[Congressional Record (Bound Edition), Volume 152 (2006), Part 12]
[Senate]
[Pages 15947-15982]
[From the U.S. Government Publishing Office, www.gpo.gov]




                           TEXT OF AMENDMENTS

  SA 4695. Mr. MARTINEZ (for Mr. Grassley (for himself and Mr. Baucus)) 
proposed an amendment to the bill H.R. 5865, to amend section 1113 of 
the Social Security Act to temporarily increase funding for the program 
of temporary assistance to United States citizens returned from foreign 
countries, and for other purposes; as follows:

       Strike all after the enacting clause and insert

     SECTION 1. PAYMENTS FOR TEMPORARY ASSISTANCE TO UNITED STATES 
                   CITIZENS RETURNED FROM FOREIGN COUNTRIES.

       (a) Increase in Aggregate Payments Limit for Fiscal Year 
     2006.--Section 1113(d) of the Social Security Act (42 U.S.C. 
     1313(d)) is amended by inserting ``, except that, in the case 
     of fiscal year 2006, the total amount of such assistance 
     provided during that fiscal year shall not exceed 
     $6,000,000'' after ``2003''.

     SEC. 2. DISCLOSURE OF INFORMATION IN THE DIRECTORY OF NEW 
                   HIRES TO ASSIST ADMINISTRATION OF FOOD STAMP 
                   PROGRAMS.

       Section 453(j) of the Social Security Act (42 U.S.C. 
     653(j)) is amended--
       (1) by redesignating the second paragraph (7) as paragraph 
     (9); and
       (2) by adding at the end the following new paragraph
       ``(10) Information comparisons and disclosure to assist in 
     administration of food stamp programs.--
       ``(A) In general.--If, for purposes of administering a food 
     stamp program under the Food Stamp Act of 1977, a State 
     agency responsible for the administration of the program 
     transmits to the Secretary the names and social security 
     account numbers of individuals, the Secretary shall disclose 
     to the State agency information on the individuals and their 
     employers maintained in the National Directory of New Hires, 
     subject to this paragraph.
       ``(B) Condition on disclosure by the secretary.--The 
     Secretary shall make a disclosure under subparagraph (A) only 
     to the extent that the Secretary determines that the 
     disclosure would not interfere with the effective operation 
     of the program under this part.
       ``(C) Use and disclosure of information by state 
     agencies.--
       ``(i) In general.--A State agency may not use or disclose 
     information provided under this paragraph except for purposes 
     of administering a program referred to in subparagraph (A).
       ``(ii) Information security.--The State agency shall have 
     in effect data security and control policies that the 
     Secretary finds adequate to ensure the security of 
     information obtained under this paragraph and to ensure that 
     access to such information is restricted to authorized 
     persons for purposes of authorized uses and disclosures.
       ``(iii) Penalty for misuse of information.--An officer or 
     employee of the State agency who fails to comply with this 
     subparagraph shall be subject to the sanctions under 
     subsection (l)(2) to the same extent as if the officer or 
     employee were an officer or employee of the United States.
       ``(D) Procedural requirements.--State agencies requesting 
     information under this paragraph shall adhere to uniform 
     procedures established by the Secretary governing information 
     requests and data matching under this paragraph.
       ``(E) Reimbursement of costs.--The State agency shall 
     reimburse the Secretary, in accordance with subsection 
     (k)(3), for the costs incurred by the Secretary in furnishing 
     the information requested under this paragraph.''.
                                 ______
                                 
  SA 4696. Mr. ALLARD submitted an amendment intended to be proposed by 
him to the bill S. 3711, to enhance the energy independence and 
security of the United States by providing for exploration, 
development, and production activities for mineral resources in the 
Gulf of Mexico, and for other purposes; which was ordered to lie on the 
table; as follows:

       On page 11, line 21, insert after ``Treasury'' the 
     following: ``, from which the Secretary of the Treasury shall 
     transfer to the Secretary such amounts as are necessary to 
     carry out the payment in lieu of taxes program under chapter 
     69 of title 31, United States Code''.

       On page 18, after line 17, add the following:
       (g) Availability of Payment in Lieu of Taxes Amounts.--
     Amounts made available for the payment in lieu of taxes 
     program under subsection (a)(1) shall--
       (1) be made available without further appropriation;
       (2) remain available until expended; and
       (3) be in addition to any amounts made available for the 
     payment in lieu of taxes program under--
       (A) section 6906 of title 31, United States Code; or
       (B) any other provision of law.
                                 ______
                                 
  SA 4697. Mr. INHOFE submitted an amendment intended to be proposed by 
him to the bill S. 3711, to enhance the energy independence and 
security of the United States by providing for exploration, 
development, and production activities for mineral resources in the 
Gulf of Mexico, and for other purposes; which was ordered to lie on the 
table; as follows:

       At the appropriate place, insert the following:

     SEC. ___. REFINERY PERMITTING PROCESS.

       (a) Short Title.--This section may be cited as the 
     ``Domestic Fuel Security Act''.
       (b) Definitions.--In this section:
       (1) Administrator.--The term ``Administrator'' means the 
     Administrator of the Environmental Protection Agency.
       (2) Indian tribe.--The term ``Indian tribe'' has the 
     meaning given the term in section 4 of the Indian Self-
     Determination and Education Assistance Act (25 U.S.C. 450b).
       (3) Permit.--The term ``permit'' means any permit, license, 
     approval, variance, or other form of authorization that a 
     refiner is required to obtain--
       (A) under any Federal law; or

[[Page 15948]]

       (B) from a State or Indian tribal government agency 
     delegated authority by the Federal Government, or authorized 
     under Federal law, to issue permits.
       (4) Refiner.--The term ``refiner'' means a person that--
       (A) owns or operates a refinery; or
       (B) seeks to become an owner or operator of a refinery.
       (5) Refinery.--
       (A) In general.--The term ``refinery'' means--
       (i) a facility at which crude oil is refined into 
     transportation fuel or other petroleum products; and
       (ii) a coal liquification or coal-to-liquid facility at 
     which coal is processed into synthetic crude oil or any other 
     fuel.
       (B) Inclusions.--The term ``refinery'' includes--
       (i) an expansion of a refinery;
       (ii) a biorefinery; and
       (iii) any facility that produces a renewable fuel (as 
     defined in section 211(o)(1) of the Clean Air Act (42 U.S.C. 
     7545(o)(1)).
       (6) Refinery expansion.--The term ``refinery expansion'' 
     means a physical change in a refinery that results in an 
     increase in the capacity of the refinery.
       (7) Refinery permitting agreement.--The term ``refinery 
     permitting agreement'' means an agreement entered into 
     between the Administrator and a State or Indian tribe under 
     subsection (d).
       (8) Refinery project.--The term ``refinery project'' means 
     a project for--
       (A) acquisition or development of a base realignment and 
     closure site for use for a refinery; or
       (B) acquisition, development, rehabilitation, expansion, or 
     improvement of refining operations on a base realignment and 
     closure site or in a community affected by a base realignment 
     and closure site.
       (9) Secretary.--The term ``Secretary'' means the Secretary 
     of Commerce.
       (10) State.--The term ``State'' means--
       (A) a State;
       (B) the District of Columbia;
       (C) the Commonwealth of Puerto Rico; and
       (D) any other territory or possession of the United States.
       (c) Economic Development Assistance to Encourage Petroleum-
     Based Refinery Activity on BRAC Property.--
       (1) Priority.--Notwithstanding section 206 of the Public 
     Works and Economic Development Act of 1965 (42 U.S.C. 3146), 
     in awarding funds made available to carry out section 
     209(c)(1) of that Act (42 U.S.C. 3149(c)(1)) pursuant to 
     section 702 of that Act (42 U.S.C. 3232), the Secretary and 
     the Economic Development Administration shall give priority 
     to refinery projects.
       (2) Federal share.--Except as provided in paragraph 
     (3)(C)(ii) and notwithstanding the Public Works and Economic 
     Development Act of 1965 (42 U.S.C. 3121 et seq.), the Federal 
     share of a refinery project shall be 80 percent of the 
     project cost.
       (3) Additional award.--
       (A) In general.--The Secretary shall make an additional 
     award in connection with a grant made to a recipient for a 
     refinery project.
       (B) Amount.--The amount of an additional award shall be 10 
     percent of the amount of the grant for the refinery project.
       (C) Use.--An additional award under this paragraph shall be 
     used--
       (i) to carry out any eligible purpose under the Public 
     Works and Economic Development Act of 1965 (42 U.S.C. 3121 et 
     seq.);
       (ii) notwithstanding section 204 of that Act (42 U.S.C. 
     3144), to pay up to 100 percent of the cost of an eligible 
     project or activity under that Act; or
       (iii) to meet the non-Federal share requirements of that 
     Act or any other Act.
       (D) Non-federal source.--For the purpose of subparagraph 
     (C)(iii), an additional award shall be treated as funds from 
     a non-Federal source.
       (E) Funding.--The Secretary shall use to carry out this 
     paragraph any amounts made available for economic development 
     assistance programs or under section 702 of that Act (42 
     U.S.C. 3232).
       (d) Streamlining of Refinery Permitting Process.--
       (1) In general.--At the request of the Governor of a State 
     or the governing body of an Indian tribe, the Administrator 
     shall enter into a refinery permitting agreement with the 
     State or Indian tribe under which the process for obtaining 
     all permits necessary for the construction and operation of a 
     refinery shall be streamlined using a systematic 
     interdisciplinary multimedia approach as provided in this 
     section.
       (2) Authority of administrator.--Under a refinery 
     permitting agreement--
       (A) the Administrator shall have authority, as applicable 
     and necessary, to--
       (i) accept from a refiner a consolidated application for 
     all permits that the refiner is required to obtain to 
     construct and operate a refinery;
       (ii) in consultation and cooperation with each Federal, 
     State, or Indian tribal government agency that is required to 
     make any determination to authorize the issuance of a permit, 
     establish a schedule under which each agency shall--

       (I) concurrently consider, to the maximum extent 
     practicable, each determination to be made; and
       (II) complete each step in the permitting process; and

       (iii) issue a consolidated permit that combines all permits 
     issued under the schedule established under clause (ii); and
       (B) the Administrator shall provide to State and Indian 
     tribal government agencies--
       (i) financial assistance in such amounts as the agencies 
     reasonably require to hire such additional personnel as are 
     necessary to enable the government agencies to comply with 
     the applicable schedule established under subparagraph 
     (A)(ii); and
       (ii) technical, legal, and other assistance in complying 
     with the refinery permitting agreement.
       (3) Agreement by the state.--Under a refinery permitting 
     agreement, a State or governing body of an Indian tribe shall 
     agree that--
       (A) the Administrator shall have each of the authorities 
     described in paragraph (2); and
       (B) each State or Indian tribal government agency shall--
       (i) in accordance with State law, make such structural and 
     operational changes in the agencies as are necessary to 
     enable the agencies to carry out consolidated project-wide 
     permit reviews concurrently and in coordination with the 
     Environmental Protection Agency and other Federal agencies; 
     and
       (ii) comply, to the maximum extent practicable, with the 
     applicable schedule established under paragraph (2)(A)(ii).
       (4) Interdisciplinary approach.--
       (A) In general.--The Administrator and a State or governing 
     body of an Indian tribe shall incorporate an 
     interdisciplinary approach, to the maximum extent 
     practicable, in the development, review, and approval of 
     permits subject to this subsection.
       (B) Options.--Among other options, the interdisciplinary 
     approach may include use of--
       (i) environmental management practices; and
       (ii) third party contractors.
       (5) Deadlines.--
       (A) New refineries.--In the case of a consolidated permit 
     for the construction of a new refinery, the Administrator and 
     the State or governing body of an Indian tribe shall approve 
     or disapprove the consolidated permit not later than--
       (i) 360 days after the date of the receipt of the 
     administratively complete application for the consolidated 
     permit; or
       (ii) on agreement of the applicant, the Administrator, and 
     the State or governing body of the Indian tribe, 90 days 
     after the expiration of the deadline established under clause 
     (i).
       (B) Expansion of existing refineries.--In the case of a 
     consolidated permit for the expansion of an existing 
     refinery, the Administrator and the State or governing body 
     of an Indian tribe shall approve or disapprove the 
     consolidated permit not later than--
       (i) 120 days after the date of the receipt of the 
     administratively complete application for the consolidated 
     permit; or
       (ii) on agreement of the applicant, the Administrator, and 
     the State or governing body of the Indian tribe, 30 days 
     after the expiration of the deadline established under clause 
     (i).
       (6) Federal agencies.--Each Federal agency that is required 
     to make any determination to authorize the issuance of a 
     permit shall comply with the applicable schedule established 
     under paragraph (2)(A)(ii).
       (7) Judicial review.--Any civil action for review of any 
     permit determination under a refinery permitting agreement 
     shall be brought exclusively in the United States district 
     court for the district in which the refinery is located or 
     proposed to be located.
       (8) Efficient permit review.--In order to reduce the 
     duplication of procedures, the Administrator shall use State 
     permitting and monitoring procedures to satisfy substantially 
     equivalent Federal requirements under this title.
       (9) Severability.--If 1 or more permits that are required 
     for the construction or operation of a refinery are not 
     approved on or before any deadline established under 
     paragraph (5), the Administrator may issue a consolidated 
     permit that combines all other permits that the refiner is 
     required to obtain other than any permits that are not 
     approved.
       (10) Savings.--Nothing in this subsection affects the 
     operation or implementation of otherwise applicable law 
     regarding permits necessary for the construction and 
     operation of a refinery.
       (11) Consultation with local governments.--Congress 
     encourages the Administrator, States, and tribal governments 
     to consult, to the maximum extent practicable, with local 
     governments in carrying out this subsection.
       (12) Authorization of appropriations.--There are authorized 
     to be appropriated such sums as are necessary to carry out 
     this subsection.
       (13) Effect on local authority.--Nothing in this subsection 
     affects--
       (A) the authority of a local government with respect to the 
     issuance of permits; or
       (B) any requirement or ordinance of a local government 
     (such as a zoning regulation).
       (e) Efficiency.--
       (1) Natural gas efficiency projects.--

[[Page 15949]]

       (A) In general.--Not later than 180 days after the date of 
     enactment of this Act, the Administrator shall solicit 
     applications from eligible entities, as determined by the 
     Administrator, for grants under the Natural Gas STAR Program 
     under the Environmental Protection Agency to pay the Federal 
     share of the cost of projects relating to the reduction of 
     methane emissions in the oil and gas industries.
       (B) Project inclusions.--To receive a grant under 
     subparagraph (A), the application of the eligible entity 
     shall include--
       (i) an identification of 1 or more technologies used to 
     achieve a reduction in the emission of methane; and
       (ii) an analysis of the cost-effectiveness of a technology 
     described in clause (i).
       (C) Limitation.--A grant to an eligible entity under this 
     paragraph shall not exceed $50,000.
       (D) Federal share.--The Federal share of the cost of a 
     project under this paragraph shall not exceed 50 percent.
       (E) Authorization of appropriations.--There is authorized 
     to be appropriated to carry out this paragraph $1,000,000 for 
     the period of fiscal years 2006 through 2010.
       (2) Efficiency promotion workshops.--
       (A) In general.--The Administrator, in conjunction with the 
     Interstate Oil and Gas Compact Commission, shall conduct a 
     series of technical workshops to provide information to 
     officials in oil- and gas-producing States relating to 
     methane emission reduction techniques.
       (B) Authorization of appropriations.--There is authorized 
     to be appropriated to carry out this paragraph $1,000,000 for 
     the period of fiscal years 2006 through 2010.
       (f) Fuel Emergency Waivers.--Section 211(c)(4)(C) of the 
     Clean Air Act (42 U.S.C. 7545(c)(4)(C)) (as amended by 
     section 1541 of the Energy Policy Act of 2005 (Public Law 
     109-58; 119 Stat. 1106)) is amended--
       (1) by redesignating the first clause (v) as clause (vi);
       (2) by redesignating the second clause (v) as clause (vii); 
     and
       (3) by inserting after clause (iv) the following:
       ``(v) A State shall be held harmless and not be required to 
     revise its State implementation plan under section 110 to 
     account for the emissions from a waiver granted by the 
     Administrator under clause (ii).''.
       (g) Procurement of Fuel Derived From Coal, Oil Shale, and 
     Tar Sands.--
       (1) Definitions.--In this subsection:
       (A) Coal-to-liquid.--The term ``coal-to-liquid'' means--
       (i) with respect to a process or technology, the use of the 
     coal resources of the United States, using the class of 
     chemical reactions known as Fischer-Tropsch, to produce 
     synthetic fuel suitable for transportation; and
       (ii) with respect to a facility, the portion of a facility 
     related to the Fischer-Tropsch process, Fischer-Tropsch 
     finished fuel production, or the capture, transportation, or 
     sequestration of byproducts of the use of coal at the 
     Fischer-Tropsch facility, including carbon emissions.
       (B) Covered fuel.--The term ``covered fuel'' means fuel 
     that is--
       (i) produced, in whole or in part, from coal, oil shale, or 
     tar sands;
       (ii) extracted by mining or in-situ methods; and
       (iii) refined or otherwise processed in the United States.
       (C) Secretary.--The term ``Secretary'' means the Secretary 
     of Defense.
       (2) Use of fuel to meet department of defense needs.--The 
     Secretary shall develop a strategy to use covered fuel to 
     assist in meeting the fuel requirements of the Department of 
     Defense at any time at which the Secretary determines that 
     the use of covered fuel would be in the national interest.
       (3) Procurement authority.--
       (A) In general.--The Secretary may enter into 1 or more 
     contracts or other agreements that meet the requirements of 
     this subsection to procure covered fuel to meet 1 or more 
     fuel requirements of the Department of Defense.
       (B) Coal-to-liquid production facilities.--
       (i) In general.--The Secretary may enter into contracts or 
     other agreements with private and other entities to develop 
     and operate coal-to-liquid facilities on or near military 
     installations.
       (ii) Considerations.--In entering into contracts and other 
     agreements under clause (i), the Secretary shall consider 
     land availability, testing opportunities, and proximity of 
     raw materials.
       (4) Clean fuel requirements.--A covered fuel may be 
     procured under this subsection only if the covered fuel meets 
     such standards for clean fuel produced from domestic sources 
     as the Secretary, in consultation with the Secretary of 
     Energy, shall establish for purposes of this subsection.
       (5) Long-term contract authority.--The Secretary may enter 
     into any contract or other agreement under this subsection 
     for a period of up to 25 years.
       (6) Fuel source analysis.--To facilitate the procurement by 
     the Department of Defense of covered fuel under this 
     subsection, the Secretary may carry out a comprehensive 
     assessment of current and potential locations in the United 
     States for the supply of covered fuel to the Department of 
     Defense.
       (7) Authorization of appropriations.--There are authorized 
     to be appropriated such sums as are necessary to carry out 
     this subsection.
       (h) Fischer-Tropsch Fuels.--
       (1) In general.--In cooperation with the Secretary of 
     Energy, the Secretary of Defense, the Administrator of the 
     Federal Aviation Administration, Secretary of Health and 
     Human Services, and Fischer-Tropsch industry representatives, 
     the Administrator shall--
       (A) conduct a research and demonstration program to 
     evaluate the air quality benefits of ultra-clean Fischer-
     Tropsch transportation fuel, including diesel and jet fuel;
       (B) evaluate the use of ultra-clean Fischer-Tropsch 
     transportation fuel as a mechanism for reducing engine 
     exhaust emissions; and
       (C) submit recommendations to Congress on the most 
     effective use and associated benefits of these ultra-clean 
     fuel for reducing public exposure to exhaust emissions.
       (2) Guidance and technical support.--The Administrator 
     shall, to the extent necessary, issue any guidance or 
     technical support documents that would facilitate the 
     effective use and associated benefit of Fischer-Tropsch fuel 
     and blends.
       (3) Requirements.--The program described in paragraph (1) 
     shall consider--
       (A) the use of neat (100 percent) Fischer-Tropsch fuel and 
     blends with conventional crude oil-derived fuel for heavy-
     duty and light-duty diesel engines and the aviation sector; 
     and
       (B) the production costs associated with domestic 
     production of those ultra clean fuel and prices for 
     consumers.
       (4) Reports.--The Administrator shall submit to the 
     Committee on Environment and Public Works of the Senate and 
     the Committee on Energy and Commerce of the House of 
     Representatives--
       (A) not later than October 1, 2006, an interim report on 
     actions taken to carry out this subsection; and
       (B) not later than December 1, 2007, a final report on 
     actions taken to carry out this subsection.
                                 ______
                                 
  SA 4698. Mrs. FEINSTEIN (for herself and Ms. Cantwell) submitted an 
amendment intended to be proposed by her to the bill S. 3711, to 
enhance the energy independence and security of the United States by 
providing for exploration, development, and production activities for 
mineral resources in the Gulf of Mexico, and for other purposes; which 
was ordered to lie on the table; as follows:

       At the end of the bill, add the following:

     SEC. 6. ENSURING AVAILABILITY OF FLEXIBLE FUEL VEHICLES.

       (a) Amendment.--
       (1) In general.--Chapter 329 of title 49, United States 
     Code, is amended by inserting after section 32902 the 
     following:

     ``Sec. 32902A. Requirement to manufacture flexible fuel 
       vehicles

       ``(a) In General.--For each model year, each manufacturer 
     of new motor vehicles (as defined under section 30(c)(2) of 
     the Internal Revenue Code of 1986) described in subsection 
     (b) shall ensure that the percentage of such vehicles 
     manufactured in a particular model year that are flexible 
     fuel vehicles shall be not less than the percentage set forth 
     for that model year in the following table:


 
                                             The percentage of flexible
         ``If the model year is:               fuel vehicles shall be:
 
  2010....................................  25 percent
  2020....................................  50 percent

       ``(b) Motor Vehicles Described.--A motor vehicle is 
     described in this subsection if the vehicle--
       ``(1) is capable of operating on gasoline or diesel fuel;
       ``(2) is distributed in interstate commerce for sale in the 
     United States; and
       ``(3) does not contain certain engines that the Secretary 
     of Transportation, in consultation with the Administrator of 
     the Environmental Protection Agency and the Secretary of 
     Energy, may temporarily exclude from the definition because 
     it is technologically infeasible for the engines to have 
     flexible fuel capability at any time during a period that the 
     Secretaries and the Administrator are engaged in an active 
     research program with the vehicle manufacturers to develop 
     that capability for the engines.''.
       (2) Definition of flexible fuel vehicle.--Section 32901(8) 
     of title 49, United States Code, is amended by inserting ``or 
     `flexible fuel vehicle''' after ```dual fueled automobile'''.
       (3) Clerical amendment.--The table of sections for chapter 
     329 of title 49, United States Code, is amended by inserting 
     after the item relating to section 32902 the following:

``Sec. 32902A. Requirements to manufacture flexible fuel vehicles.''.
       (b) Rulemaking.--
       (1) In general.--Not later than 1 year after the date of 
     the enactment of this Act, the Secretary of Transportation 
     shall issue regulations to carry out the amendments made by 
     subsection (a).

[[Page 15950]]

       (2) Hardship exemption.--The regulations issued pursuant to 
     paragraph (1) shall include a process by which a manufacturer 
     may be exempted from the requirement under section 32902A(a) 
     upon demonstrating that such requirement would create a 
     substantial economic hardship for the manufacturer.

     SEC. 7. ALTERNATIVE FUELS INFRASTRUCTURE.

       (a) Goal.--Congress declares that it is the goal of the 
     United States to increase the accessibility of alternative 
     fuels to retail consumers, and to ensure that at least 10 
     percent of motor vehicle refueling stations provide 
     alternative fuels, by calendar year 2015.
       (b) Alternative Fuel Infrastructure Initiative.--
       (1) In general.--Not later than 1 year after the date of 
     enactment of this Act, and every 2 years thereafter, the 
     Secretary of Energy, in coordination with the Secretary of 
     Transportation and the Administrator of the Environmental 
     Protection Agency, and in consultation with State and local 
     governments, shall--
       (A) subject to subparagraph (B), develop and implement 
     measures to increase the accessibility of alternative fuels 
     to retail consumers to a level sufficient to ensure that at 
     least 10 percent of motor vehicle refueling stations provide 
     alternative fuels by calendar year 2015; and
       (B) if the Secretary of Energy determines that there are 
     insufficient legal authorities to achieve the target for 
     calendar year 2015 described in subparagraph (A)--
       (i) develop and implement measures to increase the 
     accessibility of alternative fuels to retail consumers, to 
     the maximum extent practicable; and
       (ii) submit to Congress by January 1, 2008, proposed 
     legislation or other recommendations to achieve that target.
       (2) Requirement for major integrated oil companies.--
       (A) In general.--Each major integrated oil company shall 
     install and make available to retail consumers alternative 
     fuels refueling infrastructure at--
       (i) not less than 50 percent of the motor vehicle fueling 
     stations owned by the company by not later than December 31, 
     2010; and
       (ii) 100 percent of the motor vehicle refueling stations 
     owned by the company by not later than January 1, 2015.
       (B) Means of compliance.--A major integrated oil company 
     shall meet the requirements of subparagraph (A) by--
       (i) installing alternative refueling infrastructure at 
     motor vehicle fueling stations;
       (ii) purchasing alternative refueling infrastructure 
     credits issued under subparagraph (C); or
       (iii) carrying out a combination of the actions described 
     in clauses (i) and (ii).
       (C) Alternative refueling infrastructure credit trading 
     program.--Not later than 180 days after the date of enactment 
     of this Act, the Secretary shall establish a credit trading 
     program--
       (i) to permit a major integrated oil company that does not 
     install alternative refueling infrastructure to comply with 
     subparagraphs (A) and (B) to achieve that compliance by 
     purchasing sufficient alternative refueling infrastructure 
     credits; and
       (ii) under which the Secretary shall issue alternative 
     refueling infrastructure credits to entities that install new 
     alternative refueling infrastructure.
                                 ______
                                 
  SA 4699. Mrs. FEINSTEIN (for herself, Ms. Snowe, Mr. Durbin, Mr. 
Chafee, Mr. Inouye, Ms. Collins, Ms. Cantwell, Mr. Lautenberg, Mrs. 
Boxer, Mr. Menendez, Mr. Lieberman, and Mr. Reed) submitted an 
amendment intended to be proposed by her to the bill S. 3711, to 
enhance the energy independence and security of the United States by 
providing for exploration, development, and production activities for 
mineral resources in the Gulf of Mexico, and for other purposes; which 
was ordered to lie on the table; as follows:

       At the end, add the following:

     SEC. __. AUTOMOBILE FUEL ECONOMY AND SAFETY; REDUCTION IN 
                   GREENHOUSE GAS EMISSIONS AND DEPENDENCE ON 
                   FOREIGN OIL.

       (a) Average Fuel Economy Standards for Passenger 
     Automobiles and Light Trucks.--
       (1) Increased standards.--Section 32902 of title 49, United 
     States Code, is amended--
       (A) in subsection (a)--
       (i) by striking the subsection heading and inserting 
     ``Prescription of Standards by Regulation.--''; and
       (ii) by striking ``(except passenger automobiles)'' and 
     inserting ``(except passenger automobiles and light 
     trucks)''; and
       (B) by striking subsection (b) and inserting the following:
       ``(b) Standards for Passenger Automobiles and Light 
     Trucks.--
       ``(1) In general.--The Secretary of Transportation, after 
     consultation with the Administrator of the Environmental 
     Protection Agency, shall prescribe average fuel economy 
     standards for passenger automobiles and light trucks 
     manufactured by a manufacturer in each model year beginning 
     with model year 2009 in order to achieve a combined average 
     fuel economy standard for passenger automobiles and light 
     trucks for model year 2017 of at least 35 miles per gallon, 
     or such other number as the Secretary may prescribe under 
     subsection (c).
       ``(2) Elimination of suv loophole.--Beginning not later 
     than with model year 2011, the regulations prescribed under 
     this section may not make any distinction between passenger 
     automobiles and light trucks.
       ``(3) Progress toward standard required.--In prescribing 
     average fuel economy standards under paragraph (1), the 
     Secretary shall prescribe appropriate annual fuel economy 
     standard increases for passenger automobiles and light trucks 
     that--
       ``(A) increase the applicable average fuel economy standard 
     ratably beginning with model year 2009 and ending with model 
     year 2017; and
       ``(B) require that each manufacturer achieve--
       ``(i) a fuel economy standard for passenger automobiles 
     manufactured by that manufacturer of at least 31.1 miles per 
     gallon not later than model year 2009; and
       ``(ii) a fuel economy standard for light trucks 
     manufactured by that manufacturer of at least 23.6 miles per 
     gallon not later than model year 2009.
       ``(4) Fuel economy baseline for passenger automobiles.--
     Notwithstanding the maximum feasible average fuel economy 
     level established by regulations prescribed under subsection 
     (c), the minimum fleetwide average fuel economy standard for 
     passenger automobiles manufactured by a manufacturer in a 
     model year for the domestic fleet and foreign fleet of the 
     manufacturer, as calculated under section 32904 of this title 
     (as in effect before the date of enactment of the Gulf of 
     Mexico Energy Security Act of 2006), shall be the greater 
     of--
       ``(A) 27.5 miles per gallon; or
       ``(B) 92 percent of the average fuel economy projected by 
     the Secretary for the combined domestic and foreign fleets 
     manufactured by all manufacturers in that model year.
       ``(5) Deadline for regulations.--The Secretary shall 
     promulgate the regulations required by paragraphs (1) and (2) 
     in final form not later than 18 months after the date of 
     enactment of the Gulf of Mexico Energy Security Act of 
     2006.''.
       (b) Passenger Car Program Reform.--Section 32902 of title 
     49, United States Code, is amended--
       (1) in subsection (a), by striking the last sentence; and
       (2) in subsection (c)--
       (A) by striking paragraph (2); and
       (B) in paragraph (1)--
       (i) in the first sentence--

       (I) by striking ``(1) Subject to paragraph (2) of this 
     subsection'' and inserting the following:

       ``(1) In general.--Not later than 18 months before the 
     beginning of each model year''; and

       (II) by striking ``the standard under subsection (b) of 
     this section'' and inserting ``a standard under subsection 
     (b)''; and

       (ii) in the second sentence--

       (I) by striking ``Section'' and inserting the following:

       ``(2) Amendments.--Section''; and

       (II) by striking ``the standard'' and inserting ``any 
     standard prescribed under subsection (b)''.

       (c) Definition of Work Truck.--
       (1) Definition of work truck.--Section 32901(a) of title 
     49, United States Code, is amended by adding at the end the 
     following:
       ``(18) `work truck' means an automobile that the Secretary 
     determines by regulation--
       ``(A) is rated at between 8,500 and 10,000 pounds gross 
     vehicle weight; and
       ``(B) is not a medium duty passenger vehicle, as defined in 
     section 86.1803-01 of title 40, Code of Federal Regulations 
     (or a successor regulation).''.
       (2) Deadline for regulations.--The Secretary of 
     Transportation--
       (A) shall issue proposed regulations implementing the 
     amendment made by subsection (a) not later than 1 year after 
     the date of enactment of this Act; and
       (B) shall issue final regulations implementing that 
     amendment not later than 18 months after the date of 
     enactment of this Act.
       (3) Fuel economy standards for work trucks.--The Secretary 
     of Transportation, in consultation with the Administrator of 
     the Environmental Protection Agency, shall prescribe 
     standards to achieve the maximum feasible fuel economy for 
     work trucks (as defined in section 32901(a)(18) of title 49, 
     United States Code) manufactured by a manufacturer in each 
     model year beginning in model year 2011.
       (d) Definition of Light Truck.--
       (1) Definition.--
       (A) In general.--Section 32901(a) of title 49, United 
     States Code (as amended by subsection (c)), is amended--
       (i) by redesignating paragraphs (12) through (16) as 
     paragraphs (13) through (17), respectively; and
       (ii) by inserting after paragraph (11) the following:
       ``(12) `light truck' means an automobile that the Secretary 
     determines by regulation--

[[Page 15951]]

       ``(A) is manufactured primarily for transporting not more 
     than 10 individuals;
       ``(B) is rated at not more than 10,000 pounds gross vehicle 
     weight;
       ``(C) is not a passenger automobile; and
       ``(D) is not a work truck.''.
       (B) Deadline for regulations.--The Secretary of 
     Transportation--
       (i) shall issue proposed regulations implementing the 
     amendment made by subparagraph (A) not later than 1 year 
     after the date of enactment of this Act; and
       (ii) shall issue final regulations implementing that 
     amendment not later than 18 months after the date of 
     enactment of this Act.
       (C) Effective date.--Regulations prescribed under 
     subparagraph (A) shall apply beginning with model year 2009.
       (2) Applicability of existing standards.--This section does 
     not affect the application of section 32902 of title 49, 
     United States Code, to passenger automobiles or non-passenger 
     automobiles manufactured before model year 2009.
       (3) Authorization of appropriations.--There are authorized 
     to be appropriated to the Secretary of Transportation to 
     carry out chapter 329 of title 49, United States Code, 
     $25,000,000 for each of fiscal years 2007 through 2019.
       (e) Ensuring Safety of Passenger Automobiles and Light 
     Trucks.--
       (1) In general.--The Secretary of Transportation shall 
     exercise such authority under Federal law as the Secretary 
     may have to ensure that--
       (A) passenger automobiles and light trucks (as those terms 
     are defined in section 32901 of title 49, United States Code) 
     are safe;
       (B) progress is made in improving the overall safety of 
     passenger automobiles and light trucks; and
       (C) progress is made in maximizing United States 
     employment.
       (2) Vehicle safety.--Subchapter II of chapter 301 of title 
     49, United States Code, is amended by adding at the end the 
     following:

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

       ``(a) Standards.--The Secretary of Transportation shall 
     issue a motor vehicle safety standard to reduce vehicle 
     incompatibility and aggressivity between passenger vehicles 
     and non-passenger vehicles. The standard shall address 
     characteristics necessary to ensure better management of 
     crash forces in multiple vehicle frontal and side impact 
     crashes between different types, sizes, and weights of 
     vehicles with a gross vehicle weight of 10,000 pounds or less 
     in order to decrease occupant deaths and injuries.
       ``(b) Consumer Information.--The Secretary shall develop 
     and implement a public information side and frontal 
     compatibility crash test program with vehicle ratings based 
     on risks to occupants, risks to other motorists, and combined 
     risks by vehicle make and model.''.
       (3) Rulemaking deadlines.--
       (A) Rulemaking.--The Secretary of Transportation shall 
     issue--
       (i) a notice of a proposed rulemaking under section 30129 
     of title 49, United States Code, not later than January 1, 
     2008; and
       (ii) a final rule under that section not later than 
     December 31, 2009.
       (B) Effective date of requirements.--Any requirement 
     imposed under the final rule issued under subparagraph (A) 
     shall become fully effective not later than September 1, 
     2012.
       (4) Conforming amendment.--The chapter analysis for chapter 
     301 is amended by inserting after the item relating to 
     section 30128 the following:

``30129. Vehicle compatibility and aggressivity reduction standard''.
       (f) Truth in Fuel Economy Testing.--
       (1) In general.--The Administrator of the Environmental 
     Protection Agency, in consultation with the Secretary of 
     Transportation, shall use, as appropriate, existing emission 
     test cycles and updated adjustment factors to update and 
     revise the process used to determine fuel economy values for 
     labeling purposes as described in sections 600.209-85 and 
     600.209-95 of title 40, Code of Federal Regulations (or 
     successor regulations), to take into consideration current 
     factors, such as--
       (A) speed limits;
       (B) acceleration rates;
       (C) braking;
       (D) variations in weather and temperature;
       (E) vehicle load;
       (F) use of air conditioning;
       (G) driving patterns; and
       (H) the use of other fuel-consuming features.
       (2) Labels for fuel economy mode devices.--The 
     Administrator of the Environmental Protection Agency shall 
     include fuel economy label information for all fuel economy 
     modes provided by devices described in paragraph (1).
       (3) Deadline.--In carrying out paragraph (1), the 
     Administrator shall--
       (A) issue a notice of proposed rulemaking, or amend the 
     notice of proposed rulemaking for Docket Id. No. OAR-2003-
     0214, not later than 90 days after the date of enactment of 
     this Act; and
       (B) promulgate a final rule not later than 180 days after 
     the date on which the notice under subparagraph (A) is 
     issued.
       (4) Use of common measurements for labeling and compliance 
     testing.--Section 32904 of title 49, United States Code, is 
     amended by striking subsection (c) and inserting the 
     following:
       ``(c) Testing and Calculation Procedures.--The 
     Administrator shall measure fuel economy for each model and 
     calculate average fuel economy for a manufacturer using the 
     same procedures and factors used by the Administrator for 
     labeling purposes under section 32908 by model year 2015.''.
       (5) Reevaluation and report.--Not later than 3 years after 
     the date of promulgation of the final rule under paragraph 
     (3)(B), and triennially thereafter, the Administrator shall--
       (A) reevaluate the fuel economy labeling procedures 
     described in paragraphs (2) and (4) to determine whether 
     changes in the factors used to establish the labeling 
     procedures warrant a revision of that process; and
       (B) submit a report to the Committee on Commerce, Science, 
     and Transportation of the Senate and the Committee on Energy 
     and Commerce of the House of Representatives that describes 
     the results of the reevaluation process.
       (g) Onboard Fuel Economy Indicators and Devices.--
       (1) In general.--Chapter 329 of title 49, United States 
     Code (as amended by subsection (e)), is further amended by 
     adding at the end the following:

     ``Sec. 32921. Fuel economy indicators and devices

       ``(a) In General.--The Secretary of Transportation, in 
     consultation with the Administrator of the Environmental 
     Protection Agency, shall prescribe a fuel economy standard 
     for passenger automobiles and light trucks manufactured by a 
     manufacturer in each model year beginning with model year 
     2013 that requires each such automobile and light truck to be 
     equipped with--
       ``(1) an onboard electronic instrument that provides real-
     time and cumulative fuel economy data;
       ``(2) an onboard electronic instrument that signals a 
     driver when inadequate tire pressure may be affecting fuel 
     economy; and
       ``(3) a device that will allow drivers to place the 
     automobile or light truck in a mode that will automatically 
     produce greater fuel economy.
       ``(b) Exception.--Subsection (a) does not apply to any 
     vehicle that is not subject to an average fuel economy 
     standard under section 32902(b).
       ``(c) Enforcement.--Subchapter IV of chapter 301 of this 
     title shall apply to a fuel economy standard prescribed under 
     subsection (a) to the same extent and in the same manner as 
     if that standard were a motor vehicle safety standard under 
     chapter 301.''.
       (2) Conforming amendment.--The chapter analysis for chapter 
     329 of title 49, United States Code (as amended by subsection 
     (e)), is amended by inserting after the item relating to 
     section 32920 the following:

