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[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 701 Introduced in Senate (IS)]

110th CONGRESS
  1st Session
                                 S. 701

 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

                           February 28, 2007

 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.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) In General.--This Act may be cited as the ``Strategic Energy 
Fund Act of 2007''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
                     TITLE I--STRATEGIC ENERGY FUND

           Subtitle A--Establishment of Strategic Energy Fund

Sec. 101. Strategic Energy Fund.
       Subtitle B--Incentives To Accelerate Biofuels Availability

Sec. 111. Modification of alternative fuel vehicle refueling property 
                            credit.
Sec. 112. Extension of biodiesel income and excise tax credits.
Sec. 113. Extension of ethanol income and excise tax credits.
Sec. 114. Small ethanol producer credit expanded for producers of 
                            sucrose and cellulosic ethanol.
        Subtitle C--Incentives To Deploy Fuel-Efficient Vehicles

Sec. 121. Expansion of number of new qualified hybrid and advanced lean 
                            burn technology vehicles eligible for full 
                            alternative motor vehicle tax credit.
Sec. 122. Advanced technology motor vehicles manufacturing credit.
                 Subtitle D--Incentives for Clean Power

Sec. 131. Extension and modification of production tax credit for 
                            electricity produced from certain renewable 
                            resources.
Sec. 132. Extension and modification of investment tax credit with 
                            respect to solar energy property and 
                            qualified fuel cell property.
Sec. 133. Credit for wind energy systems.
Sec. 134. Extension and expansion of qualifying advanced coal project 
                            credit.
Sec. 135. Geological disposal of global warming pollutants.
         Subtitle E--Incentives for Energy Efficient Buildings

Sec. 141. Extension of energy efficient commercial buildings deduction.
Sec. 142. Extension and expansion of new energy efficient home credit.
                   Subtitle F--Clean Energy Research

Sec. 151. Assistant Secretary for Advanced Energy Research, Technology 
                            Development, and Deployment.
              TITLE II--REALIGNING OIL COMPANY INCENTIVES

                     Subtitle A--Excess Oil Profits

Sec. 201. Temporary oil profit fee.
                Subtitle B--Energy Fairness for America

Sec. 211. Elimination of deduction for intangible drilling and 
                            development costs for major oil companies.
Sec. 212. Extension of election to expense certain refineries.
Sec. 213. Elimination of amortization of geological and geophysical 
                            expenditures for major oil companies.
Sec. 214. Modifications of foreign tax credit rules applicable to major 
                            oil companies which are dual capacity 
                            taxpayers.
Sec. 215. Denial of deduction for income attributable to domestic 
                            production of oil, natural gas, or primary 
                            products thereof.
Sec. 216. Elimination of enhanced oil recovery credit for major oil 
                            companies.
Subtitle C--Protection and Retention of Value of Publicly-Owned Energy 
                               Resources

Sec. 221. Price thresholds for royalty suspension provisions.
Sec. 222. Clarification of authority to impose price thresholds for 
                            certain lease sales.
Sec. 223. Eligibility for new leases and the transfer of leases; 
                            conservation of resources fees.
Sec. 224. Repeal of certain taxpayer subsidized royalty relief for the 
                            oil and gas industry.
           Subtitle D--Reduction in Incentives to Guzzle Gas

Sec. 231. Reducing incentives to guzzle gas.

                     TITLE I--STRATEGIC ENERGY FUND

           Subtitle A--Establishment of Strategic Energy Fund

SEC. 101. STRATEGIC ENERGY FUND.

    (a) In General.--Subchapter A of chapter 98 of the Internal Revenue 
Code of 1986 (relating to trust fund code) is amended by adding at the 
end the following new section:

``SEC. 9511. STRATEGIC ENERGY FUND.

    ``(a) Establishment.--There is established in the Treasury of the 
United States a trust fund to be known as the `Strategic Energy Fund', 
consisting of such amounts as may be appropriated or credited to such 
Fund as provided in this section or section 9602(b).
    ``(b) Transfers to Fund.--
            ``(1) In general.--There are hereby appropriated to the 
        Strategic Energy Fund amounts equivalent to--
                    ``(A) the fees received in the Treasury under 
                section 5896, and
                    ``(B) the revenues received in the Treasury 
                resulting from the implementation of sections 221, 222, 
                and 223 of the Strategic Energy Fund Act of 2007.
            ``(2) Limitation.--The aggregate amount appropriated under 
        this subsection shall not exceed--
                    ``(A) for purposes described in subsection 
                (c)(1)(A)--
                            ``(i) $1,000,000,000 during fiscal year 
                        2008, and
                            ``(ii) $2,000,000,000 during each of fiscal 
                        years 2009 through 2012,
                    ``(B) for purposes described in subsection 
                (c)(1)(B), a total of $3,500,000,000 for the fiscal 
                year period 2008 through 2017, and
                    ``(C) for purposes described in subsection 
                (c)(1)(C), $2,500,000,000.
    ``(c) Expenditures.--
            ``(1) In general.--Amounts in the Strategic Energy Fund 
        shall be available, without further appropriation, to carry 
        out--
                    ``(A) the purposes authorized under section 151 of 
                the Strategic Energy Fund Act of 2007,
                    ``(B) projects under title XVII of the Energy 
                Policy Act of 2005 that have a design capacity to 
                produce, in the aggregate, 1,000,000,000 gallons of 
                cellulosic biomass ethanol, without regard to section 
                1510(l) of the Energy Policy Act of 2005 (42 U.S.C. 
                16501(l)), and
                    ``(C) the grants under section 701 of the Clean Air 
                Act.
            ``(2) Unexpended funds.--Any funds that have not been 
        expended by September 30, 2017, shall be credited back to the 
        general fund as miscellaneous tax receipts.''.
    (b) Clerical Amendment.--The table of sections for such subchapter 
is amended by adding at the end the following new item:

``Sec. 9511. Strategic Energy Fund.''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.

       Subtitle B--Incentives To Accelerate Biofuels Availability

SEC. 111. MODIFICATION OF ALTERNATIVE FUEL VEHICLE REFUELING PROPERTY 
              CREDIT.

    (a) Increase in Credit Amount.--Section 30C of the Internal Revenue 
Code of 1986 (relating to alternative fuel vehicle refueling property 
credit) is amended--
            (1) by striking ``30 percent'' in subsection (a) and 
        inserting ``50 percent'', and
            (2) by striking ``$30,000'' in subsection (b)(1) and 
        inserting ``$50,000''.
    (b) Credit Allowed for Electric Drive Transportation Property.--
Paragraph (1) of section 30C(c) of the Internal Revenue Code of 1986 
(relating to qualified alternative fuel vehicle refueling property) is 
amended by striking ``, but only with respect to any fuel'' and 
inserting ``, except that in the case of property described in 
paragraph (3)(A) thereof, only with respect to fuels''.
    (c) Extension of Credit.--Subsection (g) section 30C of the 
Internal Revenue Code of 1986 (relating to termination) is amended to 
read as follows:
    ``(g) Termination of Availability of Credit.--This section shall 
not apply to property placed in service after the earlier of December 
31, 2015, or the date after which more than 20,000 alternative 
refueling properties have been installed through use of this credit.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to property placed in service after the date of the enactment of 
this Act, in taxable years ending after such date.

SEC. 112. EXTENSION OF BIODIESEL INCOME AND EXCISE TAX CREDITS.

    (a) In General.--Sections 40A(g), 6426(c)(6), and 6427(e)(5)(B) of 
the Internal Revenue Code of 1986 are each amended by striking 
``December 31, 2008'' and inserting ``December 31, 2015''.
    (b) Effective Date.--The amendments made by this section shall take 
effect on January 1, 2009.

SEC. 113. EXTENSION OF ETHANOL INCOME AND EXCISE TAX CREDITS.

    (a) In General.--Sections 40(e)(1)(A), 6426(b)(5), and 
6427(e)(5)(A) of the Internal Revenue Code of 1986 are each amended by 
striking ``December 31, 2010'' and inserting ``December 31, 2012''.
    (b) Conforming Amendment.--Section 40(e)(1)(B) of the Internal 
Revenue Code of 1986 is amended by striking ``January 1, 2011'' and 
inserting ``January 1, 2013''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on January 1, 2011.

SEC. 114. SMALL ETHANOL PRODUCER CREDIT EXPANDED FOR PRODUCERS OF 
              SUCROSE AND CELLULOSIC ETHANOL.

