ``82'' and inserting ``87''.
SEC. 209. ELECTRIC MOTOR EFFICIENCY STANDARDS.
(a) Definitions.--Section 340(13) of the Energy Policy and
Conservation Act (42 U.S.C. 6311(13)) is amended by striking
subparagraph (A) and inserting the following:
``(A)(i) The term `electric motor' means--
``(I) a general purpose electric motor - subtype I; and
[[Page S4499]]
``(II) a general purpose electric motor - subtype II.
``(ii) The term `general purpose electric motor - subtype
I' means any motor that is considered a general purpose
motor under section 431.12 of title 10, Code of Federal
Regulations (or successor regulations).
``(iii) The term `general purpose electric motor - subtype
II' means a motor that, in addition to the design elements
for a general purpose electric motor - subtype I,
incorporates the design elements (as established in National
Electrical Manufacturers Association MG-1 (2006)) (or
successor design elements) for any of the following:
``(I) A U-Frame Motor.
``(II) A Design C Motor.
``(III) A close-coupled pump motor.
``(IV) A footless motor.
``(V) A vertical solid shaft normal thrust (tested in a
horizontal configuration).
``(VI) An 8-pole motor.
``(VII) A poly-phase motor with voltage of not more than
600 volts (other than 230 or 460 volts).''.
(b) Standards.--Section 342(b) of the Energy Policy and
Conservation Act (42 U.S.C. 6313(13)) is amended by striking
paragraph (1) and inserting the following:
``(1) Standards.--
``(A) General purpose electric motors - subtype i.--
``(i) In general.--Except as otherwise provided in this
subparagraph, a general purpose electric motor - subtype I
with a power rating of not less than 1, and not more than
200, horsepower manufactured (alone or as a component of
another piece of equipment) after the 3-year period beginning
on the date of enactment of this subparagraph, shall have a
nominal full load efficiency established in Table 12-12 of
National Electrical Manufacturers Association (referred to in
this paragraph as `NEMA') MG-1 (2006) (or a successor table).
``(ii) Fire pump motors.--A fire pump motor shall have a
nominal full load efficiency established in Table 12-11 of
NEMA MG-1 (2006) (or a successor table).
``(B) General purpose electric motors - subtype ii .--A
general purpose electric motor - subtype II with a power
rating of not less than 1, and not more than 200, horsepower
manufactured (alone or as a component of another piece of
equipment) after the 3-year period beginning on the date of
enactment of this subparagraph, shall have a nominal full
load efficiency established in Table 12-11 of NEMA MG-1
(2006) (or a successor table).
``(C) Design b, general purpose electric motors.--A NEMA
Design B, general purpose electric motor with a power rating
of not less than 201, and not more than 500, horsepower
manufactured (alone or as a component of another piece of
equipment) after the 3-year period beginning on the date of
the enactment of this subparagraph shall have a nominal full
load efficiency established in Table 12-11 of NEMA MG-1
(2006) (or a successor table).''.
(c) Effective Date.--The amendments made by this section
take effect on the date that is 3 years after the date of
enactment of this Act.
SEC. 210. ENERGY STANDARDS FOR HOME APPLIANCES.
(a) Definition of Energy Conservation Standard.--Section
321(6)(A) of the Energy Policy and Conservation Act (42
U.S.C. 6291(6)(A)) is amended by striking ``or, in the case
of'' and inserting ``and, in the case of residential clothes
washers, residential dishwashers,''.
(b) Refrigerators, Refrigerator-Freezers, and Freezers.--
Section 325(b) of the Energy Policy and Conservation Act (42
U.S.C. 6295(b)) is amended by adding at the end the
following:
``(4) Refrigerators, refrigerator-freezers, and freezers
manufactured on or after january 1, 2014.--Not later than
December 31, 2010, the Secretary shall publish a final rule
determining whether to amend the standards in effect for
refrigerators, refrigerator-freezers, and freezers
manufactured on or after January 1, 2014, and including any
amended standards.''.
(c) Residential Clothes Washers and Dishwashers.--Section
325(g)(4) of the Energy Policy and Conservation Act (42
U.S.C. 6295(g)(4)) is amended by adding at the end the
following:
``(D) Clothes washers.--
``(i) Clothes washers manufactured on or after january 1,
2011.--A residential clothes washer manufactured on or after
January 1, 2011, shall have--
``(I) an energy factor of at least 1.26; and
``(II) a water factor of not more than 9.5.
``(ii) Clothes washers manufactured on or after january 1,
2015.--Not later than December 31, 2011, the Secretary shall
publish a final rule determining whether to amend the
standards in effect for residential clothes washers
manufactured on or after January 1, 2015, and including any
amended standards.
``(E) Dishwashers.--
``(i) Dishwashers manufactured on or after january 1,
2010.--A dishwasher manufactured on or after January 2, 2010,
shall use not more than--
``(I) in the case of a standard-size dishwasher, 355 kWh
per year or 6.5 gallons of water per cycle; and
``(II) in the case of a compact-size dishwasher, 260 kWh
per year or 4.5 gallons of water per cycle.
``(ii) Dishwashers manufactured on or after january 1,
2018.--Not later than December 31, 2015, the Secretary shall
publish a final rule determining whether to amend the
standards for dishwashers manufactured on or after January 2,
2018, and including any amended standards.''.
(d) Dehumidifiers.--Section 325(cc) of the Energy Policy
and Conservation Act (42 U.S.C. 6295(cc)) is amended--
(1) in paragraph (1), by inserting ``and before October 1,
2012,'' after ``2007,''; and
(2) by striking paragraph (2) and inserting the following:
``(2) Dehumidifiers manufactured on or after october 1,
2012.--Dehumidifiers manufactured on or after October 1,
2012, shall have an Energy Factor that meets or exceeds the
following values:
------------------------------------------------------------------------
Minimum
Energy
Product Capacity (pints/day): Factor
liters/kWh
------------------------------------------------------------------------
Up to 35.00................................................ 1.35
35.01-45.00................................................ 1.50
45.01-54.00................................................ 1.60
54.01-75.00................................................ 1.70
Greater than 75.00......................................... 2.5.''
------------------------------------------------------------------------
(e) Energy Star Program.--Section 324A(d)(2) of the Energy
Policy and Conservation Act (42 U.S.C. 6294a(d)(2)) is
amended by striking ``2010'' and inserting ``2009''.
SEC. 211. IMPROVED ENERGY EFFICIENCY FOR APPLIANCES AND
BUILDINGS IN COLD CLIMATES.
(a) Research.--Section 911(a)(2) of the Energy Policy Act
of 2005 (42 U.S.C. 16191(a)(2)) is amended--
(1) in subparagraph (C), by striking ``and'' at the end;
(2) in subparagraph (D), by striking the period at the end
and inserting ``; and''; and
(3) by adding at the end the following:
``(E) technologies to improve the energy efficiency of
appliances and mechanical systems for buildings in cold
climates, including increased use of renewable resources,
including fuel.''.
(b) Rebates.--Section 124 of the Energy Policy Act of 2005
(42 U.S.C. 15821) is amended--
(1) in subsection (b)(1), by inserting ``, or products with
improved energy efficiency in cold climates,'' after
``residential Energy Star products''; and
(2) in subsection (e), by inserting ``or product with
improved energy efficiency in a cold climate'' after
``residential Energy Star product'' each place it appears.
SEC. 212. DEPLOYMENT OF NEW TECHNOLOGIES FOR HIGH-EFFICIENCY
CONSUMER PRODUCTS.
(a) Definitions.--In this section:
(1) 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.
(2) High-efficiency consumer product.--The term ``high-
efficiency consumer product'' means a product that exceeds
the energy efficiency of comparable products available in the
market by at least 25 percent.
(b) Financial Incentives Program.--Effective beginning
October 1, 2007, the Secretary shall competitively award
financial incentives under this section for the manufacture
of high-efficiency consumer products.
(c) Requirements.--
(1) In general.--The Secretary shall make awards under this
section to 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.
(2) Acceptance of bids.--In making awards under this
section, the Secretary shall--
(A) solicit bids for reverse auction from appropriate
manufacturers, as determined by the Secretary; and
(B) award financial incentives to the manufacturers that
submit the lowest bids that meet the requirements established
by the Secretary.
(d) Forms of Awards.--An award for a high-efficiency
consumer product under this section shall be in the form of a
lump sum payment in an amount equal to the product obtained
by multiplying--
(1) the amount of the bid by the manufacturer of the high-
efficiency consumer product; and
(2) the energy savings during the projected useful life of
the high-efficiency consumer product, not to exceed 10 years,
as determined under regulations issued by the Secretary.