``32921. Fuel economy indicators and devices''.
       (h) Secretary of Transportation to Certify Benefits.--
     Beginning with model year 2009, the Secretary of 
     Transportation, in consultation with the Administrator of the 
     Environmental Protection Agency, shall determine and certify 
     annually to Congress, in accordance with the average fuel 
     economy standards under section 32902 of title 49, United 
     States Code--
       (1) the annual reduction in United States consumption of 
     gasoline or petroleum distillates used for vehicle fuel, and
       (2) the annual reduction in greenhouse gas emissions,
       (i) Credit Trading Program.--Section 32903 of title 49, 
     United States Code, is amended--
       (1) in subsections (a) through (d), by striking 
     ``passenger'' each place it appears;
       (2) in subsections (a), (b), and (c), by striking ``section 
     32902(b)-(d) of this title'' each place it appears and 
     inserting ``subsection (a), (c), or (d) of section 32902'';
       (3) in subsection (a)(2), by striking ``clause (1) of this 
     subsection'' and inserting ``paragraph (1)''; and
       (4) by striking subsection (e) and inserting the following:
       ``(e) Credit Trading Among Manufacturers.--The Secretary of 
     Transportation may establish, by regulation, a corporate 
     average fuel economy credit trading program to allow 
     manufacturers whose automobiles exceed the average fuel 
     economy standards prescribed under section 32902 of this 
     title to earn credits to be sold to manufacturers whose 
     automobiles fail to achieve the prescribed standards.''.
       (j) Report to Congress.--Not later than December 31, 2012, 
     the Secretary of Transportation shall submit to Congress a 
     report on the progress made by the automobile manufacturing 
     industry towards meeting the 35 miles per gallon average fuel 
     economy standard required under section 32902(b)(4) of title 
     49, United States Code.
       (k) Labels for Fuel Economy and Greenhouse Gas Emissions.--
     Section 32908 of title 49, United States Code, is amended--
       (1) in subsection (a)(1), by striking the period at the end 
     and inserting ``, and a light truck manufactured by a 
     manufacturer in a model year after model year 2009; and''; 
     and

[[Page 15952]]

       (2) in subsection (b)--
       (A) in paragraph (1)--
       (i) by redesignating subparagraph (F) as subparagraph (H); 
     and
       (ii) by inserting after subparagraph (E) the following:
       ``(F) A label (or a logo imprinted on a label required by 
     this paragraph) that--
       ``(i) reflects the performance of an automobile on the 
     basis of criteria developed by the Administrator to reflect 
     the fuel economy and greenhouse gas and other emissions 
     consequences of operating the automobile over its likely 
     useful life;
       ``(ii) permits consumers to compare performance results 
     under clause (i) among all passenger automobiles and light 
     duty trucks; and
       ``(iii) is designed to encourage the manufacture and sale 
     of passenger automobiles and light trucks that meet or exceed 
     applicable fuel economy standards under section 32902.
       ``(G) A fuelstar under paragraph (5).''; and
       (B) by adding at the end the following:
       ``(4) Green label program.--
       ``(A) Marketing analysis.--Not later than 2 years after the 
     date of enactment of the Gulf of Mexico Energy Security Act 
     of 2006, the Administrator shall complete a study of social 
     marketing strategies with the goal of maximizing consumer 
     understanding of point-of-sale labels or logos described in 
     paragraph (1)(F).
       ``(B) Eligibility.--Not later than 3 years after the date 
     of enactment of the Gulf of Mexico Energy Security Act of 
     2006, the Administrator shall issue requirements for the 
     label or logo required by paragraph (1)(F) to ensure that a 
     passenger automobile or light truck is not eligible for the 
     label or logo unless it--
       ``(i) meets or exceeds the applicable fuel economy 
     standard; or
       ``(ii) will have the lowest greenhouse gas emissions over 
     the useful life of the vehicle of all vehicles in the vehicle 
     class to which it belongs in that model year.
       ``(C) Criteria.--In developing criteria for the label or 
     logo, the Administrator shall also consider, among others as 
     appropriate, the following factors:
       ``(i) The recyclability of the automobile.
       ``(ii) Any other pollutants or harmful byproducts related 
     to the automobile, which may include those generated during 
     manufacture of the automobile, those issued during use of the 
     automobile, or those generated after the automobile ceases to 
     be operated.
       ``(5) Fuelstar program.--
       ``(A) In general.--The Secretary shall establish a program, 
     to be known as the `fuelstar' program, under which stars 
     shall be imprinted on or attached to the label required by 
     paragraph (1).
       ``(B) Green stars.--Under the program a manufacturer may 
     place green stars on the label maintained on an automobile 
     under paragraph (1) as follows:
       ``(i) 1 green star for any automobile that meets the 
     average fuel economy standard for the model year under 
     section 32902.
       ``(ii) 1 additional green star for each 2 miles per gallon 
     by which the automobile exceeds that standard.
       ``(C) Gold stars.--Under the program a manufacturer may 
     place a gold star on the label maintained on an automobile 
     under paragraph (1) if--
       ``(i) in the case of a passenger automobile, it obtains a 
     fuel economy of 50 miles per gallon or more; and
       ``(ii) in the case of a light truck, it obtains a fuel 
     economy of 37 miles per gallon or more.''.
                                 ______
                                 
  SA 4700. Ms. SNOWE (for herself. Mrs. Feinstein, and Mr. Kerry) 
submitted an amendment intended to be proposed by her to the bill S. 
3711, to enhance the energy independence and security of the United 
States by providing for exploration, development, and production 
activities for mineral resources in the Gulf of Mexico, and for other 
purposes; which was ordered to lie on the table; as follows:

       At the end, add the following:

         TITLE II--EXTEND THE EFFICIENCY INCENTIVES ACT OF 2006

     SEC. 200. SHORT TITLE; ETC.

       (a) Short Title.--This title may be cited as the ``EXTEND 
     the Energy Efficiency Incentives Act of 2006''.
       (b) Amendment of 1986 Code.--Except as otherwise expressly 
     provided, whenever in this title an amendment or repeal is 
     expressed in terms of an amendment to, or repeal of, a 
     section or other provision, the reference shall be considered 
     to be made to a section or other provision of the Internal 
     Revenue Code of 1986.

              Subtitle A--Non-Business Energy Improvements

     SEC. 201. PERFORMANCE BASED ENERGY IMPROVEMENTS FOR NON-
                   BUSINESS PROPERTY.

       (a) In General.--Subpart A of part IV of subchapter A of 
     chapter 1 is amended by inserting after section 25D the 
     following new section:

     ``SEC. 25E. PERFORMANCE BASED ENERGY IMPROVEMENTS.

       ``(a) In General.--In the case of an individual, there 
     shall be allowed as a credit against the tax imposed by this 
     chapter for the taxable year an amount equal to the amount of 
     qualified energy efficiency expenditures paid or incurred by 
     the taxpayer during the taxable year.
       ``(b) Limitations.--
       ``(1) In general.--The amount allowed as a credit under 
     subsection (a) shall not exceed--
       ``(A) in the case of a principal residence that achieves a 
     qualified energy savings of 50 percent or more, $2,000, and
       ``(B) in the case of a principal residence which achieves a 
     qualified energy savings of less than 50 percent, the product 
     of--
       ``(i) the qualified energy savings achieved, and
       ``(ii) $4,000.
       ``(2) Minimum amount of qualified energy savings.--No 
     credit shall be allowed under subsection (a) with respect to 
     any principal residence which achieves a qualified energy 
     savings of less than 20 percent.
       ``(c) Qualified Energy Efficiency Expenditures.--For 
     purposes of this section:
       ``(1) In general.--The term `qualified energy efficiency 
     expenditures' means any amount paid or incurred which is 
     related to producing qualified energy savings in a principal 
     residence of the taxpayer which is located in the United 
     States.
       ``(2) No double benefit for certain expenditures.--The term 
     `qualified energy efficiency expenditures' shall not include 
     any expenditure for which a deduction or credit is otherwise 
     allowed to the taxpayer under this chapter.
       ``(3) Principal residence.--The term `principal residence' 
     has the same meaning as when used in section 121, except 
     that--
       ``(A) no ownership requirement shall be imposed, and
       ``(B) the period for which a building is treated as used as 
     a principal residence shall also include the 60-day period 
     ending on the 1st day on which it would (but for this 
     subparagraph) first be treated as used as a principal 
     residence.
       ``(d) Qualified Energy Savings.--For purposes of this 
     section--
       ``(1) In general.--The term `qualified energy savings' 
     means, with respect to any principal residence, the amount 
     (measured as a percentage) by which--
       ``(A) the annual energy use with respect to the principal 
     residence after qualified energy efficiency expenditures are 
     made, as certified under paragraph (2), is less than
       ``(B) the annual energy use with respect to the principal 
     residence before the qualified energy efficiency expenditures 
     were made, as certified under paragraph (2).

     In determining annual energy use under subparagraph (B), any 
     energy efficiency improvements which are not attributable to 
     qualified energy efficiency expenditures shall be 
     disregarded.
       ``(2) Certification.--
       ``(A) In general.--The Secretary, in consultation with the 
     Secretary of Energy, shall prescribe the procedures and 
     methods for the making of certifications under this paragraph 
     based on the Residential Energy Services Network (RESNET) 
     Technical Guidelines in effect on the date of the enactment 
     of this section.
       ``(B) Qualified individuals.--Any certification made under 
     this paragraph may only be made by an individual who is 
     recognized by an organization certified by the Secretary for 
     such purposes.
       ``(e) Special Rules.--For purposes of this section rules 
     similar to the rules under paragraphs (4), (5), (6), (7), 
     (8), and (9) of section 25D(e) and section 25C(e)(2) shall 
     apply.
       ``(f) Basis Adjustments.--For purposes of this subtitle, if 
     a credit is allowed under this section with respect to any 
     expenditure with respect to any property, the increase in the 
     basis of such property which would (but for this subsection) 
     result from such expenditure shall be reduced by the amount 
     of the credit so allowed.
       ``(g) Termination.--This section shall not apply with 
     respect to any property placed in service after December 31, 
     2010.''.
       (b) Interim Guidance on Certification.--
       (1) In general.--Not later than 90 days after the date of 
     the enactment of this Act, the Secretary of the Treasury, in 
     consultation with the Secretary of Energy, shall issue 
     interim guidance on--
       (A) the procedures and methods for making certifications 
     under sections 25E(d)(2)(A) and 179E(d)(2)(A) of the Internal 
     Revenue Code of 1986, as added by subsection (a) and section 
     213, respectively; and
       (B) the recognition of qualified individuals under sections 
     25E(d)(2)(B) and 179E(d)(2)(B) of such Code for the purpose 
     of making such certifications.
       (2) Consultation with stakeholders.--
       (A) In general.--The Secretary of the Treasury, in issuing 
     guidance pursuant to paragraph (1), shall consider comments 
     from energy efficiency experts and other interested parties.
       (B) Other considerations.--In the case of guidance issued 
     pursuant to paragraph (1)(B), the Secretary of the Treasury 
     shall also consider--
       (i) the Residential Energy Services Network Technical 
     Guidelines and other pertinent guidelines for evaluating 
     energy savings;
       (ii) energy modeling software, including software 
     accredited through the Residential Energy Services Network; 
     and

[[Page 15953]]

       (iii) quality assurance procedures of the Building 
     Performance Institute, Home Performance through Energy Star, 
     and the Residential Energy Services Network.
       (c) Alternative Certification Methods.--
       (1) In general.--The Secretary of the Treasury shall 
     establish a procedure for individuals and businesses to 
     petition for the approval of alternative methods of 
     certification under sections 25E(d)(2)(A) and 179E(d)(2)(A) 
     of the Internal Revenue Code of 1986, as added by subsection 
     (a) and section 213, respectively.
       (2) Determination.--The Secretary of the Treasury shall 
     make a determination on the approval or disapproval of such 
     alternative methods of certification not later than 90 days 
     after receiving a petition under paragraph (1).
       (d) Conforming Amendments.--
       (1) Section 1016(a) is amended by striking ``and'' at the 
     end of paragraph (36), by striking the period at the end of 
     paragraph (37) and inserting ``, and'', and by adding at the 
     end the following new paragraph:
       ``(38) to the extent provided in section 25E(f).''.
       (2) The table of sections for subpart A of part IV of 
     subchapter A chapter 1 is amended by inserting after the item 
     relating to section 25D the following new item:

``Sec. 25E. Performance based energy improvements.''.

       (e) Effective Dates.--The amendments made by this section 
     shall apply to amounts paid or incurred in taxable years 
     beginning after the date of the enactment of this Act.

     SEC. 202. EXTENSION AND MODIFICATION OF CREDIT FOR 
                   NONBUSINESS ENERGY PROPERTY.

       (a) Extension.--Subsection (g) of section 25C of the 
     Internal Revenue Code of 1986 (relating to termination) is 
     amended by striking ``December 31, 2007'' and inserting 
     ``December 31, 2010''.
       (b) Modifications for Residential Energy Efficiency 
     Property Expenditures.--
       (1) Increased limitation for oil furnaces and natural gas, 
     propane, and oil hot water boilers.--
       (A) In general.--Subparagraphs (B) and (C) of section 
     25C(b)(3) are amended to read as follows:
       ``(B) $150 for any qualified natural gas furnace or 
     qualified propane furnace, and
       ``(C) $300 for--
       ``(i) any item of energy-efficient building property, and
       ``(ii) any qualified oil furnace, qualified natural gas hot 
     water boiler, qualified propane hot water boiler, or 
     qualified oil hot water boiler.''.
       (B) Conforming amendment.--Clause (ii) of section 
     25C(d)(2)(A) is amended to read as follows:
       ``(ii) any qualified natural gas furnace, qualified propane 
     furnace, qualified oil furnace, qualified natural gas hot 
     water boiler, qualified propane hot water boiler, or 
     qualified oil hot water boiler, or''.
       (2) Modifications of standards for energy-efficient 
     building property.--
       (A) Electric heat pumps.--Subparagraph (B) of section 
     25C(d)(3) is amended to read as follows:
       ``(A) an electric heat pump which achieves the highest 
     efficiency tier established by the Consortium for Energy 
     Efficiency, as in effect on January 1, 2007.''.
       (B) Central air conditioners.--Section 25C(d)(3)(D) is 
     amended by striking ``2006'' and inserting ``2007''.
       (C) Oil furnaces and hot water boilers.--Paragraph (4) of 
     section 25C(d) is amended to read as follows:
       ``(4) Qualified natural gas, propane, and oil furnaces and 
     hot water boilers.--
       ``(A) Qualified natural gas furnace.--The term `qualified 
     natural gas furnace' means any natural gas furnace which 
     achieves an annual fuel utilization efficiency rate of not 
     less than 95.
       ``(B) Qualified natural gas hot water boiler.--The term 
     `qualified natural gas hot water boiler' means any natural 
     gas hot water boiler which achieves an annual fuel 
     utilization efficiency rate of not less than 95.
       ``(C) Qualified propane furnace.--The term `qualified 
     propane furnace' means any propane furnace which achieves an 
     annual fuel utilization efficiency rate of not less than 95.
       ``(D) Qualified propane hot water boiler.--The term 
     `qualified propane hot water boiler' means any propane hot 
     water boiler which achieves an annual fuel utilization 
     efficiency rate of not less than 95.
       ``(E) Qualified oil furnaces.--The term `qualified oil 
     furnace' means any oil furnace which achieves an annual fuel 
     utilization efficiency rate of not less than 90.
       ``(F) Qualified oil hot water boiler.--The term `qualified 
     oil hot water boiler' means any oil hot water boiler which 
     achieves an annual fuel utilization efficiency rate of not 
     less than 90.''.
       (c) Modification of Qualified Energy Efficiency 
     Improvements.--
       (1) In general.--Paragraph (1) of section 25C(c) is amended 
     by inserting ``, or an asphalt roof with appropriate cooling 
     granules,'' before ``which meet the Energy Star program 
     requirements''.
       (2) Building envelope component.--Subparagraph (D) of 
     section 25C(c)(2) is amended--
       (A) by inserting ``or asphalt roof'' after ``metal roof'', 
     and
       (B) by inserting ``or cooling granules'' after ``pigmented 
     coatings''.
       (d) Elimination of Credit for Qualified Energy Efficiency 
     Improvements in 2010.--
       (1) In general.--Subsection (a) of section 25C of the 
     Internal Revenue Code of 1986 is amended to read as follows:
       ``(a) Allowance of Credit.--In the case of an individual, 
     there shall be allowed as a credit against the tax imposed by 
     this chapter for the taxable year an amount equal to the 
     amount of residential energy property expenditures paid or 
     incurred by the taxpayer during the taxable year.''.
       (2) Conforming amendments.--
       (A) Section 25C(b) of such Code, as amended by subsection 
     (b)(1), is amended by striking paragraphs (1) and (2) and by 
     redesignating paragraph (3) as paragraph (1).
       (B) Section 25C(b)(1) of such Code, as redesignated by 
     subparagraph (A), is amended by striking ``by reason of 
     subsection (a)(2)''.
       (C) Section 25C of such Code is amended by striking 
     subsection (c).
       (e) Effective Dates.--
       (1) In general.--Except as provided in paragraphs (2) and 
     (3), the amendments made by this section shall apply to 
     property placed in service after the date of the enactment of 
     this Act.
       (2) Subsection (b).--The amendments made by subsection (b) 
     shall apply to property placed in service after December 31, 
     2006.
       (3) Subsection (d).--The amendments made by subsection (d) 
     shall apply to property placed in service after December 31, 
     2009.

     SEC. 203. MODIFICATION OF CREDIT FOR SOLAR ELECTRIC PROPERTY 
                   AND SOLAR HOT WATER PROPERTY.

       (a) In General.--Subsection (a) of section 25D (relating to 
     allowance of credit) is amended by striking paragraphs (1) 
     and (2) and inserting the following:
       ``(1) 100 percent of the qualified solar electric property 
     expenditures made by the taxpayer during such year,
       ``(2) 100 percent of the qualified solar hot water property 
     expenditures made by the taxpayer during such year, and''.
       (b) Limitations.--
       (1) In general.--Paragraph (1) of section 25D(b) is amended 
     by striking subparagraphs (A) and (B) and inserting the 
     following:
       ``(A) $2 with respect to each peak watt of capacity of 
     qualified solar electric property for which qualified solar 
     electric property expenditures are made,
       ``(B) in the case of qualified solar water heating property 
     expenditures, an amount equal to--
       ``(i) in the case of a dwelling unit which uses electricity 
     to heat water, $0.35 with respect to each kilowatt per year 
     of savings of qualified solar hot water property for which 
     qualified solar water heating property expenditures are made, 
     or
       ``(ii) in the case of a dwelling unit which uses natural 
     gas to heat water, $7 with respect to each annual Therm of 
     natural gas savings of qualified solar hot water property for 
     which qualified solar water heating property expenditures are 
     made, and''.
       (2) Determination of savings.--Paragraph (1) of section 
     25D(b) is amended by adding at the end the following new 
     flush sentence:

     ``For purposes of subparagraph (B), savings shall be 
     determined under regulations prescribed by the Secretary 
     based on the OG-300 Standard for the Annual Performance of 
     OG-300 Certified Systems of the Solar Rating and 
     Certification Corporation.''.
       (c) Definitions.--
       (1) In general.--Section 25D(d) is amended--
       (A) by redesignating paragraph (3) as paragraph (5), and
       (B) by striking paragraphs (1) and (2) and inserting the 
     following:
       ``(1) Qualified solar electric property expenditures.--The 
     term ` qualified solar electric property expenditures' means 
     any amount paid or incurred for qualified solar electric 
     property.
       ``(2) Qualified solar electric property.--The term 
     `qualified solar electric property' means solar electric 
     property (as defined in section 179F(c)(2)(B)) installed on 
     or in connection with a dwelling unit located in the United 
     States and used as a residence by the taxpayer.
       ``(3) Qualified solar water heating property 
     expenditures.--The term `qualified solar water heating 
     property expenditures' means any amount paid or incurred for 
     qualified solar hot water property.
       ``(4) Qualified solar hot water property.--The term 
     `qualified solar hot water property' means solar hot water 
     property (as defined in section 179F(c)(2)(C)) installed on 
     or in connection with a dwelling unit located in the United 
     States and used as a residence by the taxpayer.''.
       (2) Conforming amendments.--
       (A) Section 25D(e)(2) is amended by striking ``property 
     described in paragraph (1) and (2) of subsection (d)'' and 
     inserting ``qualified solar electric property or qualified 
     solar hot water property''.
       (B) Section 25D(e)(4)(C) is amended by striking 
     ``paragraphs (1), (2), and (3)'' and inserting ``paragraphs 
     (1),(3), and (5)''.
       (d) Dollar Amounts in Case of Joint Occupancy.--Clauses (i) 
     and (ii) of section 25D(e)(4)(A) are amended to read as 
     follows:
       ``(i) $2 in the case of each peak watt of capacity of 
     qualified solar electric property for

[[Page 15954]]

     which qualified solar electric property expenditures are 
     made,
       ``(ii) in the case of qualified solar water heating 
     property expenditures, an amount equal to--

       ``(I) in the case of a dwelling unit which uses electricity 
     to heat water, $0.35 with respect to each kilowatt per year 
     of savings of qualified solar hot water property for which 
     qualified solar water heating property expenditures are made, 
     or
       ``(II) in the case of a dwelling unit which uses natural 
     gas to heat water, $7 with respect to each annual Therm of 
     natural gas savings of qualified solar hot water property for 
     which qualified solar water heating property expenditures are 
     made, and''.

       (e) Extension of Credit.--Subsection (g) of section 25D is 
     amended by striking ``2007'' and inserting ``2010''.
       (f) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after the date of 
     the enactment of this Act.

            Subtitle B--Business-Related Energy Improvements

     SEC. 211. EXTENSION AND CLARIFICATION OF NEW ENERGY EFFICIENT 
                   HOME CREDIT.

       (a) Extension.--Subsection (g) of section 45L (relating to 
     termination) is amended by striking ``December 31, 2007'' and 
     inserting ``December 31, 2010''.
       (b) Clarification.--
       (1) In general.--Paragraph (1) of section 45L(a) is amended 
     by striking ``and'' at the end of subparagraph (A) and by 
     striking subparagraph (B) and inserting the following:
       ``(B) acquired by a person from such eligible contractor, 
     and
       ``(C) used by any person as a residence during the taxable 
     year.''.
       (2) Effective date.--The amendments made by this subsection 
     shall take effect as if included in section 1332 of the 
     Energy Policy Act of 2005.

     SEC. 212. EXTENSION AND MODIFICATION OF DEDUCTION FOR ENERGY 
                   EFFICIENT COMMERCIAL BUILDINGS.

       (a) Extension.--Subsection (h) of section 179D (relating to 
     termination) is amended to read as follows:
       ``(h) Termination.--This section shall not apply with 
     respect to property--
       ``(1) which is certified under subsection (d)(6) after 
     December 31, 2011, or
       ``(2) which is placed in service after December 31, 
     2013.''.
       (b) Increase in Maximum Amount of Deduction.--
       (1) In general.--Subparagraph (A) of section 179D(b)(1) is 
     amended by striking ``$1.80'' and inserting ``$2.25''.
       (2) Partial allowance.--Paragraph (1) of section 179D(d) is 
     amended--
       (A) by striking ``$.60'' and inserting ``$0.75'', and
       (B) by striking ``$1.80'' and inserting ``$2.25''.
       (c) Modifications to Certain Special Rules.--
       (1) Requirements for computer software used in calculating 
     energy and power consumption costs.--Computer software used 
     in preparing a calculation under section 179D(d)(2) of the 
     Internal Revenue Code of 1986 shall automatically--
       (A) generate the features, energy use, and energy and power 
     consumption costs of a reference building that meets Standard 
     90.1-2001 (as defined under section 179D(c)(2) of such Code), 
     and
       (B) compare such features, energy use, and consumption 
     costs to the features, energy use, and consumption costs of 
     the building or system with respect to which the calculation 
     is being made.
       (2) Targets for partial allowance of credit.--The targets 
     established by the Secretary of Treasury under section 
     179D(b)(1)(B) of the Internal Revenue Code of 1986 shall be 
     based on prescriptive criteria that can be modeled 
     explicitly.
       (d) Effective Date.--The amendments made by this section 
     shall apply to property placed in service in taxable years 
     beginning after the date of the enactment of this Act.

     SEC. 213. DEDUCTION FOR ENERGY EFFICIENT LOW-RISE BUILDINGS.

       (a) In General.--Part VI of subchapter B of chapter 1 is 
     amended by inserting after section 179D the following new 
     section:

     ``SEC. 179E. ENERGY EFFICIENT LOW-RISE BUILDINGS DEDUCTION.

       ``(a) In General.--There shall be allowed as a deduction an 
     amount equal to the amount of qualified energy efficiency 
     expenditures paid or incurred by the taxpayer during the 
     taxable year.
       ``(b) Limitations.--
       ``(1) In general.--The amount allowed as a credit under 
     subsection (a) shall not exceed--
       ``(A) in the case of a qualified low-rise building that 
     achieves a qualified energy savings of 50 percent or more, 
     $6,000, and
       ``(B) in the case of a qualified low-rise building which 
     achieves a qualified energy savings of less than 50 percent, 
     the product of--
       ``(i) the qualified energy savings achieved, and
       ``(ii) $12,000.
       ``(2) Minimum amount of qualified energy savings.--No 
     credit shall be allowed under subsection (a) with respect to 
     any qualified low-rise building which achieves a qualified 
     energy savings of less than 20 percent.
       ``(c) Qualified Energy Efficiency Expenditures.--For 
     purposes of this section:
       ``(1) In general.--The term `qualified energy efficiency 
     expenditures' means any amount paid or incurred which is 
     related to producing qualified energy savings in a qualified 
     low-rise building of the taxpayer which is located in the 
     United States.
       ``(2) No double benefit for certain expenditures.--The term 
     `qualified energy efficiency expenditures' shall not include 
     any expenditure for any property for which a deduction has 
     been allowed to the taxpayer under section 179F.
       ``(3) Qualified low-rise building.--The term `qualified 
     low-rise building' means a building--
       ``(A) with respect to which depreciation is allowable under 
     section 167, and
       ``(B) which is not within the scope of Standard 90.1-2001 
     (as defined under section 179D(c)(2)).
       ``(d) Qualified Energy Savings.--For purposes of this 
     section--
       ``(1) In general.--The term `qualified energy savings' 
     means, with respect to any qualified low-rise building, the 
     amount (measured as a percentage) by which--
       ``(A) the annual energy use with respect to the qualified 
     low-rise building after qualified energy efficiency 
     expenditures are made, as certified under paragraph (2), is 
     less than
       ``(B) the annual energy use with respect to the qualified 
     low-rise building before the qualified energy efficiency 
     expenditures were made, as certified under paragraph (2).
     In determining annual energy use under subparagraph (B), any 
     energy efficiency improvements which are not attributable to 
     qualified energy efficiency expenditures shall be 
     disregarded.
       ``(2) Certification.--
       ``(A) In general.--The Secretary, in consultation with the 
     Secretary of Energy, shall prescribe the procedures and 
     method for the making of certifications under this paragraph 
     based on the Residential Energy Services Network (RESNET) 
     Technical Guidelines in effect on the date of the enactment 
     of this Act.
       ``(B) Qualified individuals.--Any certification made under 
     this paragraph may only be made by an individual who is 
     recognized by an organization certified by the Secretary for 
     such purposes.
       ``(e) Special Rules.--For purposes of this section, rules 
     similar to the rules under paragraphs (8) and (9) of section 
     25D(e) shall apply.
       ``(f) Basis Adjustments.--For purposes of this subtitle, if 
     a credit is allowed under this section with respect to any 
     expenditure with respect to any property, the increase in the 
     basis of such property which would (but for this subsection) 
     result from such expenditure shall be reduced by the amount 
     of the credit so allowed.
       ``(g) Termination.--This section shall not apply with 
     respect to any property placed in service after December 31, 
     2010.''.
       (b) Conforming Amendments.--
       (1) Section 1016(a), as amended by section 201, is amended 
     by striking ``and'' at the end of paragraph (37), by striking 
     the period at the end of paragraph (38) and inserting ``, 
     and'', and by adding at the end the following new paragraph:
       ``(39) to the extent provided in section 179E(f).''.
       (2) Section 1245(a) is amended by inserting ``179E,'' after 
     ``179D,'' both places it appears in paragraphs (2)(C) and 
     (3)(C).
       (3) Section 1250(b)(3) is amended by inserting ``or 179E'' 
     after ``section 179D''.
       (4) Section 263(a)(1) is amended by striking ``or'' at the 
     end of subparagraph (J), by striking the period at the end of 
     subparagraph (K) and inserting ``, or'', and by inserting 
     after subparagraph (K) the following new subparagraph:
       ``(L) expenditures for which a deduction is allowed under 
     section 179E.''.
       (5) Section 312(k)(3)(B) is amended by striking ``179, 
     179A, 179B, 179C, or 179D'' each place it appears in the 
     heading and text and inserting ``179, 179A, 179B, 179C, 179D, 
     or 179E''.
       (6) The table of sections for part VI of subchapter B is 
     amended by inserting after the item relating to section 179D 
     the following new item:

``Sec. 179E. Energy efficient low-rise buildings deduction.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to amounts paid or incurred in taxable years 
     beginning after the date of the enactment of this Act.

     SEC. 214. ENERGY EFFICIENT PROPERTY DEDUCTION.

       (a) In General.--Part VI of subchapter B of chapter 1, as 
     amended by section 213, is amended by inserting after section 
     179E the following new section:

     ``SEC. 179F. ENERGY EFFICIENT PROPERTY.

       ``(a) In General.--There shall be allowed as a deduction an 
     amount equal to the energy efficient property expenditures 
     paid or incurred by the taxpayer during the taxable year
       ``(b) Limitation.--The amount of the deduction allowed 
     under subsection (a) for any taxable years shall not exceed--
       ``(1) $150 for any advanced main air circulating fan,
       ``(2) $450 for any qualified natural gas furnace or 
     qualified propane furnace,

[[Page 15955]]

       ``(3) $900 for--
       ``(A) any item of energy-efficient building property, and
       ``(B) any qualified oil furnace, qualified natural gas hot 
     water boiler, qualified propane hot water boiler, or 
     qualified oil hot water boiler.
       ``(4) $9 with respect to each peak watt of capacity of 
     solar electric property,
       ``(5) in the case of solar hot water property, an amount 
     equal to--
       ``(A) in the case of a dwelling unit which uses electricity 
     to heat water, $1 with respect to each kilowatt per year of 
     savings of such solar hot water property, or
       ``(B) in the case of a dwelling unit which uses natural gas 
     to heat water, $21 with respect to each annual Therm of 
     natural gas savings of such solar hot water property.

     For purposes of paragraph (5), savings shall be determined 
     under regulations prescribed by the Secretary based on the 
     OG-300 Standard for the Annual Performance of OG-300 
     Certified Systems of the Solar Rating and Certification 
     Corporation.
       ``(c) Energy Efficient Property Expenditures.--For purposes 
     of this section--
       ``(1) In general.--The term `energy efficient property 
     expenditures' means expenditures paid by the taxpayer for 
     qualified energy property which is--
       ``(A) of a character subject to the allowance for 
     depreciation, and
       ``(B) originally placed in service by the taxpayer.
       ``(2) Qualified energy property.--
       ``(A) In general.--The term `qualified energy property' has 
     the meaning given such term by section 25C(d)(2), except that 
     such term shall include solar electric property and solar hot 
     water property.
       ``(B) Solar electric property.--The term `solar electric 
     property' means property which uses solar energy to generate 
     electricity.
       ``(C) Solar hot water property.--The term `solar hot water 
     property' means property used to heat water if at least half 
     of the energy used by such property for such purpose is 
     derived from the sun.
       ``(d) Basis Adjustments.--For purposes of this subtitle, if 
     a credit is allowed under this section with respect to any 
     expenditure with respect to any property, the increase in the 
     basis of such property which would (but for this subsection) 
     result from such expenditure shall be reduced by the amount 
     of the credit so allowed.
       ``(e) Termination.--This section shall not apply with 
     respect to any property placed in service after December 31, 
     2010.''.
       (b) No Double Benefit.--Section 179D(c) is amended by 
     adding at the end the following new paragraph:
       ``(3) Certain property excluded.--The term `energy 
     efficient commercial building property' does not include any 
     property with respect to which a credit has been allowed to 
     the taxpayer under section 179F.''.
       (c) Conforming Amendments.--
       (1) Section 1016(a), as amended by section 213, is amended 
     by striking ``and'' at the end of paragraph (38), by striking 
     the period at the end of paragraph (39) and inserting ``, 
     and'', and by adding at the end the following new paragraph:
       ``(40) to the extent provided in section 179E(e).''.
       (2) Section 1245(a), as amended by section 213 is amended 
     by inserting ``179F,'' after ``179E,'' both places it appears 
     in paragraphs (2)(C) and (3)(C).
       (3) Section 1250(b)(3), as amended by section 213, is 
     amended by inserting ``or 179F'' after ``section 179E''.
       (4) Section 263(a)(1), as amended by section 213, is 
     amended by striking ``or'' at the end of subparagraph (K), by 
     striking the period at the end of subparagraph (L) and 
     inserting ``, or'', and by inserting after subparagraph (L) 
     the following new subparagraph:
       ``(M) expenditures for which a deduction is allowed under 
     section 179F.''.
       (5) Section 312(k)(3)(B), as amended by section 213, is 
     amended by striking ``179, 179A, 179B, 179C, 179D, or 179E'' 
     each place it appears in the heading and text and inserting 
     ``179, 179A, 179B, 179C, 179D, 179E, or 179F''.
       (6) The table of sections for part VI of subchapter B is 
     amended by inserting after the item relating to section 179E 
     the following new item:

``Sec. 179F. Energy efficient property.''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to property placed in service in taxable years 
     beginning after the date of the enactment of this Act.

     SEC. 215. EXTENSION OF INVESTMENT TAX CREDIT WITH RESPECT TO 
                   SOLAR ENERGY PROPERTY AND QUALIFIED FUEL CELL 
                   PROPERTY.

       (a) Solar Energy Property.--Paragraphs (2)(A)(i)(II) and 
     (3)(A)(ii) of section 48(a) are each amended by striking 
     ``2008'' and inserting ``2012''.
       (b) Eligible Fuel Cell Property.--Paragraph (1)(E) of 
     section 48(c) is amended by striking ``2007'' and inserting 
     ``2011''.

        Subtitle C--Incentives for Energy Savings Certifications

     SEC. 221. CREDIT FOR ENERGY SAVINGS CERTIFICATIONS.

       (a) In General.--Subpart D of part IV of subchapter A of 
     chapter 1 is amended by adding at the end the following new 
     section:

     ``SEC. 45N. ENERGY SAVINGS CERTIFICATION CREDIT.

       ``(a)  In General.--For purposes of section 38, the energy 
     savings certification credit determined under this section 
     for any taxable year is an amount equal to the sum of--
       ``(1) the qualified training and certification costs paid 
     or incurred by the taxpayer which may be taken into account 
     for such taxable year, plus
       ``(2) the qualified certification equipment expenditures 
     paid or incurred by the taxpayer which may be taken into 
     account for such taxable year.
       ``(b) Qualified Training and Certification Costs.--
       ``(1) In general.--The term `qualified training and 
     certification costs' means costs paid or incurred for 
     training which is required for the taxpayer or employees of 
     the taxpayer to be certified by the Secretary under section 
     25D(d)(2)(B) or 179E(d)(2)(B) for the purpose of certifying 
     energy savings.
       ``(2) Limitation.--The qualified training and certification 
     costs taken into account under subsection (a)(1) for the 
     taxable year with respect to any individual shall not exceed 
     $500 reduced by the amount of the credit allowed under 
     subsection (a)(1) to the taxpayer (or any predecessor) with 
     respect to such individual for all prior taxable years.
       ``(3) Year costs taken into account.--Qualified training 
     and certifications costs with respect to any individual shall 
     not be taken into account under subsection (a)(1) before the 
     taxable year in which the individual with respect to whom 
     such costs are paid or incurred has performed 25 
     certifications under sections 25E(d)(2)(A) and 179E(d)(2)(A).
       ``(c) Qualified Certification Equipment Expenditures.--
       ``(1) In general.--The term `qualified training equipment 
     expenditures' means costs paid or incurred for--
       ``(A) blower doors,
       ``(B) duct leakage testing equipment,
       ``(C) flue gas combustion equipment, and
       ``(D) digital manometers.
       ``(2) Limitation.--
       ``(A) In general.--The qualified certification equipment 
     expenditures taken into account under subsection (a)(2) with 
     respect to any taxpayer for any taxable year shall not exceed 
     $1,000.
       ``(B) Limitation on individual items.--The qualified 
     certification equipment expenditures taken into account under 
     subsection (a)(2) shall not exceed--
       ``(i) $500 with respect to any blower door or duct leakage 
     testing equipment, and
       ``(ii) $100 with respect to any flue gas combustion 
     equipment or digital manometer.
       ``(3) Year expenditures taken into account.--The qualified 
     certification equipment expenditures of any taxpayer shall 
     not be taken into account under subsection (a)(2) before the 
     taxable year in which the taxpayer has performed 25 
     certifications under sections 25E(d)(2)(A) and 179E(d)(2)(A).
       ``(d) Special Rules.--
       ``(1) Aggregation rules.--For purposes of this section, all 
     persons treated as a single employer under subsections (a) 
     and (b) of section 52 shall be treated as 1 person.
       ``(2) Basis reduction.--The basis of any property shall be 
     reduced by the portion of the cost of such property taken 
     into account under subsection (a).
       ``(3) Denial of double benefit.--
       ``(A) In general.--No deduction shall be allowed for that 
     portion of the expenses otherwise allowable as a deduction 
     for the taxable year which is equal to the amount taken into 
     account under subsection (a) for such taxable year.
       ``(B) Amount previously deducted.--No credit shall be 
     allowed under subsection (a) with respect to any amount for 
     which a deduction has been allowed in any preceding taxable 
     year.''.
       (b) Credit Treated as Part of General Business Credit.--
     Section 38(b) is amended by striking ``and'' at the end of 
     paragraph (29), by striking the period at the end of 
     paragraph (30) and inserting ``plus'', and by adding at the 
     end the following new paragraph:
       ``(31) the energy savings certification credit determined 
     under section 45N(a).''.
       (c) Conforming Amendments.--
       (1) Section 1016(a), as amended by this title, is amended 
     by striking ``and'' at the end of paragraph (39), by striking 
     the period at the end of paragraph (40) and inserting 
     ``and'', and by adding at the end the following new 
     paragraph:
       ``(41) to the extent provided in section 45N(d)(2).''.
       (2) The table of sections for subpart D of part IV of 
     subchapter A of chapter 1 is amended by inserting after the 
     item relating to section 45M the following new item:

``Sec. 45N. Energy savings certification credit.''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to amounts paid or incurred after the date of the 
     enactment of this Act.
                                 ______
                                 
  SA 4701. Mr. DAYTON submitted an amendment intended to be proposed by 
him to the bill S. 3711, to enhance the energy independence and 
security of the United States by providing for exploration, 
development, and production activities for mineral resources in the 
Gulf of Mexico, and for other purposes;

[[Page 15956]]

which was ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC. __. PROHIBITION ON RESTRICTION OF INSTALLATION OF 
                   RENEWABLE FUEL PUMPS.

