II 

110TH CONGRESS 

1ST SESSION S. 1554 

To comprehensively address challenges relating to energy independence, air 

pollution, and climate change facing the United States. 

IN THE SENATE OF THE UNITED STATES 

JUNE 6, 2007 

Ms. COLLINS (for herself and Mr. LIEBERMAN) introduced the following bill; 

which was read twice and referred to the Committee on Finance 

A BILL 

To comprehensively address challenges relating to energy 

independence, air pollution, and climate change facing 

the United States. 

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

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

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

5 ‘‘Energy Independence, Clean Air, and Climate Security 

6 Act of 2007’’. 

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

8 this Act is as follows: 

Sec. 1. Short title; table of contents. 


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TITLE I—ENERGY INDEPENDENCE THROUGH TRANSPORTATION 

FUEL EFFICIENCY 

Subtitle A—Automobile Fuel Economy Standards 

Sec. 101. Short title. 

Sec. 102. Average fuel economy standards for passenger automobiles and light 

trucks. 

Sec. 103. Passenger car program reform. 

Sec. 104. Work trucks. 

Sec. 105. Light trucks. 

Sec. 106. Ensuring safety of passenger automobiles and light trucks. 

Sec. 107. Onboard fuel economy indicators and devices. 

Sec. 108. Secretary of Transportation to certify benefits. 

Sec. 109. Credit trading program. 

Sec. 110. Report to Congress. 

Sec. 111. Labels for fuel economy and greenhouse gas emissions. 

Subtitle B—Improving Fuel Efficiency 

Sec. 121. Helping consumers to purchase more fuel-efficient automobiles. 

Sec. 122. Transit-oriented development corridors. 

Sec. 123. Energy-efficient motor vehicle manufacturing credit. 

Sec. 124. Fuel efficiency standards for replacement tires. 

Sec. 125. Fuel economy for heavy duty trucks. 

Sec. 126. Idling reduction tax credit. 

Sec. 127. Repeal of preemption of State law relating to automobile fuel economy standards. 

Sec. 128. Federal fleet requirements. 

TITLE II—ENERGY INDEPENDENCE THROUGH RENEWABLE 

FUELS 

Subtitle A—Advanced Clean Fuels 

Sec. 201. Definitions. 

Sec. 202. Advanced clean fuel program. 

Sec. 203. Voluntary renewable fuels labeling program. 

Sec. 204. Water quality protection. 

Subtitle B—Assistance and Research 

Sec. 211. Small ethanol producer credit expansion for producers of sucrose and 

ethanol. 

Sec. 212. Research and development in support of low-carbon fuels. 

TITLE III—CLEAN POWER ACT 

Sec. 301. Short title. 

Sec. 302. Electric energy generation emission reductions. 

Sec. 303. Savings clause. 

Sec. 304. Acid precipitation research program. 

Sec. 305. Authorization of appropriations for deposition monitoring. 

Sec. 306. Technical amendments. 

TITLE IV—REDUCING HEATING AND ELECTRIC BILLS 

Sec. 401. Weatherization assistance. 


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Sec. 402. Energy Star programs. 

Sec. 403. Renewable electricity production credit. 

Sec. 404. Efficiency resource standard. 

Sec. 405. Federal renewable portfolio standard. 

TITLE V—SAVING TAXPAYERS MONEY THROUGH ELIMINATION 

OF TAX BREAKS 

Sec. 501. Repeal of certain tax provisions for oil industry. 

TITLE VI—CLIMATE CHANGE RESEARCH 

Sec. 601. Short title. 

Sec. 602. Abrupt climate change research program. 

Sec. 603. Authorization of appropriations. 

1 TITLE I—ENERGY INDEPEND2 ENCE THROUGH TRANSPOR3 TATION FUEL EFFICIENCY 

4 Subtitle A—Automobile Fuel 

5 Economy Standards 

6 SEC. 101. SHORT TITLE. 

7 This subtitle may be cited as the ‘‘Fuel Economy Im8 provement Act’’. 

9 SEC. 102. AVERAGE FUEL ECONOMY STANDARDS FOR PAS10 SENGER AUTOMOBILES AND LIGHT TRUCKS. 

11 (a) INCREASED STANDARDS.—Section 32902 of title 

12 49, United States Code, is amended— 

13 (1) in subsection (a)— 

14 (A) by striking ‘‘NON-PASSENGER AUTO15 MOBILES.—’’ and inserting ‘‘PRESCRIPTION OF

16 STANDARDS BY REGULATION.—’’; and 

17 (B) by striking ‘‘(except passenger auto18 mobiles)’’ and inserting ‘‘(except passenger 

19 automobiles and light trucks)’’; and 


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1 (2) by amending subsection (b) to read as fol2 lows: 

3 ‘‘(b) STANDARDS FOR PASSENGER AUTOMOBILES

4 AND LIGHT TRUCKS.— 

5 ‘‘(1) IN GENERAL.—The Secretary of Transpor6 tation, in consultation with the Administrator of the 

7 Environmental Protection Agency, shall prescribe 

8 average fuel economy standards for passenger auto9 mobiles and light trucks manufactured by a manu10 facturer in each model year beginning with model 

11 year 2010 in order to achieve a combined average 

12 fuel economy standard for passenger automobiles 

13 and light trucks— 

14 ‘‘(A) of at least 35 miles per gallon begin15 ning in model year 2019 (or such other number 

16 of miles per gallon as the Secretary may pre17 scribe under subsection (c)); and 

18 ‘‘(B) of at least 45 miles per gallon begin19 ning in model year 2030 (or such other number 

20 of miles per gallon as the Secretary may pre21 scribe under subsection (c)). 

22 ‘‘(2) ELIMINATION OF SUV LOOPHOLE.—Begin23 ning not later than model year 2013, the regulations 

24 prescribed under this section may not make any disVerDate Aug 31 2005 05:41 Jun 07, 2007 Jkt 059200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S1554.IS S1554

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1 tinction between passenger automobiles and light 

2 trucks. 

3 ‘‘(3) PROGRESS TOWARD STANDARD RE4 QUIRED.—In prescribing average fuel economy 

5 standards under paragraph (1), the Secretary shall 

6 prescribe appropriate annual fuel economy standard 

7 increases for passenger automobiles and light trucks 

8 that— 

9 ‘‘(A) increase the applicable average fuel 

10 economy standard ratably beginning with model 

11 year 2010 and ending with model year 2019; 

12 ‘‘(B) require that each manufacturer 

13 achieve— 

14 ‘‘(i) a fuel economy standard for pas15 senger automobiles manufactured by that 

16 manufacturer of at least 29.5 miles per 

17 gallon not later than model year 2010; and 

18 ‘‘(ii) a fuel economy standard for light 

19 trucks manufactured by that manufacturer 

20 of at least 23.5 miles per gallon not later 

21 than model year 2010. 

22 ‘‘(4) FUEL ECONOMY BASELINE FOR PAS23 SENGER AUTOMOBILES.—Notwithstanding the max24 imum feasible average fuel economy level established 

25 by regulations prescribed under subsection (c), the 


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1 minimum fleet wide average fuel economy standard 

2 for passenger automobiles manufactured by a manu3 facturer in a model year for that manufacturer’s do4 mestic fleet and foreign fleet, as calculated under 

5 section 32904 as in effect before the date of the en6 actment of the Fuel Economy Improvement Act, 

7 shall be the greater of— 

8 ‘‘(A) 27.5 miles per gallon; or 

9 ‘‘(B) 92 percent of the average fuel econ10 omy projected by the Secretary for the com11 bined domestic and foreign fleets manufactured 

12 by all manufacturers in that model year. 

13 ‘‘(5) DEADLINE FOR REGULATIONS.—The Sec14 retary shall promulgate the regulations required by 

15 paragraphs (1) and (2) in final form not later than 

16 18 months after the date of the enactment of the 

17 Fuel Economy Improvement Act.’’. 

18 SEC. 103. PASSENGER CAR PROGRAM REFORM. 

19 Section 32902(c) of title 49, United States Code, is 

20 amended to read as follows: 

21 ‘‘(c) AMENDING PASSENGER AUTOMOBILE STAND22 ARDS.—Not later than 18 months before the beginning of 

23 each model year, the Secretary of Transportation may pre24 scribe regulations amending a standard prescribed under 

25 subsection (b) for a model year to a level that the SecVerDate Aug 31 2005 05:41 Jun 07, 2007 Jkt 059200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S1554.IS S1554

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1 retary determines to be the maximum feasible average fuel 

2 economy level for that model year. Section 553 of title 5 

3 shall apply to a proceeding to amend any standard pre4 scribed under subsection (b). Any interested person may 

5 make an oral presentation and a transcript shall be taken 

6 of that presentation. The Secretary may prescribe sepa7 rate standards for different classes of passenger auto8 mobiles.’’. 

9 SEC. 104. WORK TRUCKS. 

10 (a) DEFINITION OF WORK TRUCK.—Section 

11 32901(a) of title 49, United States Code, is amended by 

12 adding at the end the following: 

13 ‘‘(18) ‘work truck’ means an automobile that 

14 the Secretary determines by regulation— 

15 ‘‘(A) is rated at between 8,500 and 10,000 

16 pounds gross vehicle weight; and 

17 ‘‘(B) is not a medium-duty passenger vehi18 cle (as defined in section 86.1803–01 of title 

19 40, Code of Federal Regulations).’’. 

20 (b) RULEMAKING.—The Secretary of Transpor21 tation— 

22 (1) shall issue proposed regulations imple23 menting the amendment made by subsection (a) not 

24 later than 1 year after the date of the enactment of 

25 this Act; and 


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1 (2) shall issue final regulations implementing 

2 the amendment made by subsection (a) not later 

3 than 18 months after the date of the enactment of 

4 this Act. 

5 (c) FUEL ECONOMY STANDARDS FOR WORK

6 TRUCKS.—Section 32902 of title 49, United States Code, 

7 is amended— 

8 (1) by redesignating subsections (f), (g), (h), 

9 (i), and (j) as subsections (g), (h), (i), (j), and (k), 

10 respectively; 

11 (2) by inserting after subsection (e) the fol12 lowing: 

13 ‘‘(f) WORK TRUCKS.—The Secretary of Transpor14 tation, in consultation with the Administrator of the Envi15 ronmental Protection Agency, shall prescribe standards to 

16 achieve the maximum feasible fuel economy for work 

17 trucks manufactured by a manufacturer in each model 

18 year beginning with model year 2013.’’; 

19 (3) in subsection (i), as redesignated, by strik20 ing ‘‘and (g) of this section’’ and inserting ‘‘(f), and 

21 (h)’’; and 

22 (4) in subsection (k), as redesignated, by strik23 ing ‘‘or (g) of this section’’ and inserting ‘‘(f), or 

24 (h)’’. 


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1 SEC. 105. LIGHT TRUCKS. 

2 (a) DEFINITION.— 

3 (1) IN GENERAL.—Section 32901(a) of title 49, 

4 United States Code, is amended— 

5 (A) by redesignating paragraphs (12), 

6 (13), (14), (15), and (16) as paragraphs (13) 

7 (14), (15), (16), and (17), respectively; and 

8 (B) by inserting after paragraph (11) the 

9 following: 

10 ‘‘(12) ‘light truck’ means an automobile that 

11 the Secretary determines by regulation— 

12 ‘‘(A) is manufactured primarily for trans13 porting not more than 10 individuals; 

14 ‘‘(B) is rated at not more than 10,000 

15 pounds gross vehicle weight; 

16 ‘‘(C) is not a passenger automobile; and 

17 ‘‘(D) is not a work truck.’’. 

18 (2) RULEMAKING.—The Secretary of Transpor19 tation— 

20 (A) shall issue proposed regulations imple21 menting the amendment made by paragraph (1) 

22 not later than 1 year after the date of the en23 actment of this Act; and 

24 (B) shall issue final regulations imple25 menting the amendment not later than 18 


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1 months after the date of the enactment of this 

2 Act. 

3 (3) EFFECTIVE DATE.—Regulations prescribed 

4 under paragraph (1) shall apply beginning with 

5 model year 2010. 

6 (b) APPLICABILITY OF EXISTING STANDARDS.—This 

7 section does not affect the application of section 32902 

8 of title 49, United States Code, to passenger automobiles 

9 or non-passenger automobiles manufactured before model 

10 year 2010. 

11 (c) AUTHORIZATION OF APPROPRIATIONS.—There 

12 are authorized to be appropriated to the Secretary of 

13 Transportation $25,000,000 for each of the fiscal years 

14 2009 through 2021 to carry out the provisions of chapter 

15 329 of title 49, United States Code, as amended by this 

16 Act. 

17 SEC. 106. ENSURING SAFETY OF PASSENGER AUTOMOBILES 

18 AND LIGHT TRUCKS. 

19 (a) IN GENERAL.—The Secretary of Transportation 

20 shall exercise the authority given the Secretary under Fed21 eral law to ensure that— 

22 (1) passenger automobiles and light trucks (as 

23 such terms are defined in section 32901 of title 49, 

24 United States Code) are safe; 


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1 (2) progress is made in improving the overall 

2 safety of passenger automobiles and light trucks; 

3 and 

4 (3) progress is made in maximizing United 

5 States employment. 

6 (b) VEHICLE SAFETY.—Subchapter II of chapter 301 

7 of title 49, United States Code, is amended by adding at 

8 the end the following: 

9 ‘‘§ 30129. Vehicle compatibility and aggressivity re10 duction standard 

11 ‘‘(a) STANDARDS.—The Secretary of Transportation 

12 shall issue a motor vehicle safety standard to reduce vehi13 cle incompatibility and aggressivity between passenger ve14 hicles and non-passenger vehicles. The standard shall ad15 dress characteristics necessary to ensure better manage16 ment of crash forces in multiple vehicle frontal and side 

17 impact crashes between different types, sizes, and weights 

18 of vehicles with a gross vehicle weight of 10,000 pounds 

19 or less in order to decrease occupant deaths and injuries. 

20 ‘‘(b) CONSUMER INFORMATION.—The Secretary shall 

21 develop and implement a public information side and fron22 tal compatibility crash test program with vehicle ratings 

23 based on risks to occupants, risks to other motorists, and 

24 combined risks by vehicle make and model.’’. 

25 (c) RULEMAKING.— 


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1 (1) IN GENERAL.—The Secretary of Transpor2 tation shall issue— 

3 (A) a notice of a proposed rulemaking to 

4 implement section 30129 of title 49, United 

5 States Code, not later than January 1, 2010; 

6 and 

7 (B) a final rule to implement such section 

8 not later than December 31, 2011. 

9 (2) EFFECTIVE DATE.—Any requirement im10 posed under the final rule issued under paragraph 

11 (1)(B) shall become fully effective not later than 

12 September 1, 2013. 

13 (d) CONFORMING AMENDMENT.—The chapter anal14 ysis for chapter 301 of title 49, United States Code, is 

15 amended by inserting after the item relating to section 

16 30128 the following: 

‘‘30129. Vehicle compatibility and aggressivity reduction standard.’’. 

17 SEC. 107. ONBOARD FUEL ECONOMY INDICATORS AND DE18 VICES. 

19 (a) IN GENERAL.—Chapter 329 of title 49, United 

20 States Code, is amended by adding at the end the fol21 lowing: 

22 ‘‘§ 32920. Fuel economy indicators and devices 

23 ‘‘(a) IN GENERAL.—The Secretary of Transpor24 tation, in consultation with the Administrator of the Envi25 ronmental Protection Agency, shall prescribe a fuel econVerDate Aug 31 2005 05:41 Jun 07, 2007 Jkt 059200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S1554.IS S1554

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1 omy standard for passenger automobiles and light trucks 

2 manufactured by a manufacturer in each model year be3 ginning with model year 2014 that requires each such 

4 automobile and light truck to be equipped with— 

5 ‘‘(1) an onboard electronic instrument that pro6 vides real-time and cumulative fuel economy data; 

7 ‘‘(2) an onboard electronic instrument that sig8 nals a driver when inadequate tire pressure may be 

9 affecting fuel economy; and 

10 ‘‘(3) a device that will allow drivers to place the 

11 automobile or light truck in a mode that will auto12 matically produce greater fuel economy. 

13 ‘‘(b) EXCEPTION.—Subsection (a) shall not apply to 

14 any vehicle that is not subject to an average fuel economy 

15 standard under section 32902(b). 

16 ‘‘(c) ENFORCEMENT.—Subchapter IV of chapter 301 

17 shall apply to a fuel economy standard prescribed under 

18 subsection (a) to the same extent and in the same manner 

19 as if that standard were a motor vehicle safety standard 

20 under chapter 301.’’. 

21 (b) CONFORMING AMENDMENT.—The chapter anal22 ysis for chapter 329 of title 49, United States Code, is 

23 amended by inserting after the item relating to section 

24 32919 the following: 

‘‘32920. Fuel economy indicators and devices.’’. 