    (a) In General.--Subparagraph (C) of section 40(b)(4) of the 
Internal Revenue Code of 1986 (relating to small ethanol producer 
credit) is amended by inserting ``(30,000,000 gallons for any sucrose 
or cellulosic ethanol producer)'' after ``15,000,000 gallons''.
    (b) Sucrose or Cellulosic Ethanol Producer.--Section 40(b)(4) of 
the Internal Revenue Code of 1986 is amended by adding at the end the 
following new subparagraph:
                    ``(E) Sucrose or cellulosic ethanol producer.--
                            ``(i) In general.--For purposes of this 
                        paragraph, the term `sucrose or cellulosic 
                        ethanol producer' means a producer of ethanol 
                        using sucrose feedstock or a producer of 
                        cellulosic biomass ethanol (as defined in 
                        section 168(l)(3)).
                            ``(ii) Sucrose feedstock.--For purposes of 
                        clause (i), the term `sucrose feedstock' means 
                        any raw sugar, refined sugar, or sugar 
                        equivalents (including juice and extract). Such 
                        term does not include any molasses, beet thick 
                        juice, or other similar products as determined 
                        by the Secretary.''.
    (c) Conforming Amendments.--
            (1) Section 40(g)(2) of the Internal Revenue Code of 1986 
        is amended by striking ``15,000,000 gallon limitation'' and 
        inserting ``15,000,000 and 30,000,000 gallon limitations''.
            (2) Section 40(g)(5)(B) of such Code is amended by striking 
        ``15,000,000 gallons'' and inserting ``the gallon limitation 
        under subsection (b)(4)(C)''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

        Subtitle C--Incentives To Deploy Fuel-Efficient Vehicles

SEC. 121. EXPANSION OF NUMBER OF NEW QUALIFIED HYBRID AND ADVANCED LEAN 
              BURN TECHNOLOGY VEHICLES ELIGIBLE FOR FULL ALTERNATIVE 
              MOTOR VEHICLE TAX CREDIT.

    (a) In General.--Paragraph (2) of section 30B(f) of the Internal 
Revenue Code of 1986 (relating to phaseout) is amended by striking 
``60,000'' and inserting ``250,000''.
    (b) Effective Date.--The amendment made by this section shall take 
effect as if included in the amendments made by section 1341(a) of the 
Energy Policy Act of 2005.

SEC. 122. ADVANCED TECHNOLOGY MOTOR VEHICLES MANUFACTURING CREDIT.

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

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

    ``(a) Credit Allowed.--There shall be allowed as a credit against 
the tax imposed by this chapter for the taxable year an amount equal to 
35 percent of the qualified investment of an eligible taxpayer for such 
taxable year.
    ``(b) Qualified Investment.--For purposes of this section--
            ``(1) In general.--The term `qualified investment' means, 
        with respect to any taxable year, the sum of--
                    ``(A) the costs paid or incurred by the eligible 
                taxpayer during such taxable year--
                            ``(i) to re-equip, expand, or establish any 
                        manufacturing facility in the United States of 
                        the eligible taxpayer to produce advanced 
                        technology motor vehicles or to produce 
                        eligible components, and
                            ``(ii) for qualified research (as defined 
                        in section 41(d)) related to advanced 
                        technology motor vehicles and eligible 
                        components performed in the United States, and
                    ``(B) qualified engineering integration costs 
                performed in the United States.
            ``(2) Attribution rules.--For purposes of paragraph 
        (1)(A)(i), in the case of a manufacturing facility of the 
        eligible taxpayer which produces both advanced technology motor 
        vehicles and other motor vehicles, or eligible components and 
        other components, only the amount paid or incurred for the 
        production of advanced technology motor vehicles and eligible 
        components shall be taken into account.
    ``(c) Eligible Taxpayer.--For purposes of this section--
            ``(1) In general.--The term `eligible taxpayer' means--
                    ``(A) any motor vehicle manufacturer if more than 
                50 percent of its gross receipts for the taxable year 
                is derived from the manufacture of motor vehicles or 
                any component parts of such vehicles, and
                    ``(B) any motor vehicle component parts 
                manufacturer if more than 20 percent of its gross 
                receipts for the taxable year is derived from the 
                manufacture of any component parts of motor vehicles.
            ``(2) Motor vehicle manufacturer.--The term `motor vehicle 
        manufacturer' means any taxpayer who manufacturers motor 
        vehicles.
            ``(3) Motor vehicle component parts manufacturer.--The term 
        `motor vehicle component parts manufacturer' means any taxpayer 
        who manufactures motor vehicle component parts, but is not a 
        motor vehicle manufacturer.
    ``(d) Definitions.--For purposes of this section--
            ``(1) Advanced technology motor vehicle.--The term 
        `advanced technology motor vehicle' means--
                    ``(A) any new qualified fuel cell motor vehicle (as 
                defined in section 30B(b)(3));
                    ``(B) any new advanced lean burn technology motor 
                vehicle (as defined in section 30B(c)(3));
                    ``(C) any new qualified hybrid motor vehicle (as 
                defined in section 30B(d)(3)(A) and determined without 
                regard to any gross vehicle weight rating);
                    ``(D) any new qualified alternative motor fuel 
                vehicle (as defined in section 30B(e)(4));
                    ``(E) any plug-in hybrid electric vehicle; and
                    ``(F) any electric vehicle.
            ``(2) Eligible components.--The term `eligible component' 
        means any component inherent to any advanced technology motor 
        vehicle but not inherent to a motor vehicle which is not an 
        advanced technology motor vehicle, including--
                    ``(A) with respect to any gasoline or diesel-
                electric new qualified hybrid motor vehicle, any--
                            ``(i) electric motor or generator,
                            ``(ii) power split device,
                            ``(iii) power control unit,
                            ``(iv) power controls,
                            ``(v) integrated starter generator, or
                            ``(vi) battery,
                    ``(B) with respect to any hydraulic new qualified 
                hybrid motor vehicle, any--
                            ``(i) accumulator or other energy storage 
                        device,
                            ``(ii) hydraulic pump, or
                            ``(iii) hydraulic pump-motor assembly,
                            ``(iv) power control unit, or
                            ``(v) power controls,
                    ``(C) with respect to any new advanced lean burn 
                technology motor vehicle, any--
                            ``(i) diesel engine,
                            ``(ii) turbocharger,
                            ``(iii) fuel injection system, or
                            ``(iv) after-treatment system, such as a 
                        particle filter or NO<INF>X</INF> absorber, and
                    ``(D) with respect to any advanced technology motor 
                vehicle, any other component submitted for approval by 
                the Secretary.
            ``(3) Motor vehicle.--The term `motor vehicle' has the 
        meaning given such term by section 30(c)(2).
            ``(4) Plug-in hybrid electric vehicle.--
                    ``(A) In general.--The term `plug-in hybrid 
                electric vehicle' means a light-duty, medium-duty, or 
                heavy-duty on-road or nonroad vehicle that is propelled 
                by any combination of--
                            ``(i) an electric motor and on-board, 
                        rechargeable energy storage system capable of 
                        operating the vehicle in intermittent or 
                        continuous all-electric mode and which is 
                        rechargeable using an off-board source of 
                        electricity, and
                            ``(ii) an internal combustion engine or 
                        heat engine using any combustible fuel.
                    ``(B) Nonroad vehicle.--The term `nonroad vehicle' 
                means a vehicle powered by a nonroad engine, as that 
                term is defined in section 216 of the Clean Air Act (42 
                U.S.C. 7550).
            ``(5) Qualified engineering integration costs.--For 
        purposes of subsection (b)(1)(B), the term `qualified 
        engineering integration costs' means, with respect to any 
        advanced technology motor vehicle, costs incurred prior to the 
        market introduction of such motor vehicle for engineering tasks 
        related to--
                    ``(A) establishing functional, structural, and 
                performance requirements for components and subsystems 
                to meet overall vehicle objectives for a specific 
                application,
                    ``(B) designing interfaces for components and 
                subsystems with mating systems within a specific 
                vehicle application,
                    ``(C) designing cost effective, efficient, and 
                reliable manufacturing processes to produce components 
                and subsystems for a specific vehicle application, and
                    ``(D) validating functionality and performance of 
                components and subsystems for a specific vehicle 
                application.
    ``(e) Limitation Based on Amount of Tax.--
            ``(1) In general.--The credit allowed under subsection (a) 
        for any taxable year shall not exceed the sum of--
                    ``(A) the taxpayer's regular tax liability (as 
                defined in section 26(b)) for the taxable year, plus
                    ``(B) the tax imposed under section 55 for the 
                taxable year.
            ``(2) Carryover of unused credit amounts.--
                    ``(A) In general.--If the credit allowable under 
                subsection (a) for a taxable year exceeds the 
                limitation under paragraph (1) for such taxable year, 
                such excess shall be allowed--
                            ``(i) as a credit carryback to each of the 
                        13 taxable years preceding such year, and
                            ``(ii) as a credit carryforward to each of 
                        the 20 taxable years following such year.
                    ``(B) Amount carried to each year.--For purposes of 
                this paragraph, rules similar to the rules of section 
                39(a)(2) shall apply.
    ``(f) Special Rules.--
            ``(1) Reduction in basis.--For purposes of this subtitle, 
        if a credit is allowed under this section for any expenditure 
        with respect to any property, the increase in the basis of such 
        property which would (but for this paragraph) result from such 
        expenditure shall be reduced by the amount of the credit so 
        allowed.
            ``(2) Investments and property outside the united states.--
        No credit shall be allowed under subsection (a) with respect 
        to--
                    ``(A) any manufacturing facility which is located 
                outside the United States, and
                    ``(B) any engineering integration or research and 
                development conducted outside the United States.
            ``(3) Aggregation of expenditures; allocations.--For 
        purposes of this section, rules similar to the rules of 
        paragraphs (1) and (2) of section 41(f) shall apply.
            ``(4) Recapture.--The Secretary shall, by regulation, 
        provide for recapturing the benefit of any credit allowable 
        under subsection (a) with respect to any manufacturing facility 
        which ceases to produce advanced technology motor vehicles or 
        eligible components.
            ``(5) Public statement.--
                    ``(A) In general.--No credit shall be allowed under 
                subsection (a) for any taxable year unless the eligible 
                taxpayer makes publicly available a statement 
                describing the activities of the eligible taxpayer for 
                which the credit is allowed and the public benefits of 
                such activities, including the estimated amount of any 
                reduction in national oil consumption in future years 
                as a result of such activities.
                    ``(B) Time for publication.--The statement required 
                under subparagraph (A) shall be made available not 
                later than 90 days after the end of the taxable year 
                for which the credit under subsection (a) is allowed 
                and shall be in such form as the Secretary shall 
                prescribe.
            ``(6) No double benefit.--
                    ``(A) Coordination with other deductions and 
                credits.--Except as provided in subparagraph (B), the 
                amount of any deduction or other credit allowable under 
                this chapter for any cost taken into account in 
                determining the amount of the credit under subsection 
                (a) shall be reduced by the amount of such credit 
                attributable to such cost.
                    ``(B) Research and development costs.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), any amount described in subsection 
                        (b)(1)(A)(ii) taken into account in determining 
                        the amount of the credit under subsection (a) 
                        for any taxable year shall not be taken into 
                        account for purposes of determining the credit 
                        under section 41 for such taxable year.
                            ``(ii) Costs taken into account in 
                        determining base period research expenses.--Any 
                        amounts described in subsection (b)(1)(A)(ii) 
                        taken into account in determining the amount of 
                        the credit under subsection (a) for any taxable 
                        year which are qualified research expenses 
                        (within the meaning of section 41(b)) shall be 
                        taken into account in determining base period 
                        research expenses for purposes of applying 
                        section 41 to subsequent taxable years.
    ``(g) Election Not To Take Credit.--No credit shall be allowed 
under subsection (a) for any property if the taxpayer elects not to 
have this section apply to such property.
    ``(h) Regulations.--The Secretary shall prescribe such regulations 
as necessary to carry out the provisions of this section.''.
    (b) Conforming Amendments.--
            (1) Section 1016(a) of the Internal Revenue Code of 1986, 
        as amended by this Act, is amended by striking ``and'' at the 
        end of paragraph (37), by striking the period at the end of 
        paragraph (38) and inserting ``, and'', and by adding at the 
        end the following new paragraph:
            ``(39) to the extent provided in section 30D(f)(1).''.
            (2) Section 6501(m) of such Code is amended by inserting 
        ``30D(g),'' after ``30C(e)(5),''.
            (3) The table of sections for subpart B of part IV of 
        subchapter A of chapter 1 of such Code is amended by inserting 
        after the item relating to section 30C the following new item:

``Sec. 30D. Advanced technology motor vehicles manufacturing credit.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to amounts incurred in taxable years beginning after December 31, 
1993.

                 Subtitle D--Incentives for Clean Power

SEC. 131. EXTENSION AND MODIFICATION OF PRODUCTION TAX CREDIT FOR 
              ELECTRICITY PRODUCED FROM CERTAIN RENEWABLE RESOURCES.

    Section 45(d) of the Internal Revenue Code of 1986 (relating to 
qualified facilities) is amended by striking ``January 1, 2009'' each 
place it appears and inserting ``January 1, 2014''.

SEC. 132. EXTENSION AND MODIFICATION OF INVESTMENT TAX CREDIT WITH 
              RESPECT TO SOLAR ENERGY PROPERTY AND QUALIFIED FUEL CELL 
              PROPERTY.

    (a) Solar Energy Property.--Paragraphs (2)(A)(i)(II) and (3)(A)(ii) 
of section 48(a) of the Internal Revenue Code of 1986 are each amended 
by striking ``January 1, 2009'' and inserting ``January 1, 2015''.
    (b) Eligible Fuel Cell Property.--Paragraph (1)(E) of section 48(c) 
of the Internal Revenue Code of 1986 is amended by striking ``December 
31, 2007'' and inserting ``December 31, 2015''.
    (c) Credits Allowed Against the Alternative Minimum Tax.--
            (1) In general.--Section 38(c)(4)(B) of the Internal 
        Revenue Code of 1986 (defining specified credits), as amended 
        by this Act, is amended by striking the period at the end of 
        clause (iii) and inserting ``, and,'' and by adding at the end 
        the following new clause:
                            ``(iv) the portion of the investment credit 
                        under section 46(2) as determined under section 
                        48(a)(2)(A)(i).''.
            (2) Effective date.--The amendments made by this subsection 
        shall apply to taxable years beginning after December 31, 2006.
    (d) Solar Investment Credit Allowed for Public Utility Property.--
            (1) In general.--The second sentence of section 48(a)(3) of 
        the Internal Revenue Code of 1986 is amended by inserting 
        ``(other than property described in clause (i) or (ii) of 
        subparagraph (A))'' before ``shall not''.
            (2) Effective date.--The amendments made by this subsection 
        shall apply to periods after the date of the enactment of this 
        Act, in taxable years ending after such date, under rules 
        similar to the rules of section 48(m) of the Internal Revenue 
        Code of 1986 (as in effect on the day before the date of the 
        enactment of the Revenue Reconciliation Act of 1990).

SEC. 133. CREDIT FOR WIND ENERGY SYSTEMS.

    (a) Residential.--
            (1) In general.--Section 25D(a) of the Internal Revenue 
        Code of 1986 is amended by striking ``and'' at the end of 
        paragraph (2), by striking the period at the end of paragraph 
        (3) and inserting ``, and'', and by adding at the end the 
        following new paragraph:
            ``(4) 30 percent of the qualified small wind energy 
        property expenditures made by the taxpayer during such year.''.
            (2) Limitation.--Section 25D(b)(1) of the Internal Revenue 
        Code of 1986 is amended by striking ``and'' at the end of 
        subparagraph (B), by striking the period at the end of 
        subparagraph (A) and inserting ``, and'', and by adding at the 
        end the following new subparagraph:
                    ``(D) $500 with respect to each half kilowatt of 
                capacity (not to exceed $2,000) of qualifying wind 
                turbines for which qualified small wind energy property 
                expenditures are made.''.
            (3) Qualified small wind energy property expenditures.--
        Section 25D(d) of the Internal Revenue Code of 1986 is amended 
        by adding at the end the following new paragraph:
            ``(4) Qualified small wind energy property expenditure.--
                    ``(A) In general.--The term `qualified wind energy 
                property expenditure' means an expenditure for property 
                which uses a qualifying wind turbine to generate 
                electricity for use in connection with a dwelling unit 
                located in the United States and used as a residence by 
                the taxpayer.
                    ``(B) Qualifying wind turbine.--The term 
                `qualifying wind turbine' means a wind turbine of 100 
                kilowatts of rated capacity or less which meets the 
                latest performance rating standards published by the 
                American Wind Energy Association and which is used to 
                generate electricity and carries at least a 5-year 
                limited warranty covering defects in design, material, 
                or workmanship, and, for property that is not installed 
                by the taxpayer, at least a 5-year limited warranty 
                covering defects in installation.''.
    (b) Business.--Section 48(a)(3)(A) of the Internal Revenue Code of 
1986 (defining energy property) is amended by striking ``or'' at the 
end of clause (iii), by adding ``or'' at the end of clause (iv), and by 
inserting after clause (iv) the following new clause:
                            ``(v) qualifying wind turbine (as defined 
                        in section 25D(d)(B)),''.
    (c) Effective Date.--The amendments made by this section shall 
apply to property placed in service after the date of the enactment of 
this Act, in taxable years ending after such date.

SEC. 134. EXTENSION AND EXPANSION OF QUALIFYING ADVANCED COAL PROJECT 
              CREDIT.

