II 

109TH CONGRESS 

2D SESSION S. 2993 

To amend the Internal Revenue Code of 1986 to impose a temporary oil 

profit fee and to use the proceeds of the fee collected to provide a 

Strategic Energy Fund and expand certain energy tax incentives, and 

for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MAY 23, 2006 

Mrs. CLINTON introduced the following bill; which was read twice and referred 

to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to impose 

a temporary oil profit fee and to use the proceeds of 

the fee collected to provide a Strategic Energy Fund 

and expand 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. 

4 This Act may be cited as the ‘‘Strategic Energy Fund 

5 Act of 2006’’. 


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1 TITLE I—STRATEGIC ENERGY 

2 FUND 

3 Subtitle A—Establishment of 

4 Strategic Energy Fund 

5 SEC. 101. STRATEGIC ENERGY FUND. 

6 (a) IN GENERAL.—Subchapter A of chapter 98 of the 

7 Internal Revenue Code of 1986 (relating to trust fund 

8 code) is amended by adding at the end the following new 

9 section: 

10 ‘‘SEC. 9511. STRATEGIC ENERGY FUND. 

11 ‘‘(a) ESTABLISHMENT.—There is established in the 

12 Treasury of the United States a trust fund to be known 

13 as the ‘Strategic Energy Fund’, consisting of such 

14 amounts as may be appropriated or credited to such Fund 

15 as provided in this section or section 9602(b). 

16 ‘‘(b) TRANSFERS TO FUND.— 

17 ‘‘(1) IN GENERAL.—There are hereby appro18 priated to the Strategic Energy Fund amounts 

19 equivalent to the taxes received in the Treasury 

20 under section 5896. 

21 ‘‘(2) LIMITATION.—The aggregate amount ap22 propriated under this subsection shall not exceed— 

23 ‘‘(A) for purposes described in subsection 

24 (c)(1)(A)— 


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1 ‘‘(i) $1,000,000,000 during fiscal year 

2 2007, and 

3 ‘‘(ii) $2,000,000,000 during each of 

4 fiscal years 2008 through 2011, and 

5 ‘‘(B) for purposes described in subsection 

6 (c)(1)(B), $350,000,000 for fiscal years 2007 

7 through 2016. 

8 ‘‘(c) EXPENDITURES.— 

9 ‘‘(1) IN GENERAL.—Amounts in the Strategic 

10 Energy Fund shall be available, without further ap11 propriation, to carry out— 

12 ‘‘(A) the purposes authorized under section 

13 161 of the Strategic Energy Fund Act of 2006; 

14 and 

15 ‘‘(B) projects under section 1510 of the 

16 Energy Policy Act of 2005 (42 U.S.C. 16501) 

17 and section 212 of the Clean Air Act (42 

18 U.S.C. 7546) that have a design capacity to 

19 produce, in the aggregate, 1,000,000,000 gal20 lons of cellulosic biomass, without regard to sec21 tion 1510(l) of the Energy Policy Act of 2005 

22 (42 U.S.C. 16501(l)) . 

23 ‘‘(2) UNEXPENDED FUNDS.—Any funds that 

24 have not been expended by September 30, 2016, 


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1 shall be credited back to the general fund as mis2 cellaneous tax receipts.’’. 

3 (b) CLERICAL AMENDMENT.—The table of sections 

4 for such subchapter is amended by adding at the end the 

5 following new item: 

‘‘Sec. 9511. Strategic Energy Fund.’’. 

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

7 this section shall take effect on the date of the enactment 

8 of this Act. 

9 Subtitle B—Incentives to 

10 Accelerate Biofuels Availability 

11 SEC. 111. MODIFICATION OF ALTERNATIVE FUEL VEHICLE 

12 REFUELING PROPERTY CREDIT. 

13 (a) INCREASE IN CREDIT AMOUNT.—Section 30C of 

14 the Internal Revenue Code of 1986 (relating to alternative 

15 fuel vehicle refueling property credit) is amended— 

16 (1) by striking ‘‘30 percent’’ in subsection (a) 

17 and inserting ‘‘50 percent’’, and 

18 (2) by striking ‘‘$30,000’’ in subsection (b)(1) 

19 and inserting ‘‘$50,000’’. 

20 (b) CREDIT ALLOWED FOR ELECTRIC DRIVE TRANS21 PORTATION PROPERTY.—Paragraph (1) of section 30C(c) 

22 of the Internal Revenue Code of 1986 (relating to quali23 fied alternative fuel vehicle refueling property) is amended 

24 by striking ‘‘, but only with respect to any fuel’’ and inVerDate Aug 31 2005 02:45 May 26, 2006 Jkt 049196 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S2993.IS S2993

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1 serting ‘‘, except that in the case of property described 

2 in paragraph (3)(A) thereof, only with respect to fuels’’. 

3 (c) EXTENSION OF CREDIT.—Subsection (g) section 

4 30C of the Internal Revenue Code of 1986 (relating to 

5 termination) is amended to read as follows: 

6 ‘‘(g) TERMINATION OF AVAILABILITY OF CREDIT.— 

7 This section shall not apply to property placed in service 

8 after the earlier of December 31, 2014, or the date after 

9 which more than 20,000 alternative refueling properties 

10 have been installed through use of this credit.’’. 

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

12 this section shall apply to property placed in service after 

13 the date of the enactment of this Act, in taxable years 

14 ending after such date. 

15 SEC. 112. EXTENSION OF BIODIESEL INCOME AND EXCISE 

16 TAX CREDITS. 

17 (a) IN GENERAL.—Sections 40A(g), 6426(c)(6), and 

18 6427(e)(5)(B) of the Internal Revenue Code of 1986 are 

19 each amended by striking ‘‘2008’’ and inserting ‘‘2014’’. 

20 (b) EFFECTIVE DATE.—The amendments made by 

21 this section shall take effect on January 1, 2009. 


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1 SEC. 113. SMALL ETHANOL PRODUCER CREDIT EXPANDED 

2 FOR PRODUCERS OF SUCROSE AND CEL3 LULOSIC ETHANOL. 

4 (a) IN GENERAL.—Subparagraph (C) of section 

5 40(b)(4) of the Internal Revenue Code of 1986 (relating 

6 to small ethanol producer credit) is amended by inserting 

7 ‘‘(30,000,000 gallons for any sucrose or cellulosic ethanol 

8 producer)’’ after ‘‘15,000,000 gallons’’. 

9 (b) SUCROSE OR CELLULOSIC ETHANOL PRO10 DUCER.—Section 40(b)(4) of the Internal Revenue Code 

11 of 1986 is amended by adding at the end the following 

12 new subparagraph: 

13 ‘‘(E) SUCROSE OR CELLULOSIC ETHANOL

14 PRODUCER.— 

15 ‘‘(i) IN GENERAL.—For purposes of 

16 this paragraph, the term ‘sucrose or cel17 lulosic ethanol producer’ means a producer 

18 of ethanol using sucrose feedstock or cel19 lulosic feedstock. 

20 ‘‘(ii) SUCROSE FEEDSTOCK.—For pur21 poses of clause (i), the term ‘sucrose feed22 stock’ means any raw sugar, refined sugar, 

23 or sugar equivalents (including juice and 

24 extract). Such term does not include any 

25 molasses, beet thick juice, or other similar 

26 products as determined by the Secretary.’’. 


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1 (c) CONFORMING AMENDMENTS.— 

2 (1) Section 40(g)(2) of the Internal Revenue 

3 Code of 1986 is amended by striking ‘‘15,000,000 

4 gallon limitation’’ and inserting ‘‘15,000,000 and 

5 30,000,000 gallon limitations’’. 

6 (2) Section 40(g)(5)(B) of such Code is amend7 ed by striking ‘‘15,000,000 gallons’’ and inserting 

8 ‘‘the gallon limitation under subsection (b)(4)(C)’’. 

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

10 this section shall apply to taxable years beginning after 

11 the date of the enactment of this Act. 

12 Subtitle C—Incentives to Deploy13 ment of Fuel-Efficient Vehicles 

14 SEC. 121. CREDIT FOR PRODUCTION OF QUALIFIED FLEXI15 BLE FUEL VEHICLES. 

16 (a) IN GENERAL.—Subpart D of part IV of sub17 chapter A of chapter 1 of the Internal Revenue Code of 

18 1986 (relating to business related credits) is amended by 

19 adding at the end the following new section: 

20 ‘‘SEC. 45N. PRODUCTION OF QUALIFIED FLEXIBLE FUEL 

21 MOTOR VEHICLES. 

22 ‘‘(a) ALLOWANCE OF CREDIT.—For purposes of sec23 tion 38, in the case of a manufacturer, the qualified flexi24 ble fuel motor vehicle production credit determined under 

25 this section for any taxable year is an amount equal to 


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1 the incremental flexible fuel motor vehicle cost for each 

2 qualified flexible fuel motor vehicle produced in the United 

3 States by the manufacturer during the taxable year. 

4 ‘‘(b) INCREMENTAL FLEXIBLE FUEL MOTOR VEHI5 CLE COST.—With respect to any qualified flexible fuel 

6 motor vehicle, the incremental flexible fuel motor vehicle 

7 cost is an amount equal to the lesser of— 

8 ‘‘(1) the excess of— 

9 ‘‘(A) the cost of producing such qualified 

10 flexible fuel motor vehicle, over 

11 ‘‘(B) the cost of producing such motor ve12 hicle if such motor vehicle was not a qualified 

13 flexible fuel motor vehicle, or 

14 ‘‘(2) $150. 

15 ‘‘(c) QUALIFIED FLEXIBLE FUEL MOTOR VEHI16 CLE.—For purposes of this section, the term ‘qualified 

17 flexible fuel motor vehicle’ means a motor vehicle (as de18 fined under section 30(c)(2))— 

19 ‘‘(1) the production of which is not required for 

20 the manufacturer to meet— 

21 ‘‘(A) the maximum credit allowable for ve22 hicles described in paragraph (2) in determining 

23 the fleet average fuel economy requirements (as 

24 determined under section 32904 of title 49, 


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1 United States Code) of the manufacturer for 

2 the model year ending in the taxable year, or 

3 ‘‘(B) the requirements of any other provi4 sion of Federal law, and 

5 ‘‘(2) which is designed so that the vehicle is 

6 propelled by an engine which can use as a fuel a pe7 troleum mixture of which 85 percent (or another 

8 percentage of not less than 70 percent, as the Sec9 retary may determine, by rule, to provide for re10 quirements relating to cold start, safety, or vehicle 

11 functions) of the volume of consists of ethanol or 

12 biodiesel. 