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1 SEC. 108. SECRETARY OF TRANSPORTATION TO CERTIFY 

2 BENEFITS. 

3 Beginning with model year 2010, the Secretary of 

4 Transportation, in consultation with the Administrator of 

5 the Environmental Protection Agency, shall annually de6 termine and certify to Congress the reduction in United 

7 States consumption of gasoline and petroleum distillates 

8 used for vehicle fuel and the reduction in greenhouse gas 

9 emissions during the most recent year that are attrib10 utable to the implementation of the average fuel economy 

11 standards imposed under section 32902 of title 49, United 

12 States Code, as a result of the amendments made by this 

13 Act. 

14 SEC. 109. CREDIT TRADING PROGRAM. 

15 Section 32903 of title 49, United States Code, is 

16 amended— 

17 (1) by striking ‘‘passenger’’ each place it ap18 pears; 

19 (2) by striking ‘‘section 32902(b)–(d) of this 

20 title’’ each place it appears and inserting ‘‘sub21 section (a), (c), or (d) of section 32902’’; 

22 (3) in subsection (a)(2), by striking ‘‘clause (1) 

23 of this subsection’’ and inserting ‘‘paragraph (1)’’; 

24 and 

25 (4) by amending subsection (e) to read as fol26 lows: 


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1 ‘‘(e) CREDIT TRADING AMONG MANUFACTURERS.— 

2 The Secretary of Transportation may establish, by regula3 tion, a corporate average fuel economy credit trading pro4 gram to allow manufacturers whose automobiles exceed 

5 the average fuel economy standards prescribed under sec6 tion 32902 to earn credits to be sold to manufacturers 

7 whose automobiles fail to achieve the prescribed stand8 ards.’’. 

9 SEC. 110. REPORT TO CONGRESS. 

10 Not later than December 31, 2014, the Secretary of 

11 Transportation shall submit to Congress a report on the 

12 progress made by the automobile manufacturing industry 

13 towards meeting the 35 miles per gallon average fuel econ14 omy standard required under section 32902(b)(1) of title 

15 49, United States Code. 

16 SEC. 111. LABELS FOR FUEL ECONOMY AND GREENHOUSE 

17 GAS EMISSIONS. 

18 Section 32908 of title 49, United States Code, is 

19 amended— 

20 (1) in subsection (a)(1), by striking ‘‘of this 

21 title’’ and inserting ‘‘and a light truck manufactured 

22 by a manufacturer in a model year after model year 

23 2010; and’’; 

24 (2) in subsection (b)— 

25 (A) in paragraph (1)— 


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1 (i) by striking ‘‘(1)’’ and inserting the 

2 following: 

3 ‘‘(1) IN GENERAL.—’’; 

4 (ii) by moving subparagraphs (A) 

5 through (F) 2 ems to the right; 

6 (iii) by redesignating subparagraph 

7 (F) as subparagraph (H); and 

8 (iv) by inserting after subparagraph 

9 (E) the following: 

10 ‘‘(F) a label (or a logo imprinted on a label re11 quired under this paragraph) that— 

12 ‘‘(i) reflects the performance of an auto13 mobile based upon criteria developed by the Ad14 ministrator to reflect the fuel economy and 

15 greenhouse gas and other emissions con16 sequences of operating the automobile over its 

17 likely useful life; 

18 ‘‘(ii) permits consumers to compare per19 formance results under clause (i) among all 

20 passenger automobiles and light duty trucks; 

21 and 

22 ‘‘(iii) is designed to encourage the manu23 facture and sale of passenger automobiles and 

24 light trucks that meet or exceed applicable fuel 

25 economy standards under section 32902. 


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1 ‘‘(G) a fuelstar under paragraph (5).’’; 

2 (B) in paragraph (2)— 

3 (i) by striking ‘‘(2)’’ and inserting the 

4 following: 

5 ‘‘(2) REQUIREMENTS FOR COMPLIANCE.—’’; 

6 and 

7 (ii) by moving the text 2 ems to the 

8 right; 

9 (C) in paragraph (3)— 

10 (i) by striking ‘‘(3)’’ and inserting the 

11 following: 

12 ‘‘(3) DEDICATED AUTOMOBILES.—’’; and 

13 (ii) by moving the text 2 ems to the 

14 right; and 

15 (D) by adding at the end the following: 

16 ‘‘(4) GREEN LABEL PROGRAM.— 

17 ‘‘(A) MARKETING ANALYSIS.—Not later 

18 than 2 years after the date of the enactment of 

19 the Fuel Economy Improvement Act, the Ad20 ministrator shall complete a study of social 

21 marketing strategies with the goal of maxi22 mizing consumer understanding of point-of-sale 

23 labels or logos described in paragraph (1)(F). 

24 ‘‘(B) ELIGIBILITY.—Not later than 3 years 

25 after the date described in subparagraph (A), 


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1 the Administrator shall issue requirements for 

2 the label or logo required under paragraph 

3 (1)(F) to ensure that a passenger automobile or 

4 light truck is not eligible for the label or logo 

5 unless it— 

6 ‘‘(i) meets or exceeds the applicable 

7 fuel economy standard; or 

8 ‘‘(ii) will have the lowest greenhouse 

9 gas emissions over the useful life of the ve10 hicle of all vehicles in the vehicle class to 

11 which it belongs in that model year. 

12 ‘‘(C) CRITERIA.—In developing criteria for 

13 the label or logo described in paragraph (1)(F), 

14 the Administrator shall consider— 

15 ‘‘(i) the recyclability of the auto16 mobile; 

17 ‘‘(ii) any other pollutants or harmful 

18 byproducts related to the automobile, 

19 which may include those generated during 

20 manufacture of the automobile, those 

21 issued during use of the automobile, or 

22 those generated after the automobile 

23 ceases to be operated; and 

24 ‘‘(iii) other appropriate factors 

25 ‘‘(5) FUELSTAR PROGRAM.— 


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1 ‘‘(A) IN GENERAL.—The Secretary of 

2 Transportation shall establish a program, which 

3 shall be known as the ‘Fuelstar Program’, 

4 under which stars shall be imprinted on or at5 tached to the label required under paragraph 

6 (1). 

7 ‘‘(B) GREEN STARS.—Under the Fuelstar 

8 Program, a manufacturer may include on the 

9 label maintained on an automobile under para10 graph (1)— 

11 ‘‘(i) 1 green star for any automobile 

12 that meets the average fuel economy stand13 ard for the model year under section 

14 32902; and 

15 ‘‘(ii) 1 additional green star for each 

16 2 miles per gallon by which the automobile 

17 exceeds such standard. 

18 ‘‘(C) GOLD STARS.—Under the Fuelstar 

19 Program, a manufacturer may include a gold 

20 star on the label required under paragraph (1) 

21 on— 

22 ‘‘(i) a passenger automobile with a 

23 fuel economy of at least 50 miles per gal24 lon; and 


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1 ‘‘(ii) a light truck with a fuel economy 

2 of at least 37 miles per gallon.’’. 

3 Subtitle B—Improving Fuel 

4 Efficiency 

5 SEC. 121. HELPING CONSUMERS TO PURCHASE MORE 

6 FUEL-EFFICIENT AUTOMOBILES. 

7 (a) REPEAL OF LIMIT ON NUMBER OF CARS ELIGI8 BLE FOR CREDIT.—Section 30B of the Internal Revenue 

9 Code of 1986 (relating to alternative motor vehicle credit) 

10 is amended by striking subsection (f). 

11 (b) EMISSIONS STANDARDS.—Clause (iv) of section 

12 30B(c)(3)(A) of such Code is amended to read as follows: 

13 ‘‘(iv) for 2004 and later model vehi14 cles, has received a certificate that such ve15 hicle meets or exceeds the Bin 5 Tier II 

16 emission standard established in regula17 tions prescribed by the Administrator of 

18 the Environmental Protection Agency 

19 under section 202(i) of the Clean Air Act 

20 for that make and model year vehicle,’’. 

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

22 this section shall apply to property placed in service after 

23 the date of the enactment of this Act. 


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1 SEC. 122. TRANSIT-ORIENTED DEVELOPMENT CORRIDORS. 

2 (a) DEFINITIONS.—In this section, the following defi3 nitions apply: 

4 (1) DEFINITIONS FROM TITLE 49, UNITED

5 STATES CODE.—The terms ‘‘capital project’’, ‘‘local 

6 governmental authority’’, ‘‘mass transportation’’, 

7 and ‘‘urbanized area’’ have the meanings such terms 

8 have under section 5302 of title 49, United States 

9 Code. 

10 (2) STATE.—The term ‘‘State’’ means a State 

11 of the United States, the District of Columbia, Puer12 to Rico, the Northern Mariana Islands, Guam, 

13 American Samoa, and the United States Virgin Is14 lands. 

15 (3) TRANSIT-ORIENTED DEVELOPMENT COR16 RIDOR.—The term ‘‘transit-oriented development 

17 corridor’’ means rights-of-way for fixed-guideway 

18 mass transportation facilities, including commercial 

19 development that is connected with any such facility 

20 physically and functionally. 

21 (b) IN GENERAL.—In consultation with State trans22 portation departments and metropolitan planning organi23 zations, the Secretary of Transportation shall designate, 

24 in urbanized areas, at least 20 transit-oriented develop25 ment corridors by 2015 and 50 transit-oriented develop26 ment corridors by 2025. 


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1 (c) TRANSIT GRANTS.—The Secretary of Transpor2 tation shall award grants to a State or local governmental 

3 authority to construct or improve transit facilities, bicycle 

4 transportation facilities, and pedestrian walkways in a 

5 transit-oriented development corridor, including capital 

6 projects. 

7 (d) RESEARCH AND DEVELOPMENT.—In order to 

8 support effective deployment of grants and incentives 

9 under this section, the Secretary of Transportation shall 

10 establish a transit-oriented development corridors research 

11 and development program for the conduct of research on 

12 best practices and performance criteria for transit-ori13 ented development corridors. 

14 (e) AUTHORIZATION OF APPROPRIATIONS.—There 

15 are authorized to be appropriated to carry out this section 

16 $500,000,000 for each of fiscal years 2007 through 2016, 

17 of which $2,000,000 per fiscal year is authorized for the 

18 research and development program under subsection (d). 

19 SEC. 123. ENERGY-EFFICIENT MOTOR VEHICLE MANUFAC20 TURING CREDIT. 

21 (a) IN GENERAL.—Subpart B of part IV of sub22 chapter A of chapter 1 of the Internal Revenue Code of 

23 1986 (relating to foreign tax credit, etc.) is amended by 

24 adding at the end the following new section: 


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1 ‘‘SEC. 30D. ENERGY EFFICIENT MOTOR VEHICLES MANU2 FACTURING CREDIT. 

3 ‘‘(a) CREDIT ALLOWED.—In the case of an eligible 

4 taxpayer, subject to a credit allocation under subsection 

5 (e) to such eligible taxpayer, there shall be allowed as a 

6 credit against the tax imposed by this chapter for the tax7 able year to an amount equal to the sum of— 

8 ‘‘(1) the initial investment credit determined 

9 under subsection (b) for the taxable year, 

10 ‘‘(2) the fuel economy achievement credit deter11 mined under subsection (c) for such taxable year, 

12 and 

13 ‘‘(3) the eligible components R&D credit deter14 mined under subsection (d) for such taxable year. 

15 ‘‘(b) INITIAL INVESTMENT CREDIT.—For purposes 

16 of this section, the initial investment credit is equal to 20 

17 percent of the qualified investment of an eligible taxpayer 

18 with respect to energy efficient motor vehicles during the 

19 taxable year beginning in 2008. 

20 ‘‘(c) FUEL ECONOMY ACHIEVEMENT CREDIT.—For 

21 purposes of this section— 

22 ‘‘(1) IN GENERAL.—In the case of an eligible 

23 taxpayer who meets the requirements of paragraph 

24 (2) for a model year ending in a taxable year speci25 fied in the table contained in paragraph (3), the fuel 


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1 economy achievement credit for such taxable year is 

2 equal to 30 percent of the sum of— 

3 ‘‘(A) at the election of the eligible tax4 payer, such qualified investment for any pre5 ceding taxable year beginning after 2007 if 

6 such taxable year has not previously been taken 

7 into account under this subsection by such tax8 payer, plus 

9 ‘‘(B) at the election of the eligible tax10 payer, the qualified investment with respect to 

11 energy efficient motor vehicles of the eligible 

12 taxpayer for the taxable year beginning in 

13 2017. 

14 ‘‘(2) DEMONSTRATED COMBINED FLEET ECON15 OMY IMPROVEMENTS.—The requirements of this 

16 paragraph are met for any model year ending in a 

17 taxable year if the eligible taxpayer can demonstrate 

18 to the satisfaction of the Secretary that the percent19 age by which the taxpayer’s overall combined fuel 

20 economy standard for the taxpayer’s vehicle fleet for 

21 such model year exceeds such standard for such tax22 payer’s 2007 model year as reported to the National 

23 Highway Traffic Safety Administration under sec24 tion 32907 of title 49, United States Code, is not 


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1 less than the percentage determined for such model 

2 year under paragraph (3). 

3 ‘‘(3) PERCENTAGE INCREASE.—The percentage 

4 determined under this paragraph for any taxable 

5 year is equal to— 

‘‘Model year ending in Percentage 

taxable year: increase: 

2010 ................................................................................................... 5

2011 ................................................................................................... 10

2012 ................................................................................................... 15

2013 ................................................................................................... 20

2014 ................................................................................................... 27.5

2015 ................................................................................................... 35

2016 ................................................................................................... 42.5

2017 ................................................................................................... 50. 

6 ‘‘(d) ELIGIBLE COMPONENTS R&D CREDIT.—For 

7 purposes of this section, the eligible R&D credit for any 

8 taxable year is equal to 30 percent of the research and 

9 development costs paid or incurred by an eligible taxpayer 

10 for such taxable year with respect to eligible components 

11 used or to be used in the manufacture of energy efficient 

12 motor vehicles. 

13 ‘‘(e) LIMITATION.— 

14 ‘‘(1) INITIAL INVESTMENT CREDIT AND FUEL

15 ECONOMY ACHIEVEMENT CREDIT.—Subject to para16 graph (2), the aggregate amount of initial invest17 ment credits and fuel economy achievement credits 

18 allowed under subsection (a) for any taxable year be19 ginning in a calendar year after 2007 shall be alloVerDate Aug 31 2005 05:41 Jun 07, 2007 Jkt 059200 PO 00000 Frm 00025 Fmt 6652 Sfmt 6201 E:\BILLS\S1554.IS S1554

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1 cated by the Secretary among all eligible tax2 payers— 

3 ‘‘(A) based on each eligible taxpayer’s per4 centage of the total qualified investment of all 

5 such taxpayers, and 

6 ‘‘(B) such that such aggregate amount 

7 does not exceed— 

8 ‘‘(i) $1,000,000,000, plus 

9 ‘‘(ii) any amount of credit unallocated 

10 during any preceding calendar year. 

11 ‘‘(2) ELIGIBLE COMPONENTS R&D CREDIT.—Of 

12 the dollar amount available for allocation under 

13 paragraph (1) for any taxable year, 10 percent of 

14 such amount shall be allocated in the same manner 

15 by the Secretary among all eligible taxpayers with 

16 respect to the eligible components R&D credit. 

17 ‘‘(f) QUALIFIED INVESTMENT.—For purposes of this 

18 section— 

19 ‘‘(1) IN GENERAL.—The qualified investment 

20 for any taxable year is equal to the incremental costs 

21 incurred during such taxable year— 

22 ‘‘(A) to re-equip or expand any manufac23 turing facility of the eligible taxpayer to 

24 produce energy efficient motor vehicles or to 

25 produce eligible components, and 


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1 ‘‘(B) for engineering integration of such 

2 vehicles and components as described in sub3 section (h). 

4 ‘‘(2) ATTRIBUTION RULES.—In the event a fa5 cility of the eligible taxpayer produces both energy 

6 efficient motor vehicles and conventional motor vehi7 cles, or eligible and non-eligible components, only the 

8 qualified investment attributable to production of en9 ergy efficient motor vehicles and the research and 

10 development costs attributable to eligible components 

11 shall be taken into account. 

12 ‘‘(g) ENERGY EFFICIENT MOTOR VEHICLES AND EL13 IGIBLE COMPONENTS.—For purposes of this section— 

14 ‘‘(1) ENERGY EFFICIENT MOTOR VEHICLE.— 

15 The term ‘energy efficient motor vehicle’ means— 

16 ‘‘(A) any new advanced lean burn tech17 nology motor vehicle (as defined in section 

18 30B(c)(3) determined without regard to sub19 paragraph (A)(iv)(II) thereof or the weight lim20 itation under subparagraph (A)(iv)(I) thereof), 

21 ‘‘(B) any new qualified hybrid motor vehi22 cle (as defined in section 30B(d)(3)(A) deter23 mined without regard to subparagraph 

24 (A)(ii)(II) thereof, the weight limitation under 


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1 subparagraph (A)(ii)(I) thereof, and subpara2 graph (A)(iv) thereof), or 

3 ‘‘(C) any other new technology motor vehi4 cle identified by the Secretary as offering a sub5 stantial increase in fuel economy. 