    (a) Expanding Aggregate Credits.--Section 48A(d)(3)(A) of the 
Internal Revenue Code of 1986 (relating to aggregate credits) is 
amended by striking ``$1,300,000,000'' and inserting 
``$2,300,000,000''.
    (b) Authorization of Additional Projects.--Subparagraph (B) of 
section 48A(d)(3) of the Internal Revenue Code of 1986 (relating to 
aggregate credits) is amended to read as follows:
                    ``(B) Particular projects.--Of the dollar amount in 
                subparagraph (A), the Secretary is authorized to 
                certify--
                            ``(i) $800,000,000 for integrated 
                        gasification combined cycle projects the 
                        application for which is submitted during the 
                        period described in paragraph (2)(A)(i),
                            ``(ii) $500,000,000 for projects which use 
                        other advanced coal-based generation 
                        technologies the application for which is 
                        submitted during the period described in 
                        paragraph (2)(A)(i), and
                            ``(iii) $1,000,000,000 for integrated 
                        gasification combined cycle projects and other 
                        advanced coal-based generation technology 
                        projects that include equipment to separate and 
                        sequester a significant fraction of such a 
                        project's carbon dioxide emissions the 
                        application for which is submitted during the 
                        period described in paragraph (2)(A)(ii).''.
    (c) Application Period for Additional Projects.--Subparagraph (A) 
of section 48A(d)(2) of the Internal Revenue Code of 1986 (relating to 
certification) is amended to read as follows:
                    ``(A) Application period.--Each applicant for 
                certification under this paragraph shall submit an 
                application meeting the requirements of subparagraph 
                (B). An applicant may only submit an application--
                            ``(i) for an allocation from the dollar 
                        amount specified in clause (i) or (ii) of 
                        paragraph (3)(A) during the 3-year period 
                        beginning on the date the Secretary establishes 
                        the program under paragraph (1), and
                            ``(ii) for an allocation from the dollar 
                        amount specified in paragraph (3)(A)(iii) 
                        during the 3-year period beginning at the 
                        earlier of the termination of the period 
                        described in clause (i) or the date prescribed 
                        by the Secretary.''.
    (d) Effective Date.--The amendments made by this section shall take 
effect as if included in the amendments made by section 1307 of the 
Energy Policy Act of 2005.

SEC. 135. GEOLOGICAL DISPOSAL OF GLOBAL WARMING POLLUTANTS.

    The Clean Air Act (42 U.S.C. 7401 et seq.) is amended by adding at 
the end the following:

     ``TITLE VII--GEOLOGICAL DISPOSAL OF GLOBAL WARMING POLLUTANTS

``SEC. 701. GEOLOGICAL DISPOSAL OF GLOBAL WARMING POLLUTANTS.

    ``(a) Geological Carbon Dioxide Disposal Deployment Projects.--
            ``(1) In general.--The Administrator shall establish a 
        competitive grant program to provide grants to 5 entities for 
        the deployment of projects to geologically dispose of carbon 
        dioxide (referred to in this subsection as `geological disposal 
        deployment projects'), including through the use of equipment 
        to separate, pressurize, transport, and sequester carbon 
        dioxide.
            ``(2) Location.--Each geological disposal deployment 
        project shall be conducted in a geologically distinct location 
        in order to demonstrate the suitability of a variety of 
        geological structures for carbon dioxide disposal.
            ``(3) Components.--Each geological disposal deployment 
        project shall include an analysis of--
                    ``(A) mechanisms for trapping the carbon dioxide to 
                be geologically disposed;
                    ``(B) techniques for monitoring the geologically 
                disposed carbon dioxide;
                    ``(C) public response to the geological disposal 
                deployment project; and
                    ``(D) the permanency of carbon dioxide storage in 
                geological reservoirs.
            ``(4) Requirements.--
                    ``(A) In general.--The Administrator shall 
                establish--
                            ``(i) appropriate conditions for 
                        environmental protection with respect to 
                        geological disposal deployment projects to 
                        protect public health and the environment; and
                            ``(ii) requirements relating to 
                        applications for grants under this subsection.
                    ``(B) Rulemaking.--The establishment of 
                requirements under subparagraph (A) shall not require a 
                rulemaking.
                    ``(C) Minimum requirements.--At a minimum, each 
                application for a grant under this subsection shall 
                include--
                            ``(i) a description of the geological 
                        disposal deployment project proposed in the 
                        application;
                            ``(ii) an estimate of the quantity of 
                        carbon dioxide to be geologically disposed over 
                        the life of the geological disposal deployment 
                        project; and
                            ``(iii) a plan to collect and disseminate 
                        data relating to each geological disposal 
                        deployment project to be funded by the grant.
            ``(5) Partners.--An applicant for a grant under this 
        subsection may carry out a geological disposal deployment 
        project under a pilot program in partnership with 1 or more 
        public or private entities.
            ``(6) Selection criteria.--In evaluating applications under 
        this subsection, the Administrator shall--
                    ``(A) consider the previous experience of each 
                applicant with similar projects; and
                    ``(B) give priority consideration to applications 
                for geological disposal deployment projects that--
                            ``(i) offer the greatest geological 
                        diversity from other projects that have 
                        previously been approved;
                            ``(ii) are located in closest proximity to 
                        a source of carbon dioxide;
                            ``(iii) make use of the most affordable 
                        source of carbon dioxide;
                            ``(iv) are expected to geologically dispose 
                        of the largest quantity of carbon dioxide;
                            ``(v) are combined with demonstrations of 
                        advanced coal electricity generation 
                        technologies;
                            ``(vi) demonstrate the greatest commitment 
                        on the part of the applicant to ensure funding 
                        for the proposed demonstration project and the 
                        greatest likelihood that the demonstration 
                        project will be maintained or expanded after 
                        Federal assistance under this subsection is 
                        completed; and
                            ``(vii) minimize any adverse environmental 
                        effects from the project.
            ``(7) Period of grants.--
                    ``(A) In general.--A geological disposal deployment 
                project funded by a grant under this subsection shall 
                begin construction not later than 3 years after the 
                date on which the grant is provided.
                    ``(B) Term.--The Administrator shall not provide 
                grant funds to any applicant under this subsection for 
                a period of more than 5 years.
            ``(8) Transfer of information and knowledge.--The 
        Administrator shall establish mechanisms to ensure that the 
        information and knowledge gained by participants in the program 
        under this subsection are published and disseminated, including 
        to other applicants that submitted applications for a grant 
        under this subsection.
            ``(9) Schedule.--
                    ``(A) Publication.--Not later than 180 days after 
                the date of enactment of this title, the Administrator 
                shall publish in the Federal Register, and elsewhere as 
                appropriate, a request for applications to carry out 
                geological disposal deployment projects.
                    ``(B) Date for applications.--An application for a 
                grant under this subsection shall be submitted not 
                later than 180 days after the date of publication of 
                the request under subparagraph (A).
                    ``(C) Selection.--After the date by which 
                applications for grants are required to be submitted 
                under subparagraph (B), the Administrator, in a timely 
                manner, shall select, after peer review and based on 
                the criteria under paragraph (6), those geological 
                disposal deployment projects to be provided a grant 
                under this subsection.
    ``(b) Interim Standards.--Not later than 3 years after the date of 
enactment of this title, the Administrator, in consultation with the 
Secretary of Energy, shall, by regulation, establish interim geological 
carbon dioxide disposal standards that address--
            ``(1) site selection;
            ``(2) permitting processes;
            ``(3) monitoring requirements;
            ``(4) public participation; and
            ``(5) such other issues as the Administrator and the 
        Secretary of Energy determine to be appropriate.
    ``(c) Final Standards.--Not later than 6 years after the date of 
enactment of this title, taking into account the results of geological 
disposal deployment projects carried out under subsection (a), the 
Administrator shall, by regulation, establish final geological carbon 
dioxide disposal standards.
    ``(d) Considerations.--In developing standards under subsections 
(b) and (c), the Administrator shall consider the experience in the 
United States in regulating--
            ``(1) underground injection of waste;
            ``(2) enhanced oil recovery;
            ``(3) short-term storage of natural gas; and
            ``(4) long-term waste storage.
    ``(e) Termination of Authority.--This section and the authority 
provided by this section terminate on December 31, 2030.''.

         Subtitle E--Incentives for Energy Efficient Buildings

SEC. 141. EXTENSION OF ENERGY EFFICIENT COMMERCIAL BUILDINGS DEDUCTION.

    Section 179D(h) of the Internal Revenue Code of 1986 (relating to 
termination) is amended by striking ``December 31, 2008'' and inserting 
``December 31, 2015''.

SEC. 142. EXTENSION AND EXPANSION OF NEW ENERGY EFFICIENT HOME CREDIT.