       (a) In General.--Title I of the Petroleum Marketing 
     Practices Act (15 U.S.C. 2801 et seq.) is amended by adding 
     at the end the following:

     ``SEC. 107. PROHIBITION ON RESTRICTION OF INSTALLATION OF 
                   RENEWABLE FUEL PUMPS.

       ``(a) Definition of Franchise-Related Document.--In this 
     section, the term `franchise-related document' means--
       ``(1) a franchise under this Act; and
       ``(2) any other contract or directive of a franchisor 
     relating to terms or conditions of the sale of fuel by a 
     franchisee.
       ``(b) Prohibitions.--
       ``(1) In general.--Notwithstanding any provision of a 
     franchise-related document in effect on the date of enactment 
     of this section, no franchisee or affiliate of a franchisee 
     shall be restricted from--
       ``(A) installing on the marketing premises of the 
     franchisee a renewable fuel pump;
       ``(B) converting an existing tank and pump on the marketing 
     premises of the franchisee for renewable fuel use;
       ``(C) advertising (including through the use of signage or 
     logos) the sale of any renewable fuel; or
       ``(D) selling renewable fuel in any specified area on the 
     marketing premises of the franchisee (including any area in 
     which a name or logo of a franchisor or any other entity 
     appears).
       ``(2) Enforcement.--Any restriction described in paragraph 
     (1) that is contained in a franchise-related document and in 
     effect on the date of enactment of this section--
       ``(A) shall be considered to be null and void as of that 
     date; and
       ``(B) shall not be enforced under section 105.
       ``(c) Exception to 3-Grade Requirement.--No franchise-
     related document that requires that 3 grades of gasoline be 
     sold by the applicable franchisee shall prevent the 
     franchisee from selling a renewable fuel in lieu of 1 grade 
     of gasoline.''.
       (b) Conforming Amendments.--
       (1) In general.--Section 101(13) of the Petroleum Marketing 
     Practices Act (15 U.S.C. 2801(13)) is amended by adjusting 
     the indentation of subparagraph (C) appropriately.
       (2) Table of contents.--The table of contents of the 
     Petroleum Marketing Practices Act (15 U.S.C. 2801 note) is 
     amended--
       (A) by inserting after the item relating to section 106 the 
     following:

``Sec. 107. Prohibition on restriction of installation of renewable 
              fuel pumps.'';

     and
       (B) by striking the item relating to section 202 and 
     inserting the following:

``Sec. 202. Automotive fuel rating testing and disclosure 
              requirements.''.
                                 ______
                                 
  SA 4702. Mr. DAYTON submitted an amendment intended to be proposed by 
him to the bill S. 3711, to enhance the energy independence and 
security of the United States by providing for exploration, 
development, and production activities for mineral resources in the 
Gulf of Mexico, and for other purposes; which was ordered to lie on the 
table; as follows:

       At the end, add the following:

     SEC. 6. REPORT.

       Not later than October 31 of each year beginning after the 
     date of enactment of this Act, the President shall submit to 
     Congress a report that describes--
       (1) the progress of the agencies of the Federal government 
     (including the Executive Office of the President) in 
     complying with--
       (A) the Energy Policy Act of 1992 (42 U.S.C. 13201 et 
     seq.); and
       (B) Executive Order 13149 (65 Fed. Reg. 24607; relating to 
     greening the government through Federal fleet and 
     transportation efficiency);
       (2) the number of fueling centers operated by each Federal 
     agency;
       (3) the number of the fueling centers that are equipped to 
     supply renewable fuels; and
       (4) which renewable fuel blends are offered at those 
     fueling centers.

                                 ______
                                 
  SA 4703. Mr. SHELBY proposed an amendment to the bill S. 3549, to 
amend the Defense Production Act of 1950 to strengthen Government 
review and oversight of foreign investment in the United States, to 
provide for enhanced Congressional Oversight with respect thereto, and 
for other purposes; as follows:

       On page 3, line 8, strike ``written notification'' and 
     insert the following: ``a written request for review by a 
     person involved in the transaction, or by one or more members 
     of CFIUS,''.
       On page 3, line 10, strike ``under this section'' and 
     insert ``in accordance with paragraph (1)(A)''.
       On page 3, line 24, strike ``entity'' and insert 
     ``person''.
       On page 4, beginning on line 19, strike ``additional 
     assurances'' and insert ``assurances provided or renewed with 
     the approval of CFIUS''.
       On page 4, line 22, strike ``and'' and insert ``or''.
       On page 5, line 2, insert before the period the following: 
     ``, and the issues that could result in an impairment to 
     national security are not resolved through negotiation of 
     assurances between one or more members of CFIUS and the 
     entities involved in the transaction''.
       On page 5, strike line 22 and all that follows through page 
     6, line 6 and insert the following:
       ```(4) Monitoring of withdrawn transactions.--If the 
     notification or filing with respect to a proposed transaction 
     is withdrawn or rescinded, CFIUS shall continue to monitor 
     such transaction, unless the transaction is terminated by 
     agreement of the parties to the transaction. If CFIUS has 
     reason to believe that the proposed transaction has not been 
     so terminated, CFIUS shall initiate a review or investigation 
     under this section if the parties do not resubmit the 
     notification or filing within an appropriate period of 
     time.''.
       On page 6, strike lines 7 through 23 and insert the 
     following:
       ```(5) Mandatory notification related to certain 
     transactions affecting national security.--The chairperson 
     and vice chairperson of CFIUS shall, not later than 90 days 
     after the date of enactment of the Foreign Investment and 
     National Security Act of 2006, issue rules, including the 
     imposition of appropriate penalties for failure to comply 
     with this paragraph, that require each person controlled by 
     or acting on behalf of a foreign government to notify the 
     chairperson of CFIUS in writing of any proposed transaction 
     involving such person and United States critical 
     infrastructure relating to United States national 
     security.''.
       On page 8, line 17, strike ``(or longer)''.
       On page 9, line 3, strike ``and classifications''.
       On page 9, line 15, strike ``and classifying''.
       On page 10, line 17, strike ``and classification''.
       On page 15, line 1, strike ``ranking'' and insert 
     ``assessments''.
       On page 16, line 5, strike ``Additional''.
       On page 17, line 6, insert ``of CFIUS'' after ``vice 
     chairperson''.
       On page 19, line 12, strike ``transaction'' and all that 
     follows through line 16 and insert ``transaction; and''.
       On page 20, line 3, insert ``does or'' before ``does not''.
       On page 23, strike lines 21 through 24.
       On page 24, line 1, strike ``(vi)'' and insert ``(v)''.
       On page 24, line 10, strike ``(vii)'' and insert ``(vi)''
       On page 24, line 17, strike ``(vii)'' and insert ``(vii)''.
         On page 27, line 4, strike ``the term'' and insert the 
     following: ``the term `assurances' means any term, 
     understanding, commitment, agreement, or limitation, however 
     described, that relates to ameliorating in any way the 
     potential effect of a transaction on the national security;
       ``(2) the term''.
       On page 27, line 12, strike ``(2)'' and insert ``(3)''.
       On page 27, line 19, strike ``(3)'' and insert ``(4)''.
       On page 27, line 22, strike ``(4)'' and insert ``(5)''.
       On page 27, line 25, strike the period and all that follows 
     through ``The term includes'' on page 28, line 1 and insert 
     ``, and includes''.
       On page 28, line 5, strike ``(5)'' and insert ``(6)''.
       On page 28, line 11, strike ``(6)'' and insert ``(7)''.
       On page 28, line 14, strike ``(7)'' and insert ``(8)''.
                                 ______
                                 
  SA 4704. Mr. HARKIN (for himself, Mr. Johnson, Mr. Bayh, and Mr. 
Obama) submitted an amendment intended to be proposed by him to the 
bill S. 3711, to enhance the energy independence and security of the 
United States by providing for exploration, development, and production 
activities for mineral resources in the Gulf of Mexico, and for other 
purposes; which was ordered to lie on the table; as follows:

       At the end, add the following:

     SEC. 6 RENEWABLE FUEL PROGRAM.

       Section 211(o)(2) of the Clean Air Act (42 U.S.C. 
     7545(o)(2)) is amended by striking subparagraph (B) and 
     inserting the following:
       ``(B) Applicable volume.--For the purpose of subparagraph 
     (A), the applicable volume for calendar years 2007 through 
     2010 shall be determined, by rule, by the Administrator, in 
     consultation with the Secretary of Agriculture and the 
     Secretary of Energy, in a manner that ensures that the 
     applicable volume for calendar year 2010 and each calendar 
     year thereafter is at least 10,000,000,000 gallons of 
     renewable fuel.''.
                                 ______
                                 
  SA 4705. Mr. HARKIN (for himself, Mr. Lugar, and Mr. Johnson) 
submitted an amendment intended to be

[[Page 15957]]

proposed by him to the bill S. 3711, to enhance the energy independence 
and security of the United States by providing for exploration, 
development, and production activities for mineral resources in the 
Gulf of Mexico, and for other purposes; which was ordered to lie on the 
table; as follows:

       At the end, add the following:

     SEC. 6. BIOFUELS SECURITY.

       (a) Short Title.--This section may be cited as the 
     ``Biofuels Security Act of 2006''.
       (b) Renewable Fuels.--
       (1) Renewable fuel program.--Section 211(o)(2) of the Clean 
     Air Act (42 U.S.C. 7545(o)(2)) is amended by striking 
     subparagraph (B) and inserting the following:
       ``(B) Applicable volume.--
       ``(i) In general.--For the purpose of subparagraph (A), the 
     applicable volume for calendar year 2010 and each calendar 
     year thereafter shall be determined, by rule, by the 
     Administrator, in consultation with the Secretary of 
     Agriculture and the Secretary of Energy, in a manner that 
     ensures that--

       ``(I) the requirements described in clause (ii) for 
     specified calendar years are met; and
       ``(II) the applicable volume for each calendar year not 
     specified in clause (ii) is determined on an annual basis.

       ``(ii) Requirements.--The requirements referred to in 
     clause (i) are--

       ``(I) for calendar year 2010, at least 10,000,000,000 
     gallons of renewable fuel;
       ``(II) for calendar year 2020, at least 30,000,000,000 
     gallons of renewable fuel; and
       ``(III) for calendar year 2030, at least 60,000,000,000 
     gallons of renewable fuel.''.

       (2) Installation of e-85 fuel pumps by major oil companies 
     at owned stations and branded stations.--Section 211(o) of 
     the Clean Air Act (42 U.S.C. 7545(o)) is amended by adding at 
     the end the following:
       ``(11) Installation of e-85 fuel pumps by major oil 
     companies at owned stations and branded stations.--
       ``(A) Definitions.--In this paragraph:
       ``(i) E-85 fuel.--The term `E-85 fuel' means a blend of 
     gasoline approximately 85 percent of the content of which is 
     derived from ethanol produced in the United States.
       ``(ii) Major oil company.--The term `major oil company' 
     means any person that, individually or together with any 
     other person with respect to which the person has an 
     affiliate relationship or significant ownership interest, has 
     not less than 4,500 retail station outlets according to the 
     latest publication of the Petroleum News Annual Factbook.
       ``(iii) Secretary.--The term `Secretary' means the 
     Secretary of Energy, acting in consultation with the 
     Administrator of the Environmental Protection Agency and the 
     Secretary of Agriculture.
       ``(B) Regulations.--The Secretary shall promulgate 
     regulations to ensure that each major oil company that sells 
     or introduces gasoline into commerce in the United States 
     through wholly-owned stations or branded stations installs or 
     otherwise makes available 1 or more pumps that dispense E-85 
     fuel (including any other equipment necessary, such as 
     including tanks, to ensure that the pumps function properly) 
     at not less than the applicable percentage of the wholly-
     owned stations and the branded stations of the major oil 
     company specified in subparagraph (C).
       ``(C) Applicable percentage.--For the purpose of 
     subparagraph (B), the applicable percentage of the wholly-
     owned stations and the branded stations shall be determined 
     in accordance with the following table:

 ``Applicable percentage of wholly-owned stations and branded stations 
Calendar year:                                              (percent): 
  2007...........................................................5 ....

  2008..........................................................10 ....

  2009..........................................................15 ....

  2010..........................................................20 ....

  2011..........................................................25 ....

  2012..........................................................30 ....

  2013..........................................................35 ....

  2014..........................................................40 ....

  2015..........................................................45 ....

  2016 and each calendar year thereafter........................50.....

       ``(D) Geographic distribution.--
       ``(i) In general.--Subject to clause (ii), in promulgating 
     regulations under subparagraph (B), the Secretary shall 
     ensure that each major oil company described in subparagraph 
     (B) installs or otherwise makes available 1 or more pumps 
     that dispense E-85 fuel at not less than a minimum percentage 
     (specified in the regulations) of the wholly-owned stations 
     and the branded stations of the major oil company in each 
     State.
       ``(ii) Requirement.--In specifying the minimum percentage 
     under clause (i), the Secretary shall ensure that each major 
     oil company installs or otherwise makes available 1 or more 
     pumps described in that clause in each State in which the 
     major oil company operates.
       ``(E) Financial responsibility.--In promulgating 
     regulations under subparagraph (B), the Secretary shall 
     ensure that each major oil company described in that 
     subparagraph assumes full financial responsibility for the 
     costs of installing or otherwise making available the pumps 
     described in that subparagraph and any other equipment 
     necessary (including tanks) to ensure that the pumps function 
     properly.
       ``(F) Production credits for exceeding e-85 fuel pumps 
     installation requirement.--
       ``(i) Earning and period for applying credits.--If the 
     percentage of the wholly- owned stations and the branded 
     stations of a major oil company at which the major oil 
     company installs E-85 fuel pumps in a particular calendar 
     year exceeds the percentage required under subparagraph (C), 
     the major oil company earns credits under this paragraph, 
     which may be applied to any of the 3 consecutive calendar 
     years immediately after the calendar year for which the 
     credits are earned.
       ``(ii) Trading credits.--Subject to clause (iii), a major 
     oil company that has earned credits under clause (i) may sell 
     credits to another major oil company to enable the purchaser 
     to meet the requirement under subparagraph (C).
       ``(iii) Exception.--A major oil company may not use credits 
     purchased under clause (ii) to fulfill the geographic 
     distribution requirement in subparagraph (D).''.
       (3) Minimum federal fleet requirement.--Section 303(b)(1) 
     of the Energy Policy Act of 1992 (42 U.S.C. 13212(b)(1)) is 
     amended--
       (A) in subparagraph (C), by striking ``and'' after the 
     semicolon;
       (B) in subparagraph (D), by striking ``fiscal year 1999 and 
     thereafter'' and inserting ``each of fiscal years 1999 
     through 2006; and''; and
       (C) by inserting after subparagraph (D) the following:
       ``(E) 100 percent in fiscal year 2007 and thereafter,''.
       (4) Application of gasohol competition act of 1980.--
     Section 26 of the Clayton Act (15 U.S.C. 26a) is amended--
       (A) by redesignating subsection (c) as subsection (d);
       (B) by inserting after subsection (b) the following:
       ``(c) For purposes of subsection (a), restricting the right 
     of a franchisee to install on the premises of that franchisee 
     a renewable fuel pump, such as one that dispenses E85, shall 
     be considered an unlawful restriction.''; and
       (C) in subsection (d) (as redesignated by subparagraph 
     (A))--
       (i) by striking ``section,'' and inserting the following: 
     ``section--
       ``(1) the term'';
       (ii) by striking the period at the end and inserting ``; 
     and''; and
       (iii) by adding at the end the following:
       ``(2) the term `gasohol' includes any blend of ethanol and 
     gasoline such as E-85.''.
       (c) Dual Fueled Automobiles.--
       (1) Requirement to manufacture dual fueled automobiles.--
       (A) Requirement.--
       (i) In general.--Chapter 329 of title 49, United States 
     Code, is amended by inserting after section 32902 the 
     following:

     ``Sec. 32902A. Requirement to manufacture dual fueled 
       automobiles

       ``(a) Requirement.--Each manufacturer of new automobiles 
     that are capable of operating on gasoline or diesel fuel 
     shall ensure that the percentage of such automobiles, 
     manufactured in any model year after model year 2006 and 
     distributed in commerce for sale in the United States, which 
     are dual fueled automobiles is equal to not less than the 
     applicable percentage set forth in the following table:

``FThe percentage of dual fueled automobiles manufactured shall be not 
                                                             less than:
2007................................................................10 
2008................................................................20 
2009................................................................30 
2010................................................................40 
2011................................................................50 
2012................................................................60 
2013................................................................70 
2014................................................................80 
2015................................................................90 
2016 and beyond....................................................100.

       ``(b) Production Credits for Exceeding Flexible Fuel 
     Automobile Production Requirement.--
       ``(1) Earning and period for applying credits.--If the 
     number of dual fueled automobiles manufactured by a 
     manufacturer in a particular model year exceeds the number 
     required under subsection (a), the manufacturer earns credits 
     under this section, which may be applied to any of the 3 
     consecutive model years immediately after the model year for 
     which the credits are earned.
       ``(2) Trading credits.--A manufacturer that has earned 
     credits under paragraph (1) may sell credits to another 
     manufacturer to enable the purchaser to meet the requirement 
     under subsection (a).''.
       (ii) Technical amendment.--The table of sections for 
     chapter 329 of title 49, United States Code, is amended by 
     inserting after the item relating to section 32902 the 
     following:

``32902A. Requirement to manufacture dual fueled automobiles.''.

       (B) Activities to promote the use of certain alternative 
     fuels.--The Secretary of

[[Page 15958]]

     Transportation shall carry out activities to promote the use 
     of fuel mixtures containing gasoline or diesel fuel and 1 or 
     more alternative fuels, including a mixture containing at 
     least 85 percent of methanol, denatured ethanol, and other 
     alcohols by volume with gasoline or other fuels, to power 
     automobiles in the United States.
       (2) Manufacturing incentives for dual fueled automobiles.--
     Section 32905(b) of title 49, United States Code, is 
     amended--
       (A) by redesignating paragraphs (1) and (2) as 
     subparagraphs (A) and (B), respectively;
       (B) by inserting ``(1)'' before ``Except'';
       (C) by striking ``model years 1993-2010'' and inserting 
     ``model year 1993 through the first model year beginning not 
     less than 18 months after the date of enactment of the 
     Biofuels Security Act of 2006''; and
       (D) by adding at the end the following:
       ``(2) Except as provided in paragraph (5) of this 
     subsection, subsection (d) of this section, or section 
     32904(a)(2) of this title, the Administrator shall measure 
     the fuel economy for each model of dual fueled automobiles 
     manufactured by a manufacturer in the first model year 
     beginning not less than 30 months after the date of enactment 
     of the Biofuels Security Act of 2006 by dividing 1.0 by the 
     sum of--
       ``(A) 0.7 divided by the fuel economy measured under 
     section 32904(c) of this title when operating the model on 
     gasoline or diesel fuel; and
       ``(B) 0.3 divided by the fuel economy measured under 
     subsection (a) when operating the model on alternative fuel.
       ``(3) Except as provided in paragraph (5) of this 
     subsection, subsection (d) of this section, or section 
     32904(a)(2) of this title, the Administrator shall measure 
     the fuel economy for each model of dual fueled automobiles 
     manufactured by a manufacturer in the first model year 
     beginning not less than 42 months after the date of enactment 
     of the Biofuels Security Act of 2006 by dividing 1.0 by the 
     sum of--
       ``(A) 0.9 divided by the fuel economy measured under 
     section 32904(c) of this title when operating the model on 
     gasoline or diesel fuel; and
       ``(B) 0.1 divided by the fuel economy measured under 
     subsection (a) when operating the model on alternative fuel.
       ``(4) Except as provided in subsection (d) of this section, 
     or section 32904(a)(2) of this title, the Administrator shall 
     measure the fuel economy for each model of dual fueled 
     automobiles manufactured by a manufacturer in each model year 
     beginning not less than 54 months after the date of enactment 
     of the Biofuels Security Act of 2006 in accordance with 
     section 32904(c) of this title.
       ``(5) Notwithstanding paragraphs (2) through (4) of this 
     subsection, the fuel economy for all dual fueled automobiles 
     manufactured to comply with the requirements under section 
     32902A(a) of this title, including automobiles for which dual 
     fueled automobile credits have been used or traded under 
     section 32902A(b) of this title, shall be measured in 
     accordance with section 32904(c) of this title.''.
                                 ______
                                 
  SA 4706. Mr. BAYH (for himself, Mr. Brownback, Mr. Lieberman, Mr. 
Coleman, Mr. Salazar, Mr. Lugar, Mr. Obama, Mr. Chafee, Mr. Akaka, Mrs. 
Clinton, Ms. Cantwell, Ms. Collins, Mr. Kohl, Mr. Kerry, Mr. Kennedy, 
Mr. Graham, Mr. Menendez, Mr. Dodd, and Mr. Bingaman) submitted an 
amendment intended to be proposed by him to the bill S. 3711, to 
enhance the energy independence and security of the United States by 
providing for exploration, development, and production activities for 
mineral resources in the Gulf of Mexico, and for other purposes; which 
was ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

        TITLE __--VEHICLE AND FUEL CHOICES FOR AMERICAN SECURITY

     SEC. _01. FINDINGS AND PURPOSES.

       (a) Findings.--Congress finds that--
       (1) the United States is dangerously dependent on oil;
       (2) that dependence threatens the national security, 
     weakens the economy, and harms the environment of the United 
     States;
       (3) the United States currently imports nearly 60 percent 
     of oil needed in the United States, and that percentage is 
     expected to grow to almost 70 percent by 2025 if no actions 
     are taken;
       (4) approximately 2,500,000 barrels of oil per day are 
     imported from countries in the Persian Gulf region;
       (5) dependence on foreign oil has led to strategic 
     partnerships with some regimes that do not share the 
     democratic values of the United States;
       (6) terrorists have identified oil as a strategic 
     vulnerability and have increased attacks against oil 
     infrastructure worldwide;
       (7) oil imports comprise nearly 30 percent of the 
     dangerously high United States trade deficit;
       (8) it is technically feasible to achieve oil savings of 
     more than 2,500,000 barrels per day by 2017 and 7,000,000 
     barrels per day by 2026;
       (9) those goals can be achieved by establishing a set of 
     flexible policies, including--
       (A) increasing the gasoline-efficiency of cars, trucks, 
     tires, and oil;
       (B) providing economic incentives for companies and 
     consumers to purchase fuel-efficient vehicles;
       (C) encouraging the use of transit and the reduction of 
     truck idling; and
       (D) increasing production and commercialization of 
     alternative liquid fuels;
       (10) technology available as of the date of enactment of 
     this Act (including popular hybrid-electric vehicle models, 
     the sales of which in the United States increased 173 percent 
     in the first 5 months of 2005 as compared with the same 
     period in 2004) make an oil savings plan eminently 
     achievable;
       (11) achieving those goals will benefit consumers and 
     businesses through lower fuel bills and reduction in world 
     oil prices;
       (12) achieving those goals will help protect the economy of 
     the United States from high and volatile oil prices; and
       (13) it is urgent, essential, and feasible to implement an 
     action plan to achieve oil savings as soon as practicable 
     because any delay in initiating action will--
       (A) make achieving necessary oil savings more difficult and 
     expensive; and
       (B) increase the risks to the national security, economy, 
     and environment of the United States.
       (b) Purposes.--The purposes of this title are--
       (1) to accelerate market penetration of electric drive and 
     alternative motor vehicles;
       (2) to enable the accelerated market penetration of 
     efficient technologies and alternative fuels without adverse 
     impact on air quality while maintaining a policy of fuel 
     neutrality, so as to allow market forces to elect the 
     technologies and fuels that are consumer-friendly, safe, 
     environmentally-sound, and economic;
       (3) to provide time-limited financial incentives to 
     encourage production and consumer purchase of oil saving 
     technologies and fuels nationwide; and
       (4) to promote a nationwide diversity of motor vehicle 
     fuels and advanced motor vehicle technology, including 
     advanced lean burn technology, hybrid technology, flexible 
     fuel motor vehicles, alternatively fueled motor vehicles, and 
     other oil saving technologies.

             Subtitle A--Oil Savings Plan and Requirements

     SEC. _11. OIL SAVINGS TARGET AND ACTION PLAN.

       Not later than 270 days after the date of enactment of this 
     Act, the Director of the Office of Management and Budget 
     (referred to in this subtitle as the ``Director'') shall 
     publish in the Federal Register an action plan consisting 
     of--
       (1) a list of requirements proposed or to be proposed 
     pursuant to section _12 that are authorized to be issued 
     under law in effect on the date of enactment of this Act, and 
     this Act, that will be sufficient, when taken together, to 
     save from the baseline determined under section _15--
       (A) 2,500,000 barrels of oil per day on average during 
     calendar year 2016;
       (B) 7,000,000 barrels of oil per day on average during 
     calendar year 2026; and
       (C) 10,000,000 barrels per day on average during calendar 
     year 2031; and
       (2) a Federal Government-wide analysis of--
       (A) the expected oil savings from the baseline to be 
     accomplished by each requirement; and
       (B) whether all such requirements, taken together, will 
     achieve the oil savings specified in this section.

     SEC. _12. STANDARDS AND REQUIREMENTS.

       (a) In General.--On or before the date of publication of 
     the action plan under section _11, the Secretary of Energy, 
     the Secretary of Transportation, the Secretary of Defense, 
     the Secretary of Agriculture, the Administrator of the 
     Environmental Protection Agency, and the head of any other 
     agency the President determines appropriate shall each 
     propose, or issue a notice of intent to propose, regulations 
     establishing each standard or other requirement listed in the 
     action plan that is under the jurisdiction of the respective 
     agency using authorities described in subsection (b).
       (b) Authorities.--The head of each agency described in 
     subsection (a) shall use to carry out this section--
       (1) any authority in existence on the date of enactment of 
     this Act (including regulations); and
       (2) any new authority provided under this Act (including an 
     amendment made by this Act).
       (c) Final Regulations.--Not later than 18 months after the 
     date of enactment of this Act, the head of each agency 
     described in subsection (a) shall promulgate final versions 
     of the regulations required under this section.
       (d) Agency Analyses.--Each proposed and final regulation 
     promulgated under this section shall--
       (1) be designed to achieve at least the oil savings 
     resulting from the regulation under the action plan published 
     under section _11; and
       (2) be accompanied by an analysis by the applicable agency 
     describing the manner in

[[Page 15959]]

     which the regulation will promote the achievement of the oil 
     savings from the baseline determined under section _15.

     SEC. _13. INITIAL EVALUATION.

       (a) In General.--Not later than 2 years after the date of 
     enactment of this Act, the Director shall publish in the 
     Federal Register a Federal Government-wide analysis of the 
     oil savings achieved from the baseline established under 
     section _15.
       (b) Inadequate Oil Savings.--If the oil savings are less 
     than the targets established under section _11, 
     simultaneously with the analysis required under subsection 
     (a)--
       (1) the Director shall publish a revised action plan that 
     is adequate to achieve the targets; and
       (2) the Secretary of Energy, the Secretary of 
     Transportation, and the Administrator shall propose new or 
     revised regulations under subsections (a), (b), and (c), 
     respectively, of section _12.
       (c) Final Regulations.--Not later than 180 days after the 
     date on which regulations are proposed under subsection 
     (b)(2), the Secretary of Energy, the Secretary of 
     Transportation, and the Administrator shall promulgate final 
     versions of those regulations.

     SEC. _14. REVIEW AND UPDATE OF ACTION PLAN.

       (a) Review.--Not later than January 1, 2011, and every 3 
     years thereafter, the Director shall submit to Congress, and 
     publish, a report that--
       (1) evaluates the progress achieved in implementing the oil 
     savings targets established under section _11;
       (2) analyzes the expected oil savings under the standards 
     and requirements established under this Act and the 
     amendments made by this Act; and
       (3)(A) analyzes the potential to achieve oil savings that 
     are in addition to the savings required by section _11; and
       (B) if the President determines that it is in the national 
     interest, establishes a higher oil savings target for 
     calendar year 2017 or any subsequent calendar year.
       (b) Inadequate Oil Savings.--If the oil savings are less 
     than the targets established under section _11, 
     simultaneously with the report required under subsection 
     (a)--
       (1) the Director shall publish a revised action plan that 
     is adequate to achieve the targets; and
       (2) the Secretary of Energy, the Secretary of 
     Transportation, and the Administrator shall propose new or 
     revised regulations under subsections (a), (b), and (c), 
     respectively, of section _12.
       (c) Final Regulations.--Not later than 180 days after the 
     date on which regulations are proposed under subsection 
     (b)(2), the Secretary of Energy, the Secretary of 
     Transportation, and the Administrator shall promulgate final 
     versions of those regulations.

     SEC. _15. BASELINE AND ANALYSIS REQUIREMENTS.

       In performing the analyses and promulgating proposed or 
     final regulations to establish standards and other 
     requirements necessary to achieve the oil savings required by 
     this subtitle, the Secretary of Energy, the Secretary of 
     Transportation, the Secretary of Defense, the Secretary of 
     Agriculture, the Administrator of the Environmental 
     Protection Agency, and the head of any other agency the 
     President determines to be appropriate shall--
       (1) determine oil savings as the projected reduction in oil 
     consumption from the baseline established by the reference 
     case contained in the report of the Energy Information 
     Administration entitled ``Annual Energy Outlook 2005'';
       (2) determine the oil savings projections required on an 
     annual basis for each of calendar years 2009 through 2026; 
     and
       (3) account for any overlap among the standards and other 
     requirements to ensure that the projected oil savings from 
     all the promulgated standards and requirements, taken 
     together, are as accurate as practicable.

        Subtitle B--Fuel Efficient Vehicles for the 21st Century

     SEC. _21. TIRE EFFICIENCY PROGRAM.

       (a) Standards for Tires Manufactured for Interstate 
     Commerce.--Section 30123 of title 49, United States Code, is 
     amended--
       (1) in subsection (b)--
       (A) in the first sentence, by striking ``The Secretary'' 
     and inserting the following:
       ``(1) Uniform quality grading system.--
       ``(A) In general.--The Secretary'';
       (B) in the second sentence, by striking ``The Secretary'' 
     and inserting the following:
       ``(2) Nomenclature and marketing practices.--The 
     Secretary'';
       (C) in the third sentence, by striking ``A tire standard'' 
     and inserting the following:
       ``(3) Effect of standards and regulations.--A tire 
     standard''; and
       (D) in paragraph (1), as designated by subparagraph (A), by 
     adding at the end the following:
       ``(B) Inclusion.--The grading system established pursuant 
     to subparagraph (A) shall include standards for rating the 
     fuel efficiency of tires designed for use on passenger cars 
     and light trucks.''; and
       (2) by adding at the end the following:
       ``(d) National Tire Efficiency Program.--
       ``(1) Definition.--In this subsection, the term `fuel 
     economy', with respect to a tire, means the extent to which 
     the tire contributes to the fuel economy of the motor vehicle 
     on which the tire is mounted.
       ``(2) Program.--The Secretary shall develop and carry out a 
     national tire fuel efficiency program for tires designed for 
     use on passenger cars and light trucks.
       ``(3) Requirements.--Not later than March 31, 2008, the 
     Secretary shall issue regulations, which establish--
       ``(A) policies and procedures for testing and labeling 
     tires for fuel economy to enable tire buyers to make informed 
     purchasing decisions about the fuel economy of tires;
       ``(B) policies and procedures to promote the purchase of 
     energy efficient replacement tires, including purchase 
     incentives, website listings on the Internet, printed fuel 
     economy guide booklets, and mandatory requirements for tire 
     retailers to provide tire buyers with fuel efficiency 
     information on tires; and
       ``(C) minimum fuel economy standards for tires.
       ``(4) Minimum fuel economy standards.--In promulgating 
     minimum fuel economy standards for tires, the Secretary shall 
     design standards that--
       ``(A) ensure, in conjunction with the requirements under 
     paragraph (3)(B), that the average fuel economy of 
     replacement tires is not less than the average fuel economy 
     of tires sold as original equipment;
       ``(B) secure the maximum technically feasible and cost-
     effective fuel savings;
       ``(C) do not adversely affect tire safety;
       ``(D) incorporate the results from--
       ``(i) laboratory testing; and
       ``(ii) to the extent appropriate and available, on-road 
     fleet testing programs conducted by manufacturers; and
       ``(E) do not adversely affect efforts to manage scrap 
     tires.
       ``(5) Applicability.--The policies, procedures, and 
     standards developed under paragraph (3) shall apply to all 
     tire types and models regulated under the uniform tire 
     quality grading standards in section 575.104 of title 49, 
     Code of Federal Regulations (or a successor regulation).
       ``(6) Review.--
       ``(A) In general.--Not less than once every 3 years, the 
     Secretary shall--
       ``(i) review the minimum fuel economy standards in effect 
     for tires under this subsection; and
       ``(ii) subject to subparagraph (B), revise the standards as 
     necessary to ensure compliance with standards described in 
     paragraph (4).
       ``(B) Limitation.--The Secretary may not reduce the average 
     fuel economy standards applicable to replacement tires.
       ``(7) No preemption of state law.--Nothing in this section 
     shall be construed to preempt any provision of State law 
     relating to higher fuel economy standards applicable to 
     replacement tires designed for use on passenger cars and 
     light trucks.
       ``(8) Exceptions.--Nothing in this section shall apply to--
       ``(A) a tire or group of tires with the same stock keeping 
     unit, plant, and year, for which the volume of tires produced 
     or imported is less than 15,000 annually;
       ``(B) a deep tread, winter-type snow tire, space-saver 
     tire, or temporary use spare tire;
       ``(C) a tire with a normal rim diameter of 12 inches or 
     less;
       ``(D) a motorcycle tire; or
       ``(E) a tire manufactured specifically for use in an off-
     road motorized recreational vehicle.''.
       (b) Conforming Amendment.--Section 30103(b)(1) of title 49, 
     United States Code, is amended by striking ``When'' and 
     inserting ``Except as provided in section 30123(d), if''.
       (c) Time for Implementation.--Beginning not later than 
     March 31, 2008, the Secretary of Transportation shall 
     administer the national tire fuel efficiency program 
     established under section 30123(d) of title 49, United States 
     Code, in accordance with the policies, procedures, and 
     standards developed under section 30123(d)(3) of such title.
       (d) Authorization of Appropriations.--There are authorized 
     to be appropriated, for each of fiscal years 2007 through 
     2011, such sums as may be necessary to carry out section 
     30123(d) of title 49, United States Code, as added by 
     subsection (a).

     SEC. _22. REDUCTION OF 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 Administrator of the Environmental 
     Protection Agency, 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.

[[Page 15960]]



     SEC. _23. FUEL EFFICIENCY FOR HEAVY DUTY TRUCKS.

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

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

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

``Sec.
``33001. Purpose and policy.
``33002. Definition.
``33003. Testing and assessment.
``33004. Standards.
``33005. Authorization of appropriations.

     ``Sec. 33001. Purpose and policy

       ``The purpose of this chapter is to reduce petroleum 
     consumption by heavy duty motor vehicles.

     ``Sec. 33002. Definition

       ``In this chapter, the term `heavy duty motor vehicle'--
       ``(1) means a vehicle having a gross vehicle weight rating 
     of at least 10,000 pounds that is driven or drawn by 
     mechanical power and manufactured primarily for use on public 
     streets, roads, and highways; and
       ``(2) does not include a vehicle operated only on a rail 
     line.

     ``Sec. 33003. Testing and assessment

       ``(a) General Requirements.--The Administrator of the 
     Environmental Protection Agency (referred to in this section 
     as the `Administrator') shall develop and coordinate a 
     national testing and assessment program to--
       ``(1) determine the fuel economy of heavy duty vehicles; 
     and
       ``(2) assess the fuel efficiency attainable through 
     available technology.
       ``(b) Testing.--The Administrator shall--
       ``(1) design a National testing program to assess the fuel 
     economy of heavy duty vehicles (based on the program for 
     light duty vehicles); and
       ``(2) implement the program described in paragraph (1) not 
     later than 18 months after the date of enactment of this 
     chapter.
       ``(c) Assessment.--The Administrator shall consult with the 
     Secretary of Transportation on the assessment of available 
     technologies to enhance the fuel efficiency of heavy duty 
     vehicles to ensure that vehicle use and needs are considered 
     appropriately in the assessment.
       ``(d) Reporting.--The Administrator shall--
       ``(1) not later than 2 years after the date of enactment of 
     this chapter, submit a report to Congress regarding the 
     results of the assessment of available technologies to 
     improve the fuel efficiency of heavy duty vehicles.
       ``(2) submit a report to Congress, at least biannually, 
     that addresses the fuel economy of heavy duty vehicles; and

     ``Sec. 33004. Standards

       ``(a) General Requirements.--Not later than 18 months after 
     completing the testing and assessments under section 33003, 
     the Secretary of Transportation shall prescribe average heavy 
     duty vehicle fuel economy standards. Each standard shall be 
     the maximum feasible average fuel economy level that the 
     Secretary decides that manufacturers can achieve in that 
     model year. The Secretary may prescribe separate standards 
     for different classes of heavy duty motor vehicles. The 
     standards for each model year shall be completed not later 
     than 18 months before the beginning of each model year.
       ``(b) Considerations and Consultation.--In determining 
     maximum feasible average fuel economy, the Secretary shall 
     consider--
       ``(1) relevant available heavy duty motor vehicle fuel 
     consumption information;
       ``(2) technological feasibility;
       ``(3) economic practicability;
       ``(4) the desirability of reducing United States dependence 
     on oil;
       ``(5) the effects of average fuel economy standards on 
     vehicle safety;
       ``(6) the effects of average fuel economy standards on 
     levels of employment and competitiveness of the heavy truck 
     manufacturing industry ; and
       ``(7) the extent to which the standard will carry out the 
     purpose described in section 33001.
       ``(c) Cooperation.--The Secretary may advise, assist, and 
     cooperate with departments, agencies, and instrumentalities 
     of the United States Government, States, and other public and 
     private agencies in developing fuel economy standards for 
     heavy duty motor vehicles.
       ``(d) 5-Year Plan for Testing Standards.--The Secretary 
     shall establish, periodically review, and continually update 
     a 5-year plan for testing heavy duty motor vehicle fuel 
     economy standards prescribed under this chapter. In 
     developing and establishing testing priorities, the Secretary 
     shall consider factors the Secretary considers appropriate, 
     consistent with the purpose described in section 33001 and 
     the Secretary's other duties and powers under this chapter.