6 ‘‘(2) ELIGIBLE COMPONENTS.—The term ‘eligi7 ble component’ means any component inherent to 

8 any energy efficient motor vehicle, including— 

9 ‘‘(A) with respect to any gasoline-electric 

10 new qualified hybrid motor vehicle— 

11 ‘‘(i) electric motor or generator, 

12 ‘‘(ii) power split device, 

13 ‘‘(iii) power control unit, 

14 ‘‘(iv) power controls, 

15 ‘‘(v) integrated starter generator, or 

16 ‘‘(vi) battery, 

17 ‘‘(B) with respect to any new advanced 

18 lean burn technology motor vehicle— 

19 ‘‘(i) diesel engine, 

20 ‘‘(ii) turbocharger, 

21 ‘‘(iii) fuel injection system, or 

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

23 a particle filter or NOx absorber, and 


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1 ‘‘(C) with respect to any energy efficient 

2 motor vehicle, any other component approved 

3 by the Secretary. 

4 ‘‘(h) ENGINEERING INTEGRATION COSTS.—For pur5 poses of subsection (f)(1)(B), costs for engineering inte6 gration are costs incurred prior to the market introduction 

7 of energy efficient vehicles for engineering tasks related 

8 to— 

9 ‘‘(1) incorporating eligible components into the 

10 design of energy efficient motor vehicles, and 

11 ‘‘(2) designing new tooling and equipment for 

12 production facilities which produce eligible compo13 nents or energy efficient motor vehicles. 

14 ‘‘(i) ELIGIBLE TAXPAYER.—For purposes of this sec15 tion, the term ‘eligible taxpayer’ means, with respect to 

16 any taxable year, any taxpayer if more than 25 percent 

17 of the taxpayer’s gross receipts for the taxable year is de18 rived from the manufacture of motor vehicles or any com19 ponent parts of such vehicles. 

20 ‘‘(j) LIMITATION BASED ON AMOUNT OF TAX.—The 

21 credit allowed under subsection (a) for the taxable year 

22 shall not exceed the excess of— 

23 ‘‘(1) the sum of— 

24 ‘‘(A) the regular tax liability (as defined in 

25 section 26(b)) for such taxable year, plus 


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1 ‘‘(B) the tax imposed by section 55 for 

2 such taxable year, over 

3 ‘‘(2) the sum of the credits allowable under sub4 part A and sections 27, 30, 30B, and 30C for the 

5 taxable year. 

6 ‘‘(k) REDUCTION IN BASIS.—For purposes of this 

7 subtitle, if a credit is allowed under this section for any 

8 expenditure with respect to any property, the increase in 

9 the basis of such property which would (but for this para10 graph) result from such expenditure shall be reduced by 

11 the amount of the credit so allowed. 

12 ‘‘(l) NO DOUBLE BENEFIT.— 

13 ‘‘(1) COORDINATION WITH OTHER DEDUCTIONS

14 AND CREDITS.—The amount of any deduction or 

15 other credit allowable under this chapter for any 

16 cost taken into account in determining the amount 

17 of the credit under subsection (a) shall be reduced 

18 by the amount of such credit attributable to such 

19 cost. 

20 ‘‘(2) RESEARCH AND DEVELOPMENT COSTS.— 

21 ‘‘(A) IN GENERAL.—Except as provided in 

22 subparagraph (B), any amount described in 

23 subsection (d) taken into account in deter24 mining the amount of the credit under sub25 section (a) for any taxable year shall not be 


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1 taken into account for purposes of determining 

2 the credit under section 41 for such taxable 

3 year. 

4 ‘‘(B) COSTS TAKEN INTO ACCOUNT IN DE5 TERMINING BASE PERIOD RESEARCH EX6 PENSES.—Any amounts described in subsection 

7 (d) taken into account in determining the 

8 amount of the credit under subsection (a) for 

9 any taxable year which are qualified research 

10 expenses (within the meaning of section 41(b)) 

11 shall be taken into account in determining base 

12 period research expenses for purposes of apply13 ing section 41 to subsequent taxable years. 

14 ‘‘(m) BUSINESS CARRYOVERS ALLOWED.—If the 

15 credit allowable under subsection (a) for a taxable year 

16 exceeds the limitation under subsection (j) for such tax17 able year, such excess (to the extent of the credit allowable 

18 with respect to property subject to the allowance for depre19 ciation) shall be allowed as a credit carryback and 

20 carryforward under rules similar to the rules of section 

21 39. 

22 ‘‘(n) DEFINITIONS AND SPECIAL RULES.—For pur23 poses of this section— 

24 ‘‘(1) DEFINITIONS.—Any term which is used in 

25 this section and in chapter 329 of title 49, United 


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1 States Code, shall have the meaning given such term 

2 by such chapter. 

3 ‘‘(2) SPECIAL RULES.—Rules similar to the 

4 rules of paragraphs (4) and (5) of section 179A(e) 

5 and paragraphs (1) and (2) of section 41(f) shall 

6 apply. 

7 ‘‘(o) ELECTION NOT TO TAKE CREDIT.—No credit 

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

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

10 property. 

11 ‘‘(p) REGULATIONS.—The Secretary shall prescribe 

12 such regulations as necessary to carry out the provisions 

13 of this section. 

14 ‘‘(q) TERMINATION.—This section shall not apply to 

15 any qualified investment made after December 31, 2017.’’. 

16 (b) CONFORMING AMENDMENTS.— 

17 (1) Section 1016(a) of such Code is amended 

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

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

20 inserting ‘‘, and’’, and by adding at the end the fol21 lowing new paragraph: 

22 ‘‘(38) to the extent provided in section 

23 30D(k).’’. 

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

25 by inserting ‘‘30D(o),’’ after ‘‘30C(e)(5),’’. 


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

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

3 amended by inserting after the item relating to sec4 tion 30C the following new item: 

‘‘Sec. 30D. Energy efficient motor vehicles manufacturing credit.’’. 

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

6 this subsection shall apply to amounts incurred in taxable 

7 years beginning after December 31, 2007. 

8 SEC. 124. FUEL EFFICIENCY STANDARDS FOR REPLACE9 MENT TIRES. 

10 (a) STANDARDS FOR TIRES MANUFACTURED FOR

11 INTERSTATE COMMERCE.—Section 30123 of title 49, 

12 United States Code, is amended— 

13 (1) in subsection (b), by inserting after the first 

14 sentence the following: ‘‘The grading system shall 

15 include standards for rating the fuel economy of 

16 tires designed for use on passenger cars and light 

17 trucks.’’; and 

18 (2) by adding at the end of the following: 

19 ‘‘(d) NATIONAL TIRE FUEL ECONOMY PROGRAM.— 

20 (1) Not later than March 31, 2008, the Secretary shall 

21 establish a national tire fuel economy program for tires 

22 designed for use on passenger cars and light trucks. 

23 ‘‘(2) The program established under paragraph (1) 

24 shall include the following: 


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1 ‘‘(A) Policies and procedures for testing and la2 beling tires for fuel economy to inform tire pur3 chasers of the fuel economy of tires. 

4 ‘‘(B) Policies and procedures to promote the 

5 purchase of energy-efficient replacement tires, in6 cluding policies and procedures related to the fol7 lowing: 

8 ‘‘(i) Development of incentives for the pur9 chase of energy-efficient replacement tires. 

10 ‘‘(ii) Use of the Internet to promote the 

11 use of energy-efficient replacement tires. 

12 ‘‘(iii) Publication and distribution of fuel 

13 economy guide booklets. 

14 ‘‘(C) Regulations that require tire retailers to 

15 provide tire purchasers with fuel economy informa16 tion on tires, promulgated by the Secretary. 

17 ‘‘(D) Regulations that establish minimum fuel 

18 economy standards for tires, promulgated by the 

19 Secretary. 

20 ‘‘(3) The minimum fuel economy standards for tires 

21 shall, established pursuant to paragraph (2)(D)— 

22 ‘‘(A) ensure that the average fuel economy of 

23 replacement tires is equal to or better than the aver24 age fuel economy of tires sold as original equipment; 


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1 ‘‘(B) secure the maximum technically feasible 

2 and cost-effective fuel savings; 

3 ‘‘(C) not adversely affect tire safety; 

4 ‘‘(D) not adversely affect the average tire life of 

5 replacement tires; 

6 ‘‘(E) incorporate the results from— 

7 ‘‘(i) laboratory testing; and 

8 ‘‘(ii) to the extent appropriate and avail9 able, on-road fleet testing programs conducted 

10 by manufacturers; and 

11 ‘‘(F) not adversely affect efforts to manage 

12 scrap tires. 

13 ‘‘(4) The regulations, policies, procedures, and stand14 ards developed under paragraphs (2) and (3) shall apply 

15 to all tire types and models that are covered by section 

16 575.104 of title 49, Code of Federal Regulations (com17 monly known as the ‘Uniform Tire Quality Grading 

18 Standards’), or any successor regulation. 

19 ‘‘(5) Not less than once every 3 years, the Secretary 

20 shall review the minimum fuel economy standards in effect 

21 for tires under this subsection and revise the standards 

22 as necessary to ensure compliance with requirements 

23 under paragraph (3). The Secretary may not reduce the 

24 average fuel economy standards applicable to replacement 

25 tires. 


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1 ‘‘(6) Nothing in this section shall be construed to pre2 empt any provision of State law relating to higher fuel 

3 economy standards applicable to replacement tires de4 signed for use on passenger cars and light trucks. 

5 ‘‘(7) Nothing in this section shall apply to the fol6 lowing: 

7 ‘‘(A) A tire or group of tires with the same 

8 product identification number, plant, and year, for 

9 which the volume of tires produced or imported is 

10 less than 15,000 annually. 

11 ‘‘(B) A deep tread, winter-type snow tire, 

12 space-saver tire, or temporary use spare tire. 

13 ‘‘(C) A tire with a normal rim diameter of 12 

14 inches or less. 

15 ‘‘(D) A motorcycle tire. 

16 ‘‘(E) A tire manufactured specifically for use in 

17 an off-road motorized recreational vehicle. 

18 ‘‘(8) In this subsection, the term ‘fuel economy’, with 

19 respect to a tire, means the extent to which the tire con20 tributes to the fuel efficiency of the motor vehicle on which 

21 the tire is mounted.’’. 

22 (b) CONFORMING AMENDMENT.—Section 

23 30103(b)(1) of title 49, United States Code, is amended 

24 by striking ‘‘When’’ and inserting ‘‘Except as provided in 

25 section 30123(d) of this title, when’’. 


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1 SEC. 125. FUEL ECONOMY FOR HEAVY DUTY TRUCKS. 

2 Part C of subtitle VI of title 49, United States Code, 

3 is amended by inserting after chapter 329 the following: 

4 ‘‘CHAPTER 330—HEAVY DUTY MOTOR 

5 VEHICLE FUEL ECONOMY STANDARDS 

‘‘CHAPTER 330—HEAVY DUTY MOTOR VEHICLE FUEL ECONOMY

STANDARDS

‘‘Sec. 

‘‘33001. Purpose and policy. 

‘‘33002. Definition. 

‘‘33003. Testing and assessment. 

‘‘33004. Standards. 

‘‘33005. Authorization of appropriations. 

6 ‘‘§ 33001. Purpose and policy 

7 ‘‘The purpose of this chapter is to reduce petroleum 

8 consumption by heavy duty motor vehicles. 

9 ‘‘§ 33002. Definition 

10 ‘‘In this chapter, the term ‘heavy duty motor vehi11 cle’— 

12 ‘‘(1) means a vehicle having a gross vehicle 

13 weight rating of at least 10,000 pounds that is driv14 en or drawn by mechanical power and manufactured 

15 primarily for use on public streets, roads, and high16 ways; and 

17 ‘‘(2) does not include a vehicle operated only on 

18 a rail line. 

19 ‘‘§ 33003. Testing and assessment 

20 ‘‘(a) IN GENERAL.—The Administrator of the Envi21 ronmental Protection Agency (referred to in this section 


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1 as the ‘Administrator’) shall develop and coordinate a na2 tional testing and assessment program to— 

3 ‘‘(1) calculate the fuel economy of heavy duty 

4 motor vehicles; and 

5 ‘‘(2) assess the fuel economy that heavy duty 

6 motor vehicles could attain through available tech7 nology. 

8 ‘‘(b) TESTING.—Not later than 18 months after the 

9 date of the enactment of this chapter, the Administrator 

10 shall design and implement a national testing program to 

11 calculate the fuel economy of heavy duty motor vehicles 

12 that is modeled on the fuel economy program established 

13 under chapter 329. 

14 ‘‘(c) ASSESSMENT.—The Administrator shall consult 

15 with the Secretary of Transportation regarding the assess16 ment of available technologies to enhance the fuel economy 

17 of heavy duty motor vehicles to ensure that vehicle use 

18 and needs are appropriately considered. 

19 ‘‘(d) REPORTS TO CONGRESS.— 

20 ‘‘(1) INITIAL REPORT.—Not later than 2 years 

21 after the date of the enactment of this chapter, the 

22 Administrator shall submit a report to Congress re23 garding the results of the assessment of available 

24 technologies to improve the fuel economy of heavy 

25 duty motor vehicles. 


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1 ‘‘(2) BIENNIAL REPORTS.—Not less frequently 

2 than once every 2 years, the Administrator shall 

3 submit a report to Congress that addresses the fuel 

4 economy of heavy duty vehicles. 

5 ‘‘§ 33004. Standards 

6 ‘‘(a) IN GENERAL.—Not later than 18 months after 

7 the completion of the testing and assessments under sec8 tion 33003 and not later than 18 months before the begin9 ning of a model year, the Secretary of Transportation 

10 shall prescribe by regulation average fuel economy stand11 ards for heavy duty motor vehicles manufactured for such 

12 model year. Each standard shall be the maximum feasible 

13 average fuel economy level that the Secretary determines 

14 that manufacturers can achieve for that model year. The 

15 Secretary may prescribe separate standards for different 

16 classes of heavy duty motor vehicles. 

17 ‘‘(b) CONSIDERATIONS AND CONSULTATION.—In de18 termining maximum feasible average fuel economy, the 

19 Secretary shall consider— 

20 ‘‘(1) relevant available heavy duty motor vehicle 

21 fuel consumption information; 

22 ‘‘(2) technological feasibility; 

23 ‘‘(3) economic practicability; 

24 ‘‘(4) the desirability of reducing United States 

25 dependence on oil; 


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1 ‘‘(5) the effects of average fuel economy stand2 ards on vehicle safety; 

3 ‘‘(6) the effects of average fuel economy stand4 ards on levels of employment and competitiveness of 

5 the heavy duty motor vehicle manufacturing indus6 try; and 

7 ‘‘(7) the extent to which the standard will carry 

8 out the purpose described in section 33001. 

9 ‘‘(c) COOPERATION.—The Secretary may advise, as10 sist, and cooperate with departments, agencies, and in11 strumentalities of the Federal Government, States, and 

12 other public and private agencies in developing fuel econ13 omy standards for heavy duty motor vehicles. 

14 ‘‘(d) 5-YEAR PLAN FOR TESTING STANDARDS.— 

15 ‘‘(1) IN GENERAL.—The Secretary shall estab16 lish, periodically review, and continually update a 5- 

17 year plan for testing fuel economy standards pre18 scribed under this chapter for heavy duty motor ve19 hicles. 

20 ‘‘(2) PRIORITIES.—In establishing testing prior21 ities, the Secretary shall consider appropriate factors 

22 that are consistent with the purpose described in 

23 section 33001 and the Secretary’s other duties and 

24 powers under this chapter. 


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1 ‘‘§ 33005. Authorization of appropriations 

2 ‘‘There are authorized to be appropriated, for each 

3 of the fiscal years 2008 through 2013, such sums as may 

4 be necessary to carry out this chapter.’’. 

5 SEC. 126. IDLING REDUCTION TAX CREDIT. 

6 (a) IN GENERAL.—Subpart D of part IV of sub7 chapter A of chapter 1 of the Internal Revenue Code of 

8 1986 (relating to business-related credits) is amended by 

9 adding at the end the following new section: 

10 ‘‘SEC. 45O. IDLING REDUCTION CREDIT. 

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

12 the idling reduction tax credit determined under this sec13 tion for the taxable year is an amount equal to 50 percent 

14 of the amount paid or incurred for the purchase and in15 stallation of each qualifying idling reduction device or 

16 qualifying idle reduction infrastructure placed in service 

17 by the taxpayer during the taxable year. 

18 ‘‘(b) LIMITATION.—The maximum amount allowed as 

19 a credit under subsection (a) shall not exceed $3,500 per 

20 device or per infrastructure. 

21 ‘‘(c) DEFINITIONS.—For purposes of subsection 

22 (a)— 

23 ‘‘(1) QUALIFYING IDLING REDUCTION DE24 VICE.—The term ‘qualifying idling reduction device’ 

25 means any device or system of devices which— 


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1 ‘‘(A) is installed on a heavy-duty diesel2 powered on-highway vehicle, 

3 ‘‘(B) is designed to provide to such vehicle 

4 those services (such as heat, air conditioning, or 

5 electricity) that would otherwise require the op6 eration of the main drive engine while the vehi7 cle is temporarily parked or remains stationary 

8 using either— 

9 ‘‘(i) an all electric unit, such as a bat10 tery powered unit or from grid-supplied 

11 electricity, or 

12 ‘‘(ii) a dual fuel unit powered by die13 sel or other fuels, and capable of providing 

14 such services from grid-supplied electricity 

15 or on-truck batteries alone, 

16 ‘‘(C) the original use of which commences 

17 with the taxpayer, 

18 ‘‘(D) is acquired for use by the taxpayer 

19 and not for resale, and 

20 ‘‘(E) is certified by the Secretary of En21 ergy, in consultation with the Administrator of 

22 the Environmental Protection Agency and the 

23 Secretary of Transportation, to reduce long-du24 ration idling of such vehicle at a motor vehicle 


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1 rest stop or other location where such vehicles 

2 are temporarily parked or remain stationary. 

