I 

109TH CONGRESS 

2D SESSION H. R. 5375 

To provide incentives to reduce dependence on foreign oil. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 11, 2006 

Mr. DANIEL E. LUNGREN of California (for himself and Mr. COSTA) introduced the following bill; which was referred to the Committee on Ways 

and Means, and in addition to the Committees on Science and Energy 

and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To provide incentives to reduce dependence on foreign oil. 

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 ‘‘New Options Petro5 leum Energy Conservation Act of 2006’’. 

6 SEC. 2. CREDIT FOR ELECTRICITY PRODUCED FROM CLI7 MATE NEUTRAL COMBUSTION PROCESSES. 

8 (a) IN GENERAL.—Paragraph (1) of section 45(c) of 

9 the Internal Revenue Code of 1986 is amended by striking 

10 ‘‘and’’ at the end of subparagraph (G), by striking the 


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1 period at the end of subparagraph (H) and inserting ‘‘, 

2 and’’, and by adding at the end the following new subpara3 graph: 

4 ‘‘(I) any climate neutral combustion re5 source.’’. 

6 (b) CLIMATE NEUTRAL COMBUSTION RESOURCE.— 

7 Subsection (c) of section 45 of such Code is amended by 

8 adding at the end the following new paragraph: 

9 ‘‘(10) CLIMATE NEUTRAL COMBUSTION RE10 SOURCE.—The term ‘climate neutral combustion re11 source’ means any matter used as a fuel in a quali12 fied facility described in subsection (d)(11).’’. 

13 (c) CLIMATE NEUTRAL COMBUSTION FACILITY.— 

14 Subsection (d) of section 45 of such Code is amended by 

15 adding at the end the following new paragraph: 

16 ‘‘(11) CLIMATE NEUTRAL COMBUSTION FACIL17 ITY.—In the case of a facility which burns climate 

18 neutral combustion resources to produce electricity, 

19 the term ‘qualified facility’ means any facility 

20 which— 

21 ‘‘(A) captures the carbon dioxide released 

22 during combustion and uses such carbon diox23 ide to recover hydrocarbon fuel from below 

24 ground, 


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1 ‘‘(B) produces no atmospheric emissions of 

2 mercury or greenhouse gases and no emissions 

3 that form fine particles, smog, or acid rain, and 

4 ‘‘(C) is owned by the taxpayer and origi5 nally placed in service after December 31, 

6 2006.’’. 

7 (d) EFFECTIVE DATE.—The amendments made this 

8 section shall apply to electricity produced and sold after 

9 December 31, 2006, in taxable years ending after such 

10 date. 

11 SEC. 3. EXTENSION OF ENERGY CREDIT FOR SOLAR EN12 ERGY PROPERTY. 

13 (a) IN GENERAL.—Paragraph (2)(A)(i)(II) and para14 graph (3)(A)(ii) of section 48(a) of the Internal Revenue 

15 Code of 1986 (relating to energy credit) are each amended 

16 by striking ‘‘2008’’ and inserting ‘‘2012’’. 

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

18 this section shall apply to periods after December 31, 

19 2007, in taxable years ending after such date, under rules 

20 similar to the rules of section 48(m) of the Internal Rev21 enue Code of 1986 (as in effect on the day before the date 

22 of the enactment of the Revenue Reconciliation Act of 

23 1990). 


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1 SEC. 4. EXTENSION OF CREDIT FOR RESIDENTIAL ENERGY 

2 EFFICIENT PROPERTY. 

3 (a) IN GENERAL.—Subsection (g) of section 25D of 

4 the Internal Revenue Code of 1986 is amended by striking 

5 ‘‘2007’’ and inserting ‘‘2011’’. 

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

7 this section shall apply to property placed in service after 

8 December 31, 2007. 

9 SEC. 5. PRIZE PROGRAM. 

10 The Secretary of Energy shall establish a program 

11 to award a prize in the amount of $1,000,000,000 to the 

12 first automobile manufacturer incorporated in the United 

13 States to manufacture and sell in the United States 

14 60,000 midsized sedan automobiles which operate on gaso15 line and can travel 100 miles per gallon. 