     ``Sec. 33005. Authorization of appropriations

       ``There are authorized to be appropriated, for each of 
     fiscal years 2007 through 2011, such sums as may be necessary 
     to carry out this chapter.''.

     SEC. _24. NEAR-TERM VEHICLE TECHNOLOGY PROGRAM.

       (a) Purposes.--The purposes of this section are--
       (1) to enable and promote, in partnership with industry, 
     comprehensive development, demonstration, and 
     commercialization of a wide range of electric drive 
     components, systems, and vehicles using diverse electric 
     drive transportation technologies;
       (2) to make critical public investments to help private 
     industry, institutions of higher education, National 
     Laboratories, and research institutions to expand innovation, 
     industrial growth, and jobs in the United States;
       (3) to expand the availability of the existing electric 
     infrastructure for fueling light duty transportation and 
     other on-road and nonroad vehicles that are using petroleum 
     and are mobile sources of emissions--
       (A) including the more than 3,000,000 reported units (such 
     as electric forklifts, golf carts, and similar nonroad 
     vehicles) in use on the date of enactment of this Act; and
       (B) with the goal of enhancing the energy security of the 
     United States, reduce dependence on imported oil, and reduce 
     emissions through the expansion of grid supported mobility;
       (4) to accelerate the widespread commercialization of all 
     types of electric drive vehicle technology into all sizes and 
     applications of vehicles, including commercialization of 
     plug-in hybrid electric vehicles and plug-in hybrid fuel cell 
     vehicles; and
       (5) to improve the energy efficiency of and reduce the 
     petroleum use in transportation.
       (b) Definitions.--In this section:
       (1) Battery.--The term ``battery'' means an energy storage 
     device used in an on-road or nonroad vehicle powered in whole 
     or in part using an off-board or on-board source of 
     electricity.
       (2) Electric drive transportation technology.--The term 
     ``electric drive transportation technology'' means--
       (A) vehicles that use an electric motor for all or part of 
     their motive power and that may or may not use off-board 
     electricity, including battery electric vehicles, fuel cell 
     vehicles, engine dominant hybrid electric vehicles, plug-in 
     hybrid electric vehicles, plug-in hybrid fuel cell vehicles, 
     and electric rail; or
       (B) equipment relating to transportation or mobile sources 
     of air pollution that use an electric motor to replace an 
     internal combustion engine for all or part of the work of the 
     equipment, including corded electric equipment linked to 
     transportation or mobile sources of air pollution.
       (3) Engine dominant hybrid electric vehicle.--The term 
     ``engine dominant hybrid electric vehicle'' means an on-road 
     or nonroad vehicle that--
       (A) is propelled by an internal combustion engine or heat 
     engine using--
       (i) any combustible fuel;
       (ii) an on-board, rechargeable storage device; and
       (B) has no means of using an off-board source of 
     electricity.
       (4) Fuel cell vehicle.--The term ``fuel cell vehicle'' 
     means an on-road or nonroad vehicle that uses a fuel cell (as 
     defined in section 3 of the Spark M. Matsunaga Hydrogen 
     Research, Development, and Demonstration Act of 1990).
       (5) Nonroad vehicle.--The term ``nonroad vehicle'' has the 
     meaning given the term in section 216 of the Clean Air Act 
     (42 U.S.C. 7550).
       (6) Plug-in hybrid electric vehicle.--The term ``plug-in 
     hybrid electric vehicle'' means an on-road or nonroad vehicle 
     that is propelled by an internal combustion engine or heat 
     engine using--
       (A) any combustible fuel;
       (B) an on-board, rechargeable storage device; and
       (C) a means of using an off-board source of electricity.
       (7) Plug-in hybrid fuel cell vehicle.--The term ``plug-in 
     hybrid fuel cell vehicle'' means a fuel cell vehicle with a 
     battery powered by an off-board source of electricity.
       (c) Program.--The Secretary shall conduct a program of 
     research, development, demonstration, and commercial 
     application for electric drive transportation technology, 
     including--
       (1) high capacity, high efficiency batteries;
       (2) high efficiency on-board and off-board charging 
     components;
       (3) high power drive train systems for passenger and 
     commercial vehicles and for nonroad equipment;
       (4) control system development and power train development 
     and integration for plug-in hybrid electric vehicles, plug-in 
     hybrid fuel cell vehicles, and engine dominant hybrid 
     electric vehicles, including--
       (A) development of efficient cooling systems;
       (B) analysis and development of control systems that 
     minimize the emissions profile when clean diesel engines are 
     part of a plug-in hybrid drive system; and
       (C) development of different control systems that optimize 
     for different goals, including--
       (i) battery life;
       (ii) reduction of petroleum consumption; and
       (iii) green house gas reduction;
       (5) nanomaterial technology applied to both battery and 
     fuel cell systems;
       (6) large-scale demonstrations, testing, and evaluation of 
     plug-in hybrid electric vehicles in different applications 
     with different batteries and control systems, including--

[[Page 15961]]

       (A) military applications;
       (B) mass market passenger and light-duty truck 
     applications;
       (C) private fleet applications; and
       (D) medium- and heavy-duty applications;
       (7) a nationwide education strategy for electric drive 
     transportation technologies providing secondary and high 
     school teaching materials and support for university 
     education focused on electric drive system and component 
     engineering;
       (8) development, in consultation with the Administrator of 
     the Environmental Protection Agency, of procedures for 
     testing and certification of criteria pollutants, fuel 
     economy, and petroleum use for light-, medium-, and heavy-
     duty vehicle applications, including consideration of--
       (A) the vehicle and fuel as a system, not just an engine; 
     and
       (B) nightly off-board charging; and
       (9) advancement of battery and corded electric 
     transportation technologies in mobile source applications 
     by--
       (A) improvement in battery, drive train, and control system 
     technologies; and
       (B) working with industry and the Administrator of the 
     Environmental Protection Agency to--
       (i) understand and inventory markets; and
       (ii) identify and implement methods of removing barriers 
     for existing and emerging applications.
       (d) Goals.--The goals of the electric drive transportation 
     technology program established under subsection (c) shall be 
     to develop, in partnership with industry and institutions of 
     higher education, projects that focus on--
       (1) innovative electric drive technology developed in the 
     United States;
       (2) growth of employment in the United States in electric 
     drive design and manufacturing;
       (3) validation of the plug-in hybrid potential through 
     fleet demonstrations; and
       (4) acceleration of fuel cell commercialization through 
     comprehensive development and commercialization of the 
     electric drive technology systems that are the foundational 
     technology of the fuel cell vehicle system.
       (e) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $300,000,000 for 
     each of fiscal years 2007 through 2012.

     SEC. _25. LIGHTWEIGHT MATERIALS RESEARCH AND DEVELOPMENT.

       (a) In General.--As soon as practicable after the date of 
     enactment of this Act, the Secretary of Energy 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.

     SEC. _26. HYBRID AND ADVANCED DIESEL VEHICLES.

       (a) Hybrid Vehicles.--The Energy Policy Act of 2005 is 
     amended by striking section 711 (42 U.S.C. 16061) and 
     inserting the following:

     ``SEC. 711. HYBRID VEHICLES.

       ``(a) Definitions.--In this section:
       ``(1) Cost.--The term `cost' has the meaning given the term 
     `cost of a loan guarantee' within the meaning of section 
     502(5)(C) of the Federal Credit Reform Act of 1990 (2 U.S.C. 
     661a(5)(C)).
       ``(2) Eligible project.--The term `eligible project' means 
     a project to--
       ``(A) improve hybrid technologies under subsection (b); or
       ``(B) encourage domestic production of efficient hybrid and 
     advanced diesel vehicles under section 712(a).
       ``(3) Guarantee.--
       ``(A) In general.--The term `guarantee' has the meaning 
     given the term `loan guarantee' in section 502 of the Federal 
     Credit Reform Act of 1990 (2 U.S.C. 661a).
       ``(B) Inclusion.--The term `guarantee' includes a loan 
     guarantee commitment (as defined in section 502 of the 
     Federal Credit Reform Act of 1990 (2 U.S.C. 661a)).
       ``(4) Hybrid technology.--The term `hybrid technology' 
     means a battery or other rechargeable energy storage system, 
     power electronic, hybrid systems integration, and any other 
     technology for use in hybrid vehicles.
       ``(5) Obligation.--The term `obligation' means the loan or 
     other debt obligation that is guaranteed under this section.
       ``(b) Authorization.--The Secretary shall accelerate 
     efforts directed toward the improvement of hybrid 
     technologies, including through the provision of loan 
     guarantees under subsection (c).
       ``(c) Loan Guarantees.--
       ``(1) In general.--The Secretary shall make guarantees 
     under this section for eligible projects on such terms and 
     conditions as the Secretary, in consultation with the 
     Secretary of the Treasury, determines to be appropriate.
       ``(2) Specific appropriation or contribution.--No guarantee 
     shall be made unless--
       ``(A) an appropriation for the cost has been made; or
       ``(B) the Secretary has received from the borrower a 
     payment in full for the cost of the obligation and deposited 
     the payment into the Treasury.
       ``(3) Amount.--Unless otherwise provided by law, a 
     guarantee by the Secretary shall not exceed an amount equal 
     to 80 percent of the project cost of the hybrid technology 
     that is the subject of the guarantee, as estimated at the 
     time at which the guarantee is issued.
       ``(4) Repayment.--
       ``(A) In general.--No guarantee shall be made unless the 
     Secretary determines that there is a reasonable prospect of 
     repayment of the principal and interest on the obligation by 
     the borrower.
       ``(B) Amount.--No guarantee shall be made unless the 
     Secretary determines that the amount of the obligation (when 
     combined with amounts available to the borrower from other 
     sources) will be sufficient to carry out the project.
       ``(C) Subordination.--The obligation shall be subject to 
     the condition that the obligation is not subordinate to other 
     financing.
       ``(5) Interest rate.--An obligation shall bear interest at 
     a rate that does not exceed a level that the Secretary 
     determines appropriate, taking into account the prevailing 
     rate of interest in the private sector for similar loans and 
     risks.
       ``(6) Term.--The term of an obligation shall require full 
     repayment over a period not to exceed the lesser of--
       ``(A) 30 years; or
       ``(B) 90 percent of the projected useful life of the 
     physical asset to be financed by the obligation (as 
     determined by the Secretary).
       ``(7) Defaults.--
       ``(A) Payment by secretary.--
       ``(i) In general.--If a borrower defaults on the obligation 
     (as defined in regulations promulgated by the Secretary and 
     specified in the guarantee contract), the holder of the 
     guarantee shall have the right to demand payment of the 
     unpaid amount from the Secretary.
       ``(ii) Payment required.--Within such period as may be 
     specified in the guarantee or related agreements, the 
     Secretary shall pay to the holder of the guarantee the unpaid 
     interest on, and unpaid principal of the obligation as to 
     which the borrower has defaulted, unless the Secretary finds 
     that--

       ``(I) there was no default by the borrower in the payment 
     of interest or principal; or
       ``(II) the default has been remedied.

       ``(iii) Forbearance.--Nothing in this subsection precludes 
     any forbearance by the holder of the obligation for the 
     benefit of the borrower that may be agreed upon by the 
     parties to the obligation and approved by the Secretary.
       ``(B) Subrogation.--
       ``(i) In general.--If the Secretary makes a payment under 
     subparagraph (A), the Secretary shall be subrogated to the 
     rights of the recipient of the payment as specified in the 
     guarantee or related agreements including, where appropriate, 
     the authority (notwithstanding any other provision of law) 
     to--

       ``(I) complete, maintain, operate, lease, or otherwise 
     dispose of any property acquired pursuant to the guarantee or 
     related agreements; or
       ``(II) permit the borrower, pursuant to an agreement with 
     the Secretary, to continue to pursue the purposes of the 
     eligible project, as the Secretary determines to be in the 
     public interest.

       ``(ii) Superiority of rights.--The rights of the Secretary, 
     with respect to any property acquired pursuant to a guarantee 
     or related agreement, shall be superior to the rights of any 
     other person with respect to the property.
       ``(iii) Terms and conditions.--A guarantee agreement shall 
     include such detailed terms and conditions as the Secretary 
     determines appropriate to--

       ``(I) protect the interests of the United States in the 
     case of default; and
       ``(II) have available all the patents and technology 
     necessary for any person selected, including the Secretary, 
     to complete and operate the eligible project.

       ``(C) Payment of principal and interest by secretary.--With 
     respect to any obligation guaranteed under this section, the 
     Secretary may enter into a contract to pay, and pay, holders 
     of the obligation, for and on behalf of the borrower, from 
     funds appropriated for that purpose, the principal and 
     interest payments that become due and payable on the unpaid 
     balance of the obligation if the Secretary finds that--
       ``(i)(I) the borrower is unable to meet the payments and is 
     not in default;
       ``(II) it is in the public interest to permit the borrower 
     to continue to pursue the purposes of the eligible project; 
     and
       ``(III) the probable net benefit to the Federal Government 
     in paying the principal and interest will be greater than the 
     benefit that would result in the event of a default;
       ``(ii) the amount of the payment that the Secretary is 
     authorized to pay will be no greater than the amount of 
     principal and interest that the borrower is obligated to pay 
     under the agreement being guaranteed; and
       ``(iii) the borrower agrees to reimburse the Secretary for 
     the payment (including interest) on terms and conditions that 
     are satisfactory to the Secretary.

[[Page 15962]]

       ``(D) Action by attorney general.--
       ``(i) Notification.--If the borrower defaults on an 
     obligation, the Secretary shall notify the Attorney General 
     of the default.
       ``(ii) Recovery.--On receipt of notification, the Attorney 
     General shall take such action as the Attorney General 
     determines to be appropriate to recover the unpaid principal 
     and interest due from--

       ``(I) such assets of the defaulting borrower as are 
     associated with the obligation; or
       ``(II) any other security pledged to secure the obligation.

       ``(8) Fees.--
       ``(A) In general.--The Secretary shall charge and collect 
     fees for guarantees in amounts the Secretary determines are 
     sufficient to cover applicable administrative expenses.
       ``(B) Availability.--Fees collected under this paragraph 
     shall--
       ``(i) be deposited by the Secretary into the Treasury; and
       ``(ii) remain available until expended, subject to such 
     other conditions as are contained in annual appropriations 
     Acts.
       ``(9) Records; audits.--
       ``(A) In general.--A recipient of a guarantee shall keep 
     such records and other pertinent documents as the Secretary 
     shall prescribe by regulation, including such records as the 
     Secretary may require to facilitate an effective audit.
       ``(B) Access.--The Secretary and the Comptroller General of 
     the United States, or their duly authorized representatives, 
     shall have access, for the purpose of audit, to the records 
     and other pertinent documents.
       ``(10) Full faith and credit.--The full faith and credit of 
     the United States is pledged to the payment of all guarantees 
     issued under this section with respect to principal and 
     interest.
       ``(d) Authorization of Appropriations.--There are 
     authorized to be appropriated such sums as are necessary to 
     provide the cost of guarantees under this section.''.
       (b) Efficient Hybrid and Advanced Diesel Vehicles.--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 the 
     provision of loan guarantees under section 711(c) to 
     automobile manufacturers and suppliers''.

     SEC. _27. ADVANCED TECHNOLOGY MOTOR VEHICLES MANUFACTURING 
                   CREDIT.

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

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

       ``(a) Credit Allowed.--There shall be allowed as a credit 
     against the tax imposed by this chapter for the taxable year 
     an amount equal to 35 percent of so much of the qualified 
     investment of an eligible taxpayer for such taxable year as 
     does not exceed $75,000,000.
       ``(b) Qualified Investment.--For purposes of this section--
       ``(1) In general.--The qualified investment for any taxable 
     year is equal to the incremental costs incurred during such 
     taxable year--
       ``(A) to re-equip or expand any manufacturing facility of 
     the eleigible taxpayer to produce advanced technology motor 
     vehicles,
       ``(B) to re-equip, expand, or establish any manufacturing 
     facility of the eligible taxpayer to produce eligible 
     components,
       ``(C) for engineering integration performed in the United 
     States of such vehicles and components as described in 
     subsection (d), and
       ``(D) for research and development performed in the United 
     States related to advanced technology motor vehicles and 
     eligible components.
       ``(2) Attribution rules.--In the event a facility of the 
     eligible taxpayer produces both advanced technology motor 
     vehicles and conventional motor vehicles, or eligible and 
     non-eligible components, only the qualified investment 
     attributable to production of advanced technology motor 
     vehicles and eligible components shall be taken into account.
       ``(c) Advanced Technology Motor Vehicles and Eligible 
     Components.--For purposes of this section--
       ``(1) Advanced technology motor vehicle.--The term 
     `advanced technology motor vehicle' means--
       ``(A) any new advanced lean burn technology motor vehicle 
     (as defined in section 30B(c)(3)), or
       ``(B) any new qualified hybrid motor vehicle (as defined in 
     section 30B(d)(3)(A) and determined without regard to any 
     gross vehicle weight rating).
       ``(2) Eligible components.--The term `eligible component' 
     means any component inherent to any advanced technology motor 
     vehicle, including--
       ``(A) with respect to any gasoline or diesel-electric new 
     qualified hybrid motor vehicle--
       ``(i) electric motor or generator,
       ``(ii) power split device,
       ``(iii) power control unit,
       ``(iv) power controls,
       ``(v) integrated starter generator, or
       ``(vi) battery,
       ``(B) with respect to any hydraulic new qualified hybrid 
     motor vehicle--
       ``(i) hydraulic accumulator vessel,
       ``(ii) hydraulic pump, or
       ``(iii) hydraulic pump-motor assembly,
       ``(C) with respect to any new advanced lean burn technology 
     motor vehicle--
       ``(i) diesel engine,
       ``(ii) turbocharger,
       ``(iii) fuel injection system, or
       ``(iv) after-treatment system, such as a particle filter or 
     NOx absorber, and
       ``(D) with respect to any advanced technology motor 
     vehicle, any other component submitted for approval by the 
     Secretary.
       ``(d) Engineering Integration Costs.--For purposes of 
     subsection (b)(1)(C), costs for engineering integration are 
     costs incurred prior to the market introduction of advanced 
     technology vehicles for engineering tasks related to--
       ``(1) establishing functional, structural, and performance 
     requirements for component and subsystems to meet overall 
     vehicle objectives for a specific application,
       ``(2) designing interfaces for components and subsystems 
     with mating systems within a specific vehicle application,
       ``(3) designing cost effective, efficient, and reliable 
     manufacturing processes to produce components and subsystems 
     for a specific vehicle application, and
       ``(4) validating functionality and performance of 
     components and subsystems for a specific vehicle application.
       ``(e) Eligible Taxpayer.--For purposes of this section, the 
     term `eligible taxpayer' means any taxpayer if more than 50 
     percent of its gross receipts for the taxable year is derived 
     from the manufacture of motor vehicles or any component parts 
     of such vehicles.
       ``(f) Limitation Based on Amount of Tax.--The credit 
     allowed under subsection (a) for the taxable year shall not 
     exceed the excess of--
       ``(1) the sum of--
       ``(A) the regular tax liability (as defined in section 
     26(b)) for such taxable year, plus
       ``(B) the tax imposed by section 55 for such taxable year 
     and any prior taxable year beginning after 1986 and not taken 
     into account under section 53 for any prior taxable year, 
     over
       ``(2) the sum of the credits allowable under subpart A and 
     sections 27, 30, and 30B for the taxable year.
       ``(g) Reduction in Basis.--For purposes of this subtitle, 
     if a credit is allowed under this section for any expenditure 
     with respect to any property, the increase in the basis of 
     such property which would (but for this paragraph) result 
     from such expenditure shall be reduced by the amount of the 
     credit so allowed.
       ``(h) No Double Benefit.--
       ``(1) Coordination with other deductions and credits.--
     Except as provided in paragraph (2), the amount of any 
     deduction or other credit allowable under this chapter for 
     any cost taken into account in determining the amount of the 
     credit under subsection (a) shall be reduced by the amount of 
     such credit attributable to such cost.
       ``(2) Research and development costs.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     any amount described in subsection (b)(1)(D) taken into 
     account in determining the amount of the credit under 
     subsection (a) for any taxable year shall not be taken into 
     account for purposes of determining the credit under section 
     41 for such taxable year.
       ``(B) Costs taken into account in determining base period 
     research expenses.--Any amounts described in subsection 
     (b)(1)(D) taken into account in determining the amount of the 
     credit under subsection (a) for any taxable year which are 
     qualified research expenses (within the meaning of section 
     41(b)) shall be taken into account in determining base period 
     research expenses for purposes of applying section 41 to 
     subsequent taxable years.
       ``(i) Business Carryovers Allowed.--If the credit allowable 
     under subsection (a) for a taxable year exceeds the 
     limitation under subsection (f) for such taxable year, such 
     excess (to the extent of the credit allowable with respect to 
     property subject to the allowance for depreciation) shall be 
     allowed as a credit carryback and carryforward under rules 
     similar to the rules of section 39.
       ``(j) Special Rules.--For purposes of this section, rules 
     similar to the rules of paragraphs (4) and (5) of section 
     179A(e) and paragraphs (1) and (2) of section 41(f) shall 
     apply.
       ``(k) Election Not to Take Credit.--No credit shall be 
     allowed under subsection (a) for any property if the taxpayer 
     elects not to have this section apply to such property.
       ``(l) Regulations.--The Secretary shall prescribe such 
     regulations as necessary to carry out the provisions of this 
     section.
       ``(m) Termination.--This section shall not apply to any 
     qualified investment after December 31, 2015.''.
       (b) Conforming Amendments.--
       (1) Section 1016(a) of the Internal Revenue Code of 1986 is 
     amended by striking ``and'' at the end of paragraph (35), by 
     striking the period at the end of paragraph (36) and 
     inserting ``, and'', and by adding at the end the following 
     new paragraph:
       ``(37) to the extent provided in section 30D(g).''.
       (2) Section 6501(m) of such Code is amended by inserting 
     ``30D(k),'' after ``30C(e)(5),''.

[[Page 15963]]

       (3) The table of sections for subpart B of part IV of 
     subchapter A of chapter 1 of such Code is amended by 
     inserting after the item relating to section 30C the 
     following new item:

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

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

     SEC. _28. CONSUMER INCENTIVES TO PURCHASE ADVANCED TECHNOLOGY 
                   VEHICLES.

       (a) Elimination on Number of New Qualified Hybrid and 
     Advanced Lean Burn Technology Vehicles Eligible for 
     Alternative Motor Vehicle Credit.--
       (1) In general.--Section 30D of the Internal Revenue Code 
     of 1986 is amended by striking subsection (f) and by 
     redesignating subsections (g) through (j) as subsections (f) 
     through (i), respectively.
       (2) Conforming amendments.--
       (A) Paragraphs (4) and (6) of section 30B(h) of the 
     Internal Revenue Code of 1986 are each amended amended by 
     striking ``(determined without regard to subsection (g))'' 
     and inserting ``determined without regard to subsection 
     (f))''.
       (B) Section 38(b)(25) of such Code is amended by striking 
     ``section 30B(g)(1)'' and inserting ``section 30B(f)(1)''.
       (C) Section 55(c)(2) of such Code is amended by striking 
     ``section 30B(g)(2)'' and inserting ``section 30B(f)(2)''.
       (D) Section 1016(a)(36) of such Code is amended by striking 
     ``section 30B(h)(4)'' and inserting ``section 30B(g)(4)''.
       (E) Section 6501(m) of such Code is amended by striking 
     ``section 30B(h)(9)'' and inserting ``section 30B(g)(9)''.
       (b) Extension of Alternative Vehicle Credit for New 
     Qualified Hybrid Motor Vehicles.--Paragraph (3) of section 
     30B(i) of the Internal Revenue Code of 1986 (as redesignated 
     by subsection (a)) is amended by striking ``December 31, 
     2009'' and inserting ``December 31, 2010''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after December 31, 
     2005, in taxable years ending after such date.

     SEC. _29. FEDERAL FLEET REQUIREMENTS.

       (a) Regulations.--
       (1) In general.--The Secretary of Energy shall issue 
     regulations for Federal fleets subject to the Energy Policy 
     Act of 1992 (42 U.S.C. 13201 et seq.) requiring that not 
     later than fiscal year 2016 each Federal agency achieve at 
     least a 30 percent reduction in petroleum consumption, as 
     calculated from the baseline established by the Secretary for 
     fiscal year 1999.
       (2) Requirement.--Not later than fiscal year 2016, of the 
     Federal vehicles required to be alternative fueled vehicles 
     under title V of the Energy Policy Act of 1992 (42 U.S.C. 
     13251 et seq.), at least 30 percent shall be hybrid motor 
     vehicles (including plug-in hybrid motor vehicles) or new 
     advanced lean burn technology motor vehicles (as defined in 
     section 30B(c)(3) of the Internal Revenue Code of 1986).
       (b) Inclusion of Electric Drive in Energy Policy Act of 
     1992.--Section 508(a) of the Energy Policy Act of 1992 (42 
     U.S.C. 13258(a)) is amended--
       (1) by inserting ``(1)'' before ``The Secretary''; and
       (2) by adding at the end the following:
       ``(2) Not later than January 31, 2007, the Secretary 
     shall--
       ``(A) allocate credit in an amount to be determined by the 
     Secretary for--
       ``(i) acquisition of--
       ``(I) a light-duty hybrid electric vehicle;
       ``(II) a plug-in hybrid electric vehicle;
       ``(III) a fuel cell electric vehicle;
       ``(IV) a medium- or heavy-duty hybrid electric vehicle;
       ``(V) a neighborhood electric vehicle; or
       ``(VI) a medium- or heavy-duty dedicated vehicle; and
       ``(ii) investment in qualified alternative fuel 
     infrastructure or nonroad equipment, as determined by the 
     Secretary; and
       ``(B) allocate more than 1, but not to exceed 5, credits 
     for investment in an emerging technology relating to any 
     vehicle described in subparagraph (A) to encourage--
       ``(i) a reduction in petroleum demand;
       ``(ii) technological advancement; and
       ``(iii) environmental safety.''.
       (c) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section (including the 
     amendments made by subsection (b)) $10,000,000 for the period 
     of fiscal years 2007 through 2012.

     SEC. _30. TAX INCENTIVES FOR PRIVATE FLEETS.

       (a) In General.--Subpart E of part IV of subchapter A of 
     chapter 1 of the Internal Revenue Code of 1986 is amended by 
     inserting after section 48B the following new section:

     ``SEC. 48C. FUEL-EFFICIENT FLEET CREDIT.

       ``(a) General Rule.--For purposes of section 46, the fuel-
     efficient fleet credit for any taxable year is 15 percent of 
     the qualified fuel-efficient vehicle investment amount of an 
     eligible taxpayer for such taxable year.
       ``(b) Vehicle Purchase Requirement.--In the case of any 
     eligible taxpayer which places less than 10 qualified fuel-
     efficient vehicles in service during the taxable year, the 
     qualified fuel-efficient vehicle investment amount shall be 
     zero.
       ``(c) Qualified Fuel-Efficient Vehicle Investment Amount.--
     For purposes of this section--
       ``(1) In general.--The term `qualified fuel-efficient 
     vehicle investment amount' means the basis of any qualified 
     fuel-efficient vehicle placed in service by an eligible 
     taxpayer during the taxable year.
       ``(2) Qualified fuel-efficient vehicle.--The term 
     `qualified fuel-efficient vehicle' means an automobile which 
     has a fuel economy which is at least 125 percent greater than 
     the average fuel economy standard for an automobile of the 
     same class and model year.
       ``(3) Other terms.--The terms `automobile', `average fuel 
     economy standard', `fuel economy', and `model year' have the 
     meanings given to such terms under section 32901 of title 49, 
     United States Code.
       ``(d) Eligible Taxpayer.--The term `eligible taxpayer' 
     means, with respect to any taxable year, a taxpayer who owns 
     a fleet of 100 or more vehicles which are used in the trade 
     or business of the taxpayer on the first day of such taxable 
     year.
       ``(e) Termination.--This section shall not apply to any 
     vehicle placed in service after December 31, 2010.''.
       (b) Credit Treated as Part of Investment Credit.--Section 
     46 of the Internal Revenue Code of 1986 is amended by 
     striking ``and'' at the end of paragraph (3), by striking the 
     period at the end of paragraph (4) and inserting ``, and'', 
     and by adding at the end the following new paragraph:
       ``(5) the fuel-efficient fleet credit.''.
       (c) Conforming Amendments.--
       (1) Section 49(a)(1)(C) of the Internal Revenue Code of 
     1986 is amended by striking ``and'' at the end of clause 
     (iii), by striking the period at the end of clause (iv) and 
     inserting ``, and'', and by adding at the end the following 
     new clause:
       ``(v) the basis of any qualified fuel-efficient vehicle 
     which is taken into account under section 48C.''.
       (2) The table of sections for subpart E of part IV of 
     subchapter A of chapter 1 of such Code is amended by 
     inserting after the item relating to section 48 the following 
     new item:

``Sec. 48C. Fuel-efficient fleet credit.''.

       (d) Effective Date.--The amendments made by this section 
     shall apply to periods after December 31, 2005, in taxable 
     years ending after such date, under rules similar to the 
     rules of section 48(m) of the Internal Revenue Code of 1986 
     (as in effect on the day before the date of the enactment of 
     the Revenue Reconciliation Act of 1990).

     SEC. _31. REDUCING INCENTIVES TO GUZZLE GAS.

       (a) Inclusion of Heavy Vehicles in Limitation on 
     Depreciation of Certain Luxury Automobiles.--
       (1) In general.--Section 280F(d)(5)(A) of the Internal 
     Revenue Code of 1986 (defining passenger automobile) is 
     amended--
       (A) by striking clause (ii) and inserting the following new 
     clause:
       ``(ii)(I) which is rated at 6,000 pounds unloaded gross 
     vehicle weight or less, or
       ``(II) which is rated at more than 6,000 pounds but not 
     more than 14,000 pounds gross vehicle weight.'',
       (B) by striking ``clause (ii)'' in the second sentence and 
     inserting ``clause (ii)(I)''.
       (2) Exception for vehicles used in farming business.--
     Section 280F(d)(5)(B) of such Code (relating to exception for 
     certain vehicles) is amended by striking ``and'' at the end 
     of clause (ii), by redesignating clause (iii) as clause (iv), 
     and by inserting after clause (ii) the following new clause:
       ``(iii) any vehicle used in a farming business (as defined 
     in section 263A(e)(4), and''.
       (3) Effective date.--The amendments made by this subsection 
     shall apply to property placed in service after the date of 
     the enactment of this Act.
       (b) Updated Depreciation Deduction Limits.--
       (1) In general.--Subparagraph (A) of section 280F(a)(1) of 
     the Internal Revenue Code of 1986 (relating to limitation on 
     amount of depreciation for luxury automobiles) is amended to 
     read as follows:
       ``(I) Limitation.--The amount of the depreciation deduction 
     for any taxable year shall not exceed for any passenger 
     automobile--
       ``(i) for the 1st taxable year in the recovery period--

       ``(I) described in subsection (d)(5)(A)(ii)(I), $4,000,
       ``(II) described in the second sentence of subsection 
     (d)(5)(A), $5,000, and
       ``(III) described in subsection (d)(5)(A)(ii)(II), $6,000,

       ``(ii) for the 2nd taxable year in the recovery period--

       ``(I) described in subsection (d)(5)(A)(ii)(I), $6,400,
       ``(II) described in the second sentence of subsection 
     (d)(5)(A), $8,000, and
       ``(III) described in subsection (d)(5)(A)(ii)(II), $9,600,

       ``(iii) for the 3rd taxable year in the recovery period--

       ``(I) described in subsection (d)(5)(A)(ii)(I), $3,850,
       ``(II) described in the second sentence of subsection 
     (d)(5)(A), $4,800, and
       ``(III) described in subsection (d)(5)(A)(ii)(II), $5,775, 
     and

       ``(iv) for each succeeding taxable year in the recovery 
     period--

[[Page 15964]]

       ``(I) described in subsection (d)(5)(A)(ii)(I), $2,325,
       ``(II) described in the second sentence of subsection 
     (d)(5)(A), $2,900, and
       ``(III) described in subsection (d)(5)(A)(ii)(II), 
     $3,475.''.

       (2) Years after recovery period.--Section 280F(a)(1)(B)(ii) 
     of such Code is amended to read as follows:
       ``(ii) Limitation.--The amount treated as an expense under 
     clause (i) for any taxable year shall not exceed for any 
     passenger automobile--

       ``(I) described in subsection (d)(5)(A)(ii)(I), $2,325,
       ``(II) described in the second sentence of subsection 
     (d)(5)(A), $2,900, and
       ``(III) described in subsection (d)(5)(A)(ii)(II), 
     $3,475.''.

       (3) Inflation adjustment.--Section 280F(d)(7) of such Code 
     (relating to automobile price inflation adjustment) is 
     amended--
       (A) by striking ``after 1988'' in subparagraph (A) and 
     inserting ``after 2006'', and
       (B) by striking subparagraph (B) and inserting the 
     following new subparagraph:
       ``(B) Automobile price inflation adjustment.--For purposes 
     of this paragraph--
       ``(i) In general.--The automobile price inflation 
     adjustment for any calendar year is the percentage (if any) 
     by which--

       ``(I) the average wage index for the preceding calendar 
     year, exceeds
       ``(II) the average wage index for 2005.

       ``(ii) Average wage index.--The term `average wage index' 
     means the average wage index published by the Social Security 
     Administration.''.
       (4) Effective date.--The amendments made by this subsection 
     shall apply to property placed in service after the date of 
     the enactment of this Act.
       (c) Expensing Limitation for Farm Vehicles.--
       (1) In general.--Paragraph (6) of section 179(b) of the 
     Internal Revenue Code of 1986 (relating to limitations) is 
     amended to read as follows:
       ``(6) Limitation on cost taken into account for farm 
     vehicles.--The cost of any vehicle described in section 
     280F(d)(5)(B)(iii) for any taxable year which may be taken 
     into account under this section shall not exceed $30,000.''.
       (2) Effective date.--The amendment made by this subsection 
     shall apply to property placed in service after the date of 
     the enactment of this Act.

     SEC. _32. INCREASING THE EFFICIENCY OF MOTOR VEHICLES.

       (a) Definitions.--In this section:
       (1) Alternative fuel.--The term ``alternative fuel'' has 
     the meaning given the term in section 32901(a) of title 49, 
     United States Code.
       (2) E85.--The term ``E85'' means a fuel blend containing 85 
     percent ethanol and 15 percent gasoline or diesel by volume.
       (3) Flexible fuel motor vehicle.--The term ``flexible fuel 
     motor vehicle'' means a light duty motor vehicle warrantied 
     by the manufacturer of the vehicle to operate on any 
     combination of gasoline, E85, and M85.
       (4) Hybrid motor vehicle.--The term ``hybrid motor 
     vehicle'' means a new qualified hybrid motor vehicle (as 
     defined in section 30B(d)(3) of the Internal Revenue Code of 
     1986) that achieves at least 125 percent of the model year 
     2002 city fuel economy.
       (5) Light-duty motor vehicle.--The term ``light-duty motor 
     vehicle'' means, as defined in regulations promulgated by the 
     Administrator of the Environmental Protection Agency in 
     effect on the date of enactment of this Act--
       (A) a light-duty truck; or
       (B) a light-duty vehicle.
       (6) M85.--The term ``M85'' means a fuel blend containing 85 
     percent methanol and 15 percent gasoline or diesel by volume.
       (7) Plug-in hybrid motor vehicle.--The term ``plug-in 
     hybrid electric vehicle'' means a hybrid motor vehicle that--
       (A) has an onboard, rechargeable storage device capable of 
     propelling the vehicle solely by electricity for at least 10 
     miles; and
       (B) achieves at least 125 percent of the model year 2002 
     city fuel economy.
       (8) Qualified motor vehicle.--The term ``qualified motor 
     vehicle'' means--
       (A) a new advanced lean burn technology motor vehicle (as 
     defined in section 30B(c)(3) of the Internal Revenue Code of 
     1986) that achieves at least 125 percent of the model year 
     2002 city fuel economy;
       (B) an alternative fueled automobile (as defined in section 
     32901(a) of title 49, United States Code);
       (C) a flexible fuel motor vehicle;
       (D) a new qualified fuel cell motor vehicle (as defined in 
     section 30B(b)(3) of the Internal Revenue Code of 1986);
       (E) a hybrid motor vehicle;
       (F) a plug-in hybrid motor vehicle; and
       (G) any other appropriate motor vehicle that uses 
     substantially new technology and achieve at least 175 percent 
     of the model year 2002 city fuel economy, as determined by 
     the Secretary of Transportation, by regulation.
       (b) Requirements.--
       (1) Model year 2012.--Not less than 10 percent of light-
     duty motor vehicles manufactured for model year 2012 and sold 
     in the United States shall be qualified motor vehicles.
       (2) Model year 2013.--Not less than 20 percent of light-
     duty motor vehicles manufactured for model year 2013 and sold 
     in the United States shall be qualified motor vehicles.
       (3) Model year 2014.--Not less than 30 percent of light-
     duty motor vehicles manufactured for model year 2014 and sold 
     in the United States shall be qualified motor vehicles.
       (4) Model year 2015.--Not less than 40 percent of light-
     duty motor vehicles manufactured for model year 2015 shall be 
     qualified motor vehicles.
       (5) Model year 2016.--Not less than 50 percent of light-
     duty motor vehicles manufactured for model year 2016 shall be 
     qualified motor vehicles.
       (6) Model years 2017 and thereafter.--Not less than 50 
     percent of light-duty motor vehicles manufactured for model 
     year 2017 and each model year thereafter and sold in the 
     United States shall be qualified motor vehicles, of which not 
     less than 10 percent shall be--
       (A) hybrid motor vehicles;
       (B) plug-in hybrid motor vehicles;
       (C) new advanced lean burn technology motor vehicles (as 
     defined in section 30B(c)(3) of the Internal Revenue Code of 
     1986);
       (D) new qualified fuel cell motor vehicles (as defined in 
     section 30B(b)(3) of the Internal Revenue Code of 1986); or
       (E) any other appropriate motor vehicle that uses 
     substantially new technology and achieve at least 175 percent 
     of the model year 2002 city fuel economy, as determined by 
     the Secretary of Transportation, by regulation.
       (c) Rulemaking.--Not later than 1 year after the date of 
     enactment of this Act, the Secretary of Transportation shall 
     promulgate regulations to carry out this section.