3 ‘‘(2) HEAVY-DUTY DIESEL-POWERED ON-HIGH4 WAY VEHICLE.—The term ‘heavy-duty diesel-pow5 ered on-highway vehicle’ means any vehicle, ma6 chine, tractor, trailer, or semi-trailer propelled or 

7 drawn by mechanical power and used upon the high8 ways in the transportation of passengers or prop9 erty, or any combination thereof determined by the 

10 Federal Highway Administration. 

11 ‘‘(3) LONG-DURATION IDLING.—The term ‘long12 duration idling’ means the operation of a main drive 

13 engine, for a period greater than 15 consecutive 

14 minutes, where the main drive engine is not engaged 

15 in gear. Such term does not apply to routine stop16 pages associated with traffic movement or conges17 tion. 

18 ‘‘(4) QUALIFYING IDLE REDUCTION INFRA19 STRUCTURE.—The term ‘qualifying idle reduction 

20 infrastructure’ means either— 

21 ‘‘(A) off-truck equipment to supply electric 

22 power, including electric receptacles, boxes, wir23 ing, conduit, and other connections to one truck 

24 space, or 


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1 ‘‘(B) off-truck equipment that directly pro2 vides air conditioning, heating, electric power, 

3 and other connections and services to one truck 

4 space. 

5 ‘‘(d) NO DOUBLE BENEFIT.—For purposes of this 

6 section— 

7 ‘‘(1) REDUCTION IN BASIS.—If a credit is de8 termined under this section with respect to any 

9 property by reason of expenditures described in sub10 section (a), the basis of such property shall be re11 duced by the amount of the credit so determined. 

12 ‘‘(2) OTHER DEDUCTIONS AND CREDITS.—No 

13 deduction or credit shall be allowed under any other 

14 provision of this chapter with respect to the amount 

15 of the credit determined under this section. 

16 ‘‘(e) ELECTION NOT TO CLAIM CREDIT.—This sec17 tion shall not apply to a taxpayer for any taxable year 

18 if such taxpayer elects to have this section not apply for 

19 such taxable year.’’. 

20 (b) CREDIT TO BE PART OF GENERAL BUSINESS

21 CREDIT.—Subsection (b) of section 38 of the Internal 

22 Revenue Code of 1986 (relating to general business credit) 

23 is amended by striking ‘‘plus’’ at the end of paragraph 

24 (30), by striking the period at the end of paragraph (31) 


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1 and inserting ‘‘, plus’’ , and by adding at the end the fol2 lowing new paragraph: 

3 ‘‘(32) the idling reduction tax credit determined 

4 under section 45O(a).’’. 

5 (c) CONFORMING AMENDMENTS.— 

6 (1) The table of sections for subpart D of part 

7 IV of subchapter A of chapter 1 of the Internal Rev8 enue Code of 1986 is amended by inserting after the 

9 item relating to section 45N the following new item: 

‘‘Sec. 45O. Idling reduction credit.’’. 

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

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

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

13 inserting ‘‘, and’’, and by adding at the end the fol14 lowing: 

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

16 which a credit was allowed under section 45O, to the 

17 extent provided in section 45O(d)(1).’’. 

18 (3) Section 6501(m) of such Code is amended 

19 by inserting ‘‘45O(e),’’ after ‘‘45D(c)(4),’’. 

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

21 this section shall apply to taxable years beginning after 

22 December 31, 2006. 

23 (e) DETERMINATION OF CERTIFICATION STANDARDS

24 BY SECRETARY OF ENERGY FOR CERTIFYING IDLING RE25 DUCTION DEVICES.—Not later than 6 months after the 


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1 date of the enactment of this Act and in order to reduce 

2 air pollution and fuel consumption, the Secretary of En3 ergy, in consultation with the Administrator of the Envi4 ronmental Protection Agency and the Secretary of Trans5 portation, shall publish the standards under which the 

6 Secretary, in consultation with the Administrator of the 

7 Environmental Protection Agency and the Secretary of 

8 Transportation, will, for purposes of section 45O of the 

9 Internal Revenue Code of 1986 (as added by this section), 

10 certify the idling reduction devices and idling reduction in11 frastructure which will reduce long-duration idling of vehi12 cles at motor vehicle rest stops or other locations where 

13 such vehicles are temporarily parked or remain stationary 

14 in order to reduce air pollution and fuel consumption. 

15 SEC. 127. REPEAL OF PREEMPTION OF STATE LAW RELAT16 ING TO AUTOMOBILE FUEL ECONOMY STAND17 ARDS. 

18 Section 32919 of title 49, United States Code, is re19 pealed. 

20 SEC. 128. FEDERAL FLEET REQUIREMENTS. 

21 (a) REGULATIONS.— 

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

23 shall issue regulations for Federal fleets subject to 

24 the Energy Policy Act of 1992 (42 U.S.C. 13201 et 

25 seq.) requiring that not later than fiscal year 2016 


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1 each Federal agency achieve at least a 30 percent 

2 reduction in petroleum consumption, as calculated 

3 from the baseline established by the Secretary for 

4 fiscal year 2005. 

5 (2) REQUIREMENT.—Beginning not later than 

6 fiscal year 2016, of the Federal vehicles required to 

7 be alternative fueled vehicles under title V of the 

8 Energy Policy Act of 1992 (42 U.S.C. 13251 et 

9 seq.), at least 30 percent shall be hybrid motor vehi10 cles (including plug-in hybrid motor vehicles) or new 

11 advanced lean burn technology motor vehicles (as 

12 defined in section 30B(c)(3) of the Internal Revenue 

13 Code of 1986). 

14 (b) INCLUSION OF ELECTRIC DRIVE IN ENERGY

15 POLICY ACT OF 1992.—Section 508(a) of the Energy Pol16 icy Act of 1992 (42 U.S.C. 13258(a)) is amended— 

17 (1) by striking ‘‘The Secretary’’ and inserting 

18 the following: 

19 ‘‘(1) ALLOCATION.—The Secretary’’; and 

20 (2) by adding at the end the following: 

21 ‘‘(2) ELECTRIC VEHICLES.—Not later than 

22 January 31, 2009, the Secretary shall— 

23 ‘‘(A) allocate credit in an amount to be de24 termined by the Secretary for— 

25 ‘‘(i) acquisition of— 


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1 ‘‘(I) a light-duty hybrid motor ve2 hicle; 

3 ‘‘(II) a plug-in hybrid motor vehi4 cle; 

5 ‘‘(III) a fuel cell electric vehicle; 

6 ‘‘(IV) a medium- or heavy-duty 

7 hybrid motor vehicle; 

8 ‘‘(V) a neighborhood electric ve9 hicle; or 

10 ‘‘(VI) a medium- or heavy-duty 

11 dedicated vehicle; and 

12 ‘‘(ii) investment in qualified alter13 native fuel infrastructure or nonroad 

14 equipment, as determined by the Sec15 retary; and 

16 ‘‘(B) allocate more than 1, but not more 

17 than 5, credits for investment in an emerging 

18 technology relating to any vehicle described in 

19 subparagraph (A) to encourage— 

20 ‘‘(i) a reduction in petroleum demand; 

21 ‘‘(ii) technological advancement; and 

22 ‘‘(iii) environmental safety.’’. 

23 (c) AUTHORIZATION OF APPROPRIATIONS.—There 

24 are authorized to be appropriated to carry out this section, 


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1 and the amendments made by subsection (b), $10,000,000 

2 for the period of fiscal years 2008 through 2013. 

3 TITLE II—ENERGY INDEPEND4 ENCE THROUGH RENEWABLE 

5 FUELS 

6 Subtitle A—Advanced Clean Fuels 

7 SEC. 201. DEFINITIONS. 

8 Section 211(o)(1) of the Clean Air Act (42 U.S.C. 

9 7545(o)(1)) is amended— 

10 (1) by redesignating subparagraphs (A) through 

11 (D) as subparagraphs (C), (P), (L), and (M), re12 spectively; 

13 (2) by inserting before subparagraph (C) (as re14 designated by paragraph (1)) the following: 

15 ‘‘(A) ACADEMY.—The term ‘Academy’ 

16 means the National Academy of Sciences. 

17 ‘‘(B) ADVERSE LIFECYCLE IMPACT.—The 

18 term ‘adverse lifecycle impact’ means, with re19 spect to increases in the volume of renewable 

20 fuel sold or dispensed to consumers in the 

21 United States for a calendar year, that the in22 creases, as determined by the Administrator, 

23 would reasonably be anticipated— 

24 ‘‘(i) to result in an inconsistency or 

25 material interference with the implementaVerDate Aug 31 2005 05:41 Jun 07, 2007 Jkt 059200 PO 00000 Frm 00049 Fmt 6652 Sfmt 6201 E:\BILLS\S1554.IS S1554

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1 tion of or compliance with any Federal en2 vironmental law (including a regulation); 

3 ‘‘(ii) to result in a material increase 

4 in— 

5 ‘‘(I) air pollution, including glob6 al warming pollution; 

7 ‘‘(II) water pollution; or 

8 ‘‘(III) human exposure to pes9 ticides; 

10 ‘‘(iii) to result in a substantial in11 crease in deforestation on a global or na12 tional scale; 

13 ‘‘(iv) to result in a substantial adverse 

14 effect on land conservation and wildlife 

15 habitat; 

16 ‘‘(v) to result in any other substantial 

17 adverse effect on the environment; 

18 ‘‘(vi) to result in a substantial adverse 

19 effect on food or feed production or prices, 

20 as determined in consultation with the Sec21 retary of Agriculture; 

22 ‘‘(vii) to result in a substantial ad23 verse effect on long-term agricultural pro24 ductivity, including effects on soils and 


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1 water resources, as determined in consulta2 tion with the Secretary of Agriculture; or 

3 ‘‘(viii) not to increase the supply of 

4 clean, domestic energy;’’; 

5 (3) in subparagraph (C) (as redesignated by 

6 paragraph (1)), by striking clause (viii) and insert7 ing the following: 

8 ‘‘(viii) separated food waste, yard 

9 waste, and lawn debris recovered from mu10 nicipal solid waste.’’; 

11 (4) by inserting after subparagraph (C) (as re12 designated by paragraph (1)) the following: 

13 ‘‘(D) CONVENTIONAL TRANSPORTATION

14 FUEL.—The term ‘conventional transportation 

15 fuel’ means any fossil-fuel-based transportation 

16 fuel used in the United States as of the date of 

17 enactment of the Energy Independence, Clean 

18 Air, and Climate Security Act of 2007. 

19 ‘‘(E) ECOSYSTEM CONVERSION.—The term 

20 ‘ecosystem conversion’ means an alteration of 

21 an ecologically significant native habitat (in22 cluding modification of hydrology and dominant 

23 vegetative and other species) to an extent at 

24 which the native habitat no longer supports 


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1 most dominant native species or ecological proc2 esses. 

3 ‘‘(F) FIREWISE ZONE.—The term ‘firewise 

4 zone’ means the immediate vicinity of a build5 ing or other area regularly occupied by individ6 uals, or any public infrastructure, that is at 

7 risk of wildfire. 

8 ‘‘(G) FUEL EMISSION BASELINE.—The 

9 term ‘fuel emission baseline’ means the average 

10 lifecycle greenhouse gas emissions per unit of 

11 energy of the fossil fuel component of conven12 tional transportation fuels in commerce in the 

13 United States in calendar year 2008, as deter14 mined by the Administrator under paragraph 

15 (11). 

16 ‘‘(H) FUEL PROVIDER.— 

17 ‘‘(i) IN GENERAL.—The term ‘fuel 

18 provider’ means an obligated party (as de19 scribed in section 80.1106 of title 40, Code 

20 of Federal Regulations (or a successor reg21 ulation)). 

22 ‘‘(ii) INCLUSIONS.—The term ‘fuel 

23 provider’ includes, as the Administrator 

24 determines to be appropriate, an individual 

25 or entity that produces, blends, or imports 


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1 gasoline or any other transportation fuel in 

2 commerce in, or into, the United States. 

3 ‘‘(I) GREENHOUSE GAS.—The term ‘green4 house gas’ means any of— 

5 ‘‘(i) carbon dioxide; 

6 ‘‘(ii) methane; 

7 ‘‘(iii) nitrous oxide; 

8 ‘‘(iv) hydrofluorocarbons; 

9 ‘‘(v) perfluorocarbons; and 

10 ‘‘(vi) sulfur hexafluoride. 

11 ‘‘(J) LIFECYCLE GREENHOUSE GAS EMIS12 SIONS.—The term ‘lifecycle greenhouse gas 

13 emissions’ means, with respect to a transpor14 tation fuel, the aggregate quantity of green15 house gases emitted, directly or indirectly, dur16 ing production, feedstock production or extrac17 tion, distribution, marketing, and use of the 

18 transportation fuel, or waste disposal relating 

19 to the transportation fuel, as determined by the 

20 Administrator under paragraph (11)(B). 

21 ‘‘(K) NATIVE HABITAT.— 

22 ‘‘(i) IN GENERAL.—The term ‘native 

23 habitat’ means dynamic groupings of na24 tive plant and animal communities that— 


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1 ‘‘(I) occur together on a land2 scape or in water; and 

3 ‘‘(II) are connected through— 

4 ‘‘(aa) similar ecological proc5 esses; 

6 ‘‘(bb) underlying environ7 mental features, such as geology; 

8 or 

9 ‘‘(cc) environmental gra10 dients, such as elevation. 

11 ‘‘(ii) EXCLUSION.—The term ‘native 

12 habitat’ does not include land that is or 

13 has been under agricultural production.’’; 

14 (5) in clause (i) of subparagraph (L) (as redes15 ignated by paragraph (1)), by striking ‘‘The term’’ 

16 and inserting ‘‘Except as otherwise provided in this 

17 subsection, the term’’; 

18 (6) by inserting after subparagraph (M) (as re19 designated by paragraph (1)) the following: 

20 ‘‘(N) TECHNICALLY INFEASIBLE.—The 

21 term ‘technically infeasible’, with respect to 

22 compliance with a standard or requirement 

23 under this subsection, means that adequate 

24 technology or infrastructure is not reasonably 

25 anticipated to exist within a sufficient time to 


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1 permit compliance with the standard or require2 ment. 

3 ‘‘(O) TRANSPORTATION FUEL.—The term 

4 ‘transportation fuel’ means fuel used to power 

5 motor vehicles, nonroad engines, or aircraft.’’. 

6 SEC. 202. ADVANCED CLEAN FUEL PROGRAM. 

7 (a) ADVANCED CLEAN FUEL PERFORMANCE STAND8 ARD.—Section 211(o) of the Clean Air Act (42 U.S.C. 

9 7545(o)) is amended by adding at the end the following: 

10 ‘‘(11) ADVANCED CLEAN FUEL PERFORMANCE

11 STANDARD.— 

12 ‘‘(A) DEFINITIONS.—In this paragraph: 

13 ‘‘(i) NATIONAL INTEREST LAND.— 

14 The term ‘national interest land’ includes 

15 land that is within the National Wildlife 

16 Refuge System, the National Park System, 

17 a National Monument, the National Wil18 derness Preservation System, the National 

19 Landscape Conservation System, or the 

20 National Forest System, that is Bureau of 

21 Land Management land protected by stat22 ute, proclamation, or regulation from com23 mercial timber activities, or that is endan24 gered or threatened species habitat, an oldVerDate Aug 31 2005 05:41 Jun 07, 2007 Jkt 059200 PO 00000 Frm 00055 Fmt 6652 Sfmt 6201 E:\BILLS\S1554.IS S1554

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1 growth forest, or an inventoried roadless 

2 area. 

3 ‘‘(ii) PHASE II RENEWABLE FUEL.— 

4 The term ‘phase II renewable fuel’ means 

5 renewable fuel the lifecycle greenhouse gas 

6 emissions of which are 50 percent to 74 

7 percent lower than the fuel emission base8 line. 

9 ‘‘(iii) PHASE III RENEWABLE FUEL.— 

10 The term ‘phase III renewable fuel’ means 

11 renewable fuel the lifecycle greenhouse gas 

12 emissions of which are at least 75 percent 

13 lower than the fuel emission baseline. 

14 ‘‘(iv) RENEWABLE BIOMASS.— 

15 ‘‘(I) IN GENERAL.—The term ‘re16 newable biomass’ means any organic 

17 matter that is available on a renew18 able or recurring basis. 