    (a) Extension.--Section 45L(g) of the Internal Revenue Code of 1986 
(relating to termination) is amended by striking ``December 31, 2008'' 
and inserting ``December 31, 2015''.
    (b) Inclusion of 30 Percent Homes.--
            (1) In general.--Section 45L(c) of the Internal Revenue 
        Code of 1986 (relating to energy saving requirements) is 
        amended--
                    (A) by striking ``or'' at the end of paragraph (2);
                    (B) by redesignating paragraph (3) as paragraph 
                (4); and
                    (C) by inserting after paragraph (2) the following 
                new paragraph:
            ``(3) certified--
                    ``(A) to have a level of annual heating and cooling 
                energy consumption which is at least 30 percent below 
                the annual level described in paragraph (1), and
                    ``(B) to have building envelope component 
                improvements account for at least 1/3 of such 30 
                percent, or.''.
            (2) Applicable amount of credit.--Section 45L(a)(2) is 
        amended by striking ``paragraph (3)'' and inserting ``paragraph 
        (3) or (4)''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to qualified new energy efficient homes acquired 
        after the date of the enactment of this Act.

                   Subtitle F--Clean Energy Research

SEC. 151. ASSISTANT SECRETARY FOR ADVANCED ENERGY RESEARCH, TECHNOLOGY 
              DEVELOPMENT, AND DEPLOYMENT.

    (a) Establishment.--
            (1) In general.--The Secretary of Energy shall establish in 
        the Department of Energy the position of Assistant Secretary 
        for Advanced Energy Research, Technology Development, and 
        Deployment (referred to in this section as the ``Assistant 
        Secretary''), to be headed by, and to report to, the Secretary.
            (2) Qualifications.--The Assistant Secretary shall be an 
        individual with--
                    (A) an advanced education degree in energy 
                technology; and
                    (B) substantial commercial research and technology 
                development and deployment experience.
    (b) Mission.--The mission of the Assistant Secretary is--
            (1) to implement an innovative energy research, technology 
        development, and deployment program to--
                    (A) increase national security by significantly 
                reducing petroleum and imported fuels consumption;
                    (B) significantly improve the efficiency of 
                electricity use and the reliability of the electricity 
                system; and
                    (C) significantly reduce greenhouse gas emissions; 
                and
            (2) to sponsor a diverse portfolio of cutting-edge, high-
        payoff research, development, and deployment projects to carry 
        out the program.
    (c) Experimental Personnel Authority.--The Assistant Secretary may 
staff the office of the Assistant Secretary primarily using a program 
of experimental use of special personnel management authority in order 
to facilitate recruitment of eminent experts in science or engineering 
for management of research and development projects and programs 
administered by the Assistant Secretary under similar terms and 
conditions as the authority is exercised under section 1101 of the 
Strom Thurmond National Defense Authorization Act for Fiscal Year 1999 
(Public Law 105-261; 5 U.S.C. 3104 note), as determined by the 
Assistant Secretary.
    (d) Transactions Other Than Contracts and Grants.--To carry out 
projects under this section, the Assistant Secretary may enter into 
transactions to carry out advanced research projects under this 
subsection under similar terms and conditions as the authority is 
exercised under section 646(g) of the Department of Energy Organization 
Act (42 U.S.C. 7256(g)).
    (e) Prizes for Advanced Technology Achievements.--
            (1) In general.--Subject to paragraphs (2) through (4), the 
        Assistant Secretary may carry out a program to award cash 
        prizes in recognition of outstanding achievements in basic, 
        advanced, and applied research, technology development, and 
        prototype development that have the potential to advance the 
        mission described in subsection (b) under similar terms and 
        conditions as the authority is exercised under section 1008 of 
        the Energy Policy Act of 2005 (42 U.S.C. 16396).
            (2) Competition requirements.--In carrying out this 
        subsection, the Assistant Secretary shall--
                    (A) use a competitive process for the selection of 
                recipients of cash prizes; and
                    (B) conduct widely-advertised solicitation of 
                submissions of research results, technology 
                developments, and prototypes.
            (3) Maximum amount for all cash prizes.--The total amount 
        of all cash prizes awarded for a fiscal year under this 
        subsection may not exceed $50,000,000.
            (4) Maximum amount of individual cash prizes.--The amount 
        of an individual cash prize awarded under this subsection may 
        not exceed $10,000,000 unless the amount of the award is 
        approved by the Secretary of Energy.
    (f) Commercialization of Cellulosic Biomass Ethanol.--Of the 
amounts that are made available to carry out this section, the 
Assistant Secretary shall use not less that $2,000,000,000 to conduct 
research and development to increase yields, reduce production costs, 
and take other steps to accelerate the commercialization of cellulosic 
biomass ethanol (as defined in section 211(o)(1) of the Clean Air Act 
(42 U.S.C. 7545(o)(1))).
    (g) Advanced Automotive Battery Research.--Of the amounts that are 
made available to carry out this section, the Assistant Secretary shall 
use not less than $500,000,000 to conduct research and development on 
advanced battery technology for use in hybrid-electric vehicles.
    (h) Annual Reports.--As soon as practicable after the end of each 
fiscal year for which the Assistant Secretary receives funds under 
subsection (i), the Assistant Secretary shall submit to the Committee 
on Energy and Natural Resources of the Senate and the Committee on 
Energy and Commerce, and the Committee on Science, of the House of 
Representatives a report on the progress, challenges, future 
milestones, and strategic plan of the Assistant Secretary, including--
            (1) a description of, and rationale for, any changes in the 
        strategic plan;
            (2) the adequacy of human and financial resources necessary 
        to achieve the mission described in subsection (b); and
            (3) in the case of cash prizes awarded under subsection 
        (e), a description of--
                    (A) the applications of the research, technology, 
                or prototypes for which prizes were awarded;
                    (B) the total amount of the prizes that were 
                awarded;
                    (C) the methods used for solicitation and 
                evaluation of submissions and an assessment of the 
                effectiveness of those methods; and
                    (D) recommendations to improve the prize program.
    (i)  Relationship to Other Authority.--The program under this 
section may be carried out in conjunction with, or in addition to, the 
exercise of any other authority of the Assistant Secretary to acquire, 
support, or stimulate basic, advanced, and applied research, technology 
development, or prototype projects.

              TITLE II--REALIGNING OIL COMPANY INCENTIVES

                     Subtitle A--Excess Oil Profits

SEC. 201. TEMPORARY OIL PROFIT FEE.

    (a) In General.--Subtitle E of the Internal Revenue Code of 1986 
(relating to alcohol, tobacco, and certain other excise taxes) is 
amended by adding at the end the following new chapter:

            ``CHAPTER 56--TEMPORARY FEE ON EXCESS OIL PROFIT

``Sec. 5896. Imposition of fee.
``Sec. 5897. Excess profit; etc.
``Sec. 5898. Special rules and definitions.

``SEC. 5896. IMPOSITION OF FEE.

    ``(a) In General.--In addition to any other tax imposed under this 
title, there is hereby imposed on any applicable taxpayer an excise fee 
in an amount equal to 50 percent of the excess profit of such taxpayer 
for any taxable year beginning during 2007 or 2008.
    ``(b) Applicable Taxpayer.--For purposes of this chapter, the term 
`applicable taxpayer' means, with respect to operations in the United 
States--
            ``(1) any integrated oil company (as defined in section 
        291(b)(4)), and
            ``(2) any other producer or refiner of crude oil with gross 
        receipts from the sale of such crude oil or refined oil 
        products for the taxable year exceeding $100,000,000.

``SEC. 5897. EXCESS PROFIT; ETC.

    ``(a) General Rule.--For purposes of this chapter, the term `excess 
profit' means the excess of the adjusted taxable income of the 
applicable taxpayer for the taxable year over the reasonably inflated 
average profit for such taxable year.
    ``(b) Adjusted Taxable Income.--For purposes of this chapter, with 
respect to any applicable taxpayer, the adjusted taxable income for any 
taxable year is equal to the taxable income for such taxable year 
(within the meaning of section 63 and determined without regard to this 
subsection)--
            ``(1) increased by any interest expense deduction, 
        charitable contribution deduction, and any net operating loss 
        deduction carried forward from any prior taxable year, and
            ``(2) reduced by--
                    ``(A) any interest income, dividend income, and net 
                operating losses to the extent such losses exceed 
                taxable income for the taxable year, and
                    ``(B) any qualified domestic energy investment for 
                such taxable year.
In the case of any applicable taxpayer which is a foreign corporation, 
the adjusted taxable income shall be determined with respect to such 
income which is effectively connected with the conduct of a trade or 
business in the United States.
    ``(c) Reasonably Inflated Average Profit.--For purposes of this 
chapter, with respect to any applicable taxpayer, the reasonably 
inflated average profit for any taxable year is an amount equal to the 
average of the adjusted taxable income of such taxpayer for taxable 
years beginning during the 2000-2004 taxable year period (determined 
without regard to the taxable year with the highest adjusted taxable 
income in such period) plus 10 percent of such average.
    ``(d) Qualified Domestic Energy Investment.--
            ``(1) In general.--For purposes of this chapter, the term 
        `qualified domestic energy investment' means any amount paid or 
        incurred with respect to--
                    ``(A) any qualified facility described in paragraph 
                (1), (2), (3), or (4) of section 45(d) (determined 
                without regard to any placed in service date 
                requirement under such section), and
                    ``(B) any facility for the production of alcohol 
                used as a fuel (within the meaning of section 40) or 
                biodiesel or agri-biodiesel used as a fuel (within the 
                meaning of section 40A),
        originally placed in service by the taxpayer after the date of 
        the enactment of this section and for which no binding contract 
        was entered into before such date.
            ``(2) Denial of double benefit.--No deduction or credit 
        under this title shall be allowed for that portion of the 
        amount taken into account in determining any qualified domestic 
        energy investment under this section.

