[Congressional Record (Bound Edition), Volume 153 (2007), Part 12]
[Senate]
[Pages 16371-16460]
[From the U.S. Government Publishing Office, www.gpo.gov]




                           TEXT OF AMENDMENTS

                                 ______
                                 
  SA 1655. Mr. NELSON of Florida (for himself and Mr. Sanders) 
submitted an amendment intended to be proposed to amendment SA 1502 
proposed by Mr. Reid to the bill H.R. 6, to reduce our Nation's 
dependency on foreign oil by investing in clean, renewable, and 
alternative energy resources, promoting new emerging energy 
technologies, developing greater efficiency, and creating a Strategic 
Energy Efficiency and Renewables Reserve to invest in alternative 
energy, and for other purposes; which was ordered to lie on the table; 
as follows:

       On page 241, line 5, strike ``35'' and insert ``40''.
                                 ______
                                 
  SA 1656. Mr. SCHUMER submitted an amendment intended to be proposed 
to amendment SA 1502 proposed by Mr. Reid to the bill H.R. 6, to reduce 
our Nation's dependency on foreign oil by investing in clean, 
renewable, and alternative energy resources, promoting new emerging 
energy technologies, developing greater efficiency, and creating a 
Strategic Energy Efficiency and Renewables Reserve to invest in 
alternative energy, and for other purposes; which was ordered to lie on 
the table; as follows:

       At the end of subtitle F of title II, add the following:

     SEC. 2__. ENERGY EFFICIENCY RESOURCE STANDARD FOR RETAIL 
                   ELECTRICITY AND NATURAL GAS DISTRIBUTORS.

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

     ``SEC. 610. ENERGY EFFICIENCY RESOURCE STANDARD FOR RETAIL 
                   ELECTRICITY AND NATURAL GAS DISTRIBUTORS.

       ``(a) Definitions.--In this section:
       ``(1) Base quantity.--The term `base quantity', with 
     respect to a retail electricity or natural gas distributor, 
     means the total quantity of electric energy or natural gas 
     delivered by the retail electricity or natural gas 
     distributor to retail customers (other than to an electricity 
     distributor for purposes of electric generation) during the 
     most recent calendar year for which information is available.
       ``(2) CHP savings.--
       ``(A) In general.--The term `CHP savings' means the 
     increment of electric output of a new combined heat and power 
     system that is attributable to the higher efficiency of the 
     combined system (as compared to the efficiency of separate 
     production of the electric and thermal outputs), as 
     determined in accordance with such regulations as the 
     Secretary may promulgate.
       ``(B) Related definition.--For purposes of subparagraph 
     (A), the term `new combined heat and power system' means a 
     system that uses the same energy source for the generation of 
     electrical or mechanical power and the production of steam or 
     another form of useful thermal energy, if--
       ``(i) the facility at which the system is used meets such 
     requirements relating to efficiency and other operating 
     characteristics as the Secretary may promulgate by 
     regulation;
       ``(ii) the net wholesale sales of electricity by the 
     facility will not exceed 50 percent of total annual electric 
     generation by the facility; and
       ``(iii) the facility commences operation after June 30, 
     2007.
       ``(3) Customer facility savings.--The term `customer 
     facility savings' means a reduction in end-use electricity or 
     natural gas consumption (including recycled energy savings) 
     at a facility of an end-use consumer of electricity or 
     natural gas served by a retail electricity or natural gas 
     distributor, as compared to--
       ``(A) consumption at that facility during a base year;
       ``(B) in the case of new equipment, regardless of whether 
     the new equipment replaces existing equipment at the end of 
     the useful life of the existing equipment, consumption by new 
     equipment of average efficiency; or
       ``(C) in the case of a new facility, consumption at a 
     reference facility.
       ``(4) Electricity savings.--The term `electricity savings' 
     means, as determined in accordance with such regulations as 
     the Secretary may promulgate--
       ``(A) customer facility savings of electricity consumption, 
     adjusted to reflect any associated increase in fuel 
     consumption at the facility;
       ``(B) reductions in distribution system losses of 
     electricity achieved by a retail electricity distributor, as 
     compared to losses attributable to new or replacement 
     distribution system equipment of average efficiency (as 
     defined in regulations to be promulgated by the Secretary); 
     and
       ``(C) CHP savings.
       ``(5) Natural gas savings.--The term `natural gas savings' 
     means, as determined in accordance with such regulations as 
     the Secretary may promulgate--
       ``(A) customer facility savings of natural gas, adjusted to 
     reflect any associated increase in electricity consumption at 
     the facility; and
       ``(B) reductions in leakage, operational losses, and gas 
     fuel consumption in the operation of a gas distribution 
     system achieved by a retail gas distributor, as compared to 
     similar losses during a base year.
       ``(6) Recycled energy savings.--The term `recycled energy 
     savings' means a reduction in electricity or natural gas 
     consumption that is attributable to electrical or mechanical 
     power (or both), or thermal energy, produced by modifying an 
     industrial or commercial system that was in operation before 
     July 1, 2007, in order to recapture energy that would 
     otherwise be wasted.
       ``(7) Retail electricity or natural gas distributor.--The 
     term `retail electricity or natural gas distributor' means a 
     person or Federal or State agency that--
       ``(A) owns or operates an electric or natural gas 
     distribution facility; and
       ``(B) using the facility, delivers to consumers of the 
     energy that are not affiliated with, and that are not lessees 
     or tenants of, the person or agency, during the most recent 
     calendar year for which data are available--
       ``(i) more than 800,000 megawatt hours of electricity; or
       ``(ii) more than 1,000,000,000 cubic feet of natural gas.
       ``(8) Verified electricity or natural gas savings.--The 
     term `verified electricity or natural gas savings' means 
     electricity savings or natural gas savings that meet the 
     requirements of subsection (c).
       ``(b) Performance Standard.--
       ``(1) In general.--For calendar year 2010, and each 
     calendar year thereafter, each retail electricity or natural 
     gas distributor shall submit to the Secretary, by not later 
     than March 31 of the calendar year after the applicable 
     calendar year, a number of credits issued under subsection 
     (d) equal to the following percentages of the base quantity 
     of the retail electricity or natural gas distributor 
     applicable to the calendar year:


------------------------------------------------------------------------
                                Electricity
             Year               Credits (%)    Natural Gas Credits (%)
------------------------------------------------------------------------
             2010                   0.5                  0.3
------------------------------------------------------------------------
             2011                   1.25                 0.6
------------------------------------------------------------------------
             2012                   2.0                  1.0
------------------------------------------------------------------------
             2013                   3.0                  1.5
------------------------------------------------------------------------
             2014                   4.0                  2.0
------------------------------------------------------------------------
             2015                   5.0                  2.5
------------------------------------------------------------------------
             2016                   6.0                  3.0
------------------------------------------------------------------------
             2017                   7.0                  3.5
------------------------------------------------------------------------

[[Page 16372]]

 
             2018                   8.0                  4.0
------------------------------------------------------------------------
             2019                   9.0                  4.5
------------------------------------------------------------------------
             2020                   10.0                 5.0
------------------------------------------------------------------------

       ``(2) Subsequent calendar years.--For calendar year 2021 
     and each calendar year thereafter, each retail electricity or 
     natural gas distributor shall submit to the Secretary, by not 
     later than March 31 of the calendar year after the applicable 
     calendar year, a number of credits issued under subsection 
     (d) equal to such a percentage of the base quantity of the 
     retail electricity or natural gas distributor as the 
     Secretary may determine, by regulation, but in no case less 
     than the applicable percentage for calendar year 2020.
       ``(c) Measurement and Verification of Savings.--Not later 
     than June 30, 2009, the Secretary shall promulgate 
     regulations regarding measurement and verification of 
     electricity and natural gas savings under this section, 
     including--
       ``(1) procedures and standards for defining and measuring 
     electricity savings and natural gas savings that will be 
     eligible to receive credits under subsection (d)(2), which 
     shall--
       ``(A) specify the types of energy efficiency and energy 
     conservation measures that will be eligible for the credits;
       ``(B) require that energy consumption estimates for 
     customer facilities or portions of facilities in the 
     applicable base and current years be adjusted, as 
     appropriate, to account for changes in weather, level of 
     production, and building area;
       ``(C) account for the useful life of electricity savings 
     measures;
       ``(D) include deemed savings values for specific, commonly-
     used efficiency measures;
       ``(E) specify the extent to which electricity savings and 
     natural gas savings attributable to measures carried out 
     before July 1, 2007, are eligible to receive credits under 
     this section; and
       ``(F) exclude savings that--
       ``(i) are not properly attributable to measures carried out 
     by the entity seeking the credit (or a designated agent of 
     the entity); or
       ``(ii) have already been credited under this section to 
     another entity; and
       ``(2) procedures and standards for third-party verification 
     of reported electricity savings or natural gas savings.
       ``(d) Credit and Trading System.--
       ``(1) Credit regulations.--
       ``(A) In general.--Not later than June 30, 2009, the 
     Secretary shall promulgate regulations regarding--
       ``(i) the issuance of credits under this section;
       ``(ii) a national credit trading system; and
       ``(iii) a system for independent monitoring of the market 
     for the credits.
       ``(B) Limitations.--In promulgating regulations under 
     subparagraph (A), the Secretary may establish such 
     limitations as the Secretary determines to be appropriate 
     with respect to the extent to which a retail electricity or 
     natural gas distributor may achieve compliance with 
     subsection (b) by submitting credits issued for electricity 
     or natural gas savings that are not customer facility savings 
     at a facility served by the retail electricity or natural gas 
     distributor.
       ``(C) Requirement.--In promulgating regulations under 
     subparagraph (A), the Secretary shall provide for the 
     issuance of appropriate credits for the mechanical output of 
     new combined heat and power systems.
       ``(2) Issuance of credits.--In accordance with the 
     regulations promulgated under paragraph (1), the Secretary 
     shall issue credits for--
       ``(A) verified electricity and natural gas savings achieved 
     by a retail electricity or natural gas distributor in a 
     certain calendar year; and
       ``(B) verified electricity and natural gas savings achieved 
     by other entities (including State agencies), if--
       ``(i)(I) no retail electricity or natural gas distributor 
     paid a substantial portion of the cost of achieving the 
     savings; or
       ``(II) if a retail electricity or natural gas distributor 
     paid a substantial portion of the cost of achieving the 
     savings, the retail electricity or natural gas distributor 
     has waived any entitlement to the credit; and
       ``(ii) the measures used to achieve the verified 
     electricity and natural gas savings were installed or placed 
     in operation by the entity seeking certification (or a 
     designated agent of the entity).
       ``(3) Value of credits.--A credit issued by the Secretary 
     under this subsection shall have a value of--
       ``(A) 1,000 kilowatt-hours, in the case of an electricity 
     savings credit; or
       ``(B) 10 therms, in the case of a natural gas savings 
     credit.
       ``(4) Fee.--
       ``(A) In general.--Subject to subparagraph (B), the 
     Secretary shall charge the recipient of a credit under this 
     section a fee in an amount equal to, as determined by the 
     Secretary, the administrative costs of issuing, recording, 
     monitoring the sale or exchange of, and receiving the credit.
       ``(B) Maximum amount.--Notwithstanding subparagraph (A), 
     the amount of a fee under this paragraph shall be not more 
     than, as applicable--
       ``(i) $1 for a electric credit; or
       ``(ii) $0.10 for a natural gas credit.
       ``(C) Use of funds.--The Secretary shall use fees received 
     under this paragraph for the administrative costs of carrying 
     out this subsection.
       ``(5) Credit sale and use.--In accordance with regulations 
     promulgated under paragraph (1), any entity that receives a 
     credit under this section may--
       ``(A) sell or transfer the credit to any other entity; or
       ``(B) use the credit to achieve compliance with the 
     performance standard under subsection (b).
       ``(e) Buyout Option.--In lieu of submitting credits to 
     achieve compliance with an applicable performance standard 
     under subsection (b) for a calendar year, a retail 
     electricity or natural gas distributor may pay to the 
     Secretary, by not later than March 31 of the following 
     calendar year, a buyout fee in an amount equal to, as 
     adjusted for inflation in accordance with such regulations as 
     the Secretary may promulgate--
       ``(1) $20 for each electricity savings credit otherwise 
     required to be submitted by the retail electricity or natural 
     gas distributor; or
       ``(2) $2 for each natural gas savings credit otherwise 
     required to be submitted by the retail electricity or natural 
     gas distributor.
       ``(f) State Administration.--On receipt of an application 
     from the Governor of a State, the Secretary may authorize the 
     State to administer and enforce an energy efficiency program 
     in the State in lieu of the program under this section, if 
     the Secretary determines that the State program will achieve 
     electricity savings and natural gas savings at least 
     equivalent to the electricity savings and natural gas savings 
     that would be required to be achieved by electricity and 
     natural gas distributors in the State under this section.
       ``(g) Information and Reports.--In accordance with section 
     13 of the Federal Energy Administration Act of 1974 (15 
     U.S.C. 774), the Secretary may require any retail electricity 
     or natural gas distributor or other entity that receives a 
     credit under this section, and any other entity as the 
     Secretary determines to be necessary, to provide such 
     information and reports, and access to any records or 
     facility of the entity, as the Secretary determines to be 
     appropriate to carry out this section.
       ``(h) Enforcement.--
       ``(1) Failure to submit credits.--Except in a case in which 
     a State program is carried out in lieu of the program under 
     this section under subsection (f), if a retail electricity or 
     natural gas distributor fails to submit to the Secretary any 
     credit required for compliance with the applicable 
     performance standard under subsection (b), or to pay to the 
     Secretary an applicable buyout payment under subsection (e), 
     the Secretary shall assess against the retail electricity or 
     natural gas distributor a civil penalty for each such failure 
     in an amount equal to, as adjusted for inflation in 
     accordance with such regulations as the Secretary may 
     promulgate--
       ``(A) $100 for each electricity savings credit or buyout 
     payment failed to be made by the retail electricity or 
     natural gas distributor; or
       ``(B) $10 for each natural gas savings credit or buyout 
     payment failed to be made by the retail electricity or 
     natural gas distributor.
       ``(2) Procedure.--The procedures under section 31(c) of the 
     Federal Power Act (16 U.S.C. 823b(c)) shall apply to a civil 
     penalty assessed under paragraph (1).
       ``(i) State Law.--Nothing in this section supersedes or 
     otherwise affects any State or local law (including 
     regulations) relating to electricity savings or natural gas 
     savings, to the extent that the State or local law requires 
     equal or greater electricity savings or natural gas saving 
     than the savings required by this section.''.

                                 ______
                                 
  SA 1657. Mr. ISAKSON submitted an amendment intended to be proposed 
to amendment SA 1502 proposed by Mr. Reid to the bill H.R. 6, to reduce 
our Nation's dependency on foreign oil by investing in clean, 
renewable, and alternative energy resources, promoting

[[Page 16373]]

new emerging energy technologies, developing greater efficiency, and 
creating a Strategic Energy Efficiency and Renewables Reserve to invest 
in alternative energy, and for other purposes; which was ordered to lie 
on the table; as follows:

       On page 251, line 14, strike ``(e)'' and insert the 
     following:
       (e) Alternative Fuel Economy Standards for Low Volume 
     Manufacturers and New Entrants.--Section 32902(d) of title 
     49, United States Code, is amended to read as follows:
       ``(d) Alternative Average Fuel Economy Standard.--
       ``(1) In general.--Upon the application of an eligible 
     manufacturer, the Secretary of Transportation may prescribe 
     an alternative average fuel economy standard for automobiles 
     manufactured by that manufacturer if the Secretary determines 
     that--
       ``(A) the applicable standard prescribed under subsection 
     (a), (b), or (c) is more stringent than the maximum feasible 
     average fuel economy level that manufacturer can achieve; and
       ``(B) the alternative average fuel economy standard 
     prescribed under this subsection is the maximum feasible 
     average fuel economy level that manufacturer can achieve.
       ``(2) Application of alternative standard.--The Secretary 
     may provide for the application of an alternative average 
     fuel economy standard prescribed under paragraph (1) to--
       ``(A) the manufacturer that applied for the alternative 
     average fuel economy standard;
       ``(B) all automobiles to which this subsection applies; or
       ``(C) classes of automobiles manufactured by eligible 
     manufacturers.
       ``(3) Importers.--Notwithstanding paragraph (1), an 
     importer registered under section 30141(c) may not be 
     exempted as a manufacturer under paragraph (1) for an 
     automobile that the importer--
       ``(A) imports; or
       ``(B) brings into compliance with applicable motor vehicle 
     safety standards prescribed under chapter 301 for an 
     individual described in section 30142.
       ``(4) Application.--The Secretary of Transportation may 
     prescribe the contents of an application for an alternative 
     average fuel economy standard.
       ``(5) Eligible manufacturer defined.--In this section, the 
     term `eligible manufacturer' means a manufacturer that--
       ``(A) is not owned in part or in whole by another 
     manufacturer that sold greater than 0.5 percent of the number 
     of automobiles sold in the United States in the model year 
     prior to the model year to which the application relates.
       ``(B) sold in the United States fewer than 0.5 percent of 
     the number of automobiles sold in the United States in the 
     model year that is 2 years before the model year to which the 
     application relates; and
       ``(C) will sell in the United States fewer than 0.5 percent 
     of the automobiles sold in the United States for the model 
     year for which the alternative average fuel economy standard 
     will apply.''.
       (f)

                                 ______
                                 
  SA 1658. Mr. VITTER submitted an amendment intended to be proposed to 
amendment SA 1502 proposed by Mr. Reid to the bill H.R. 6, to reduce 
our Nation's dependency on foreign oil by investing in clean, 
renewable, and alternative energy resources, promoting new emerging 
energy technologies, developing greater efficiency, and creating a 
Strategic Energy Efficiency and Renewables Reserve to invest in 
alternative energy, and for other purposes; which was ordered to lie on 
the table; as follows:

       At the appropriate place, insert the following:

     SEC. __. USE OF COASTAL IMPACT ASSISTANCE TO IMPROVE 
                   HURRICANE OR FLOOD PROTECTION IN RESPONSE TO 
                   HURRICANE KATRINA OR RITA.

       Section 31(d)(3) of the Outer Continental Shelf Lands Act 
     (43 U.S.C. 1356a(d)(3)) is amended--
       (1) by striking ``Not'' and inserting the following:
       ``(A) In general.--Except as provided in subparagraph (B), 
     no''; and
       (2) by adding at the end the following:
       ``(B) Use for hurricane or flood protection in response to 
     certain hurricanes.--Subparagraph (A) shall not apply to the 
     extent that the 1 or more purposes are designed to improve 
     the level of hurricane or flood protection in an area 
     declared to be a major disaster in accordance with section 
     401 of the Robert T. Stafford Disaster Relief and Emergency 
     Assistance Act (42 U.S.C. 5170) in response to Hurricane 
     Katrina or Rita during calendar year 2005.''.

                                 ______
                                 
  SA 1659. Mr. SUNUNU submitted an amendment intended to be proposed to 
amendment SA 1502 proposed by Mr. Reid to the bill H.R. 6, to reduce 
our Nation's dependency on foreign oil by investing in clean, 
renewable, and alternative energy resources, promoting new emerging 
energy technologies, developing greater efficiency, and creating a 
Strategic Energy Efficiency and Renewables Reserve to invest in 
alternative energy, and for other purposes; which was ordered to lie on 
the table; as follows:

       At the appropriate place, insert the following:

     SECTION _. CREDIT FOR BIOMASS FUEL PROPERTY EXPENDITURES.

       (a) Allowance of Credit.--Subsection (a) of section 25D 
     (relating to allowance of credit), as amended by this Act, is 
     amended--
       (1) by striking ``and'' at the end of paragraph (3),
       (2) by striking the period at the end of paragraph (4) and 
     inserting ``, and'', and
       (3) by adding at the end the following new paragraph:
       ``(5) 30 percent of the qualified biomass fuel property 
     expenditures made by the taxpayer during such year.''.
       (b) Maximum Credit.--Paragraph (1) of section 25D(b) 
     (relating to maximum credit), as amended by this Act, is 
     amended--
       (1) by striking ``and'' at the end of subparagraph (C),
       (2) by striking the period at the end of subparagraph (D) 
     and inserting ``, and'', and
       (3) by adding at the end the following new subparagraph:
       ``(E) $4,000 with respect to any qualified biomass fuel 
     property expenditures.''.
       (c) Maximum Expenditures.--Subparagraph (A) of section 
     25D(e)(4) (relating to maximum expenditures in case of joint 
     occupancy) is amended--
       (1) by striking ``and'' at the end of clause (ii),
       (2) by striking the period at the end of clause (iii) and 
     inserting ``, and'', and
       (3) by adding at the end the following new clause:
       ``(iv) $13,334 in the case of any qualified biomass fuel 
     property expenditures.''.
       (d) Qualified Biomass Fuel Property Expenditures.--
     Subsection (d) of section 25D (relating to definitions), as 
     amended by this Act, is amended by adding at the end the 
     following new paragraph:
       ``(5) Qualified biomass fuel property expenditure.--
       ``(A) In general.--The term `qualified biomass fuel 
     property expenditure' means an expenditure for property--
       ``(i) which uses the burning of biomass fuel to heat a 
     dwelling unit located in the United States and used as a 
     residence by the taxpayer, or to heat water for use in such a 
     dwelling unit, and
       ``(ii) which has a thermal efficiency rating of at least 75 
     percent.
       ``(B) Biomass fuel.--For purposes of this section, the term 
     `biomass fuel' means any plant-derived fuel available on a 
     renewable or recurring basis, including agricultural crops 
     and trees, wood and wood waste and residues (including wood 
     pellets), plants (including aquatic plants), grasses, 
     residues, and fibers.''.
       (e) Effective Date.--The amendments made by this subsection 
     shall apply to expenditures paid or incurred in taxable years 
     beginning after December 31, 2007.

                                 ______
                                 
  SA 1660. Mr. INHOFE (for himself and Mrs. Clinton) submitted an 
amendment intended to be proposed to amendment SA 1502 proposed by Mr. 
Reid to the bill H.R. 6, to reduce our Nation's dependency on foreign 
oil by investing in clean, renewable, and alternative energy resources, 
promoting new emerging energy technologies, developing greater 
efficiency, and creating a Strategic Energy Efficiency and Renewables 
Reserve to invest in alternative energy, and for other purposes; which 
was ordered to lie on the table; as follows:

       Strike sections 402 through 404 and insert the following:

     SEC. 402. COST-EFFECTIVE AND GEOTHERMAL HEAT PUMP TECHNOLOGY 
                   ACCELERATION PROGRAM.

       (a) Definition of Administrator.--In this section, the term 
     ``Administrator'' means the Administrator of General 
     Services.
       (b) Establishment.--
       (1) In general.--The Administrator shall establish a 
     program to accelerate the use of more cost-effective 
     technologies and practices and geothermal heat pumps at GSA 
     facilities.
       (2) Requirements.--The program established under this 
     subsection shall--
       (A) ensure centralized responsibility for the coordination 
     of cost reduction-related and geothermal heat pump-related 
     recommendations, practices, and activities of all relevant 
     Federal agencies;
       (B) provide technical assistance and operational guidance 
     to applicable tenants to achieve the goal identified in 
     subsection (c)(2)(B)(ii); and
       (C) establish methods to track the success of Federal 
     departments and agencies with respect to that goal.
       (c) Accelerated Use of Technologies.--
       (1) Review.--
       (A) In general.--As part of the program under this section, 
     not later than 90 days

[[Page 16374]]

     after the date of enactment of this Act, the Administrator 
     shall conduct a review of--
       (i) current use of cost-effective lighting technologies and 
     geothermal heat pumps in GSA facilities; and
       (ii) the availability to managers of GSA facilities of 
     cost-effective lighting technologies and geothermal heat 
     pumps.
       (B) Requirements.--The review under subparagraph (A) 
     shall--
       (i) examine the use of cost-effective lighting 
     technologies, geothermal heat pumps, and other cost-effective 
     technologies and practices by Federal agencies in GSA 
     facilities; and
       (ii) as prepared in consultation with the Administrator of 
     the Environmental Protection Agency, identify cost-effective 
     lighting technology and geothermal heat pump technology 
     standards that could be used for all types of GSA facilities.
       (2) Replacement.--
       (A) In general.--As part of the program under this section, 
     not later than 180 days after the date of enactment of this 
     Act, the Administrator shall establish, using available 
     appropriations, a cost-effective lighting technology and 
     geothermal heat pump technology acceleration program to 
     achieve maximum feasible replacement of existing lighting, 
     heating, cooling technologies with cost-effective lighting 
     technologies and geothermal heat pump technologies in each 
     GSA facility.
       (B) Acceleration plan timetable.--
       (i) In general.--To implement the program established under 
     subparagraph (A), not later than 1 year after the date of 
     enactment of this Act, the Administrator shall establish a 
     timetable, including milestones for specific activities 
     needed to replace existing lighting, heating, cooling 
     technologies with cost-effective lighting technologies and 
     geothermal heat pump technologies, to the maximum extent 
     feasible (including at the maximum rate feasible), at each 
     GSA facility.
       (ii) Goal.--The goal of the timetable under clause (i) 
     shall be to complete, using available appropriations, maximum 
     feasible replacement of existing lighting, heating, and 
     cooling technologies with cost-effective lighting 
     technologies and geothermal heat pump technologies by not 
     later than the date that is 5 years after the date of 
     enactment of this Act.
       (d) GSA Facility Technologies and Practices.--Not later 
     than 180 days after the date of enactment of this Act, and 
     annually thereafter, the Administrator shall--
       (1) ensure that a manager responsible for accelerating the 
     use of cost-effective technologies and practices and 
     geothermal heat pump technologies is designated for each GSA 
     facility; and
       (2) submit to Congress a plan, to be implemented to the 
     maximum extent feasible (including at the maximum rate 
     feasible) using available appropriations, by not later than 
     the date that is 5 years after the date of enactment of this 
     Act, that--
       (A) with respect to cost-effective technologies and 
     practices--
       (i) identifies the specific activities needed to achieve a 
     20-percent reduction in operational costs through the 
     application of cost-effective technologies and practices from 
     2003 levels at GSA facilities by not later than 5 years after 
     the date of enactment of this Act; and
       (ii) describes activities required and carried out to 
     estimate the funds necessary to achieve the reduction 
     described in clause (i);
       (B) includes an estimate of the funds necessary to carry 
     out this section;
       (C) describes the status of the implementation of cost-
     effective technologies and practices and geothermal heat pump 
     technologies and practices at GSA facilities, including--
       (i) the extent to which programs, including the program 
     established under subsection (b), are being carried out in 
     accordance with this subtitle; and
       (ii) the status of funding requests and appropriations for 
     those programs;
       (D) identifies within the planning, budgeting, and 
     construction processes, all types of GSA facility-related 
     procedures that inhibit new and existing GSA facilities from 
     implementing cost-effective technologies or geothermal heat 
     pump technologies;
       (E) recommends language for uniform standards for use by 
     Federal agencies in implementing cost-effective technologies 
     and practices and geothermal heat pump technologies and 
     practices;
       (F) in coordination with the Office of Management and 
     Budget, reviews the budget process for capital programs with 
     respect to alternatives for--
       (i) permitting Federal agencies to retain all identified 
     savings accrued as a result of the use of cost-effective 
     technologies and geothermal heat pump technologies; and
       (ii) identifying short- and long-term cost savings that 
     accrue from the use of cost-effective technologies and 
     practices and geothermal heat pump technologies and 
     practices;
       (G)(i) with respect to geothermal heat pump technologies, 
     achieves substantial operational cost savings through the 
     application of the technologies; and
       (ii) with respect to cost-effective technologies and 
     practices, achieves cost savings through the application of 
     cost-effective technologies and practices sufficient to pay 
     the incremental additional costs of installing the cost-
     effective technologies and practices by not later than the 
     date that is 5 years after the date of installation; and
       (H) includes recommendations to address each of the 
     matters, and a plan for implementation of each 
     recommendation, described in subparagraphs (A) through (G).
       (e) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as are necessary to carry out 
     this section, to remain available until expended.

     SEC. 403. ENVIRONMENTAL PROTECTION AGENCY DEMONSTRATION GRANT 
                   PROGRAM FOR LOCAL GOVERNMENTS.

       (a) Grant Program.--
       (1) In general.--The Administrator of the Environmental 
     Protection Agency (referred to in this section as the 
     ``Administrator'') shall establish a demonstration program 
     under which the Administrator shall provide competitive 
     grants to assist local governments (such as municipalities 
     and counties), with respect to local government buildings--
       (A) to deploy cost-effective technologies and practices; 
     and
       (B) to achieve operational cost savings, through the 
     application of cost-effective technologies and practices, as 
     verified by the Administrator.
       (2) Cost sharing.--
       (A) In general.--The Federal share of the cost of an 
     activity carried out using a grant provided under this 
     section shall be 40 percent.
       (B) Waiver of non-federal share.--The Administrator may 
     waive up to 100 percent of the local share of the cost of any 
     grant under this section should the Administrator determine 
     that the community is economically distressed, pursuant to 
     objective economic criteria established by the Administrator 
     in published guidelines.
       (3) Maximum amount.--The amount of a grant provided under 
     this subsection shall not exceed $1,000,000.
       (b) Guidelines.--
       (1) In general.--Not later than 1 year after the date of 
     enactment of this Act, the Administrator shall issue 
     guidelines to implement the grant program established under 
     subsection (a).
       (2) Requirements.--The guidelines under paragraph (1) shall 
     establish--
       (A) standards for monitoring and verification of 
     operational cost savings through the application of cost-
     effective technologies and practices reported by grantees 
     under this section;
       (B) standards for grantees to implement training programs, 
     and to provide technical assistance and education, relating 
     to the retrofit of buildings using cost-effective 
     technologies and practices; and
       (C) a requirement that each local government that receives 
     a grant under this section shall achieve facility-wide cost 
     savings, through renovation of existing local government 
     buildings using cost-effective technologies and practices, of 
     at least 40 percent as compared to the baseline operational 
     costs of the buildings before the renovation (as calculated 
     assuming a 3-year, weather-normalized average).
       (c) Compliance With State and Local Law.--Nothing in this 
     section or any program carried out using a grant provided 
     under this section supersedes or otherwise affects any State 
     or local law, to the extent that the State or local law 
     contains a requirement that is more stringent than the 
     relevant requirement of this section.
       (d) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $20,000,000 for 
     each of fiscal years 2007 through 2012.
       (e) Reports.--
       (1) In general.--The Administrator shall provide annual 
     reports to Congress on cost savings achieved and actions 
     taken and recommendations made under this section, and any 
     recommendations for further action.
       (2) Final report.--The Administrator shall issue a final 
     report at the conclusion of the program, including findings, 
     a summary of total cost savings achieved, and recommendations 
     for further action.
       (f) Termination.--The program under this section shall 
     terminate on September 30, 2012.

     SEC. 404. DEFINITIONS.

       In this subtitle:
       (1) Cost-effective lighting technology.--
       (A) In general.--The term ``cost-effective lighting 
     technology'' means a lighting technology that--
       (i) will result in substantial operational cost savings by 
     ensuring an installed consumption of not more than 1 watt per 
     square foot; or
       (ii) is contained in a list under--

       (I) section 553 of Public Law 95-619 (42 U.S.C. 8259b); and
       (II) Federal acquisition regulation 23-203.

       (B) Inclusions.--The term ``cost-effective lighting 
     technology'' includes--
       (i) lamps;
       (ii) ballasts;
       (iii) luminaires;
       (iv) lighting controls;
       (v) daylighting; and
       (vi) early use of other highly cost-effective lighting 
     technologies.

[[Page 16375]]

       (2) Cost-effective technologies and practices.--The term 
     ``cost-effective technologies and practices'' means a 
     technology or practice that--
       (A) will result in substantial operational cost savings by 
     reducing utility costs; and
       (B) complies with the provisions of section 553 of Public 
     Law 95-619 (42 U.S.C. 8259b) and Federal acquisition 
     regulation 23-203.
       (3) Operational cost savings.--
       (A) In general.--The term ``operational cost savings'' 
     means a reduction in end-use operational costs through the 
     application of cost-effective technologies and practices or 
     geothermal heat pumps, including a reduction in electricity 
     consumption relative to consumption by the same customer or 
     at the same facility in a given year, as defined in 
     guidelines promulgated by the Administrator pursuant to 
     section 403(b), that achieves cost savings sufficient to pay 
     the incremental additional costs of using cost-effective 
     technologies and practices or geothermal heat pumps by not 
     later than--
       (i) for cost-effective technologies and practices, the date 
     that is 5 years after the date of installation; and
       (ii) for geothermal heat pumps, as soon as practical after 
     the date of installation of the applicable geothermal heat 
     pump.
       (B) Inclusions.--The term ``operational cost savings'' 
     includes savings achieved at a facility as a result of--
       (i) the installation or use of cost-effective technologies 
     and practices; or
       (ii) the planting of vegetation that shades the facility 
     and reduces the heating, cooling, or lighting needs of the 
     facility.
       (C) Exclusion.--The term ``operational cost savings'' does 
     not include savings from measures that would likely be 
     adopted in the absence of cost-effective technology and 
     practices programs, as determined by the Administrator.
       (4) Geothermal heat pump.--The term ``geothermal heat 
     pump'' means any heating or air conditioning technology 
     that--
       (A) uses the ground or ground water as a thermal energy 
     source to heat, or as a thermal energy sink to cool, a 
     building; and
       (B) meets the requirements of the Energy Star program of 
     the Environmental Protection Agency applicable to geothermal 
     heat pumps on the date of purchase of the technology.
       (5) GSA facility.--
       (A) In general.--The term ``GSA facility'' means any 
     building, structure, or facility, in whole or in part 
     (including the associated support systems of the building, 
     structure, or facility) that--
       (i) is constructed (including facilities constructed for 
     lease), renovated, or purchased, in whole or in part, by the 
     Administrator for use by the Federal Government; or
       (ii) is leased, in whole or in part, by the Administrator 
     for use by the Federal Government--

       (I) except as provided in subclause (II), for a term of not 
     less than 5 years; or
       (II) for a term of less than 5 years, if the Administrator 
     determines that use of cost-effective technologies and 
     practices would result in the payback of expenses.

       (B) Inclusion.--The term ``GSA facility'' includes any 
     group of buildings, structures, or facilities described in 
     subparagraph (A) (including the associated energy-consuming 
     support systems of the buildings, structures, and 
     facilities).
       (C) Exemption.--The Administrator may exempt from the 
     definition of ``GSA facility'' under this paragraph a 
     building, structure, or facility that meets the requirements 
     of section 543(c) of Public Law 95-619 (42 U.S.C. 8253(c)).
                                 ______
                                 
  SA 1661. Mr. CARPER submitted an amendment intended to be proposed to 
amendment SA 1502 proposed by Mr. Reid to the bill H.R. 6, to reduce 
our Nation's dependency on foreign oil by investing in clean, 
renewable, and alternative energy resources, promoting new emerging 
energy technologies, developing greater efficiency, and creating a 
Strategic Energy Efficiency and Renewables Reserve to invest in 
alternative energy, and for other purposes; which was ordered to lie on 
the table; as follows:

       At the appropriate place, insert the following:

     SEC. __. MODIFICATION OF EMISSION STANDARD FOR NEW QUALIFIED 
                   ADVANCED LEAN BURN MOTOR VEHICLE CREDIT.

       Subclause (I) of section 30B(c)(3)(A)(iv) of the Internal 
     Revenue Code of 1986 is amended by inserting ``(the Bin 8 
     Tier II emission standard so established in the case of a 
     2009 model vehicle)'' after ``model year vehicle''.
                                 ______
                                 
  SA 1662. Ms. KLOBUCHAR (for herself, Mr. Bond, Mr. Nelson of 
Nebraska, Mr. Voinovich, Mr. Kerry, and Mr. Hagel) submitted an 
amendment intended to be proposed to amendment SA 1502 proposed by Mr. 
Reid to the bill H.R. 6, to reduce our Nation's dependency on foreign 
oil by investing in clean, renewable, and alternative energy resources, 
promoting new emerging energy technologies, developing greater 
efficiency, and creating a Strategic Energy Efficiency and Renewables 
Reserve to invest in alternative energy, and for other purposes; which 
was ordered to lie on the table; as follows:

       At the end of subtitle B of title I, add the following:

     SEC. 131. RENEWABLE FUELS INFRASTRUCTURE DEVELOPMENT.

       (a) Definition of Renewable Fuel.--In this section, the 
     term ``renewable fuel'' means--
       (1) any fuel at least 85 percent of the volume of which 
     consists of ethanol; and
       (2) any mixture of biodiesel (as defined in section 
     40A(d)(1) of the Internal Revenue Code of 1986) and diesel 
     fuel (as defined in section 4083(a)(3) of that Code), 
     determined without regard to any use of kerosene, that 
     contains at least 20 percent biodiesel.
       (b) Infrastructure Development Grant Program.--
       (1) In general.--The Secretary shall establish a program 
     under which the Secretary shall provide grants to retail and 
     wholesale motor fuel dealers and other entities for the 
     installation, replacement, or conversion of motor fuel 
     storage and dispensing infrastructure that will be used 
     exclusively to store and dispense renewable fuel, including 
     equipment used in the blending, distribution, and transport 
     of those fuels.
       (2) Application.--
       (A) In general.--To be eligible to receive a grant under 
     this subsection, an entity shall submit to the Secretary an 
     application at such time, in such manner, and containing such 
     information as the Secretary may require.
       (B) Combined applications.--
       (i) In general.--A local government entity or a nonprofit 
     entity may submit to the Secretary an application to receive 
     a grant under this subsection--

       (I) on behalf of a group of retailers within a certain 
     geographical area; or
       (II) to carry out a regional or multistate deployment 
     project.

       (ii) Inclusions.--An application under clause (i) shall 
     include--

       (I) a description of the proposed project of the local 
     government entity or a nonprofit entity;
       (II) a certification of the ability of the local government 
     entity or nonprofit entity to provide the non-Federal share 
     of the cost of the proposed project, as required under 
     subsection (e); and
       (III) a list containing the name and location of each 
     retailer that will receive the funds.

       (c) Retail Technical and Marketing Assistance.--
       (1) In general.--The Secretary shall offer to enter into 
     contracts with entities with demonstrated experience in 
     assisting retail fueling stations in installing refueling 
     systems and marketing renewable fuels nationally, for the 
     provision of technical and marketing assistance to recipients 
     of grants under this section.
       (2) Inclusions.--Assistance provided under paragraph (1) 
     shall include--
       (A) technical advice relating to compliance with applicable 
     Federal and State environmental requirements;
       (B) help in identifying supply sources and securing long-
     term contracts; and
       (C) the provision of public outreach, education, and 
     labeling materials.
       (3) Allocation.--Of amounts made available to carry out the 
     grant program under subsection (b), the Secretary shall 
     reserve not less than 15 percent for the provision of 
     technical and marketing assistance under this subsection.
       (d) Selection Criteria.--Not later than 1 year after the 
     date of enactment of this Act, the Secretary shall establish 
     criteria for evaluating applications for grants under this 
     section in a manner that will maximize the availability and 
     use of renewable fuels, including criteria that provide for 
     priority consideration for applications that, as determined 
     by the Secretary--
       (1) are most likely to maximize displacement of petroleum 
     consumption, measured as a total quantity and a percentage;
       (2) are best able to incorporate existing infrastructure 
     while maximizing, to the extent practicable, the use of 
     renewable fuels; and
       (3) demonstrate--
       (A) the greatest commitment on the part of the applicant to 
     ensure funding for the proposed project; and
       (B) the greatest likelihood that the project will be 
     maintained or expanded after the assistance provided under 
     this section is expended.
       (e) Limitation.--The amount of assistance provided to an 
     entity under this section shall not exceed, as applicable--
       (1) an amount equal to 20 percent of the estimated cost of 
     the installation, replacement, or conversion of motor fuel 
     storage and dispensing infrastructure; or
       (2) $100,000 for a combination of equipment at any retail 
     outlet location.
       (f) Regulations.--The Secretary shall promulgate such 
     regulations as the Secretary determines to be necessary to 
     carry out this section, including regulations requiring 
     entities that receive assistance under this section--

[[Page 16376]]

       (1) to provide to the public renewable fuel;
       (2) to establish a marketing plan that informs consumers of 
     the price and availability of the renewable fuel;
       (3) to clearly label renewable fuel dispensers and related 
     equipment; and
       (4) to submit to the Secretary periodic reports on the 
     status of--
       (A) the renewable fuel sales of the entity;
       (B) the type and quantity of renewable fuel dispensed at 
     each location of the entity; and
       (C) the average price of the renewable fuel.
       (g) Notification Requirements.--
       (1) In general.--On or before the date on which an 
     renewable fuel station for which assistance is provided under 
     this section opens to offer renewable fuel to the public, the 
     owner or operator of the station shall submit to the 
     Secretary a notice of the opening.
       (2) Action by secretary.--On receipt of a notice under 
     paragraph (1), the Secretary shall include the name and 
     location of the applicable renewable fuel station on a list 
     to be published and maintained on the website of the 
     Secretary.
       (h) Authorization of Appropriations.--There is authorized 
     to be appropriated to the Secretary to carry out this section 
     $25,000,000, to remain available until expended.
                                 ______
                                 
  SA 1663. Mr. MARTINEZ submitted an amendment intended to be proposed 
to amendment SA 1502 proposed by Mr. Reid to the bill H.R. 6, to reduce 
our Nation's dependency on foreign oil by investing in clean, 
renewable, and alternative energy resources, promoting new emerging 
energy technologies, developing greater efficiency, and creating a 
Strategic Energy Efficiency and Renewables Reserve to invest in 
alternative energy, and for other purposes; which was ordered to lie on 
the table; as follows:

       On page 27, after line 23, add the following:

     SEC. 1__. SUBSTANTIALLY SIMILAR FUELS.

       (a) Treatment of Certain Gasoline.--Section 211(f)(1) of 
     the Clean Air Act (42 U.S.C. 7545(f)(1) is amended by adding 
     at the end the following:
       ``(C) Treatment of certain gasoline.--
       ``(i) In general.--For the purpose of this subsection, 
     gasoline described in clause (ii) shall be considered to be 
     substantially similar to any fuel or fuel additive used in 
     the certification of any model year 1975 vehicle or engine.
       ``(ii) Description of gasoline.--Gasoline referred to in 
     clause (i) is gasoline that contains--

       ``(I) not more than 3.7 percent oxygen, by weight, such 
     that the oxygen weight of gasoline is not greater than the 
     equivalent oxygen weight in E-10 gasoline: or
       ``(II) a greater quantity of oxygen, as the Administrator 
     may determine by regulation.''.

       (b) Rulemaking.--
       (1) In general.--As soon as practicable after the date of 
     enactment of this Act, the Administrator of the Environmental 
     Protection Agency shall conduct a rulemaking to revise 
     regulations under section 80.27 of title 40, Code of Federal 
     Regulations (as in effect on the date of enactment of this 
     Act), promulgated under section 211(h) of the Clean Air Act 
     (42 U.S.C. 7545(h)), to clarify the maximum allowable 
     quantity of ethanol, in fuels that are considered to be 
     substantially similar and permitted to be introduced into 
     commerce under section 211(f) of that Act (42 U.S.C. 
     7545(f)), that may be replaced by biobutanol and other 
     higher-molecular-weight alcohol cosolvents.
       (2) Effect of section.--Except with respect to the 
     rulemaking required under paragraph (1), nothing in this 
     section or the amendment made by subsection (a) affects 
     section 211(h) of the Clean Air Act (42 U.S.C. 7545(h)).

                                 ______
                                 
  SA 1664. Ms. KLOBUCHAR (for herself and Ms. Cantwell) submitted an 
amendment intended to be proposed to amendment SA 1502 proposed by Mr. 
Reid to the bill H.R. 6, to reduce our Nation's dependency on foreign 
oil by investing in clean, renewable, and alternative energy resources, 
promoting new emerging energy technologies, developing greater 
efficiency, and creating a Strategic Energy Efficiency and Renewables 
Reserve to invest in alternative energy, and for other purposes; which 
was ordered to lie on the table; as follows:

       On page 47, after line 23, add the following:

     SEC. 131. RIGHT TO RETAIL RENEWABLE FUEL.

       (a) Prohibition on Restriction of Installation of 
     Alternative Fuel Pumps.--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 
                   ALTERNATIVE FUEL PUMPS.

       ``(a) Definitions.--In this section--
       ``(1) the term `alternative fuel' means any fuel--
       ``(A) at least 85 percent of the volume (or any other 
     percentage, but not less than 70 percent, as determined by 
     the Secretary, by rule, to provide for requirements relating 
     to cold start, safety, or vehicle functions) of which 
     consists of ethanol, natural gas, compressed natural gas, 
     liquefied natural gas, liquefied petroleum gas, hydrogen, or 
     any combination of such fuels; or
       ``(B) that consists of any mixture of biodiesel (as defined 
     in section 40A(d)(1) of the Internal Revenue Code of 1986) 
     and diesel fuel (as defined in section 4083(a)(3) of the 
     Internal Revenue Code of 1986), determined without regard to 
     any use of kerosene and containing at least 20 percent 
     biodiesel; and
       ``(2) the term `franchise-related document' means--
       ``(A) a franchise under this Act; and
       ``(B) any other contract or directive of a franchisor 
     related to terms or conditions of the sale of fuel by a 
     franchisee.
       ``(b) Prohibitions.--(1) Notwithstanding any provision of a 
     franchise-related document in effect on the date of the 
     enactment of this section, a franchisee or affiliate of a 
     franchisee may not be restricted from--
       ``(A) installing on the marketing premises of the 
     franchisee an alternative fuel pump;
       ``(B) converting an existing tank and pump on the marketing 
     premises of the franchisee for alternative fuel use;
       ``(C) advertising (including through the use of signage or 
     logos) the sale of any alternative fuel; or
       ``(D) selling alternative 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)(A) 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--
       ``(i) shall be considered to be null and void as of that 
     date; and
       ``(ii) may not be enforced under section 105.
       ``(B)(i) It shall be an unfair or deceptive act or practice 
     in or affecting commerce (within the meaning of subsections 
     (a)(1) and (n) of section 5 of the Federal Trade Commission 
     Act (15 U.S.C. 45)) for any person to violate the 
     requirements of this section. For purposes of the Federal 
     Trade Commission Act (15 U.S.C. 41 et seq.), including any 
     remedy or penalty applicable to any violation of such Act, 
     such a violation shall be treated as a violation of a rule 
     under such Act respecting unfair or deceptive acts or 
     practices.
       ``(ii) The Federal Trade Commission shall enforce the 
     requirements of this section. All of the functions and powers 
     of the Federal Trade Commission under the Federal Trade 
     Commission Act are available to the Commission to enforce 
     compliance by any person subject to the jurisdiction of the 
     Commission with the requirements imposed under this section.
       ``(c) Exception to 3-Grade Requirement.--A franchise-
     related document that requires that 3 grades of gasoline be 
     sold by the applicable franchisee shall not prevent the 
     franchisee from selling an alternative fuel instead of 1 
     grade of gasoline.''.
       (b) Conforming Amendments.--
       (1) In general.--Section 101(13)(C) of the Petroleum 
     Marketing Practices Act (15 U.S.C. 2801(13)(C)) is amended by 
     striking ``(C)'' and all that follows through ``failure'' and 
     inserting the following:
       ``(C) any failure''.
       (2) Table of contents.--The table of contents for such Act 
     (15 U.S.C. 2801 note) is amended by inserting after the item 
     relating to section 106 the following:

``Sec. 107. Prohibition on restriction of installation of alternative 
              fuel pumps.''.
                                 ______
                                 
  SA 1665. Mr. SALAZAR (for himself and Mr. Brown) submitted an 
amendment intended to be proposed to amendment SA 1502 proposed by Mr. 
Reid to the bill H.R. 6, to reduce our Nation's dependency on foreign 
oil by investing in clean, renewable, and alternative energy resources, 
promoting new emerging energy technologies, developing greater 
efficiency, and creating a Strategic Energy Efficiency and Renewables 
Reserve to invest in alternative energy, and for other purposes; which 
was ordered to lie on the table; as follows:

       Beginning on page 117, strike line 21 and all that follows 
     through page 118, line 7, and insert the following:
       (a) In General.--As soon as practicable after the date of 
     enactment of this Act, the Secretary shall establish a 
     research and development program to determine ways in which--
       (1) the weight of vehicles may be reduced to improve fuel 
     efficiency without compromising passenger safety;
       (2) new materials (including cast metal composite 
     materials) with a higher strength to weight ratio may be 
     developed;
       (3) the cost of lightweight materials (such as steel 
     alloys, fiberglass, and metal and carbon composites) required 
     for the construction of lighter-weight vehicles may be 
     reduced; and
       (4) the efficiency of automated manufacturing processes to 
     produce materials with a higher strength to weight ratio may 
     be improved.

[[Page 16377]]


                                 ______
                                 
  SA 1666. Mr. INHOFE (for himself, Mr. Burr, and Mrs. Dole) submitted 
an amendment intended to be proposed to amendment SA 1502 proposed by 
Mr. Reid to the bill H.R. 6, to reduce our Nation's dependency on 
foreign oil by investing in clean, renewable, and alternative energy 
resources, promoting new emerging energy technologies, developing 
greater efficiency, and creating a Strategic Energy Efficiency and 
Renewables Reserve to invest in alternative energy, and for other 
purposes; which was ordered to lie on the table; as follows:

       At the end of subtitle A of title I, add the following:

     SEC. 113. AGRICULTURE EQUITY.

       (a) Assessment of Food and Feed Availability.--
       (1) In general.--The Administrator of the Environmental 
     Protection Agency (referred to in this section as the 
     ``Administrator'') shall conduct an assessment of the 
     availability of corn for food and feed uses by not later than 
     July 31 and November 30 of each calendar year after the date 
     of enactment of this Act.
       (2) Regional weather conditions.--
       (A) In general.--Not later than August 1, 2007, and 
     annually thereafter, the Administrator, in consultation with 
     the Secretary of Agriculture, the Secretary of Commerce, and 
     the Association of American Feed Control Officials, shall 
     submit to Congress, and publish in the Federal Register, an 
     assessment of the Administrator regarding--
       (i) regional weather conditions during the current crop 
     year; and
       (ii) the impact of the conditions on projected local corn 
     supplies.
       (B) Factors for consideration.--In conducting the 
     assessment under subparagraph (A), the Administrator shall 
     take into consideration, as applicable--
       (i) the impacts of drought, including reduced 
     precipitation;
       (ii) the impacts of flooding, including increased 
     precipitation; and
       (iii) projected local demand for corn during the following 
     crop year.
       (3) Estimates.--
       (A) In general.--Not later than December 1, 2007, and 
     annually thereafter, the Administrator shall conduct an 
     assessment of the most current estimates of the ratio that, 
     with respect to the marketing year beginning in September of 
     the calendar year in which the assessment is conducted--
       (i) United States domestic ending stocks of corn; bears to
       (ii) total use of corn.
       (B) Factors for consideration.--In conducting the 
     assessment under subparagraph (A), the Administrator shall 
     take into consideration, and rely on, the data published by 
     the Secretary of Agriculture in the monthly report entitled 
     ``World Agricultural Supply and Demand Estimates'' (or 
     similar public and authoritative estimates provided by the 
     Secretary of Agriculture).
       (b) Potential Economic and Consumer Harm Assessment.--
       (1) Regional weather conditions.--If the Administrator 
     determines that an assessment of the Administrator under 
     subsection (a)(2) indicates that there is a reasonable 
     likelihood that the ratio described in subsection (a)(3)(A) 
     will be equal to or less than 0.10, the Administrator shall 
     publish the determination in the Federal Register by not 
     later than 14 days after the date on which the determination 
     is made.
       (2) Estimates.--If the Administrator determines that an 
     assessment of the Administrator under subsection (a)(3) 
     indicates that there is a reasonable likelihood that the 
     ratio described in subsection (a)(3)(A) will be equal to or 
     less than 0.10, the Administrator, in consultation with the 
     Secretary and the Secretary of Agriculture, shall publish, by 
     not later than 14 days after the date on which the 
     determination is made, the intention of the Administrator to 
     request the President to modify a portion of the requirement 
     described in section 111(a)(2).
       (3) Regional disruption.--If the Administrator determines 
     that an assessment of the Administrator under subsection 
     (a)(2) indicates that a regional disruption to the 
     availability of feed corn with respect to livestock producers 
     will occur, the Administrator, in consultation with the 
     Secretary of Agriculture, shall develop and implement a plan 
     to ensure that regional food and feed supplies are 
     maintained, to the maximum extent practicable, including 
     through adjustments to the applicable renewable fuels 
     standard under section 111(a) in the affected region.
       (c) Actions to Prevent Economic and Consumer Harm.--
       (1) In general.--Subject to paragraph (2), the 
     Administrator may submit to the President a petition to 
     request a modification of a requirement under the renewable 
     fuels standard under section 111(a) in a quantity of gallons 
     sufficient to ensure, to the maximum extent practicable, that 
     the ratio described in subsection (a)(3)(A) will be at least 
     0.10.
       (2) Limitation.--A requirement under the renewable fuels 
     standard under section 111(a) shall not be reduced by more 
     than 15 percent during any calendar year.
       (3) Effective period.--A modification under paragraph (1) 
     shall be effective during the 1-year period beginning on the 
     effective date of the modification.
       (d) Public Participation.--
       (1) In general.--The Administrator shall--
       (A) make each assessment conducted, and each modification 
     provided, pursuant to this section available to the public; 
     and
       (B) provide an opportunity for public comment relating to 
     each assessment and modification for a period of not more 
     than 30 days.
       (2) Modifications.--Not later than 14 days after the end of 
     the comment period described in paragraph (1)(B), the 
     President shall promulgate the modification that is the 
     subject to the comment period, unless the President, in 
     consultation with the Administrator, determines that clear 
     and compelling evidence demonstrates that the modification 
     would not have a material effect on the quantity of corn 
     available for food and feed use.

                                 ______
                                 
  SA 1667. Mr. INHOFE submitted an amendment intended to be proposed to 
amendment SA 1502 proposed by Mr. Reid to the bill H.R. 6, to reduce 
our Nation's dependency on foreign oil by investing in clean, 
renewable, and alternative energy resources, promoting new emerging 
energy technologies, developing greater efficiency, and creating a 
Strategic Energy Efficiency and Renewables Reserve to invest in 
alternative energy, and for other purposes; which was ordered to lie on 
the table; as follows:

       On page 23, between lines 22 and 23, insert the following:
       (iii) Treatment of certain refiners and refineries.--

       (I) In general.--A refiner shall be eligible for an 
     extension of an exemption under clause (ii) as a small 
     business refiner after December 31, 2007, if the refiner 
     makes an election under section 179C of the Internal Revenue 
     Code of 1986.
       (II) Small refineries.--A small refinery owned by a refiner 
     described in subclause (I) shall be eligible for an extension 
     of an exemption under clause (ii) as a small refinery after 
     December 31, 2007, if the refinery makes an election under 
     section 179C of the Internal Revenue Code of 1986.
       (III) Mergers and acquisitions.--An entity that is the 
     result of a merger or acquisition by 1 or more refiners shall 
     not be eligible for an extension under subclause (I) unless 
     the merger or acquisition involves only refineries of small 
     business refiners described in that subclause.

                                 ______
                                 
  SA 1668. Mr. INHOFE submitted an amendment intended to be proposed to 
amendment SA 1502 proposed by Mr. Reid to the bill H.R. 6, to reduce 
our Nation's dependency on foreign oil by investing in clean, 
renewable, and alternative energy resources, promoting new emerging 
energy technologies, developing greater efficiency, and creating a 
Strategic Energy Efficiency and Renewables Reserve to invest in 
alternative energy, and for other purposes; which was ordered to lie on 
the table; as follows:

       At the end of subtitle C of title I, add the following:

     SEC. 151. STUDY OF INCREASED CONSUMPTION OF ETHANOL-BLENDED 
                   GASOLINE WITH HIGHER LEVELS OF ETHANOL.

       (a) In General.--The Administrator of the Environmental 
     Protection Agency, in cooperation with the Secretary, the 
     Secretary of Agriculture, and the Secretary of 
     Transportation, and after providing notice and an opportunity 
     for public comment, shall conduct a study of the feasibility 
     of increasing consumption in the United States of ethanol-
     blended gasoline with levels of ethanol of not less than 10 
     percent and not more than 40 percent.
       (b) Study.--The study under subsection (a) shall include--
       (1) a review of production and infrastructure constraints 
     on increasing the consumption of ethanol;
       (2) an evaluation of the economic, market, and energy 
     impacts of State and regional differences in ethanol blends;
       (3) an evaluation of the economic, market, and energy 
     impacts on gasoline retailers and consumers of separate and 
     distinctly-labeled fuel storage facilities and dispensers;
       (4) an evaluation on the environmental impacts of mid-level 
     ethanol blends on evaporative and exhaust emissions from on-
     road, off-road and marine engines, recreational boats, 
     vehicles, and equipment;
       (5) an evaluation of the impacts of mid-level ethanol 
     blends on the operation, durability and performance of 
     onroad, off-road, and marine engines, recreational boats, 
     vehicles, and equipment; and
       (6) an evaluation of the safety impacts of mid-level 
     ethanol blends on consumers that own and operate off-road and 
     marine engines, recreational boats, vehicles, or equipment.
       (c) Report.--Not later than 18 months after the date of 
     enactment of this Act, the

[[Page 16378]]

     Administrator shall submit to Congress a report describing 
     the results of the study conducted under this section.
       (d) Authorization of Appropriations.--There is authorized 
     to be appropriated to the Administrator to carry out the 
     study under this section $1,000,000.
       (e) Technical Amendment.--Section 211(f)(4) of the Clean 
     Air Act (42 U.S.C. 7545(f)(4)) is amended by striking the 
     last sentence and inserting the following: ``The 
     Administrator, after providing notice and an opportunity for 
     public comment, shall approve or deny an application 
     submitted under this paragraph by not later than 270 days 
     after the date of receipt of the application.''.

                                 ______
                                 
  SA 1669. Mr. INHOFE submitted an amendment intended to be proposed to 
amendment SA 1502 proposed by Mr. Reid to the bill H.R. 6, to reduce 
our Nation's dependency on foreign oil by investing in clean, 
renewable, and alternative energy resources, promoting new emerging 
energy technologies, developing greater efficiency, and creating a 
Strategic Energy Efficiency and Renewables Reserve to invest in 
alternative energy, and for other purposes; which was ordered to lie on 
the table; as follows:

       At the appropriate place, insert the following:

     SEC. ___. EMERGENCY SERVICE ROUTE.

       Section 1948 of the Safe, Accountable, Flexible, Efficient 
     Transportation Equity Act: A Legacy for Users (Public Law 
     109-59; 119 Stat. 1514) is repealed.

                                 ______
                                 
  SA 1670. Ms. MURKOWSKI (for herself and Mr. Stevens) submitted an 
amendment intended to be proposed to amendment SA 1502 proposed by Mr. 
Reid to the bill H.R. 6, to reduce our Nation's dependency on foreign 
oil by investing in clean, renewable, and alternative energy resources, 
promoting new emerging energy technologies, developing greater 
efficiency, and creating a Strategic Energy Efficiency and Renewables 
Reserve to invest in alternative energy, and for other purposes; which 
was ordered to lie on the table; as follows:

       At the end, add the following:

      TITLE VIII--COASTAL PLAIN STRATEGIC PETROLEUM READY RESERVE

     SEC. 801. SHORT TITLE.

       This title may be cited as the ``Coastal Plain Strategic 
     Petroleum Ready Reserve Act of 2007''.

     SEC. 802. FINDINGS; PURPOSES.

       (a) Findings.--Congress finds that--
       (1) domestic production of crude oil is in sharp decline;
       (2) more than 60 percent of the oil consumed in the United 
     States is imported;
       (3) traditional sources of foreign oil supply, including 
     the Middle East, are facing terrorism, armed conflicts, 
     instability, and political uncertainty, which increase the 
     vulnerability and threaten the security of the oil imports on 
     which the United States has become so dependent;
       (4) crude oil production in Alaska, a major source of 
     domestic oil for the United States has decreased from 
     approximately 2,000,000 barrels a day in 1991 to 
     approximately 800,000 barrels a day in 2007;
       (5) the approximately 1,500,000-acre Coastal Plain area of 
     the 19,000,000-acre Arctic National Wildlife Refuge is 
     projected to contain--
       (A) a median of 10,400,000,000 barrels of oil; and
       (B) very large reserves of natural gas;
       (6) there are legislative measures pending in Congress to 
     designate all or a portion of the Coastal Plain as a 
     wilderness, which would prevent the large crude oil and 
     natural gas reserves of the Coastal Plain from being used as 
     a strategic petroleum reserve; and
       (7) the proposed designation of the Coastal Plain as 
     wilderness is contrary to the critically important interests 
     of the security and energy policy of the United States.
       (b) Purposes.--The purposes of this title are--
       (1) to designate the public land of the Coastal Plain area 
     of the Arctic National Wildlife Refuge as a strategic 
     petroleum reserve;
       (2) to ensure that the reserves of crude oil and natural 
     gas in the Coastal Plain are ready, but not actually made 
     available until authorized by Act of Congress, for commercial 
     production; and
       (3) in recognition of the long lead times in Alaska 
     associated with the transition from expressions of industry 
     interest in leasing, exploration, and development of crude 
     oil and natural gas to the actual leasing, exploration, and 
     development, to authorize seismic and exploration activities 
     in the Coastal Plain so that production of crude oil and 
     natural gas can proceed in the Coastal Plain if Congress 
     determines, after the date of enactment of this Act, that 
     production of oil and natural gas in the Coastal Plain is 
     necessary based on--
       (A) the need for domestic oil; and
       (B) political uncertainties and instability in major 
     producing regions of the world.

     SEC. 803. DEFINITIONS.

       In this title:
       (1) Coastal plain.--The term ``Coastal Plain'' means--
       (A) the approximately 1,500,000 acres of land described in 
     Appendix I to part 37 of subchapter C of chapter 1 of title 
     50, Code of Federal Regulations; and
       (B) land within the exterior boundaries of the Refuge that 
     is north of the area described in subparagraph (A).
       (2) Exploratory activity.--The term ``exploratory 
     activity'' means an activity described in subparagraph (A), 
     (B), or (C) of section 804(c)(1).
       (3) Final statement.--The term ``Final Statement'' means 
     the final legislative environmental impact statement on the 
     Coastal Plain, dated April 1987, and prepared pursuant to 
     section 1002 of the Alaska National Interest Lands 
     Conservation Act (16 U.S.C. 3142) and section 102(2)(C) of 
     the National Environmental Policy Act of 1969 (42 U.S.C. 
     4332(2)(C)).
       (4) Refuge.--The term ``Refuge'' means the Arctic National 
     Wildlife Refuge in the State.
       (5) Reserve.--The term ``Reserve'' means the Coastal Plain 
     Strategic Petroleum Ready Reserve designated by section 
     804(a).
       (6) Secretary.--The term ``Secretary'' means the Secretary 
     of the Interior.
       (7) State.--The term ``State'' means the State of Alaska.
       (8) Winter.--The term ``winter'' means the applicable 
     period of time defined for the winter season by the State 
     Department of Natural Resources.

     SEC. 804. COASTAL PLAIN STRATEGIC PETROLEUM READY RESERVE.

       (a) In General.--The public land in the Coastal Plain is 
     designated as the Coastal Plain Strategic Petroleum Ready 
     Reserve.
       (b) Administration.--The public land in the Reserve shall 
     be administered by the Secretary in accordance with--
       (1) any law applicable to the Coastal Plain; and
       (2) this title.
       (c) Authorized Exploratory Activities.--
       (1) In general.--To enable the Secretary to expeditiously 
     open the Coastal Plain to oil and natural gas production if 
     Congress authorizes such production in the Reserve in 
     accordance with section 807, beginning not later than winter 
     2008, the Secretary shall conduct, or shall enter into 1 or 
     more contracts with other Federal agencies or private 
     entities for the conduct of the following activities on 
     public land in the Reserve and private land of the Kaktovik 
     Inupiat Corporation or the Arctic Slope Regional Corporation 
     in the Coastal Plain:
       (A) Seismic exploration activities.
       (B) Exploratory drilling to delineate the locations and 
     provide firm estimates of the quantities of oil and natural 
     gas holdings.
       (C) The provision of any infrastructure necessary for the 
     exploratory activities.
       (2) Contract terms and conditions.--A contract for the 
     conduct of exploratory activity entered into by the Secretary 
     under paragraph (1) shall--
       (A) provide that the Secretary may close, on a seasonal 
     basis, such portions of the Coastal Plain to exploratory 
     drilling activities as are necessary to protect caribou 
     calving areas and other species of fish and wildlife;
       (B) provide that the Federal Government shall be fully 
     responsible and liable for the reclamation of land within the 
     Coastal Plain and any other Federal land that is adversely 
     affected in connection with exploratory activities within the 
     Coastal Plain conducted under this title;
       (C) contain terms and conditions relating to protection of 
     fish and wildlife, fish and wildlife habitat, subsistence 
     resources, and the environment as required under paragraph 
     (3); and
       (D) contain such other provisions as the Secretary 
     determines to be necessary to ensure compliance with this 
     title and regulations issued under this title.
       (3) Limitation.--Any exploratory activity authorized under 
     paragraph (1) shall be conducted only during the winter 
     unless the President authorizes the exploratory activity to 
     be conducted during additional periods based on a finding by 
     the President that there is a national oil shortage.
       (4) Applicable law.--The Secretary shall conduct any 
     exploratory activity authorized under paragraph (1) in 
     accordance with applicable land use and environmental laws, 
     including any regulations promulgated by the Secretary to 
     carry out this title.
       (d) Private Land Protections.--
       (1) In general.--The designation of the Reserve under 
     subsection (a) does not affect property rights or title to 
     private land located within the Coastal Plain that is owned 
     by--
       (A) the Kaktovik Inupiat Corporation; or
       (B) the Arctic Slope Regional Corporation.
       (2) Access.--Access to and across the Reserve, including 
     right-of-way access by Kaktovik Inupiat Corporation, Arctic 
     Slope Regional Corporation, and shareholders of the 
     Corporations, shall be permitted--
       (A) for--

[[Page 16379]]

       (i) subsistence, customary, and traditional uses; and
       (ii) reasonable commercial purposes; and
       (B) for access in accordance with sections 1110 and 1111 of 
     the Alaska National Interest Lands Conservation Act (16 
     U.S.C. 3170, 3171).
       (3) Limitation on leasing and commercial production 
     activities.--
       (A) In general.--The Secretary shall not conduct any oil or 
     natural gas production activity in the Reserve unless--
       (i) the maximum quantity of surface acreage covered by 
     production and support facilities (including airstrips and 
     any area covered by gravel berms or piers for support of 
     pipelines) does not exceed 2,000 acres on the Coastal Plain;
       (ii) the President submits to Congress--

       (I) a finding that oil or natural gas production in the 
     Reserve is necessary for the economic or national security of 
     the United States; and
       (II) a plan for the production and storage of oil or 
     natural gas produced from the Reserve; and

       (iii) the oil or natural gas production is specifically 
     authorized by an Act of Congress in accordance with section 
     807.
       (B) Costs.--The costs of any natural gas leasing or 
     commercial production activity authorized under subparagraph 
     (A) shall be paid by the United States.
       (C) Use.--Any oil or natural gas produced in accordance 
     with subparagraph (A) shall be made available for sale only 
     in accordance with section 161 of the Energy Policy and 
     Conservation Act (42 U.S.C. 6241).
       (D) Royalties.--Any royalties or revenues from the sale of 
     oil or natural gas under subparagraph (C) shall be allocated 
     in accordance with applicable law.
       (4) Infrastructure.--The Secretary may construct any 
     infrastructure authorized under subsection (c)(1)(C) on 
     private land in the Reserve only with the consent of the 
     owner of the private land.

     SEC. 805. COMPLIANCE WITH REQUIREMENTS UNDER CERTAIN LAWS.

       (a) Compatibility.--For purposes of the National Wildlife 
     Refuge System Administration Act of 1966 (16 U.S.C. 668dd et 
     seq.)--
       (1) the exploratory activities authorized in the Reserve 
     under this title shall be considered to be compatible with 
     the purposes for which the Refuge was established; and
       (2) no further findings or decisions shall be required to 
     implement the exploratory activities.
       (b) Adequacy of Final Statement.--The Final Statement shall 
     be considered to satisfy the requirements under the National 
     Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) 
     that apply with respect to pre-seismic and pre-exploration 
     drilling activities, including actions authorized to be taken 
     by the Secretary to develop and promulgate the regulations 
     for the conduct of exploratory activities authorized by this 
     title before the conduct of the activities.
       (c) Compliance With NEPA for Other Actions.--
       (1) In general.--Before conducting exploratory activities 
     under this title, the Secretary shall prepare an 
     environmental impact statement in accordance with the 
     National Environmental Policy Act of 1969 (42 U.S.C. 4321 et 
     seq.) with respect to the actions authorized by this title 
     that are not referred to in paragraph (2).
       (2) Identification and analysis.--Notwithstanding any other 
     provision of law, in carrying out this subsection, the 
     Secretary shall not be required--
       (A) to identify nonexploratory alternative courses of 
     action; or
       (B) to analyze the environmental effects of those courses 
     of action.
       (3) Identification of preferred action.--Not later than 18 
     months after the date of enactment of this Act, the Secretary 
     shall--
       (A) identify only a preferred action and a single 
     alternative for exploratory activities; and
       (B) analyze the environmental effects and potential 
     mitigation measures for those 2 alternatives.
       (4) Public comments.--In carrying out this subsection, the 
     Secretary shall consider only public comments that are filed 
     not later than 20 days after the date of publication of an 
     environmental analysis.
       (5) Effect of compliance.--Notwithstanding any other 
     provision of law, compliance with this subsection shall be 
     considered to satisfy all requirements for the analysis and 
     consideration of the environmental effects of proposed 
     exploratory activities under this title.

     SEC. 806. COASTAL PLAIN ENVIRONMENTAL PROTECTION.

       (a) No Significant Adverse Effect Standard To Govern 
     Authorized Coastal Plain Activities.--The Secretary shall 
     administer this title through regulations, terms, conditions, 
     restrictions, prohibitions, stipulations, and other 
     provisions that--
       (1) ensure, to the maximum extent practicable, that 
     exploratory activities will result in no significant adverse 
     effect on fish and wildlife, fish and wildlife habitat, and 
     the environment of the Coastal Plain; and
       (2) require the application of the best commercially 
     available technology for oil and gas exploration operations.
       (b) Site-Specific Assessment and Mitigation.--The Secretary 
     shall require, with respect to any proposed exploratory 
     drilling activities on the Coastal Plain, that--
       (1) a site-specific environmental analysis be made of the 
     probable effects, if any, that the drilling or related 
     activities will have on fish and wildlife, fish and wildlife 
     habitat, subsistence resources, subsistence uses, and the 
     environment;
       (2) a plan be implemented to avoid, minimize, and mitigate 
     (in that order and to the maximum extent practicable) any 
     significant adverse effect identified under paragraph (1); 
     and
       (3) the development of the plan occur after consultation 
     with each agency having jurisdiction over matters mitigated 
     by the plan.
       (c) Regulations To Protect Coastal Plain Fish and Wildlife 
     Resources, Subsistence Users, and the Environment.--Before 
     conducting any exploratory activities authorized by this 
     title, the Secretary shall prepare and issue regulations, 
     terms, conditions, restrictions, prohibitions, stipulations, 
     and other measures designed to ensure, to the maximum extent 
     practicable, that the exploratory activities carried out on 
     the Coastal Plain under this title are conducted in a manner 
     consistent with the purposes and environmental requirements 
     of this title.
       (d) Compliance With Federal and State Environmental Laws 
     and Other Requirements.--The proposed regulations, terms, 
     conditions, restrictions, prohibitions, and stipulations for 
     carrying out this title shall require--
       (1) compliance with all applicable provisions of Federal 
     and State environmental law (including regulations);
       (2) implementation of and compliance with--
       (A) standards that are at least as effective as the safety 
     and environmental mitigation measures, as described in items 
     1 through 29 on pages 167 through 169 of the Final Statement, 
     on the Coastal Plain;
       (B) seasonal limitations on exploratory activities, as 
     necessary, to avoid significant adverse effects during 
     periods of concentrated fish and wildlife breeding, denning, 
     nesting, spawning, and migration;
       (C) appropriate prohibitions or restrictions on--
       (i) access by all modes of transportation;
       (ii) sand and gravel extraction; and
       (iii) use of explosives;
       (D) reasonable stipulations for protection of cultural and 
     archaeological resources;
       (E) measures to protect groundwater and surface water, 
     including--
       (i) avoidance, to the maximum extent practicable, of 
     springs, streams, and river systems;
       (ii) the protection of natural surface drainage patterns, 
     wetland, and riparian habitats; and
       (iii) the regulation of methods or techniques for 
     developing or transporting adequate supplies of water for 
     exploratory drilling; and
       (F) research, monitoring, and reporting requirements;
       (3) that exploratory activities (except surface geological 
     studies) be limited to the period between approximately 
     November 1 and May 1 of each year and be supported, if 
     necessary, by ice roads, winter trails with adequate snow 
     cover, ice pads, ice airstrips, and air transport methods 
     (except that those exploration activities may be permitted at 
     other times if the Secretary determines that the exploratory 
     activities will have no significant adverse effect on fish 
     and wildlife, fish and wildlife habitat, and the environment 
     of the Coastal Plain);
       (4) avoidance or reduction of air traffic-related 
     disturbance to fish and wildlife;
       (5) treatment and disposal of hazardous and toxic wastes, 
     solid wastes, reserve pit fluids, drilling muds and cuttings, 
     and domestic wastewater, including, in accordance with 
     applicable Federal and State environmental laws (including 
     regulations)--
       (A) preparation of an annual waste management report;
       (B) development and implementation of a hazardous materials 
     tracking system; and
       (C) prohibition on the use of chlorinated solvents;
       (6) fuel storage and oil spill contingency planning;
       (7) conduct of periodic field crew environmental briefings;
       (8) avoidance of significant adverse effects on subsistence 
     hunting, fishing, and trapping;
       (9) compliance with applicable air and water quality 
     standards;
       (10) appropriate seasonal and safety zone designations 
     around well sites, within which subsistence hunting and 
     trapping shall be limited; and
       (11) development and implementation of such other 
     protective environmental requirements, restrictions, terms, 
     and conditions as the Secretary determines to be necessary.
       (e) Considerations.--In preparing and issuing regulations, 
     terms, conditions, restrictions, prohibitions, and 
     stipulations under this section, the Secretary shall take 
     into consideration--
       (1) the stipulations and conditions that govern the 
     National Petroleum Reserve-Alaska leasing program, as set 
     forth in the 1999 Northeast National Petroleum Reserve-Alaska 
     Final Integrated Activity Plan/Environmental Impact 
     Statement;

[[Page 16380]]

       (2) the environmental protection standards that governed 
     the initial Coastal Plain seismic exploration program under 
     parts 37.31 through 37.33 of title 50, Code of Federal 
     Regulations (or successor regulations); and
       (3) the land use stipulations for exploratory drilling on 
     the KIC-ASRC private land described in Appendix 2 of the 
     agreement between Arctic Slope Regional Corporation and the 
     United States dated August 9, 1983.
       (f) Facility Consolidation Planning.--
       (1) In general.--After providing for public notice and 
     comment, the Secretary shall prepare and periodically update 
     a plan to govern, guide, and direct the siting and 
     construction of facilities for the exploration of oil and gas 
     resources from the Coastal Plain.
       (2) Objectives.--The objectives of the plan shall be--
       (A) the avoidance of unnecessary duplication of facilities 
     and activities;
       (B) the encouragement of consolidation of common facilities 
     and activities;
       (C) the location or confinement of facilities and 
     activities to areas that will minimize impact on fish and 
     wildlife, fish and wildlife habitat, and the environment;
       (D) the use of existing facilities, to the maximum extent 
     practicable; and
       (E) the enhancement of compatibility between wildlife 
     values and development activities.

     SEC. 807. EXPEDITED PROCEDURE.

       (a) Definition of Bill.--In this section, the term ``bill'' 
     means only a bill to amend section 1003 of the Alaska 
     National Interest Lands Conservation Act (16 U.S.C. 3143) to 
     authorize oil or natural gas production in the Reserve.
       (b) Mandatory Introduction.--Not later than 30 days after 
     the date of receipt from the President of a bill described in 
     subsection (a), the Chairperson of the Committee on Energy 
     and Natural Resources of the Senate and the Chairperson of 
     the Committee on Natural Resources of the House of 
     Representatives shall introduce the bill, by request.
       (c) Referral to Committee.--
       (1) House of representatives.--A bill described in 
     subsection (a) introduced in the House of Representatives 
     shall be referred to the Committee on Natural Resources of 
     the House of Representatives.
       (2) Senate.--A bill described in subsection (a) introduced 
     in the Senate shall be referred to the Committee on Energy 
     and Natural Resources of the Senate.
       (3) Timing.--A bill described in subsection (a) shall be 
     reported not earlier than 60 days after the date of 
     introduction of the bill.
       (d) Discharge of Committee.--The committee to which a bill 
     described in subsection (a) is referred shall be considered 
     to have discharged the bill from further consideration, and 
     the bill shall be placed on the appropriate calendar of the 
     appropriate House, if the committee fails to report the bill 
     by the earlier of--
       (1) the date that is 90 calendar days after the date of 
     introduction of the bill; and
       (2) the end of the first day after there is reported to the 
     applicable House a bill described in subsection (a).
       (e) Floor Consideration.--
       (1) In general.--On the date on which the committee to 
     which a bill is referred has reported, or is considered to be 
     discharged from further consideration under subsection (d)--
       (A) it shall be in order at any time (even if a previous 
     motion to the same effect has been disagreed to) for any 
     Member of the respective House to move to proceed to the 
     consideration of the bill; and
       (B) all points of order against the bill (and against 
     consideration of the bill) are waived.
       (2) Treatment of motion.--
       (A) In general.--A motion under paragraph (1)(A) shall be 
     considered to be--
       (i) highly privileged in the House of Representatives;
       (ii) privileged in the Senate; and
       (iii) not debatable.
       (B) Amendments and other motions not allowed.--The motion 
     shall not be subject to--
       (i) an amendment;
       (ii) a motion to postpone; or
       (iii) a motion to proceed to the consideration of other 
     business.
       (C) Motions to reconsider.--A motion to reconsider the vote 
     by which the motion is agreed to or disagreed to shall not be 
     in order.
       (D) Agreement to motion to proceed.--If a motion to proceed 
     to the consideration of the bill is agreed to, the bill shall 
     remain the unfinished business of the respective House until 
     the bill is disposed of.
       (3) Debate.--
       (A) In general.--Debate on the bill (including all 
     debatable motions and appeals in connection with the bill) 
     shall be limited to not more than 50 hours, which shall be 
     divided equally between those favoring and those opposing the 
     bill.
       (B) Motions to further limit debate.--A motion to limit 
     further debate on the bill is in order and not debatable.
       (C) Amendments and other motions not allowed.--The bill 
     shall not be subject to--
       (i) an amendment;
       (ii) a motion to postpone;
       (iii) a motion to proceed to the consideration of other 
     business; or
       (iv) a motion to recommit.
       (D) Motions to reconsider.--A motion to reconsider the vote 
     by which the bill is agreed to or disagreed to is not in 
     order.
       (4) Vote on final passage.--Immediately following the 
     conclusion of the debate on a bill described in subsection 
     (a), and a single quorum call at the conclusion of the 
     debate, if requested in accordance with the rules of the 
     appropriate House, the vote on final passage of the bill 
     shall occur.
       (5) Rulings of the chair on procedure.--An appeal from a 
     decision of the Chairperson relating to the application of 
     the rules of the Senate or the House of Representatives, as 
     the case may be, to the procedure relating to a bill 
     described in subsection (a) shall be decided without debate.
       (f) Coordination With Action by Other House.--If, before 
     the passage by 1 House of a bill of that House described in 
     subsection (a), the House receives from the other House a 
     bill described in subsection (a)--
       (1) the bill of the other House shall not be referred to a 
     committee; and
       (2) with respect to a bill described in subsection (a) of 
     the House receiving the bill--
       (A) the procedure in that House shall be the same as if no 
     bill had been received from the other House; but
       (B) the vote on final passage shall be on the bill of the 
     other House.
       (g) Rules of House of Representatives and Senate.--This 
     section is enacted by Congress--
       (1) as an exercise of the rulemaking power of the Senate 
     and House of Representatives, respectively, and as such--
       (A) this section is deemed to be--
       (i) a part of the rules of each House, respectively; but
       (ii) applicable only with respect to the procedure to be 
     followed in that House in the case of a bill described in 
     subsection (a); and
       (B) this section supersedes other rules only to the extent 
     that this section is inconsistent with those rules; and
       (2) with full recognition of the constitutional right of 
     either House to change the rules (so far as relating to the 
     procedure of that House) at any time, in the same manner, and 
     to the same extent as in the case of any other rule of that 
     House.

     SEC. 808. STRATEGIC PETROLEUM RESERVE.

       (a) Establishment.--
       (1) Policy.--Section 151(b) of the Energy Policy and 
     Conservation Act (42 U.S.C. 6231(b)) is amended by striking 
     ``1 billion'' and inserting ``1,500,000,000''.
       (2) Level.--Section 154(a) of the Energy Policy and 
     Conservation Act (42 U.S.C. 6234(a)) is amended by striking 
     ``1 billion'' and inserting ``1,500,000,000''.
       (b) Filling Strategic Petroleum Reserve to Capacity.--
     Section 301(e) of the Energy Policy Act of 2005 (42 U.S.C. 
     6240 note; Public Law 109-58) is amended by striking 
     ``1,000,000,000-barrel'' and inserting ``1,500,000,000-
     barrel''.

     SEC. 809. ANNUAL REPORT.

       Not later than June 30, 2008, and each June 30 thereafter, 
     the Secretary and the Secretary of Energy shall jointly 
     submit to the appropriate committees of Congress a report 
     that describes--
       (1) the volume of crude oil produced during the previous 
     year in--
       (A) the State; and
       (B) the United States;
       (2) the volume of crude oil imported into the United States 
     during the previous year by--
       (A) the country of origin; and
       (B) the average price paid per barrel;
       (3) the volume of petroleum products imported during the 
     previous year by--
       (A) the country of origin; and
       (B) the average price paid per barrel;
       (4) the average daily throughput of crude oil for the 
     previous year by the trans-Alaska pipeline;
       (5) updated projections of the potential and known reserves 
     of crude oil and natural gas located in the Reserve; and
       (6) the status of the activities authorized under section 
     804(c)(1).

     SEC. 810. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated such sums as are 
     necessary to carry out this title.
                                 ______
                                 
  SA 1671. Ms. LANDRIEU submitted an amendment intended to be proposed 
to amendment SA 1502 proposed by Mr. Reid to the bill H.R. 6, to reduce 
our Nation's dependency on foreign oil by investing in clean, 
renewable, and alternative energy resources, promoting new emerging 
energy technologies, developing greater efficiency, and creating a 
Strategic Energy Efficiency and Renewables Reserve to invest in 
alternative energy, and for other purposes; which was ordered to lie on 
the table; as follows:

       On page 277, strike beginning with line 10 through page 
     288, line 2, and insert the following:

     SEC. 602. DEFINITIONS.

       In this title:
       (1) Affected area.--The term ``affected area'' means an 
     area covered by a Presidential declaration of energy 
     emergency as provided in section 606.
       (2) Supplier.--The term ``supplier'' means any person 
     engaged in the trade or business

[[Page 16381]]

     of selling or reselling, at retail or wholesale, or 
     distributing road transportation fuels or domestic home 
     heating oil.
       (3) Price gouging.--The term ``price gouging'' means the 
     charging of an unconscionably excessive price by a supplier 
     in an affected area while a Presidential declaration of 
     energy emergency is in effect.
       (4) Unconscionably excessive price.--The term 
     ``unconscionably excessive price'' means an average price 
     charged in an affected area for road transportation fuels or 
     domestic home heating oil that--
       (A)(i)(I) represents a gross disparity between the price at 
     which it was offered for sale in the usual course of the 
     supplier's business during the 30 days prior to the 
     President's declaration of an energy emergency; and
       (II) grossly exceeds the price at which the same or similar 
     road transportation fuels or domestic home heating oil were 
     readily obtainable by purchasers from other suppliers in the 
     in the same relevant geographic market within the affected 
     area; or
       (ii) represents an exercise of unfair leverage or 
     unconscionable means on the part of the supplier, during a 
     period of declared energy emergency; and
       (B) is not attributable to the justifiable price increases 
     set forth in section 603(c).
       (5) Commission.--The term ``Commission'' means the Federal 
     Trade Commission.
       (6) Wholesale.--The term ``wholesale'' refers to a sale 
     that occurs at a petroleum terminal rack or any sale 
     thereafter, other than a retail sale to a consumer.

     SEC. 603. PROHIBITION ON PRICE GOUGING DURING ENERGY 
                   EMERGENCIES.

       (a) In General.--During any energy emergency declared by 
     the President under section 606, it is unlawful for any 
     supplier to sell, or offer to sell, road transportation fuels 
     or domestic home heating oil in, or for use in, the area to 
     which that declaration applies at an unconscionably excessive 
     price.
       (b) Factors Considered.--In determining whether a violation 
     of subsection (a) has occurred, there shall be taken into 
     account, among other factors, whether--
       (1) the price charged was a price that would reasonably 
     exist in a competitive and freely functioning market; and
       (2) the price at which the road transportation fuel or 
     domestic home heating oil was sold reasonably reflects 
     additional costs or risks, not within the control of the 
     seller, that were paid or incurred by the seller.
       (c) Justifiable Price Increases.--The prohibition in 
     subsection (a) does not apply to the extent that the increase 
     in the price of the road transportation fuel or domestic home 
     heating oil is substantially attributable to--
       (1) an increase in the wholesale cost of road 
     transportation fuel or domestic home heating oil to a retail 
     seller or reseller;
       (2) an increase in the replacement costs for road 
     transportation fuel or domestic home heating oil sold;
       (3) an increase in operational costs; or
       (4) local, regional, national, or international market 
     conditions.

     SEC. 604. PROHIBITION ON MARKET MANIPULATION.

       It is unlawful for any person, directly or indirectly, to 
     use or employ, in connection with the purchase or sale of 
     road transportation fuels or domestic home heating oil at 
     wholesale, any manipulative or deceptive device or 
     contrivance, in contravention of such rules and regulations 
     as the Commission may prescribe as necessary or appropriate 
     in the public interest or for the protection of United States 
     citizens.

     SEC. 605. PROHIBITION ON FALSE INFORMATION.

       It is unlawful for any person to report information related 
     to the wholesale price of road transportation fuels or 
     domestic home heating oil distillates to a Federal department 
     or agency if--
       (1) that person knew, or reasonably should have known, the 
     information to be false or misleading;
       (2) the information was required by law to be reported; and
       (3) the person intended the false or misleading data to 
     affect data compiled by the Commission for statistical or 
     analytical purposes with respect to the market for road 
     transportation fuels or domestic home heating oil.

     SEC. 606. PRESIDENTIAL DECLARATION OF ENERGY EMERGENCY.

       (a) In General.--If the President finds that the health, 
     safety, welfare, or economic well-being of the citizens of 
     the United States is at risk because of a shortage or 
     imminent shortage of adequate supplies of road transportation 
     fuels or domestic home heating oil due to a disruption in the 
     national distribution system for road transportation fuels or 
     domestic home heating oil (including such a shortage related 
     to a major disaster (as defined in section 102(2) of the 
     Robert T. Stafford Disaster Relief and Emergency Assistance 
     Act (42 U.S.C. 5122(2))), the President may declare that a 
     Federal energy emergency exists.
       (b) Scope and Duration.--The emergency declaration shall 
     specify--
       (1) the period, not to exceed 30 days, for which the 
     declaration applies;
       (2) the circumstance or condition necessitating the 
     declaration; and
       (3) the area or region to which it applies, which, for the 
     48 contiguous states may not be limited to a single State.
       (c) Extensions.--The President may--
       (1) extend a declaration under subsection (a) for a period 
     of not more than 30 days; and
       (2) extend such a declaration not more than twice.

     SEC. 607. ENFORCEMENT BY THE FEDERAL TRADE COMMISSION.

       (a) Enforcement.--This title shall be enforced by the 
     Federal Trade Commission in the same manner, by the same 
     means, and with the same jurisdiction as though all 
     applicable terms of the Federal Trade Commission Act were 
     incorporated into and made part of this title.
       (b) Violation Is Unfair or Deceptive Act or Practice.--The 
     violation of any provision of this title shall be treated as 
     an unfair or deceptive act or practice proscribed under a 
     rule issued under section 18(a)(1)(B) of the Federal Trade 
     Commission Act (15 U.S.C. 57a(a)(1)(B)).
       (c) Commission Actions.--Following the declaration of an 
     energy emergency by the President under section 606, the 
     Commission shall--
       (1) maintain within the Commission--
       (A) a toll-free hotline that a consumer may call to report 
     an incident of price gouging in the affected area; and
       (B) a program to develop and distribute to the public 
     informational materials to assist residents of the affected 
     area in detecting and avoiding price gouging;
       (2) consult with the Attorney General, the United States 
     Attorney for the districts in which a disaster occurred (if 
     the declaration is related to a major disaster), and State 
     and local law enforcement officials to determine whether any 
     supplier in the affected area is charging or has charged an 
     unconscionably excessive price for road transportation fuels 
     or domestic home heating oil in the affected area; and
       (3) conduct an investigation to determine whether any 
     supplier in the affected area has violated section 603, and 
     upon such finding, take any action the Commission determines 
     to be appropriate to remedy the violation.
       (d) Limited Preemption.--This title shall preempt State 
     laws only with respect to affected areas and only for the 
     period of time that a declaration of energy emergency issued 
     under section 606 is in effect. Nothing contained in this 
     section shall otherwise prohibit an authorized State official 
     from proceeding in State court to enforce a civil or criminal 
     statute of that State.

     SEC. 608. ENFORCEMENT BY STATE ATTORNEYS GENERAL.

       (a) In General.--A State, as parens partriae, may, on 
     behalf of its residents, petition the Commission to enforce 
     the provisions of section 603, or to impose the civil 
     penalties authorized by section 609 for violations of section 
     603, whenever the Attorney General of the State has reason to 
     believe that the interests of the residents of the State have 
     been or are being threatened or adversely affected by a 
     supplier engaged in the sale or resale, at retail or 
     wholesale, or distribution of road transportation fuel or 
     domestic home heating oil in violation of section 603.
       (b) Notice.--The State shall petition the Commission to 
     enforce the provisions of section 607 by filing with the 
     Commission a written notice of probable violation which sets 
     forth the State's reasons for believing section 603 has been 
     violated.
       (c) Required Investigation.--Upon receiving the notice 
     required by subsection (b), the Commission shall commence or 
     continue an investigation in accordance with section 
     607(c)(3), taking into account the claims set forth in the 
     State's notice of probable violation.
       (d) Limitation on State Action While Federal Action Is 
     Pending.--If the Commission has instituted a civil action or 
     an administrative action for violation of this title, a State 
     attorney general, or official or agency of a State, may not 
     bring an action during the pendency of that action against 
     any defendant named in the complaint of the Commission or the 
     other agency for any violation of this title alleged in the 
     Commission's civil or administrative action.
       (e) Limited Preemption.--This title shall preempt State 
     laws only with respect to affected areas and only for the 
     period of time that a declaration of energy emergency under 
     section 606 is in effect. Nothing contained in this section 
     shall otherwise prohibit an authorized State official from 
     proceeding in State court to enforce a civil or criminal 
     statute of that State.

     SEC. 609. EFFECT ON OTHER LAWS.

       (a) Other Authority of the Commission.--Nothing in this 
     title shall be construed to limit or affect in any way the 
     Commission's authority to bring enforcement actions or take 
     any other measure under the Federal Trade Commission Act (15 
     U.S.C. 41 et seq.) or any other provision of law.
       (b) State Law.--Nothing in this title preempts any State 
     law.

                                 ______
                                 
  SA 1672. Mr. SCHUMER (for himself and Mr. Kennedy) submitted an 
amendment intended to be proposed to amendment SA 1502 proposed by Mr. 
Reid to the bill H.R. 6, to reduce our Nation's dependency on foreign 
oil by investing in clean, renewable, and alternative energy resources, 
promoting

[[Page 16382]]

 new emerging energy technologies, developing greater efficiency, and 
creating a Strategic Energy Efficiency and Renewables Reserve to invest 
in alternative energy, and for other purposes; which was ordered to lie 
on the table; as follows:

       At the appropriate place, insert the following:

     SEC. _. COMMUTER BENEFIT EQUITY.

       (a) Uniform Dollar Limitation for All Types of 
     Transportation Fringe Benefits.--
       (1) In general.--Section 132(f)(2) of the Internal Revenue 
     Code of 1986 (relating to limitation on exclusion) is 
     amended--
       (A) by striking ``$100'' in subparagraph (A) and inserting 
     ``$200'', and
       (B) by striking ``$175'' in subparagraph (B) and inserting 
     ``$200''.
       (2) Inflation adjustment conforming amendments.--
     Subparagraph (A) of section 132(f)(6) of the Internal Revenue 
     Code of 1986 (relating to inflation adjustment) is amended--
       (A) by striking the last sentence,
       (B) by striking ``1999'' and inserting ``2008'', and
       (C) by striking ``1998'' and inserting ``2007''.
       (3) Effective date.--The amendments made by this subsection 
     shall apply to taxable years beginning after December 31, 
     2006.
       (b) Clarification of Federal Employee Benefits.--Section 
     7905 of title 5, United States Code, is amended--
       (1) in subsection (a)--
       (A) in paragraph (2)(C) by inserting ``and'' after the 
     semicolon;
       (B) in paragraph (3) by striking ``; and'' and inserting a 
     period; and
       (C) by striking paragraph (4); and
       (2) in subsection (b)(2)(A) by amending subparagraph (A) to 
     read as follows:
       ``(A) a qualified transportation fringe as defined in 
     section 132(f)(1) of the Internal Revenue Code of 1986;''.

