II 

109TH CONGRESS 

2D SESSION S. 2398 

To establish an Advanced Research Projects Administration-Energy to initiate 

high risk, innovative energy research to improve the energy security 

of the United States, to extend certain energy tax incentives, and for 

other purposes. 

IN THE SENATE OF THE UNITED STATES 

MARCH 9, 2006 

Mr. BAUCUS introduced the following bill; which was read twice and referred 

to the Committee on Finance 

A BILL 

To establish an Advanced Research Projects AdministrationEnergy to initiate high risk, innovative energy research 

to improve the energy security of the United States, 

to extend certain energy tax incentives, and for other 

purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Energy Competitiveness Act of 2006’’. 

6 (b) TABLE OF CONTENTS.—The table of contents of 

7 this Act is as follows: 


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Sec. 1. Short title; table of contents. 

TITLE I—ADVANCED RESEARCH PROJECTS ADMINISTRATIONENERGY 

Sec. 101. Advanced Research Projects Administration-Energy. 

TITLE II—ENERGY TAX INCENTIVES 

Subtitle A—Energy Infrastructure Tax Incentives 

Sec. 201. Extension of credit for electricity produced from certain renewable resources. 

Sec. 202. Extension and expansion of credit to holders of clean renewable energy bonds. 

Sec. 203. Extension and expansion of qualifying advanced coal project credit. 

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

Subtitle B—Domestic Fossil Fuel Security 

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

Subtitle C—Conservation and Energy Efficiency Provisions 

Sec. 221. Extension of energy efficient commercial buildings deduction. 

Sec. 222. Extension of new energy efficient home credit. 

Sec. 223. Extension of residential energy efficient property credit. 

Sec. 224. Extension of credit for business installation of qualified fuel cells and 

stationary microturbine power plants. 

Sec. 225. Extension of business solar investment tax credit. 

Subtitle D—Alternative Fuels and Vehicles Incentives 

Sec. 231. Extension of excise tax provisions and income tax credit for biodiesel 

and alternative fuels. 

Sec. 232. Exception from depreciation limitation for certain alternative and 

electric passenger automobiles. 

1 TITLE I—ADVANCED RESEARCH 

2 PROJECTS ADMINISTRATION3 ENERGY 

4 SEC. 101. ADVANCED RESEARCH PROJECTS ADMINISTRA5 TION-ENERGY. 

6 (a) ESTABLISHMENT.—There is established the Ad7 vanced Research Projects Administration-Energy (re8 ferred to in this section as ‘‘ARPA–E’’). 


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1 (b) GOALS.—The goals of ARPA–E are to reduce the 

2 quantity of energy the United States imports from foreign 

3 sources and to improve the competitiveness of the United 

4 States economy by— 

5 (1) promoting revolutionary changes in the crit6 ical technologies that would promote energy competi7 tiveness; 

8 (2) turning cutting-edge science and engineer9 ing into technologies for energy and environmental 

10 application; and 

11 (3) accelerating innovation in energy and the 

12 environment for both traditional and alternative en13 ergy sources and in energy efficiency mechanisms 

14 to— 

15 (A) reduce energy use; 

16 (B) decrease the reliance of the United 

17 States on foreign energy sources; and 

18 (C) improve energy competitiveness. 

19 (c) DIRECTOR.— 

20 (1) IN GENERAL.—ARPA–E shall be headed by 

21 a Director (referred to in this section as the ‘‘Direc22 tor’’) appointed by the President. 

23 (2) POSITIONS AT LEVEL V.—Section 5316 of 

24 title 5, United States Code, is amended by adding 

25 at the end the following: 


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1 ‘‘Director, Advanced Research Projects Admin2 istration-Energy.’’. 

3 (d) DUTIES.— 

4 (1) IN GENERAL.—In carrying out this section, 

5 the Director shall award competitive grants, cooper6 ative agreements, or contracts to institutions of 

7 higher education, companies, or consortia of such 

8 entities (which may include federally funded re9 search and development centers) to achieve the goal 

10 described in subsection (b) through acceleration of— 

11 (A) energy-related research; 

12 (B) development of resultant techniques, 

13 processes, and technologies, and related testing 

14 and evaluation; and 

15 (C) demonstration and commercial applica16 tion of the most promising technologies and re17 search applications. 