``SEC. 5898. SPECIAL RULES AND DEFINITIONS.

    ``(a) Withholding and Deposit of Fee.--The Secretary shall provide 
such rules as are necessary for the withholding and deposit of the fee 
imposed under section 5896.
    ``(b) Records and Information.--Each taxpayer liable for the fee 
under section 5896 shall keep such records, make such returns, and 
furnish such information as the Secretary may by regulations prescribe.
    ``(c) Return of Fee.--The Secretary shall provide for the filing 
and the time of such filing of the return of the fee imposed under 
section 5896.
    ``(d) Crude Oil.--The term `crude oil' includes crude oil 
condensates and natural gasoline.
    ``(e) Businesses Under Common Control.--For purposes of this 
chapter, all members of the same controlled group of corporations 
(within the meaning of section 267(f)) and all persons under common 
control (within the meaning of section 52(b) but determined by treating 
an interest of more than 50 percent as a controlling interest) shall be 
treated as 1 person.
    ``(f) Regulations.--The Secretary shall prescribe such regulations 
as may be necessary or appropriate to carry out the purposes of this 
chapter.''.
    (b) Clerical Amendment.--The table of chapters for subtitle E of 
the Internal Revenue Code of 1986 is amended by adding at the end the 
following new item:

          ``Chapter 56. Temporary Fee on Excess Oil Profit.''.

    (c) Deductibility of Fee.--The first sentence of section 164(a) of 
the Internal Revenue Code of 1986 (relating to deduction for taxes) is 
amended by inserting after paragraph (5) the following new paragraph:
            ``(6) The fee imposed by section 5896.''.

                Subtitle B--Energy Fairness for America

SEC. 211. ELIMINATION OF DEDUCTION FOR INTANGIBLE DRILLING AND 
              DEVELOPMENT COSTS FOR MAJOR OIL COMPANIES.

    (a) In General.--Section 263(c) of the Internal Revenue Code of 
1986 is amended by adding at the end the following new sentences: 
``This subsection shall not apply during any taxable year with respect 
to an applicable taxpayer (as defined in section 5896(b)) if during the 
preceding taxable year for the production of oil, the average price of 
crude oil in the United States is greater than $34.71 per barrel, and 
for the production of natural gas, the average wellhead price of 
natural gas in the United States is greater than $4.34 per 1,000 cubic 
feet. For purposes of the preceding sentence, the Secretary shall 
determine average prices, taking into consideration the most recent 
data reported by the Energy Information Administration. For taxable 
years beginning after December 31, 2008, each dollar amount specified 
in this subsection shall be adjusted to reflect changes for the 12-
month period ending the preceding September 30 in the Consumer Price 
Index for All Urban Consumers published by the Bureau of Labor 
Statistics of the Department of Labor.''
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after the date of the enactment of this Act.

SEC. 212. EXTENSION OF ELECTION TO EXPENSE CERTAIN REFINERIES.

    (a) Extension.--
            (1) In general.--Section 179C(c)(1) of the Internal Revenue 
        Code of 1986 (defining qualified refinery property) is 
        amended--
                    (A) by striking ``and before January 1, 2012'' in 
                subparagraph (B) and inserting ``and, in the case of 
                any qualified refinery described in subsection (d)(1), 
                before January 1, 2012'', and
                    (B) by inserting ``if described in subsection 
                (d)(1)'' after ``of which'' in subparagraph (F)(i).
            (2) Conforming amendment.--Subsection (d) of section 179C 
        of the Internal Revenue Code of 1986 is amended to read as 
        follows:
    ``(d) Qualified Refinery.--For purposes of this section, the term 
`qualified refinery' means any refinery located in the United States 
which is designed to serve the primary purpose of processing liquid 
fuel from--
            ``(1) crude oil, or
            ``(2) qualified fuels (as defined in section 45K(c)).''.
            (3) Effective date.--The amendments made by this subsection 
        shall take effect as if included in the amendment made by 
        section 1323(a) of the Energy Policy Act of 2005.
    (b) Nonapplication for Major Oil Companies.--
            (1) In general.--Section 179C of the Internal Revenue Code 
        of 1986 is amended by adding at the end the following new 
        subsection:
    ``(i) Nonapplication of Section.--This section shall not apply 
during any taxable year with respect to an applicable taxpayer (as 
defined in section 5896(b)) if during the preceding taxable year for 
the production of oil, the average price of crude oil in the United 
States is greater than $34.71 per barrel. For purposes of the preceding 
sentence, the Secretary shall determine average prices, taking into 
consideration the most recent data reported by the Energy Information 
Administration. For taxable years beginning after December 31, 2008, 
the dollar amount specified in this paragraph shall be adjusted to 
reflect changes for the 12-month period ending the preceding September 
30 in the Consumer Price Index for All Urban Consumers published by the 
Bureau of Labor Statistics of the Department of Labor.''.
            (2) Effective date.--The amendment made by this subsection 
        shall apply to taxable years beginning after the date of the 
        enactment of this Act.

SEC. 213. ELIMINATION OF AMORTIZATION OF GEOLOGICAL AND GEOPHYSICAL 
              EXPENDITURES FOR MAJOR OIL COMPANIES.

    (a) In General.--Section 167(h) of the Internal Revenue Code of 
1986 is amended by adding at the end the following new paragraph:
            ``(5) Nonapplication of section.--This subsection shall not 
        apply during any taxable year with respect to an applicable 
        taxpayer (as defined in section 5896(b)) if during the 
        preceding taxable year for the production of oil, the average 
        price of crude oil in the United States is greater than $34.71 
        per barrel, and for the production of natural gas, the average 
        wellhead price of natural gas in the United States is greater 
        than $4.34 per 1,000 cubic feet. For purposes of the preceding 
        sentence, the Secretary shall determine average prices, taking 
        into consideration the most recent data reported by the Energy 
        Information Administration. For taxable years beginning after 
        December 31, 2008, each dollar amount specified in this 
        subparagraph shall be adjusted to reflect changes for the 12-
        month period ending the preceding September 30 in the Consumer 
        Price Index for All Urban Consumers published by the Bureau of 
        Labor Statistics of the Department of Labor.''.
    (b) Effective Date.--The amendments made by this section shall take 
effect on and after the date of the enactment of this Act.

SEC. 214. MODIFICATIONS OF FOREIGN TAX CREDIT RULES APPLICABLE TO MAJOR 
              OIL COMPANIES WHICH ARE DUAL CAPACITY TAXPAYERS.

    (a) In General.--Section 901 of the Internal Revenue Code of 1986 
(relating to credit for taxes of foreign countries and of possessions 
of the United States) is amended by redesignating subsection (m) as (n) 
and by inserting after subsection (l) the following new subsection:
    ``(m) Special Rules Relating to Major Oil Companies Which Are Dual 
Capacity Taxpayers.--
            ``(1) General rule.--Notwithstanding any other provision of 
        this chapter, any amount paid or accrued by a dual capacity 
        taxpayer which is an applicable taxpayer (as defined in section 
        5896(b)) to a foreign country or possession of the United 
        States for any period shall not be considered a tax--
                    ``(A) if, for such period, the foreign country or 
                possession does not impose a generally applicable 
                income tax, or
                    ``(B) to the extent such amount exceeds the amount 
                (determined in accordance with regulations) which--
                            ``(i) is paid by such dual capacity 
                        taxpayer pursuant to the generally applicable 
                        income tax imposed by the country or 
                        possession, or
                            ``(ii) would be paid if the generally 
                        applicable income tax imposed by the country or 
                        possession were applicable to such dual 
                        capacity taxpayer.
                Nothing in this paragraph shall be construed to imply 
                the proper treatment of any such amount not in excess 
                of the amount determined under subparagraph (B).
            ``(2) Dual capacity taxpayer.--For purposes of this 
        subsection, the term `dual capacity taxpayer' means, with 
        respect to any foreign country or possession of the United 
        States, a person who--
                    ``(A) is subject to a levy of such country or 
                possession, and
                    ``(B) receives (or will receive) directly or 
                indirectly a specific economic benefit (as determined 
                in accordance with regulations) from such country or 
                possession.
            ``(3) Generally applicable income tax.--For purposes of 
        this subsection--
                    ``(A) In general.--The term `generally applicable 
                income tax' means an income tax (or a series of income 
                taxes) which is generally imposed under the laws of a 
                foreign country or possession on income derived from 
                the conduct of a trade or business within such country 
                or possession.
                    ``(B) Exceptions.--Such term shall not include a 
                tax unless it has substantial application, by its terms 
                and in practice, to--
                            ``(i) persons who are not dual capacity 
                        taxpayers, and
                            ``(ii) persons who are citizens or 
                        residents of the foreign country or 
                        possession.''.
    (b) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        apply to taxes paid or accrued in taxable years beginning after 
        the date of the enactment of this Act.
            (2) Contrary treaty obligations upheld.--The amendments 
        made by this section shall not apply to the extent contrary to 
        any treaty obligation of the United States.