16 SEC. 6. LITHIUM ION BATTERY TECHNOLOGY. 

17 There are authorized to be appropriated to the Sec18 retary of Energy $30,000,000 for fiscal year 2007 for the 

19 development of advanced lithium ion battery technology. 

20 SEC. 7. EXPENSING OF PROPERTY USED IN THE REFINING 

21 OF ETHANOL, METHANOL, AND BIODIESEL. 

22 (a) IN GENERAL.—Part VI of subchapter B of chap23 ter 1 of the Internal Revenue Code of 1986 (relating to 

24 itemized deductions for individuals and corporations) is 

25 amended by inserting after section 179D the following new 

26 section: 


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1 ‘‘SEC. 179E. ELECTION TO EXPENSE CERTAIN PROPERTY 

2 USED IN REFINING ETHANOL, METHANOL, 

3 AND BIODIESEL. 

4 ‘‘(a) IN GENERAL.—A taxpayer may elect to treat the 

5 cost of any qualified biofuel property as an expense which 

6 is not chargeable to capital account. Any cost so treated 

7 shall be allowed as a deduction for the taxable year in 

8 which the property is placed in service. 

9 ‘‘(b) ELECTION.—An election under this section for 

10 any taxable year shall be made on the taxpayer’s return 

11 of the tax imposed by this chapter for the taxable year. 

12 Such election shall be made in such manner as the Sec13 retary may by regulations prescribe. Any election made 

14 under this section may not be revoked except with the con15 sent of the Secretary. 

16 ‘‘(c) QUALIFIED BIOFUEL PROPERTY.—For purposes 

17 of this section— 

18 ‘‘(1) IN GENERAL.—The term ‘qualified biofuel 

19 property’ means any property— 

20 ‘‘(A) used for the refining of any biofuel, 

21 and 

22 ‘‘(B) the original use of which commences 

23 with the taxpayer. 

24 ‘‘(2) BIOFUEL.—The term ‘biofuel’ means 

25 qualified methanol or ethanol fuel (as defined in secVerDate Aug 31 2005 04:15 May 12, 2006 Jkt 049200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H5375.IH H5375

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1 tion 4041(b)(2)(B)) and biodiesel (as defined in sec2 tion 40A(d)). 

3 ‘‘(d) DUAL USE PROPERTY.—In the case of any 

4 property which is used for the refining of any biofuel and 

5 for any other use, the cost of such property taken into 

6 account under subsection (a) shall be reduced by an 

7 amount which bears the same ratio to the cost of such 

8 property as such other uses bears to all uses of such prop9 erty. 

10 ‘‘(e) COORDINATION WITH 50 PERCENT EXPENSING

11 OF REFINERIES.—Section 179C shall not apply to any 

12 property taken into account under subsection (a). 

13 ‘‘(f) RECAPTURE.—Rules similar to the rules of sec14 tion 179(d)(10) shall apply with respect to any property 

15 which ceases to be qualified biofuel property.’’. 

16 (b) CONFORMING AMENDMENTS.— 

17 (1) Section 1245(a) of such Code is amended 

18 by inserting ‘‘179E,’’ after ‘‘179D,’’ both places it 

19 appears in paragraphs (2)(C) and (3)(C). 

20 (2) Section 263(a)(1) of such Code is amended 

21 by striking ‘‘or’’ at the end of subparagraph (J), by 

22 striking the period at the end of subparagraph (K) 

23 and inserting ‘‘, or’’, and by inserting after subpara24 graph (K) the following new subparagraph: 


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1 ‘‘(L) expenditures for which a deduction is 

2 allowed under section 179E.’’. 

3 (3) Section 312(k)(3)(B) of such Code is 

4 amended by striking ‘‘or 179D’’ each place it ap5 pears in the heading and text and inserting ‘‘179D, 

6 or 179E’’. 

7 (4) The table of sections for part VI of sub8 chapter B of chapter 1 of such Code is amended by 

9 inserting after the item relating to section 179D the 

10 following new item: 

‘‘Sec. 179E. Election to expense certain property used in refining ethanol, 

methanol, and biodiesel.’’. 

11 (c) 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. 

Æ 


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