13 ‘‘(d) OTHER DEFINITIONS AND SPECIAL RULES.— 

14 For purposes of this section— 

15 ‘‘(1) MANUFACTURER.—The term ‘manufac16 turer’ has the meaning given such term in regula17 tions prescribed by the Administrator of the Envi18 ronmental Protection Agency for purposes of the ad19 ministration of title II of the Clean Air Act (42 

20 U.S.C. 7521 et seq.). 

21 ‘‘(2) REDUCTION IN BASIS.—For purposes of 

22 this subtitle, if a credit is allowed under this section 

23 for any expenditure with respect to any property, the 

24 increase in the basis of such property which would 

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1 ture shall be reduced by the amount of the credit so 

2 allowed. 

3 ‘‘(3) NO DOUBLE BENEFIT.—The amount of 

4 any deduction or credit allowable under this chapter 

5 (other than the credits allowable under this section 

6 and section 30B) shall be reduced by the amount of 

7 credit allowed under subsection (a) for such vehicle 

8 for the taxable year. 

9 ‘‘(4) ELECTION NOT TO TAKE CREDIT.—No 

10 credit shall be allowed under subsection (a) for any 

11 vehicle if the taxpayer elects to not have this section 

12 apply to such vehicle. 

13 ‘‘(e) CROSS REFERENCE.—For an election to claim 

14 certain minimum tax credits in lieu of the credit deter15 mined under this section, see section 53(e).’’. 

16 (b) CREDIT ALLOWED AGAINST THE ALTERNATIVE

17 MINIMUM TAX.—Section 38(c)(4)(B) of the Internal Rev18 enue Code of 1986 (defining specified credits) is amended 

19 by striking the period at the end of clause (ii)(II) and in20 serting ‘‘, and’’, and by adding at the end the following 

21 new clause: 

22 ‘‘(iii) the credit determined under sec23 tion 45N.’’. 

24 (c) ELECTION TO USE ADDITIONAL AMT CREDIT.— 

25 Section 53 of the Internal Revenue Code of 1986 (relating 


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1 to credit for prior year minimum tax liability) is amended 

2 by adding at the end the following new subsection: 

3 ‘‘(e) ADDITIONAL CREDIT IN LIEU OF FLEXIBLE

4 FUEL MOTOR VEHICLE CREDIT.— 

5 ‘‘(1) IN GENERAL.—In the case of a taxpayer 

6 making an election under this subsection for a tax7 able year, the limitation under subsection (c) for 

8 such taxable year shall be increased by the amount 

9 of the credit determined under section 45N for such 

10 taxable year. 

11 ‘‘(2) ELECTION.—A taxpayer may make an 

12 election under this subsection for any taxable year 

13 only if the taxpayer elects not to take the credit 

14 under section 45N for such taxable year pursuant to 

15 section 45N(c)(4). Any election under this sub16 section may not be revoked except with the consent 

17 of the Secretary. 

18 ‘‘(3) CREDIT REFUNDABLE.—The aggregate in19 crease in the credit under this section for any tax20 able year by reason of this subsection shall for pur21 poses of this title (other than subsection (b)(2) of 

22 this section) be treated as a credit allowed to the 

23 taxpayer under subpart C.’’. 

24 (d) CONFORMING AMENDMENTS.— 


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1 (1) Section 38(b) of the Internal Revenue Code 

2 of 1986 is amended by striking ‘‘and’’ at the end of 

3 paragraph (29), by striking the period at the end of 

4 paragraph (30) and inserting ‘‘, plus’’, and by add5 ing at the end the following new paragraph: 

6 ‘‘(31) the qualified flexible fuel motor vehicle 

7 production credit determined under section 

8 45N(a).’’. 

9 (2) Section 1016(a) of such Code is amended 

10 by striking ‘‘and’’ at the end of paragraph (36), by 

11 striking the period at the end of paragraph (37) and 

12 inserting ‘‘, and’’, and by adding at the end the fol13 lowing: 

14 ‘‘(38) in the case of a facility with respect to 

15 which a credit was allowed under section 45N, to the 

16 extent provided in section 45N(d)(2).’’. 

17 (e) CLERICAL AMENDMENT.—The table of sections 

18 for subpart D of part IV of subchapter A of chapter 1 

19 of the Internal Revenue Code of 1986 is amended by add20 ing at the end the following new item: 

‘‘Sec. 45N. Production of qualified flexible fuel motor vehicles.’’. 

21 (f) EFFECTIVE DATE.—The amendments made by 

22 this section shall apply to motor vehicles produced in 

23 model years ending after the date of the enactment of this 

24 Act. 


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1 SEC. 122. TAX CREDIT FOR FUEL-EFFICIENT FLEETS. 

2 (a) IN GENERAL.—Subpart E of part IV of sub3 chapter A of chapter 1 of the Internal Revenue Code of 

4 1986 is amended by inserting after section 48B the fol5 lowing new section: 

6 ‘‘SEC. 48C. FUEL-EFFICIENT FLEET CREDIT. 

7 ‘‘(a) GENERAL RULE.—For purposes of section 46, 

8 the fuel-efficient fleet credit for any taxable year is 15 per9 cent of the qualified fuel-efficient vehicle investment 

10 amount of an eligible taxpayer for such taxable year. 

11 ‘‘(b) VEHICLE PURCHASE REQUIREMENT.—In the 

12 case of any eligible taxpayer which places less than 10 

13 qualified fuel-efficient vehicles in service during the tax14 able year, the qualified fuel-efficient vehicle investment 

15 amount shall be zero. 

16 ‘‘(c) QUALIFIED FUEL-EFFICIENT VEHICLE INVEST17 MENT AMOUNT.—For purposes of this section— 

18 ‘‘(1) IN GENERAL.—The term ‘qualified fuel-ef19 ficient vehicle investment amount’ means the basis 

20 of any qualified fuel-efficient vehicle placed in serv21 ice by an eligible taxpayer during the taxable year. 

22 ‘‘(2) QUALIFIED FUEL-EFFICIENT VEHICLE.— 

23 ‘‘(A) IN GENERAL.—The term ‘qualified 

24 fuel-efficient vehicle’ means an vehicle which 

25 has a fuel economy which is at least 150 per26 cent greater than the average fuel economy 


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1 standard for an vehicle of the same class and 

2 model year. 

3 ‘‘(B) CERTAIN VEHICLES EXCLUDED.— 

4 Such term shall not include any vehicle for 

5 which a credit is allowed to the eligible taxpayer 

6 under section 30 or 30B. 

7 ‘‘(3) OTHER TERMS.—The terms ‘vehicle’, ‘av8 erage fuel economy standard’, ‘fuel economy’, and 

9 ‘model year’ have the meanings given to such terms 

10 under section 32901 of title 49, United States Code. 

11 ‘‘(d) ELIGIBLE TAXPAYER.—The term ‘eligible tax12 payer’ means, with respect to any taxable year, a taxpayer 

13 who owns a fleet of 100 or more vehicles which are used 

14 in the trade or business of the taxpayer on the first day 

15 of such taxable year. 

16 ‘‘(e) TERMINATION.—This section shall not apply to 

17 any vehicle placed in service after December 31, 2010.’’. 

18 (b) CREDIT TREATED AS PART OF INVESTMENT

19 CREDIT.—Section 46 of the Internal Revenue Code of 

20 1986 is amended by striking ‘‘and’’ at the end of para21 graph (3), by striking the period at the end of paragraph 

22 (4) and inserting ‘‘, and,’’ and by adding at the end the 

23 following new paragraph: 

24 ‘‘(5) the fuel-efficient fleet credit.’’. 

25 (c) CONFORMING AMENDMENTS.— 


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1 (1) Section 49(a)(1)(C) of the Internal Revenue 

2 Code of 1986 is amended by striking ‘‘and’’ at the 

3 end of clause (iii), by striking the period at the end 

4 of clause (iv) and inserting ‘‘, and,’’ and by adding 

5 at the end the following new clause: 

6 ‘‘(v) the basis of any qualified fuel-ef7 ficient vehicle which is taken into account 

8 under section 48C.’’. 

9 (2) The table of sections for subpart E of part 

10 IV of subchapter A of chapter 1 of such Code is 

11 amended by inserting after the item relating to sec12 tion 48 the following new item: 

‘‘Sec. 48C. Fuel-efficient fleet credit.’’. 

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

14 this section shall apply to periods after December 31, 

15 2005, in taxable years ending after such date, under rules 

16 similar to the rules of section 48(m) of the Internal Rev17 enue Code of 1986 (as in effect on the day before the date 

18 of the enactment of the Revenue Reconciliation Act of 

19 1990). 

20 SEC. 123. ADVANCED TECHNOLOGY MOTOR VEHICLES MAN21 UFACTURING CREDIT. 

22 (a) IN GENERAL.—Subpart B of part IV of sub23 chapter A of chapter 1 of the Internal Revenue Code of 

24 1986 (relating to foreign tax credit, etc.) is amended by 

25 adding at the end the following new section: 


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1 ‘‘SEC. 30D. ADVANCED TECHNOLOGY MOTOR VEHICLES 

2 MANUFACTURING CREDIT. 

3 ‘‘(a) CREDIT ALLOWED.—There shall be allowed as 

4 a credit against the tax imposed by this chapter for the 

5 taxable year an amount equal to 35 percent of the quali6 fied investment of an eligible taxpayer for such taxable 

7 year. 

8 ‘‘(b) QUALIFIED INVESTMENT.—For purposes of this 

9 section— 

10 ‘‘(1) IN GENERAL.—The term ‘qualified invest11 ment’ means, with respect to any taxable year, the 

12 sum of— 

13 ‘‘(A) the costs paid or incurred by the eli14 gible taxpayer during such taxable year— 

15 ‘‘(i) to re-equip, expand, or establish 

16 any manufacturing facility of the eligible 

17 taxpayer to produce advanced technology 

18 motor vehicles or to produce eligible com19 ponents, and 

20 ‘‘(ii) for qualified research (as defined 

21 in section 41(d)) related to advanced tech22 nology motor vehicles and eligible compo23 nents, and 

24 ‘‘(B) qualified engineering integration 

25 costs. 


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1 ‘‘(2) ATTRIBUTION RULES.—For purposes of 

2 paragraph (1)(A)(i), in the case of a manufacturing 

3 facility of the eligible taxpayer which produces both 

4 advanced technology motor vehicles and other motor 

5 vehicles, or eligible components and other compo6 nents, only the amount paid or incurred for the pro7 duction of advanced technology motor vehicles and 

8 eligible components shall be taken into account. 

9 ‘‘(c) ELIGIBLE TAXPAYER.—For purposes of this sec10 tion, the term ‘eligible taxpayer’ means any taxpayer if 

11 more than 50 percent of its gross receipts for the taxable 

12 year is derived from the manufacture of motor vehicles 

13 or any component parts of such vehicles. 