             Subtitle C--Fuel Choices for the 21st Century

     SEC. _41. INCREASE IN ALTERNATIVE FUEL VEHICLE REFUELING 
                   PROPERTY CREDIT.

       (a) In General.--Subsection (a) of section 30C of the 
     Internal Revenue Code of 1986 is amended by striking ``30 
     percent'' and inserting ``50 percent''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to property placed in service after December 31, 
     2005, in taxable years ending after such date.

     SEC. _42. USE OF CAFE PENALTIES TO BUILD ALTERNATIVE FUELING 
                   INFRASTRUCTURE.

       Section 32912 of title 49, United States Code, is amended 
     by adding at the end the following
       ``(e) Alternative Fueling Infrastructure Trust Fund.--(1) 
     There is established in the Treasury of the United States a 
     trust fund, to be known as the Alternative Fueling 
     Infrastructure Trust Fund, consisting of such amounts as are 
     deposited into the Trust Fund under paragraph (2) and any 
     interest earned on investment of amounts in the Trust Fund.
       ``(2) The Secretary of Transportation shall remit 90 
     percent of the amount collected in civil penalties under this 
     section to the Trust Fund.
       ``(3)(A) The Secretary of Energy shall obligate such sums 
     as are available in the Trust Fund to establish a grant 
     program to increase the number of locations at which 
     consumers may purchase alternative fuels.
       ``(B)(i) The Secretary of Energy may award grants under 
     this paragraph, in an amount equal to not more than $150,000 
     per fueling station, to--
       ``(I) individual fueling stations; and
       ``(II) corporations (including nonprofit corporations) with 
     demonstrated experience in the administration of grant 
     funding for the purpose of alternative fueling 
     infrastructure.
       ``(ii) In awarding grants under this paragraph, the 
     Secretary shall consider the number of vehicles in service 
     capable of using a specific type of alternative fuel.
       ``(iii) Grant recipients shall provide a non-Federal match 
     of not less than $1 for every $3 of grant funds received 
     under this paragraph.
       ``(iv) Each grant recipient shall select the locations for 
     each alternative fuel station to be constructed with grant 
     funds received under this paragraph on a formal, open, and 
     competitive basis.
       ``(C) Grant funds received under this paragraph may be used 
     to--
       ``(i) construct new facilities to dispense alternative 
     fuels;
       ``(ii) purchase equipment to upgrade, expand, or otherwise 
     improve existing alternative fuel facilities; or
       ``(iii) purchase equipment or pay for specific turnkey 
     fueling services by alternative fuel providers.
       ``(D) Facilities constructed or upgraded with grant funds 
     under this paragraph shall--
       ``(i) provide alternative fuel available to the public for 
     a period not less than 4 years;
       ``(ii) establish a marketing plan to advance the sale and 
     use of alternative fuels;
       ``(iii) prominently display the price of alternative fuel 
     on the marquee and in the station;
       ``(iv) provide point of sale materials on alternative fuel;
       ``(v) clearly label the dispenser with consistent 
     materials;
       ``(vi) price the alternative fuel at the same margin that 
     is received for unleaded gasoline; and

[[Page 15965]]

       ``(vii) support and use all available tax incentives to 
     reduce the cost of the alternative fuel to the lowest 
     possible retail price.
       ``(E) Not later than the date on which each alternative 
     fuel station begins to offer alternative fuel to the public, 
     the grant recipient that used grant funds to construct such 
     station shall notify the Secretary of Energy of such opening. 
     The Secretary of Energy shall add each new alternative fuel 
     station to the alternative fuel station locator on its 
     Website when it receives notification under this 
     subparagraph.
       ``(F) Not later than 6 months after the receipt of a grant 
     award under this paragraph, and every 6 months thereafter, 
     each grant recipient shall submit a report to the Secretary 
     of Energy that describes--
       ``(i) the status of each alternative fuel station 
     constructed with grant funds received under this paragraph;
       ``(ii) the amount of alternative fuel dispensed at each 
     station during the preceding 6-month period; and
       ``(iii) the average price per gallon of the alternative 
     fuel sold at each station during the preceding 6-month 
     period.''.

     SEC. _43. MINIMUM QUANTITY OF RENEWABLE FUEL DERIVED FROM 
                   CELLULOSIC BIOMASS.

       Section 211(o)(2)(B) of the Clean Air Act (42 U.S.C. 
     7545(o)(2)(B)) is amended by striking clause (iii) and 
     inserting the following:
       ``(iii) Minimum quantity derived from cellulosic biomass.--

       ``(I) In general.--The applicable volume referred to in 
     clause (ii) shall contain a minimum of--

       ``(aa) for each of calendar years 2010 through 2012, 
     75,000,000 gallons that are derived from cellulosic biomass; 
     and
       ``(bb) for calendar year 2013 and each calendar year 
     thereafter, 250,000,000 gallons that are derived from 
     cellulosic biomass.

       ``(II) Ratio.--For calendar year 2010 and each calendar 
     year thereafter, the 2.5-to-1 ratio referred to in paragraph 
     (4) shall not apply.''.

     SEC. _44. MINIMUM QUANTITY OF RENEWABLE FUEL DERIVED FROM 
                   SUGAR.

       (a) In General.--Section 211(o)(2)(B) of the Clean Air Act 
     (42 U.S.C. 7545(o)(2)(B)) is amended by adding at the end the 
     following:
       ``(v) Minimum quantity derived from sugar.--For calendar 
     year 2008 and each calendar year thereafter, the applicable 
     volume referred to in clause (ii) shall contain a minimum of 
     100,000,000 gallons that are derived from domestically-grown 
     sugarcane, sugar beets, or sugar components.''.
       (b) Applicable Volume.--Section 211(o)(2)(B)(i) of the 
     Clean Air Act (42 U.S.C. 7545(o)(2)(B)(i)) is amended--
       (1) in the item relating to calendar year 2008, by striking 
     ``5.4'' and inserting ``5.5'';
       (2) in the item relating to calendar year 2009, by striking 
     ``6.1'' and inserting ``6.2'';
       (3) in the item relating to calendar year 2010, by striking 
     ``6.8'' and inserting ``6.9'';
       (4) in the item relating to calendar year 2011, by striking 
     ``7.4'' and inserting ``7.5''; and
       (5) in the item relating to calendar year 2012, by striking 
     ``7.5'' and inserting ``7.6''.

     SEC. _45. BIOENERGY RESEARCH AND DEVELOPMENT.

       Section 931(c) of the Energy Policy Act of 2005 (42 U.S.C. 
     16231(c)) is amended--
       (1) in paragraph (1), by striking ``$213,000,000'' and 
     inserting ``$326,000,000'';
       (2) in paragraph (2), by striking ``$251,000,000'' and 
     inserting ``$377,000,000''; and
       (3) in paragraph (3), by striking ``$274,000,000'' and 
     inserting ``$398,000,000''.

     SEC. _46. PRODUCTION INCENTIVES FOR CELLULOSIC BIOFUELS.

       Section 942(f) of the Energy Policy Act of 2005 (42 U.S.C. 
     16251(f)) is amended by striking ``$250,000,000'' and 
     inserting ``$200,000,000 for each of fiscal years 2007 
     through 2011''.

     SEC. _47. LOW-INTEREST LOAN AND GRANT PROGRAM FOR RETAIL 
                   DELIVERY OF E-85 FUEL.

       (a) Purposes of Loans.--Section 312(a) of the Consolidated 
     Farm and Rural Development Act (7 U.S.C. 1942(a)) is 
     amended--
       (1) in paragraph (9)(B)(ii), by striking ``or'' at the end;
       (2) in paragraph (10), by striking the period at the end 
     and inserting ``; or''; and
       (3) by adding at the end the following:
       ``(11) building infrastructure, including pump stations, 
     for the retail delivery to consumers of any fuel that 
     contains not less than 85 percent ethanol, by volume.''.
       (b) Program.--Subtitle B of the Consolidated Farm and Rural 
     Development Act (7 U.S.C. 1941 et seq.) is amended by adding 
     at the end the following:

     ``SEC. 320. LOW-INTEREST LOAN AND GRANT PROGRAM FOR RETAIL 
                   DELIVERY OF E-85 FUEL.

       ``(a) In General.--The Secretary shall establish a low-
     interest loan and grant program to assist farmer-owned 
     ethanol producers (including cooperatives and limited 
     liability corporations) to develop and build infrastructure, 
     including pump stations, for the retail delivery to consumers 
     of any fuel that contains not less than 85 percent ethanol, 
     by volume.
       ``(b) Terms.--
       ``(1) Interest rate.--A low-interest loan under this 
     section shall be fixed at not more than 5 percent for each 
     year.
       ``(2) Amortization.--The repayment of a loan under this 
     section shall be amortized over the expected life of the 
     infrastructure project that is being financed with the 
     proceeds of the loan.
       ``(c) Authorization of Appropriations.--There are 
     authorized to be appropriated such sums as are necessary to 
     carry out this section.''.
       (c) Regulations.--As soon as practicable after the date of 
     enactment of this Act, the Secretary of Agriculture shall 
     promulgate such regulations as are necessary to carry out the 
     amendments made by this section.

     SEC. _48. TRANSIT-ORIENTED DEVELOPMENT CORRIDORS.

       (a) Definitions.--In this section:
       (1) Transit-oriented development corridor.--The term 
     ``Transit-Oriented Development Corridor'' or ``TODC'' means a 
     geographic area designated by the Secretary under subsection 
     (b).
       (2) Other terms.--The terms ``fixed guide way'', ``local 
     governmental authority'', ``mass transportation'', 
     ``Secretary'', ``State'', and ``urbanized area'' have the 
     meanings given the terms in section 5302 of title 49, United 
     States Code.
       (b) Transit-Oriented Development Corridors.--
       (1) In general.--The Secretary shall develop and carry out 
     a program to designate geographic areas in urbanized areas as 
     Transit-Oriented Development Corridors.
       (2) Criteria.--An area designated as a TODC under paragraph 
     (1) shall include rights-of-way for fixed guide way mass 
     transportation facilities (including commercial development 
     of facilities that have a physical and functional connection 
     with each facility).
       (3) Number of todcs.--In consultation with State 
     transportation departments and metropolitan planning 
     organizations, the Secretary shall designate--
       (A) not fewer than 10 TODCs by December 31, 2015; and
       (B) not fewer than 20 TODCs by December 31, 2025.
       (4) Transit grants.--
       (A) In general.--The Secretary make grants to eligible 
     states and local governmental authorities to pay the Federal 
     share of the cost of designating geographic areas in 
     urbanized areas as TODCs.
       (B) Application.--Each eligible State or local governmental 
     authority that desires to receive a grant under this 
     paragraph shall submit an application to the Secretary, at 
     such time, in such manner, and accompanied by such additional 
     information as the Secretary may reasonably require.
       (C) Labor standards.--Subchapter IV of chapter 31 of title 
     40, United States Code shall apply to projects that receive 
     funding under this section.
       (D) Federal share.--The Federal share of the cost of a 
     project under this subsection shall be 50 percent.
       (c) TODC Research and Development.--To support effective 
     deployment of grants and incentives under this section, the 
     Secretary shall establish a TODC research and development 
     program to conduct research on the best practices and 
     performance criteria for TODCs.
       (d) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $50,000,000 for 
     each of fiscal years 2007 through 2012.

         Subtitle D--Nationwide Energy Security Media Campaign

     SEC. _51. NATIONWIDE MEDIA CAMPAIGN TO DECREASE OIL 
                   CONSUMPTION.

       (a) In General.--The Secretary of Energy, acting through 
     the Assistant Secretary for Energy Efficiency and Renewable 
     Energy (referred to in this section as the ``Secretary''), 
     shall develop and conduct a national media campaign for the 
     purpose of decreasing oil consumption in the United States 
     over the next decade.
       (b) Contract With Entity.--The Secretary shall carry out 
     subsection (a) directly or through--
       (1) 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.

[[Page 15966]]

       (2) Limitations.--In carrying out this section, the 
     Secretary shall allocate not less than 85 percent of funds 
     made available under subsection (e) for each fiscal year for 
     the advertising functions specified under paragraph (1)(A).
       (d) Reports.--The Secretary shall annually submit to 
     Congress a report that describes--
       (1) the strategy of the national media campaign and whether 
     specific objectives of the campaign were accomplished, 
     including--
       (A) determinations concerning the rate of change of oil 
     consumption, in both absolute and per capita terms; and
       (B) an evaluation that enables consideration whether the 
     media campaign contributed to reduction of oil consumption;
       (2) steps taken to ensure that the national media campaign 
     operates in an effective and efficient manner consistent with 
     the overall strategy and focus of the campaign;
       (3) plans to purchase advertising time and space;
       (4) policies and practices implemented to ensure that 
     Federal funds are used responsibly to purchase advertising 
     time and space and eliminate the potential for waste, fraud, 
     and abuse; and
       (5) all contracts or cooperative agreements entered into 
     with a corporation, partnership, or individual working on 
     behalf of the national media campaign.
       (e) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $5,000,000 for 
     each of fiscal years 2006 through 2010.

                                 ______
                                 
  SA 4707. Mr. BAYH (for himself, Mr. Brownback, Mr. Lieberman, Mr. 
Coleman, Mr. Salazar, Mr. Lugar, Mr. Obama, Mr. Chafee, Mr. Akaka, Mrs. 
Clinton, Mr. Dodd, Mr. Kohl, Ms. Cantwell, Mr. Kerry, Mr. Graham, Mr. 
Menendez, Ms. Collins, and Mr. Bingaman) submitted an amendment 
intended to be proposed by him to the bill S. 3711, to enhance the 
energy independence and security of the United States by providing for 
exploration, development, and production activities for mineral 
resources in the Gulf of Mexico, and for other purposes; which was 
ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

        TITLE __--VEHICLE AND FUEL CHOICES FOR AMERICAN SECURITY

             Subtitle A--Oil Savings Plan and Requirements

     SEC. _01. OIL SAVINGS TARGET AND ACTION PLAN.

       Not later than 270 days after the date of enactment of this 
     Act, the Director of the Office of Management and Budget 
     (referred to in this subtitle as the ``Director'') shall 
     publish in the Federal Register an action plan consisting 
     of--
       (1) a list of requirements proposed or to be proposed 
     pursuant to section _02 that are authorized to be issued 
     under law in effect on the date of enactment of this Act, and 
     this Act, that will be sufficient, when taken together, to 
     save from the baseline determined under section _05--
       (A) 2,500,000 barrels of oil per day on average during 
     calendar year 2016;
       (B) 7,000,000 barrels of oil per day on average during 
     calendar year 2026; and
       (C) 10,000,000 barrels per day on average during calendar 
     year 2031; and
       (2) a Federal Government-wide analysis of--
       (A) the expected oil savings from the baseline to be 
     accomplished by each requirement; and
       (B) whether all such requirements, taken together, will 
     achieve the oil savings specified in this section.

     SEC. _02. STANDARDS AND REQUIREMENTS.

       (a) In General.--On or before the date of publication of 
     the action plan under section _01, the Secretary of Energy, 
     the Secretary of Transportation, the Secretary of Defense, 
     the Secretary of Agriculture, the Administrator of the 
     Environmental Protection Agency, and the head of any other 
     agency the President determines appropriate shall each 
     propose, or issue a notice of intent to propose, regulations 
     establishing each standard or other requirement listed in the 
     action plan that is under the jurisdiction of the respective 
     agency using authorities described in subsection (b).
       (b) Authorities.--The head of each agency described in 
     subsection (a) shall use to carry out this section--
       (1) any authority in existence on the date of enactment of 
     this Act (including regulations); and
       (2) any new authority provided under this Act (including an 
     amendment made by this Act).
       (c) Final Regulations.--Not later than 18 months after the 
     date of enactment of this Act, the head of each agency 
     described in subsection (a) shall promulgate final versions 
     of the regulations required under this section.
       (d) Agency Analyses.--Each proposed and final regulation 
     promulgated under this section shall--
       (1) be designed to achieve at least the oil savings 
     resulting from the regulation under the action plan published 
     under section _01; and
       (2) be accompanied by an analysis by the applicable agency 
     describing the manner in which the regulation will promote 
     the achievement of the oil savings from the baseline 
     determined under section _05.

     SEC. _03. INITIAL EVALUATION.

       (a) In General.--Not later than 2 years after the date of 
     enactment of this Act, the Director shall publish in the 
     Federal Register a Federal Government-wide analysis of the 
     oil savings achieved from the baseline established under 
     section _05.
       (b) Inadequate Oil Savings.--If the oil savings are less 
     than the targets established under section _01, 
     simultaneously with the analysis required under subsection 
     (a)--
       (1) the Director shall publish a revised action plan that 
     is adequate to achieve the targets; and
       (2) the Secretary of Energy, the Secretary of 
     Transportation, and the Administrator shall propose new or 
     revised regulations under subsections (a), (b), and (c), 
     respectively, of section _02.
       (c) Final Regulations.--Not later than 180 days after the 
     date on which regulations are proposed under subsection 
     (b)(2), the Secretary of Energy, the Secretary of 
     Transportation, and the Administrator shall promulgate final 
     versions of those regulations.

     SEC. _04. REVIEW AND UPDATE OF ACTION PLAN.

       (a) Review.--Not later than January 1, 2011, and every 3 
     years thereafter, the Director shall submit to Congress, and 
     publish, a report that--
       (1) evaluates the progress achieved in implementing the oil 
     savings targets established under section _01;
       (2) analyzes the expected oil savings under the standards 
     and requirements established under this Act and the 
     amendments made by this Act; and
       (3)(A) analyzes the potential to achieve oil savings that 
     are in addition to the savings required by section _01; and
       (B) if the President determines that it is in the national 
     interest, establishes a higher oil savings target for 
     calendar year 2017 or any subsequent calendar year.
       (b) Inadequate Oil Savings.--If the oil savings are less 
     than the targets established under section _01, 
     simultaneously with the report required under subsection 
     (a)--
       (1) the Director shall publish a revised action plan that 
     is adequate to achieve the targets; and
       (2) the Secretary of Energy, the Secretary of 
     Transportation, and the Administrator shall propose new or 
     revised regulations under subsections (a), (b), and (c), 
     respectively, of section _02.
       (c) Final Regulations.--Not later than 180 days after the 
     date on which regulations are proposed under subsection 
     (b)(2), the Secretary of Energy, the Secretary of 
     Transportation, and the Administrator shall promulgate final 
     versions of those regulations.

     SEC. _05. BASELINE AND ANALYSIS REQUIREMENTS.

       In performing the analyses and promulgating proposed or 
     final regulations to establish standards and other 
     requirements necessary to achieve the oil savings required by 
     this subtitle, the Secretary of Energy, the Secretary of 
     Transportation, the Secretary of Defense, the Secretary of 
     Agriculture, the Administrator of the Environmental 
     Protection Agency, and the head of any other agency the 
     President determines to be appropriate shall--
       (1) determine oil savings as the projected reduction in oil 
     consumption from the baseline established by the reference 
     case contained in the report of the Energy Information 
     Administration entitled ``Annual Energy Outlook 2005'';
       (2) determine the oil savings projections required on an 
     annual basis for each of calendar years 2009 through 2026; 
     and
       (3) account for any overlap among the standards and other 
     requirements to ensure that the projected oil savings from 
     all the promulgated standards and requirements, taken 
     together, are as accurate as practicable.

        Subtitle B--Fuel Efficient Vehicles for the 21st Century

     SEC. _21. TIRE EFFICIENCY PROGRAM.

       (a) Standards for Tires Manufactured for Interstate 
     Commerce.--Section 30123 of title 49, United States Code, is 
     amended--
       (1) in subsection (b)--
       (A) in the first sentence, by striking ``The Secretary'' 
     and inserting the following:
       ``(1) Uniform quality grading system.--
       ``(A) In general.--The Secretary'';
       (B) in the second sentence, by striking ``The Secretary'' 
     and inserting the following:
       ``(2) Nomenclature and marketing practices.--The 
     Secretary'';
       (C) in the third sentence, by striking ``A tire standard'' 
     and inserting the following:
       ``(3) Effect of standards and regulations.--A tire 
     standard''; and
       (D) in paragraph (1), as designated by subparagraph (A), by 
     adding at the end the following:
       ``(B) Inclusion.--The grading system established pursuant 
     to subparagraph (A) shall include standards for rating the 
     fuel efficiency of tires designed for use on passenger cars 
     and light trucks.''; and

[[Page 15967]]

       (2) by adding at the end the following:
       ``(d) National Tire Efficiency Program.--
       ``(1) Definition.--In this subsection, the term `fuel 
     economy', with respect to a tire, means the extent to which 
     the tire contributes to the fuel economy of the motor vehicle 
     on which the tire is mounted.
       ``(2) Program.--The Secretary shall develop and carry out a 
     national tire fuel efficiency program for tires designed for 
     use on passenger cars and light trucks.
       ``(3) Requirements.--Not later than March 31, 2008, the 
     Secretary shall issue regulations, which establish--
       ``(A) policies and procedures for testing and labeling 
     tires for fuel economy to enable tire buyers to make informed 
     purchasing decisions about the fuel economy of tires;
       ``(B) policies and procedures to promote the purchase of 
     energy efficient replacement tires, including purchase 
     incentives, website listings on the Internet, printed fuel 
     economy guide booklets, and mandatory requirements for tire 
     retailers to provide tire buyers with fuel efficiency 
     information on tires; and
       ``(C) minimum fuel economy standards for tires.
       ``(4) Minimum fuel economy standards.--In promulgating 
     minimum fuel economy standards for tires, the Secretary shall 
     design standards that--
       ``(A) ensure, in conjunction with the requirements under 
     paragraph (3)(B), that the average fuel economy of 
     replacement tires is not less than the average fuel economy 
     of tires sold as original equipment;
       ``(B) secure the maximum technically feasible and cost-
     effective fuel savings;
       ``(C) do not adversely affect tire safety;
       ``(D) incorporate the results from--
       ``(i) laboratory testing; and
       ``(ii) to the extent appropriate and available, on-road 
     fleet testing programs conducted by manufacturers; and
       ``(E) do not adversely affect efforts to manage scrap 
     tires.
       ``(5) Applicability.--The policies, procedures, and 
     standards developed under paragraph (3) shall apply to all 
     tire types and models regulated under the uniform tire 
     quality grading standards in section 575.104 of title 49, 
     Code of Federal Regulations (or a successor regulation).
       ``(6) Review.--
       ``(A) In general.--Not less than once every 3 years, the 
     Secretary shall--
       ``(i) review the minimum fuel economy standards in effect 
     for tires under this subsection; and
       ``(ii) subject to subparagraph (B), revise the standards as 
     necessary to ensure compliance with standards described in 
     paragraph (4).
       ``(B) Limitation.--The Secretary may not reduce the average 
     fuel economy standards applicable to replacement tires.
       ``(7) No preemption of state law.--Nothing in this section 
     shall be construed to preempt any provision of State law 
     relating to higher fuel economy standards applicable to 
     replacement tires designed for use on passenger cars and 
     light trucks.
       ``(8) Exceptions.--Nothing in this section shall apply to--
       ``(A) a tire or group of tires with the same stock keeping 
     unit, plant, and year, for which the volume of tires produced 
     or imported is less than 15,000 annually;
       ``(B) a deep tread, winter-type snow tire, space-saver 
     tire, or temporary use spare tire;
       ``(C) a tire with a normal rim diameter of 12 inches or 
     less;
       ``(D) a motorcycle tire; or
       ``(E) a tire manufactured specifically for use in an off-
     road motorized recreational vehicle.''.
       (b) Conforming Amendment.--Section 30103(b)(1) of title 49, 
     United States Code, is amended by striking ``When'' and 
     inserting ``Except as provided in section 30123(d), if''.
       (c) Time for Implementation.--Beginning not later than 
     March 31, 2008, the Secretary of Transportation shall 
     administer the national tire fuel efficiency program 
     established under section 30123(d) of title 49, United States 
     Code, in accordance with the policies, procedures, and 
     standards developed under section 30123(d)(3) of such title.
       (d) Authorization of Appropriations.--There are authorized 
     to be appropriated, for each of fiscal years 2007 through 
     2011, such sums as may be necessary to carry out section 
     30123(d) of title 49, United States Code, as added by 
     subsection (a).

     SEC. _22. REDUCTION OF 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 Administrator of the Environmental 
     Protection Agency, 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.

     SEC. _23. FUEL EFFICIENCY FOR HEAVY DUTY TRUCKS.

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

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

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

``Sec.
``33001. Purpose and policy.
``33002. Definition.
``33003. Testing and assessment.
``33004. Standards.
``33005. Authorization of appropriations.

     ``Sec. 33001. Purpose and policy

       ``The purpose of this chapter is to reduce petroleum 
     consumption by heavy duty motor vehicles.

     ``Sec. 33002. Definition

       ``In this chapter, the term `heavy duty motor vehicle'--
       ``(1) means a vehicle having a gross vehicle weight rating 
     of at least 10,000 pounds that is driven or drawn by 
     mechanical power and manufactured primarily for use on public 
     streets, roads, and highways; and
       ``(2) does not include a vehicle operated only on a rail 
     line.

     ``Sec. 33003. Testing and assessment

       ``(a) General Requirements.--The Administrator of the 
     Environmental Protection Agency (referred to in this section 
     as the `Administrator') shall develop and coordinate a 
     national testing and assessment program to--
       ``(1) determine the fuel economy of heavy duty vehicles; 
     and
       ``(2) assess the fuel efficiency attainable through 
     available technology.
       ``(b) Testing.--The Administrator shall--
       ``(1) design a National testing program to assess the fuel 
     economy of heavy duty vehicles (based on the program for 
     light duty vehicles); and
       ``(2) implement the program described in paragraph (1) not 
     later than 18 months after the date of enactment of this 
     chapter.
       ``(c) Assessment.--The Administrator shall consult with the 
     Secretary of Transportation on the assessment of available 
     technologies to enhance the fuel efficiency of heavy duty 
     vehicles to ensure that vehicle use and needs are considered 
     appropriately in the assessment.
       ``(d) Reporting.--The Administrator shall--
       ``(1) not later than 2 years after the date of enactment of 
     this chapter, submit a report to Congress regarding the 
     results of the assessment of available technologies to 
     improve the fuel efficiency of heavy duty vehicles.
       ``(2) submit a report to Congress, at least biannually, 
     that addresses the fuel economy of heavy duty vehicles; and

     ``Sec. 33004. Standards

       ``(a) General Requirements.--Not later than 18 months after 
     completing the testing and assessments under section 33003, 
     the Secretary of Transportation shall prescribe average heavy 
     duty vehicle fuel economy standards. Each standard shall be 
     the maximum feasible average fuel economy level that the 
     Secretary decides that manufacturers can achieve in that 
     model year. The Secretary may prescribe separate standards 
     for different classes of heavy duty motor vehicles. The 
     standards for each model year shall be completed not later 
     than 18 months before the beginning of each model year.
       ``(b) Considerations and Consultation.--In determining 
     maximum feasible average fuel economy, the Secretary shall 
     consider--
       ``(1) relevant available heavy duty motor vehicle fuel 
     consumption information;
       ``(2) technological feasibility;
       ``(3) economic practicability;
       ``(4) the desirability of reducing United States dependence 
     on oil;
       ``(5) the effects of average fuel economy standards on 
     vehicle safety;
       ``(6) the effects of average fuel economy standards on 
     levels of employment and competitiveness of the heavy truck 
     manufacturing industry ; and
       ``(7) the extent to which the standard will carry out the 
     purpose described in section 33001.
       ``(c) Cooperation.--The Secretary may advise, assist, and 
     cooperate with departments, agencies, and instrumentalities 
     of the United States Government, States, and other public and 
     private agencies in developing fuel economy standards for 
     heavy duty motor vehicles.
       ``(d) 5-Year Plan for Testing Standards.--The Secretary 
     shall establish, periodically review, and continually update 
     a 5-year plan for testing heavy duty motor vehicle fuel 
     economy standards prescribed under this chapter. In 
     developing and establishing testing priorities, the Secretary 
     shall consider factors the Secretary considers appropriate, 
     consistent with the purpose described in section 33001 and 
     the Secretary's other duties and powers under this chapter.

     ``Sec. 33005. Authorization of appropriations

       ``There are authorized to be appropriated, for each of 
     fiscal years 2007 through 2011, such sums as may be necessary 
     to carry out this chapter.''.

[[Page 15968]]



     SEC. _24. NEAR-TERM VEHICLE TECHNOLOGY PROGRAM.

       (a) Purposes.--The purposes of this section are--
       (1) to enable and promote, in partnership with industry, 
     comprehensive development, demonstration, and 
     commercialization of a wide range of electric drive 
     components, systems, and vehicles using diverse electric 
     drive transportation technologies;
       (2) to make critical public investments to help private 
     industry, institutions of higher education, National 
     Laboratories, and research institutions to expand innovation, 
     industrial growth, and jobs in the United States;
       (3) to expand the availability of the existing electric 
     infrastructure for fueling light duty transportation and 
     other on-road and nonroad vehicles that are using petroleum 
     and are mobile sources of emissions--
       (A) including the more than 3,000,000 reported units (such 
     as electric forklifts, golf carts, and similar nonroad 
     vehicles) in use on the date of enactment of this Act; and
       (B) with the goal of enhancing the energy security of the 
     United States, reduce dependence on imported oil, and reduce 
     emissions through the expansion of grid supported mobility;
       (4) to accelerate the widespread commercialization of all 
     types of electric drive vehicle technology into all sizes and 
     applications of vehicles, including commercialization of 
     plug-in hybrid electric vehicles and plug-in hybrid fuel cell 
     vehicles; and
       (5) to improve the energy efficiency of and reduce the 
     petroleum use in transportation.
       (b) Definitions.--In this section:
       (1) Battery.--The term ``battery'' means an energy storage 
     device used in an on-road or nonroad vehicle powered in whole 
     or in part using an off-board or on-board source of 
     electricity.
       (2) Electric drive transportation technology.--The term 
     ``electric drive transportation technology'' means--
       (A) vehicles that use an electric motor for all or part of 
     their motive power and that may or may not use off-board 
     electricity, including battery electric vehicles, fuel cell 
     vehicles, engine dominant hybrid electric vehicles, plug-in 
     hybrid electric vehicles, plug-in hybrid fuel cell vehicles, 
     and electric rail; or
       (B) equipment relating to transportation or mobile sources 
     of air pollution that use an electric motor to replace an 
     internal combustion engine for all or part of the work of the 
     equipment, including corded electric equipment linked to 
     transportation or mobile sources of air pollution.
       (3) Engine dominant hybrid electric vehicle.--The term 
     ``engine dominant hybrid electric vehicle'' means an on-road 
     or nonroad vehicle that--
       (A) is propelled by an internal combustion engine or heat 
     engine using--
       (i) any combustible fuel;
       (ii) an on-board, rechargeable storage device; and
       (B) has no means of using an off-board source of 
     electricity.
       (4) Fuel cell vehicle.--The term ``fuel cell vehicle'' 
     means an on-road or nonroad vehicle that uses a fuel cell (as 
     defined in section 3 of the Spark M. Matsunaga Hydrogen 
     Research, Development, and Demonstration Act of 1990).
       (5) Nonroad vehicle.--The term ``nonroad vehicle'' has the 
     meaning given the term in section 216 of the Clean Air Act 
     (42 U.S.C. 7550).
       (6) Plug-in hybrid electric vehicle.--The term ``plug-in 
     hybrid electric vehicle'' means an on-road or nonroad vehicle 
     that is propelled by an internal combustion engine or heat 
     engine using--
       (A) any combustible fuel;
       (B) an on-board, rechargeable storage device; and
       (C) a means of using an off-board source of electricity.
       (7) Plug-in hybrid fuel cell vehicle.--The term ``plug-in 
     hybrid fuel cell vehicle'' means a fuel cell vehicle with a 
     battery powered by an off-board source of electricity.
       (c) Program.--The Secretary shall conduct a program of 
     research, development, demonstration, and commercial 
     application for electric drive transportation technology, 
     including--
       (1) high capacity, high efficiency batteries;
       (2) high efficiency on-board and off-board charging 
     components;
       (3) high power drive train systems for passenger and 
     commercial vehicles and for nonroad equipment;
       (4) control system development and power train development 
     and integration for plug-in hybrid electric vehicles, plug-in 
     hybrid fuel cell vehicles, and engine dominant hybrid 
     electric vehicles, including--
       (A) development of efficient cooling systems;
       (B) analysis and development of control systems that 
     minimize the emissions profile when clean diesel engines are 
     part of a plug-in hybrid drive system; and
       (C) development of different control systems that optimize 
     for different goals, including--
       (i) battery life;
       (ii) reduction of petroleum consumption; and
       (iii) green house gas reduction;
       (5) nanomaterial technology applied to both battery and 
     fuel cell systems;
       (6) large-scale demonstrations, testing, and evaluation of 
     plug-in hybrid electric vehicles in different applications 
     with different batteries and control systems, including--
       (A) military applications;
       (B) mass market passenger and light-duty truck 
     applications;
       (C) private fleet applications; and
       (D) medium- and heavy-duty applications;
       (7) a nationwide education strategy for electric drive 
     transportation technologies providing secondary and high 
     school teaching materials and support for university 
     education focused on electric drive system and component 
     engineering;
       (8) development, in consultation with the Administrator of 
     the Environmental Protection Agency, of procedures for 
     testing and certification of criteria pollutants, fuel 
     economy, and petroleum use for light-, med-
     ium-, and heavy-duty vehicle applications, including 
     consideration of--
       (A) the vehicle and fuel as a system, not just an engine; 
     and
       (B) nightly off-board charging; and
       (9) advancement of battery and corded electric 
     transportation technologies in mobile source applications 
     by--
       (A) improvement in battery, drive train, and control system 
     technologies; and
       (B) working with industry and the Administrator of the 
     Environmental Protection Agency to--
       (i) understand and inventory markets; and
       (ii) identify and implement methods of removing barriers 
     for existing and emerging applications.
       (d) Goals.--The goals of the electric drive transportation 
     technology program established under subsection (c) shall be 
     to develop, in partnership with industry and institutions of 
     higher education, projects that focus on--
       (1) innovative electric drive technology developed in the 
     United States;
       (2) growth of employment in the United States in electric 
     drive design and manufacturing;
       (3) validation of the plug-in hybrid potential through 
     fleet demonstrations; and
       (4) acceleration of fuel cell commercialization through 
     comprehensive development and commercialization of the 
     electric drive technology systems that are the foundational 
     technology of the fuel cell vehicle system.
       (e) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $300,000,000 for 
     each of fiscal years 2007 through 2012.

     SEC. _25. LIGHTWEIGHT MATERIALS RESEARCH AND DEVELOPMENT.

       (a) In General.--As soon as practicable after the date of 
     enactment of this Act, the Secretary of Energy 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.

     SEC. _26. HYBRID AND ADVANCED DIESEL VEHICLES.

       (a) Hybrid Vehicles.--The Energy Policy Act of 2005 is 
     amended by striking section 711 (42 U.S.C. 16061) and 
     inserting the following:

     ``SEC. 711. HYBRID VEHICLES.

       ``(a) Definitions.--In this section:
       ``(1) Cost.--The term `cost' has the meaning given the term 
     `cost of a loan guarantee' within the meaning of section 
     502(5)(C) of the Federal Credit Reform Act of 1990 (2 U.S.C. 
     661a(5)(C)).
       ``(2) Eligible project.--The term `eligible project' means 
     a project to--
       ``(A) improve hybrid technologies under subsection (b); or
       ``(B) encourage domestic production of efficient hybrid and 
     advanced diesel vehicles under section 712(a).
       ``(3) Guarantee.--
       ``(A) In general.--The term `guarantee' has the meaning 
     given the term `loan guarantee' in section 502 of the Federal 
     Credit Reform Act of 1990 (2 U.S.C. 661a).
       ``(B) Inclusion.--The term `guarantee' includes a loan 
     guarantee commitment (as defined in section 502 of the 
     Federal Credit Reform Act of 1990 (2 U.S.C. 661a)).
       ``(4) Hybrid technology.--The term `hybrid technology' 
     means a battery or other rechargeable energy storage system, 
     power electronic, hybrid systems integration, and any other 
     technology for use in hybrid vehicles.
       ``(5) Obligation.--The term `obligation' means the loan or 
     other debt obligation that is guaranteed under this section.
       ``(b) Authorization.--The Secretary shall accelerate 
     efforts directed toward the improvement of hybrid 
     technologies, including through the provision of loan 
     guarantees under subsection (c).
       ``(c) Loan Guarantees.--
       ``(1) In general.--The Secretary shall make guarantees 
     under this section for eligible projects on such terms and 
     conditions as the Secretary, in consultation with the 
     Secretary of the Treasury, determines to be appropriate.