                                 ______
                                 
  SA 1673. Mr. BINGAMAN (for himself, Mr. Dodd, Mr. Allard, Mr. Reed, 
Mr. Crapo, Mr. Schumer, Mr. Martinez, Mr. Casey, and Mr. Bayh) 
submitted an amendment intended to be proposed to amendment SA 1502 
proposed by Mr. Reid to the bill H.R. 6, to reduce our Nation's 
dependency on foreign oil by investing in clean, renewable, and 
alternative energy resources, promoting new emerging energy 
technologies, developing greater efficiency, and creating a Strategic 
Energy Efficiency and Renewables Reserve to invest in alternative 
energy, and for other purposes; which was ordered to lie on the table; 
as follows:

       On page 157, line 5, strike ``and if'' and insert the 
     following: ``the Secretary of Housing and Urban Development 
     or the Secretary of Agriculture make a determination that the 
     revised codes do not negatively affect the availability or 
     affordability of new construction of assisted housing and 
     single family and multifamily residential housing (other than 
     manufactured homes) subject to mortgages insured under the 
     National Housing Act (12 U.S.C. 1701 et seq.) or insured, 
     guaranteed, or made by the Secretary of Agriculture under 
     title V of the Housing Act of 1949 (42 U.S.C. 1471 et seq.), 
     respectively, and''.

                                 ______
                                 
  SA 1674. Mr. FEINGOLD submitted an amendment intended to be proposed 
to amendment SA 1502 proposed by Mr. Reid to the bill H.R. 6, to reduce 
our Nation's dependency on foreign oil by investing in clean, 
renewable, and alternative energy resources, promoting new emerging 
energy technologies, developing greater efficiency, and creating a 
Strategic Energy Efficiency and Renewables Reserve to invest in 
alternative energy, and for other purposes; which was ordered to lie on 
the table; as follows:

       On page 163, strike lines 8 and 9 and insert the following:
       (b) Protection for Small Business.--Section 111(c)(3) of 
     the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 
     2621(c)(3)) is amended by striking ``subsection (d)(7) or 
     (8)'' and inserting ``paragraph (7), (8), (16), or (17) of 
     subsection (d)''.
       (c) Natural Gas Utilities.--Section 303(b) of the Public 
     Utility Regulatory Policies Act of 1978 (15 U.S.C. * * *
       On page 164, between lines 20 and 21, insert the following:
       (d) Small Business Impacts.--Section 303(d) of the Public 
     Utility Regulatory Policies Act of 1978 (15 U.S.C. 3203(d)) 
     is amended by striking ``subsection (b)(3) or (4)'' and 
     inserting ``any of paragraphs (3) through (6) of subsection 
     (b)''.
                                 ______
                                 
  SA 1675. Mr. MENENDEZ submitted an amendment intended to be proposed 
to amendment SA 1502 proposed by Mr. Reid to the bill H.R. 6, to reduce 
our Nation's dependency on foreign oil by investing in clean, 
renewable, and alternative energy resources, promoting new emerging 
energy technologies, developing greater efficiency, and creating a 
Strategic Energy Efficiency and Renewables Reserve to invest in 
alternative energy, and for other purposes; which was ordered to lie on 
the table; as follows:

       At the end, add the following:

                       TITLE VIII--MISCELLANEOUS

     SEC. 801. STUDY OF THE EFFECT OF PRIVATE WIRE LAWS ON THE 
                   DEVELOPMENT OF COMBINED HEAT AND POWER 
                   FACILITIES.

       (a) Study.--
       (1) In general.--The Secretary, in consultation with the 
     States and other appropriate entities, shall conduct a study 
     of the laws (including regulations) affecting the siting of 
     privately owned electric distribution wires on and across 
     public rights-of-way.
       (2) Requirements.--The study under paragraph (1) shall 
     include--
       (A) an evaluation of--
       (i) the purposes of the laws; and
       (ii) the effect the laws have on the development of 
     combined heat and power facilities;
       (B) a determination of whether a change in the laws would 
     have any operating, reliability, cost, or other impacts on 
     electric utilities and the customers of the electric 
     utilities; and
       (C) an assessment of--
       (i) whether privately owned electric distribution wires 
     would result in duplicative facilities; and
       (ii) whether duplicative facilities are necessary or 
     desirable.
       (b) Report.--Not later than 1 year after the date of 
     enactment of this Act, the Secretary shall submit to Congress 
     a report that describes the results of the study conducted 
     under subsection (a).
                                 ______
                                 
  SA 1676. Mr. BROWN submitted an amendment intended to be proposed to 
amendment SA 1502 proposed by Mr. Reid to the bill H.R. 6, to reduce 
our Nation's dependency on foreign oil by investing in clean, 
renewable, and alternative energy resources, promoting new emerging 
energy technologies, developing greater efficiency, and creating a 
Strategic Energy Efficiency and Renewables Reserve to invest in 
alternative energy, and for other purposes; which was ordered to lie on 
the table; as follows:

       On page 161, between lines 2 and 3, insert the following:

     SEC. 26_. RENEWABLE ENERGY INNOVATION MANUFACTURING 
                   PARTNERSHIP.

       (a) Establishment.--The Secretary shall carry out a 
     program, to be known as the Renewable Energy Innovation 
     Manufacturing Partnership Program (referred to in this 
     section as the ``Program''), to make assistance awards to 
     eligible entities for use in carrying out research, 
     development, and demonstration relating to the manufacturing 
     of renewable energy technologies.
       (b) Solicitation.--To carry out the Program, the Secretary 
     shall annually conduct a competitive solicitation for 
     assistance awards for an eligible project described in 
     subsection (e).
       (c) Program Purposes.--The purposes of the Program are--
       (1) to develop, or aid in the development of, advanced 
     manufacturing processes, materials, and infrastructure;
       (2) to increase the domestic production of renewable energy 
     technology and components; and
       (3) to better coordinate Federal, State, and private 
     resources to meet regional and national renewable energy 
     goals through advanced manufacturing partnerships.
       (d) Eligible Entities.--An entity shall be eligible to 
     receive an assistance award under the Program to carry out an 
     eligible project described in subsection (e) if the entity is 
     composed of--
       (1) 1 or more public or private nonprofit institutions or 
     national laboratories engaged in research, development, 
     demonstration, or technology transfer, that would participate 
     substantially in the project; and
       (2) 1 or more private entities engaged in the manufacturing 
     or development of renewable energy system components 
     (including solar energy, wind energy, biomass, geothermal 
     energy, energy storage, or fuel cells).
       (e) Eligible Projects.--An eligible entity may use an 
     assistance award provided under this section to carry out a 
     project relating to--
       (1) the conduct of studies of market opportunities for 
     component manufacturing of renewable energy systems;
       (2) the conduct of multiyear applied research, development, 
     demonstration, and deployment projects for advanced 
     manufacturing processes, materials, and infrastructure for 
     renewable energy systems; and
       (3) other similar ventures, as approved by the Secretary, 
     that promote advanced manufacturing of renewable 
     technologies.
       (f) Criteria and Guidelines.--The Secretary shall establish 
     criteria and guidelines for the submission, evaluation, and 
     funding of proposed projects under the Program.

[[Page 16383]]

       (g) Cost Sharing.--Section 988 of the Energy Policy Act of 
     2005 (42 U.S.C. 16352) shall apply to a project carried out 
     under this section.
       (h) Disclosure.--Section 623 of the Energy Policy Act of 
     1992 (42 U.S.C. 13293) shall apply to a project carried out 
     under this subsection.
       (i) Sense of the Senate.--It is the sense of the Senate 
     that the Secretary should ensure that small businesses 
     engaged in renewable manufacturing be considered for loan 
     guarantees authorized under title XVII of the Energy Policy 
     Act of 2005 (42 U.S.C. 16511 et seq.).
       (j) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $25,000,000 for 
     each of fiscal years 2008 through 2013, to remain available 
     until expended.
                                 ______
                                 
  SA 1677. Mr. BINGAMAN submitted an amendment intended to be proposed 
to amendment SA 1502 proposed by Mr. Reid to the bill H.R. 6, to reduce 
our Nation's dependency on foreign oil by investing in clean, 
renewable, and alternative energy resources, promoting new emerging 
energy technologies, developing greater efficiency, and creating a 
Strategic Energy Efficiency and Renewables Reserve to invest in 
alternative energy, and for other purposes; which was ordered to lie on 
the table; as follows:

       On page 7, line 11, insert ``(including landfill gas and 
     sewage waste treatment gas)'' after ``biogas''.
       On page 7, strike lines 13 through 16 and insert the 
     following:
       biomass;
       (vi) butanol or other alcohols produced through the 
     conversion of organic matter from renewable biomass; and
       (vii) other fuel derived from cellulosic biomass.
       On page 9, line 13, strike ``, boiler fuel,''.
       On page 9, line 20, strike ``, boiler,''.
       On page 10, lines 17 and 18, strike ``motor vehicle fuel, 
     home heating oil, and boiler fuel'' and insert ``motor 
     vehicle fuel and home heating oil''.
       On page 11, line 11, strike ``built'' and insert ``that 
     commence operations''.
       On page 44, lines 4 and 5, strike ``local biorefineries'' 
     and insert ``local biorefineries, including by portable 
     processing equipment''.
       On page 44, lines 13 and 14, strike ``local biorefineries'' 
     and insert ``local biorefineries, including by portable 
     processing equipment''.
       On page 47, strike lines 9 through 15 and insert the 
     following:
       (1) Quality regulations.--Not later than 180 days after the 
     date of enactment of this Act, the President shall promulgate 
     regulations to ensure that each diesel-equivalent fuel 
     derived from renewable biomass and introduced into interstate 
     commerce is tested and certified to comply with applicable 
     standards of the American Society for Testing and Materials.

                                 ______
                                 
  SA 1678. Mrs. HUTCHISON (for herself and Mr. Cornyn) submitted an 
amendment intended to be proposed to amendment SA 1502 proposed by Mr. 
Reid to the bill H.R. 6, to reduce our Nation's dependency on foreign 
oil by investing in clean, renewable, and alternative energy resources, 
promoting new emerging energy technologies, developing greater 
efficiency, and creating a Strategic Energy Efficiency and Renewables 
Reserve to invest in alternative energy, and for other purposes; which 
was ordered to lie on the table; as follows:

       On page 21, strike line 12 and insert the following:
       (2) Petitions for waiver.--
       (A) In general.--The President,
       On page 21, between lines 19 and 20, insert the following:
       (B) Immediate relief.--During the 90-day period described 
     in subparagraph (A), the President may authorize the 
     Administrator of the Environmental Protection Agency to 
     adjust the requirements described in subsection (a) as the 
     Administrator of the Environmental Protection Agency 
     determines to be necessary to provide immediate relief until 
     the date on which the President, in consultation with the 
     Secretary of Energy, the Secretary of Agriculture, and the 
     Administrator of the Environmental Protection Agency, 
     approves or disapproves a State petition for a waiver under 
     subparagraph (A).
                                 ______
                                 
  SA 1679. Mrs. HUTCHISON (for herself and Mr. Cornyn) submitted an 
amendment intended to be proposed to amendment SA 1502 proposed by Mr. 
Reid to the bill H.R. 6, to reduce our Nation's dependency on foreign 
oil by investing in clean, renewable, and alternative energy resources, 
promoting new emerging energy technologies, developing greater 
efficiency, and creating a Strategic Energy Efficiency and Renewables 
Reserve to invest in alternative energy, and for other purposes; which 
was ordered to lie on the table; as follows:

       On page 26, strike lines 19 through 21 and insert the 
     following:
       (j) Study of Impact of Renewable Fuel Standard.--
       (1) In general.--The Secretary shall enter into an 
     arrangement with the National Academy of Sciences under which 
     the Academy shall conduct a study to assess the impact of the 
     requirements described in subsection (a)(2) on each industry 
     relating to the production of feed grains, livestock, food, 
     and energy.
       (2) Participation.--In conducting the study under paragraph 
     (1), the National Academy of Sciences shall seek the 
     participation, and consider the input, of--
       (A) producers of feed grains;
       (B) producers of livestock, poultry, and pork products;
       (C) producers of food and food products;
       (D) producers of energy;
       (E) individuals and entities interested in issues relating 
     to conservation, the environment, and nutrition; and
       (F) users of renewable fuels.
       (3) Considerations.--In conducting the study, the National 
     Academy of Sciences shall consider--
       (A) the likely impact on domestic animal agriculture 
     feedstocks that, in any crop year, are significantly below 
     current projections; and
       (B) policy options to alleviate the impact on domestic 
     animal agriculture feedstocks that are significantly below 
     current projections.
       (4) Components.--The study shall include--
       (A) a description of the conditions under which the 
     requirements described in subsection (a)(2) should be 
     suspended or reduced to prevent adverse impacts to domestic 
     animal agriculture feedstocks described in paragraph (3)(B); 
     and
       (B) recommendations for the means by which the Federal 
     Government could prevent or minimize adverse economic 
     hardships and impacts.
       (5) Deadline for completion of study.--Not later than 270 
     days after the date of enactment of this Act, the Secretary 
     shall submit to Congress a report that describes the results 
     of the study.
       (6) Periodic reviews.--
       (A) In general.--To allow for the appropriate adjustment of 
     the requirements described in subsection (a)(2), the 
     Secretary shall conduct periodic reviews of--
       (i) existing technologies;
       (ii) the feasibility of achieving compliance with the 
     requirements; and
       (iii) the impacts of the requirements described in 
     subsection (a)(2) on each individual and entity described in 
     paragraph (2).
       (B) Adjustment of requirements.--If, on completion of a 
     periodic review under subparagraph (A), or on the date on 
     which the Secretary submits to Congress the report under 
     paragraph (5), the Secretary concludes that there will be a 
     shortfall in the supply of domestic feed grain-based 
     feedstocks or renewable fuels for the period covered by the 
     review, as soon as practicable after the date on which the 
     Secretary submits to Congress the report under that 
     paragraph, the Administrator of the Environmental Protection 
     Agency, in consultation with the Secretary, shall, after an 
     opportunity for public notice and comment, promulgate 
     regulations to establish a downward adjustment of the 
     requirements described in subsection (a)(2) necessary to 
     alleviate the shortfall, as determined by the Secretary.
       (k) Effective Date.--Except as otherwise specifically 
     provided in this section, this section takes effect on the 
     date on which the National Academies of Science completes the 
     study under subsection (j).

                                 ______
                                 
  SA 1690. Mr. HAGEL submitted an amendment intended to be proposed to 
amendment SA 1502 proposed by Mr. Reid to the bill H.R. 6, to reduce 
our Nation's dependency on foreign oil by investing in clean, 
renewable, and alternative energy resources, promoting new emerging 
energy technologies, developing greater efficiency, and creating a 
Strategic Energy Efficiency and Renewables Reserve to invest in 
alternative energy, and for other purposes; which was ordered to lie on 
the table; as follows:

       At the end of subtitle D of title II, add the following:

     SEC. 255. ENERGY-RELATED RESEARCH AND DEVELOPMENT.

       (a) Findings.--Congress finds that--
       (1) information and opinions provided by individuals and 
     entities of the academic and industrial sectors should be an 
     important consideration with respect to energy-related 
     research and development activities carried out by the 
     Federal Government;
       (2) in carrying out energy-related research and development 
     activities, the Federal Government should regularly seek 
     input from multiple sources, including the industrial sector, 
     academia, and other relevant sectors;
       (3) research is better focused around well-defined problems 
     that need to be resolved;

[[Page 16384]]

       (4) a number of potential problems to be resolved are 
     likely to require input from a diverse selection of 
     technologies and contributing sectors;
       (5) sharing of information relating to energy research and 
     development is important to the development and innovation of 
     energy technologies;
       (6) necessary intellectual property protection can lead to 
     delays in sharing valuable information that could aid in 
     resolving major energy-related problems;
       (7) the Federal Government should facilitate the sharing of 
     information from a diverse array of industries by ensuring 
     the protection of intellectual property while simultaneously 
     creating an environment of openness and cooperation; and
       (8) the Federal Government should revise the methods of the 
     Federal Government regarding energy-related research and 
     development to encourage faster development and 
     implementation of energy technologies.
       (b) Definitions.--In this section:
       (1) Network.--The term ``network'' means the Energy 
     Technologies Innovation Network established by subsection 
     (d)(1).
       (2) Secretary.--The term ``Secretary'' means the Secretary 
     of Energy.
       (3) Survey.--The term ``survey'' means a survey conducted 
     pursuant to subsection (c).
       (c) Energy-Related Research and Development Priorities.--
       (1) In general.--As soon as practicable after the date of 
     enactment of this Act, and on the dates that are 5 years and 
     10 years after that date, the Secretary shall conduct a 
     survey in accordance with this subsection to determine the 10 
     highest-priority energy-related problems to resolve to ensure 
     the goals of--
       (A) maximizing the energy security of the United States;
       (B) maximizing improvements in energy efficiency within the 
     United States; and
       (C) minimizing damage to the economy and the environment of 
     the United States.
       (2) Survey.--
       (A) In general.--Each survey shall contain a request that 
     the respondent shall list, in descending order of priority, 
     the 10 highest-priority energy-related problems that, in the 
     opinion of the respondent, require resolution as quickly as 
     practicable to ensure the goals described in paragraph (1).
       (B) Announcement.--The Secretary shall announce the 
     existence of each survey by--
       (i) publishing an announcement in the Federal Register; and
       (ii) placing an announcement in a prominent position on the 
     homepage of the website of the Department of the Energy.
       (C) Availability.--The Secretary shall ensure that each 
     survey is made available--
       (i) in an electronic format only through a link on the 
     Department of Energy website;
       (ii) for a period of not less than 21 days and not more 
     than 30 days; and
       (iii) to any individual or entity that elects to 
     participate.
       (D) Additional information gathering.--Each survey--
       (i) shall require each respondent to provide information 
     regarding--

       (I) the age of the respondent;
       (II) the occupational category of the respondent;
       (III) the period of time during which the respondent has 
     held the current occupation of the respondent; and
       (IV) the State and country in which the respondent resides; 
     and

       (ii) may request, but shall not require--

       (I) the name of the respondent;
       (II) an identification of the employer of the respondent;
       (III) the electronic mail address of the respondent; and
       (IV) such other information as the Secretary determines to 
     be appropriate.

       (E) Respondents.--The Secretary shall seek responses to a 
     survey from appropriate representatives of--
       (i) the energy, transportation, manufacturing, 
     construction, mining, and electronic industries;
       (ii) academia;
       (iii) research facilities;
       (iv) nongovernmental organizations;
       (v) the Federal Government; and
       (vi) units of State and local government.
       (F) Nonpolitical requirement.--The Secretary shall ensure 
     that each survey is conducted, to the maximum extent 
     practicable--
       (i) in a transparent, nonpolitical, and scientific manner; 
     and
       (ii) without any political bias.
       (G) Report.--Not later than 180 days after the date on 
     which a survey under this subsection is no longer available 
     under subparagraph (C)(ii), the Secretary shall submit to 
     Congress and make available to the public (including through 
     publication in the Federal Register and on the website of the 
     Department of Energy) a report that--
       (i) describes the results of the survey; and
       (ii) includes a list of the 10 highest-priority energy-
     related problems based on all responses to the survey.
       (d) Energy Technologies Innovation Network.--
       (1) Establishment.--There is established an information and 
     collaboration network, to be known as the ``Energy 
     Technologies Innovation Network''.
       (2) Purpose.--The purpose of the network shall be to 
     provide a forum through which interested parties (including 
     scientists and entrepreneurs) can present, discuss, and 
     collaborate with respect to information and ideas relating to 
     energy technologies.
       (3) Operation of network.--
       (A) In general.--The Secretary shall operate the network.
       (B) Use of third-party databases.--In operating the network 
     pursuant to subparagraph (A), the Secretary may use any 
     relevant database of a third party that, as determined by the 
     Secretary--
       (i) has experience with respect to the establishment and 
     maintenance of a comprehensive database of Federal research 
     and development projects that--

       (I) is easily searchable;
       (II) is open to the public;
       (III) is capable of expansion; and
       (IV) requires only limited interaction with any database 
     manager beyond the initial interaction necessary to register 
     with the database;

       (ii) provides a secure electronic forum to enable 
     collaboration among users of the network; and
       (iii) agrees to collaborate with the Secretary to protect 
     the intellectual property rights of individual users and 
     governmental agencies participating in the network in 
     accordance with paragraph (6).
       (4) Required contributors.--Each research laboratory or 
     other facility that receives Federal funding shall provide to 
     the network the results of the research conducted using that 
     funding, regardless of whether the research relates to 
     energy, subject to the condition that revelation of the 
     research will not adversely effect national security.
       (5) Other contributors.--Other entities, including entities 
     in the academic and industrial sectors and individuals, may 
     participate in the network to actively contribute to 
     resolving--
       (A) the energy-related problems included on the list of the 
     report under subsection (c)(2)(G)(ii); or
       (B) any other energy-related problem that the contributor 
     determines would advance the goals described in subsection 
     (c)(1).
       (6) Protection of information and ideas.--In operating the 
     network under paragraph (3), the Secretary shall employ such 
     individuals and entities with experience relating to--
       (A) intellectual property as the Secretary determines to be 
     necessary to ensure that--
       (i) information and ideas presented, and discussed in the 
     network are--

       (I) monitored with respect to the intellectual property 
     owners and components of the information or ideas; and
       (II) protected in accordance with applicable Federal 
     intellectual property law (including regulations);

       (ii) information and ideas developed within the network 
     are--

       (I) monitored with respect to the intellectual property 
     components of the developers of the information or ideas; and
       (II) protected in accordance with applicable Federal 
     intellectual property law (including regulations); and

       (iii) contributors to the network are provided adequate 
     assurances that intellectual property rights of the 
     contributors will be protected with respect to participation 
     in the network;
       (B) setting up, maintaining, and operating a network that 
     ensures security and reliability.
       (e) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as are necessary to carry out 
     this section.

                                 ______
                                 
  SA 1681. Mr. HAGEL (for himself and Mr. Lieberman) submitted an 
amendment intended to be proposed to amendment SA 1502 proposed by Mr. 
Reid to the bill H.R. 6, to reduce our Nation's dependency on foreign 
oil by investing in clean, renewable, and alternative energy resources, 
promoting new emerging energy technologies, developing greater 
efficiency, and creating a Strategic Energy Efficiency and Renewables 
Reserve to invest in alternative energy, and for other purposes; which 
was ordered to lie on the table; as follows:

       At the end of subtitle E of title II, add the following:

     SEC. 2__. REESTABLISHMENT OF OFFICE OF TECHNOLOGICAL 
                   ASSESSMENT.

       (a) Office of Technology Assessment.--
       (1) In general.--Sections 113 and 114 of the Legislative 
     Branch Appropriations Act, 1996 (Public Law 104-52; 109 Stat. 
     526), are repealed.
       (2) Application.--The Technology Assessment Act of 1972 
     (Public Law 92-484; 86 Stat. 797) shall be applied and 
     administered as if sections 113 and 114 of the Legislative 
     Branch Appropriations Act, 1996 (Public Law 104-52; 109 Stat. 
     526) had not been enacted.
       (b) Amendment to Short Title.--
       (1) In general.--The first section of the Technology 
     Assessment Act of 1972 (Public Law 92-484; 86 Stat. 797) is 
     amended by striking ``Technology Assessment Act of 1972''

[[Page 16385]]

     and inserting ``Office of Technology Assessment 
     Reestablishment Act of 2007''.
       (2) Cross-references.--Any reference in a law, regulation, 
     or other document of the United States to the ``Technology 
     Assessment Act of 1972'' shall be considered to be a 
     reference to the ``Office of Technology Assessment 
     Reestablishment Act of 2007''.
       (c) Establishment of Office.--Section 3(c) of the Office of 
     Technology Assessment Reestablishment Act of 2007 (Public Law 
     92-484; 86 Stat. 797) is amended--
       (1) by redesignating paragraphs (1) through (8) as 
     paragraphs (6) through (13), respectively;
       (2) in paragraph (12) (as redesignated by paragraph (1)), 
     by striking ``paragraphs (1) through (5)'' and inserting 
     ``paragraphs (6) through (10)''; and
       (3) by inserting before paragraph (6) (as redesignated by 
     paragraph (1)), the following:
       ``(1) provide Congress with timely, impartial analyses of 
     scientific and technological information;
       ``(2) make assessments relating to the uses and application 
     of technology toward achieving national policy goals;
       ``(3) assess and analyze technologies that could contribute 
     to solving energy security related issues;
       ``(4) assess and analyze foreign sciences and technologies 
     that could contribute to achieving national policy goals;
       ``(5) assess the impact of existing or probable policies on 
     scientific and technological advances;''.
       (d) Priority of Assessments; Requirements.--Section 3 of 
     the Office of Technology Assessment Reestablishment Act of 
     2007 (Public Law 92-484; 86 Stat. 798) is amended by adding 
     at the end the following:
       ``(f) Priority of Assessments.--
       ``(1) In general.--Except as provided in paragraph (2), 
     requests for the conduct of assessment activities under 
     subsection (d)(1) shall be addressed by the Office in the 
     following order:
       ``(A) Requests with bipartisan and bicameral support.
       ``(B) Requests with bipartisan support.
       ``(C) Requests from individual members of Congress.
       ``(2) Except.--Notwithstanding paragraph (1), the Director 
     of the Office, with the approval of the Board, may determine 
     the final priority for requests within and among the 
     categories described in subparagraphs (A) through (C) of 
     paragraph (1).
       ``(g) Deadline.--In conducting assessments requested under 
     subsection (d)(1), the Director and the person or entity 
     submitting the request shall agree on a timeline for the 
     delivery of the results of the assessment, including 
     briefings, findings, draft reports, final reports, or any 
     other appropriate information.
       ``(h) Peer Review.--Each assessment report requested under 
     subsection (d) shall be subject to peer review, which shall 
     consist of rigorous vetting, checking, criticism, and 
     recommendations for improvement by independent, qualified 
     experts in the various aspects of the matters being assessed.
       ``(i) Availability of Assessments.--The Office shall 
     maintain an electronic resource that makes available to the 
     public--
       ``(1) assessments produced by the Office; and
       ``(2) any other information determined to be appropriate by 
     the Director.''.
       (e) Use of the Congressional Budget Office.--The Office of 
     Technology Assessment Reestablishment Act of 2007 (Public Law 
     92-484; 86 Stat. 797) is amended--
       (1) by redesignating sections 10, 11, and 12, as sections 
     11, 13, and 14, respectively; and
       (2) by inserting after section 9 the following:

     ``SEC. 10. USE OF CONGRESSIONAL BUDGET OFFICE.

       ``(a) In General.--The Director of the Congressional Budget 
     Office may make available to the Office any services and 
     assistance that may be appropriate to carry out the 
     objectives of this Act, including all of the services and 
     assistance which the Congressional Budget Office is otherwise 
     authorized to provide to the Congress.
       ``(b) Reimbursement.--Services and assistance made 
     available to the Office by the Director of the Congressional 
     Budget Office under this section may be provided with or 
     without reimbursement by the Office, as agreed upon by the 
     Board and the Director of the Congressional Budget Office.
       ``(c) Effect.--Nothing in this section alters or modifies 
     any services or responsibilities (other than services 
     performed for, and responsibilities relating to, the Office) 
     that the Director of the Congressional Budget Office performs 
     for or on behalf of the Congress under any law.''.
       (f) Coordination With National Academies.--The Office of 
     Technology Assessment Reestablishment Act of 2007 (Public Law 
     92-484; 86 Stat. 797) is amended by inserting after section 
     11 (as redesignated by subsection (e)(1)) the following:

     ``SEC. 12. COORDINATION WITH NATIONAL ACADEMIES.

       ``The Office shall maintain a continuing liaison with the 
     National Academies of Science with respect to--
       ``(1) grants and contracts formulated or activated by the 
     National Academies of Science for purposes of technology 
     assessment;
       ``(2) the promotion of coordination in areas of technology 
     assessment; and
       ``(3) the avoidance of unnecessary duplication or 
     overlapping of research activities in the development of 
     technology assessment techniques and programs.''.
       (g) Authorization of Appropriations.--The Office of 
     Technology Assessment Reestablishment Act of 2007 (Public Law 
     92-484; 86 Stat. 797) is amended by striking section 14 (as 
     redesignated by subsection (e)(1)) and inserting the 
     following:

     ``SEC. 14. AUTHORIZATION OF APPROPRIATIONS.

       ``Of amounts in the Treasury not otherwise appropriated, 
     there is authorized to be appropriated to the Office to carry 
     out the duties of the Office pursuant to this Act $15,000,000 
     for each of fiscal years 2008 through 2013.''.
                                 ______
                                 
  SA 1682. Mr. HAGEL submitted an amendment intended to be proposed to 
amendment SA 1502 proposed by Mr. Reid to the bill H.R. 6, to reduce 
our Nation's dependency on foreign oil by investing in clean, 
renewable, and alternative energy resources, promoting new emerging 
energy technologies, developing greater efficiency, and creating a 
Strategic Energy Efficiency and Renewables Reserve to invest in 
alternative energy, and for other purposes; which was ordered to lie on 
the table; as follows:

       At the appropriate place, insert the following:

     SEC. __. APPLIANCE EFFICIENCY STANDARDS COMMISSION.

       (a) Appliance Efficiency Standards Commission.--Section 325 
     of the Energy Policy and Conservation Act (42 U.S.C. 6295) is 
     amended by adding at the end the following:
       ``(hh) Appliance Efficiency Standards Commission.--
       ``(1) Establishment.--
       ``(A) Establishment.--There is established a commission to 
     be known as the `Appliance Efficiency Standards Commission' 
     (referred to in this subsection as the `Commission').
       ``(B) Membership.--
       ``(i) Composition.--The Commission shall be composed of 14 
     members appointed by the President, of whom--

       ``(I) 5 members shall be appointed to represent energy and 
     manufacturing industries;
       ``(II) 3 members shall be appointed to represent consumer 
     organizations;
       ``(III) 2 members shall be appointed from nongovernmental 
     organizations that specialize in energy efficiency, 
     environmental protection, or consumer advocacy; and
       ``(IV) 1 member shall be appointed from each of--

       ``(aa) the Department of Commerce;
       ``(bb) the National Academy of Sciences;
       ``(cc) the Department of Energy; and
       ``(dd) the Environmental Protection Agency.
       ``(ii) Date of appointments.--The appointment of a member 
     of the Commission shall be made not later than 90 days after 
     the date of enactment of this subsection.
       ``(C) Term; vacancies.--
       ``(i) Term.--Subject to clause (ii), the term of office of 
     a member of the Commission shall be 3 years.
       ``(ii) Staggered initial terms.--Of the initial members of 
     the Commission appointed under clause (i), the term of office 
     of--

       ``(I) 5 members shall be 3 years;
       ``(II) 5 members shall be 2 years; and
       ``(III) 4 members shall be 1 year.

       ``(iii) Vacancies.--A vacancy on the Commission--

       ``(I) shall not affect the powers of the Commission; and
       ``(II) shall be filled in the same manner as the original 
     appointment was made.

       ``(D) Initial meeting.--Not later than 30 days after the 
     date on which all members of the Commission have been 
     appointed, the Commission shall hold the initial meeting of 
     the Commission.
       ``(E) Meetings.--The Commission shall meet at the call of 
     the Chairperson.
       ``(F) Quorum.--A majority of the members of the Commission 
     shall constitute a quorum, but a lesser number of members may 
     hold hearings.
       ``(G) Chairperson and vice chairperson.--The Commission 
     shall select a Chairperson and Vice Chairperson from among 
     the members of the Commission.
       ``(2) Duties.--The Commission shall--
       ``(A) conduct ongoing studies of the establishment or 
     improvement of energy conservation standards and test 
     protocols for consumer goods and appliances that will reduce 
     the use of electricity use of consumer products and improve 
     the competitiveness of the United States; and
       ``(B) based on the studies, make recommendations to the 
     Secretary for the establishment or improvement of energy 
     conservation standards and test protocols through expedited 
     rulemaking under subsection (ii).
       ``(3) Powers.--
       ``(A) Hearings.--The Commission may hold such hearings, 
     meet and act at such times and places, take such testimony, 
     and receive such evidence as the Commission considers 
     advisable to carry out this subsection.

[[Page 16386]]

       ``(B) Information from federal agencies.--
       ``(i) In general.--The Commission may secure directly from 
     a Federal agency such information as the Commission considers 
     necessary to carry out this subsection.
       ``(ii) Provision of information.--On request of the 
     Chairperson of the Commission, the head of the agency shall 
     provide the information to the Commission.
       ``(C) Postal services.--The Commission may use the United 
     States mails in the same manner and under the same conditions 
     as other agencies of the Federal Government.
       ``(D) Gifts.--The Commission may accept, use, and dispose 
     of gifts or donations of services or property.
       ``(4) Commission personnel matters.--
       ``(A) Compensation of members.--
       ``(i) Non-federal employees.--A member of the Commission 
     who is not an officer or employee of the Federal Government 
     shall be compensated at a rate equal to the daily equivalent 
     of the annual rate of basic pay prescribed for level IV of 
     the Executive Schedule under section 5315 of title 5, United 
     States Code, for each day (including travel time) during 
     which the member is engaged in the performance of the duties 
     of the Commission.
       ``(ii) Federal employees.--A member of the Commission who 
     is an officer or employee of the Federal Government shall 
     serve without compensation in addition to the compensation 
     received for the services of the member as an officer or 
     employee of the Federal Government.
       ``(B) Travel expenses.--A member of the Commission shall be 
     allowed travel expenses, including per diem in lieu of 
     subsistence, at rates authorized for an employee of an agency 
     under subchapter I of chapter 57 of title 5, United States 
     Code, while away from the home or regular place of business 
     of the member in the performance of the duties of the 
     Commission.
       ``(C) Staff.--
       ``(i) In general.--The Chairperson of the Commission may, 
     without regard to the civil service laws (including 
     regulations), appoint and terminate an executive director and 
     such other additional personnel as are necessary to enable 
     the Commission to perform the duties of the Commission.
       ``(ii) Confirmation of executive director.--The employment 
     of an executive director shall be subject to confirmation by 
     the Commission.
       ``(iii) Compensation.--

       ``(I) In general.--Except as provided in subclause (I), the 
     Chairperson of the Commission may fix the compensation of the 
     executive director and other 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.
       ``(II) Maximum rate of pay.--The rate of pay for the 
     executive director and other personnel shall not exceed the 
     rate payable for level V of the Executive Schedule under 
     section 5316 of title 5, United States Code.

       ``(D) Detail of federal government employees.--
       ``(i) In general.--An employee of the Federal Government 
     may be detailed to the Commission without reimbursement.
       ``(ii) Civil service status.--The detail of the employee 
     shall be without interruption or loss of civil service status 
     or privilege.
       ``(E) Procurement of temporary and intermittent services.--
     The Chairperson of the Commission may procure temporary and 
     intermittent services in accordance with section 3109(b) of 
     title 5, United States Code, at rates for individuals that do 
     not exceed the daily equivalent of the annual rate of basic 
     pay prescribed for level V of the Executive Schedule under 
     section 5316 of that title.
       ``(5) Administration.--Section 14 of the Federal Advisory 
     Committee Act (5 U.S.C. App.) shall not apply to the 
     Commission.
       ``(6) Authorization of appropriations.--There are 
     authorized to be appropriated such sums as are necessary to 
     carry out this subsection, to remain available until 
     expended.''.
       (b) Expedited Rulemakings.--Section 325 of the Energy 
     Policy and Conservation Act (42 U.S.C. 6295) (as amended by 
     subsection (a)) is amended by adding at the end the 
     following:
       ``(ii) Expedited Rulemaking for Standards Recommended by 
     Appliance Efficiency Standards Commission.--
       ``(1) In general.--The Secretary shall conduct an expedited 
     rulemaking based on each energy conservation standard or test 
     procedure recommended by the Appliance Efficiency Standards 
     Commission established under subsection (hh).
       ``(2) Procedure.--
       ``(A) In general.--Notwithstanding subsection (p) or 
     section 336(a), if the Secretary receives a recommendation of 
     the Appliance Efficiency Standards Commission, the Secretary 
     shall conduct an expedited rulemaking with respect to the 
     standard or test procedure proposed in the recommendation in 
     accordance with this paragraph.
       ``(B) Advanced notice of proposed rulemaking.--If no 
     advanced notice of proposed rulemaking has been issued under 
     subsection (p)(1) with respect to the rulemaking covered by 
     the recommendation, the requirements of subsection (p) with 
     respect to the issuance of an advanced notice of proposed 
     rulemaking shall not apply.
       ``(C) Proposed rule.--
       ``(i) Publication.--Not later than 30 days after the 
     receipt of a recommendation described in paragraph (1), the 
     Secretary shall publish a proposed rule proposing the 
     standard or test procedure covered by the recommendation.
       ``(ii) Public comment period.--Notwithstanding paragraphs 
     (2) and (3) of subsection (p), the public comment period for 
     the proposed rule shall be the 30-day period beginning on the 
     date of publication of the proposed rule in the Federal 
     Register.
       ``(iii) Public hearing.--Notwithstanding section 336(a), 
     the Secretary may waive the holding of a public hearing with 
     respect to the proposed rule.
       ``(D) Final rule.--Notwithstanding subsection (p)(4), the 
     Secretary--
       ``(i) may publish a final rule at any time after the 60-day 
     period beginning on the date of publication of the proposed 
     rule in the Federal Register; and
       ``(ii) shall publish a final rule not later than 120 days 
     after the date of publication of the proposed rule in the 
     Federal Register.''.
                                 ______
                                 
  SA 1683. Mr. VOINOVICH (for himself, Mr. Carper, and Mr. Inhofe) 
submitted an amendment intended to be proposed to amendment SA 1502 
proposed by Mr. Reid to the bill H.R. 6, to reduce our Nation's 
dependency on foreign oil by investing in clean, renewable, and 
alternative energy resources, promoting new emerging energy 
technologies, developing greater efficiency, and creating a Strategic 
Energy Efficiency and Renewables Reserve to invest in alternative 
energy, and for other purposes; which was ordered to lie on the table; 
as follows:

       At the end of title VII, add the following:

     SEC. 7__. CONVENTION ON SUPPLEMENTARY COMPENSATION FOR 
                   NUCLEAR DAMAGE CONTINGENT COST ALLOCATION.

       (a) Findings and Purpose.--
       (1) Findings.--Congress finds that--
       (A) section 170 of the Atomic Energy Act of 1954 (42 U.S.C. 
     2210) (commonly known as the ``Price-Anderson Act'')--
       (i) provides a predictable legal framework necessary for 
     nuclear projects; and
       (ii) ensures prompt and equitable compensation in the event 
     of a nuclear incident in the United States;
       (B) section 170 of that Act, in effect, provides operators 
     of nuclear powerplants with insurance for damage arising out 
     of a nuclear incident and funds the insurance primarily 
     through the assessment of a retrospective premium from each 
     operator after the occurrence of a nuclear incident;
       (C) the Convention on Supplementary Compensation for 
     Nuclear Damage, done at Vienna on September 12, 1997, will 
     establish a global system--
       (i) to provide a predictable legal framework necessary for 
     nuclear energy projects; and
       (ii) to ensure prompt and equitable compensation in the 
     event of a nuclear incident;
       (D) the Convention benefits United States nuclear suppliers 
     that face potentially unlimited liability for a nuclear 
     incidents outside the coverage of section 170 of the Atomic 
     Energy Act of 1954 (42 U.S.C. 2210) by replacing a 
     potentially open-ended liability with a predictable liability 
     regime that, in effect, provides nuclear suppliers with 
     insurance for damage arising out of such an incident;
       (E) the Convention also benefits United States nuclear 
     facility operators that may be publicly liable for a Price-
     Anderson incident by providing an additional early source for 
     a Price-Anderson incident by providing an additional early 
     source of funds to compensate damage arising out of the 
     Price-Anderson incident;
       (F) the combined operation of the Convention, section 170 
     of the Atomic Energy Act of 1954 (42 U.S.C. 2210), and this 
     section will augment the quantity of assured funds available 
     for victims in a wider variety of nuclear incidents while 
     reducing the potential liability of United States suppliers 
     without increasing potential costs to United States 
     operators;
       (G) the cost of those benefits is the obligation of the 
     United States to contribute to the supplementary compensation 
     fund established by the Convention;
       (H) any such contribution should be funded in a manner that 
     neither upsets settled expectations based on the liability 
     regime established under section 170 of the Atomic Energy Act 
     of 1954 (42 U.S.C. 2210) nor shifts to Federal taxpayers 
     liability risks for nuclear incidents at foreign 
     installations;
       (I) with respect to a Price-Anderson incident, funds 
     already available under section 170 of the Atomic Energy Act 
     of 1954 (42 U.S.C. 2210) should be used; and
       (J) with respect to a nuclear incident outside the United 
     States not covered by section 170 of the Atomic Energy Act of 
     1954 (42 U.S.C. 2210), a retrospective premium should be 
     prorated among nuclear suppliers relieved from potential 
     liability for which insurance is not available.

[[Page 16387]]

       (2) Purpose.--The purpose of this section is to allocate 
     the contingent costs associated with participation by the 
     United States in the international nuclear liability 
     compensation system established by the Convention on 
     Supplementary Compensation for Nuclear Damage, done at Vienna 
     on September 12, 1997--
       (A) with respect to a Price-Anderson incident, by using 
     funds made available under section 170 of the Atomic Energy 
     Act of 1954 (42 U.S.C. 2210) to cover the contingent costs in 
     a manner that neither increases the burdens nor decreases the 
     benefits under section 170 of that Act; and
       (B) with respect to a covered incident outside the United 
     States that is not a Price-Anderson incident, by allocating 
     the contingent costs equitably, on the basis of risk, among 
     the class of nuclear suppliers relieved by the Convention 
     from the risk of potential liability resulting from any 
     covered incident outside the United States.
       (b) Definitions.--In this section:
       (1) Commission.--The term ``Commission'' means the Nuclear 
     Regulatory Commission.
       (2) Contingent cost.--The term ``contingent cost'' means 
     the cost to the United States in the event of a covered 
     incident the amount of which is equal to the amount of funds 
     the United States is obligated to make available under 
     paragraph 1(b) of Article III of the Convention.
       (3) Convention.--The term ``Convention'' means the 
     Convention on Supplementary Compensation for Nuclear Damage, 
     done at Vienna on September 12, 1997.
       (4) Covered incident.--The term ``covered incident'' means 
     a nuclear incident the occurrence of which results in a 
     request for funds pursuant to Article VII of the Convention.
       (5) Covered installation.--The term ``covered 
     installation'' means a nuclear installation at which the 
     occurrence of a nuclear incident could result in a request 
     for funds under Article VII of the Convention.
       (6) Covered person.--
       (A) In general.--The term ``covered person'' means--
       (i) a United States person; and
       (ii) an individual or entity (including an agency or 
     instrumentality of a foreign country) that--

       (I) is located in the United States; or
       (II) carries out an activity in the United States.

       (B) Exclusions.--The term ``covered person'' does not 
     include--
       (i) the United States; or
       (ii) any agency or instrumentality of the United States.
       (7) Nuclear supplier.--The term ``nuclear supplier'' means 
     a covered person (or a successor in interest of a covered 
     person) that--
       (A) supplies facilities, equipment, fuel, services, or 
     technology pertaining to the design, construction, operation, 
     or decommissioning of a covered installation; or
       (B) transports nuclear materials that could result in a 
     covered incident.
       (8) Price-anderson incident.--The term ``Price-Anderson 
     incident'' means a covered incident for which section 170 of 
     the Atomic Energy Act of 1954 (42 U.S.C. 2210) would make 
     funds available to compensate for public liability (as 
     defined in section 11 of that Act (42 U.S.C. 2014)).
       (9) Secretary.--The term ``Secretary'' means the Secretary 
     of Energy.
       (10) United states.--
       (A) In general.--The term ``United States'' has the meaning 
     given the term in section 11 of the Atomic Energy Act of 1954 
     (42 U.S.C. 2014).
       (B) Inclusions.--The term ``United States'' includes--
       (i) the Commonwealth of Puerto Rico;
       (ii) any other territory or possession of the United 
     States;
       (iii) the Canal Zone; and
       (iv) the waters of the United States territorial sea under 
     Presidential Proclamation Number 5928, dated December 27, 
     1988 (43 U.S.C. 1331 note).
       (11) United states person.--The term ``United States 
     person'' means--
       (A) any individual who is a resident, national, or citizen 
     of the United States (other than an individual residing 
     outside of the United States and employed by a person who is 
     not a United States person); and
       (B) any corporation, partnership, association, joint stock 
     company, business trust, unincorporated organization, or sole 
     proprietorship that is organized under the laws of the United 
     States.
       (c) Use of Price-Anderson Funds.--
       (1) In general.--Funds made available under section 170 of 
     the Atomic Energy Act of 1954 (42 U.S.C. 2210) shall be used 
     to cover the contingent cost resulting from any Price-
     Anderson incident.
       (2) Effect.--The use of funds pursuant to paragraph (1) 
     shall not reduce the limitation on public liability 
     established under section 170 e. of the Atomic Energy Act of 
     1954 (42 U.S.C. 2210(e)).
       (d) Effect on Amount of Public Liability.--
       (1) In general.--Funds made available to the United States 
     under Article VII of the Convention with respect to a Price-
     Anderson incident shall be used to satisfy public liability 
     resulting from the Price-Anderson incident.
       (2) Amount.--The amount of public liability allowable under 
     section 170 of the Atomic Energy Act of 1954 (42 U.S.C. 2210) 
     relating to a Price-Anderson incident under paragraph (1) 
     shall be increased by an amount equal to the difference 
     between--
       (A) the amount of funds made available for the Price-
     Anderson incident under Article VII of the Convention; and
       (B) the amount of funds used under subsection (c) to cover 
     the contingent cost resulting from the Price-Anderson 
     incident.
       (e) Retrospective Risk Pooling Program.--
       (1) In general.--Except as provided in paragraph (2), each 
     nuclear supplier shall participate in a retrospective risk 
     pooling program in accordance with this section to cover the 
     contingent cost resulting from a covered incident outside the 
     United States that is not a Price-Anderson incident.
       (2) Deferred payment.--
       (A) In general.--The obligation of a nuclear supplier to 
     participate in the retrospective risk pooling program shall 
     be deferred until the United States is called on to provide 
     funds pursuant to Article VII of the Convention with respect 
     to a covered incident that is not a Price-Anderson incident.
       (B) Amount of deferred payment.--The amount of a deferred 
     payment of a nuclear supplier under subparagraph (A) shall be 
     based on the risk-informed assessment formula determined 
     under subparagraph (C).
       (C) Risk-informed assessment formula.--
       (i) In general.--Not later than 3 years after the date of 
     enactment of this Act, and every 5 years thereafter, the 
     Secretary shall, by regulation, determine the risk-informed 
     assessment formula for the allocation among nuclear suppliers 
     of the contingent cost resulting from a covered incident that 
     is not a Price-Anderson incident, taking into account risk 
     factors such as--

       (I) the nature and intended purpose of the goods and 
     services supplied by each nuclear supplier to each covered 
     installation outside the United States;
       (II) the quantity of the goods and services supplied by 
     each nuclear supplier to each covered installation outside 
     the United States;
       (III) the hazards associated with the supplied goods and 
     services if the goods and services fail to achieve the 
     intended purposes;
       (IV) the hazards associated with the covered installation 
     outside the United States to which the goods and services are 
     supplied;
       (V) the legal, regulatory, and financial infrastructure 
     associated with the covered installation outside the United 
     States to which the goods and services are supplied; and
       (VI) the hazards associated with particular forms of 
     transportation.

       (ii) Factors for consideration.--In determining the 
     formula, the Secretary may--

       (I) exclude--

       (aa) goods and services with negligible risk;
       (bb) classes of goods and services not intended 
     specifically for use in a nuclear installation;
       (cc) a nuclear supplier with a de minimis share of the 
     contingent cost; and
       (dd) a nuclear supplier no longer in existence for which 
     there is no identifiable successor; and

       (II) establish the period on which the risk assessment is 
     based.

       (iii) Application.--In applying the formula, the Secretary 
     shall not consider any covered installation or transportation 
     for which funds would be available under section 170 of the 
     Atomic Energy Act of 1954 (42 U.S.C. 2210).
       (iv) Report.--Not later than 5 years after the date of 
     enactment of this Act and every 5 years thereafter, the 
     Secretary 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 report on whether 
     there is a need for continuation or amendment of this 
     section, taking into account the effects of the 
     implementation of the Convention on the United States nuclear 
     industry and suppliers.
       (f) Reporting.--
       (1) Collection of information.--
       (A) In general.--The Secretary may collect information 
     necessary for developing and implementing the formula for 
     calculating the deferred payment of a nuclear supplier under 
     subsection (e)(2).
       (B) Provision of information.--Each nuclear supplier and 
     other appropriate persons shall make available to the 
     Secretary such information, reports, records, documents, and 
     other data as the Secretary determines, by regulation, to be 
     necessary or appropriate to develop and implement the formula 
     under subsection (e)(2)(C).
       (2) Private insurance.--The Secretary shall make available 
     to nuclear suppliers, and insurers of nuclear suppliers, 
     information to support the voluntary establishment and 
     maintenance of private insurance against any risk for which 
     nuclear suppliers may be required to pay deferred payments 
     under this section.
       (g) Effect on Liability.--Nothing in any other law 
     (including regulations) limits liability for a covered 
     incident to an amount equal to less than the amount 
     prescribed in paragraph 1(a) of Article IV of the Convention, 
     unless the law--
       (1) specifically refers to this section; and

[[Page 16388]]

       (2) explicitly repeals, alters, amends, modifies, impairs, 
     displaces, or supersedes the effect of this subsection.
       (h) Payments to and by the United States.--
       (1) Action by nuclear suppliers.--
       (A) Notification.--In the case of a request for funds under 
     Article VII of the Convention resulting from a covered 
     incident that is not a Price-Anderson incident, the Secretary 
     shall notify each nuclear supplier of the amount of the 
     deferred payment required to be made by the nuclear supplier.
       (B) Payments.--
       (i) In general.--Except as provided in clause (ii), not 
     later than 60 days after receipt of a notification under 
     subparagraph (A), a nuclear supplier shall pay to the general 
     fund of the Treasury the deferred payment of the nuclear 
     supplier required under subparagraph (A).
       (ii) Annual payments.--A nuclear supplier may elect to 
     prorate payment of the deferred payment required under 
     subparagraph (A) in 5 equal annual payments (including 
     interest on the unpaid balance at the prime rate prevailing 
     at the time the first payment is due).
       (C) Vouchers.--A nuclear supplier shall submit payment 
     certification vouchers to the Secretary of the Treasury in 
     accordance with section 3325 of title 31, United States Code.
       (2) Use of funds.--
       (A) In general.--Amounts paid into the Treasury under 
     paragraph (1) shall be available to the Secretary of the 
     Treasury, without further appropriation and without fiscal 
     year limitation, for the purpose of making the contributions 
     of public funds required to be made by the United States 
     under the Convention.
       (B) Action by secretary of treasury.--The Secretary of the 
     Treasury shall pay the contribution required under the 
     Convention to the court of competent jurisdiction under 
     Article XIII of the Convention with respect to the applicable 
     covered incident.
       (3) Failure to pay.--If a nuclear supplier fails to make a 
     payment required under this subsection, the Secretary may 
     take appropriate action to recover from the nuclear 
     supplier--
       (A) the amount of the payment due from the nuclear 
     supplier;
       (B) any applicable interest on the payment; and
       (C) a penalty of not more than twice the amount of the 
     deferred payment due from the nuclear supplier.
       (i) Limitation on Judicial Review; Cause of Action.--
       (1) Limitation on judicial review.--
       (A) In general.--In any civil action arising under the 
     Convention over which Article XIII of the Convention grants 
     jurisdiction to the courts of the United States, any appeal 
     or review by writ of mandamus or otherwise with respect to a 
     nuclear incident that is not a Price-Anderson incident shall 
     be in accordance with chapter 83 of title 28, United States 
     Code, except that the appeal or review shall occur in the 
     United States Court of Appeals for the District of Columbia 
     Circuit.
       (B) Supreme court jurisdiction.--Nothing in this paragraph 
     affects the jurisdiction of the Supreme Court of the United 
     States under chapter 81 of title 28, United States Code.
       (2) Cause of action.--
       (A) In general.--Subject to subparagraph (B), in any civil 
     action arising under the Convention over which Article XIII 
     of the Convention grants jurisdiction to the courts of the 
     United States, in addition to any other cause of action that 
     may exist, an individual or entity shall have a cause of 
     action against the operator to recover for nuclear damage 
     suffered by the individual or entity.
       (B) Requirement.--Subparagraph (A) shall apply only if the 
     individual or entity seeks a remedy for nuclear damage (as 
     defined in Article I of the Convention) that was caused by a 
     nuclear incident (as defined in Article I of the Convention) 
     that is not a Price-Anderson incident.
       (C) Effect of paragraph.--Nothing in this paragraph limits, 
     modifies, extinguishes, or otherwise affects any cause of 
     action that would have existed in the absence of enactment of 
     this paragraph.
       (j) Right of Recourse.--This section does not provide to an 
     operator of a covered installation any right of recourse 
     under the Convention.
       (k) Protection of Sensitive United States Information.--
     Nothing in the Convention or this section requires the 
     disclosure of--
       (1) any data that, at any time, was Restricted Data (as 
     defined in section 11 of the Atomic Energy Act of 1954 (42 
     U.S.C. 2014));
       (2) information relating to intelligence sources or methods 
     protected by section 102A(i) of the National Security Act of 
     1947 (50 U.S.C. 403-1(i)); or
       (3) national security information classified under 
     Executive Order 12958 (50 U.S.C. 435 note; relating to 
     classified national security information) (or a successor 
     regulation).
       (l) Regulations.--
       (1) In general.--The Secretary or the Commission, as 
     appropriate, may prescribe regulations to carry out section 
     170 of the Atomic Energy Act of 1954 (42 U.S.C. 2210) and 
     this section.
       (2) Requirement.--Rules prescribed under this subsection 
     shall ensure, to the maximum extent practicable, that--
       (A) the implementation of section 170 of the Atomic Energy 
     Act of 1954 (42 U.S.C. 2210) and this section is consistent 
     and equitable; and
       (B) the financial and operational burden on a Commission 
     licensee in complying with section 170 of that Act is not 
     greater as a result of the enactment of this section.
       (3) Applicability of provision.--Section 553 of title 5, 
     United States Code, shall apply with respect to the 
     promulgation of regulations under this subsection.
       (4) Effect of subsection.--The authority provided under 
     this subsection is in addition to, and does not impair or 
     otherwise affect, any other authority of the Secretary or the 
     Commission to prescribe regulations.
       (m) Effective Date.--This section takes effect on the date 
     of enactment of this Act.

                                 ______
                                 
  SA 1684. Mrs. HUTCHISON (for herself and Mr. Cornyn) submitted an 
amendment intended to be proposed to amendment SA 1502 proposed by Mr. 
Reid to the bill H.R. 6, to reduce our Nation's dependency on foreign 
oil by investing in clean, renewable, and alternative energy resources, 
promoting new emerging energy technologies, developing greater 
efficiency, and creating a Strategic Energy Efficiency and Renewables 
Reserve to invest in alternative energy, and for other purposes; which 
was ordered to lie on the table; as follows:

       On page 21, strike lines 4 through 6 and insert the 
     following:
       (A) implementation of the requirement would significantly 
     harm--
       (i) the economy or environment of a State, region, or the 
     United States; or
       (ii) any industry located in a State, region, or the United 
     States, particularly with respect to--

       (I) producers of livestock, poultry, and pork products; and
       (II) processors of food and food products;

                                 ______
                                 
  SA 1685. Mr. HAGEL submitted an amendment intended to be proposed to 
amendment SA 1502 proposed by Mr. Reid to the bill H.R. 6, to reduce 
our Nation's dependency on foreign oil by investing in clean, 
renewable, and alternative energy resources, promoting new emerging 
energy technologies, developing greater efficiency, and creating a 
Strategic Energy Efficiency and Renewables Reserve to invest in 
alternative energy, and for other purposes; which was ordered to lie on 
the table; as follows:

       At the end of subtitle B of title II, add the following:

     SEC. 2__. ADVANCED COAL GENERATION DEPLOYMENT OF ADVANCED 
                   COAL GENERATION UNITS.

       (a) Definitions.--In this section:
       (1) Air separation unit.--The term ``air separation unit'' 
     means a technology capable of using ambient air to separate 
     and concentrate a gas with 95 percent oxygen concentration 
     for use in oxy fuel technology.
       (2) Capture-ready.--The term ``capture ready'' means the 
     design of a new coal-fired unit that reduces the cost of and 
     facilitates the addition of carbon dioxide separation and 
     capture technologies after the unit has been placed into 
     service.
       (3) Oxy fuel.--The term ``oxy fuel'' means a coal-fired 
     boiler that burns coal in an environment with a 95 percent 
     oxygen concentration.
       (4) Subcritical pulverized coal unit.--The term 
     ``subcritical pulverized coal unit'' means a coal-fired 
     boiler that operates--
       (A) at a pressure below 3,200 pounds per square inch; and
       (B) below a temperature of 1,025 degrees Fahrenheit.
       (5) Supercritical pulverized coal unit.--The term 
     ``supercritical pulverized coal unit'' means a coal-fired 
     boiler that--
       (A) reaches an electricity generating efficiency of from 37 
     percent to 40 percent (High Heating Value); and
       (B) operates at a minimum pressure of 3,500 pounds per 
     square inch and a minimum temperature of 1,050 degrees 
     Fahrenheit.
       (6) Ultrasupercritical pulverized coal unit.--The term 
     ``ultrasupercritical pulverized coal unit'' means a coal-
     fired boiler that--
       (A) reaches an electricity generating efficiency of more 
     than 43 percent (High Heating Value); and
       (B) operates at a minimum pressure of 4,600 pounds per 
     square inch and a minimum temperature of 1,110 degrees 
     Fahrenheit.
       (b) Exemption From New Source Review.--Effective beginning 
     on the date of enactment of this Act, any subcritical 
     pulverized coal unit in existence on the date of enactment of 
     this Act that is rebuilt with a supercritical pulverized coal 
     unit, or an ultrasupercritical pulverized coal unit, that 
     includes post-combustion carbon dioxide capture technology or 
     an oxy fuel pulverized coal unit shall be exempt from new 
     source review requirements under the Clean Air Act (42 U.S.C. 
     7401 et seq.) if--

[[Page 16389]]

       (1) there is no appreciable increase in the rate of 
     regulated emissions calculated by quantity of pollutants 
     removed per ton of coal used; and
       (2) the new unit does not--
       (A) cause the area in which the unit is located to 
     deteriorate from an attainment to a nonattainment area; or
       (B) alter the progress of the State in achieving attainment 
     under the applicable State implementation plan.
       (c) Loan Guarantees for Oxy Fuel Air Separation Units and 
     Air-Blown Ultrasupercritical Pulverized Coal Units That Are 
     Capture-Ready.--Section 1703(b) of the Energy Policy Act of 
     2005 (42 U.S.C. 16513(b)) is amended by adding at the end the 
     following:
       ``(11) Air separation units and air-blown 
     ultrasupercritical pulverized coal units that are capture 
     ready (as the terms are defined in section 2__(a) of the 
     Renewable Fuels, Consumer Protection, and Energy Efficiency 
     Act of 2007).''.
                                 ______
                                 
  SA 1686. Mr. ALLARD submitted an amendment intended to be proposed to 
amendment SA 1502 proposed by Mr. Reid to the bill H.R. 6, to reduce 
our Nation's dependency on foreign oil by investing in clean, 
renewable, and alternative energy resources, promoting new emerging 
energy technologies, developing greater efficiency, and creating a 
Strategic Energy Efficiency and Renewables Reserve to invest in 
alternative energy, and for other purposes; which was ordered to lie on 
the table; as follows:

       At the appropriate place, insert the following:

     SEC. _. EXTENSION OF QUALIFIED GREEN BUILDING AND SUSTAINABLE 
                   DESIGN PROJECT BONDS.

       (a) Subsection (l) of section 142 (relating to qualified 
     green building and sustainable design projects) is amended--
       (1) by striking ``2009'' in paragraph (8) and inserting 
     ``2012'', and
       (2) by striking ``2009'' in paragraph (9) and inserting 
     ``2012''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.
                                 ______
                                 
  SA 1687. Mr. BURR submitted an amendment intended to be proposed to 
amendment SA 1502 proposed by Mr. Reid to the bill H.R. 6, to reduce 
our Nation's dependency on foreign oil by investing in clean, 
renewable, and alternative energy resources, promoting new emerging 
energy technologies, developing greater efficiency, and creating a 
Strategic Energy Efficiency and Renewables Reserve to invest in 
alternative energy, and for other purposes; which was ordered to lie on 
the table; as follows:

       Beginning on page 292, strike line 7 and all that follows 
     through page 293, line 6, and insert the following:
       (4) the Department of Energy should be designated as the 
     lead United States Government agency in charge of formulating 
     and coordinating the national energy security policy of the 
     United States, and in furtherance of these goals, there 
     should be established within the Department of Energy an 
     Assistant Secretary of Energy for Energy Security whose 
     responsibilities should include--
       (A) directing the development of the national energy 
     security strategy of the United States;
       (B) coordinating the national energy security policy of the 
     United States with the Department of Defense, the Department 
     of State, and the National Security Council, as appropriate, 
     to address the impact of, and integrate national security and 
     foreign policy on, the national energy security policy of the 
     United States;
       (C) monitoring international and domestic energy 
     developments to gauge their impact on the national energy 
     security policy of the United States and implementing changes 
     in such policy as necessary to maintain the national security 
     and energy security of the United States;
       (D) identifying foreign sources of energy critical to the 
     national energy security of the United States and developing 
     strategies for ensuring United States access to critical 
     foreign energy resources;
       (E) developing strategies for reducing United States 
     dependence on foreign sources of energy, including demand 
     reduction, efficiency improvement, and development of 
     alternative and new sources of domestic energy; and
       (F) developing strategies in conjunction with the 
     Department of State for working with major international 
     producers and consumers, including China, Russia, the 
     European Union, and Africa, to minimize politicization of 
     global energy resources while ensuring access through global 
     energy markets.
                                 ______
                                 
  SA 1688. Mr. BURR submitted an amendment intended to be proposed to 
amendment SA 1502 proposed by Mr. Reid to the bill H.R. 6, to reduce 
our Nation's dependency on foreign oil by investing in clean, 
renewable, and alternative energy resources, promoting new emerging 
energy technologies, developing greater efficiency, and creating a 
Strategic Energy Efficiency and Renewables Reserve to invest in 
alternative energy, and for other purposes; which was ordered to lie on 
the table; as follows:

       On page 313, strike lines 20 and 21 and insert the 
     following:

     SEC. 707. ANNUAL NATIONAL ENERGY SECURITY STRATEGY REPORT.

       (a) Reports.--
       (1) In general.--Subject to paragraph (2), on the date on 
     which the President submits to Congress the budget for the 
     following fiscal year under section 1105 of title 31, United 
     States Code, the President shall submit to Congress a 
     comprehensive report on the national energy security of the 
     United States.
       (2) New presidents.--In addition to the reports required 
     under paragraph (1), the President shall submit a 
     comprehensive report on the national energy security of the 
     United States by not later than 150 days after the date on 
     which the President assumes the office of President after a 
     presidential election.
       (b) Contents.--Each report under this section shall 
     describe the national energy security strategy of the United 
     States, including a comprehensive description of--
       (1) the worldwide interests, goals, and objectives of the 
     United States that are vital to the national energy security 
     of the United States;
       (2) the foreign policy, worldwide commitments, and national 
     defense capabilities of the United States necessary--
       (A) to deter political manipulation of world energy 
     resources; and
       (B) to implement the national energy security strategy of 
     the United States;
       (3) the proposed short-term and long-term uses of the 
     political, economic, military, and other authorities of the 
     United States--
       (A) to protect or promote energy security; and
       (B) to achieve the goals and objectives described in 
     paragraph (1);
       (4) the adequacy of the capabilities of the United States 
     to protect the national energy security of the United States, 
     including an evaluation of the balance among the capabilities 
     of all elements of the national authority of the United 
     States to support the implementation of the national energy 
     security strategy; and
       (5) such other information as the President determines to 
     be necessary to inform Congress on matters relating to the 
     national energy security of the United States.
       (c) Classified and Unclassified Form.--Each national energy 
     security strategy report shall be submitted to Congress in--
       (1) a classified form; and
       (2) an unclassified form.

     SEC. 708. APPROPRIATE CONGRESSIONAL COMMITTEES DEFINED.

                                 ______
                                 
  SA 1689. Mr. BURR submitted an amendment intended to be proposed to 
amendment SA 1502 proposed by Mr. Reid to the bill H.R. 6, to reduce 
our Nation's dependency on foreign oil by investing in clean, 
renewable, and alternative energy resources, promoting new emerging 
energy technologies, developing greater efficiency, and creating a 
Strategic Energy Efficiency and Renewables Reserve to invest in 
alternative energy, and for other purposes; which was ordered to lie on 
the table; as follows:

       After section 706, insert the following:

     SEC. 707. NATIONAL SECURITY COUNCIL REORGANIZATION.

       Section 101(a) of the National Security Act of 1947 (50 
     U.S.C. 402(a)) is amended--
       (1) by redesignating paragraphs (5), (6), and (7) as 
     paragraphs (6), (7), and (8), respectively; and
       (2) by inserting after paragraph (4) the following:
       ``(5) the Secretary of Energy;''.
                                 ______
                                 
  SA 1690. Mr. MENENDEZ (for himself and Mr. Sanders) submitted an 
amendment intended to be proposed to amendment SA 1502 proposed by Mr. 
Reid to the bill H.R. 6, to reduce our Nation's dependency on foreign 
oil by investing in clean, renewable, and alternative energy resources, 
promoting new emerging energy technologies, developing greater 
efficiency, and creating a Strategic Energy Efficiency and Renewables 
Reserve to invest in alternative energy, and for other purposes; which 
was ordered to lie on the table; as follows:

       At the end, add the following:

                        TITLE VIII--SOLAR ENERGY

     SEC. 801. FINDINGS AND PURPOSES.

       (a) Findings.--Congress finds that--

[[Page 16390]]

       (1) solar energy is the most abundant energy source in the 
     United States;
       (2) solar energy can play a significant role in the economy 
     of the United States;
       (3) photovoltaic products are produced by domestic and 
     foreign manufacturers and are purchased by thousands of 
     people throughout the United States and foreign countries;
       (4) photovoltaic products should be readily available and 
     marketed efficiently to ensure that the people of the United 
     States have adequate access to clean and renewable, 
     domestically-produced energy;
       (5) the maintenance and expansion of existing markets for 
     solar energy are vital to the welfare of photovoltaic 
     producers and those concerned with marketing, using, and 
     producing photovoltaic products, as well as to the general 
     economy of the United States; and
       (6) photovoltaic products move in interstate and foreign 
     commerce, and photovoltaic products that do not move in 
     interstate or foreign commerce directly burden or affect 
     interstate commerce of photovoltaic products.
       (b) Purposes.--The purposes of this title are--
       (1) to provide for the establishment of an orderly 
     procedure for financing (through assessments on all 
     photovoltaic products manufactured and shipped in the United 
     States and on photovoltaic products imported into the United 
     States) and carrying out a coordinated program of promotion 
     and research designed to strengthen the position of the solar 
     energy industry in the marketplace; and
       (2) to maintain and expand domestic and foreign markets and 
     uses for solar energy and solar energy products.

     SEC. 802. DEFINITIONS.

       In this title:
       (1) Assessment.--The term ``assessment'' means a fee 
     required to be paid for a photovoltaic product in accordance 
     with an order at a rate equal to $.02 per watt, based on the 
     nameplate capacity of the photovoltaic product (or an 
     equivalent capacity of the photovoltaic product for balance-
     of-system components, as determined by the Secretary).
       (2) Board.--The term ``Board'' means the Solar Energy 
     Promotion and Research Board established under an order and 
     described in section 803(b).
       (3) Consumer information.--The term ``consumer 
     information'' means technology specifications, environmental 
     data, and other information that would assist consumers and 
     other persons in making evaluations and decisions regarding 
     the purchase and use of solar energy products.
       (4) Department.--The term ``Department'' means the 
     Department of Energy.
       (5) Foundation.--The term ``Foundation'' means the Solar 
     Energy Research and Education Foundation.
       (6) Importer.--The term ``importer'' means any person that 
     imports a photovoltaic product into the United States.
       (7) Industry information.--The term ``industry 
     information'' means information and programs that are 
     designed to lead to the development of new markets, marketing 
     strategies, increased efficiency, and activities to enhance 
     the image of the solar energy industry.
       (8) Order.--The term ``order'' means a final solar energy 
     promotion and research order promulgated under section 
     803(b).
       (9) Person.--The term ``person'' means any--
       (A) individual;
       (B) group of individuals;
       (C) partnership;
       (D) corporation;
       (E) association;
       (F) cooperative; or
       (G) other entity.
       (10) Photovoltaic product.--The term ``photovoltaic 
     product'' means--
       (A) any photovoltaic cell, module, or other solar electric 
     product with a nameplate capacity that exceeds 1 watt; and
       (B) any balance-of-system component (such as an inverter) 
     used in a solar electric system.
       (11) Producer.--The term ``producer'' means any person that 
     manufacturers photovoltaic products.
       (12) Promotion.--The term ``promotion'' means any action 
     (including paid advertising) to advance the image and 
     desirability of solar energy products to improve the 
     competitive position and stimulate the sales of solar energy 
     products in the marketplace.
       (13) Research.--The term ``research'' means--
       (A) studies testing the effectiveness of market development 
     and promotion efforts;
       (B) studies relating to technological advancement or 
     environmental benefit; and
       (C) other related solar energy research and new product 
     development.
       (14) Secretary.--The term ``Secretary'' means the Secretary 
     of Energy.
       (15) State.--The term ``State'' means--
       (A) a State; and
       (B) the District of Columbia.
       (16) United states.--The term ``United States'' means the 
     all of the States.

     SEC. 803. ORDERS.

       (a) Proposed Order.--Not later than January 1, 2008, the 
     Secretary shall--
       (1) publish in the Federal Register a proposed solar energy 
     promotion and research order; and
       (2) provide notice and opportunity for public comment on 
     the proposed order.
       (b) Final Order.--Not later than 120 days after the date of 
     publication of a proposed order in accordance with subsection 
     (a), the Secretary shall promulgate a final order, which 
     shall take effect as of that date of promulgation.
       (c) Requirements.--A final order promulgated under 
     subsection (b) shall--
       (1) provide for the establishment and selection of a Solar 
     Energy Promotion and Research Board, to be composed of 
     members who are producers or importers appointed by the 
     Secretary from nominations submitted by the Solar Energy 
     Industries Association;
       (2) define the powers and duties of the Board, which 
     shall--
       (A) hold at least an annual meeting; and
       (B) include only the powers--
       (i) to administer the order issued under this section, in 
     accordance with the terms and conditions of the order;
       (ii) to recommend to the Secretary rules to carry out the 
     order;
       (iii) to approve or disapprove budgets submitted by the 
     Foundation;
       (iv) to receive, investigate, and report to the Secretary 
     complaints of violations of the order;
       (v) to collect and use assessments in accordance with this 
     subsection; and
       (vi) to recommend to the Secretary amendments to the order;
       (3) specify the circumstances under which special meetings 
     of the Board may be held;
       (4) provide that--
       (A)(i) except as provided in clauses (ii) through (iv)--
       (I) the term of a member appointed to the Board shall be 3 
     years; and
       (II) no member appointed to the Board may serve more than 2 
     consecutive terms;
       (ii) with respect to the initial appointments to the Board, 
     members shall be appointed in staggered 1-, 2-, and 3-year 
     terms, as determined by the Secretary;
       (iii) the Secretary shall have a permanent appointment to 
     the Board; and
       (iv) the President of the Solar Energy Industries 
     Association shall have a permanent appointment to the Board;
       (B) Board members shall serve without compensation, but 
     shall be reimbursed for their reasonable expenses incurred in 
     carrying out the duties of the Board;
       (C) the total costs of collection of assessments and 
     administrative staff incurred by the Board during any fiscal 
     year shall not exceed 5 percent of the projected total 
     assessments to be collected by the Board for the fiscal year; 
     and
       (D) the Board shall use, to the maximum extent practicable, 
     the resources, staff, and facilities of industry 
     organizations to carry out the duties of the Board;
       (5) provide that the Board shall oversee the disbursement 
     of assessment funds to the Foundation for the promotion of 
     solar energy;
       (6) provide that the Foundation--
       (A) shall develop plans or projects of promotion and 
     advertising, research, consumer information, and industry 
     information, to be funded by assessments collected by the 
     Board;
       (B) shall, in developing those plans or projects, to the 
     maximum extent practicable, take into account similarities 
     and differences between different solar technologies;
       (C) to ensure coordination and efficient use of funds, 
     shall enter into contracts or agreements with established 
     nonprofit organizations to implement programs of promotion 
     and advertising, research, consumer information, and industry 
     information, on the condition that any such contract or 
     agreement provides that--
       (i) the person entering the contract or agreement shall 
     develop and submit to the Foundation a proposal for a plan or 
     project, together with 1 or more budgets that describe the 
     estimated costs to be incurred for the plan or project;
       (ii) the plan or project shall become effective on the 
     approval of the Secretary; and
       (iii) the person entering the contract or agreement shall, 
     with respect to the plan or project--

       (I) keep accurate records of all transactions;
       (II) account for funds received and expended;
       (III) submit to the Foundation periodic reports on 
     activities conducted; and
       (IV) submit such other reports as the Secretary, Board, or 
     Foundation may require; and

       (D) may use the resources, staff, and facilities of the 
     Board and industry organizations to carry out the duties of 
     the Foundation;
       (7) provide that an employee of an industry organization--
       (A) may not receive compensation for work performed for the 
     Foundation; but
       (B) shall be reimbursed from assessments collected by the 
     Board for reasonable expenses incurred in performing that 
     work;
       (8) require the Board and the Foundation--
       (A) to maintain such books and records, which shall be 
     available to the Secretary for inspection and audit, as the 
     Secretary may prescribe;
       (B) to prepare and submit to the Secretary, from time to 
     time, such reports as the Secretary may require; and

[[Page 16391]]

       (C) to account for the receipt and disbursement of all 
     funds received by the Board and Foundation;
       (9) provide that--
       (A) each producer shall, for each photovoltaic product 
     produced by the producer, collect an assessment and remit the 
     assessment to the Board in a manner prescribed by the order;
       (B) each importer shall, for each photovoltaic product 
     imported by the importer, pay to the Board an assessment in 
     the manner prescribed by the order; and
       (C) the Board shall use assessments received under this 
     paragraph--
       (i) to provide funds to the Foundation for use in carrying 
     out solar energy projects;
       (ii) to pay the costs of plans and projects carried out by 
     the Board;
       (iii) to reimburse employees as described in paragraph 
     (7)(B);
       (iv) to pay the administrative expenses incurred by the 
     Board in carrying out the duties of the Board, and by the 
     Secretary, after promulgation of the order (including 
     administrative expenses incurred in carrying out a referendum 
     under section 804); and
       (v) to establish a reasonable reserve;
       (10) permit the Board, with the approval of the Secretary, 
     to invest funds collected through assessments, pending 
     disbursement, only in--
       (A) obligations of the United States (or any agency of the 
     United States);
       (B) general obligations of any State (or any political 
     subdivision of a State);
       (C) any interest-bearing account or certificate of deposit 
     of a bank that is a member of the Federal Reserve System; or
       (D) obligations fully guaranteed as to principal and 
     interest by the United States;
       (11) prohibit any funds received by the Board under the 
     order from being used to pay the salary of any Federal 
     employee, other than for recommending amendments to the 
     order;
       (12) require that each producer and importer--
       (A) maintain and make available for inspection such books 
     and records as may be required by the order, including 
     records of persons from which the producer or importer 
     received payment for photovoltaic products produced or 
     imported by the producer or importer;
       (B) submit reports at such time, in such manner, and having 
     such content as is prescribed by the order; and
       (C) make information described in subparagraphs (A) and (B) 
     available to the Secretary, upon request, for use in 
     administering and enforcing the order or this title; and
       (13) contain such other terms and conditions as are 
     consistent with this title and necessary to carry out the 
     order.
       (d) Availability of Information.--
       (1) In general.--Subject to paragraph (2), information made 
     available to the Secretary in accordance with subsection 
     (c)(12) shall be--
       (A) kept confidential by all officers and employees of the 
     Department; and
       (B) disclosed only--
       (i) in the course of a civil action or administrative 
     proceeding involving the order--

       (I) that is brought or initiated at the request of the 
     Secretary; or
       (II) to which the Secretary or any other officer of the 
     United States is a party; and

       (ii) to the extent that the Secretary or a court of law 
     determines the information to be relevant.
       (2) No prohibition on issuance or publication of certain 
     information.--Nothing in this paragraph prohibits--
       (A) the issuance of any general statement, based on any 
     report submitted to the Secretary under subsection 
     (c)(12)(B), of the number of persons subject to the order or 
     statistical data collected by those persons, on the condition 
     that the statement does not identify the information provided 
     by any person; or
       (B) the publication, by direction of the Secretary, of the 
     name of any person violating the order, together with a 
     statement of the particular provisions of the order violated 
     by the person.
       (3) Prohibited disclosure.--
       (A) In general.--Except as otherwise provided in this 
     subsection, no information obtained under this title or the 
     order may be made available to any agency or officer of the 
     United States for any purpose other than the implementation 
     of this title and the order (including the conduct of any 
     investigation or enforcement action necessary to implement 
     this title or the order).
       (B) Penalty for violation.--A person that violates 
     subparagraph (A) shall be--
       (i) fined not more than $1,000, imprisoned for not more 
     than 1 year, or both; and
       (ii) if the person is an officer or employee of the Board 
     or the Department, removed from office.

     SEC. 804. REFERENDUM.

       (a) Continuation or Termination of Order.--
       (1) Initial referendum.--Not later than 4 years after the 
     date of promulgation of the order or such earlier date as may 
     be recommended by the Board, the Secretary shall conduct an 
     initial referendum among persons who have been producers or 
     importers during a representative period, as determined by 
     the Secretary, to determine whether the producers and 
     importers favor the termination of the order.
       (2) Second referendum.--After conducting the initial 
     referendum under paragraph (1), on the request of a 
     representative group comprising 25 percent or more of the 
     producers and importers that voted in the initial referendum, 
     the Secretary may conduct a second referendum to determine 
     whether producers and importers described in paragraph (1) 
     favor the termination of the order.
       (3) Continuation of order.--The order shall remain in 
     effect only if the Secretary determines that the order was 
     approved by not less than--
       (A) a majority of the producers and importers voting in the 
     initial referendum under paragraph (1); or
       (B) in the case of a second referendum conducted under 
     paragraph (2), a majority of the producers and importers 
     voting in that second referendum.
       (4) Failure to approve continuation.--If the Secretary 
     determines that continuation of the order is not approved by 
     a majority of the persons voting in the initial referendum 
     under paragraph (1) or a second referendum under paragraph 
     (2), the Secretary shall--
       (A) terminate the collection of assessments under the order 
     by not later than 180 days after the date on which the 
     Secretary makes that determination; and
       (B) terminate the order, in an orderly manner, as soon as 
     practicable after that date.
       (b) Administrative Matters.--
       (1) Reimbursement.--Subject to section 803(c)(11)(A), the 
     Department shall be reimbursed for expenditures relating to 
     the conduct of a referendum under this section from 
     assessments received by the Board in accordance with the 
     order.
       (2) Time and place of referendum; certification.--Subject 
     to paragraph (3)--
       (A) a referendum conducted under this section shall be 
     conducted at local offices on a date and as determined by the 
     Secretary; and
       (B) at such a referendum, a producer or importer--
       (i) shall certify that the producer or importer was engaged 
     in the production of photovoltaic products during a 
     representative period determined by the Secretary; and
       (ii) on the same day, shall be provided an opportunity to 
     vote in the referendum.
       (3) Absentee mail ballot.--The Secretary shall--
       (A) provide for a producer or importer to receive an 
     absentee mail ballot for use in voting in a referendum on 
     request; and
       (B) establish rules by which a producer or importer may use 
     such an absentee mail ballot to vote in a referendum.

     SEC. 805. ENFORCEMENT.

       (a) Restraining Order; Civil Fine.--If the Secretary 
     determines that the administration and enforcement of this 
     title or the order would be adequately served by the issuance 
     of an administrative order or assessment of a civil penalty, 
     following an opportunity for an administrative hearing on the 
     record, the Secretary may--
       (1) issue an administrative order to restrain or prevent a 
     person from violating the order; and
       (2) assess a civil fine of not more than $25,000 for each 
     violation of the order.
       (b) Jurisdiction of District Court.--The United States 
     district courts shall have exclusive jurisdiction over any 
     civil action brought to enforce, or to prevent or restrain a 
     person from violating, the order or this title.
       (c) Civil Action to Be Referred to Attorney General.--A 
     civil action authorized to be brought under this section 
     shall be referred to the Attorney General for appropriate 
     action.

     SEC. 806. INVESTIGATORY POWERS AND PROCEDURES.

       (a) Investigations.--The Secretary may conduct such 
     investigations as the Secretary determines to be necessary--
       (1) for the effective administration of this title; or
       (2) to determine whether any person subject to this title 
     has engaged or is about to engage in any act that constitutes 
     or will constitute a violation of the order or this title.
       (b) Powers.--
       (1) In general.--In conducting an investigation described 
     in paragraph (1), the Secretary may administer such oaths and 
     affirmations, subpoena and compel the attendance of such 
     witnesses, receive such evidence, and require the production 
     of such records as are relevant to the investigation.
       (2) Geographical boundary.--The attendance of witnesses and 
     the production of records under paragraph (1) may be required 
     from any place in the United States.
       (3) Judicial action.--In a case of contumacy by, or refusal 
     to obey a subpoena issued to, any person, the Secretary may 
     request any court of the United States within the 
     jurisdiction of which the investigation or proceeding is 
     carried on, or in which the person resides or carries on 
     business, to issue, and such a court may issue, an order 
     requiring the attendance and testimony of the person and the 
     production of any requested records.
       (4) Contempt.--Any failure to obey an order of a court 
     issued under paragraph (3)

[[Page 16392]]

     may be punished by the court as a contempt of the court.
       (5) Service of process.--Process in any case described in 
     this subsection may be served--
       (A) in the judicial district in which a person is an 
     inhabitant; or
       (B) wherever the person may be found.

     SEC. 807. EFFECT ON OTHER AUTHORITY.

       Nothing in this title preempts, supercedes, or otherwise 
     affects any other Federal or State program relating to solar 
     energy promotion.

     SEC. 808. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated such sums as are 
     necessary to carry out the consumer education activities 
     authorized by the order and this title.
                                 ______
                                 
  SA 1691. Mr. WYDEN (for himself and Mr. Sununu) submitted an 
amendment intended to be proposed to amendment SA 1502 proposed by Mr. 
Reid to the bill H.R. 6, to reduce our Nation's dependency on foreign 
oil by investing in clean, renewable, and alternative energy resources, 
promoting new emerging energy technologies, developing greater 
efficiency, and creating a Strategic Energy Efficiency and Renewables 
Reserve to invest in alternative energy, and for other purposes; which 
was ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC. __. REMOVAL OF ROYALTY RELIEF AUTHORITY.

       Sections 344 and 345 of the Energy Policy Act of 2005 (42 
     U.S.C. 15904, 15905) are repealed.
                                 ______
                                 
  SA 1692. Ms. MURKOWSKI submitted an amendment intended to be proposed 
to amendment SA 1502 proposed by Mr. Reid to the bill H.R. 6, to reduce 
our Nation's dependency on foreign oil by investing in clean, 
renewable, and alternative energy resources, promoting new emerging 
energy technologies, developing greater efficiency, and creating a 
Strategic Energy Efficiency and Renewables Reserve to invest in 
alternative energy, and for other purposes; which was ordered to lie on 
the table; as follows:

       At the appropriate place, insert the following:

     SEC. ___. LICENSING OF LAKE DIANA HYDROELECTRIC PROJECT.

       (a) In General.--Notwithstanding any other provision of 
     law, the license to construct the project described in the 
     Federal Energy Regulatory Commission preliminary permit 
     application numbered 12716-000 is approved.
       (b) Project Construction Requirements.--The project 
     referred to in subsection (a) shall be carried out in 
     accordance with the notice of intent dated March 29, 2007, as 
     determined by the Federal Energy Regulatory Commission under 
     subsection (c).
       (c) Approval.--The Federal Energy Regulatory Commission 
     shall approve the project only if the Commission determines 
     that the project--
       (1) will be carried out in accordance with the notice of 
     intent referred to in subsection (b); and
       (2) will best develop the affected water resources, in 
     accordance with section 10(a) of the Federal Power Act (16 
     U.S.C. 803(a)).
       (d) License Conditions.--The license for the project 
     referred to in subsection (a) shall include conditions 
     identical to the license conditions relating to the use of 
     affected water determined to be necessary and appropriate by 
     the Federal Energy Regulatory Commission under section 10(a) 
     of that Act (16 U.S.C. 803(a)).
                                 ______
                                 
  SA 1693. Mr. BINGAMAN (for himself, Mrs. Boxer, and Mr. Reid) 
submitted an amendment intended to be proposed to amendment SA 1502 
proposed by Mr. Reid to the bill H.R. 6, to reduce our Nation's 
dependency on foreign oil by investing in clean, renewable, and 
alternative energy resources, promoting new emerging energy 
technologies, developing greater efficiency, and creating a Strategic 
Energy Efficiency and Renewables Reserve to invest in alternative 
energy, and for other purposes; which was ordered to lie on the table; 
as follows:

       On page 59, after line 21, insert the following:

                  Subtitle D--Environmental Safeguards

     SEC. 161. GRANTS FOR PRODUCTION OF ADVANCED BIOFUELS.

       (a) In General.--The Secretary shall establish a grant 
     program to encourage the production of advanced biofuels.
       (b) Requirements and Priority.--In making grants under this 
     section, the Secretary--
       (1) shall make awards to the proposals for advanced 
     biofuels with the greatest reduction in lifecycle greenhouse 
     gas emissions compared to the comparable motor vehicle fuel 
     lifecycle emissions during calendar year 2007; and
       (2) shall not make an award to a project that does not 
     achieve at least a 50-percent reduction in such lifecycle 
     greenhouse gas emissions.
       (c) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $500,000,000 for 
     the period of fiscal years 2008 through 2015.

     SEC. 162. STUDIES OF EFFECTS OF RENEWABLE FUEL USE.

       Section 211 of the Clean Air Act (42 U.S.C. 7545) is 
     amended by adding at the end the following:
       ``(t) Studies of Effects of Renewable Fuel Use.--
       ``(1) In general.--Not later than 1 year after the date of 
     enactment of this subsection, the Administrator shall offer 
     to enter into appropriate arrangements with the National 
     Academy of Sciences and any other independent research 
     institute determined to be appropriate by the Administrator, 
     in consultation with appropriate Federal agencies, to conduct 
     2 studies on the effects of increased domestic use of 
     renewable fuels under the Renewable Fuels, Consumer 
     Protection, and Energy Efficiency Act of 2007.
       ``(2) Matters to be studied.--
       ``(A) In general.--The studies under this subsection shall 
     assess, quantify, and recommend analytical methodologies in 
     relation to environmental changes associated with the 
     increased domestic use of renewable fuels under the Renewable 
     Fuels, Consumer Protection, and Energy Efficiency Act of 
     2007, including production, handling, transportation, and use 
     of the fuels.
       ``(B) Specific matters.--The studies shall include an 
     assessment and quantification, to the maximum extent 
     practicable, of significant changes--
       ``(i) in air and water quality and the quality of other 
     natural resources;
       ``(ii) in land use patterns;
       ``(iii) in the rate of deforestation in the United States 
     and globally;
       ``(iv) to greenhouse gas emissions;
       ``(v) to significant geographic areas and habitats with 
     high biodiversity values (including species richness, the 
     presence of species that are exclusively native to a place, 
     or the presence of endangered species); or
       ``(vi) in the long-term capacity of the United States to 
     produce biomass feedstocks.
       ``(C) Baseline comparison.--In making an assessment or 
     quantifying effects of increased use of renewable fuels, the 
     studies shall use an appropriate baseline involving increased 
     use of the conventional transportation fuels, if displacement 
     by use of renewable fuels had not occurred.
       ``(3) Reports to congress.--The Administrator shall submit 
     to Congress a report summarizing the assessments and findings 
     of--
       ``(A) the first study, along with any recommendations by 
     the Administrator to mitigate adverse effects identified by 
     the study, not later than 3 years after the date of enactment 
     of this subsection; and
       ``(B) the second study, along with any recommendations by 
     the Administrator to mitigate adverse effects identified by 
     the study, not later December 31, 2015.''.

     SEC. 163. INTEGRATED CONSIDERATION OF WATER QUALITY IN 
                   DETERMINATIONS ON FUELS AND FUEL ADDITIVES.

       Section 211(c)(1) of the Clean Air Act (42 U.S.C. 
     7545(c)(1)) is amended--
       (1) by striking ``nonroad vehicle (A) if in the judgment of 
     the Administrator'' and inserting ``nonroad vehicle--
       ``(A) if, in the judgment of the Administrator, any fuel or 
     fuel additive or'';
       (2) in subparagraph (A), by striking ``air pollution 
     which'' and inserting ``air pollution or water pollution 
     (including any degradation in the quality of groundwater) 
     that''; and
       (3) by striking ``, or (B) if'' and inserting the 
     following: ``; or
       ``(B) if''.

     SEC. 164. ANTI-BACKSLIDING.

       Section 211 of the Clean Air Act (42 U.S.C. 7545) (as 
     amended by section 162) is amended by adding at the end the 
     following:
       ``(u) Prevention of Air Quality Deterioration.--
       ``(1) Study.--
       ``(A) In general.--Not later than 18 months after the date 
     of enactment of the Renewable Fuels, Consumer Protection, and 
     Energy Efficiency Act of 2007, the Administrator shall 
     complete a study to determine whether the renewable fuel 
     volumes required by that Act will adversely impact air 
     quality as a result of changes in vehicle and engine 
     emissions of air pollutants regulated under this Act.
       ``(B) Considerations.--The study shall include 
     consideration of--
       ``(i) different blend levels, types of renewable fuels, and 
     available vehicle technologies; and
       ``(ii) appropriate national, regional, and local air 
     quality control measures.
       ``(2) Regulations.--Not later than 3 years after the date 
     of enactment of the Renewable Fuels, Consumer Protection, and 
     Energy Efficiency Act of 2007, the Administrator shall--

[[Page 16393]]

       ``(A) promulgate regulations to implement appropriate 
     measures to mitigate, to the greatest extent achievable, 
     considering the results of the study under paragraph (1), any 
     adverse impacts on air quality, as the result of the 
     renewable volumes required by that Act; or
       ``(B) make a determination that no such measures are 
     necessary.
       ``(3) Other requirements.--Nothing in title I of the 
     Renewable Fuels, Consumer Protection, and Energy Efficiency 
     Act of 2007 supercedes or otherwise affects any Federal or 
     State requirement under any other provision of law that is 
     more stringent than any requirement of this title.''.
                                 ______
                                 
  SA 1694. Mr. BINGAMAN (for himself, Mrs. Boxer, and Mr. Reid) 
submitted an amendment intended to be proposed to amendment SA 1502 
proposed by Mr. Reid to the bill H.R. 6, to reduce our Nation's 
dependency on foreign oil by investing in clean, renewable, and 
alternative energy resources, promoting new emerging energy 
technologies, developing greater efficiency, and creating a Strategic 
Energy Efficiency and Renewables Reserve to invest in alternative 
energy, and for other purposes; which was ordered to lie on the table; 
as follows:

       At the end of the amendment, add the following:

     SEC. 165. LIFECYCLE GREENHOUSE GAS EMISSIONS FOR ADVANCED 
                   BIOFUELS.

       (a) 50-Percent Reduction.--In addition to or as part of the 
     regulations promulgated under section 111(a)(1), the 
     President shall promulgate regulations to ensure that 
     advanced biofuels achieve at least a 50-percent reduction in 
     lifecycle greenhouse gas emissions compared to the comparable 
     transportation fuel.
       (b) Failure To Achieve.--Notwithstanding paragraphs (1) and 
     (3) of section 102 and section 111(a)--
       (1) an advanced biofuel that achieves a reduction of at 
     least 20 percent, but less than 50 percent, in lifecycle 
     greenhouse gas emissions compared to gasoline shall be 
     considered a conventional biofuel under section 111(a); and
       (2) an advanced biofuel that achieves a reduction of less 
     than 20 percent in lifecycle greenhouse gas emissions 
     compared to gasoline shall not be considered to be a 
     renewable fuel under section 111(a).
                                 ______
                                 
  SA 1695. Mr. BINGAMAN (for himself, Mrs. Boxer, and Mr. Reid) 
submitted an amendment intended to be proposed to amendment SA 1502 
proposed by Mr. Reid to the bill H.R. 6, to reduce our Nation's 
dependency on foreign oil by investing in clean, renewable, and 
alternative energy resources, promoting new emerging energy 
technologies, developing greater efficiency, and creating a Strategic 
Energy Efficiency and Renewables Reserve to invest in alternative 
energy, and for other purposes; which was ordered to lie on the table; 
as follows:

       On page 7, between lines 23 and 24, insert the following:
       (4) Lifecycle greenhouse gas emissions.--The term 
     ``lifecycle greenhouse gas emissions'' means the aggregate 
     quantity of greenhouse gases attributable to the production, 
     transportation, and use of renewable fuel, including the 
     production, extraction, cultivation, distribution, marketing, 
     and transportation of feedstocks, as modified by deducting, 
     as determined by the Administrator of the Environmental 
     Protection Agency--
       (A) any greenhouse gases captured at the facility and 
     sequestered; and
       (B) the carbon content, expressed in units of carbon 
     dioxide equivalent, of any feedstock that is renewable 
     biomass.
       On page 7, line 24, strike ``(4)'' and insert ``(5)''.
       On page 9, line 11, strike ``(5)'' and insert ``(6)''.
       On page 10, line 1, strike ``(6)'' and insert ``(7)''.
       On page 10, line 3, strike ``(7)'' and insert ``(8)''.
                                 ______
                                 
  SA 1696. Mr. NELSON of Nebraska (for himself, Mr. Craig, Mr. Crapo, 
Mr. Kohl, Mr. Allard, and Mr. Thune) submitted an amendment intended to 
be proposed to amendment SA 1502 proposed by Mr. Reid to the bill H.R. 
6, to reduce our Nation's dependency on foreign oil by investing in 
clean, renewable, and alternative energy resources, promoting new 
emerging energy technologies, developing greater efficiency, and 
creating a Strategic Energy Efficiency and Renewables Reserve to invest 
in alternative energy, and for other purposes; which was ordered to lie 
on the table; as follows:

       At the appropriate place, insert the following:

     SEC. 2. CREDIT FOR PRODUCTION OF BIOGAS FROM CERTAIN 
                   RENEWABLE FEEDSTOCKS.