18 (2) SMALL-BUSINESS CONCERNS.—The Direc19 tor shall carry out programs established under this 

20 section, to the maximum extent practicable, in a 

21 manner that is similar to the Small Business Inno22 vation Research Program established under section 

23 9 of the Small Business Act (15 U.S.C. 638) to en24 sure that small-business concerns are fully able to 

25 participate in the programs. 


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1 (e) PERSONNEL.— 

2 (1) PROGRAM MANAGERS.— 

3 (A) APPOINTMENT.—The Director shall 

4 appoint employees to serve as program man5 agers for each of the programs that are estab6 lished to carry out the duties of ARPA–E under 

7 this section. 

8 (B) DUTIES.—Program managers shall be 

9 responsible for— 

10 (i) establishing research and develop11 ment goals for the program, as well as 

12 publicizing goals of the program to the 

13 public and private sectors; 

14 (ii) soliciting applications for specific 

15 areas of particular promise, especially 

16 areas for which the private sector cannot 

17 or will not provide funding; 

18 (iii) selecting research projects for 

19 support under the program from among 

20 applications submitted to ARPA–E, based 

21 on— 

22 (I) the scientific and technical 

23 merit of the proposed projects; 


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1 (II) the demonstrated capabilities 

2 of the applicants to successfully carry 

3 out the proposed research project; and 

4 (III) such other criteria as are 

5 established by the Director; and 

6 (iv) monitoring the progress of 

7 projects supported under the program. 

8 (2) OTHER PERSONNEL.— 

9 (A) IN GENERAL.—Subject to subpara10 graph (B), the Director shall appoint such em11 ployees as are necessary to carry out the duties 

12 of ARPA–E under this section. 

13 (B) LIMITATIONS.—The Director shall ap14 point not more than 250 employees to carry out 

15 the duties of ARPA–E under this section, in16 cluding not less than 180 technical staff, of 

17 which— 

18 (i) not less than 20 staff shall be sen19 ior technical managers (including program 

20 managers designated under paragraph 

21 (1)); and 

22 (ii) not less than 80 staff shall be 

23 technical program managers. 

24 (3) EXPERIMENTAL PERSONNEL AUTHORITY.— 

25 In appointing personnel for ARPA–E, the Director 


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1 shall have the hiring and management authorities 

2 described in section 1101 of the Strom Thurmond 

3 National Defense Authorization Act for Fiscal Year 

4 1999 (Public Law 105–261; 5 U.S.C. 3104 note). 

5 (4) MAXIMUM DURATION OF EMPLOYMENT.— 

6 (A) PROGRAM MANAGERS AND SENIOR

7 TECHNICAL MANAGERS.— 

8 (i) IN GENERAL.—Subject to clause 

9 (ii), a program manager and a senior tech10 nical manager appointed under this sub11 section shall serve for a term not to exceed 

12 4 years after the date of appointment. 

13 (ii) EXTENSIONS.—The Director may 

14 extend the term of employment of a pro15 gram manager or a senior technical man16 ager appointed under this subsection for 

17 not more than 4 years through 1 or more 

18 2-year terms. 

19 (B) TECHNICAL PROGRAM MANAGERS.—A 

20 technical program manager appointed under 

21 this subsection shall serve for a term not to ex22 ceed 6 years after the date of appointment. 

23 (5) LOCATION.—The office of an officer or em24 ployee of ARPA–E shall not be located in the head25 quarters of the Department of Energy. 


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1 (f) TRANSACTIONS OTHER THAN CONTRACTS AND

2 GRANTS.— 

3 (1) IN GENERAL.—To carry out projects 

4 through ARPA–E, the Director may enter into 

5 transactions (other than contracts, cooperative 

6 agreements, and grants) to carry out advanced re7 search projects under this section under similar 

8 terms and conditions as the authority is exercised 

9 under section 646(g) of the Department of Energy 

10 Organization Act (42 U.S.C. 7256(g)). 

11 (2) PEER REVIEW.—Peer review shall not be 

12 required for 75 percent of the research projects car13 ried out by the Director under this section. 

14 (g) PRIZES FOR ADVANCED TECHNOLOGY ACHIEVE15 MENTS.—The Director may carry out a program to award 

16 cash prizes in recognition of outstanding achievements in 

17 basic, advanced, and applied research, technology develop18 ment, and prototype development that have the potential 

19 for application to the performance of the mission of 

20 ARPA–E under similar terms and conditions as the au21 thority is exercised under section 1008 of the Energy Pol22 icy Act of 2005 (42 U.S.C. 16396). 