TITLE III--PROMOTING HIGH EFFICIENCY VEHICLES, ADVANCED BATTERIES, AND
ENERGY STORAGE
SEC. 301. LIGHTWEIGHT MATERIALS RESEARCH AND DEVELOPMENT.
(a) In General.--As soon as practicable after the date of
enactment of this Act, the Secretary shall establish a
research and development program to determine ways in which--
(1) the weight of vehicles may be reduced to improve fuel
efficiency without compromising passenger safety; and
(2) the cost of lightweight materials (such as steel alloys
and carbon fibers) required for the construction of lighter-
weight vehicles may be reduced.
(b) Authorization of Appropriations.--There is authorized
to be appropriated to carry out this section $60,000,000 for
each of fiscal years 2007 through 2012.
[[Page S4500]]
SEC. 302. LOAN GUARANTEES FOR FUEL-EFFICIENT AUTOMOBILE PARTS
MANUFACTURERS.
(a) In General.--Section 712(a) of the Energy Policy Act of
2005 (42 U.S.C. 16062(a)) is amended in the second sentence
by striking ``grants to automobile manufacturers'' and
inserting ``grants and loan guarantees under section 1703 to
automobile manufacturers and suppliers''.
(b) Conforming Amendment.--Section 1703(b) of the Energy
Policy Act of 2005 (42 U.S.C. 16513(b)) is amended by by
striking paragraph (8) and inserting the following:
``(8) Production facilities for the manufacture of fuel
efficient vehicles or parts of those vehicles, including
electric drive transportation technology and advanced diesel
vehicles.''.
SEC. 303. ADVANCED TECHNOLOGY VEHICLES MANUFACTURING
INCENTIVE PROGRAM.
(a) Definitions.--In this section:
(1) Adjusted average fuel economy.--The term ``adjusted
average fuel economy'' means the average fuel economy of a
manufacturer for all light duty vehicles produced by the
manufacturer, adjusted such that the fuel economy of each
vehicle that qualifies for an award shall be considered to be
equal to the average fuel economy for vehicles of a similar
footprint for model year 2002.
(2) Advanced technology vehicle.--The term ``advanced
technology vehicle'' means a light duty vehicle that meets--
(A) the Bin 5 Tier II emission standard established in
regulations issued 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 emission
standard;
(B) any new emission standard for fine particulate matter
prescribed by the Administrator under that Act (42 U.S.C.
7401 et seq.); and
(C) at least 125 percent of the average base year combined
fuel economy for vehicles of a substantially similar
footprint.
(3) Combined fuel economy.--The term ``combined fuel
economy'' means--
(A) the combined city/highway miles per gallon values, as
reported in accordance with section 32908 of title 49, United
States Code; and
(B) in the case of an electric drive vehicle with the
ability to recharge from an off-board source, the reported
mileage, as determined in a manner consistent with the
Society of Automotive Engineers Recommended Practice J1711 or
a similar practice recommended by the Secretary .
(4) Engineering integration costs.--The term ``engineering
integration costs'' includes the cost of engineering tasks
relating to--
(A) incorporating qualifying components into the design of
advanced technology vehicles; and
(B) designing new tooling and equipment for production
facilities that produce qualifying components or advanced
technology vehicles.
(5) Qualifying components.--The term ``qualifying
components'' means components that the Secretary determines
to be--
(A) specially designed for advanced technology vehicles;
and
(B) installed for the purpose of meeting the performance
requirements of advanced technology vehicles.
(b) Manufacturer Facility Conversion Awards.--The Secretary
shall provide facility conversion funding awards under this
section to automobile manufacturers and component suppliers
to pay not more than 30 percent of the cost of--
(1) reequipping or expanding an existing manufacturing
facility in the United States to produce--
(A) qualifying advanced technology vehicles; or
(B) qualifying components; and
(2) engineering integration performed in the United States
of qualifying vehicles and qualifying components.
(c) Period of Availability.--An award under subsection (b)
shall apply to--
(1) facilities and equipment placed in service before
December 30, 2017; and
(2) engineering integration costs incurred during the
period beginning on the date of enactment of this Act and
ending on December 30, 2017.
(d) Improvement.--The Secretary shall issue regulations
that require that, in order for an automobile manufacturer to
be eligible for an award under this section during a
particular year, the adjusted average fuel economy of the
manufacturer for light duty vehicles produced by the
manufacturer during the most recent year for which data are
available shall be not less than the average fuel economy for
all light duty vehicles of the manufacturer for model year
2002.
SEC. 304. ENERGY STORAGE COMPETITIVENESS.
(a) Short Title.--This section may be cited as the ``United
States Energy Storage Competitiveness Act of 2007''.
(b) Energy Storage Systems for Motor Transportation and
Electricity Transmission and Distribution.--
(1) Definitions.--In this subsection:
(A) Council.--The term ``Council'' means the Energy Storage
Advisory Council established under paragraph (3).
(B) Compressed air energy storage.--The term ``compressed
air energy storage'' means, in the case of an electricity
grid application, the storage of energy through the
compression of air.
(C) Department.--The term ``Department'' means the
Department of Energy.
(D) Flywheel.--The term ``flywheel'' means, in the case of
an electricity grid application, a device used to store
rotational kinetic energy.
(E) Ultracapacitor.--The term ``ultracapacitor'' means an
energy storage device that has a power density comparable to
conventional capacitors but capable of exceeding the energy
density of conventional capacitors by several orders of
magnitude.
(2) Program.--The Secretary shall carry out a research,
development, and demonstration program to support the ability
of the United States to remain globally competitive in energy
storage systems for motor transportation and electricity
transmission and distribution.
(3) Energy storage advisory council.--
(A) Establishment.--Not later than 90 days after the date
of enactment of this Act, the Secretary shall establish an
Energy Storage Advisory Council.
(B) Composition.--
(i) In general.--Subject to clause (ii), the Council shall
consist of not less than 15 individuals appointed by the
Secretary, based on recommendations of the National Academy
of Sciences.
(ii) Energy storage industry.--The Council shall consist
primarily of representatives of the energy storage industry
of the United States.
(iii) Chairperson.--The Secretary shall select a
Chairperson for the Council from among the members appointed
under clause (i)
(C) Meetings.--
(i) In general.--The Council shall meet not less than once
a year.
(ii) Federal advisory committee act.--The Federal Advisory
Committee Act (5 U.S.C. App. 2) shall apply to a meeting of
the Council.
(D) Plans.--No later than 1 year after the date of
enactment of this Act, in conjunction with the Secretary, the
Council shall develop 5-year plans for integrating basic and
applied research so that the United States retains a globally
competitive domestic energy storage industry for motor
transportation and electricity transmission and distribution.
(E) Review.--The Council shall--
(i) assess the performance of the Department in meeting the
goals of the plans developed under subparagraph (D); and
(ii) make specific recommendations to the Secretary on
programs or activities that should be established or
terminated to meet those goals.
(4) Basic research program.--
(A) Basic research.--The Secretary shall conduct a basic
research program on energy storage systems to support motor
transportation and electricity transmission and distribution,
including--
(i) materials design;
(ii) materials synthesis and characterization;
(iii) electrolytes, including bioelectrolytes;
(iv) surface and interface dynamics; and
(v) modeling and simulation.
(B) Nanoscience centers.--The Secretary shall ensure that
the nanoscience centers of the Department--
(i) support research in the areas described in subparagraph
(A), as part of the mission of the centers; and
(ii) coordinate activities of the centers with activities
of the Council.
(5) Applied research program.--The Secretary shall conduct
an applied research program on energy storage systems to
support motor transportation and electricity transmission and
distribution technologies, including--
(A) ultracapacitors;
(B) flywheels;
(C) compressed air energy systems;
(D) power conditioning electronics; and
(E) manufacturing technologies for energy storage systems.
(6) Energy storage research centers.--
(A) In general.--The Secretary shall establish, through
competitive bids, 4 energy storage research centers to
translate basic research into applied technologies to advance
the capability of the United States to maintain a globally
competitive posture in energy storage systems for motor
transportation and electricity transmission and distribution.
(B) Program management.--The centers shall be jointly
managed by the Under Secretary for Science and the Under
Secretary of Energy of the Department.