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

     ``SEC. 40B. BIOGAS PRODUCED FROM CERTAIN RENEWABLE 
                   FEEDSTOCKS.

       ``(a) General Rule.--For purposes of section 38, the 
     qualified biogas production credit for any taxable year is an 
     amount equal to the product of--
       ``(1) $4.27, and
       ``(2) each million British thermal units (mmBtu) of 
     biogas--
       ``(A) produced by the taxpayer--
       ``(i) from qualified energy feedstock, and
       ``(ii) at a qualified facility, and
       ``(B) either--
       ``(i) sold by the taxpayer to an unrelated person during 
     the taxable year, or
       ``(ii) used by the taxpayer during the taxable year.
       ``(b) Definitions.--
       ``(1) Biogas.--The term `biogas' means a gas that--
       ``(A) is derived by processing qualified energy feedstock 
     through anaerobic digestion, gasification, or other similar 
     processes, and
       ``(B) is an energy or fuel alternative to fossil fuels such 
     as coal, natural gas or petroleum-based products.''
       ``(2) Qualified energy feedstock.--
       ``(A) In general.--The term `qualified energy feedstock' 
     means--
       ``(i) manure of agricultural livestock, including litter, 
     wood shavings, straw, rice hulls, bedding material, and other 
     materials incidentally collected with the manure,
       ``(ii) any nonhazardous, cellulosic, or other organic 
     agricultural or food industry byproduct or waste material 
     that is derived from--

       ``(I) harvesting residues,
       ``(II) wastes or byproducts from fermentation processes, 
     ethanol production, biodiesel production, slaughter of 
     agricultural livestock, food production, food processing, or 
     food service, or
       ``(III) other organic wastes, byproducts, or sources, or

       ``(iii) solid wood waste materials, including waste 
     pallets, crates, dunnage, manufacturing and construction wood 
     wastes, and landscape or right-of-way tree trimmings.
       ``(B) Exclusions.--The term `qualified energy feedstock' 
     does not include--
       ``(i) pressure-treated, chemically-treated, or painted wood 
     wastes,
       ``(ii) municipal solid waste,
       ``(iii) landfills, or
       ``(iv) paper that is commonly recycled.
       ``(C) Agricultural livestock.--The term `agricultural 
     livestock' means poultry, cattle, sheep, swine, goats, 
     horses, mules, and other equines.
       ``(3) Qualified facility.--The term `qualified facility' 
     means a facility that--
       ``(A) uses anaerobic digestion technology, gasification 
     technology, or other similar technologies to process 
     qualified energy feedstock into biogas,
       ``(B) is owned by the taxpayer,
       ``(C) is located in the United States,
       ``(D) is originally placed in service before January 1, 
     2018, and
       ``(E) the biogas output of which is--
       ``(i) marketed through interconnection with a gas 
     distribution or transmission pipeline, or
       ``(ii) used on-site or off-site in a quantity that is 
     sufficient to offset the consumption of at least 50,000 mmBtu 
     annually of commercially-marketed fuel derived from coal, 
     crude oil, natural gas, propane, or other fossil fuel.
       ``(c) Special Rules.--For purposes of this section--
       ``(1) Production attributable to the taxpayer.--In the case 
     of a facility in which more than 1 person has an ownership 
     interest, except to the extent provided in regulations 
     prescribed by the Secretary, production from the qualified 
     facility shall be allocated among such persons in proportion 
     to their respective ownership interests in the gross sales 
     from such qualified facility.
       ``(2) Related persons.--Persons shall be treated as related 
     to each other if such persons would be treated as a single 
     employer under the regulations prescribed under section 
     52(b). In the case of a corporation which is a member of an 
     affiliated group of corporations filing a consolidated 
     return, such corporation shall be treated as selling biogas 
     to an unrelated person if such biogas is sold to such a 
     person by another member of such group.
       ``(3) 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.
       ``(4) Coordination with credit from producing fuel from a 
     nonconventional source.--The amount of biogas produced and 
     sold or used by the taxpayer during any taxable year which is 
     taken into account under this section shall be reduced by the 
     amount of biogas produced and sold by the taxpayer in such 
     taxable year which is taken into account under section 45K.
       ``(5) Credit eligibility in the case of government-owned 
     facilities using poultry waste.--In the case of a facility 
     using poultry waste to produce biogas and owned by a 
     governmental unit, subparagraph (B) of subsection (b)(3) 
     shall be applied by substituting

[[Page 16394]]

     `is leased or operated by the taxpayer' for `is owned by the 
     taxpayer'.
       ``(d) Transferability of Credit.--
       ``(1) In general.--A taxpayer may transfer the credit under 
     this section through an assignment to any person. Such 
     transfer may be revoked only with the consent of the 
     Secretary.
       ``(2) Regulations.--The Secretary shall prescribe such 
     regulations as necessary to ensure that any credit 
     transferred under paragraph (1) is claimed once and not 
     reassigned by such other person.
       ``(e) Adjustment Based on Inflation.--
       ``(1) In general.--The $4.27 amount under subsection (b)(1) 
     shall be adjusted by multiplying such amount by the inflation 
     adjustment factor for the calendar year in which the sale 
     occurs. If any amount as increased under the preceding 
     sentence is not a multiple of 0.1 cent, such amount shall be 
     rounded to the nearest multiple of 0.1 cent.
       ``(2) Computation of inflation adjustment factor.--
       ``(A) In general.--The Secretary shall, not later than 
     April 1 of each calendar year, determine and publish in the 
     Federal Register the inflation adjustment factor in 
     accordance with this paragraph.
       ``(B) Inflation adjustment factor.--The term `inflation 
     adjustment factor' means, with respect to a calendar year, a 
     fraction the numerator of which is the GDP implicit price 
     deflator for the preceding calendar year and the denominator 
     of which is the GDP implicit price deflator for calendar year 
     2007. The term `GDP implicit price deflator' means the most 
     recent revision of the implicit price deflator for the gross 
     domestic product as computed and published by the Department 
     of Commerce before March 15 of the calendar year.
       ``(f) Application of Section.--This section shall apply 
     with respect to biogas produced and sold--
       ``(1) after the date of the enactment of this section, and
       ``(2) before the date on which the Secretary of Energy 
     certifies that 100,000,000 British thermal units of biogas 
     have been produced at qualified facilities after such 
     date.''.
       (b) Credit Treated as Business Credit.--Section 38(b) of 
     the Internal Revenue Code of 1986 is amended by striking 
     ``plus'' at the end of paragraph (30), by striking the period 
     at the end of paragraph (31) and inserting ``, plus'', and by 
     adding at the end the following new paragraph:
       ``(32) the qualified biogas production credit under section 
     40B(a).''.
       (c) Credit Allowed Against AMT.--Section 38(c)(4)(B) of the 
     Internal Revenue Code of 1986 is amended by striking ``and'' 
     at the end of clause (i), 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 40B.''.
       (d) Clerical Amendment.--The table of sections for subpart 
     D of part IV of subchapter A of chapter 1 of the Internal 
     Revenue Code of 1986 is amended by inserting after the item 
     relating to section 40A the following new item:

``Sec. 40B. Biogas produced from certain renewable feedstocks.''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to biogas produced and sold or used in taxable 
     years beginning after the date of the enactment of this Act.
                                 ______
                                 
  SA 1697. Mr. WEBB submitted an amendment intended to be proposed to 
amendment SA 1502 proposed by Mr. Reid to the bill H.R. 6, to reduce 
our Nation's dependency on foreign oil by investing in clean, 
renewable, and alternative energy resources, promoting new emerging 
energy technologies, developing greater efficiency, and creating a 
Strategic Energy Efficiency and Renewables Reserve to invest in 
alternative energy, and for other purposes; which was ordered to lie on 
the table; as follows:

       On page 283, after line 20, insert the following:
       (d) Major Energy Producer Records.--
       (1) In general.--Following the declaration of an energy 
     emergency by the President under section 606, a major energy 
     producer (as defined by section 702) shall maintain and shall 
     make available to the Federal Trade Commission, such books, 
     accounts, memoranda, and other records as the Commission 
     determines are relevant to determine whether the producer is 
     in violation of this title.
       (2) Retention.--A major energy producer subject to 
     paragraph (1) shall retain records required by paragraph (1) 
     for a period of 1 year after the expiration of the 
     declaration of an energy emergency.
                                 ______
                                 
  SA 1698. Ms. CANTWELL submitted an amendment intended to be proposed 
to amendment SA 1502 proposed by Mr. Reid to the bill H.R. 6, to reduce 
our Nation's dependency on foreign oil by investing in clean, 
renewable, and alternative energy resources, promoting new emerging 
energy technologies, developing greater efficiency, and creating a 
Strategic Energy Efficiency and Renewables Reserve to invest in 
alternative energy, and for other purposes; which was ordered to lie on 
the table; as follows:

       In section 102(4), strike subparagraph (A) and insert the 
     following:
       (A) nonmerchantable materials or precommercial thinnings 
     that--
       (i) are byproducts of preventive treatments, such as trees, 
     wood, brush, thinnings, chips, and slash, that are removed--

       (I) to reduce hazardous fuels;
       (II) to reduce or contain disease or insect infestation; or
       (III) to restore forest health;

       (ii) would not otherwise be used for higher-value products; 
     and
       (iii) are harvested from National Forest System land or 
     public land (as defined in section 103 of the Federal Land 
     Policy and Management Act of 1976 (43 U.S.C. 1702))--

       (I) where permitted by law; and
       (II) in accordance with--

       (aa) applicable land management plans; and
       (bb) the requirements for old-growth maintenance, 
     restoration, and management direction of paragraphs (2), (3), 
     and (4) of subsection (e) and the requirements for large-tree 
     retention of subsection (f) of section 102 of the Healthy 
     Forests Restoration Act of 2003 (16 U.S.C. 6512); or
                                 ______
                                 
  SA 1699. Ms. CANTWELL submitted an amendment intended to be proposed 
to amendment SA 1502 proposed by Mr. Reid to the bill H.R. 6, to reduce 
our Nation's dependency on foreign oil by investing in clean, 
renewable, and alternative energy resources, promoting new emerging 
energy technologies, developing greater efficiency, and creating a 
Strategic Energy Efficiency and Renewables Reserve to invest in 
alternative energy, and for other purposes; which was ordered to lie on 
the table; as follows:

       Beginning on page 117, strike line 21 and all that follows 
     through page 118, line 10, and insert the following:

     SEC. 241. LIGHTWEIGHT MATERIALS RESEARCH AND DEVELOPMENT.

       (a) In General.--As soon as practicable after the date of 
     enactment of this Act, the Secretary shall establish a 
     research and development program to determine ways in which--
       (1) the weight of motor vehicle structures may be reduced 
     to improve fuel efficiency without compromising passenger 
     safety;
       (2) the cost of primary lightweight materials (such as 
     high-strength steel alloys, aluminum, magnesium, and carbon 
     fiber for reinforced polymer composites) with the properties 
     required for the construction of lighter-weight vehicles may 
     be reduced; and
       (3) the cost of processing, joining, and recycling 
     lightweight materials for high-volume applications may be 
     reduced.
       (b) Authorization of Appropriations.--There is authorized 
     to the appropriated to carry out this section $90,000,000 for 
     each of fiscal years 2007 through 2012.
                                 ______
                                 
  SA 1700. Ms. COLLINS submitted an amendment intended to be proposed 
to amendment SA 1502 proposed by Mr. Reid to the bill H.R. 6, to reduce 
our Nation's dependency on foreign oil by investing in clean, 
renewable, and alternative energy resources, promoting new emerging 
energy technologies, developing greater efficiency, and creating a 
Strategic Energy Efficiency and Renewables Reserve to invest in 
alternative energy, and for other purposes; which was ordered to lie on 
the table; as follows:

       At the end of subtitle B of title I, add the following:

     SEC. 13_. RESEARCH AND DEVELOPMENT IN SUPPORT OF LOW-CARBON 
                   FUELS.

       (a) Declaration of Policy.--Congress declares that, in 
     order to achieve maximum reductions in greenhouse gas 
     emissions, enhance national security, and ensure the 
     protection of wildlife habitat, biodiversity, water quality, 
     air quality, and rural and regional economies throughout the 
     lifecycle of each low-carbon fuel, it is necessary and 
     desirable to undertake a combination of basic and applied 
     research, as well as technology development and 
     demonstration, involving the colleges and universities of the 
     United States, in partnership with the Federal Government, 
     State governments, and the private sector.
       (b) Purpose.--The purpose of this section is to provide for 
     research support to facilitate the development of sustainable 
     markets and technologies to produce and use woody biomass and 
     other low-carbon fuels for the production of thermal and 
     electric energy, biofuels, and bioproducts.
       (c) Definition of Fuel Emission Baseline.--In this section, 
     the term ``fuel emission baseline'' means the average 
     lifecycle greenhouse gas emissions per unit of energy of the 
     fossil fuel component of conventional transportation fuels in 
     commerce in the United States in calendar year 2008, as 
     determined by the President.

[[Page 16395]]

       (d) Grant Program.--The President shall establish a program 
     to provide to eligible entities (as identified by the 
     President) grants for use in--
       (1) providing financial support for not more than 4 nor 
     less than 6 demonstration facilities that--
       (A) use woody biomass to deploy advanced technologies for 
     production of thermal and electric energy, biofuels, and 
     bioproducts; and
       (B) are targeted at regional feedstocks and markets;
       (2) conducting targeted research for the development of 
     cellulosic ethanol and other liquid fuels from woody or other 
     biomass that may be used in transportation or stationary 
     applications, such as industrial processes or industrial, 
     commercial, and residential heating;
       (3) conducting research into the best scientifically-based 
     and periodically-updated methods of assessing and certifying 
     the impacts of each low-carbon fuel with respect to--
       (A) the reduction in lifecycle greenhouse gas emissions of 
     each fuel as compared to--
       (i) the fuel emission baseline; and
       (ii) the greenhouse gas emissions of other sectors, such as 
     the agricultural, industrial, and manufacturing sectors;
       (B) the contribution of the fuel toward enhancing the 
     energy security of the United States by displacing imported 
     petroleum and petroleum products;
       (C) any impacts of the fuel on wildlife habitat, 
     biodiversity, water quality, and air quality; and
       (D) any effect of the fuel with respect to rural and 
     regional economies;
       (4) conducting research to determine to what extent the use 
     of low-carbon fuels in the transportation sector would impact 
     greenhouse gas emissions in other sectors, such as the 
     agricultural, industrial, and manufacturing sectors;
       (5) conducting research for the development of the supply 
     infrastructure that may provide renewable biomass feedstocks 
     in a consistent, predictable, and environmentally-sustainable 
     manner;
       (6) conducting research for the development of supply 
     infrastructure that may provide renewable low-carbon fuels in 
     a consistent, predictable, and environmentally-sustainable 
     manner; and
       (7) conducting policy research on the global movement of 
     low-carbon fuels in a consistent, predictable, and 
     environmentally-sustainable manner.
       (e) Authorization of Appropriations.--There are authorized 
     to be appropriated to carry out this section--
       (1) $45,000,000 for fiscal year 2009;
       (2) $50,000,000 for fiscal year 2010;
       (3) $55,000,000 for fiscal year 2011;
       (4) $60,000,000 for fiscal year 2012; and
       (5) $65,000,000 for fiscal year 2013.
                                 ______
                                 
  SA 1701. Mrs. DOLE submitted an amendment to be proposed by her to 
the bill S. 1639, to provide for comprehensive immigration reform and 
for other purposes; which was ordered to lie on the table; as follows:

       At the appropriate place, insert the following:
       (s) Definition of Aggravated Felony and Additional Grounds 
     for Ineligibility for Z Nonimmigrant Status.--
       (1) Aggravated felony.--Section 101(a)(43) of the 
     Immigration and Nationality Act (8 U.S.C. 1101(a)(43)) is 
     amended--
       (A) by striking ``and'' at the end of subparagraph (T);
       (B) by striking the period at the end of subparagraph (U) 
     and inserting ``; and'' and
       (C) by adding at the end the following:
       ``(V) a second conviction for drunk driving, regardless of 
     the State in which the conviction occurred or whether the 
     offense is classified as a misdemeanor or a felony under 
     State law.''.
       (2) Grounds for ineligibility.--In addition to the grounds 
     of ineligibility described in subsection (d)(1)(F), an alien 
     shall be ineligible for Z nonimmigrant status if the alien 
     has been convicted of drunk driving, regardless of the State 
     in which the conviction occurred or whether the offense is 
     classified as a misdemeanor or a felony under State law.
                                 ______
                                 
  SA 1702. Ms. SNOWE (for herself and Mr. Kerry) submitted an amendment 
intended to be proposed to amendment SA 1502 proposed by Mr. Reid to 
the bill H.R. 6, to reduce our Nation's dependency on foreign oil by 
investing in clean, renewable, and alternative energy resources, 
promoting new emerging energy technologies, developing greater 
efficiency, and creating a Strategic Energy Efficiency and Renewables 
Reserve to invest in alternative energy, and for other purposes; which 
was ordered to lie on the table; as follows:

       On page 161, between lines 2 and 3, insert the following:

     SEC. 269. EXPRESS LOANS FOR RENEWABLE ENERGY AND ENERGY 
                   EFFICIENCY.

       Section 7(a)(31) of the Small Business Act (15 U.S.C. 
     636(a)(31)) is amended by adding at the end the following:
       ``(F) Express loans for renewable energy and energy 
     efficiency.--
       ``(i) Definitions.--In this subparagraph--

       ``(I) the term `biomass'--

       ``(aa) means any organic material that is available on a 
     renewable or recurring basis, including--
       ``(AA) agricultural crops;
       ``(BB) trees grown for energy production;
       ``(CC) wood waste and wood residues;
       ``(DD) plants (including aquatic plants and grasses);
       ``(EE) residues;
       ``(FF) fibers;
       ``(GG) animal wastes and other waste materials; and
       ``(HH) fats, oils, and greases (including recycled fats, 
     oils, and greases); and
       ``(bb) does not include--
       ``(AA) paper that is commonly recycled; or
       ``(BB) unsegregated solid waste;

       ``(II) the term `energy efficiency project' means the 
     installation or upgrading of equipment that results in a 
     significant reduction in energy usage; and
       ``(III) the term `renewable energy system' means a system 
     of energy derived from--

       ``(aa) a wind, solar, biomass (including biodiesel), or 
     geothermal source; or
       ``(bb) hydrogen derived from biomass or water using an 
     energy source described in item (aa).
       ``(ii) Loans.--Loans may be made under the `Express Loan 
     Program' for the purpose of--

       ``(I) purchasing a renewable energy system; or
       ``(II) an energy efficiency project for an existing 
     business.''.

                                 ______
                                 
  SA 1703. Ms. MURKOWSKI submitted an amendment intended to be proposed 
to amendment SA 1502 proposed by Mr. Reid to the bill H.R. 6, to reduce 
our Nation's dependency on foreign oil by investing in clean, 
renewable, and alternative energy resources, promoting new emerging 
energy technologies, developing greater efficiency, and creating a 
Strategic Energy Efficiency and Renewables Reserve to invest in 
alternative energy, and for other purposes; which was ordered to lie on 
the table; as follows:

       At the appropriate place insert the following:

     SEC. ___. TAX TREATMENT OF INCOME RECEIVED IN CONNECTION WITH 
                   THE EXXON VALDEZ LITIGATION.

       (a) Income Averaging of Amounts Received From the Exxon 
     Valdez Litigation.--For purposes of section 1301 of the 
     Internal Revenue Code of 1986--
       (1) any qualified taxpayer who receives any qualified 
     settlement income in any taxable year shall be treated as 
     engaged in a fishing business (determined without regard to 
     the commercial nature of the business), and
       (2) such qualified settlement income shall be treated as 
     income attributable to such a fishing business for such 
     taxable year.
       (b) Qualified Settlement Income Not Included in SECA.--For 
     purposes of chapter 2 of the Internal Revenue Code of 1986 
     and section 211 of the Social Security Act, no portion of 
     qualified settlement income received by a qualified taxpayer 
     shall be treated as self-employment income.
       (c) Qualified Taxpayer.--For purposes of this section, the 
     term ``qualified taxpayer'' means--
       (1) any plaintiff in the civil action In re Exxon Valdez, 
     No. 89-095-CV (HRH) (Consolidated) (D. Alaska); or
       (2) any beneficiary of the estate of such a plaintiff who--
       (A) acquired the right to receive qualified settlement 
     income from that plaintiff; and
       (B) was the spouse or an immediate relative of that 
     plaintiff.
       (d) Qualified Settlement Income.--For purposes of this 
     section, the term ``qualified settlement income'' means 
     income, including interest and any punitive damage award, 
     received (whether as lump sums or periodic payments) in 
     connection with the civil action In re Exxon Valdez, No. 89-
     095-CV (HRH) (Consolidated) (D. Alaska) (whether pre- or post 
     judgment and whether related to a settlement or judgment).
                                 ______
                                 
  SA 1704. Mr. BAUCUS (for himself, Mr. Grassley, Mr. Bingaman, Ms. 
Cantwell, Mr. Wyden, Mr. Schumer, Mr. Salazar, and Ms. Snowe) proposed 
an amendment to amendment SA 1502 proposed by Mr. Reid to the bill H.R. 
6, to reduce our Nation's dependency on foreign oil by investing in 
clean, renewable, and alternative energy resources, promoting new 
emerging energy technologies, developing greater efficiency, and 
creating a Strategic Energy Efficiency and Renewables Reserve to invest 
in alternative energy, and for other purposes; which was ordered to lie 
on the table; as follows:

       At the end add the following:

                   TITLE VIII--ENERGY TAX PROVISIONS

     SEC. 800. SHORT TITLE; ETC.

       (a) Short Title.--This title may be cited as the ``Energy 
     Advancement and Investment Act of 2007''.

[[Page 16396]]

       (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.
       (c) Table of Contents.--The table of contents for this 
     title is as follows:

                   TITLE VIII--ENERGY TAX PROVISIONS

Sec. 800. Short title; etc.

             Subtitle A--Energy Advancement and Investment

              PART I--Advanced Electricity Infrastructure

Sec. 801. Extension and modification of renewable electricity, refined 
              coal, and Indian coal production credit.
Sec. 802. Extension and modification of credit for clean renewable 
              energy bonds.
Sec. 803. Clean coal energy bonds.
Sec. 804. Extension and modification of energy credit.
Sec. 805. Energy credit for combined heat and power system property.
Sec. 806. Special depreciation allowance for certain electric 
              transmission property.
Sec. 807. Extension of special rule to implement FERC restructuring 
              policy.
Sec. 808. Extension and modification of credit for residential energy 
              efficient property.
Sec. 809. Credit for residential wind property.
Sec. 810. Expansion and modification of advanced coal project 
              investment credit.
Sec. 811. Expansion and modification of coal gasification investment 
              credit.
Sec. 812. Seven-year applicable recovery period for depreciation of 
              qualified energy management devices.
Sec. 813. Landowner incentive to encourage electric transmission build-
              out.

                 PART II--Carbon Dioxide Sequestration

Sec. 815. Tax credit for carbon dioxide sequestration.
Sec. 816. Seven-year applicable recovery period for depreciation of 
              qualified carbon dioxide pipeline property.
Sec. 817. Certain income and gains relating to industrial source carbon 
              dioxide treated as qualifying income for publicly traded 
              partnerships.

                    PART III--Domestic Fuel Security

Sec. 821. Credit for production of cellulosic biomass alcohol.
Sec. 822. Expansion of special allowance to cellulosic biomass alcohol 
              fuel plant property.
Sec. 823. Extension of small ethanol producer credit.
Sec. 824. Credit for producers of fossil free alcohol.
Sec. 825. Modification of alcohol credit.
Sec. 826. Extension and modification of credit for biodiesel used as 
              fuel .
Sec. 827. Extension and modification of alternative fuel credit.
Sec. 828. Extension of alternative fuel vehicle refueling property 
              credit.
Sec. 829. Extension of suspension of taxable income limit on percentage 
              depletion for oil and natural gas produced from marginal 
              properties.
Sec. 830. Extension and modification of election to expense certain 
              refineries.
Sec. 831. Ethanol tariff extension.
Sec. 832. Elimination of duty drawback on certain imported ethanol.
Sec. 833. Certain income and gains relating to alcohol fuel mixtures, 
              biodiesel fuel mixtures, and alternative fuel treated as 
              qualifying income for publicly traded partnerships.
Sec. 834. Technical amendments.

                 PART IV--Advanced Technology Vehicles

Sec. 841. Expansion and modification of credit for alternative fuel 
              motor vehicles.
Sec. 842. Credit for plug-in electric drive motor vehicles.
Sec. 843. Exclusion from heavy truck tax for idling reduction units and 
              advanced insulation added after purchase.

               PART V--Conservation and Energy Efficiency

Sec. 851. Extension and modification of nonbusiness energy property 
              credit.
Sec. 852. Extension and modification of new energy efficient home 
              credit.
Sec. 853. Extension and modification of energy efficient commercial 
              buildings deduction.
Sec. 854. Modifications of energy efficient appliance credit for 
              appliances produced after 2007.

                    PART VI--Accountability Studies

Sec. 861. Cost-benefit analysis of pollution reduction and saving in 
              imported oil per dollar of tax benefit.
Sec. 862. Effect of energy related tax benefits on prices for consumer 
              goods.
Sec. 863. Study on tax-credit bonds.

                       PART VII--Other Provisions


                      SUBPART A--Timber Provisions

Sec. 871. Deduction for qualified timber gain.
Sec. 872. Excise tax not applicable to section 1203 deduction of real 
              estate investment trusts.
Sec. 873. Timber REIT modernization.
Sec. 874. Mineral royalty income qualifying income for timber REITs.
Sec. 875. Modification of taxable REIT subsidiary asset test for timber 
              REITs.
Sec. 876. Safe harbor for timber property.


                        SUBPART B--Miscellaneous

Sec. 877. Special rules for refund of the coal excise tax to certain 
              coal producers and exporters.
Sec. 878. Credit to holders of rural renaissance bonds.

                 Subtitle B--Revenue Raising Provisions

Sec. 881. Denial of deduction for major integrated oil companies for 
              income attributable to domestic production of oil, 
              natural gas, or primary products thereof.
Sec. 882. Elimination of the different treatment of foreign oil and gas 
              extraction income and foreign oil related income for 
              purposes of the foreign tax credit.
Sec. 883. Increase and extension of Oil Spill Liability Trust Fund tax.
Sec. 884. Limitation on drawback claimed for amounts deposited into the 
              Oil Spill Liability Trust Fund.
Sec. 885. Tax on crude oil and natural gas produced from the outer 
              Continental Shelf in the Gulf of Mexico.
Sec. 886. Taxation of taxable fuels in foreign trade zones.
Sec. 887. Clarification of penalty for sale of fuel failing to meet EPA 
              regulations.
Sec. 888. Clarification of eligibility for certain fuels credits for 
              fuel with insufficient nexus to the United States.
Sec. 889. Treatment of qualified alcohol fuel mixtures and qualified 
              biodiesel fuel mixtures as taxable fuels.
Sec. 890. Calculation of volume of alcohol for fuel credits.
Sec. 891. Bulk transfer exception not to apply to finished gasoline.
Sec. 892. Application of rules treating inverted corporations as 
              domestic corporations to certain transactions occurring 
              after March 20, 2002.
Sec. 893. Modification of effective date of leasing provisions of the 
              American Jobs Creation Act of 2004.
Sec. 894. Revision of tax rules on expatriation of individuals.

   Subtitle C--Secure Rural Schools and Community Self-Determination 
                                Program

Sec. 901. Secure rural schools and community self-determination 
              program.

             Subtitle A--Energy Advancement and Investment

              PART I--ADVANCED ELECTRICITY INFRASTRUCTURE

     SEC. 801. EXTENSION AND MODIFICATION OF RENEWABLE 
                   ELECTRICITY, REFINED COAL, AND INDIAN COAL 
                   PRODUCTION CREDIT.

       (a) Extension.--
       (1) In general.--Section 45(d) (relating to qualified 
     facilities) is amended--
       (A) by striking ``January 1, 2009'' each place it appears 
     in paragraphs (1), (2), (3), (4), (5), (6), (7), (8), and (9) 
     and inserting ``January 1, 2014'', and
       (B) by striking ``7-year period'' both places it appears in 
     paragraph (10)(A) and inserting ``8-year period''.
       (2) Effective date.--The amendments made by this subsection 
     shall take effect on the date of the enactment of this Act.
       (b) Credit Rate for Electricity Maintained at 2007 Level.--
       (1) In general.--Section 45(a)(1) (relating to general 
     rule) is amended by striking ``1.5 cents'' and inserting ``2 
     cents''.
       (2) No inflation adjustment.--Section 45(b)(2) (relating to 
     credit and phaseout adjustment based on inflation) is amended 
     by striking ``1.5 cent amount in subsection (a), the''.
       (3) Conforming amendments.--Section 45(b)(4)(A) is 
     amended--
       (A) by striking ``2003'' and inserting ``2006'', and
       (B) by striking ``the amount in effect'' and all that 
     follows and inserting ``subsection (a)(1) shall be applied by 
     substituting `0.9 cent' for `2 cents'.''.
       (4) Effective date.--The amendments made by this subsection 
     shall apply to electricity produced and sold after December 
     31, 2006.
       (c) Modification of Refined Coal as a Qualified Energy 
     Resource.--
       (1) Elimination of increased market value test.--Section 
     45(c)(7)(A) (defining refined coal) is amended--

[[Page 16397]]

       (A) by striking clause (iv),
       (B) by adding ``and'' at the end of clause (ii), and
       (C) by striking ``, and'' at the end of clause (iii) and 
     inserting a period.
       (2) Increase in required emission reduction.--Section 
     45(c)(7)(B) (defining qualified emission reduction) is 
     amended by inserting ``at least 40 percent of the emissions 
     of'' after ``nitrogen oxide and''.
       (3) Effective date.--The amendments made by this subsection 
     shall apply to coal produced and sold after December 31, 
     2007.
       (d) Credit Allowed for On-Site Use of Electricity Produced 
     From Biomass.--
       (1) On-site use.--Section 45(e) (relating to definitions 
     and special rules) is amended by adding at the end the 
     following new paragraph:
       ``(12) Credit allowed for on-site use of electricity 
     produced from biomass.--In the case of electricity produced 
     after December 31, 2007, at any facility described in 
     paragraph (2) or (3) which is equipped with net metering to 
     determine electricity consumption or sale (such consumption 
     or sale to be verified by a third party as determined by the 
     Secretary), subsection (a)(2) shall be applied without regard 
     to subparagraph (B) thereof.''.
       (2) Effective date.--The amendment made by this subsection 
     shall take effect on the date of the enactment of this Act.
       (e) Expansion of Resources to Wave, Current, Tidal, and 
     Ocean Thermal Energy.--
       (1) In general.--Section 45(c)(1) (defining qualified 
     energy resources) is amended by striking ``and'' at the end 
     of subparagraph (G), by striking the period at the end of 
     subparagraph (H) and inserting ``, and'', and by adding at 
     the end the following new subparagraph:
       ``(I) wave, current, tidal, and ocean thermal energy.''.
       (2) Definition of resources.--Section 45(c) is amended by 
     adding at the end the following new paragraph:
       ``(10) Wave, current, tidal, and ocean thermal energy.--The 
     term `wave, current, tidal, and ocean thermal energy' means 
     electricity produced from any of the following:
       ``(A) Free flowing ocean water derived from tidal currents, 
     ocean currents, waves, or estuary currents.
       ``(B) Ocean thermal energy.''.
       (3) Facilities.--Section 45(d) is amended by adding at the 
     end the following new paragraph:
       ``(11) Wave, current, tidal, and ocean thermal facility.--
     In the case of a facility using resources described in 
     subparagraph (A), (B), or (C) of subsection (c)(10) to 
     produce electricity, the term `qualified facility' means any 
     facility owned by the taxpayer which is originally placed in 
     service after the date of the enactment of this paragraph and 
     before January 1, 2014, but such term shall not include a 
     facility which includes impoundment structures or a small 
     irrigation power facility.''.
       (4) Credit rate.--Section 45(b)(4)(A) (relating to credit 
     rate), as amended by this section, is amended by striking 
     ``or (9)'' and inserting ``(9), or (11)''.
       (5) Effective date.--The amendments made by this subsection 
     shall take effect on the date of the enactment of this Act.
       (f) Trash Facility Clarification.--
       (1) In general.--Paragraph (7) of section 45(d) is 
     amended--
       (A) by striking ``facility which burns'' and inserting 
     ``facility (other than a facility described in paragraph (6)) 
     which uses'', and
       (B) by striking ``combustion''.
       (2) Effective date.--The amendments made by this subsection 
     shall apply to electricity produced and sold before, on, or 
     after December 31, 2007.

     SEC. 802. EXTENSION AND MODIFICATION OF CREDIT FOR CLEAN 
                   RENEWABLE ENERGY BONDS.

       (a) Increase in Amount of Bonds Designated; 4-Year 
     Extension.--
       (1) In general.--Section 54(f) (relating to limitation on 
     amount of bonds designated) is amended by adding at the end 
     the following new paragraph:
       ``(3) National annual limitation.--
       ``(A) In general.--There is a national clean renewable 
     energy bond annual limitation for each calendar year. Such 
     limitation is $900,000,000 for 2008, 2009, 2010, and 2011, 
     and, except as provided in subparagraph (C), zero thereafter.
       ``(B) Allocation by secretary.--The national clean 
     renewable energy bond limitation for a calendar year shall be 
     allocated by the Secretary among qualified projects in such 
     manner as the Secretary determines appropriate, except that 
     the Secretary may not allocate more than $563,000,000 of such 
     limitation for each calendar year to finance qualified 
     projects of qualified borrowers which are governmental 
     bodies, of which not less than one-half of such amount shall 
     be allocated with respect to qualified projects equaling or 
     exceeding $10,000,000 in capital expenditures per project.
       ``(C) Carryover of unused limitation.--If for any calendar 
     year, the national clean renewable energy bond annual 
     limitation for such year exceeds the amount of bonds 
     allocated during such year, such limitation for the following 
     calendar year shall be increased by the amount of such 
     excess. Any carryforward of a limitation may be carried only 
     to the first year following the unused limitation year. For 
     purposes of the preceding sentence, a limitation shall be 
     treated as used on a first-in first-out basis.''.
       (2) Conforming amendment.--Section 54 is amended by 
     striking subsection (m).
       (b) Limitation on Time for Issuance.--Section 54(d)(1)(A) 
     (defining clean renewable energy bond) is amended by 
     inserting ``, or is issued by the qualified issuer pursuant 
     to an allocation by the Secretary to such issuer of a portion 
     of the national clean renewable energy bond annual limitation 
     under subsection (f)(3) by not later than the end of the 
     calendar year following the year of such allocation'' after 
     ``subsection (f)(2)''.
       (c) Modification of Ratable Principal Amortization 
     Requirement.--
       (1) In general.--Paragraph (5) of section 54(l) is amended 
     to read as follows:
       ``(5) Ratable principal amortization required.--A bond 
     shall not be treated as a clean renewable energy bond unless 
     it is part of an issue which provides for an equal amount of 
     principal to be paid by the qualified issuer during each 12-
     month period that the issue is outstanding (other than the 
     first 12-month period in the case of bonds issued pursuant to 
     an allocation under subsection (f)(3)).''.
       (2) Conforming amendment.--The third sentence of section 
     54(e)(2) is amended by striking ``subsection (l)(6)'' and 
     inserting ``subsection (l)(5)''.
       (d) Qualified Project Includes Certain Transmission 
     Lines.--Section 54(d)(2)(A) (defining qualified project) is 
     amended by inserting ``and any electric transmission property 
     capital expenditures (as defined in section 
     172(b)(1)(I)(v)(I)) related to such facility'' after 
     ``qualified borrower''.
       (e) Effective Date.--The amendments made by this section 
     shall take effect on the date of the enactment of this Act.

     SEC. 803. CLEAN COAL ENERGY BONDS.

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

     ``SEC. 54A. CREDIT TO HOLDERS OF CLEAN COAL ENERGY BONDS.

       ``(a) Allowance of Credit.--If a taxpayer holds a clean 
     coal energy bond on 1 or more credit allowance dates of the 
     bond occurring during any taxable year, there shall be 
     allowed as a credit against the tax imposed by this chapter 
     for the taxable year an amount equal to the sum of the 
     credits determined under subsection (b) with respect to such 
     dates.
       ``(b) Amount of Credit.--
       ``(1) In general.--The amount of the credit determined 
     under this subsection with respect to any credit allowance 
     date for a clean coal energy bond is 25 percent of the annual 
     credit determined with respect to such bond.
       ``(2) Annual credit.--The annual credit determined with 
     respect to any clean coal energy bond is the product of--
       ``(A) the credit rate determined by the Secretary under 
     paragraph (3) for the day on which such bond was sold, 
     multiplied by
       ``(B) the outstanding face amount of the bond.
       ``(3) Determination.--For purposes of paragraph (2), with 
     respect to any clean coal energy bond, the Secretary shall 
     determine daily or cause to be determined daily a credit rate 
     which shall apply to the first day on which there is a 
     binding, written contract for the sale or exchange of the 
     bond. The credit rate for any day is the credit rate which 
     the Secretary or the Secretary's designee estimates will 
     permit the issuance of clean coal energy bonds with a 
     specified maturity or redemption date without discount and 
     without interest cost to the qualified issuer.
       ``(4) Credit allowance date.--For purposes of this section, 
     the term `credit allowance date' means--
       ``(A) March 15,
       ``(B) June 15,
       ``(C) September 15, and
       ``(D) December 15.
       ``Such term also includes the last day on which the bond is 
     outstanding.
       ``(5) Special rule for issuance and redemption.--In the 
     case of a bond which is issued during the 3-month period 
     ending on a credit allowance date, the amount of the credit 
     determined under this subsection with respect to such credit 
     allowance date shall be a ratable portion of the credit 
     otherwise determined based on the portion of the 3-month 
     period during which the bond is outstanding. A similar rule 
     shall apply when the bond is redeemed or matures.
       ``(c) Limitation Based on Amount of Tax.--The credit 
     allowed under subsection (a) for any taxable year shall not 
     exceed the excess of--
       ``(1) the sum of the regular tax liability (as defined in 
     section 26(b)) plus the tax imposed by section 55, over
       ``(2) the sum of the credits allowable under this part 
     (other than subpart C, section 1400N(l), and this section).
       ``(d) Clean Coal Energy Bond.--For purposes of this 
     section--
       ``(1) In general.--The term `clean coal energy bond' means 
     any bond issued as part of an issue if--
       ``(A) the bond is issued by a qualified issuer pursuant to 
     an allocation by the Secretary

[[Page 16398]]

     to such issuer of a portion of the national clean coal energy 
     bond limitation under subsection (f)(2),
       ``(B) 95 percent or more of the proceeds from the sale of 
     such issue are to be used for capital expenditures incurred 
     by qualified borrowers for 1 or more qualified projects,
       ``(C) the qualified issuer designates such bond for 
     purposes of this section and the bond is in registered form, 
     and
       ``(D) the issue meets the requirements of subsection (h).
       ``(2) Qualified project; special use rules.--
       ``(A) In general.--The term `qualified project' means a 
     qualifying advanced coal project (as defined in section 
     48A(c)(1)) placed in service by a qualified borrower.
       ``(B) Refinancing rules.--For purposes of paragraph (1)(B), 
     a qualified project may be refinanced with proceeds of a 
     clean coal energy bond only if the indebtedness being 
     refinanced (including any obligation directly or indirectly 
     refinanced by such indebtedness) was originally incurred by a 
     qualified borrower after the date of the enactment of this 
     section.
       ``(C) Reimbursement.--For purposes of paragraph (1)(B), a 
     clean coal energy bond may be issued to reimburse a qualified 
     borrower for amounts paid after the date of the enactment of 
     this section with respect to a qualified project, but only 
     if--
       ``(i) prior to the payment of the original expenditure, the 
     qualified borrower declared its intent to reimburse such 
     expenditure with the proceeds of a clean coal energy bond,
       ``(ii) not later than 60 days after payment of the original 
     expenditure, the qualified issuer adopts an official intent 
     to reimburse the original expenditure with such proceeds, and
       ``(iii) the reimbursement is made not later than 18 months 
     after the date the original expenditure is paid.
       ``(D) Treatment of changes in use.--For purposes of 
     paragraph (1)(B), the proceeds of an issue shall not be 
     treated as used for a qualified project to the extent that a 
     qualified borrower takes any action within its control which 
     causes such proceeds not to be used for a qualified project. 
     The Secretary shall prescribe regulations specifying remedial 
     actions that may be taken (including conditions to taking 
     such remedial actions) to prevent an action described in the 
     preceding sentence from causing a bond to fail to be a clean 
     coal energy bond.
       ``(e) Maturity Limitations.--
       ``(1) Duration of term.--A bond shall not be treated as a 
     clean coal energy bond if the maturity of such bond exceeds 
     the maximum term determined by the Secretary under paragraph 
     (2) with respect to such bond.
       ``(2) Maximum term.--During each calendar month, the 
     Secretary shall determine the maximum term permitted under 
     this paragraph for bonds issued during the following calendar 
     month. Such maximum term shall be the term which the 
     Secretary estimates will result in the present value of the 
     obligation to repay the principal on the bond being equal to 
     50 percent of the face amount of such bond. Such present 
     value shall be determined without regard to the requirements 
     of subsection (l)(5) and using as a discount rate the average 
     annual interest rate of tax of tax-exempt obligations having 
     a term of 10 years or more which are issued during the month. 
     If the term as so determined is not a multiple of a whole 
     year, such term shall be rounded to the next highest whole 
     year.
       ``(f) Limitation on Amount of Bonds Designated.--
       ``(1) National limitation.--There is a national clean coal 
     energy bond limitation of $3,000,000,000.
       ``(2) Allocation by secretary.--The Secretary shall 
     allocate the amount described in paragraph (1) among 
     qualified projects in such manner as the Secretary determines 
     appropriate, except that the Secretary may not allocate more 
     than $1,875,000,000 of the national clean coal energy bond 
     limitation to finance qualified projects of qualified 
     borrowers which are governmental bodies.
       ``(g) Credit Included in Gross Income.--Gross income 
     includes the amount of the credit allowed to the taxpayer 
     under this section (determined without regard to subsection 
     (c)) and the amount so included shall be treated as interest 
     income.
       ``(h) Special Rules Relating to Expenditures.--
       ``(1) In general.--An issue shall be treated as meeting the 
     requirements of this subsection if, as of the date of 
     issuance, the qualified issuer reasonably expects--
       ``(A) at least 95 percent of the proceeds from the sale of 
     the issue are to be spent for 1 or more qualified projects 
     within the 5-year period beginning on the date of issuance of 
     the clean coal energy bond,
       ``(B) a binding commitment with a third party to spend at 
     least 10 percent of the proceeds from the sale of the issue 
     will be incurred within the 6-month period beginning on the 
     date of issuance of the clean coal energy bond or, in the 
     case of a clean coal energy bond the proceeds of which are to 
     be loaned to 2 or more qualified borrowers, such binding 
     commitment will be incurred within the 6-month period 
     beginning on the date of the loan of such proceeds to a 
     qualified borrower, and
       ``(C) such projects will be completed with due diligence 
     and the proceeds from the sale of the issue will be spent 
     with due diligence.
       ``(2) Extension of period.--Upon submission of a request 
     prior to the expiration of the period described in paragraph 
     (1)(A), the Secretary may extend such period if the qualified 
     issuer establishes that the failure to satisfy the 5-year 
     requirement is due to reasonable cause and the related 
     projects will continue to proceed with due diligence.
       ``(3) Failure to spend required amount of bond proceeds 
     within 5 years.--To the extent that less than 95 percent of 
     the proceeds of such issue are expended by the close of the 
     5-year period beginning on the date of issuance (or if an 
     extension has been obtained under paragraph (2), by the close 
     of the extended period), the qualified issuer shall redeem 
     all of the nonqualified bonds within 90 days after the end of 
     such period. For purposes of this paragraph, the amount of 
     the nonqualified bonds required to be redeemed shall be 
     determined in the same manner as under section 142.
       ``(i) Special Rules Relating to Arbitrage.--A bond which is 
     part of an issue shall not be treated as a clean coal energy 
     bond unless, with respect to the issue of which the bond is a 
     part, the qualified issuer satisfies the arbitrage 
     requirements of section 148 with respect to proceeds of the 
     issue.
       ``(j) Cooperative Electric Company; Clean Coal Energy Bond 
     Lender; Governmental Body; Qualified Borrower.--For purposes 
     of this section--
       ``(1) Cooperative electric company.--The term `cooperative 
     electric company' means a mutual or cooperative electric 
     company described in section 501(c)(12) or section 
     1381(a)(2)(C), or a not-for-profit electric utility which has 
     received a loan or loan guarantee under the Rural 
     Electrification Act.
       ``(2) Clean coal energy bond lender.--The term `clean coal 
     energy bond lender' means a lender which is a cooperative 
     which is owned by, or has outstanding loans to, 100 or more 
     cooperative electric companies and is in existence on 
     February 1, 2002, and shall include any affiliated entity 
     which is controlled by such lender.
       ``(3) Governmental body.--The term `governmental body' 
     means any State, territory, possession of the United States, 
     the District of Columbia, Indian tribal government, and any 
     political subdivision thereof.
       ``(4) Qualified issuer.--The term `qualified issuer' 
     means--
       ``(A) a clean coal energy bond lender,
       ``(B) a cooperative electric company, or
       ``(C) a governmental body.
       ``(5) Qualified borrower.--The term `qualified borrower' 
     means--
       ``(A) a mutual or cooperative electric company described in 
     section 501(c)(12) or 1381(a)(2)(C), or
       ``(B) a governmental body.
       ``(k) Special Rules Relating to Pool Bonds.--No portion of 
     a pooled financing bond may be allocable to any loan unless 
     the borrower has entered into a written loan commitment for 
     such portion prior to the issue date of such issue.
       ``(l) Other Definitions and Special Rules.--For purposes of 
     this section--
       ``(1) Bond.--The term `bond' includes any obligation.
       ``(2) Pooled financing bond.--The term `pooled financing 
     bond' shall have the meaning given such term by section 
     149(f)(4)(A).
       ``(3) Partnership; s corporation; and other pass-thru 
     entities.--
       ``(A) In general.--Under regulations prescribed by the 
     Secretary, in the case of a partnership, trust, S 
     corporation, or other pass-thru entity, rules similar to the 
     rules of section 41(g) shall apply with respect to the credit 
     allowable under subsection (a).
       ``(B) No basis adjustment.--Rules similar to the rules 
     under section 1397E(l) shall apply.
       ``(4) Bonds held by regulated investment companies.--If any 
     clean coal energy bond is held by a regulated investment 
     company, the credit determined under subsection (a) shall be 
     allowed to shareholders of such company under procedures 
     prescribed by the Secretary.
       ``(5) Ratable principal amortization required.--A bond 
     shall not be treated as a clean coal energy bond unless it is 
     part of an issue which provides for an equal amount principal 
     to be paid by the qualified issuer during each 12-month 
     period that the issue is outstanding (other than the first 
     12-month period).
       ``(6) Reporting.--Issuers of clean coal energy bonds shall 
     submit reports similar to the reports required under section 
     149(e).
       ``(m) Termination.--This section shall not apply with 
     respect to any bond issued after December 31, 2012.''.
       (b) Reporting.--Subsection (d) of section 6049 (relating to 
     returns regarding payments of interest) is amended by adding 
     at the end the following new paragraph:
       ``(9) Reporting of credit on clean coal energy bonds.--
       ``(A) In general.--For purposes of subsection (a), the term 
     `interest' includes amounts includible in gross income under 
     section 54A(g) and such amounts shall be treated as paid on 
     the credit allowance date (as defined in section 54A(b)(4)).
       ``(B) Reporting to corporations, etc.--Except as otherwise 
     provided in regulations,

[[Page 16399]]

     in the case of any interest described in subparagraph (A), 
     subsection (b)(4) shall be applied without regard to 
     subparagraphs (A), (H), (I), (J), (K), and (L)(i) of such 
     subsection.
       ``(C) Regulatory authority.--The Secretary may prescribe 
     such regulations as are necessary or appropriate to carry out 
     the purposes of this paragraph, including regulations which 
     require more frequent or more detailed reporting.''.
       (c) Conforming Amendment.--Section 54(c)(2) is amended by 
     inserting ``section 54A,'' after ``subpart C,''.
       (d) Clerical Amendment.--The table of sections for subpart 
     H of part IV of subchapter A of chapter 1 is amended by 
     adding at the end the following new item:

``Sec. 54A. Credit to holders of clean coal energy bonds.''.
       (e) Issuance of Regulations.--The Secretary of the Treasury 
     shall issues regulations required under section 54A of the 
     Internal Revenue Code of 1986 (as added by this section) not 
     later than 120 days after the date of the enactment of this 
     Act.
       (f) Effective Date.--The amendments made by this section 
     shall apply to bonds issued after December 31, 2007.

     SEC. 804. EXTENSION AND MODIFICATION OF ENERGY CREDIT.

       (a) Extension.--
       (1) Qualified fuel cell property.--Subparagraph (E) of 
     section 48(c)(1) is amended by striking ``December 31, 2008'' 
     and inserting ``December 31, 2016''.
       (2) Qualified microturbine property.--Subparagraph (E) of 
     section 48(c)(2) is amended by striking ``December 31, 2008'' 
     and inserting ``December 31, 2016''.
       (3) Solar property.--Paragraphs (2)(i)(II) and (3)(A)(ii) 
     of section 48(a) are each amended by striking ``January 1, 
     2009'' and inserting ``January 1, 2017''.
       (b) Repeal of Public Utility Property Exclusion.--
       (1) In general.--Paragraph (3) of section 48(a), as amended 
     by subsection (a)(3), is amended by striking the first 
     sentence which follows subparagraph (D).
       (2) Conforming amendments.--
       (A) Section 48(c)(1), as amended by subsection (a)(1), is 
     amended by striking subparagraph (D) and by redesignating 
     subparagraph (E) as subparagraph (D).
       (B) Section 48(c)(2), as amended by subsection (a)(2), is 
     amended by striking subparagraph (D) and by redesignating 
     subparagraph (E) as subparagraph (D).
       (c) Repeal of Dollar Per Kilowatt Limitation for Fuel Cell 
     Property.--
       (1) In general.--Section 48(c)(1), as amended by subsection 
     (b)(2)(A), is amended by striking subparagraph (B) and by 
     redesignating subparagraphs (C) and (D) as subparagraphs (B) 
     and (C), respectively.
       (2) Conforming amendment.--Section 48(a)(1) is amended by 
     striking ``paragraphs (1)(B) and (2)(B) of subsection (c)'' 
     and inserting ``subsection (c)(2)(B)''.
       (d) Effective Dates.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by section shall apply to periods after the 
     date of the enactment of this Act, 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).
       (2) Extensions.--The amendments made by subsection (a) 
     shall take effect on the date of the enactment of this Act.

     SEC. 805. ENERGY CREDIT FOR COMBINED HEAT AND POWER SYSTEM 
                   PROPERTY.

       (a) In General.--Section 48(a)(3)(A) (defining energy 
     property) is amended by striking ``or'' at the end of clause 
     (iii), by inserting ``or'' at the end of clause (iv), and by 
     adding at the end the following new clause:
       ``(v) combined heat and power system property,''.
       (b) Combined Heat and Power System Property.--Section 48 
     (relating to energy credit; reforestation credit) is amended 
     by adding at the end the following new subsection:
       ``(d) Combined Heat and Power System Property.--For 
     purposes of subsection (a)(3)(A)(v)--
       ``(1) Combined heat and power system property.--The term 
     `combined heat and power system property' means property 
     comprising a system--
       ``(A) which uses the same energy source for the 
     simultaneous or sequential generation of electrical power, 
     mechanical shaft power, or both, in combination with the 
     generation of steam or other forms of useful thermal energy 
     (including heating and cooling applications),
       ``(B) which has an electrical capacity of not more than 15 
     megawatts or a mechanical energy capacity of not more than 
     2,000 horsepower or an equivalent combination of electrical 
     and mechanical energy capacities,
       ``(C) which produces--
       ``(i) at least 20 percent of its total useful energy in the 
     form of thermal energy which is not used to produce 
     electrical or mechanical power (or combination thereof), and
       ``(ii) at least 20 percent of its total useful energy in 
     the form of electrical or mechanical power (or combination 
     thereof),
       ``(D) the energy efficiency percentage of which exceeds 60 
     percent, and
       ``(E) which is placed in service before January 1, 2017.
       ``(2) Special rules.--
       ``(A) Energy efficiency percentage.--For purposes of this 
     subsection, the energy efficiency percentage of a system is 
     the fraction--
       ``(i) the numerator of which is the total useful 
     electrical, thermal, and mechanical power produced by the 
     system at normal operating rates, and expected to be consumed 
     in its normal application, and
       ``(ii) the denominator of which is the lower heating value 
     of the fuel sources for the system.
       ``(B) Determinations made on btu basis.--The energy 
     efficiency percentage and the percentages under paragraph 
     (1)(C) shall be determined on a Btu basis.
       ``(C) Input and output property not included.--The term 
     `combined heat and power system property' does not include 
     property used to transport the energy source to the facility 
     or to distribute energy produced by the facility.
       ``(3) Systems using biomass.--If a system is designed to 
     use biomass (within the meaning of paragraphs (2) and (3) of 
     section 45(c) without regard to the last sentence of 
     paragraph (3)(A)) for at least 90 percent of the energy 
     source--
       ``(A) paragraph (1)(D) shall not apply, but
       ``(B) the amount of credit determined under subsection (a) 
     with respect to such system shall not exceed the amount which 
     bears the same ratio to such amount of credit (determined 
     without regard to this paragraph) as the energy efficiency 
     percentage of such system bears to 60 percent.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to periods after the date of the enactment of 
     this Act, 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. 806. SPECIAL DEPRECIATION ALLOWANCE FOR CERTAIN ELECTRIC 
                   TRANSMISSION PROPERTY.

       (a) In General.--Section 168 (relating to accelerated cost 
     recovery system) is amended by adding at the end the 
     following:
       ``(m) Special Allowance for Certain Electric Transmission 
     Property.--
       ``(1) Additional allowance.--In the case of any specified 
     electric transmission property--
       ``(A) the depreciation deduction provided by section 167(a) 
     for the taxable year in which such property is placed in 
     service shall include an allowance equal to 50 percent of the 
     adjusted basis of such property, and
       ``(B) the adjusted basis of such property shall be reduced 
     by the amount of such deduction before computing the amount 
     otherwise allowable as a depreciation deduction under this 
     chapter for such taxable year and any subsequent taxable 
     year.
       ``(2) Specified electric transmission property.--The term 
     `specified electric transmission property' means property of 
     a character subject to the allowance for depreciation--
       ``(A) which is used in the United States as a generator tie 
     to solely transmit electricity from any qualified facility 
     described in section 45(d) (without regard to any placed in 
     service date or the last sentence of paragraph (4) thereof) 
     to the grid,
       ``(B) the original use of which commences with the taxpayer 
     after the date of the enactment of this subsection,
       ``(C) which is acquired by the taxpayer by purchase (as 
     defined in section 179(d)) after the date of the enactment of 
     this subsection, but only if no written binding contract for 
     the acquisition was in effect on or before the date of the 
     enactment of this subsection, and
       ``(D) which is placed in service by the taxpayer before 
     January 1, 2014.
       ``(3) Exceptions.--
       ``(A) Alternative depreciation property.--Such term shall 
     not include any property described in section 
     168(k)(2)(D)(i).
       ``(B) Election out.--If a taxpayer makes an election under 
     this subparagraph with respect to any class of property for 
     any taxable year, this subsection shall not apply to all 
     property in such class placed in service during such taxable 
     year.
       ``(4) Special rules.--For purposes of this subsection, 
     rules similar to the rules of subparagraph (E) of section 
     168(k)(2) shall apply, except that such subparagraph shall be 
     applied--
       ``(A) by substituting `the date of the enactment of 
     subsection (l)' for `September 10, 2001' each place it 
     appears therein,
       ``(B) by substituting `January 1, 2014' for `January 1, 
     2005' in clause (i) thereof, and
       ``(C) by substituting `specified electric transmission 
     property' for `qualified property' in clause (iv) thereof.
       ``(5) Recapture.--For purposes of this subsection, rules 
     similar to the rules under section 179(d)(10) shall apply 
     with respect to any specified electric transmission property 
     which ceases to be specified electric transmission 
     property.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to property placed in service after the date of 
     the enactment of this Act in taxable years ending after such 
     date.

[[Page 16400]]



     SEC. 807. EXTENSION OF SPECIAL RULE TO IMPLEMENT FERC 
                   RESTRUCTURING POLICY.

       (a) Qualifying Electric Transmission Transaction.--
       (1) In general.--Section 451(i)(3) (defining qualifying 
     electric transmission transaction) is amended by striking 
     ``January 1, 2008'' and inserting ``January 1, 2010''.
       (2) Effective date.--The amendment made by this subsection 
     shall apply to transactions after December 31, 2007.
       (b) Independent Transmission Company.--
       (1) In general.--Section 451(i)(4)(B)(ii) (defining 
     independent transmission company) is amended by striking 
     ``December 31, 2007'' and inserting ``the date which is 2 
     years after the date of such transaction''.
       (2) Effective date.--The amendment made by this subsection 
     shall take effect as if included in the amendments made by 
     section 909 of the American Jobs Creation Act of 2004.

     SEC. 808. EXTENSION AND MODIFICATION OF CREDIT FOR 
                   RESIDENTIAL ENERGY EFFICIENT PROPERTY.

       (a) Extension.--Section 25D(g) (relating to termination) is 
     amended by striking ``December 31, 2008'' and inserting 
     ``December 31, 2014''.
       (b) Maximum Credit for Solar Electric Property.--
       (1) In general.--Section 25D(b)(1)(A) (relating to maximum 
     credit) is amended by striking ``$2,000'' and inserting 
     ``$4,000''.
       (2) Conforming amendment.--Section 25D(e)(4)(A)(i) is 
     amended by striking ``$6,667'' and inserting ``$13,334''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to expenditures made after December 31, 2007.

     SEC. 809. CREDIT FOR RESIDENTIAL WIND PROPERTY.

       (a) In General.--Section 25D(a) (relating to allowance of 
     credit) is amended by striking ``and'' at the end of 
     paragraph (2), by striking the period at the end of paragraph 
     (3) and inserting ``, and'', and by adding at the end the 
     following new paragraph:
       ``(4) 30 percent of the qualified small wind energy 
     property expenditures made by the taxpayer during such 
     year.''.
       (b) Limitation.--Section 25D(b)(1) (relating to maximum 
     credit) is amended by striking ``and'' at the end of 
     subparagraph (B), by striking the period at the end of 
     subparagraph (A) and inserting ``, and'', and by adding at 
     the end the following new subparagraph:
       ``(D) $500 with respect to each half kilowatt of capacity 
     (not to exceed $4,000) of wind turbines for which qualified 
     small wind energy property expenditures are made.''.
       (c) Qualified Small Wind Energy Property Expenditures.--
       (1) In general.--Section 25D(d) (relating to definitions) 
     is amended by adding at the end the following new paragraph:
       ``(4) Qualified small wind energy property expenditure.--
     The term `qualified small wind energy property expenditure' 
     means an expenditure for property which uses a wind turbine 
     to generate electricity for use in connection with a dwelling 
     unit located in the United States and used as a residence by 
     the taxpayer.''.
       (2) No double benefit.--Section 45(d)(1) (relating to wind 
     facility) is amended by adding at the end the following new 
     sentence: ``Such term shall not include any facility with 
     respect to which any qualified small wind energy property 
     expenditure (as defined in subsection (d)(4) of section 25D) 
     is taken into account in determining the credit under such 
     section.''.
       (d) Maximum Expenditures in Case of Joint Occupancy.--
     Section 25D(e)(4)(A) (relating to maximum expenditures) 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) $1,667 in the case of each half kilowatt of capacity 
     of wind turbines for which qualified small wind energy 
     property expenditures are made.''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to expenditures after December 31, 2007.

     SEC. 810. EXPANSION AND MODIFICATION OF ADVANCED COAL PROJECT 
                   INVESTMENT CREDIT.

       (a) Credit Rate Parity Among Projects.--Section 48A(a) 
     (relating to qualifying advanced coal project credit) is 
     amended by striking ``equal to'' and all that follows and 
     inserting ``equal to30 percent of the qualified investment 
     for such taxable year.''.
       (b) Expansion of Aggregate Credits.--Section 48A(d)(3)(A) 
     (relating to aggregate credits) is amended by striking 
     ``$1,300,000,000'' and inserting ``$3,800,000,000''.
       (c) Authorization of Additional Projects.--
       (1) In general.--Subparagraph (B) of section 48A(d)(3) 
     (relating to aggregate credits) is amended to read as 
     follows:
       ``(B) Particular projects.--Of the dollar amount in 
     subparagraph (A), the Secretary is authorized to certify--
       ``(i) $800,000,000 for integrated gasification combined 
     cycle projects the application for which is submitted during 
     the period described in paragraph (2)(A)(i),
       ``(ii) $500,000,000 for projects which use other advanced 
     coal-based generation technologies the application for which 
     is submitted during the period described in paragraph 
     (2)(A)(i),
       ``(iii) $1,500,000,000 for integrated gasification combined 
     cycle projects the application for which is submitted during 
     the period described in paragraph (2)(A)(ii), and
       ``(iv) $1,000,000,000 for other advanced coal-based 
     generation technology projects the application for which is 
     submitted during the period described in paragraph 
     (2)(A)(ii).''.
       (2) Application period for additional projects.--
     Subparagraph (A) of section 48A(d)(2) (relating to 
     certification) is amended to read as follows:
       ``(A) Application period.--Each applicant for certification 
     under this paragraph shall submit an application meeting the 
     requirements of subparagraph (B). An applicant may only 
     submit an application--
       ``(i) for an allocation from the dollar amount specified in 
     clause (i) or (ii) of paragraph (3)(A) during the 3-year 
     period beginning on the date the Secretary establishes the 
     program under paragraph (1), and
       ``(ii) for an allocation from the dollar amount specified 
     in clause (iii) or (iv) of paragraph (3)(A) during the 3-year 
     period beginning at the earlier of the termination of the 
     period described in clause (i) or the date prescribed by the 
     Secretary.''.
       (3) Capture and sequestration of carbon dioxide emissions 
     requirement.--Section 48A(e)(1) (relating to requirements) is 
     amended by striking ``and'' at the end of subparagraph (E), 
     by striking the period at the end of subparagraph (F) and 
     inserting ``, and'', and by adding at the end the following 
     new subparagraph:
       ``(G) in the case of any project the application for which 
     is submitted during the period described in paragraph 
     (2)(A)(ii), the project includes equipment to separate and 
     sequester 65 percent of such project's total carbon dioxide 
     emissions.''.
       (d) Effective Date.--The amendments made by this section 
     shall take effect on the date of the enactment of this Act.

     SEC. 811. EXPANSION AND MODIFICATION OF COAL GASIFICATION 
                   INVESTMENT CREDIT.

       (a) Credit Rate.--Section 48B(a) (relating to qualifying 
     gasification project credit) is amended by striking ``20 
     percent'' and inserting ``30 percent''.
       (b) Expansion of Aggregate Credits.--Section 48B(d)(1) 
     (relating to qualifying gasification project program) is 
     amended by striking ``$350,000,000'' and inserting 
     ``$1,850,000,000 (of which $1,500,000,000 shall be allocated 
     for qualifying gasification projects that include equipment 
     to separate and sequester 75 percent of such a project's 
     total carbon dioxide emissions)''.
       (c) Eligible Projects Include Fischer-Tropsch Process.--
     Section 48B(c)(7) (defining eligible entity) is amended by 
     striking ``and'' at the end of subparagraph (F), by striking 
     the period at the end of subparagraph (G) and inserting ``, 
     and'', and by adding at the end the following new 
     subparagraph:
       ``(H) transportation grade liquid fuels.''.
       (d) Effective Date.--The amendments made by this section 
     shall take effect on the date of the enactment of this Act.

     SEC. 812. SEVEN-YEAR APPLICABLE RECOVERY PERIOD FOR 
                   DEPRECIATION OF QUALIFIED ENERGY MANAGEMENT 
                   DEVICES.

       (a) In General.--Section 168(e)(3)(C) (defining 7-year 
     property) is amended by striking ``and'' at the end of clause 
     (iv), by redesignating clause (v) as clause (vi), and by 
     inserting after clause (iv) the following new clause:
       ``(v) any qualified energy management device, and''.
       (b) Definition of Qualified Energy Management Device.--
     Section 168(i) (relating to definitions and special rules) is 
     amended by inserting at the end the following new paragraph:
       ``(18) Qualified energy management device.--
       ``(A) In general.--The term `qualified energy management 
     device' means any energy management device which is placed in 
     service before January 1, 2011, by a taxpayer who is a 
     supplier of electric energy or a provider of electric energy 
     services.
       ``(B) Energy management device.--For purposes of 
     subparagraph (A), the term `energy management device' means 
     any two-way communications network and associated equipment, 
     including equipment installed on the premises of a consumer, 
     which is used by the taxpayer--
       ``(i) to measure and record electricity usage data on a 
     time-differentiated basis of at least 60 minutes, and
       ``(ii) to provide such data on demand to both consumers and 
     the taxpayer.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after the date of 
     the enactment of this Act.

     SEC. 813. LANDOWNER INCENTIVE TO ENCOURAGE ELECTRIC 
                   TRANSMISSION BUILD-OUT.

       (a) In General.--Part III of subchapter B of chapter 1 
     (relating to items specifically excluded from gross income) 
     is amended by inserting after section 139A the following new 
     section:

[[Page 16401]]



     ``SEC. 139B. ELECTRIC TRANSMISSION EASEMENT PAYMENTS.

       ``(a) In General.--Gross income shall not include any 
     qualified electric transmission easement payment.
       ``(b) Qualified Electric Transmission Easement Payment.--
     For purposes of this section, the term `qualified electric 
     transmission payment' means any payment by an electric 
     utility or electric transmission entity pursuant to an 
     easement or other agreement granted by the payee (or any 
     predecessor of such payee) for the right of such entity (or 
     any successors of such entity) to locate on such payee's 
     property transmission lines and equipment used to transmit 
     electricity at 230 or more kilovolts primarily from qualified 
     facilities described in section 45(d) (without regard to any 
     placed in service date or the last sentence of paragraph (4) 
     thereof) or energy property (as defined in section 48(a)(3)) 
     placed in service after the date of the enactment of this 
     section.
       ``(c) No Increase in Basis.--Notwithstanding any other 
     provision of this subtitle, no increase in the basis or 
     adjusted basis of any property shall result from any amount 
     excluded under this subsection with respect to such property.
       ``(d) Denial of Double Benefit.--Notwithstanding any other 
     provision of this subtitle, no deduction or credit shall be 
     allowed (to the person for whose benefit a qualified electric 
     transmission easement payment is made) for, or by reason of, 
     any expenditure to the extent of the amount excluded under 
     this section with respect to such expenditure.''.
       (b) Clerical Amendment.--The table of sections for such 
     part III is amended by inserting after the item relating to 
     section 139A the following new item:

``Sec. 139B. Electric transmission easement payments.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to payments received after the date of the 
     enactment of this Act.

                 PART II--CARBON DIOXIDE SEQUESTRATION

     SEC. 815. TAX CREDIT FOR CARBON DIOXIDE SEQUESTRATION.

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

     ``SEC. 45O. CREDIT FOR CARBON DIOXIDE SEQUESTRATION.

       ``(a) General Rule.--For purposes of section 38, the carbon 
     dioxide sequestration credit for any taxable year is an 
     amount equal to the sum of--
       ``(1) $20 per metric ton of qualified carbon dioxide which 
     is--
       ``(A) captured by the taxpayer at a qualified facility, and
       ``(B) disposed of by the taxpayer in secure geological 
     storage, and
       ``(2) $10 per metric ton of qualified carbon dioxide which 
     is--
       ``(A) captured by the taxpayer at a qualified facility, and
       ``(B) used by the taxpayer as a tertiary injectant in a 
     qualified enhanced oil or natural gas recovery project.
       ``(b) Qualified Carbon Dioxide.--For purposes of this 
     section--
       ``(1) In general.--The term `qualified carbon dioxide' 
     means carbon dioxide captured from an industrial source 
     which--
       ``(A) would otherwise be released into the atmosphere as 
     industrial emission of greenhouse gas, and
       ``(B) is measured at the source of capture and verified at 
     the point of disposal or injection.
       ``(2) Recycled carbon dioxide.--The term `qualified carbon 
     dioxide' includes the initial deposit of captured carbon 
     dioxide used as a tertiary injectant. Such term does not 
     include carbon dioxide that is re-captured, recycled, and re-
     injected as part of the enhanced oil and natural gas recovery 
     process.
       ``(c) Qualified Facility.--For purposes of this section, 
     the term `qualified facility' means any industrial facility--
       ``(1) which is owned by the taxpayer,
       ``(2) at which carbon capture equipment is placed in 
     service, and
       ``(3) which captures not less than 500,000 metric tons of 
     carbon dioxide during the taxable year.
       ``(d) Special Rules and Other Definitions.--For purposes of 
     this section--
       ``(1) Only carbon dioxide captured within the united states 
     taken into account.--The credit under this section shall 
     apply only with respect to qualified carbon dioxide the 
     capture of which is within--
       ``(A) the United States (within the meaning of section 
     638(1)), or
       ``(B) a possession of the United States (within the meaning 
     of section 638(2)).
       ``(2) Secure geological storage.--The Secretary, in 
     consultation with the Administrator of the Environmental 
     Protection Agency, shall establish regulations for 
     determining adequate security measures for the geological 
     storage of carbon dioxide under subsection (a)(1)(B) such 
     that the carbon dioxide does not escape into the atmosphere. 
     Such term shall include storage at deep saline formations and 
     unminable coal seems under such conditions as the Secretary 
     may determine under such regulations.
       ``(3) Tertiary injectant.--The term `tertiary injectant' 
     has the same meaning as when used within section 193(b)(1).
       ``(4) Qualified enhanced oil or natural gas recovery 
     project.--The term `qualified enhanced oil or natural gas 
     recovery project' has the meaning given the term `qualified 
     enhanced oil recovery project' by section 43(c)(2), by 
     substituting `crude oil or natural gas' for `crude oil' in 
     subparagraph (A)(i) thereof.
       ``(5) Credit attributable to taxpayer.--Any credit under 
     this section shall be attributable to the person that 
     captures and physically or contractually ensures the disposal 
     of or the use as a tertiary injectant of the qualified carbon 
     dioxide, except to the extent provided in regulations 
     prescribed by the Secretary.
       ``(6) Recapture.--The Secretary shall, by regulations, 
     provide for recapturing the benefit of any credit allowable 
     under subsection (a) with respect to any qualified carbon 
     dioxide which ceases to be captured, disposed of, or used as 
     a tertiary injectant in a manner consistent with the 
     requirements of this section.
       ``(7) Inflation adjustment.--In the case of any taxable 
     year beginning in a calendar year after 2008, there shall be 
     substituted for each dollar amount contained in subsection 
     (a) an amount equal to the product of--
       ``(A) such dollar amount, multiplied by
       ``(B) the inflation adjustment factor for such calendar 
     year determined under section 43(b)(3)(B) for such calendar 
     year, determined by substituting `2007' for `1990'.
       ``(e) Application of Section.--The credit under this 
     section shall apply with respect to qualified carbon dioxide 
     before the end of the calendar year in which the Secretary, 
     in consultation with the Administrator of the Environmental 
     Protection Agency, certifies that 75,000,000 metric tons of 
     qualified carbon dioxide have been captured and disposed of 
     or used as a tertiary injectant.''.
       (b) Conforming Amendment.--Section 38(b) (relating to 
     general business credit) is amended by striking ``plus'' at 
     the end of paragraph (30), by striking the period at the end 
     of paragraph (31) and inserting ``, plus'', and by adding at 
     the end of following new paragraph:
       ``(32) the carbon dioxide sequestration credit determined 
     under section 45O(a).''.
       (c) Clerical Amendment.--The table of sections for subpart 
     B of part IV of subchapter A of chapter 1 (relating to other 
     credits) is amended by adding at the end the following new 
     section:

``Sec. 45O. Credit for carbon dioxide sequestration.''.
       (d) Effective Date.--The amendments made by this section 
     shall apply carbon dioxide captured after the date of the 
     enactment of this Act.

     SEC. 816. SEVEN-YEAR APPLICABLE RECOVERY PERIOD FOR 
                   DEPRECIATION OF QUALIFIED CARBON DIOXIDE 
                   PIPELINE PROPERTY.

       (a) In General.--Section 168(e)(3)(C) (defining 7-year 
     property), as amended by this Act, is amended by striking 
     ``and'' at the end of clause (v), by redesignating clause 
     (vi) as clause (vii), and by inserting after clause (iv) the 
     following new clause:
       ``(vi) any qualified carbon dioxide pipeline property--

       ``(I) the original use of which commences with the taxpayer 
     after the date of the enactment of this clause,
       ``(II) the original purpose of which is to transport carbon 
     dioxide, and
       ``(III) which is placed in service before January 1, 
     2014.''.

       (b) Definition of Qualified Carbon Dioxide Pipeline 
     Property.--Section 168(e) (relating to classification of 
     property) is amended by inserting at the end the following 
     new paragraph:
       ``(8) Qualified carbon dioxide pipeline property.--The term 
     `qualified carbon dioxide pipeline property' means property 
     which is used in the United States solely to transmit 
     qualified carbon dioxide (as defined in section 45O(b)) from 
     the point of capture to the point of disposal (as described 
     in section 45O(a)(1)(B)) or the point at which such qualified 
     carbon dioxide is used as a tertiary injectant (as described 
     in section 45O(a)(2)(B)).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after the date of 
     the enactment of this Act.

     SEC. 817. CERTAIN INCOME AND GAINS RELATING TO INDUSTRIAL 
                   SOURCE CARBON DIOXIDE TREATED AS QUALIFYING 
                   INCOME FOR PUBLICLY TRADED PARTNERSHIPS.

       (a) In General.--Subparagraph (E) of section 7704(d)(1) 
     (defining qualifying income) is amended by inserting ``or 
     industrial source carbon dioxide'' after ``timber)''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect on the date of the enactment of this Act, 
     in taxable years ending after such date.

                    PART III--DOMESTIC FUEL SECURITY

     SEC. 821. CREDIT FOR PRODUCTION OF CELLULOSIC BIOMASS 
                   ALCOHOL.

       (a) In General.--Subsection (a) of section 40 (relating to 
     alcohol used as fuel) is amended by striking ``plus'' at the 
     end of paragraph (2), by striking the period at the end of 
     paragraph (3) and inserting ``, plus'', and by adding at the 
     end the following new paragraph:

[[Page 16402]]

       ``(4) the small cellulosic alcohol producer credit.''.
       (b) Small Cellulosic Alcohol Producer Credit.--
       (1) In general.--Subsection (b) of section 40 is amended by 
     adding at the end the following new paragraph:
       ``(6) Small cellulosic alcohol producer credit.--
       ``(A) In general.--In addition to any other credit allowed 
     under this section, there shall be allowed as a credit 
     against the tax imposed by this chapter for the taxable year 
     an amount equal to the applicable amount for each gallon of 
     qualified cellulosic alcohol production.
       ``(B) Applicable amount.--For purposes of subparagraph (A), 
     the applicable amount means the excess of--
       ``(i) $1.11, over
       ``(ii) the sum of--

       ``(I) the amount of the credit allowable for alcohol which 
     is ethanol under subsection (b)(1) (without regard to 
     subsection (b)(3)) at the time of the qualified cellulosic 
     alcohol production, plus
       ``(II) the amount of the credit allowable under subsection 
     (b)(4) at the time of such production.

       ``(C) Qualified cellulosic alcohol production.--For 
     purposes of this section, the term `qualified cellulosic 
     alcohol production' means any cellulosic biomass alcohol 
     which is produced by an eligible small cellulosic alcohol 
     producer and which during the taxable year--
       ``(i) is sold by the taxpayer to another person--

       ``(I) for use by such other person in the production of a 
     qualified alcohol mixture in such other person's trade or 
     business (other than casual off-farm production),
       ``(II) for use by such other person as a fuel in a trade or 
     business, or
       ``(III) who sells such cellulosic biomass alcohol at retail 
     to another person and places such cellulosic biomass alcohol 
     in the fuel tank of such other person, or

       ``(ii) is used or sold by the taxpayer for any purpose 
     described in clause (i).
       ``(D) Additional distillation excluded.--The qualified 
     cellulosic alcohol production of any taxpayer for any taxable 
     year shall not include any alcohol which is purchased by the 
     taxpayer and with respect to which such producer increases 
     the proof of the alcohol by additional distillation.
       ``(E) Application of paragraph.--This paragraph shall apply 
     with respect to qualified cellulosic alcohol production--
       ``(i) after December 31, 2007, and
       ``(ii) before the end of the later of--

       ``(I) December 31, 2012, or
       ``(II) the calendar year in which the Secretary, in 
     consultation with the Administrator of the Environmental 
     Protection Agency, certifies that 1,000,000,000 gallons of 
     cellulosic biomass alcohol (as so defined) have been produced 
     in or imported into the United States after such date.''.

       (2) Termination date not to apply.--Subsection (e) of 
     section 40 (relating to termination) is amended by adding at 
     the end the following new paragraph:
       ``(3) Exception for small cellulosic alcohol producer 
     credit.--Paragraph (1) shall not apply to the portion of the 
     credit allowed under this section by reason of subsection 
     (a)(4).''.
       (c) Eligible Small Cellulosic Alcohol Producer.--Section 40 
     is amended by adding at the end the following new subsection:
       ``(i) Definitions and Special Rules for Small Cellulosic 
     Alcohol Producer.--For purposes of this section--
       ``(1) In general.--The term `eligible small cellulosic 
     alcohol producer' means a person, who at all times during the 
     taxable year, has a productive capacity for cellulosic 
     biomass alcohol not in excess of 60,000,000 gallons.
       ``(2) Cellulosic biomass alcohol.--
       ``(A) In general.--The term `cellulosic biomass alcohol' 
     has the meaning given such term under section 168(l)(3), but 
     does not include any alcohol with a proof of less than 150.
       ``(B) Determination of proof.--The determination of the 
     proof of any alcohol shall be made without regard to any 
     added denaturants.
       ``(3) Aggregation rule.--For purposes of the 60,000,000 
     gallon limitation under paragraph (1), all members of the 
     same controlled group of corporations (within the meaning of 
     section 267(f)) and all persons under common control (within 
     the meaning of section 52(b) but determined by treating an 
     interest of more than 50 percent as a controlling interest) 
     shall be treated as 1 person.
       ``(4) Partnership, s corporations, and other pass-thru 
     entities.--In the case of a partnership, trust, S 
     corporation, or other pass-thru entity, the limitation 
     contained in paragraph (1) shall be applied at the entity 
     level and at the partner or similar level.
       ``(5)  Allocation.--For purposes of this subsection, in the 
     case of a facility in which more than 1 person has an 
     interest, productive capacity shall be allocated among such 
     persons in such manner as the Secretary may prescribe.
       ``(6) Regulations.--The Secretary may prescribe such 
     regulations as may be necessary to prevent the credit 
     provided for in subsection (a)(4) from directly or indirectly 
     benefitting any person with a direct or indirect productive 
     capacity of more than 60,000,000 gallons of cellulosic 
     biomass alcohol during the taxable year.
       ``(7) Allocation of small cellulosic producer credit to 
     patrons of cooperative.--Rules similar to the rules under 
     subsection (g)(6) shall apply for purposes of this 
     subsection.''.
       (d) Alcohol Not Used as a Fuel, etc.--
       (1) In general.--Paragraph (3) of section 40(d) is amended 
     by redesignating subparagraph (D) as subparagraph (E) and by 
     inserting after subparagraph (C) the following new 
     subparagraph:
       ``(D) Small cellulosic alcohol producer credit.--If--
       ``(i) any credit is allowed under subsection (a)(4), and
       ``(ii) any person does not use such fuel for a purpose 
     described in subsection (b)(6)(C),

     then there is hereby imposed on such person a tax equal to 
     the applicable amount for each gallon of such cellulosic 
     biomass alcohol.''.
       (2) Conforming amendments.--
       (A) Subparagraph (C) of section 40(d)(3) is amended by 
     striking ``producer'' in the heading and inserting ``small 
     ethanol producer''.
       (B) Subparagraph (E) of section 40(d)(3), as redesignated 
     by paragraph (1), is amended by striking ``or (C)'' and 
     inserting ``(C), or (D)''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to fuel produced after December 31, 2007.

     SEC. 822. EXPANSION OF SPECIAL ALLOWANCE TO CELLULOSIC 
                   BIOMASS ALCOHOL FUEL PLANT PROPERTY.

       (a) In General.--Paragraph (3) of section 168(l) (relating 
     to special allowance for cellulosic biomass ethanol plant 
     property) is amended to read as follows:
       ``(3) Cellulosic biomass alcohol.--For purposes of this 
     subsection, the term `cellulosic biomass alcohol' means any 
     alcohol produced from any lignocellulosic or hemicellulosic 
     matter that is available on a renewable or recurring 
     basis.''.
       (b) Conforming Amendments.--
       (1) Subsection (l) of section 168 is amended by striking 
     ``cellulosic biomass ethanol'' each place it appears and 
     inserting ``cellulosic biomass alcohol''.
       (2) The heading of section 168(l) is amended by striking 
     ``Cellulosic Biomass Ethanol'' and inserting ``Cellulosic 
     Biomass Alcohol''.
       (3) The heading of paragraph (2) of section 168(l) is 
     amended by striking ``cellulosic biomass ethanol'' and 
     inserting ``cellulosic biomass alcohol''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after the date of 
     the enactment of this Act, in taxable years ending after such 
     date.

     SEC. 823. EXTENSION OF SMALL ETHANOL PRODUCER CREDIT.

       Paragraph (1) of section 40(e) (relating to termination) is 
     amended--
       (1) in subparagraph (A), by inserting ``(December 31, 2012, 
     in the case of the credit allowed by reason of subsection 
     (a)(3))'' after ``December 31, 2010'', and
       (2) in subparagraph (B), by inserting ``(January 1, 2013, 
     in the case of the credit allowed by reason of subsection 
     (a)(3))'' after ``January 1, 2011''.

     SEC. 824. CREDIT FOR PRODUCERS OF FOSSIL FREE ALCOHOL.

       (a) In General.--Subsection (a) of section 40 (relating to 
     alcohol used as fuel), as amended by section 821, is amended 
     by striking ``plus'' at the end of paragraph (3), by striking 
     the period at the end of paragraph (4) and inserting ``, 
     plus'', and by adding at the end the following new paragraph:
       ``(5) the small fossil free alcohol producer credit.''.
       (b) Small Fossil Free Alcohol Producer Credit.--
       (1) In general.--Subsection (b) of section 40, as amended 
     by section 821, is amended by adding at the end the following 
     new paragraph:
       ``(7) Small fossil free alcohol producer credit.--
       ``(A) In general.--In addition to any other credit allowed 
     under this section, there shall be allowed as a credit 
     against the tax imposed by this chapter for the taxable year 
     an amount equal to 25 cents for each gallon of qualified 
     fossil free alcohol production.
       ``(B) Qualified fossil free alcohol production.--For 
     purposes of this section, the term `qualified fossil free 
     alcohol production' means alcohol which is produced by an 
     eligible small fossil free alcohol producer at a fossil free 
     alcohol production facility and which during the taxable 
     year--
       ``(i) is sold by the taxpayer to another person--

       ``(I) for use by such other person in the production of a 
     qualified alcohol mixture in such other person's trade or 
     business (other than casual off-farm production),
       ``(II) for use by such other person as a fuel in a trade or 
     business, or
       ``(III) who sells such alcohol at retail to another person 
     and places such alcohol in the fuel tank of such other 
     person, or

       ``(ii) is used or sold by the taxpayer for any purpose 
     described in clause (i).
       ``(C) Additional distillation excluded.--The qualified 
     fossil free alcohol production of any taxpayer for any 
     taxable year shall not include any alcohol which is purchased 
     by the taxpayer and with respect to which

[[Page 16403]]

     such producer increases the proof of the alcohol by 
     additional distillation.''.
       (c) Eligible Small Fossil Free Alcohol Producer.--Section 
     40, as amended by section 821, is amended by adding at the 
     end the following new subsection:
       ``(j) Definitions and Special Rules for Small Fossil Free 
     Alcohol Producer.--For purposes of this section--
       ``(1) In general.--The term `eligible small fossil free 
     alcohol producer' means a person, who at all times during the 
     taxable year, has a productive capacity for alcohol from all 
     fossil free alcohol production facilities of the taxpayer 
     which is not in excess of 60,000,000 gallons.
       ``(2) Fossil free alcohol production facility.--The term 
     `fossil free alcohol production facility' means any facility 
     at which 90 percent of the fuel used in the production of 
     alcohol is from biomass (as defined in section 45K(c)(3)).
       ``(3) Aggregation rule.--For purposes of the 60,000,000 
     gallon limitation under paragraph (1), all members of the 
     same controlled group of corporations (within the meaning of 
     section 267(f)) and all persons under common control (within 
     the meaning of section 52(b) but determined by treating an 
     interest of more than 50 percent as a controlling interest) 
     shall be treated as 1 person.
       ``(4) Partnership, s corporations, and other pass-thru 
     entities.--In the case of a partnership, trust, S 
     corporation, or other pass-thru entity, the limitation 
     contained in paragraph (1) shall be applied at the entity 
     level and at the partner or similar level.
       ``(5)  Allocation.--For purposes of this subsection, in the 
     case of a facility in which more than 1 person has an 
     interest, productive capacity shall be allocated among such 
     persons in such manner as the Secretary may prescribe.
       ``(6) Regulations.--The Secretary may prescribe such 
     regulations as may be necessary to prevent the credit 
     provided for in subsection (a)(5) from directly or indirectly 
     benefitting any person with a direct or indirect productive 
     capacity of more than 60,000,000 gallons of alcohol from 
     fossil free alcohol production facilities during the taxable 
     year.
       ``(7) Allocation of small fossil free alcohol producer 
     credit to patrons of cooperative.--Rules similar to the rules 
     under subsection (g)(6) shall apply for purposes of this 
     subsection.''.
       (d) Alcohol Not Used as a Fuel, etc.--
       (1) In general.--Paragraph (3) of section 40(d), as amended 
     by section 821, is amended by redesignating subparagraph (E) 
     as subparagraph (F) and by inserting after subparagraph (D) 
     the following new subparagraph:
       ``(E) Small fossil free alcohol producer credit.--If--
       ``(i) any credit is allowed under subsection (a)(5), and
       ``(ii) any person does not use such fuel for a purpose 
     described in subsection (b)(7)(B),

     then there is hereby imposed on such person a tax equal to 25 
     cents for each gallon of such alcohol.''.
       (2) Conforming amendment.--Subparagraph (E) of section 
     40(d)(3), as redesignated by paragraph (1) and amended by 
     section 821, is amended by striking ``or (D)'' and inserting 
     ``(C), or (E)''.
       (e) Termination.--Paragraph (1) of section 40(e), as 
     amended by section 823, is amended--
       (1) in subparagraph (A), by striking ``(December 31, 2012, 
     in the case of the credit allowed by reason of subsection 
     (a)(3))'' and inserting ``(December 31, 2012, in the case of 
     the credits allowed by reason of paragraphs (3) and (5) of 
     subsection (a))'', and
       (2) in subparagraph (B), by striking ``(January 1, 2013, in 
     the case of the credit allowed by reason of subsection 
     (a)(3))'' and inserting ``(January 1, 2013, in the case of 
     the credits allowed by reason of paragraphs (3) and (5) of 
     subsection (a))''.
       (f) Effective Date.--The amendments made by this section 
     shall apply to fuel produced after December 31, 2007.

     SEC. 825. MODIFICATION OF ALCOHOL CREDIT.

       (a) Income Tax Credit.--Subsection (h) of section 40 
     (relating to reduced credit for ethanol blenders) is amended 
     by adding at the end the following new paragraph:
       ``(3) Reduced amount after sale of 7,500,000,000 gallons.--
       ``(A) In general.--In the case of any calendar year 
     beginning after the date described in subparagraph (B), the 
     last row in the table in paragraph (2) shall be applied by 
     substituting `46 cents' for `51 cents'.
       ``(B) Date described.--The date described in this 
     subparagraph is the first date on which 7,500,000,000 gallons 
     of ethanol (including cellulosic ethanol) have been produced 
     in or imported into the United States after the date of the 
     enactment of this paragraph, as certified by the Secretary, 
     in consultation with the Administrator of the Environmental 
     Protection Agency.''.
       (b) Excise Tax Credit.--
       (1) In general.--Paragraph (2) of section 6426(b) (relating 
     to alcohol fuel mixture credit) is amended by adding at the 
     end the following new subparagraph:
       ``(C) Reduced amount after sale of 7,500,000,000 gallons.--
     In the case of any alcohol fuel mixture produced in a 
     calendar year beginning after the date described in section 
     40(h)(3)(B), subparagraph (A) shall be applied by 
     substituting `46 cents' for `51 cents'.''.
       (2) Conforming amendment.--Subparagraph (A) of section 
     6426(b)(2) is amended by striking ``subparagraph (B)'' and 
     inserting ``subparagraphs (B) and (C)''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on the date of the enactment of this Act.

     SEC. 826. EXTENSION AND MODIFICATION OF CREDIT FOR BIODIESEL 
                   USED AS FUEL .

       (a) Extension.--
       (1) Income tax credits for biodiesel and renewable diesel 
     and small agri-biodiesel producer credit.--Section 40A(g) 
     (relating to termination) is amended by striking ``December 
     31, 2008'' and inserting ``December 31, 2010 (December 31, 
     2012, in the case of the credit allowed by reason of 
     subsection (a)(3))''.
       (2) Excise tax credit.--Section 6426(c)(6) (relating to 
     termination) is amended by striking ``2008'' and inserting 
     ``2010''.
       (3) Fuels not used for taxable purposes.--Section 
     6427(e)(5)(B) (relating to termination) is amended by 
     striking ``2008'' and inserting ``2010''.
       (b) Modification of Credit for Renewable Diesel.--
       (1) In general.--Section 40A(f) (relating to renewable 
     diesel) is amended by adding at the end the following new 
     paragraph:
       ``(4) Special rule for co-processed renewable diesel.--In 
     the case of a taxpayer which produces renewable diesel 
     through the co-processing of biomass and petroleum at any 
     facility, this subsection shall not apply to so much of the 
     renewable diesel produced at such facility and sold or used 
     during the taxable year in a qualified biodiesel mixture as 
     exceeds 60,000,000 gallons.''.
       (c) Modification Relating to Definition of Agri-
     Biodiesel.--Paragraph (2) of section 40A(d) (relating to 
     agri-biodiesel) is amended by striking ``and mustard seeds'' 
     and inserting ``mustard seeds, and camelina''.
       (d) Effective Dates.--The amendments made by this section 
     shall apply to fuel sold or used after the date of the 
     enactment of this Act.

     SEC. 827. EXTENSION AND MODIFICATION OF ALTERNATIVE FUEL 
                   CREDIT.

       (a) Extension.--
       (1) Alternative fuel credit.--Paragraph (4) of section 
     6426(d) (relating to alternative fuel credit) is amended by 
     striking ``September 30, 2009'' and inserting ``December 31, 
     2012''.
       (2) Alternative fuel mixture credit.--Paragraph (3) of 
     section 6426(e) (relating to alternative fuel mixture credit) 
     is amended by striking ``September 30, 2009'' and inserting 
     ``December 31, 2012''.
       (3) Payments.--Subparagraph (C) of section 6427(e)(5) 
     (relating to termination) is amended by striking ``September 
     30, 2009'' and inserting ``December 31, 2012''.
       (b) Modifications.--
       (1) Alternative fuel to include compressed or liquified 
     biomass gas.--Paragraph (2) of section 6426(d) (relating to 
     alternative fuel credit) is amended by striking ``and'' at 
     the end of subparagraph (E), by redesignating subparagraph 
     (F) as subparagraph (G), and by inserting after subparagraph 
     (E) the following new subparagraph:
       ``(F) compressed or liquified biomass gas, and''.
       (2) Credit allowed for aviation use of fuel.--Paragraph (1) 
     of section 6426(d) is amended by inserting ``sold by the 
     taxpayer for use as a fuel in aviation,'' after 
     ``motorboat,''.
       (c) Carbon Capture Requirement for Certain Fuels.--
       (1) In general.--Subsection (d) of section 6426, as amended 
     by subsection (a), is amended by redesignating paragraph (4) 
     as paragraph (5) and by inserting after paragraph (3) the 
     following new paragraph:
       ``(4) Carbon capture requirement.--The requirements of this 
     paragraph are met if the fuel is certified, under such 
     procedures as required by the Secretary, as having been 
     produced at a facility which is primarily a liquid coal 
     facility which separates and sequesters not less than 75 
     percent of such facility's total carbon dioxide emissions.''.
       (2) Conforming amendment.--Subparagraph (E) of section 
     6426(d)(2) is amended by inserting ``which meets the 
     requirements of paragraph (4) and which is'' after ``any 
     liquid fuel''.
       (d) Effective Dates.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to fuel sold or 
     used after the date of the enactment of this Act.
       (2) Carbon capture requirements.--The amendments made by 
     subsection (c) shall apply to fuel sold or used after 
     December 31, 2007.

     SEC. 828. EXTENSION OF ALTERNATIVE FUEL VEHICLE REFUELING 
                   PROPERTY CREDIT.

       Paragraph (2) of section 30C(g) (relating to termination) 
     is amended by striking ``December 31, 2009'' and inserting 
     ``December 31, 2012''.

     SEC. 829. EXTENSION OF SUSPENSION OF TAXABLE INCOME LIMIT ON 
                   PERCENTAGE DEPLETION FOR OIL AND NATURAL GAS 
                   PRODUCED FROM MARGINAL PROPERTIES.

       Subparagraph (H) of section 613A(c)(6) (relating to oil and 
     gas produced from marginal properties) is amended by striking 
     ``January 1, 2008'' and inserting ``January 1, 2010''.

[[Page 16404]]



     SEC. 830. EXTENSION AND MODIFICATION OF ELECTION TO EXPENSE 
                   CERTAIN REFINERIES.