14 ‘‘(d) DEFINITIONS.—For purposes of this section— 

15 ‘‘(1) ADVANCED TECHNOLOGY MOTOR VEHI16 CLE.—The term ‘advanced technology motor vehicle’ 

17 means— 

18 ‘‘(A) any new qualified fuel cell motor vehi19 cle (as defined in section 30B(b)(3)), 

20 ‘‘(B) any new advanced lean burn tech21 nology motor vehicle (as defined in section 

22 30B(c)(3)), 

23 ‘‘(C) any new qualified hybrid motor vehi24 cle (as defined in section 30B(d)(3)(A) and deVerDate Aug 31 2005 02:45 May 26, 2006 Jkt 049196 PO 00000 Frm 00017 Fmt 6652 Sfmt 6201 E:\BILLS\S2993.IS S2993

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1 termined without regard to any gross vehicle 

2 weight rating), and 

3 ‘‘(D) any new qualified alternative motor 

4 fuel vehicle (as defined in section 30B(e)(4)). 

5 ‘‘(2) ELIGIBLE COMPONENTS.—The term ‘eligi6 ble component’ means any component inherent to 

7 any advanced technology motor vehicle but not in8 herent to a motor vehicle which is not an advanced 

9 technology motor vehicle, including— 

10 ‘‘(A) with respect to any gasoline or diesel11 electric new qualified hybrid motor vehicle, 

12 any— 

13 ‘‘(i) electric motor or generator, 

14 ‘‘(ii) power split device, 

15 ‘‘(iii) power control unit, 

16 ‘‘(iv) power controls, 

17 ‘‘(v) integrated starter generator, or 

18 ‘‘(vi) battery, 

19 ‘‘(B) with respect to any hydraulic new 

20 qualified hybrid motor vehicle, any— 

21 ‘‘(i) hydraulic accumulator vessel, 

22 ‘‘(ii) hydraulic pump, or 

23 ‘‘(iii) hydraulic pump-motor assembly, 

24 ‘‘(C) with respect to any new advanced 

25 lean burn technology motor vehicle, any— 


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1 ‘‘(i) diesel engine, 

2 ‘‘(ii) turbocharger, 

3 ‘‘(iii) fuel injection system, or 

4 ‘‘(iv) after-treatment system, such as 

5 a particle filter or NOx absorber, and 

6 ‘‘(D) with respect to any advanced tech7 nology motor vehicle, any other component sub8 mitted for approval by the Secretary. 

9 ‘‘(3) QUALIFIED ENGINEERING INTEGRATION

10 COSTS.—For purposes of subsection (b)(1)(B), the 

11 term ‘qualified engineering integration costs’ means, 

12 with respect to any advanced technology motor vehi13 cle, costs incurred prior to the market introduction 

14 of such motor vehicle for engineering tasks related 

15 to— 

16 ‘‘(A) establishing functional, structural, 

17 and performance requirements for components 

18 and subsystems to meet overall vehicle objec19 tives for a specific application, 

20 ‘‘(B) designing interfaces for components 

21 and subsystems with mating systems within a 

22 specific vehicle application, 

23 ‘‘(C) designing cost effective, efficient, and 

24 reliable manufacturing processes to produce 


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1 components and subsystems for a specific vehi2 cle application, and 

3 ‘‘(D) validating functionality and perform4 ance of components and subsystems for a spe5 cific vehicle application. 

6 ‘‘(4) MOTOR VEHICLE.—The term ‘motor vehi7 cle’ has the meaning given such term by section 

8 30(c)(2). 

9 ‘‘(e) LIMITATION BASED ON AMOUNT OF TAX.— 

10 ‘‘(1) IN GENERAL.—The credit allowed under 

11 subsection (a) for any taxable year shall not exceed 

12 the sum of— 

13 ‘‘(A) the taxpayer’s regular tax liability (as 

14 defined in section 26(b)) for the taxable year, 

15 plus 

16 ‘‘(B) the tax imposed under section 55 for 

17 the taxable year. 

18 ‘‘(2) CARRYOVER OF UNUSED CREDIT

19 AMOUNTS.— 

20 ‘‘(A) IN GENERAL.—If the credit allowable 

21 under subsection (a) for a taxable year exceeds 

22 the limitation under paragraph (1) for such tax23 able year, such excess shall be allowed— 


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1 ‘‘(i) as a credit carryback to each of 

2 the 13 taxable years preceding such year, 

3 and 

4 ‘‘(ii) as a credit carryforward to each 

5 of the 20 taxable years following such year. 

6 ‘‘(B) AMOUNT CARRIED TO EACH YEAR.— 

7 For purposes of this paragraph, rules similar to 

8 the rules of section 39(a)(2) shall apply. 

9 ‘‘(f) SPECIAL RULES.— 

10 ‘‘(1) REDUCTION IN BASIS.—For purposes of 

11 this subtitle, if a credit is allowed under this section 

12 for any expenditure with respect to any property, the 

13 increase in the basis of such property which would 

14 (but for this paragraph) result from such expendi15 ture shall be reduced by the amount of the credit so 

16 allowed. 

17 ‘‘(2) INVESTMENTS AND PROPERTY OUTSIDE

18 THE UNITED STATES.—No credit shall be allowed 

19 under subsection (a) with respect to— 

20 ‘‘(A) any manufacturing facility which is 

21 located outside the United States, and 

22 ‘‘(B) any engineering integration or re23 search and development conducted outside the 

24 United States. 


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1 ‘‘(3) AGGREGATION OF EXPENDITURES; ALLO2 CATIONS.—For purposes of this section, rules simi3 lar to the rules of paragraphs (1) and (2) of section 

4 41(f) shall apply. 

5 ‘‘(4) RECAPTURE.—The Secretary shall, by reg6 ulation, provide for recapturing the benefit of any 

7 credit allowable under subsection (a) with respect to 

8 any manufacturing facility which ceases to produce 

9 advanced technology motor vehicles or eligible com10 ponents. 

11 ‘‘(5) PUBLIC STATEMENT.— 

12 ‘‘(A) IN GENERAL.—No credit shall be al13 lowed under subsection (a) for any taxable year 

14 unless the eligible taxpayer makes publicly 

15 available a statement describing the activities of 

16 the eligible taxpayer for which the credit is al17 lowed and the public benefits of such activities, 

18 including the estimated amount of any reduc19 tion in national oil consumption in future years 

20 as a result of such activities. 

21 ‘‘(B) TIME FOR PUBLICATION.—The state22 ment required under subparagraph (A) shall be 

23 made available not later than 90 days after the 

24 end of the taxable year for which the credit 


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1 under subsection (a) is allowed and shall be in 

2 such form as the Secretary shall prescribe. 

3 ‘‘(6) NO DOUBLE BENEFIT.— 

4 ‘‘(A) COORDINATION WITH OTHER DEDUC5 TIONS AND CREDITS.—Except as provided in 

6 subparagraph (B), the amount of any deduction 

7 or other credit allowable under this chapter for 

8 any cost taken into account in determining the 

9 amount of the credit under subsection (a) shall 

10 be reduced by the amount of such credit attrib11 utable to such cost. 

12 ‘‘(B) RESEARCH AND DEVELOPMENT

13 COSTS.— 

14 ‘‘(i) IN GENERAL.—Except as pro15 vided in clause (ii), any amount described 

16 in subsection (b)(1)(A)(ii) taken into ac17 count in determining the amount of the 

18 credit under subsection (a) for any taxable 

19 year shall not be taken into account for 

20 purposes of determining the credit under 

21 section 41 for such taxable year. 

22 ‘‘(ii) COSTS TAKEN INTO ACCOUNT IN

23 DETERMINING BASE PERIOD RESEARCH

24 EXPENSES.—Any amounts described in 

25 subsection (b)(1)(A)(ii) taken into account 


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1 in determining the amount of the credit 

2 under subsection (a) for any taxable year 

3 which are qualified research expenses 

4 (within the meaning of section 41(b)) shall 

5 be taken into account in determining base 

6 period research expenses for purposes of 

7 applying section 41 to subsequent taxable 

8 years. 

9 ‘‘(g) ELECTION NOT TO TAKE CREDIT.—No credit 

10 shall be allowed under subsection (a) for any property if 

11 the taxpayer elects not to have this section apply to such 

12 property. 

13 ‘‘(h) REGULATIONS.—The Secretary shall prescribe 

14 such regulations as necessary to carry out the provisions 

15 of this section.’’. 

16 (b) CONFORMING AMENDMENTS.— 

17 (1) Section 1016(a) of the Internal Revenue 

18 Code of 1986, as amended by this Act, is amended 

19 by striking ‘‘and’’ at the end of paragraph (37), by 

20 striking the period at the end of paragraph (38) and 

21 inserting ‘‘, and’’, and by adding at the end the fol22 lowing new paragraph: 

23 ‘‘(39) to the extent provided in section 

24 30D(f)(1).’’. 


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1 (2) Section 6501(m) of such Code is amended 

2 by inserting ‘‘30D(g),’’ after ‘‘30C(e)(5),’’. 

3 (3) The table of sections for subpart B of part 

4 IV of subchapter A of chapter 1 of such Code is 

5 amended by inserting after the item relating to sec6 tion 30C the following new item: 

‘‘Sec. 30D. Advanced technology motor vehicles manufacturing credit.’’. 

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

8 this section shall apply to amounts incurred in taxable 

9 years beginning after December 31, 1993. 

10 Subtitle D—Incentives for Clean 

11 Power 

12 SEC. 131. EXTENSION OF PRODUCTION TAX CREDIT FOR 

13 ELECTRICITY PRODUCED FROM CERTAIN RE14 NEWABLE RESOURCES. 

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

16 (relating to qualified facilities) is amended by striking 

17 ‘‘2008’’ each place it appears and inserting ‘‘2018’’. 

18 SEC. 132. EXTENSION AND MODIFICATION OF INVESTMENT 

19 TAX CREDIT WITH RESPECT TO SOLAR EN20 ERGY PROPERTY AND QUALIFIED FUEL CELL 

21 PROPERTY. 

22 (a) SOLAR ENERGY PROPERTY.—Paragraphs 

23 (2)(A)(i)(II) and (3)(A)(ii) of section 48(a) of the Internal 

24 Revenue Code of 1986 are each amended by striking 

25 ‘‘2008’’ and inserting ‘‘2015’’. 


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1 (b) ELIGIBLE FUEL CELL PROPERTY.—Paragraph 

2 (1)(E) of section 48(c) of the Internal Revenue Code of 

3 1986 is amended by striking ‘‘2007’’ and inserting 

4 ‘‘2014’’. 