(C) Participation agreements.--As a condition of
participating in a center, a participant shall enter into a
participation agreement with the center that requires that
activities conducted by the participant for the center
promote the goal of enabling the United States to compete
successfully in global energy storage markets.
(D) Plans.--A center shall conduct activities that promote
the achievement of the goals of the plans of the Council
under paragraph (3)(D).
(E) Cost sharing.--In carrying out this paragraph, the
Secretary shall require cost-sharing in accordance with
section 988 of the Energy Policy Act of 2005 (42 U.S.C.
16352).
(F) National laboratories.--A national laboratory (as
defined in section 2 of the Energy Policy Act 2005 (42 U.S.C.
15801)) may participate in a center established under this
paragraph as part of a cooperative research and development
agreement (as defined in section 12(d) of the Stevenson-
Wydler Technology Innovation Act of 1980 (15 U.S.C.
3710a(d))).
(G) Intellectual property.--A participant in a center under
this paragraph shall
[[Page S4501]]
have a royalty-free, exclusive nontransferable license to
intellectual property that the center invents from funding
received under this subsection.
(7) Review by national academy of sciences.--Not later than
5 years after the date of enactment of this Act, the
Secretary shall offer to enter into an arrangement with the
National Academy of Sciences to assess the performance of the
Department in making the United States globally competitive
in energy storage systems for motor transportation and
electricity transmission and distribution.
(8) Authorization of appropriations.--There are authorized
to be appropriated to carry out--
(A) the basic research program under paragraph (4)
$50,000,000 for each of fiscal years 2008 through 2017;
(B) the applied research program under paragraph (5)
$80,000,000 for each of fiscal years 2008 through 2017; and;
(C) the energy storage research center program under
paragraph (6) $100,000,000 for each of fiscal years 2008
through 2017.
(c) Advanced Battery and Electric Vehicle Technology
Program.--
(1) Definitions.--In this subsection:
(A) Battery.--The term ``battery'' means an electrochemical
energy storage device powered directly by electrical current.
(B) Electric drive transportation technology.--The term
``electric drive transportation technology'' means vehicle
systems that use stored electrical energy to provide motive
power, including electric motors and drivetrain systems.
(2) Program.--The Secretary shall conduct a program of
research, development, demonstration, and commercial
application for batteries and electric drive transportation
technology, including--
(A) batteries;
(B) on-board and off-board charging components;
(C) drivetrain systems;
(D) vehicles systems integration; and
(E) control systems, including systems that optimize for--
(i) prolonging battery life;
(ii) reduction of petroleum consumption; and
(iii) reduction of fossil fuel emissions.
(3) Authorization of appropriations.--There is authorized
to be appropriated to carry out this subsection $200,000,000
for each of fiscal years 2007 through 2012.
TITLE IV--SETTING ENERGY EFFICIENCY GOALS
SEC. 401. NATIONAL GOALS FOR ENERGY SAVINGS IN
TRANSPORTATION.
(a) Goals.--The goals of the United States are to reduce
gasoline usage in the United States from the levels projected
under subsection (b) by--
(1) 20 percent by calendar year 2017;
(2) 35 percent by calendar year 2025; and
(3) 45 percent by calendar year 2030.
(b) Measurement.--For purposes of subsection (a), reduction
in gasoline usage shall be measured from the estimates for
each year in subsection (a) contained in the reference case
in the report of the Energy Information Administration
entitled ``Annual Energy Outlook 2007''.
(c) Strategic Plan.--
(1) In general.--Not later than 1 year after the date of
enactment of this Act, the Secretary, in cooperation with the
Administrator of the Environmental Protection Agency and the
heads of other appropriate Federal agencies, shall develop a
strategic plan to achieve the national goals for reduction in
gasoline usage established under subsection (a).
(2) Public input and comment.--The Secretary shall develop
the plan in a manner that provides appropriate opportunities
for public comment.
(d) Plan Contents.--The strategic plan shall--
(1) establish future regulatory, funding, and policy
priorities to ensure compliance with the national goals;
(2) include energy savings estimates for each sector; and
(3) include data collection methodologies and compilations
used to establish baseline and energy savings data.
(e) Plan Updates.--
(1) In general.--The Secretary shall--
(A) update the strategic plan biennially; and
(B) include the updated strategic plan in the national
energy policy plan required by section 801 of the Department
of Energy Organization Act (42 U.S.C. 7321).
(2) Contents.--In updating the plan, the Secretary shall--
(A) report on progress made toward implementing efficiency
policies to achieve the national goals established under
subsection (a); and
(B) to the maximum extent practicable, verify energy
savings resulting from the policies.
(f) Report to Congress and Public.--The Secretary shall
submit to Congress, and make available to the public, the
initial strategic plan developed under subsection (c) and
each updated plan.
SEC. 402. NATIONAL ENERGY EFFICIENCY IMPROVEMENT GOALS.
(a) Goals.--The goals of the United States are--
(1) to achieve an improvement in the overall energy
productivity of the United States (measured in gross domestic
product per unit of energy input) of at least 2.5 percent per
year by the year 2012; and
(2) to maintain that annual rate of improvement each year
through 2030.
(b) Strategic Plan.--
(1) In general.--Not later than 1 year after the date of
enactment of this Act, the Secretary, in cooperation with the
Administrator of the Environmental Protection Agency and the
heads of other appropriate Federal agencies, shall develop a
strategic plan to achieve the national goals for improvement
in energy productivity established under subsection (a).
(2) Public input and comment.--The Secretary shall develop
the plan in a manner that provides appropriate opportunities
for public input and comment.
(c) Plan Contents.--The strategic plan shall--
(1) establish future regulatory, funding, and policy
priorities to ensure compliance with the national goals;
(2) include energy savings estimates for each sector; and
(3) include data collection methodologies and compilations
used to establish baseline and energy savings data.
(d) Plan Updates.--
(1) In general.--The Secretary shall--
(A) update the strategic plan biennially; and
(B) include the updated strategic plan in the national
energy policy plan required by section 801 of the Department
of Energy Organization Act (42 U.S.C. 7321).
(2) Contents.--In updating the plan, the Secretary shall--
(A) report on progress made toward implementing efficiency
policies to achieve the national goals established under
subsection (a); and
(B) verify, to the maximum extent practicable, energy
savings resulting from the policies.
(e) Report to Congress and Public.--The Secretary shall
submit to Congress, and make available to the public, the
initial strategic plan developed under subsection (b) and
each updated plan.
(f) National Action Plan on Energy Efficiency.--The
Administrator of the Environmental Protection Agency and the
Secretary, with the heads of other Federal agencies as
appropriate, shall continue to support maintenance and
updating of the National Action Plan on Energy Efficiency to
help inform the development of the strategic plan under
subsection (b).
SEC. 403. NATIONWIDE MEDIA CAMPAIGN TO INCREASE ENERGY
EFFICIENCY.
(a) In General.--The Secretary, 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 increasing energy efficiency throughout the
economy of the United States over the next decade.
(b) Contract With Entity.--The Secretary shall carry out
subsection (a) directly or through--
(1) competitively bid 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 energy
consumption, in both absolute and per capita terms; and
(B) an evaluation that enables consideration whether the
media campaign contributed to reduction of energy
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,
[[Page S4502]]
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 $5,000,000 for
each of fiscal years 2008 through 2012.
TITLE V--PROMOTING FEDERAL LEADERSHIP IN ENERGY EFFICIENCY AND
RENEWABLE ENERGY
SEC. 501. FEDERAL FLEET CONSERVATION REQUIREMENTS.
(a) Federal Fleet Conservation Requirements.--
(1) In general.--Part J of title III of the Energy Policy
and Conservation Act (42 U.S.C. 6374 et seq.) is amended by
adding at the end the following:
``SEC. 400FF. FEDERAL FLEET CONSERVATION REQUIREMENTS.
``(a) Mandatory Reduction in Petroleum Consumption.--
``(1) In general.--The Secretary shall issue regulations
for Federal fleets subject to section 400AA requiring that
not later than October 1, 2015, each Federal agency achieve
at least a 20 percent reduction in petroleum consumption, and
that each Federal agency increase alternative fuel
consumption by 10 percent annually, as calculated from the
baseline established by the Secretary for fiscal year 2005.
``(2) Plan.--
``(A) Requirement.--The regulations shall require each
Federal agency to develop a plan to meet the required
petroleum reduction levels and the alternative fuel
consumption increases.