       (a) Extension.--Paragraph (1) of section 179C(c) (relating 
     to qualified refinery property) is amended--
       (1) by striking ``January 1, 2012'' in subparagraph (B) and 
     inserting ``January 1, 2014'', and
       (2) by striking ``January 1, 2008'' each place it appears 
     in subparagraph (F) and inserting ``January 1, 2010''.
       (b) Inclusion of Fuel Derived From Shale and Tar Sands.--
       (1) In general.--Subsection (d) of section 179C is amended 
     by inserting ``, or directly from shale or tar sands'' after 
     ``(as defined in section 45K(c))''.
       (2) Conforming amendment.--Paragraph (2) of section 179C(e) 
     is amended by inserting ``shale, tar sands, or'' before 
     ``qualified fuels''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after the date of 
     the enactment of this Act.

     SEC. 831. ETHANOL TARIFF EXTENSION.

       Headings 9901.00.50 and 9901.00.52 of the Harmonized Tariff 
     Schedule of the United States are each amended in the 
     effective period column by striking ``1/1/2009'' and 
     inserting ``1/1/2011''.

     SEC. 832. ELIMINATION AND REDUCTIONS OF DUTY DRAWBACK ON 
                   CERTAIN IMPORTED ETHANOL.

       (a) In General.--Section 313(p)(3)(A)(i)(I) of the Tariff 
     Act of 1930 (19 U.S.C. 1313(p)(3)(A)(i)(I)) is amended by 
     striking ``or'' and inserting the following: ``other than an 
     article that contains either--
       ``(aa) imported ethyl alcohol (provided for in subheading 
     2207.10.60 or 2207.20.00 of such Schedule), or
       ``(bb) any imported mixture (provided for in heading 2710 
     or 3824 of such Schedule) that contains ethyl alcohol, or''.
       (b) Limitations on, and Reductions of, Drawbacks.--Section 
     313 of the Tariff Act of 1930 (19 U.S.C. 1313) is amended by 
     adding at the end the following new subsection:
       ``(z) Limitations on, and Reductions of, Drawbacks.--
       ``(1) Limitations.--
       ``(A) In general.--Ethyl alcohol or mixture containing 
     ethyl alcohol described in subparagraph (B) may be treated as 
     being of the same kind and quality under subsection (b) of 
     this section or may be treated as being commercially 
     interchangeable with any other ethyl alcohol or mixture 
     containing ethyl alcohol under subsection (j)(2) of this 
     section, only if the other ethyl alcohol or mixture--
       ``(i) if imported, is subject to the additional duty under 
     subheading 9901.00.50 of the Harmonized Tariff Schedule of 
     the United States; or
       ``(ii) if domestic, is subject to Federal excise tax under 
     section 4041 or 4081 of the Internal Revenue Code of 1986 in 
     an amount equal to or greater than the amount of drawback 
     claimed.
       ``(B) Ethyl alcohol or mixture containing ethyl alcohol 
     described.--Ethyl alcohol or mixture containing ethyl alcohol 
     described in this subparagraph means--
       ``(i) ethyl alcohol classifiable under subheading 
     2207.10.60 or 2207.20.00 of the Harmonized Tariff Schedule of 
     the United States, or
       ``(ii) a mixture containing ethyl alcohol classifiable 
     under heading 2710 or 3824 of the Harmonized Tariff Schedule 
     of the United States,

     which, if imported would be subject to additional duty under 
     subheading 9901.00.50 of such Schedule.
       ``(2) Reduction of drawback.--For purposes of subsections 
     (b), (j)(2), and (p) of this section, the amount of the 
     refund as drawback under this section shall be reduced by an 
     amount equal to any Federal tax credit or refund of any 
     Federal tax paid on the merchandise with respect to which the 
     drawback is claimed.''.
       (c) Effective Date.--The amendments made by this section 
     apply to articles exported on or after the date that is 15 
     days after the date of the enactment of this Act.

     SEC. 833. CERTAIN INCOME AND GAINS RELATING TO ALCOHOL FUEL 
                   MIXTURES, BIODIESEL FUEL MIXTURES, AND 
                   ALTERNATIVE FUEL TREATED AS QUALIFYING INCOME 
                   FOR PUBLICLY TRADED PARTNERSHIPS.

       (a) In General.--Subparagraph (E) of section 7704(d)(1) 
     (defining qualifying income), as amended by this Act, is 
     amended by inserting ``, or the transportation or storage of 
     any fuel described in subsection (b), (c), or (d) of section 
     6426'' after ``carbon dioxide)''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect on the date of the enactment of this Act, 
     in taxable years ending after such date.

     SEC. 834. TECHNICAL AMENDMENTS.

       (a) Amendments Related to Section 11113 of the Safe, 
     Accountable, Flexible, Efficient Transportation Equity Act: A 
     Legacy for Users.--
       (1) Paragraph (3) of section 6427(i) is amended--
       (A) by inserting ``or under subsection (e)(2) by any person 
     with respect to an alternative fuel (as defined in section 
     6426(d)(2))'' after ``section 6426'' in subparagraph (A),
       (B) by inserting ``or (e)(2)'' after ``subsection (e)(1)'' 
     in subparagraphs (A)(i) and (B), and
       (C) by inserting ``and alternative fuel credit'' after 
     ``mixture credit'' in the heading thereof.
       (2)(A) Subparagraph (G) of section 6426(d)(2), as 
     redesignated by section 827, is amended by striking 
     ``hydrocarbons'' and inserting ``fuel''.
       (B) Section 6426 is amended by adding at the end the 
     following new subsection:
       ``(h) Denial of Double Benefit.--No credit shall be 
     determined under subsection (d) or (e) with respect to any 
     fuel which is described in subsection (b) or (c) or section 
     40 or 40A.''.
       (3) The amendments made by this subsection shall take 
     effect as if included in section 11113 of the SAFETEA-LU.
       (b) Amendments Related to the Energy Policy Act of 2005.--
       (1) Amendment related to section 1342 of the act.--
       (A) So much of subsection (b) of section 30C as precedes 
     paragraph (1) thereof is amended to read as follows:
       ``(b) Limitation.--The credit allowed under subsection (a) 
     with respect to all alternative fuel vehicle refueling 
     property placed in service by the taxpayer during the taxable 
     year at a location shall not exceed--''.
       (B) Subsection (c) of section 30C is amended to read as 
     follows:
       ``(c) Qualified Alternative Fuel Vehicle Refueling 
     Property.----For purposes of this section, the term 
     `qualified alternative fuel vehicle refueling property' has 
     the same meaning as the term `qualified clean-fuel vehicle 
     refueling property' would have under section 179A if--
       ``(1) paragraph (1) of section 179A(d) did not apply to 
     property installed on property which is used as the principal 
     residence (within the meaning of section 121) of the 
     taxpayer, and
       ``(2) only the following were treated as clean burning 
     fuels for purposes of section 179A(d):
       ``(A) Any fuel at least 85 percent of the volume of which 
     consists of one or more of the following: ethanol, natural 
     gas, compressed natural gas, liquified natural gas, liquefied 
     petroleum gas, or hydrogen.
       ``(B) Biodiesel (as defined in section 40A(d)(1)).
       ``(C) Any mixture--
       ``(i) which consists of two or more of the following: 
     biodiesel (as so defined), diesel fuel (as defined in section 
     4083(a)(3)), or kerosene, and
       ``(ii) at least 20 percent of the volume of which consists 
     of biodiesel (as so defined) determined without regard to any 
     kerosene in such mixture.''.
       (2) Amendments related to section 1362 of the act.--
       (A)(i) Paragraph (1) of section 4041(d) is amended by 
     adding at the end the following new sentence: ``No tax shall 
     be imposed under the preceding sentence on the sale or use of 
     any liquid if tax was imposed with respect to such liquid 
     under section 4081 at the Leaking Underground Storage Tank 
     Trust Fund financing rate.''.
       (ii) Paragraph (3) of section 4042(b) is amended to read as 
     follows:
       ``(3) Exception for fuel on which leaking underground 
     storage tank trust fund financing rate separately imposed.--
     The Leaking Underground Storage Tank Trust Fund financing 
     rate under paragraph (2)(B) shall not apply to the use of any 
     fuel if tax was imposed with respect to such fuel under 
     section 4041(d) or 4081 at the Leaking Underground Storage 
     Tank Trust Fund financing rate.''.
       (iii) Notwithstanding section 6430 of the Internal Revenue 
     Code of 1986, a refund, credit, or payment may be made under 
     subchapter B of chapter 65 of such Code for taxes imposed 
     with respect to any liquid after September 30, 2005, and 
     before the date of the enactment of this Act under section 
     4041(d)(1) or 4042 of such Code at the Leaking Underground 
     Storage Tank Trust Fund financing rate to the extent that tax 
     was imposed with respect to such liquid under section 4081 at 
     the Leaking Underground Storage Tank Trust Fund financing 
     rate.
       (B)(i) Paragraph (5) of section 4041(d) is amended--
       (I) by striking ``(other than with respect to any sale for 
     export under paragraph (3) thereof)'', and
       (II) by adding at the end the following new sentence: ``The 
     preceding sentence shall not apply with respect to subsection 
     (g)(3) and so much of subsection (g)(1) as relates to vessels 
     (within the meaning of section 4221(d)(3)) employed in 
     foreign trade or trade between the United States and any of 
     its possessions.''
       (ii) Section 4082 is amended--
       (I) by striking ``(other than such tax at the Leaking 
     Underground Storage Tank Trust Fund financing rate imposed in 
     all cases other than for export)'' in subsection (a), and
       (II) by redesignating subsections (f) and (g) as 
     subsections (g) and (h) and by inserting after subsection (e) 
     the following new subsection:
       ``(f) Exception for Leaking Underground Storage Tank Trust 
     Fund Financing Rate.--
       ``(1) In general.--Subsection (a) shall not apply to the 
     tax imposed under section 4081 at the Leaking Underground 
     Storage Tank Trust Fund financing rate.

[[Page 16405]]

       ``(2) Exception for export, etc.--Paragraph (1) shall not 
     apply with respect to any fuel if the Secretary determines 
     that such fuel is destined for export or for use by the 
     purchaser as supplies for vessels (within the meaning of 
     section 4221(d)(3)) employed in foreign trade or trade 
     between the United States and any of its possessions.''.
       (iii) Subsection (e) of section 4082 is amended--
       (I) by striking ``an aircraft, the rate of tax under 
     section 4081(a)(2)(A)(iii) shall be zero.'' and inserting 
     ``an aircraft--
       ``(1) the rate of tax under section 4081(a)(2)(A)(iii) 
     shall be zero, and
       ``(2) if such aircraft is employed in foreign trade or 
     trade between the United States and any of its possessions, 
     the increase in such rate under section 4081(a)(2)(B) shall 
     be zero.''; and
       (II) by moving the last sentence flush with the margin of 
     such subsection (following the paragraph (2) added by clause 
     (i)).
       (iv) Section 6430 is amended to read as follows:

     ``SEC. 6430. TREATMENT OF TAX IMPOSED AT LEAKING UNDERGROUND 
                   STORAGE TANK TRUST FUND FINANCING RATE.

       ``No refunds, credits, or payments shall be made under this 
     subchapter for any tax imposed at the Leaking Underground 
     Storage Tank Trust Fund financing rate, except in the case of 
     fuels--
       ``(1) which are exempt from tax under section 4081(a) by 
     reason of section 4081(f)(2),
       ``(2) which are exempt from tax under section 4041(d) by 
     reason of the last sentence of paragraph (5) thereof, or
       ``(3) with respect to which the rate increase under section 
     4081(a)(2)(B) is zero by reason of section 4082(e)(2).''.
       (C) Paragraph (5) of section 4041(d) is amended by 
     inserting ``(b)(1)(A)'' after ``subsections''.
       (3) Effective date.--
       (A) In general.--Except as otherwise provided in this 
     paragraph, the amendments made by this subsection shall take 
     effect as if included in the provisions of the Energy Policy 
     Act of 2005 to which they relate.
       (B) Nonapplication of exemption for off-highway business 
     use.--The amendment made by paragraph (2)(C) shall apply to 
     fuel sold for use or used after the date of the enactment of 
     this Act.
       (C) Amendment made by the safetea-lu.--The amendment made 
     by paragraph (2)(B)(iii)(II) shall take effect as if included 
     in section 11161 of the SAFETEA-LU.
       (c) Amendments Related to Section 339 of the American Jobs 
     Creation Act of 2004.--
       (1)(A) Section 45H is amended by striking subsection (d) 
     and by redesignating subsections (e), (f), and (g) as 
     subsections (d), (e), and (f), respectively.
       (B) Subsection (d) of section 280C is amended to read as 
     follows:
       ``(d) Credit for Low Sulfur Diesel Fuel Production.--The 
     deductions otherwise allowed under this chapter for the 
     taxable year shall be reduced by the amount of the credit 
     determined for the taxable year under section 45H(a).''.
       (C) Subsection (a) of section 1016 is amended by striking 
     paragraph (31) and by redesignating paragraphs (32) through 
     (37) as paragraphs (31) through (36), respectively.
       (2)(A) Section 45H, as amended by paragraph (1), is amended 
     by adding at the end the following new subsection:
       ``(g) Election to Not Take Credit.--No credit shall be 
     determined under subsection (a) for the taxable year if the 
     taxpayer elects not to have subsection (a) apply to such 
     taxable year.''.
       (B) Subsection (m) of section 6501 is amended by inserting 
     ``45H(g),'' after ``45C(d)(4),''.
       (3)(A) Subsections (b)(1)(A), (c)(2), (e)(1), and (e)(2) of 
     section 45H (as amended by paragraph (1)) and section 179B(a) 
     are each amended by striking ``qualified capital costs'' and 
     inserting ``qualified costs''.
       (B) The heading of paragraph (2) of section 45H(c) is 
     amended by striking ``capital''.
       (C) Subsection (a) of section 179B is amended by inserting 
     ``and which are properly chargeable to capital account'' 
     before the period at the end.
       (4) The amendments made by this subsection shall take 
     effect as if included in section 339 of the American Jobs 
     Creation Act of 2004.

                 PART IV--ADVANCED TECHNOLOGY VEHICLES

     SEC. 841. EXPANSION AND MODIFICATION OF CREDIT FOR 
                   ALTERNATIVE FUEL MOTOR VEHICLES.

       (a) Extension.--Section 30B(j) (relating to termination) is 
     amended--
       (1) by striking ``December 31, 2014'' in paragraph (1) and 
     inserting ``December 31, 2016'',
       (2) by striking ``December 31, 2010'' in paragraph (2) and 
     inserting ``December 31, 2012'',
       (3) by striking ``December 31, 2009'' in paragraph (3) and 
     inserting ``December 31, 2012'', and
       (4) by striking ``December 31, 2010'' in paragraph (4) and 
     inserting ``December 31, 2012''.
       (b) Modification Relating to New Qualified Alternative Fuel 
     Motor Vehicle Credit.--The last sentence of section 30B(e)(2) 
     is amended to read as follows: ``A new qualified alternative 
     fuel motor vehicle which weighs more than 14,000 pounds gross 
     vehicle weight rating shall be deemed to satisfy the 
     preceding sentence if it is certified as exceeding the most 
     stringent standard applicable to the model year in which such 
     motor vehicle was produced.''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on the date of the enactment of this Act.

     SEC. 842. CREDIT FOR PLUG-IN ELECTRIC DRIVE MOTOR VEHICLES.

       (a) Plug-in Electric Drive Motor Vehicle Credit.--
       (1) In general.--Subpart B of part IV of subchapter A of 
     chapter 1 (relating to other credits) is amended by adding at 
     the end the following new section:

     ``SEC. 30D. PLUG-IN ELECTRIC DRIVE MOTOR VEHICLE CREDIT.

       ``(a) Allowance of Credit.--
       ``(1) In general.--There shall be allowed as a credit 
     against the tax imposed by this chapter for the taxable year 
     an amount equal to the applicable amount with respect to each 
     new qualified plug-in electric drive motor vehicle placed in 
     service by the taxpayer during the taxable year.
       ``(2) Applicable amount.--For purposes of paragraph (1), 
     the applicable amount is sum of--
       ``(A) $2,500, plus
       ``(B) $400 for each kilowatt hour of traction battery 
     capacity of at least 5 kilowatt hours, plus
       ``(C) $400 for each kilowatt hour of traction battery 
     capacity in excess of 5 kilowatt hours.
       ``(b) Limitations.--
       ``(1) Limitation based on weight.--The amount of the credit 
     allowed under subsection (a) by reason of subsection 
     (a)(2)(A) shall not exceed--
       ``(A) $7,500, in the case of any new qualified plug-in 
     electric drive motor vehicle with a gross vehicle weight 
     rating of not more than 10,000 pounds,
       ``(B) $10,000, in the case of any new qualified plug-in 
     electric drive motor vehicle with a gross vehicle weight 
     rating of more than 10,000 pounds but not more than 14,000 
     pounds,
       ``(C) $12,500, in the case of any new qualified plug-in 
     electric drive motor vehicle with a gross vehicle weight 
     rating of more than 14,000 pounds but not more than 26,000 
     pounds, and
       ``(D) $15,000, in the case of any new qualified plug-in 
     electric drive motor vehicle with a gross vehicle weight 
     rating of more than 26,000 pounds.
       ``(2) Limitation on number of passenger vehicles and light 
     trucks eligible for credit.--No credit shall be allowed under 
     subsection (a) for any new qualified plug-in electric drive 
     motor vehicle which is a passenger vehicle or light truck in 
     any calendar year following the calendar year which includes 
     the first date on which the total number of such new 
     qualified plug-in electric drive motor vehicles sold for use 
     in the United States after December 31, 2007, is at least 
     250,000.
       ``(c) New Qualified Plug-in Electric Drive Motor Vehicle.--
     For purposes of this section, the term `new qualified plug-in 
     electric drive motor vehicle' means a motor vehicle--
       ``(1) which draws propulsion using a traction battery with 
     at least 4 kilowatt hours of capacity,
       ``(2) which uses an offboard source of energy to recharge 
     such battery,
       ``(3) which, in the case of a passenger vehicle or light 
     truck which has a gross vehicle weight rating of not more 
     than 8,500 pounds, has received a certificate of conformity 
     under the Clean Air Act and meets or exceeds the equivalent 
     qualifying California low emission vehicle standard under 
     section 243(e)(2) of the Clean Air Act for that make and 
     model year, and
       ``(A) in the case of a vehicle having a gross vehicle 
     weight rating of 6,000 pounds or less, the Bin 5 Tier II 
     emission standard established in regulations prescribed by 
     the Administrator of the Environmental Protection Agency 
     under section 202(i) of the Clean Air Act for that make and 
     model year vehicle, and
       ``(B) in the case of a vehicle having a gross vehicle 
     weight rating of more than 6,000 pounds but not more than 
     8,500 pounds, the Bin 8 Tier II emission standard which is so 
     established,
       ``(4) the original use of which commences with the 
     taxpayer,
       ``(5) which is acquired for use or lease by the taxpayer 
     and not for resale, and
       ``(6) which is made by a manufacturer.
       ``(d) Application With Other Credits.--
       ``(1) Business credit treated as part of general business 
     credit.--So much of the credit which would be allowed under 
     subsection (a) for any taxable year (determined without 
     regard to this subsection) that is attributable to property 
     of a character subject to an allowance for depreciation shall 
     be treated as a credit listed in section 38(b) for such 
     taxable year (and not allowed under subsection (a)).
       ``(2) Personal credit.--The credit allowed under subsection 
     (a) (after the application of paragraph (1)) for any taxable 
     year shall not exceed the excess (if any) of--
       ``(A) the regular tax liability (as defined in section 
     26(b)) reduced by the sum of the credits allowable under 
     subpart A and sections 27, 30, 30B, and 30C, over

[[Page 16406]]

       ``(B) the tentative minimum tax for the taxable year.
       ``(e) 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) Other terms.--The terms `passenger automobile', 
     `light truck', and `manufacturer' have the meanings given 
     such terms in regulations prescribed by the Administrator of 
     the Environmental Protection Agency for purposes of the 
     administration of title II of the Clean Air Act (42 U.S.C. 
     7521 et seq.).
       ``(3) Traction battery capacity.--Traction battery capacity 
     shall be measured in kilowatt hours from a 100 percent state 
     of charge to a zero percent state of charge.
       ``(4) Reduction in basis.--For purposes of this subtitle, 
     the basis of any property for which a credit is allowable 
     under subsection (a) shall be reduced by the amount of such 
     credit so allowed.
       ``(5) No double benefit.--The amount of any deduction or 
     other credit allowable under this chapter for a new qualified 
     plug-in electric drive motor vehicle shall be reduced by the 
     amount of credit allowed under subsection (a) for such 
     vehicle for the taxable year.
       ``(6) Property used by tax-exempt entity.--In the case of a 
     vehicle the use of which is described in paragraph (3) or (4) 
     of section 50(b) and which is not subject to a lease, the 
     person who sold such vehicle to the person or entity using 
     such vehicle shall be treated as the taxpayer that placed 
     such vehicle in service, but only if such person clearly 
     discloses to such person or entity in a document the amount 
     of any credit allowable under subsection (a) with respect to 
     such vehicle (determined without regard to subsection 
     (b)(2)).
       ``(7) Property used outside united states, etc., not 
     qualified.--No credit shall be allowable under subsection (a) 
     with respect to any property referred to in section 50(b)(1) 
     or with respect to the portion of the cost of any property 
     taken into account under section 179.
       ``(8) Recapture.--The Secretary shall, by regulations, 
     provide for recapturing the benefit of any credit allowable 
     under subsection (a) with respect to any property which 
     ceases to be property eligible for such credit (including 
     recapture in the case of a lease period of less than the 
     economic life of a vehicle).
       ``(9) Election to not take credit.--No credit shall be 
     allowed under subsection (a) for any vehicle if the taxpayer 
     elects not to have this section apply to such vehicle.
       ``(10) Interaction with air quality and motor vehicle 
     safety standards.--Unless otherwise provided in this section, 
     a motor vehicle shall not be considered eligible for a credit 
     under this section unless such vehicle is in compliance 
     with--
       ``(A) the applicable provisions of the Clean Air Act for 
     the applicable make and model year of the vehicle (or 
     applicable air quality provisions of State law in the case of 
     a State which has adopted such provision under a waiver under 
     section 209(b) of the Clean Air Act), and
       ``(B) the motor vehicle safety provisions of sections 30101 
     through 30169 of title 49, United States Code.
       ``(f) Regulations.--
       ``(1) In general.--Except as provided in paragraph (2), the 
     Secretary shall promulgate such regulations as necessary to 
     carry out the provisions of this section.
       ``(2) Coordination in prescription of certain 
     regulations.--The Secretary of the Treasury, in coordination 
     with the Secretary of Transportation and the Administrator of 
     the Environmental Protection Agency, shall prescribe such 
     regulations as necessary to determine whether a motor vehicle 
     meets the requirements to be eligible for a credit under this 
     section.
       ``(g) Termination.--This section shall not apply to 
     property purchased after December 31, 2014.''.
       (2) Coordination with other motor vehicle credits.--
       (A) New qualified fuel cell motor vehicles.--Paragraph (3) 
     of section 30B(b) is amended by adding at the end the 
     following new flush sentence:

     ``Such term shall not include any motor vehicle which is a 
     new qualified plug-in electric drive motor vehicle (as 
     defined by section 30D(c)).''.
       (B) New qualified hybrid motor vehicles.--Paragraph (3) of 
     section 30B(d) is amended by adding at the end the following 
     new flush sentence:

     ``Such term shall not include any motor vehicle which is a 
     new qualified plug-in electric drive motor vehicle (as 
     defined by section 30D(c)).''.
       (3) Conforming amendments.--
       (A) Section 38(b), as amended by this Act, is amended by 
     striking ``plus'' at the end of paragraph (31), by striking 
     the period at the end of paragraph (32) and inserting 
     ``plus'', and by adding at the end the following new 
     paragraph:
       ``(33) the portion of the new qualified plug-in electric 
     drive motor vehicle credit to which section 30D(d)(1) 
     applies.''.
       (B) Section 55(c)(3) is amended by inserting ``30D(d)(2),'' 
     after ``30C(d)(2),''.
       (C) Section 1016(a), as amended by this Act, is amended by 
     striking ``and'' at the end of paragraph (35), by striking 
     the period at the end of paragraph (36) and inserting ``, 
     and'', and by adding at the end the following new paragraph:
       ``(37) to the extent provided in section 30D(e)(4).''.
       (D) Section 6501(m) is amended by inserting ``30D(e)(9)'' 
     after ``30C(e)(5)''.
       (E) The table of sections for subpart B of part IV of 
     subchapter A of chapter 1 is amended by adding at the end the 
     following new item:

``Sec. 30D. Plug-in electric drive motor vehicle credit.''.
       (b) Conversion Kits.--
       (1) In general.--Section 30B (relating to alternative motor 
     vehicle credit) is amended by redesignating subsections (i) 
     and (j) as subsections (j) and (k), respectively, and by 
     inserting after subsection (h) the following new subsection:
       ``(i) Plug-in Conversion Credit.--
       ``(1) In general.--For purposes of subsection (a), the 
     plug-in conversion credit determined under this subsection 
     with respect to any motor vehicle which is converted to a 
     qualified plug-in electric drive motor vehicle is an amount 
     equal to 10 percent of the cost of the plug-in traction 
     battery module installed in such vehicle as part of such 
     conversion.
       ``(2) Limitations.--The amount of the credit allowed under 
     this subsection shall not exceed $2,500 with respect to the 
     conversion of any motor vehicle.
       ``(3) Definitions and special rules.--For purposes of this 
     subsection--
       ``(A) Qualified plug-in electric drive motor vehicle.--The 
     term `qualified plug-in electric drive motor vehicle' means 
     any new qualified plug-in electric drive motor vehicle (as 
     defined in section 30D(c), determined without regard to 
     paragraphs (4) and (6) thereof).
       ``(B) Plug-in traction battery module.--The term `plug-in 
     traction battery module' means an electro-chemical energy 
     storage device which--
       ``(i) has a traction battery capacity of not less than 2.5 
     kilowatt hours,
       ``(ii) is equipped with an electrical plug by means of 
     which it can be energized and recharged when plugged into an 
     external source of electric power,
       ``(iii) consists of a standardized configuration and is 
     mass produced,
       ``(iv) has been tested and approved by the National Highway 
     Transportation Safety Administration as compliant with 
     applicable motor vehicle and motor vehicle equipment safety 
     standards when installed by a mechanic with standardized 
     training in protocols established by the battery manufacturer 
     as part of a nationwide distribution program, and
       ``(v) is certified by a battery manufacturer as meeting the 
     requirements of clauses (i) through (iv).
       ``(C) Credit allowed to lessor of battery module.--In the 
     case of a plug-in traction battery module which is leased to 
     the taxpayer, the credit allowed under this subsection shall 
     be allowed to the lessor of the plug-in traction battery 
     module.
       ``(D) Credit allowed in addition to other credits.--The 
     credit allowed under this subsection shall be allowed with 
     respect to a motor vehicle notwithstanding whether a credit 
     has been allowed with respect to such motor vehicle under 
     this section (other than this subsection) in any preceding 
     taxable year.
       ``(4) Termination.--This subsection shall not apply to 
     conversions made after December 31, 2009.''.
       (2) Credit treated as part of alternative motor vehicle 
     credit.--Section 30B(a) 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 plug-in conversion credit determined under 
     subsection (i).''.
       (3) No recapture for vehicles converted to qualified plug-
     in electric drive motor vehicles.--Paragraph (8) of section 
     30B(h) is amended by adding at the end the following: ``, 
     except that no benefit shall be recaptured if such property 
     ceases to be eligible for such credit by reason of conversion 
     to a qualified plug-in electric drive motor vehicle.''
       (c) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after December 31, 
     2007, in taxable years beginning after such date.

     SEC. 843. EXCLUSION FROM HEAVY TRUCK TAX FOR IDLING REDUCTION 
                   UNITS AND ADVANCED INSULATION ADDED AFTER 
                   PURCHASE.

       (a) In General.--Section 4053 (relating to exemptions) is 
     amended by adding at the end the following new paragraphs:
       ``(7) Idling reduction device.--Any device or system of 
     devices which--
       ``(A) is designed to provide to a vehicle those services 
     (such as heat, air conditioning, or electricity) that would 
     otherwise require the operation of the main drive engine 
     while the vehicle is temporarily parked or remains stationary 
     using either--
       ``(i) an all electric unit, such as a battery powered unit 
     or from grid-supplied electricity, or
       ``(ii) a dual fuel unit powered by diesel or other fuels, 
     and capable of providing such

[[Page 16407]]

     services from grid-supplied electricity or on-truck batteries 
     alone, and
       ``(B) is certified by the Secretary of Energy, in 
     consultation with the Administrator of the Environmental 
     Protection Agency and the Secretary of Transportation, to 
     reduce long-duration idling of such vehicle at a motor 
     vehicle rest stop or other location where such vehicles are 
     temporarily parked or remain stationary.

     For purposes of subparagraph (B), the term `long-duration 
     idling' means the operation of a main drive engine, for a 
     period greater than 15 consecutive minutes, where the main 
     drive engine is not engaged in gear. Such term does not apply 
     to routine stoppages associated with traffic movement or 
     congestion.
       ``(8) Advanced insulation.--Any insulation that has an R 
     value of not less than R35 per inch.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to sales or installations after December 31, 
     2007.

               PART V--CONSERVATION AND ENERGY EFFICIENCY

     SEC. 851. EXTENSION AND MODIFICATION OF NONBUSINESS ENERGY 
                   PROPERTY CREDIT.

       (a) Extension of Credit.--Section 25C(g) (relating to 
     termination) is amended by striking ``December 31, 2007'' and 
     inserting ``December 31, 2009''.
       (b) Natural Gas Fired Heat Pumps.--Section 25C(d)(3) 
     (relating to energy-efficient building property) is amended--
       (1) by striking ``and'' at the end of subparagraph (D),
       (2) by striking the period at the end of subparagraph (E) 
     and inserting ``, and'', and
       (3) by adding at the end the following new subparagraph:
       ``(F) a natural gas fired heat pump with a heating 
     coefficient of performance (COP) of at least 1.1.''.
       (c) Modifications of Standards for Energy-Efficient 
     Building Property.--
       (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) Electric heat pumps.--Subparagraph (B) of section 
     25C(d)(3) is amended to read as follows:
       ``(B) an electric heat pump which achieves the highest 
     efficiency tier established by the Consortium for Energy 
     Efficiency, as in effect on January 1, 2008.''.
       (3) Water heaters.--Subparagraph (E) of section 25C(d)(3) 
     is amended to read as follows:
       ``(E) a natural gas, propane, or oil water heater which has 
     either an energy factor of at least 0.80 or a thermal 
     efficiency of at least 90 percent.''.
       (4) 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 90.
       ``(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 90.
       ``(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.''.
       (d) Effective Date.--The amendments made this section shall 
     apply to expenditures made after December 31, 2007.

     SEC. 852. EXTENSION AND MODIFICATION OF NEW ENERGY EFFICIENT 
                   HOME CREDIT.

       (a) Extension of Credit.--Subsection (g) of section 45L 
     (relating to termination), as amended by section 205 of 
     division A of the Tax Relief and Health Care Act of 2006, is 
     amended by striking ``December 31, 2008'' and inserting 
     ``December 31, 2011''.
       (b) Modification.--
       (1) In general.--Subparagraph (B) of section 45L(a)(1) is 
     amended to read as follows:
       ``(B)(i) acquired by a person from such eligible contractor 
     and used by any person as a residence during the taxable 
     year, or
       ``(ii) used by such eligible contractor as a residence 
     during the taxable year.''.
       (2) Effective date.--The amendments made by this subsection 
     shall apply to homes purchased after December 31, 2008.

     SEC. 853. EXTENSION AND MODIFICATION OF ENERGY EFFICIENT 
                   COMMERCIAL BUILDINGS DEDUCTION.

       (a) Extension.--Section 179D(h) (relating to termination) 
     is amended by striking ``December 31, 2008'' and inserting 
     ``December 31, 2013''.
       (b) Adjustment of Maximum Deduction Amount.--
       (1) In general.--Subparagraph (A) of section 179D(b)(1) 
     (relating to maximum amount of deduction) 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) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after the date of 
     the enactment of this Act.

     SEC. 854. MODIFICATIONS OF ENERGY EFFICIENT APPLIANCE CREDIT 
                   FOR APPLIANCES PRODUCED AFTER 2007.

       (a) In General.--Section 45M of the Internal Revenue Code 
     of 1986 is amended to read as follows:

     ``SEC. 45M. ENERGY EFFICIENT APPLIANCE CREDIT.

       ``(a) General Rule.--
       ``(1) In general.--For purposes of section 38, the energy 
     efficient appliance credit determined under this section for 
     any taxable year is an amount equal to the sum of the credit 
     amounts determined under paragraph (2) for each type of 
     qualified energy efficient appliance produced by the taxpayer 
     during the calendar year ending with or within the taxable 
     year.
       ``(2) Credit amounts.--The credit amount determined for any 
     type of qualified energy efficient appliance is--
       ``(A) the applicable amount determined under subsection (b) 
     with respect to such type, multiplied by
       ``(B) the eligible production for such type.
       ``(b) Applicable Amount.--For purposes of subsection (a)--
       ``(1) Dishwashers.--The applicable amount is $75 in the 
     case of a residential model dishwasher which--
       ``(A) is manufactured in calendar year 2008, 2009, or 2010, 
     and
       ``(B) uses not more than 307 kilowatt hours per year and 
     5.0 gallons per cycle (5.5 gallons for dishwashers designed 
     for greater than 12 place settings).
       ``(2) Clothes washers.--The applicable amount is--
       ``(A) $125 in the case of a residential model top-loading 
     clothes washer which--
       ``(i) is manufactured in calendar year 2008 or 2009, and
       ``(ii) meets or exceeds a 1.8 MEF and does not exceed a 7.5 
     water consumption factor,
       ``(B) $150 in the case of a residential or commercial model 
     clothes washer which--
       ``(i) is manufactured in calendar year 2008, 2009, or 2010, 
     and
       ``(ii) meets or exceeds a 2.0 MEF and does not exceed a 6.0 
     water consumption factor, and
       ``(C) $250 in the case of a residential or commercial model 
     clothes washer which--
       ``(i) is manufactured in calendar year 2008, 2009, or 2010, 
     and
       ``(ii) meets or exceeds a 2.2 MEF and does not exceed a 4.5 
     water consumption factor.
       ``(3) Refrigerators.--The applicable amount is--
       ``(A) $75 in the case of a residential model refrigerator 
     which--
       ``(i) is manufactured in calendar year 2008 or 2009, and
       ``(ii) consumes at least 23 percent, but not more than 24.9 
     percent, fewer kilowatt hours per year than the 2001 energy 
     conservation standards,
       ``(B) $100 in the case of a residential model refrigerator 
     which--
       ``(i) is manufactured in calendar year 2008, 2009, or 2010, 
     and
       ``(ii) consumes at least 25 percent, but not more than 29.9 
     percent, fewer kilowatt hours per year than the 2001 energy 
     conservation standards, and
       ``(C) $200 in the case of a residential model refrigerator 
     which--
       ``(i) is manufactured in calendar year 2008, 2009, or 2010, 
     and
       ``(ii) consumes at least 30 percent fewer kilowatt hours 
     per year than the 2001 energy conservation standards.
       ``(c) Eligible Production.--The eligible production in a 
     calendar year with respect to each type of qualified energy 
     efficient appliance is the excess of--
       ``(1) the number of appliances of such type which are 
     produced in the United States by the taxpayer during such 
     calendar year, over
       ``(2) the average number of appliances of such type which 
     were produced in the United

[[Page 16408]]

     States by the taxpayer (or any predecessor) during the 
     preceding 2-calendar year period.
       ``(d) Types of Qualified Energy Efficient Appliances.--For 
     purposes of this section, the types of qualified energy 
     efficient appliances are--
       ``(1) dishwashers described in subsection (b)(1),
       ``(2) clothes washers described in subsection (b)(2), and
       ``(3) refrigerators described in subsection (b)(3).
       ``(e) Limitations.--
       ``(1) Aggregate credit amount allowed.--Except as provided 
     in paragraph (2), the aggregate amount of credit allowed 
     under subsection (a) with respect to a taxpayer for any 
     taxable year shall not exceed $75,000,000 reduced by the 
     amount of the credit allowed under subsection (a) to the 
     taxpayer (or any predecessor) for all prior taxable years 
     beginning after December 31, 2007.
       ``(2) Limitation based on gross receipts.--The credit 
     allowed under subsection (a) with respect to a taxpayer for 
     the taxable year shall not exceed an amount equal to 2 
     percent of the average annual gross receipts of the taxpayer 
     for the 3 taxable years preceding the taxable year in which 
     the credit is determined beginning after December 31, 2007.
       ``(3) Gross receipts.--For purposes of this subsection, the 
     rules of paragraphs (2) and (3) of section 448(c) shall 
     apply.
       ``(f) Definitions.--For purposes of this section:
       ``(1) Dishwasher.--The term `dishwasher' means a dishwasher 
     subject to the energy conservation standards established by 
     the Department of Energy.
       ``(2) Clothes washer.--The term `clothes washer' includes a 
     clothes washer subject to the energy conservation standards 
     established by the Department of Energy.
       ``(3) Top-loading clothes washer.--The term `top-loading 
     clothes washer' means a clothes washer with the clothes 
     container compartment access located on the top of the 
     machine.
       ``(4) Refrigerator.--The term `refrigerator' means an 
     automatic defrost refrigerator-freezer which has an internal 
     volume of at least 16.5 cubic feet.
       ``(5) Gallons per cycle.--The term `gallons per cycle' 
     means the amount of water, expressed in gallons, required to 
     complete a normal cycle of a dishwasher.
       ``(6) MEF.--The term `MEF' means the modified energy factor 
     established by the Department of Energy for compliance with 
     the Federal energy conservation standard.
       ``(7) Water consumption factor.--The term `water 
     consumption factor' means the quotient of the total weighted 
     per-cycle water consumption divided by the cubic foot 
     capacity of the clothes washer.
       ``(8) 2001 energy conservation standard.--The term `2001 
     energy conservation standard' means the energy conservation 
     standards promulgated by the Department of Energy and 
     effective July 1, 2001.
       ``(g) Special Rules.--For purposes of this section:
       ``(1) In general.--Rules similar to the rules of 
     subsections (c), (d), and (e) of section 52 shall apply.
       ``(2) Controlled group.--
       ``(A) In general.--All persons treated as a single employer 
     under subsection (a) or (b) of section 52 or subsection (m) 
     or (o) of section 414 shall be treated as a single producer.
       ``(B) Inclusion of foreign corporations.--For purposes of 
     subparagraph (A), in applying subsections (a) and (b) of 
     section 52 to this section, section 1563 shall be applied 
     without regard to subsection (b)(2)(C) thereof.
       ``(3) Verification.--No amount shall be allowed as a credit 
     under subsection (a) with respect to which the taxpayer has 
     not submitted such information or certification as the 
     Secretary, in consultation with the Secretary of Energy, 
     determines necessary.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to appliances produced after December 31, 2007.

                    PART VI--ACCOUNTABILITY STUDIES

     SEC. 861. COST-BENEFIT ANALYSIS OF POLLUTION REDUCTION AND 
                   SAVING IN IMPORTED OIL PER DOLLAR OF TAX 
                   BENEFIT.

       (a) Cost-Benefit Analysis.--The Secretary of the Treasury 
     shall undertake a cost-benefit analysis of those provisions 
     of this Act that use tax incentives to reduce the use of 
     imported oil and to reduce the emissions of carbon dioxide 
     and harmful air pollutants.
       (b) Report.--Not later than December 31 of the 2nd calendar 
     year after the date of the enactment of this Act, the 
     Secretary of the Treasury shall prepare and submit to the 
     Committee on Finance of the Senate and the Committee on Ways 
     and Means of the House of Representatives a report on the 
     cost-benefit analysis conducted pursuant to subsection (a).

     SEC. 862. EFFECT OF ENERGY RELATED TAX BENEFITS ON PRICES FOR 
                   CONSUMER GOODS.

       (a) Study.--The Secretary of the Treasury shall undertake a 
     study of the estimated effects on the price of consumer goods 
     that may result from the enactment of the amendments to the 
     Internal Revenue Code of 1986 made by this Act, including the 
     effect on the price of foodstuffs, soaps, automobiles, motor 
     fuels, and any other product for which the amendments made by 
     this Act may be expected to significantly alter the supply 
     and demand conditions of a consumer goods market.
       (b) Report.--Not later than December 31 of the 2nd calendar 
     year after the date of the enactment of this Act, the 
     Secretary of the Treasury shall prepare and submit to the 
     Committee on Finance of the Senate and the Committee on Ways 
     and Means of the House of Representatives a report on the 
     study conducted pursuant to subsection (a).

     SEC. 863. STUDY ON TAX-CREDIT BONDS.

       (a) Study.--The Secretary of the Treasury shall undertake a 
     study of the use of tax-credit bonds as a means of 
     subsidizing the borrowing costs of the beneficiaries of such 
     financing. In addition to providing a general examination of 
     the effectiveness of the tax-credit bonds described in 
     paragraph (2) and of the Federal subsidy provided by tax-
     credit bonds relative to the subsidy provided by tax-exempt 
     bonds, the study shall--
       (1) examine the extent to which projects eligible for tax-
     credit bonds also receive other Federal tax benefits under 
     present law,
       (2) examine any market or administrative issues associated 
     with present-law tax-credit bonds under sections 54 and 1397E 
     of the Internal Revenue Code of 1986 and sections 54A and 54B 
     of such Code, as added by this Act, including--
       (A) the effect of the Department of the Treasury setting 
     the credit rate,
       (B) the Department's selection of projects eligible for 
     financing,
       (C) the potential for arbitrage earnings and the extent to 
     which this may affect the level of subsidy,
       (D) the lack of uniform rules for tax-credit bonds, and
       (E) the direct issuance of tax-credit bonds by private 
     parties, and
       (3) discuss the changes to present-law that would be 
     necessary to provide a tax-credit bond that delivers a 
     subsidy comparable to that provided by tax-exempt bonds and 
     reduces the market and administrative issues associated with 
     present-law tax-credit bonds.
       (b) Report.--Not later than December 31 of the 2nd calendar 
     year after the date of the enactment of this Act, the 
     Secretary of the Treasury shall prepare and submit to the 
     Committee on Finance of the Senate and the Committee on Ways 
     and Means of the House of Representatives a report on the 
     results of the study conducted pursuant to subsection (a).

                       PART VII--OTHER PROVISIONS

                      Subpart A--Timber Provisions

     SEC. 871. DEDUCTION FOR QUALIFIED TIMBER GAIN.

       (a) In General.--Part I of subchapter P of chapter 1 is 
     amended by adding at the end the following new section:

     ``SEC. 1203. DEDUCTION FOR QUALIFIED TIMBER GAIN.

       ``(a) In General.--In the case of a taxpayer which elects 
     the application of this section for a taxable year, there 
     shall be allowed a deduction against gross income in an 
     amount equal to 60 percent of the lesser of--
       ``(1) the taxpayer's qualified timber gain for such year, 
     or
       ``(2) the taxpayer's net capital gain for such year.
       ``(b) Qualified Timber Gain.--For purposes of this section, 
     the term `qualified timber gain' means, with respect to any 
     taxpayer for any taxable year, the excess (if any) of--
       ``(1) the sum of the taxpayer's gains described in 
     subsections (a) and (b) of section 631 for such year, over
       ``(2) the sum of the taxpayer's losses described in such 
     subsections for such year.
       ``(c) Special Rules for Pass-Thru Entities.--
       ``(1) In the case of any qualified timber gain of a pass-
     thru entity (as defined in section 1(h)(10)) other than a 
     real estate investment trust, the election under this section 
     shall be made separately by each taxpayer subject to tax on 
     such gain.
       ``(2) In the case of any qualified timber gain of a real 
     estate investment trust, the election under this section 
     shall be made by the real estate investment trust.
       ``(d) Termination.--
       ``(1) In general.--This section shall not apply to any 
     taxable year beginning after the date that is 1 year after 
     the date of the enactment of this section.
       ``(2) Taxable years which include date of termination.--In 
     the case of any taxable year which includes the date of the 
     termination described in paragraph (1), for purposes of this 
     section, the taxpayer's qualified timber gain shall not 
     exceed the excess that would be described in subsection (b) 
     if only dispositions of timber before such date were taken 
     into account.''.
       (b) Coordination With Maximum Capital Gains Rates.--
       (1) Taxpayers other than corporations.--Paragraph (2) of 
     section 1(h) is amended to read as follows:
       ``(2) Reduction of net capital gain.--For purposes of this 
     subsection, the net capital gain for any taxable year shall 
     be reduced (but not below zero) by the sum of--
       ``(A) the amount which the taxpayer takes into account as 
     investment income under section 163(d)(4)(B)(iii), and
       ``(B) in the case of a taxable year with respect to which 
     an election is in effect under section 1203, the lesser of--

[[Page 16409]]

       ``(i) the amount described in paragraph (1) of section 
     1203(a), or
       ``(ii) the amount described in paragraph (2) of such 
     section.''.
       (2) Corporations.--Section 1201 is amended by redesignating 
     subsection (b) as subsection (c) and inserting after 
     subsection (a) the following new subsection:
       ``(b) Qualified Timber Gain Not Taken Into Account.--For 
     purposes of this section, in the case of a corporation with 
     respect to which an election is in effect under section 1203, 
     the net capital gain for any taxable year shall be reduced 
     (but not below zero) by the corporation's qualified timber 
     gain (as defined in section 1203(b)).''.
       (c) Deduction Allowed Whether or Not Individual Itemizes 
     Other Deductions.--Subsection (a) of section 62 is amended by 
     inserting before the last sentence the following new 
     paragraph:
       ``(22) Qualified timber gains.--The deduction allowed by 
     section 1203.''.
       (d) Deduction Allowed in Computing Adjusted Current 
     Earnings.--Subparagraph (C) of section 56(g)(4) is amended by 
     adding at the end the following new clause:
       ``(vii) Deduction for qualified timber gain.--Clause (i) 
     shall not apply to any deduction allowed under section 
     1203.''.
       (e) Deduction Allowed in Computing Taxable Income of 
     Electing Small Business Trusts.--Subparagraph (C) of section 
     641(c)(2) is amended by inserting after clause (iii) the 
     following new clause:
       ``(iv) The deduction allowed under section 1203.''.
       (f) Treatment of Qualified Timber Gain of Real Estate 
     Investment Trusts.--Paragraph (3) of section 857(b) is 
     amended by inserting after subparagraph (F) the following new 
     subparagraph:
       ``(G) Treatment of qualified timber gain.--For purposes of 
     this part, in the case of a real estate investment trust with 
     respect to which an election is in effect under section 
     1203--
       ``(i) Reduction of net capital gain.--The net capital gain 
     of the real estate investment trust for any taxable year 
     shall be reduced (but not below zero) by the real estate 
     investment trust's qualified timber gain (as defined in 
     section 1203(b)).
       ``(ii) Adjustment to shareholder's basis attributable to 
     deduction for qualified timber gains.--

       ``(I) In general.--The adjusted basis of shares in the 
     hands of the shareholder shall be increased by the amount of 
     the deduction allowable under section 1203(a) as provided in 
     subclauses (II) and (III).
       ``(II) Allocation of basis increase for distributions made 
     during taxable year.--For any taxable year of a real estate 
     investment trust for which an election is in effect under 
     section 1203, in the case of a distribution made with respect 
     to shares during such taxable year of amounts attributable to 
     the deduction allowable under section 1203(a), the adjusted 
     basis of such shares shall be increased by the amount of such 
     distributions.
       ``(III) Allocation of excess.--If the deduction allowable 
     under section 1203(a) for a taxable year exceeds the amount 
     of distributions described in subclause (II), the excess 
     shall be allocated to every shareholder of the real estate 
     investment trust at the close of the trust's taxable year in 
     the same manner as if a distribution of such excess were made 
     with respect to such shares.
       ``(IV) Designations.--To the extent provided in 
     regulations, a real estate investment trust shall designate 
     the amounts described in subclauses (II) and (III) in a 
     manner similar to the designations provided with respect to 
     capital gains described in subparagraphs (C) and (D).
       ``(V) Definitions.--As used in this subparagraph, the terms 
     `share' and `shareholder' shall include beneficial interests 
     and holders of beneficial interests, respectively.

       ``(iii) Earnings and profits deduction for qualified timber 
     gains.--The deduction allowable under section 1203(a) for a 
     taxable year shall be allowed as a deduction in computing the 
     earnings and profits of the real estate investment trust for 
     such taxable year. The earnings and profits of any such 
     shareholder which is a corporation shall be appropriately 
     adjusted in accordance with regulations prescribed by the 
     Secretary.''.
       (g) Loss Attributable to Basis Adjustment for Deduction for 
     Qualified Timber Gain of Real Estate Investment Trusts.--
       (1) Section 857(b)(8) is amended by redesignating 
     subparagraphs (B) and (C) as subparagraphs (C) and (D), 
     respectively, and by inserting after subparagraph (A) the 
     following new subparagraph:
       ``(B) Loss attributable to basis adjustment for deduction 
     for qualified timber gain.--If--
       ``(i) a shareholder of a real estate investment trust 
     receives a basis adjustment provided under subsection 
     (b)(3)(G)(ii), and
       ``(ii) the taxpayer has held such share or interest for 6 
     months or less,

     then any loss on the sale or exchange of such share or 
     interest shall, to the extent of the amount described in 
     clause (i), be disallowed.''.
       (2) Subparagraph (D) of section 857(b)(8), as redesignated 
     by paragraph (1), is amended by striking ``subparagraph (A)'' 
     and inserting ``subparagraphs (A) and (B)''.
       (h) Conforming Amendments.--
       (1) Subparagraph (B) of section 172(d)(2) is amended to 
     read as follows:
       ``(B) the exclusion under section 1202, and the deduction 
     under section 1203, shall not be allowed.''.
       (2) Paragraph (4) of section 642(c) is amended by striking 
     the first sentence and inserting ``To the extent that the 
     amount otherwise allowable as a deduction under this 
     subsection consists of gain described in section 1202(a) or 
     qualified timber gain (as defined in section 1203(b)), proper 
     adjustment shall be made for any exclusion allowable to the 
     estate or trust under section 1202 and for any deduction 
     allowable to the estate or trust under section 1203.''
       (3) Paragraph (3) of section 643(a) is amended by striking 
     the last sentence and inserting ``The exclusion under section 
     1202 and the deduction under section 1203 shall not be taken 
     into account.''.
       (4) Subparagraph (C) of section 643(a)(6) is amended to 
     read as follows:
       ``(C) Paragraph (3) shall not apply to a foreign trust. In 
     the case of such a trust--
       ``(i) there shall be included gains from the sale or 
     exchange of capital assets, reduced by losses from such sales 
     or exchanges to the extent such losses do not exceed gains 
     from such sales or exchanges, and
       ``(ii) the deduction under section 1203 shall not be taken 
     into account.''.
       (5) Paragraph (4) of section 691(c) is amended by inserting 
     ``1203,'' after ``1202,''.
       (6) Paragraph (2) of section 871(a) is amended by inserting 
     ``or 1203,'' after ``1202,''.
       (7) The table of sections for part I of subchapter P of 
     chapter 1 is amended by adding at the end the following new 
     item:

``Sec. 1203. Deduction for qualified timber gain.''.
       (i) Effective Date.--
       (1) In general.--The amendments made by this section shall 
     apply to taxable years ending after the date of the enactment 
     of this Act.
       (2) Taxable years which include date of enactment.--In the 
     case of any taxable year which includes the date of the 
     enactment of this Act, for purposes of the Internal Revenue 
     Code of 1986, the taxpayer's qualified timber gain shall not 
     exceed the excess that would be described in section 1203(b) 
     of such Code, as added by this section, if only dispositions 
     of timber after such date were taken into account.

     SEC. 872. EXCISE TAX NOT APPLICABLE TO SECTION 1203 DEDUCTION 
                   OF REAL ESTATE INVESTMENT TRUSTS.

       (a) In General.--Subparagraph (B) of section 4981(b)(1) is 
     amended to read as follows:
       ``(B) 95 percent of the real estate investment trust's 
     capital gain net income, without regard to any reduction that 
     would be applied for purposes of section 857(b)(3)(G)(i).''.
       (b) Effective Date.--
       (1) In general.--The amendment made by this section shall 
     apply to taxable years ending after the date of the enactment 
     of this Act.
       (2) Taxable years which include date of enactment.--In the 
     case of any taxable year which includes the date of the 
     enactment of this Act, for purposes of the Internal Revenue 
     Code of 1986, the taxpayer's qualified timber gain shall not 
     exceed the excess that would be described in section 1203(b) 
     of such Code, as added by this Act, if only dispositions of 
     timber after such date were taken into account.

     SEC. 873. TIMBER REIT MODERNIZATION.

       (a) In General.--Section 856(c)(5) is amended by adding 
     after subparagraph (G) the following new subparagraph:
       ``(H) Treatment of timber gains.--
       ``(i) In general.--Gain from the sale of real property 
     described in paragraph (2)(D) and (3)(C) shall include gain 
     which is--

       ``(I) recognized by an election under section 631(a) from 
     timber owned by the real estate investment trust, the cutting 
     of which is provided by a taxable REIT subsidiary of the real 
     estate investment trust;
       ``(II) recognized under section 631(b); or
       ``(III) income which would constitute gain under subclause 
     (I) or (II) but for the failure to meet the 1-year holding 
     period requirement.

       ``(ii) Special rules.--

       ``(I) For purposes of this subtitle, cut timber, the gain 
     of which is recognized by a real estate investment trust 
     pursuant to an election under section 631(a) described in 
     clause (i)(I) or so much of clause (i)(III) as relates to 
     clause (i)(I), shall be deemed to be sold to the taxable REIT 
     subsidiary of the real estate investment trust on the first 
     day of the taxable year.
       ``(II) For purposes of this subtitle, income described in 
     this subparagraph shall not be treated as gain from the sale 
     of property described in section 1221(a)(1).

       ``(iii) Termination.--

       ``(I) In general.--This subparagraph shall not apply to 
     dispositions on or after the termination date.
       ``(II) Termination date.--For purposes of this subsection, 
     the termination date is the date that is 1 year after the 
     date of the enactment of this subparagraph.''.

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

[[Page 16410]]



     SEC. 874. MINERAL ROYALTY INCOME QUALIFYING INCOME FOR TIMBER 
                   REITS.

       (a) In General.--Section 856(c)(2) is amended by striking 
     ``and'' at the end of subparagraph (G), by inserting ``and'' 
     at the end of subparagraph (H), and by adding after 
     subparagraph (H) the following new subparagraph:
       ``(I) mineral royalty income earned before the termination 
     date, from real property owned by a timber real estate 
     investment trust held, or once held, in connection with the 
     trade or business of producing timber by such real estate 
     investment trust;''.
       (b) Timber Real Estate Investment Trust.--Section 
     856(c)(5), as amended by this Act, is amended by adding after 
     subparagraph (H) the following new subparagraph:
       ``(I) Timber real estate investment trust.--The term 
     `timber real estate investment trust' means a real estate 
     investment trust in which more than 50 percent in value of 
     its total assets consists of real property held in connection 
     with the trade or business of producing timber.''.
       (c) Effective Dates.--
       (1) Subsection (a).--The amendment made by subsection (a) 
     shall apply to income earned after the date of the enactment 
     of this Act.
       (2) Subsection (b).--The amendments made by subsection (b) 
     shall apply to taxable years ending after the date of the 
     enactment of this Act.

     SEC. 875. MODIFICATION OF TAXABLE REIT SUBSIDIARY ASSET TEST 
                   FOR TIMBER REITS.

       (a) In General.--Section 856(c)(4)(B)(ii) is amended by 
     inserting ``(in the case of a quarter which closes before the 
     termination date, 25 percent in the case of a timber real 
     estate investment trust)'' after ``not more than 20 percent 
     of the value of its total assets is represented by securities 
     of one or more taxable REIT subsidiaries''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to quarters closing after the date of the 
     enactment of this Act.

     SEC. 876. SAFE HARBOR FOR TIMBER PROPERTY.

       (a) In General.--Section 857(b)(6) (relating to income from 
     prohibited transactions) is amended by adding at the end the 
     following new subparagraph:
       ``(G) Special rules for sales to qualified organizations.--
       ``(i) In general.--In the case of sale of a real estate 
     asset (as defined in section 856(c)(5)(B)) to a qualified 
     organization (as defined in section 170(h)(3)) exclusively 
     for conservation purposes (within the meaning of section 
     170(h)(1)(C)), subparagraph (D) shall be applied--

       ``(I) by substituting `2 years' for `4 years' in clause 
     (i), and
       ``(II) by substituting `2-year period' for `4-year period' 
     in clauses (ii) and (iii).

       ``(ii) Termination.--This subparagraph shall not apply to 
     sales on or after the termination date.''.
       (b) Prohibited Transactions.--Section 857(b)(6)(D)(v) is 
     amended by inserting ``or, in the case of a sale before the 
     termination date, a taxable REIT subsidiary'' after 
     ``independent contractor (as defined in section 856(d)(3)) 
     from whom the trust itself does not derive or receive any 
     income''.
       (c) Sales That Are Not Prohibited Transactions.--Section 
     857(b)(6), as amended by subsection (a), is amended by adding 
     at the end the following new subparagraph:
       ``(H) Sales of property that are not a prohibited 
     transaction.--In the case of a sale before the termination 
     date, the sale of property which is not a prohibited 
     transaction through application of subparagraph (D) shall be 
     considered property held for investment or for use in a trade 
     or business and not property described in section 1221(a)(1) 
     for all purposes of this subtitle.''.
       (d) Termination Date.--Section 857(b)(6), as amended by 
     subsections (a) and (c), is amended by adding at the end the 
     following new subparagraph:
       ``(I) Termination date.--For purposes of this paragraph, 
     the termination date is the date that is 1 year after the 
     date of the enactment of this subparagraph.''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to dispositions after the date of the enactment 
     of this Act.

                        Subpart B--Miscellaneous

     SEC. 877. SPECIAL RULES FOR REFUND OF THE COAL EXCISE TAX TO 
                   CERTAIN COAL PRODUCERS AND EXPORTERS.

       (a) Refund.--
       (1) Coal producers.--
       (A) In general.--Notwithstanding subsections (a)(1) and (c) 
     of section 6416 and section 6511 of the Internal Revenue Code 
     of 1986, if--
       (i) a coal producer establishes that such coal producer, or 
     a party related to such coal producer, exported coal produced 
     by such coal producer to a foreign country or shipped coal 
     produced by such coal producer to a possession of the United 
     States, the export or shipment of which was other than 
     through an exporter who has filed a claim for a refund under 
     paragraph (2),
       (ii) such coal producer filed a return on or after October 
     1, 1990, and on or before the date of the enactment of this 
     Act, and
       (iii) such coal producer files a claim for refund not later 
     than the close of the 30-day period beginning on the date of 
     the enactment of this Act,

     then the Secretary of the Treasury shall pay to such coal 
     producer an amount equal to the tax paid under section 4121 
     of such Code on such coal exported by the coal producer or a 
     party related to such coal producer.
       (B) Special rules for certain taxpayers.--For purposes of 
     this section--
       (i) Establishment of export.--If a coal producer or a party 
     related to a coal producer has received a judgment described 
     in clause (iii), such coal producer shall be deemed to have 
     established the export of coal to a foreign country or 
     shipment of coal to a possession of the United States under 
     subparagraph (A)(i).
       (ii) Amount of payment.--If a taxpayer described in clause 
     (i) is entitled to a payment under subparagraph (A), the 
     amount of such payment shall be reduced by any amount awarded 
     under the judgment described in clause (iii).
       (iii) Judgment described.--A judgment is described in this 
     subparagraph if such judgment--

       (I) is made by a court of competent jurisdiction within the 
     United States,
       (II) relates to the constitutionality of any tax paid on 
     exported coal under section 4121 of the Internal Revenue Code 
     of 1986, and
       (III) is in favor of the coal producer or the party related 
     to the coal producer.

       (iv) Recapture.--In the case any judgment described in 
     clause (iii) is overturned, the coal producer shall pay to 
     the Secretary the amount of any payment received under 
     subparagraph (A) unless the coal producer establishes the 
     export of the coal to a foreign country or shipment of coal 
     to a possession of the United States.
       (2) Exporters.--Notwithstanding subsections (a)(1) and (c) 
     of section 6416 and section 6511 of the Internal Revenue Code 
     of 1986, and a judgment described in paragraph (1)(B)(iii) of 
     this subsection, if--
       (A) an exporter establishes that such exporter exported 
     coal to a foreign country or shipped coal to a possession of 
     the United States, or caused such coal to be so exported or 
     shipped,
       (B) such exporter filed a return on or after October 1, 
     1990, and on or before the date of the enactment of this Act, 
     and
       (C) such exporter files a claim for refund not later than 
     the close of the 30-day period beginning on the date of the 
     enactment of this Act,
     then the Secretary of the Treasury shall pay to such exporter 
     an amount equal to $0.825 per ton of such coal exported by 
     the exporter or caused to be exported by the exporter.
       (b) Limitations.--Subsection (a) shall not apply with 
     respect to exported coal if a credit or refund of tax imposed 
     by section 4121 of such Code on such coal has been allowed or 
     made to, or if a settlement with the Federal Government has 
     been made with and accepted by, the coal producer, a party 
     related to such coal producer, or the exporter, of such coal, 
     as of the date that the claim is filed under this section 
     with respect to such exported coal. For purposes of this 
     subsection, the term ``settlement with the Federal 
     Government'' shall not include any settlement or stipulation 
     entered into as of the date of the enactment of this Act, the 
     terms of which contemplate a judgment concerning which any 
     party has reserved the right to file an appeal, or has filed 
     an appeal.
       (c) Subsequent Refund Prohibited.--No refund shall be made 
     under this section to the extent that a credit or refund of 
     such tax on such exported coal has been paid to any person.
       (d) Definitions.--For purposes of this section--
       (1) Coal producer.--The term ``coal producer'' means the 
     person in whom is vested ownership of the coal immediately 
     after the coal is severed from the ground, without regard to 
     the existence of any contractual arrangement for the sale or 
     other disposition of the coal or the payment of any royalties 
     between the producer and third parties. The term includes any 
     person who extracts coal from coal waste refuse piles or from 
     the silt waste product which results from the wet washing (or 
     similar processing) of coal.
       (2) Exporter.--The term ``exporter'' means a person, other 
     than a coal producer, who does not have a contract, fee 
     arrangement, or any other agreement with a producer or seller 
     of such coal to sell or export such coal to a third party on 
     behalf of the producer or seller of such coal and--
       (A) is indicated in the shipper's export declaration or 
     other documentation as the exporter of record, or
       (B) actually exported such coal to a foreign country or 
     shipped such coal to a possession of the United States, or 
     caused such coal to be so exported or shipped.
       (3) Related party.--The term ``a party related to such coal 
     producer'' means a person who--
       (A) is related to such coal producer through any degree of 
     common management, stock ownership, or voting control,
       (B) is related (within the meaning of section 144(a)(3) of 
     such Code) to such coal producer, or
       (C) has a contract, fee arrangement, or any other agreement 
     with such coal producer to sell such coal to a third party on 
     behalf of such coal producer.

[[Page 16411]]

       (e) Timing of Refund.--With respect to any claim for refund 
     filed pursuant to this section, the Secretary of the Treasury 
     shall determine whether the requirements of this section are 
     met not later than 180 days after such claim is filed. If the 
     Secretary determines that the requirements of this section 
     are met, the claim for refund shall be paid not later than 
     180 days after the Secretary makes such determination.
       (f) Interest.--Any refund paid pursuant to this section 
     shall be paid by the Secretary of the Treasury with interest 
     from the date of overpayment determined by using the 
     overpayment rate and method under section 6621 of such Code.
       (g) Denial of Double Benefit.--The payment under subsection 
     (a) with respect to any coal shall not exceed--
       (1) in the case of a payment to a coal producer, the amount 
     of tax paid under section 4121 of the Internal Revenue Code 
     of 1986 with respect to such coal by such coal producer or a 
     party related to such coal producer, and
       (2) in the case of a payment to an exporter, an amount 
     equal to $0.825 per ton with respect to such coal exported by 
     the exporter or caused to be exported by the exporter.
       (h) Application of Section.--This section applies only to 
     claims on coal exported on or after October 1, 1990, through 
     the date of the enactment of this Act.
       (i) Standing Not Conferred.--
       (1) Exporters.--With respect to exporters, this section 
     shall not confer standing upon an exporter to commence, or 
     intervene in, any judicial or administrative proceeding 
     concerning a claim for refund by a coal producer of any 
     Federal or State tax, fee, or royalty paid by the coal 
     producer.
       (2) Coal producers.--With respect to coal producers, this 
     section shall not confer standing upon a coal producer to 
     commence, or intervene in, any judicial or administrative 
     proceeding concerning a claim for refund by an exporter of 
     any Federal or State tax, fee, or royalty paid by the 
     producer and alleged to have been passed on to an exporter.

     SEC. 878. CREDIT TO HOLDERS OF RURAL RENAISSANCE BONDS.

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

     ``SEC. 54B. CREDIT TO HOLDERS OF RURAL RENAISSANCE BONDS.

       ``(a) Allowance of Credit.--In the case of a taxpayer who 
     holds a rural renaissance bond on 1 or more credit allowance 
     dates of the bond occurring during any taxable year, there 
     shall be allowed as a credit against the tax imposed by this 
     chapter for the taxable year an amount equal to the sum of 
     the credits determined under subsection (b) with respect to 
     such dates.
       ``(b) Amount of Credit.--
       ``(1) In general.--The amount of the credit determined 
     under this subsection with respect to any credit allowance 
     date for a rural renaissance bond is 25 percent of the annual 
     credit determined with respect to such bond.
       ``(2) Annual credit.--The annual credit determined with 
     respect to any rural renaissance bond is the product of--
       ``(A) the credit rate determined by the Secretary under 
     paragraph (3) for the day on which such bond was sold, 
     multiplied by
       ``(B) the outstanding face amount of the bond.
       ``(3) Determination.--For purposes of paragraph (2), with 
     respect to any rural renaissance bond, the Secretary shall 
     determine daily or caused to be determined daily a credit 
     rate which shall apply to the first day on which there is a 
     binding, written contract for the sale or exchange of the 
     bond. The credit rate for any day is the credit rate which 
     the Secretary or the Secretary's designee estimates will 
     permit the issuance of rural renaissance bonds with a 
     specified maturity or redemption date without discount and 
     without interest cost to the qualified issuer.
       ``(4) Credit allowance date.--For purposes of this section, 
     the term `credit allowance date' means--
       ``(A) March 15,
       ``(B) June 15,
       ``(C) September 15, and
       ``(D) December 15.

     Such term also includes the last day on which the bond is 
     outstanding.
       ``(5) Special rule for issuance and redemption.--In the 
     case of a bond which is issued during the 3-month period 
     ending on a credit allowance date, the amount of the credit 
     determined under this subsection with respect to such credit 
     allowance date shall be a ratable portion of the credit 
     otherwise determined based on the portion of the 3-month 
     period during which the bond is outstanding. A similar rule 
     shall apply when the bond is redeemed or matures.
       ``(c) Limitation Based on Amount of Tax.--The credit 
     allowed under subsection (a) for any taxable year shall not 
     exceed the excess of--
       ``(1) the sum of the regular tax liability (as defined in 
     section 26(b)) plus the tax imposed by section 55, over
       ``(2) the sum of the credits allowable under this part 
     (other than subpart C, section 1400N(l), and this section).
       ``(d) Rural Renaissance Bond.--For purposes of this 
     section--
       ``(1) In general.--The term `rural renaissance bond' means 
     any bond issued as part of an issue if--
       ``(A) the bond is issued by a qualified issuer pursuant to 
     an allocation by the Secretary to such issuer of a portion of 
     the national rural renaissance bond limitation under 
     subsection (f)(2),
       ``(B) 95 percent or more of the proceeds from the sale of 
     such issue are to be used for capital expenditures incurred 
     by qualified borrowers for 1 or more qualified projects,
       ``(C) the qualified issuer designates such bond for 
     purposes of this section and the bond is in registered form,
       ``(D) the issue meets the requirements of subsection (h), 
     and
       ``(E) such bond is not a federally guaranteed bond (within 
     the meaning of section 149(b)(2)).
       ``(2) Qualified project; special use rules.--
       ``(A) In general.--The term `qualified project' means 1 or 
     more projects described in subparagraph (B) located in a 
     rural area.
       ``(B) Projects described.--A project described in this 
     subparagraph is a project eligible for assistance under--
       ``(i) the utilities programs described in section 
     381E(d)(2) of the Consolidated Farm and Rural Development Act 
     (7 U.S.C. 2009d(d)(2)),
       ``(ii) the distance learning or telemedicine programs 
     authorized pursuant to chapter 1 of subtitle D of title XXIII 
     of the Food, Agriculture, Conservation, and Trade Act of 1990 
     (7 U.S.C. 950aaa et seq.),
       ``(iii) the rural electric programs authorized pursuant to 
     the Rural Electrification Act of 1936 (7 U.S.C. 901 et seq.),
       ``(iv) the rural telephone programs authorized pursuant to 
     the Rural Electrification Act of 1936 (7 U.S.C. 901 et seq.),
       ``(v) the broadband access programs authorized pursuant to 
     title VI of the Rural Electrification Act of 1936 (7 U.S.C. 
     950bb et seq.), and
       ``(vi) the rural community facility programs as described 
     in section 381E(d)(1) of the Consolidated Farm and Rural 
     Development Act (7 U.S.C. 2009d(d)(1)).
       ``(C) Refinancing rules.--For purposes of paragraph (1)(B), 
     a qualified project may be refinanced with proceeds of a 
     rural renaissance bond only if the indebtedness being 
     refinanced (including any obligation directly or indirectly 
     refinanced by such indebtedness) was originally incurred by a 
     qualified borrower after the date of the enactment of this 
     section.
       ``(D) Reimbursement.--For purposes of paragraph (1)(B), a 
     rural renaissance bond may be issued to reimburse a qualified 
     borrower for amounts paid after the date of the enactment of 
     this section with respect to a qualified project, but only 
     if--
       ``(i) prior to the payment of the original expenditure, the 
     qualified borrower declared its intent to reimburse such 
     expenditure with the proceeds of a rural renaissance bond,
       ``(ii) not later than 60 days after payment of the original 
     expenditure, the qualified issuer adopts an official intent 
     to reimburse the original expenditure with such proceeds, and
       ``(iii) the reimbursement is made not later than 18 months 
     after the date the original expenditure is paid.
       ``(E) Treatment of changes in use.--For purposes of 
     paragraph (1)(B), the proceeds of an issue shall not be 
     treated as used for a qualified project to the extent that a 
     qualified borrower or qualified issuer takes any action 
     within its control which causes such proceeds not to be used 
     for a qualified project. The Secretary shall prescribe 
     regulations specifying remedial actions that may be taken 
     (including conditions to taking such remedial actions) to 
     prevent an action described in the preceding sentence from 
     causing a bond to fail to be a rural renaissance bond.
       ``(F) Treatment of other subsidies.--For purposes of 
     subparagraph (B), a qualified project does not include any 
     portion of a project financed by grants or subsidized 
     financing provided (directly or indirectly) under a Federal 
     program, including any State or local obligation used to 
     provide financing for such portion the interest on which is 
     exempt from tax under section 103.
       ``(e) Maturity Limitations.--
       ``(1) Duration of term.--A bond shall not be treated as a 
     rural renaissance bond if the maturity of such bond exceeds 
     the maximum term determined by the Secretary under paragraph 
     (2) with respect to such bond.
       ``(2) Maximum term.--During each calendar month, the 
     Secretary shall determine the maximum term permitted under 
     this paragraph for bonds issued during the following calendar 
     month. Such maximum term shall be the term which the 
     Secretary estimates will result in the present value of the 
     obligation to repay the principal on the bond being equal to 
     50 percent of the face amount of such bond. Such present 
     value shall be determined without regard to the requirements 
     of paragraph (3) and using as a discount rate the average 
     annual interest rate of tax-exempt obligations having a term 
     of 10 years or more which are issued during the month. If the 
     term as so determined is not a multiple

[[Page 16412]]

     of a whole year, such term shall be rounded to the next 
     highest whole year.
       ``(3) Ratable principal amortization required.--A bond 
     shall not be treated as a rural renaissance bond unless it is 
     part of an issue which provides for an equal amount of 
     principal to be paid by the qualified issuer during each 
     calendar year that the issue is outstanding.
       ``(f) Limitation on Amount of Bonds Designated.--
       ``(1) National limitation.--There is a national rural 
     renaissance bond limitation of $400,000,000.
       ``(2) Allocation by secretary.--
       ``(A) In general.--In accordance with subparagraph (B), the 
     Secretary shall allocate the amount described in paragraph 
     (1) among at least 20 qualified projects, or such lesser 
     number of qualified projects with proper applications filed 
     after 12 months after the adoption of the selection process 
     under subparagraph (B).
       ``(B) Selection process.--In consultation with the 
     Secretary of Agriculture, the Secretary shall adopt a process 
     to select projects described in subparagraph (A). Under such 
     process, the Secretary shall not allocate more than 15 
     percent of the allocation under subparagraph (A) to qualified 
     projects within a single State.
       ``(g) Credit Included in Gross Income.--Gross income 
     includes the amount of the credit allowed to the taxpayer 
     under this section (determined without regard to subsection 
     (c)) and the amount so included shall be treated as interest 
     income.
       ``(h) Special Rules Relating to Expenditures.--
       ``(1) In general.--An issue shall be treated as meeting the 
     requirements of this subsection if, as of the date of 
     issuance, the qualified issuer reasonably expects--
       ``(A) at least 95 percent of the proceeds from the sale of 
     the issue are to be spent for 1 or more qualified projects 
     within the 5-year period beginning on the date of issuance of 
     the rural renaissance bond,
       ``(B) a binding commitment with a third party to spend at 
     least 10 percent of the proceeds from the sale of the issue 
     will be incurred within the 6-month period beginning on the 
     date of issuance of the rural renaissance bond or, in the 
     case of a rural renaissance bond the proceeds of which are to 
     be loaned to 2 or more qualified borrowers, such binding 
     commitment will be incurred within the 6-month period 
     beginning on the date of the loan of such proceeds to a 
     qualified borrower, and
       ``(C) such projects will be completed with due diligence 
     and the proceeds from the sale of the issue will be spent 
     with due diligence.
       ``(2) Extension of period.--Upon submission of a request 
     prior to the expiration of the period described in paragraph 
     (1)(A), the Secretary may extend such period if the qualified 
     issuer establishes that the failure to satisfy the 5-year 
     requirement is due to reasonable cause and the related 
     projects will continue to proceed with due diligence.
       ``(3) Failure to spend required amount of bond proceeds 
     within 5 years.--To the extent that less than 95 percent of 
     the proceeds of such issue are expended by the close of the 
     5-year period beginning on the date of issuance (or if an 
     extension has been obtained under paragraph (2), by the close 
     of the extended period), the qualified issuer shall redeem 
     all of the nonqualified bonds within 90 days after the end of 
     such period. For purposes of this paragraph, the amount of 
     the nonqualified bonds required to be redeemed shall be 
     determined in the same manner as under section 142.
       ``(i) Special Rules Relating to Arbitrage.--A bond which is 
     part of an issue shall not be treated as a rural renaissance 
     bond unless, with respect to the issue of which the bond is a 
     part, the qualified issuer satisfies the arbitrage 
     requirements of section 148 with respect to proceeds of the 
     issue.
       ``(j) Definitions and Special Rules Relating to Issuers and 
     Borrowers.--For purposes of this section--
       ``(1) Qualified issuer.--The term `qualified issuer' 
     means--
       ``(A) a rural renaissance bond lender,
       ``(B) a cooperative electric company, or
       ``(C) a governmental body.
       ``(2) Qualified borrower.--The term `qualified borrower' 
     means--
       ``(A) a mutual or cooperative electric company described in 
     section 501(c)(12) or 1381(a)(2)(C), or
       ``(B) a governmental body.
       ``(3) Rural renaissance bond lender.--The term `rural 
     renaissance bond lender' means a lender which is a 
     cooperative which is owned by, or has outstanding loans to, 
     100 or more cooperative electric companies and is in 
     existence on February 1, 2002, and shall include any 
     affiliated entity which is controlled by such lender.
       ``(4) Cooperative electric company.--The term `cooperative 
     electric company' means a mutual or cooperative electric 
     company described in section 501(c)(12) or section 
     1381(a)(2)(C), or a not-for-profit electric utility which has 
     received a loan or loan guarantee under the Rural 
     Electrification Act.
       ``(5) Governmental body.--The term `governmental body' 
     means any State, territory, possession of the United States, 
     the District of Columbia, Indian tribal government, and any 
     political subdivision thereof.
       ``(k) Special Rules Relating to Pool Bonds.--No portion of 
     a pooled financing bond may be allocable to loan unless the 
     borrower has entered into a written loan commitment for such 
     portion prior to the issue date of such issue.
       ``(l) Other Definitions and Special Rules.--For purposes of 
     this section--
       ``(1) Bond.--The term `bond' includes any obligation.
       ``(2) Pooled financing bond.--The term `pooled financing 
     bond' shall have the meaning given such term by section 
     149(f)(4)(A).
       ``(3) Rural area.--The term `rural area' shall have the 
     meaning given such term by section 1393(a)(2).
       ``(4) Partnership; s corporation; and other pass-thru 
     entities.--
       ``(A) In general.--Under regulations prescribed by the 
     Secretary, in the case of a partnership, trust, S 
     corporation, or other pass-thru entity, rules similar to the 
     rules of section 41(g) shall apply with respect to the credit 
     allowable under subsection (a).
       ``(B) No basis adjustment.--In the case of a bond held by a 
     partnership or an S corporation, rules similar to the rules 
     under section 1397E(i) shall apply.
       ``(5) Bonds held by regulated investment companies.--If any 
     rural renaissance bond is held by a regulated investment 
     company, the credit determined under subsection (a) shall be 
     allowed to shareholders of such company under procedures 
     prescribed by the Secretary.
       ``(6) Reporting.--Issuers of rural renaissance bonds shall 
     submit reports similar to the reports required under section 
     149(e).
       ``(7) Termination.--This section shall not apply with 
     respect to any bond issued after December 31, 2008.''.
       (b) Reporting.--Subsection (d) of section 6049 (relating to 
     returns regarding payments of interest), as amended by this 
     Act, is amended by adding at the end the following new 
     paragraph:
       ``(10) Reporting of credit on rural renaissance bonds.--
       ``(A) In general.--For purposes of subsection (a), the term 
     `interest' includes amounts includible in gross income under 
     section 54B(g) and such amounts shall be treated as paid on 
     the credit allowance date (as defined in section 54B(b)(4)).
       ``(B) Reporting to corporations, etc.--Except as otherwise 
     provided in regulations, in the case of any interest 
     described in subparagraph (A), subsection (b)(4) shall be 
     applied without regard to subparagraphs (A), (H), (I), (J), 
     (K), and (L)(i) of such subsection.
       ``(C) Regulatory authority.--The Secretary may prescribe 
     such regulations as are necessary or appropriate to carry out 
     the purposes of this paragraph, including regulations which 
     require more frequent or more detailed reporting.''.
       (c) Conforming Amendments.--
       (1) The table of sections for subpart H of part IV of 
     subchapter A of chapter 1, as amended by this Act, is amended 
     by adding at the end the following new item:

``Sec. 54B. Credit to holders of rural renaissance bonds.''.

       (2) Section 54(c)(2), as amended by this Act, is amended by 
     inserting ``section 54B,'' after ``section 54A,''.
       (3) Section 54A(c)(2), as added by this Act, is amended by 
     inserting ``section 54B,'' after ``subpart C,''.
       (d) Issuance of Regulations.--The Secretary of Treasury 
     shall issue regulations required under section 54B of the 
     Internal Revenue Code of 1986 (as added by this section) not 
     later than 120 days after the date of the enactment of this 
     Act.
       (e) Effective Date.--The amendments made by this section 
     shall apply to bonds issued after the date of the enactment 
     of this Act.

                 Subtitle B--Revenue Raising Provisions

     SEC. 881. DENIAL OF DEDUCTION FOR MAJOR INTEGRATED OIL 
                   COMPANIES FOR INCOME ATTRIBUTABLE TO DOMESTIC 
                   PRODUCTION OF OIL, NATURAL GAS, OR PRIMARY 
                   PRODUCTS THEREOF.

       (a) In General.--Subparagraph (B) of section 199(c)(4) of 
     the Internal Revenue Code of 1986 (relating to exceptions) is 
     amended by striking ``or'' at the end of clause (ii), by 
     striking the period at the end of clause (iii) and inserting 
     ``, or'', and by inserting after clause (iii) the following 
     new clause:
       ``(iv) in the case of any major integrated oil company (as 
     defined in section 167(h)(5)(B)), the production, refining, 
     processing, transportation, or distribution of oil, natural 
     gas, or any primary product thereof during any taxable year 
     described in section 167(h)(5)(B).''.
       (b) Primary Product.--Section 199(c)(4)(B) of such Code is 
     amended by adding at the end the following flush sentence:

     ``For purposes of clause (iv), the term `primary product' has 
     the same meaning as when used in section 927(a)(2)(C), as in 
     effect before its repeal.''.
       (c) Conforming Amendments.--Section 199(c)(4) of such Code 
     is amended--
       (1) in subparagraph (A)(i)(III) by striking ``electricity, 
     natural gas,'' and inserting ``electricity'', and
       (2) in subparagraph (B)(ii) by striking ``electricity, 
     natural gas,'' and inserting ``electricity''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

[[Page 16413]]



     SEC. 882. ELIMINATION OF THE DIFFERENT TREATMENT OF FOREIGN 
                   OIL AND GAS EXTRACTION INCOME AND FOREIGN OIL 
                   RELATED INCOME FOR PURPOSES OF THE FOREIGN TAX 
                   CREDIT.

       (a) In General.--Subsections (a) and (b) of section 907 
     (relating to special rules in case of foreign oil and gas 
     income) are amended to read as follows:
       ``(a) Reduction in Amount Allowed as Foreign Tax Under 
     Section 901.--In applying section 901, the amount of any 
     foreign oil and gas taxes paid or accrued (or deemed to have 
     been paid) during the taxable year which would (but for this 
     subsection) be taken into account for purposes of section 901 
     shall be reduced by the amount (if any) by which the amount 
     of such taxes exceeds the product of--
       ``(1) the amount of the combined foreign oil and gas income 
     for the taxable year,
       ``(2) multiplied by--
       ``(A) in the case of a corporation, the percentage which is 
     equal to the highest rate of tax specified under section 
     11(b), or
       ``(B) in the case of an individual, a fraction the 
     numerator of which is the tax against which the credit under 
     section 901(a) is taken and the denominator of which is the 
     taxpayer's entire taxable income.
       ``(b) Combined Foreign Oil and Gas Income; Foreign Oil and 
     Gas Taxes.--For purposes of this section--
       ``(1) Combined foreign oil and gas income.--The term 
     `combined foreign oil and gas income' means, with respect to 
     any taxable year, the sum of--
       ``(A) foreign oil and gas extraction income, and
       ``(B) foreign oil related income.
       ``(2) Foreign oil and gas taxes.--The term `foreign oil and 
     gas taxes' means, with respect to any taxable year, the sum 
     of--
       ``(A) oil and gas extraction taxes, and
       ``(B) any income, war profits, and excess profits taxes 
     paid or accrued (or deemed to have been paid or accrued under 
     section 902 or 960) during the taxable year with respect to 
     foreign oil related income (determined without regard to 
     subsection (c)(4)) or loss which would be taken into account 
     for purposes of section 901 without regard to this 
     section.''.
       (b) Recapture of Foreign Oil and Gas Losses.--Paragraph (4) 
     of section 907(c) (relating to recapture of foreign oil and 
     gas extraction losses by recharacterizing later extraction 
     income) is amended to read as follows:
       ``(4) Recapture of foreign oil and gas losses by 
     recharacterizing later combined foreign oil and gas income.--
       ``(A) In general.--The combined foreign oil and gas income 
     of a taxpayer for a taxable year (determined without regard 
     to this paragraph) shall be reduced--
       ``(i) first by the amount determined under subparagraph 
     (B), and
       ``(ii) then by the amount determined under subparagraph 
     (C).

     The aggregate amount of such reductions shall be treated as 
     income (from sources without the United States) which is not 
     combined foreign oil and gas income.
       ``(B) Reduction for pre-2008 foreign oil extraction 
     losses.--The reduction under this paragraph shall be equal to 
     the lesser of--
       ``(i) the foreign oil and gas extraction income of the 
     taxpayer for the taxable year (determined without regard to 
     this paragraph), or
       ``(ii) the excess of--

       ``(I) the aggregate amount of foreign oil extraction losses 
     for preceding taxable years beginning after December 31, 
     1982, and before January 1, 2008, over
       ``(II) so much of such aggregate amount as was 
     recharacterized under this paragraph (as in effect before and 
     after the date of the enactment of the Energy Advancement and 
     Investment Act of 2007) for preceding taxable years beginning 
     after December 31, 1982.

       ``(C) Reduction for post-2007 foreign oil and gas losses.--
     The reduction under this paragraph shall be equal to the 
     lesser of--
       ``(i) the combined foreign oil and gas income of the 
     taxpayer for the taxable year (determined without regard to 
     this paragraph), reduced by an amount equal to the reduction 
     under subparagraph (A) for the taxable year, or
       ``(ii) the excess of--

       ``(I) the aggregate amount of foreign oil and gas losses 
     for preceding taxable years beginning after December 31, 
     2007, over
       ``(II) so much of such aggregate amount as was 
     recharacterized under this paragraph for preceding taxable 
     years beginning after December 31, 2007.

       ``(D) Foreign oil and gas loss defined.--
       ``(i) In general.--For purposes of this paragraph, the term 
     `foreign oil and gas loss' means the amount by which--

       ``(I) the gross income for the taxable year from sources 
     without the United States and its possessions (whether or not 
     the taxpayer chooses the benefits of this subpart for such 
     taxable year) taken into account in determining the combined 
     foreign oil and gas income for such year, is exceeded by
       ``(II) the sum of the deductions properly apportioned or 
     allocated thereto.

       ``(ii) Net operating loss deduction not taken into 
     account.--For purposes of clause (i), the net operating loss 
     deduction allowable for the taxable year under section 172(a) 
     shall not be taken into account.
       ``(iii) Expropriation and casualty losses not taken into 
     account.--For purposes of clause (i), there shall not be 
     taken into account--

       ``(I) any foreign expropriation loss (as defined in section 
     172(h) (as in effect on the day before the date of the 
     enactment of the Revenue Reconciliation Act of 1990)) for the 
     taxable year, or
       ``(II) any loss for the taxable year which arises from 
     fire, storm, shipwreck, or other casualty, or from theft,

     to the extent such loss is not compensated for by insurance 
     or otherwise.
       ``(iv) Foreign oil extraction loss.--For purposes of 
     subparagraph (B)(ii)(I), foreign oil extraction losses shall 
     be determined under this paragraph as in effect on the day 
     before the date of the enactment of the Energy Advancement 
     and Investment Act of 2007.''.
       (c) Carryback and Carryover of Disallowed Credits.--Section 
     907(f) (relating to carryback and carryover of disallowed 
     credits) is amended--
       (1) by striking ``oil and gas extraction taxes'' each place 
     it appears and inserting ``foreign oil and gas taxes'', and
       (2) by adding at the end the following new paragraph:
       ``(4) Transition rules for pre-2008 and 2008 disallowed 
     credits.--
       ``(A) Pre-2008 credits.--In the case of any unused credit 
     year beginning before January 1, 2008, this subsection shall 
     be applied to any unused oil and gas extraction taxes carried 
     from such unused credit year to a year beginning after 
     December 31, 2007--
       ``(i) by substituting `oil and gas extraction taxes' for 
     `foreign oil and gas taxes' each place it appears in 
     paragraphs (1), (2), and (3), and
       ``(ii) by computing, for purposes of paragraph (2)(A), the 
     limitation under subparagraph (A) for the year to which such 
     taxes are carried by substituting `foreign oil and gas 
     extraction income' for `foreign oil and gas income' in 
     subsection (a).
       ``(B) 2008 credits.--In the case of any unused credit year 
     beginning in 2008, the amendments made to this subsection by 
     the Energy Advancement and Investment Act of 2007 shall be 
     treated as being in effect for any preceding year beginning 
     before January 1, 2008, solely for purposes of determining 
     how much of the unused foreign oil and gas taxes for such 
     unused credit year may be deemed paid or accrued in such 
     preceding year.''.
       (d) Conforming Amendment.--Section 6501(i) is amended by 
     striking ``oil and gas extraction taxes'' and inserting 
     ``foreign oil and gas taxes''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. 883. INCREASE AND EXTENSION OF OIL SPILL LIABILITY TRUST 
                   FUND TAX.

       (a) Increase in Rate.--
       (1) In general.--Section 4611(c)(2)(B) (relating to rates) 
     is amended by striking ``5 cents'' and inserting ``10 
     cents''.
       (2) Effective date.--The amendment made by this subsection 
     shall apply on and after the first day of the first calendar 
     quarter beginning more than 60 days after the date of the 
     enactment of this Act.
       (b) Extension.--
       (1) In general.--Section 4611(f) (relating to application 
     of Oil Spill Liability Trust Fund financing rate) is amended 
     by striking paragraphs (2) and (3) and inserting the 
     following new paragraph:
       ``(2) Termination.--The Oil Spill Liability Trust Fund 
     financing rate shall not apply after December 31, 2017.''.
       (2) Conforming amendment.--Section 4611(f)(1) is amended by 
     striking ``paragraphs (2) and (3)'' and inserting ``paragraph 
     (2)''.
       (3) Effective date.--The amendments made by this subsection 
     shall take effect on the date of the enactment of this Act.

     SEC. 884. LIMITATION ON DRAWBACK CLAIMED FOR AMOUNTS 
                   DEPOSITED INTO THE OIL SPILL LIABILITY TRUST 
                   FUND.

       Section 313(j) of the Tariff Act of 1930 (19 U.S. C. 
     1313(j)) is amended by adding at the end the following new 
     paragraph:
       ``(5) Limitation on certain drawbacks.--Any tax or fee 
     imposed under section 4611 of the Internal Revenue Code of 
     1986 for deposit in the Oil Spill Liability Trust Fund 
     pursuant to section 9509 of such Code shall not be eligible 
     for refund as drawback under this section.''.

     SEC. 885. TAX ON CRUDE OIL AND NATURAL GAS PRODUCED FROM THE 
                   OUTER CONTINENTAL SHELF IN THE GULF OF MEXICO.

       (a) In General.--Subtitle E (relating to alcohol, tobacco, 
     and certain other excise taxes) is amended by adding at the 
     end the following new chapter:

 ``CHAPTER 56--TAX ON SEVERANCE OF CRUDE OIL AND NATURAL GAS FROM THE 
             OUTER CONTINENTAL SHELF IN THE GULF OF MEXICO

``Sec. 5896. Imposition of tax.
``Sec. 5897. Taxable crude oil or natural gas and removal price.
``Sec. 5898. Special rules and definitions.

     ``SEC. 5896. IMPOSITION OF TAX.

       ``(a) In General.--In addition to any other tax imposed 
     under this title, there is hereby

[[Page 16414]]

     imposed a tax equal to 13 percent of the removal price of any 
     taxable crude oil or natural gas removed from the premises 
     during any taxable period.
       ``(b) Credit for Federal Royalties Paid.--
       ``(1) In general.--There shall be allowed as a credit 
     against the tax imposed by subsection (a) with respect to the 
     production of any taxable crude oil or natural gas an amount 
     equal to the aggregate amount of royalties paid under Federal 
     law with respect to such production.
       ``(2) Limitation.--The aggregate amount of credits allowed 
     under paragraph (1) to any taxpayer for any taxable period 
     shall not exceed the amount of tax imposed by subsection (a) 
     for such taxable period.
       ``(c) Tax Paid by Producer.--The tax imposed by this 
     section shall be paid by the producer of the taxable crude 
     oil or natural gas.

     ``SEC. 5897. TAXABLE CRUDE OIL OR NATURAL GAS AND REMOVAL 
                   PRICE.

       ``(a) Taxable Crude Oil or Natural Gas.--For purposes of 
     this chapter, the term `taxable crude oil or natural gas' 
     means crude oil or natural gas which is produced from Federal 
     submerged lands on the outer Continental Shelf in the Gulf of 
     Mexico pursuant to a lease entered into with the United 
     States which authorizes the production.
       ``(b) Removal Price.--For purposes of this chapter--
       ``(1) In general.--Except as otherwise provided in this 
     subsection, the term `removal price' means--
       ``(A) in the case of taxable crude oil, the amount for 
     which a barrel of such crude oil is sold, and
       ``(B) in the case of taxable natural gas, the amount per 
     1,000 cubic feet for which such natural gas is sold.
       ``(2) Sales between related persons.--In the case of a sale 
     between related persons, the removal price shall not be less 
     than the constructive sales price for purposes of determining 
     gross income from the property under section 613.
       ``(3) Oil or gas removed from property before sale.--If 
     crude oil or natural gas is removed from the property before 
     it is sold, the removal price shall be the constructive sales 
     price for purposes of determining gross income from the 
     property under section 613.
       ``(4) Refining begun on property.--If the manufacture or 
     conversion of crude oil into refined products begins before 
     such oil is removed from the property--
       ``(A) such oil shall be treated as removed on the day such 
     manufacture or conversion begins, and
       ``(B) the removal price shall be the constructive sales 
     price for purposes of determining gross income from the 
     property under section 613.
       ``(5) Property.--The term `property' has the meaning given 
     such term by section 614.

     ``SEC. 5898. SPECIAL RULES AND DEFINITIONS.