23 (h) COORDINATION OF ACTIVITIES.—The Director— 


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1 (1) shall ensure that the activities of ARPA–E 

2 are coordinated with activities of Department of En3 ergy offices and outside agencies; and 

4 (2) may carry out projects jointly with other 

5 agencies. 

6 (i) REPORT.—Not later than September 30, 2007, 

7 the Director shall submit to Congress a report on the ac8 tivities of ARPA–E under this section, including a rec9 ommendation on whether ARPA–E needs an energy re10 search laboratory. 

11 (j) AUTHORIZATION OF APPROPRIATIONS.—There 

12 are authorized to be appropriated to carry out this sec13 tion— 

14 (1) $300,000,000 for fiscal year 2007; 

15 (2) $600,000,000 for fiscal year 2008; 

16 (3) $1,100,000,000 for fiscal year 2009; 

17 (4) $1,500,000,000 for fiscal year 2010; and 

18 (5) $2,000,000,000 for fiscal year 2011. 


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1 TITLE II—ENERGY TAX 

2 INCENTIVES 

3 Subtitle A—Energy Infrastructure 

4 Tax Incentives 

5 SEC. 201. EXTENSION OF CREDIT FOR ELECTRICITY PRO6 DUCED FROM CERTAIN RENEWABLE RE7 SOURCES. 

8 Section 45(d) of the Internal Revenue Code of 1986 

9 (relating to qualified facilities) is amended by striking 

10 ‘‘2008’’ each place it appears and inserting ‘‘2011’’. 

11 SEC. 202. EXTENSION AND EXPANSION OF CREDIT TO 

12 HOLDERS OF CLEAN RENEWABLE ENERGY 

13 BONDS. 

14 (a) IN GENERAL.—Section 54(m) of the Internal 

15 Revenue Code of 1986 (relating to termination) is amend16 ed by striking ‘‘2007’’ and inserting ‘‘2010’’. 

17 (b) ANNUAL VOLUME CAP FOR BONDS ISSUED DUR18 ING EXTENSION PERIOD.—Paragraph (1) of section 54(f) 

19 of the Internal Revenue Code of 1986 (relating to limita20 tion on amount of bonds designated) is amended to read 

21 as follows: 

22 ‘‘(1) NATIONAL LIMITATION.— 

23 ‘‘(A) INITIAL NATIONAL LIMITATION.— 

24 With respect to bonds issued after December 

25 31, 2005, and before January 1, 2008, there is 


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1 a national clean renewable energy bond limita2 tion of $800,000,000. 

3 ‘‘(B) ANNUAL NATIONAL LIMITATION.— 

4 With respect to bonds issued after December 

5 31, 2007, and before January 1, 2011, there is 

6 a national clean renewable energy bond limita7 tion for each calendar year of $800,000,000.’’. 

8 (c) EFFECTIVE DATE.—The amendments made by 

9 this section shall apply to bonds issued after the date of 

10 the enactment of this Act. 

11 SEC. 203. EXTENSION AND EXPANSION OF QUALIFYING AD12 VANCED COAL PROJECT CREDIT. 

13 (a) IN GENERAL.—Section 48A(d)(3)(A) of the In14 ternal Revenue Code of 1986 (relating to aggregate cred15 its) is amended by striking ‘‘$1,300,000,000’’ and insert16 ing ‘‘$1,800,000,000’’. 

17 (b) AUTHORIZATION OF ADDITIONAL INTEGRATED

18 GASIFICATION COMBINED CYCLE PROJECTS.—Subpara19 graph (B) of section 48A(d)(3) of te Internal Revenue 

20 Code of 1986 (relating to aggregate credits) is amended 

21 to read as follows: 

22 ‘‘(B) PARTICULAR PROJECTS.—Of the dol23 lar amount in subparagraph (A), the Secretary 

24 is authorized to certify— 


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1 ‘‘(i) $800,000,000 for integrated gas2 ification combined cycle projects the appli3 cation for which is submitted during the 

4 period described in paragraph (2)(A)(i), 

5 ‘‘(ii) $500,000,000 for projects which 

6 use other advanced coal-based generation 

7 technologies the application for which is 

8 submitted during the period described in 

9 paragraph (2)(A)(i), and 

10 ‘‘(iii) $500,000,000 for integrated 

11 gasification combined cycle projects the ap12 plication for which is submitted during the 

13 period described in paragraph (2)(A)(ii).’’. 