5 (c) CREDITS ALLOWED AGAINST THE ALTERNATIVE

6 MINIMUM TAX.— 

7 (1) IN GENERAL.—Section 38(c)(4)(B) of the 

8 Internal Revenue Code of 1986 (defining specified 

9 credits), as amended by this Act, is amended by 

10 striking the period at the end of clause (iii) and in11 serting ‘‘, and,’’ and by adding at the end the fol12 lowing new clause: 

13 ‘‘(iv) the portion of the investment 

14 credit under section 46(2) as determined 

15 under section 48(a)(2)(A)(i).’’. 

16 (2) EFFECTIVE DATE.—The amendments made 

17 by this subsection shall apply to taxable years begin18 ning after December 31, 2005. 

19 (d) SOLAR INVESTMENT CREDIT ALLOWED FOR

20 PUBLIC UTILITY PROPERTY.— 

21 (1) IN GENERAL.—The second sentence of sec22 tion 48(a)(3) of the Internal Revenue Code of 1986 

23 is amended by inserting ‘‘(other than property de24 scribed in clause (i) or (ii) of subparagraph (A))’’ 

25 before ‘‘shall not’’. 


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1 (2) EFFECTIVE DATE.—The amendments made 

2 by this subsection shall apply to periods after the 

3 date of the enactment of this Act, in taxable years 

4 ending after such date, under rules similar to the 

5 rules of section 48(m) of the Internal Revenue Code 

6 of 1986 (as in effect on the day before the date of 

7 the enactment of the Revenue Reconciliation Act of 

8 1990). 

9 SEC. 133. CREDIT FOR WIND ENERGY SYSTEMS. 

10 (a) RESIDENTIAL.— 

11 (1) IN GENERAL.—Section 25D(a) of the Inter12 nal Revenue Code of 1986 is amended by striking 

13 ‘‘and’’ at the end of paragraph (2), by striking the 

14 period at the end of paragraph (3) and inserting ‘‘, 

15 and’’, and by adding at the end the following new 

16 paragraph: 

17 ‘‘(4) 30 percent of the qualified small wind en18 ergy property expenditures made by the taxpayer 

19 during such year.’’. 

20 (2) LIMITATION.—Section 25D(b)(1) of the In21 ternal Revenue Code of 1986 is amended by striking 

22 ‘‘and’’ at the end of subparagraph (B), by striking 

23 the period at the end of subparagraph (A) and in24 serting ‘‘, and’’, and by adding at the end the fol25 lowing new subparagraph: 


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1 ‘‘(D) $500 with respect to each half kilo2 watt of capacity (not to exceed $2,000) of 

3 qualifying wind turbines for which qualified 

4 small wind energy property expenditures are 

5 made.’’. 

6 (3) QUALIFIED SMALL WIND ENERGY PROP7 ERTY EXPENDITURES.—Section 25D(d) of the Inter8 nal Revenue Code of 1986 is amended by adding at 

9 the end the following new paragraph: 

10 ‘‘(4) QUALIFIED SMALL WIND ENERGY PROP11 ERTY EXPENDITURE.— 

12 ‘‘(A) IN GENERAL.—The term ‘qualified 

13 wind energy property expenditure’ means an ex14 penditure for property which uses a qualifying 

15 wind turbine to generate electricity for use in 

16 connection with a dwelling unit located in the 

17 United States and used as a residence by the 

18 taxpayer. 

19 ‘‘(B) QUALIFYING WIND TURBINE.—The 

20 term ‘qualifying wind turbine’ means a wind 

21 turbine of 100 kilowatts of rated capacity or 

22 less which meets the latest performance rating 

23 standards published by the American Wind En24 ergy Association and which is used to generate 

25 electricity and carries at least a 5-year limited 


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1 warranty covering defects in design, material, 

2 or workmanship, and, for property that is not 

3 installed by the taxpayer, at least a 5-year lim4 ited warranty covering defects in installation.’’. 

5 (b) BUSINESS.—Section 48(a)(3)(A) of the Internal 

6 Revenue Code of 1986 (defining energy property) is 

7 amended by striking ‘‘or’’ at the end of clause (iii), by 

8 adding ‘‘or’’ at the end of clause (iv), and by inserting 

9 after clause (iv) the following new clause: 

10 ‘‘(v) qualifying wind turbine (as de11 fined in section 25D(d)(B)),’’. 

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

13 this section shall apply to property placed in service after 

14 the date of the enactment of this Act, in taxable years 

15 ending after such date. 

16 Subtitle E—Incentives to Increase 

17 Oil Recovery Using Carbon Se18 questration 

19 SEC. 141. TAX CREDIT FOR CARBON DIOXIDE CAPTURED 

20 FROM INDUSTRIAL SOURCES AND USED IN 

21 ENHANCED OIL AND NATURAL GAS RECOV22 ERY. 

23 (a) IN GENERAL.—Subpart D of part IV of sub24 chapter A of chapter 1 of the Internal Revenue Code of 

25 1986 (relating to business credits), as amended by this 


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1 Act, is amended by adding at the end the following new 

2 section: 

3 ‘‘SEC. 45O. CREDIT FOR CARBON DIOXIDE CAPTURED FROM 

4 INDUSTRIAL SOURCES AND USED AS A TER5 TIARY INJECTANT IN ENHANCED OIL AND 

6 NATURAL GAS RECOVERY. 

7 ‘‘(a) GENERAL RULE.—For purposes of section 38, 

8 the captured carbon dioxide tertiary injectant credit for 

9 any taxable year is an amount equal to the product of— 

10 ‘‘(1) the credit amount, and 

11 ‘‘(2) the qualified carbon dioxide captured from 

12 industrial sources and used as a tertiary injectant in 

13 qualified enhanced oil and natural gas recovery 

14 which is attributable to the taxpayer. 

15 ‘‘(b) CREDIT AMOUNT.—For purposes of this sec16 tion— 

17 ‘‘(1) IN GENERAL.—The credit amount is $0.75 

18 per 1,000 standard cubic feet. 

19 ‘‘(2) INFLATION ADJUSTMENT.—In the case of 

20 any taxable year beginning in a calendar year after 

21 2007, there shall be substituted for the $0.75 

22 amount under paragraph (1) an amount equal to the 

23 product of— 

24 ‘‘(A) $0.75, multiplied by 


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1 ‘‘(B) the inflation adjustment factor for 

2 such calendar year determined under section 

3 43(b)(3)(B) for such calendar year, determined 

4 by substituting ‘2006’ for ‘1990’. 

5 ‘‘(c) QUALIFIED CARBON DIOXIDE.—For purposes of 

6 this section— 

7 ‘‘(1) IN GENERAL.—The term ‘qualified carbon 

8 dioxide’ means carbon dioxide captured from an an9 thropogenic source that— 

10 ‘‘(A) would otherwise be released into the 

11 atmosphere as industrial emission of green12 house gas, 

13 ‘‘(B) is measurable at the source of cap14 ture, 

15 ‘‘(C) is compressed, treated, and trans16 ported via pipeline, 

17 ‘‘(D) is sold as a tertiary injectant in 

18 qualified enhanced oil and natural gas recovery, 

19 and 

20 ‘‘(E) is permanently sequestered in geologi21 cal formations as a result of the enhanced oil 

22 and natural gas recovery process. 

23 ‘‘(2) ANTHROPOGENIC SOURCE.—An anthropo24 genic source of carbon dioxide is an industrial 


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1 source, including any of the following types of 

2 plants, and facilities related to such plant— 

3 ‘‘(A) a coal and natural gas fired electrical 

4 generating power station, 

5 ‘‘(B) a natural gas processing and treating 

6 plant, 

7 ‘‘(C) an ethanol plant, 

8 ‘‘(D) a fertilizer plant, and 

9 ‘‘(E) a chemical plant. 

10 ‘‘(3) DEFINITIONS.— 

11 ‘‘(A) QUALIFIED ENHANCED OIL AND NAT12 URAL GAS RECOVERY.—The term ‘qualified en13 hanced oil and natural gas recovery’ has the 

14 meaning given such term by section 43(c)(2). 

15 ‘‘(B) TERTIARY INJECTANT.—The term 

16 ‘tertiary injectant’ has the same meaning as 

17 when used within section 193(b)(1). 

18 ‘‘(d) OTHER DEFINITIONS AND SPECIAL RULES.— 

19 For purposes of this section— 

20 ‘‘(1) ONLY CARBON DIOXIDE CAPTURED WITH21 IN THE UNITED STATES TAKEN INTO ACCOUNT.— 

22 Sales shall be taken into account under this section 

23 only with respect to qualified carbon dioxide of 

24 which is within— 


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1 ‘‘(A) the United States (within the mean2 ing of section 638(1)), or 

3 ‘‘(B) a possession of the United States 

4 (within the meaning of section 638(2)). 

5 ‘‘(2) RECYCLED CARBON DIOXIDE.—The term 

6 ‘qualified carbon dioxide’ includes the initial deposit 

7 of captured carbon dioxide used as a tertiary 

8 injectant. Such term does not include carbon dioxide 

9 that is re-captured, recycled, and re-injected as part 

10 of the enhanced oil and natural gas recovery process. 

11 ‘‘(3) CREDIT ATTRIBUTABLE TO TAXPAYER.— 

12 Any credit under this section shall be attributable to 

13 the person that captures, treats, compresses, trans14 ports and sells the carbon dioxide for use as a ter15 tiary injectant in enhanced oil and natural gas re16 covery, except to the extent provided in regulations 

17 prescribed by the Secretary.’’. 

18 (b) CONFORMING AMENDMENT.—Section 38(b) of 

19 the Internal Revenue Code of 1986 (relating to general 

20 business credit), as amended by this Act, is amended by 

21 striking ‘‘plus’’ at the end of paragraph (30), by striking 

22 the period at the end of paragraph (31) and inserting ‘‘, 

23 plus’’, and by adding at the end of following new para24 graph: 


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1 ‘‘(32) the captured carbon dioxide tertiary 

2 injectant credit determined under section 45O(a).’’. 

3 (c) CLERICAL AMENDMENT.—The table of sections 

4 for subpart B of part IV of subchapter A of chapter 1 

5 of the Internal Revenue Code of 1986 (relating to other 

6 credits), as amended by this Act, is amended by adding 

7 at the end the following new section: 

‘‘Sec. 45O. Credit for carbon dioxide captured from industrial sources and used 

as a tertiary injectant in enhanced oil and natural gas recovery.’’. 

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

9 this section shall apply to taxable years beginning after 

10 the date of the enactment of this Act. 

11 Subtitle F—Incentives for Energy 

12 Efficient Buildings 

13 SEC. 151. EXTENSION OF ENERGY EFFICIENT COMMERCIAL 

14 BUILDINGS DEDUCTION. 

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

16 1986 (relating to termination) is amended by striking 

17 ‘‘2007’’ and inserting ‘‘2014’’. 