       ``(a) Administrative Requirements.--
       ``(1) Withholding and deposit of tax.--The Secretary shall 
     provide for the withholding and deposit of the tax imposed 
     under section 5896 on a quarterly basis.
       ``(2) Records and information.--Each taxpayer liable for 
     tax under section 5896 shall keep such records, make such 
     returns, and furnish such information (to the Secretary and 
     to other persons having an interest in the taxable crude oil 
     or natural gas) with respect to such oil as the Secretary may 
     by regulations prescribe.
       ``(3) Taxable periods; return of tax.--
       ``(A) Taxable period.--Except as provided by the Secretary, 
     each calendar year shall constitute a taxable period.
       ``(B) Returns.--The Secretary shall provide for the filing, 
     and the time for filing, of the return of the tax imposed 
     under section 5896.
       ``(b) Definitions.--For purposes of this chapter--
       ``(1) Producer.--The term `producer' means the holder of 
     the economic interest with respect to the crude oil or 
     natural gas.
       ``(2) Crude oil.--The term `crude oil' includes crude oil 
     condensates and natural gasoline.
       ``(3) Premises and crude oil product.--The terms `premises' 
     and `crude oil product' have the same meanings as when used 
     for purposes of determining gross income from the property 
     under section 613.
       ``(c) Adjustment of Removal Price.--In determining the 
     removal price of oil or natural gas from a property in the 
     case of any transaction, the Secretary may adjust the removal 
     price to reflect clearly the fair market value of oil or 
     natural gas removed.
       ``(d) Regulations.--The Secretary shall prescribe such 
     regulations as may be necessary or appropriate to carry out 
     the purposes of this chapter.''.
       (b) Deductibility of Tax.--The first sentence of section 
     164(a) (relating to deduction for taxes) is amended by 
     inserting after paragraph (5) the following new paragraph:
       ``(6) The tax imposed by section 5896(a) (after application 
     of section 5896(b)) on the severance of crude oil or natural 
     gas from the outer Continental Shelf in the Gulf of 
     Mexico.''.
       (c) Clerical Amendment.--The table of chapters for subtitle 
     E is amended by adding at the end the following new item:

``Chapter 56. Tax on severance of crude oil and natural gas from the 
              outer Continental Shelf in the Gulf of Mexico.''.

       (d) Effective Date.--The amendments made by this section 
     shall apply to crude oil or natural gas removed after the 
     date of the enactment of this Act.

     SEC. 886. TAXATION OF TAXABLE FUELS IN FOREIGN TRADE ZONES.

       (a) Tax Imposed on Removals and Entries in Foreign Trade 
     Zones.--
       (1) In general.--Subsection (a) of section 4083 (relating 
     to definitions) is amended by adding at the end the following 
     new paragraph:
       ``(4) United states.--The term `United States' includes any 
     foreign trade zone or bonded warehouse located in the United 
     States.''.
       (2) Conforming amendment.--Section 4081(a)(1)(A) (relating 
     to imposition of tax) is amended--
       (A) in clause (i), by inserting ``in the United States'' 
     after ``refinery''; and
       (B) in clause (ii), by inserting ``in the United States'' 
     after ``terminal''.
       (b) Treatment of Taxable Fuel in Foreign Trade Zones.--
     Paragraph (2) of section 81c(a) of title 19, United States 
     Code, is amended by inserting ``(other than the provisions 
     relating to taxable fuel (as defined under section 4083(a) of 
     the Internal Revenue Code of 1986))'' after ``thereunder''.
       (c) Effective Dates.--
       (1) Subsection (a).--The amendments made by subsection (a) 
     shall apply to removals and entries after December 31, 2007.
       (2) Subsection (b).--The amendment made by subsection (b) 
     shall take effect on January 1, 2008.

     SEC. 887. CLARIFICATION OF PENALTY FOR SALE OF FUEL FAILING 
                   TO MEET EPA REGULATIONS.

       (a) In General.--Subsection (a) of section 6720A (relating 
     to penalty with respect to certain adulterated fuels) is 
     amended by striking ``applicable EPA regulations (as defined 
     in section 45H(c)(3))'' and inserting ``the requirements for 
     diesel fuel under section 211 of the Clean Air Act, as 
     determined by the Secretary,''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to any transfer, sale, or holding out for sale or 
     resale occurring after the date of the enactment of this Act.

     SEC. 888. CLARIFICATION OF ELIGIBILITY FOR CERTAIN FUELS 
                   CREDITS FOR FUEL WITH INSUFFICIENT NEXUS TO THE 
                   UNITED STATES.

       (a) In General.--
       (1) Alcohol credit.--Subsection (d) of section 40 is 
     amended by adding at the end the following new paragraph:
       ``(6) Limitation to alcohol with connection to the united 
     states.--
       ``(A) Alcohol credit.--No alcohol credit shall be 
     determined under this section with respect to any alcohol 
     unless such alcohol is produced in the United States for 
     consumption in the United States or entered into the United 
     States for consumption in the United States.
       ``(B) Alcohol mixture credit.--No alcohol mixture credit 
     shall be determined under this section with respect to any 
     mixture unless such mixture is produced in the United States 
     for consumption in the United States or entered into the 
     United States for consumption in the United States.
       ``(C) No credits for alcohol destined for export.--No 
     credit (other than the small ethanol producer credit) shall 
     be determined under this section with respect to any mixture 
     or alcohol if such mixture or alcohol is destined for export 
     from the United States (as determined by the Secretary).
       ``(D) Special rule for small producer credits.--No small 
     ethanol producer credit, small cellulosic alcohol producer 
     credit, or small fossil free alcohol producer credit shall be 
     determined under this section with respect to any alcohol 
     unless such alcohol is produced in the United States.''.
       (2) Biodiesel credit.--Subsection (d) of section 40A is 
     amended by adding at the end the following new paragraph:
       ``(5) Limitation to biodiesel with connection to the united 
     states.--
       ``(A) Biodiesel credit.--No biodiesel credit shall be 
     determined under this section with respect to any biodiesel 
     unless such biodiesel is produced in the United States for 
     consumption in the United States or is entered into the 
     United States for consumption in the United States.
       ``(B) Biodiesel mixture credit.--No biodiesel mixture 
     credit shall be determined under this section with respect to 
     any mixture unless such mixture is produced in the United 
     States for consumption in the United States or is entered 
     into the United States for consumption in the United States.
       ``(C) No credits for biodiesel destined for export.--No 
     credit (other than the small agri-biodiesel producer credit) 
     shall be determined under this section with respect to any 
     mixture or biodiesel if such mixture or biodiesel is destined 
     for export from the United States (as determined by the 
     Secretary).
       ``(D) Special rule for small agri-biodiesel producer 
     credit.--No small agri-biodiesel producer credit shall be 
     determined under this section with respect to any agri-

[[Page 16415]]

     biodiesel unless such agri-biodiesel is produced in the 
     United States.''.
       (3) Excise tax credits.--Section 6426, as amended by 
     section 833, is amended by adding at the end the following 
     new subsection:
       ``(i) Limitation to Fuels With Connection to the United 
     States.--
       ``(1) Mixture credits.--No credit shall be determined under 
     this section with respect to any mixture unless such mixture 
     is produced in the United States for consumption in the 
     United States or is entered into the United States for 
     consumption in the United States.
       ``(2) Alternative fuel credit.--No alternative fuel credit 
     shall be determined under this section with respect to any 
     alternative fuel unless such alternative fuel is produced in 
     the United States for consumption in the United States or is 
     entered into the United States for consumption in the United 
     States.
       ``(3) No credits for fuels destined for export.--No credit 
     shall be determined under this section with respect to any 
     mixture or alternative fuel if such mixture or alternative 
     fuel is destined for export from the United States (as 
     determined by the Secretary).''.
       (4) Payments.--Subsection (e) of section 6427 is amended by 
     redesignating paragraph (5), as amended by this Act, as 
     paragraph (6) and by inserting after paragraph (4) the 
     following new paragraph:
       ``(5) Limitation to fuels with connection to the united 
     states.--No amount shall be payable under paragraph (1) or 
     (2) with respect to any mixture or alternative fuel if credit 
     is not allowed with respect to such mixture or alternative 
     fuel by reason of section 6426(i).''.
       (b) 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. 889. TREATMENT OF QUALIFIED ALCOHOL FUEL MIXTURES AND 
                   QUALIFIED BIODIESEL FUEL MIXTURES AS TAXABLE 
                   FUELS.

       (a) In General.--Subparagraph (A) of section 4083(a)(3) 
     (relating to diesel fuel) is amended by striking ``and'' at 
     the end of clause (ii), by redesignating clause (iii) as 
     clause (v), and inserting after clause (ii) the following new 
     clauses:
       ``(iii) any qualified mixture (as defined in section 
     40(b)(1)(B)) which is a mixture of alcohol and special fuel,
       ``(iv) any qualified biodiesel mixture (as defined in 
     section 40A(b)(1)(B)), and''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to fuels removed, entered, or sold after December 
     31, 2007.

     SEC. 890. CALCULATION OF VOLUME OF ALCOHOL FOR FUEL CREDITS.

       (a) In General.--Paragraph (4) of section 40(d) (relating 
     to volume of alcohol) is amended by striking ``the volume of 
     alcohol'' and all that follows and inserting ``the volume of 
     alcohol shall not include any denaturant added to such 
     alcohol.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to fuel sold or used after December 31, 2007.

     SEC. 891. BULK TRANSFER EXCEPTION NOT TO APPLY TO FINISHED 
                   GASOLINE.

       (a) In General.--Subparagraph (B) of section 4081(a)(1) 
     (relating to tax on removal, entry, or sale) is amended by 
     adding at the end the following new clause:
       ``(iii) Exception for finished gasoline.--Clause (i) shall 
     not apply to any gasoline which meets the requirements for 
     gasoline under section 211 of the Clean Air Act.''.
       (b) Exception to Tax on Finished Gasoline for Prior Taxable 
     Removals.--Paragraph (1) of section 4081(a) is amended by 
     adding at the end the following new subparagraph:
       ``(C) Exemption for previously taxed finished gasoline.--
     The tax imposed by this paragraph shall not apply to the 
     removal of gasoline described in subparagraph (B)(iii) from 
     any terminal if there was a prior taxable removal or entry of 
     such fuel under clause (i), (ii), or (iii) of subparagraph 
     (A). The preceding sentence shall not apply to the volume of 
     any product added to such gasoline at the terminal unless 
     there was a prior taxable removal or entry of such product 
     under clause (i), (ii), or (iii) of subparagraph (A).''.
       (c) Effective Date.--The amendment made by this section 
     shall apply to fuel removed, entered, or sold after December 
     31, 2007.

     SEC. 892. APPLICATION OF RULES TREATING INVERTED CORPORATIONS 
                   AS DOMESTIC CORPORATIONS TO CERTAIN 
                   TRANSACTIONS OCCURRING AFTER MARCH 20, 2002.

       (a) In General.--Section 7874(b) (relating to inverted 
     corporations treated as domestic corporations) is amended to 
     read as follows:
       ``(b) Inverted Corporations Treated as Domestic 
     Corporations.--
       ``(1) In general.--Notwithstanding section 7701(a)(4), a 
     foreign corporation shall be treated for purposes of this 
     title as a domestic corporation if such corporation would be 
     a surrogate foreign corporation if subsection (a)(2) were 
     applied by substituting `80 percent' for `60 percent'.
       ``(2) Special rule for certain transactions occurring after 
     march 20, 2002.--
       ``(A) In general.--If--
       ``(i) paragraph (1) does not apply to a foreign 
     corporation, but
       ``(ii) paragraph (1) would apply to such corporation if, in 
     addition to the substitution under paragraph (1), subsection 
     (a)(2) were applied by substituting `March 20, 2002' for 
     `March 4, 2003' each place it appears,

     then paragraph (1) shall apply to such corporation but only 
     with respect to taxable years of such corporation beginning 
     after December 31, 2006.
       ``(B) Special rules.--Subject to such rules as the 
     Secretary may prescribe, in the case of a corporation to 
     which paragraph (1) applies by reason of this paragraph--
       ``(i) the corporation shall be treated, as of the close of 
     its last taxable year beginning before January 1, 2007, as 
     having transferred all of its assets, liabilities, and 
     earnings and profits to a domestic corporation in a 
     transaction with respect to which no tax is imposed under 
     this title,
       ``(ii) the bases of the assets transferred in the 
     transaction to the domestic corporation shall be the same as 
     the bases of the assets in the hands of the foreign 
     corporation, subject to any adjustments under this title for 
     built-in losses,
       ``(iii) the basis of the stock of any shareholder in the 
     domestic corporation shall be the same as the basis of the 
     stock of the shareholder in the foreign corporation for which 
     it is treated as exchanged, and
       ``(iv) the transfer of any earnings and profits by reason 
     of clause (i) shall be disregarded in determining any deemed 
     dividend or foreign tax creditable to the domestic 
     corporation with respect to such transfer.
       ``(C) Regulations.--The Secretary may prescribe such 
     regulations as may be necessary or appropriate to carry out 
     this paragraph, including regulations to prevent the 
     avoidance of the purposes of this paragraph.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2006.

     SEC. 893. MODIFICATION OF EFFECTIVE DATE OF LEASING 
                   PROVISIONS OF THE AMERICAN JOBS CREATION ACT OF 
                   2004.

       (a) Leases to Foreign Entities.--Section 849(b) of the 
     American Jobs Creation Act of 2004 is amended by adding at 
     the end the following new paragraph:
       ``(5) Leases to foreign entities.--In the case of tax-
     exempt use property leased to a tax-exempt entity which is a 
     foreign person or entity, the amendments made by this part 
     shall apply to taxable years beginning after December 31, 
     2006, with respect to leases entered into on or before March 
     12, 2004.''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect as if included in the enactment of the 
     American Jobs Creation Act of 2004.

     SEC. 894. REVISION OF TAX RULES ON EXPATRIATION OF 
                   INDIVIDUALS.

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

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

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

     Proper adjustment shall be made in the amount of any gain or 
     loss subsequently realized for gain or loss taken into 
     account under the preceding sentence.
       ``(3) Exclusion for certain gain.--
       ``(A) In general.--The amount which, but for this 
     paragraph, would be includible in the gross income of any 
     individual by reason of this section shall be reduced (but 
     not below zero) by $600,000. For purposes of this paragraph, 
     allocable expatriation gain taken into account under 
     subsection (f)(2) shall be treated in the same manner as an 
     amount required to be includible in gross income.
       ``(B) Cost-of-living adjustment.--
       ``(i) In general.--In the case of an expatriation date 
     occurring in any calendar year after 2007, the $600,000 
     amount under subparagraph (A) shall be increased by an amount 
     equal to--

       ``(I) such dollar amount, multiplied by
       ``(II) the cost-of-living adjustment determined under 
     section 1(f)(3) for such calendar year, determined by 
     substituting `calendar year 2006' for `calendar year 1992' in 
     subparagraph (B) thereof.

       ``(ii) Rounding rules.--If any amount after adjustment 
     under clause (i) is not a multiple of $1,000, such amount 
     shall be rounded to the next lower multiple of $1,000.
       ``(4) Election to continue to be taxed as united states 
     citizen.--
       ``(A) In general.--If a covered expatriate elects the 
     application of this paragraph--

[[Page 16416]]

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

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

[[Page 16417]]

       ``(C)(i) such separate share shall be treated as a separate 
     trust consisting of the assets allocable to such share,
       ``(ii) the separate trust shall be treated as having sold 
     its assets on the day before the expatriation date for their 
     fair market value and as having distributed all of its assets 
     to the individual as of such time, and
       ``(iii) the individual shall be treated as having 
     recontributed the assets to the separate trust.

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

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

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

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

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

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

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

[[Page 16418]]

       ``(j) Regulations.--The Secretary shall prescribe such 
     regulations as may be necessary or appropriate to carry out 
     the purposes of this section.''.
       (b) Inclusion in Income of Gifts and Bequests Received by 
     United States Citizens and Residents From Expatriates.--
     Section 102 (relating to gifts, etc. not included in gross 
     income) is amended by adding at the end the following new 
     subsection:
       ``(d) Gifts and Inheritances From Covered Expatriates.--
       ``(1) Treatment of gifts and inheritances.--
       ``(A) In general.--Subsection (a) shall not exclude from 
     gross income the value of any property acquired by gift, 
     bequest, devise, or inheritance from a covered expatriate 
     after the expatriation date.
       ``(B) Determination of basis.--Notwithstanding sections 
     1015 or 1022, the basis of any property described in 
     subparagraph (A) in the hands of the donee or the person 
     acquiring such property from the decedent shall be equal to 
     the fair market value of the property at the time of the 
     gift, bequest, devise, or inheritance.
       ``(2) Exceptions for transfers otherwise subject to estate 
     or gift tax.--Paragraph (1) shall not apply to any property 
     if either--
       ``(A) the gift, bequest, devise, or inheritance is--
       ``(i) shown on a timely filed return of tax imposed by 
     chapter 12 as a taxable gift by the covered expatriate, or
       ``(ii) included in the gross estate of the covered 
     expatriate for purposes of chapter 11 and shown on a timely 
     filed return of tax imposed by chapter 11 of the estate of 
     the covered expatriate, or
       ``(B) no such return was timely filed but no such return 
     would have been required to be filed even if the covered 
     expatriate were a citizen or long-term resident of the United 
     States.
       ``(3) Definitions.--For purposes of this subsection, any 
     term used in this subsection which is also used in section 
     877A shall have the same meaning as when used in section 
     877A.''.
       (c) Definition of Termination of United States 
     Citizenship.--Section 7701(a) is amended by adding at the end 
     the following new paragraph:
       ``(50) Termination of united states citizenship.--
       ``(A) In general.--An individual shall not cease to be 
     treated as a United States citizen before the date on which 
     the individual's citizenship is treated as relinquished under 
     section 877A(e)(3).
       ``(B) Dual citizens.--Under regulations prescribed by the 
     Secretary, subparagraph (A) shall not apply to an individual 
     who became at birth a citizen of the United States and a 
     citizen of another country.''.
       (d) Ineligibility for Visa or Admission to United States.--
       (1) In general.--Section 212(a)(10)(E) of the Immigration 
     and Nationality Act (8 U.S.C. 1182(a)(10)(E)) is amended to 
     read as follows:
       ``(E) Former citizens not in compliance with expatriation 
     revenue provisions.--Any alien who is a former citizen of the 
     United States who relinquishes United States citizenship 
     (within the meaning of section 877A(e)(3) of the Internal 
     Revenue Code of 1986) and who is not in compliance with 
     section 877A of such Code (relating to expatriation) is 
     inadmissible.''.
       (2) Availability of information.--
       (A) In general.--Section 6103(l) (relating to disclosure of 
     returns and return information for purposes other than tax 
     administration) is amended by adding at the end the following 
     new paragraph:
       ``(21) Disclosure to deny visa or admission to certain 
     expatriates.--Upon written request of the Attorney General or 
     the Attorney General's delegate, the Secretary shall disclose 
     whether an individual is in compliance with section 877A (and 
     if not in compliance, any items of noncompliance) to officers 
     and employees of the Federal agency responsible for 
     administering section 212(a)(10)(E) of the Immigration and 
     Nationality Act solely for the purpose of, and to the extent 
     necessary in, administering such section 212(a)(10)(E).''.
       (B) Safeguards.--Section 6103(p)(4) (relating to 
     safeguards) is amended by striking ``or (20)'' each place it 
     appears and inserting ``(20), or (21)''.
       (3) Effective dates.--The amendments made by this 
     subsection shall apply to individuals who relinquish United 
     States citizenship on or after the date of the enactment of 
     this Act.
       (e) Conforming Amendments.--
       (1) Section 877 is amended by adding at the end the 
     following new subsection:
       ``(h) Application.--This section shall not apply to an 
     expatriate (as defined in section 877A(e)) whose expatriation 
     date (as so defined) occurs on or after the date of the 
     enactment of this subsection.''.
       (2) Section 2107 is amended by adding at the end the 
     following new subsection:
       ``(f) Application.--This section shall not apply to any 
     expatriate subject to section 877A.''.
       (3) Section 2501(a)(3) is amended by adding at the end the 
     following new subparagraph:
       ``(C) Application.--This paragraph shall not apply to any 
     expatriate subject to section 877A.''.
       (4) Section 6039G(a) is amended by inserting ``or 877A'' 
     after ``section 877(b)''.
       (5) The second sentence of section 6039G(d) is amended by 
     inserting ``or who relinquishes United States citizenship 
     (within the meaning of section 877A(e)(3))'' after ``section 
     877(a))''.
       (6) Section 7701(n) is amended by adding at the end the 
     following new paragraph:
       ``(3) Application.--This subsection shall not apply to any 
     expatriate subject to section 877A.''.
       (f) Clerical Amendment.--The table of sections for subpart 
     A of part II of subchapter N of chapter 1 is amended by 
     inserting after the item relating to section 877 the 
     following new item:

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

   Subtitle C--Secure Rural Schools and Community Self-Determination 
                                Program

     SEC. 901. SECURE RURAL SCHOOLS AND COMMUNITY SELF-
                   DETERMINATION PROGRAM.

       (a) Reauthorization of the Secure Rural Schools and 
     Community Self-Determination Act of 2000.--The Secure Rural 
     Schools and Community Self-Determination Act of 2000 (16 
     U.S.C. 500 note; Public Law 106-393) is amended by striking 
     sections 1 through 403 and inserting the following:

     ``SECTION 1. SHORT TITLE.

       ``This Act may be cited as the `Secure Rural Schools and 
     Community Self-Determination Act of 2000'.

     ``SEC. 2. PURPOSES.

       ``The purposes of this Act are--
       ``(1) to stabilize and transition payments to counties to 
     provide funding for schools and roads that supplements other 
     available funds;
       ``(2) to make additional investments in, and create 
     additional employment opportunities through, projects that--
       ``(A)(i) improve the maintenance of existing 
     infrastructure;
       ``(ii) implement stewardship objectives that enhance forest 
     ecosystems; and
       ``(iii) restore and improve land health and water quality;
       ``(B) enjoy broad-based support; and
       ``(C) have objectives that may include--
       ``(i) road, trail, and infrastructure maintenance or 
     obliteration;
       ``(ii) soil productivity improvement;
       ``(iii) improvements in forest ecosystem health;
       ``(iv) watershed restoration and maintenance;
       ``(v) the restoration, maintenance, and improvement of 
     wildlife and fish habitat;
       ``(vi) the control of noxious and exotic weeds; and
       ``(vii) the reestablishment of native species; and
       ``(3) to improve cooperative relationships among--
       ``(A) the people that use and care for Federal land; and
       ``(B) the agencies that manage the Federal land.

     ``SEC. 3. DEFINITIONS.

       ``In this Act:
       ``(1) Adjusted share.--The term `adjusted share' means the 
     number equal to the quotient obtained by dividing--
       ``(A) the number equal to the quotient obtained by 
     dividing--
       ``(i) the base share for the eligible county; by
       ``(ii) the income adjustment for the eligible county; by
       ``(B) the number equal to the sum of the quotients obtained 
     under subparagraph (A) and paragraph (8)(A) for all eligible 
     counties.
       ``(2) Base share.--The term `base share' means the number 
     equal to the average of--
       ``(A) the quotient obtained by dividing--
       ``(i) the number of acres of Federal land described in 
     paragraph (7)(A) in each eligible county; by
       ``(ii) the total number acres of Federal land in all 
     eligible counties in all eligible States; and
       ``(B) the quotient obtained by dividing--
       ``(i) the amount equal to the average of the 3 highest 25-
     percent payments and safety net payments made to each 
     eligible State for each eligible county during the 
     eligibility period; by
       ``(ii) the amount equal to the sum of the amounts 
     calculated under clause (i) and paragraph (9)(B)(i) for all 
     eligible counties in

[[Page 16419]]

     all eligible States during the eligibility period.
       ``(3) County payment.--The term `county payment' means the 
     payment for an eligible county calculated under section 
     101(b).
       ``(4) Eligible county.--The term `eligible county' means 
     any county that--
       ``(A) contains Federal land (as defined in paragraph (7)); 
     and
       ``(B) elects to receive a share of the State payment or the 
     county payment under section 102(b).
       ``(5) Eligibility period.--The term `eligibility period' 
     means fiscal year 1986 through fiscal year 1999.
       ``(6) Eligible state.--The term `eligible State' means a 
     State or territory of the United States that received a 25-
     percent payment for 1 or more fiscal years of the eligibility 
     period.
       ``(7) Federal land.--The term `Federal land' means--
       ``(A) land within the National Forest System, as defined in 
     section 11(a) of the Forest and Rangeland Renewable Resources 
     Planning Act of 1974 (16 U.S.C. 1609(a)) exclusive of the 
     National Grasslands and land utilization projects designated 
     as National Grasslands administered pursuant to the Act of 
     July 22, 1937 (7 U.S.C. 1010-1012); and
       ``(B) such portions of the revested Oregon and California 
     Railroad and reconveyed Coos Bay Wagon Road grant land as are 
     or may hereafter come under the jurisdiction of the 
     Department of the Interior, which have heretofore or may 
     hereafter be classified as timberlands, and power-site land 
     valuable for timber, that shall be managed, except as 
     provided in the former section 3 of the Act of August 28, 
     1937 (50 Stat. 875; 43 U.S.C. 1181c), for permanent forest 
     production.
       ``(8) 50-Percent adjusted share.--The term `50-percent 
     adjusted share' means the number equal to the quotient 
     obtained by dividing--
       ``(A) the number equal to the quotient obtained by 
     dividing--
       ``(i) the 50-percent base share for the eligible county; by
       ``(ii) the income adjustment for the eligible county; by
       ``(B) the number equal to the sum of the quotients obtained 
     under subparagraph (A) and paragraph (1)(A) for all eligible 
     counties.
       ``(9) 50-Percent base share.--The term `50-percent base 
     share' means the number equal to the average of--
       ``(A) the quotient obtained by dividing--
       ``(i) the number of acres of Federal land described in 
     paragraph (7)(B) in each eligible county; by
       ``(ii) the total number acres of Federal land in all 
     eligible counties in all eligible States; and
       ``(B) the quotient obtained by dividing--
       ``(i) the amount equal to the average of the 3 highest 50-
     percent payments made to each eligible county during the 
     eligibility period; by
       ``(ii) the amount equal to the sum of the amounts 
     calculated under clause (i) and paragraph (2)(B)(i) for all 
     eligible counties in all eligible States during the 
     eligibility period.
       ``(10) 50-percent payment.--The term `50-percent payment' 
     means the payment that is the sum of the 50-percent share 
     otherwise paid to a county pursuant to title II of the Act of 
     August 28, 1937 (chapter 876; 50 Stat. 875; 43 U.S.C. 1181f), 
     and the payment made to a county pursuant to the Act of May 
     24, 1939 (chapter 144; 53 Stat. 753; 43 U.S.C. 1181f-1 et 
     seq.).
       ``(11) Full funding amount.--The term `full funding amount' 
     means--
       ``(A) $526,079,656 for fiscal year 2007;
       ``(B) $520,000,000 for fiscal year 2008; and
       ``(C) for fiscal year 2009 and each fiscal year thereafter, 
     the amount that is equal to 90 percent of the full funding 
     amount for the preceding fiscal year.
       ``(12) Income adjustment.--The term `income adjustment' 
     means the square of the quotient obtained by dividing--
       ``(A) the per capita personal income for each eligible 
     county; by
       ``(B) the median per capita personal income of all eligible 
     counties.
       ``(13) Per capita personal income.--The term `per capita 
     personal income' means the most recent per capita personal 
     income data, as determined by the Bureau of Economic 
     Analysis.
       ``(14) Safety net payments.--The term `safety net payments' 
     means the special payment amounts paid to States and counties 
     required by section 13982 or 13983 of the Omnibus Budget 
     Reconciliation Act of 1993 (Public Law 103-66; 16 U.S.C. 500 
     note; 43 U.S.C. 1181f note).
       ``(15) Secretary concerned.--The term `Secretary concerned' 
     means--
       ``(A) the Secretary of Agriculture or the designee of the 
     Secretary of Agriculture with respect to the Federal land 
     described in paragraph (7)(A); and
       ``(B) the Secretary of the Interior or the designee of the 
     Secretary of the Interior with respect to the Federal land 
     described in paragraph (7)(B).
       ``(16) State payment.--The term `State payment' means the 
     payment for an eligible State calculated under section 
     101(a).
       ``(17) 25-Percent payment.--The term `25-percent payment' 
     means the payment to States required by the sixth paragraph 
     under the heading of `forest service' in the Act of May 23, 
     1908 (35 Stat. 260; 16 U.S.C. 500), and section 13 of the Act 
     of March 1, 1911 (36 Stat. 963; 16 U.S.C. 500).

 ``TITLE I--SECURE PAYMENTS FOR STATES AND COUNTIES CONTAINING FEDERAL 
                                  LAND

     ``SEC. 101. SECURE PAYMENTS FOR STATES CONTAINING FEDERAL 
                   LAND.

       ``(a) State Payment.--For each of fiscal years 2007 through 
     2011, the Secretary of Agriculture shall calculate for each 
     eligible State an amount equal to the sum of the products 
     obtained by multiplying--
       ``(1) the adjusted share for each eligible county within 
     the eligible State; by
       ``(2) the full funding amount for the fiscal year.
       ``(b) County Payment.--For each of fiscal years 2007 
     through 2011, the Secretary of the Interior shall calculate 
     for each eligible county that received a 50-percent payment 
     during the eligibility period an amount equal to the product 
     obtained by multiplying--
       ``(1) the 50-percent adjusted share for the eligible 
     county; by
       ``(2) the full funding amount for the fiscal year.

     ``SEC. 102. PAYMENTS TO STATES AND COUNTIES.

       ``(a) Payment Amounts.--Except as provided in section 103, 
     the Secretary of the Treasury shall pay to--
       ``(1) a State or territory of the United States an amount 
     equal to the sum of the amounts elected under subsection (b) 
     by each county within the State or territory for--
       ``(A) if the county is eligible for the 25-percent payment, 
     the share of the 25-percent payment; or
       ``(B) the share of the State payment of the eligible 
     county; and
       ``(2) a county an amount equal to the amount elected under 
     subsection (b) by each county for--
       ``(A) if the county is eligible for the 50-percent payment, 
     the 50-percent payment; or
       ``(B) the county payment for the eligible county.
       ``(b) Election to Receive Payment Amount.--
       ``(1) Election; submission of results.--
       ``(A) In general.--The election to receive a share of the 
     State payment, the county payment, a share of the State 
     payment and the county payment, a share of the 25-percent 
     payment, the 50-percent payment, or a share of the 25-percent 
     payment and the 50-percent payment, as applicable, shall be 
     made at the discretion of each affected county by August 1, 
     2007, and August 1 of each second fiscal year thereafter, in 
     accordance with paragraph (2), and transmitted to the 
     Secretary concerned by the Governor of each eligible State.
       ``(B) Failure to transmit.--If an election for an affected 
     county is not transmitted to the Secretary concerned by the 
     date specified under subparagraph (A), the affected county 
     shall be considered to have elected to receive a share of the 
     State payment, the county payment, or a share of the State 
     payment and the county payment, as applicable.
       ``(2) Duration of election.--
       ``(A) In general.--A county election to receive a share of 
     the 25-percent payment or 50-percent payment, as applicable 
     shall be effective for 2 fiscal years.
       ``(B) Full funding amount.--If a county elects to receive a 
     share of the State payment or the county payment, the 
     election shall be effective for all subsequent fiscal years 
     through fiscal year 2011.
       ``(3) Source of payment amounts.--The payment to an 
     eligible State or eligible county under this section for a 
     fiscal year shall be derived from--
       ``(A) any revenues, fees, penalties, or miscellaneous 
     receipts, exclusive of deposits to any relevant trust fund, 
     special account, or permanent operating funds, received by 
     the Federal Government from activities by the Bureau of Land 
     Management or the Forest Service on the applicable Federal 
     land;
       ``(B) for fiscal year 2007, any funds appropriated to carry 
     out this Act; and
       ``(C) to the extent of any shortfall, out of any amounts in 
     the Treasury of the United States not otherwise appropriated.
       ``(c) Distribution and Expenditure of Payments.--
       ``(1) Distribution method.--A State that receives a payment 
     under subsection (a) for Federal land described in section 
     3(7)(A) shall distribute the appropriate payment amount among 
     the appropriate counties in the State in accordance with--
       ``(A) the Act of May 23, 1908 (16 U.S.C. 500); and
       ``(B) section 13 of the Act of March 1, 1911 (36 Stat. 963; 
     16 U.S.C. 500).
       ``(2) Expenditure purposes.--Subject to subsection (d), 
     payments received by a State under subsection (a) and 
     distributed to counties in accordance with paragraph (1) 
     shall be expended as required by the laws referred to in 
     paragraph (1).
       ``(d) Expenditure Rules for Eligible Counties.--
       ``(1) Allocations.--
       ``(A) Use of portion in same manner as 25-percent payment 
     or 50-percent payment, as applicable.--Except as provided in 
     paragraph (3)(B), if an eligible county elects to receive its 
     share of the State payment or the county payment, not less 
     than 80 percent,

[[Page 16420]]

     but not more than 85 percent, of the funds shall be expended 
     in the same manner in which the 25-percent payments or 50-
     percent payment, as applicable, are required to be expended.
       ``(B) Election as to use of balance.--Except as provided in 
     subparagraph (C), an eligible county shall elect to do 1 or 
     more of the following with the balance of any funds not 
     expended pursuant to subparagraph (A):
       ``(i) Reserve any portion of the balance for projects in 
     accordance with title II.
       ``(ii) Reserve not more than 7 percent of the total share 
     for the eligible county of the State payment or the county 
     payment for projects in accordance with title III.
       ``(iii) Return the portion of the balance not reserved 
     under clauses (i) and (ii) to the Treasury of the United 
     States.
       ``(C) Counties with modest distributions.--In the case of 
     each eligible county to which more than $100,000, but less 
     than $350,000, is distributed for any fiscal year pursuant to 
     either or both of paragraphs (1)(B) and (2)(B) of subsection 
     (a), the eligible county, with respect to the balance of any 
     funds not expended pursuant to subparagraph (A) for that 
     fiscal year, shall--
       ``(i) reserve any portion of the balance for--

       ``(I) carrying out projects under title II;
       ``(II) carrying out projects under title III; or
       ``(III) a combination of the purposes described in 
     subclauses (I) and (II); or

       ``(ii) return the portion of the balance not reserved under 
     clause (i) to the Treasury of the United States.
       ``(2) Distribution of funds.--
       ``(A) In general.--Funds reserved by an eligible county 
     under subparagraph (B)(i) or (C)(i) of paragraph (1) for 
     carrying out projects under title II shall be deposited in a 
     special account in the Treasury of the United States.
       ``(B) Availability.--Amounts deposited under subparagraph 
     (A) shall--
       ``(i) be available for expenditure by the Secretary 
     concerned, without further appropriation; and
       ``(ii) remain available until expended in accordance with 
     title II.
       ``(3) Election.--
       ``(A) Notification.--
       ``(i) In general.--An eligible county shall notify the 
     Secretary concerned of an election by the eligible county 
     under this subsection not later than September 30 of each 
     fiscal year.
       ``(ii) Failure to elect.--Except as provided in 
     subparagraph (B), if the eligible county fails to make an 
     election by the date specified in clause (i), the eligible 
     county shall--

       ``(I) be considered to have elected to expend 85 percent of 
     the funds in accordance with paragraph (1)(A); and
       ``(II) return the balance to the Treasury of the United 
     States.

       ``(B) Counties with minor distributions.--In the case of 
     each eligible county to which less than $100,000 is 
     distributed for any fiscal year pursuant to either or both of 
     paragraphs (1)(B) and (2)(B) of subsection (a), the eligible 
     county may elect to expend all the funds in the same manner 
     in which the 25-percent payments or 50-percent payments, as 
     applicable, are required to be expended.
       ``(e) Time for Payment.--The payments required under this 
     section for a fiscal year shall be made as soon as 
     practicable after the end of that fiscal year.

     ``SEC. 103. TRANSITION PAYMENTS TO THE STATES OF CALIFORNIA, 
                   OREGON, AND WASHINGTON.

       ``(a) Definitions.--In this section:
       ``(1) Adjusted amount.--The term `adjusted amount' means, 
     with respect to a covered State--
       ``(A) for fiscal year 2007--
       ``(i) the sum of the amounts paid for fiscal year 2006 
     under section 102(a)(2) (as in effect on September 29, 2006) 
     for the eligible counties in the covered State that have 
     elected under section 102(b) to receive a share of the State 
     payment for fiscal year 2007; and
       ``(ii) the sum of the amounts paid for fiscal year 2006 
     under section 103(a)(2) (as in effect on September 29, 2006) 
     for the eligible counties in the State of Oregon that have 
     elected under section 102(b) to receive the county payment 
     for fiscal year 2007;
       ``(B) for fiscal year 2008, 90 percent of--
       ``(i) the sum of the amounts paid for fiscal year 2006 
     under section 102(a)(2) (as in effect on September 29, 2006) 
     for the eligible counties in the covered State that have 
     elected under section 102(b) to receive a share of the State 
     payment for fiscal year 2008; and
       ``(ii) the sum of the amounts paid for fiscal year 2006 
     under section 103(a)(2) (as in effect on September 29, 2006) 
     for the eligible counties in the State of Oregon that have 
     elected under section 102(b) to receive the county payment 
     for fiscal year 2008;
       ``(C) for fiscal year 2009, 81 percent of--
       ``(i) the sum of the amounts paid for fiscal year 2006 
     under section 102(a)(2) (as in effect on September 29, 2006) 
     for the eligible counties in the covered State that have 
     elected under section 102(b) to receive a share of the State 
     payment for fiscal year 2009; and
       ``(ii) the sum of the amounts paid for fiscal year 2006 
     under section 103(a)(2) (as in effect on September 29, 2006) 
     for the eligible counties in the State of Oregon that have 
     elected under section 102(b) to receive the county payment 
     for fiscal year 2009; and
       ``(D) for fiscal year 2010, 73 percent of--
       ``(i) the sum of the amounts paid for fiscal year 2006 
     under section 102(a)(2) (as in effect on September 29, 2006) 
     for the eligible counties in the covered State that have 
     elected under section 102(b) to receive a share of the State 
     payment for fiscal year 2010; and
       ``(ii) the sum of the amounts paid for fiscal year 2006 
     under section 103(a)(2) (as in effect on September 29, 2006) 
     for the eligible counties in the State of Oregon that have 
     elected under section 102(b) to receive the county payment 
     for fiscal year 2010.
       ``(2) Covered state.--The term `covered State' means each 
     of the States of California, Oregon, and Washington.
       ``(b) Transition Payments.--For each of fiscal years 2007 
     through 2010, in lieu of the payment amounts that otherwise 
     would have been made under paragraphs (1)(B) and (2)(B) of 
     section 102(a), the Secretary of the Treasury shall pay the 
     adjusted amount to each covered State and the eligible 
     counties within the covered State, as applicable.
       ``(c) Distribution of Adjusted Amount in Oregon and 
     Washington.--It is the intent of Congress that the method of 
     distributing the payments under subsection (b) among the 
     counties in the States of Oregon and Washington for each of 
     fiscal years 2007 through 2010 be in the same proportion that 
     the payments were distributed to the eligible counties in 
     fiscal year 2006.
       ``(d) Distribution of Payments in California.--The 
     following payments shall be distributed among the eligible 
     counties in the State of California in the same proportion 
     that payments under section 102(a)(2) (as in effect on 
     September 29, 2006) were distributed to the eligible counties 
     for fiscal year 2006:
       ``(1) Payments to the State of California under subsection 
     (b).
       ``(2) The shares of the eligible counties of the State 
     payment for California under section 102 for fiscal year 
     2011.
       ``(e) Treatment of Payments.--For purposes of this Act, any 
     payment made under subsection (b) shall be considered to be a 
     payment made under section 102(a).

              ``TITLE II--SPECIAL PROJECTS ON FEDERAL LAND

     ``SEC. 201. DEFINITIONS.

       ``In this title:
       ``(1) Participating county.--The term `participating 
     county' means an eligible county that elects under section 
     102(d) to expend a portion of the Federal funds received 
     under section 102 in accordance with this title.
       ``(2) Project funds.--The term `project funds' means all 
     funds an eligible county elects under section 102(d) to 
     reserve for expenditure in accordance with this title.
       ``(3) Resource advisory committee.--The term `resource 
     advisory committee' means--
       ``(A) an advisory committee established by the Secretary 
     concerned under section 205; or
       ``(B) an advisory committee determined by the Secretary 
     concerned to meet the requirements of section 205.
       ``(4) Resource management plan.--The term `resource 
     management plan' means--
       ``(A) a land use plan prepared by the Bureau of Land 
     Management for units of the Federal land described in section 
     3(7)(B) pursuant to section 202 of the Federal Land Policy 
     and Management Act of 1976 (43 U.S.C. 1712); or
       ``(B) a land and resource management plan prepared by the 
     Forest Service for units of the National Forest System 
     pursuant to section 6 of the Forest and Rangeland Renewable 
     Resources Planning Act of 1974l (16 U.S.C. 1604).

     ``SEC. 202. GENERAL LIMITATION ON USE OF PROJECT FUNDS.

       ``(a) Limitation.--Project funds shall be expended solely 
     on projects that meet the requirements of this title.
       ``(b) Authorized Uses.--Project funds may be used by the 
     Secretary concerned for the purpose of entering into and 
     implementing cooperative agreements with willing Federal 
     agencies, State and local governments, private and nonprofit 
     entities, and landowners for protection, restoration, and 
     enhancement of fish and wildlife habitat, and other resource 
     objectives consistent with the purposes of this Act on 
     Federal land and on non-Federal land where projects would 
     benefit the resources on Federal land.

     ``SEC. 203. SUBMISSION OF PROJECT PROPOSALS.

       ``(a) Submission of Project Proposals to Secretary 
     Concerned.--
       ``(1) Projects funded using project funds.--Not later than 
     September 30 for fiscal year 2007, and each September 30 
     thereafter for each succeeding fiscal year through fiscal 
     year 2011, each resource advisory committee shall submit to 
     the Secretary concerned a description of any projects that 
     the resource advisory committee proposes the Secretary 
     undertake using any project funds reserved by eligible 
     counties in the area in which the resource advisory committee 
     has geographic jurisdiction.
       ``(2) Projects funded using other funds.--A resource 
     advisory committee may submit to the Secretary concerned a 
     description of any projects that the committee proposes the 
     Secretary undertake using funds

[[Page 16421]]

     from State or local governments, or from the private sector, 
     other than project funds and funds appropriated and otherwise 
     available to do similar work.
       ``(3) Joint projects.--Participating counties or other 
     persons may propose to pool project funds or other funds, 
     described in paragraph (2), and jointly propose a project or 
     group of projects to a resource advisory committee 
     established under section 205.
       ``(b) Required Description of Projects.--In submitting 
     proposed projects to the Secretary concerned under subsection 
     (a), a resource advisory committee shall include in the 
     description of each proposed project the following 
     information:
       ``(1) The purpose of the project and a description of how 
     the project will meet the purposes of this title.
       ``(2) The anticipated duration of the project.
       ``(3) The anticipated cost of the project.
       ``(4) The proposed source of funding for the project, 
     whether project funds or other funds.
       ``(5)(A) Expected outcomes, including how the project will 
     meet or exceed desired ecological conditions, maintenance 
     objectives, or stewardship objectives.
       ``(B) An estimate of the amount of any timber, forage, and 
     other commodities and other economic activity, including jobs 
     generated, if any, anticipated as part of the project.
       ``(6) A detailed monitoring plan, including funding needs 
     and sources, that--
       ``(A) tracks and identifies the positive or negative 
     impacts of the project, implementation, and provides for 
     validation monitoring; and
       ``(B) includes an assessment of the following:
       ``(i) Whether or not the project met or exceeded desired 
     ecological conditions; created local employment or training 
     opportunities, including summer youth jobs programs such as 
     the Youth Conservation Corps where appropriate.
       ``(ii) Whether the project improved the use of, or added 
     value to, any products removed from land consistent with the 
     purposes of this title.
       ``(7) An assessment that the project is to be in the public 
     interest.
       ``(c) Authorized Projects.--Projects proposed under 
     subsection (a) shall be consistent with section 2.

     ``SEC. 204. EVALUATION AND APPROVAL OF PROJECTS BY SECRETARY 
                   CONCERNED.

       ``(a) Conditions for Approval of Proposed Project.--The 
     Secretary concerned may make a decision to approve a project 
     submitted by a resource advisory committee under section 203 
     only if the proposed project satisfies each of the following 
     conditions:
       ``(1) The project complies with all applicable Federal laws 
     (including regulations).
       ``(2) The project is consistent with the applicable 
     resource management plan and with any watershed or subsequent 
     plan developed pursuant to the resource management plan and 
     approved by the Secretary concerned.
       ``(3) The project has been approved by the resource 
     advisory committee in accordance with section 205, including 
     the procedures issued under subsection (e) of that section.
       ``(4) A project description has been submitted by the 
     resource advisory committee to the Secretary concerned in 
     accordance with section 203.
       ``(5) The project will improve the maintenance of existing 
     infrastructure, implement stewardship objectives that enhance 
     forest ecosystems, and restore and improve land health and 
     water quality.
       ``(b) Environmental Reviews.--
       ``(1) Request for payment by county.--The Secretary 
     concerned may request the resource advisory committee 
     submitting a proposed project to agree to the use of project 
     funds to pay for any environmental review, consultation, or 
     compliance with applicable environmental laws required in 
     connection with the project.
       ``(2) Conduct of environmental review.--If a payment is 
     requested under paragraph (1) and the resource advisory 
     committee agrees to the expenditure of funds for this 
     purpose, the Secretary concerned shall conduct environmental 
     review, consultation, or other compliance responsibilities in 
     accordance with Federal laws (including regulations).
       ``(3) Effect of refusal to pay.--
       ``(A) In general.--If a resource advisory committee does 
     not agree to the expenditure of funds under paragraph (1), 
     the project shall be deemed withdrawn from further 
     consideration by the Secretary concerned pursuant to this 
     title.
       ``(B) Effect of withdrawal.--A withdrawal under 
     subparagraph (A) shall be deemed to be a rejection of the 
     project for purposes of section 207(c).
       ``(c) Decisions of Secretary Concerned.--
       ``(1) Rejection of projects.--
       ``(A) In general.--A decision by the Secretary concerned to 
     reject a proposed project shall be at the sole discretion of 
     the Secretary concerned.
       ``(B) No administrative appeal or judicial review.--
     Notwithstanding any other provision of law, a decision by the 
     Secretary concerned to reject a proposed project shall not be 
     subject to administrative appeal or judicial review.
       ``(C) Notice of rejection.--Not later than 30 days after 
     the date on which the Secretary concerned makes the rejection 
     decision, the Secretary concerned shall notify in writing the 
     resource advisory committee that submitted the proposed 
     project of the rejection and the reasons for rejection.
       ``(2) Notice of project approval.--The Secretary concerned 
     shall publish in the Federal Register notice of each project 
     approved under subsection (a) if the notice would be required 
     had the project originated with the Secretary.
       ``(d) Source and Conduct of Project.--Once the Secretary 
     concerned accepts a project for review under section 203, the 
     acceptance shall be deemed a Federal action for all purposes.
       ``(e) Implementation of Approved Projects.--
       ``(1) Cooperation.--Notwithstanding chapter 63 of title 31, 
     United States Code, using project funds the Secretary 
     concerned may enter into contracts, grants, and cooperative 
     agreements with States and local governments, private and 
     nonprofit entities, and landowners and other persons to 
     assist the Secretary in carrying out an approved project.
       ``(2) Best value contracting.--
       ``(A) In general.--For any project involving a contract 
     authorized by paragraph (1) the Secretary concerned may elect 
     a source for performance of the contract on a best value 
     basis.
       ``(B) Factors.--The Secretary concerned shall determine 
     best value based on such factors as--
       ``(i) the technical demands and complexity of the work to 
     be done;
       ``(ii)(I) the ecological objectives of the project; and
       ``(II) the sensitivity of the resources being treated;
       ``(iii) the past experience by the contractor with the type 
     of work being done, using the type of equipment proposed for 
     the project, and meeting or exceeding desired ecological 
     conditions; and
       ``(iv) the commitment of the contractor to hiring highly 
     qualified workers and local residents.
       ``(3) Merchantable timber contracting pilot program.--
       ``(A) Establishment.--The Secretary concerned shall 
     establish a pilot program to implement a certain percentage 
     of approved projects involving the sale of merchantable 
     timber using separate contracts for--
       ``(i) the harvesting or collection of merchantable timber; 
     and
       ``(ii) the sale of the timber.
       ``(B) Annual percentages.--Under the pilot program, the 
     Secretary concerned shall ensure that, on a nationwide basis, 
     not less than the following percentage of all approved 
     projects involving the sale of merchantable timber are 
     implemented using separate contracts:
       ``(i) For fiscal year 2007, 25 percent.
       ``(ii) For fiscal year 2008, 35 percent.
       ``(iii) For fiscal year 2009, 45 percent.
       ``(iv) For each of fiscal years 2010 and 2011, 50 percent.
       ``(C) Inclusion in pilot program.--The decision whether to 
     use separate contracts to implement a project involving the 
     sale of merchantable timber shall be made by the Secretary 
     concerned after the approval of the project under this title.
       ``(D) Assistance.--
       ``(i) In general.--The Secretary concerned may use funds 
     from any appropriated account available to the Secretary for 
     the Federal land to assist in the administration of projects 
     conducted under the pilot program.
       ``(ii) Maximum amount of assistance.--The total amount 
     obligated under this subparagraph may not exceed $1,000,000 
     for any fiscal year during which the pilot program is in 
     effect.
       ``(E) Review and report.--
       ``(i) Initial report.--Not later than September 30, 2009, 
     the Comptroller General shall submit to the Committees on 
     Agriculture, Nutrition, and Forestry and Energy and Natural 
     Resources of the Senate and the Committees on Agriculture and 
     Natural Resources of the House of Representatives a report 
     assessing the pilot program.
       ``(ii) Annual report.--The Secretary concerned shall submit 
     to the Committees on Agriculture, Nutrition, and Forestry and 
     Energy and Natural Resources of the Senate and the Committees 
     on Agriculture and Natural Resources of the House of 
     Representatives an annual report describing the results of 
     the pilot program.
       ``(f) Requirements for Project Funds.--The Secretary shall 
     ensure that at least 50 percent of all project funds be used 
     for projects that are primarily dedicated--
       ``(1) to road maintenance, decommissioning, or 
     obliteration; or
       ``(2) to restoration of streams and watersheds.

     ``SEC. 205. RESOURCE ADVISORY COMMITTEES.

       ``(a) Establishment and Purpose of Resource Advisory 
     Committees.--
       ``(1) Establishment.--The Secretary concerned shall 
     establish and maintain resource advisory committees to 
     perform the duties in subsection (b), except as provided in 
     paragraph (4).
       ``(2) Purpose.--The purpose of a resource advisory 
     committee shall be--

[[Page 16422]]

       ``(A) to improve collaborative relationships; and
       ``(B) to provide advice and recommendations to the land 
     management agencies consistent with the purposes of this 
     title.
       ``(3) Access to resource advisory committees.--To ensure 
     that each unit of Federal land has access to a resource 
     advisory committee, and that there is sufficient interest in 
     participation on a committee to ensure that membership can be 
     balanced in terms of the points of view represented and the 
     functions to be performed, the Secretary concerned may, 
     establish resource advisory committees for part of, or 1 or 
     more, units of Federal land.
       ``(4) Existing advisory committees.--
       ``(A) In general.--An advisory committee that meets the 
     requirements of this section, a resource advisory committee 
     established before September 29, 2006, or an advisory 
     committee determined by the Secretary concerned before 
     September 29, 2006, to meet the requirements of this section 
     may be deemed by the Secretary concerned to be a resource 
     advisory committee for the purposes of this title.
       ``(B) Charter.--A charter for a committee described in 
     subparagraph (A) that was filed on or before September 29, 
     2006, shall be considered to be filed for purposes of this 
     Act.
       ``(C) Bureau of land management advisory committees.--The 
     Secretary of the Interior may deem a resource advisory 
     committee meeting the requirements of subpart 1784 of part 
     1780 of title 43, Code of Federal Regulations, as a resource 
     advisory committee for the purposes of this title.
       ``(b) Duties.--A resource advisory committee shall--
       ``(1) review projects proposed under this title by 
     participating counties and other persons;
       ``(2) propose projects and funding to the Secretary 
     concerned under section 203;
       ``(3) provide early and continuous coordination with 
     appropriate land management agency officials in recommending 
     projects consistent with purposes of this Act under this 
     title;
       ``(4) provide frequent opportunities for citizens, 
     organizations, tribes, land management agencies, and other 
     interested parties to participate openly and meaningfully, 
     beginning at the early stages of the project development 
     process under this title;
       ``(5)(A) monitor projects that have been approved under 
     section 204; and
       ``(B) advise the designated Federal official on the 
     progress of the monitoring efforts under subparagraph (A); 
     and
       ``(6) make recommendations to the Secretary concerned for 
     any appropriate changes or adjustments to the projects being 
     monitored by the resource advisory committee.
       ``(c) Appointment by the Secretary.--
       ``(1) Appointment and term.--
       ``(A) In general.--The Secretary concerned, shall appoint 
     the members of resource advisory committees for a term of 4 
     years beginning on the date of appointment.
       ``(B) Reappointment.--The Secretary concerned may reappoint 
     members to subsequent 4-year terms.
       ``(2) Basic requirements.--The Secretary concerned shall 
     ensure that each resource advisory committee established 
     meets the requirements of subsection (d).
       ``(3) Initial appointment.--Not later than 180 days after 
     the date of the enactment of this Act, the Secretary 
     concerned shall make initial appointments to the resource 
     advisory committees.
       ``(4) Vacancies.--The Secretary concerned shall make 
     appointments to fill vacancies on any resource advisory 
     committee as soon as practicable after the vacancy has 
     occurred.
       ``(5) Compensation.--Members of the resource advisory 
     committees shall not receive any compensation.
       ``(d) Composition of Advisory Committee.--
       ``(1) Number.--Each resource advisory committee shall be 
     comprised of 15 members.
       ``(2) Community interests represented.--Committee members 
     shall be representative of the interests of the following 3 
     categories:
       ``(A) 5 persons that--
       ``(i) represent organized labor or non-timber forest 
     product harvester groups;
       ``(ii) represent developed outdoor recreation, off highway 
     vehicle users, or commercial recreation activities;
       ``(iii) represent--

       ``(I) energy and mineral development interests; or
       ``(II) commercial or recreational fishing interests;

       ``(iv) represent the commercial timber industry; or
       ``(v) hold Federal grazing or other land use permits, or 
     represent nonindustrial private forest land owners, within 
     the area for which the committee is organized.
       ``(B) 5 persons that represent--
       ``(i) nationally recognized environmental organizations;
       ``(ii) regionally or locally recognized environmental 
     organizations;
       ``(iii) dispersed recreational activities;
       ``(iv) archaeological and historical interests; or
       ``(v) nationally or regionally recognized wild horse and 
     burro interest groups, wildlife or hunting organizations, or 
     watershed associations.
       ``(C) 5 persons that--
       ``(i) hold State elected office (or a designee);
       ``(ii) hold county or local elected office;
       ``(iii) represent American Indian tribes within or adjacent 
     to the area for which the committee is organized;
       ``(iv) are school officials or teachers; or
       ``(v) represent the affected public at large.
       ``(3) Balanced representation.--In appointing committee 
     members from the 3 categories in paragraph (2), the Secretary 
     concerned shall provide for balanced and broad representation 
     from within each category.
       ``(4) Geographic distribution.--The members of a resource 
     advisory committee shall reside within the State in which the 
     committee has jurisdiction and, to extent practicable, the 
     Secretary concerned shall ensure local representation in each 
     category in paragraph (2).
       ``(5) Chairperson.--A majority on each resource advisory 
     committee shall select the chairperson of the committee.
       ``(e) Approval Procedures.--
       ``(1) In general.--Subject to paragraph (3), each resource 
     advisory committee shall establish procedures for proposing 
     projects to the Secretary concerned under this title.
       ``(2) Quorum.--A quorum must be present to constitute an 
     official meeting of the committee.
       ``(3) Approval by majority of members.--A project may be 
     proposed by a resource advisory committee to the Secretary 
     concerned under section 203(a), if the project has been 
     approved by a majority of members of the committee from each 
     of the 3 categories in subsection (d)(2).
       ``(f) Other Committee Authorities and Requirements.--
       ``(1) Staff assistance.--A resource advisory committee may 
     submit to the Secretary concerned a request for periodic 
     staff assistance from Federal employees under the 
     jurisdiction of the Secretary.
       ``(2) Meetings.--All meetings of a resource advisory 
     committee shall be announced at least 1 week in advance in a 
     local newspaper of record and shall be open to the public.
       ``(3) Records.--A resource advisory committee shall 
     maintain records of the meetings of the committee and make 
     the records available for public inspection.

     ``SEC. 206. USE OF PROJECT FUNDS.

       ``(a) Agreement Regarding Schedule and Cost of Project.--
       ``(1) Agreement between parties.--The Secretary concerned 
     may carry out a project submitted by a resource advisory 
     committee under section 203(a) using project funds or other 
     funds described in section 203(a)(2), if, as soon as 
     practicable after the issuance of a decision document for the 
     project and the exhaustion of all administrative appeals and 
     judicial review of the project decision, the Secretary 
     concerned and the resource advisory committee enter into an 
     agreement addressing, at a minimum, the following:
       ``(A) The schedule for completing the project.
       ``(B) The total cost of the project, including the level of 
     agency overhead to be assessed against the project.
       ``(C) For a multiyear project, the estimated cost of the 
     project for each of the fiscal years in which it will be 
     carried out.
       ``(D) The remedies for failure of the Secretary concerned 
     to comply with the terms of the agreement consistent with 
     current Federal law.
       ``(2) Limited use of federal funds.--The Secretary 
     concerned may decide, at the sole discretion of the Secretary 
     concerned, to cover the costs of a portion of an approved 
     project using Federal funds appropriated or otherwise 
     available to the Secretary for the same purposes as the 
     project.
       ``(b) Transfer of Project Funds.--
       ``(1) Initial transfer required.--As soon as practicable 
     after the agreement is reached under subsection (a) with 
     regard to a project to be funded in whole or in part using 
     project funds, or other funds described in section 203(a)(2), 
     the Secretary concerned shall transfer to the applicable unit 
     of National Forest System land or Bureau of Land Management 
     District an amount of project funds equal to--
       ``(A) in the case of a project to be completed in a single 
     fiscal year, the total amount specified in the agreement to 
     be paid using project funds, or other funds described in 
     section 203(a)(2); or
       ``(B) in the case of a multiyear project, the amount 
     specified in the agreement to be paid using project funds, or 
     other funds described in section 203(a)(2) for the first 
     fiscal year.
       ``(2) Condition on project commencement.--The unit of 
     National Forest System land or Bureau of Land Management 
     District concerned, shall not commence a project until the 
     project funds, or other funds described in section 203(a)(2) 
     required to be transferred under paragraph (1) for the 
     project, have been made available by the Secretary concerned.
       ``(3) Subsequent transfers for multiyear projects.--
       ``(A) In general.--For the second and subsequent fiscal 
     years of a multiyear project to be funded in whole or in part 
     using project funds, the unit of National Forest System land 
     or Bureau of Land Management District concerned shall use the 
     amount of project

[[Page 16423]]

     funds required to continue the project in that fiscal year 
     according to the agreement entered into under subsection (a).
       ``(B) Suspension of work.--The Secretary concerned shall 
     suspend work on the project if the project funds required by 
     the agreement in the second and subsequent fiscal years are 
     not available.

     ``SEC. 207. AVAILABILITY OF PROJECT FUNDS.

       ``(a) Submission of Proposed Projects to Obligate Funds.--
     By September 30 of each fiscal year through fiscal year 2011, 
     a resource advisory committee shall submit to the Secretary 
     concerned pursuant to section 203(a)(1) a sufficient number 
     of project proposals that, if approved, would result in the 
     obligation of at least the full amount of the project funds 
     reserved by the participating county in the preceding fiscal 
     year.
       ``(b) Use or Transfer of Unobligated Funds.--Subject to 
     section 208, if a resource advisory committee fails to comply 
     with subsection (a) for a fiscal year, any project funds 
     reserved by the participating county in the preceding fiscal 
     year and remaining unobligated shall be available for use as 
     part of the project submissions in the next fiscal year.
       ``(c) Effect of Rejection of Projects.--Subject to section 
     208, any project funds reserved by a participating county in 
     the preceding fiscal year that are unobligated at the end of 
     a fiscal year because the Secretary concerned has rejected 
     one or more proposed projects shall be available for use as 
     part of the project submissions in the next fiscal year.
       ``(d) Effect of Court Orders.--
       ``(1) In general.--If an approved project under this Act is 
     enjoined or prohibited by a Federal court, the Secretary 
     concerned shall return the unobligated project funds related 
     to the project to the participating county or counties that 
     reserved the funds.
       ``(2) Expenditure of funds.--The returned funds shall be 
     available for the county to expend in the same manner as the 
     funds reserved by the county under subparagraph (B) or (C)(i) 
     of section 102(d)(1).

     ``SEC. 208. TERMINATION OF AUTHORITY.

       ``(a) In General.--The authority to initiate projects under 
     this title shall terminate on September 30, 2011.
       ``(b) Deposits in Treasury.--Any project funds not 
     obligated by September 30, 2012, shall be deposited in the 
     Treasury of the United States.

                       ``TITLE III--COUNTY FUNDS

     ``SEC. 301. DEFINITIONS.

       ``In this title:
       ``(1) County funds.--The term `county funds' means all 
     funds an eligible county elects under section 102(d) to 
     reserve for expenditure in accordance with this title.
       ``(2) Participating county.--The term `participating 
     county' means an eligible county that elects under section 
     102(d) to expend a portion of the Federal funds received 
     under section 102 in accordance with this title.

     ``SEC. 302. USE.

       ``(a) Authorized Uses.--A participating county, including 
     any applicable agencies of the participating county, shall 
     use county funds, in accordance with this title, only--
       ``(1) to carry out activities under the Firewise 
     Communities program to provide to homeowners in fire-
     sensitive ecosystems education on, and assistance with 
     implementing, techniques in home siting, home construction, 
     and home landscaping that can increase the protection of 
     people and property from wildfires;
       ``(2) to reimburse the participating county for search and 
     rescue and other emergency services, including firefighting, 
     that are--
       ``(A) performed on Federal land after the date on which the 
     use was approved under subsection (b);
       ``(B) paid for by the participating county; and
       ``(3) to develop community wildfire protection plans in 
     coordination with the appropriate Secretary concerned.
       ``(b) Proposals.--A participating county shall use county 
     funds for a use described in subsection (a) only after a 45-
     day public comment period, at the beginning of which the 
     participating county shall--
       ``(1) publish in any publications of local record a 
     proposal that describes the proposed use of the county funds; 
     and
       ``(2) submit the proposal to any resource advisory 
     committee established under section 205 for the participating 
     county.

     ``SEC. 303. CERTIFICATION.

       ``(a) In General.--Not later than February 1 of the year 
     after the year in which any county funds were expended by a 
     participating county, the appropriate official of the 
     participating county shall submit to the Secretary concerned 
     a certification that the county funds expended in the 
     applicable year have been used for the uses authorized under 
     section 302(a), including a description of the amounts 
     expended and the uses for which the amounts were expended.
       ``(b) Review.--The Secretary concerned shall review the 
     certifications submitted under subsection (a) as the 
     Secretary concerned determines to be appropriate.

     ``SEC. 304. TERMINATION OF AUTHORITY.

       ``(a) In General.--The authority to initiate projects under 
     this title terminates on September 30, 2011.
       ``(b) Availability.--Any county funds not obligated by 
     September 30, 2012, shall be returned to the Treasury of the 
     United States.

                  ``TITLE IV--MISCELLANEOUS PROVISIONS

     ``SEC. 401. REGULATIONS.

       ``The Secretary of Agriculture and the Secretary of the 
     Interior shall issue regulations to carry out the purposes of 
     this Act.

     ``SEC. 402. AUTHORIZATION OF APPROPRIATIONS.

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

     ``SEC. 403. TREATMENT OF FUNDS AND REVENUES.

       ``(a) Relation to Other Appropriations.--Funds made 
     available under section 402 and funds made available to a 
     Secretary concerned under section 206 shall be in addition to 
     any other annual appropriations for the Forest Service and 
     the Bureau of Land Management.
       ``(b) Deposit of Revenues and Other Funds.--All revenues 
     generated from projects pursuant to title II, including any 
     interest accrued from the revenues, shall be deposited in the 
     Treasury of the United States.''.
       (b) Forest Receipt Payments to Eligible States and 
     Counties.--
       (1) Act of may 23, 1908.--The sixth paragraph under the 
     heading ``forest service'' in the Act of May 23, 1908 (16 
     U.S.C. 500) is amended in the first sentence by striking 
     ``twenty-five percentum'' and all that follows through 
     ``shall be paid'' and inserting the following: ``an amount 
     equal to the annual average of 25 percent of all amounts 
     received for the applicable fiscal year and each of the 
     preceding 6 fiscal years from each national forest shall be 
     paid''.
       (2) Weeks law.--Section 13 of the Act of March 1, 1911 
     (commonly known as the ``Weeks Law'') (16 U.S.C. 500) is 
     amended in the first sentence by striking ``twenty-five 
     percentum'' and all that follows through ``shall be paid'' 
     and inserting the following: ``an amount equal to the annual 
     average of 25 percent of all amounts received for the 
     applicable fiscal year and each of the preceding 6 fiscal 
     years from each national forest shall be paid''.
       (c) Payments in Lieu of Taxes.--
       (1) In general.--Section 6906 of title 31, United States 
     Code, is amended to read as follows:

     ``Sec. 6906. Funding

       ``For each of fiscal years 2008 through 2012--
       ``(1) each county or other eligible unit of local 
     government shall be entitled to payment under this chapter; 
     and
       ``(2) sums shall be made available to the Secretary of the 
     Interior for obligation or expenditure in accordance with 
     this chapter.''.
       (2) Conforming amendment.--The table of sections for 
     chapter 69 of title 31, United States Code, is amended by 
     striking the item relating to section 6906 and inserting the 
     following:

``6906. Funding.''.

       (3) Budget scorekeeping.--
       (A) In general.--Notwithstanding the Budget Scorekeeping 
     Guidelines and the accompanying list of programs and accounts 
     set forth in the joint explanatory statement of the committee 
     of conference accompanying Conference Report 105-217, the 
     amendment made by paragraph (1) shall be treated in the 
     baseline for purposes of section 257 of the Balanced Budget 
     and Emergency Deficit Control Act of 1985 (2 U.S.C. 907) (as 
     in effect before September 30, 2002), by the Chairpersons of 
     the Committee on the Budget of the House of Representatives 
     and the Committee on the Budget of the Senate, as 
     appropriate, for purposes of budget enforcement in the House 
     of Representatives and the Senate, and under the 
     Congressional Budget Act of 1974 (2 U.S.C. 601 et seq.) as if 
     Payment in Lieu of Taxes (14-1114-0-1-806) were an account 
     designated as Appropriated Entitlements and Mandatories for 
     Fiscal Year 1997 in the joint explanatory statement of the 
     committee of conference accompanying Conference Report 105-
     217.
       (B) Effective date.--This paragraph shall--
       (i) be effective beginning on the date of enactment of this 
     Act; and
       (ii) remain in effect for any fiscal year for which the 
     entitlement in section 6906 of title 31, United States Code 
     (as amended by paragraph (1)), applies.

                                 ______
                                 
  SA 1705. Mr. KERRY (for himself, Ms. Cantwell, and Mr. Tester) 
submitted an amendment intended to be proposed to amendment SA 1502 
proposed by Mr. Reid to the bill H.R. 6, to reduce our Nation's 
dependency on foreign oil by investing in clean, renewable, and 
alternative energy resources, promoting new emerging energy 
technologies, developing greater efficiency, and creating a Strategic 
Energy Efficiency and Renewables Reserve to invest in alternative 
energy, and for other purposes; which was ordered to lie on the table; 
as follows:

       On page 177, after line 21, insert the following:

[[Page 16424]]



     SEC. 279. SMALL BUSINESS EMERGENCY FUEL ASSISTANCE.

       (a) Short Title.--This section may be cited as the ``Small 
     Business Emergency Fuel Assistance Act of 2007''.
       (b) Emergency Fuel Assistance Program.--There is 
     established within the Economic Development Administration of 
     the Department of Commerce, an emergency assistance program 
     for small businesses dependent on fuel.
       (c) Declaration of Fuel Emergency.--
       (1) By the secretary.--The Secretary of Commerce may 
     declare a severe fuel supply interruption for small 
     businesses if--
       (A) the retail price of gasoline in the United States is at 
     least 60 percent higher than the 5-year rolling average 
     retail price for 2 consecutive weeks; and
       (B) the price differential continues to increase during the 
     most recent week for which price information is available.
       (2) By a governor.--If the Secretary does not declare a 
     fuel emergency during a period that meets the criteria 
     described in paragraph (1)--
       (A) a Governor may certify that small businesses in the 
     State have incurred economic injury as a result of a fuel 
     interruption in the State;
       (B) a Governor may request financial assistance through the 
     program established under this section; and
       (C) the Secretary shall provide the Governor with a written 
     determination not later than 30 days after receiving a 
     request under subparagraph (B).
       (d) Grants Authorized.--
       (1) In general.--The Secretary of Commerce is authorized to 
     award grants to States under a declaration of fuel supply 
     interruption in accordance with this section.
       (2) In general.--Subject to paragraph (3), the Secretary 
     shall award grants to States, in accordance with an 
     allocation formula established by the Secretary based on the 
     pro rata share of each State of the total need among all 
     States, as applicable, for emergency assistance for fuel 
     interruption, as determined on the basis of--
       (A) the number and percentage of qualifying small 
     businesses operating within the State;
       (B) the increase in the retail price of fuel in the State; 
     and
       (C) such other factors as the Secretary determines to be 
     appropriate.
       (3) Allocation plan.--Each State shall establish, after 
     giving notice to the public, an opportunity for public 
     comment, and consideration of public comments received, an 
     allocation plan for the distribution of financial assistance 
     received under this subsection, which shall be submitted to 
     the Secretary, shall be made available to the public by the 
     State, and shall include--
       (A) application requirements for qualifying small 
     businesses seeking to receive assistance under this 
     subsection, including a requirement that each application 
     include--
       (i) demonstration of need for assistance under this 
     subsection;
       (ii) a plan to decrease the total commercial energy usage 
     of the small business through energy efficiency measures, 
     such as those promoted through the Energy Star Program; and
       (iii) if a small business has previously received 
     assistance under this subsection, evidence that the small 
     business has implemented the plan previously documented under 
     clause (ii); and
       (B) factors for selecting among small businesses that meet 
     the application requirements, with preference given to 
     applicants based on the percentage of operating costs 
     expended on fuel.
       (e) Eligibility.--A small business is eligible for a grant 
     under this section if--
       (1) the average gross receipts of the small business for 
     the 3 preceding taxable years does not exceed $5,000,000; or
       (2) the small business employed an average of more than 1 
     and fewer than 50 qualified employees on business days during 
     the preceding taxable year.
       (f) Defined Term.--In this section, the term ``aggregate 
     gross assets'' has the meaning given such term in section 
     1202(d)(2) of the Internal Revenue Code of 1986.
       (g) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Department of Commerce $100,000,000 
     for each of the fiscal years 2008 through 2012 to carry out 
     this section.
                                 ______
                                 
  SA 1706. Mr. KERRY (for himself and Ms. Snowe) submitted an amendment 
intended to be proposed to amendment SA 1502 proposed by Mr. Reid to 
the bill H.R. 6, to reduce our Nation's dependency on foreign oil by 
investing in clean, renewable, and alternative energy resources, 
promoting new emerging energy technologies, developing greater 
efficiency, and creating a Strategic Energy Efficiency and Renewables 
Reserve to invest in alternative energy, and for other purposes; which 
was ordered to lie on the table; as follows:

       On page 161, between lines 2 and 3, insert the following:

     SEC. 269. SMALL BUSINESS ENERGY EFFICIENCY.

       (a) Definitions.--In this section--
       (1) the terms ``Administration'' and ``Administrator'' mean 
     the Small Business Administration and the Administrator 
     thereof, respectively;
       (2) the term ``association'' means the association of small 
     business development centers established under section 
     21(a)(3)(A) of the Small Business Act (15 U.S.C. 
     648(a)(3)(A));
       (3) the term ``disability'' has the meaning given that term 
     in section 3 of the Americans with Disabilities Act of 1990 
     (42 U.S.C. 12102);
       (4) the term ``electric utility'' has the meaning given 
     that term in section 3 of the Public Utility Regulatory 
     Policies Act of 1978 (16 U.S.C. 2602);
       (5) the term ``on-bill financing'' means a low interest or 
     no interest financing agreement between a small business 
     concern and an electric utility for the purchase or 
     installation of equipment, under which the regularly 
     scheduled payment of that small business concern to that 
     electric utility is not reduced by the amount of the 
     reduction in cost attributable to the new equipment and that 
     amount is credited to the electric utility, until the cost of 
     the purchase or installation is repaid;
       (6) the term ``small business concern'' has the meaning 
     given that term in section 3 of the Small Business Act (15 
     U.S.C. 636);
       (7) the term ``small business development center'' means a 
     small business development center described in section 21 of 
     the Small Business Act (15 U.S.C. 648);
       (8) the term ``telecommuting'' means the use of 
     telecommunications to perform work functions under 
     circumstances which reduce or eliminate the need to commute; 
     and
       (9) the term ``veteran'' has the meaning given that term in 
     section 101 of title 38, United States Code.
       (b) Implementation of Small Business Energy Efficiency 
     Program.--
       (1) In general.--Not later than 90 days after the date of 
     enactment of this Act, the Administrator shall promulgate 
     final rules establishing the Government-wide program 
     authorized under subsection (d) of section 337 of the Energy 
     Policy and Conservation Act (42 U.S.C. 6307) that ensure 
     compliance with that subsection by not later than 6 months 
     after such date of enactment.
       (2) Plan.--Not later than 90 days after the date of 
     enactment of this Act, the Administrator shall publish a 
     detailed plan regarding how the Administrator will--
       (A) assist small business concerns in becoming more energy 
     efficient; and
       (B) build on the Energy Star for Small Business Program of 
     the Department of Energy and the Environmental Protection 
     Agency.
       (3) Assistant administrator for small business energy 
     policy.--
       (A) In general.--There is in the Administration an 
     Assistant Administrator for Small Business Energy Policy, who 
     shall be appointed by, and report to, the Administrator.
       (B) Duties.--The Assistant Administrator for Small Business 
     Energy Policy shall--
       (i) oversee and administer the requirements under this 
     subsection and section 337(d) of the Energy Policy and 
     Conservation Act (42 U.S.C. 6307(d)); and
       (ii) promote energy efficiency efforts for small business 
     concerns and reduce energy costs of small business concerns.
       (4) Reports.--The Administrator shall submit to the 
     Committee on Small Business and Entrepreneurship of the 
     Senate and the Committee on Small Business of the House of 
     Representatives an annual report on the progress of the 
     Administrator in encouraging small business concerns to 
     become more energy efficient, including data on the rate of 
     use of the Small Business Energy Clearinghouse established 
     under section 337(d)(4) of the Energy Policy and Conservation 
     Act (42 U.S.C. 6307(d)(4)).
       (c) Small Business Energy Efficiency.--
       (1) Authority.--The Administrator shall establish a Small 
     Business Energy Efficiency Pilot Program (in this subsection 
     referred to as the ``Efficiency Pilot Program'') to provide 
     energy efficiency assistance to small business concerns 
     through small business development centers.
       (2) Small business development centers.--
       (A) In general.--In carrying out the Efficiency Pilot 
     Program, the Administrator shall enter into agreements with 
     small business development centers under which such centers 
     shall--
       (i) provide access to information and resources on energy 
     efficiency practices, including on-bill financing options;
       (ii) conduct training and educational activities;
       (iii) offer confidential, free, one-on-one, in-depth energy 
     audits to the owners and operators of small business concerns 
     regarding energy efficiency practices;
       (iv) give referrals to certified professionals and other 
     providers of energy efficiency assistance who meet such 
     standards for educational, technical, and professional 
     competency as the Administrator shall establish; and
       (v) act as a facilitator between small business concerns, 
     electric utilities, lenders, and the Administration to 
     facilitate on-bill financing arrangements.

[[Page 16425]]

       (B) Reports.--Each small business development center 
     participating in the Efficiency Pilot Program shall submit to 
     the Administrator and the Administrator of the Environmental 
     Protection Agency an annual report that includes--
       (i) a summary of the energy efficiency assistance provided 
     by that center under the Efficiency Pilot Program;
       (ii) the number of small business concerns assisted by that 
     center under the Efficiency Pilot Program;
       (iii) statistics on the total amount of energy saved as a 
     result of assistance provided by that center under the 
     Efficiency Pilot Program; and
       (iv) any additional information determined necessary by the 
     Administrator, in consultation with the association.
       (C) Reports to congress.--Not later than 60 days after the 
     date on which all reports under subparagraph (B) relating to 
     a year are submitted, the Administrator shall submit to the 
     Committee on Small Business and Entrepreneurship of the 
     Senate and the Committee on Small Business of the House of 
     Representatives a report summarizing the information 
     regarding the Efficiency Pilot Program submitted by small 
     business development centers participating in that program.
       (3) Eligibility.--A small business development center shall 
     be eligible to participate in the Efficiency Pilot Program 
     only if that center is certified under section 21(k)(2) of 
     the Small Business Act (15 U.S.C. 648(k)(2)).
       (4) Selection of participating state programs.--
       (A) Groupings.--
       (i) Selection of programs.--The Administrator shall select 
     the small business development center programs of 2 States 
     from each of the groupings of States described in clauses 
     (ii) through (xi) to participate in the pilot program 
     established under this subsection.
       (ii) Group 1.--Group 1 shall consist of Maine, 
     Massachusetts, New Hampshire, Connecticut, Vermont, and Rhode 
     Island.
       (iii) Group 2.--Group 2 shall consist of New York, New 
     Jersey, Puerto Rico, and the Virgin Islands.
       (iv) Group 3.--Group 3 shall consist of Pennsylvania, 
     Maryland, West Virginia, Virginia, the District of Columbia, 
     and Delaware.
       (v) Group 4.--Group 4 shall consist of Georgia, Alabama, 
     North Carolina, South Carolina, Mississippi, Florida, 
     Kentucky, and Tennessee.
       (vi) Group 5.--Group 5 shall consist of Illinois, Ohio, 
     Michigan, Indiana, Wisconsin, and Minnesota.
       (vii) Group 6.--Group 6 shall consist of Texas, New Mexico, 
     Arkansas, Oklahoma, and Louisiana.
       (viii) Group 7.--Group 7 shall consist of Missouri, Iowa, 
     Nebraska, and Kansas.
       (ix) Group 8.--Group 8 shall consist of Colorado, Wyoming, 
     North Dakota, South Dakota, Montana, and Utah.
       (x) Group 9.--Group 9 shall consist of California, Guam, 
     American Samoa, Hawaii, Nevada, and Arizona.
       (xi) Group 10.--Group 10 shall consist of Washington, 
     Alaska, Idaho, and Oregon.
       (5) Matching requirement.--Subparagraphs (A) and (B) of 
     section 21(a)(4) of the Small Business Act (15 U.S.C. 
     648(a)(4)) shall apply to assistance made available under the 
     Efficiency Pilot Program.
       (6) Grant amounts.--Each small business development center 
     selected to participate in the Efficiency Pilot Program under 
     paragraph (4) shall be eligible to receive a grant in an 
     amount equal to--
       (A) not less than $100,000 in each fiscal year; and
       (B) not more than $300,000 in each fiscal year.
       (7) Evaluation and report.--The Comptroller General of the 
     United States shall--
       (A) not later than 30 months after the date of disbursement 
     of the first grant under the Efficiency Pilot Program, 
     initiate an evaluation of that pilot program; and
       (B) not later than 6 months after the date of the 
     initiation of the evaluation under subparagraph (A), submit 
     to the Administrator, the Committee on Small Business and 
     Entrepreneurship of the Senate, and the Committee on Small 
     Business of the House of Representatives, a report 
     containing--
       (i) the results of the evaluation; and
       (ii) any recommendations regarding whether the Efficiency 
     Pilot Program, with or without modification, should be 
     extended to include the participation of all small business 
     development centers.
       (8) Guarantee.--The Administrator may guarantee the timely 
     payment of a loan made to a small business concern through an 
     on-bill financing agreement on such terms and conditions as 
     the Administrator shall establish through a formal rule 
     making, after providing notice and an opportunity for 
     comment.
       (9) Authorization of appropriations.--
       (A) In general.--There are authorized to be appropriated to 
     carry out this subsection--
       (i) $5,000,000 for the first fiscal year beginning after 
     the date of enactment of this Act; and
       (ii) $5,000,000 for each of the 3 fiscal years following 
     the fiscal year described in clause (i).
       (B) Limitation on use of other funds.--The Administrator 
     may carry out the Efficiency Pilot Program only with amounts 
     appropriated in advance specifically to carry out this 
     subsection.
       (10) Termination.--The authority under this subsection 
     shall terminate 4 years after the date of disbursement of the 
     first grant under the Efficiency Pilot Program.
       (d) Small Business Telecommuting.--
       (1) Pilot program.--
       (A) In general.--In accordance with this subsection, the 
     Administrator shall conduct, in not more than 5 of the 
     regions of the Administration, a pilot program to provide 
     information regarding telecommuting to employers that are 
     small business concerns and to encourage such employers to 
     offer telecommuting options to employees (in this subsection 
     referred to as the ``Telecommuting Pilot Program'').
       (B) Special outreach to individuals with disabilities.--In 
     carrying out the Telecommuting Pilot Program, the 
     Administrator shall make a concerted effort to provide 
     information to--
       (i) small business concerns owned by or employing 
     individuals with disabilities, particularly veterans who are 
     individuals with disabilities;
       (ii) Federal, State, and local agencies having knowledge 
     and expertise in assisting individuals with disabilities, 
     including veterans who are individuals with disabilities; and
       (iii) any group or organization, the primary purpose of 
     which is to aid individuals with disabilities or veterans who 
     are individuals with disabilities.
       (C) Permissible activities.--In carrying out the 
     Telecommuting Pilot Program, the Administrator may--
       (i) produce educational materials and conduct presentations 
     designed to raise awareness in the small business community 
     of the benefits and the ease of telecommuting;
       (ii) conduct outreach--

       (I) to small business concerns that are considering 
     offering telecommuting options; and
       (II) as provided in subparagraph (B); and

       (iii) acquire telecommuting technologies and equipment to 
     be used for demonstration purposes.
       (D) Selection of regions.--In determining which regions 
     will participate in the Telecommuting Pilot Program, the 
     Administrator shall give priority consideration to regions in 
     which Federal agencies and private-sector employers have 
     demonstrated a strong regional commitment to telecommuting.
       (2) Report to congress.--Not later than 2 years after the 
     date on which funds are first appropriated to carry out this 
     subsection, the Administrator shall transmit to the Committee 
     on Small Business and Entrepreneurship of the Senate and the 
     Committee on Small Business of the House of Representatives a 
     report containing the results of an evaluation of the 
     Telecommuting Pilot Program and any recommendations regarding 
     whether the pilot program, with or without modification, 
     should be extended to include the participation of all 
     regions of the Administration.
       (3) Termination.--The Telecommuting Pilot Program shall 
     terminate 4 years after the date on which funds are first 
     appropriated to carry out this subsection.
       (4) Authorization of appropriations.--There is authorized 
     to be appropriated to the Administration $5,000,000 to carry 
     out this subsection.
       (e) Encouraging Innovation in Energy Efficiency.--Section 9 
     of the Small Business Act (15 U.S.C. 638) is amended by 
     adding at the end the following:
       ``(z) Encouraging Innovation in Energy Efficiency.--
       ``(1) Federal agency energy-related priority.--In carrying 
     out its duties under this section to SBIR and STTR 
     solicitations by Federal agencies, the Administrator shall--
       ``(A) ensure that such agencies give high priority to small 
     business concerns that participate in or conduct energy 
     efficiency or renewable energy system research and 
     development projects; and
       ``(B) include in the annual report to Congress under 
     subsection (b)(7) a determination of whether the priority 
     described in subparagraph (A) is being carried out.
       ``(2) Consultation required.--The Administrator shall 
     consult with the heads of other Federal agencies and 
     departments in determining whether priority has been given to 
     small business concerns that participate in or conduct energy 
     efficiency or renewable energy system research and 
     development projects, as required by this section.
       ``(3) Guidelines.--The Administrator shall, as soon as is 
     practicable after the date of enactment of this subsection, 
     issue guidelines and directives to assist Federal agencies in 
     meeting the requirements of this section.
       ``(4) Definitions.--In this subsection--
       ``(A) the term `biomass'--
       ``(i) means any organic material that is available on a 
     renewable or recurring basis, including--

       ``(I) agricultural crops;
       ``(II) trees grown for energy production;
       ``(III) wood waste and wood residues;
       ``(IV) plants (including aquatic plants and grasses);
       ``(V) residues;

[[Page 16426]]

       ``(VI) fibers;
       ``(VII) animal wastes and other waste materials; and
       ``(VIII) fats, oils, and greases (including recycled fats, 
     oils, and greases); and

       ``(ii) does not include--

       ``(I) paper that is commonly recycled; or
       ``(II) unsegregated solid waste;

       ``(B) the term `energy efficiency project' means the 
     installation or upgrading of equipment that results in a 
     significant reduction in energy usage; and
       ``(C) the term `renewable energy system' means a system of 
     energy derived from--
       ``(i) a wind, solar, biomass (including biodiesel), or 
     geothermal source; or
       ``(ii) hydrogen derived from biomass or water using an 
     energy source described in clause (i).''.
                                 ______
                                 
  SA 1707. Mr. KERRY submitted an amendment intended to be proposed to 
amendment SA 1502 proposed by Mr. Reid to the bill H.R. 6, to reduce 
our Nation's dependency on foreign oil by investing in clean, 
renewable, and alternative energy resources, promoting new emerging 
energy techniques, developing greater efficiency, and creating a 
Strategic Energy Efficiency and Renewables Reserve to invest in 
alternative energy, and for other purposes; which was ordered to lie on 
the table; as follows:

       At the appropriate place, insert the following:

                      TITLE __--ENERGY EMERGENCIES

     SEC. _01. FINDINGS.

       Congress finds that--
       (1) a significant number of small business concerns in the 
     United States, including nonfarm and agricultural producers, 
     use heating oil, natural gas, propane, or kerosene to heat 
     their facilities and for other purposes;
       (2) a significant number of small business concerns in the 
     United States sell, distribute, market, or otherwise engage 
     in commerce directly related to heating oil, natural gas, 
     propane, and kerosene; and
       (3) significant increases in the price of heating oil, 
     natural gas, propane, or kerosene--
       (A) disproportionately harm small business concerns 
     dependent on those fuels or that use, sell, or distribute 
     those fuels in the ordinary course of their business, and can 
     cause them substantial economic injury;
       (B) can negatively affect the national economy and regional 
     economies;
       (C) occurred during the winters of 1983 to 1984, 1988 to 
     1989, 1996 to 1997, 1999 to 2000, 2000 to 2001, and 2004 to 
     2005; and
       (D) can be caused by a host of factors, including 
     international conflicts, global or regional supply 
     difficulties, weather conditions, insufficient inventories, 
     refinery capacity, transportation, and competitive structures 
     in the markets, causes that are often unforeseeable to, and 
     beyond the control of, those who own and operate small 
     business concerns.

     SEC. _02. SMALL BUSINESS ENERGY EMERGENCY DISASTER LOAN 
                   PROGRAM.

       (a) In General.--Section 7(b) of the Small Business Act (15 
     U.S.C. 636(b)) is amended by inserting after paragraph (3) 
     the following:
       ``(4) Energy emergencies.--
       ``(A) Definitions.--In this paragraph--
       ``(i) the term `base price index' means the moving average 
     of the closing unit price on the New York Mercantile Exchange 
     for heating oil, natural gas, or propane for the 10 days, in 
     each of the most recent 2 preceding years, which correspond 
     to the trading days described in clause (ii);
       ``(ii) the term `current price index' means the moving 
     average of the closing unit price on the New York Mercantile 
     Exchange, for the 10 most recent trading days, for contracts 
     to purchase heating oil, natural gas, or propane during the 
     subsequent calendar month, commonly known as the `front 
     month';
       ``(iii) the term `heating fuel' means heating oil, natural 
     gas, propane, or kerosene; and
       ``(iv) the term `significant increase' means--

       ``(I) with respect to the price of heating oil, natural 
     gas, or propane, any time the current price index exceeds the 
     base price index by not less than 40 percent; and
       ``(II) with respect to the price of kerosene, any increase 
     which the Administrator, in consultation with the Secretary 
     of Energy, determines to be significant.

       ``(B) Authorization.--The Administration may make such 
     loans, either directly or in cooperation with banks or other 
     lending institutions through agreements to participate on an 
     immediate or deferred basis, to assist a small business 
     concern that has suffered or that is likely to suffer 
     substantial economic injury as the result of a significant 
     increase in the price of heating fuel occurring on or after 
     October 1, 2004.
       ``(C) Interest rate.--Any loan or guarantee extended under 
     this paragraph shall be made at the same interest rate as 
     economic injury loans under paragraph (2).
       ``(D) Maximum amount.--No loan may be made under this 
     paragraph, either directly or in cooperation with banks or 
     other lending institutions through agreements to participate 
     on an immediate or deferred basis, if the total amount 
     outstanding and committed to the borrower under this 
     subsection would exceed $1,500,000, unless such borrower 
     constitutes a major source of employment in its surrounding 
     area, as determined by the Administrator, in which case the 
     Administrator, in the discretion of the Administrator, may 
     waive the $1,500,000 limitation.
       ``(E) Declarations.--For purposes of assistance under this 
     paragraph--
       ``(i) a declaration of a disaster area based on conditions 
     specified in this paragraph shall be required, and shall be 
     made by the President or the Administrator; or
       ``(ii) if no declaration has been made under clause (i), 
     the Governor of a State in which a significant increase in 
     the price of heating fuel has occurred may certify to the 
     Administration that small business concerns have suffered 
     economic injury as a result of such increase and are in need 
     of financial assistance which is not otherwise available on 
     reasonable terms in that State, and upon receipt of such 
     certification, the Administration may make such loans as 
     would have been available under this paragraph if a disaster 
     declaration had been issued.
       ``(F) Use of funds.--Notwithstanding any other provision of 
     law, loans made under this paragraph may be used by a small 
     business concern described in subparagraph (B) to convert 
     from the use of heating fuel to a renewable or alternative 
     energy source, including agriculture and urban waste, 
     geothermal energy, cogeneration, solar energy, wind energy, 
     or fuel cells.''.
       (b) Conforming Amendments Relating to Heating Fuel.--
     Section 3(k) of the Small Business Act (15 U.S.C. 632(k)) is 
     amended--
       (1) by inserting ``, significant increases in the price of 
     heating fuel'' after ``civil disorders''; and
       (2) by inserting ``other'' before ``economic''.
       (c) Effective Period.--The amendments made by this section 
     shall apply during the 4-year period beginning on the date on 
     which guidelines are published by the Administrator of the 
     Small Business Administration under section _04.

     SEC. _03. AGRICULTURAL PRODUCER EMERGENCY LOANS.

       (a) In General.--Section 321(a) of the Consolidated Farm 
     and Rural Development Act (7 U.S.C. 1961(a)) is amended--
       (1) in the first sentence--
       (A) by striking ``operations have'' and inserting 
     ``operations (i) have''; and
       (B) by inserting before ``: Provided,'' the following: ``, 
     or (ii)(I) are owned or operated by such an applicant that is 
     also a small business concern (as defined in section 3 of the 
     Small Business Act (15 U.S.C. 632)), and (II) have suffered 
     or are likely to suffer substantial economic injury on or 
     after October 1, 2004, as the result of a significant 
     increase in energy costs or input costs from energy sources 
     occurring on or after October 1, 2004, in connection with an 
     energy emergency declared by the President or by the 
     Secretary'';
       (2) in the third sentence, by inserting before the period 
     at the end the following: ``or by an energy emergency 
     declared by the President or by the Secretary''; and
       (3) in the fourth sentence--
       (A) by striking ``or natural disaster'' each place such 
     term appears and inserting ``, natural disaster, or energy 
     emergency'';
       (B) by inserting ``or declaration'' after ``emergency 
     designation''; and
       (C) by inserting ``or energy emergency'' after ``such 
     natural disaster''.
       (b) Funding.--Funds available on the date of the enactment 
     of this Act for emergency loans under subtitle C of the 
     Consolidated Farm and Rural Development Act (7 U.S.C. 1961 et 
     seq.) shall be available to carry out the amendments made by 
     subsection (a) to meet the needs resulting from energy 
     emergencies.
       (c) Effective Period.--The amendments made by this section 
     shall apply during the 4-year period beginning on the date on 
     which guidelines are published by the Secretary of 
     Agriculture under section _04.

     SEC. _04. GUIDELINES AND RULEMAKING.

       (a) Guidelines.--Not later than 30 days after the date of 
     the enactment of this Act, the Administrator of the Small 
     Business Administration and the Secretary of Agriculture 
     shall each issue such guidelines as the Administrator or the 
     Secretary, as applicable, determines to be necessary to carry 
     out this title and the amendments made by this title.
       (b) Rulemaking.--Not later than 30 days after the date of 
     enactment of this Act, the Administrator, after consultation 
     with the Secretary of Energy, shall promulgate regulations 
     specifying the method for determining a significant increase 
     in the price of kerosene under section 7(b)(4)(A)(iv)(II) of 
     the Small Business Act, as added by section _02.

     SEC. _05. REPORTS.

       (a) Small Business Administration.--Not later than 12 
     months after the date on which the Administrator issues 
     guidelines under section _04, and annually thereafter until 
     the date that is 12 months after the end of the effective 
     period of section 7(b)(4) of the Small Business Act, as added 
     section _02,

[[Page 16427]]

     the Administrator shall submit to the Committee on Small 
     Business and Entrepreneurship of the Senate and the Committee 
     on Small Business of the House of Representatives, a report 
     on the effectiveness of the assistance made available under 
     such section, including--
       (1) the number of small business concerns that applied for 
     a loan under such section and the number of those that 
     received such loans;
       (2) the dollar value of those loans;
       (3) the States in which the small business concerns that 
     received such loans are located;
       (4) the type of heating fuel or energy that caused the 
     significant increase in the cost for the participating small 
     business concerns; and
       (5) recommendations for ways to improve the assistance 
     provided under such section, if any.
       (b) Department of Agriculture.--
       (1) In general.--Not later than 1 year after the date on 
     which the Secretary of Agriculture issues guidelines under 
     section _04, and annually thereafter until the date that is 1 
     year after the end of the effective period of the amendments 
     made to section 321(a) of the Consolidated Farm and Rural 
     Development Act (7 U.S.C. 1961(a)) by this title, the 
     Secretary shall submit a report to the committees listed in 
     paragraph (2) that--
       (A) describes the effectiveness of the assistance made 
     available under section 321(a) of the Consolidated Farm and 
     Rural Development Act (7 U.S.C. 1961(a)); and
       (B) contains recommendations for ways to improve the 
     assistance provided under such section 321(a), if any.
       (2) Report recipients.--The report described in paragraph 
     (1) shall be submitted to--
       (A) the Committee on Small Business and Entrepreneurship of 
     the Senate;
       (B) the Committee on Agriculture, Nutrition, and Forestry 
     of the Senate;
       (C) the Committee on Small Business of the House of 
     Representatives; and
       (D) the Committee on Agriculture of the House of 
     Representatives.
                                 ______
                                 
  SA 1708. Mr. TESTER (for himself, Mr. Coleman) submitted an amendment 
intended to be proposed to amendment SA 1502 proposed by Mr. Reid to 
the bill H.R. 6, to reduce our Nation's dependency on foreign oil by 
investing in clean, renewable, and alternative energy resources, 
promoting new emerging energy technologies, developing greater 
efficiency, and creating a Strategic Energy Efficiency and Renewables 
Reserve to invest in alternative energy, and for other purposes; which 
was ordered to lie on the table; as follows:

       On page 177, after line 21, add the following:

     SEC. 279. ENERGY EFFICIENT SCHOOLS.