19 ‘‘(II) INCLUSIONS.—The term 

20 ‘renewable biomass’ includes— 

21 ‘‘(aa) renewable plant mate22 rial, including— 

23 ‘‘(AA) feed grains; 

24 ‘‘(BB) other agricul25 tural commodities; 


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1 ‘‘(CC) other plants and 

2 trees grown for energy pro3 duction; and 

4 ‘‘(DD) algae; and 

5 ‘‘(bb) waste material, includ6 ing— 

7 ‘‘(AA) crop residue; 

8 ‘‘(BB) other vegetative 

9 waste material (including 

10 wood waste and wood resi11 dues); 

12 ‘‘(CC) animal waste 

13 and byproducts (including 

14 fats, oils, greases, and ma15 nure); and 

16 ‘‘(DD) separated food 

17 waste, yard waste, and lawn 

18 debris recovered from mu19 nicipal solid waste. 

20 ‘‘(III) EXCLUSIONS.—The term 

21 ‘renewable biomass’ does not include 

22 biomass derived from— 

23 ‘‘(aa) land on which eco24 system conversion has occurred 

25 after the date of enactment of 


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1 the Energy Independence, Clean 

2 Air, and Climate Security Act of 

3 2007, as determined by the Ad4 ministrator; 

5 ‘‘(bb) land enrolled in the 

6 conservation reserve program es7 tablished under subchapter B of 

8 chapter 1 of subtitle D of title 

9 XII of the Food Security Act of 

10 1985 (16 U.S.C. 3831 et seq.) or 

11 the wetlands reserve program es12 tablished under subchapter C of 

13 chapter 1 of subtitle D of title 

14 XII of the Food Security Act of 

15 1985 (16 U.S.C. 3837 et seq.), 

16 unless the biomass is produced in 

17 a manner consistent with all ap18 plicable guidelines, and terms 

19 and conditions of any applicable 

20 contract, under the program; 

21 ‘‘(cc) any national interest 

22 land (other than land in a 

23 firewise zone), except for harvest 

24 residue, mill waste, or pre-com25 mercial thinnings derived from 


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1 national interest land assigned to 

2 timber production; 

3 ‘‘(dd) recyclable 

4 postconsumer waste paper; 

5 ‘‘(ee) painted, treated, or 

6 pressurized wood; 

7 ‘‘(ff) wood contaminated 

8 with plastic or metals; or 

9 ‘‘(gg) any material pro10 duced, harvested, acquired, trans11 ported, or processed pursuant to 

12 an exemption from otherwise ap13 plicable Federal environmental 

14 laws (including regulations). 

15 ‘‘(v) RENEWABLE FUEL.— 

16 ‘‘(I) IN GENERAL.—The term ‘re17 newable fuel’ means transportation 

18 fuel that is not an ether and that— 

19 ‘‘(aa)(AA) is produced from 

20 renewable biomass; or 

21 ‘‘(BB) is natural gas pro22 duced from a biogas source, in23 cluding a landfill, sewage waste 

24 treatment plant, feedlot, or other 


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1 place where decaying organic ma2 terial is found; 

3 ‘‘(bb) is used to replace or 

4 reduce the quantity of fossil fuel 

5 present in a fuel mixture used for 

6 transportation; and 

7 ‘‘(cc) has lifecycle green8 house gas emissions that are at 

9 least 20 percent lower than the 

10 fuel emission baseline. 

11 ‘‘(II) INCLUSION.—The term ‘re12 newable fuel’ includes fuel meeting the 

13 criteria in subclause (I) that is— 

14 ‘‘(aa) cellulosic biomass eth15 anol and waste derived ethanol; 

16 ‘‘(bb) biodiesel (as defined in 

17 section 312(f) of the Energy Pol18 icy Act of 1992 (42 U.S.C. 

19 13220(f))) and any blending 

20 components derived from renew21 able fuel (provided that only the 

22 renewable fuel portion of any 

23 such blending component shall be 

24 considered part of the applicable 

25 volume under the renewable fuel 


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1 program established by this sub2 section); or 

3 ‘‘(cc) fuel produced from py4 rolysis or thermal conversion of 

5 renewable biomass. 

6 ‘‘(B) STANDARD.— 

7 ‘‘(i) IN GENERAL.—Not later than 

8 January 1, 2010, the Administrator shall, 

9 by regulation— 

10 ‘‘(I) establish a methodology for 

11 use in determining the lifecycle green12 house gas emissions of transportation 

13 fuel in commerce, including— 

14 ‘‘(aa) conventional transpor15 tation fuel; and 

16 ‘‘(bb) renewable fuel; 

17 ‘‘(II) determine the fuel emission 

18 baseline; 

19 ‘‘(III) establish a transportation 

20 fuel certification and marketing proc21 ess— 

22 ‘‘(aa) to certify fuels that 

23 qualify as renewable fuel under 

24 this paragraph; 


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1 ‘‘(bb) to determine the 

2 lifecycle greenhouse gas emis3 sions of conventional transpor4 tation fuels and renewable fuels 

5 being sold or introduced into 

6 commerce in the United States; 

7 and 

8 ‘‘(cc) to label and market 

9 conventional transportation fuel 

10 and renewable fuel in a manner 

11 that indicates— 

12 ‘‘(AA) the status of the 

13 fuel as conventional trans14 portation fuel or renewable 

15 fuel; and 

16 ‘‘(BB) the lifecycle 

17 greenhouse gas emissions of 

18 the fuel; and 

19 ‘‘(IV) in accordance with clause 

20 (ii), establish a requirement applicable 

21 to each fuel provider to reduce the av22 erage lifecycle greenhouse gas emis23 sions per unit of energy of the aggre24 gate quantity of transportation fuel 

25 produced, blended, or imported by the 


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1 fuel provider to a level that is, to the 

2 maximum extent practicable— 

3 ‘‘(aa) by not later than cal4 endar year 2011, at least equal 

5 to or less than the fuel emission 

6 baseline; 

7 ‘‘(bb) by not later than cal8 endar year 2015, 5 percent less 

9 than the fuel emission baseline; 

10 and 

11 ‘‘(cc) by not later than cal12 endar year 2020, 10 percent less 

13 than the fuel emission baseline. 

14 ‘‘(ii) MAXIMUM REDUCTIONS.— 

15 ‘‘(I) IN GENERAL.—In deter16 mining the maximum practicable level 

17 of reduction under clause (i)(IV), the 

18 Administrator shall— 

19 ‘‘(aa) take into consideration 

20 the results of the applicable 

21 study carried out under para22 graph (12); and 

23 ‘‘(bb) determine whether a 

24 level of reduction— 


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1 ‘‘(AA) is technically in2 feasible; or 

3 ‘‘(BB) would result in 1 

4 or more adverse lifecycle im5 pacts that cannot be ade6 quately mitigated through 

7 regulatory or nonregulatory 

8 measures under subclause 

9 (II). 

10 ‘‘(II) MITIGATION.— 

11 ‘‘(aa) IN GENERAL.—For 

12 the purpose of making a deter13 mination under subclause 

14 (I)(bb)(BB), the Administrator, 

15 in consultation with the heads of 

16 other appropriate Federal agen17 cies, shall use the existing au18 thorities of the Administrator to 

19 mitigate, to the maximum extent 

20 practicable, using regulatory or 

21 nonregulatory approaches as the 

22 Administrator determines to be 

23 appropriate, adverse lifecycle im24 pacts in accordance with a sched25 ule that ensures that mitigation 


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1 measures are in place by a date 

2 sufficient to avoid adverse 

3 lifecycle impacts. 

4 ‘‘(bb) AIR QUALITY IM5 PACTS.—For the purpose of this 

6 subclause, in the case of any air 

7 quality-related adverse lifecycle 

8 impact resulting from emissions 

9 from motor vehicles using renew10 able fuel, the Administrator shall 

11 ensure, by regulation promul12 gated under this title, that gaso13 line containing renewable fuel 

14 does not result in— 

15 ‘‘(AA) average per-gal16 lon motor vehicle emissions 

17 (measured on a mass basis) 

18 of air pollutants in excess of 

19 those emissions attributable 

20 to gasoline sold or intro21 duced into commerce in the 

22 United States in calendar 

23 year 2007; or 

24 ‘‘(BB) a violation of 

25 any motor vehicle emission 


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1 or fuel content limitation 

2 under any other provision of 

3 this Act. 

4 ‘‘(iii) CALENDAR YEAR 2025 AND

5 THEREAFTER.—For calendar year 2025, 

6 and each fifth calendar year thereafter, the 

7 Administrator, in consultation with the 

8 Secretary of Agriculture and the Secretary 

9 of Energy, shall revise the applicable per10 formance standard to require that each 

11 fuel provider shall additionally reduce, to 

12 the maximum extent practicable, the aver13 age lifecycle greenhouse gas emissions per 

14 unit of energy of the aggregate quantity of 

15 transportation fuel introduced by the fuel 

16 provider into commerce in the United 

17 States. 

18 ‘‘(iv) REVISION OF REGULATIONS.—In 

19 accordance with the purposes of the En20 ergy Independence, Clean Air, and Climate 

21 Security Act of 2007 , the Administrator 

22 may, as appropriate, revise the regulations 

23 promulgated under clause (i) as necessary 

24 to reflect or respond to changes in the 


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1 transportation fuel market or other rel2 evant circumstances. 

3 ‘‘(v) METHOD OF CALCULATION.—In 

4 calculating the lifecycle greenhouse gas 

5 emissions of hydrogen or electricity (when 

6 used as a transportation fuel) pursuant to 

7 clause (i)(I), the Administrator shall— 

8 ‘‘(I) include emissions resulting 

9 from the production of the hydrogen 

10 or electricity; and 

11 ‘‘(II) consider to be equivalent to 

12 the energy delivered by 1 gallon of 

13 ethanol the energy delivered by— 

14 ‘‘(aa) 6.4 kilowatt-hours of 

15 electricity; 

16 ‘‘(bb) 132 standard cubic 

17 feet of hydrogen; or 

18 ‘‘(cc) 1.25 gallons of liquid 

19 hydrogen. 

20 ‘‘(C) ELECTION TO PARTICIPATE.—An 

21 electricity provider may elect to participate in 

22 the program under this section if the electricity 

23 provider— 


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1 ‘‘(i) provides and separately tracks 

2 electricity for transportation through a 

3 meter that— 

4 ‘‘(I) measures the electricity used 

5 for transportation separately from 

6 electricity used for other purposes; 

7 and 

8 ‘‘(II) allows for load management 

9 and time-of-use rates; and 

10 ‘‘(ii) generates more than 15 percent 

11 of the electricity sold by the electricity pro12 vider from renewable energy sources. 

13 ‘‘(D) CREDITS.— 

14 ‘‘(i) IN GENERAL.—The regulations 

15 promulgated to carry out this paragraph 

16 shall permit fuel providers to receive cred17 its for achieving, during a calendar year, 

18 greater reductions in lifecycle greenhouse 

19 gas emissions of the fuel produced, blend20 ed, or imported by the fuel provider than 

21 are required under subparagraph 

22 (B)(i)(IV). 

23 ‘‘(ii) METHOD OF CALCULATION.— 

24 The number of credits received by a fuel 

25 provider as described clause (i) for a calVerDate Aug 31 2005 05:41 Jun 07, 2007 Jkt 059200 PO 00000 Frm 00068 Fmt 6652 Sfmt 6201 E:\BILLS\S1554.IS S1554

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1 endar year shall be calculated by multi2 plying— 

3 ‘‘(I) the aggregate quantity of 

4 fuel produced, distributed, or im5 ported by the fuel provider in the cal6 endar year; and 

7 ‘‘(II) the difference between— 

8 ‘‘(aa) the lifecycle green9 house gas emissions of that 

10 quantity of fuel; and 

11 ‘‘(bb) the maximum lifecycle 

12 greenhouse gas emissions of that 

13 quantity of fuel permitted for the 

14 calendar year under subpara15 graph (B)(i)(VI). 

16 ‘‘(E) COMPLIANCE.—Each fuel provider 

17 subject to this paragraph shall demonstrate 

18 compliance with this paragraph, including, as 

19 necessary, through the use of credits banked or 

20 purchased. 

21 ‘‘(F) NO EFFECT ON STATE AUTHORITY

22 OR MORE STRINGENT REQUIREMENTS.—Noth23 ing in this subsection— 

24 ‘‘(i) affects the authority of a State to 

25 establish, or to maintain in effect, any 


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1 transportation fuel performance standard 

2 or other similar standard that is more 

3 stringent than a standard established 

4 under this paragraph; or 

5 ‘‘(ii) supercedes or otherwise affects 

6 any more stringent requirement under any 

7 other provision of this Act.’’. 

8 (b) ADVANCED CLEAN FUEL VOLUME STANDARD.— 

9 Section 211(o)(2) of the Clean Air Act (42 U.S.C. 

10 7545(o)(2)) is amended— 

11 (1) in subparagraph (B)— 

12 (A) by striking the subparagraph designa13 tion and heading and all that follows through 

14 ‘‘For the purpose’’ and inserting the following: 

15 ‘‘(B) APPLICABLE VOLUME.—For the pur16 pose’’; and 

17 (B) by striking clauses (ii) through (iv); 

18 and 

19 (2) by adding at the end the following: 

20 ‘‘(C) ADVANCED CLEAN FUEL VOLUME

21 STANDARD.— 

22 ‘‘(i) DEFINITION OF RENEWABLE

23 FUEL.—In this subparagraph, the term 

24 ‘renewable fuel’ has the meaning given the 

25 term in paragraph (11). 


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1 ‘‘(ii) INCREASE IN RENEWABLE FUEL

2 VOLUME.— 

3 ‘‘(I) IN GENERAL.—Unless, 

4 based on the results of the study car5 ried out under paragraph (12), the 

6 Administrator determines that the 

7 total applicable volume of renewable 

8 fuel specified in clause (iii) for a cal9 endar year would be technically infea10 sible, or would result in 1 or more ad11 verse lifecycle impacts that cannot be 

12 adequately mitigated under subclause 

13 (V), the Administrator shall promul14 gate regulations that require the ag15 gregate quantity of transportation fuel 

16 sold or introduced into commerce in 

17 the United States to contain such vol18 ume of renewable fuel as the Adminis19 trator determines will result in the 

20 total minimum volume for the cal21 endar year specified in clause (iii). 

22 ‘‘(II) INCREASE.—If the Admin23 istrator makes a determination under 

24 subclause (I), the Administrator may 

25 promulgate regulations that require 


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1 such increase in the aggregate quan2 tity of transportation fuel sold or in3 troduced into commerce in the United 

4 States as the Administrator deter5 mines to be appropriate, with respect 

6 to the determination under subclause 

7 (I). 

8 ‘‘(III) SCHEDULE OF REGULA9 TIONS.—In implementing subclauses 

10 (I) and (II), the Administrator shall— 

11 ‘‘(aa) not later than Janu12 ary 1, 2010, promulgate regula13 tions establishing any total appli14 cable volume requirements for 

15 calendar years 2011 through 

16 2013; and 

17 ‘‘(bb) not later than Janu18 ary 1, 2013, and every 3 years 

19 thereafter, promulgate regula20 tions establishing any total appli21 cable volume requirements for 

22 the 3-calendar-year period begin23 ning with the calendar year after 

24 the calendar year in which the 

25 regulations are promulgated. 


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1 ‘‘(IV) EFFECTIVE DATE.—The 

2 regulations promulgated under sub3 clauses (I) and (II) shall take effect 

4 not sooner than 1 year after the date 

5 of promulgation of the regulations. 

6 ‘‘(V) MITIGATION.— 

7 ‘‘(aa) IN GENERAL.—For 

8 purposes of this clause, the Ad9 ministrator, in consultation with 

10 the heads of other appropriate 

11 Federal agencies, shall use the 

12 existing authorities of the Admin13 istrator to mitigate, to the max14 imum extent practicable, using 

15 regulatory or nonregulatory ap16 proaches as the Administrator 

17 determines to be appropriate, ad18 verse lifecycle impacts in accord19 ance with a schedule that ensures 

20 that mitigation measures are in 

21 place by a date sufficient to avoid 

22 adverse lifecycle impacts. 

23 ‘‘(bb) AIR QUALITY IM24 PACTS.—For the purpose of this 

25 subclause, in the case of any air 


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1 quality-related adverse lifecycle 

2 impact resulting from emissions 

3 from motor vehicles using renew4 able fuel, the Administrator shall 

5 ensure, by regulation, that gaso6 line containing renewable fuel 

7 does not result in— 

8 ‘‘(AA) average per gal9 lon motor vehicle emissions 

10 (measured on a mass basis) 

11 of air pollutants in excess of 

12 the quantity of those emis13 sions attributable to gasoline 

14 sold or introduced into com15 merce in the United States 

16 during calendar year 2007; 

17 or 

18 ‘‘(BB) a violation of 

19 any motor vehicle emission 

20 or fuel content limitation 

21 under any other provision of 

22 this Act. 