18 SEC. 152. EXTENSION AND EXPANSION OF NEW ENERGY EF19 FICIENT HOME CREDIT. 

20 (a) EXTENSION.—Section 45L(g) of the Internal 

21 Revenue Code of 1986 (relating to termination) is amend22 ed by striking ‘‘2007’’ and inserting ‘‘2014’’. 

23 (b) INCLUSION OF 30 PERCENT HOMES.— 


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1 (1) IN GENERAL.—Section 45L(c) of the Inter2 nal Revenue Code of 1986 (relating to energy saving 

3 requirements) is amended— 

4 (A) by striking ‘‘or’’ at the end of para5 graph (2); 

6 (B) by redesignating paragraph (3) as 

7 paragraph (4); and 

8 (C) by inserting after paragraph (2) the 

9 following new paragraph: 

10 ‘‘(3) certified— 

11 ‘‘(A) to have a level of annual heating and 

12 cooling energy consumption which is at least 30 

13 percent below the annual level described in 

14 paragraph (1), and 

15 ‘‘(B) to have building envelope component 

16 improvements account for at least 1/3 of such 

17 30 percent, or.’’. 

18 (2) APPLICABLE AMOUNT OF CREDIT.—Section 

19 45L(a)(2) is amended by striking ‘‘paragraph (3)’’ 

20 and inserting ‘‘paragraph (3) or (4)’’. 

21 (3) EFFECTIVE DATE.—The amendments made 

22 by this subsection shall apply to qualified new en23 ergy efficient homes acquired after the date of the 

24 enactment of this Act. 


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1 Subtitle G—Clean Energy Research 

2 SEC. 161. ASSISTANT SECRETARY FOR ADVANCED ENERGY 

3 RESEARCH, TECHNOLOGY DEVELOPMENT, 

4 AND DEPLOYMENT. 

5 (a) ESTABLISHMENT.— 

6 (1) IN GENERAL.—The Secretary of Energy 

7 shall establish in the Department of Energy the po8 sition of Assistant Secretary for Advanced Energy 

9 Research, Technology Development, and Deployment 

10 (referred to in this section as the ‘‘Assistant Sec11 retary’’), to be headed by, and to report to, the Sec12 retary. 

13 (2) QUALIFICATIONS.—The Assistant Secretary 

14 shall be an individual with— 

15 (A) an advanced education degree in en16 ergy technology; and 

17 (B) substantial commercial research and 

18 technology development and deployment experi19 ence. 

20 (b) MISSION.—The mission of the Assistant Sec21 retary is— 

22 (1) to implement an innovative energy research, 

23 technology development, and deployment program 

24 to— 


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1 (A) increase national security by signifi2 cantly reducing petroleum and imported fuels 

3 consumption; 

4 (B) significantly improve the efficiency of 

5 electricity use and the reliability of the elec6 tricity system; and 

7 (C) significantly reduce greenhouse gas 

8 emissions; and 

9 (2) to sponsor a diverse portfolio of cutting10 edge, high-payoff research, development, and deploy11 ment projects to carry out the program. 

12 (c) EXPERIMENTAL PERSONNEL AUTHORITY.—The 

13 Assistant Secretary may staff the office of the Assistant 

14 Secretary primarily using a program of experimental use 

15 of special personnel management authority in order to fa16 cilitate recruitment of eminent experts in science or engi17 neering for management of research and development 

18 projects and programs administered by the Assistant Sec19 retary under similar terms and conditions as the authority 

20 is exercised under section 1101 of the Strom Thurmond 

21 National Defense Authorization Act for Fiscal Year 1999 

22 (Public Law 105–261; 5 U.S.C. 3104 note), as determined 

23 by the Assistant Secretary. 

24 (d) TRANSACTIONS OTHER THAN CONTRACTS AND

25 GRANTS.—To carry out projects under this section, the 


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1 Assistant Secretary may enter into transactions to carry 

2 out advanced research projects under this subsection 

3 under similar terms and conditions as the authority is ex4 ercised under section 646(g) of the Department of Energy 

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

6 (e) PRIZES FOR ADVANCED TECHNOLOGY ACHIEVE7 MENTS.— 

8 (1) IN GENERAL.—Subject to paragraphs (2) 

9 through (4), the Assistant Secretary may carry out 

10 a program to award cash prizes in recognition of 

11 outstanding achievements in basic, advanced, and 

12 applied research, technology development, and proto13 type development that have the potential to advance 

14 the mission described in subsection (b) under similar 

15 terms and conditions as the authority is exercised 

16 under section 1008 of the Energy Policy Act of 

17 2005 (42 U.S.C. 16396). 

18 (2) COMPETITION REQUIREMENTS.—In car19 rying out this subsection, the Assistant Secretary 

20 shall— 

21 (A) use a competitive process for the selec22 tion of recipients of cash prizes; and 

23 (B) conduct widely-advertised solicitation 

24 of submissions of research results, technology 

25 developments, and prototypes. 


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1 (3) MAXIMUM AMOUNT FOR ALL CASH

2 PRIZES.—The total amount of all cash prizes award3 ed for a fiscal year under this subsection may not 

4 exceed $50,000,000. 

5 (4) MAXIMUM AMOUNT OF INDIVIDUAL CASH

6 PRIZES.—The amount of an individual cash prize 

7 awarded under this subsection may not exceed 

8 $10,000,000 unless the amount of the award is ap9 proved by the Secretary of Energy. 

10 (f) COMMERCIALIZATION OF CELLULOSIC BIOMASS

11 ETHANOL.—Of the amounts that are made available to 

12 carry out this section, the Assistant Secretary shall use 

13 not less that $1,000,000,000 to conduct research and de14 velopment to increase yields, reduce production costs, and 

15 take other steps to accelerate the commercialization of cel16 lulosic biomass ethanol (as defined in section 211(o)(1) 

17 of the Clean Air Act (42 U.S.C. 7545(o)(1))). 

18 (g) ANNUAL REPORTS.—As soon as practicable after 

19 the end of each fiscal year for which the Assistant Sec20 retary receives funds under subsection (h), the Assistant 

21 Secretary shall submit to the Committee on Energy and 

22 Natural Resources of the Senate and the Committee on 

23 Energy and Commerce, and the Committee on Science, of 

24 the House of Representatives a report on the progress, 


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1 challenges, future milestones, and strategic plan of the As2 sistant Secretary, including— 

3 (1) a description of, and rationale for, any 

4 changes in the strategic plan; 

5 (2) the adequacy of human and financial re6 sources necessary to achieve the mission described in 

7 subsection (b); and 

8 (3) in the case of cash prizes awarded under 

9 subsection (e), a description of— 

10 (A) the applications of the research, tech11 nology, or prototypes for which prizes were 

12 awarded; 

13 (B) the total amount of the prizes that 

14 were awarded; 

15 (C) the methods used for solicitation and 

16 evaluation of submissions and an assessment of 

17 the effectiveness of those methods; and 

18 (D) recommendations to improve the prize 

19 program. 

20 (h) RELATIONSHIP TO OTHER AUTHORITY.—The 

21 program under this section may be carried out in conjunc22 tion with, or in addition to, the exercise of any other au23 thority of the Assistant Secretary to acquire, support, or 

24 stimulate basic, advanced, and applied research, tech25 nology development, or prototype projects. 


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1 TITLE II—REALIGNING OIL 

2 COMPANY INCENTIVES 

3 Subtitle A—Excess Oil Profits 

4 SEC. 201. TEMPORARY OIL PROFIT FEE. 

5 (a) IN GENERAL.—Subtitle E of the Internal Rev6 enue Code of 1986 (relating to alcohol, tobacco, and cer7 tain other excise taxes) is amended by adding at the end 

8 the following new chapter: 

9 ‘‘CHAPTER 56—TEMPORARY FEE ON 

10 EXCESS OIL PROFIT 

‘‘Sec. 5896. Imposition of fee. 

‘‘Sec. 5897. Excess profit; etc. 

‘‘Sec. 5898. Special rules and definitions. 

11 ‘‘SEC. 5896. IMPOSITION OF FEE. 

12 ‘‘(a) IN GENERAL.—In addition to any other tax im13 posed under this title, there is hereby imposed on any ap14 plicable taxpayer an excise fee in an amount equal to 50 

15 percent of the excess profit of such taxpayer for any tax16 able year beginning during 2006 or 2007. 

17 ‘‘(b) APPLICABLE TAXPAYER.—For purposes of this 

18 chapter, the term ‘applicable taxpayer’ means, with re19 spect to operations in the United States— 

20 ‘‘(1) any integrated oil company (as defined in 

21 section 291(b)(4)), and 

22 ‘‘(2) any other producer or refiner of crude oil 

23 with gross receipts from the sale of such crude oil 


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1 or refined oil products for the taxable year exceeding 

2 $100,000,000. 

3 ‘‘SEC. 5897. EXCESS PROFIT; ETC. 

4 ‘‘(a) GENERAL RULE.—For purposes of this chapter, 

5 the term ‘excess profit’ means the excess of the adjusted 

6 taxable income of the applicable taxpayer for the taxable 

7 year over the reasonably inflated average profit for such 

8 taxable year. 

9 ‘‘(b) ADJUSTED TAXABLE INCOME.—For purposes of 

10 this chapter, with respect to any applicable taxpayer, the 

11 adjusted taxable income for any taxable year is equal to 

12 the taxable income for such taxable year (within the mean13 ing of section 63 and determined without regard to this 

14 subsection)— 

15 ‘‘(1) increased by any interest expense deduc16 tion, charitable contribution deduction, and any net 

17 operating loss deduction carried forward from any 

18 prior taxable year, and 

19 ‘‘(2) reduced by— 

20 ‘‘(A) any interest income, dividend income, 

21 and net operating losses to the extent such 

22 losses exceed taxable income for the taxable 

23 year, and 

24 ‘‘(B) any qualified domestic energy invest25 ment for such taxable year. 


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1 In the case of any applicable taxpayer which is a foreign 

2 corporation, the adjusted taxable income shall be deter3 mined with respect to such income which is effectively con4 nected with the conduct of a trade or business in the 

5 United States. 

6 ‘‘(c) REASONABLY INFLATED AVERAGE PROFIT.— 

7 For purposes of this chapter, with respect to any applica8 ble taxpayer, the reasonably inflated average profit for any 

9 taxable year is an amount equal to the average of the ad10 justed taxable income of such taxpayer for taxable years 

11 beginning during the 2000–2004 taxable year period (de12 termined without regard to the taxable year with the high13 est adjusted taxable income in such period) plus 10 per14 cent of such average. 