       (a) Definitions.--In this section:
       (1) Baseline energy efficiency standard.--The term 
     ``baseline energy efficiency standard'' means--
       (A) in the case of new construction of a building, the most 
     recent version of applicable provisions of the International 
     Energy Conservation Code; and
       (B) in the case of renovation of a building, a standard to 
     be calculated based on a 3-year, weather-normalized average 
     for the building.
       (2) High-performance school building.--The term ``high-
     performance school building'' means a school building that 
     integrates and optimizes all major high-performance building 
     attributes, including energy and water efficiency, renewable 
     energy, indoor air quality, durability, lifecycle cost 
     performance, and occupant productivity.
       (3) Renewable energy.--The term ``renewable energy'' 
     means--
       (A) energy produced using solar, wind, biomass, ocean, 
     geothermal, or hydroelectric energy; or
       (B) heating and cooling from a ground source heat pump.
       (4) School.--The term ``school'' means an accredited public 
     school that is--
       (A) subject to the authority of a State education agency; 
     and
       (B)(i) an elementary school or secondary school (as those 
     terms are defined in section 9101 of the Elementary and 
     Secondary Education Act of 1965 (20 U.S.C. 7801)); or
       (ii) a BIA school (within the meaning of section 
     9101(26)(C) of that Act (20 U.S.C. 7801(26)(C))).
       (5) State educational agency.--The term ``State educational 
     agency'' has the meaning given the term in section 9101 of 
     the Elementary and Secondary Education Act of 1965 (20 U.S.C. 
     7801)).
       (6) State energy office.--The term ``State energy office'' 
     means--
       (A) the State agency that is responsible for developing 
     State energy conservation plans under section 362 of the 
     Energy Policy and Conservation Act (42 U.S.C. 6322); or
       (B) if an agency described in subparagraph (A) does not 
     exist in a State, a State agency designated by the Governor 
     of the State.
       (b) Establishment of Program.--There is established in the 
     Department of Energy a program, to be known as the ``High-
     Performance Schools Program'', under which the Secretary may 
     provide grants to State energy offices to assist school 
     districts in the State--
       (1) to improve the energy efficiency of, and use of 
     renewable energy in, school buildings;
       (2) to educate students regarding--
       (A) energy consumption in buildings; and
       (B) the benefits of energy efficiency and renewable energy;
       (3) to administer the program; and
       (4) to promote participation in the program.
       (c) Conditions of Receipt.--As a condition of receiving a 
     grant under this section, a State energy office shall agree 
     to use the grant only to provide assistance to school 
     districts in the State that demonstrate to the satisfaction 
     of the State energy office--
       (1) financial need with respect to the construction of new 
     or renovated high-performance school buildings;
       (2) a commitment to use the grant funds to develop high-
     performance school buildings, in accordance with a plan that 
     the State energy office, in consultation with the State 
     educational agency, determines to be feasible and appropriate 
     to achieve the purposes for which the grant is provided;
       (3) a commitment to educate students and the public 
     regarding the energy efficiency and renewable energy uses 
     relating to the program; and
       (4) that the school district has conducted an energy audit 
     satisfactory to the State energy office of the baseline 
     energy consumption of the district.
       (d) Administration.--
       (1) Selection of projects.--In selecting school districts 
     to receive funds provided under this section, the Secretary 
     shall--
       (A) give priority to States that carry out, or propose to 
     carry out, projects that--
       (i) achieve maximum increases in energy efficiency; and
       (ii) achieve maximum cost savings as a result of that 
     increased efficiency; and
       (B) ensure geographical diversity of distribution of funds 
     throughout the United States, to the maximum extent 
     practicable.
       (2) Use of grants by state energy offices.--A State energy 
     office may use a portion of a grant received under this 
     section--
       (A) to evaluate compliance by school districts in the State 
     with the requirements of this section;
       (B) to develop and conduct programs for school board 
     members, school personnel, architects, engineers, and other 
     interested persons to advance the concepts of high-
     performance school buildings;
       (C) to obtain technical services and assistance in planning 
     and designing high-performance school buildings;
       (D) to collect and monitor data relating to high-
     performance school building projects; or
       (E) for promotional and marketing activities.
       (e) Supplementing Grant Funds.--Each State energy office 
     that receives a grant under this section shall encourage each 
     school district provided funds by the State energy office to 
     supplement, to the maximum extent practicable, the funds 
     using funds from other sources in the implementation of the 
     plans of the school districts.
       (f) Other Funds.--Of amounts made available to carry out 
     this section, the Secretary may reserve an amount equal to 
     the lesser of 10 percent of the amounts and $500,000 for a 
     fiscal year to provide assistance to State energy offices 
     with respect to the coordination and implementation of the 
     program under this section, including the development of 
     reference materials--
       (1) to clarify and support the purposes of this section; 
     and
       (2) to increase the quantity in the States of high-
     performance school buildings.
       (g) Report.--Not later than 3 years after the date on which 
     the Secretary provides the initial grant to a State energy 
     office pursuant to this section, the Secretary shall submit 
     to the Committee on Energy and Natural Resources of the 
     Senate and the Committee on Energy and Commerce of the House 
     of Representatives a report that describes, with respect to 
     each school that uses funds provided under this section--
       (1) the projected quantity of energy savings of the school, 
     as compared to the baseline energy efficiency standard 
     applicable to a similar school that does not use--
       (A) energy efficient technologies; or
       (B) renewable energy;
       (2) the projected amount of savings relating to reduced 
     operation and maintenance costs due to use by the school of--
       (A) any energy efficiency technology; or
       (B) renewable energy; and
       (3) the level of participation of students and faculty 
     members of the school in each applicable energy efficiency 
     and renewable energy technology.
       (h) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $10,000,000 for 
     each of fiscal years 2008 through 2012.
                                 ______
                                 
  SA 1709. Mr. ENZI proposed an amendment to the bill S. 277, to modify 
the boundaries of Grand Teton National Park to include certain land 
within the GT Park Subdivision, and for other purposes; as follows:


[[Page 16428]]

       Strike section 4 and insert the following:

     SEC. 4. CRAIG THOMAS DISCOVERY AND VISITOR CENTER.

       (a) Findings.--Congress finds that--
       (1) Craig Thomas was raised on a ranch just outside of 
     Cody, Wyoming, near Yellowstone National Park and Grand Teton 
     National Park, where he--
       (A) began a lifelong association with those parks; and
       (B) developed a deep and abiding dedication to the values 
     of the public land of the United States;
       (2) during his 18-year tenure in Congress, including 
     service in both the Senate and the House of Representatives, 
     Craig Thomas forged a distinguished legislative record on 
     issues as diverse as public land management, agriculture, 
     fiscal responsibility, and rural health care;
       (3) as Chairman and Ranking Member of the National Parks 
     Subcommittee of the Committee on Energy and Natural Resources 
     of the Senate and a frequent visitor to many units of the 
     National Park System, including Yellowstone National Park and 
     Grand Teton National Park, Craig Thomas was a strong 
     proponent for ensuring that people of all ages and abilities 
     had a wide range of opportunities to learn more about the 
     natural and cultural heritage of the United States;
       (4) Craig Thomas authored legislation to provide critical 
     funding and management reforms to protect units of the 
     National Park System into the 21st century, ensuring quality 
     visits to units of the National Park System and the 
     protection of natural and cultural resources;
       (5) Craig Thomas strongly supported public-private 
     partnerships and collaboration between the National Park 
     Service and other organizations that foster new opportunities 
     for providing visitor services while encouraging greater 
     citizen involvement in the stewardship of units of the 
     National Park System;
       (6) Craig Thomas was instrumental in obtaining the Federal 
     share for a public-private partnership with the Grand Teton 
     National Park Foundation and the Grand Teton Natural History 
     Association to construct a new discovery and visitor center 
     at Grand Teton National Park;
       (7) on June 4, 2007, Craig Thomas passed away after 
     battling cancer for 7 months;
       (8) Craig Thomas is survived by his wife, Susan, and 
     children, Patrick, Greg, Peter, and Lexie; and
       (9) in memory of the distinguished career of service of 
     Craig Thomas to the people of the United States, the 
     dedication of Craig Thomas to units of the National Park 
     System, generally, and to Grand Teton National Park, 
     specifically, and the critical role of Craig Thomas in the 
     new discovery and visitor center at Grand Teton National 
     Park, the Grand Teton Discovery and Visitor Center should be 
     designated as the ``Craig Thomas Discovery and Visitor 
     Center''.
       (b) The Craig Thomas Discovery and Visitor Center.--
       (1) Designation.--The Grand Teton Discovery and Visitor 
     Center located in Moose, Wyoming, and scheduled for 
     completion in August 2007 shall be known and designated as 
     the ``Craig Thomas Discovery and Visitor Center''.
       (2) Reference.--Any reference in a law, map, regulation, 
     document, paper, or other record of the United States to the 
     Grand Teton Discovery and Visitor Center referred to in 
     paragraph (1) shall be deemed to be a reference to the 
     ``Craig Thomas Discovery and Visitor Center''.

     SEC. 5. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated to the Secretary 
     such sums as are necessary to carry out this Act.
                                 ______
                                 
  SA 1710. Mr. FEINGOLD (for himself, Mr. Sanders, and Mr. Menendez) 
submitted an amendment intended to be proposed to amendment SA 1502 
proposed by Mr. Reid to the bill H.R. 6, to reduce our Nation's 
dependency on foreign oil by investing in clean, renewable, and 
alternative energy resources, promoting new emerging energy 
technologies, developing greater efficiency, and creating a Strategic 
Energy Efficiency and Renewables Reserve to invest in alternative 
energy, and for other purposes; which was ordered to lie on the table; 
as follows:

       On page 166, strike lines 17 through 19, and insert the 
     following:
       ``(1) to reduce fossil fuel emissions created as a result 
     of activities within the boundaries of the States or units of 
     local government in an environmentally sustainable way that, 
     to the maximum extent practicable, maximizes benefits for 
     local and regional communities;
                                 ______
                                 
  SA 1711. Mr. PRYOR (for himself, Mr. Bond, Mr. Levin, Mr. Voinovich, 
Ms. Stabenow, and Mrs. McCaskill) submitted an amendment intended to be 
proposed to amendment SA 1502 proposed by Mr. Reid to the bill H.R. 6, 
to reduce our Nation's dependency on foreign oil by investing in clean, 
renewable, and alternative energy resources, promoting new emerging 
energy technologies, developing greater efficiency, and creating a 
Strategic Energy Efficiency and Renewables Reserve to invest in 
alternative energy, and for other purposes; which was ordered to lie on 
the table; as follows:

       On page 239, strike line 16 and all that follows through 
     page 277, line 5 and insert the following:

           TITLE V--CORPORATE AVERAGE FUEL ECONOMY STANDARDS

     SEC. 501. INCREASING THE EFFICIENCY OF AUTOMOBILES.

       (a) Definitions.--In this section:
       (1) Automobile.--The term ``automobile'' means, as defined 
     in regulations promulgated by the Administrator of the 
     Environmental Protection Agency that are in effect on the 
     date of the enactment of this Act--
       (A) a light-duty truck; or
       (B) a light-duty vehicle.
       (2) Alternative fuel.--The term ``alternative fuel'' has 
     the meaning given the term in section 32901(a) of title 49, 
     United States Code.
       (3) E85.--The term ``E85'' means a fuel blend containing 85 
     percent denatured ethanol and 15 percent gasoline by volume.
       (4) Flexible fuel automobile.--The term ``flexible fuel 
     automobile'' means an automobile warrantied by the 
     manufacturer of the vehicle to operate on any combination of 
     gasoline, E85, and M85 or diesel fuel blends containing not 
     less than 20 percent non-petroleum based fuel alternatives.
       (5) 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.
       (6) M85.--The term ``M85'' means a fuel blend containing 85 
     percent methanol and 15 percent gasoline by volume.
       (7) Plug-in hybrid automobile.--The term ``plug-in hybrid 
     automobile'' means a hybrid automobile that--
       (A) has an onboard, rechargeable storage device capable of 
     propelling the vehicle by electricity for at least 10 miles; 
     and
       (B) achieves at least 125 percent of the model year 2002 
     city fuel economy.
       (8) Qualified automobile.--The term ``qualified 
     automobile'' 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 automobile;
       (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 automobile;
       (F) a plug-in hybrid automobile;
       (G) an electric automobile;
       (H) a hydrogen internal combustion engine automobile; and
       (I) any other appropriate automobile that uses 
     substantially new technology and achieves at least 175 
     percent of the model year 2002 city fuel economy, as 
     determined by the Secretary of Transportation, by regulation.
       (b) Requirements.--
       (1) In general.--For each model year, the percentage of new 
     automobiles manufactured by a manufacturer for sale in the 
     United States that are qualified automobiles shall be not 
     less than the corresponding percentage in the following 
     table:

For model year:                       The percentage that are qualified
                                    automobiles shall be not less than:
2012.........................................................20 percent
2013.........................................................30 percent
2014.........................................................40 percent
2015 and thereafter..........................................50 percent

       (2) New technology.--Not less than 10 percent of the number 
     of qualified automobiles required to be manufactured by a 
     manufacturer for sale in the United States in each model year 
     after 2016 pursuant to paragraph (1), shall be--
       (A) hybrid automobiles;
       (B) plug-in hybrid automobiles;
       (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);
       (E) electric automobiles; or
       (F) any other appropriate automobile that uses 
     substantially new technology and achieves at least 175 
     percent of the model year 2002 combined fuel economy, as 
     determined by the Secretary of Transportation, by regulation.
       (c) Qualified Automobile Credits.--
       (1) In general.--The Secretary shall issue qualified 
     automobile production credits to manufacturers for 
     automobiles manufactured for model year 2012 and for each 
     subsequent model year, in accordance with this subsection.
       (2) Effect of credit.--Each credit issued to a manufacturer 
     under this subsection shall reduce the qualified automobile 
     mandate requirement under subsection (b)(1) by 1

[[Page 16429]]

     automobile for the model year to which the credit applies.
       (3) Rate of credit issuance.--For each qualified automobile 
     (except for automobiles described in subparagraphs (B) and 
     (C) of subsection (a)(8)) manufactured for model year 2012, 
     2013, 2014, 2015, or 2016, the manufacturer shall be issued--
       (A) 1.25 qualified automobile production credits if the 
     combined fuel economy for such automobile is greater than 110 
     percent and less than 125 percent of the combined fuel 
     economy of the model year 2002 inertia weight class;
       (B) 1.5 qualified automobile production credits if the 
     combined fuel economy for such automobile is at least 125 
     percent and less than 150 percent of the combined fuel 
     economy of the model year 2002 inertia weight class;
       (C) 2.0 qualified automobile production credits if the 
     combined fuel economy for such automobile is at least 150 
     percent and less than 175 percent of the combined fuel 
     economy of the model year 2002 inertia weight class; and
       (D) 3.0 qualified automobile production credits if the 
     combined fuel economy for such automobile is at least 175 
     percent of the combined fuel economy of the model year 2002 
     inertia weight class;
       (4) Defined term.--For purposes of this paragraph, the term 
     ``model year 2002 inertia weight class'' has the same meaning 
     as the term ``vehicle inertia weight class'' as defined in 
     Section 30B of the Internal Revenue Code of 1986.
       (d) Rulemaking.--Not later than 1 year after the date of 
     the enactment of this Act, the Secretary of Transportation 
     shall promulgate regulations to carry out this section.

     SEC. 502. AVERAGE FUEL ECONOMY STANDARDS FOR AUTOMOBILES.

       (a) Increased Standards.--Section 32902 of title 49, United 
     States Code, is amended--
       (1) by amending subsection (a) to read as follows:
       ``(a) Nonpassenger Automobiles.--
       ``(1) Annual prescription of average fuel economy 
     standards.--
       ``(A) In general.--Not later than 18 months before the 
     beginning of each model year, the Secretary of Transportation 
     shall prescribe by regulation average fuel economy standards 
     for nonpassenger automobiles manufactured by a manufacturer 
     in that model year.
       ``(B) Standards based on class.--The Secretary may 
     prescribe separate standards for different classes of 
     nonpassenger automobiles.
       ``(C) Standards based on vehicle attributes.--The Secretary 
     may prescribe such standards based on vehicle attributes 
     pursuant to subsection (j).
       ``(D) Minimum standard.--Each standard prescribed under 
     this paragraph shall be the maximum feasible average fuel 
     economy level that the Secretary determines the manufacturers 
     can achieve in that model year, consistent with subsection 
     (e).
       ``(2) Average fuel economy standard for model years 2012 
     through 2014.--Not later than April 1, 2010, the Secretary 
     shall establish average fuel economy standards for 
     nonpassenger automobiles for each of the model years 2012, 
     2013, and 2014. Each such standard shall be set at the 
     maximum feasible average fuel economy level that the 
     Secretary determines the manufacturers can achieve in each 
     such model year.
       ``(3) Average fuel economy standard for model year 2015.--
     Not later than April 1, 2013, the Secretary shall establish 
     the average fuel economy standard for nonpassenger 
     automobiles for model year 2015--
       ``(A) at least 25.3 miles per gallon, consistent with 
     paragraph (1)(D); or
       ``(B) if the Secretary prescribes average fuel economy 
     standards on the basis of vehicle attributes pursuant to 
     subsection (j), at a level that yields estimated fuel savings 
     not less than those that would be achieved by the average 
     fuel economy standard described in subparagraph (A).
       ``(4) Average fuel economy standard for model years 2016 
     through 2019.--Not later than April 1, 2014, the Secretary 
     shall establish average fuel economy standards for 
     nonpassenger automobiles for each of the model years 2016, 
     2017, 2018, and 2019. Each such standard shall be set at the 
     maximum feasible average fuel economy level that the 
     Secretary determines the manufacturers can achieve in each 
     such model year.
       ``(5) Average fuel economy standard for model year 2020.--
     Not later than April 1, 2018, the Secretary shall establish 
     the average fuel economy standard for nonpassenger 
     automobiles for model year 2020--
       ``(A) at least 27.7 miles per gallon, consistent with 
     paragraph (1)(D); or
       ``(B) if the Secretary prescribes average fuel economy 
     standards on the basis of vehicle attributes pursuant to 
     subsection (j), at a level that yields estimated fuel savings 
     not less than those that would be achieved by the average 
     fuel economy standard described in subparagraph (A).
       ``(6) Average fuel economy standard for model years 2021 
     through 2024.--Not later than April 1, 2019, the Secretary 
     shall establish average fuel economy standards for 
     nonpassenger automobiles for each of the model years 2021, 
     2022, 2023, and 2024. Each such standard shall be set at the 
     maximum feasible average fuel economy level that the 
     Secretary determines the manufacturers can achieve in each 
     such model year.
       ``(7) Average fuel economy standard for model years 2025 
     and thereafter.--Not later than April 1, 2023, the Secretary 
     shall establish the average fuel economy standard for 
     nonpassenger automobiles for model year 2025 and each 
     subsequent model year--
       ``(A) at least 30 miles per gallon, consistent with 
     paragraph (1)(D); or
       ``(B) if the Secretary prescribes average fuel economy 
     standards on the basis of vehicle attributes pursuant to 
     subsection (j), a level that yields estimated fuel savings 
     not less than those that would be achieved by the average 
     fuel economy standard described in subparagraph (A).''; and
       (2) by amending subsection (b) to read as follows:
       ``(b) Passenger Automobiles.--
       ``(1) Annual prescription of average fuel economy 
     standards.--
       ``(A) In general.--Not later than 18 months before the 
     beginning of each model year after model year 2011, the 
     Secretary of Transportation shall prescribe by regulation 
     average fuel economy standards for passenger automobiles 
     manufactured by a manufacturer in that model year.
       ``(B) Authority for prescription of differing standards 
     based on class.--The Secretary may prescribe separate 
     standards for different classes of passenger automobiles.
       ``(C) Standards based on vehicle attributes.--The Secretary 
     may prescribe such standards based on vehicle attributes 
     pursuant to subsection (j).
       ``(D) Minimum standard.--Each standard prescribed under 
     this paragraph shall be the maximum feasible average fuel 
     economy level that the Secretary determines the manufacturers 
     can achieve in that model year, consistent with subsection 
     (e).
       ``(2) Average fuel economy standard for model year 2012.--
     Not later than April 1, 2010, the Secretary shall establish 
     the average fuel economy standard for passenger automobiles 
     for model year 2012--
       ``(A) at least 29 miles per gallon, consistent with 
     paragraph (1)(D); or
       ``(B) if the Secretary prescribes average fuel economy 
     standards on the basis of vehicle attributes pursuant to 
     subsection (j), at a level that yields estimated fuel savings 
     not less than those that would be achieved by the average 
     fuel economy standard described in subparagraph (A).
       ``(3) Average fuel economy standard for model years 2013 
     through 2016.--Not later than April 1, 2011, the Secretary 
     shall establish average fuel economy standards for passenger 
     automobiles for each of the model years 2013, 2014, 2015, and 
     2016. Each such standard shall be set at the maximum feasible 
     average fuel economy level that the Secretary determines the 
     manufacturers can achieve in each such model year.
       ``(4) Average fuel economy standard for model years 2017.--
     Not later than April 1, 2015, the Secretary shall establish 
     the average fuel economy standard for passenger automobiles 
     for model year 2017--
       ``(A) at least 32.5 miles per gallon, consistent with 
     paragraph (1)(D); or
       ``(B) if the Secretary prescribes average fuel economy 
     standards on the basis of vehicle attributes pursuant to 
     subsection (j), at a level that yields estimated fuel savings 
     not less than those that would be achieved by the average 
     fuel economy standard described in subparagraph (A).
       ``(5) Average fuel economy standard for model years 2018 
     through 2021.--Not later than April 1, 2016, the Secretary 
     shall establish average fuel economy standards for passenger 
     automobiles for model years 2018, 2019, 2020, and 2021. Each 
     such standard shall be set at the maximum feasible average 
     fuel economy level that the Secretary determines the 
     manufacturers can achieve in each such model year.
       ``(6) Average fuel economy standard for model years 2022 
     and thereafter.--Not later than April 1, 2020, the Secretary 
     shall establish the average fuel economy standard for 
     passenger automobiles for model year 2022 and each subsequent 
     model year--
       ``(A) at least 36 miles per gallon, consistent with 
     paragraph (1)(D); or
       ``(B) if the Secretary prescribes average fuel economy 
     standards on the basis of vehicle attributes pursuant to 
     subsection (j), at a level that yields estimated fuel savings 
     not less than those that would be achieved by the average 
     fuel economy standard described in subparagraph (A).
       ``(7) Minimum for average fuel economy standards based on 
     vehicle attributes.--
       ``(A) In general.--Notwithstanding any other provision of 
     this section, for any model year in which the Secretary 
     prescribes average fuel economy standards for passenger 
     automobiles on the basis of vehicle attributes pursuant to 
     subsection (j), the average fuel economy standard for 
     passenger automobiles manufactured by a manufacturer in that 
     model year shall also provide for an alternative minimum 
     standard that shall apply only to a manufacturer's 
     domestically manufactured passenger automobiles, as 
     calculated under section 32904 as in effect on the day before 
     the date of the enactment of the Renewable Fuels, Consumer 
     Protection, and Energy Efficiency Act of 2007.

[[Page 16430]]

       ``(B) Alternative minimum standard.--The alternative 
     minimum standard referred to in subparagraph (A) shall be the 
     greater of--
       ``(i) 27.5 miles per gallon; or
       ``(ii) 92 percent of the average fuel economy projected by 
     the Secretary for the combined domestic and foreign fleets 
     manufactured for sale in the United States by all 
     manufacturers in that model year, which projection shall be 
     published in the Federal Register when the standard for that 
     model year is promulgated in accordance with this section.
       ``(C) Applicability.--The alternative minimum standard 
     under this paragraph shall apply to a manufacturer's 
     domestically manufactured passenger automobiles only if the 
     passenger automobile standard established on the basis of 
     vehicle attributes pursuant to subsection (j), excluding any 
     credits transferred by the manufacturer pursuant to 
     subsection (g) from other categories of automobiles described 
     in paragraph (5)(B), would allow that manufacturer to comply 
     with a less stringent passenger automobile standard than the 
     alternative minimum standard.''.
       (b) Repeal of Authority to Amend Passenger Automobile Fuel 
     Economy Standards.--
       (1) In general.--Section 32902 of title 49, United States 
     Code, is amended--
       (A) by striking subsection (c); and
       (B) by redesignating subsections (d) through (j) as 
     subsections (c) through (i), respectively.
       (2) Conforming amendments.--
       (A) Section 32901(a)(12) of such title is amended by 
     striking ``section 32902(d)'' and inserting ``section 
     32902(c)''.
       (B) Section 32902 of such title is amended--
       (i) in subsection (c)(1), as redesignated by paragraph 
     (1)(B), by striking ``under subsection (b) or (c)'' and 
     inserting ``under subsection (b)'';
       (ii) in subsection (d)(2), as redesignated by paragraph 
     (1)(B), by striking ``under subsection (a), (b), (c), or 
     (d)'' and inserting ``under subsection (a), (b), or (c)'';
       (iii) in subsection (f), as redesignated by paragraph 
     (1)(B)--

       (I) in paragraph (1)--

       (aa) by striking ``under subsection (a) or (d)'' and 
     inserting ``under subsection (a), (b), or (c)''; and
       (bb) by striking ``of subsection (a) or (d)'' and inserting 
     ``of subsection (a), (b), or (c)''; and

       (II) in paragraph (2), by striking ``(and submit the 
     amendment to Congress when required under subsection (c)(2) 
     of this section)'';

       (iv) in subsection (g), as redesignated by paragraph 
     (1)(B), by striking ``carrying out subsections (c), (f), and 
     (g)'' and inserting ``carrying out subsections (a), (b), (e), 
     and (f)''; and
       (v) in subsection (i), as redesignated by paragraph (1)(B), 
     by striking ``under subsection (a), (c), or (g) of this 
     section'' and inserting ``under subsection (a), (b), or 
     (f)''.
       (C) Section 32904(a)(1)(B) of such title is amended by 
     striking ``section 32902(b)-(d)'' and inserting ``subsections 
     (b) and (c) of section 32902''.
       (D) Section 32907(a)(4) of such title is amended by 
     striking ``section 32902(d)'' and inserting ``section 
     32902(c)''.
       (E) Section 32909(b) of such title is amended by striking 
     ``, except that a petition for review'' and all that follows 
     through ``referred to in section 32902(c)(2)''.
       (F) Section 32917(b)(1)(B) of such title is amended by 
     striking ``or (c)''.
       (c) Authority of the Secretary to Prescribe Standards Based 
     on Vehicle Attributes.--Section 32902 of title 49, United 
     States Code, as amended by this section, is further amended 
     by adding at the end the following:
       ``(j) Authority of the Secretary to Prescribe Standards 
     Based on Vehicle Attributes.--
       ``(1) In general.--The authority of the Secretary of 
     Transportation to prescribe by regulation average fuel 
     economy standards for passenger automobiles and nonpassenger 
     automobiles includes the authority to prescribe standards 
     based on vehicle attributes related to fuel economy and to 
     express any such attribute-based standard in the form of a 
     mathematical function.
       ``(2) Transition period.--If the Secretary prescribes 
     standards for passenger automobiles on the basis of vehicle 
     attributes, the Secretary shall provide a transition period 
     during the first 3 model years in which an attribute-based 
     standard would apply during which each manufacturer may elect 
     whether to comply with the attribute-based standard or with 
     the single corporate average fuel economy level prescribed 
     under subsection (b).
       ``(3) Prescription of standards for multiple years.--The 
     authority of the Secretary to prescribe by regulation average 
     fuel economy standards for automobiles includes the authority 
     to prescribe standards by issuing regulations governing more 
     than 1 model year at a time, up to 5 consecutive model 
     years.''.
       (d) Technical and Conforming Amendments.--
       (1) Section 32901(a) of title 49, United States Code, is 
     amended--
       (A) by redesignating paragraph (16) as paragraph (17); and
       (B) by inserting after paragraph (15) the following:
       ``(16) `nonpassenger automobile' means an automobile that 
     is not a passenger automobile; and''.
       (2) Section 32903 of title 49, United States Code, is 
     amended--
       (A) by striking ``section 32902(b)-(d) of this title'' each 
     place it appears and inserting ``subsections (b) and (c) of 
     section 32902'';
       (B) in subsection (a)(2), by striking ``clause (1) of this 
     subsection,'' and inserting ``paragraph (1)''; and
       (C) in subsection (e), by striking ``automobiles that are 
     not passenger automobiles'' and inserting ``nonpassenger 
     automobiles''.
       (e) Effective Date.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall take effect on the date 
     of the enactment of this Act.
       (2) Transition for passenger automobiles.--The standard or 
     standards for passenger automobiles under the authority of 
     section 32902(b) of title 49, United States Code, in effect 
     on the day before the date of the enactment of this Act, 
     shall remain in effect until a standard for passenger 
     automobiles is established under the authority of section 
     32902(b) of such title, as amended by this section.
       (3) Average fuel economy standard for nonpassenger 
     automobiles in model years through 2011.--The average fuel 
     economy standard for nonpassenger automobiles, under the 
     authority of section 32902(a) of such title for model years 
     through 2011, shall be the standard described in the final 
     rule issued by the National Highway Traffic Safety 
     Administration entitled ``Average Fuel Economy Standards for 
     Light Trucks Model Years 2008-2011'' (71 Fed. Reg. 17566), as 
     amended in a notice published by the National Highway Traffic 
     Safety Administration on April 14, 2006 (71 Fed. Reg. 19449).

     SEC. 503. FUEL ECONOMY TARGET FOR COMMERCIAL MEDIUM-DUTY AND 
                   HEAVY-DUTY ON-HIGHWAY VEHICLES.

       Section 32902 of title 49, United States Code, as amended 
     by section 502, is further amended by adding at the end the 
     following:
       ``(k) Commercial Medium- and Heavy-Duty On-Highway 
     Vehicles.--
       ``(1) Study.--Not later than 18 months after the date of 
     the enactment of the Renewable Fuels, Consumer Protection, 
     and Energy Efficiency Act of 2007, the Secretary of 
     Transportation, in consultation with the Secretary of Energy 
     and the Administrator of the Environmental Protection Agency, 
     shall examine the fuel efficiency of commercial medium- and 
     heavy-duty on-highway vehicles and determine--
       ``(A) the appropriate test procedures and methodologies for 
     measuring commercial medium- and heavy-duty on-highway 
     vehicle fuel efficiency;
       ``(B) the appropriate metric for measuring and expressing 
     commercial medium- and heavy-duty on-highway vehicle fuel 
     efficiency performance, taking into consideration, among 
     other things, the work performed by such on-highway vehicles 
     and types of operations in which they are used;
       ``(C) the range of factors, including, without limitation, 
     design, functionality, use, duty cycle, infrastructure, and 
     total overall energy consumption and operating costs that 
     effect commercial medium- and heavy-duty on-highway vehicle 
     fuel efficiency; and
       ``(D) such other factors and conditions that could have an 
     impact on a program to improve commercial medium- and heavy-
     duty on-highway vehicle fuel efficiency.
       ``(2) Rulemaking.--Not later than 24 months after 
     completion of the study required under paragraph (1), the 
     Secretary of Transportation, in consultation with the 
     Secretary of Energy and the Administrator of the 
     Environmental Protection Agency, and based on the results of 
     that study, shall determine in a rulemaking procedure how to 
     implement a commercial medium- and heavy-duty on-highway 
     vehicle fuel efficiency improvement program and, as 
     appropriate, shall adopt test methods, measurement metrics, 
     fuel efficiency standards, and compliance and enforcement 
     protocols that are appropriate, cost-effective, and 
     technologically feasible for commercial medium- and heavy-
     duty on-highway vehicles.
       ``(3) Lead-time; regulatory stability.--Any commercial 
     medium- and heavy-duty on-highway vehicle fuel efficiency 
     regulatory program adopted pursuant to this subsection shall 
     provide no less than 4 full model years of regulatory lead-
     time and 3 full model years of regulatory stability.
       ``(4) Commercial medium- and heavy-duty on-highway vehicle 
     defined.--In this subsection, the term `commercial medium- 
     and heavy-duty on-highway vehicle' means a commercial on-
     highway vehicle with a gross vehicle weight rating of more 
     than 10,000 pounds.''.

     SEC. 504. CREDIT AVAILABILITY.

       (a) In General.--Section 32903 of title 49, United States 
     Code, is amended--
       (1) by striking ``section 32902(b)-(d) of this title'' each 
     place it appears and inserting ``subsections (b) and (c) of 
     section 32902'';
       (2) in subsection (a)--
       (A) by striking ``3 consecutive model years'' each place it 
     appears and inserting ``5 consecutive model years''; and

[[Page 16431]]

       (B) in paragraph (2), by striking ``clause (1) of this 
     subsection,'' and inserting ``paragraph (1)'';
       (3) in subsection (b)--
       (A) in paragraph (1), by striking ``paragraph (2) of this 
     subsection'' and inserting ``paragraph (2) and subsection 
     (g)''; and
       (B) in paragraph (2), by striking ``3 model years'' and 
     inserting ``5 model years'';
       (4) in subsection (e), by striking ``automobiles that are 
     not passenger automobiles'' and inserting ``nonpassenger 
     automobiles''; and
       (5) by adding at the end the following:
       ``(g) Credit Transferring Within a Manufacturer's Fleet.--
       ``(1) Average fuel economy credit transferring program.--
     The Secretary of Transportation shall establish, by 
     regulation, a corporate average fuel economy credit 
     transferring program to allow any manufacturer whose 
     automobiles exceed any of the average fuel economy standards 
     prescribed under section 32902 to transfer the credits earned 
     under this section and to apply them within that 
     manufacturer's fleet to a compliance category of automobiles 
     that fails to achieve the prescribed standards.
       ``(2) Availability of credits transferred.--Credits 
     transferred under this section are available to be used in 
     the same model years that the manufacturer could have applied 
     them under subsections (a), (b), (d) and (e) as well as for 
     the model year in which the manufacturer earned them. The 
     maximum increase in any compliance category attributable to 
     transferred credits is 1.0 mile per gallon in any single 
     model year.
       ``(3) Limitation on credit transfers to category of 
     passenger automobiles.--In the case of transfers to the 
     category of automobiles described in paragraph 5(B)(i), the 
     transfer is limited to the extent that the fuel economy level 
     of the manufacturer's fleet of passenger automobiles 
     manufactured domestically shall comply with the provisions 
     established under section 32902(b)(7), excluding any 
     transfers from other categories of automobiles described in 
     paragraph 5(B).
       ``(4) Effective date.--A credit transferred in conformance 
     with this section may only be so transferred if such credit 
     is earned no earlier than the first model year after the date 
     of the enactment of the Renewable Fuels, Consumer Protection, 
     and Energy Efficiency Act of 2007.
       ``(5) Definitions.--In this subsection:
       ``(A) Fleet.--The term `fleet' means all automobiles 
     manufactured by a manufacturer in a given model year.
       ``(B) Compliance category of automobiles.--The term 
     `compliance category of automobiles' means any of the 3 
     categories of automobiles for which compliance is separately 
     calculated under this chapter, namely--
       ``(i) passenger automobiles manufactured domestically;
       ``(ii) passenger automobiles not manufactured domestically; 
     and
       ``(iii) nonpassenger automobiles.''.
       (b) Flexible Fueled Vehicles.--
       (1) Extension of alternative fuel automobiles manufacturing 
     incentives.--Section 32905 of title 49, United States Code, 
     is amended--
       (A) by striking ``1993-2010'' each place it appears and 
     inserting ``1993 through 2020.'';
       (B) by striking subsections (f) and (g); and
       (C) by redesignating subsection (h) as subsection (f).
       (2) Extension of maximum increase period.--Section 32906(a) 
     of title 49, United States Code, is amended--
       (A) by striking ``1993-2010'' and inserting ``1993 through 
     2020'';
       (B) in paragraph (1)--
       (i) in subparagraph (A), by striking ``(A)''; and
       (ii) by striking subparagraph (B); and
       (C) in paragraph (2), by striking ``described--'' and all 
     that follows and inserting ``is more than 1.2 miles per 
     gallon, the limitation in paragraph (1) applies.''.

     SEC. 505. RESEARCH ON AND DEVELOPMENT OF LEAP-AHEAD 
                   TECHNOLOGY.

       (a) Program.--The Secretary of Energy (referred to in this 
     section as the ``Secretary''), in cooperation with heads of 
     other Federal agencies, shall carry out a comprehensive 
     program to develop advanced vehicle technologies (including 
     associated components and parts) that will offer--
       (1) the potential for significantly-improved fuel economy; 
     and
       (2) significant reductions in emissions.
       (b) Components.--The program carried out under subsection 
     (a) shall include research and development in the areas of--
       (1) advanced lightweight materials;
       (2) advanced battery technology;
       (3) hybrid systems, including--
       (A) power electronics, electric motors, power control 
     units, and power controls;
       (B) hydraulic accumulators or other energy storage devices; 
     and
       (C) testing and analysis;
       (4) plug-in hybrids;
       (5) advanced clean diesel;
       (6) hydrogen internal combustion engines;
       (7) fuel cell technology;
       (8) hydrogen storage;
       (9) fuel cell membranes;
       (10) cellulosic ethanol;
       (11) biodiesel fuel;
       (12) biodiesel fuel and technology;
       (13) ethanol and biofuels technology; and
       (14) such other related areas as the Secretary determines 
     to be appropriate.
       (c) Advanced Lightweight Materials.--In carrying out this 
     section, the Secretary shall carry out an advanced 
     lightweight materials research and development program the 
     primary focuses of which shall include--
       (1) the provision of--
       (A) technical advice for compliance with applicable Federal 
     and State environmental requirements;
       (B) assistance in identifying supply sources and securing 
     long-term contracts; and
       (C) public outreach, education, and labeling materials; and
       (2) the development of--
       (A) low-cost, durable, abuse-tolerant lithium ion-based 
     chemistries or other advanced chemistries;
       (B) advanced lightweight steels that provide a 30-percent 
     weight reduction;
       (C) advanced lightweight metals (such as magnesium, 
     aluminum, and titanium);
       (D) advanced composites, particularly carbon fiber 
     precursors and forming; and
       (E) advanced forming and joining processes for lightweight 
     materials, including mixed materials (such as combinations of 
     steel, aluminum, magnesium, and carbon fiber into a single 
     assembly or vehicle).
       (d) Advanced Batteries.--
       (1) In general.--In carrying out this section, the 
     Secretary shall carry out an advanced battery program the 
     primary focuses of which shall be--
       (A) research in the chemistry of exploratory battery 
     technologies (other than lithium ion batteries); and
       (B) battery and battery systems production process research 
     and development.
       (2) Industry alliance.--In carrying out the advanced 
     battery program under this subsection, the Secretary shall 
     competitively select an Industry Alliance to represent 
     participants who are private, for-profit firms headquartered 
     in the United States, the primary business of which is the 
     manufacturing of batteries and battery systems.
       (3) Research.--
       (A) Grants.--The Secretary shall carry out research 
     activities of the Initiative through competitively-awarded 
     grants to--
       (i) researchers, including Industry Alliance participants;
       (ii) small businesses;
       (iii) National Laboratories; and
       (iv) institutions of higher education.
       (B) Industry alliance.--The Secretary shall annually 
     solicit from the Industry Alliance--
       (i) comments to identify advanced battery technology needs 
     relevant to electric drive technology;
       (ii) an assessment of the progress of research activities 
     of the Initiative; and
       (iii) assistance in annually updating advanced battery 
     technology road maps.
       (4) Availability to the public.--The information and road 
     maps developed under this subsection shall be available to 
     the public.
       (5) Preference.--In making awards under this subsection, 
     the Secretary shall give preference to participants in the 
     Industry Alliance.
       (6) Cost sharing.--In carrying out this subsection, the 
     Secretary shall require cost sharing in accordance with 
     section 120(b) of title 23, United States Code.
       (e) Hybrid Systems.--In carrying out this section, the 
     Secretary shall carry out a program relating to hybrid 
     systems, the primary focus of which shall be research on and 
     development of--
       (1) advanced electric traction systems and wheel motors;
       (2) advanced power electronics;
       (3) systems integration; and
       (4) hydraulic accumulators or other energy storage devices.
       (f) Plug-in Hybrids.--In carrying out this section, the 
     Secretary shall carry out a program relating to plug-in 
     hybrids, the primary focus of which shall be--
       (1) research on and development of advanced batteries with 
     appropriate power to energy ratios necessary for minimum 
     electric range and vehicle performance, such as acceleration; 
     and
       (2) the early demonstration of vehicles and infrastructure 
     through the provision of procurement assistance to fleet 
     purchasers.
       (g) Advanced Clean Diesel.--In carrying out this section, 
     the Secretary shall carry out a program of research and 
     development relating to diesel combustion and emissions, the 
     primary focuses of which shall be--
       (1) the development of clean-burn and after treatment 
     technologies, including advanced low-temperature combustion 
     (including homogeneous charge compression-ignition);
       (2) the development of mixed mode operation that combines 
     attributes of compression- and spark-ignition engine 
     technologies;
       (3) the integration of advanced technologies, including 
     increased expansion ratio, variable valve timing, reduced 
     friction, and improved exhaust gas heat recovery;
       (4) the development of NOX after treatment 
     systems, including absorber-catalysts, selective catalytic 
     reduction, and lean NOX catalysts;
       (5) the development of particulate matter after treatment 
     systems;

[[Page 16432]]

       (6) the development of powertrain integration of engine and 
     after treatment systems; and
       (7) enhancements in durability and reliability and 
     reduction of costs.
       (h) Hydrogen Internal Combustion Engines.--In carrying out 
     this section, the Secretary shall carry out a program of 
     research and development relating to hydrogen internal 
     combustion engines, the primary focuses of which shall be--
       (1) to advance hydrogen internal combustion engine 
     technology to a level at which the robustness and durability 
     of such an engine would be acceptable to real-world 
     customers; and
       (2) to use those engines to provide an affordable 
     transition to a hydrogen economy by creating a demand for 
     hydrogen refueling infrastructure and bridging to hydrogen-
     powered fuel cells.
       (i) Fuel Cell Technology.--In carrying out this section, 
     the Secretary shall carry out a program of research and 
     development relating to fuel cell technology, the primary 
     focuses of which shall be research on and development of--
       (1) fuel cell stack components and fuel cell manufacturing 
     processes; and
       (2) materials resistant to hydrogen embrittlement.
       (j) Hydrogen Storage.--In carrying out this section, the 
     Secretary shall carry out a program of research and 
     development relating to hydrogen storage, the primary focus 
     of which shall be research on and development of competitive 
     storage methods for sufficient quantities of hydrogen onboard 
     a vehicle (including a demonstration of hydrogen refueling 
     infrastructure for not less than 10 nor more than 20 
     stations)--
       (1) to enable increased development and use of hydrogen 
     internal combustion engines and hydrogen-powered fuel cell 
     vehicles; and
       (2) to meet or surpass the customer-discernable attributes 
     of vehicles available as of the date of enactment of this Act 
     with respect to range and cost per mile.
       (k) Fuel Cell Membranes.--In carrying out this section, the 
     Secretary shall carry out a program of research and 
     development relating to fuel cell membranes, the primary 
     focuses of which shall be--
       (1) the achievement of a fundamental understanding of the 
     catalytic materials for fuel cells; and
       (2) the development of low-cost fuel cell membranes.
       (l) Cellulosic Ethanol.--In carrying out this section, the 
     Secretary shall carry out a program of research and 
     development relating to cellulosic ethanol, the primary focus 
     of which shall be research on and development of enzymes 
     necessary for the production of cellulosic ethanol.
       (m) Biodiesel Fuel.--In carrying out this section, the 
     Secretary shall carry out a program of research and 
     development relating to biodiesel fuel, the primary focuses 
     of which shall be--
       (1) the development of a national B-20 standard;
       (2) fundamental research on biomass-to-liquid alternatives;
       (3) total lifecycle analyses of the total potential for 
     petroleum replacement, total fossil fuel replacement, or 
     greenhouse gas reductions for biodiesel options;
       (4) an assessment of feedstock options; and
       (5) an assessment of the effects on engine durability and 
     reliability including the effects due to fuel quality 
     variations, stability, and degradation parameters.
       (n) Biodiesel Fuel and Technology.--In carrying out this 
     section, the Secretary shall carry out a program of research 
     and development relating to biodiesel fuel, the primary 
     focuses of which shall be--
       (1) the evaluation and optimization of B-100 processing 
     variables to enhance blendstock stability, maintain uniform 
     quality and specifications, and reduce cost;
       (2) the development and expansion of processing, blending, 
     and distribution infrastructure;
       (3) the development of standardized labeling and dispensing 
     of equipment information;
       (4) establishment of a consumer education outreach program;
       (5) assessment and evaluation of biodiesel on advanced 
     engine (such as high-pressure injector) and after treatment 
     components; and
       (6) assessment of the effects of biodiesel on advanced 
     combustion clean-burn strategies.
       (o) Ethanol and Biofuels Technology.--In carrying out this 
     section, the Secretary shall carry out a program of research 
     and development relating to ethanol and biofuels technology, 
     the primary focus of which shall be research and development 
     into--
       (1) ethanol and biofuels transport systems, such as truck, 
     rail, and pipelines;
       (2) advanced high-efficiency combustion research for fuels, 
     such as E-85;
       (3) materials compatibility for E-85 fuel;
       (4) E-85 vehicle engineering and calibration to speed 
     conversion of systems; and
       (5) advanced combustion and after-treatment systems to 
     support fuel efficiency gains
       (p) Authorization of Appropriations.--There are authorized 
     to be appropriated--
       (1) to carry out subsection (a), $60,000,000 for each of 
     fiscal years 2008 through 2012;
       (2) to carry out subsection (b), $143,000,000 for each of 
     the fiscal years 2008 through 2012;
       (3) to conduct research and development into hybrid systems 
     (power electronics, electric motors, hydraulic accumulators, 
     other energy storage devices, testing, and analysis), 
     $64,000,000 for each of the fiscal years 2008 through 2012;
       (4) to conduct research and development into plug-in 
     hybrids, $56,000,000 for each of the fiscal years 2008 
     through 2012;
       (5) to conduct research and development into advanced clean 
     diesel, $54,000,000 for each of the fiscal years 2008 through 
     2010;
       (6) to conduct research and development into hydrogen 
     internal combustion engines, $11,000,000 for each of the 
     fiscal years 2008 through 2012;
       (7) to conduct research and development into fuel cell 
     technology, $40,000,000 for each of the fiscal years 2008 
     through 2012;
       (8) to conduct research and development into hydrogen 
     storage, $88,000,000 for each of the fiscal years 2008 
     through 2012;
       (9) to conduct research and development into fuel cell 
     membranes, $64,000,000 for each of the fiscal years 2008 
     through 2012;
       (10) to conduct research and development into cellulosic 
     ethanol, $340,000,000 for each of the fiscal years 2008 
     through 2012;
       (11) to conduct research and development into biodiesel 
     fuel and technology, $7,000,000 for each of the fiscal years 
     2008 through 2012; and
       (12) to conduct research and development into ethanol 
     biofuels technology, $23,000,000 for each of the fiscal years 
     2008 through 2012.

     SEC. 506. PROHIBITION ON FRANCHISE AGREEMENT RESTRICTIONS 
                   RELATED TO ALTERNATIVE FUEL INFRASTRUCTURE.

       (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 
                   ALTERNATIVE FUEL PUMPS.

       ``(a) Definition.--In this section:
       ``(1) Alternative fuel.--The term `alternative fuel' means 
     any fuel--
       ``(A) at least 85 percent of the volume of which consists 
     of ethanol, natural gas, compressed natural gas, liquefied 
     natural gas, liquefied petroleum gas, hydrogen, or any 
     combination of those fuels; or
       ``(B) any mixture of biodiesel (as defined in section 
     40A(d)(1) of the Internal Revenue Code of 1986) and diesel 
     fuel (as defined in section 4083(a)(3) of the Internal 
     Revenue Code of 1986), determined without regard to any use 
     of kerosene and containing at least 20 percent biodiesel.
       ``(2) Franchise-related document.--The term `franchise-
     related document' means--
       ``(A) a franchise under this Act; and
       ``(B) 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 an alternative fuel pump or storage tank;
       ``(B) converting an existing tank and pump on the marketing 
     premises of the franchisee for alternative fuel use;
       ``(C) advertising (including through the use of signage or 
     logos) the sale of any alternative fuel;
       ``(D) selling alternative 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);
       ``(E) purchasing alternative fuel solely from the 
     franchisor if the franchisor does not offer its own renewable 
     fuel for sale by the franchisee;
       ``(F) listing alternative fuel availability or prices, 
     including on service station signs, fuel dispensers, or light 
     poles; or
       ``(G) allowing payment of alternative fuel with a credit 
     card.
       ``(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 an alternative 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 by inserting after the item relating to section 106 
     the following:

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

[[Page 16433]]



     SEC. 507. PIPELINE FEASIBILITY STUDY.

       (a) In General.--The Secretary of Energy, in consultation 
     with the Secretary of Transportation, shall conduct a study 
     of the feasibility of the construction of dedicated ethanol 
     pipelines.
       (b) Factors.--In conducting the study, the Secretary of 
     Energy shall consider--
       (1) the quantity of ethanol production that would make 
     dedicated pipelines economically viable;
       (2) existing or potential barriers to dedicated ethanol 
     pipelines, including technical, siting, financing, and 
     regulatory barriers;
       (3) market risk (including throughput risk) and means of 
     mitigating the risk;
       (4) regulatory, financing, and siting options that would 
     mitigate risk in those areas and help ensure the construction 
     of 1 or more dedicated ethanol pipelines;
       (5) financial incentives that may be necessary for the 
     construction of dedicated ethanol pipelines, including the 
     return on equity that sponsors of the initial dedicated 
     ethanol pipelines will require to invest in the pipelines;
       (6) technical factors that may compromise the safe 
     transportation of ethanol in pipelines, including an 
     identification of any remedial or preventative measures to 
     ensure pipeline integrity; and
       (7) such other factors as the Secretary of Energy considers 
     to be appropriate.
       (c) Report.--Not later than 15 months after the date of 
     enactment of this Act, the Secretary of Energy shall submit 
     to Congress a report describing the results of the study 
     conducted under this section.

     SEC. 508. 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) 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 
     the progress of the agencies of the Federal Government 
     (including the Executive Office of the President) in 
     complying with--
       (1) the Energy Policy Act of 1992 (42 U.S.C. 13201 et 
     seq.);
       (2) Executive Order 13149 (65 Fed. Reg. 24595; relating to 
     greening the government through Federal fleet and 
     transportation efficiency); and
       (3) the fueling center requirements of this section.
                                 ______
                                 
  SA 1712. Mr. PRYOR (for himself, Mr. Bond, Mr. Levin, Mr. Voinovich, 
Ms. Stabenow, and Mrs. McCaskill) submitted an amendment intended to be 
proposed to amendment SA 1502 proposed by Mr. Reid to the bill H.R. 6, 
to reduce our Nation's dependency on foreign oil by investing in clean, 
renewable, and alternative energy resources, promoting new emerging 
energy technologies, developing greater efficiency, and creating a 
Strategic Energy Efficiency and Renewables Reserve to invest in 
alternative energy, and for other purposes; which was ordered to lie on 
the table; as follows:

       On page 239, strike line 16 and all that follows through 
     page 263, line 8 and insert the following:

           TITLE V--CORPORATE AVERAGE FUEL ECONOMY STANDARDS

     SEC. 501. INCREASING THE EFFICIENCY OF AUTOMOBILES.

       (a) Definitions.--In this section:
       (1) Automobile.--The term ``automobile'' means, as defined 
     in regulations promulgated by the Administrator of the 
     Environmental Protection Agency that are in effect on the 
     date of the enactment of this Act--
       (A) a light-duty truck;
       (B) a light-duty vehicle; or
       (C) a medium-duty passenger vehicle.
       (2) Alternative fuel.--The term ``alternative fuel'' has 
     the meaning given the term in section 32901(a) of title 49, 
     United States Code.
       (3) E85.--The term ``E85'' means a fuel blend containing 85 
     percent denatured ethanol and 15 percent gasoline by volume.
       (4) Flexible fuel automobile.--The term ``flexible fuel 
     automobile'' means an automobile warrantied by the 
     manufacturer of the vehicle to operate on any combination of 
     gasoline, E85, and M85 or diesel fuel blends containing not 
     less than 20 percent non-petroleum based fuel alternatives.
       (5) 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.
       (6) M85.--The term ``M85'' means a fuel blend containing 85 
     percent methanol and 15 percent gasoline by volume.
       (7) Plug-in hybrid automobile.--The term ``plug-in hybrid 
     automobile'' means a hybrid automobile that--
       (A) has an onboard, rechargeable storage device capable of 
     propelling the vehicle by electricity for at least 10 miles; 
     and
       (B) achieves at least 125 percent of the model year 2002 
     city fuel economy.
       (8) Qualified automobile.--The term ``qualified 
     automobile'' 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 automobile;
       (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 automobile;
       (F) a plug-in hybrid automobile;
       (G) an electric automobile;
       (H) a hydrogen internal combustion engine automobile; and
       (I) any other appropriate automobile that uses 
     substantially new technology and achieves at least 175 
     percent of the model year 2002 city fuel economy, as 
     determined by the Secretary of Transportation, by regulation.
       (b) Requirements.--
       (1) In general.--For each model year, the percentage of new 
     automobiles manufactured by a manufacturer for sale in the 
     United States that are qualified automobiles shall be not 
     less than the corresponding percentage in the following 
     table:

For model year:                       The percentage that are qualified
                                    automobiles shall be not less than:
2012.........................................................20 percent
2013.........................................................30 percent
2014.........................................................40 percent
2015 and thereafter..........................................50 percent

       (2) New technology.--Not less than 10 percent of the number 
     of qualified automobiles required to be manufactured by a 
     manufacturer for sale in the United States in each model year 
     after 2016 pursuant to paragraph (1), shall be--
       (A) hybrid automobiles;
       (B) plug-in hybrid automobiles;
       (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);
       (E) electric automobiles; or
       (F) any other appropriate automobile that uses 
     substantially new technology and achieves at least 175 
     percent of the model year 2002 combined fuel economy, as 
     determined by the Secretary of Transportation, by regulation.
       (c) Qualified Automobile Credits.--
       (1) In general.--The Secretary shall issue qualified 
     automobile production credits to manufacturers for 
     automobiles manufactured for model year 2012 and for each 
     subsequent model year, in accordance with this subsection.
       (2) Effect of credit.--Each credit issued to a manufacturer 
     under this subsection shall reduce the qualified automobile 
     mandate requirement under subsection (b)(1) by 1 automobile 
     for the model year to which the credit applies.
       (3) Rate of credit issuance.--For each qualified automobile 
     (except for automobiles described in subparagraphs (B) and 
     (C) of subsection (a)(8)) manufactured for model year 2012, 
     2013, 2014, 2015, or 2016, the manufacturer shall be issued--
       (A) 1.25 qualified automobile production credits if the 
     combined fuel economy for such automobile is greater than 110 
     percent and less than 125 percent of the combined fuel 
     economy of the model year 2002 inertia weight class;

[[Page 16434]]

       (B) 1.5 qualified automobile production credits if the 
     combined fuel economy for such automobile is at least 125 
     percent and less than 150 percent of the combined fuel 
     economy of the model year 2002 inertia weight class;
       (C) 2.0 qualified automobile production credits if the 
     combined fuel economy for such automobile is at least 150 
     percent and less than 175 percent of the combined fuel 
     economy of the model year 2002 inertia weight class; and
       (D) 3.0 qualified automobile production credits if the 
     combined fuel economy for such automobile is at least 175 
     percent of the combined fuel economy of the model year 2002 
     inertia weight class;
       (4) Defined term.--For purposes of this paragraph, the term 
     ``model year 2002 inertia weight class'' has the same meaning 
     as the term ``vehicle inertia weight class'' as defined in 
     Section 30B of the Internal Revenue Code of 1986.
       (d) Rulemaking.--Not later than 1 year after the date of 
     the enactment of this Act, the Secretary of Transportation 
     shall promulgate regulations to carry out this section.

     SEC. 502. AVERAGE FUEL ECONOMY STANDARDS FOR AUTOMOBILES.

       (a) Increased Standards.--Section 32902 of title 49, United 
     States Code, is amended--
       (1) by amending subsection (a) to read as follows:
       ``(a) Nonpassenger Automobiles.--
       ``(1) Annual prescription of average fuel economy 
     standards.--
       ``(A) In general.--Not later than 18 months before the 
     beginning of each model year, the Secretary of Transportation 
     shall prescribe by regulation average fuel economy standards 
     for nonpassenger automobiles manufactured by a manufacturer 
     in that model year.
       ``(B) Standards based on class.--The Secretary may 
     prescribe separate standards for different classes of 
     nonpassenger automobiles.
       ``(C) Standards based on vehicle attributes.--The Secretary 
     may prescribe such standards based on vehicle attributes 
     pursuant to subsection (j).
       ``(D) Minimum standard.--Each standard prescribed under 
     this paragraph shall be the maximum feasible average fuel 
     economy level that the Secretary determines the manufacturers 
     can achieve in that model year, consistent with subsection 
     (e).
       ``(2) Average fuel economy standard for model years 2012 
     through 2014.--Not later than April 1, 2010, the Secretary 
     shall establish average fuel economy standards for 
     nonpassenger automobiles for each of the model years 2012, 
     2013, and 2014. Each such standard shall be set at the 
     maximum feasible average fuel economy level that the 
     Secretary determines the manufacturers can achieve in each 
     such model year.
       ``(3) Average fuel economy standard for model year 2015.--
     Not later than April 1, 2013, the Secretary shall establish 
     the average fuel economy standard for nonpassenger 
     automobiles for model year 2015--
       ``(A) at least 25.3 miles per gallon, consistent with 
     paragraph (1)(D); or
       ``(B) if the Secretary prescribes average fuel economy 
     standards on the basis of vehicle attributes pursuant to 
     subsection (j), at a level that yields estimated fuel savings 
     not less than those that would be achieved by the average 
     fuel economy standard described in subparagraph (A).
       ``(4) Average fuel economy standard for model years 2016 
     through 2019.--Not later than April 1, 2014, the Secretary 
     shall establish average fuel economy standards for 
     nonpassenger automobiles for each of the model years 2016, 
     2017, 2018, and 2019. Each such standard shall be set at the 
     maximum feasible average fuel economy level that the 
     Secretary determines the manufacturers can achieve in each 
     such model year.
       ``(5) Average fuel economy standard for model year 2020.--
     Not later than April 1, 2018, the Secretary shall establish 
     the average fuel economy standard for nonpassenger 
     automobiles for model year 2020--
       ``(A) at least 27.7 miles per gallon, consistent with 
     paragraph (1)(D); or
       ``(B) if the Secretary prescribes average fuel economy 
     standards on the basis of vehicle attributes pursuant to 
     subsection (j), at a level that yields estimated fuel savings 
     not less than those that would be achieved by the average 
     fuel economy standard described in subparagraph (A).
       ``(6) Average fuel economy standard for model years 2021 
     through 2024.--Not later than April 1, 2019, the Secretary 
     shall establish average fuel economy standards for 
     nonpassenger automobiles for each of the model years 2021, 
     2022, 2023, and 2024. Each such standard shall be set at the 
     maximum feasible average fuel economy level that the 
     Secretary determines the manufacturers can achieve in each 
     such model year.
       ``(7) Average fuel economy standard for model years 2025 
     and thereafter.--Not later than April 1, 2023, the Secretary 
     shall establish the average fuel economy standard for 
     nonpassenger automobiles for model year 2025 and each 
     subsequent model year--
       ``(A) at least 30 miles per gallon, consistent with 
     paragraph (1)(D); or
       ``(B) if the Secretary prescribes average fuel economy 
     standards on the basis of vehicle attributes pursuant to 
     subsection (j), a level that yields estimated fuel savings 
     not less than those that would be achieved by the average 
     fuel economy standard described in subparagraph (A).''; and
       (2) by amending subsection (b) to read as follows:
       ``(b) Passenger Automobiles.--
       ``(1) Annual prescription of average fuel economy 
     standards.--
       ``(A) In general.--Not later than 18 months before the 
     beginning of each model year after model year 2011, the 
     Secretary of Transportation shall prescribe by regulation 
     average fuel economy standards for passenger automobiles 
     manufactured by a manufacturer in that model year.
       ``(B) Authority for prescription of differing standards 
     based on class.--The Secretary may prescribe separate 
     standards for different classes of passenger automobiles.
       ``(C) Standards based on vehicle attributes.--The Secretary 
     may prescribe such standards based on vehicle attributes 
     pursuant to subsection (j).
       ``(D) Minimum standard.--Each standard prescribed under 
     this paragraph shall be the maximum feasible average fuel 
     economy level that the Secretary determines the manufacturers 
     can achieve in that model year, consistent with subsection 
     (e).
       ``(2) Average fuel economy standard for model year 2012.--
     Not later than April 1, 2010, the Secretary shall establish 
     the average fuel economy standard for passenger automobiles 
     for model year 2012--
       ``(A) at least 29 miles per gallon, consistent with 
     paragraph (1)(D); or
       ``(B) if the Secretary prescribes average fuel economy 
     standards on the basis of vehicle attributes pursuant to 
     subsection (j), at a level that yields estimated fuel savings 
     not less than those that would be achieved by the average 
     fuel economy standard described in subparagraph (A).
       ``(3) Average fuel economy standard for model years 2013 
     through 2016.--Not later than April 1, 2011, the Secretary 
     shall establish average fuel economy standards for passenger 
     automobiles for each of the model years 2013, 2014, 2015, and 
     2016. Each such standard shall be set at the maximum feasible 
     average fuel economy level that the Secretary determines the 
     manufacturers can achieve in each such model year.
       ``(4) Average fuel economy standard for model years 2017.--
     Not later than April 1, 2015, the Secretary shall establish 
     the average fuel economy standard for passenger automobiles 
     for model year 2017--
       ``(A) at least 32.5 miles per gallon, consistent with 
     paragraph (1)(D); or
       ``(B) if the Secretary prescribes average fuel economy 
     standards on the basis of vehicle attributes pursuant to 
     subsection (j), at a level that yields estimated fuel savings 
     not less than those that would be achieved by the average 
     fuel economy standard described in subparagraph (A).
       ``(5) Average fuel economy standard for model years 2018 
     through 2021.--Not later than April 1, 2016, the Secretary 
     shall establish average fuel economy standards for passenger 
     automobiles for model years 2018, 2019, 2020, and 2021. Each 
     such standard shall be set at the maximum feasible average 
     fuel economy level that the Secretary determines the 
     manufacturers can achieve in each such model year.
       ``(6) Average fuel economy standard for model years 2022 
     and thereafter.--Not later than April 1, 2020, the Secretary 
     shall establish the average fuel economy standard for 
     passenger automobiles for model year 2022 and each subsequent 
     model year--
       ``(A) at least 36 miles per gallon, consistent with 
     paragraph (1)(D); or
       ``(B) if the Secretary prescribes average fuel economy 
     standards on the basis of vehicle attributes pursuant to 
     subsection (j), at a level that yields estimated fuel savings 
     not less than those that would be achieved by the average 
     fuel economy standard described in subparagraph (A).
       ``(7) Minimum for average fuel economy standards based on 
     vehicle attributes.--
       ``(A) In general.--Notwithstanding any other provision of 
     this section, for any model year in which the Secretary 
     prescribes average fuel economy standards for passenger 
     automobiles on the basis of vehicle attributes pursuant to 
     subsection (j), the average fuel economy standard for 
     passenger automobiles manufactured by a manufacturer in that 
     model year shall also provide for an alternative minimum 
     standard that shall apply only to a manufacturer's 
     domestically manufactured passenger automobiles, as 
     calculated under section 32904 as in effect on the day before 
     the date of the enactment of the Renewable Fuels, Consumer 
     Protection, and Energy Efficiency Act of 2007.
       ``(B) Alternative minimum standard.--The alternative 
     minimum standard referred to in subparagraph (A) shall be the 
     greater of--
       ``(i) 27.5 miles per gallon; or
       ``(ii) 92 percent of the average fuel economy projected by 
     the Secretary for the combined domestic and foreign fleets 
     manufactured for sale in the United States by all 
     manufacturers in that model year, which projection shall be 
     published in the Federal Register when the standard for that 
     model year is promulgated in accordance with this section.

[[Page 16435]]

       ``(C) Applicability.--The alternative minimum standard 
     under this paragraph shall apply to a manufacturer's 
     domestically manufactured passenger automobiles only if the 
     passenger automobile standard established on the basis of 
     vehicle attributes pursuant to subsection (j), excluding any 
     credits transferred by the manufacturer pursuant to 
     subsection (g) from other categories of automobiles described 
     in paragraph (5)(B), would allow that manufacturer to comply 
     with a less stringent passenger automobile standard than the 
     alternative minimum standard.''.
       (b) Repeal of Authority To Amend Passenger Automobile Fuel 
     Economy Standards.--
       (1) In general.--Section 32902 of title 49, United States 
     Code, is amended--
       (A) by striking subsection (c); and
       (B) by redesignating subsections (d) through (j) as 
     subsections (c) through (i), respectively.
       (2) Conforming amendments.--
       (A) Section 32901(a)(12) of such title is amended by 
     striking ``section 32902(d)'' and inserting ``section 
     32902(c)''.
       (B) Section 32902 of such title is amended--
       (i) in subsection (c)(1), as redesignated by paragraph 
     (1)(B), by striking ``under subsection (b) or (c)'' and 
     inserting ``under subsection (b)'';
       (ii) in subsection (d)(2), as redesignated by paragraph 
     (1)(B), by striking ``under subsection (a), (b), (c), or 
     (d)'' and inserting ``under subsection (a), (b), or (c)'';
       (iii) in subsection (f), as redesignated by paragraph 
     (1)(B)--

       (I) in paragraph (1)--

       (aa) by striking ``under subsection (a) or (d)'' and 
     inserting ``under subsection (a), (b), or (c)''; and
       (bb) by striking ``of subsection (a) or (d)'' and inserting 
     ``of subsection (a), (b), or (c)''; and

       (II) in paragraph (2), by striking ``(and submit the 
     amendment to Congress when required under subsection (c)(2) 
     of this section)'';

       (iv) in subsection (g), as redesignated by paragraph 
     (1)(B), by striking ``carrying out subsections (c), (f), and 
     (g)'' and inserting ``carrying out subsections (a), (b), (e), 
     and (f)''; and
       (v) in subsection (i), as redesignated by paragraph (1)(B), 
     by striking ``under subsection (a), (c), or (g) of this 
     section'' and inserting ``under subsection (a), (b), or 
     (f)''.
       (C) Section 32904(a)(1)(B) of such title is amended by 
     striking ``section 32902(b)-(d)'' and inserting ``subsections 
     (b) and (c) of section 32902''.
       (D) Section 32907(a)(4) of such title is amended by 
     striking ``section 32902(d)'' and inserting ``section 
     32902(c)''.
       (E) Section 32909(b) of such title is amended by striking 
     ``, except that a petition for review'' and all that follows 
     through ``referred to in section 32902(c)(2)''.
       (F) Section 32917(b)(1)(B) of such title is amended by 
     striking ``or (c)''.
       (c) Authority of the Secretary To Prescribe Standards Based 
     on Vehicle Attributes.--Section 32902 of title 49, United 
     States Code, as amended by this section, is further amended 
     by adding at the end the following:
       ``(j) Authority of the Secretary To Prescribe Standards 
     Based on Vehicle Attributes.--
       ``(1) In general.--The authority of the Secretary of 
     Transportation to prescribe by regulation average fuel 
     economy standards for passenger automobiles and nonpassenger 
     automobiles includes the authority to prescribe standards 
     based on vehicle attributes related to fuel economy and to 
     express any such attribute-based standard in the form of a 
     mathematical function.
       ``(2) Transition period.--If the Secretary prescribes 
     standards for passenger automobiles on the basis of vehicle 
     attributes, the Secretary shall provide a transition period 
     during the first 3 model years in which an attribute-based 
     standard would apply during which each manufacturer may elect 
     whether to comply with the attribute-based standard or with 
     the single corporate average fuel economy level prescribed 
     under subsection (b).
       ``(3) Prescription of standards for multiple years.--The 
     authority of the Secretary to prescribe by regulation average 
     fuel economy standards for automobiles includes the authority 
     to prescribe standards by issuing regulations governing more 
     than 1 model year at a time, up to 5 consecutive model 
     years.''.
       (d) Technical and Conforming Amendments.--
       (1) Section 32901(a) of title 49, United States Code, is 
     amended--
       (A) by redesignating paragraph (16) as paragraph (17); and
       (B) by inserting after paragraph (15) the following:
       ``(16) `nonpassenger automobile' means an automobile that 
     is not a passenger automobile; and''.
       (2) Section 32903 of title 49, United States Code, is 
     amended--
       (A) by striking ``section 32902(b)-(d) of this title'' each 
     place it appears and inserting ``subsections (b) and (c) of 
     section 32902'';
       (B) in subsection (a)(2), by striking ``clause (1) of this 
     subsection,'' and inserting ``paragraph (1)''; and
       (C) in subsection (e), by striking ``automobiles that are 
     not passenger automobiles'' and inserting ``nonpassenger 
     automobiles''.
       (e) Effective Date.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall take effect on the date 
     of the enactment of this Act.
       (2) Transition for passenger automobiles.--The standard or 
     standards for passenger automobiles under the authority of 
     section 32902(b) of title 49, United States Code, in effect 
     on the day before the date of the enactment of this Act, 
     shall remain in effect until a standard for passenger 
     automobiles is established under the authority of section 
     32902(b) of such title, as amended by this section.
       (3) Average fuel economy standard for nonpassenger 
     automobiles in model years through 2011.--The average fuel 
     economy standard for nonpassenger automobiles, under the 
     authority of section 32902(a) of such title for model years 
     through 2011, shall be the standard described in the final 
     rule issued by the National Highway Traffic Safety 
     Administration entitled ``Average Fuel Economy Standards for 
     Light Trucks Model Years 2008-2011'' (71 Fed. Reg. 17566), as 
     amended in a notice published by the National Highway Traffic 
     Safety Administration on April 14, 2006 (71 Fed. Reg. 19449).

     SEC. 503. FUEL EFFICIENCY TARGET FOR COMMERCIAL MEDIUM-DUTY 
                   AND HEAVY-DUTY ON-HIGHWAY VEHICLES.

       Section 32902 of title 49, United States Code, as amended 
     by section 502, is further amended by adding at the end the 
     following:
       ``(k) Commercial Medium- and Heavy-Duty On-Highway 
     Vehicles.--
       ``(1) Study.--Not later than 18 months after the date of 
     the enactment of the Renewable Fuels, Consumer Protection, 
     and Energy Efficiency Act of 2007, the Secretary of 
     Transportation, in consultation with the Secretary of Energy 
     and the Administrator of the Environmental Protection Agency, 
     shall examine the fuel efficiency of commercial medium- and 
     heavy-duty on-highway vehicles and determine--
       ``(A) the appropriate test procedures and methodologies for 
     measuring commercial medium- and heavy-duty on-highway 
     vehicle fuel efficiency;
       ``(B) the appropriate metric for measuring and expressing 
     commercial medium- and heavy-duty on-highway vehicle fuel 
     efficiency performance, taking into consideration, among 
     other things, the work performed by such on-highway vehicles 
     and types of operations in which they are used;
       ``(C) the range of factors, including, without limitation, 
     design, functionality, use, duty cycle, infrastructure, and 
     total overall energy consumption and operating costs that 
     effect commercial medium- and heavy-duty on-highway vehicle 
     fuel efficiency; and
       ``(D) such other factors and conditions that could have an 
     impact on a program to improve commercial medium- and heavy-
     duty on-highway vehicle fuel efficiency.
       ``(2) Rulemaking.--Not later than 24 months after 
     completion of the study required under paragraph (1), the 
     Secretary of Transportation, in consultation with the 
     Secretary of Energy and the Administrator of the 
     Environmental Protection Agency, and based on the results of 
     that study, shall determine in a rulemaking procedure how to 
     implement a commercial medium- and heavy-duty on-highway 
     vehicle fuel efficiency improvement program and, as 
     appropriate, shall adopt test methods, measurement metrics, 
     fuel efficiency targets, and compliance and enforcement 
     protocols that are appropriate, cost-effective, and 
     technologically feasible for commercial medium- and heavy-
     duty on-highway vehicles.
       ``(3) Lead-time; regulatory stability.--Any commercial 
     medium- and heavy-duty on-highway vehicle fuel efficiency 
     regulatory program adopted pursuant to this subsection shall 
     provide no less than 4 full model years of regulatory lead-
     time and 3 full model years of regulatory stability.
       ``(4) Commercial medium- and heavy-duty on-highway vehicle 
     defined.--In this subsection, the term `commercial medium- 
     and heavy-duty on-highway vehicle' means a commercial on-
     highway vehicle with a gross vehicle weight rating of more 
     than 10,000 pounds.''.

     SEC. 504. CREDIT AVAILABILITY.

       (a) In General.--Section 32903 of title 49, United States 
     Code, is amended--
       (1) by striking ``section 32902(b)-(d) of this title'' each 
     place it appears and inserting ``subsections (b) and (c) of 
     section 32902'';
       (2) in subsection (a)--
       (A) by striking ``3 consecutive model years'' each place it 
     appears and inserting ``5 consecutive model years''; and
       (B) in paragraph (2), by striking ``clause (1) of this 
     subsection,'' and inserting ``paragraph (1)'';
       (3) in subsection (b)--
       (A) in paragraph (1), by striking ``paragraph (2) of this 
     subsection'' and inserting ``paragraph (2) and subsection 
     (g)''; and
       (B) in paragraph (2), by striking ``3 model years'' and 
     inserting ``5 model years'';
       (4) in subsection (e), by striking ``automobiles that are 
     not passenger automobiles'' and inserting ``nonpassenger 
     automobiles''; and
       (5) by adding at the end the following:

[[Page 16436]]

       ``(g) Credit Transferring Within a Manufacturer's Fleet.--
       ``(1) Average fuel economy credit transferring program.--
     The Secretary of Transportation shall establish, by 
     regulation, a corporate average fuel economy credit 
     transferring program to allow any manufacturer whose 
     automobiles exceed any of the average fuel economy standards 
     prescribed under section 32902 to transfer the credits earned 
     under this section and to apply them within that 
     manufacturer's fleet to a compliance category of automobiles 
     that fails to achieve the prescribed standards.
       ``(2) Availability of credits transferred.--Credits 
     transferred under this section are available to be used in 
     the same model years that the manufacturer could have applied 
     them under subsections (a), (b), (d) and (e) as well as for 
     the model year in which the manufacturer earned them. The 
     maximum increase in any compliance category attributable to 
     transferred credits is 1.0 mile per gallon in any single 
     model year.
       ``(3) Limitation on credit transfers to category of 
     passenger automobiles.--In the case of transfers to the 
     category of automobiles described in paragraph 5(B)(i), the 
     transfer is limited to the extent that the fuel economy level 
     of the manufacturer's fleet of passenger automobiles 
     manufactured domestically shall comply with the provisions 
     established under section 32902(b)(7), excluding any 
     transfers from other categories of automobiles described in 
     paragraph 5(B).
       ``(4) Effective date.--A credit transferred in conformance 
     with this section may only be so transferred if such credit 
     is earned no earlier than the first model year after the date 
     of the enactment of the Renewable Fuels, Consumer Protection, 
     and Energy Efficiency Act of 2007.
       ``(5) Definitions.--In this subsection:
       ``(A) Fleet.--The term `fleet' means all automobiles 
     manufactured by a manufacturer in a given model year.
       ``(B) Compliance category of automobiles.--The term 
     `compliance category of automobiles' means any of the 3 
     categories of automobiles for which compliance is separately 
     calculated under this chapter, namely--
       ``(i) passenger automobiles manufactured domestically;
       ``(ii) passenger automobiles not manufactured domestically; 
     and
       ``(iii) nonpassenger automobiles.''.
       (b) Flexible Fueled Vehicles.--
       (1) Extension of alternative fuel automobiles manufacturing 
     incentives.--Section 32905 of title 49, United States Code, 
     is amended--
       (A) by striking ``1993-2010'' each place it appears and 
     inserting ``1993 through 2020.'';
       (B) by striking subsections (f) and (g); and
       (C) by redesignating subsection (h) as subsection (f).
       (2) Extension of maximum increase period.--Section 32906(a) 
     of title 49, United States Code, is amended--
       (A) by striking ``1993-2010'' and inserting ``1993 through 
     2020'';
       (B) in paragraph (1)--
       (i) in subparagraph (A), by striking ``(A)''; and
       (ii) by striking subparagraph (B); and
       (C) in paragraph (2), by striking ``described--'' and all 
     that follows and inserting ``is more than 1.2 miles per 
     gallon, the limitation in paragraph (1) applies.''.

     SEC. 505. RESEARCH ON AND DEVELOPMENT OF LEAP-AHEAD 
                   TECHNOLOGY.

       (a) Program.--The Secretary of Energy (referred to in this 
     section as the ``Secretary''), in cooperation with heads of 
     other Federal agencies, shall carry out a comprehensive 
     program to develop advanced vehicle technologies (including 
     associated components and parts) that will offer--
       (1) the potential for significantly-improved fuel economy; 
     and
       (2) significant reductions in emissions.
       (b) Components.--The program carried out under subsection 
     (a) shall include research and development in the areas of--
       (1) advanced lightweight materials;
       (2) advanced battery technology and battery systems;
       (3) hybrid systems, including--
       (A) power electronics, electric motors, power control 
     units, and power controls;
       (B) hydraulic accumulators or other energy storage devices; 
     and
       (C) testing and analysis;
       (4) plug-in hybrids;
       (5) advanced clean diesel;
       (6) hydrogen internal combustion engines;
       (7) fuel cell technology;
       (8) hydrogen storage;
       (9) fuel cell membranes;
       (10) cellulosic ethanol;
       (11) biodiesel fuel;
       (12) biodiesel fuel and technology;
       (13) ethanol and biofuels technology; and
       (14) such other related areas as the Secretary determines 
     to be appropriate.
       (c) Advanced Lightweight Materials.--In carrying out this 
     section, the Secretary shall carry out an advanced 
     lightweight materials research and development program the 
     primary focuses of which shall include--
       (1) the provision of--
       (A) technical advice for compliance with applicable Federal 
     and State environmental requirements;
       (B) assistance in identifying supply sources and securing 
     long-term contracts; and
       (C) public outreach, education, and labeling materials; and
       (2) the development of--
       (A) low-cost, durable, abuse-tolerant lithium ion-based 
     chemistries or other advanced chemistries;
       (B) advanced lightweight steels that provide a 30-percent 
     weight reduction;
       (C) advanced lightweight metals (such as magnesium, 
     aluminum, and titanium);
       (D) advanced composites, particularly carbon fiber 
     precursors and forming; and
       (E) advanced forming and joining processes for lightweight 
     materials, including mixed materials (such as combinations of 
     steel, aluminum, magnesium, and carbon fiber into a single 
     assembly or vehicle).
       (d) Advanced Batteries.--
       (1) In general.--In carrying out this section, the 
     Secretary shall carry out an advanced battery program the 
     primary focuses of which shall be--
       (A) research in the chemistry of exploratory battery 
     technologies (other than lithium ion batteries); and
       (B) battery and battery systems production process research 
     and development.
       (2) Industry alliance.--In carrying out the advanced 
     battery program under this subsection, the Secretary shall 
     competitively select an Industry Alliance to represent 
     participants who are private, for-profit firms headquartered 
     in the United States, the primary business of which is the 
     manufacturing of batteries and battery systems.
       (3) Research.--
       (A) Grants.--The Secretary shall carry out research 
     activities of the Initiative through competitively-awarded 
     grants to--
       (i) researchers, including Industry Alliance participants;
       (ii) small businesses;
       (iii) National Laboratories; and
       (iv) institutions of higher education.
       (B) Industry alliance.--The Secretary shall annually 
     solicit from the Industry Alliance--
       (i) comments to identify advanced battery technology needs 
     relevant to electric drive technology;
       (ii) an assessment of the progress of research activities 
     of the Initiative; and
       (iii) assistance in annually updating advanced battery 
     technology road maps.
       (4) Availability to the public.--The information and road 
     maps developed under this subsection shall be available to 
     the public.
       (5) Preference.--In making awards under this subsection, 
     the Secretary shall give preference to participants in the 
     Industry Alliance.
       (6) Cost sharing.--In carrying out this subsection, the 
     Secretary shall require cost sharing in accordance with 
     section 120(b) of title 23, United States Code.
       (e) Hybrid Systems.--In carrying out this section, the 
     Secretary shall carry out a program relating to hybrid 
     systems, the primary focus of which shall be research on and 
     development of--
       (1) advanced electric traction systems and wheel motors;
       (2) advanced power electronics;
       (3) systems integration; and
       (4) hydraulic accumulators or other energy storage devices.
       (f) Plug-in Hybrids.--In carrying out this section, the 
     Secretary shall carry out a program relating to plug-in 
     hybrids, the primary focus of which shall be--
       (1) research on and development of advanced batteries with 
     appropriate power to energy ratios necessary for minimum 
     electric range and vehicle performance, such as acceleration; 
     and
       (2) the early demonstration of vehicles and infrastructure 
     through the provision of procurement assistance to fleet 
     purchasers.
       (g) Advanced Clean Diesel.--In carrying out this section, 
     the Secretary shall carry out a program of research and 
     development relating to diesel combustion and emissions, the 
     primary focuses of which shall be--
       (1) the development of clean-burn and after treatment 
     technologies, including advanced low-temperature combustion 
     (including homogeneous charge compression-ignition);
       (2) the development of mixed mode operation that combines 
     attributes of compression- and spark-ignition engine 
     technologies;
       (3) the integration of advanced technologies, including 
     increased expansion ratio, variable valve timing, reduced 
     friction, and improved exhaust gas heat recovery;
       (4) the development of NOx after treatment 
     systems, including absorber-catalysts, selective catalytic 
     reduction, and lean NOx catalysts;
       (5) the development of particulate matter after treatment 
     systems;
       (6) the development of powertrain integration of engine and 
     after treatment systems; and
       (7) enhancements in durability and reliability and 
     reduction of costs.
       (h) Hydrogen Internal Combustion Engines.--In carrying out 
     this section, the Secretary shall carry out a program of 
     research and development relating to hydrogen internal 
     combustion engines, the primary focuses of which shall be--
       (1) to advance hydrogen internal combustion engine 
     technology to a level at which

[[Page 16437]]

     the robustness and durability of such an engine would be 
     acceptable to real-world customers; and
       (2) to use those engines to provide an affordable 
     transition to a hydrogen economy by creating a demand for 
     hydrogen refueling infrastructure and bridging to hydrogen-
     powered fuel cells.
       (i) Fuel Cell Technology.--In carrying out this section, 
     the Secretary shall carry out a program of research and 
     development relating to fuel cell technology, the primary 
     focuses of which shall be research on and development of--
       (1) fuel cell stack components and fuel cell manufacturing 
     processes; and
       (2) materials resistant to hydrogen embrittlement.
       (j) Hydrogen Storage.--In carrying out this section, the 
     Secretary shall carry out a program of research and 
     development relating to hydrogen storage, the primary focus 
     of which shall be research on and development of competitive 
     storage methods for sufficient quantities of hydrogen onboard 
     a vehicle (including a demonstration of hydrogen refueling 
     infrastructure for not less than 10 nor more than 20 
     stations)--
       (1) to enable increased development and use of hydrogen 
     internal combustion engines and hydrogen-powered fuel cell 
     vehicles; and
       (2) to meet or surpass the customer-discernable attributes 
     of vehicles available as of the date of enactment of this Act 
     with respect to range and cost per mile.
       (k) Fuel Cell Membranes.--In carrying out this section, the 
     Secretary shall carry out a program of research and 
     development relating to fuel cell membranes, the primary 
     focuses of which shall be--
       (1) the achievement of a fundamental understanding of the 
     catalytic materials for fuel cells; and
       (2) the development of low-cost fuel cell membranes.
       (l) Cellulosic Ethanol.--In carrying out this section, the 
     Secretary shall carry out a program of research and 
     development relating to cellulosic ethanol, the primary focus 
     of which shall be research on and development of enzymes 
     necessary for the production of cellulosic ethanol.
       (m) Biodiesel Fuel.--In carrying out this section, the 
     Secretary shall carry out a program of research and 
     development relating to biodiesel fuel, the primary focuses 
     of which shall be--
       (1) the development of a national B-20 standard;
       (2) fundamental research on biomass-to-liquid alternatives;
       (3) total lifecycle analyses of the total potential for 
     petroleum replacement, total fossil fuel replacement, or 
     greenhouse gas reductions for biodiesel options;
       (4) an assessment of feedstock options; and
       (5) an assessment of the effects on engine durability and 
     reliability including the effects due to fuel quality 
     variations, stability, and degradation parameters.
       (n) Biodiesel Fuel and Technology.--In carrying out this 
     section, the Secretary shall carry out a program of research 
     and development relating to biodiesel fuel, the primary 
     focuses of which shall be--
       (1) the evaluation and optimization of B-100 processing 
     variables to enhance blendstock stability, maintain uniform 
     quality and specifications, and reduce cost;
       (2) the development and expansion of processing, blending, 
     and distribution infrastructure;
       (3) the development of standardized labeling and dispensing 
     of equipment information;
       (4) establishment of a consumer education outreach program;
       (5) assessment and evaluation of biodiesel on advanced 
     engine (such as high-pressure injector) and after treatment 
     components; and
       (6) assessment of the effects of biodiesel on advanced 
     combustion clean-burn strategies.
       (o) Ethanol and Biofuels Technology.--In carrying out this 
     section, the Secretary shall carry out a program of research 
     and development relating to ethanol and biofuels technology, 
     the primary focus of which shall be research and development 
     into--
       (1) ethanol and biofuels transport systems, such as truck, 
     rail, and pipelines;
       (2) advanced high-efficiency combustion research for fuels, 
     such as E-85;
       (3) materials compatibility for E-85 fuel;
       (4) E-85 vehicle engineering and calibration to speed 
     conversion of systems; and
       (5) advanced combustion and after-treatment systems to 
     support fuel efficiency gains.
       (p) Authorization of Appropriations.--There are authorized 
     to be appropriated--
       (1) to carry out subsection (a), $60,000,000 for each of 
     fiscal years 2008 through 2012;
       (2) to carry out subsection (b), $143,000,000 for each of 
     the fiscal years 2008 through 2012;
       (3) to conduct research and development into hybrid systems 
     (power electronics, electric motors, hydraulic accumulators, 
     other energy storage devices, testing, and analysis), 
     $64,000,000 for each of the fiscal years 2008 through 2012;
       (4) to conduct research and development into plug-in 
     hybrids, $56,000,000 for each of the fiscal years 2008 
     through 2012;
       (5) to conduct research and development into advanced clean 
     diesel, $54,000,000 for each of the fiscal years 2008 through 
     2010;
       (6) to conduct research and development into hydrogen 
     internal combustion engines, $11,000,000 for each of the 
     fiscal years 2008 through 2012;
       (7) to conduct research and development into fuel cell 
     technology, $40,000,000 for each of the fiscal years 2008 
     through 2012;
       (8) to conduct research and development into hydrogen 
     storage, $88,000,000 for each of the fiscal years 2008 
     through 2012;
       (9) to conduct research and development into fuel cell 
     membranes, $64,000,000 for each of the fiscal years 2008 
     through 2012;
       (10) to conduct research and development into cellulosic 
     ethanol, $340,000,000 for each of the fiscal years 2008 
     through 2012;
       (11) to conduct research and development into biodiesel 
     fuel and technology, $7,000,000 for each of the fiscal years 
     2008 through 2012; and
       (12) to conduct research and development into ethanol 
     biofuels technology, $23,000,000 for each of the fiscal years 
     2008 through 2012.

     SEC. 506. PROHIBITION ON FRANCHISE AGREEMENT RESTRICTIONS 
                   RELATED TO ALTERNATIVE FUEL INFRASTRUCTURE.

       (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 
                   ALTERNATIVE FUEL PUMPS.

       ``(a) Definition.--In this section:
       ``(1) Alternative fuel.--The term `alternative fuel' means 
     any fuel--
       ``(A) at least 85 percent of the volume of which consists 
     of ethanol, natural gas, compressed natural gas, liquefied 
     natural gas, liquefied petroleum gas, hydrogen, or any 
     combination of those fuels; or
       ``(B) any mixture of biodiesel (as defined in section 
     40A(d)(1) of the Internal Revenue Code of 1986) and diesel 
     fuel (as defined in section 4083(a)(3) of the Internal 
     Revenue Code of 1986), determined without regard to any use 
     of kerosene and containing at least 20 percent biodiesel.
       ``(2) Franchise-related document.--The term `franchise-
     related document' means--
       ``(A) a franchise under this Act; and
       ``(B) 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 an alternative fuel pump or storage tank;
       ``(B) converting an existing tank and pump on the marketing 
     premises of the franchisee for alternative fuel use;
       ``(C) advertising (including through the use of signage or 
     logos) the sale of any alternative fuel;
       ``(D) selling alternative 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);
       ``(E) purchasing alternative fuel solely from the 
     franchisor if the franchisor does not offer its own renewable 
     fuel for sale by the franchisee;
       ``(F) listing alternative fuel availability or prices, 
     including on service station signs, fuel dispensers, or light 
     poles; or
       ``(G) allowing payment of alternative fuel with a credit 
     card.
       ``(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 an alternative 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 by inserting after the item relating to section 106 
     the following:

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

     SEC. 507. 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--

[[Page 16438]]

       (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) shall 
     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) 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 
     the progress of the agencies of the Federal Government 
     (including the Executive Office of the President) in 
     complying with--
       (1) the Energy Policy Act of 1992 (42 U.S.C. 13201 et 
     seq.);
       (2) Executive Order 13149 (65 Fed. Reg. 24595; relating to 
     greening the government through Federal fleet and 
     transportation efficiency); and
       (3) the fueling center requirements of this section.

     SEC. 508. LABELS FOR FUEL ECONOMY AND GREENHOUSE GAS 
                   EMISSIONS.

       Section 32908(b) of title 49, United States Code, is 
     amended--
       (1) in paragraph (1)--
       (A) by redesignating subparagraph (F) as subparagraph (H); 
     and
       (B) by inserting after subparagraph (E) the following:
       ``(F) a label (or a logo imprinted on a label required by 
     this paragraph) that--
       ``(i) reflects an automobile's performance 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 automobiles; and
       ``(iii) is designed to encourage the manufacture and sale 
     of automobiles that meet or exceed applicable fuel economy 
     standards under section 32902.
       ``(G) a fuelstar under paragraph (5).''; and
       (2) by adding at the end the following:
       ``(4) Green label program.--
       ``(A) Marketing analysis.--Not later than 2 years after the 
     date of the enactment of the Ten-in-Ten Fuel Economy Act, the 
     Administrator shall implement a consumer education program 
     and execute marketing strategies to improve consumer 
     understanding of automobile performance described in 
     paragraph (1)(F).
       ``(B) Eligibility.--Not later than 3 years after the date 
     described in subparagraph (A), the Administrator shall issue 
     requirements for the label or logo required under paragraph 
     (1)(F) to ensure that an automobile 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 
     attribute class to which it belongs in that model year.
       ``(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 Fuelstar Program, a 
     manufacturer may include on the label maintained on an 
     automobile under paragraph (1)--
       ``(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 such standard; and
       ``(iii) 1 additional green star for the use of thermal 
     management technologies, including energy efficient air 
     conditioning systems, glass, and powertrain systems.
       ``(C) Gold stars.--Under the Fuelstar Program, a 
     manufacturer may include a gold star on the label maintained 
     on an automobile under paragraph (1) if the automobile 
     attains a fuel economy of at least 50 miles per gallon.''.

     SEC. 509. NATIONAL ACADEMY OF SCIENCES STUDIES.

       (a) In General.--As soon as practicable after the date of 
     enactment of this Act, the Secretary of Transportation shall 
     execute an agreement with the National Academy of Sciences to 
     develop a report evaluating vehicle fuel economy standards, 
     including--
       (1) an assessment of automotive technologies and costs to 
     reflect developments since the Academy's 2002 report 
     evaluating the corporate average fuel economy standards was 
     conducted;
       (2) an analysis of existing and potential technologies that 
     may be used practically to improve automobile fuel economy;
       (3) an analysis of how such technologies may be practically 
     integrated into the automotive manufacturing process; and
       (4) an assessment of how such technologies may be used to 
     meet the new fuel economy standards under chapter 329 of 
     title 49, United States Code, as amended by this title.
       (b) Quinquennial Updates.--After submitting the initial 
     report, the Academy shall update the report at 5 year 
     intervals thereafter through 2025.
       (c) Report.--The Academy shall submit the report to the 
     Secretary, the Senate Committee on Commerce, Science, and 
     Transportation and the House of Representatives Committee on 
     Energy and Commerce, with its findings and recommendations no 
     later than 18 months after the date on which the Secretary 
     executes the agreement with the Academy.

     SEC. 510. STANDARDS FOR EXECUTIVE AGENCY AUTOMOBILES.