``(B) Measures.--The plan may allow an agency to meet the
required petroleum reduction level through--
``(i) the use of alternative fuels;
``(ii) the acquisition of vehicles with higher fuel
economy, including hybrid vehicles and plug-in hybrid
vehicles if the vehicles are commercially available;
``(iii) the substitution of cars for light trucks;
``(iv) an increase in vehicle load factors;
``(v) a decrease in vehicle miles traveled;
``(vi) a decrease in fleet size; and
``(vii) other measures.
``(b) Federal Employee Incentive Programs for Reducing
Petroleum Consumption.--
``(1) In general.--Each Federal agency shall actively
promote incentive programs that encourage Federal employees
and contractors to reduce petroleum through the use of
practices such as--
``(A) telecommuting;
``(B) public transit;
``(C) carpooling; and
``(D) bicycling.
``(2) Monitoring and support for incentive programs.--The
Administrator of General Services, the Director of the Office
of Personnel Management, and the Secretary of Energy shall
monitor and provide appropriate support to agency programs
described in paragraph (1).
``(3) Recognition.--The Secretary may establish a program
under which the Secretary recognizes private sector employers
and State and local governments for outstanding programs to
reduce petroleum usage through practices described in
paragraph (1).
``(c) Replacement Tires.--
``(1) In general.--Except as provided in paragraph (2), the
regulations issued under subsection (a)(1) shall include a
requirement that, to the maximum extent practicable, each
Federal agency purchase energy-efficient replacement tires
for the respective fleet vehicles of the agency.
``(2) Exceptions.--This section does not apply to--
``(A) law enforcement motor vehicles;
``(B) emergency motor vehicles; or
``(C) motor vehicles acquired and used for military
purposes that the Secretary of Defense has certified to the
Secretary must be exempt for national security reasons.
``(d) Annual Reports on Compliance.--The Secretary shall
submit to Congress an annual report that summarizes actions
taken by Federal agencies to comply with this section.''.
(2) Table of contents amendment.--The table of contents of
the Energy Policy and Conservation Act (42 U.S.C. prec. 6201)
is amended by adding at the end of the items relating to part
J of title III the following:
``Sec. 400FF. Federal fleet conservation requirements.''.
(b) Authorization of Appropriations.--There is authorized
to be appropriated to carry out the amendment made by this
section $10,000,000 for the period of fiscal years 2008
through 2013.
SEC. 502. FEDERAL REQUIREMENT TO PURCHASE ELECTRICITY
GENERATED BY RENEWABLE ENERGY.
Section 203 of the Energy Policy Act of 2005 (42 U.S.C.
15852) is amended by striking subsection (a) and inserting
the following:
``(a) Requirement.--
``(1) In general.--The President, acting through the
Secretary, shall ensure that, of the total quantity of
domestic electric energy the Federal Government consumes
during any fiscal year, the following percentages shall be
renewable energy from facilities placed in service after
January 1, 1999:
``(A) Not less than 10 percent in fiscal year 2010.
``(B) Not less than 15 percent in fiscal year 2015.
``(2) Capitol complex.--The Architect of the Capitol, in
consultation with the Secretary, shall ensure that, of the
total quantity of electric energy the Capitol complex
consumes during any fiscal year, the percentages prescribed
in paragraph (1) shall be renewable energy.
``(3) Waiver authority.--The President may reduce or waive
the requirement under paragraph (1) on an annual basis, if
the President determines that the average governmentwide cost
per kilowatt hour of complying with paragraph (1) will be
more than 50 percent higher than the average governmentwide
cost per kilowatt-hour for electric energy in the preceding
year.''.
SEC. 503. ENERGY SAVINGS PERFORMANCE CONTRACTS.
(a) Retention of Savings.--Section 546(c) of the National
Energy Conservation Policy Act (42 U.S.C. 8256(c)) is amended
by striking paragraph (5).
(b) Financing Flexibility.--Section 801(a)(2) of the
National Energy Conservation Policy Act (42 U.S.C.
8287(a)(2)) is amended by adding at the end the following:
``(E) Separate contracts.--In carrying out a contract under
this title, a Federal agency may--
``(i) enter into a separate contract for energy services
and conservation measures under the contract; and
``(ii) provide all or part of the financing necessary to
carry out the contract.''.
(c) Sunset and Reporting Requirements.--Section 801 of the
National Energy Conservation Policy Act (42 U.S.C. 8287) is
amended by striking subsection (c).
(d) Definition of Energy Savings.--Section 804(2) of the
National Energy Conservation Policy Act (42 U.S.C. 8287c(2))
is amended--
(1) by redesignating subparagraphs (A), (B), and (C) as
clauses (i), (ii), and (iii), respectively, and indenting
appropriately;
(2) by striking ``means a reduction'' and inserting
``means--
``(A) a reduction'';
(3) by striking the period at the end and inserting a
semicolon; and
(4) by adding at the end the following:
``(B) the increased efficient use of an existing energy
source by cogeneration or heat recovery, and installation of
renewable energy systems;
``(C) the sale or transfer of electrical or thermal energy
generated on-site, but in excess of Federal needs, to
utilities or non-Federal energy users; and
``(D) the increased efficient use of existing water sources
in interior or exterior applications.''.
(e) Energy and Cost Savings in Nonbuilding Applications.--
(1) Definitions.--In this subsection:
(A) Nonbuilding application.--The term ``nonbuilding
application'' means--
(i) any class of vehicles, devices, or equipment that is
transportable under the power of the applicable vehicle,
device, or equipment by land, sea, or air and that consumes
energy from any fuel source for the purpose of--
(I) that transportation; or
(II) maintaining a controlled environment within the
vehicle, device, or equipment; and
(ii) any federally-owned equipment used to generate
electricity or transport water.
(B) Secondary savings.--
(i) In general.--The term ``secondary savings'' means
additional energy or cost savings that are a direct
consequence of the energy savings that result from the energy
efficiency improvements that were financed and implemented
pursuant to an energy savings performance contract.
(ii) Inclusions.--The term ``secondary savings'' includes--
(I) energy and cost savings that result from a reduction in
the need for fuel delivery and logistical support;
(II) personnel cost savings and environmental benefits; and
(III) in the case of electric generation equipment, the
benefits of increased efficiency in the production of
electricity, including revenues received by the Federal
Government from the sale of electricity so produced.
(2) Study.--
(A) In general.--As soon as practicable after the date of
enactment of this Act, the Secretary and the Secretary of
Defense shall jointly conduct, and submit to Congress and the
President a report of, a study of the potential for the use
of energy savings performance contracts to reduce energy
consumption and provide energy and cost savings in
nonbuilding applications.
(B) Requirements.--The study under this subsection shall
include--
(i) an estimate of the potential energy and cost savings to
the Federal Government, including secondary savings and
benefits, from increased efficiency in nonbuilding
applications;
(ii) an assessment of the feasibility of extending the use
of energy savings performance contracts to nonbuilding
applications, including an identification of any regulatory
or statutory barriers to such use; and
(iii) such recommendations as the Secretary and Secretary
of Defense determine to be appropriate.
SEC. 504. ENERGY MANAGEMENT REQUIREMENTS FOR FEDERAL
BUILDINGS.
Section 543(a)(1) of the National Energy Conservation
Policy Act (42 U.S.C. 8253(a)(1)) is amended by striking the
table and inserting the following:
``Fiscal Year Percentage reduction
2006...............................................................2
2007...............................................................4
2008...............................................................9
[[Page S4503]]
2009..............................................................12
2010..............................................................15
2011..............................................................18
2012..............................................................21
2013..............................................................24
2014..............................................................27
2015...........................................................30.''.
SEC. 505. COMBINED HEAT AND POWER AND DISTRICT ENERGY
INSTALLATIONS AT FEDERAL SITES.
Section 543 of the National Energy Conservation Policy Act
(42 U.S.C. 8253) is amended by adding at the end the
following:
``(f) Combined Heat and Power and District Energy
Installations at Federal Sites.--
``(1) In general.--Not later than 1 year after the date of
enactment of this subsection, the Secretary, in consultation
with the Administrator of General Services and the Secretary
of Defense, shall identify Federal sites that could achieve
significant cost-effective energy savings through the use of
combined heat and power or district energy installations.
``(2) Information and technical assistance.--The Secretary
shall provide agencies with information and technical
assistance that will enable the agencies to take advantage of
the energy savings described in paragraph (1).
``(3) Energy performance requirements.--Any energy savings
from the installations described in paragraph (1) may be
applied to meet the energy performance requirements for an
agency under subsection (a)(1).''.