SEC. 215. DENIAL OF DEDUCTION FOR INCOME ATTRIBUTABLE TO DOMESTIC 
              PRODUCTION OF OIL, NATURAL GAS, OR PRIMARY PRODUCTS 
              THEREOF.

    (a) In General.--Subparagraph (B) of section 199(c)(4) of the 
Internal Revenue Code of 1986 (relating to exceptions) is amended by 
striking ``or'' at the end of clause (ii), by striking the period at 
the end of clause (iii) and inserting ``, or'', and by inserting after 
clause (iii) the following new clause:
                            ``(iv) the sale, exchange, or other 
                        disposition of oil, natural gas, or any primary 
                        product thereof.''.
    (b) Primary Product.--Section 199(c)(4)(B) of such Code is amended 
by adding at the end the following flush sentence:
                ``For purposes of clause (iv), the term `primary 
                product' has the same meaning as when used in section 
                927(a)(2)(C), as in effect before its repeal.''.
    (c) Conforming Amendments.--Section 199(c)(4) of such Code is 
amended--
            (1) in subparagraph (A)(i)(III) by striking ``electricity, 
        natural gas,'' and inserting ``electricity'', and
            (2) in subparagraph (B)(ii) by striking ``electricity, 
        natural gas,'' and inserting ``electricity''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2007.

SEC. 216. ELIMINATION OF ENHANCED OIL RECOVERY CREDIT FOR MAJOR OIL 
              COMPANIES.

    (a) In General.--Section 43 of the Internal Revenue Code of 1986 is 
amended by adding at the end the following new subsection:
    ``(f) Nonapplication of Section.--This section shall not apply 
during any taxable year with respect to an applicable taxpayer (as 
defined in section 5896(b)) if during the preceding taxable year for 
the production of oil, the average price of crude oil in the United 
States is greater than $34.71 per barrel. For purposes of the preceding 
sentence, the Secretary shall determine average prices, taking into 
consideration the most recent data reported by the Energy Information 
Administration. For taxable years beginning after December 31, 2008, 
the dollar amount specified in this paragraph shall be adjusted to 
reflect changes for the 12-month period ending the preceding September 
30 in the Consumer Price Index for All Urban Consumers published by the 
Bureau of Labor Statistics of the Department of Labor.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after the date of the enactment of this Act.

Subtitle C--Protection and Retention of Value of Publicly-Owned Energy 
                               Resources

SEC. 221. PRICE THRESHOLDS FOR ROYALTY SUSPENSION PROVISIONS.

    The Secretary of the Interior shall agree to a request by any 
lessee to amend any lease issued for any Central and Western Gulf of 
Mexico tract during the period of January 1, 1998, through December 31, 
1999, to incorporate price thresholds applicable to royalty suspension 
provisions, that are equal to or less than the price thresholds 
described in clauses (v) through (vii) of section 8(a)(3)(C) of the 
Outer Continental Shelf Lands Act (43 U.S.C. 1337(a)(3)(C)). Any 
amended lease shall impose the new or revised price thresholds 
effective October 1, 2006. Existing lease provisions shall prevail 
through September 30, 2006.

SEC. 222. CLARIFICATION OF AUTHORITY TO IMPOSE PRICE THRESHOLDS FOR 
              CERTAIN LEASE SALES.

    Congress reaffirms the authority of the Secretary of the Interior 
under section 8(a)(1)(H) of the Outer Continental Shelf Lands Act (43 
U.S.C. 1337(a)(1)(H)) to vary, based on the price of production from a 
lease, the suspension of royalties under any lease subject to section 
304 of the Outer Continental Shelf Deep Water Royalty Relief Act 
(Public Law 104-58; 43 U.S.C. 1337 note).

SEC. 223. ELIGIBILITY FOR NEW LEASES AND THE TRANSFER OF LEASES; 
              CONSERVATION OF RESOURCES FEES.

    (a) Issuance of New Leases.--
            (1) In general.--The Secretary shall not issue any new 
        lease that authorizes the production of oil or natural gas in 
        the Gulf of Mexico under the Outer Continental Shelf Lands Act 
        (43 U.S.C. 1331 et seq.) to a person described in paragraph (2) 
        unless--
                    (A) the person has renegotiated each covered lease 
                with respect to which the person is a lessee, to modify 
                the payment responsibilities of the person to include 
                price thresholds that are equal to or less than the 
                price thresholds described in clauses (v) through (vii) 
                of section 8(a)(3)(C) of the Outer Continental Shelf 
                Lands Act (43 U.S.C. 1337(a)(3)(C)); or
                    (B) the person has--
                            (i) paid all fees established by the 
                        Secretary under subsection (b) that are due 
                        with respect to each covered lease for which 
                        the person is a lessee; or
                            (ii) entered into an agreement with the 
                        Secretary under which the person is obligated 
                        to pay such fees.
            (2) Persons described.--A person referred to in paragraph 
        (1) is a person that--
                    (A) is a lessee that--
                            (i) holds a covered lease on the date on 
                        which the Secretary considers the issuance of 
                        the new lease; or
                            (ii) was issued a covered lease before the 
                        date of enactment of this Act, but transferred 
                        the covered lease to another person or entity 
                        (including a subsidiary or affiliate of the 
                        lessee) after the date of enactment of this 
                        Act; or
                    (B) any other person or entity who has any direct 
                or indirect interest in, or who derives any benefit 
                from, a covered lease;
            (3) Multiple lessees.--
                    (A) In general.--For purposes of paragraph (1), if 
                there are multiple lessees that own a share of a 
                covered lease, the Secretary may implement separate 
                agreements with any lessee with a share of the covered 
                lease that modifies the payment responsibilities with 
                respect to the share of the lessee to include price 
                thresholds that are equal to or less than the price 
                thresholds described in clauses (v) through (vii) of 
                section 8(a)(3)(C) of the Outer Continental Shelf Lands 
                Act (43 U.S.C. 1337(a)(3)(C)).
                    (B) Treatment of share as covered lease.--Beginning 
                on the effective date of an agreement under 
                subparagraph (A), any share subject to the agreement 
                shall not constitute a covered lease with respect to 
                any lessees that entered into the agreement.
    (b) Conservation of Resources Fees.--
            (1) In general.--Not later than 60 days after the date of 
        enactment of this Act, the Secretary of the Interior by 
        regulation shall establish--
                    (A) a conservation of resources fee for producing 
                Federal oil and gas leases in the Gulf of Mexico; and
                    (B) a conservation of resources fee for 
                nonproducing Federal oil and gas leases in the Gulf of 
                Mexico.
            (2) Producing lease fee terms.--The fee under paragraph 
        (1)(A)--
                    (A) subject to subparagraph (C), shall apply to 
                covered leases that are producing leases;
                    (B) shall be set at $9 per barrel for oil and $1.25 
                per million Btu for gas, respectively, in 2005 dollars; 
                and
                    (C) shall apply only to production of oil or gas 
                occurring--
                            (i) in any calendar year in which the 
                        arithmetic average of the daily closing prices 
                        for light sweet crude oil on the New York 
                        Mercantile Exchange (NYMEX) exceeds $34.73 per 
                        barrel for oil and $4.34 per million Btu for 
                        gas in 2005 dollars; and
                            (ii) on or after October 1, 2006.
            (3) Nonproducing lease fee terms.--The fee under paragraph 
        (1)(B)--
                    (A) subject to subparagraph (C), shall apply to 
                leases that are nonproducing leases;
                    (B) shall be set at $3.75 per acre per year in 2005 
                dollars; and
                    (C) shall apply on and after October 1, 2006.
            (4) Treatment of receipts.--Amounts received by the United 
        States as fees under this subsection shall be treated as 
        offsetting receipts.
    (c) Transfers.--A lessee or any other person who has any direct or 
indirect interest in, or who derives a benefit from, a lease shall not 
be eligible to obtain by sale or other transfer (including through a 
swap, spinoff, servicing, or other agreement) any covered lease, the 
economic benefit of any covered lease, or any other lease for the 
production of oil or natural gas in the Gulf of Mexico under the Outer 
Continental Shelf Lands Act (43 U.S.C. 1331 et seq.), unless--
            (1) the lessee or other person has--
                    (A) renegotiated all covered leases of the lessee 
                or other person; and
                    (B) entered into an agreement with the Secretary to 
                modify the terms of all covered leases of the lessee or 
                other person to include limitations on royalty relief 
                based on market prices that are equal to or less than 
                the price thresholds described in clauses (v) through 
                (vii) of section 8(a)(3)(C) of the Outer Continental 
                Shelf Lands Act (43 U.S.C. 1337(a)(3)(C)); or
            (2) the lessee or other person has--
                    (A) paid all fees established by the Secretary 
                under subsection (b) that are due with respect to each 
                covered lease for which the person is a lessee; or
                    (B) entered into an agreement with the Secretary 
                under which the person is obligated to pay such fees.
    (d) Definitions.--In this section--
            (1) Covered lease.--The term ``covered lease'' means a 
        lease for oil or gas production in the Gulf of Mexico that is--
                    (A) in existence on the date of enactment of this 
                Act;
                    (B) issued by the Department of the Interior under 
                section 304 of the Outer Continental Shelf Deep Water 
                Royalty Relief Act (43 U.S.C. 1337 note; Public Law 
                104-58); and
                    (C) not subject to limitations on royalty relief 
                based on market price that are equal to or less than 
                the price thresholds described in clauses (v) through 
                (vii) of section 8(a)(3)(C) of the Outer Continental 
                Shelf Lands Act (43 U.S.C. 1337(a)(3)(C)).
            (2) Lessee.--The term ``lessee'' includes any person or 
        other entity that controls, is controlled by, or is in or under 
        common control with, a lessee.
            (3) Secretary.--The term ``Secretary'' means the Secretary 
        of the Interior.