23 ‘‘(iii) TOTAL ADVANCED CLEAN FUEL

24 VOLUME.— 


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1 ‘‘(I) CALENDAR YEARS 2011

2 THROUGH 2025.—For the purpose of 

3 clause (ii), the total applicable vol4 umes for any of calendar years 2011 

5 through 2025 (including the minimum 

6 additional volumes required under 

7 subparagraph (B)) shall be deter8 mined in accordance with the fol9 lowing table: 

Calendar year 

Total applicable volume of renewable fuel 

(in billions 

of gallons) 

Total volume of 

phase II renewable fuel 

(in billions 

of gallons) 

Total volume of 

phase III 

renewable 

fuel (in billions of gallons) 

2011 ................................................ 12.0 0 0

2012 ................................................ 14.0 0.5 0.25

2013 ................................................ 16.0 0.5 0.25

2014 ................................................ 18.0 1.5 0.75

2015 ................................................ 20.0 1.5 0.75

2016 ................................................ 22.0 3.0 1.5

2017 ................................................ 24.0 3.0 1.5

2018 ................................................ 26.0 5.0 2.5

2019 ................................................ 28.0 5.0 2.5

2020 ................................................ 30.0 8.0 4.0

2021 ................................................ 31.0 8.0 4.0

2022 ................................................ 32.0 11.0 6.0

2023 ................................................ 33.0 11.0 6.0

2024 ................................................ 34.0 11.0 6.0

2025 ................................................ 35.0 13.0 8.0. 

10 ‘‘(II) CALENDAR YEAR 2026 AND

11 THEREAFTER.—Subject to clause (iv), 

12 for the purposes of clause (ii), the 

13 total applicable volume for calendar 


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1 year 2026 and each calendar year 

2 thereafter shall be determined by the 

3 Administrator, in consultation with 

4 the Secretary of Agriculture and the 

5 Secretary of Energy, based on a re6 view of the implementation of this 

7 subparagraph and subparagraph (B) 

8 during calendar years 2011 through 

9 2025, including a review of— 

10 ‘‘(aa) the impact of renew11 able fuel, phase II renewable fuel, 

12 and phase III renewable fuel on 

13 the environment of the United 

14 States and the world; and 

15 ‘‘(bb) the impact of the use 

16 of renewable fuel, phase II re17 newable fuel, and phase III re18 newable fuel on other factors, in19 cluding job creation, rural eco20 nomic development, domestic en21 ergy production, and the energy 

22 security of the United States. 

23 ‘‘(III) REVISION OF REGULA24 TIONS.—In accordance with the pur25 poses of the Energy Independence, 


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1 Clean Air, and Climate Security Act 

2 of 2007 , the Administrator may, as 

3 appropriate, revise the regulations 

4 promulgated pursuant to clause (i) as 

5 the Administrator determines to be 

6 necessary to reflect or respond to— 

7 ‘‘(aa) changes in the trans8 portation fuel market; or 

9 ‘‘(bb) other relevant cir10 cumstances. 

11 ‘‘(iv) CALCULATION OF TOTAL AD12 VANCED CLEAN FUEL VOLUME.—For the 

13 purpose of clause (iii)(II), the total appli14 cable volume for calendar year 2026 and 

15 each calendar year thereafter shall be 

16 equal to the product obtained by multi17 plying— 

18 ‘‘(I) the number of gallons of 

19 gasoline that the Administrator esti20 mates will be sold or introduced into 

21 commerce in the calendar year; and 

22 ‘‘(II) the ratio that, as applica23 ble— 

24 ‘‘(aa) 35,000,000,000 gal25 lons of renewable fuel (including 


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1 up to 13,000,000,000 gallons of 

2 phase II renewable fuel and up to 

3 8,000,000,000 gallons of phase 

4 III renewable fuel); bears to 

5 ‘‘(bb) the number of gallons 

6 of conventional transportation 

7 fuel sold or introduced into com8 merce in calendar year 2025. 

9 ‘‘(v) NO EFFECT ON MORE STRIN10 GENT REQUIREMENTS.—Nothing in this 

11 subparagraph supercedes or otherwise af12 fects any more stringent requirement 

13 under any other provision of this Act.’’. 

14 (c) STUDY.—Section 211(o) of the Clean Air Act (42 

15 U.S.C. 7545(o)) (as amended by subsection (a)) is amend16 ed by adding at the end the following: 

17 ‘‘(12) STUDY ON EFFECTS OF INCREASE IN RE18 NEWABLE FUEL VOLUME.— 

19 ‘‘(A) IN GENERAL.—The Administrator 

20 shall offer to enter into an agreement with the 

21 Academy under which the Academy shall peri22 odically carry out, and submit to Congress and 

23 the Administrator a report on the results of, a 

24 study to determine whether the total applicable 

25 volume of renewable fuel specified in paragraph 


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1 (2)(C)(iii) or the advanced clean fuel perform2 ance standards specified in paragraph (11)(B) 

3 for any calendar year would reasonably be an4 ticipated— 

5 ‘‘(i) to result in 1 or more adverse 

6 lifecycle impacts; or 

7 ‘‘(ii) to be technically infeasible. 

8 ‘‘(B) SCHEDULE OF STUDIES.—In imple9 menting subparagraph (A), the Administrator 

10 shall— 

11 ‘‘(i) not later than 90 days after the 

12 date of enactment of this paragraph, offer 

13 to enter into an agreement with the Acad14 emy under which the Academy shall con15 duct the study described in subparagraph 

16 (A) with respect to calendar years 2011 

17 through 2013; and 

18 ‘‘(ii) not later than 3 years after the 

19 deadline specified in clause (i), and every 3 

20 years thereafter, offer to enter into an 

21 agreement with the Academy under which 

22 the Academy shall conduct the study de23 scribed in subparagraph (A) with respect 

24 to the 3-calendar-year period following the 


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1 most recent 3-calendar-year period studied 

2 by the Academy under this paragraph. 

3 ‘‘(C) INITIAL STUDY OF ANALYTICAL

4 METHODS.—The first study conducted under 

5 this paragraph shall include an identification 

6 and development of analytical methods for 

7 use— 

8 ‘‘(i) in determining the lifecycle green9 house gas emissions of conventional trans10 portation fuel and renewable fuel; and 

11 ‘‘(ii) in assessing the impacts of in12 creasing volumes of renewable fuel in the 

13 transportation fuel supply on— 

14 ‘‘(I) the environment of the 

15 United States and the world, taking 

16 into consideration potential additional 

17 warming of the oceans and surface of 

18 Earth as a result of changes in land 

19 use and cover; and 

20 ‘‘(II) food and feedstock supply 

21 and prices.’’. 

22 (d) OPT-IN AREAS UNDER REFORMULATED GASO23 LINE PROGRAM.—Section 211(k)(6)(B) of the Clean Air 

24 Act (42 U.S.C. 7545(k)(6)(B)) is amended— 


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1 (1) in the subparagraph heading, by striking 

2 ‘‘OZONE TRANSPORT REGION’’ and inserting ‘‘ADDI3 TIONAL OPT-IN AREAS’’; and 

4 (2) in clause (i)(I)— 

5 (A) by striking ‘‘in the ozone transport re6 gion established by section 184(a)’’; and 

7 (B) by striking ‘‘(other than an area clas8 sified as a marginal, moderate, serious, or se9 vere ozone nonattainment area under subpart 2 

10 of part D of title I)’’. 

11 SEC. 203. VOLUNTARY RENEWABLE FUELS LABELING PRO12 GRAM. 

13 Section 211(o) of the Clean Air Act (42 U.S.C. 

14 7545(o)) (as amended by section 202(c)) is amended by 

15 adding at the end the following: 

16 ‘‘(13) VOLUNTARY RENEWABLE FUELS LABEL17 ING PROGRAM.— 

18 ‘‘(A) DEFINITIONS.—In this paragraph: 

19 ‘‘(i) PROGRAM.—The term ‘Program’ 

20 means the Voluntary Renewable Fuels La21 beling Program established under subpara22 graph (B). 

23 ‘‘(ii) RENEWABLE FUEL.—The term 

24 ‘renewable fuel’ has the meaning given the 

25 term in paragraph (11). 


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1 ‘‘(iii) VOLUNTARY MANAGEMENT

2 PRACTICE.—The term ‘voluntary manage3 ment practice’ means a practice that pro4 tects the ecological values (including water, 

5 soil, and biological diversity) of a landscape 

6 used to produce renewable biomass. 

7 ‘‘(B) ESTABLISHMENT.—The Adminis8 trator shall establish a program, to be modeled 

9 on the Energy Star Program, to promote con10 sumer awareness of renewable fuels that meet 

11 the requirements of subparagraph (C). 

12 ‘‘(C) REQUIREMENTS.—The Program shall 

13 provide authorization to applicable entities for 

14 the use of a unique label for any renewable fuel 

15 that— 

16 ‘‘(i) has a lifecycle greenhouse gas 

17 emission rate that is at least 50 percent 

18 lower than the fuel emission baseline; and 

19 ‘‘(ii) complies with applicable vol20 untary management practices established 

21 under subparagraph (D)(i). 

22 ‘‘(D) VOLUNTARY MANAGEMENT PRAC23 TICES, TERMS, AND PROCEDURES.—In carrying 

24 out the Program, the Administrator shall estab25 lish— 


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1 ‘‘(i) voluntary management practices 

2 for use in determining the eligibility of a 

3 renewable fuel for a unique renewable fuel 

4 label under the Program; 

5 ‘‘(ii) terms governing the use of a 

6 unique renewable fuel label; and 

7 ‘‘(iii) procedures for— 

8 ‘‘(I) designating a renewable fuel 

9 to be eligible for a unique renewable 

10 fuel label; 

11 ‘‘(II) verifying the values re12 ported by producers of renewable fuel; 

13 and 

14 ‘‘(III) monitoring compliance 

15 with the voluntary management prac16 tices established under clause (i). 

17 ‘‘(E) LABEL INFORMATION.—The label to 

18 be applied to each qualifying renewable fuel 

19 under the Program shall indicate the lifecycle 

20 greenhouse gas emission rate of the renewable 

21 fuel. 

22 ‘‘(F) ADVISORY COMMITTEE.— 

23 ‘‘(i) ESTABLISHMENT.—The Adminis24 trator shall establish an independent adviVerDate Aug 31 2005 05:41 Jun 07, 2007 Jkt 059200 PO 00000 Frm 00083 Fmt 6652 Sfmt 6201 E:\BILLS\S1554.IS S1554

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1 sory committee to assist the Administrator 

2 in carrying out the Program. 

3 ‘‘(ii) DUTIES.—Not less frequently 

4 than once every 2 years, the advisory com5 mittee shall provide recommendations to 

6 the Administrator for updates and im7 provements to the Program, including rec8 ommendations relating to the voluntary 

9 management practices established under 

10 subparagraph (D)(i).’’. 

11 SEC. 204. WATER QUALITY PROTECTION. 

12 Section 211(c)(1) of the Clean Air Act (42 U.S.C. 

13 7545(c)(1)) is amended— 

14 (1) by striking ‘‘nonroad vehicle (A) if in the 

15 judgment of the Administrator’’ and inserting the 

16 following: ‘‘nonroad vehicle— 

17 ‘‘(A) if, in the judgment of the Adminis18 trator, any fuel or fuel additive or’’; 

19 (2) by striking ‘‘, or (B) if’’ and inserting the 

20 following: ‘‘; or 

21 ‘‘(B) if’’; and 

22 (3) in subparagraph (A), by striking ‘‘air pollu23 tion which’’ and inserting ‘‘air pollution or water 

24 pollution (including any degradation in the quality of 

25 groundwater) that’’. 


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1 Subtitle B—Assistance and 

2 Research 

3 SEC. 211. SMALL ETHANOL PRODUCER CREDIT EXPANSION 

4 FOR PRODUCERS OF SUCROSE AND ETH5 ANOL. 

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

7 40(b)(4) of the Internal Revenue Code of 1986 (relating 

8 to small ethanol producer credit) is amended by inserting 

9 ‘‘(30,000,000 gallons for any sucrose or cellulosic ethanol 

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

11 (b) SUCROSE OR CELLULOSIC ETHANOL PRO12 DUCER.—Section 40(b)(4) of the Internal Revenue Code 

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

14 new subparagraph: 

15 ‘‘(E) SUCROSE OR CELLULOSIC ETHANOL

16 PRODUCER.— 

17 ‘‘(i) IN GENERAL.—For purposes of 

18 this paragraph, the term ‘sucrose or cel19 lulosic ethanol producer’ means a producer 

20 of ethanol using sucrose feedstock or a 

21 producer of cellulosic biomass ethanol (as 

22 defined in section 168(l)(3)). 

23 ‘‘(ii) SUCROSE FEEDSTOCK.—For pur24 poses of clause (i), the term ‘sucrose feed25 stock’ means any raw sugar, refined sugar, 


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1 or sugar equivalents (including juice and 

2 extract). Such term does not include any 

3 molasses, beet thick juice, or other similar 

4 products as determined by the Secretary.’’. 

5 (c) CONFORMING AMENDMENTS.— 

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

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

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

9 30,000,000 gallon limitations’’. 

10 (2) Section 40(g)(5)(B) of such Code is amend11 ed by striking ‘‘15,000,000 gallons’’ and inserting 

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

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

14 this section shall apply to taxable years beginning after 

15 the date of the enactment of this Act. 

16 SEC. 212. RESEARCH AND DEVELOPMENT IN SUPPORT OF 

17 LOW-CARBON FUELS. 

18 (a) DECLARATION OF POLICY.—Congress declares 

19 that, in order to achieve maximum reductions in green20 house gas emissions, enhance national security, and en21 sure the protection of wildlife habitat, biodiversity, water 

22 quality, air quality, and rural and regional economies 

23 throughout the lifecycle of each low-carbon fuel, it is nec24 essary and desirable to undertake a combination of basic 

25 and applied research, as well as technology development 


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1 and demonstration, involving the colleges and universities 

2 of the United States, in partnership with the Federal Gov3 ernment, State governments, and the private sector. 

4 (b) PURPOSE.—The purpose of this section is to pro5 vide for research support to facilitate the development of 

6 sustainable markets and technologies to produce and use 

7 woody biomass and other low-carbon fuels for the produc8 tion of thermal and electric energy, biofuels, and bioprod9 ucts. 

10 (c) GRANT PROGRAM.—The Administrator shall es11 tablish a program to provide to eligible entities (as identi12 fied by the Administrator) grants for use in— 

13 (1) providing financial support for not more 

14 than 4 nor less than 6 demonstration facilities 

15 that— 

16 (A) use woody biomass to deploy advanced 

17 technologies for production of thermal and elec18 tric energy, biofuels, and bioproducts; and 

19 (B) are targeted at regional feedstocks and 

20 markets; 

21 (2) conducting targeted research for the devel22 opment of cellulosic ethanol and other liquid fuels 

23 from woody or other biomass that may be used in 

24 transportation or stationary applications, such as inVerDate Aug 31 2005 05:41 Jun 07, 2007 Jkt 059200 PO 00000 Frm 00087 Fmt 6652 Sfmt 6201 E:\BILLS\S1554.IS S1554

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1 dustrial processes or industrial, commercial, and res2 idential heating; 

3 (3) conducting research into the best scientif4 ically-based and periodically-updated methods of as5 sessing and certifying the impacts of each low-car6 bon fuel with respect to— 

7 (A) the reduction in lifecycle greenhouse 

8 gas emissions of each fuel as compared to— 

9 (i) the fuel emission baseline; and 

10 (ii) the greenhouse gas emissions of 

11 other sectors, such as the agricultural, in12 dustrial, and manufacturing sectors; 

13 (B) the contribution of the fuel toward en14 hancing the energy security of the United 

15 States by displacing imported petroleum and 

16 petroleum products; 

17 (C) any impacts of the fuel on wildlife 

18 habitat, biodiversity, water quality, and air 

19 quality; and 

20 (D) any effect of the fuel with respect to 

21 rural and regional economies; 

22 (4) conducting research to determine to what 

23 extent the use of low-carbon fuels in the transpor24 tation sector would impact greenhouse gas emissions 


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1 in other sectors, such as the agricultural, industrial, 

2 and manufacturing sectors; 

3 (5) conducting research for the development of 

4 the supply infrastructure that may provide renew5 able biomass feedstocks in a consistent, predictable, 

6 and environmentally-sustainable manner; 

7 (6) conducting research for the development of 

8 supply infrastructure that may provide renewable 

9 low-carbon fuels in a consistent, predictable, and en10 vironmentally-sustainable manner; and 

11 (7) conducting policy research on the global 

12 movement of low-carbon fuels in a consistent, pre13 dictable, and environmentally-sustainable manner. 

14 (d) AUTHORIZATION OF APPROPRIATIONS.—There 

15 are authorized to be appropriated to carry out this sec16 tion— 

17 (1) $45,000,000 for fiscal year 2009; 

18 (2) $50,000,000 for fiscal year 2010; 

19 (3) $55,000,000 for fiscal year 2011; 

20 (4) $60,000,000 for fiscal year 2012; and 

21 (5) $65,000,000 for fiscal year 2013. 

22 TITLE III—CLEAN POWER ACT 

23 SEC. 301. SHORT TITLE. 

24 This title may be cited as the ‘‘Clean Power Act of 

25 2007’’. 


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1 SEC. 302. ELECTRIC ENERGY GENERATION EMISSION RE2 DUCTIONS. 

3 (a) IN GENERAL.—The Clean Air Act (42 U.S.C. 

4 7401 et seq.) is amended by adding at the end the fol5 lowing: 

6 ‘‘TITLE VII—ELECTRIC ENERGY 

7 GENERATION EMISSION RE8 DUCTIONS 

‘‘Sec. 701. Findings. 

‘‘Sec. 702. Purposes. 

‘‘Sec. 703. Definitions. 