       (a) In General.--Section 32917 of title 49, United States 
     Code, is amended to read as follows:

     ``Sec. 32917. Standards for Executive agency automobiles

       ``(a) Fuel Efficiency.--The head of an Executive agency 
     shall ensure that each new automobile procured by the 
     Executive agency is as fuel efficient as practicable.
       ``(b) Definitions.--In this section:
       ``(1) Executive agency.--The term `Executive agency' has 
     the meaning given that term in section 105 of title 5.
       ``(2) New automobile.--The term `new automobile', with 
     respect to the fleet of automobiles of an executive agency, 
     means an automobile that is leased for at least 60 
     consecutive days or bought, by or for the Executive agency, 
     after September 30, 2008. The term does not include any 
     vehicle designed for combat-related missions, law enforcement 
     work, or emergency rescue work.''.
       (b) Report.--The Administrator of the General Services 
     Administration shall develop a report describing and 
     evaluating the efforts of the heads of the Executive agencies 
     to comply with section 32917 of title 49, United States Code, 
     for fiscal year 2009. The Administrator shall submit the 
     report to Congress no later than December 31, 2009.

                                 ______
                                 
  SA 1713. Mr. PRYOR (for himself, Mr. Bond, Mr. Levin, Mr. Voinovich, 
Ms. Stabenow, and Mrs. McCaskill) submitted an amendment intended to be 
proposed to amendment SA 1502 proposed by Mr. Reid to the bill H.R. 6, 
to reduce our Nation's dependency on foreign oil by investing in clean, 
renewable, and alternative energy resources, promoting new emerging 
energy technologies, developing greater efficiency, and creating a 
Strategic Energy Efficiency and Renewables Reserve to invest in 
alternative energy, and for other purposes; which was ordered to lie on 
the table; as follows:

       On page 239, strike line 16 and all that follows through 
     page 263, line 8 and insert the following:

           TITLE V--CORPORATE AVERAGE FUEL ECONOMY STANDARDS

     SEC. 501. INCREASING THE EFFICIENCY OF AUTOMOBILES.

       (a) Definitions.--In this section:
       (1) Automobile.--The term ``automobile'' means, as defined 
     in regulations promulgated by the Administrator of the 
     Environmental Protection Agency that are in effect on the 
     date of the enactment of this Act--
       (A) a light-duty truck;
       (B) a light-duty vehicle; or
       (C) a medium-duty passenger vehicle.
       (2) Alternative fuel.--The term ``alternative fuel'' has 
     the meaning given the term in section 32901(a) of title 49, 
     United States Code.
       (3) E85.--The term ``E85'' means a fuel blend containing 85 
     percent denatured ethanol and 15 percent gasoline by volume.
       (4) Flexible fuel automobile.--The term ``flexible fuel 
     automobile'' means an automobile warrantied by the 
     manufacturer of the vehicle to operate on any combination of 
     gasoline, E85, and M85 or diesel fuel blends containing not 
     less than 20 percent non-petroleum based fuel alternatives.
       (5) 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.
       (6) M85.--The term ``M85'' means a fuel blend containing 85 
     percent methanol and 15 percent gasoline by volume.
       (7) Plug-in hybrid automobile.--The term ``plug-in hybrid 
     automobile'' means a hybrid automobile that--
       (A) has an onboard, rechargeable storage device capable of 
     propelling the vehicle by electricity for at least 10 miles; 
     and

[[Page 16439]]

       (B) achieves at least 125 percent of the model year 2002 
     city fuel economy.
       (8) Qualified automobile.--The term ``qualified 
     automobile'' 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 automobile;
       (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 automobile;
       (F) a plug-in hybrid automobile;
       (G) an electric automobile;
       (H) a hydrogen internal combustion engine automobile; and
       (I) any other appropriate automobile that uses 
     substantially new technology and achieves at least 175 
     percent of the model year 2002 city fuel economy, as 
     determined by the Secretary of Transportation, by regulation.
       (b) Requirements.--
       (1) In general.--For each model year, the percentage of new 
     automobiles manufactured by a manufacturer for sale in the 
     United States that are qualified automobiles shall be not 
     less than the corresponding percentage in the following 
     table:

For model year:                       The percentage that are qualified
                                    automobiles shall be not less than:
2012.........................................................20 percent
2013.........................................................30 percent
2014.........................................................40 percent
2015 and thereafter..........................................50 percent

       (2) New technology.--Not less than 10 percent of the number 
     of qualified automobiles required to be manufactured by a 
     manufacturer for sale in the United States in each model year 
     after 2016 pursuant to paragraph (1), shall be--
       (A) hybrid automobiles;
       (B) plug-in hybrid automobiles;
       (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);
       (E) electric automobiles; or
       (F) any other appropriate automobile that uses 
     substantially new technology and achieves at least 175 
     percent of the model year 2002 combined fuel economy, as 
     determined by the Secretary of Transportation, by regulation.
       (c) Qualified Automobile Credits.--
       (1) In general.--The Secretary shall issue qualified 
     automobile production credits to manufacturers for 
     automobiles manufactured for model year 2012 and for each 
     subsequent model year, in accordance with this subsection.
       (2) Effect of credit.--Each credit issued to a manufacturer 
     under this subsection shall reduce the qualified automobile 
     mandate requirement under subsection (b)(1) by 1 automobile 
     for the model year to which the credit applies.
       (3) Rate of credit issuance.--For each qualified automobile 
     (except for automobiles described in subparagraphs (B) and 
     (C) of subsection (a)(8)) manufactured for model year 2012, 
     2013, 2014, 2015, or 2016, the manufacturer shall be issued--
       (A) 1.25 qualified automobile production credits if the 
     combined fuel economy for such automobile is greater than 110 
     percent and less than 125 percent of the combined fuel 
     economy of the model year 2002 inertia weight class;
       (B) 1.5 qualified automobile production credits if the 
     combined fuel economy for such automobile is at least 125 
     percent and less than 150 percent of the combined fuel 
     economy of the model year 2002 inertia weight class;
       (C) 2.0 qualified automobile production credits if the 
     combined fuel economy for such automobile is at least 150 
     percent and less than 175 percent of the combined fuel 
     economy of the model year 2002 inertia weight class; and
       (D) 3.0 qualified automobile production credits if the 
     combined fuel economy for such automobile is at least 175 
     percent of the combined fuel economy of the model year 2002 
     inertia weight class;
       (4) Defined term.--For purposes of this paragraph, the term 
     ``model year 2002 inertia weight class'' has the same meaning 
     as the term ``vehicle inertia weight class'' as defined in 
     Section 30B of the Internal Revenue Code of 1986.
       (d) Rulemaking.--Not later than 1 year after the date of 
     the enactment of this Act, the Secretary of Transportation 
     shall promulgate regulations to carry out this section.

     SEC. 502. AVERAGE FUEL ECONOMY STANDARDS FOR AUTOMOBILES.

       (a) Increased Standards.--Section 32902 of title 49, United 
     States Code, is amended--
       (1) by amending subsection (a) to read as follows:
       ``(a) Nonpassenger Automobiles.--
       ``(1) Annual prescription of average fuel economy 
     standards.--
       ``(A) In general.--Not later than 18 months before the 
     beginning of each model year, the Secretary of Transportation 
     shall prescribe by regulation average fuel economy standards 
     for nonpassenger automobiles manufactured by a manufacturer 
     in that model year.
       ``(B) Standards based on class.--The Secretary may 
     prescribe separate standards for different classes of 
     nonpassenger automobiles.
       ``(C) Standards based on vehicle attributes.--The Secretary 
     may prescribe such standards based on vehicle attributes 
     pursuant to subsection (j).
       ``(D) Minimum standard.--Each standard prescribed under 
     this paragraph shall be the maximum feasible average fuel 
     economy level that the Secretary determines the manufacturers 
     can achieve in that model year, consistent with subsection 
     (e).
       ``(2) Average fuel economy standard for model years 2012 
     through 2014.--Not later than April 1, 2010, the Secretary 
     shall establish average fuel economy standards for 
     nonpassenger automobiles for each of the model years 2012, 
     2013, and 2014. Each such standard shall be set at the 
     maximum feasible average fuel economy level that the 
     Secretary determines the manufacturers can achieve in each 
     such model year.
       ``(3) Average fuel economy standard for model year 2015.--
     Not later than April 1, 2013, the Secretary shall establish 
     the average fuel economy standard for nonpassenger 
     automobiles for model year 2015--
       ``(A) at least 25.3 miles per gallon, consistent with 
     paragraph (1)(D); or
       ``(B) if the Secretary prescribes average fuel economy 
     standards on the basis of vehicle attributes pursuant to 
     subsection (j), at a level that yields estimated fuel savings 
     not less than those that would be achieved by the average 
     fuel economy standard described in subparagraph (A).
       ``(4) Average fuel economy standard for model years 2016 
     through 2019.--Not later than April 1, 2014, the Secretary 
     shall establish average fuel economy standards for 
     nonpassenger automobiles for each of the model years 2016, 
     2017, 2018, and 2019. Each such standard shall be set at the 
     maximum feasible average fuel economy level that the 
     Secretary determines the manufacturers can achieve in each 
     such model year.
       ``(5) Average fuel economy standard for model year 2020.--
     Not later than April 1, 2018, the Secretary shall establish 
     the average fuel economy standard for nonpassenger 
     automobiles for model year 2020--
       ``(A) at least 27.7 miles per gallon, consistent with 
     paragraph (1)(D); or
       ``(B) if the Secretary prescribes average fuel economy 
     standards on the basis of vehicle attributes pursuant to 
     subsection (j), at a level that yields estimated fuel savings 
     not less than those that would be achieved by the average 
     fuel economy standard described in subparagraph (A).
       ``(6) Average fuel economy standard for model years 2021 
     through 2024.--Not later than April 1, 2019, the Secretary 
     shall establish average fuel economy standards for 
     nonpassenger automobiles for each of the model years 2021, 
     2022, 2023, and 2024. Each such standard shall be set at the 
     maximum feasible average fuel economy level that the 
     Secretary determines the manufacturers can achieve in each 
     such model year.
       ``(7) Average fuel economy standard for model years 2025 
     and thereafter.--Not later than April 1, 2023, the Secretary 
     shall establish the average fuel economy standard for 
     nonpassenger automobiles for model year 2025 and each 
     subsequent model year--
       ``(A) at least 30 miles per gallon, consistent with 
     paragraph (1)(D); or
       ``(B) if the Secretary prescribes average fuel economy 
     standards on the basis of vehicle attributes pursuant to 
     subsection (j), a level that yields estimated fuel savings 
     not less than those that would be achieved by the average 
     fuel economy standard described in subparagraph (A).''; and
       (2) by amending subsection (b) to read as follows:
       ``(b) Passenger Automobiles.--
       ``(1) Annual prescription of average fuel economy 
     standards.--
       ``(A) In general.--Not later than 18 months before the 
     beginning of each model year after model year 2011, the 
     Secretary of Transportation shall prescribe by regulation 
     average fuel economy standards for passenger automobiles 
     manufactured by a manufacturer in that model year.
       ``(B) Authority for prescription of differing standards 
     based on class.--The Secretary may prescribe separate 
     standards for different classes of passenger automobiles.
       ``(C) Standards based on vehicle attributes.--The Secretary 
     may prescribe such standards based on vehicle attributes 
     pursuant to subsection (j).
       ``(D) Minimum standard.--Each standard prescribed under 
     this paragraph shall be the maximum feasible average fuel 
     economy level that the Secretary determines the manufacturers 
     can achieve in that model year, consistent with subsection 
     (e).
       ``(2) Average fuel economy standard for model year 2012.--
     Not later than April 1, 2010, the Secretary shall establish 
     the average fuel economy standard for passenger automobiles 
     for model year 2012--
       ``(A) at least 29 miles per gallon, consistent with 
     paragraph (1)(D); or

[[Page 16440]]

       ``(B) if the Secretary prescribes average fuel economy 
     standards on the basis of vehicle attributes pursuant to 
     subsection (j), at a level that yields estimated fuel savings 
     not less than those that would be achieved by the average 
     fuel economy standard described in subparagraph (A).
       ``(3) Average fuel economy standard for model years 2013 
     through 2016.--Not later than April 1, 2011, the Secretary 
     shall establish average fuel economy standards for passenger 
     automobiles for each of the model years 2013, 2014, 2015, and 
     2016. Each such standard shall be set at the maximum feasible 
     average fuel economy level that the Secretary determines the 
     manufacturers can achieve in each such model year.
       ``(4) Average fuel economy standard for model years 2017.--
     Not later than April 1, 2015, the Secretary shall establish 
     the average fuel economy standard for passenger automobiles 
     for model year 2017--
       ``(A) at least 32.5 miles per gallon, consistent with 
     paragraph (1)(D); or
       ``(B) if the Secretary prescribes average fuel economy 
     standards on the basis of vehicle attributes pursuant to 
     subsection (j), at a level that yields estimated fuel savings 
     not less than those that would be achieved by the average 
     fuel economy standard described in subparagraph (A).
       ``(5) Average fuel economy standard for model years 2018 
     through 2021.--Not later than April 1, 2016, the Secretary 
     shall establish average fuel economy standards for passenger 
     automobiles for model years 2018, 2019, 2020, and 2021. Each 
     such standard shall be set at the maximum feasible average 
     fuel economy level that the Secretary determines the 
     manufacturers can achieve in each such model year.
       ``(6) Average fuel economy standard for model years 2022 
     and thereafter.--Not later than April 1, 2020, the Secretary 
     shall establish the average fuel economy standard for 
     passenger automobiles for model year 2022 and each subsequent 
     model year--
       ``(A) at least 36 miles per gallon, consistent with 
     paragraph (1)(D); or
       ``(B) if the Secretary prescribes average fuel economy 
     standards on the basis of vehicle attributes pursuant to 
     subsection (j), at a level that yields estimated fuel savings 
     not less than those that would be achieved by the average 
     fuel economy standard described in subparagraph (A).
       ``(7) Minimum for average fuel economy standards based on 
     vehicle attributes.--
       ``(A) In general.--Notwithstanding any other provision of 
     this section, for any model year in which the Secretary 
     prescribes average fuel economy standards for passenger 
     automobiles on the basis of vehicle attributes pursuant to 
     subsection (j), the average fuel economy standard for 
     passenger automobiles manufactured by a manufacturer in that 
     model year shall also provide for an alternative minimum 
     standard that shall apply only to a manufacturer's 
     domestically manufactured passenger automobiles, as 
     calculated under section 32904 as in effect on the day before 
     the date of the enactment of the Renewable Fuels, Consumer 
     Protection, and Energy Efficiency Act of 2007.
       ``(B) Alternative minimum standard.--The alternative 
     minimum standard referred to in subparagraph (A) shall be the 
     greater of--
       ``(i) 27.5 miles per gallon; or
       ``(ii) 92 percent of the average fuel economy projected by 
     the Secretary for the combined domestic and foreign fleets 
     manufactured for sale in the United States by all 
     manufacturers in that model year, which projection shall be 
     published in the Federal Register when the standard for that 
     model year is promulgated in accordance with this section.
       ``(C) Applicability.--The alternative minimum standard 
     under this paragraph shall apply to a manufacturer's 
     domestically manufactured passenger automobiles only if the 
     passenger automobile standard established on the basis of 
     vehicle attributes pursuant to subsection (j), excluding any 
     credits transferred by the manufacturer pursuant to 
     subsection (g) from other categories of automobiles described 
     in paragraph (5)(B), would allow that manufacturer to comply 
     with a less stringent passenger automobile standard than the 
     alternative minimum standard.''.
       (b) Repeal of Authority To Amend Passenger Automobile Fuel 
     Economy Standards.--
       (1) In general.--Section 32902 of title 49, United States 
     Code, is amended--
       (A) by striking subsection (c); and
       (B) by redesignating subsections (d) through (j) as 
     subsections (c) through (i), respectively.
       (2) Conforming amendments.--
       (A) Section 32901(a)(12) of such title is amended by 
     striking ``section 32902(d)'' and inserting ``section 
     32902(c)''.
       (B) Section 32902 of such title is amended--
       (i) in subsection (c)(1), as redesignated by paragraph 
     (1)(B), by striking ``under subsection (b) or (c)'' and 
     inserting ``under subsection (b)'';
       (ii) in subsection (d)(2), as redesignated by paragraph 
     (1)(B), by striking ``under subsection (a), (b), (c), or 
     (d)'' and inserting ``under subsection (a), (b), or (c)'';
       (iii) in subsection (f), as redesignated by paragraph 
     (1)(B)--

       (I) in paragraph (1)--

       (aa) by striking ``under subsection (a) or (d)'' and 
     inserting ``under subsection (a), (b), or (c)''; and
       (bb) by striking ``of subsection (a) or (d)'' and inserting 
     ``of subsection (a), (b), or (c)''; and

       (II) in paragraph (2), by striking ``(and submit the 
     amendment to Congress when required under subsection (c)(2) 
     of this section)'';

       (iv) in subsection (g), as redesignated by paragraph 
     (1)(B), by striking ``carrying out subsections (c), (f), and 
     (g)'' and inserting ``carrying out subsections (a), (b), (e), 
     and (f)''; and
       (v) in subsection (i), as redesignated by paragraph (1)(B), 
     by striking ``under subsection (a), (c), or (g) of this 
     section'' and inserting ``under subsection (a), (b), or 
     (f)''.
       (C) Section 32904(a)(1)(B) of such title is amended by 
     striking ``section 32902(b)-(d)'' and inserting ``subsections 
     (b) and (c) of section 32902''.
       (D) Section 32907(a)(4) of such title is amended by 
     striking ``section 32902(d)'' and inserting ``section 
     32902(c)''.
       (E) Section 32909(b) of such title is amended by striking 
     ``, except that a petition for review'' and all that follows 
     through ``referred to in section 32902(c)(2)''.
       (F) Section 32917(b)(1)(B) of such title is amended by 
     striking ``or (c)''.
       (c) Authority of the Secretary To Prescribe Standards Based 
     on Vehicle Attributes.--Section 32902 of title 49, United 
     States Code, as amended by this section, is further amended 
     by adding at the end the following:
       ``(j) Authority of the Secretary To Prescribe Standards 
     Based on Vehicle Attributes.--
       ``(1) In general.--The authority of the Secretary of 
     Transportation to prescribe by regulation average fuel 
     economy standards for passenger automobiles and nonpassenger 
     automobiles includes the authority to prescribe standards 
     based on vehicle attributes related to fuel economy and to 
     express any such attribute-based standard in the form of a 
     mathematical function.
       ``(2) Transition period.--If the Secretary prescribes 
     standards for passenger automobiles on the basis of vehicle 
     attributes, the Secretary shall provide a transition period 
     during the first 3 model years in which an attribute-based 
     standard would apply during which each manufacturer may elect 
     whether to comply with the attribute-based standard or with 
     the single corporate average fuel economy level prescribed 
     under subsection (b).
       ``(3) Prescription of standards for multiple years.--The 
     authority of the Secretary to prescribe by regulation average 
     fuel economy standards for automobiles includes the authority 
     to prescribe standards by issuing regulations governing more 
     than 1 model year at a time, up to 5 consecutive model 
     years.''.
       (d) Technical and Conforming Amendments.--
       (1) Section 32901(a) of title 49, United States Code, is 
     amended--
       (A) by redesignating paragraph (16) as paragraph (17); and
       (B) by inserting after paragraph (15) the following:
       ``(16) `nonpassenger automobile' means an automobile that 
     is not a passenger automobile; and''.
       (2) Section 32903 of title 49, United States Code, is 
     amended--
       (A) by striking ``section 32902(b)-(d) of this title'' each 
     place it appears and inserting ``subsections (b) and (c) of 
     section 32902'';
       (B) in subsection (a)(2), by striking ``clause (1) of this 
     subsection,'' and inserting ``paragraph (1)''; and
       (C) in subsection (e), by striking ``automobiles that are 
     not passenger automobiles'' and inserting ``nonpassenger 
     automobiles''.
       (e) Effective Date.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall take effect on the date 
     of the enactment of this Act.
       (2) Transition for passenger automobiles.--The standard or 
     standards for passenger automobiles under the authority of 
     section 32902(b) of title 49, United States Code, in effect 
     on the day before the date of the enactment of this Act, 
     shall remain in effect until a standard for passenger 
     automobiles is established under the authority of section 
     32902(b) of such title, as amended by this section.
       (3) Average fuel economy standard for nonpassenger 
     automobiles in model years through 2011.--The average fuel 
     economy standard for nonpassenger automobiles, under the 
     authority of section 32902(a) of such title for model years 
     through 2011, shall be the standard described in the final 
     rule issued by the National Highway Traffic Safety 
     Administration entitled ``Average Fuel Economy Standards for 
     Light Trucks Model Years 2008-2011'' (71 Fed. Reg. 17566), as 
     amended in a notice published by the National Highway Traffic 
     Safety Administration on April 14, 2006 (71 Fed. Reg. 19449).

     SEC. 503. FUEL EFFICIENCY TARGET FOR COMMERCIAL MEDIUM-DUTY 
                   AND HEAVY-DUTY ON-HIGHWAY VEHICLES.

       Section 32902 of title 49, United States Code, as amended 
     by section 502, is further amended by adding at the end the 
     following:

[[Page 16441]]

       ``(k) Commercial Medium- and Heavy-Duty On-Highway 
     Vehicles.--
       ``(1) Study.--Not later than 18 months after the date of 
     the enactment of the Renewable Fuels, Consumer Protection, 
     and Energy Efficiency Act of 2007, the Secretary of 
     Transportation, in consultation with the Secretary of Energy 
     and the Administrator of the Environmental Protection Agency, 
     shall examine the fuel efficiency of commercial medium- and 
     heavy-duty on-highway vehicles and determine--
       ``(A) the appropriate test procedures and methodologies for 
     measuring commercial medium- and heavy-duty on-highway 
     vehicle fuel efficiency;
       ``(B) the appropriate metric for measuring and expressing 
     commercial medium- and heavy-duty on-highway vehicle fuel 
     efficiency performance, taking into consideration, among 
     other things, the work performed by such on-highway vehicles 
     and types of operations in which they are used;
       ``(C) the range of factors, including, without limitation, 
     design, functionality, use, duty cycle, infrastructure, and 
     total overall energy consumption and operating costs that 
     effect commercial medium- and heavy-duty on-highway vehicle 
     fuel efficiency; and
       ``(D) such other factors and conditions that could have an 
     impact on a program to improve commercial medium- and heavy-
     duty on-highway vehicle fuel efficiency.
       ``(2) Rulemaking.--Not later than 24 months after 
     completion of the study required under paragraph (1), the 
     Secretary of Transportation, in consultation with the 
     Secretary of Energy and the Administrator of the 
     Environmental Protection Agency, and based on the results of 
     that study, shall determine in a rulemaking procedure how to 
     implement a commercial medium- and heavy-duty on-highway 
     vehicle fuel efficiency improvement program and, as 
     appropriate, shall adopt test methods, measurement metrics, 
     fuel efficiency targets, and compliance and enforcement 
     protocols that are appropriate, cost-effective, and 
     technologically feasible for commercial medium- and heavy-
     duty on-highway vehicles.
       ``(3) Lead-time; regulatory stability.--Any commercial 
     medium- and heavy-duty on-highway vehicle fuel efficiency 
     regulatory program adopted pursuant to this subsection shall 
     provide no less than 4 full model years of regulatory lead-
     time and 3 full model years of regulatory stability.
       ``(4) Commercial medium- and heavy-duty on-highway vehicle 
     defined.--In this subsection, the term `commercial medium- 
     and heavy-duty on-highway vehicle' means a commercial on-
     highway vehicle with a gross vehicle weight rating of more 
     than 10,000 pounds.''.

     SEC. 504. CREDIT AVAILABILITY.

       (a) In General.--Section 32903 of title 49, United States 
     Code, is amended--
       (1) by striking ``section 32902(b)-(d) of this title'' each 
     place it appears and inserting ``subsections (b) and (c) of 
     section 32902'';
       (2) in subsection (a)--
       (A) by striking ``3 consecutive model years'' each place it 
     appears and inserting ``5 consecutive model years''; and
       (B) in paragraph (2), by striking ``clause (1) of this 
     subsection,'' and inserting ``paragraph (1)'';
       (3) in subsection (b)--
       (A) in paragraph (1), by striking ``paragraph (2) of this 
     subsection'' and inserting ``paragraph (2) and subsection 
     (g)''; and
       (B) in paragraph (2), by striking ``3 model years'' and 
     inserting ``5 model years'';
       (4) in subsection (e), by striking ``automobiles that are 
     not passenger automobiles'' and inserting ``nonpassenger 
     automobiles''; and
       (5) by adding at the end the following:
       ``(g) Credit Transferring Within a Manufacturer's Fleet.--
       ``(1) Average fuel economy credit transferring program.--
     The Secretary of Transportation shall establish, by 
     regulation, a corporate average fuel economy credit 
     transferring program to allow any manufacturer whose 
     automobiles exceed any of the average fuel economy standards 
     prescribed under section 32902 to transfer the credits earned 
     under this section and to apply them within that 
     manufacturer's fleet to a compliance category of automobiles 
     that fails to achieve the prescribed standards.
       ``(2) Availability of credits transferred.--Credits 
     transferred under this section are available to be used in 
     the same model years that the manufacturer could have applied 
     them under subsections (a), (b), (d) and (e) as well as for 
     the model year in which the manufacturer earned them. The 
     maximum increase in any compliance category attributable to 
     transferred credits is 1.0 mile per gallon in any single 
     model year.
       ``(3) Limitation on credit transfers to category of 
     passenger automobiles.--In the case of transfers to the 
     category of automobiles described in paragraph 5(B)(i), the 
     transfer is limited to the extent that the fuel economy level 
     of the manufacturer's fleet of passenger automobiles 
     manufactured domestically shall comply with the provisions 
     established under section 32902(b)(7), excluding any 
     transfers from other categories of automobiles described in 
     paragraph 5(B).
       ``(4) Effective date.--A credit transferred in conformance 
     with this section may only be so transferred if such credit 
     is earned no earlier than the first model year after the date 
     of the enactment of the Renewable Fuels, Consumer Protection, 
     and Energy Efficiency Act of 2007.
       ``(5) Definitions.--In this subsection:
       ``(A) Fleet.--The term `fleet' means all automobiles 
     manufactured by a manufacturer in a given model year.
       ``(B) Compliance category of automobiles.--The term 
     `compliance category of automobiles' means any of the 3 
     categories of automobiles for which compliance is separately 
     calculated under this chapter, namely--
       ``(i) passenger automobiles manufactured domestically;
       ``(ii) passenger automobiles not manufactured domestically; 
     and
       ``(iii) nonpassenger automobiles.''.
       (b) Flexible Fueled Vehicles.--
       (1) Extension of alternative fuel automobiles manufacturing 
     incentives.--Section 32905 of title 49, United States Code, 
     is amended--
       (A) by striking ``1993-2010'' each place it appears and 
     inserting ``1993 through 2020.'';
       (B) by striking subsections (f) and (g); and
       (C) by redesignating subsection (h) as subsection (f).
       (2) Extension of maximum increase period.--Section 32906(a) 
     of title 49, United States Code, is amended--
       (A) by striking ``1993-2010'' and inserting ``1993 through 
     2020'';
       (B) in paragraph (1)--
       (i) in subparagraph (A), by striking ``(A)''; and
       (ii) by striking subparagraph (B); and
       (C) in paragraph (2), by striking ``described--'' and all 
     that follows and inserting ``is more than 1.2 miles per 
     gallon, the limitation in paragraph (1) applies.''.

     SEC. 505. RESEARCH ON AND DEVELOPMENT OF LEAP-AHEAD 
                   TECHNOLOGY.

       (a) Program.--The Secretary of Energy (referred to in this 
     section as the ``Secretary''), in cooperation with heads of 
     other Federal agencies, shall carry out a comprehensive 
     program to develop advanced vehicle technologies (including 
     associated components and parts) that will offer--
       (1) the potential for significantly-improved fuel economy; 
     and
       (2) significant reductions in emissions.
       (b) Components.--The program carried out under subsection 
     (a) shall include research and development in the areas of--
       (1) advanced lightweight materials;
       (2) advanced battery technology and battery systems;
       (3) hybrid systems, including--
       (A) power electronics, electric motors, power control 
     units, and power controls;
       (B) hydraulic accumulators or other energy storage devices; 
     and
       (C) testing and analysis;
       (4) plug-in hybrids;
       (5) advanced clean diesel;
       (6) hydrogen internal combustion engines;
       (7) fuel cell technology;
       (8) hydrogen storage;
       (9) fuel cell membranes;
       (10) cellulosic ethanol;
       (11) biodiesel fuel;
       (12) biodiesel fuel and technology;
       (13) ethanol and biofuels technology; and
       (14) such other related areas as the Secretary determines 
     to be appropriate.
       (c) Advanced Lightweight Materials.--In carrying out this 
     section, the Secretary shall carry out an advanced 
     lightweight materials research and development program the 
     primary focuses of which shall include--
       (1) the provision of--
       (A) technical advice for compliance with applicable Federal 
     and State environmental requirements;
       (B) assistance in identifying supply sources and securing 
     long-term contracts; and
       (C) public outreach, education, and labeling materials; and
       (2) the development of--
       (A) low-cost, durable, abuse-tolerant lithium ion-based 
     chemistries or other advanced chemistries;
       (B) advanced lightweight steels that provide a 30-percent 
     weight reduction;
       (C) advanced lightweight metals (such as magnesium, 
     aluminum, and titanium);
       (D) advanced composites, particularly carbon fiber 
     precursors and forming; and
       (E) advanced forming and joining processes for lightweight 
     materials, including mixed materials (such as combinations of 
     steel, aluminum, magnesium, and carbon fiber into a single 
     assembly or vehicle).
       (d) Advanced Batteries.--
       (1) In general.--In carrying out this section, the 
     Secretary shall carry out an advanced battery program the 
     primary focuses of which shall be--
       (A) research in the chemistry of exploratory battery 
     technologies (other than lithium ion batteries); and
       (B) battery and battery systems production process research 
     and development.
       (2) Industry alliance.--In carrying out the advanced 
     battery program under this subsection, the Secretary shall 
     competitively select an Industry Alliance to represent 
     participants who are private, for-profit firms headquartered 
     in the United States, the primary business of which is the 
     manufacturing of batteries and battery systems.
       (3) Research.--

[[Page 16442]]

       (A) Grants.--The Secretary shall carry out research 
     activities of the Initiative through competitively-awarded 
     grants to--
       (i) researchers, including Industry Alliance participants;
       (ii) small businesses;
       (iii) National Laboratories; and
       (iv) institutions of higher education.
       (B) Industry alliance.--The Secretary shall annually 
     solicit from the Industry Alliance--
       (i) comments to identify advanced battery technology needs 
     relevant to electric drive technology;
       (ii) an assessment of the progress of research activities 
     of the Initiative; and
       (iii) assistance in annually updating advanced battery 
     technology road maps.
       (4) Availability to the public.--The information and road 
     maps developed under this subsection shall be available to 
     the public.
       (5) Preference.--In making awards under this subsection, 
     the Secretary shall give preference to participants in the 
     Industry Alliance.
       (6) Cost sharing.--In carrying out this subsection, the 
     Secretary shall require cost sharing in accordance with 
     section 120(b) of title 23, United States Code.
       (e) Hybrid Systems.--In carrying out this section, the 
     Secretary shall carry out a program relating to hybrid 
     systems, the primary focus of which shall be research on and 
     development of--
       (1) advanced electric traction systems and wheel motors;
       (2) advanced power electronics;
       (3) systems integration; and
       (4) hydraulic accumulators or other energy storage devices.
       (f) Plug-In Hybrids.--In carrying out this section, the 
     Secretary shall carry out a program relating to plug-in 
     hybrids, the primary focus of which shall be--
       (1) research on and development of advanced batteries with 
     appropriate power to energy ratios necessary for minimum 
     electric range and vehicle performance, such as acceleration; 
     and
       (2) the early demonstration of vehicles and infrastructure 
     through the provision of procurement assistance to fleet 
     purchasers.
       (g) Advanced Clean Diesel.--In carrying out this section, 
     the Secretary shall carry out a program of research and 
     development relating to diesel combustion and emissions, the 
     primary focuses of which shall be--
       (1) the development of clean-burn and after treatment 
     technologies, including advanced low-temperature combustion 
     (including homogeneous charge compression-ignition);
       (2) the development of mixed mode operation that combines 
     attributes of compression- and spark-ignition engine 
     technologies;
       (3) the integration of advanced technologies, including 
     increased expansion ratio, variable valve timing, reduced 
     friction, and improved exhaust gas heat recovery;
       (4) the development of NOx after treatment 
     systems, including absorber-catalysts, selective catalytic 
     reduction, and lean NOx catalysts;
       (5) the development of particulate matter after treatment 
     systems;
       (6) the development of powertrain integration of engine and 
     after treatment systems; and
       (7) enhancements in durability and reliability and 
     reduction of costs.
       (h) Hydrogen Internal Combustion Engines.--In carrying out 
     this section, the Secretary shall carry out a program of 
     research and development relating to hydrogen internal 
     combustion engines, the primary focuses of which shall be--
       (1) to advance hydrogen internal combustion engine 
     technology to a level at which the robustness and durability 
     of such an engine would be acceptable to real-world 
     customers; and
       (2) to use those engines to provide an affordable 
     transition to a hydrogen economy by creating a demand for 
     hydrogen refueling infrastructure and bridging to hydrogen-
     powered fuel cells.
       (i) Fuel Cell Technology.--In carrying out this section, 
     the Secretary shall carry out a program of research and 
     development relating to fuel cell technology, the primary 
     focuses of which shall be research on and development of--
       (1) fuel cell stack components and fuel cell manufacturing 
     processes; and
       (2) materials resistant to hydrogen embrittlement.
       (j) Hydrogen Storage.--In carrying out this section, the 
     Secretary shall carry out a program of research and 
     development relating to hydrogen storage, the primary focus 
     of which shall be research on and development of competitive 
     storage methods for sufficient quantities of hydrogen onboard 
     a vehicle (including a demonstration of hydrogen refueling 
     infrastructure for not less than 10 nor more than 20 
     stations)--
       (1) to enable increased development and use of hydrogen 
     internal combustion engines and hydrogen-powered fuel cell 
     vehicles; and
       (2) to meet or surpass the customer-discernable attributes 
     of vehicles available as of the date of enactment of this Act 
     with respect to range and cost per mile.
       (k) Fuel Cell Membranes.--In carrying out this section, the 
     Secretary shall carry out a program of research and 
     development relating to fuel cell membranes, the primary 
     focuses of which shall be--
       (1) the achievement of a fundamental understanding of the 
     catalytic materials for fuel cells; and
       (2) the development of low-cost fuel cell membranes.
       (l) Cellulosic Ethanol.--In carrying out this section, the 
     Secretary shall carry out a program of research and 
     development relating to cellulosic ethanol, the primary focus 
     of which shall be research on and development of enzymes 
     necessary for the production of cellulosic ethanol.
       (m) Biodiesel Fuel.--In carrying out this section, the 
     Secretary shall carry out a program of research and 
     development relating to biodiesel fuel, the primary focuses 
     of which shall be--
       (1) the development of a national B-20 standard;
       (2) fundamental research on biomass-to-liquid alternatives;
       (3) total lifecycle analyses of the total potential for 
     petroleum replacement, total fossil fuel replacement, or 
     greenhouse gas reductions for biodiesel options;
       (4) an assessment of feedstock options; and
       (5) an assessment of the effects on engine durability and 
     reliability including the effects due to fuel quality 
     variations, stability, and degradation parameters.
       (n) Biodiesel Fuel and Technology.--In carrying out this 
     section, the Secretary shall carry out a program of research 
     and development relating to biodiesel fuel, the primary 
     focuses of which shall be--
       (1) the evaluation and optimization of B-100 processing 
     variables to enhance blendstock stability, maintain uniform 
     quality and specifications, and reduce cost;
       (2) the development and expansion of processing, blending, 
     and distribution infrastructure;
       (3) the development of standardized labeling and dispensing 
     of equipment information;
       (4) establishment of a consumer education outreach program;
       (5) assessment and evaluation of biodiesel on advanced 
     engine (such as high-pressure injector) and after treatment 
     components; and
       (6) assessment of the effects of biodiesel on advanced 
     combustion clean-burn strategies.
       (o) Ethanol and Biofuels Technology.--In carrying out this 
     section, the Secretary shall carry out a program of research 
     and development relating to ethanol and biofuels technology, 
     the primary focus of which shall be research and development 
     into--
       (1) ethanol and biofuels transport systems, such as truck, 
     rail, and pipelines;
       (2) advanced high-efficiency combustion research for fuels, 
     such as E-85;
       (3) materials compatibility for E-85 fuel;
       (4) E-85 vehicle engineering and calibration to speed 
     conversion of systems; and
       (5) advanced combustion and after-treatment systems to 
     support fuel efficiency gains
       (p) Authorization of Appropriations.--There are authorized 
     to be appropriated--
       (1) to carry out subsection (a), $60,000,000 for each of 
     fiscal years 2008 through 2012;
       (2) to carry out subsection (b), $143,000,000 for each of 
     the fiscal years 2008 through 2012;
       (3) to conduct research and development into hybrid systems 
     (power electronics, electric motors, hydraulic accumulators, 
     other energy storage devices, testing, and analysis), 
     $64,000,000 for each of the fiscal years 2008 through 2012;
       (4) to conduct research and development into plug-in 
     hybrids, $56,000,000 for each of the fiscal years 2008 
     through 2012;
       (5) to conduct research and development into advanced clean 
     diesel, $54,000,000 for each of the fiscal years 2008 through 
     2010;
       (6) to conduct research and development into hydrogen 
     internal combustion engines, $11,000,000 for each of the 
     fiscal years 2008 through 2012;
       (7) to conduct research and development into fuel cell 
     technology, $40,000,000 for each of the fiscal years 2008 
     through 2012;
       (8) to conduct research and development into hydrogen 
     storage, $88,000,000 for each of the fiscal years 2008 
     through 2012;
       (9) to conduct research and development into fuel cell 
     membranes, $64,000,000 for each of the fiscal years 2008 
     through 2012;
       (10) to conduct research and development into cellulosic 
     ethanol, $340,000,000 for each of the fiscal years 2008 
     through 2012;
       (11) to conduct research and development into biodiesel 
     fuel and technology, $7,000,000 for each of the fiscal years 
     2008 through 2012; and
       (12) to conduct research and development into ethanol 
     biofuels technology, $23,000,000 for each of the fiscal years 
     2008 through 2012.

     SEC. 506. LABELS FOR FUEL ECONOMY AND GREENHOUSE GAS 
                   EMISSIONS.

       Section 32908(b) of title 49, United States Code, is 
     amended--
       (1) in paragraph (1)--
       (A) by redesignating subparagraph (F) as subparagraph (H); 
     and
       (B) by inserting after subparagraph (E) the following:
       ``(F) a label (or a logo imprinted on a label required by 
     this paragraph) that--
       ``(i) reflects an automobile's performance on the basis of 
     criteria developed by the Administrator to reflect the fuel 
     economy and

[[Page 16443]]

     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 automobiles; and
       ``(iii) is designed to encourage the manufacture and sale 
     of automobiles that meet or exceed applicable fuel economy 
     standards under section 32902.
       ``(G) a fuelstar under paragraph (5).''; and
       (2) by adding at the end the following:
       ``(4) Green Label Program.--
       ``(A) Marketing analysis.--Not later than 2 years after the 
     date of the enactment of the Ten-in-Ten Fuel Economy Act, the 
     Administrator shall implement a consumer education program 
     and execute marketing strategies to improve consumer 
     understanding of automobile performance described in 
     paragraph (1)(F).
       ``(B) Eligibility.--Not later than 3 years after the date 
     described in subparagraph (A), the Administrator shall issue 
     requirements for the label or logo required under paragraph 
     (1)(F) to ensure that an automobile 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 
     attribute class to which it belongs in that model year.
       ``(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 Fuelstar Program, a 
     manufacturer may include on the label maintained on an 
     automobile under paragraph (1)--
       ``(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 such standard; and
       ``(iii) 1 additional green star for the use of thermal 
     management technologies, including energy efficient air 
     conditioning systems, glass, and powertrain systems.
       ``(C) Gold stars.--Under the Fuelstar Program, a 
     manufacturer may include a gold star on the label maintained 
     on an automobile under paragraph (1) if the automobile 
     attains a fuel economy of at least 50 miles per gallon.''.

     SEC. 507. NATIONAL ACADEMY OF SCIENCES STUDIES.

       (a) In General.--As soon as practicable after the date of 
     enactment of this Act, the Secretary of Transportation shall 
     execute an agreement with the National Academy of Sciences to 
     develop a report evaluating vehicle fuel economy standards, 
     including--
       (1) an assessment of automotive technologies and costs to 
     reflect developments since the Academy's 2002 report 
     evaluating the corporate average fuel economy standards was 
     conducted;
       (2) an analysis of existing and potential technologies that 
     may be used practically to improve automobile fuel economy;
       (3) an analysis of how such technologies may be practically 
     integrated into the automotive manufacturing process; and
       (4) an assessment of how such technologies may be used to 
     meet the new fuel economy standards under chapter 329 of 
     title 49, United States Code, as amended by this title.
       (b) Quinquennial Updates.--After submitting the initial 
     report, the Academy shall update the report at 5 year 
     intervals thereafter through 2025.
       (c) Report.--The Academy shall submit the report to the 
     Secretary, the Senate Committee on Commerce, Science, and 
     Transportation and the House of Representatives Committee on 
     Energy and Commerce, with its findings and recommendations no 
     later than 18 months after the date on which the Secretary 
     executes the agreement with the Academy.

     SEC. 508. STANDARDS FOR EXECUTIVE AGENCY AUTOMOBILES.

       (a) In General.--Section 32917 of title 49, United States 
     Code, is amended to read as follows:

     ``Sec. 32917. Standards for Executive agency automobiles

       ``(a) Fuel Efficiency.--The head of an Executive agency 
     shall ensure that each new automobile procured by the 
     Executive agency is as fuel efficient as practicable.
       ``(b) Definitions.--In this section:
       ``(1) Executive agency.--The term `Executive agency' has 
     the meaning given that term in section 105 of title 5.
       ``(2) New automobile.--The term `new automobile', with 
     respect to the fleet of automobiles of an executive agency, 
     means an automobile that is leased for at least 60 
     consecutive days or bought, by or for the Executive agency, 
     after September 30, 2008. The term does not include any 
     vehicle designed for combat-related missions, law enforcement 
     work, or emergency rescue work.''.
       (b) Report.--The Administrator of the General Services 
     Administration shall develop a report describing and 
     evaluating the efforts of the heads of the Executive agencies 
     to comply with section 32917 of title 49, United States Code, 
     for fiscal year 2009. The Administrator shall submit the 
     report to Congress no later than December 31, 2009.

                                 ______
                                 
  SA 1714. Mr. SCHUMER (for Mr. Kennedy) proposed an amendment to the 
bill H.R. 1429, to reauthorize the Head Start Act, to improve program 
quality, to expand access, and for other purposes; as follows:

       Strike all after the enacting clause and insert the 
     following:

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Head Start for School 
     Readiness Act''.

     SEC. 2. STATEMENT OF PURPOSE.

       Section 636 of the Head Start Act (42 U.S.C. 9831) is 
     amended to read as follows:

     ``SEC. 636. STATEMENT OF PURPOSE.

       ``It is the purpose of this subchapter to promote the 
     school readiness of low-income children by enhancing their 
     cognitive and social development--
       ``(1) with a learning environment that supports cognitive 
     development (including the growth of language, pre-literacy, 
     and premathematics skills) and the growth of social, 
     emotional, and physical skills; and
       ``(2) through the provision to low-income children and 
     their families of health, educational, nutritional, social, 
     and other services that are determined, based on family needs 
     assessments, to be necessary.''.

     SEC. 3. DEFINITIONS.

       Section 637 of the Head Start Act (42 U.S.C. 9832) is 
     amended--
       (1) in paragraph (2), by inserting ``(including a 
     community-based organization, as defined in section 9101 of 
     the Elementary and Secondary Education Act of 1965 (20 U.S.C. 
     7801))'' after ``nonprofit'';
       (2) in paragraph (3)(C), by inserting ``, including 
     financial literacy,'' after ``Parent literacy'';
       (3) in paragraph (17), by striking ``Mariana Islands,'' and 
     all that follows and inserting ``Mariana Islands.''; and
       (4) by adding at the end the following:
       ``(18) The term `deficiency' means--
       ``(A) a systemic or substantial material failure of an 
     agency in an area of performance that the Secretary 
     determines involves--
       ``(i) a threat to the health, safety, or civil rights of 
     children or staff;
       ``(ii) a denial to parents of the exercise of their full 
     roles and responsibilities related to program operations;
       ``(iii) a failure to comply with standards related to early 
     childhood development and health services, family and 
     community partnerships, or program design and management;
       ``(iv) the misuse of funds under this subchapter;
       ``(v) loss of legal status or financial viability, loss of 
     permits, debarment from receiving Federal grants or 
     contracts, or the improper use of Federal funds; or
       ``(vi) failure to meet any other Federal or State 
     requirement that the agency has shown an unwillingness or 
     inability to correct, after notice from the Secretary, within 
     the period specified;
       ``(B) systemic failure of the board of directors of an 
     agency to fully exercise its legal and fiduciary 
     responsibilities;
       ``(C) substantial failure of an agency to meet the 
     administrative requirements of section 644(b);
       ``(D) failure of an agency to demonstrate that the agency 
     attempted to meet the coordination and collaboration 
     requirements with entities described in section 
     640(a)(5)(D)(ii)(I); or
       ``(E) having an unresolved area of noncompliance.
       ``(19) The term `homeless child' means a child described in 
     section 725(2) of the McKinney-Vento Homeless Assistance Act 
     (42 U.S.C. 11434a(2)).
       ``(20) The term `institution of higher education' has the 
     meaning given the term in section 101(a) of the Higher 
     Education Act of 1965 (20 U.S.C. 1001(a)).
       ``(21) The term `interrater reliability' means the extent 
     to which 2 or more independent raters or observers 
     consistently obtain the same result when using the same 
     assessment tool.
       ``(22) The term `limited English proficient', used with 
     respect to a child, means a child--
       ``(A) who is enrolled or preparing to enroll in a Head 
     Start program (which may include an Early Head Start 
     program), or other early care and education program;
       ``(B)(i) who was not born in the United States or whose 
     native language is a language other than English;
       ``(ii)(I) who is a Native American, Alaska Native, or a 
     native resident of an outlying area (as defined in section 
     9101 of the Elementary and Secondary Education Act of 1965 
     (20 U.S.C. 7801)); and
       ``(II) who comes from an environment where a language other 
     than English has had a significant impact on the child's 
     level of English language proficiency; or
       ``(iii) who is migratory, whose native language is a 
     language other than English, and who comes from an 
     environment where a language other than English is dominant; 
     and
       ``(C) whose difficulties in speaking or understanding the 
     English language may be sufficient to deny such child--
       ``(i) the ability to successfully achieve in a classroom in 
     which the language of instruction is English; or

[[Page 16444]]

       ``(ii) the opportunity to participate fully in society.
       ``(23) The term `unresolved area of noncompliance' means 
     failure to correct a noncompliance item within 120 days, or 
     within such additional time (if any) authorized by the 
     Secretary, after receiving from the Secretary notice of such 
     noncompliance item, pursuant to section 641A(d).''.

     SEC. 4. FINANCIAL ASSISTANCE FOR HEAD START PROGRAMS.

       Section 638 of the Head Start Act (42 U.S.C. 9833) is 
     amended by inserting ``for a period of 5 years'' after 
     ``provide financial assistance to such agency''.

     SEC. 5. AUTHORIZATION OF APPROPRIATIONS.

       Section 639 of the Head Start Act (42 U.S.C. 9834) is 
     amended to read as follows:

     ``SEC. 639. AUTHORIZATION OF APPROPRIATIONS.

       ``(a) In General.--There are authorized to be appropriated 
     for carrying out the provisions of this subchapter 
     $7,350,000,000 for fiscal year 2008, $7,650,000,000 for 
     fiscal year 2009, $7,995,000,000 for fiscal year 2010, and 
     such sums as may be necessary for each of fiscal years 2011 
     and 2012.
       ``(b) Specific Programs.--From the amount appropriated 
     under subsection (a), the Secretary shall make available to 
     carry out research, demonstration, and evaluation activities, 
     including longitudinal studies under section 649, not more 
     than $20,000,000 for fiscal year 2008, and such sums as may 
     be necessary for each of fiscal years 2009 through 2012, of 
     which not more than $7,000,000 for each of fiscal years 2008 
     through 2012 shall be available to carry out impact studies 
     under section 649(g).''.

     SEC. 6. ALLOTMENT OF FUNDS.

       (a) Allotment.--Section 640(a) of the Head Start Act (42 
     U.S.C. 9835(a)) is amended--
       (1) in paragraph (2)--
       (A) by striking subparagraph (A) and inserting the 
     following:
       ``(A) Indian Head Start programs, services for children 
     with disabilities, and migrant and seasonal Head Start 
     programs, except that the Secretary shall reserve for each 
     fiscal year for use by Indian Head Start and migrant and 
     seasonal Head Start programs (referred to in this paragraph 
     as `covered programs'), on a nationwide basis, a sum that is 
     the total of a percentage specified by the Secretary that is 
     not less than 4 percent of the amount appropriated under 
     section 639 for that fiscal year (for Indian Head Start 
     programs) and a percentage specified by the Secretary that is 
     not less than 5 percent of that appropriated amount (for 
     migrant and seasonal Head Start programs) (referred to in 
     this paragraph as the `specified percentages'), except that--
       ``(i) if reserving the specified percentages would reduce 
     the number of children served by Head Start programs, 
     relative to the number of children served on the date of 
     enactment of the Head Start for School Readiness Act, taking 
     into consideration an appropriate adjustment for inflation, 
     the Secretary shall reserve percentages that approach, as 
     closely as practicable, the specified percentages and that do 
     not cause such a reduction; and
       ``(ii) notwithstanding any other provision of this 
     subparagraph, the Secretary shall reserve for each fiscal 
     year for use by Indian Head Start programs and by migrant and 
     seasonal Head Start programs, on a nationwide basis, not less 
     than the amount that was obligated for use by Indian Head 
     Start programs and by migrant and seasonal Head Start 
     programs for the previous fiscal year;'';
       (B) by striking subparagraph (C) and inserting the 
     following:
       ``(C) training and technical assistance activities that are 
     sufficient to meet the needs associated with program 
     expansion and to foster program and management improvement 
     activities as described in any of paragraphs (1) through (18) 
     of section 648(d), in an amount for each fiscal year that is 
     not less than 2 percent of the amount appropriated under 
     section 639 for such fiscal year, of which--
       ``(i) 50 percent shall be made available to Head Start 
     agencies to use directly, or by establishing local or 
     regional agreements with community experts, institutions of 
     higher education, or private consultants, for any of the 
     following training and technical assistance activities, 
     including--
       ``(I) activities that ensure that Head Start programs meet 
     or exceed the performance standards described in section 
     641A(a)(1);
       ``(II) activities that ensure that Head Start programs have 
     adequate numbers of trained, qualified staff who have skills 
     in working with children and families, including children who 
     are limited English proficient and their families and 
     children with disabilities;
       ``(III) activities to pay expenses, including direct 
     training for expert consultants working with any staff, to 
     improve the management and implementation of Head Start 
     services and systems;
       ``(IV) activities that help ensure that Head Start programs 
     have qualified staff who can promote language skills and 
     literacy growth of children and who can provide children with 
     a variety of skills that have been identified as predictive 
     of later reading achievement, school success, and the skills, 
     knowledge, abilities, development, and progress described in 
     section 641A(a)(1)(B)(ii);
       ``(V) activities to improve staff qualifications and to 
     assist with the implementation of career development programs 
     and to encourage the staff to continually improve their 
     skills and expertise, including developing partnerships with 
     programs that recruit, train, place, and support college 
     students in Head Start centers to deliver an innovative early 
     childhood development program to preschool children;
       ``(VI) activities that help local programs ensure that the 
     arrangement, condition, and implementation of the learning 
     environments in Head Start programs are conducive to 
     providing effective program services to children and 
     families;
       ``(VII) activities to provide training necessary to improve 
     the qualifications of Head Start staff and to support staff 
     training, child counseling, health services, and other 
     services necessary to address the needs of children enrolled 
     in Head Start programs, including children from families in 
     crises, children who experience chronic violence or 
     homelessness, children who experience substance abuse in 
     their families, and children under 3 years of age, where 
     applicable;
       ``(VIII) activities to provide classes or in-service-type 
     programs to improve or enhance parenting skills, job skills, 
     adult and family literacy, including financial literacy, or 
     training to become a classroom aide or bus driver in a Head 
     Start program;
       ``(IX) additional activities determined appropriate for the 
     improvement of Head Start agencies' programs, as determined 
     in the agencies' technical assistance and training plans; or
       ``(X) any other activities regarding the use of funds as 
     determined by the Secretary;
       ``(ii) 50 percent shall be made available to the 
     Secretary--
       ``(I) to provide directly training and technical assistance 
     on early childhood education and care or to support, through 
     grants or other arrangements, a State system of training and 
     technical assistance (which may include such a system for a 
     consortium of States within a region); and
       ``(II) to assist local programs (including Indian Head 
     Start programs and migrant and seasonal Head Start programs) 
     in meeting the performance standards described in section 
     641A(a)(1); and
       ``(iii) not less than $3,000,000 of the amount in clause 
     (ii) appropriated for such fiscal year shall be made 
     available to carry out activities described in section 
     648(d)(4);'';
       (C) in subparagraph (D), by striking ``agencies;'' and 
     inserting ``agencies);''; and
       (D) by adding at the end of the flush matter at the end the 
     following: ``In no case shall the Secretary use funds 
     appropriated under this subchapter to expand or create 
     additional slots or services in non-Indian and non-migrant 
     and seasonal Head Start programs until the amounts based on 
     the specified percentages for Indian Head Start programs and 
     migrant and seasonal Head Start programs pursuant to 
     subparagraph (A) are reached. The Secretary shall require 
     each Head Start agency to report at the end of each budget 
     year on how funds provided to carry out subparagraph (C)(i) 
     were used.'';
       (2) in paragraph (3)--
       (A) in subparagraph (A)(i)(I)--
       (i) by striking ``60 percent of such excess amount for 
     fiscal year 1999'' and all that follows through ``2003;''; 
     and
       (ii) by inserting the following: ``30 percent of such 
     excess amount for fiscal year 2008, and 40 percent of such 
     excess amount for each of fiscal years 2009 through 2012;'';
       (B) in subparagraph (B)--
       (i) in clause (i), by striking ``performance standards'' 
     and all that follows and inserting ``performance standards 
     pursuant to section 641A(a)(1).'';
       (ii) by striking clause (ii) and inserting the following:
       ``(ii) Ensuring that such programs have adequate numbers of 
     qualified staff, and that such staff is furnished adequate 
     training, including training to promote the development of 
     language, premathematics, and pre-literacy skills in young 
     children and in working with limited English proficient 
     children, children in foster care, children referred by child 
     welfare services, and children with disabilities, when 
     appropriate.'';
       (iii) by striking clause (iii) and inserting the following:
       ``(iii) Developing and financing the salary scales and 
     benefits standards under section 644(a) and section 653, in 
     order to ensure that salary levels and benefits are adequate 
     to attract and retain qualified staff for such programs.'';
       (iv) by striking clause (iv) and inserting the following:
       ``(iv) Using salary increases to--
       ``(I) assist with the implementation of quality programs 
     and improve staff qualifications;
       ``(II) ensure that staff can promote the language skills 
     and literacy growth of children and can provide children with 
     a variety of skills that have been identified, through 
     scientifically based early reading research, as predictive of 
     later reading achievement, as well as the skills, knowledge, 
     abilities, development, and progress described in section 
     641A(a)(1)(B)(ii); and
       ``(III) encourage the staff to continually improve their 
     skills and expertise--
       ``(aa) through the implementation of career development 
     programs; and

[[Page 16445]]

       ``(bb) through the completion of postsecondary coursework 
     in early childhood education.'';
       (v) in clause (v)--

       (I) by striking ``community-wide'' and inserting 
     ``communitywide''; and
       (II) by inserting ``, including collaborations to increase 
     program participation by underserved populations of eligible 
     children'' before the period; and

       (vi) by striking clauses (vii) and (viii) and inserting the 
     following:
       ``(vii) Providing assistance to complete postsecondary 
     coursework, to enable Head Start teachers to improve 
     competencies and the resulting child outcomes, including 
     informing the teachers of the availability of Federal and 
     State incentive and loan forgiveness programs.
       ``(viii) Promoting the regular attendance and stability of 
     all Head Start children with particular attention to highly 
     mobile children, including children of migrant or seasonal 
     farmworkers (where appropriate), homeless children, and 
     children in foster care.
       ``(ix) Making such other improvements in the quality of 
     such programs as the Secretary may designate.'';
       (C) in subparagraph (C)--
       (i) in clause (i)(I), by striking the last sentence and 
     inserting ``Salary increases, in excess of cost-of-living 
     allowances, provided with such funds shall be subject to the 
     specific standards governing salaries and salary increases 
     established pursuant to section 644(a).'';
       (ii) in clause (ii)--

       (I) in the matter preceding subclause (I), by striking 
     ``education performance'' and all that follows through 
     ``641A(a)(1)(B)''and inserting ``standards and measures 
     described in section 641A'';
       (II) in subclause (I), by inserting ``, pre-literacy,'' 
     after ``language'';
       (III) by striking subclause (II) and inserting the 
     following:

       ``(II) to help limited English proficient children attain 
     the knowledge, skills, abilities, and development specified 
     in section 641A(a)(1)(B)(ii) and to promote the acquisition 
     of the English language by such children and their 
     families;''; and

       (IV) by striking subclause (IV) and inserting the 
     following:

       ``(IV) to provide education and training necessary to 
     improve the qualifications of Head Start staff, particularly 
     assistance to enable more instructors to be fully competent 
     and to meet the degree requirements under section 
     648A(a)(2)(A), and to support staff training, child 
     counseling, and other services necessary to address the 
     challenges of children participating in Head Start programs, 
     including children from immigrant, refugee, and asylee 
     families, children from families in crisis, homeless 
     children, children in foster care, children referred to Head 
     Start programs by child welfare agencies, and children who 
     are exposed to chronic violence or substance abuse.'';
       (iii) in clause (iii), by inserting ``, educational staff 
     who have the qualifications described in section 648A(a),'' 
     after ``ratio'';
       (iv) in clause (v), by striking ``programs, including'' and 
     all that follows and inserting ``programs.'';
       (v) by redesignating clause (vi) as clause (x); and
       (vi) by inserting after clause (v) the following:
       ``(vi) To conduct outreach to homeless families in an 
     effort to increase the program participation of homeless 
     children.
       ``(vii) To conduct outreach to migrant and seasonal 
     farmworker families and families with limited English 
     proficient children.
       ``(viii) To partner with institutions of higher education 
     and nonprofit organizations, including community-based 
     organizations, that recruit, train, place, and support 
     college students, to serve as mentors and reading partners to 
     preschool children in Head Start programs.
       ``(ix) To upgrade the qualifications and skills of 
     educational personnel to meet the professional standards 
     described in section 648A(a)(1), including certification and 
     licensure as bilingual education teachers, as teachers of 
     English as a second language, and for other educational 
     personnel who serve limited English proficient children.'';
       (3) in paragraph (4), in the first sentence--
       (A) in subparagraph (A), by striking ``1998'' and inserting 
     ``2007''; and
       (B) by striking subparagraph (B) and inserting the 
     following:
       ``(B) any amount available after all allotments are made 
     under subparagraph (A) for such fiscal year shall be 
     distributed as follows:
       ``(i) Each State shall receive an amount sufficient to 
     serve the same number of children in Head Start programs in 
     each State as were served on the date of enactment of the 
     Head Start for School Readiness Act, taking into 
     consideration an appropriate adjustment for inflation.
       ``(ii) After ensuring that each State has received the 
     amount described in clause (i), the Secretary shall 
     distribute the remaining balance, by--
       ``(I) distributing 65 percent of the balance among the 
     States serving less than 60 percent (as determined by the 
     Secretary) of children who are 3 or 4 years of age from 
     families whose income is below the poverty line, by allotting 
     to each of those States an amount that bears the same 
     relationship to that 65 percent as the number of children who 
     are less than 5 years of age from families whose income is 
     below the poverty line (referred to in this clause as `young 
     low-income children') in that State bears to the number of 
     young low-income children in all those States; and
       ``(II) distributing 35 percent of the balance among the 
     States, by allotting to each State an amount that bears the 
     same relationship to that 35 percent as the number of young 
     low-income children in that State bears to the number of 
     young low-income children in all the States.'';
       (4) in paragraph (5)--
       (A) in subparagraph (A), by inserting after ``paragraph 
     (4)'' the following: ``(and amounts reserved, before such 
     allotments, for national administrative offices)'';
       (B) by redesignating subparagraphs (E) and (F) as 
     subparagraphs (G) and (H), respectively;
       (C) by striking subparagraphs (B), (C), and (D) and 
     inserting the following:
       ``(B)(i) From the reserved sums, the Secretary shall award 
     a collaboration grant to each State and to each national 
     administrative office serving Indian Head Start programs and 
     migrant and seasonal Head Start programs to facilitate 
     collaboration between Head Start agencies and entities 
     (including the State or national administrative office) that 
     carry out other activities designed to benefit low-income 
     families and children from birth to school entry. The 
     national administrative offices shall use the funds made 
     available through the grants to carry out the authorities and 
     responsibilities described in subparagraphs (B) and (C).
       ``(ii) Grants described in clause (i) shall be used to--
       ``(I) assist Head Start agencies to collaborate with 
     entities involved in State and local planning processes to 
     better meet the needs of low-income families and children 
     from birth to school entry;
       ``(II) assist Head Start agencies to coordinate activities 
     with the State agency responsible for administering the State 
     program carried out under the Child Care and Development 
     Block Grant Act of 1990 (42 U.S.C. 9858 et seq.) and entities 
     providing resource and referral services in the State, to 
     make full-working-day and full calendar year services 
     available to children;
       ``(III) promote alignment of Head Start services with the 
     Head Start Child Outcomes Framework and, as appropriate, 
     State early learning standards;
       ``(IV) promote better linkages between Head Start agencies 
     and other child and family agencies, including agencies that 
     provide health, mental health, or family services, or other 
     child or family supportive services, such as services 
     provided under section 619 or part C of the Individuals with 
     Disabilities Education Act (20 U.S.C. 1419, 1431 et seq.); 
     and
       ``(V) carry out the activities of the State Director of 
     Head Start Collaboration authorized in subparagraph (D).
       ``(C) In order to improve coordination and delivery of 
     early childhood education and care to children in the State, 
     a State that receives a collaboration grant under 
     subparagraph (B) shall--
       ``(i) appoint or designate an individual to serve as, or 
     carry out the responsibilities of, the State Director of Head 
     Start Collaboration;
       ``(ii) ensure that the State Director of Head Start 
     Collaboration holds a position with sufficient authority and 
     access to ensure that the collaboration described in 
     subparagraph (B) is effective and involves a range of State 
     agencies; and
       ``(iii) involve the State Head Start Association in the 
     selection of the Director and involve the Association in 
     determinations relating to the ongoing direction of the 
     collaboration office involved.
       ``(D) The State Director of Head Start Collaboration, 
     shall--
       ``(i) not later than 1 year after the State receives a 
     collaboration grant under subparagraph (B), conduct an 
     assessment that--
       ``(I) addresses the needs of Head Start agencies in the 
     State with respect to collaboration, coordination of 
     services, and alignment of services with the Head Start Child 
     Outcomes Framework and, as appropriate, State early learning 
     standards;
       ``(II) shall be updated on an annual basis; and
       ``(III) shall be made available to the general public 
     within the State;
       ``(ii) develop a strategic plan that is based on the 
     assessment described in clause (i) that will--
       ``(I) enhance collaboration and coordination of Head Start 
     services with other entities providing early childhood 
     education and care (such as child care or services offered by 
     museums), health care, mental health care, welfare, child 
     protective services, education and community service 
     activities, family literacy services, reading readiness 
     programs (including such programs offered by public and 
     school libraries), services relating to children with 
     disabilities, other early childhood education and care for 
     limited English proficient children and homeless children, 
     and services provided for children in foster

[[Page 16446]]

     care and children referred to Head Start programs by child 
     welfare agencies, including agencies and State officials 
     responsible for such services;
       ``(II) assist Head Start agencies to develop a plan for the 
     provision of full-working-day, full calendar year services 
     for children enrolled in Head Start programs who need such 
     care;
       ``(III) assist Head Start agencies to align services with 
     the Head Start Child Outcomes Framework and, as appropriate, 
     State early learning standards; and
       ``(IV) enable Head Start agencies in the State to better 
     access professional development opportunities for Head Start 
     staff, such as by--
       ``(aa) working with local Head Start agencies to meet the 
     degree requirements described in section 648A(a)(2)(A), 
     including providing distance learning opportunities for Head 
     Start staff, where needed to make higher education more 
     accessible to Head Start staff; and
       ``(bb) enabling the State Head Start agencies to better 
     conduct outreach to eligible families;
       ``(iii) promote partnerships between Head Start agencies, 
     State and local governments, and the private sector to help 
     ensure that children from low-income families, who are in 
     Head Start programs or are preschool age, are receiving 
     comprehensive services to prepare the children to enter 
     school ready to learn;
       ``(iv) consult with the chief State school officer, local 
     educational agencies, and providers of early childhood 
     education and care, regarding early childhood education and 
     care at both the State and local levels;
       ``(v) promote partnerships (such as the partnerships 
     involved with the Free to Grow initiative) between Head Start 
     agencies, schools, law enforcement, relevant community-based 
     organizations, and substance abuse and mental health 
     treatment agencies to strengthen family and community 
     environments and to reduce the impact on child development of 
     substance abuse, child abuse, domestic violence, and other 
     high risk behaviors that compromise healthy development;
       ``(vi) promote partnerships between Head Start agencies and 
     other organizations in order to enhance the Head Start 
     curriculum, including partnerships to promote inclusion of 
     more books in Head Start classrooms and partnerships to 
     promote coordination of activities with the Ready-to-Learn 
     Television program carried out under subpart 3 of part D of 
     title II of the Elementary and Secondary Education Act of 
     1965 (20 U.S.C. 6775 et seq.); and
       ``(vii) identify other resources and organizations (both 
     public and private) for the provision of in-kind services to 
     Head Start agencies in the State.
       ``(E)(i) The Governor of the State shall--
       ``(I) designate or establish a council to serve as the 
     State Advisory Council on Early Childhood Education and Care, 
     for children from birth to school entry (in this subchapter 
     referred to as the `State Advisory Council'); and
       ``(II) designate an individual to coordinate activities of 
     the State Advisory Council, as described in clause (iv)(I).
       ``(ii) The Governor may designate an existing entity to 
     serve as the State Advisory Council, if the entity includes 
     representatives consistent with clause (iii).
       ``(iii) Members of the State Advisory Council shall 
     include, to the maximum extent possible--
       ``(I) the State Director of Head Start Collaboration;
       ``(II) a representative of the State educational agency and 
     local educational agencies;
       ``(III) a representative of institutions of higher 
     education;
       ``(IV) a representative (or representatives) of the State 
     agency (or agencies) responsible for health or mental health 
     care;
       ``(V) a representative of the State agency responsible for 
     professional standards, certification, and licensing for 
     early childhood educators;
       ``(VI) a representative of the State agency responsible for 
     child care;
       ``(VII) early childhood educators, including professionals 
     with expertise in second language acquisition and 
     instructional strategies in teaching limited English 
     proficient children;
       ``(VIII) kindergarten teachers and teachers in grades 1 
     through 3;
       ``(IX) health care professionals;
       ``(X) child development specialists, including specialists 
     in prenatal, infant, and toddler development;
       ``(XI) a representative of the State agency responsible for 
     assisting children with developmental disabilities;
       ``(XII) a representative of the State agency responsible 
     for programs under section 619 or part C of the Individuals 
     with Disabilities Education Act (20 U.S.C. 1419, 1431 et 
     seq.);
       ``(XIII) a representative of the State interagency 
     coordinating councils established under section 641 of the 
     Individuals with Disabilities Education Act (20 U.S.C. 1441);
       ``(XIV) a representative of the State Head Start 
     Association (where appropriate), and other representatives of 
     Head Start programs in the State;
       ``(XV) a representative of the State network of child care 
     resource and referral agencies;
       ``(XVI) a representative of community-based organizations;
       ``(XVII) a representative of State and local providers of 
     early childhood education and care;
       ``(XVIII) a representative of Indian Head Start programs 
     (where appropriate) and a representative of migrant and 
     seasonal Head Start programs (where appropriate);
       ``(XIX) parents;
       ``(XX) religious and business leaders;
       ``(XXI) the head of the State library administrative 
     agency;
       ``(XXII) representatives of State and local organizations 
     and other entities providing professional development to 
     early childhood educators and child care providers;
       ``(XXIII) a representative from the Office of Coordinator 
     for Education of Homeless Children and Youths in the State;
       ``(XXIV) a State legislator; and
       ``(XXV) a representative of other entities determined to be 
     relevant by the Governor of the State.
       ``(iv)(I) The State Advisory Council shall be responsible 
     for, in addition to responsibilities assigned to the council 
     by the Governor of the State--
       ``(aa) conducting a periodic statewide needs assessment 
     concerning early childhood education and care for children 
     from birth to school entry and assessing the availability of 
     high quality prekindergarten services for low-income children 
     in the State;
       ``(bb) identifying barriers to, and opportunities for, 
     collaboration and coordination among entities carrying out 
     federally-funded and State-funded child development, child 
     care, and early childhood education programs;
       ``(cc) developing recommendations regarding means of 
     establishing a unified data collection system for early 
     childhood education and care throughout the State;
       ``(dd) developing a statewide professional development and 
     career ladder plan for early childhood education and care in 
     the State;
       ``(ee) assisting 2-year and 4-year public and private 
     institutions of higher education, which may include assisting 
     the institutions with development of articulation agreements 
     or model programs of early childhood education and care, 
     including practica or internships for students to spend time 
     in a Head Start or prekindergarten program; and
       ``(ff) undertaking collaborative efforts to develop, and 
     make recommendations for improvements in, State early 
     learning standards.
       ``(II) The State Advisory Council shall hold public 
     hearings and provide an opportunity for public comment on the 
     activities described in subclause (I). The State Advisory 
     Council shall submit a statewide strategic report addressing 
     the activities described in subclause (I) to the State 
     Director of Head Start Collaboration and the Governor of the 
     State.
       ``(III) After submission of a statewide strategic report 
     under subclause (II), the State Advisory Council shall meet 
     periodically to review any implementation of the 
     recommendations in such report and any changes in State and 
     local needs.
       ``(F)(i)(I) Prior to carrying out paragraph (4), the 
     Secretary shall reserve a portion to carry out this 
     subparagraph for a fiscal year. The Secretary shall reserve 
     the portion from the amount (if any) by which the funds 
     appropriated under section 639(a) for the fiscal year exceed 
     the adjusted prior year appropriation (as defined in 
     paragraph (3)(A)(ii)), without reducing the share available 
     for quality improvement funds described in paragraph (3)(B).
       ``(II) To the extent consistent with subclause (I), the 
     Secretary shall reserve $100,000,000 for fiscal year 2008. 
     Funds reserved under this subclause shall remain available 
     for obligation through fiscal year 2012.
       ``(ii) The Secretary shall use the portion reserved under 
     clause (i) to award, on a competitive basis, one-time startup 
     grants of not less than $500,000 to eligible States to enable 
     such States to pay for the Federal share of the cost of 
     further developing and implementing the recommendations and 
     plans for which the State's State Advisory Council is 
     responsible under subparagraph (E)(iv)(I). Such grants 
     shall--
       ``(I) facilitate the development of high-quality systems of 
     early childhood education and care designed to improve school 
     preparedness;
       ``(II) increase and make effective use of existing and new 
     delivery systems and funds for early childhood education and 
     care; and
       ``(III) enhance existing early childhood education and care 
     (in existence on the date on which the grant involved is 
     awarded).
       ``(iii) To be eligible to receive a grant under this 
     subparagraph, a State shall prepare and submit to the 
     Secretary an application, for a 3-year period, at such time, 
     in such manner, and containing such information as the 
     Secretary shall require, including--
       ``(I) a description of the State's State Advisory Council's 
     responsibilities under subparagraph (E)(iv)(I);
       ``(II) a description, for each fiscal year, of how the 
     State will make effective use of funds available under this 
     subparagraph,

[[Page 16447]]

     with funds described in clause (iv), to create an early 
     childhood education and care system, by developing or 
     enhancing programs and activities described in subparagraph 
     (E)(iv)(I);
       ``(III) a description of the State early learning standards 
     and the State's goals for increasing the number of children 
     entering kindergarten ready to learn;
       ``(IV) information identifying the agency or joint 
     interagency office and individual designated to carry out the 
     activities under this subparagraph, which may be the 
     individual designated under subparagraph (E)(i)(II); and
       ``(V) a description of how the State plans to sustain 
     activities under this subparagraph beyond the grant period.
       ``(iv) The Federal share of the cost described in clause 
     (ii) shall be 30 percent, and the State shall provide the 
     non-Federal share.
       ``(v) Funds made available under this subparagraph shall be 
     used to supplement, and not supplant, other Federal, State, 
     and local funds expended to carry out activities related to 
     early childhood education and care in the State.
       ``(vi) Not later than 18 months after the date a State 
     receives a grant under this subparagraph, the State shall 
     submit an interim report to the Secretary. A State that 
     receives a grant under this subparagraph shall submit a final 
     report to the Secretary at the end of the grant period.''; 
     and
       (D) in subparagraph (G), as redesignated by subparagraph 
     (B) of this paragraph--
       (i) in clause (i)(I), by striking ``child care and early 
     childhood education programs and resources'' and inserting 
     ``early childhood education and care programs and 
     resources''; and
       (ii) in clause (ii), by striking ``Federal child care or 
     early childhood education'' and inserting ``Federal early 
     childhood education or child care''; and
       (5) in paragraph (6)--
       (A) in subparagraph (A), by striking ``7.5 percent'' and 
     all that follows and inserting ``not less than 12 percent for 
     fiscal year 2008, not less than 14 percent for fiscal year 
     2009, not less than 16 percent for fiscal year 2010, not less 
     than 18 percent for fiscal year 2011, and not less than 20 
     percent for fiscal year 2012, of the amount appropriated 
     pursuant to section 639(a).'';
       (B) by striking subparagraph (B);
       (C) in subparagraph (C)(i), by striking ``required to be'' 
     each place it appears; and
       (D) by redesignating subparagraph (C) as subparagraph (B).
       (b) Minimum Enrollment Requirement for Children With 
     Disabilities.--The first sentence of section 640(d) of the 
     Head Start Act (42 U.S.C. 9835(d)) is amended to read as 
     follows: ``The Secretary shall establish policies and 
     procedures to assure that, for fiscal year 2008 and 
     thereafter, not less than 10 percent of the total number of 
     children actually enrolled by each Head Start agency and each 
     delegate agency will be children with disabilities who are 
     eligible for special education or early intervention 
     services, as appropriate, as determined under the Individuals 
     with Disabilities Education Act (20 U.S.C. 1400 et seq.), and 
     that the Head Start agency or delegate agency involved will 
     collaborate with the State or local agency providing services 
     under section 619 or part C of the Individuals with 
     Disabilities Education Act (20 U.S.C. 1419, 1431 et seq.) to 
     ensure the provision of services to meet the special needs of 
     such children.''.
       (c) Service Delivery Models.--Section 640(f) of the Head 
     Start Act (42 U.S.C. 9835(f)) is amended--
       (1) by striking ``(f) The'' and inserting ``(f)(1) Not 
     later than 1 year after the date of enactment of the Head 
     Start for School Readiness Act, the'';
       (2) by striking ``needs.'' and inserting ``needs, including 
     models that leverage the capacity and capabilities of the 
     delivery system of early childhood education and care.''; and
       (3) by adding at the end the following:
       ``(2) In establishing the procedures the Secretary shall 
     establish procedures to provide for--
       ``(A) the conversion of part-day programs to full-day 
     programs or part-day slots to full-day slots; and
       ``(B) serving additional infants and toddlers pursuant to 
     section 645(a)(5).''.
       (d) Additional Funds.--Section 640(g)(2) of the Head Start 
     Act (42 U.S.C. 9835(g)(2)) is amended--
       (1) by striking subparagraph (C) and inserting the 
     following:
       ``(C) the extent to which the applicant has undertaken 
     communitywide strategic planning and needs assessments 
     involving other community organizations and Federal, State, 
     and local public agencies serving children and families 
     (including organizations and agencies providing family 
     support services and protective services to children and 
     families and organizations serving families in whose homes 
     English is not the language customarily spoken), and 
     individuals, organizations, and public entities serving 
     children with disabilities, children in foster care, and 
     homeless children including the local educational agency 
     liaison designated under section 722(g)(1)(J)(ii) of the 
     McKinney-Vento Homeless Assistance Act (42 U.S.C. 
     11432(g)(1)(J)(ii));'';
       (2) in subparagraph (D)--
       (A) by striking ``community'' the first place it appears 
     and inserting ``communitywide''; and
       (B) by striking ``other local'' and inserting ``the State 
     and local'';
       (3) in subparagraph (E)--
       (A) by inserting ``would like to participate but'' after 
     ``community who''; and
       (B) by striking ``early childhood program'' and inserting 
     ``early childhood education and care program'';
       (4) in subparagraph (G), by inserting ``leverage the 
     existing delivery systems of such services (existing as of 
     the date of the allocation decision) and'' after ``manner 
     that will''; and
       (5) in subparagraph (H), by inserting ``, including the 
     local educational agency liaison designated under section 
     722(g)(1)(J)(ii) of the McKinney-Vento Homeless Assistance 
     Act (42 U.S.C. 11432(g)(1)(J)(ii)),'' after ``community 
     involved''.
       (e) Vehicle Safety Requirements.--Section 640(i) of the 
     Head Start Act (42 U.S.C. 9835(i)) is amended--
       (1) by striking ``(i)'' and inserting ``(i)(1)'';
       (2) in paragraph (1), as so designated, by adding at the 
     end the following: ``The regulations shall also establish 
     requirements to ensure the appropriate supervision of, and 
     appropriate background checks for, individuals with whom the 
     agencies contract to transport those children.''; and
       (3) by adding at the end the following:
       ``(2)(A) Section 1310.12(a) of title 45, Code of Federal 
     Regulations, shall take effect 30 days after the date of 
     enactment of this Act.
       ``(B)(i) Not later than 60 days after the National Highway 
     Traffic Safety Administration of the Department of 
     Transportation submits its study on occupant protection on 
     Head Start transit vehicles (related to Government 
     Accountability Office report GAO-06-767R), the Secretary of 
     Health and Human Services shall review and shall revise as 
     necessary the allowable alternate vehicle standards described 
     in part 1310 of that title (or any corresponding similar 
     regulation or ruling) relating to allowable alternate 
     vehicles used to transport children for a Head Start program. 
     In making any such revision, the Secretary shall revise the 
     standards to be consistent with the findings contained in 
     such study, including making a determination on the exemption 
     of such a vehicle from Federal seat spacing requirements, and 
     Federal supporting seating requirements related to 
     compartmentalization, if such vehicle meets all other 
     applicable Federal motor vehicle safety standards, including 
     standards for seating systems, occupant crash protection, 
     seat belt assemblies, and child restraint anchorage systems 
     consistent with that part 1310 (or any corresponding similar 
     regulation or ruling).
       ``(ii) Notwithstanding subparagraph (A), until such date as 
     the Secretary of Health and Human Services completes the 
     review and any necessary revision specified in clause (i), 
     the provisions of section 1310.12(a) of that title relating 
     to Federal seat spacing requirements, and Federal supporting 
     seating requirements related to compartmentalization, for 
     allowable alternate vehicles used to transport children for a 
     Head Start program, shall not apply to such a vehicle if such 
     vehicle meets all other applicable Federal motor vehicle 
     safety standards, as described in clause (i).''.
       (f) Migrant and Seasonal Head Start Programs.--Section 
     640(l) of the Head Start Act (42 U.S.C. 9835(l)) is amended--
       (1) in paragraph (1), by striking ``and seasonal farmworker 
     families'' and inserting ``or seasonal farmworkers''; and
       (2) by striking paragraph (3) and inserting the following:
       ``(3) In carrying out this subchapter, the Secretary shall 
     continue the administrative arrangement at the national level 
     for meeting the needs of Indian children and children of 
     migrant or seasonal farmworkers and shall ensure--
       ``(A) that appropriate funding is provided to meet such 
     needs, including training and technical assistance provided 
     by staff with knowledge of and experience in working with 
     such populations; and
       ``(B) the appointment of a national Indian Head Start 
     collaboration director and a national migrant and seasonal 
     Head Start program collaboration director.
       ``(4)(A) For the purposes of paragraph (3), the Secretary 
     shall conduct an annual consultation in each affected Head 
     Start region, with tribal governments operating Head Start 
     (including Early Head Start) programs.
       ``(B) The consultations shall be for the purpose of better 
     meeting the needs of American Indian and Alaska Native 
     children and families pertinent to subsection (a)(2)(A), 
     taking into consideration funding allocations, distribution 
     formulas, and other issues affecting the delivery of Head 
     Start services within tribal communities.
       ``(C) The Secretary shall publish a notification of the 
     consultations in the Federal Register prior to conducting the 
     consultations.
       ``(D) A detailed report of each consultation shall be 
     prepared and made available, on a timely basis, to all tribal 
     governments receiving funds under this subchapter.
       ``(5)(A) In order to increase access to Head Start services 
     for children of migrant or seasonal farmworkers, the 
     Secretary shall work

[[Page 16448]]

     in collaboration with providers of migrant and seasonal Head 
     Start programs, the Secretary of Agriculture, the Secretary 
     of Labor, and the Secretary of Education to--
       ``(i) collect, report, and share data on farmworkers and 
     their families in order to adequately account for the number 
     of children of migrant or seasonal farmworkers who are 
     eligible for Head Start services and determine how many of 
     such children receive the services; and
       ``(ii) identify barriers that prevent children of migrant 
     or seasonal farmworkers who are eligible for Head Start 
     services from accessing Head Start services, and develop a 
     plan for eliminating such barriers, including certain 
     requirements relating to tracking, health records, and 
     educational documents.
       ``(B) Not later than 1 year after the date of enactment of 
     the Head Start for School Readiness Act, the Secretary shall 
     publish in the Federal Register a notice about how the 
     Secretary plans to carry out the activities identified in 
     subparagraph (A) and shall provide a period for public 
     comment. To the extent practicable, the Secretary shall 
     consider comments received before implementing any of the 
     activities identified in subparagraph (A).
       ``(C) Not later than 18 months after the date of enactment 
     of the Head Start for School Readiness Act, the Secretary 
     shall submit a report to the Committee on Education and Labor 
     of the House of Representatives and the Committee on Health, 
     Education, Labor, and Pensions of the Senate detailing how 
     the Secretary plans to carry out the activities identified in 
     subparagraph (A).
       ``(D) The Secretary shall take appropriate caution to 
     ensure the protection of the confidentiality of any 
     personally identifiable data, information, and records 
     collected or maintained regarding children and families 
     served by migrant and seasonal Head Start programs.
       ``(E) Nothing in this paragraph shall be construed to 
     authorize the development of a nationwide database of 
     personally identifiable data, information, or records on 
     individuals involved in studies or other collections of data 
     under this paragraph.''.
       (g) Homeless Children.--Section 640 of the Head Start Act 
     (42 U.S.C. 9835) is amended by adding at the end the 
     following:
       ``(m) Enrollment of Homeless Children.--The Secretary shall 
     issue regulations to remove barriers to the enrollment and 
     participation of homeless children in Head Start programs. 
     Such regulations shall require Head Start agencies to--
       ``(1) implement policies and procedures to ensure that 
     homeless children are identified and receive priority for 
     enrollment;
       ``(2) allow homeless children to apply to, enroll in, and 
     attend Head Start programs while required documents, such as 
     proof of residency, proof of immunization, and other medical 
     records, birth certificates, and other documents, are 
     obtained within a reasonable timeframe; and
       ``(3) coordinate individual Head Start programs with 
     efforts to implement subtitle B of title VII of the McKinney-
     Vento Homeless Assistance Act (42 U.S.C. 11431 et seq.).
       ``(n) Rule of Construction.--Nothing in this subchapter 
     shall be construed to require a State to establish a program 
     of early childhood education and care for children in the 
     State, to require any child to participate in a program in 
     order to attend preschool, or to participate in any initial 
     screening prior to participation in a program of early 
     childhood education and care, except as provided under 
     section 612(a)(3) of the Individuals with Disabilities 
     Education Act (20 U.S.C. 1412(a)(3)) and consistent with 
     section 635(a)(5) of such Act (20 U.S.C. 1435(a)(5)).
       ``(o) Curricula.--All curricula funded under this 
     subchapter shall be scientifically based, developmentally and 
     linguistically based (to the extent practicable), and age 
     appropriate. The curricula shall reflect all areas of child 
     development and learning. Parents shall have the opportunity 
     to examine any such curricula or instructional materials 
     funded under this subchapter.''.

     SEC. 7. DESIGNATION OF HEAD START AGENCIES.

       Section 641 of the Head Start Act (42 U.S.C. 9836) is 
     amended to read as follows:

     ``SEC. 641. DESIGNATION OF HEAD START AGENCIES.

       ``(a) Designation.--
       ``(1) In general.--The Secretary is authorized to designate 
     as a Head Start agency any local public or private nonprofit 
     or for-profit agency, within a community, including a 
     community-based organization that--
       ``(A) has power and authority to carry out the purpose of 
     this subchapter and perform the functions set forth in 
     section 642 within a community; and
       ``(B) is determined to have the capacity to plan, conduct, 
     administer, and evaluate, either directly or by other 
     arrangements, a Head Start program.
       ``(2) Required goals for designation.--In order to be 
     designated as a Head Start agency, an entity described in 
     paragraph (1) shall--
       ``(A) establish program goals for improving the school 
     readiness of children participating in a program under this 
     subchapter, including goals for meeting the performance 
     standards described in section 641A(a)(1) and shall establish 
     results-based school readiness goals that are aligned with 
     the Head Start Child Outcomes Framework, State early learning 
     standards (as appropriate), and requirements and expectations 
     for local public schools; and
       ``(B) have a governing body--
       ``(i) with legal and fiscal responsibility for 
     administering and overseeing programs under this subchapter;
       ``(ii) that fully participates in the development, 
     planning, and evaluation of the programs to ensure the 
     operation of programs of high quality;
       ``(iii) that is responsible for ensuring compliance with 
     Federal laws and regulations, including the performance 
     standards described in section 641A(a)(1), as well as 
     applicable State, tribal, and local laws and regulations, 
     including laws defining the nature and operations of the 
     governing body; and
       ``(iv) that has procedures to facilitate meaningful 
     consultation and collaboration about decisions of the 
     governing body and the policy council established under 
     paragraph (3).
       ``(3) Establishment of policy council upon designation.--
     Upon receiving designation as a Head Start agency, the agency 
     shall establish a policy council that--
       ``(A) in accordance with paragraph (5)(C), shall make 
     decisions that influence the character of programs consistent 
     with paragraph (5)(F); and
       ``(B) with the governing body, shall establish processes to 
     resolve internal disputes.
       ``(4) Eligibility for subsequent grants.--In order to 
     receive a grant under this subchapter subsequent to the 
     initial grant provided following the date of enactment of the 
     Head Start for School Readiness Act, an entity described in 
     paragraph (1) shall demonstrate that the entity has met or is 
     making progress toward meeting the goals described in 
     paragraph (2)(A).
       ``(5) Governing body and policy council.--
       ``(A) Establishment of governing body.--Each Head Start 
     agency shall establish a governing body in accordance with 
     paragraph (2)(B).
       ``(B) Composition of governing body.--
       ``(i) In general.--The governing body shall be composed as 
     follows:

       ``(I) Not less than 1 member of the governing body shall 
     have a background in fiscal management.
       ``(II) Not less than 1 member of the governing body shall 
     have a background in early childhood education and care.
       ``(III) Not less than 1 member of the governing body shall 
     be a licensed attorney familiar with issues that come before 
     the governing body.
       ``(IV) Additional members shall reflect the community to be 
     served, and include parents of children who are currently, or 
     were formerly, enrolled in Head Start programs.
       ``(V) In the case in which the governing body is a part of 
     a Head Start agency that is a public agency, members of the 
     governing body shall include elected or appointed public 
     officials.

       ``(ii) Consultants.--In the case that persons described in 
     clause (i) are not available to serve as members of the 
     governing body, the governing body shall make use of 
     consultants in the areas described in clause (i) to work 
     directly with the governing body.
       ``(iii) Conflict of interest.--Members of the governing 
     body shall--

       ``(I) not have a conflict of interest with the Head Start 
     agency (including any delegate agency); and
       ``(II) not receive compensation for the purposes of serving 
     on the governing body or for providing services to the Head 
     Start agency.

       ``(C) Responsibilities of governing body.--
       ``(i) In general.--The governing body shall be responsible 
     for--

       ``(I) the selection of delegate agencies and such agencies' 
     service areas;
       ``(II) establishing procedures and criteria for 
     recruitment, selection, and enrollment;
       ``(III) all funding applications and amendments to funding 
     applications for programs under this subchapter;
       ``(IV) establishing procedures and guidelines to access and 
     collect the information described in paragraph (6);
       ``(V) review and approval of--

       ``(aa) the annual self-assessment, financial audit, and 
     findings from the Federal monitoring review, of the Head 
     Start agency (including any delegate agency); and
       ``(bb) such agency's progress in carrying out the 
     programmatic and fiscal intent of such agency's grant 
     application;

       ``(VI) developing procedures for how members of the policy 
     council of the Head Start agency are selected, consistent 
     with subparagraph (E)(ii);
       ``(VII) financial audits, accounting, and reporting;
       ``(VIII) personnel policies and procedures regarding 
     hiring, termination, salary scales (and changes made to the 
     scale), and salaries of the Executive Director, Head Start 
     Director, the Director of Human Resources, the Chief Fiscal 
     Officer, and any equivalent position; and
       ``(IX) review and approval of the community assessment, 
     including any updates to such assessment.

       ``(ii) Conduct of responsibilities.--The governing body 
     shall ensure the development and approval of an internal 
     control structure to facilitate those responsibilities in 
     order to--

[[Page 16449]]

       ``(I) safeguard Federal funds;
       ``(II) comply with laws and regulations that have an impact 
     on financial statements;
       ``(III) detect or prevent noncompliance with this 
     subchapter; and
       ``(IV) receive financial audit reports and direct and 
     monitor staff implementation of corrective actions.

       ``(iii) Committees.--The governing body shall, to the 
     extent practicable and appropriate, establish--

       ``(I) advisory committees to oversee responsibilities 
     related to financial auditing and finances of the Head Start 
     agency, as well as compliance with Federal, State, and local 
     laws and regulations; and
       ``(II) at the discretion of the governing body, additional 
     advisory committees to study and make recommendations on 
     areas related to the improvement of the Head Start program.

       ``(D) Establishment of policy council.--Each Head Start 
     agency shall establish a policy council in accordance with 
     paragraph (3).
       ``(E) Composition of policy council.--
       ``(i) In general.--The policy council shall consist of--

       ``(I) parents of children currently enrolled in the 
     programs of the Head Start agency (including any delegate 
     agency), which shall constitute a majority of the membership 
     of the policy council; and
       ``(II) members at large of the community served by the Head 
     Start agency, which may include parents of children 
     previously enrolled in the programs of the Head Start agency 
     (including any delegate agency).

       ``(ii) Selection.--Parents serving on the policy council 
     shall be elected by parents of children currently enrolled in 
     the programs of the Head Start agency (including any delegate 
     agency) and shall represent, proportionately, all program 
     options and settings operated by the Head Start agency 
     (including any delegate agency).
       ``(iii) Conflict of interest.--Members of the policy 
     council shall--

       ``(I) not have a conflict of interest with the Head Start 
     agency (including any delegate agency); and
       ``(II) not receive compensation for serving on the policy 
     council or for providing services to the Head Start agency.