SEC. 506. FEDERAL BUILDING ENERGY EFFICIENCY PERFORMANCE
STANDARDS.
Section 305(a)(3) of the Energy Conservation and Production
Act (42 U.S.C. 6834(a)(3)) is amended by striking ``(3)(A)''
and all that follows through the end of subparagraph (A) and
inserting the following:
``(3) Federal building energy efficiency performance
standards.--
``(A) In general.--Not later than 1 year after the date of
enactment of the Energy Efficiency Promotion Act of 2007, the
Secretary shall establish, by rule, revised Federal building
energy efficiency performance standards that require that:
``(i) For new Federal buildings and Federal buildings
undergoing major renovations:
``(I) The buildings be designed to achieve energy
consumption levels that are at least 30 percent below the
levels established in the version of the ASHRAE Standard or
the International Energy Conservation Code, as appropriate,
that is in effect as of the date of enactment of the Energy
Efficiency Promotion Act of 2007.
``(II) The buildings be designed so that the fossil fuel-
generated energy consumption of the buildings is reduced, as
compared with the fossil fuel-generated energy consumption by
a similar Federal building in fiscal year 2003 (as measured
by Commercial Buildings Energy Consumption Survey or
Residential Energy Consumption Survey data from the Energy
Information Agency), by the percentage specified in the
following table:
------------------------------------------------------------------------
------------------------------------------------------------------------
``Fiscal Year Percentage
Reduction
2007............................................... 50
2010............................................... 60
2015............................................... 70
2020............................................... 80
2025............................................... 90
2030............................................... 100.
------------------------------------------------------------------------
``(III) Sustainable design principles are applied to the
siting, design, and construction of all new and replacement
buildings and major renovations of buildings.
``(ii) If water is used to achieve energy efficiency, water
conservation technologies shall be applied to the extent that
the technologies are life-cycle cost-effective.''.
SEC. 507. APPLICATION OF INTERNATIONAL ENERGY CONSERVATION
CODE TO PUBLIC AND ASSISTED HOUSING.
Section 109 of the Cranston-Gonzalez National Affordable
Housing Act (42 U.S.C. 12709) is amended--
(1) in subsection (a)(2), by striking ``the Council of
American'' and all that follows through ``2003'' and
inserting ``the 2006'';
(2) in subsection (b)--
(A) in the heading, by striking ``Model Energy Code.--''
and inserting ``International Energy Conservation Code.--'';
and
(B) by striking ``CABO'' and all that follows through
``2003'' and inserting ``the 2006'';
(3) in subsection (c)--
(A) in the heading, by striking ``Model Energy Code and'';
and
(B) by striking ``CABO'' and all that follows through
``2003'' and inserting ``the 2006''; and
(4) by adding at the end the following:
``(d) Failure to Amend the Standards.--Not later than 1
year after the requirements of the 2006 International Energy
Conservation Code are revised, if the Secretaries have not
amended the energy efficiency standards under this section or
made a determination under subsection (c), and if the
Secretary of Energy has made a determination under section
304 of the Energy Conservation and Production Act (42 U.S.C.
6833) that such revised International Energy Conservation
Code would improve energy efficiency, all new construction of
housing described in subsection (a) shall meet the
requirements of such revised International Energy
Conservation Code.''.
TITLE VI--ASSISTING STATE AND LOCAL GOVERNMENTS IN ENERGY EFFICIENCY
SEC. 601. WEATHERIZATION ASSISTANCE FOR LOW-INCOME PERSONS.
Section 422 of the Energy Conservation and Production Act
(42 U.S.C. 6872) is amended by striking ``$700,000,000 for
fiscal year 2008'' and inserting ``$750,000,000 for each of
fiscal years 2008 through 2012''.
SEC. 602. STATE ENERGY CONSERVATION PLANS.
Section 365(f) of the Energy Policy and Conservation Act
(42 U.S.C. 6325(f)) is amended by striking ``fiscal year
2008'' and inserting ``each of fiscal years 2008 through
2012''.
SEC. 603. UTILITY ENERGY EFFICIENCY PROGRAMS.
(a) Electric Utilities.--Section 111(d) of the Public
Utility Regulatory Policies Act of 1978 (16 U.S.C. 2621(d))
is amended by adding at the end the following:
``(16) Integrated resource planning.--Each electric utility
shall--
``(A) integrate energy efficiency resources into utility,
State, and regional plans; and
``(B) adopt policies establishing cost-effective energy
efficiency as a priority resource.
``(17) Rate design modifications to promote energy
efficiency investments.--
``(A) In general.--The rates allowed to be charged by any
electric utility shall--
``(i) align utility incentives with the delivery of cost-
effective energy efficiency; and
``(ii) promote energy efficiency investments.
``(B) Policy options.--In complying with subparagraph (A),
each State regulatory authority and each nonregulated utility
shall consider--
``(i) removing the throughput incentive and other
regulatory and management disincentives to energy efficiency;
``(ii) providing utility incentives for the successful
management of energy efficiency programs;
``(iii) including the impact on adoption of energy
efficiency as 1 of the goals of retail rate design,
recognizing that energy efficiency must be balanced with
other objectives;
``(iv) adopting rate designs that encourage energy
efficiency for each customer class; and
``(v) allowing timely recovery of energy efficiency-related
costs.''.
(b) Natural Gas Utilities.--Section 303(b) of the Public
Utility Regulatory Policies Act of 1978 (16 U.S.C. 3203(b))
is amended by adding at the end the following:
``(5) Energy efficiency.--Each natural gas utility shall--
``(A) integrate energy efficiency resources into the plans
and planning processes of the natural gas utility; and
``(B) adopt policies that establish energy efficiency as a
priority resource in the plans and planning processes of the
natural gas utility.
``(6) Rate design modifications to promote energy
efficiency investments.--
``(A) In general.--The rates allowed to be charged by a
natural gas utility shall align utility incentives with the
deployment of cost-effective energy efficiency.
``(B) Policy options.--In complying with subparagraph (A),
each State regulatory authority and each nonregulated utility
shall consider--
``(i) separating fixed-cost revenue recovery from the
volume of transportation or sales service provided to the
customer;
``(ii) providing to utilities incentives for the successful
management of energy efficiency programs, such as allowing
utilities to retain a portion of the cost-reducing benefits
accruing from the programs;
``(iii) promoting the impact on adoption of energy
efficiency as 1 of the goals of retail rate design,
recognizing that energy efficiency must be balanced with
other objectives; and
``(iv) adopting rate designs that encourage energy
efficiency for each customer class.''.
SEC. 604. ENERGY EFFICIENCY AND DEMAND RESPONSE PROGRAM
ASSISTANCE.
The Secretary shall provide technical assistance regarding
the design and implementation of the energy efficiency and
demand response programs established under this title, and
the amendments made by this title, to State energy offices,
public utility regulatory commissions, and nonregulated
utilities through the appropriate national laboratories of
the Department of Energy.
SEC. 605. ENERGY AND ENVIRONMENTAL BLOCK GRANT.
(a) Definitions.--In this section
(1) Eligible entity.--The term ``eligible entity'' means--
(A) a State;
(B) an eligible unit of local government within a State;
and
(C) the District of Columbia.
(2) Eligible unit of local government.--The term ``eligible
unit of local government'' means--
(A) a city with a population of at least 35,000; and
(B) a county with a population of at least 200,000.
(3) State.--The term ``State'' means--
(A) each of the several States of the United States;
(B) the Commonwealth of Puerto Rico;
(C) Guam;
(D) American Samoa; and
(E) the United States Virgin Islands.
(b) Purpose.--The purpose of this section is to assist
State and local governments in implementing strategies--
(1) to reduce fossil fuel emissions created as a result of
activities within the boundaries of the States or units of
local government;
[[Page S4504]]
(2) to reduce the total energy use of the States and units
of local government; and
(3) to improve energy efficiency in the transportation
sector, building sector, and any other appropriate sectors.
(c) Program.--
(1) In general.--The Secretary shall provide to eligible
entities block grants to carry out eligible activities (as
specified under paragraph (2)) relating to the implementation
of environmentally beneficial energy strategies.
(2) Eligible activities.--The Secretary, in consultation
with the Administrator of the Environmental Protection
Agency, the Secretary of Transportation, and the Secretary of
Housing and Urban Development, shall establish a list of
activities that are eligible for assistance under the grant
program.