‘‘Sec. 704. Emission limitations. 

‘‘Sec. 705. Emission allowances. 

‘‘Sec. 706. Permitting and trading of emission allowances. 

‘‘Sec. 707. Emission allowance allocation. 

‘‘Sec. 708. Mercury emission limitations. 

‘‘Sec. 709. Other hazardous air pollutants. 

‘‘Sec. 710. Effect of failure to promulgate regulations. 

‘‘Sec. 711. Prohibitions. 

‘‘Sec. 712. Modernization of electricity generating facilities. 

‘‘Sec. 713. Relationship to other law. 

9 ‘‘SEC. 701. FINDINGS. 

10 ‘‘Congress finds that— 

11 ‘‘(1) public health and the environment con12 tinue to suffer as a result of pollution emitted by 

13 powerplants across the United States, despite the 

14 success of Public Law 101–549 (commonly known 

15 as the ‘Clean Air Act Amendments of 1990’) (42 

16 U.S.C. 7401 et seq.) in reducing emissions; 

17 ‘‘(2) according to the most reliable scientific 

18 knowledge, acid rain precursors must be significantly 

19 reduced for the ecosystems of the Northeast and 


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1 Southeast to recover from the ecological harm 

2 caused by acid deposition; 

3 ‘‘(3) because lakes and sediments across the 

4 United States are being contaminated by mercury 

5 emitted by powerplants, there is an increasing risk 

6 of mercury poisoning of aquatic habitats and fish7 consuming human populations; 

8 ‘‘(4)(A) electricity generation accounts for ap9 proximately 40 percent of the total emissions in the 

10 United States of carbon dioxide, a major greenhouse 

11 gas causing global warming; and 

12 ‘‘(B) the quantity of carbon dioxide in the at13 mosphere is growing without constraint and well be14 yond the international commitments of the United 

15 States; 

16 ‘‘(5) the cumulative impact of powerplant emis17 sions on public and environmental health must be 

18 addressed swiftly by reducing those harmful emis19 sions to levels that are less threatening; and 

20 ‘‘(6)(A) the atmosphere is a public resource; 

21 and 

22 ‘‘(B) emission allowances, representing permis23 sion to use that resource for disposal of air pollution 

24 from electricity generation, should be allocated to 

25 promote public purposes, including— 


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1 ‘‘(i) protecting electricity consumers from 

2 adverse economic impacts; 

3 ‘‘(ii) providing transition assistance to ad4 versely affected employees, communities, and 

5 industries; and 

6 ‘‘(iii) promoting clean energy resources and 

7 energy efficiency. 

8 ‘‘SEC. 702. PURPOSES. 

9 ‘‘The purposes of this title are— 

10 ‘‘(1) to alleviate the environmental and public 

11 health damage caused by emissions of sulfur dioxide, 

12 nitrogen oxides, carbon dioxide, and mercury result13 ing from the combustion of fossil fuels in the genera14 tion of electric and thermal energy; 

15 ‘‘(2) to reduce by 2012 the annual national 

16 emissions from electricity generating facilities to not 

17 more than— 

18 ‘‘(A) 2,250,000 tons of sulfur dioxide; 

19 ‘‘(B) 1,510,000 tons of nitrogen oxides; 

20 and 

21 ‘‘(C) 2,050,000,000 tons of carbon dioxide; 

22 ‘‘(3) to reduce by 2011 the annual national 

23 emissions of mercury from electricity generating fa24 cilities to not more than 5 tons; 


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1 ‘‘(4) to effectuate the reductions described in 

2 paragraphs (2) and (3) by— 

3 ‘‘(A) requiring electricity generating facili4 ties to comply with specified emission limita5 tions by specified deadlines; and 

6 ‘‘(B) allowing electricity generating facili7 ties to meet the emission limitations (other than 

8 the emission limitation for mercury) through an 

9 alternative method of compliance consisting of 

10 an emission allowance and transfer system; and 

11 ‘‘(5) to encourage energy conservation, use of 

12 renewable and clean alternative technologies, and 

13 pollution prevention as long-range strategies, con14 sistent with this title, for reducing air pollution and 

15 other adverse impacts of energy generation and use. 

16 ‘‘SEC. 703. DEFINITIONS. 

17 ‘‘In this title: 

18 ‘‘(1) COVERED POLLUTANT.—The term ‘cov19 ered pollutant’ means— 

20 ‘‘(A) sulfur dioxide; 

21 ‘‘(B) any nitrogen oxide; 

22 ‘‘(C) carbon dioxide; and 

23 ‘‘(D) mercury. 

24 ‘‘(2) ELECTRICITY GENERATING FACILITY.— 

25 The term ‘electricity generating facility’ means an 


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1 electric or thermal electricity generating unit, a com2 bination of such units, or a combination of 1 or 

3 more such units and 1 or more combustion devices, 

4 that— 

5 ‘‘(A) has a nameplate capacity of 15 

6 megawatts or more (or the equivalent in ther7 mal energy generation, determined in accord8 ance with a methodology developed by the Ad9 ministrator); 

10 ‘‘(B) generates electric energy, for sale, 

11 through combustion of fossil fuel; and 

12 ‘‘(C) emits a covered pollutant into the at13 mosphere. 

14 ‘‘(3) ELECTRICITY INTENSIVE PRODUCT.—The 

15 term ‘electricity intensive product’ means a product 

16 with respect to which the cost of electricity con17 sumed in the production of the product represents 

18 more than 5 percent of the value of the product. 

19 ‘‘(4) EMISSION ALLOWANCE.—The term ‘emis20 sion allowance’ means a limited authorization to 

21 emit in accordance with this title— 

22 ‘‘(A) 1 ton of sulfur dioxide; 

23 ‘‘(B) 1 ton of nitrogen oxides; or 

24 ‘‘(C) 1 ton of carbon dioxide. 


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1 ‘‘(5) ENERGY EFFICIENCY PROJECT.—The term 

2 ‘energy efficiency project’ means any specific action 

3 (other than ownership or operation of an energy effi4 cient building) commenced after the date of enact5 ment of this title— 

6 ‘‘(A) at a facility (other than an electricity 

7 generating facility), that verifiably reduces the 

8 annual electricity or natural gas consumption 

9 per unit output of the facility, as compared 

10 with the annual electricity or natural gas con11 sumption per unit output that would be ex12 pected in the absence of an allocation of emis13 sion allowances (as determined by the Adminis14 trator); or 

15 ‘‘(B) by an entity that is primarily engaged 

16 in the transmission and distribution of elec17 tricity, that significantly improves the efficiency 

18 of that type of entity, as compared with stand19 ards for efficiency developed by the Adminis20 trator, in consultation with the Secretary of En21 ergy, after the date of enactment of this title. 

22 ‘‘(6) ENERGY EFFICIENT BUILDING.—The term 

23 ‘energy efficient building’ means a residential build24 ing or commercial building completed after the date 

25 of enactment of this title for which the projected 


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1 lifetime consumption of electricity or natural gas for 

2 heating, cooling, and ventilation is at least 30 per3 cent less than the lifetime consumption of a typical 

4 new residential building or commercial building, as 

5 determined by the Administrator (in consultation 

6 with the Secretary of Energy)— 

7 ‘‘(A) on a State or regional basis; and 

8 ‘‘(B) taking into consideration— 

9 ‘‘(i) applicable building codes; and 

10 ‘‘(ii) consumption levels achieved in 

11 practice by new residential buildings or 

12 commercial buildings in the absence of an 

13 allocation of emission allowances. 

14 ‘‘(7) ENERGY EFFICIENT PRODUCT.—The term 

15 ‘energy efficient product’ means a product manufac16 tured after the date of enactment of this title that 

17 has an expected lifetime electricity or natural gas 

18 consumption that— 

19 ‘‘(A) is less than the average lifetime elec20 tricity or natural gas consumption for that type 

21 of product; and 

22 ‘‘(B) does not exceed the lesser of— 

23 ‘‘(i) the maximum energy consump24 tion that qualifies for the applicable En25 ergy Star label for that type of product; or 


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1 ‘‘(ii) the average energy consumption 

2 of the most efficient 25 percent of that 

3 type of product manufactured in the same 

4 year. 

5 ‘‘(8) LIFETIME.—The term ‘lifetime’ means— 

6 ‘‘(A) in the case of a residential building 

7 that is an energy efficient building, 30 years; 

8 ‘‘(B) in the case of a commercial building 

9 that is an energy efficient building, 15 years; 

10 and 

11 ‘‘(C) in the case of an energy efficient 

12 product, a period determined by the Adminis13 trator to be the average life of that type of en14 ergy efficient product. 

15 ‘‘(9) MERCURY.—The term ‘mercury’ includes 

16 any mercury compound. 

17 ‘‘(10) NEW CLEAN FOSSIL FUEL-FIRED ELEC18 TRICITY GENERATING UNIT.—The term ‘new clean 

19 fossil fuel-fired electricity generating unit’ means a 

20 unit that— 

21 ‘‘(A) has been in operation for 10 years or 

22 less; and 

23 ‘‘(B) is— 

24 ‘‘(i) a natural gas fired generator 

25 that— 


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1 ‘‘(I) has an energy conversion ef2 ficiency of at least 55 percent; and 

3 ‘‘(II) uses best available control 

4 technology (as defined in section 169); 

5 ‘‘(ii) a generator that— 

6 ‘‘(I) uses integrated gasification 

7 combined cycle technology; 

8 ‘‘(II) uses best available control 

9 technology (as defined in section 169); 

10 and 

11 ‘‘(III) has an energy conversion 

12 efficiency of at least 45 percent; or 

13 ‘‘(iii) a fuel cell operating on fuel de14 rived from a nonrenewable source of en15 ergy. 

16 ‘‘(11) NONWESTERN REGION.—The term ‘non17 western region’ means the area of the States that is 

18 not included in the western region. 

19 ‘‘(12) RENEWABLE ELECTRICITY GENERATING

20 UNIT.—The term ‘renewable electricity generating 

21 unit’ means a unit that— 

22 ‘‘(A) has been in operation for 10 years or 

23 less; and 

24 ‘‘(B) generates electric energy by means 

25 of— 


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1 ‘‘(i) wind; 

2 ‘‘(ii) biomass; 

3 ‘‘(iii) landfill gas; 

4 ‘‘(iv) a geothermal, solar thermal, or 

5 photovoltaic source; or 

6 ‘‘(v) a fuel cell operating on fuel de7 rived from a renewable source of energy. 

8 ‘‘(13) SMALL BUSINESS CONCERN.—The term 

9 ‘small business concern’ has the meaning given the 

10 term in section 3 of the Small Business Act (15 

11 U.S.C. 632). 

12 ‘‘(14) SMALL ELECTRICITY GENERATING FACIL13 ITY.—The term ‘small electricity generating facility’ 

14 means an electric or thermal electricity generating 

15 unit, or combination of units, that— 

16 ‘‘(A) has a nameplate capacity of less than 

17 15 megawatts (or the equivalent in thermal en18 ergy generation, determined in accordance with 

19 a methodology developed by the Administrator); 

20 ‘‘(B) generates electric energy, for sale, 

21 through combustion of fossil fuel; and 

22 ‘‘(C) emits a covered pollutant into the at23 mosphere. 

24 ‘‘(15) WESTERN REGION.—The term ‘western 

25 region’ means the area comprising the States of AriVerDate Aug 31 2005 05:41 Jun 07, 2007 Jkt 059200 PO 00000 Frm 00099 Fmt 6652 Sfmt 6201 E:\BILLS\S1554.IS S1554

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1 zona, California, Colorado, Idaho, Montana, Nevada, 

2 New Mexico, Oregon, Utah, Washington, and Wyo3 ming. 

4 ‘‘SEC. 704. EMISSION LIMITATIONS. 

5 ‘‘(a) IN GENERAL.—Subject to subsections (b) and 

6 (c), the Administrator shall promulgate regulations to en7 sure that, during 2012 and each year thereafter (in the 

8 case of each covered pollutant other than carbon dioxide), 

9 and during 2022 and each year thereafter (in the case 

10 of carbon dioxide), the total annual emissions of covered 

11 pollutants from all electricity generating facilities located 

12 in all States does not exceed— 

13 ‘‘(1) in the case of sulfur dioxide— 

14 ‘‘(A) 275,000 tons in the western region; 

15 or 

16 ‘‘(B) 1,975,000 tons in the nonwestern re17 gion; 

18 ‘‘(2) in the case of nitrogen oxides, 1,510,000 

19 tons; 

20 ‘‘(3) in the case of carbon dioxide, 

21 2,050,000,000 tons; or 

22 ‘‘(4) in the case of mercury, 5 tons. 

23 ‘‘(b) EXCESS EMISSIONS BASED ON UNUSED AL24 LOWANCES.—The regulations promulgated under sub25 section (a) shall authorize emissions of covered pollutants 


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1 in excess of the national emission limitations established 

2 under that subsection for a year to the extent that the 

3 number of tons of the excess emissions is less than or 

4 equal to the number of emission allowances that are— 

5 ‘‘(1) used in the year; but 

6 ‘‘(2) allocated for any previous year under sec7 tion 707. 

8 ‘‘(c) REDUCTIONS.—For 2012 (or 2022, in the case 

9 of carbon dioxide) and each year thereafter, the quantity 

10 of emissions specified for each covered pollutant in sub11 section (a) shall be reduced by the sum of— 

12 ‘‘(1) the number of tons of the covered pollut13 ant that were emitted by small electricity generating 

14 facilities in the second preceding year; and 

15 ‘‘(2) any number of tons of reductions in emis16 sions of the covered pollutant required under section 

17 705(h). 

18 ‘‘SEC. 705. EMISSION ALLOWANCES. 

19 ‘‘(a) CREATION AND ALLOCATION.— 

20 ‘‘(1) IN GENERAL.—For 2012 (or 2022, in the 

21 case of carbon dioxide) and each year thereafter, 

22 subject to paragraph (2), there are created, and the 

23 Administrator shall allocate in accordance with sec24 tion 707, emission allowances as follows: 

25 ‘‘(A) In the case of sulfur dioxide— 


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1 ‘‘(i) 275,000 emission allowances for 

2 each year for use in the western region; 

3 and 

4 ‘‘(ii) 1,975,000 emission allowances 

5 for each year for use in the nonwestern re6 gion. 

7 ‘‘(B) In the case of nitrogen oxides, 

8 1,510,000 emission allowances for each year. 

9 ‘‘(C) In the case of carbon dioxide, 

10 2,050,000,000 emission allowances for each 

11 year. 

12 ‘‘(2) REDUCTIONS.—For 2012 (or 2022, in the 

13 case of carbon dioxide) and each year thereafter, the 

14 number of emission allowances specified for each 

15 covered pollutant in paragraph (1) shall be reduced 

16 by a number equal to the sum of— 

17 ‘‘(A) the number of tons of the covered 

18 pollutant that were emitted by small electricity 

19 generating facilities in the second preceding 

20 year; and 

21 ‘‘(B) any number of tons of reductions in 

22 emissions of the covered pollutant required 

23 under subsection (h). 

24 ‘‘(b) NATURE OF EMISSION ALLOWANCES.— 


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1 ‘‘(1) NOT A PROPERTY RIGHT.—An emission al2 lowance allocated by the Administrator under sub3 section (a) is not a property right. 

4 ‘‘(2) NO LIMIT ON AUTHORITY TO TERMINATE

5 OR LIMIT.—Nothing in this title or any other provi6 sion of law limits the authority of the United States 

7 to terminate or limit an emission allowance. 

8 ‘‘(3) TRACKING AND TRANSFER OF EMISSION

9 ALLOWANCES.— 

10 ‘‘(A) IN GENERAL.—Not later than 1 year 

11 after the date of enactment of this title, the Ad12 ministrator shall promulgate regulations to es13 tablish an emission allowance tracking and 

14 transfer system for emission allowances of sul15 fur dioxide, nitrogen oxides, and carbon dioxide. 

16 ‘‘(B) REQUIREMENTS.—The emission al17 lowance tracking and transfer system estab18 lished under subparagraph (A) shall— 

19 ‘‘(i) incorporate the requirements of 

20 subsections (b) and (d) of section 412 (ex21 cept that written certification by the trans22 feree shall not be necessary to effect a 

23 transfer); and 

24 ‘‘(ii) permit any entity— 


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1 ‘‘(I) to buy, sell, or hold an emis2 sion allowance; and 

3 ‘‘(II) to permanently retire an 

4 unused emission allowance. 

5 ‘‘(C) PROCEEDS OF TRANSFERS.—Pro6 ceeds from the transfer of emission allowances 

7 by any person to which the emission allowances 

8 have been allocated— 

9 ‘‘(i) shall not constitute funds of the 

10 United States; and 

11 ‘‘(ii) shall not be available to meet any 

12 obligations of the United States. 

13 ‘‘(c) IDENTIFICATION AND USE.— 

14 ‘‘(1) IN GENERAL.—Each emission allowance 

15 allocated by the Administrator shall bear a unique 

16 serial number, including— 

17 ‘‘(A) an identifier of the covered pollutant 

18 to which the emission allowance pertains; and 

19 ‘‘(B) the first year for which the allowance 

20 may be used. 