SEC. 224. REPEAL OF CERTAIN TAXPAYER SUBSIDIZED ROYALTY RELIEF FOR THE 
              OIL AND GAS INDUSTRY.

    (a) Repeal of Provisions of Energy Policy Act of 2005.--The 
following provisions of the Energy Policy Act of 2005 (Public Law 109-
58) are repealed:
            (1) Section 344 (42 U.S.C. 15904; relating to incentives 
        for natural gas production from deep wells in shallow waters of 
        the Gulf of Mexico).
            (2) Section 345 (42 U.S.C. 15905; relating to royalty 
        relief for deep water production in the Gulf of Mexico).
            (3) Subsection (i) of section 365 (42 U.S.C. 15924; 
        relating to the prohibition on drilling-related permit 
        application cost recovery fees).
    (b) Provisions Relating to Planning Areas Offshore Alaska.--Section 
8(a)(3)(B) of the Outer Continental Shelf Lands Act (43 U.S.C. 
1337(a)(3)(B)) is amended by striking ``and in the Planning Areas 
offshore Alaska'' after ``West longitude''.
    (c) Provisions Relating to Naval Petroleum Reserve in Alaska.--
Section 107 of the Naval Petroleum Reserves Production Act of 1976 (as 
transferred, redesignated, moved, and amended by section 347 of the 
Energy Policy Act of 2005 (119 Stat. 704)) is amended--
            (1) in subsection (i) by striking paragraphs (2) through 
        (6); and
            (2) by striking subsection (k).

           Subtitle D--Reduction in Incentives to Guzzle Gas

SEC. 231. REDUCING INCENTIVES TO GUZZLE GAS.

    (a) Inclusion of Heavy Vehicles in Limitation on Depreciation of 
Certain Luxury Automobiles.--
            (1) In general.--Section 280F(d)(5)(A) of the Internal 
        Revenue Code of 1986 (defining passenger automobile) is 
        amended--
                    (A) by striking clause (ii) and inserting the 
                following new clause:
                            ``(ii)(I) which is rated at 6,000 pounds 
                        unloaded gross vehicle weight or less, or
                            ``(II) which is rated at more than 6,000 
                        pounds but not more than 14,000 pounds gross 
                        vehicle weight.'', and
                    (B) by striking ``clause (ii)'' in the second 
                sentence and inserting ``clause (ii)(I)''.
            (2) Exception for vehicles used in farming business.--
        Section 280F(d)(5)(B) of such Code (relating to exception for 
        certain vehicles) is amended by striking ``and'' at the end of 
        clause (ii), by redesignating clause (iii) as clause (iv), and 
        by inserting after clause (ii) the following new clause:
                            ``(iii) any vehicle used in a farming 
                        business (as defined in section 263A(e)(4), 
                        and''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to property placed in service after the date of the 
        enactment of this Act.
    (b) Updated Depreciation Deduction Limits.--
            (1) In general.--Subparagraph (A) of section 280F(a)(1) of 
        the Internal Revenue Code of 1986 (relating to limitation on 
        amount of depreciation for luxury automobiles) is amended to 
        read as follows:
                    ``(I) Limitation.--The amount of the depreciation 
                deduction for any taxable year shall not exceed for any 
                passenger automobile--
                            ``(i) for the 1st taxable year in the 
                        recovery period--
                                    ``(I) described in subsection 
                                (d)(5)(A)(ii)(I), $4,000,
                                    ``(II) described in the second 
                                sentence of subsection (d)(5)(A), 
                                $5,000, and
                                    ``(III) described in subsection 
                                (d)(5)(A)(ii)(II), $6,000,
                            ``(ii) for the 2nd taxable year in the 
                        recovery period--
                                    ``(I) described in subsection 
                                (d)(5)(A)(ii)(I), $6,400,
                                    ``(II) described in the second 
                                sentence of subsection (d)(5)(A), 
                                $8,000, and
                                    ``(III) described in subsection 
                                (d)(5)(A)(ii)(II), $9,600,
                            ``(iii) for the 3rd taxable year in the 
                        recovery period--
                                    ``(I) described in subsection 
                                (d)(5)(A)(ii)(I), $3,850,
                                    ``(II) described in the second 
                                sentence of subsection (d)(5)(A), 
                                $4,800, and
                                    ``(III) described in subsection 
                                (d)(5)(A)(ii)(II), $5,775, and
                            ``(iv) for each succeeding taxable year in 
                        the recovery period--
                                    ``(I) described in subsection 
                                (d)(5)(A)(ii)(I), $2,325,
                                    ``(II) described in the second 
                                sentence of subsection (d)(5)(A), 
                                $2,900, and
                                    ``(III) described in subsection 
                                (d)(5)(A)(ii)(II), $3,475.''.
            (2) Years after recovery period.--Section 280F(a)(1)(B)(ii) 
        of such Code is amended to read as follows:
                            ``(ii) Limitation.--The amount treated as 
                        an expense under clause (i) for any taxable 
                        year shall not exceed for any passenger 
                        automobile--
                                    ``(I) described in subsection 
                                (d)(5)(A)(ii)(I), $2,325,
                                    ``(II) described in the second 
                                sentence of subsection (d)(5)(A), 
                                $2,900, and
                                    ``(III) described in subsection 
                                (d)(5)(A)(ii)(II), $3,475.''.
            (3) Inflation adjustment.--Section 280F(d)(7) of such Code 
        (relating to automobile price inflation adjustment) is 
        amended--
                    (A) by striking ``after 1988'' in subparagraph (A) 
                and inserting ``after 2007'', and
                    (B) by striking subparagraph (B) and inserting the 
                following new subparagraph:
                    ``(B) Automobile price inflation adjustment.--For 
                purposes of this paragraph--
                            ``(i) In general.--The automobile price 
                        inflation adjustment for any calendar year is 
                        the percentage (if any) by which--
                                    ``(I) the average wage index for 
                                the preceding calendar year, exceeds
                                    ``(II) the average wage index for 
                                2006.
                            ``(ii) Average wage index.--The term 
                        `average wage index' means the average wage 
                        index published by the Social Security 
                        Administration.''.
            (4) Effective date.--The amendments made by this subsection 
        shall apply to property placed in service after the date of the 
        enactment of this Act.
    (c) Expensing Limitation for Farm Vehicles.--
            (1) In general.--Paragraph (6) of section 179(b) of the 
        Internal Revenue Code of 1986 (relating to limitations) is 
        amended to read as follows:
            ``(6) Limitation on cost taken into account for farm 
        vehicles.--The cost of any vehicle described in section 
        280F(d)(5)(B)(iii) for any taxable year which may be taken into 
        account under this section shall not exceed $30,000.''.
            (2) Effective date.--The amendment made by this subsection 
        shall apply to property placed in service after the date of the 
        enactment of this Act.
                                 <all>
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