(3) Allocation to states and eligible units of local
government.--
(A) In general.--Of the amounts made available to provide
grants under this subsection, the Secretary shall allocate--
(i) 70 percent to eligible units of local government; and
(ii) 30 percent to States.
(B) Distribution to eligible units of local government.--
(i) In general.--The Secretary shall establish a formula
for the distribution of amounts under subparagraph (A)(i) to
eligible units of local government, taking into account any
factors that the Secretary determines to be appropriate,
including the residential and daytime population of the
eligible units of local government.
(ii) Criteria.--Amounts shall be distributed to eligible
units of local government under clause (i) only if the
eligible units of local government meet the criteria for
distribution established by the Secretary for units of local
government.
(C) Distribution to states.--
(i) In general.--Of the amounts provided to States under
subparagraph (A)(ii), the Secretary shall distribute--
(I) at least 1.25 percent to each State; and
(II) the remainder among the States, based on a formula, to
be determined by the Secretary, that takes into account the
population of the States and any other criteria that the
Secretary determines to be appropriate.
(ii) Criteria.--Amounts shall be distributed to States
under clause (i) only if the States meet the criteria for
distribution established by the Secretary for States.
(iii) Limitation on use of state funds.--At least 40
percent of the amounts distributed to States under this
subparagraph shall be used by the States for the conduct of
eligible activities in nonentitlement areas in the States, in
accordance with any criteria established by the Secretary.
(4) Report.--Not later than 2 years after the date on which
an eligible entity first receives a grant under this section,
and every 2 years thereafter, the eligible entity shall
submit to the Secretary a report that describes any eligible
activities carried out using assistance provided under this
subsection.
(5) Authorization of appropriations.--There are authorized
to be appropriated such sums as are necessary to carry out
this subsection for each of fiscal years 2008 through 2012.
(d) Environmentally Beneficial Energy Strategies
Supplemental Grant Program.--
(1) In general.--The Secretary shall provide to each
eligible entity that meets the applicable criteria under
subparagraph (B)(ii) or (C)(ii) of subsection (c)(3) a
supplemental grant to pay the Federal share of the total
costs of carrying out an eligible activity (as specified
under subsection (c)(2)) relating to the implementation of an
environmentally beneficial energy strategy.
(2) Requirements.--To be eligible for a grant under
paragraph (1), an eligible entity shall--
(A) demonstrate to the satisfaction of the Secretary that
the eligible entity meets the applicable criteria under
subparagraph (B)(ii) or (C)(ii) of subsection (c)(3); and
(B) submit to the Secretary for approval a plan that
describes the activities to be funded by the grant.
(3) Cost-sharing requirement.--
(A) Federal share.--The Federal share of the cost of
carrying out any activities under this subsection shall be 75
percent.
(B) Non-federal share.--
(i) Form.--Not more than 50 percent of the non-Federal
share may be in the form of in-kind contributions.
(ii) Limitation.--Amounts provided to an eligible entity
under subsection (c) shall not be used toward the non-Federal
share.
(4) Maintenance of effort.--An eligible entity shall
provide assurances to the Secretary that funds provided to
the eligible entity under this subsection will be used only
to supplement, not to supplant, the amount of Federal, State,
and local funds otherwise expended by the eligible entity for
eligible activities under this subsection.
(5) Authorization of appropriations.--There are authorized
to be appropriated such sums as are necessary to carry out
this subsection for each of fiscal years 2008 through 2012.
(e) Grants to Other States and Communities.--
(1) In general.--Of the total amount of funds that are made
available each fiscal year to carry out this section, the
Secretary shall use 2 percent of the amount to make
competitive grants under this section to States and units of
local government that are not eligible entities or to
consortia of such units of local government.
(2) Applications.--To be eligible for a grant under this
subsection, a State, unit of local government, or consortia
described in paragraph (1) shall apply to the Secretary for a
grant to carry out an activity that would otherwise be
eligible for a grant under subsection (c) or (d).
(3) Priority.--In awarding grants under this subsection,
the Secretary shall give priority to--
(A) States with populations of less than 2,000,000; and
(B) projects that would result in significant energy
efficiency improvements, reductions in fossil fuel use, or
capital improvements.
SEC. 606. ENERGY SUSTAINABILITY AND EFFICIENCY GRANTS FOR
INSTITUTIONS OF HIGHER EDUCATION.
(a) Definitions.--In this section:
(1) Energy sustainability.--The term ``energy
sustainability'' includes using a renewable energy resource
and a highly efficient technology for electricity generation,
transportation, heating, or cooling.
(2) Institution of higher education.--The term
``institution of higher education'' has the meaning given the
term in section 2 of the Energy Policy Act of 2005 (42 U.S.C.
15801).
(b) Grants for Energy Efficiency Improvement.--
(1) In general.--The Secretary shall award not more than
100 grants to institutions of higher education to carry out
projects to improve energy efficiency on the grounds and
facilities of the institution of higher education, including
not less than 1 grant to an institution of higher education
in each State.
(2) Condition.--As a condition of receiving a grant under
this subsection, an institution of higher education shall
agree to--
(A) implement a public awareness campaign in the community
in which the institution of higher education is located to
promote the project; and
(B) submit to the Secretary, and make available to the
public, reports on any improvements achieved as part of a
project carried out under paragraph (1).
(c) Grants for Innovation in Energy Sustainability.--
(1) In general.--The Secretary shall award not more than
250 grants to institutions of higher education to engage in
innovative energy sustainability projects, including not less
than 2 grants to institutions of higher education in each
State.
(2) Innovation projects.--An innovation project carried out
with a grant under this subsection shall--
(A) involve an innovative technology that is not yet
commercially available;
(B) have the greatest potential for testing or modeling new
technologies or processes; and
(C) ensure active student participation in the project,
including the planning, implementation, evaluation, and other
phases of the project.
(3) Condition.--As a condition of receiving a grant under
this subsection, an institution of higher education shall
agree to submit to the Secretary, and make available to the
public, reports that describe the results of the projects
carried out under paragraph (1).
(d) Awarding of Grants.--
(1) Application.--An institution of higher education that
seeks to receive a grant under this section may submit to the
Secretary an application for the grant at such time, in such
form, and containing such information as the Secretary may
prescribe.
(2) Selection.--The Secretary shall establish a committee
to assist in the selection of grant recipients under this
section.
(e) Allocation to Institutions of Higher Education With
Small Endowments.--Of the amount of grants provided for a
fiscal year under this section, the Secretary shall provide
not less 50 percent of the amount to institutions of higher
education that have an endowment of not more than
$100,000,000, with 50 percent of the allocation set aside for
institutions of higher education that have an endowment of
not more than $50,000,000.
(f) Grant Amounts.--The maximum amount of grants for a
project under this section shall not exceed--
(1) in the case of grants for energy efficiency improvement
under subsection (b), $1,000,000; or.
(2) in the case of grants for innovation in energy
sustainability under subsection (c), $500,000.
(g) Authorization of Appropriations.--There are authorized
to be appropriated such sums as are necessary to carry out
this section for each of fiscal years 2008 through 2012.
SEC. 607. WORKFORCE TRAINING.
Section 1101 of the Energy Policy Act of 2005 (42 U.S.C.
16411) is amended--
(1) by redesignating subsection (d) as subsection (e); and
(2) by inserting after subsection (c) the following:
``(d) Workforce Training.--
``(1) In general.--The Secretary, in cooperation with the
Secretary of Labor, shall promulgate regulations to implement
a program to provide workforce training to meet the high
demand for workers skilled in the energy efficiency and
renewable energy industries.
``(2) Consultation.--In carrying out this subsection, the
Secretary shall consult with
[[Page S4505]]
representatives of the energy efficiency and renewable energy
industries concerning skills that are needed in those
industries.''.
SEC. 608. ASSISTANCE TO STATES TO REDUCE SCHOOL BUS IDLING.
(a) Statement of Policy.--Congress encourages each local
educational agency (as defined in section 9101(26) of the
Elementary and Secondary Education Act of 1965 (20 U.S.C.
7801(26))) that receives Federal funds under the Elementary
and Secondary Education Act of 1965 (20 U.S.C. 6301 et seq.)
to develop a policy to reduce the incidence of school bus
idling at schools while picking up and unloading students.
(b) Authorization of Appropriations.--There are authorized
to be appropriated to the Secretary, working in coordination
with the Secretary of Education, $5,000,000 for each of
fiscal years 2007 through 2012 for use in educating States
and local education agencies about--
(1) benefits of reducing school bus idling; and
(2) ways in which school bus idling may be reduced.