14 (c) APPLICATION PERIOD FOR ADDITIONAL

15 PROJECTS.—Subparagraph (A) of section 48A(d)(2) of 

16 the Internal Revenue Code of 1986 (relating to certifi17 cation) is amended to read as follows: 

18 ‘‘(A) APPLICATION PERIOD.—Each appli19 cant for certification under this paragraph shall 

20 submit an application meeting the requirements 

21 of subparagraph (B). An applicant may only 

22 submit an application— 

23 ‘‘(i) for an allocation from the dollar 

24 amount specified in clause (i) or (ii) of 

25 paragraph (3)(A) during the 3-year period 


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1 beginning on the date the Secretary estab2 lishes the program under paragraph (1), 

3 and 

4 ‘‘(ii) for an allocation from the dollar 

5 amount specified in paragraph (3)(A)(iii) 

6 during the 3-year period beginning at the 

7 termination of the period described in 

8 clause (i).’’. 

9 (d) EFFECTIVE DATE.—The amendments made by 

10 this section shall take effect as if included in the amend11 ments made by section 1307 of the Energy Policy Act of 

12 2005. 

13 SEC. 204. EXTENSION AND EXPANSION OF QUALIFYING 

14 GASIFICATION PROJECT CREDIT. 

15 (a) IN GENERAL.—Section 48B(d)(1) of the Internal 

16 Revenue Code of 1986 (relating to qualifying gasification 

17 project program) is amended by striking ‘‘$350,000,000’’ 

18 and inserting ‘‘$850,000,000’’. 

19 (b) EFFECTIVE DATE.—The amendment made by 

20 this section shall take effect as if included in the amend21 ments made by section 1307 of the Energy Policy Act of 

22 2005. 


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1 Subtitle B—Domestic Fossil Fuel 

2 Security 

3 SEC. 211. EXTENSION OF ELECTION TO EXPENSE CERTAIN 

4 REFINERIES. 

5 (a) IN GENERAL.—Section 179C(c)(1) of the Inter6 nal Revenue Code of 1986 (defining qualified refinery 

7 property) is amended— 

8 (1) by striking ‘‘and before January 1, 2012’’ 

9 in subparagraph (B) and inserting ‘‘and, in the case 

10 of any qualified refinery described in subsection 

11 (d)(1), before January 1, 2012’’, and 

12 (2) by inserting ‘‘if described in subsection 

13 (d)(1)’’ after ‘‘of which’’ in subparagraph (F)(i). 

14 (b) CONFORMING AMENDMENT.—Subsection (d) of 

15 section 179C of the Internal Revenue Code of 1986 is 

16 amended to read as follows: 

17 ‘‘(d) QUALIFIED REFINERY.—For purposes of this 

18 section, the term ‘qualified refinery’ means any refinery 

19 located in the United States which is designed to serve 

20 the primary purpose of processing liquid fuel from— 

21 ‘‘(1) crude oil, or 

22 ‘‘(2) qualified fuels (as defined in section 

23 45K(c)).’’. 

24 (c) EFFECTIVE DATE.—The amendments made by 

25 this section shall take effect as if included in the amendVerDate Aug 31 2005 01:20 Mar 10, 2006 Jkt 049200 PO 00000 Frm 00014 Fmt 6652 Sfmt 6201 E:\BILLS\S2398.IS S2398

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1 ment made by section 1323(a) of the Energy Policy Act 

2 of 2005. 

3 Subtitle C—Conservation and 

4 Energy Efficiency Provisions 

5 SEC. 221. EXTENSION OF ENERGY EFFICIENT COMMERCIAL 

6 BUILDINGS DEDUCTION. 

7 Section 179D(h) of the Internal Revenue Code of 

8 1986 (relating to termination) is amended by striking 

9 ‘‘2007’’ and inserting ‘‘2010’’. 