[[Page 15969]]

       ``(2) Specific appropriation or contribution.--No guarantee 
     shall be made unless--
       ``(A) an appropriation for the cost has been made; or
       ``(B) the Secretary has received from the borrower a 
     payment in full for the cost of the obligation and deposited 
     the payment into the Treasury.
       ``(3) Amount.--Unless otherwise provided by law, a 
     guarantee by the Secretary shall not exceed an amount equal 
     to 80 percent of the project cost of the hybrid technology 
     that is the subject of the guarantee, as estimated at the 
     time at which the guarantee is issued.
       ``(4) Repayment.--
       ``(A) In general.--No guarantee shall be made unless the 
     Secretary determines that there is a reasonable prospect of 
     repayment of the principal and interest on the obligation by 
     the borrower.
       ``(B) Amount.--No guarantee shall be made unless the 
     Secretary determines that the amount of the obligation (when 
     combined with amounts available to the borrower from other 
     sources) will be sufficient to carry out the project.
       ``(C) Subordination.--The obligation shall be subject to 
     the condition that the obligation is not subordinate to other 
     financing.
       ``(5) Interest rate.--An obligation shall bear interest at 
     a rate that does not exceed a level that the Secretary 
     determines appropriate, taking into account the prevailing 
     rate of interest in the private sector for similar loans and 
     risks.
       ``(6) Term.--The term of an obligation shall require full 
     repayment over a period not to exceed the lesser of--
       ``(A) 30 years; or
       ``(B) 90 percent of the projected useful life of the 
     physical asset to be financed by the obligation (as 
     determined by the Secretary).
       ``(7) Defaults.--
       ``(A) Payment by secretary.--
       ``(i) In general.--If a borrower defaults on the obligation 
     (as defined in regulations promulgated by the Secretary and 
     specified in the guarantee contract), the holder of the 
     guarantee shall have the right to demand payment of the 
     unpaid amount from the Secretary.
       ``(ii) Payment required.--Within such period as may be 
     specified in the guarantee or related agreements, the 
     Secretary shall pay to the holder of the guarantee the unpaid 
     interest on, and unpaid principal of the obligation as to 
     which the borrower has defaulted, unless the Secretary finds 
     that--

       ``(I) there was no default by the borrower in the payment 
     of interest or principal; or
       ``(II) the default has been remedied.

       ``(iii) Forbearance.--Nothing in this subsection precludes 
     any forbearance by the holder of the obligation for the 
     benefit of the borrower that may be agreed upon by the 
     parties to the obligation and approved by the Secretary.
       ``(B) Subrogation.--
       ``(i) In general.--If the Secretary makes a payment under 
     subparagraph (A), the Secretary shall be subrogated to the 
     rights of the recipient of the payment as specified in the 
     guarantee or related agreements including, where appropriate, 
     the authority (notwithstanding any other provision of law) 
     to--

       ``(I) complete, maintain, operate, lease, or otherwise 
     dispose of any property acquired pursuant to the guarantee or 
     related agreements; or
       ``(II) permit the borrower, pursuant to an agreement with 
     the Secretary, to continue to pursue the purposes of the 
     eligible project, as the Secretary determines to be in the 
     public interest.

       ``(ii) Superiority of rights.--The rights of the Secretary, 
     with respect to any property acquired pursuant to a guarantee 
     or related agreement, shall be superior to the rights of any 
     other person with respect to the property.
       ``(iii) Terms and conditions.--A guarantee agreement shall 
     include such detailed terms and conditions as the Secretary 
     determines appropriate to--

       ``(I) protect the interests of the United States in the 
     case of default; and
       ``(II) have available all the patents and technology 
     necessary for any person selected, including the Secretary, 
     to complete and operate the eligible project.

       ``(C) Payment of principal and interest by secretary.--With 
     respect to any obligation guaranteed under this section, the 
     Secretary may enter into a contract to pay, and pay, holders 
     of the obligation, for and on behalf of the borrower, from 
     funds appropriated for that purpose, the principal and 
     interest payments that become due and payable on the unpaid 
     balance of the obligation if the Secretary finds that--
       ``(i)(I) the borrower is unable to meet the payments and is 
     not in default;
       ``(II) it is in the public interest to permit the borrower 
     to continue to pursue the purposes of the eligible project; 
     and
       ``(III) the probable net benefit to the Federal Government 
     in paying the principal and interest will be greater than the 
     benefit that would result in the event of a default;
       ``(ii) the amount of the payment that the Secretary is 
     authorized to pay will be no greater than the amount of 
     principal and interest that the borrower is obligated to pay 
     under the agreement being guaranteed; and
       ``(iii) the borrower agrees to reimburse the Secretary for 
     the payment (including interest) on terms and conditions that 
     are satisfactory to the Secretary.
       ``(D) Action by attorney general.--
       ``(i) Notification.--If the borrower defaults on an 
     obligation, the Secretary shall notify the Attorney General 
     of the default.
       ``(ii) Recovery.--On receipt of notification, the Attorney 
     General shall take such action as the Attorney General 
     determines to be appropriate to recover the unpaid principal 
     and interest due from--

       ``(I) such assets of the defaulting borrower as are 
     associated with the obligation; or
       ``(II) any other security pledged to secure the obligation.

       ``(8) Fees.--
       ``(A) In general.--The Secretary shall charge and collect 
     fees for guarantees in amounts the Secretary determines are 
     sufficient to cover applicable administrative expenses.
       ``(B) Availability.--Fees collected under this paragraph 
     shall--
       ``(i) be deposited by the Secretary into the Treasury; and
       ``(ii) remain available until expended, subject to such 
     other conditions as are contained in annual appropriations 
     Acts.
       ``(9) Records; audits.--
       ``(A) In general.--A recipient of a guarantee shall keep 
     such records and other pertinent documents as the Secretary 
     shall prescribe by regulation, including such records as the 
     Secretary may require to facilitate an effective audit.
       ``(B) Access.--The Secretary and the Comptroller General of 
     the United States, or their duly authorized representatives, 
     shall have access, for the purpose of audit, to the records 
     and other pertinent documents.
       ``(10) Full faith and credit.--The full faith and credit of 
     the United States is pledged to the payment of all guarantees 
     issued under this section with respect to principal and 
     interest.
       ``(d) Authorization of Appropriations.--There are 
     authorized to be appropriated such sums as are necessary to 
     provide the cost of guarantees under this section.''.
       (b) Efficient Hybrid and Advanced Diesel Vehicles.--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 the 
     provision of loan guarantees under section 711(c) to 
     automobile manufacturers and suppliers''.

     SEC. _27. FEDERAL FLEET REQUIREMENTS.

       (a) Regulations.--
       (1) In general.--The Secretary of Energy shall issue 
     regulations for Federal fleets subject to the Energy Policy 
     Act of 1992 (42 U.S.C. 13201 et seq.) requiring that not 
     later than fiscal year 2016 each Federal agency achieve at 
     least a 30 percent reduction in petroleum consumption, as 
     calculated from the baseline established by the Secretary for 
     fiscal year 1999.
       (2) Requirement.--Not later than fiscal year 2016, of the 
     Federal vehicles required to be alternative fueled vehicles 
     under title V of the Energy Policy Act of 1992 (42 U.S.C. 
     13251 et seq.), at least 30 percent shall be hybrid motor 
     vehicles (including plug-in hybrid motor vehicles) or new 
     advanced lean burn technology motor vehicles (as defined in 
     section 30B(c)(3) of the Internal Revenue Code of 1986).
       (b) Inclusion of Electric Drive in Energy Policy Act of 
     1992.--Section 508(a) of the Energy Policy Act of 1992 (42 
     U.S.C. 13258(a)) is amended--
       (1) by inserting ``(1)'' before ``The Secretary''; and
       (2) by adding at the end the following:
       ``(2) Not later than January 31, 2007, the Secretary 
     shall--
       ``(A) allocate credit in an amount to be determined by the 
     Secretary for--
       ``(i) acquisition of--
       ``(I) a light-duty hybrid electric vehicle;
       ``(II) a plug-in hybrid electric vehicle;
       ``(III) a fuel cell electric vehicle;
       ``(IV) a medium- or heavy-duty hybrid electric vehicle;
       ``(V) a neighborhood electric vehicle; or
       ``(VI) a medium- or heavy-duty dedicated vehicle; and
       ``(ii) investment in qualified alternative fuel 
     infrastructure or nonroad equipment, as determined by the 
     Secretary; and
       ``(B) allocate more than 1, but not to exceed 5, credits 
     for investment in an emerging technology relating to any 
     vehicle described in subparagraph (A) to encourage--
       ``(i) a reduction in petroleum demand;
       ``(ii) technological advancement; and
       ``(iii) environmental safety.''.
       (c) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section (including the 
     amendments made by subsection (b)) $10,000,000 for the period 
     of fiscal years 2007 through 2012

     SEC. _28. INCREASING THE EFFICIENCY OF MOTOR VEHICLES.

       (a) Definitions.--In this section:
       (1) Alternative fuel.--The term ``alternative fuel'' has 
     the meaning given the term in section 32901(a) of title 49, 
     United States Code.
       (2) E85.--The term ``E85'' means a fuel blend containing 85 
     percent ethanol and 15 percent gasoline or diesel by volume.
       (3) Flexible fuel motor vehicle.--The term ``flexible fuel 
     motor vehicle'' means a

[[Page 15970]]

     light duty motor vehicle warrantied by the manufacturer of 
     the vehicle to operate on any combination of gasoline, E85, 
     and M85.
       (4) Hybrid motor vehicle.--The term ``hybrid motor 
     vehicle'' means a new qualified hybrid motor vehicle (as 
     defined in section 30B(d)(3) of the Internal Revenue Code of 
     1986) that achieves at least 125 percent of the model year 
     2002 city fuel economy.
       (5) Light-duty motor vehicle.--The term ``light-duty motor 
     vehicle'' means, as defined in regulations promulgated by the 
     Administrator of the Environmental Protection Agency in 
     effect on the date of enactment of this Act--
       (A) a light-duty truck; or
       (B) a light-duty vehicle.
       (6) M85.--The term ``M85'' means a fuel blend containing 85 
     percent methanol and 15 percent gasoline or diesel by volume.
       (7) Plug-in hybrid motor vehicle.--The term ``plug-in 
     hybrid electric vehicle'' means a hybrid motor vehicle that--
       (A) has an onboard, rechargeable storage device capable of 
     propelling the vehicle solely by electricity for at least 10 
     miles; and
       (B) achieves at least 125 percent of the model year 2002 
     city fuel economy.
       (8) Qualified motor vehicle.--The term ``qualified motor 
     vehicle'' means--
       (A) a new advanced lean burn technology motor vehicle (as 
     defined in section 30B(c)(3) of the Internal Revenue Code of 
     1986) that achieves at least 125 percent of the model year 
     2002 city fuel economy;
       (B) an alternative fueled automobile (as defined in section 
     32901(a) of title 49, United States Code);
       (C) a flexible fuel motor vehicle;
       (D) a new qualified fuel cell motor vehicle (as defined in 
     section 30B(b)(3) of the Internal Revenue Code of 1986);
       (E) a hybrid motor vehicle;
       (F) a plug-in hybrid motor vehicle; and
       (G) any other appropriate motor vehicle that uses 
     substantially new technology and achieve at least 175 percent 
     of the model year 2002 city fuel economy, as determined by 
     the Secretary of Transportation, by regulation.
       (b) Requirements.--
       (1) Model year 2012.--Not less than 10 percent of light-
     duty motor vehicles manufactured for model year 2012 and sold 
     in the United States shall be qualified motor vehicles.
       (2) Model year 2013.--Not less than 20 percent of light-
     duty motor vehicles manufactured for model year 2013 and sold 
     in the United States shall be qualified motor vehicles.
       (3) Model year 2014.--Not less than 30 percent of light-
     duty motor vehicles manufactured for model year 2014 and sold 
     in the United States shall be qualified motor vehicles.
       (4) Model year 2015.--Not less than 40 percent of light-
     duty motor vehicles manufactured for model year 2015 shall be 
     qualified motor vehicles.
       (5) Model year 2016.--Not less than 50 percent of light-
     duty motor vehicles manufactured for model year 2016 shall be 
     qualified motor vehicles.
       (6) Model years 2017 and thereafter.--Not less than 50 
     percent of light-duty motor vehicles manufactured for model 
     year 2017 and each model year thereafter and sold in the 
     United States shall be qualified motor vehicles, of which not 
     less than 10 percent shall be--
       (A) hybrid motor vehicles;
       (B) plug-in hybrid motor vehicles;
       (C) new advanced lean burn technology motor vehicles (as 
     defined in section 30B(c)(3) of the Internal Revenue Code of 
     1986);
       (D) new qualified fuel cell motor vehicles (as defined in 
     section 30B(b)(3) of the Internal Revenue Code of 1986); or
       (E) any other appropriate motor vehicle that uses 
     substantially new technology and achieve at least 175 percent 
     of the model year 2002 city fuel economy, as determined by 
     the Secretary of Transportation, by regulation.
       (c) Rulemaking.--Not later than 1 year after the date of 
     enactment of this Act, the Secretary of Transportation shall 
     promulgate regulations to carry out this section.

             Subtitle C--Fuel Choices for the 21st Century

     SEC. _31. USE OF CAFE PENALTIES TO BUILD ALTERNATIVE FUELING 
                   INFRASTRUCTURE.

       Section 32912 of title 49, United States Code, is amended 
     by adding at the end the following
       ``(e) Alternative Fueling Infrastructure Trust Fund.--(1) 
     There is established in the Treasury of the United States a 
     trust fund, to be known as the Alternative Fueling 
     Infrastructure Trust Fund, consisting of such amounts as are 
     deposited into the Trust Fund under paragraph (2) and any 
     interest earned on investment of amounts in the Trust Fund.
       ``(2) The Secretary of Transportation shall remit 90 
     percent of the amount collected in civil penalties under this 
     section to the Trust Fund.
       ``(3)(A) The Secretary of Energy shall obligate such sums 
     as are available in the Trust Fund to establish a grant 
     program to increase the number of locations at which 
     consumers may purchase alternative fuels.
       ``(B)(i) The Secretary of Energy may award grants under 
     this paragraph, in an amount equal to not more than $150,000 
     per fueling station, to--
       ``(I) individual fueling stations; and
       ``(II) corporations (including nonprofit corporations) with 
     demonstrated experience in the administration of grant 
     funding for the purpose of alternative fueling 
     infrastructure.
       ``(ii) In awarding grants under this paragraph, the 
     Secretary shall consider the number of vehicles in service 
     capable of using a specific type of alternative fuel.
       ``(iii) Grant recipients shall provide a non-Federal match 
     of not less than $1 for every $3 of grant funds received 
     under this paragraph.
       ``(iv) Each grant recipient shall select the locations for 
     each alternative fuel station to be constructed with grant 
     funds received under this paragraph on a formal, open, and 
     competitive basis.
       ``(C) Grant funds received under this paragraph may be used 
     to--
       ``(i) construct new facilities to dispense alternative 
     fuels;
       ``(ii) purchase equipment to upgrade, expand, or otherwise 
     improve existing alternative fuel facilities; or
       ``(iii) purchase equipment or pay for specific turnkey 
     fueling services by alternative fuel providers.
       ``(D) Facilities constructed or upgraded with grant funds 
     under this paragraph shall--
       ``(i) provide alternative fuel available to the public for 
     a period not less than 4 years;
       ``(ii) establish a marketing plan to advance the sale and 
     use of alternative fuels;
       ``(iii) prominently display the price of alternative fuel 
     on the marquee and in the station;
       ``(iv) provide point of sale materials on alternative fuel;
       ``(v) clearly label the dispenser with consistent 
     materials;
       ``(vi) price the alternative fuel at the same margin that 
     is received for unleaded gasoline; and
       ``(vii) support and use all available tax incentives to 
     reduce the cost of the alternative fuel to the lowest 
     possible retail price.
       ``(E) Not later than the date on which each alternative 
     fuel station begins to offer alternative fuel to the public, 
     the grant recipient that used grant funds to construct such 
     station shall notify the Secretary of Energy of such opening. 
     The Secretary of Energy shall add each new alternative fuel 
     station to the alternative fuel station locator on its 
     Website when it receives notification under this 
     subparagraph.
       ``(F) Not later than 6 months after the receipt of a grant 
     award under this paragraph, and every 6 months thereafter, 
     each grant recipient shall submit a report to the Secretary 
     of Energy that describes--
       ``(i) the status of each alternative fuel station 
     constructed with grant funds received under this paragraph;
       ``(ii) the amount of alternative fuel dispensed at each 
     station during the preceding 6-month period; and
       ``(iii) the average price per gallon of the alternative 
     fuel sold at each station during the preceding 6-month 
     period.''.

     SEC. _32. MINIMUM QUANTITY OF RENEWABLE FUEL DERIVED FROM 
                   CELLULOSIC BIOMASS.

       Section 211(o)(2)(B) of the Clean Air Act (42 U.S.C. 
     7545(o)(2)(B)) is amended by striking clause (iii) and 
     inserting the following:
       ``(iii) Minimum quantity derived from cellulosic biomass.--

       ``(I) In general.--The applicable volume referred to in 
     clause (ii) shall contain a minimum of--

       ``(aa) for each of calendar years 2010 through 2012, 
     75,000,000 gallons that are derived from cellulosic biomass; 
     and
       ``(bb) for calendar year 2013 and each calendar year 
     thereafter, 250,000,000 gallons that are derived from 
     cellulosic biomass.

       ``(II) Ratio.--For calendar year 2010 and each calendar 
     year thereafter, the 2.5-to-1 ratio referred to in paragraph 
     (4) shall not apply.''.

     SEC. _33. MINIMUM QUANTITY OF RENEWABLE FUEL DERIVED FROM 
                   SUGAR.

       (a) In General.--Section 211(o)(2)(B) of the Clean Air Act 
     (42 U.S.C. 7545(o)(2)(B)) is amended by adding at the end the 
     following:
       ``(v) Minimum quantity derived from sugar.--For calendar 
     year 2008 and each calendar year thereafter, the applicable 
     volume referred to in clause (ii) shall contain a minimum of 
     100,000,000 gallons that are derived from domestically-grown 
     sugarcane, sugar beets, or sugar components.''.
       (b) Applicable Volume.--Section 211(o)(2)(B)(i) of the 
     Clean Air Act (42 U.S.C. 7545(o)(2)(B)(i)) is amended--
       (1) in the item relating to calendar year 2008, by striking 
     ``5.4'' and inserting ``5.5'';
       (2) in the item relating to calendar year 2009, by striking 
     ``6.1'' and inserting ``6.2'';
       (3) in the item relating to calendar year 2010, by striking 
     ``6.8'' and inserting ``6.9'';
       (4) in the item relating to calendar year 2011, by striking 
     ``7.4'' and inserting ``7.5''; and
       (5) in the item relating to calendar year 2012, by striking 
     ``7.5'' and inserting ``7.6''.

     SEC. _34. BIOENERGY RESEARCH AND DEVELOPMENT.

       Section 931(c) of the Energy Policy Act of 2005 (42 U.S.C. 
     16231(c)) is amended--
       (1) in paragraph (1), by striking ``$213,000,000'' and 
     inserting ``$326,000,000'';

[[Page 15971]]

       (2) in paragraph (2), by striking ``$251,000,000'' and 
     inserting ``$377,000,000''; and
       (3) in paragraph (3), by striking ``$274,000,000'' and 
     inserting ``$398,000,000''.

     SEC. _35. PRODUCTION INCENTIVES FOR CELLULOSIC BIOFUELS.

       Section 942(f) of the Energy Policy Act of 2005 (42 U.S.C. 
     16251(f)) is amended by striking ``$250,000,000'' and 
     inserting ``$200,000,000 for each of fiscal years 2007 
     through 2011''.

     SEC. _36. LOW-INTEREST LOAN AND GRANT PROGRAM FOR RETAIL 
                   DELIVERY OF E-85 FUEL.

       (a) Purposes of Loans.--Section 312(a) of the Consolidated 
     Farm and Rural Development Act (7 U.S.C. 1942(a)) is 
     amended--
       (1) in paragraph (9)(B)(ii), by striking ``or'' at the end;
       (2) in paragraph (10), by striking the period at the end 
     and inserting ``; or''; and
       (3) by adding at the end the following:
       ``(11) building infrastructure, including pump stations, 
     for the retail delivery to consumers of any fuel that 
     contains not less than 85 percent ethanol, by volume.''.
       (b) Program.--Subtitle B of the Consolidated Farm and Rural 
     Development Act (7 U.S.C. 1941 et seq.) is amended by adding 
     at the end the following:

     ``SEC. 320. LOW-INTEREST LOAN AND GRANT PROGRAM FOR RETAIL 
                   DELIVERY OF E-85 FUEL.

       ``(a) In General.--The Secretary shall establish a low-
     interest loan and grant program to assist farmer-owned 
     ethanol producers (including cooperatives and limited 
     liability corporations) to develop and build infrastructure, 
     including pump stations, for the retail delivery to consumers 
     of any fuel that contains not less than 85 percent ethanol, 
     by volume.
       ``(b) Terms.--
       ``(1) Interest rate.--A low-interest loan under this 
     section shall be fixed at not more than 5 percent for each 
     year.
       ``(2) Amortization.--The repayment of a loan under this 
     section shall be amortized over the expected life of the 
     infrastructure project that is being financed with the 
     proceeds of the loan.
       ``(c) Authorization of Appropriations.--There are 
     authorized to be appropriated such sums as are necessary to 
     carry out this section.''.
       (c) Regulations.--As soon as practicable after the date of 
     enactment of this Act, the Secretary of Agriculture shall 
     promulgate such regulations as are necessary to carry out the 
     amendments made by this section.

     SEC. _37. TRANSIT-ORIENTED DEVELOPMENT CORRIDORS.

       (a) Definitions.--In this section:
       (1) Transit-oriented development corridor.--The term 
     ``Transit-Oriented Development Corridor'' or ``TODC'' means a 
     geographic area designated by the Secretary under subsection 
     (b).
       (2) Other terms.--The terms ``fixed guide way'', ``local 
     governmental authority'', ``mass transportation'', 
     ``Secretary'', ``State'', and ``urbanized area'' have the 
     meanings given the terms in section 5302 of title 49, United 
     States Code.
       (b) Transit-Oriented Development Corridors.--
       (1) In general.--The Secretary shall develop and carry out 
     a program to designate geographic areas in urbanized areas as 
     Transit-Oriented Development Corridors.
       (2) Criteria.--An area designated as a TODC under paragraph 
     (1) shall include rights-of-way for fixed guide way mass 
     transportation facilities (including commercial development 
     of facilities that have a physical and functional connection 
     with each facility).
       (3) Number of todcs.--In consultation with State 
     transportation departments and metropolitan planning 
     organizations, the Secretary shall designate--
       (A) not fewer than 10 TODCs by December 31, 2015; and
       (B) not fewer than 20 TODCs by December 31, 2025.
       (4) Transit grants.--
       (A) In general.--The Secretary make grants to eligible 
     states and local governmental authorities to pay the Federal 
     share of the cost of designating geographic areas in 
     urbanized areas as TODCs.
       (B) Application.--Each eligible State or local governmental 
     authority that desires to receive a grant under this 
     paragraph shall submit an application to the Secretary, at 
     such time, in such manner, and accompanied by such additional 
     information as the Secretary may reasonably require.
       (C) Labor standards.--Subchapter IV of chapter 31 of title 
     40, United States Code shall apply to projects that receive 
     funding under this section.
       (D) Federal share.--The Federal share of the cost of a 
     project under this subsection shall be 50 percent.
       (c) TODC Research and Development.--To support effective 
     deployment of grants and incentives under this section, the 
     Secretary shall establish a TODC research and development 
     program to conduct research on the best practices and 
     performance criteria for TODCs.
       (d) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $50,000,000 for 
     each of fiscal years 2007 through 2012.

         Subtitle D--Nationwide Energy Security Media Campaign

     SEC. _41. NATIONWIDE MEDIA CAMPAIGN TO DECREASE OIL 
                   CONSUMPTION.

       (a) In General.--The Secretary of Energy, acting through 
     the Assistant Secretary for Energy Efficiency and Renewable 
     Energy (referred to in this section as the ``Secretary''), 
     shall develop and conduct a national media campaign for the 
     purpose of decreasing oil consumption in the United States 
     over the next decade.
       (b) Contract With Entity.--The Secretary shall carry out 
     subsection (a) directly or through--
       (1) 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 oil 
     consumption, in both absolute and per capita terms; and
       (B) an evaluation that enables consideration whether the 
     media campaign contributed to reduction of oil consumption;
       (2) steps taken to ensure that the national media campaign 
     operates in an effective and efficient manner consistent with 
     the overall strategy and focus of the campaign;
       (3) plans to purchase advertising time and space;
       (4) policies and practices implemented to ensure that 
     Federal funds are used responsibly to purchase advertising 
     time and space and eliminate the potential for waste, fraud, 
     and abuse; and
       (5) all contracts or cooperative agreements entered into 
     with a corporation, partnership, or individual working on 
     behalf of the national media campaign.
       (e) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $5,000,000 for 
     each of fiscal years 2006 through 2010.
                                 ______
                                 
  SA 4708. Mr. BAYH (for himself, Mr. Brownback, Mr. Lieberman, Mr. 
Coleman, Mr. Salazar, Mr. Lugar, Mr. Obama, Mr. Chafee, Mr. Akaka, Mrs. 
Clinton, Mr. Dodd, Mr. Kohl, Ms. Cantwell, Mr. Kerry, Mr. Graham, Mr. 
Menendez, Ms. Collins, and Mr. Bingaman) submitted an amendment 
intended to be proposed by him to the bill S. 3711, to enhance the 
energy independence and security of the United States by providing for 
exploration, development, and production activities for mineral 
resources in the Gulf of Mexico, and for other purposes; which was 
ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

  TITLE __--TAX INCENTIVES FOR VEHICLE AND FUEL CHOICES FOR AMERICAN 
                                SECURITY

        Subtitle A--Fuel Efficient Vehicles for the 21st Century

     SEC. _01. ADVANCED TECHNOLOGY MOTOR VEHICLES MANUFACTURING 
                   CREDIT.

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

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

       ``(a) Credit Allowed.--There shall be allowed as a credit 
     against the tax imposed by this chapter for the taxable year 
     an amount equal to 35 percent of so much of the qualified 
     investment of an eligible taxpayer for

[[Page 15972]]

     such taxable year as does not exceed $75,000,000.
       ``(b) Qualified Investment.--For purposes of this section--
       ``(1) In general.--The qualified investment for any taxable 
     year is equal to the incremental costs incurred during such 
     taxable year--
       ``(A) to re-equip or expand any manufacturing facility of 
     the eleigible taxpayer to produce advanced technology motor 
     vehicles,
       ``(B) to re-equip, expand, or establish any manufacturing 
     facility of the eligible taxpayer to produce eligible 
     components,
       ``(C) for engineering integration performed in the United 
     States of such vehicles and components as described in 
     subsection (d), and
       ``(D) for research and development performed in the United 
     States related to advanced technology motor vehicles and 
     eligible components.
       ``(2) Attribution rules.--In the event a facility of the 
     eligible taxpayer produces both advanced technology motor 
     vehicles and conventional motor vehicles, or eligible and 
     non-eligible components, only the qualified investment 
     attributable to production of advanced technology motor 
     vehicles and eligible components shall be taken into account.
       ``(c) Advanced Technology Motor Vehicles and Eligible 
     Components.--For purposes of this section--
       ``(1) Advanced technology motor vehicle.--The term 
     `advanced technology motor vehicle' means--
       ``(A) any new advanced lean burn technology motor vehicle 
     (as defined in section 30B(c)(3)), or
       ``(B) any new qualified hybrid motor vehicle (as defined in 
     section 30B(d)(3)(A) and determined without regard to any 
     gross vehicle weight rating).
       ``(2) Eligible components.--The term `eligible component' 
     means any component inherent to any advanced technology motor 
     vehicle, including--
       ``(A) with respect to any gasoline or diesel-electric new 
     qualified hybrid motor vehicle--
       ``(i) electric motor or generator,
       ``(ii) power split device,
       ``(iii) power control unit,
       ``(iv) power controls,
       ``(v) integrated starter generator, or
       ``(vi) battery,
       ``(B) with respect to any hydraulic new qualified hybrid 
     motor vehicle--
       ``(i) hydraulic accumulator vessel,
       ``(ii) hydraulic pump, or
       ``(iii) hydraulic pump-motor assembly,
       ``(C) with respect to any new advanced lean burn technology 
     motor vehicle--
       ``(i) diesel engine,
       ``(ii) turbocharger,
       ``(iii) fuel injection system, or
       ``(iv) after-treatment system, such as a particle filter or 
     NOx absorber, and
       ``(D) with respect to any advanced technology motor 
     vehicle, any other component submitted for approval by the 
     Secretary.
       ``(d) Engineering Integration Costs.--For purposes of 
     subsection (b)(1)(C), costs for engineering integration are 
     costs incurred prior to the market introduction of advanced 
     technology vehicles for engineering tasks related to--
       ``(1) establishing functional, structural, and performance 
     requirements for component and subsystems to meet overall 
     vehicle objectives for a specific application,
       ``(2) designing interfaces for components and subsystems 
     with mating systems within a specific vehicle application,
       ``(3) designing cost effective, efficient, and reliable 
     manufacturing processes to produce components and subsystems 
     for a specific vehicle application, and
       ``(4) validating functionality and performance of 
     components and subsystems for a specific vehicle application.
       ``(e) Eligible Taxpayer.--For purposes of this section, the 
     term `eligible taxpayer' means any taxpayer if more than 50 
     percent of its gross receipts for the taxable year is derived 
     from the manufacture of motor vehicles or any component parts 
     of such vehicles.
       ``(f) Limitation Based on Amount of Tax.--The credit 
     allowed under subsection (a) for the taxable year shall not 
     exceed the excess of--
       ``(1) the sum of--
       ``(A) the regular tax liability (as defined in section 
     26(b)) for such taxable year, plus
       ``(B) the tax imposed by section 55 for such taxable year 
     and any prior taxable year beginning after 1986 and not taken 
     into account under section 53 for any prior taxable year, 
     over
       ``(2) the sum of the credits allowable under subpart A and 
     sections 27, 30, and 30B for the taxable year.
       ``(g) Reduction in Basis.--For purposes of this subtitle, 
     if a credit is allowed under this section for any expenditure 
     with respect to any property, the increase in the basis of 
     such property which would (but for this paragraph) result 
     from such expenditure shall be reduced by the amount of the 
     credit so allowed.
       ``(h) No Double Benefit.--
       ``(1) Coordination with other deductions and credits.--
     Except as provided in paragraph (2), the amount of any 
     deduction or other credit allowable under this chapter for 
     any cost taken into account in determining the amount of the 
     credit under subsection (a) shall be reduced by the amount of 
     such credit attributable to such cost.
       ``(2) Research and development costs.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     any amount described in subsection (b)(1)(D) taken into 
     account in determining the amount of the credit under 
     subsection (a) for any taxable year shall not be taken into 
     account for purposes of determining the credit under section 
     41 for such taxable year.
       ``(B) Costs taken into account in determining base period 
     research expenses.--Any amounts described in subsection 
     (b)(1)(D) taken into account in determining the amount of the 
     credit under subsection (a) for any taxable year which are 
     qualified research expenses (within the meaning of section 
     41(b)) shall be taken into account in determining base period 
     research expenses for purposes of applying section 41 to 
     subsequent taxable years.
       ``(i) Business Carryovers Allowed.--If the credit allowable 
     under subsection (a) for a taxable year exceeds the 
     limitation under subsection (f) for such taxable year, such 
     excess (to the extent of the credit allowable with respect to 
     property subject to the allowance for depreciation) shall be 
     allowed as a credit carryback and carryforward under rules 
     similar to the rules of section 39.
       ``(j) Special Rules.--For purposes of this section, rules 
     similar to the rules of paragraphs (4) and (5) of section 
     179A(e) and paragraphs (1) and (2) of section 41(f) shall 
     apply
       ``(k) Election Not to Take Credit.--No credit shall be 
     allowed under subsection (a) for any property if the taxpayer 
     elects not to have this section apply to such property.
       ``(l) Regulations.--The Secretary shall prescribe such 
     regulations as necessary to carry out the provisions of this 
     section.
       ``(m) Termination.--This section shall not apply to any 
     qualified investment after December 31, 2015.''.
       (b) Conforming Amendments.--
       (1) Section 1016(a) of the Internal Revenue Code of 1986 is 
     amended by striking ``and'' at the end of paragraph (35), by 
     striking the period at the end of paragraph (36) and 
     inserting ``, and'', and by adding at the end the following 
     new paragraph:
       ``(37) to the extent provided in section 30D(g).''.
       (2) Section 6501(m) of such Code is amended by inserting 
     ``30D(k),'' after ``30C(e)(5),''.
       (3) The table of sections for subpart B of part IV of 
     subchapter A of chapter 1 of such Code is amended by 
     inserting after the item relating to section 30C the 
     following new item:

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

     SEC. _02. CONSUMER INCENTIVES TO PURCHASE ADVANCED TECHNOLOGY 
                   VEHICLES.

       (a) Elimination on Number of New Qualified Hybrid and 
     Advanced Lean Burn Technology Vehicles Eligible for 
     Alternative Motor Vehicle Credit.--
       (1) In general.--Section 30D of the Internal Revenue Code 
     of 1986 is amended by striking subsection (f) and by 
     redesignating subsections (g) through (j) as subsections (f) 
     through (i), respectively.
       (2) Conforming amendments.--
       (A) Paragraphs (4) and (6) of section 30B(h) of the 
     Internal Revenue Code of 1986 are each amended amended by 
     striking ``(determined without regard to subsection (g))'' 
     and inserting ``determined without regard to subsection 
     (f))''.
       (B) Section 38(b)(25) of such Code is amended by striking 
     ``section 30B(g)(1)'' and inserting ``section 30B(f)(1)''.
       (C) Section 55(c)(2) of such Code is amended by striking 
     ``section 30B(g)(2)'' and inserting ``section 30B(f)(2)''.
       (D) Section 1016(a)(36) of such Code is amended by striking 
     ``section 30B(h)(4)'' and inserting ``section 30B(g)(4)''.
       (E) Section 6501(m) of such Code is amended by striking 
     ``section 30B(h)(9)'' and inserting ``section 30B(g)(9)''.
       (b) Extension of Alternative Vehicle Credit for New 
     Qualified Hybrid Motor Vehicles.--Paragraph (3) of section 
     30B(i) of the Internal Revenue Code of 1986 (as redesignated 
     by subsection (a)) is amended by striking ``December 31, 
     2009'' and inserting ``December 31, 2010''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after December 31, 
     2005, in taxable years ending after such date.

     SEC. _03. TAX INCENTIVES FOR PRIVATE FLEETS.

       (a) In General.--Subpart E of part IV of subchapter A of 
     chapter 1 of the Internal Revenue Code of 1986 is amended by 
     inserting after section 48B the following new section:

     ``SEC. 48C. FUEL-EFFICIENT FLEET CREDIT.

       ``(a) General Rule.--For purposes of section 46, the fuel-
     efficient fleet credit for any taxable year is 15 percent of 
     the qualified fuel-efficient vehicle investment amount of an 
     eligible taxpayer for such taxable year.
       ``(b) Vehicle Purchase Requirement.--In the case of any 
     eligible taxpayer which places less than 10 qualified fuel-
     efficient vehicles in service during the taxable year, the 
     qualified fuel-efficient vehicle investment amount shall be 
     zero.

[[Page 15973]]

       ``(c) Qualified Fuel-Efficient Vehicle Investment Amount.--
     For purposes of this section--
       ``(1) In general.--The term `qualified fuel-efficient 
     vehicle investment amount' means the basis of any qualified 
     fuel-efficient vehicle placed in service by an eligible 
     taxpayer during the taxable year.
       ``(2) Qualified fuel-efficient vehicle.--The term 
     `qualified fuel-efficient vehicle' means an automobile which 
     has a fuel economy which is at least 125 percent greater than 
     the average fuel economy standard for an automobile of the 
     same class and model year.
       ``(3) Other terms.--The terms `automobile', `average fuel 
     economy standard', `fuel economy', and `model year' have the 
     meanings given to such terms under section 32901 of title 49, 
     United States Code.
       ``(d) Eligible Taxpayer.--The term `eligible taxpayer' 
     means, with respect to any taxable year, a taxpayer who owns 
     a fleet of 100 or more vehicles which are used in the trade 
     or business of the taxpayer on the first day of such taxable 
     year.
       ``(e) Termination.--This section shall not apply to any 
     vehicle placed in service after December 31, 2010.''.
       (b) Credit Treated as Part of Investment Credit.--Section 
     46 of the Internal Revenue Code of 1986 is amended by 
     striking ``and'' at the end of paragraph (3), by striking the 
     period at the end of paragraph (4) and inserting ``, and'', 
     and by adding at the end the following new paragraph:
       ``(5) the fuel-efficient fleet credit.''.
       (c) Conforming Amendments.--
       (1) Section 49(a)(1)(C) of the Internal Revenue Code of 
     1986 is amended by striking ``and'' at the end of clause 
     (iii), by striking the period at the end of clause (iv) and 
     inserting ``, and'', and by adding at the end the following 
     new clause:
       ``(v) the basis of any qualified fuel-efficient vehicle 
     which is taken into account under section 48C.''.
       (2) The table of sections for subpart E of part IV of 
     subchapter A of chapter 1 of such Code is amended by 
     inserting after the item relating to section 48 the following 
     new item:

``Sec. 48C. Fuel-efficient fleet credit.''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to periods after December 31, 2005, in taxable 
     years ending after such date, under rules similar to the 
     rules of section 48(m) of the Internal Revenue Code of 1986 
     (as in effect on the day before the date of the enactment of 
     the Revenue Reconciliation Act of 1990).

     SEC. _04. REDUCING INCENTIVES TO GUZZLE GAS.