Mr. DOMENICI. Mr. President, over 18 months ago, the President signed
into law the Energy Policy Act of 2005. The enactment of that
comprehensive legislation was a watershed event in structuring sound
Energy policy for this Nation's future. We did a great deal in that
energy bill on energy conservation and improved energy efficiency.
EPAct implemented new efficiency standards for 15 large commercial
and residential appliances that have, in the past, consumed a great
deal of energy, such as commercial washers, refrigerators, freezers,
air-conditioners, and icemakers. In response to that mandate, the
Department of Energy codified 15 new efficiency standards. Because of
these new standards alone, we will save 50,000 megawatts of off-peak
electricity use by 2020--which is an energy savings equal to more than
eighty 600-megawatt power plants.
EPAct also encourages consumers to make their homes more energy
efficient by giving them a 10-percent personal tax credit for energy
efficient improvements. Additionally, homebuilders get a business tax
credit for the construction of new homes that meet a 30-percent energy
reduction standard. The law aids businesses in saving energy by
providing a deduction for energy-efficient commercial buildings meeting
a 50-percent energy reduction standard. Manufacturers are also assisted
in building more energy-efficient home products via a manufacturers'
tax credit for energy-efficient dishwashers, clothes washers, and
refrigerators.
Still, there is no doubt that much can be done to improve the ways in
which we use energy. That is why I am pleased today to introduce the
Energy Efficiency Promotion Act of 2007 with Senator Bingaman. The bill
we are introducing is a good starting point--but it is still a work in
progress. I expect this bill to evolve over the course of the next
several weeks with important input from those who will be tasked with
implementing this policy and those who will be impacted by it. In
particular, I am very interested in the Energy Department's views on
this bill, and the committee will conduct a hearing next week at which
the Department will testify.
The Energy Efficiency Promotion Act of 2007 represents over $12
billion in net present benefits for consumers. Potential electricity
savings of 50 billion kilowatt hours per year equal enough energy
savings to power almost 5 million households. Potential natural gas
savings of 170 million therms per year equal enough energy savings to
heat 250,000 households. And water savings from the legislation amount
to about 560 million gallons per day.
This bill presses for better energy efficiency in the Federal
Government--the appropriate place to start. Title I focuses on the
promotion of energy-efficient lighting technologies within Federal
Government and requires all general purpose lighting in Federal
buildings to be Energy Star rated or designated as efficient by the
Federal Energy Management Program. Title I also contains a sense of the
Senate that Federal policies be adopted on efficient lightbulb
standards.
Title II, which deals with energy efficiency standards, sets forth a
number of consensus standards on such products as residential boilers,
clothes washers, dishwashers, dehumidifiers, and electric motors. Such
efficiency standards have the potential to save significant amounts of
energy. This title also provides DOE with the authority to expedite
rulemakings for energy-efficient consensus standards.
Title III promotes high efficiency vehicles, advanced batteries, and
energy storage. It provides for lightweight materials research and
development and loan guarantee the manufacture of fuel-efficient
vehicle parts, including hybrid and advanced diesel vehicles.
Title IV sets forth national energy savings goals in the areas of
transportation and the Nation's energy productivity. This title extends
the President's goal for gasoline savings and further seeks to improve
the Nation's overall energy productivity.
Title V calls for increased federal leadership in energy efficiency
and renewable energy. It directs DOE to reduce petroleum consumption
and increases the Federal requirement to purchase electricity generated
by renewable energy. This title also permanently authorizes the Energy
Savings Performance Contracts Program.
Title VI seeks to assist State and local governments with their
ongoing efforts to improve their energy efficiency. It extends the
authorization for both the Weatherization Assistance Program and the
State Energy Conservation Program. This title also establishes energy
efficiency grant programs for local governments and institutions of
higher learning.
Again, I think the Energy Efficiency Promotion Act of 2007 we are
introducing today is a good starting point for our continued work in
the energy efficiency area. I look forward to working with Senator
Bingaman, the administration, and all affected stakeholders as we move
forward on this bill.
______
By Mr. BOND (for himself and Mr. Dodd):
S. 1117. A bill to establish a grant program to provide vision care
to children, and for other purposes; to the Committee on Health,
Education, Labor, and Pensions.
Mr. BOND. Mr. President, children endure a lot. They cannot always
tell us what's wrong. Often they do not know themselves. So it takes a
special person to work with young people and help identify their
problems. Every child deserves the opportunity to reach their full
potential, but it takes more than a book-bag full of pencils, paper,
books and rulers to equip children with the tools necessary to succeed
in school.
The most important tool kids will take to school is their eyes. Good
vision is critical to learning. 80 percent of what kids learn in their
early school years is visual. Unfortunately, we overlook that fact
sometimes. According to the CDC only one in three children receive any
form of preventive vision care before entering school. That means many
kids are in school with an undetected vision problem. One in four
children has a vision problem that can interfere with learning. Some
children are even labeled ``disruptive'' or thought to have a learning
disability when the real reason for their difficulty is an undetected
vision problem.
Without any vision care, some of our children will continue to fall
through the cracks. I sympathize with these kids because I suffer from
permanent vision loss in one eye as a result of undiagnosed Amblyopia
in childhood. Amblyopia is the number one cause of vision loss in young
Americans. If discovered and treated early, vision loss from Amblyopia
can be largely prevented. Had I been identified and treated before I
entered school, I could have avoided a lifetime of vision loss. Parents
are not always aware that their child may suffer from a vision problem.
By educating parents on the importance of vision care and recognizing
signs of visual impairment we can help children avoid unnecessary
vision loss.
To ensure that children get the vital vision care that they need to
succeed, today Senator Dodd and I are introducing the Vision Care for
Kids Act which will establish a grant program to compliment and
encourage existing State efforts to improve children's vision care.
More specifically, grant funds will be used to: (1) provide
comprehensive eye exams to children that have been previously
identified as needing such services; (2) provide treatment or services
necessary to correct vision problems identified in that eye exam; and
(3) develop and disseminate educational materials to recognize the
signs of visual impairment in children
[[Page S4506]]
for parents, teachers, and health care practitioners.
We need to do this. We must improve vision care for children to
better equip them to succeed in school and in life. The Vision Care for
Kids Act, endorsed by the American Academy of Ophthalmology, American
Optometric Association, and Vision Council of America, will make a
difference in the lives of children across the country.
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. 1117
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Vision Care for Kids Act of
2007''.
SEC. 2. FINDINGS.
Congress makes the following findings:
(1) Millions of children in the United States suffer from
vision problems, many of which go undetected. Because
children with vision problems can struggle developmentally,
resulting in physical, emotional, and social consequences,
good vision is essential for proper physical development and
educational progress.
(2) Vision problems in children range from common
conditions such as refractive errors, amblyopia, strabismus,
ocular trauma, and infections, to rare but potentially life-
or sight-threatening problems such as retinoblastoma,
infantile cataracts, congenital glaucoma, and genetic or
metabolic diseases of the eye.
(3) Since many serious ocular conditions are treatable if
identified in the preschool and early school-aged years,
early detection provides the best opportunity for effective
treatment and can have far-reaching implications for vision.
(4) Various identification methods, including vision
screening and comprehensive eye examinations required by
State laws, can be helpful in identifying children needing
services. A child identified as needing services through
vision screening should receive a comprehensive eye
examination followed by subsequent treatment as needed. Any
child identified as needing services should have access to
subsequent treatment as needed.
(5) There is a need to increase public awareness about the
prevalence and devastating consequences of vision disorders
in children and to educate the public and health care
providers about the warning signs and symptoms of ocular and
vision disorders and the benefits of early detection,
evaluation, and treatment.
SEC. 3. GRANTS REGARDING VISION CARE FOR CHILDREN.
(a) In General.--The Secretary of Health and Human Services
(referred to in this section as the ``Secretary''), acting
through the Director of the Centers for Disease Control and
Prevention, may award grants to States on the basis of an
established review process for the purpose of complementing
existing State efforts for--
(1) providing comprehensive eye examinations by a licensed
optometrist or ophthalmologist for children who have been
previously identified through a vision screening or eye
examination by a licensed health care provider or vision
screener as needing such services, with priority given to
children who are under the age of 9 years;
(2) providing treatment or services, subsequent to the
examinations described in paragraph (1), necessary to correct
vision problems; and
(3) developing and disseminating, to parents, teachers, and
health care practitioners, educational materials on
recognizing signs of visual impairment in children.