15 ‘‘(d) QUALIFIED DOMESTIC ENERGY INVESTMENT.— 

16 For purposes of this chapter, the term ‘qualified domestic 

17 energy investment’ means any amount paid or incurred 

18 with respect to— 

19 ‘‘(1) qualified refinery property (as defined in 

20 section 179C(c) and determined without regard to 

21 any termination date), 

22 ‘‘(2) any qualified facility described in para23 graph (1), (2), (3), or (4) of section 45(d) (deter24 mined without regard to any placed in service date), 

25 and 


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1 ‘‘(3) any facility for the production of alcohol 

2 used as a fuel (within the meaning of section 40) or 

3 biodiesel or agri-biodiesel used as a fuel (within the 

4 meaning of section 40A). 

5 ‘‘SEC. 5898. SPECIAL RULES AND DEFINITIONS. 

6 ‘‘(a) WITHHOLDING AND DEPOSIT OF FEE.—The 

7 Secretary shall provide such rules as are necessary for the 

8 withholding and deposit of the fee imposed under section 

9 5896. 

10 ‘‘(b) RECORDS AND INFORMATION.—Each taxpayer 

11 liable for the fee under section 5896 shall keep such 

12 records, make such returns, and furnish such information 

13 as the Secretary may by regulations prescribe. 

14 ‘‘(c) RETURN OF FEE.—The Secretary shall provide 

15 for the filing and the time of such filing of the return of 

16 the fee imposed under section 5896. 

17 ‘‘(d) CRUDE OIL.—The term ‘crude oil’ includes 

18 crude oil condensates and natural gasoline. 

19 ‘‘(e) BUSINESSES UNDER COMMON CONTROL.—For 

20 purposes of this chapter, all members of the same con21 trolled group of corporations (within the meaning of sec22 tion 267(f)) and all persons under common control (within 

23 the meaning of section 52(b) but determined by treating 

24 an interest of more than 50 percent as a controlling inter25 est) shall be treated as 1 person. 


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1 ‘‘(f) REGULATIONS.—The Secretary shall prescribe 

2 such regulations as may be necessary or appropriate to 

3 carry out the purposes of this chapter.’’. 

4 (b) CLERICAL AMENDMENT.—The table of chapters 

5 for subtitle E of the Internal Revenue Code of 1986 is 

6 amended by adding at the end the following new item: 

‘‘CHAPTER 56. TEMPORARY FEE ON EXCESS OIL PROFIT.’’. 

7 (c) DEDUCTIBILITY OF FEE.—The first sentence of 

8 section 164(a) of the Internal Revenue Code of 1986 (re9 lating to deduction for taxes) is amended by inserting 

10 after paragraph (5) the following new paragraph: 

11 ‘‘(6) The fee imposed by section 5896.’’. 

12 Subtitle B—Energy Fairness for 

13 America 

14 SEC. 211. ELIMINATION OF DEDUCTION FOR INTANGIBLE 

15 DRILLING AND DEVELOPMENT COSTS FOR 

16 MAJOR OIL COMPANIES. 

17 (a) IN GENERAL.—Section 263(c) of the Internal 

18 Revenue Code of 1986 is amended by adding at the end 

19 the following new sentences: ‘‘This subsection shall not 

20 apply during any taxable year with respect to an applica21 ble taxpayer (as defined in section 5896(b)) if during the 

22 preceding taxable year for the production of oil, the aver23 age price of crude oil in the United States is greater than 

24 $34.71 per barrel, and for the production of natural gas, 

25 the average wellhead price of natural gas in the United 


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1 States is greater than $4.34 per 1,000 cubic feet. For pur2 poses of the preceding sentence, the Secretary shall deter3 mine average prices, taking into consideration the most 

4 recent data reported by the Energy Information Adminis5 tration. For taxable years beginning after December 31, 

6 2007, each dollar amount specified in this subsection shall 

7 be adjusted to reflect changes for the 12-month period 

8 ending the preceding September 30 in the Consumer Price 

9 Index for All Urban Consumers published by the Bureau 

10 of Labor Statistics of the Department of Labor.’’ 

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

12 this section shall apply to taxable years beginning after 

13 the date of the enactment of this Act. 

14 SEC. 212. OIL AND GAS ROYALTY-RELATED AMENDMENTS. 

15 (a) REPEAL.—Sections 344 through 346 of the En16 ergy Policy Act of 2005 (42 U.S.C. 15902 et seq.) are 

17 repealed. 

18 (b) TERMINATION OF ALASKA OFFSHORE ROYALTY

19 SUSPENSION.—Section 8(a)(3)(B) of the Outer Conti20 nental Shelf Lands Act (43 U.S.C. 1337(a)(3)(B)) is 

21 amended by striking ‘‘and in the Planning Areas offshore 

22 Alaska’’. 

23 SEC. 213. EXTENSION OF ELECTION TO EXPENSE CERTAIN 

24 REFINERIES. 

25 (a) EXTENSION.— 


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1 (1) IN GENERAL.—Section 179C(c)(1) of the 

2 Internal Revenue Code of 1986 (defining qualified 

3 refinery property) is amended— 

4 (A) by striking ‘‘and before January 1, 

5 2012’’ in subparagraph (B) and inserting ‘‘and, 

6 in the case of any qualified refinery described in 

7 subsection (d)(1), before January 1, 2012’’, and 

8 (B) by inserting ‘‘if described in subsection 

9 (d)(1)’’ after ‘‘of which’’ in subparagraph 

10 (F)(i). 

11 (2) CONFORMING AMENDMENT.—Subsection (d) 

12 of section 179C of the Internal Revenue Code of 

13 1986 is amended to read as follows: 

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

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

16 located in the United States which is designed to serve 

17 the primary purpose of processing liquid fuel from— 

18 ‘‘(1) crude oil, or 

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

20 45K(c)).’’. 

21 (3) EFFECTIVE DATE.—The amendments made 

22 by this subsection shall take effect as if included in 

23 the amendment made by section 1323(a) of the En24 ergy Policy Act of 2005. 


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1 (b) NONAPPLICATION FOR MAJOR OIL COMPA2 NIES.— 

3 (1) IN GENERAL.—Section 179C of the Internal 

4 Revenue Code of 1986 is amended by adding at the 

5 end the following new subsection: 

6 ‘‘(i) NONAPPLICATION OF SECTION.—This section 

7 shall not apply during any taxable year with respect to 

8 an applicable taxpayer (as defined in section 5896(b)) if 

9 during the preceding taxable year for the production of 

10 oil, the average price of crude oil in the United States is 

11 greater than $34.71 per barrel. For purposes of the pre12 ceding sentence, the Secretary shall determine average 

13 prices, taking into consideration the most recent data re14 ported by the Energy Information Administration. For 

15 taxable years beginning after December 31, 2007, the dol16 lar amount specified in this paragraph shall be adjusted 

17 to reflect changes for the 12-month period ending the pre18 ceding September 30 in the Consumer Price Index for All 

19 Urban Consumers published by the Bureau of Labor Sta20 tistics of the Department of Labor.’’. 

21 (2) EFFECTIVE DATE.—The amendment made 

22 by this subsection shall apply to taxable years begin23 ning after the date of the enactment of this Act. 


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1 SEC. 214. ELIMINATION OF AMORTIZATION OF GEOLOGI2 CAL AND GEOPHYSICAL EXPENDITURES FOR 

3 MAJOR OIL COMPANIES. 

4 (a) IN GENERAL.—Section 167(h) of the Internal 

5 Revenue Code of 1986 is amended by adding at the end 

6 the following new paragraph: 

7 ‘‘(5) NONAPPLICATION OF SECTION.—This sub8 section shall not apply during any taxable year with 

9 respect to an applicable taxpayer (as defined in sec10 tion 5896(b)) if during the preceding taxable year 

11 for the production of oil, the average price of crude 

12 oil in the United States is greater than $34.71 per 

13 barrel, and for the production of natural gas, the av14 erage wellhead price of natural gas in the United 

15 States is greater than $4.34 per 1,000 cubic feet. 

16 For purposes of the preceding sentence, the Sec17 retary shall determine average prices, taking into 

18 consideration the most recent data reported by the 

19 Energy Information Administration. For taxable 

20 years beginning after December 31, 2007, each dol21 lar amount specified in this subparagraph shall be 

22 adjusted to reflect changes for the 12-month period 

23 ending the preceding September 30 in the Consumer 

24 Price Index for All Urban Consumers published by 

25 the Bureau of Labor Statistics of the Department of 

26 Labor.’’. 


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

2 this section shall take effect on and after the date of the 

3 enactment of this Act. 

4 SEC. 215. REVALUATION OF LIFO INVENTORIES OF MAJOR 

5 OIL COMPANIES. 

6 (a) GENERAL RULE.—Notwithstanding any other 

7 provision of law, if a taxpayer is an applicable taxpayer 

8 (as defined in section 5896(b)) for its last taxable year 

9 ending in calendar year 2005, the taxpayer shall— 

10 (1) increase, effective as of the close of such 

11 taxable year, the value of each historic LIFO layer 

12 of inventories of crude oil, natural gas, or any other 

13 petroleum product (within the meaning of section 

14 4611) by the layer adjustment amount, and 

15 (2) decrease its cost of goods sold for such tax16 able year by the aggregate amount of the increases 

17 under paragraph (1). 

18 If the aggregate amount of the increases under paragraph 

19 (1) exceed the taxpayer’s cost of goods sold for such tax20 able year, the taxpayer’s gross income for such taxable 

21 year shall be increased by the amount of such excess. 

22 (b) LAYER ADJUSTMENT AMOUNT.—For purposes of 

23 this section— 


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1 (1) IN GENERAL.—The term ‘‘layer adjustment 

2 amount’’ means, with respect to any historic LIFO 

3 layer, the product of— 

4 (A) $18.75, and 

5 (B) the number of barrels of crude oil (or 

6 in the case of natural gas or other petroleum 

7 products, the number of barrel-of-oil equiva8 lents) represented by the layer. 

9 (2) BARREL-OF-OIL EQUIVALENT.—The term 

10 ‘‘barrel-of-oil equivalent’’ has the meaning given 

11 such term by section 29(d)(5) (as in effect before its 

12 redesignation by the Energy Tax Incentives Act of 

13 2005). 

14 (c) APPLICATION OF REQUIREMENT.— 

15 (1) NO CHANGE IN METHOD OF ACCOUNTING.— 

16 Any adjustment required by this section shall not be 

17 treated as a change in method of accounting. 

18 (2) UNDERPAYMENTS OF ESTIMATED TAX.—No 

19 addition to the tax shall be made under section 6655 

20 of the Internal Revenue Code of 1986 (relating to 

21 failure by corporation to pay estimated tax) with re22 spect to any underpayment of an installment re23 quired to be paid with respect to the taxable year 

24 described in subsection (a) to the extent such under25 payment was created or increased by this section. 