       (a) Inclusion of Heavy Vehicles in Limitation on 
     Depreciation of Certain Luxury Automobiles.--
       (1) In general.--Section 280F(d)(5)(A) of the Internal 
     Revenue Code of 1986 (defining passenger automobile) is 
     amended--
       (A) by striking clause (ii) and inserting the following new 
     clause:
       ``(ii)(I) which is rated at 6,000 pounds unloaded gross 
     vehicle weight or less, or
       ``(II) which is rated at more than 6,000 pounds but not 
     more than 14,000 pounds gross vehicle weight.'',
       (B) by striking ``clause (ii)'' in the second sentence and 
     inserting ``clause (ii)(I)''.
       (2) Exception for vehicles used in farming business.--
     Section 280F(d)(5)(B) of such Code (relating to exception for 
     certain vehicles) is amended by striking ``and'' at the end 
     of clause (ii), by redesignating clause (iii) as clause (iv), 
     and by inserting after clause (ii) the following new clause:
       ``(iii) any vehicle used in a farming business (as defined 
     in section 263A(e)(4), and''.
       (3) Effective date.--The amendments made by this subsection 
     shall apply to property placed in service after the date of 
     the enactment of this Act.
       (b) Updated Depreciation Deduction Limits.--
       (1) In general.--Subparagraph (A) of section 280F(a)(1) of 
     the Internal Revenue Code of 1986 (relating to limitation on 
     amount of depreciation for luxury automobiles) is amended to 
     read as follows:
       ``(I) Limitation.--The amount of the depreciation deduction 
     for any taxable year shall not exceed for any passenger 
     automobile--
       ``(i) for the 1st taxable year in the recovery period--

       ``(I) described in subsection (d)(5)(A)(ii)(I), $4,000,
       ``(II) described in the second sentence of subsection 
     (d)(5)(A), $5,000, and
       ``(III) described in subsection (d)(5)(A)(ii)(II), $6,000,

       ``(ii) for the 2nd taxable year in the recovery period--

       ``(I) described in subsection (d)(5)(A)(ii)(I), $6,400,
       ``(II) described in the second sentence of subsection 
     (d)(5)(A), $8,000, and
       ``(III) described in subsection (d)(5)(A)(ii)(II), $9,600,

       ``(iii) for the 3rd taxable year in the recovery period--

       ``(I) described in subsection (d)(5)(A)(ii)(I), $3,850,
       ``(II) described in the second sentence of subsection 
     (d)(5)(A), $4,800, and
       ``(III) described in subsection (d)(5)(A)(ii)(II), $5,775, 
     and

       ``(iv) for each succeeding taxable year in the recovery 
     period--

       ``(I) described in subsection (d)(5)(A)(ii)(I), $2,325,
       ``(II) described in the second sentence of subsection 
     (d)(5)(A), $2,900, and
       ``(III) described in subsection (d)(5)(A)(ii)(II), 
     $3,475.''.

       (2) Years after recovery period.--Section 280F(a)(1)(B)(ii) 
     of such Code is amended to read as follows:
       ``(ii) Limitation.--The amount treated as an expense under 
     clause (i) for any taxable year shall not exceed for any 
     passenger automobile--

       ``(I) described in subsection (d)(5)(A)(ii)(I), $2,325,
       ``(II) described in the second sentence of subsection 
     (d)(5)(A), $2,900, and
       ``(III) described in subsection (d)(5)(A)(ii)(II), 
     $3,475.''.

       (3) Inflation adjustment.--Section 280F(d)(7) of such Code 
     (relating to automobile price inflation adjustment) is 
     amended--
       (A) by striking ``after 1988'' in subparagraph (A) and 
     inserting ``after 2006'', and
       (B) by striking subparagraph (B) and inserting the 
     following new subparagraph:
       ``(B) Automobile price inflation adjustment.--For purposes 
     of this paragraph--
       ``(i) In general.--The automobile price inflation 
     adjustment for any calendar year is the percentage (if any) 
     by which--

       ``(I) the average wage index for the preceding calendar 
     year, exceeds
       ``(II) the average wage index for 2005.

       ``(ii) Average wage index.--The term `average wage index' 
     means the average wage index published by the Social Security 
     Administration.''.
       (4) Effective date.--The amendments made by this subsection 
     shall apply to property placed in service after the date of 
     the enactment of this Act.
       (c) Expensing Limitation for Farm Vehicles.--
       (1) In general.--Paragraph (6) of section 179(b) of the 
     Internal Revenue Code of 1986 (relating to limitations) is 
     amended to read as follows:
       ``(6) Limitation on cost taken into account for farm 
     vehicles.--The cost of any vehicle described in section 
     280F(d)(5)(B)(iii) for any taxable year which may be taken 
     into account under this section shall not exceed $30,000.''.
       (2) Effective date.--The amendment made by this subsection 
     shall apply to property placed in service after the date of 
     the enactment of this Act.

             Subtitle B--Fuel Choices for the 21st Century

     SEC. _11. INCREASE IN ALTERNATIVE FUEL VEHICLE REFUELING 
                   PROPERTY CREDIT.

       (a) In General.--Subsection (a) of section 30C of the 
     Internal Revenue Code of 1986 is amended by striking ``30 
     percent'' and inserting ``50 percent''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to property placed in service after December 31, 
     2005, in taxable years ending after such date.
                                 ______
                                 
  SA 4709. Mr. OBAMA (for himself, Mr. Lugar, Mr. Biden, Mr. Bingaman, 
Mr. Coleman, Mr. Specter, Mr. Smith, and Mr. Harkin) submitted an 
amendment intended to be proposed by him to the bill S. 3711, to 
enhance the energy independence and security of the United States by 
providing for exploration, development, and production activities for 
mineral resources in the Gulf of Mexico, and for other purposes; which 
was ordered to lie on the table; as follows:

       On page 18, after line 17, add the following:

     SEC. 6. FUEL ECONOMY REFORM.

       (a) Short Title.--This section may be cited as the ``Fuel 
     Economy Reform Act''.
       (b) Findings.--Congress makes the following findings:
       (1) United States dependence on oil imports imposes 
     tremendous burdens on America's economy, foreign policy, and 
     military.
       (2) According to the Energy Information Administration, 60 
     percent of the crude oil and petroleum products consumed in 
     the United States between April 2005 and March 2006 
     (12,400,000 barrels per day) was imported. At a cost of $75 
     per barrel of oil, Americans remit more than $600,000 per 
     minute to other countries for petroleum, money that could 
     have been spent creating domestic jobs and strengthening our 
     Nation's economy.
       (3) A significant percentage of these petroleum imports 
     originate in countries controlled by regimes that are 
     unstable or openly hostile to the interests of the United 
     States. Dependence on production from these countries 
     contributes to the volatility of domestic and global markets 
     and the ``risk premium'' paid by American consumers.
       (4) The Energy Information Administration projects that the 
     total petroleum demand in the United States will increase by 
     23 percent between 2006 and 2026, while domestic crude 
     production is expected to decrease by 11 percent, resulting 
     in an anticipated 28 percent increase in petroleum imports. 
     Absent significant action, our Nation will become more 
     vulnerable to oil price increases, more dependent upon 
     foreign oil, and less able to pursue our national interests.

[[Page 15974]]

       (5) America's ability to broadly transition to alternative 
     fuels, such as cellulosic ethanol and hydrogen, is predicated 
     upon producing more fuel-efficient vehicles. Failure to do so 
     would tax scarce resources and increase long-term costs.
       (6) Two-thirds of all domestic oil use occurs in the 
     transportation sector, which is 97 percent reliant upon 
     petroleum-based fuels. Passenger vehicles, including light 
     trucks under 10,000 pounds gross vehicle weight, represent 
     over 60 percent of the oil used in the transportation sector.
       (7) Corporate average fuel economy of all cars and trucks 
     improved by 70 percent between 1975 and 1987. Between 1987 
     and 2006, fuel economy improvements have stagnated and are 
     much worse than the vehicle fuel economy in many developed 
     countries and some developing countries, including China.
       (8) Significant improvements in engine technology occurred 
     between 1986 and 2006. These advances have been used to make 
     vehicles larger and more powerful, rather than to increase 
     fuel economy. Between 1985 and 2005, average vehicle 
     horsepower nearly doubled, average vehicle weight increased 
     by 25 percent, and acceleration times for new vehicles 
     improved by 25 percent. During the same time period, average 
     vehicle fuel economy decreased by 2 percent.
       (9) According to a 2002 fuel economy report by the National 
     Academies of Science, improvements in gasoline engine 
     technology offer the opportunity to increase fuel economy by 
     50 percent, while maintaining vehicle size and performance 
     and improving safety. The fleet analyzed by the Academies 
     would average 37 miles per gallon. When the report was 
     released in 2002, it noted that these technologies could be 
     available for wide use within 10 to 15 years.
       (10) The 2002 fuel economy report study clearly states that 
     fuel economy can be increased without negatively impacting 
     the safety of America's cars and trucks. Some new 
     technologies can increase both safety and fuel economy (such 
     as high strength materials, unibody design, lower bumpers). 
     Design changes related to fuel economy also present 
     opportunities to reduce the incompatibility of tall, stiff, 
     heavy vehicles with the majority of vehicles on the road.
       (11) A 2004 report by David Greene of Oak Ridge National 
     Labs entitled, ``The Effect of Fuel Economy on Automobile 
     Safety: A Reexamination'', demonstrates that fuel economy is 
     not linked with increased fatalities. The report notes that, 
     ``higher mpg is significantly correlated with fewer 
     fatalities''. In other words, a thorough analysis of data 
     from 1966 to 2002 indicates that vehicle manufacturers can 
     simultaneously increase fuel economy and improve vehicle 
     safety.
       (12) A 2002 study entitled, ``An Analysis of Traffic Deaths 
     by Vehicle Type and Model'', by Marc Ross and Tom Wenzel from 
     the University of Michigan, demonstrates that large vehicles 
     do not have lower fatality rates than smaller vehicles. Ross 
     and Wenzel analyzed Federal accident data between 1995 and 
     1999 and showed that the Honda Civic and Volkswagen Jetta 
     both had lower fatality rates for the driver than the Ford 
     Explorer, the Dodge Ram, or the Toyota 4Runner. Even the 
     largest vehicles, such as the Chevrolet Tahoe and Suburban, 
     had fatality rates that were no better than the Jetta or the 
     Nissan Maxima. In other words, a well-designed compact car 
     can be safer than an sport-utility vehicle or a pickup truck. 
     Design, rather than weight, is the key to vehicle safety.
       (13) Significant change must occur to strengthen the 
     economic competitiveness of the domestic auto industry. 
     According to a recent study by the University of Michigan, a 
     sustained gasoline price of $2.86 per gallon would lead 
     Detroit's Big 3 automakers' profits to shrink by 
     $7,000,000,000 as they absorb 75 percent of the lost vehicle 
     sales. This would put nearly 300,000 Americans out of work.
       (14) Opportunities exist to strengthen the domestic vehicle 
     industry while improving fuel economy. A 2004 study performed 
     by the University of Michigan concludes that the provision of 
     $1,500,000,000 in tax incentives over 10 years to enable the 
     retrofit of domestic manufacturing and parts facilities to 
     produce clean cars would lead to a gain of nearly 60,000 
     domestic jobs and pay for itself through the resulting 
     increase in domestic tax receipts.
       (c) Definition of Automobile.--
       (1) In general.--Section 32901(a)(3) of title 49, United 
     States Code, is amended by striking ``rated at--'' and all 
     that follows through the period at the end and inserting 
     ``rated at not more than 10,000 pounds gross vehicle 
     weight.''.
       (2) Fuel economy information.--Section 32908(a) of title 
     49, United States Code, is amended, by striking ``section--'' 
     and all that follows through ``(2)'' and inserting ``section, 
     the term''.
       (3) Effective date.--The amendments made by this subsection 
     shall apply to model year 2009 and each subsequent model 
     year.
       (d) Average Fuel Economy Standards.--
       (1) Standards.--Section 32902 of title 49, United States 
     Code, is amended--
       (A) in subsection (a)--
       (i) in the header, by inserting ``Manufactured Before Model 
     Year 2012'' after ``Non-Passenger Automobiles''; and
       (ii) by adding at the end the following: ``This subsection 
     shall not apply to automobiles manufactured after model year 
     2011.'';
       (B) in subsection (b)--
       (i) in the header, by inserting ``Manufactured Before Model 
     Year 2012'' after ``Passenger Automobiles'';
       (ii) by inserting ``and before model year 2009'' after 
     ``1984''; and
       (iii) by adding at the end the following: ``Such standard 
     shall be increased by 4 percent per year for model years 2009 
     through 2011 (rounded to the nearest 1/10 mile per gallon)'';
       (C) by amending subsection (c) to read as follows:
       ``(c) Automobiles Manufactured After Model Year 2011.--(1) 
     Not later than 18 months before the beginning of each model 
     year after model year 2011, the Secretary of Transportation 
     shall prescribe, by regulation--
       ``(A) an average fuel economy standard for automobiles 
     manufactured by a manufacturer in that model year; or
       ``(B) based on 1 or more vehicle attributes that relate to 
     fuel economy--
       ``(i) separate standards for different classes of 
     automobiles; or
       ``(ii) standards expressed in the form of a mathematical 
     function.
       ``(2)(A) Except as provided under paragraphs (3) and (4) 
     and subsection (d), standards under paragraph (1) shall 
     attain a projected aggregate level of average fuel economy of 
     27.5 miles per gallon for all automobiles manufactured by all 
     manufacturers for model year 2012.
       ``(B) The projected aggregate level of average fuel economy 
     for model year 2013 and each succeeding model year shall be 
     increased by 4 percent from the level for the prior model 
     year (rounded to the nearest 1/10 mile per gallon).
       ``(C) Notwithstanding subparagraphs (A) and (B), the 
     fleetwide average fuel economy standard for passenger 
     automobiles manufactured by a manufacturer in a model year 
     for that manufacturer's domestic fleet and for its foreign 
     fleet as calculated under section 32904 as in effect before 
     the date of enactment of the Fuel Economy Reform Act shall 
     not be less than 92 percent of the average fuel economy 
     projected by the Secretary for the combined domestic and 
     foreign fleets manufactured by all manufacturers in that 
     model year.
       ``(3) If the actual aggregate level of average fuel economy 
     achieved by manufacturers for each of 3 consecutive model 
     years is at least 5 percent less than the projected aggregate 
     level of average fuel economy for such model year, the 
     Secretary shall make appropriate adjustments to the standards 
     prescribed under this subsection.
       ``(4)(A) Notwithstanding paragraphs (1) through (3) and 
     subsection (b), the Secretary of Transportation may prescribe 
     a lower average fuel economy standard for 1 or more model 
     years if the Secretary of Transportation, in consultation 
     with the Secretary of Energy, determines that the minimum 
     standards prescribed under paragraph (2) or (3) or subsection 
     (b) for each model year--
       ``(i) are technologically unachievable;
       ``(ii) cannot be achieved without materially reducing the 
     overall safety of automobiles manufactured or sold in the 
     United States; or
       ``(iii) is shown, by clear and convincing evidence, not to 
     be cost effective.
       ``(B) If a lower standard is prescribed for a model year 
     under subparagraph (A), such standard shall be the maximum 
     standard that--
       ``(i) is technologically achievable;
       ``(ii) can be achieved without materially reducing the 
     overall safety of automobiles manufactured or sold in the 
     United States; and
       ``(iii) is cost effective.
       ``(5) In determining cost effectiveness under paragraph 
     (4)(A)(iii), the Secretary of Transportation shall take into 
     account the total value to the Nation of reduced petroleum 
     use, including the value of reducing external costs of 
     petroleum use, using a value for such costs equal to 50 
     percent of the value of a gallon of gasoline saved or the 
     amount determined in an analysis of the external costs of 
     petroleum use that considers--
       ``(A) value to consumers;
       ``(B) economic security;
       ``(C) national security;
       ``(D) foreign policy;
       ``(E) the impact of oil use--
       ``(i) on sustained cartel rents paid to foreign suppliers;
       ``(ii) on long-run potential gross domestic product due to 
     higher normal-market oil price levels, including inflationary 
     impacts;
       ``(iii) on import costs, wealth transfers, and potential 
     gross domestic product due to increased trade imbalances;
       ``(iv) on import costs and wealth transfers during oil 
     shocks;
       ``(v) on macroeconomic dislocation and adjustment costs 
     during oil shocks;
       ``(vi) on the cost of existing energy security policies, 
     including the management of the Strategic Petroleum Reserve;
       ``(vii) on the timing and severity of the oil peaking 
     problem;
       ``(viii) on the risk, probability, size, and duration of 
     oil supply disruptions;

[[Page 15975]]

       ``(ix) on OPEC strategic behavior and long-run oil pricing;
       ``(x) on the short term elasticity of energy demand and the 
     magnitude of price increases resulting from a supply shock;
       ``(xi) on oil imports, military costs, and related security 
     costs, including intelligence, homeland security, sea lane 
     security and infrastructure, and other military activities;
       ``(xii) on oil imports, diplomatic and foreign policy 
     flexibility, and connections to geopolitical strife, 
     terrorism, and international development activities;
       ``(xiii) all relevant environmental hazards under the 
     jurisdiction of the Environmental Protection Agency; and
       ``(xiv) on well-to-wheels urban and local air emissions of 
     `pollutants' and their uninternalized costs;
       ``(F) the impact of the oil or energy intensity of the 
     United States economy on the sensitivity of the economy to 
     oil price changes, including the magnitude of gross domestic 
     product losses in response to short term price shocks or long 
     term price increases;
       ``(G) the impact of United States payments for oil imports 
     on political, economic, and military developments in unstable 
     or unfriendly oil exporting countries;
       ``(H) the uninternalized costs of pipeline and storage oil 
     seepage, and for risk of oil spills from production, 
     handling, and transport, and related landscape damage; and
       ``(I) additional relevant factors, as determined by the 
     Secretary.
       ``(6) When considering the value to consumers of a gallon 
     of gasoline saved, the Secretary of Transportation may not 
     use a value less than the greatest of--
       ``(A) the average national cost of a gallon of gasoline 
     sold in the United States during the 12-month period ending 
     on the date on which the new fuel economy standard is 
     proposed;
       ``(B) the most recent weekly estimate by the Energy 
     Information Administration of the Department of Energy of the 
     average national cost of a gallon of gasoline (all grades) 
     sold in the United States; or
       ``(C) the gasoline prices projected by the Energy 
     Information Administration for the 20-year period beginning 
     in the year following the year in which the standards are 
     established.
       ``(7) In prescribing standards under this subsection, the 
     Secretary may prescribe standards for 1 or more model years.
       ``(8)(A) Not later than December 31, 2016, the Secretary of 
     Transportation, the Secretary of Energy, and the 
     Administrator of the Environmental Protection Agency shall 
     submit a joint report to Congress on the state of global 
     automotive efficiency technology development, and on the 
     accuracy of tests used to measure fuel economy of automobiles 
     under section 32904(c), utilizing the study and assessment of 
     the National Academy of Sciences referred to in subparagraph 
     (B).
       ``(B) The Secretary shall enter into appropriate 
     arrangements with the National Academy of Sciences to conduct 
     a comprehensive study of the technological opportunities to 
     enhance fuel economy and an analysis and assessment of the 
     accuracy of fuel economy tests used by the Administrator of 
     the Environmental Protection Agency to measure fuel economy 
     for each model under section 32904(c). Such analysis and 
     assessment shall identify any additional factors or methods 
     that should be included in tests to measure fuel economy for 
     each model to more accurately reflect actual fuel economy of 
     automobiles. The Secretary and the Administrator of the 
     Environmental Protection Agency shall furnish, at the request 
     of the Academy, any information which the Academy determines 
     to be necessary to conduct the study, analysis, and 
     assessment under this subparagraph.
       ``(C) The report submitted under subparagraph (A) shall 
     include--
       ``(i) the study of the National Academy of Sciences 
     referred to in subparagraph (B); and
       ``(ii) an assessment by the Secretary of technological 
     opportunities to enhance fuel economy and opportunities to 
     increase overall fleet safety.
       ``(D) The report submitted under subparagraph (A) shall 
     identify and examine additional opportunities to reform the 
     regulatory structure under this chapter, including approaches 
     that seek to merge vehicle and fuel requirements into a 
     single system that achieves equal or greater reduction in 
     petroleum use and environmental benefits.
       ``(E) The report submitted under subparagraph (A) shall--
       ``(i) include conclusions reached by the Administrator of 
     the Environmental Protection Agency, as a result of detailed 
     analysis and public comment, on the accuracy of current fuel 
     economy tests;
       ``(ii) identify any additional factors that the 
     Administrator determines should be included in tests to 
     measure fuel economy for each model to more accurately 
     reflect actual fuel economy of automobiles; and
       ``(iii) include a description of options, formulated by the 
     Secretary and the Administrator, to incorporate such 
     additional factors in fuel economy tests in a manner that 
     will not effectively increase or decrease average fuel 
     economy for any automobile manufacturer.
       ``(F) There is authorized to be appropriated to the 
     Secretary such amounts as are required to carry out the 
     study, analysis, and assessment required by subparagraph 
     (B).''; and
       (D) in subsection (g)(2), by striking ``(and submit the 
     amendment to Congress when required under subsection (c)(2) 
     of this section)''.
       (2) Conforming amendments.--
       (A) In general.--Chapter 329 of title 49, United States 
     Code, is amended--
       (i) in section 32903--

       (I) by striking ``passenger'' each place it appears;
       (II) by striking ``section 32902(b)-(d) of this title'' 
     each place it appears and inserting ``subsection (c) or (d) 
     of section 32902'';
       (III) by striking subsection (e); and
       (IV) by redesignating subsection (f) as subsection (e); and

       (ii) in section 32904(a)--

       (I) by striking ``passenger'' each place it appears; and
       (II) in paragraph (1), by striking ``subject to'' and all 
     that follows through ``section 32902(b)-(d) of this title'' 
     and inserting ``subsection (c) or (d) of section 32902''.

       (B) Effective date.--The amendments made by subparagraph 
     (A) shall apply to automobiles manufactured after model year 
     2011.
       (e) Credit Trading and Compliance.--
       (1) Credit trading.--Section 32903(a) of title 49, United 
     States Code, is amended--
       (A) by inserting ``Credits earned by a manufacturer under 
     this section may be sold to any other manufacturer and used 
     as if earned by that manufacturer; except that credits earned 
     by a manufacturer described in section 32904(b)(1)(A)(i) may 
     not be sold to or purchased by a manufacturer described in 
     32904(b)(1)(A)(ii),'' after ``earns credits.''; and
       (B) by striking ``3 consecutive model years immediately'' 
     each place it appears and inserting ``model years''.
       (2) Treatment of imports.--
       (A) Conforming amendment.--Section 32904(b) is amended by 
     striking ``passenger'' each place it appears.
       (B) Applicability.--The amendments made by subparagraph (A) 
     shall apply to automobiles manufactured after model year 
     2011.
       (3) Multi-year compliance period.--Section 32904(c) of such 
     title is amended--
       (A) by inserting ``(1)'' before ``The Administrator''; and
       (B) by adding at the end the following:
       ``(2) The Secretary, by rule, may allow a manufacturer to 
     elect a multi-year compliance period of not more than 4 
     consecutive model years in lieu of the single model year 
     compliance period otherwise applicable under this chapter.''.
       (f) Consumer Tax Credit.--
       (1) Elimination on number of new qualified hybrid and 
     advanced lean burn technology vehicles eligible for 
     alternative motor vehicle credit.--
       (A) In general.--Section 30B of the Internal Revenue Code 
     of 1986 is amended--
       (i) in subsection (c)(2)(A), by inserting ``and highway'' 
     after ``city'' in each place it appears;
       (ii) in subsection (d)(2)(B)(ii), by inserting ``and 
     highway'' after ``city'' in each place it appears;
       (iii) by striking subsection (f);
       (iv) by redesignating subsections (g) through (j) as 
     subsections (f) through (i), respectively; and
       (v) in subsection (g)(2), as redesignated, by inserting 
     ``and highway'' after ``city'' in each place it appears.
       (B) Conforming amendments.--
       (i) Paragraphs (4) and (6) of section 30B(h) of such Code 
     are each amended by striking ``(determined without regard to 
     subsection (g))'' and inserting ``determined without regard 
     to subsection (f))''.
       (ii) Section 38(b)(25) of such Code is amended by striking 
     ``section 30B(g)(1)'' and inserting ``section 30B(f)(1)''.
       (iii) Section 55(c)(2) of such Code is amended by striking 
     ``section 30B(g)(2)'' and inserting ``section 30B(f)(2)''.
       (iv) Section 1016(a)(36) of such Code is amended by 
     striking ``section 30B(h)(4)'' and inserting ``section 
     30B(g)(4)''.
       (v) Section 6501(m) of such Code is amended by striking 
     ``section 30B(h)(9)'' and inserting ``section 30B(g)(9)''.
       (2) Extension of alternative vehicle credit for new 
     qualified hybrid motor vehicles.--Paragraph (3) of section 
     30B(i) of such Code (as redesignated by paragraph (1)) is 
     amended by striking ``December 31, 2009'' and inserting 
     ``December 31, 2010''.
       (3) Effective date.--The amendments made by this subsection 
     shall apply to property placed in service after December 31, 
     2005, in taxable years ending after such date.
       (g) Advanced Technology Motor Vehicles Manufacturing 
     Credit.--
       (1) In general.--Subpart B of part IV of subchapter A of 
     chapter 1 of the Internal Revenue Code of 1986 (relating to 
     foreign tax credit, etc.) is amended by adding at the end the 
     following:

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

       ``(a) Credit Allowed.--There shall be allowed as a credit 
     against the tax imposed by this chapter for the taxable year 
     an amount equal to 35 percent of the qualified investment of 
     an eligible taxpayer for such taxable year.

[[Page 15976]]

       ``(b) Qualified Investment.--For purposes of this section--
       ``(1) In general.--The qualified investment for any taxable 
     year is equal to the incremental costs incurred during such 
     taxable year--
       ``(A) to re-equip, expand, or establish any manufacturing 
     facility in the United States of the eligible taxpayer to 
     produce advanced technology motor vehicles or to produce 
     eligible components,
       ``(B) for engineering integration performed in the United 
     States of such vehicles and components as described in 
     subsection (d),
       ``(C) for research and development performed in the United 
     States related to advanced technology motor vehicles and 
     eligible components, and
       ``(D) for employee retraining with respect to the 
     manufacturing of such vehicles or components (determined 
     without regard to wages or salaries of such retrained 
     employees).
       ``(2) Attribution rules.--In the event a facility of the 
     eligible taxpayer produces both advanced technology motor 
     vehicles and conventional motor vehicles, or eligible and 
     non-eligible components, only the qualified investment 
     attributable to production of advanced technology motor 
     vehicles and eligible components shall be taken into account.
       ``(c) Definitions.--In this section:
       ``(1) Advanced technology motor vehicle.--The term 
     `advanced technology motor vehicle' means--
       ``(A) any qualified electric vehicle (as defined in section 
     30(c)(1)),
       ``(B) any new qualified fuel cell motor vehicle (as defined 
     in section 30B(b)(3)),
       ``(C) any new advanced lean burn technology motor vehicle 
     (as defined in section 30B(c)(3)),
       ``(D) any new qualified hybrid motor vehicle (as defined in 
     section 30B(d)(2)(A) and determined without regard to any 
     gross vehicle weight rating),
       ``(E) any new qualified alternative fuel motor vehicle (as 
     defined in section 30B(e)(4), including any mixed-fuel 
     vehicle (as defined in section 30B(e)(5)(B)), and
       ``(F) any other motor vehicle using electric drive 
     transportation technology (as defined in paragraph (3)).
       ``(2) Electric drive transportation technology.--The term 
     `electric drive transportation technology' means technology 
     used by vehicles that use an electric motor for all or part 
     of their motive power and that may or may not use off-board 
     electricity, such as battery electric vehicles, fuel cell 
     vehicles, engine dominant hybrid electric vehicles, plug-in 
     hybrid electric vehicles, and plug-in hybrid fuel cell 
     vehicles.
       ``(3) Eligible components.--The term `eligible component' 
     means any component inherent to any advanced technology motor 
     vehicle, including--
       ``(A) with respect to any gasoline or diesel-electric new 
     qualified hybrid motor vehicle--
       ``(i) electric motor or generator;
       ``(ii) power split device;
       ``(iii) power control unit;
       ``(iv) power controls;
       ``(v) integrated starter generator; or
       ``(vi) battery;
       ``(B) with respect to any hydraulic new qualified hybrid 
     motor vehicle--
       ``(i) accumulator or other energy storage device;
       ``(ii) hydraulic pump;
       ``(iii) hydraulic pump-motor assembly;
       ``(iv) power control unit; and
       ``(v) power controls;
       ``(C) with respect to any new advanced lean burn technology 
     motor vehicle--
       ``(i) diesel engine;
       ``(ii) turbo charger;
       ``(iii) fuel injection system; or
       ``(iv) after-treatment system, such as a particle filter or 
     NOx absorber; and
       ``(D) with respect to any advanced technology motor 
     vehicle, any other component submitted for approval by the 
     Secretary.
       ``(4) Eligible taxpayer.--The term `eligible taxpayer' 
     means any taxpayer if more than 20 percent of the taxpayer's 
     gross receipts for the taxable year is derived from the 
     manufacture of motor vehicles or any component parts of such 
     vehicles.
       ``(d) Engineering Integration Costs.--For purposes of 
     subsection (b)(1)(B), costs for engineering integration are 
     costs incurred prior to the market introduction of advanced 
     technology vehicles for engineering tasks related to--
       ``(1) establishing functional, structural, and performance 
     requirements for component and subsystems to meet overall 
     vehicle objectives for a specific application,
       ``(2) designing interfaces for components and subsystems 
     with mating systems within a specific vehicle application,
       ``(3) designing cost effective, efficient, and reliable 
     manufacturing processes to produce components and subsystems 
     for a specific vehicle application, and
       ``(4) validating functionality and performance of 
     components and subsystems for a specific vehicle application.
       ``(e) Limitation Based on Amount of Tax.--The credit 
     allowed under subsection (a) for the taxable year shall not 
     exceed the excess of--
       ``(1) the sum of--
       ``(A) the regular tax liability (as defined in section 
     26(b)) for such taxable year, plus
       ``(B) the tax imposed by section 55 for such taxable year 
     and any prior taxable year beginning after 1986 and not taken 
     into account under section 53 for any prior taxable year, 
     over
       ``(2) the sum of the credits allowable under subpart A and 
     sections 27, 30, and 30B for the taxable year.
       ``(f) Reduction in Basis.--For purposes of this subtitle, 
     if a credit is allowed under this section for any expenditure 
     with respect to any property, the increase in the basis of 
     such property which would (but for this paragraph) result 
     from such expenditure shall be reduced by the amount of the 
     credit so allowed.
       ``(g) No Double Benefit.--
       ``(1) Coordination with other deductions and credits.--
     Except as provided in paragraph (2), the amount of any 
     deduction or other credit allowable under this chapter for 
     any cost taken into account in determining the amount of the 
     credit under subsection (a) shall be reduced by the amount of 
     such credit attributable to such cost.
       ``(2) Research and development costs.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     any amount described in subsection (b)(1)(C) taken into 
     account in determining the amount of the credit under 
     subsection (a) for any taxable year shall not be taken into 
     account for purposes of determining the credit under section 
     41 for such taxable year.
       ``(B) Costs taken into account in determining base period 
     research expenses.--Any amounts described in subsection 
     (b)(1)(C) taken into account in determining the amount of the 
     credit under subsection (a) for any taxable year which are 
     qualified research expenses (within the meaning of section 
     41(b)) shall be taken into account in determining base period 
     research expenses for purposes of applying section 41 to 
     subsequent taxable years.
       ``(h) Business Carryovers Allowed.--If the credit allowable 
     under subsection (a) for a taxable year exceeds the 
     limitation under subsection (e) for such taxable year, such 
     excess (to the extent of the credit allowable with respect to 
     property subject to the allowance for depreciation) shall be 
     allowed as a credit carryback to each of the 15 taxable years 
     immediately preceding the unused credit year and as a 
     carryforward to each of the 20 taxable years immediately 
     following the unused credit year.
       ``(i) Special Rules.--For purposes of this section, rules 
     similar to the rules of section 179A(e)(4) and paragraphs (1) 
     and (2) of section 41(f) shall apply
       ``(j) Election Not to Take Credit.--No credit shall be 
     allowed under subsection (a) for any property if the taxpayer 
     elects not to have this section apply to such property.
       ``(k) Regulations.--The Secretary shall prescribe such 
     regulations as necessary to carry out the provisions of this 
     section.
       ``(l) Termination.--This section shall not apply to any 
     qualified investment after December 31, 2010.''.
       (2) Conforming amendments.--
       (A) Section 1016(a) of the Internal Revenue Code of 1986 is 
     amended by striking ``and'' at the end of paragraph (36), by 
     striking the period at the end of paragraph (37) and 
     inserting ``, and'', and by adding at the end the following:
       ``(38) to the extent provided in section 30D(g).''.
       (B) Section 6501(m) of such Code is amended by inserting 
     ``30D(k),'' after ``30C(e)(5),''.
       (C) The table of sections for subpart B of part IV of 
     subchapter A of chapter 1 of such Code is amended by 
     inserting after the item relating to section 30C the 
     following:

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

       (3) Effective date.--The amendments made by this subsection 
     shall apply to amounts incurred in taxable years beginning 
     after December 31, 1999.
                                 ______
                                 
  SA 4710. Mr. OBAMA (for himself and Mrs. Clinton) submitted an 
amendment intended to be proposed by him to the bill S. 3711, to 
enhance the energy independence and security of the United States by 
providing for exploration, development, and production activities for 
mineral resources in the Gulf of Mexico, and for other purposes; which 
was ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

                   TITLE __--HEALTH CARE FOR HYBRIDS

     SEC. _01. SHORT TITLE.

       This title may be cited as the ``Health Care for Hybrids 
     Act''.

     SEC. _02. FINDINGS.

       Congress makes the following findings:
       (1) The United States imports over half the oil it 
     consumes.
       (2) According to present trends, the United States reliance 
     on foreign oil will increase to 68 percent of its total 
     consumption by 2025.
       (3) With only 3 percent of the world's known oil reserves, 
     the health of the United States economy is dependent on world 
     oil prices.
       (4) World oil prices are overwhelmingly dictated by 
     countries other than the United States, thus endangering our 
     economic and national security.

[[Page 15977]]

       (5) Legacy health care costs associated with retiree 
     workers are an increasing burden on the global 
     competitiveness of American industries.
       (6) American automakers have lagged behind their foreign 
     competitors in producing hybrid and other energy efficient 
     automobiles.
       (7) Innovative uses of new technology in automobiles in the 
     United States will help retain American jobs, support health 
     care obligations for retiring workers in the automotive 
     sector, decrease America's dependence on foreign oil, and 
     address pressing environmental concerns.

                          Subtitle A--Program

     SEC. _11. COORDINATING TASK FORCE.

       Not later than 6 months after the date of enactment of this 
     Act, the Secretary of Energy, the Secretary of Health and 
     Human Services, the Secretary of Transportation, and the 
     Secretary of the Treasury shall establish, and appoint an 
     equal number of representatives to, a task force (referred to 
     in this Act as the ``task force'') to administer the program 
     established under this Act.

     SEC. _12. ESTABLISHMENT OF PROGRAM.

       (a) In General.--Not later than 1 year after the date of 
     enactment of this Act, the task force established under 
     section _11 shall establish a program to provide financial 
     assistance to eligible domestic automobile manufacturers for 
     the costs incurred in providing health benefits to their 
     retired employees.
       (b) Consultation.--In establishing the program under 
     subsection (a), the task force shall consult with 
     representatives from the domestic automobile manufacturers, 
     unions representing employees of such manufacturers, and 
     consumer and environmental groups.
       (c) Eligible Domestic Automobile Manufacturer.--To be 
     eligible to receive financial assistance under the program 
     established under subsection (a), a domestic automobile 
     manufacturer shall--
       (1) submit an application to the task force at such time, 
     in such manner, and containing such information as the task 
     force shall require;
       (2) certify that such manufacturer is providing full health 
     care coverage to all of its domestic employees;
       (3) provide an assurance that the manufacturer will invest 
     an amount equal to not less than 50 percent of the amount of 
     health savings derived by the manufacturer as a result of its 
     retiree health care costs being covered under the program 
     under this section, in--
       (A) the domestic manufacture and commercialization of 
     petroleum fuel reduction technologies, including alternative 
     or flexible fuel vehicles, hybrids, and other state-of-the-
     art fuel saving technologies;
       (B) the retraining of workers and retooling of assembly 
     lines for such domestic manufacture and commercialization;
       (C) research and development, design, commercialization, 
     and other costs related to the diversifying of domestic 
     production of automobiles through the offering of high 
     performance fuel efficient vehicles; and
       (D) assisting domestic automobile component suppliers to 
     retool their domestic manufacturing plants to produce 
     components for petroleum fuel reduction technologies, 
     including alternative or flexible fuel vehicles, hybrid, 
     advanced diesel, or other state-of-the-art fuel saving 
     technologies; and
       (4) provide additional assurances and information as the 
     task force may require, including information needed by the 
     task force to audit the manufacturer's compliance with the 
     requirements of the program.
       (d) Limitation.--The total amount of financial assistance 
     that may be provided each year under the program under this 
     section with respect to any single domestic automobile 
     manufacturer shall not exceed an amount equal to 10 percent 
     of the retiree health care costs of that manufacturer for 
     that year.

     SEC. _13. REPORTING.

       Not later than 6 months after the date of enactment of this 
     Act, and every 6 months thereafter, the task force shall 
     submit to Congress a report on any financial assistance 
     provided under this program under this Act and the resulting 
     changes in the manufacture and commercialization of fuel 
     saving technologies implemented by auto manufacturers as a 
     result of such financial assistance. Not later than 1 year 
     after the date of enactment of this Act, the task force shall 
     submit a report to Congress on the effectiveness of current 
     consumer incentives available for the purchase of hybrid 
     vehicles in encouraging the purchase of such vehicles and 
     whether these incentives should be expanded.

     SEC. _14. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated, such sums as may 
     be necessary in each fiscal year to carry out this Act.

     SEC. _15. LIMITATION ON BACKSLIDING.

       To be eligible to receive financial assistance under this 
     subtitle, a manufacturer shall provide assurances to the task 
     force that fuel savings achieved with respect its average 
     adjusted fuel economy will not result in decreases with 
     respect to fuel economy elsewhere in the domestic fleet. The 
     task force shall determine compliance with such assurances 
     using accepted measurements of fuel savings.

     SEC. _16. TERMINATION OF PROGRAM.

       The program established under this subtitle shall terminate 
     on December 31, 2015.

                          Subtitle B--Offsets

     SEC. _21. CLARIFICATION OF ECONOMIC SUBSTANCE DOCTRINE.