(b) Criteria and Coordination.--
(1) Criteria.--The Secretary, in consultation with
appropriate professional and consumer organizations including
individuals with knowledge of age appropriate vision
services, shall develop criteria--
(A) governing the operation of the grant program under
subsection (a); and
(B) for the collection of data related to vision assessment
and the utilization of follow up services.
(2) Coordination.--The Secretary shall, as appropriate,
coordinate the program under subsection (a) with the program
under section 330 of the Public Health Service Act (relating
to health centers) (42 U.S.C. 254b), the program under title
XIX of the Social Security Act (relating to the Medicaid
program) (42 U.S.C. 1396 et seq.), the program under title
XXI of such Act (relating to the State children's health
insurance program) (42 U.S.C. 1397aa et seq.), and with other
Federal or State programs that provide services to children.
(c) Application.--To be eligible to receive a grant under
subsection (a), a State shall submit to the Secretary an
application in such form, made in such manner, and containing
such information as the Secretary may require, including--
(1) information on existing Federal, Federal-State, or
State-funded children's vision programs;
(2) a plan for the use of grant funds, including how funds
will be used to complement existing State efforts (including
possible partnerships with non-profit entities);
(3) a plan to determine if a grant eligible child has been
identified as provided for in subsection (a); and
(4) a description of how funds will be used to provide
items or services, only as a secondary payer--
(A) for an eligible child, to the extent that the child is
not covered for the items or services under any State
compensation program, under an insurance policy, or under any
Federal or State health benefits program; or
(B) for an eligible child, to the extent that the child
receives the items or services from an entity that provides
health services on a prepaid basis.
(d) Evaluations.--To be eligible to receive a grant under
subsection (a), a State shall agree that, not later than 1
year after the date on which amounts under the grant are
first received by the State, and annually thereafter while
receiving amounts under the grant, the State will submit to
the Secretary an evaluation of the operations and activities
carried out under the grant, including--
(1) an assessment of the utilization of vision services and
the status of children receiving these services as a result
of the activities carried out under the grant;
(2) the collection, analysis, and reporting of children's
vision data according to guidelines prescribed by the
Secretary; and
(3) such other information as the Secretary may require.
(e) Limitations in Expenditure of Grant.--A grant may be
made under subsection (a) only if the State involved agrees
that the State will not expend more than 20 percent of the
amount received under the grant to carry out the purpose
described in paragraph (3) of such subsection.
(f) Definition.--For purposes of this section, the term
``comprehensive eye examination'' includes an assessment of a
patient's history, general medical observation, external and
ophthalmoscopic examination, visual acuity, ocular alignment
and motility, refraction, and as appropriate, binocular
vision or gross visual fields, performed by an optometrist or
an ophthalmologist.
(g) Authorization of Appropriations.--For the purpose of
carrying out this section, there are authorized to be
appropriated such sums as may be necessary for each of fiscal
years 2008 through 2012.
Mr. DODD. Mr. President, today, Senator Bond and I are introducing
the Vision Care for Kids Act of 2007. This legislation will provide
follow-up vision care services for those children who have visual
problems and are not covered under an insurance policy or under any
Federal, or State health benefits program.
Why is this legislation needed? Let's look at the facts. According to
the 2004 Vision Problems Action Plan, published by Prevent Blindness
America, vision problems affect one in 20 preschoolers and 80 percent
of children under age six are not screened for vision problems before
entering public school.
Perhaps even more startling than the statistics I have just
mentioned, is that 20 States do not require children to receive any
vision care prior to entry or during their early school years. Thus,
millions of children are at risk of having possible vision problems
later in life.
I am pleased that my home State of Connecticut provides annual
screenings to children in kindergarten through grade six. In addition,
during the ninth grade, each student also receives a vision screening.
Following the eye tests that are administered in Connecticut's schools,
the local superintendent sends a note to the parent or guardian of each
student who is found to have a problem.
Although Connecticut provides screenings in the early years, it is
important to note that out of the 467,488 children in Connecticut,
there are almost 70,000 who have untreated vision disorders, according
to the most recent Census data. Nationwide, almost 6 million out of
close to 40 million children have untreated vision disorders. The
Centers for Disease Control and Prevention said that ``impaired vision
can affect a child's cognitive, emotional, neurological, and physical
development.''
With the introduction of the Vision Care for Kids Act, Senator Bond
and I are seeking to improve the data I have outlined. When this
legislation is enacted, the States will have the resources to pay for
follow-up vision treatment for children who now do not have the
financial means to undergo this much needed care.
Our initiative will enable Federal funding to complement existing
State efforts in regard to: providing comprehensive eye examinations
for children under age nine; furnishing the necessary treatment or
services needed if an eye exam determines additional
[[Page S4507]]
care is needed; and developing educational materials for parents,
teachers, and health care practitioners that will increase recognition
of the signs of visual impairment in children. The Vision Care for Kids
Act will serve as an incentive to States to provide eye care to those
youngsters who are in need of treatment and are currently unable to
access care.
This year, we are working on the reauthorization of the State
Children's Health Insurance Program (SCHIP). SCHIP was created to
provide health care to millions of children who were previously
uninsured. Over the last ten years, we have seen the positive impact of
this essential program. Passage of the Vision Care for Kids Act will be
a key component of ensuring that we have a comprehensive children's
health care delivery system in this country. I look forward to working
with Senator Bond and my colleagues to see that this legislation is not
only is not only passed by this body soon, but that it is signed into
law.
______
By Mr. DORGAN (for himself and Mr. Craig):
S. 1118. A bill to improve the energy security of the United States
by raising average fuel economy standards, and for other purposes; to
the Committee on Commerce, Science, and Transportation.
Mr. DORGAN. Mr. President, today I am pleased to be joined by Senator
Craig to introduce legislation called the Fuel Efficiency Act of 2007.
This legislation is an important component of broader legislation that
my colleague and I recently introduced on March 14, 2007. That
legislation is a balanced plan with the overall goal to improve the
energy security of the U.S. through a 50 percent reduction in the oil
intensity of the economy by 2030.
This is important to me because the United States remains dangerously
dependent on foreign sources of oil. Today we import over 60 percent of
our oil from Iraq, Kuwait, Saudi Arabia, Nigeria, Venezuela, and other
unstable nations of the world. This is very troubling to me.
Our larger proposal is grounded in four cornerstone principles. The
first principle is achievable, stepped increases in fuel efficiency of
the transportation fleet. The second principle promotes increased
availability of alternative fuel sources and infrastructure. The third
principle calls for expanded production and enhanced exploration of
domestic and other secure oil and natural gas resources. Finally, the
fourth principle improves the management of alliances to better secure
global energy supplies.
In the United States, we use about 67 percent of our oil to power our
vehicles. This is the area where we are least secure and increasingly
dependent. For these reasons and more, we introduced S. 875 as a bi-
partisan, balanced approach to securing our future energy through
reducing our dependence on foreign oil.
I am also a member of the Senate Commerce, Science and Transportation
Committee which has jurisdiction over the fuel economy standards of our
Nation's vehicle fleet. I look forward to working with Chairman Inouye,
Ranking Member Stevens, and other members of the committee who are
interested in enacting strong, fair, and forwarding-looking fuel
economy standards.
It should be noted that this is the first time that both Senator
Craig and I have publicly stated our support for increased fuel economy
standards beyond the incremental steps that the current administration
has made to date. Our Nation's fuel economy standards have not
significantly changed since the mid-1980s. We now have lower passenger
vehicle fuel efficiency standards than Japan, the European Union,
Australia, Canada, and yes, even China.
The bill we have introduced today reforms and strengthens fuel
efficiency standards by establishing an annual 4 percent increase in
the fuel economy of the entire new vehicle fleet, including
automobiles, medium trucks, and heavy trucks from 2012-2030. The
National Highway Traffic Safety Administration will have discretion to
invoke ``off-ramps'' if it is determined that the increase is not
technologically achievable, creates material safety concerns, or is not
cost effective.
Senator Craig and I came together to develop a new pathway forward
because we believe that bolder energy security measures must be taken
now to address our long-term security, economic growth and
environmental protection. There is no silver bullet to solving our
energy dependence. Digging and drilling is a strategy I call yesterday
forever. Conservation alone is not the answer. Renewable fuels hold
promise, but we need to do much more here. We believe the combination
of steps sets the right pathway to U.S. energy security, and we look
forward to moving increased fuel economy standards through the Senate
Commerce Committee.
____________________