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1 SEC. 216. MODIFICATIONS OF FOREIGN TAX CREDIT RULES 

2 APPLICABLE TO MAJOR OIL COMPANIES 

3 WHICH ARE DUAL CAPACITY TAXPAYERS. 

4 (a) IN GENERAL.—Section 901 of the Internal Rev5 enue Code of 1986 (relating to credit for taxes of foreign 

6 countries and of possessions of the United States) is 

7 amended by redesignating subsection (m) as (n) and by 

8 inserting after subsection (l) the following new subsection: 

9 ‘‘(m) SPECIAL RULES RELATING TO MAJOR OIL

10 COMPANIES WHICH ARE DUAL CAPACITY TAXPAYERS.— 

11 ‘‘(1) GENERAL RULE.—Notwithstanding any 

12 other provision of this chapter, any amount paid or 

13 accrued by a dual capacity taxpayer which is an ap14 plicable taxpayer (as defined in section 5896(b)) to 

15 a foreign country or possession of the United States 

16 for any period shall not be considered a tax— 

17 ‘‘(A) if, for such period, the foreign coun18 try or possession does not impose a generally 

19 applicable income tax, or 

20 ‘‘(B) to the extent such amount exceeds 

21 the amount (determined in accordance with reg22 ulations) which— 

23 ‘‘(i) is paid by such dual capacity tax24 payer pursuant to the generally applicable 

25 income tax imposed by the country or pos26 session, or 


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1 ‘‘(ii) would be paid if the generally ap2 plicable income tax imposed by the country 

3 or possession were applicable to such dual 

4 capacity taxpayer. 

5 Nothing in this paragraph shall be construed to 

6 imply the proper treatment of any such amount 

7 not in excess of the amount determined under 

8 subparagraph (B). 

9 ‘‘(2) DUAL CAPACITY TAXPAYER.—For pur10 poses of this subsection, the term ‘dual capacity tax11 payer’ means, with respect to any foreign country or 

12 possession of the United States, a person who— 

13 ‘‘(A) is subject to a levy of such country or 

14 possession, and 

15 ‘‘(B) receives (or will receive) directly or 

16 indirectly a specific economic benefit (as deter17 mined in accordance with regulations) from 

18 such country or possession. 

19 ‘‘(3) GENERALLY APPLICABLE INCOME TAX.— 

20 For purposes of this subsection— 

21 ‘‘(A) IN GENERAL.—The term ‘generally 

22 applicable income tax’ means an income tax (or 

23 a series of income taxes) which is generally im24 posed under the laws of a foreign country or 

25 possession on income derived from the conduct 


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1 of a trade or business within such country or 

2 possession. 

3 ‘‘(B) EXCEPTIONS.—Such term shall not 

4 include a tax unless it has substantial applica5 tion, by its terms and in practice, to— 

6 ‘‘(i) persons who are not dual capacity 

7 taxpayers, and 

8 ‘‘(ii) persons who are citizens or resi9 dents of the foreign country or posses10 sion.’’. 

11 (b) EFFECTIVE DATE.— 

12 (1) IN GENERAL.—The amendments made by 

13 this section shall apply to taxes paid or accrued in 

14 taxable years beginning after the date of the enact15 ment of this Act. 

16 (2) CONTRARY TREATY OBLIGATIONS

17 UPHELD.—The amendments made by this section 

18 shall not apply to the extent contrary to any treaty 

19 obligation of the United States. 

20 SEC. 217. DENIAL OF DEDUCTION FOR INCOME ATTRIB21 UTABLE TO DOMESTIC PRODUCTION OF OIL, 

22 NATURAL GAS, OR PRIMARY PRODUCTS 

23 THEREOF. 

24 (a) IN GENERAL.—Subparagraph (B) of section 

25 199(c)(4) of the Internal Revenue Code of 1986 (relating 


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1 to exceptions) is amended by striking ‘‘or’’ at the end of 

2 clause (ii), by striking the period at the end of clause (iii) 

3 and inserting ‘‘, or’’, and by inserting after clause (iii) the 

4 following new clause: 

5 ‘‘(iv) in the case of any applicable tax6 payer (as defined in section 5896(b)), the 

7 production, refining, processing, transpor8 tation, or distribution of oil, natural gas, 

9 or any primary product thereof during any 

10 taxable year described in section 

11 167(h)(5)(A).’’. 

12 (b) CONFORMING AMENDMENTS.—Section 199(c)(4) 

13 of the Internal Revenue Code of 1986 is amended— 

14 (1) in subparagraph (A)(i)(III) by striking 

15 ‘‘electricity, natural gas,’’ and inserting ‘‘electricity’’, 

16 and 

17 (2) in subparagraph (B)(ii) by striking ‘‘elec18 tricity, natural gas,’’ and inserting ‘‘electricity’’. 

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

20 this section shall apply to taxable years beginning after 

21 December 31, 2005. 

22 SEC. 218. RULES RELATING TO FOREIGN OIL AND GAS IN23 COME. 

24 (a) SEPARATE BASKET FOR FOREIGN TAX CRED25 IT.— 


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1 (1) YEARS BEFORE 2007.—Paragraph (1) of 

2 section 904(d) of the Internal Revenue Code of 1986 

3 (relating to separate application of section with re4 spect to certain categories of income), as in effect 

5 for years beginning before 2007, is amended by 

6 striking ‘and’ at the end of subparagraph (H), by 

7 redesignating subparagraph (I) as subparagraph (J), 

8 and by inserting after subparagraph (H) the fol9 lowing new subparagraph: 

10 ‘‘(I) foreign oil and gas income, and’’. 

11 (2) 2007 AND AFTER.—Paragraph (1) of sec12 tion 904(d) of such Code, as in effect for years be13 ginning after 2006, is amended by striking ‘‘and’’ at 

14 the end of subparagraph (A), by striking the period 

15 at the end of subparagraph (B) and inserting ‘‘, 

16 and’’, and by adding at the end the following: 

17 ‘‘(C) foreign oil and gas income.’’. 

18 (b) DEFINITION.— 

19 (1) YEARS BEFORE 2007.—Paragraph (2) of 

20 section 904(d) of the Internal Revenue Code of 

21 1986, as in effect for years beginning before 2007, 

22 is amended by redesignating subparagraphs (H) and 

23 (I) as subparagraphs (I) and (J), respectively, and 

24 by inserting after subparagraph (G) the following 

25 new subparagraph: 


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1 ‘‘(H) FOREIGN OIL AND GAS INCOME.— 

2 The term ‘foreign oil and gas income’ has the 

3 meaning given such term by section 954(g).’’. 

4 (2) 2007 AND AFTER.—Section 904(d)(2) of 

5 such Code, as in effect for years after 2006, is 

6 amended by redesignating subparagraphs (J) and 

7 (K) as subparagraphs (K) and (L) and by inserting 

8 after subparagraph (I) the following: 

9 ‘‘(J) FOREIGN OIL AND GAS INCOME.—For 

10 purposes of this section— 

11 ‘‘(i) IN GENERAL.—The term ‘foreign 

12 oil and gas income’ has the meaning given 

13 such term by section 954(g). 

14 ‘‘(ii) COORDINATION.—Passive cat15 egory income and general category income 

16 shall not include foreign oil and gas income 

17 (as so defined).’’. 

18 (c) CONFORMING AMENDMENTS.— 

19 (1) Section 904(d)(3)(F)(i) of the Internal Rev20 enue Code of 1986 is amended by striking ‘‘or (E)’’ 

21 and inserting ‘‘(E), or (I)’’. 

22 (2) Section 907(a) of such Code is hereby re23 pealed. 

24 (3) Section 907(c)(4) of such Code is hereby re25 pealed. 


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1 (4) Section 907(f) of such Code is hereby re2 pealed. 

3 (d) EFFECTIVE DATES.— 

4 (1) IN GENERAL.—The amendments made by 

5 this section shall apply to taxable years beginning 

6 after the date of the enactment of this Act. 

7 (2) YEARS AFTER 2006.—The amendments 

8 made by paragraphs (1)(B) and (2)(B) shall apply 

9 to taxable years beginning after December 31, 2006. 

10 (3) TRANSITIONAL RULES.— 

11 (A) SEPARATE BASKET TREATMENT.—Any 

12 taxes paid or accrued in a taxable year begin13 ning on or before the date of the enactment of 

14 this Act, with respect to income which was de15 scribed in subparagraph (I) of section 

16 904(d)(1) of such Code (as in effect on the day 

17 before the date of the enactment of this Act), 

18 shall be treated as taxes paid or accrued with 

19 respect to foreign oil and gas income to the ex20 tent the taxpayer establishes to the satisfaction 

21 of the Secretary of the Treasury that such 

22 taxes were paid or accrued with respect to for23 eign oil and gas income. 

24 (B) CARRYOVERS.—Any unused oil and 

25 gas extraction taxes which under section 907(f) 


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1 of such Code (as so in effect) would have been 

2 allowable as a carryover to the taxpayer’s first 

3 taxable year beginning after the date of the en4 actment of this Act (without regard to the limi5 tation of paragraph (2) of such section 907(f) 

6 for first taxable year) shall be allowed as 

7 carryovers under section 904(c) of such Code in 

8 the same manner as if such taxes were unused 

9 taxes under such section 904(c) with respect to 

10 foreign oil and gas extraction income. 

11 (C) LOSSES.—The amendment made by 

12 subsection (c)(3) shall not apply to foreign oil 

13 and gas extraction losses arising in taxable 

14 years beginning on or before the date of the en15 actment of this Act. 

16 SEC. 219. ELIMINATION OF DEFERRAL FOR FOREIGN OIL 

17 AND GAS EXTRACTION INCOME. 

18 (a) GENERAL RULE.—Paragraph (1) of section 

19 954(g) of the Internal Revenue Code of 1986 (defining 

20 foreign base company oil related income) is amended to 

21 read as follows: 

22 ‘‘(1) IN GENERAL.—Except as otherwise pro23 vided in this subsection, the term ‘foreign oil and 

24 gas income’ means, in the case of any applicable tax25 payer (as defined in section 5896(b)) during any 


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1 taxable year described in section 167(h)(5)(A), any 

2 income of a kind which would be taken into account 

3 in determining the amount of— 

4 ‘‘(A) foreign oil and gas extraction income 

5 (as defined in section 907(c)), or 

6 ‘‘(B) foreign oil related income (as defined 

7 in section 907(c)).’’. 

8 (b) CONFORMING AMENDMENTS.— 

9 (1) Subsections (a)(5), (b)(5), and (b)(6) of 

10 section 954, and section 952(c)(1)(B)(ii)(I) of the 

11 Internal Revenue Code of 1986, are each amended 

12 by striking ‘‘base company oil related income’’ each 

13 place it appears (including in the heading of sub14 section (b)(8)) and inserting ‘‘oil and gas income’’. 