       ``(F) Responsibilities of policy council.--The policy 
     council shall be responsible for--
       ``(i) program planning, including--

       ``(I) program design, including long and short term program 
     goals, all funding applications and amendments to funding 
     applications, and objectives based on the annual 
     communitywide assessment and self-assessment;
       ``(II) program recruitment, selection, and enrollment 
     priorities; and
       ``(III) budget planning for program expenditures consistent 
     with subparagraph (C)(i)(VII), including polices for 
     reimbursement and participation in policy council activities;

       ``(ii) program operation consistent with subparagraph 
     (C)(i)(VIII), including implementation of standards of 
     conduct for program staff, contractors, and volunteers and 
     criteria for the employment and dismissal of program staff; 
     and
       ``(iii) activities to support the active involvement of 
     parents in supporting program operations, including policies 
     to ensure that the Head Start program is responsive to 
     community and parent needs.
       ``(6) Information sharing.--The governing body and the 
     policy council shall share with each other regular and 
     accurate information for use by both entities about program 
     planning, policies, and Head Start agency operations, 
     including--
       ``(A) monthly financial statements (including detailed 
     credit card account expenditures for any employee with a Head 
     Start agency credit card or who seeks reimbursement for 
     charged expenses);
       ``(B) monthly program information summaries;
       ``(C) program enrollment reports, including attendance 
     reports for children whose care is partially subsidized by 
     another public agency;
       ``(D) monthly reports of meals and snacks provided through 
     programs of the Department of Agriculture;
       ``(E) the financial audit;
       ``(F) the annual self-assessment, including any findings 
     related to the annual self-assessment;
       ``(G) the community assessment of the Head Start agency's 
     service area and any applicable updates;
       ``(H) communication and guidance from the Secretary; and
       ``(I) the program information reports.
       ``(7) Training and technical assistance.--Appropriate 
     training and technical assistance shall be provided to the 
     members of the governing body and the policy council to 
     ensure that the members understand the information the 
     members receive and can effectively oversee and participate 
     in the programs of the Head Start agency.
       ``(b) Communities.--For purposes of this subchapter, a 
     community may be a city, county, or multicity or multicounty 
     unit within a State, an Indian reservation (including Indians 
     in any off-reservation area designated by an appropriate 
     tribal government in consultation with the Secretary), or a 
     neighborhood or other area (irrespective of boundaries or 
     political subdivisions) that provides a suitable 
     organizational base and possesses the commonality of interest 
     needed to operate a Head Start program.
       ``(c) Redesignation.--
       ``(1) In general.--In administering the provisions of this 
     section, the Secretary shall, in consultation with the 
     Governor of the State involved, redesignate as a Head Start 
     agency any Head Start agency (including any delegate agency) 
     that is high performing, as determined by meeting each of the 
     following criteria:
       ``(A) Is receiving assistance under this subchapter.
       ``(B) Meets or exceeds standards described in section 
     641A(a)(1) (including program and financial management 
     requirements).
       ``(C) Has no unresolved deficiencies, including having 
     resolved any deficiencies found during the last triennial 
     review under section 641A(c).
       ``(D) Can demonstrate, through agreements such as memoranda 
     of understanding, active collaboration with the State or 
     local community in the provision of services for children 
     (such as the provision of extended day services, education, 
     professional development and training for staff, and other 
     types of cooperative endeavors).
       ``(E) Completes and submits the appropriate reapplication 
     forms as required by the Secretary.
       ``(2) Limitation.--A Head Start agency with a triennial 
     review under section 641A(c) scheduled not later than 18 
     months after the date of enactment of the Head Start for 
     School Readiness Act shall not be subject to the criteria 
     described in paragraph (1) for that review in order to be 
     redesignated. The Head Start agency shall be subject to the 
     criteria for any subsequent triennial review.
       ``(d) Designation When No Entity Is Redesignated.--If no 
     entity in a community is redesignated according to subsection 
     (c), the Secretary shall, after conducting an open 
     competition, designate a Head Start agency from among 
     qualified applicants in such community.
       ``(e) Effectiveness.--In selecting from among qualified 
     applicants for designation as a Head Start agency, the 
     Secretary shall consider the effectiveness of each such 
     applicant to provide Head Start services, based on--
       ``(1) any past performance of such applicant in providing 
     services comparable to Head Start services, including how 
     effectively such applicant provided such comparable services;
       ``(2) the plan of such applicant to provide comprehensive 
     health, educational, nutritional, social, and other services 
     needed to aid participating children in attaining their full 
     potential, and to prepare children to succeed in school;
       ``(3) the capacity of such applicant to serve eligible 
     children with programs that use scientifically based research 
     that promote school readiness of children participating in 
     the program;
       ``(4) the plan of such applicant to meet standards set 
     forth in section 641A(a)(1), with particular attention to the 
     standards set forth in subparagraphs (A) and (B) of such 
     section;
       ``(5) the plan of such applicant to coordinate the Head 
     Start program the applicant proposes to carry out with other 
     preschool programs, including--
       ``(A) the Early Reading First and Even Start programs under 
     subparts 2 and 3 of part B of title I of the Elementary and 
     Secondary Education Act of 1965 (20 U.S.C. 6371 et seq., 6381 
     et seq.);
       ``(B) other preschool program under title I of that Act (20 
     U.S.C. 6301 et seq.);
       ``(C) programs under section 619 and part C of the 
     Individuals with Disabilities Education Act (20 U.S.C. 1419, 
     1431 et seq.);
       ``(D) State prekindergarten programs;
       ``(E) child care programs;
       ``(F) the educational programs that the children in the 
     Head Start program involved will enter at the age of 
     compulsory school attendance; and
       ``(G) reading readiness programs such as those conducted by 
     public and school libraries;
       ``(6) the plan of such applicant to coordinate the Head 
     Start program that the applicant proposes to carry out with 
     public and private entities who are willing to commit 
     resources to assist the Head Start program in meeting its 
     program needs;
       ``(7) the plan of such applicant to collaborate with a 
     local library, where available, that is interested in that 
     collaboration, to--
       ``(A) develop innovative programs to excite children about 
     the world of books, such as programs that involve--
       ``(i) taking children to the library for a story hour;
       ``(ii) promoting the use of library cards;
       ``(iii) developing a lending library or using a mobile 
     library van; and
       ``(iv) providing fresh books in the Head Start classroom on 
     a regular basis;
       ``(B) assist in literacy training for Head Start teachers; 
     and
       ``(C) support parents and other caregivers in literacy 
     efforts;
       ``(8) the plan of such applicant--
       ``(A) to facilitate the involvement of parents of 
     participating children in activities (at home and in the 
     center involved where

[[Page 16450]]

     practicable) designed to help such parents become full 
     partners in the education of their children;
       ``(B) to afford such parents the opportunity to participate 
     in the development and overall conduct of the program at the 
     local level, including through providing transportation 
     costs;
       ``(C) to offer (directly or through referral to local 
     entities, such as entities carrying out Even Start programs 
     under subpart 3 of part B of title I of the Elementary and 
     Secondary Education Act of 1965 (20 U.S.C. 6381 et seq.), 
     public and school libraries, and entities carrying out family 
     support programs) to such parents--
       ``(i) family literacy services; and
       ``(ii) parenting skills training;
       ``(D) to offer to parents of participating children 
     substance abuse counseling (either directly or through 
     referral to local entities), if needed, including information 
     on the effect of drug exposure on infants and fetal alcohol 
     syndrome;
       ``(E) at the option of such applicant, to offer (directly 
     or through referral to local entities) to such parents--
       ``(i) training in basic child development (including 
     cognitive development);
       ``(ii) assistance in developing literacy and communication 
     skills;
       ``(iii) opportunities to share experiences with other 
     parents (including parent mentor relationships);
       ``(iv) regular in-home visitation; or
       ``(v) any other activity designed to help such parents 
     become full partners in the education of their children;
       ``(F) to provide, with respect to each participating 
     family, a family needs assessment that includes consultation 
     with such parents (including foster parents and grandparents, 
     where applicable) about the benefits of parent involvement 
     and about the activities described in subparagraphs (C), (D), 
     and (E) in which such parents may choose to become involved 
     (taking into consideration their specific family needs, work 
     schedules, and other responsibilities); and
       ``(G) to extend outreach to fathers, in appropriate cases, 
     in order to strengthen the role of fathers in families, in 
     the education of their young children, and in the Head Start 
     program, by working directly with fathers and father figures 
     through activities such as--
       ``(i) in appropriate cases, including fathers in home 
     visits and providing opportunities for direct father-child 
     interactions; and
       ``(ii) targeting increased male participation in the 
     conduct of the program;
       ``(9) the ability of such applicant to carry out the plans 
     described in paragraphs (2), (4), and (5);
       ``(10) other factors related to the requirements of this 
     subchapter;
       ``(11) the plan of such applicant to meet the needs of 
     limited English proficient children and their families, 
     including procedures to identify such children, plans to 
     provide trained personnel, and plans to provide services to 
     assist the children in making progress toward the acquisition 
     of the English language;
       ``(12) the plan of such applicant to meet the needs of 
     children with disabilities, including procedures to identify 
     such children, procedures for referral of such children for 
     evaluation to State and local agencies providing services 
     under section 619 or part C of the Individuals with 
     Disabilities Education Act (20 U.S.C. 1419, 1431 et seq), and 
     plans for collaboration with those State and local agencies;
       ``(13) the plan of such applicant who chooses to assist 
     younger siblings of children who will participate in the Head 
     Start program, to obtain health services from other sources;
       ``(14) the plan of such applicant to collaborate with other 
     entities providing early childhood education and care in the 
     community;
       ``(15) the plan of such applicant to meet the needs of 
     homeless children and children in foster care, including the 
     transportation needs of such children; and
       ``(16) the plan of such applicant to recruit and retain 
     qualified staff.
       ``(f) Involvement of Parents and Area Residents.--The 
     Secretary shall continue the practice of involving parents 
     and area residents who are affected by programs under this 
     subchapter in the selection of qualified applicants for 
     designation as Head Start agencies.
       ``(g) Priority.--In selecting from among qualified 
     applicants for designation as a Head Start agency, the 
     Secretary shall give priority to applicants that have 
     demonstrated capacity in providing effective, comprehensive, 
     and well-coordinated early childhood education and care to 
     children and their families.
       ``(h) Interim Basis.--If there is not a qualified applicant 
     in a community for designation as a Head Start agency, the 
     Secretary shall designate a qualified agency to carry out the 
     Head Start program in the community on an interim basis until 
     a qualified applicant from the community is so designated.
       ``(i) Prohibition Against Non-Indian Head Start Agency 
     Receiving a Grant for an Indian Head Start Program.--
       ``(1) In general.--Notwithstanding any other provision of 
     law except as provided in paragraph (2), under no condition 
     may a non-Indian Head Start agency receive a grant to carry 
     out an Indian Head Start program.
       ``(2) Exception.--In a community in which there is no 
     Indian Head Start agency available for designation to carry 
     out an Indian Head Start program, a non-Indian Head Start 
     agency may receive a grant to carry out an Indian Head Start 
     program but only until such time as an Indian Head Start 
     agency in such community becomes available and is designated 
     pursuant to this section.''.

     SEC. 8. QUALITY STANDARDS; MONITORING OF HEAD START AGENCIES 
                   AND PROGRAMS.

       Section 641A of the Head Start Act (42 U.S.C. 9836a) is 
     amended--
       (1) in subsection (a)--
       (A) in paragraph (1)(A), by striking ``642(d)'' and 
     inserting ``642(c)'';
       (B) in paragraph (1)(B)--
       (i) in clause (i), by striking ``education performance 
     standards'' and inserting ``educational performance 
     standards''; and
       (ii) by striking clause (ii) and inserting the following:
       ``(ii) additional educational standards based on the 
     recommendations of the National Academy of Sciences panel 
     described in section 649(h) and other experts in the field, 
     to ensure that the curriculum involved addresses, and that 
     the children participating in the program show appropriate 
     progress toward developing and applying, the recommended 
     educational outcomes, after the panel considers the 
     appropriateness of additional educational standards relating 
     to--
       ``(I) language skills related to listening, understanding, 
     speaking, and communicating;
       ``(II) pre-literacy knowledge and skills;
       ``(III) premathematics knowledge and skills;
       ``(IV) scientific abilities;
       ``(V) general cognitive abilities related to academic 
     achievement and child development;
       ``(VI) social and emotional development related to early 
     learning and school success;
       ``(VII) physical development; and
       ``(VIII) in the case of limited English proficient 
     children, progress toward acquisition of the English language 
     (which may include progress made with linguistically 
     appropriate instructional services) while making meaningful 
     progress in attaining the knowledge, skills, abilities, and 
     development described in subclauses (I) through (VII);'';
       (C) in paragraph (1)(D), by striking ``projects; and'' and 
     inserting ``projects, including regulations that require that 
     the facilities used by Head Start agencies (including Early 
     Head Start agencies and including any delegate agencies) for 
     regularly scheduled center-based and combination program 
     option classroom activities--
       ``(i) shall be in compliance with State and local 
     requirements concerning licensing for such facilities; and
       ``(ii) shall be accessible by State and local authorities 
     for purposes of monitoring and ensuring compliance; and'';
       (D) in paragraph (2)--
       (i) in subparagraph (B)--

       (I) in clause (i), by striking ``the date of enactment of 
     this section'' and inserting ``the date of enactment of the 
     Head Start for School Readiness Act'';
       (II) in clause (ii), by striking ``the date of enactment of 
     this Act'' and inserting ``the date of enactment of the Head 
     Start for School Readiness Act'';
       (III) in clause (iii)--

       (aa) by striking ``early childhood education and 
     development'' and inserting ``early childhood education and 
     care''; and
       (bb) by inserting ``homeless children, children in foster 
     care,'' after ``children with disabilities,'';

       (IV) in clause (vi), by striking ``including the language'' 
     and all that follows and inserting ``and the language 
     background and family structure of such children, and changes 
     in the population and number of such children who are in 
     foster care or are homeless children'';
       (V) by striking clause (vii) and inserting the following:

       ``(vii) the need for Head Start agencies to maintain close 
     and frequent communications with parents, including 
     conducting periodic meetings to discuss the progress of 
     individual children in Head Start programs; and
       ``(viii) the unique challenges faced by individual 
     programs, including those programs that are seasonal or short 
     term and those programs that serve rural populations;'';
       (ii) in subparagraph (C)(ii), by striking ``the date of 
     enactment of the Coats Human Services Reauthorization Act of 
     1998.'' and inserting ``the date of enactment of the Head 
     Start for School Readiness Act; and''; and
       (iii) by adding at the end the following:
       ``(D) consult with Indian tribes, American Indian and 
     Alaska Native experts in early childhood education and care, 
     linguists, and the National Indian Head Start Directors 
     Association on the review and promulgation of standards under 
     this subchapter (including standards for language acquisition 
     and school readiness).'';
       (E) by adding at the end the following:
       ``(4) Evaluations and corrective actions for delegate 
     agencies.--

[[Page 16451]]

       ``(A) Procedures.--
       ``(i) In general.--Subject to clause (ii), the Head Start 
     agency shall establish procedures relating to its delegate 
     agencies, including--

       ``(I) procedures for evaluating delegate agencies;
       ``(II) procedures for defunding delegate agencies; and
       ``(III) procedures for appealing a defunding decision 
     relating to a delegate agency.

       ``(ii) Termination.--The Head Start agency may not 
     terminate a delegate agency's contract or reduce a delegate 
     agency's service area without showing cause or demonstrating 
     the cost-effectiveness of such a decision.
       ``(B) Evaluations.--Each Head Start agency--
       ``(i) shall evaluate its delegate agencies using the 
     procedures established pursuant to this section, including 
     subparagraph (A); and
       ``(ii) shall inform the delegate agencies of the 
     deficiencies identified through the evaluation that shall be 
     corrected.
       ``(C) Remedies to ensure corrective actions.--In the event 
     that the Head Start agency identifies a deficiency for a 
     delegate agency through the evaluation, the Head Start agency 
     shall take action, which may include--
       ``(i) initiating procedures to terminate the designation of 
     the agency unless the agency corrects the deficiency;
       ``(ii) conducting monthly monitoring visits to such 
     delegate agency until all deficiencies are corrected or the 
     Head Start agency decides to defund such delegate agency; and
       ``(iii) releasing funds to such delegate agency--

       ``(I) only as reimbursements, until all deficiencies are 
     corrected or the Head Start agency decides to defund such 
     delegate agency; and
       ``(II) only if there is continuity of services for children 
     and families.

       ``(D) Rule of construction.--Nothing in this paragraph 
     shall be construed to impact or obviate the responsibilities 
     of the Secretary with respect to Head Start agencies 
     (including any delegate agencies) receiving funding under 
     this subchapter.'';
       (2) in subsection (b)--
       (A) in paragraph (2)--
       (i) by striking the paragraph heading and inserting the 
     following:
       ``(2) Characteristics and use of measures.--'';
       (ii) in subparagraph (B), by striking ``, not later than 
     July 1, 1999; and'' and inserting a semicolon;
       (iii) in subparagraph (C), by striking the period and 
     inserting a semicolon;
       (iv) by striking the flush matter following subparagraph 
     (C); and
       (v) by adding at the end the following:
       ``(D) measure characteristics that are strongly predictive 
     (as determined on a scientific basis) of a child's school 
     readiness and later performance in school;
       ``(E) be appropriate for the population served; and
       ``(F) be reviewed not less than every 4 years, based on 
     advances in the science of early childhood development.
     The performance measures shall be issued by regulation and 
     shall include the performance standards and additional 
     educational standards described in subparagraphs (A) and (B) 
     of subsection (a)(1).'';
       (B) in paragraph (3)--
       (i) in subparagraph (A), by striking ``; and'' and 
     inserting a semicolon;
       (ii) in subparagraph (B), by striking the period and 
     inserting ``; and''; and
       (iii) by adding at the end the following:
       ``(C) to enable Head Start agencies to individualize 
     programs of instruction to better meet the needs of the child 
     involved.'';
       (C) by striking paragraph (4);
       (D) by redesignating paragraph (5) as paragraph (4); and
       (E) by adding at the end the following:
       ``(5) Rule of construction.--Nothing in this subchapter 
     shall be construed to authorize or permit the Secretary or 
     any employee or contractor of the Department of Health and 
     Human Services to mandate, direct, control, or suggest the 
     selection of a curriculum, a program of instruction, or 
     instructional materials, for a Head Start program.'';
       (3) in subsection (c)--
       (A) in paragraph (1)--
       (i) by striking subparagraph (C) and inserting the 
     following:
       ``(C) Unannounced site inspections for health and safety 
     reasons, as appropriate.'';
       (ii) by redesignating subparagraph (D) as subparagraph (E); 
     and
       (iii) by inserting after subparagraph (C) the following:
       ``(D) Followup reviews, including--
       ``(i) prompt return visits as necessary for failure to meet 
     1 or more of the performance measures developed by the 
     Secretary under subsection (b);
       ``(ii) a review of agencies and programs with citations 
     that include findings of deficiencies not later than 6 months 
     after the date of such citation; and
       ``(iii) followup reviews that incorporate a monitoring 
     visit without prior notice of the visit to the agency or 
     program involved or with such limited prior notice as is 
     necessary to ensure the participation of parents and key 
     staff members.''; and
       (B) by striking paragraph (2) and inserting the following:
       ``(2) Conduct of reviews.--
       ``(A) In general.--The Secretary shall ensure that reviews 
     described in paragraph (1)--
       ``(i) are performed, to the maximum extent practicable, by 
     employees of the Department of Health and Human Services who 
     are knowledgeable about Head Start programs;
       ``(ii) are conducted by review teams that shall include 
     individuals who are knowledgeable about Head Start programs 
     and other early childhood education and care and, to the 
     maximum extent practicable, the diverse (including linguistic 
     and cultural) needs of eligible children (including children 
     with disabilities, homeless children, and children in foster 
     care) and limited English proficient children and their 
     families, and personnel management, financial accountability, 
     and systems development and monitoring;
       ``(iii) include as part of the reviews of the programs, a 
     review and assessment of program effectiveness, including 
     strengths and weaknesses, as measured in accordance with the 
     results-based performance measures developed by the Secretary 
     pursuant to subsection (b) and with the performance standards 
     established pursuant to subsection (a)(1);
       ``(iv) seek information from the communities and States 
     where Head Start programs exist about innovative or effective 
     collaborative efforts, barriers to collaboration, and the 
     efforts of the Head Start agencies to collaborate with the 
     entities providing early childhood education and care in the 
     community;
       ``(v) include as part of the reviews of the programs, a 
     review and assessment of whether the programs are in 
     conformity with the income eligibility requirements under 
     section 645 and regulations promulgated under such section;
       ``(vi) include as part of the reviews of the programs, a 
     review and assessment of whether programs have adequately 
     addressed population and community needs (including needs of 
     populations of limited English proficient children and 
     children of migrant or seasonal farmworkers);
       ``(vii) include as part of the reviews of the programs, a 
     review and assessment of whether programs have adequately 
     addressed the needs of children with disabilities, including 
     whether the agencies involved have met the 10 percent minimum 
     enrollment requirement specified in section 640(d) and 
     whether the agencies have made sufficient efforts to 
     collaborate with State and local agencies providing services 
     under section 619 or part C of the Individuals with 
     Disabilities Education Act (20 U.S.C. 1419, 1431 et seq.);
       ``(viii) include as part of the reviews of the programs, 
     data from the results of periodic child assessments, and a 
     review and assessment of child outcomes and performance as 
     they relate to agency-determined school readiness goals 
     described in section 641(a)(2)(A); and
       ``(ix) in the case of Early Head Start agencies and 
     programs, are conducted by a review team that includes 
     individuals who are knowledgeable about the development of 
     infants and toddlers.
       ``(B) Training; quality and consistency.--The Secretary, 
     from funds available under section 640(a)(2)(D), shall 
     provide periodic training for supervisors and members of 
     review teams in such topics as program management and 
     financial audit performance. The Secretary shall ensure the 
     quality and consistency across and within regions of reviews 
     and non-compliance and deficiency determinations by 
     conducting periodic interrater reliability checks.'';
       (4) in subsection (d)(1)--
       (A) in the matter preceding subparagraph (A), by inserting 
     ``or fails to address the communitywide strategic plan and 
     needs assessment identified in section 640(g)(2)(C),'' after 
     ``subsection (b),''; and
       (B) in subparagraph (A), by inserting ``and identify the 
     assistance to be provided consistent with paragraph (3)'' 
     after ``corrected'';
       (5) in subsection (e), by striking the last sentence and 
     inserting ``The information contained in such report shall be 
     made available to parents with children receiving assistance 
     under this subchapter in an understandable and uniform 
     format, and to the extent practicable, in a language that the 
     parents can understand. Such information shall be made widely 
     available through public means such as distribution through 
     public agencies, and, at a minimum, by posting such 
     information on the Internet immediately upon publication.''; 
     and
       (6) by adding at the end the following:
       ``(f) Self-Assessments.--
       ``(1) In general.--Not less frequently than once each 
     program year, with the consultation and participation of 
     policy councils, and, as applicable, policy committees, and, 
     as appropriate, other community members, each agency 
     receiving funds under this subchapter shall conduct a 
     comprehensive self-assessment of the agency's effectiveness 
     and progress in meeting program goals and objectives and in 
     implementing and complying with performance standards 
     described in subsection (a)(1).
       ``(2) Report and improvement plans.--
       ``(A) Report.--An agency conducting a self-assessment shall 
     report the findings of

[[Page 16452]]

     the self-assessment to the relevant policy council, policy 
     committee, governing body, and regional office of the 
     Administration for Children and Families of the Department of 
     Health and Human Services. Each self-assessment shall 
     identify areas of strength and weakness.
       ``(B) Improvement plan.--The agency shall develop an 
     improvement plan approved by the governing body of the agency 
     to strengthen any areas identified in the self-assessment as 
     weaknesses or in need of improvement. The agency shall report 
     the areas to the appropriate regional office of the 
     Administration for Children and Families.
       ``(3) Ongoing monitoring.--Each Head Start agency 
     (including each Early Head Start agency and including any 
     delegate agency) shall establish and implement procedures for 
     the ongoing monitoring of their Head Start (including Early 
     Head Start) programs, to ensure that the operations of the 
     programs work toward meeting program goals and objectives and 
     Head Start performance standards.
       ``(4) Training and technical assistance.--Funds may be made 
     available, through section 648(d), for training and technical 
     assistance to assist agencies in conducting self-assessments.
       ``(g) Reduction of Grants and Redistribution of Funds in 
     Cases of Under-Enrollment.--
       ``(1) Definitions.--In this subsection:
       ``(A) Actual enrollment.--The term `actual enrollment' 
     means, with respect to the program of a Head Start agency, 
     the actual number of children enrolled in such program and 
     reported by the agency (as required in paragraph (2)) in a 
     given month.
       ``(B) Base grant.--The term `base grant' means, with 
     respect to a Head Start agency for a fiscal year, that 
     portion of the grant derived--
       ``(i) from amounts reserved for use in accordance with 
     section 640(a)(2)(A), for a Head Start agency administering 
     an Indian Head Start program or migrant or seasonal Head 
     Start program;
       ``(ii) from amounts reserved for payments under section 
     640(a)(2)(B); or
       ``(iii) from amounts available under section 640(a)(2)(D) 
     or allotted among States under section 640(a)(4).
       ``(C) Funded enrollment.--The term `funded enrollment' 
     means, with respect to the program of a Head Start agency in 
     a fiscal year, the number of children that the agency is 
     funded to serve through a grant for the program during such 
     fiscal year, as indicated in the grant award.
       ``(2) Enrollment reporting requirement for current fiscal 
     year.--Each entity carrying out a Head Start program shall 
     report on a monthly basis to the Secretary and the relevant 
     Head Start agency--
       ``(A) the actual enrollment in such program; and
       ``(B) if such actual enrollment is less than the funded 
     enrollment, any apparent reason for such enrollment 
     shortfall.
       ``(3) Secretarial review and plan.--The Secretary shall--
       ``(A) on a semiannual basis, determine which Head Start 
     agencies are operating with an actual enrollment that is less 
     than the funded enrollment based on not less than 4 
     consecutive months of data;
       ``(B) for each such Head Start agency operating a program 
     with an actual enrollment that is less than 95 percent of its 
     funded enrollment, as determined under subparagraph (A), 
     develop, in collaboration with such agency, a plan and 
     timetable for reducing or eliminating under-enrollment taking 
     into consideration--
       ``(i) the quality and extent of the outreach, recruitment, 
     and communitywide needs assessment conducted by such agency;
       ``(ii) changing demographics, mobility of populations, and 
     the identification of new underserved low-income populations;
       ``(iii) facilities-related issues that may impact 
     enrollment;
       ``(iv) the ability to provide full-day programs, where 
     needed, through funds made available under this subchapter or 
     through collaboration with entities carrying out other 
     preschool or child care programs, or programs with other 
     funding sources (where available);
       ``(v) the availability and use by families of other 
     preschool and child care options (including parental care) in 
     the community served; and
       ``(vi) agency management procedures that may impact 
     enrollment; and
       ``(C) provide timely and ongoing technical assistance to 
     each agency described in subparagraph (B) for the purpose of 
     implementing the plan described in such subparagraph.
       ``(4) Implementation.--Upon receipt of the technical 
     assistance described in paragraph (3)(C), a Head Start agency 
     shall immediately implement the plan described in paragraph 
     (3)(B).
       ``(5) Secretarial action for continued under-enrollment.--
     If, 1 year after the date of implementation of the plan 
     described in paragraph (3)(B), the Head Start agency 
     continues to operate a program at less than funded 
     enrollment, the Secretary shall, where determined 
     appropriate, continue to provide technical assistance to such 
     agency.
       ``(6) Secretarial review and adjustment for chronic under-
     enrollment.--
       ``(A) In general.--If, after receiving technical assistance 
     and developing and implementing a plan to the extent 
     described in paragraphs (3), (4), and (5) for 9 months, a 
     Head Start agency is still operating a program with an actual 
     enrollment that is less than 95 percent of its funded 
     enrollment, the Secretary may--
       ``(i) designate such agency as chronically under-enrolled; 
     and
       ``(ii) recapture, withhold, or reduce the base grant for 
     the program by a percentage equal to the percentage 
     difference between funded enrollment and actual enrollment 
     for the program for the most recent year in which the agency 
     is determined to be under-enrolled under paragraph (3)(A).
       ``(B) Waiver or limitation of reductions.--If the 
     Secretary, after the implementation of the plan described in 
     paragraph (3)(B), finds that--
       ``(i) the causes of the enrollment shortfall, or a portion 
     of the shortfall, are beyond the agency's control (such as 
     serving significant numbers of children of migrant or 
     seasonal farmworkers, homeless children, children in foster 
     care, or other highly mobile children);
       ``(ii) the shortfall can reasonably be expected to be 
     temporary; or
       ``(iii) the number of slots allotted to the agency is small 
     enough that under-enrollment does not constitute a 
     significant shortfall, the Secretary may, as appropriate, 
     waive or reduce the percentage recapturing, withholding, or 
     reduction otherwise required by subparagraph (A).
       ``(C) Procedural requirements; effective date.--The actions 
     taken by the Secretary under this paragraph with respect to a 
     Head Start agency shall take effect 1 day after the date on 
     which--
       ``(i) the time allowed for appeal under section 646(a) 
     expires without an appeal by the agency; or
       ``(ii) the action is upheld in an administrative hearing 
     under section 646.
       ``(7) Redistribution of funds.--
       ``(A) In general.--The Secretary shall use amounts 
     recovered from a Head Start agency through recapturing, 
     withholding, or reduction under paragraph (6) in a fiscal 
     year--
       ``(i) in the case of a Head Start agency administering an 
     Indian Head Start program or a migrant or seasonal Head Start 
     program, whose base grant is derived from amounts specified 
     in paragraph (1)(B)(i), to redirect funds to 1 or more 
     agencies that--

       ``(I) are administering Head Start programs serving the 
     same special population; and
       ``(II) demonstrate that the agencies will use such 
     redirected funds to increase enrollment in their Head Start 
     programs in such fiscal year; or

       ``(ii) in the case of a Head Start agency in a State, whose 
     base grant is derived from amounts specified in clause (ii) 
     or (iii) of paragraph (1)(B), to redirect funds to 1 or more 
     agencies that--

       ``(I) are administering Head Start programs in the same 
     State; and
       ``(II) make the demonstration described in clause (i)(II).

       ``(B) Special rule.--If there is no agency located in a 
     State that meets the requirements of subclauses (I) and (II) 
     of subparagraph (A)(ii), in the case of a Head Start agency 
     described in subparagraph (A)(ii), the Secretary shall use 
     amounts described in subparagraph (A) to redirect funds to 
     Head Start agencies located in other States that make the 
     demonstration described in subparagraph (A)(i)(II).
       ``(C) Adjustment to funded enrollment.--The Secretary shall 
     adjust as necessary the requirements relating to funded 
     enrollment indicated in the grant agreement of a Head Start 
     agency receiving redistributed amounts under this paragraph.
       ``(h) Contract With Nonprofit Intermediary Organization.--
     From funds reserved under clause (i) or (ii) of section 
     640(a)(2)(C) or from whatever other resources the Secretary 
     determines appropriate, in carrying out the provisions of 
     this section, the Secretary or a Head Start agency may 
     contract with a nonprofit intermediary organization that--
       ``(1) provides evaluations and technical assistance to 
     improve overall performance management; and
       ``(2) has an exclusive focus of improving the performance 
     management and the use of technology in assessing performance 
     and meeting Head Start regulations and can provide on-site, 
     hands-on guidance with the implementation of Head Start 
     programs.''.

     SEC. 9. CENTERS OF EXCELLENCE IN EARLY CHILDHOOD.

       The Head Start Act is amended by inserting after section 
     641A (42 U.S.C. 9836a) the following:

     ``SEC. 641B. CENTERS OF EXCELLENCE IN EARLY CHILDHOOD.

       ``(a) Definition.--In this section, the term `center of 
     excellence' means a Center of Excellence in Early Childhood 
     designated under subsection (b).
       ``(b) Designation and Bonus Grants.--The Secretary shall, 
     subject to the availability of funds under this subchapter, 
     including under subsection (f), establish a program under 
     which the Secretary shall--
       ``(1) designate not more than 200 exemplary Head Start 
     agencies (including Early Head

[[Page 16453]]

     Start agencies, Indian Head Start agencies, and migrant and 
     seasonal Head Start agencies) as Centers of Excellence in 
     Early Childhood; and
       ``(2) make bonus grants to the centers of excellence to 
     carry out the activities described in subsection (d).
       ``(c) Application and Designation.--
       ``(1) Application.--
       ``(A) Nomination and submission.--
       ``(i) In general.--To be eligible to receive a designation 
     as a center of excellence under subsection (b), except as 
     provided in clause (ii), a Head Start agency in a State shall 
     be nominated by the Governor of the State and shall submit an 
     application to the Secretary at such time, in such manner, 
     and containing such information as the Secretary may require.
       ``(ii) Indian and migrant and seasonal head start 
     programs.--In the case of an Indian Head Start agency or a 
     migrant or seasonal Head Start agency, to be eligible to 
     receive a designation as a center of excellence under 
     subsection (b), such an agency shall be nominated by the head 
     of the appropriate regional office of the Department of 
     Health and Human Services and shall submit an application to 
     the Secretary in accordance with clause (i).
       ``(B) Contents.--At a minimum, the application shall 
     include--
       ``(i) evidence that the Head Start program carried out by 
     the agency has significantly improved the school readiness 
     of, and enhanced academic outcomes for, children who have 
     participated in the program;
       ``(ii) evidence that the program meets or exceeds 
     performance standards described in section 641A(a)(1), as 
     evidenced by successful completion of programmatic and 
     monitoring reviews, and has no findings of deficiencies with 
     respect to such standards;
       ``(iii) evidence that the program is making progress toward 
     meeting the requirements described in section 648A;
       ``(iv) evidence demonstrating the existence of a 
     collaborative partnership among the Head Start agency, the 
     State (or a State agency), and other providers of early 
     childhood education and care in the local community involved;
       ``(v) a nomination letter from the Governor, or appropriate 
     regional office, demonstrating the agency's ability to 
     provide the coordination, transition, and training services 
     of the program to be carried out under the bonus grant 
     involved, including coordination of activities with State and 
     local agencies that provide early childhood education and 
     care to children and families in the community served by the 
     agency;
       ``(vi) information demonstrating the existence of a local 
     council for excellence in early childhood, which shall 
     include representatives of all the institutions, agencies, 
     and groups involved in the work of the center for, and the 
     local provision of services to, eligible children and other 
     at-risk children, and their families; and
       ``(vii) a description of how the Center, in order to expand 
     accessibility and continuity of quality early childhood 
     education and care, will coordinate activities assisted under 
     this section with--

       ``(I) programs carried out under the Child Care and 
     Development Block Grant Act of 1990 (42 U.S.C. 9858 et seq.);
       ``(II) other programs carried out under this subchapter, 
     including the Early Head Start programs carried out under 
     section 645A;
       ``(III)(aa) Early Reading First and Even Start programs 
     carried out under subparts 2 and 3 of part B of title I of 
     the Elementary and Secondary Education Act of 1965 (20 U.S.C. 
     6371 et seq., 6381 et seq.);
       ``(bb) other preschool programs carried out under title I 
     of that Act (20 U.S.C. 6301 et seq.); and
       ``(cc) the Ready-to-Learn Television program carried out 
     under subpart 3 of part D of title II of that Act (20 U.S.C. 
     6775 et seq.);
       ``(IV) programs carried out under section 619 and part C of 
     the Individuals with Disabilities Education Act (20 U.S.C. 
     1419, 1431 et seq.);
       ``(V) State prekindergarten programs; and
       ``(VI) other programs of early childhood education and 
     care.

       ``(2) Selection.--In selecting agencies to designate as 
     centers of excellence under subsection (b), the Secretary 
     shall designate not less than 1 from each of the 50 States, 
     the District of Columbia, an Indian Head Start program, a 
     migrant or seasonal Head Start program, and the Commonwealth 
     of Puerto Rico.
       ``(3) Priority.--In making bonus grant determinations under 
     this section, the Secretary shall give priority to programs 
     that, through their applications, demonstrate that they are 
     of exceptional quality and would serve as exemplary models 
     for programs in the same geographic region. The Secretary may 
     also consider the populations served by the applicants, such 
     as programs that serve large proportions of families of 
     limited English proficient children or other underserved 
     populations, and may make bonus grants to programs that do an 
     exceptional job meeting the needs of children in such 
     populations.
       ``(4) Term of designation.--
       ``(A) In general.--Subject to subparagraph (B), the 
     Secretary shall designate a Head Start agency as a center of 
     excellence for a 5-year term. During the period of that 
     designation, subject to the availability of appropriations, 
     the agency shall be eligible to receive a bonus grant under 
     subsection (b).
       ``(B) Revocation.--The Secretary may revoke an agency's 
     designation under subsection (b) if the Secretary determines 
     that the agency is not demonstrating adequate performance or 
     has had findings of deficiencies described in paragraph 
     (1)(B)(ii).
       ``(5) Amount of bonus grant.--The Secretary shall base the 
     amount of funding provided through a bonus grant made under 
     subsection (b) to a center of excellence on the number of 
     children eligible for Head Start services in the community 
     involved. The Secretary shall, subject to the availability of 
     funding, make such a bonus grant in an amount of not less 
     than $200,000 per year.
       ``(d) Use of Funds.--
       ``(1) Activities.--A center of excellence that receives a 
     bonus grant under subsection (b)--
       ``(A) shall use the funds made available through the bonus 
     grant to model and disseminate, to other Head Start centers 
     in the State involved, best practices for achieving early 
     academic success, including--
       ``(i) best practices for achieving school readiness and 
     developing pre-literacy and premathematics skills for at-risk 
     children and achieving the acquisition of the English 
     language for limited English proficient children; and
       ``(ii) best practices for providing seamless service 
     delivery for eligible children and their families;
       ``(B) may use the funds made available through the bonus 
     grant--
       ``(i) to provide Head Start services to additional eligible 
     children;
       ``(ii) to better meet the needs of working families in the 
     community served by the center by serving more children in 
     existing Early Head Start programs (existing as of the date 
     the center is designated under this section) or in full-
     working-day, full calendar year Head Start programs;
       ``(iii) to further coordinate early childhood education and 
     care and social services available in the community served by 
     the center for at-risk children (birth through age 8), their 
     families, and pregnant women;
       ``(iv) to provide training and cross training for Head 
     Start teachers and staff, child care providers, public and 
     private preschool and elementary school teachers, and other 
     providers of early childhood education and care, and training 
     and cross training to develop agency leaders;
       ``(v) to provide effective transitions between Head Start 
     programs and elementary school, to facilitate ongoing 
     communication between Head Start and elementary school 
     teachers concerning children receiving Head Start services, 
     and to provide training and technical assistance to providers 
     who are public elementary school teachers and other staff of 
     local educational agencies, child care providers, family 
     service providers, and other providers of early childhood 
     education and care, to help the providers described in this 
     clause increase their ability to work with low-income, at-
     risk children and their families;
       ``(vi) to develop or maintain partnerships with 
     institutions of higher education and nonprofit organizations, 
     including community-based organizations, that recruit, train, 
     place, and support college students to serve as mentors and 
     reading partners to preschool children in Head Start 
     programs; and
       ``(vii) to carry out other activities determined by the 
     center to improve the overall quality of the Head Start 
     program carried out by the agency and the program carried out 
     under the bonus grant involved.
       ``(2) Involvement of other head start agencies and 
     providers.--A center that receives a bonus grant under 
     subsection (b), in carrying out activities under this 
     subsection, shall work with the center's delegate agencies 
     and several additional Head Start agencies (especially 
     agencies that are low-performing on the performance standards 
     described in section 641A(a)(1)), and other providers of 
     early childhood education and care in the community involved, 
     to encourage the agencies and providers described in this 
     paragraph to carry out model programs.
       ``(e) Research and Reports.--
       ``(1) Research.--The Secretary shall, subject to the 
     availability of funds to carry out this subsection, award a 
     grant or contract to an independent organization to conduct 
     research on the ability of the centers of excellence to 
     improve the school readiness of children receiving Head Start 
     services, and to positively impact school results in the 
     earliest grades. The organization shall also conduct research 
     to measure the success of the centers of excellence at 
     encouraging the center's delegate agencies, additional Head 
     Start agencies, and other providers of early childhood 
     education and care in the communities involved to meet 
     measurable improvement goals, particularly in the area of 
     school readiness.
       ``(2) Report.--Not later than 48 months after the date of 
     enactment of the Head Start for School Readiness Act, the 
     organization shall prepare and submit to the Secretary and 
     Congress a report containing the results of the research 
     described in paragraph (1).
       ``(f) Authorization of Appropriations.--There are 
     authorized to be appropriated for each of fiscal years 2008 
     through 2012--

[[Page 16454]]

       ``(1) $90,000,000 to make bonus grants to centers of 
     excellence under subsection (b) to carry out activities 
     described in subsection (d);
       ``(2) $500,000 to pay for the administrative costs of the 
     Secretary in carrying out this section; and
       ``(3) $2,000,000 for research activities described in 
     subsection (e).''.

     SEC. 10. POWERS AND FUNCTIONS OF HEAD START AGENCIES.

       Section 642 of the Head Start Act (42 U.S.C. 9837) is 
     amended--
       (1) by striking all that precedes ``In order'' the first 
     place it appears and inserting the following:

     ``SEC. 642. POWERS AND FUNCTIONS OF HEAD START AGENCIES.

       ``(a) In General.--''; and
       (2) by striking subsections (b) through (e) and inserting 
     the following:
       ``(b) Additional Requirements.--In order to be designated 
     as a Head Start agency under this subchapter, a Head Start 
     agency shall also--
       ``(1) establish a program with all standards set forth in 
     section 641A(a)(1), with particular attention to the 
     standards set forth in subparagraphs (A) and (B) of such 
     section;
       ``(2) demonstrate the capacity to serve eligible children 
     with scientifically based curricula and other interventions 
     and support services that help promote the school readiness 
     of children participating in the program;
       ``(3) establish effective procedures and provide for the 
     regular assessment of Head Start children, including 
     observational and direct formal assessment, where 
     appropriate;
       ``(4) establish effective procedures, for determining the 
     needs of children, that include high quality research based 
     developmental screening tools that have been demonstrated to 
     be valid, reliable, and accurate for children from a range of 
     backgrounds;
       ``(5) establish effective procedures for timely referral of 
     children with disabilities to State and local agencies 
     providing services under section 619 and part C of the 
     Individuals with Disabilities Education Act (20 U.S.C. 1419, 
     1431 et seq.), and collaboration with those agencies;
       ``(6) establish effective procedures for providing 
     necessary services to children with disabilities prior to an 
     eligibility determination by the State or local agency 
     responsible for providing services under section 619 or part 
     C of such Act;
       ``(7) require each delegate agency to create a policy 
     committee, which shall--
       ``(A) be comprised of members of the community to be 
     served, including parents of children who are currently 
     enrolled in the Head Start programs of the Head Start agency; 
     and
       ``(B) serve in an advisory capacity to the delegate agency, 
     to make decisions and recommendations regarding program 
     planning and operation and parental involvement.
       ``(8) seek the involvement of parents, area residents, and 
     local business in the design and implementation of the 
     program;
       ``(9) provide for the regular participation of parents and 
     area residents in the implementation of the program;
       ``(10) provide technical and other support needed to enable 
     such parents and area residents to secure, on their own 
     behalf, available assistance from public and private sources;
       ``(11) establish effective procedures to carry out 
     subparagraphs (A) and (B) of section 641(f)(8);
       ``(12) conduct outreach to schools in which Head Start 
     children will enroll, local educational agencies, the local 
     business community, community-based organizations, faith-
     based organizations, museums, and libraries to generate 
     support and leverage the resources of the entire local 
     community in order to improve school readiness;
       ``(13) establish effective procedures to carry out section 
     641(f)(8)(C);
       ``(14) establish effective procedures to carry out section 
     641(f)(8)(D);
       ``(15) establish effective procedures to carry out section 
     641(f)(8)(E);
       ``(16) establish effective procedures to carry out section 
     641(f)(8)(F);
       ``(17) consider providing services to assist younger 
     siblings of children participating in its Head Start program, 
     to obtain health services from other sources;
       ``(18) perform community outreach to encourage individuals 
     previously unaffiliated with Head Start programs to 
     participate in its Head Start program as volunteers;
       ``(19)(A) inform custodial parents in single-parent 
     families that participate in programs, activities, or 
     services carried out or provided under this subchapter about 
     the availability of child support services for purposes of 
     establishing paternity and acquiring child support; and
       ``(B) refer eligible parents to the child support offices 
     of State and local governments;
       ``(20) provide parents of limited English proficient 
     children outreach and information in an understandable and 
     uniform format and, to the extent practicable, in a language 
     that the parents can understand; and
       ``(21) at the option of such agency, partner with an 
     institution of higher education and a nonprofit organization 
     to provide college students with the opportunity to serve as 
     mentors or reading partners to Head Start participants.
       ``(c) Transition Activities To Facilitate Continued 
     Progress.--
       ``(1) In general.--Each Head Start agency shall collaborate 
     with the entities listed in this subsection, to the maximum 
     extent possible, to ensure the successful transition of Head 
     Start children to school, so that such children are able to 
     build upon the developmental and educational gains achieved 
     in Head Start programs in further schooling.
       ``(2) Coordination.--
       ``(A) Local educational agency.--In communities where both 
     public prekindergarten programs and Head Start programs 
     operate, a Head Start agency shall collaborate and coordinate 
     activities with the local educational agency or other public 
     agency responsible for the operation of the prekindergarten 
     program and providers of prekindergarten, including outreach 
     activities to identify eligible children.
       ``(B) Elementary schools.--Head Start staff shall, with the 
     permission of the parents of children enrolled in Head Start 
     programs, regularly communicate with the elementary schools 
     such children will be attending to--
       ``(i) share information about such children;
       ``(ii) collaborate with the teachers in such elementary 
     schools regarding teaching strategies and options; and
       ``(iii) ensure a smooth transition to elementary school for 
     such children.
       ``(C) Other programs.--The head of each Head Start agency 
     shall coordinate activities and collaborate with the State 
     agency responsible for administering the State program 
     carried out under the Child Care and Development Block Grant 
     Act of 1990 (42 U.S.C. 9858 et seq.), other entities 
     providing early childhood education and care, and the 
     agencies responsible for administering section 106 of the 
     Child Abuse Prevention and Treatment Act (42 U.S.C. 5106a), 
     parts B and E of title IV of the Social Security Act (42 
     U.S.C. 621 et seq. and 670 et seq.), programs under subtitle 
     B of title VII of the McKinney-Vento Homeless Assistance Act 
     (42 U.S.C. 11431 et seq.), Even Start programs under subpart 
     3 of part B of title I of the Elementary and Secondary 
     Education Act of 1965 (20 U.S.C. 6381 et seq.), and programs 
     under section 619 and part C of the Individuals with 
     Disabilities Education Act (20 U.S.C. 1419, 1431 et seq.), 
     serving the children and families served by the Head Start 
     agency.
       ``(3) Collaboration.--A Head Start agency shall take steps 
     to coordinate activities with the local educational agency 
     serving the community involved and with schools in which 
     children participating in a Head Start program operated by 
     such agency will enroll following such program, including--
       ``(A) collaborating on the shared use of transportation and 
     facilities, in appropriate cases;
       ``(B) collaborating to reduce the duplication of services 
     while increasing the program participation of underserved 
     populations of eligible children; and
       ``(C) exchanging information on the provision of 
     noneducational services to such children.
       ``(4) Parental involvement.--In order to promote the 
     continued involvement of the parents of children that 
     participate in Head Start programs in the education of their 
     children, the Head Start agency shall--
       ``(A) provide training to the parents--
       ``(i) to inform the parents about their rights and 
     responsibilities concerning the education of their children; 
     and
       ``(ii) to enable the parents, upon the transition of their 
     children to school--

       ``(I) to understand and work with schools in order to 
     communicate with teachers and other school personnel;
       ``(II) to support the schoolwork of their children; and
       ``(III) to participate as appropriate in decisions relating 
     to the education of their children; and

       ``(B) take other actions, as appropriate and feasible, to 
     support the active involvement of the parents with schools, 
     school personnel, and school-related organizations.
       ``(d) Assessment or Evaluation.--Each Head Start agency 
     shall adopt, in consultation with experts in child 
     development and with classroom teachers, an assessment or 
     evaluation to measure whether classroom teachers have 
     mastered the functions described in section 648A(a)(1) and 
     have attained a level of literacy appropriate to implement 
     Head Start curricula.
       ``(e) Funded Enrollment; Waiting List.--Each Head Start 
     agency shall enroll 100 percent of its funded enrollment and 
     maintain an active waiting list at all times with ongoing 
     outreach to the community and activities to identify 
     underserved populations.
       ``(f) Technical Assistance and Training Plan.--In order to 
     receive funds under this subchapter, a Head Start agency 
     shall develop an annual technical assistance and training 
     plan. Such plan shall be based on the agency's self-
     assessment, the communitywide needs assessment, and the needs 
     of parents to be served by such agency.''.

     SEC. 11. HEAD START TRANSITION.

       Section 642A of the Head Start Act (42 U.S.C. 9837a) is 
     amended to read as follows:

     ``SEC. 642A. HEAD START TRANSITION AND ALIGNMENT WITH K-12 
                   EDUCATION.

       ``(a) In General.--Each Head Start agency shall take steps 
     to coordinate activities with

[[Page 16455]]

     the local educational agency serving the community involved 
     and with schools in which children participating in a Head 
     Start program operated by such agency will enroll following 
     such program, which may include--
       ``(1) developing and implementing a systematic procedure 
     for transferring, with parental consent, Head Start program 
     records for each participating child to the school in which 
     such child will enroll;
       ``(2) establishing ongoing channels of communication 
     between Head Start staff and their counterparts in the 
     schools (including, as appropriate, teachers, social workers, 
     health staff, and local educational agency liaisons 
     designated under section 722(g)(1)(J)(ii) of the McKinney-
     Vento Homeless Assistance Act (42 U.S.C. 11432(g)(1)(J)(ii))) 
     to--
       ``(A) facilitate coordination of programs;
       ``(B) develop continuity of developmentally appropriate 
     curricular objectives and practices, in order to ensure an 
     effective transition to school and appropriate shared 
     expectations for the learning and development of children as 
     they make the transition to school; and
       ``(C) provide appropriate linkages between the Head Start 
     program and educational services, including services related 
     to language, literacy, and numeracy, provided by such local 
     educational agency;
       ``(3) establishing comprehensive transition policies and 
     procedures that support children transitioning to school, 
     including by engaging the local education agency in the 
     establishment of such policies;
       ``(4) conducting outreach to parents, elementary school 
     (such as kindergarten) teachers, and Head Start teachers to 
     discuss the educational, developmental, and other needs of 
     individual children;
       ``(5) organizing and participating in joint training, 
     including transition-related training of school staff and 
     Head Start staff;
       ``(6) developing and implementing a family outreach and 
     support program, in cooperation with entities carrying out 
     parental involvement efforts under title I of the Elementary 
     and Secondary Education Act of 1965 (20 U.S.C. 6301 et seq.), 
     and family outreach and support efforts under subtitle B of 
     title VII of the McKinney-Vento Homeless Assistance Act (42 
     U.S.C. 11431 et seq.), taking into consideration the language 
     needs of parents of limited English proficient children;
       ``(7) assisting families, administrators, and teachers in 
     enhancing educational and developmental continuity and 
     continuity of parental involvement in activities between Head 
     Start services and elementary school classes;
       ``(8) helping parents understand the importance of parental 
     involvement in a child's academic success while teaching the 
     parents strategies for maintaining parental involvement as 
     their child moves from the Head Start program to elementary 
     school;
       ``(9) helping parents understand the instructional and 
     other services provided by the school in which their child 
     will enroll after participation in the Head Start program; 
     and
       ``(10) coordinating activities and collaborating to ensure 
     that curricula used in the Head Start program are aligned 
     with the Head Start Child Outcomes Framework and, as 
     appropriate, State early learning standards, with regard to 
     cognitive development (including language, pre-literacy, and 
     premathematics competencies), and social, emotional, and 
     physical competencies that children entering kindergarten are 
     expected to demonstrate.
       ``(b) Construction.--In this section, a reference to a Head 
     Start agency, or its program, services, facility, or 
     personnel, shall not be construed to be a reference to an 
     Early Head Start agency, or its program, services, facility, 
     or personnel.''.

     SEC. 12. SUBMISSION OF PLANS TO GOVERNORS.

       Section 643 of the Head Start Act (42 U.S.C. 9838) is 
     amended--
       (1) in the first sentence--
       (A) by striking ``chief executive officer'' and inserting 
     ``Governor''; and
       (B) by striking ``45'' and inserting ``30'';
       (2) in the last sentence, by striking ``, however,''; and
       (3) by adding at the end the following: ``This section 
     shall not apply to contracts, agreements, grants, loans, or 
     other assistance for Indian Head Start programs and migrant 
     and seasonal Head Start programs.''.

     SEC. 13. COSTS OF DEVELOPING AND ADMINISTERING A PROGRAM.

       Section 644(b) of the Head Start Act (42 U.S.C. 9839(b)) is 
     amended--
       (1) by striking ``Except'' and inserting ``(1) Except''; 
     and
       (2) by adding at the end the following:
       ``(2)(A) The limitation prescribed by paragraph (1) shall 
     not prohibit a Head Start agency from expending an amount in 
     excess of allowable direct costs associated with developing 
     and administering a program assisted under this subchapter, 
     if--
       ``(i) the agency submits an application for a grant year 
     containing an assurance that--
       ``(I) the agency will serve a greater percentage of 
     children in the community involved than were served in the 
     preceding grant year; and
       ``(II) the agency will not diminish services provided to 
     currently enrolled children (as of the date of the 
     application), including the number of hours and days such 
     services are provided;
       ``(ii) any such excess amount does not exceed 5 percent of 
     the total costs, including the required non-Federal 
     contributions to such costs, of such program; and
       ``(iii) in the event that the applicant applies to expend 
     any such excess amount in a subsequent grant year, the 
     applicant continues to serve the same number of children as 
     proposed in the initial application submitted under this 
     paragraph and accomplishes, relative to the prior Head Start 
     agency, at least 3 of the 5 improved outcomes.
       ``(B) In subparagraph (A), the term `improved outcome' 
     means--
       ``(i) an increase in average teacher salary;
       ``(ii) an increase in the number of qualified teachers;
       ``(iii) a significant increase in the number of children 
     who receive full-day Head Start services;
       ``(iv) a decrease in the caseload for family workers; or
       ``(v) an increase in transportation options for families.
       ``(C) The Secretary shall approve not more than 10 
     applications described in subparagraph (A) for a fiscal year, 
     and to the extent practicable shall ensure participation 
     under this paragraph of a diverse group of Head Start 
     agencies, including public, private nonprofit, and for-profit 
     agencies operating Head Start programs.''.

     SEC. 14. PARTICIPATION IN HEAD START PROGRAMS.

       Section 645 of the Head Start Act (42 U.S.C. 9840) is 
     amended--
       (1) in subsection (a)--
       (A) in paragraph (1)--
       (i) in subparagraph (A)--

       (I) by inserting ``130 percent of'' after ``below''; and
       (II) by striking ``and'' at the end;

       (ii) by redesignating subparagraph (B) as subparagraph (C);
       (iii) by inserting after subparagraph (A) the following:
       ``(B) that the Head Start agencies involved make efforts to 
     ensure that the programs serve children from families with 
     incomes below the poverty line prior to serving other income-
     eligible children; and''; and
       (iv) in the flush matter at the end, by adding at the end 
     the following: ``A homeless child shall be deemed eligible 
     for Head Start services.''; and
       (B) by adding at the end the following:
       ``(3)(A) In this paragraph:
       ``(i) The term `dependent' has the meaning given the term 
     in paragraphs (2)(A) and (4)(A)(i) of section 401(a) of title 
     37, United States Code.
       ``(ii) The terms `member' and `uniformed services' have the 
     meanings given the terms in paragraphs (23) and (3), 
     respectively, of section 101 of title 37, United States Code.
       ``(B) The following amounts of pay and allowance of a 
     member of the uniformed services shall not be considered to 
     be income for purposes of determining the eligibility of a 
     dependent of such member for programs funded under this 
     subchapter:
       ``(i) The amount of any special pay payable under section 
     310 of title 37, United States Code, relating to duty subject 
     to hostile fire or imminent danger.
       ``(ii) The amount of basic allowance payable under section 
     403 of such title, including any such amount that is provided 
     on behalf of the member for housing that is acquired or 
     constructed under the alternative authority for the 
     acquisition and improvement of military housing under 
     subchapter IV of chapter 169 of title 10, United States Code, 
     or any other related provision of law.
       ``(4) After demonstrating a need through a communitywide 
     needs assessment, a Head Start agency may apply to the 
     Secretary to convert part-day sessions, particularly 
     consecutive part-day sessions, into full-day sessions.
       ``(5)(A) Consistent with a communitywide needs assessment, 
     a Head Start agency may apply to the Secretary to serve 
     additional infants and toddlers if the agency submits an 
     application to the Secretary containing--
       ``(i) a description of how the needs of pregnant women, 
     infants, and toddlers will be addressed in accordance with 
     section 645A(b), and with regulations prescribed by the 
     Secretary pursuant to section 641A in areas including the 
     agency's approach to child development and provision of 
     health services, approach to family and community 
     partnerships, and approach to program design and management;
       ``(ii) a description of how the needs of eligible Head 
     Start children are being and will be served;
       ``(iii) assurances that the agency will participate in 
     technical assistance activities (including a planning period, 
     start-up site visits, and national training activities) in 
     the same manner as recipients of grants under section 645A; 
     and
       ``(iv) evidence that the agency meets the same eligibility 
     criteria as recipients of grants under section 645A.
       ``(B) In approving such applications, the Secretary shall 
     take into account the costs of serving persons under section 
     645A.
       ``(C) Any Head Start agency designated under this section 
     and permitted to use

[[Page 16456]]

     grant funds under subparagraph (A) to serve additional 
     infants and toddlers shall be considered to be an Early Head 
     Start agency and shall be subject to the same rules, 
     regulations, and conditions as apply to recipients of grants 
     under section 645A for those grant funds.''; and
       (2) in the first sentence of subsection (c), by striking 
     ``(age 3 to compulsory school attendance)'' and inserting 
     ``(other than children eligible for an Early Head Start 
     program)''; and
       (3) in subsection (d), by adding at the end the following:
       ``(4) Notwithstanding any other provision of this Act, an 
     Indian tribe that operates both an Early Head Start program 
     under section 645A and a Head Start program may, at its 
     discretion, at any time during the grant period involved, 
     reallocate funds between the Early Head Start program and the 
     Head Start program in order to address fluctuations in client 
     population, including pregnant women and children birth to 
     compulsory school age. The reallocation of such funds between 
     programs by an Indian tribe shall not serve as the basis for 
     the Secretary to reduce a base grant (as defined in section 
     641A(g)(1)) for either program in succeeding years.''.

     SEC. 15. EARLY HEAD START PROGRAMS.

       Section 645A of the Head Start Act (42 U.S.C. 9840a) is 
     amended--
       (1) by striking the section heading and inserting the 
     following:

     ``SEC. 645A. EARLY HEAD START PROGRAMS.'';

       (2) in subsection (b)--
       (A) in paragraph (4), by striking ``provide services to 
     parents to support their role as parents'' and inserting 
     ``provide additional services and research-based activities 
     to parents to support their role as parents (including 
     parenting skills training and training in basic child 
     development)'';
       (B) by redesignating paragraphs (5), (6), (7), (8), and (9) 
     as paragraphs (6), (8), (11), (12), and (13), respectively;
       (C) by inserting after paragraph (4) the following:
       ``(5) where appropriate and in conjunction with services 
     provided under this section to the children's immediate 
     families (or as approved by the Secretary), provide home-
     based services to family child care homes, and kin 
     caregivers, caring for infants and toddlers who also 
     participate in Early Head Start programs, to provide 
     continuity in supporting the children's cognitive, social, 
     emotional, and physical development;'';
       (D) in paragraph (6), as redesignated by subparagraph (B)--
       (i) by inserting ``(including home-based services)'' after 
     ``with services'';
       (ii) by inserting ``and homeless infants and toddlers'' 
     after ``disabilities''; and
       (iii) by inserting ``, and family support services'' after 
     ``health services'';
       (E) by inserting after paragraph (6), as redesignated by 
     subparagraph (B), the following:
       ``(7) ensure that children with documented behavioral 
     problems, including problems involving behavior related to 
     prior or existing trauma, receive appropriate screening and 
     referral;'';
       (F) by inserting after paragraph (8), as redesignated by 
     subparagraph (B), the following:
       ``(9) develop and implement a systematic procedure for 
     transitioning children and parents from an Early Head Start 
     program to a Head Start program or another local program of 
     early childhood education and care;
       ``(10) establish channels of communication between staff of 
     Early Head Start programs and staff of Head Start programs or 
     other local providers of early childhood education and care, 
     to facilitate the coordination of programs;''; and
       (G) in paragraph (12), as redesignated by subparagraph 
     (B)--
       (i) by striking ``and providers'' and inserting ``, 
     providers''; and
       (ii) by inserting ``, and the agencies responsible for 
     administering section 106 of the Child Abuse Prevention and 
     Treatment Act (42 U.S.C. 5106a) and parts B and E of title IV 
     of the Social Security Act (42 U.S.C. 621 et seq. and 670 et 
     seq.)'' after ``(20 U.S.C. 1400 et seq.)'';
       (3) in subsection (d)--
       (A) in paragraph (1), by inserting ``, including tribal 
     governments and entities operating migrant and seasonal Head 
     Start programs'' after ``subchapter''; and
       (B) in paragraph (2), by inserting ``, including community-
     based organizations'' after ``private entities'';
       (4) in subsection (g)(2)--
       (A) in subparagraph (A), by adding at the end the 
     following: ``In determining the amount so reserved, the 
     Secretary shall consider the number of Early Head Start 
     programs newly funded for that fiscal year.''; and
       (B) in subparagraph (B)--
       (i) in clause (ii), by inserting ``, including supporting 
     infant and toddler specialists to assist such staff and 
     improve the programs carried out under this section'' after 
     ``section''; and
       (ii) by striking clause (iv) and inserting the following:
       ``(iv) providing professional development and personnel 
     enhancement activities, including the provision of funds to 
     recipients of grants under subsection (a), relating to--

       ``(I) effective methods of conducting parent education, 
     home visiting, and promoting quality early childhood 
     development;
       ``(II) recruiting and retaining qualified staff; and
       ``(III) increasing program participation for underserved 
     populations of eligible children.''; and

       (5) by adding at the end the following:
       ``(h) Staff Qualifications and Development.--
       ``(1) Center-based staff.--The Secretary shall establish 
     staff qualification goals to ensure that, not later than 
     September 30, 2012, all teachers providing direct services to 
     Early Head Start children and families in Early Head Start 
     centers have a minimum of a child development associate 
     credential or an associate degree, and have been trained (or 
     have equivalent course work) in early childhood development 
     with a focus on infant and toddler development.
       ``(2) Home visitor staff.--
       ``(A) Standards.--In order to further enhance the quality 
     of home visiting services provided to families of children 
     participating in home-based, center-based, or combination 
     program options under this subchapter, the Secretary shall 
     establish standards for training, qualifications, and the 
     conduct of home visits for home visitor staff in Early Head 
     Start programs.
       ``(B) Contents.--The standards for training, 
     qualifications, and the conduct of home visits shall include 
     content related to--
       ``(i) structured child-focused home visiting that promotes 
     parents' ability to support the child's cognitive, social, 
     emotional, and physical development;
       ``(ii) effective strengths-based parent education, 
     including methods to encourage parents as their child's first 
     teachers;
       ``(iii) early childhood development with respect to 
     children from birth through age 3;
       ``(iv) methods to help parents promote emergent literacy in 
     their children from birth through age 3, including use of 
     research-based strategies to support the development of 
     literacy and language skills for children who are limited 
     English proficient;
       ``(v) health, vision, hearing, and developmental 
     screenings;
       ``(vi) strategies for helping families coping with crisis; 
     and
       ``(vii) the relationship of health and well-being of 
     pregnant women to prenatal and early child development.''.

     SEC. 16. APPEALS, NOTICE, AND HEARING AND RECORDS AND 
                   FINANCIAL AUDITS.

       (a) Appeals, Notice, and Hearing.--Section 646(a) of the 
     Head Start Act (42 U.S.C. 9841(a)) is amended by striking 
     paragraphs (3) and (4) and inserting the following:
       ``(3) financial assistance under this subchapter may be 
     terminated or reduced, and an application for refunding may 
     be denied, after the recipient has been afforded reasonable 
     notice and opportunity for a full and fair hearing, 
     including--
       ``(A) a right to file a notice of appeal of a decision not 
     later than 30 days after notice of the decision from the 
     Secretary; and
       ``(B) access to a full and fair hearing of the appeal, not 
     later than 120 days after receipt by the Secretary of the 
     notice of appeal;
       ``(4) the Secretary shall develop and publish procedures 
     (including mediation procedures) to be used in order to--
       ``(A) resolve in a timely manner conflicts potentially 
     leading to an adverse action between--
       ``(i) recipients of financial assistance under this 
     subchapter; and
       ``(ii) delegate agencies, or policy councils of Head Start 
     agencies;
       ``(B) avoid the need for an administrative hearing on an 
     adverse action; and
       ``(C) prohibit a Head Start agency from expending financial 
     assistance awarded under this subchapter for the purpose of 
     paying legal fees pursuant to an appeal under paragraph (3), 
     except that such fees shall be reimbursed by the Secretary if 
     the agency prevails in such decision; and
       ``(5) the Secretary may suspend funds to a grantee under 
     this subchapter--
       ``(A) except as provided in subparagraph (B), for not more 
     than 30 days; or
       ``(B) in the case of a grantee under this subchapter that 
     has multiple and recurring deficiencies for 180 days or more 
     and has not made substantial and significant progress toward 
     meeting the goals of the grantee's quality improvement plan 
     or eliminating all deficiencies identified by the Secretary, 
     during the hearing of an appeal described in paragraph (3), 
     for any amount of time, including permanently.''.
       (b) Records and Financial Audits.--
       (1) Heading.--Section 647 of the Head Start Act (42 U.S.C. 
     9842) is amended by striking the section heading and 
     inserting the following: ``records and financial audits''.
       (2) Recipients.--Section 647(a) of the Head Start Act (42 
     U.S.C. 9842(a)) is amended by striking ``Each recipient of'' 
     and inserting ``Each Head Start center, including each Early 
     Head Start center, receiving''.
       (3) Financial audits.--Subsections (a) and (b) of section 
     647 of the Head Start Act (42 U.S.C. 9842) are amended by 
     striking ``audit'' and inserting ``financial audit''.
       (4) Accounting.--Section 647 of the Head Start Act (42 
     U.S.C. 9842) is amended by adding at the end the following:

[[Page 16457]]

       ``(c) Each Head Start center, including each Early Head 
     Start center, receiving financial assistance under this 
     subchapter shall maintain, and annually submit to the 
     Secretary, a complete accounting of its administrative 
     expenses, including expenses for salaries and compensation 
     funded under this subchapter and provide such additional 
     documentation as the Secretary may require.''.

     SEC. 17. TECHNICAL ASSISTANCE AND TRAINING.

       Section 648 of the Head Start Act (42 U.S.C. 9843) is 
     amended--
       (1) in subsection (a)(2), by striking ``(b) and (c)'' and 
     inserting ``(b), (c), and (d)'';
       (2) by redesignating subsections (b) through (e) as 
     subsections (c) through (f), respectively;
       (3) by inserting after subsection (a) the following:
       ``(b) The Secretary shall make available funds set aside in 
     section 640(a)(2)(C)(ii) to support a State system of 
     training and technical assistance (which may include such a 
     system for a consortium of States within a region) that 
     improves the capacity of Head Start programs to deliver 
     services in accordance with the standards described in 
     section 641A(a)(1), with particular attention to the 
     standards described in subparagraphs (A) and (B) of such 
     section. The Secretary shall--
       ``(1) ensure that agencies with demonstrated expertise in 
     providing high-quality training and technical assistance to 
     improve the delivery of Head Start services, including the 
     State Head Start Associations, State agencies, Indian Head 
     Start agencies, migrant and seasonal Head Start agencies, and 
     other entities providing training and technical assistance in 
     early childhood education and care, for the State (including 
     such a consortium of States within a region), are included in 
     the planning and coordination of the system; and
       ``(2) encourage States (including such consortia) to 
     supplement the funds authorized in section 640(a)(2)(C)(ii) 
     with Federal, State, or local funds other than funds made 
     available under this subchapter, to expand training and 
     technical assistance activities beyond Head Start agencies to 
     include other providers of other early childhood education 
     and care within a State (including such a consortium).'';
       (4) in paragraph (3) of subsection (c), as redesignated by 
     paragraph (2), by striking ``child care and early childhood 
     programs'' and inserting ``early childhood education and care 
     programs'';
       (5) in subsection (d), as redesignated by paragraph (2)--
       (A) in paragraph (1)(B)(ii), by striking ``educational 
     performance measures'' and inserting ``measures'';
       (B) in paragraph (2), by inserting ``and for activities 
     described in section 1222(d) of the Elementary and Secondary 
     Education Act of 1965 (20 U.S.C. 6372(d))'' after ``children 
     with disabilities'';
       (C) in paragraph (3), by striking ``early childhood 
     professional development systems'' and inserting 
     ``professional development systems regarding early childhood 
     education and care'';
       (D) in paragraph (5), by inserting ``, including assessing 
     the needs of homeless children and their families'' after 
     ``needs assessment'';
       (E) by striking paragraph (7) and inserting the following:
       ``(7) assist Head Start agencies in better serving the 
     needs of families with very young children, including 
     providing support and program planning and implementation 
     assistance for Head Start agencies that apply to serve or are 
     serving additional infants and toddlers with funds previously 
     used for 3- and 4-year-olds in accordance with section 
     645(a)(5);'';
       (F) in paragraph (10), by striking ``; and'' and inserting 
     a semicolon;
       (G) in paragraph (11), by striking the period and inserting 
     a semicolon; and
       (H) by adding at the end the following:
       ``(12) assist Head Start agencies in increasing the program 
     participation of homeless children;
       ``(13) provide training and technical assistance to members 
     of governing bodies, policy councils, and, as appropriate, 
     policy committees, to ensure that the members can fulfill 
     their functions;
       ``(14) provide training and technical assistance to Head 
     Start agencies to assist such agencies in conducting self-
     assessments;
       ``(15) assist Head Start agencies in improving outreach to, 
     and the quality of services available to, families of limited 
     English proficient children, including such services to help 
     such families learn English, particularly in communities that 
     have experienced a large percentage increase in the 
     population of such families;
       ``(16) assist Head Start agencies and improve programs to 
     increase the capacity of classroom staff to meet the needs of 
     children with disabilities in Head Start classrooms;
       ``(17) provide activities that help ensure that Head Start 
     programs have qualified staff who can promote prevention of 
     childhood obesity by integrating into the programs 
     developmentally appropriate research-based initiatives that 
     stress the importance of physical activity and nutrition 
     choices made by children and family, through daily classroom 
     and family routines; and
       ``(18) assist Indian Head Start agencies to provide on-site 
     and off-site training to staff, using approaches that 
     identify and enhance the positive resources and strengths of 
     Indian children and families, to improve parent and family 
     engagement and staff development, particularly with regard to 
     child and family development.'';
       (6) in subsection (e), as redesignated by paragraph (2), by 
     inserting ``including community-based organizations,'' after 
     ``nonprofit entities,'';
       (7) in subsection (f), as redesignated by paragraph (2)--
       (A) by striking ``early childhood development and child 
     care programs'' and inserting ``early childhood education and 
     care programs''; and
       (B) by inserting ``or providing services to children 
     determined to be abused or neglected, training for personnel 
     providing services to children referred by entities providing 
     child welfare services or receiving child welfare services,'' 
     after ``English language)''; and
       (8) by adding at the end the following:
       ``(g) The Secretary shall provide, either directly or 
     through grants or other arrangements, funds for training of 
     Head Start personnel in addressing the unique needs of 
     children with disabilities and their families, migrant and 
     seasonal farmworker families, families of children with 
     limited English proficiency, and homeless families.
       ``(h) Funds used under this section shall be used to 
     provide high quality, sustained, and intensive, training and 
     technical assistance in order to have a positive and lasting 
     impact on classroom instruction. Funds shall be used to carry 
     out activities related to 1 or more of the following:
       ``(1) Education and early childhood development.
       ``(2) Child health, nutrition, and safety.
       ``(3) Family and community partnerships.
       ``(4) Other areas that impact the quality or overall 
     effectiveness of Head Start programs.
       ``(i) Funds used under this section for training shall be 
     used for needs identified annually by a grant applicant 
     (including any delegate agency) in its program improvement 
     plan, except that funds shall not be used for long-distance 
     travel expenses for training activities--
       ``(1) available locally or regionally; or
       ``(2) substantially similar to locally or regionally 
     available training activities.
       ``(j)(1) To support local efforts to enhance early language 
     and preliteracy development of children in Head Start 
     programs, and to provide the children with high-quality oral 
     language skills, and environments that are rich in 
     literature, in which to acquire language and preliteracy 
     skills, each Head Start agency, in coordination with the 
     appropriate State office and the relevant State Head Start 
     collaboration office, shall ensure that all of the agency's 
     Head Start teachers receive ongoing training in language and 
     emergent literacy (referred to in this subsection as 
     `literacy training'), including appropriate curricula and 
     assessments to improve instruction and learning. Such 
     training shall include training in methods to promote 
     phonological awareness (including phonemic awareness) and 
     vocabulary development in an age-appropriate and culturally 
     and linguistically appropriate manner.
       ``(2) The literacy training shall be provided at the local 
     level in order--
       ``(A) to be provided, to the extent feasible, in the 
     context of the Head Start programs of the State involved and 
     the children the program involved serves; and
       ``(B) to be tailored to the early childhood literacy 
     background and experience of the teachers involved.
       ``(3) The literacy training shall be culturally and 
     linguistically appropriate and support children's development 
     in their home language.
       ``(4) The literacy training shall include training in how 
     to work with parents to enhance positive language and early 
     literacy development at home.
       ``(5) The literacy training shall include specific methods 
     to best address the needs of children who are limited English 
     proficient.
       ``(6) The literacy training shall include training on how 
     to best address the language and literacy needs of children 
     with disabilities, including training on how to work with 
     specialists in language development.''.

     SEC. 18. STAFF QUALIFICATION AND DEVELOPMENT.

       Section 648A of the Head Start Act (42 U.S.C. 9843a) is 
     amended--
       (1) in subsection (a)--
       (A) by striking paragraph (2) and inserting the following:
       ``(2) Degree requirements.--
       ``(A) In general.--The Secretary shall establish staff 
     qualification goals to ensure that--
       ``(i) not later than September 30, 2012, all Head Start 
     teachers nationwide in center-based programs have at least--

       ``(I)(aa) an associate degree (or equivalent coursework) 
     relating to early childhood; or
       ``(bb) an associate degree in a related educational area 
     and, to the extent practicable, coursework relating to early 
     childhood; and
       ``(II) demonstrated teaching competencies, as determined by 
     the program director involved (including, at a minimum, an 
     appropriate level of literacy, a demonstrated capacity to be 
     highly engaged with children,

[[Page 16458]]

     and a demonstrated ability to effectively implement an early 
     childhood curriculum);

       ``(ii) not later than September 30, 2010, all Head Start 
     curriculum specialists and education coordinators nationwide 
     in center-based programs have--

       ``(I) the capacity to offer assistance to other teachers in 
     the implementation and adaptation of curricula to the group 
     and individual needs of a class; and
       ``(II)(aa) a baccalaureate or advanced degree relating to 
     early childhood; or
       ``(bb) a baccalaureate or advanced degree and coursework 
     equivalent to a major relating to early childhood;

       ``(iii) not later than September 30, 2010, all Head Start 
     teaching assistants nationwide in center-based programs 
     have--

       ``(I) at least a child development associate credential;
       ``(II) enrolled in a program leading to an associate or 
     baccalaureate degree; or
       ``(III) enrolled in a child development associate 
     credential program to be completed within 2 years; and

       ``(iv) not later than September 30, 2013, 50 percent of all 
     Head Start teachers in center-based programs in each State 
     (and geographic region for Indian Head Start programs and for 
     migrant and seasonal Head Start programs) have a 
     baccalaureate degree relating to early childhood (or a 
     related educational area), and demonstrated teaching 
     competencies, as determined by the program director involved 
     (including, at a minimum, an appropriate level of literacy, a 
     demonstrated capacity to be highly engaged with children, and 
     a demonstrated ability to effectively implement an early 
     childhood curriculum).
       ``(B) Teacher in-service requirement.--Each Head Start 
     teacher shall attend not less than 15 clock hours of 
     professional development per year. Such professional 
     development shall be high quality, sustained, intensive, and 
     classroom-focused in order to have a positive and lasting 
     impact on classroom instruction and the teacher's performance 
     in the classroom, and regularly evaluated for effectiveness.
       ``(C) Progress.--
       ``(i) Report.--The Secretary shall--

       ``(I) require Head Start agencies to--

       ``(aa) describe continuing progress each year toward 
     achieving the goals described in subparagraph (A);
       ``(bb) submit to the Secretary a report indicating the 
     number and percentage of classroom instructors in center-
     based programs with child development associate credentials 
     or associate, baccalaureate, or advanced degrees; and

       ``(II) compile and submit a summary of all program reports 
     described in subclause (I)(bb) to the Committee on Education 
     and Labor of the House of Representatives and the Committee 
     on Health, Education, Labor, and Pensions of the Senate.

       ``(ii) Demonstrate progress.--A Head Start agency may 
     demonstrate that progress by partnering with institutions of 
     higher education or other programs that recruit, train, 
     place, and support college students to deliver an innovative 
     program of early childhood education and care to preschool 
     children.
       ``(D) Service requirements.--The Secretary shall establish 
     requirements to ensure that, in order to enable Head Start 
     agencies to comply with the requirements of subparagraph (A), 
     individuals who receive financial assistance under this 
     subchapter to pursue a degree or credential described in 
     subparagraph (A) shall--
       ``(i) teach or work in a Head Start program for a minimum 
     of 3 years after receiving the degree; or
       ``(ii) repay the total or a prorated amount of the 
     financial assistance received based on the length of service 
     completed after receiving the degree.''; and
       (B) in paragraph (3), by striking ``(i) or (ii)'' and 
     inserting ``(i) or (iv)'';
       (2) in subsection (c)--
       (A) in paragraph (2), by striking ``and'' at the end;
       (B) in paragraph (3), by striking the period and inserting 
     ``; and''; and
       (C) by adding at the end the following:
       ``(4) promote the use of appropriate strategies to meet the 
     needs of special populations (including populations of 
     limited English proficient children).'';
       (3) in subsection (d)(3)(C) by inserting ``, including a 
     center,'' after ``any agency''; and
       (4) by adding at the end the following:
       ``(f) Professional Development Plans.--Every Head Start 
     agency and center shall create, in consultation with 
     employees of the agency or center (including family service 
     workers), a professional development plan for employees who 
     provide direct services to children, including a plan for 
     classroom teachers, curriculum specialists, and education 
     coordinators, and teaching assistants to meet the 
     requirements set forth in subsection (a).
       ``(g) Construction.--In this section, a reference to a Head 
     Start agency, or its program, services, facility or 
     personnel, shall not be considered to be a reference to an 
     Early Head Start agency, or its program, services, facility 
     or personnel. For purposes of this section, a teacher who is 
     providing services, in a migrant or seasonal Head Start 
     program, in a classroom for children under age 3, shall be 
     considered to be a teacher in an Early Head Start program, as 
     described in section 645A.''.

     SEC. 19. TRIBAL COLLEGES AND UNIVERSITIES HEAD START 
                   PARTNERSHIP.

       The Head Start Act (42 U.S.C. 9831 et seq.) is amended by 
     inserting after section 648A the following:

     ``SEC. 648B. TRIBAL COLLEGE OR UNIVERSITY HEAD START 
                   PARTNERSHIP PROGRAM.

       ``(a) Purpose.--The purpose of this section is to promote 
     social competencies and school readiness in Indian children.
       ``(b) Tribal College or University Head Start Partnership 
     Program.--
       ``(1) Grants.--The Secretary is authorized to award grants, 
     for periods of not less than 5 years, to Tribal Colleges and 
     Universities to--
       ``(A) implement education programs that include education 
     concerning tribal culture and language and increase the 
     number of associate, baccalaureate, and advanced degrees in 
     early childhood education and related fields that are earned 
     by Indian Head Start agency staff members, parents of 
     children served by such an agency, and members of the tribal 
     community involved;
       ``(B) develop and implement the programs under subparagraph 
     (A) in technology-mediated formats, including providing the 
     programs through such means as distance learning and use of 
     advanced technology, as appropriate; and
       ``(C) provide technology literacy programs for Indian Head 
     Start agency staff members and children and families of 
     children served by such an agency.
       ``(2) Staffing.--The Secretary shall ensure that the 
     American Indian Programs Branch of the Head Start Bureau of 
     the Department of Health and Human Services shall have 
     staffing sufficient to administer the programs under this 
     section and to provide appropriate technical assistance to 
     Tribal Colleges and Universities receiving grants under this 
     section.
       ``(c) Application.--Each Tribal College or University 
     desiring a grant under this section shall submit an 
     application to the Secretary, at such time, in such manner, 
     and containing such information as the Secretary may require, 
     including a certification that the Tribal College or 
     University has established a partnership with 1 or more 
     Indian Head Start agencies for the purpose of conducting the 
     activities described in subsection (b).
       ``(d) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section, 
     $10,000,000 for fiscal year 2008 and such sums as may be 
     necessary for each of fiscal years 2009 through 2012.
       ``(e) Definitions.--In this section:
       ``(1) Institution of higher education.--The term 
     `institution of higher education' has the meaning given such 
     term in section 101(a) of the Higher Education Act of 1965 
     (20 U.S.C. 1001(a)).
       ``(2) Tribal college or university.--The term `Tribal 
     College or University'--
       ``(A) has the meaning given such term in section 316 of the 
     Higher Education Act of 1965 (20 U.S.C. 1059c); and
       ``(B) means an institution determined to be accredited or a 
     candidate for accreditation by a nationally recognized 
     accrediting agency or association.''.

     SEC. 20. RESEARCH, DEMONSTRATIONS, AND EVALUATION.

       Section 649 of the Head Start Act (42 U.S.C. 9844) is 
     amended--
       (1) in subsection (a)(1)(B), by inserting ``, children 
     determined to be abused or neglected, homeless children, and 
     children in foster care'' after ``children with 
     disabilities'';
       (2) in subsection (d)--
       (A) by redesignating paragraphs (5), (6), (7), (8), (9), 
     and (10), as paragraphs (6), (8), (9), (10), (11), and (12);
       (B) by inserting after paragraph (4) the following:
       ``(5)(A) identify successful strategies that promote good 
     oral health and provide effective linkages to quality dental 
     services through pediatric dental referral networks, for 
     infants and toddlers participating in Early Head Start 
     programs and children participating in other Head Start 
     programs; and
       ``(B) identify successful strategies that promote good 
     vision health through vision screenings for such infants, 
     toddlers, and children, and referrals for appropriate 
     followup care for those identified as having a vision 
     problem;'';
       (C) in paragraph (6), as redesignated by subparagraph (A), 
     by striking ``child care, early childhood education, or child 
     development services'' and inserting ``early childhood 
     education and care services'';
       (D) by inserting after that paragraph (6) the following:
       ``(7)(A) contribute to understanding the impact of services 
     related to children with disabilities, delivered in Head 
     Start classrooms, on both children with disabilities and 
     typically-developing children; and
       ``(B) disseminate promising practices for increasing the 
     availability and quality of such services;'';
       (E) in paragraph (10), as redesignated by subparagraph (A), 
     by adding ``and'' after the semicolon;
       (F) by striking paragraph (11), as redesignated by 
     subparagraph (A);

[[Page 16459]]

       (G) by redesignating paragraph (12), as redesignated by 
     subparagraph (A), as paragraph (11); and
       (H) by striking the last sentence;
       (3) in subsection (e)(3), by striking ``child care, early 
     childhood education, or child development services'' and 
     inserting ``early childhood education and care services'';
       (4) in subsection (g)--
       (A) in paragraph (1)(A)--
       (i) in the matter preceding clause (i), by striking 
     ``education, and early childhood programs'' and inserting 
     ``and early childhood education and care programs'';
       (ii) by striking clause (i); and
       (iii) by redesignating clauses (ii) and (iii) as clauses 
     (i) and (ii), respectively;
       (B) in paragraph (2), by striking ``, and research, 
     education, and early childhood programs'' and inserting ``and 
     research, and early childhood education and care programs'';
       (C) in paragraph (5)(D)--
       (i) in clause (i), by striking ``early childhood programs'' 
     and inserting ``early childhood education and care 
     programs''; and
       (ii) in clause (ii), by striking ``early childhood 
     program'' and inserting ``early childhood education and care 
     program''; and
       (D) in paragraph (7)(C)--
       (i) in clause (i), by striking ``2003'' and inserting 
     ``2008''; and
       (ii) in clause (ii)--

       (I) by striking ``Education and the Workforce'' and 
     inserting ``Education and Labor''; and
       (II) by striking ``Labor and Human Resources'' and 
     inserting ``Health, Education, Labor, and Pensions''; and

       (5) by striking subsection (h) and inserting the following:
       ``(h) Review of Assessments.--
       ``(1) Application of study.--When the study on 
     Developmental Outcomes and Assessments for Young Children by 
     the National Academy of Sciences is made available to the 
     Secretary, the Secretary shall--
       ``(A) incorporate the results of the study, as appropriate 
     and in accordance with paragraphs (2) and (3), into each 
     assessment used in the Head Start programs; and
       ``(B) use the results of the study to develop, inform, and 
     revise the standards and measures described in section 641A.
       ``(2) Development and refinement.--In developing and 
     refining any assessment used in the Head Start programs, the 
     Secretary shall--
       ``(A) receive recommendations from the Panel on 
     Developmental Outcomes and Assessments for Young Children of 
     the National Academy of Sciences; and
       ``(B) with respect to the development or refinement of such 
     assessment, ensure--
       ``(i) consistency with relevant, nationally recognized 
     professional and technical standards;
       ``(ii) validity and reliability for all purposes for which 
     assessments under this subchapter are designed and used;
       ``(iii) developmental and linguistic appropriateness of 
     such assessments for children assessed, including children 
     who are limited English proficient; and
       ``(iv) that the results can be used to improve the quality 
     of, accountability of, and training and technical assistance 
     in, Head Start programs.
       ``(3) Additional requirements.--The Secretary, in carrying 
     out the process described under paragraph (2), shall ensure 
     that--
       ``(A) staff administering any assessments under this 
     subchapter have received appropriate training to administer 
     such assessments;
       ``(B) appropriate accommodations for children with 
     disabilities and children who are limited English proficient 
     are made;
       ``(C) the English and Spanish (and any other language, as 
     appropriate) forms of such assessments are valid and 
     reliable; and
       ``(D) such assessments are not used to exclude children 
     from Head Start programs.
       ``(4) Suspended implementation of national reporting 
     system.--The Secretary shall--
       ``(A) suspend implementation and terminate further 
     development and use of the National Reporting System; and
       ``(B) incorporate, as appropriate, recommendations under 
     paragraph (2)(A) into any assessment used in the Head Start 
     programs.
       ``(i) Special Rule.--The use of assessment items and data 
     on any assessment authorized under this subchapter by any 
     agent of the Federal Government to rank or compare individual 
     children or teachers, or to provide rewards or sanctions for 
     individual children or teachers is prohibited. The Secretary 
     shall not use the results of a single assessment as the sole 
     method for assessing program effectiveness or making grantee 
     funding determinations at the national, regional, or local 
     level under this subchapter.
       ``(j) Services to Limited English Proficient Children and 
     Families.--
       ``(1) Study.--The Secretary shall conduct a study on the 
     status of limited English proficient children and their 
     families in Head Start (including Early Head Start) programs.
       ``(2) Report.--The Secretary shall prepare and submit to 
     Congress, not later than September 2011, a report containing 
     the results of the study, including information on--
       ``(A) the demographics of limited English proficient 
     children from birth through age 5, including the number of 
     such children receiving Head Start (including Early Head 
     Start) services and the geographic distribution of children 
     described in this subparagraph;
       ``(B) the nature of Head Start (including Early Head Start) 
     services provided to limited English proficient children and 
     their families, including the types, content, duration, 
     intensity, and costs of family services, language assistance, 
     and educational services;
       ``(C) procedures in Head Start programs for the assessment 
     of language needs and the transition of limited English 
     proficient children to kindergarten, including the extent to 
     which Head Start programs meet the requirements of section 
     642A for limited English proficient children;
       ``(D) the qualifications of and training provided to Head 
     Start (including Early Head Start) teachers serving limited 
     English proficient children and their families;
       ``(E) the rate of progress made by limited English 
     proficient children and their families in Head Start 
     (including Early Head Start) programs, including--
       ``(i) the rate of progress of the limited English 
     proficient children toward meeting the additional educational 
     standards described in section 641A(a)(1)(B)(ii) while 
     enrolled in Head Start programs, measured between 1990 and 
     2006;
       ``(ii) the correlation between the progress described in 
     this subparagraph and the type of instruction and educational 
     program provided to the limited English proficient children; 
     and
       ``(iii) the correlation between the progress described in 
     this subparagraph and the health and family services provided 
     by Head Start programs to limited English proficient children 
     and their families; and
       ``(F) the extent to which Head Start programs make use of 
     funds under section 640(a)(3) to improve the quality of Head 
     Start services provided to limited English proficient 
     children and their families.
       ``(k) Research and Evaluation Activities Relevant to 
     Diverse Communities.--For purposes of conducting the study in 
     described in subsection (j), activities described in section 
     640(l)(5)(A), and other research and evaluation activities 
     relevant to limited English proficient children and their 
     families, migrant and seasonal farmworker families, and other 
     families from diverse populations served by Head Start 
     programs, the Secretary shall award, on a competitive basis, 
     funds from amounts made available under section 639(b) to 1 
     or more organizations with a demonstrated capacity for 
     serving and studying the populations involved.''.

     SEC. 21. REPORTS.

       Section 650 of the Head Start Act (42 U.S.C. 9846) is 
     amended--
       (1) in subsection (a)--
       (A) in the matter preceding paragraph (1)--
       (i) by striking ``Education and the Workforce'' and 
     inserting ``Education and Labor'';
       (ii) by striking ``Labor and Human Resources'' and 
     inserting ``Health, Education, Labor, and Pensions''; and
       (iii) by striking ``(including disabled and non-English 
     language background children)'' and inserting ``(including 
     children with disabilities, limited English proficient 
     children, and children participating in Indian Head Start 
     programs and migrant and seasonal Head Start programs)'';
       (B) in paragraph (8), by inserting ``homelessness, children 
     in foster care,'' after ``ethnic background,'';
       (C) in paragraph (12), by inserting ``vision care,'' after 
     ``dental care,'';
       (D) in paragraph (14)--
       (i) by striking ``Alaskan Natives'' and inserting ``Alaska 
     Natives''; and
       (ii) by striking ``migrant and'' and inserting ``migrant 
     or''; and
       (E) in the flush matter at the end--
       (i) by striking ``Education and the Workforce'' and 
     inserting ``Education and Labor''; and
       (ii) by striking ``Labor and Human Resources'' and 
     inserting ``Health, Education, Labor, and Pensions''; and
       (2) in subsection (b)--
       (A) by striking ``Education and the Workforce'' and 
     inserting ``Education and Labor'';
       (B) by striking ``Labor and Human Resources'' and inserting 
     ``Health, Education, Labor, and Pensions''; and
       (C) by striking ``Native Alaskan'' and inserting ``Alaska 
     Native''.

     SEC. 22. COMPARABILITY OF WAGES.

       Section 653 of the Head Start Act (42 U.S.C. 9848) is 
     amended--
       (1) by striking ``The Secretary shall take'' and inserting 
     ``(a) The Secretary shall take''; and
       (2) by adding at the end the following:
       ``(b) No Federal funds shall be used to pay the 
     compensation of an individual employed by a Head Start agency 
     in carrying out programs under this subchapter, either as 
     direct or indirect costs or any proration of such costs, in 
     an amount in excess of an amount based on the rate payable 
     for level II of the Executive Schedule under section 5313 of 
     title 5, United States Code.''.

     SEC. 23. LIMITATION WITH RESPECT TO CERTAIN UNLAWFUL 
                   ACTIVITIES.

       Section 655 of the Head Start Act (42 U.S.C. 9850) is 
     amended by inserting ``or in'' after ``assigned by''.

[[Page 16460]]



     SEC. 24. POLITICAL ACTIVITIES.

       Section 656 of the Head Start Act (42 U.S.C. 9851) is 
     amended--
       (1) by striking all that precedes ``chapter 15'' and 
     inserting the following:

     ``SEC. 656. POLITICAL ACTIVITIES.

       ``(a) State or Local Agency.--For purposes of''; and
       (2) by striking subsection (b) and inserting the following:
       ``(b) Restrictions.--
       ``(1) In general.--A program assisted under this 
     subchapter, and any individual employed by, or assigned to or 
     in, a program assisted under this subchapter (during the 
     hours in which such individual is working on behalf of such 
     program), shall not engage in--
       ``(A) any partisan or nonpartisan political activity or any 
     other political activity associated with a candidate, or 
     contending faction or group, in an election for public or 
     party office; or
       ``(B) any activity to provide voters or prospective voters 
     with transportation to the polls or similar assistance in 
     connection with any such election.
       ``(2) Rules and regulations.--The Secretary, after 
     consultation with the Director of the Office of Personnel 
     Management, may issue rules and regulations to provide for 
     the enforcement of this section, which may include provisions 
     for summary suspension of assistance or other action 
     necessary to permit enforcement on an emergency basis.''.

     SEC. 25. PARENTAL CONSENT REQUIREMENT FOR HEALTH SERVICES.

       The Head Start Act (42 U.S.C. 9831 et seq.) is amended by 
     adding at the end the following new section:

     ``SEC. 657A. PARENTAL CONSENT REQUIREMENT FOR NONEMERGENCY 
                   INTRUSIVE PHYSICAL EXAMINATIONS.

       ``(a) Definition.--The term `nonemergency intrusive 
     physical examination' means, with respect to a child, a 
     physical examination that--
       ``(1) is not immediately necessary to protect the health or 
     safety of the child involved or the health or safety of 
     another individual; and
       ``(2) requires incision or is otherwise invasive, or 
     involves exposure of private body parts.
       ``(b) Requirement.--A Head Start agency shall obtain 
     written parental consent before administration of any 
     nonemergency intrusive physical examination of a child in 
     connection with participation in a program under this 
     subchapter.
       ``(c) Rule of Construction.--Nothing in this section shall 
     be construed to prohibit agencies from using established 
     methods, for handling cases of suspected or known child abuse 
     and neglect, that are in compliance with applicable Federal, 
     State, or tribal law.''.

     SEC. 26. CONFORMING AMENDMENT.

       Section 2501(c)(1)(C) of the Children's Health Act of 2000 
     (42 U.S.C. 247b-1 note) is amended by striking ``9840a(h)'' 
     and inserting ``9840a''.

     SEC. 27. COMPLIANCE WITH THE IMPROPER PAYMENTS INFORMATION 
                   ACT OF 2002.

       (a) Definitions.--In this section, the term--
       (1) ``appropriate committees'' means--
       (A) the Committee on Health, Education, Labor, and Pensions 
     of the Senate; and
       (B) the Committee on Education and Labor of the House of 
     Representatives; and
       (2) ``improper payment'' has the meaning given that term 
     under section 2(d)(2) of the Improper Payments Information 
     Act of 2002 (31 U.S.C. 3321 note).
       (b) Requirement for Compliance Certification and Report.--
     The Secretary of Health and Human Services shall submit a 
     report to the appropriate committees that--
       (1) contains a certification that the Department of Health 
     and Human Services has, for each program and activity of the 
     Administration for Children and Families, performed and 
     completed a risk assessment to determine programs and 
     activities that are at significant risk of making improper 
     payments; and
       (2) describes the actions to be taken to reduce improper 
     payments for the programs and activities determined to be at 
     significant risk of making improper payments.
                                 ______
                                 
  SA 1715. Mr. CRAIG submitted an amendment intended to be proposed to 
amendment SA 1502 proposed by Mr. Reid to the bill H.R. 6, to reduce 
our Nation's dependency on foreign oil by investing in clean, 
renewable, and alternative energy resources, promoting new emerging 
energy technologies, developing greater efficiency, and creating a 
Strategic Energy Efficiency and Renewables Reserve to invest in 
alternative energy, and for other purposes; which was ordered to lie on 
the table; as follows:

       On page 221, line 21, strike ``and''.
       On page 221, between lines 21 and 22, insert the following:
       (iv) wood products that are certified under all nationally 
     recognized sustainable forest certification programs, as 
     determined by the Director, that are carried out by a third 
     party; and
       On page 221, line 22, strike ``(iv)'' and insert ``(v)''.

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