10 SEC. 222. EXTENSION OF NEW ENERGY EFFICIENT HOME 

11 CREDIT. 

12 (a) IN GENERAL.—Subsection (g) of section 45L of 

13 the Internal Revenue Code of 1986 (relating to new energy 

14 efficient home credit) is amended to read as follows: 

15 ‘‘(g) TERMINATION.—This section shall not apply 

16 to— 

17 ‘‘(1) any qualified new energy efficient home 

18 meeting the energy saving requirements of sub19 section (c)(1) acquired after December 31, 2010, 

20 and 

21 ‘‘(2) any qualified new energy efficient home 

22 meeting the energy saving requirements of para23 graph (2) or (3) of subsection (c) acquired after De24 cember 31, 2007.’’. 


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1 (b) EFFECTIVE DATE.—The amendment made by 

2 this section shall take effect as if included in the amend3 ments made by section 1332 of the Energy Policy Act of 

4 2005. 

5 SEC. 223. EXTENSION OF RESIDENTIAL ENERGY EFFICIENT 

6 PROPERTY CREDIT. 

7 Section 25D(g) of the Internal Revenue Code of 1986 

8 (relating to termination) is amended by striking ‘‘2007’’ 

9 and inserting ‘‘2010’’. 

10 SEC. 224. EXTENSION OF CREDIT FOR BUSINESS INSTALLA11 TION OF QUALIFIED FUEL CELLS AND STA12 TIONARY MICROTURBINE POWER PLANTS. 

13 Sections 48(c)(1)(E) and 48(c)(2)(E) of the Internal 

14 Revenue Code of 1986 (relating to termination) are each 

15 amended by striking ‘‘2007’’ and inserting ‘‘2010’’. 

16 SEC. 225. EXTENSION OF BUSINESS SOLAR INVESTMENT 

17 TAX CREDIT. 

18 Sections 48(a)(2)(A)(i)(II) and 48(a)(3)(A)(ii) of the 

19 Internal Revenue Code of 1986 (relating to termination) 

20 are each amended by striking ‘‘2008’’ and inserting 

21 ‘‘2011’’. 


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1 Subtitle D—Alternative Fuels and 

2 Vehicles Incentives 

3 SEC. 231. EXTENSION OF EXCISE TAX PROVISIONS AND IN4 COME TAX CREDIT FOR BIODIESEL AND AL5 TERNATIVE FUELS. 

6 (a) BIODIESEL.—Sections 40A(g), 6426(c)(6), and 

7 6427(e)(5)(B) of the Internal Revenue Code of 1986 are 

8 each amended by striking ‘‘2008’’ and inserting ‘‘2010’’. 

9 (b) ALTERNATIVE FUEL.— 

10 (1) FUELS.—Sections 6426(d)(4) and 

11 6427(e)(5)(C) of the Internal Revenue Code of 1986 

12 are each amended by striking ‘‘September 30, 2009’’ 

13 and inserting ‘‘December 31, 2010’’. 

14 (2) REFUELING PROPERTY.—Section 30C(g) of 

15 such Code is amended by striking ‘‘2009’’ and in16 serting ‘‘2010’’. 

17 (c) EFFECTIVE DATE.—The amendments made by 

18 this section shall take effect on January 1, 2007. 

19 SEC. 232. EXCEPTION FROM DEPRECIATION LIMITATION 

20 FOR CERTAIN ALTERNATIVE AND ELECTRIC 

21 PASSENGER AUTOMOBILES. 

22 (a) IN GENERAL.—Paragraph (1) of section 280F(a) 

23 of the Internal Revenue Code of 1986 (relating to limita24 tion) is amended by adding at the end the following new 

25 subparagraph: 


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1 ‘‘(D) SPECIAL RULE FOR CERTAIN ALTER2 NATIVE MOTOR VEHICLES AND QUALIFIED

3 ELECTRIC VEHICLES.—Subparagraph (A) shall 

4 not apply to any motor vehicle for which a cred5 it is allowable under section 30 or 30B.’’. 

6 (b) CONFORMING AMENDMENT.—Subparagraph (C) 

7 of section 280F(a)(1) of the Internal Revenue Code of 

8 1986 is amended by striking clause (ii) and by redesig9 nating clause (iii) as clause (ii). 

10 (c) EFFECTIVE DATE.—The amendments made by 

11 this section shall apply to property placed in service after 

12 the date of the enactment of this Act. 

Æ 


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