15 (2) Subsection (b)(4) of section 954 of such 

16 Code is amended by striking ‘‘base company oil-re17 lated income’’ and inserting ‘‘oil and gas income’’. 

18 (3) The subsection heading for subsection (g) of 

19 section 954 of such Code is amended by striking 

20 ‘‘FOREIGN BASE COMPANY OIL RELATED INCOME’’ 

21 and inserting ‘‘FOREIGN OIL AND GAS INCOME’’. 

22 (4) Subparagraph (A) of section 954(g)(2) of 

23 such Code is amended by striking ‘‘foreign base 

24 company oil related income’’ and inserting ‘‘foreign 

25 oil and gas income’’. 


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

2 this section shall apply to taxable years of foreign corpora3 tions beginning after the date of the enactment of this 

4 Act, and to taxable years of United States shareholders 

5 ending with or within such taxable years of foreign cor6 porations. 

7 Subtitle C—Protection and Reten8 tion of Value of Publicly-Owned 

9 Energy Resources 

10 SEC. 221. SUSPENSION OF ROYALTY RELIEF. 

11 (a) REQUIREMENT.—Subject to subsection (b), the 

12 Secretary of the Interior (referred to in this subtitle as 

13 the ‘‘Secretary’’) shall suspend the application of any pro14 vision of Federal law under which a person would other15 wise be provided relief from a requirement to pay a royalty 

16 for the production of oil or natural gas from Federal land 

17 (including submerged land) occurring after the date of en18 actment of this Act during a period in which— 

19 (1) for the production of oil, the average price 

20 of crude oil in the United States during the 4-week 

21 period immediately preceding the suspension is 

22 greater than $34.71 per barrel; and 

23 (2) for the production of natural gas, the aver24 age wellhead price of natural gas in the United 

25 States during the 4-week period immediately preVerDate Aug 31 2005 02:45 May 26, 2006 Jkt 049196 PO 00000 Frm 00061 Fmt 6652 Sfmt 6201 E:\BILLS\S2993.IS S2993

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1 ceding the suspension is greater than $4.34 per 

2 1,000 cubic feet. 

3 (b) DETERMINATION OF AVERAGE PRICES.— 

4 (1) DATA.—For purposes of subsection (a), the 

5 Secretary shall determine average prices, taking into 

6 consideration the most recent data reported by the 

7 Energy Information Administration. 

8 (2) ADJUSTMENT.—For fiscal year 2008 and 

9 each subsequent fiscal year, each dollar amount 

10 specified in subsection (a) shall be adjusted to re11 flect changes for the 12-month period ending the 

12 preceding November 30 in the Consumer Price 

13 Index for All Urban Consumers published by the 

14 Bureau of Labor Statistics of the Department of 

15 Labor. 

16 SEC. 222. RENEGOTIATION OF EXISTING LEASES. 

17 (a) IN GENERAL.—Not later than 90 days after the 

18 date of enactment of this Act, the Secretary shall make 

19 a determination regarding the ability of the Secretary to 

20 renegotiate leases that— 

21 (1) are in effect prior to the date of enactment 

22 of this Act; 

23 (2) authorize the production of oil or natural 

24 gas on Federal land; and 


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1 (3) do not contain terms at least equal to the 

2 royalty relief price thresholds described in section 

3 591. 

4 (b) AFFIRMATIVE DETERMINATION.— 

5 (1) IN GENERAL.—If the Secretary determines 

6 that the Secretary has the authority to renegotiate 

7 leases described in subsection (a), the Secretary 

8 shall immediately offer to renegotiate the terms of 

9 those leases to include the royalty relief price thresh10 olds described in section 591. 

11 (2) FAILURE TO RENEGOTIATE.—If a lessee 

12 fails to renegotiate under paragraph (1), the Sec13 retary shall preclude that lessee from— 

14 (A) entering into new leases; or 

15 (B) obtaining other existing leases or inter16 ests in leases. 

17 (c) NEGATIVE DETERMINATION.—If the Secretary 

18 determines that the Secretary does not have the authority 

19 to renegotiate leases described in subsection (a), the Sec20 retary shall immediately submit to Congress recommenda21 tions for changes to law that will— 

22 (1) provide the authority necessary; or 

23 (2) produce the same level of revenue from 

24 leases for the production of oil and gas from Federal 

25 land that will otherwise be lost due to the failure of 


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1 lessees to renegotiate and modify the terms of exist2 ing leases as described in subsection (b)(1). 

3 Subtitle D—Reduction in 

4 Incentives to Guzzle Gas 

5 SEC. 231. REDUCING INCENTIVES TO GUZZLE GAS. 

6 (a) INCLUSION OF HEAVY VEHICLES IN LIMITATION

7 ON DEPRECIATION OF CERTAIN LUXURY AUTO8 MOBILES.— 

9 (1) IN GENERAL.—Section 280F(d)(5)(A) of 

10 the Internal Revenue Code of 1986 (defining pas11 senger automobile) is amended— 

12 (A) by striking clause (ii) and inserting the 

13 following new clause: 

14 ‘‘(ii)(I) which is rated at 6,000 

15 pounds unloaded gross vehicle weight or 

16 less, or 

17 ‘‘(II) which is rated at more than 

18 6,000 pounds but not more than 14,000 

19 pounds gross vehicle weight.’’, and 

20 (B) by striking ‘‘clause (ii)’’ in the second 

21 sentence and inserting ‘‘clause (ii)(I)’’. 

22 (2) EXCEPTION FOR VEHICLES USED IN FARM23 ING BUSINESS.—Section 280F(d)(5)(B) of such 

24 Code (relating to exception for certain vehicles) is 

25 amended by striking ‘‘and’’ at the end of clause (ii), 


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1 by redesignating clause (iii) as clause (iv), and by in2 serting after clause (ii) the following new clause: 

3 ‘‘(iii) any vehicle used in a farming 

4 business (as defined in section 263A(e)(4), 

5 and’’. 

6 (3) EFFECTIVE DATE.—The amendments made 

7 by this subsection shall apply to property placed in 

8 service after the date of the enactment of this Act. 

9 (b) UPDATED DEPRECIATION DEDUCTION LIMITS.— 

10 (1) IN GENERAL.—Subparagraph (A) of section 

11 280F(a)(1) of the Internal Revenue Code of 1986 

12 (relating to limitation on amount of depreciation for 

13 luxury automobiles) is amended to read as follows: 

14 ‘‘(I) LIMITATION.—The amount of the de15 preciation deduction for any taxable year shall 

16 not exceed for any passenger automobile— 

17 ‘‘(i) for the 1st taxable year in the re18 covery period— 

19 ‘‘(I) described in subsection 

20 (d)(5)(A)(ii)(I), $4,000, 

21 ‘‘(II) described in the second sen22 tence of subsection (d)(5)(A), $5,000, 

23 and 

24 ‘‘(III) described in subsection 

25 (d)(5)(A)(ii)(II), $6,000, 


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1 ‘‘(ii) for the 2nd taxable year in the 

2 recovery period— 

3 ‘‘(I) described in subsection 

4 (d)(5)(A)(ii)(I), $6,400, 

5 ‘‘(II) described in the second sen6 tence of subsection (d)(5)(A), $8,000, 

7 and 

8 ‘‘(III) described in subsection 

9 (d)(5)(A)(ii)(II), $9,600, 

10 ‘‘(iii) for the 3rd taxable year in the 

11 recovery period— 

12 ‘‘(I) described in subsection 

13 (d)(5)(A)(ii)(I), $3,850, 

14 ‘‘(II) described in the second sen15 tence of subsection (d)(5)(A), $4,800, 

16 and 

17 ‘‘(III) described in subsection 

18 (d)(5)(A)(ii)(II), $5,775, and 

19 ‘‘(iv) for each succeeding taxable year 

20 in the recovery period— 

21 ‘‘(I) described in subsection 

22 (d)(5)(A)(ii)(I), $2,325, 

23 ‘‘(II) described in the second sen24 tence of subsection (d)(5)(A), $2,900, 

25 and 


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1 ‘‘(III) described in subsection 

2 (d)(5)(A)(ii)(II), $3,475.’’. 

3 (2) YEARS AFTER RECOVERY PERIOD.—Section 

4 280F(a)(1)(B)(ii) of such Code is amended to read 

5 as follows: 

6 ‘‘(ii) LIMITATION.—The amount treat7 ed as an expense under clause (i) for any 

8 taxable year shall not exceed for any pas9 senger automobile— 

10 ‘‘(I) described in subsection 

11 (d)(5)(A)(ii)(I), $2,325, 

12 ‘‘(II) described in the second sen13 tence of subsection (d)(5)(A), $2,900, 

14 and 

15 ‘‘(III) described in subsection 

16 (d)(5)(A)(ii)(II), $3,475.’’. 

17 (3) INFLATION ADJUSTMENT.—Section 

18 280F(d)(7) of such Code (relating to automobile 

19 price inflation adjustment) is amended— 

20 (A) by striking ‘‘after 1988’’ in subpara21 graph (A) and inserting ‘‘after 2006’’, and 

22 (B) by striking subparagraph (B) and in23 serting the following new subparagraph: 

24 ‘‘(B) AUTOMOBILE PRICE INFLATION AD25 JUSTMENT.—For purposes of this paragraph— 


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1 ‘‘(i) IN GENERAL.—The automobile 

2 price inflation adjustment for any calendar 

3 year is the percentage (if any) by which— 

4 ‘‘(I) the average wage index for 

5 the preceding calendar year, exceeds 

6 ‘‘(II) the average wage index for 

7 2005. 

8 ‘‘(ii) AVERAGE WAGE INDEX.—The 

9 term ‘average wage index’ means the aver10 age wage index published by the Social Se11 curity Administration.’’. 

12 (4) EFFECTIVE DATE.—The amendments made 

13 by this subsection shall apply to property placed in 

14 service after the date of the enactment of this Act. 

15 (c) EXPENSING LIMITATION FOR FARM VEHICLES.— 

16 (1) IN GENERAL.—Paragraph (6) of section 

17 179(b) of the Internal Revenue Code of 1986 (relat18 ing to limitations) is amended to read as follows: 

19 ‘‘(6) LIMITATION ON COST TAKEN INTO AC20 COUNT FOR FARM VEHICLES.—The cost of any vehi21 cle described in section 280F(d)(5)(B)(iii) for any 

22 taxable year which may be taken into account under 

23 this section shall not exceed $30,000.’’. 


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1 (2) EFFECTIVE DATE.—The amendment made 

2 by this subsection shall apply to property placed in 

3 service after the date of the enactment of this Act. 

Æ 


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