       (a) In General.--Section 7701 of the Internal Revenue Code 
     of 1986 is amended by redesignating subsection (o) as 
     subsection (p) and by inserting after subsection (n) the 
     following new subsection:
       ``(o) Clarification of Economic Substance Doctrine; Etc.--
       ``(1) General rules.--
       ``(A) In general.--In any case in which a court determines 
     that the economic substance doctrine is relevant for purposes 
     of this title to a transaction (or series of transactions), 
     such transaction (or series of transactions) shall have 
     economic substance only if the requirements of this paragraph 
     are met.
       ``(B) Definition of economic substance.--For purposes of 
     subparagraph (A)--
       ``(i) In general.--A transaction has economic substance 
     only if--

       ``(I) the transaction changes in a meaningful way (apart 
     from Federal tax effects) the taxpayer's economic position, 
     and
       ``(II) the taxpayer has a substantial nontax purpose for 
     entering into such transaction and the transaction is a 
     reasonable means of accomplishing such purpose.

     In applying subclause (II), a purpose of achieving a 
     financial accounting benefit shall not be taken into account 
     in determining whether a transaction has a substantial nontax 
     purpose if the origin of such financial accounting benefit is 
     a reduction of income tax
       ``(ii) Special rule where taxpayer relies on profit 
     potential.--A transaction shall not be treated as having 
     economic substance by reason of having a potential for profit 
     unless--

       ``(I) the present value of the reasonably expected pre-tax 
     profit from the transaction is substantial in relation to the 
     present value of the expected net tax benefits that would be 
     allowed if the transaction were respected, and
       ``(II) the reasonably expected pre-tax profit from the 
     transaction exceeds a risk-free rate of return.

       ``(C) Treatment of fees and foreign taxes.--Fees and other 
     transaction expenses and foreign taxes shall be taken into 
     account as expenses in determining pre-tax profit under 
     subparagraph (B)(ii).
       ``(2) Special rules for transaction 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

[[Page 15978]]

     this subsection, the provisions of this subsection shall not 
     be construed as altering or supplanting any other rule of 
     law, and the requirements of this subsection shall be 
     construed as being in addition to any such other rule of law.
       ``(5) Regulations.--The Secretary shall prescribe such 
     regulations as may be necessary or appropriate to carry out 
     the purposes of this subsection. Such regulations may include 
     exemptions from the application of this subsection.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to transactions entered into after the date of 
     the enactment of this Act.

     SEC. _22. PENALTY FOR UNDERSTATEMENTS ATTRIBUTABLE TO 
                   TRANSACTIONS LACKING ECONOMIC SUBSTANCE, ETC.

       (a) In General.--Subchapter A of chapter 68 of the Internal 
     Revenue Code of 1986 is amended by inserting after section 
     6662A the following new section:

     ``SEC. 6662A. PENALTY FOR UNDERSTATEMENTS ATTRIBUTABLE TO 
                   TRANSACTIONS LACKING ECONOMIC SUBSTANCE, ETC.

       ``(a) Imposition of Penalty.--If a taxpayer has an 
     noneconomic substance transaction understatement for any 
     taxable year, there shall be added to the tax an amount equal 
     to 40 percent of the amount of such understatement.
       ``(b) Reduction of Penalty for Disclosed Transactions.--
     Subsection (a) shall be applied by substituting `20 percent' 
     for `40 percent' with respect to the portion of any 
     noneconomic substance transaction understatement with respect 
     to which the relevant facts affecting the tax treatment of 
     the item are adequately disclosed in the return or a 
     statement attached to the return.
       ``(c) Noneconomic Substance Transaction Understatement.--
     For purposes of this section--
       ``(1) In general.--The term `noneconomic substance 
     transaction understatement' means any amount which would be 
     an understatement under section 6662A(b)(1) if section 6662A 
     were applied by taking into account items attributable to 
     noneconomic substance transactions rather than items to which 
     section 6662A would apply without regard to this paragraph.
       ``(2) Noneconomic substance transaction.--The term 
     `noneconomic substance transaction' means any transaction 
     if--
       ``(A) there is a lack of economic substance (within the 
     meaning of section 7701(o)(1)) for the transaction giving 
     rise to the claimed benefit or the transaction was not 
     respected under section 7701(o)(2), or
       ``(B) the transaction fails to meet the requirements of any 
     similar rule of law.
       ``(d) Rules Applicable to Compromise of Penalty.--
       ``(1) In general.--If the 1st letter of proposed deficiency 
     which allows the taxpayer an opportunity for administrative 
     review in the Internal 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) of the 
     Internal Revenue Code of 1986 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 of the Internal Revenue 
     Code of 1986 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:
       ``(3) 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 of the Internal Revenue 
     Code of 1986 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 of the Internal Revenue Code of 
     1986 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. _23. DENIAL OF DEDUCTION FOR INTEREST ON UNDERPAYMENTS 
                   ATTRIBUTABLE TO NONECONOMIC SUBSTANCE 
                   TRANSACTIONS.

       (a) In General.--Section 163(m) of the Internal Revenue 
     Code of 1986 (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.
                                 ______
                                 
  SA 4711. Mr. OBAMA (for himself and Mr. Lugar) submitted an amendment 
intended to be proposed by him to the bill S. 3711, to enhance the 
energy independence and security of the United States by providing for 
exploration, development, and production activities for mineral 
resources in the Gulf of Mexico, and for other purposes; which was 
ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

                      TITLE __--ALTERNATIVE FUELS

     SEC. __01. OFFICE OF ENERGY SECURITY.

       (a) Definitions.--In this section:
       (1) Director.--The term ``Director'' means the Director of 
     Energy Security appointed under subsection (c)(1).
       (2) Office.--The term ``Office'' means the Office of Energy 
     Security established by subsection (b).
       (b) Establishment.--There is established in the Executive 
     Office of the President the Office of Energy Security.
       (c) Director.--
       (1) In general.--The Office shall be headed by a Director, 
     who shall be appointed by the President, by and with the 
     advice and consent of the Senate.
       (2) Rate of pay.--The Director shall be paid at a rate of 
     pay equal to level I of the Executive Schedule under section 
     5312 of title 5, United States Code.
       (d) Responsibilities.--
       (1) In general.--The Office, acting through the Director, 
     shall be responsible for overseeing all Federal energy 
     security programs, including the coordination of efforts of 
     Federal agencies to assist the United States in achieving 
     full energy independence.
       (2) Specific responsibilities.--In carrying out paragraph 
     (1), the Director shall--
       (A) serve as head of the energy community;
       (B) act as the principal advisor to the President, the 
     National Security Council, the National Economic Council, the 
     Domestic Policy Council, and the Homeland Security Council 
     with respect to intelligence matters relating to energy 
     security;
       (C) with request to budget requests and appropriations for 
     Federal programs relating to energy security--
       (i) consult with the President and the Director of the 
     Office of Management and Budget with respect to each major 
     Federal budgetary decision relating to energy security of the 
     United States;
       (ii) based on priorities established by the President, 
     provide to the heads of departments containing agencies or 
     organizations within the energy community, and to the heads 
     of such agencies and organizations, guidance for use in 
     developing the budget for Federal programs relating to energy 
     security;
       (iii) based on budget proposals provided to the Director by 
     the heads of agencies and organizations described in clause 
     (ii), develop and determine an annual consolidated budget for 
     Federal programs relating to energy security; and

[[Page 15979]]

       (iv) present the consolidated budget, together with any 
     recommendations of the Director and any heads of agencies and 
     organizations described in clause (ii), to the President for 
     approval;
       (D) establish and meet regularly with a council of business 
     and labor leaders to develop and provide to the President and 
     Congress recommendations relating to the impact of energy 
     supply and prices on economic growth;
       (E) submit to Congress an annual report that describes the 
     progress of the United States toward the goal of achieving 
     full energy independence; and
       (F) carry out such other responsibilities as the President 
     may assign.
       (e) Staff.--
       (1) In general.--The Director may, without regard to the 
     civil service laws (including regulations), appoint and 
     terminate such personnel as are necessary to enable the 
     Director to carry out the responsibilities of the Director 
     under this section.
       (2) Compensation.--
       (A) In general.--Except as provided in subparagraph (B), 
     the Director may fix the compensation of personnel without 
     regard to the provisions of chapter 51 and subchapter III of 
     chapter 53 of title 5, United States Code, relating to 
     classification of positions and General Schedule pay rates.
       (B) Maximum rate of pay.--The rate of pay for the personnel 
     appointed by the Director shall not exceed the rate payable 
     for level V of the Executive Schedule under section 5316 of 
     title 5, United States Code.
       (f) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as are necessary to carry out 
     this section.

     SEC. __02. CREDIT FOR PRODUCTION OF QUALIFIED FLEXIBLE FUEL 
                   MOTOR VEHICLES.

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

     ``SEC. 45N. PRODUCTION OF QUALIFIED FLEXIBLE FUEL MOTOR 
                   VEHICLES.

       ``(a) Allowance of Credit.--For purposes of section 38, the 
     qualified flexible fuel motor vehicle production credit 
     determined under this section for any taxable year is an 
     amount equal to $100 for each qualified flexible fuel motor 
     vehicle produced in the United States by the manufacturer 
     during the taxable year.
       ``(b) Qualified Flexible Fuel Motor Vehicle.--For purposes 
     of this section, the term `qualified flexible fuel motor 
     vehicle' means a flexible fuel motor vehicle--
       ``(1) the production of which is not required for the 
     manufacturer to meet--
       ``(A) the maximum credit allowable for vehicles described 
     in paragraph (2) in determining the fleet average fuel 
     economy requirements (as determined under section 32904 of 
     title 49, United States Code) of the manufacturer for the 
     model year ending in the taxable year, or
       ``(B) the requirements of any other provision of Federal 
     law, and
       ``(2) which is designed so that the vehicle is propelled by 
     an engine which can use as a fuel a gasoline mixture of which 
     85 percent (or another percentage of not less than 70 
     percent, as the Secretary may determine, by rule, to provide 
     for requirements relating to cold start, safety, or vehicle 
     functions) of the volume of consists of ethanol.
       ``(c) Other Definitions and Special Rules.--For purposes of 
     this section--
       ``(1) Motor vehicle.--The term `motor vehicle' has the 
     meaning given such term by section 30(c)(2).
       ``(2) Manufacturer.--The term `manufacturer' has the 
     meaning given such term in regulations prescribed by the 
     Administrator of the Environmental Protection Agency for 
     purposes of the administration of title II of the Clean Air 
     Act (42 U.S.C. 7521 et seq.).
       ``(3) Reduction in basis.--For purposes of this subtitle, 
     if a credit is allowed under this section for any expenditure 
     with respect to any property, the increase in the basis of 
     such property which would (but for this paragraph) result 
     from such expenditure shall be reduced by the amount of the 
     credit so allowed.
       ``(4) No double benefit.--The amount of any deduction or 
     credit allowable under this chapter (other than the credits 
     allowable under this section and section 30B) shall be 
     reduced by the amount of credit allowed under subsection (a) 
     for such vehicle for the taxable year.
       ``(5) Election not to take credit.--No credit shall be 
     allowed under subsection (a) for any vehicle if the taxpayer 
     elects to not have this section apply to such vehicle.
       ``(6) Termination.--This section shall not apply to any 
     vehicle produced after December 31, 2010.
       ``(7) Cross reference.--For an election to claim certain 
     minimum tax credits in lieu of the credit determined under 
     this section, see section 53(e).''.
       (b) Credit Allowed Against the Alternative Minimum Tax.--
     Section 38(c)(4)(B) of the Internal Revenue Code of 1986 
     (defining specified credits) is amended by striking the 
     period at the end of clause (ii)(II) and inserting ``, and'', 
     and by adding at the end the following new clause:
       ``(iii) the credit determined under section 45N.''.
       (c) Election to Use Additional AMT Credit.--Section 53 of 
     the Internal Revenue Code of 1986 (relating to credit for 
     prior year minimum tax liability) is amended by adding at the 
     end the following new subsection:
       ``(e) Additional Credit in Lieu of Flexible Fuel Motor 
     Vehicle Credit.--
       ``(1) In general.--In the case of a taxpayer making an 
     election under this subsection for a taxable year, the amount 
     otherwise determined under subsection (c) shall be increased 
     by any amount of the credit determined under section 45N for 
     such taxable year which the taxpayer elects not to claim 
     pursuant to such election.
       ``(2) Election.--A taxpayer may make an election for any 
     taxable year not to claim any amount of the credit allowable 
     under section 45N with respect to property produced by the 
     taxpayer during such taxable year. An election under this 
     subsection may only be revoked with the consent of the 
     Secretary.
       ``(3) Credit refundable.--The aggregate increase in the 
     credit allowed by this section for any taxable year by reason 
     of this subsection shall for purposes of this title (other 
     than subsection (b)(2) of this section) be treated as a 
     credit allowed to the taxpayer under subpart C.''.
       (d) Conforming Amendments.--Section 38(b) of the Internal 
     Revenue Code of 1986 is amended by striking ``and'' at the 
     end of paragraph (29), by striking the period at the end of 
     paragraph (30) and inserting a comma, and by adding at the 
     end the following new paragraph:
       ``(31) the qualified flexible fuel motor vehicle production 
     credit determined under section 45N, plus''.
       (e) Clerical Amendment.--The table of sections for subpart 
     D of part IV of subchapter A of chapter 1 of the Internal 
     Revenue Code of 1986 is amended by adding at the end the 
     following new item:

``Sec. 45N. Production of qualified flexible fuel motor vehicles''.
       (f) Effective Date.--The amendments made by this section 
     shall apply to motor vehicles produced in model years ending 
     after the date of the enactment of this Act.

     SEC. __03. INCENTIVES FOR THE RETAIL SALE OF ALTERNATIVE 
                   FUELS AS MOTOR VEHICLE FUEL.

       (a) In General.--Subpart D of part IV of subchapter A of 
     chapter 1 of the Internal Revenue Code of 1986 (relating to 
     business related credits) is amended by inserting after 
     section 40A the following new section:

     ``SEC. 40B. CREDIT FOR RETAIL SALE OF ALTERNATIVE FUELS AS 
                   MOTOR VEHICLE FUEL.

       ``(a) General Rule.--The alternative fuel retail sales 
     credit for any taxable year is the applicable amount for each 
     gallon of alternative fuel sold at retail by the taxpayer 
     during such year.
       ``(b) Applicable Amount.--For purposes of this section, the 
     applicable amount shall be determined in accordance with the 
     following table:

``In the case of any sale:    The applicable amount for each gallon is:
Before 2009...................................................35 cents 
During 2009 or 2010...........................................20 cents 
During 2011.................................................10 cents.''
       ``(c) Definitions.--For purposes of this section--
       ``(1) Alternative fuel.--The term `alternative fuel' means 
     any fuel at least 85 percent (or another percentage of not 
     less than 70 percent, as the Secretary may determine, by 
     rule, to provide for requirements relating to cold start, 
     safety, or vehicle functions) of the volume of which consists 
     of ethanol.
       ``(2) Sold at retail.--
       ``(A) In general.--The term `sold at retail' means the 
     sale, for a purpose other than resale, after manufacture, 
     production, or importation.
       ``(B) Use treated as sale.--If any person uses alternative 
     fuel (including any use after importation) as a fuel to 
     propel any qualified alternative fuel motor vehicle (as 
     defined in this section) before such fuel is sold at retail, 
     then such use shall be treated in the same manner as if such 
     fuel were sold at retail as a fuel to propel such a vehicle 
     by such person.
       ``(3) Qualified alternative fuel motor vehicle.--The term 
     `new qualified alternative fuel motor vehicle' means any 
     motor vehicle--
       ``(A) which is capable of operating on an alternative fuel,
       ``(B) the original use of which commences with the 
     taxpayer,
       ``(C) which is acquired by the taxpayer for use or lease, 
     but not for resale, and
       ``(D) which is made by a manufacturer.
       ``(d) Election To Pass Credit.--A person which sells 
     alternative fuel at retail may elect to pass the credit 
     allowable under this section to the purchaser of such fuel 
     or, in the event the purchaser is a tax-exempt entity or 
     otherwise declines to accept such credit, to the person which 
     supplied such fuel, under rules established by the Secretary.
       ``(e) Pass-Thru in the Case of Estates and Trusts.--Under 
     regulations prescribed by the Secretary, rules similar to the 
     rules of subsection (d) of section 52 shall apply.
       ``(f) Termination.--This section shall not apply to any 
     fuel sold at retail after December 31, 2011.''.

[[Page 15980]]

       (b) Credit Treated as Business Credit.--Section 38(b) of 
     the Internal Revenue Code of 1986 (relating to current year 
     business credit) (as amended by section 3(d)) is amended by 
     adding at the end the following new paragraph:
       ``(32) the alternative fuel retail sales credit determined 
     under section 40B(a).''.
       (c) Clerical Amendment.--The table of sections for subpart 
     D of part IV of subchapter A of chapter 1 of the Internal 
     Revenue Code of 1986 is amended by inserting after the item 
     relating to section 40A the following new item:

``Sec. 40B. Credit for retail sale of alternative fuels as motor 
              vehicle fuel''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to fuel sold at retail after the date of 
     enactment of this Act, in taxable years ending after such 
     date.

     SEC. __04. ALTERNATIVE DIESEL FUEL CONTENT OF DIESEL.

       (a) Findings.--Congress finds that--
       (1) section 211(o) of the Clean Air Act (42 U.S.C. 7535(o)) 
     (as amended by section 1501 of the Energy Policy Act of 2005 
     (Public Law 109-58)) established a renewable fuel program 
     under which entities in the petroleum sector are required to 
     blend renewable fuels into motor vehicle fuel based on the 
     gasoline motor pool;
       (2) the need for energy diversification is greater as of 
     the date of enactment of this Act than it was only months 
     before the date of enactment of the Energy Policy Act (Public 
     Law 109-58; 119 Stat. 594); and
       (3)(A) the renewable fuel program under section 211(o) of 
     the Clean Air Act requires a small percentage of the gasoline 
     motor pool, totaling nearly 140,000,000,000 gallons, to 
     contain a renewable fuel; and
       (B) the small percentage requirement described in 
     subparagraph (A) does not include the 40,000,000,000-gallon 
     diesel motor pool.
       (b) Alternative Diesel Fuel Program for Diesel Motor 
     Pool.--Section 211 of the Clean Air Act (42 U.S.C. 7545) is 
     amended by inserting after subsection (o) the following:
       ``(p) Alternative Diesel Fuel Program for Diesel Motor 
     Pool.--
       ``(1) Definition of alternative diesel fuel.--
       ``(A) In general.--In this subsection, the term 
     `alternative diesel fuel' means biodiesel (as defined in 
     section 312(f) of the Energy Policy Act of 1992 (42 U.S.C. 
     13220(f))) and any blending components derived from 
     alternative fuel (provided that only the alternative fuel 
     portion of any such blending component shall be considered to 
     be part of the applicable volume under the alternative diesel 
     fuel program established by this subsection).
       ``(B) Inclusions.--The term `alternative diesel fuel' 
     includes a diesel fuel substitute produced from--
       ``(i) animal fat;
       ``(ii) vegetable oil;
       ``(iii) recycled yellow grease;
       ``(iv) thermal depolymerization;
       ``(v) thermochemical conversion;
       ``(vi) the coal-to-liquid process (including the Fischer-
     Tropsch process); or
       ``(vii) a diesel-ethanol blend of not less than 7 percent 
     ethanol.
       ``(2) Alternative diesel fuel program.--
       ``(A) Regulations.--
       ``(i) In general.--Not later than 1 year after the date of 
     enactment of this subsection, the Administrator shall 
     promulgate regulations to ensure that diesel sold or 
     introduced into commerce in the United States (except in 
     noncontiguous States or territories), on an annual average 
     basis, contains the applicable volume of alternative diesel 
     fuel determined in accordance with subparagraph (B).
       ``(ii) Provisions of regulations.--Regardless of the date 
     of promulgation, the regulations promulgated under clause 
     (i)--

       ``(I) shall contain compliance provisions applicable to 
     refineries, blenders, distributors, and importers, as 
     appropriate, to ensure that the requirements of this 
     paragraph are met; but
       ``(II) shall not--

       ``(aa) restrict geographic areas in which alternative 
     diesel fuel may be used; or
       ``(bb) impose any per-gallon obligation for the use of 
     alternative diesel fuel.
       ``(iii) Requirement in case of failure to promulgate 
     regulations.--If the Administrator fails to promulgate 
     regulations under clause (i), the percentage of alternative 
     diesel fuel in the diesel motor pool sold or dispensed to 
     consumers in the United States, on a volume basis, shall be 
     0.6 percent for calendar year 2008.
       ``(B) Applicable volume.--
       ``(i) Calendar years 2008 through 2015.--For the purpose of 
     subparagraph (A), the applicable volume for any of calendar 
     years 2008 through 2015 shall be determined in accordance 
     with the following table:

``Applicable volume of Alternative diesel fuel in diesel motor pool (in 
  millions of gallons):                                  Calendar year:
  250.........................................................2008 ....

  500.........................................................2009 ....

  750.........................................................2010 ....

  1,000.......................................................2011 ....

  1,250.......................................................2012 ....

  1,500.......................................................2013 ....

  1,750.......................................................2014 ....

  2,000.......................................................2015.....

       ``(ii) Calendar year 2016 and thereafter.--The applicable 
     volume for calendar year 2016 and each calendar year 
     thereafter shall be determined by the Administrator, in 
     coordination with the Secretary of Agriculture and the 
     Secretary of Energy, based on a review of the implementation 
     of the program during calendar years 2008 through 2015, 
     including a review of--

       ``(I) the impact of the use of alternative diesel fuels on 
     the environment, air quality, energy security, job creation, 
     and rural economic development; and
       ``(II) the expected annual rate of future production of 
     alternative diesel fuels to be used as a blend component or 
     replacement to the diesel motor pool.

       ``(iii) Minimum applicable volume.--For the purpose of 
     subparagraph (A), the applicable volume for calendar year 
     2016 and each calendar year thereafter shall be equal to the 
     product obtained by multiplying--

       ``(I) the number of gallons of diesel that the 
     Administrator estimates will be sold or introduced into 
     commerce during the calendar year; and
       ``(II) the ratio that--

       ``(aa) 2,000,000,000 gallons of alternative diesel fuel; 
     bears to
       ``(bb) the number of gallons of diesel sold or introduced 
     into commerce during calendar year 2015.
       ``(3) Applicable percentages.--
       ``(A) Provision of estimate of volumes of diesel sales.--
     Not later than October 31 of each of calendar years 2007 
     through 2015, the Administrator of the Energy Information 
     Administration shall provide to the Administrator an 
     estimate, with respect to the following calendar year, of the 
     volumes of diesel projected to be sold or introduced into 
     commerce in the United States.
       ``(B) Determination of applicable percentages.--
       ``(i) In general.--Not later than November 30 of each of 
     calendar years 2008 through 2015, based on the estimate 
     provided under subparagraph (A), the Administrator shall 
     determine and publish in the Federal Register, with respect 
     to the following calendar year, the alternative diesel fuel 
     obligation that ensures that the requirements of paragraph 
     (2) are met.
       ``(ii) Required elements.--The alternative diesel fuel 
     obligation determined for a calendar year under clause (i) 
     shall--

       ``(I) be applicable to refineries, blenders, and importers, 
     as appropriate;
       ``(II) be expressed in terms of a volume percentage of 
     diesel sold or introduced into commerce in the United States; 
     and
       ``(III) subject to subparagraph (C), consist of a single 
     applicable percentage that applies to all categories of 
     persons described in subclause (I).

       ``(C) Adjustments.--In determining the applicable 
     percentage for a calendar year, the Administrator shall make 
     adjustments to prevent the imposition of redundant 
     obligations on any person described in subparagraph 
     (B)(ii)(I).
       ``(4) Credit program.--
       ``(A) In general.--The regulations promulgated pursuant to 
     paragraph (2)(A) shall provide for the generation of an 
     appropriate amount of credits by any person that refines, 
     blends, or imports diesel that contains a quantity of 
     alternative diesel fuel that is greater than the quantity 
     required under paragraph (2).
       ``(B) Use of credits.--A person that generates a credit 
     under subparagraph (A) may use the credit, or transfer all or 
     a portion of the credit to another person, for the purpose of 
     complying with regulations promulgated pursuant to paragraph 
     (2).
       ``(C) Duration of credits.--A credit generated under this 
     paragraph shall be valid during the 1-year period beginning 
     on the date on which the credit is generated.
       ``(D) Inability to generate or purchase sufficient 
     credits.--The regulations promulgated pursuant to paragraph 
     (2)(A) shall include provisions allowing any person that is 
     unable to generate or purchase sufficient credits under 
     subparagraph (A) to meet the requirements of paragraph (2) by 
     carrying forward a credit generated during a previous year on 
     the condition that the person, during the calendar year 
     following the year in which the alternative diesel fuel 
     deficit is created--
       ``(i) achieves compliance with the alternative diesel fuel 
     requirement under paragraph (2); and
       ``(ii) generates or purchases additional credits under 
     subparagraph (A) to offset the deficit of the previous year.
       ``(5) Waivers.--
       ``(A) In general.--The Administrator, in consultation with 
     the Secretary of Agriculture and the Secretary of Energy, may 
     waive the requirements of paragraph (2) in whole or in part 
     on receipt of a petition of 1 or more States by reducing the 
     national quantity of alternative diesel fuel for the diesel 
     motor pool required under paragraph (2) based on a 
     determination by the Administrator, after public notice and 
     opportunity for comment, that--
       ``(i) implementation of the requirement would severely harm 
     the economy or environment of a State, a region, or the 
     United States; or

[[Page 15981]]

       ``(ii) there is an inadequate domestic supply of 
     alternative diesel fuel.
       ``(B) Petitions for waivers.--Not later than 90 days after 
     the date on which the Administrator receives a petition under 
     subparagraph (A), the Administrator, in consultation with the 
     Secretary of Agriculture and the Secretary of Energy, shall 
     approve or disapprove the petition.
       ``(C) Termination of waivers.--
       ``(i) In general.--Except as provided in clause (ii), a 
     waiver under subparagraph (A) shall terminate on the date 
     that is 1 year after the date on which the waiver is 
     provided.
       ``(ii) Exception.--The Administrator, in consultation with 
     the Secretary of Agriculture and the Secretary of Energy, may 
     extend a waiver under subparagraph (A), as the Administrator 
     determines to be appropriate.''.
       (c) Penalties and Enforcement.--Section 211(d) of the Clean 
     Air Act (42 U.S.C. 7545(d)) is amended--
       (1) in paragraph (1), by striking ``or (o)'' each place it 
     appears and inserting ``(o), or (p)''; and
       (2) in paragraph (2), by striking ``and (o)'' each place it 
     appears and inserting ``(o), and (p)''.
       (d) Technical Amendments.--Section 211 of the Clean Air Act 
     (42 U.S.C. 7545) is amended--
       (1) in subsection (i)(4), by striking ``section 324'' each 
     place it appears and inserting ``section 325'';
       (2) in subsection (k)(10), by indenting subparagraphs (E) 
     and (F) appropriately;
       (3) in subsection (n), by striking ``section 219(2)'' and 
     inserting ``section 216(2)'';
       (4) by redesignating the second subsection (r) and 
     subsection (s) as subsections (s) and (t), respectively; and
       (5) in subsection (t)(1) (as redesignated by paragraph 
     (4)), by striking ``this subtitle'' and inserting ``this 
     part''.

     SEC. __05. EXCISE TAX CREDIT FOR CELLULOSIC BIOMASS ETHANOL.

       (a) In General.--Paragraph (2) of section 6426(b) of the 
     Internal Revenue Code of 1986 (relating to alcohol fuel 
     mixture credit) is amended by adding at the end the following 
     new subparagraph:
       ``(C) Cellulosic biomass ethanol.--In the case of an 
     alcohol fuel mixture consisting of cellulosic biomass ethanol 
     (as defined in section 211(o)(1)(A) of the Clean Air Act), 
     the applicable amount is equal to the product of--
       ``(i) the amount specified in subparagraph (A), times
       ``(ii) the equivalent number of gallons of renewable fuel 
     specified in section 211(o)(4) of such Act.''.
       (b) Conforming Amendment.--Section 6426(b)(2)(A) of such 
     Code is amended by striking ``subparagraph (B)'' and 
     inserting ``subparagraphs (B) and (C)''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to fuel sold or used after the date of the 
     enactment of this Act.

     SEC. __06. INCENTIVE FOR FEDERAL AND STATE FLEETS FOR MEDIUM 
                   AND HEAVY DUTY HYBRIDS.

       Section 301 of the Energy Policy Act of 1992 (42 U.S.C. 
     13211) is amended--
       (1) in paragraph (3), by striking ``or a dual fueled 
     vehicle'' and inserting ``, a dual fueled vehicle, or a 
     medium or heavy duty vehicle that is a hybrid vehicle'';
       (2) by redesignating paragraphs (11), (12), (13), and (14) 
     as paragraphs (12), (14), (15), and (16), respectively;
       (3) by inserting after paragraph (10) the following:
       ``(11) the term `hybrid vehicle' means a vehicle powered 
     both by a diesel or gasoline engine and an electric motor 
     that is recharged as the vehicle operates;''; and
       (4) by inserting after paragraph (12) (as redesignated by 
     paragraph (2)) the following:
       ``(13) the term `medium or heavy duty vehicle' means a 
     vehicle that--
       ``(A) in the case of a medium duty vehicle, has a gross 
     vehicle weight rating of more than 8,500 pounds but not more 
     than 14,000 pounds; and
       ``(B) in the case of a heavy duty vehicle, has a gross 
     vehicle weight rating of more than 14,000 pounds;''.

     SEC. __07. PUBLIC ACCESS TO FEDERAL ALTERNATIVE REFUELING 
                   STATIONS.

       (a) Definitions.--In this section:
       (1) Alternative fuel refueling station.--The term 
     ``alternative fuel refueling station'' has the meaning given 
     the term ``qualified alternative fuel vehicle refueling 
     property'' in section 30C(c)(1) of the Internal Revenue Code 
     of 1986.
       (2) Secretary.--The term ``Secretary'' means the Secretary 
     of Energy.
       (b) Access to Federal Alternative Refueling Stations.--Not 
     later than 18 months after the date of enactment of this 
     Act--
       (1) except as provided in subsection (d)(1), any Federal 
     property that includes at least 1 fuel refueling station 
     shall include at least 1 alternative fuel refueling station; 
     and
       (2) except as provided in subsection (d)(2), any 
     alternative fuel refueling station located on property owned 
     by the Federal government shall permit full public access for 
     the purpose of refueling using alternative fuel.
       (c) Duration.--The requirements described in subsection (b) 
     shall remain in effect until the sooner of--
       (1) the date that is 7 years after the date of enactment of 
     this Act; or
       (2) the date on which the Secretary determines that not 
     less than 5 percent of the commercial refueling 
     infrastructure in the United States offers alternative fuels 
     to the general public.
       (d) Exceptions.--
       (1) Waiver.--Subsection (b)(1) shall not apply to any 
     Federal property under the jurisdiction of a Federal agency 
     if the Secretary determines that alternative fuel is not 
     reasonably available to retail purchasers of the fuel, as 
     certified by the head of the agency to the Secretary.
       (2) National security exemption.--Subsection (b)(2) does 
     not apply to property of the Federal government that the 
     Secretary, in consultation with the Secretary of Defense, has 
     certified must be exempt for national security reasons.
       (e) Verification of Compliance.--The Secretary shall--
       (1) monitor compliance with this section by all Federal 
     agencies; and
       (2) annually submit to Congress a report describing the 
     extent of compliance with this section.

     SEC. __08. PURCHASE OF CLEAN FUEL BUSES.

       (a) In General.--Chapter 53 of title 49, United States 
     Code, is amended by inserting after section 5325 the 
     following:

     ``Sec. 5326. Purchase of clean fuel buses

       ``(a) Definition of Clean Fuel Bus.--In this section, the 
     term `clean fuel bus' means a vehicle that--
       ``(1) is capable of being powered by--
       ``(A) compressed natural gas;
       ``(B) liquefied natural gas;
       ``(C) 1 or more batteries;
       ``(D) a fuel that is composed of at least 85 percent 
     ethanol (or another percentage of not less than 70 percent, 
     as the Secretary may determine, by rule, to provide for 
     requirements relating to cold start, safety, or vehicle 
     functions);
       ``(E) electricity (including a hybrid electric or plug-in 
     hybrid electric vehicle);
       ``(F) a fuel cell; or
       ``(G) ultra-low sulfur diesel; and
       ``(2) has been certified by the Administrator of the 
     Environmental Protection Agency to significantly reduce 
     harmful emissions, particularly in a nonattainment area (as 
     defined in section 171 of the Clean Air Act (42 U.S.C. 
     7501)).
       ``(b) Purchase of Buses.--A bus purchased using funds made 
     available from the Mass Transit Account of the Highway Trust 
     Fund shall be a clean fuel bus.''.
       (b) Conforming Amendment.--The analysis for chapter 53 is 
     amended by inserting after the item relating to section 5325 
     the following:

``5326. Clean fuel buses''.

     SEC. __09. DOMESTIC FUELS INFRASTRUCTURE FOR THE DEPARTMENT 
                   OF DEFENSE.

       (a) Program Required.--The Secretary of Defense shall carry 
     out a program to evaluate the commercial and technical 
     viability of advanced technologies for the production of 
     alternative transportation fuels having applications for the 
     Department of Defense. The program shall include the 
     construction and operation of testing facilities in 
     accordance with subsection (d).
       (b) Alternative Transportation Fuels Defined.--For purposes 
     of this section, the term ``alternative transportation 
     fuels'' means--
       (1) denatured ethanol and other alcohols;
       (2) mixtures containing at least 85 percent (or another 
     percentage of not less than 70 percent, as the Secretary may 
     determine, by rule, to provide for requirements relating to 
     cold start, safety, or vehicle functions) by volume of 
     denatured ethanol, particularly ethanols derived from 
     cellulosic biomass;
       (3) coal-derived liquid fuels, including Fischer-Tropsch 
     fuels;
       (4) fuels (other than alcohol) derived from biological 
     materials, including fuels derived from vegetable oils, 
     animal fats, thermal depolymerization, or thermalchemical 
     conversion; and
       (5) any other fuel the Secretary determines, by rule, is 
     substantially not petroleum and would yield substantial 
     energy security benefits and substantial environmental 
     benefits.
       (c) Coordination of Efforts.--
       (1) In general.--The Secretary of Defense shall carry out 
     the program required by this section through the Under 
     Secretary of Defense for Acquisition, Technology, and 
     Logistics and in consultation with the Director of Defense 
     Research and Engineering, the Advanced Systems and Concepts 
     Office, the Secretary of Agriculture, and the Secretary of 
     Energy.
       (2) Role of biomass research and development technologic 
     advisory committee.--The consultations under paragraph (1) 
     shall include the participation of the Biomass Research and 
     Development Technical Advisory Committee established under 
     section 306 of the Biomass Research and Development Act of 
     2000 (title III of Public Law 106-224; 7 U.S.C. 8101 note).
       (d) Facilities for Evaluating Production of Alternative 
     Transportation Fuels.--
       (1) In general.--In carrying out the program required by 
     this section, the Secretary

[[Page 15982]]

     of Defense shall provide for the construction or capital 
     modification of--
       (A) not more than 3 facilities for the purposes of 
     evaluating the production from cellulosic biomass of 
     alternative transportation fuels having applications for the 
     Department of Defense; and
       (B) not more than 3 facilities for the purposes of 
     evaluating the production from coal of alternative 
     transportation fuels having applications for the Department 
     of Defense, with not less than one of such facilities 
     utilizing coal resources with a ranking by the American 
     Society for Testing and Materials of high volatile bituminous 
     B and C.
       (2) Location of facilities.--The facilities constructed 
     under paragraph (1) for the purposes of cellulosic biomass 
     shall--
       (A) afford the efficient use of a diverse range of fuel 
     sources; and
       (B) give initial preference to existing domestic facilities 
     with current or potential capacity for cellulose or coal 
     conversion.
       (3) Capacity of facilities.--Each facility constructed 
     under paragraph (1) shall have the flexibility for producing 
     commercial volumes of alternative transportation fuels such 
     that when the facility demonstrates economic viability of the 
     process it can provide commercial production for the region 
     in which it is located.
       (4) Authority to enter into transactions for facility 
     construction.--The Secretary of Defense shall seek to 
     construct the facilities required by paragraph (1) at the 
     lowest cost practicable. The Secretary may make grants, enter 
     into agreements, and provide loans or loan guarantees to 
     corporations, cooperatives, and consortia of such entities 
     for such purposes.
       (5) Evaluations at facilities.--Not later than 5 years 
     after the date of enactment of this Act, the Secretary of 
     Defense shall begin at the facilities described in paragraph 
     (1) evaluations of the technical and commercial viability of 
     different processes of producing alternative transportation 
     fuels having Department of Defense applications from 
     cellulosic biomass or coal.
       (e) Program Milestones.--In carrying out the program 
     required by this section, the Secretary of Defense shall meet 
     the following milestones:
       (1) Selection of testing processes.--Not later than 180 
     days after the date of enactment of this Act, the Secretary 
     shall select processes for evaluating the technical and 
     commercial viability of producing alternative fuels from 
     cellulosic biomass or coal.
       (2) Initiation of work at existing facilities.--Not later 
     than one year after the date of enactment of this Act, the 
     Secretary shall enter into agreements to carry out testing 
     under this section at existing facilities.
       (3) Construction agreements.--Not later than one year after 
     the date of enactment of this Act, the Secretary shall enter 
     into agreements for the capital modification or construction 
     of facilities under subsection (d)(1).
       (4) Completion of engineering and design work.--Not later 
     than three years after the date of enactment of this Act, the 
     Secretary shall complete capital modifications of existing 
     facilities and the engineering and design work necessary for 
     the construction of new facilities under this section.
       (f) Report on Program.--Not later than 18 months after the 
     date of enactment of this Act, and annually thereafter for 
     the next 5 years, the Secretary of Defense shall, in 
     consultation with the Under Secretary of Defense for 
     Acquisition, Technology, and Logistics, submit a report on 
     the implementation and results of the program required by 
     this section to--
       (1) the Committees on Armed Services, Energy and Natural 
     Resources, Agriculture, and Appropriations of the Senate; and
       (2) the Committees on Armed Services, Energy and Commerce, 
     Agriculture, and Appropriations of the House of 
     Representatives.
       (g) Funding.--
       (1) In general.--Of the amounts authorized to be 
     appropriated under this section, $250,000,000 may be 
     available for the program required by this section for fiscal 
     years 2007 through 2012.
       (2) Availability.--Amounts available under paragraph (1) 
     shall remain available until expended.

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