21 ‘‘(2) SULFUR DIOXIDE EMISSION ALLOW22 ANCES.—In the case of sulfur dioxide emission al23 lowances, the Administrator shall ensure that the 

24 emission allowances allocated to electricity gener25 ating facilities in the western region are distinguishVerDate Aug 31 2005 05:41 Jun 07, 2007 Jkt 059200 PO 00000 Frm 00104 Fmt 6652 Sfmt 6201 E:\BILLS\S1554.IS S1554

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1 able from emission allowances allocated to electricity 

2 generating facilities in the nonwestern region. 

3 ‘‘(3) YEAR OF USE.—Each emission allowance 

4 may be used in the year for which the emission al5 lowance is allocated or in any subsequent year. 

6 ‘‘(d) ANNUAL SUBMISSION OF EMISSION ALLOW7 ANCES.— 

8 ‘‘(1) IN GENERAL.—On or before April 1, 2013 

9 (or April 1, 2023, in the case of carbon dioxide), and 

10 April 1 of each year thereafter, the owner or oper11 ator of each electricity generating facility shall sub12 mit to the Administrator 1 emission allowance for 

13 the applicable covered pollutant (other than mer14 cury) for each ton of sulfur dioxide, nitrogen oxides, 

15 or carbon dioxide emitted by the electricity gener16 ating facility during the previous calendar year. 

17 ‘‘(2) SPECIAL RULE FOR OZONE

18 EXCEEDANCES.— 

19 ‘‘(A) IDENTIFICATION OF FACILITIES CON20 TRIBUTING TO NONATTAINMENT.—Not later 

21 than December 31, 2013, and the end of each 

22 3-year period thereafter, each State, consistent 

23 with the obligations of the State under section 

24 110(a)(2)(D), shall identify the electricity gen25 erating facilities in the State and in other 


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1 States that are significantly contributing (as 

2 determined based on guidance issued by the Ad3 ministrator) to nonattainment of the national 

4 ambient air quality standard for ozone in the 

5 State. 

6 ‘‘(B) SUBMISSION OF ADDITIONAL ALLOW7 ANCES.—In 2012 and each year thereafter, on 

8 petition from a State or a person demonstrating 

9 that the control measures in effect at an elec10 tricity generating facility that is identified 

11 under subparagraph (A) as significantly con12 tributing to nonattainment of the national am13 bient air quality standard for ozone in a State 

14 during the previous year are inadequate to pre15 vent the significant contribution described in 

16 subparagraph (A), the Administrator, if the Ad17 ministrator determines that the electricity gen18 erating facility is inadequately controlled for ni19 trogen oxides, may require that the electricity 

20 generating facility submit 3 nitrogen oxide 

21 emission allowances for each ton of nitrogen ox22 ides emitted by the electricity generating facility 

23 during any period of an exceedance of the na24 tional ambient air quality standard for ozone in 

25 the State during the previous year. 


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1 ‘‘(3) REGIONAL LIMITATIONS FOR SULFUR DI2 OXIDE.—The Administrator shall not allow— 

3 ‘‘(A) the use of sulfur dioxide emission al4 lowances allocated for the western region to 

5 meet the obligations under this subsection of 

6 electricity generating facilities in the non7 western region; or 

8 ‘‘(B) the use of sulfur dioxide emission al9 lowances allocated for the nonwestern region to 

10 meet the obligations under this subsection of 

11 electricity generating facilities in the western 

12 region. 

13 ‘‘(e) EMISSION VERIFICATION, MONITORING, AND

14 RECORDKEEPING.— 

15 ‘‘(1) IN GENERAL.—The Administrator shall 

16 ensure that Federal regulations, in combination with 

17 any applicable State regulations, are adequate to 

18 verify, monitor, and document emissions of covered 

19 pollutants from electricity generating facilities. 

20 ‘‘(2) INVENTORY OF EMISSIONS FROM SMALL

21 ELECTRICITY GENERATING FACILITIES.—On or be22 fore July 1, 2008, the Administrator, in cooperation 

23 with State agencies, shall complete, and on an an24 nual basis update, a comprehensive inventory of 

25 emissions of sulfur dioxide, nitrogen oxides, carbon 


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1 dioxide, and particulate matter from small electricity 

2 generating facilities. 

3 ‘‘(3) MONITORING INFORMATION.— 

4 ‘‘(A) IN GENERAL.—Not later than 180 

5 days after the date of enactment of this title, 

6 the Administrator shall promulgate regulations 

7 to require each electricity generating facility to 

8 submit to the Administrator— 

9 ‘‘(i) not later than April 1 of each 

10 year, verifiable information on covered pol11 lutants emitted by the electricity gener12 ating facility in the previous year, ex13 pressed in— 

14 ‘‘(I) tons of covered pollutants; 

15 and 

16 ‘‘(II) tons of covered pollutants 

17 per megawatt hour of energy (or the 

18 equivalent thermal energy) generated; 

19 and 

20 ‘‘(ii) as part of the first submission 

21 under clause (i), verifiable information on 

22 covered pollutants emitted by the elec23 tricity generating facility in 2002, 2003, 

24 and 2004, if the electricity generating faVerDate Aug 31 2005 05:41 Jun 07, 2007 Jkt 059200 PO 00000 Frm 00108 Fmt 6652 Sfmt 6201 E:\BILLS\S1554.IS S1554

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1 cility was required to report that informa2 tion in those years. 

3 ‘‘(B) SOURCE OF INFORMATION.—Infor4 mation submitted under subparagraph (A) shall 

5 be obtained using a continuous emission moni6 toring system (as defined in section 402). 

7 ‘‘(C) AVAILABILITY TO THE PUBLIC.—The 

8 information described in subparagraph (A) shall 

9 be made available to the public— 

10 ‘‘(i) in the case of the first year in 

11 which the information is required to be 

12 submitted under that subparagraph, not 

13 later than 18 months after the date of en14 actment of this title; and 

15 ‘‘(ii) in the case of each year there16 after, not later than April 1 of the year. 

17 ‘‘(4) AMBIENT AIR QUALITY MONITORING FOR

18 SULFUR DIOXIDE AND HAZARDOUS AIR POLLUT19 ANTS.— 

20 ‘‘(A) IN GENERAL.—Beginning January 1, 

21 2008, each coal-fired electricity generating facil22 ity with an aggregate generating capacity of 50 

23 megawatts or more shall, in accordance with 

24 guidelines issued by the Administrator, com25 mence ambient air quality monitoring within a 


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1 30-mile radius of the coal-fired electricity gen2 erating facility for the purpose of measuring 

3 maximum concentrations of sulfur dioxide and 

4 hazardous air pollutants emitted by the coal5 fired electricity generating facility. 

6 ‘‘(B) LOCATION OF MONITORING

7 POINTS.—Monitoring under subparagraph (A) 

8 shall include monitoring at not fewer than 2 

9 points— 

10 ‘‘(i) that are at ground level and with11 in 3 miles of the coal-fired electricity gen12 erating facility; 

13 ‘‘(ii) at which the concentration of 

14 pollutants being monitored is expected to 

15 be the greatest; and 

16 ‘‘(iii) at which the monitoring shall be 

17 the most frequent. 

18 ‘‘(C) FREQUENCY OF MONITORING OF SUL19 FUR DIOXIDE.—Monitoring of sulfur dioxide 

20 under subparagraph (A) shall be carried out on 

21 a continuous basis and averaged over 5-minute 

22 periods. 

23 ‘‘(D) AVAILABILITY TO THE PUBLIC.—The 

24 results of the monitoring under subparagraph 

25 (A) shall be made available to the public. 


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1 ‘‘(f) EXCESS EMISSION PENALTY.— 

2 ‘‘(1) IN GENERAL.—Subject to paragraph (2), 

3 section 411 shall be applicable to an owner or oper4 ator of an electricity generating facility. 

5 ‘‘(2) CALCULATION OF PENALTY.— 

6 ‘‘(A) IN GENERAL.—Except as provided in 

7 subparagraph (B), the penalty for failure to 

8 submit emission allowances for covered pollut9 ants as required under subsection (d) shall be 

10 equal to 3 times the product obtained by multi11 plying— 

12 ‘‘(i) as applicable— 

13 ‘‘(I) the number of tons emitted 

14 in excess of the emission limitation re15 quirement applicable to the electricity 

16 generating facility; or 

17 ‘‘(II) the number of emission al18 lowances that the owner or operator 

19 failed to submit; and 

20 ‘‘(ii) the average annual market price 

21 of emission allowances (as determined by 

22 the Administrator). 

23 ‘‘(B) MERCURY.—In the case of mercury, 

24 the penalty shall be equal to 3 times the prod25 uct obtained by multiplying— 


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1 ‘‘(i) the number of grams emitted in 

2 excess of the emission limitation require3 ment for mercury applicable to the elec4 tricity generating facility; and 

5 ‘‘(ii) the average cost of mercury con6 trols at electricity generating units that 

7 have a nameplate capacity of 15 

8 megawatts or more in all States (as deter9 mined by the Administrator). 

10 ‘‘(g) SIGNIFICANT ADVERSE LOCAL IMPACTS.— 

11 ‘‘(1) IN GENERAL.—If the Administrator deter12 mines that emissions of an electricity generating fa13 cility may reasonably be anticipated to cause or con14 tribute to a significant adverse impact on an area 

15 (including endangerment of public health, contribu16 tion to acid deposition in a sensitive receptor area, 

17 and other degradation of the environment), the Ad18 ministrator shall limit the emissions of the electricity 

19 generating facility as necessary to avoid that impact. 

20 ‘‘(2) VIOLATION.—Notwithstanding the avail21 ability of emission allowances, it shall be a violation 

22 of this Act for any electricity generating facility to 

23 exceed any limitation on emissions established under 

24 paragraph (1). 

25 ‘‘(h) ADDITIONAL REDUCTIONS.— 


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1 ‘‘(1) PROTECTION OF PUBLIC HEALTH OR WEL2 FARE OR THE ENVIRONMENT.—If the Administrator 

3 determines that the emission levels necessary to 

4 achieve the national emission limitations established 

5 under section 704 are not reasonably anticipated to 

6 protect public health or welfare or the environment 

7 (including protection of children, pregnant women, 

8 minority or low-income communities, and other sen9 sitive populations), the Administrator may require 

10 reductions in emissions from electricity generating 

11 facilities in addition to the reductions required under 

12 the other provisions of this title. 

13 ‘‘(2) EMISSION ALLOWANCE TRADING.— 

14 ‘‘(A) STUDIES.— 

15 ‘‘(i) IN GENERAL.—In 2015 and at 

16 the end of each 3-year period thereafter, 

17 the Administrator shall complete a study 

18 of the impacts of the emission allowance 

19 trading authorized under this title. 

20 ‘‘(ii) REQUIRED ASSESSMENT.—The 

21 study shall include an assessment of ambi22 ent air quality in areas surrounding elec23 tricity generating facilities that participate 

24 in emission allowance trading, including a 

25 comparison between— 


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1 ‘‘(I) the ambient air quality in 

2 those areas; and 

3 ‘‘(II) the national average ambi4 ent air quality. 

5 ‘‘(B) LIMITATION ON EMISSIONS.—If the 

6 Administrator determines, based on the results 

7 of a study under subparagraph (A), that ad8 verse local impacts result from emission allow9 ance trading, the Administrator may require re10 ductions in emissions from electricity gener11 ating facilities in addition to the reductions re12 quired under the other provisions of this title. 

13 ‘‘(i) USE OF CERTAIN OTHER EMISSION ALLOW14 ANCES.— 

15 ‘‘(1) IN GENERAL.—Subject to paragraph (2), 

16 emission allowances or other emission trading in17 struments created under title I or IV for sulfur diox18 ide or nitrogen oxides shall not be valid for submis19 sion under subsection (d). 

20 ‘‘(2) EMISSION ALLOWANCES PLACED IN RE21 SERVE.— 

22 ‘‘(A) IN GENERAL.—Except as provided in 

23 subparagraph (B), an emission allowance de24 scribed in paragraph (1) that was placed in re25 serve under section 404(a)(2) or 405 or 


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1 through regulations implementing controls on 

2 nitrogen oxides, because an affected unit emit3 ted fewer tons of sulfur dioxide or nitrogen ox4 ides than were permitted under an emission 

5 limitation imposed under title I or IV before the 

6 date of enactment of this title, shall be considered to be equivalent to 1 7 ⁄4 of an emission al8 lowance created by subsection (a) for sulfur di9 oxide or nitrogen oxides, respectively. 

10 ‘‘(B) EMISSION ALLOWANCES RESULTING

11 FROM ACHIEVEMENT OF NEW SOURCE PER12 FORMANCE STANDARDS.—If an emission allow13 ance described in subparagraph (A) was created 

14 and placed in reserve during the period of 2001 

15 through 2009 by the owner or operator of an 

16 electricity generating facility through the appli17 cation of pollution control technology that re18 sulted in the achievement and maintenance by 

19 the electricity generating facility of the applica20 ble standards of performance required of new 

21 sources under section 111, the emission allow22 ance shall be valid for submission under sub23 section (d). 


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1 ‘‘SEC. 706. PERMITTING AND TRADING OF EMISSION AL2 LOWANCES. 

3 ‘‘(a) IN GENERAL.—Not later than 1 year after the 

4 date of enactment of this title, the Administrator shall 

5 promulgate regulations to establish a permitting and emis6 sion allowance trading compliance program to implement 

7 the limitations on emissions of covered pollutants from 

8 electricity generating facilities established under section 

9 704. 

10 ‘‘(b) EMISSION ALLOWANCE TRADING WITH FACILI11 TIES OTHER THAN ELECTRICITY GENERATING FACILI12 TIES.— 

13 ‘‘(1) IN GENERAL.—Subject to paragraph (2) 

14 and section 705(i), the regulations promulgated to 

15 establish the program under subsection (a) shall pro16 hibit use of emission allowances generated from 

17 other emission control programs for the purpose of 

18 demonstrating compliance with the limitations on 

19 emissions of covered pollutants from electricity gen20 erating facilities established under section 704. 

21 ‘‘(2) EXCEPTION FOR CERTAIN CARBON DIOX22 IDE EMISSION CONTROL PROGRAMS.—The prohibi23 tion described in paragraph (1) shall not apply in 

24 the case of carbon dioxide emission allowances gen25 erated from an emission control program that limits 


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1 total carbon dioxide emissions from the entirety of 

2 any industrial sector. 

3 ‘‘(c) METHODOLOGY.—The program established 

4 under subsection (a) shall clearly identify the methodology 

5 for the allocation of emission allowances, including stand6 ards for measuring annual electricity generation and en7 ergy efficiency as the standards relate to emissions. 

8 ‘‘SEC. 707. EMISSION ALLOWANCE ALLOCATION. 

9 ‘‘(a) ALLOCATION TO ELECTRICITY CONSUMERS.— 

10 ‘‘(1) IN GENERAL.—For 2012 (or 2022, in the 

11 case of carbon dioxide) and each year thereafter, 

12 after making allocations of emission allowances 

13 under subsections (b) through (g), the Administrator 

14 shall allocate the remaining emission allowances cre15 ated by section 705(a) for the year for each covered 

16 pollutant other than mercury to households served 

17 by electricity. 

18 ‘‘(2) ALLOCATION AMONG HOUSEHOLDS.—The 

19 allocation to each household shall reflect— 

20 ‘‘(A) the number of persons residing in the 

21 household; and 

22 ‘‘(B) the ratio that— 

23 ‘‘(i) the quantity of the residential 

24 electricity consumption of the State in 

25 which the household is located; bears to 


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1 ‘‘(ii) the quantity of the residential 

2 electricity consumption of all States. 

3 ‘‘(3) REGULATIONS.—Not later than 1 year 

4 after the date of enactment of this title, the Admin5 istrator shall promulgate regulations making appro6 priate arrangements for the allocation of emission 

7 allowances to households under this subsection, in8 cluding as necessary the appointment of 1 or more 

9 trustees— 

10 ‘‘(A) to receive the emission allowances for 

11 the benefit of the households; 

12 ‘‘(B) to obtain fair market value for the 

13 emission allowances; and 

14 ‘‘(C) to distribute the proceeds to the bene15 ficiaries. 

16 ‘‘(b) ALLOCATION FOR TRANSITION ASSISTANCE.— 

17 ‘‘(1) IN GENERAL.—For 2012 and each year 

18 thereafter through 2021 (or, for 2022 and each year 

19 thereafter through 2031, in the case of carbon diox20 ide), the Administrator shall allocate the percentage 

21 specified in paragraph (2) of the emission allowances 

22 created by section 705(a) for the year for each cov23 ered pollutant other than mercury in the following 

24 manner: 


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1 ‘‘(A) 80 percent shall be allocated to pro2 vide transition assistance to— 

3 ‘‘(i) dislocated workers (as defined in 

4 section 101 of the Workforce Investment 

5 Act of 1998 (29 U.S.C. 2801)) whose em6 ployment has been terminated or who have 

7 been laid off as a result of the emission re8 ductions required by this title; 

9 ‘‘(ii) communities that have experi10 enced disproportionate adverse economic 

11 impacts as a result of the emission reduc12 tions required by this title; and 

13 ‘‘(iii) small business concerns that 

14 have experienced disproportionate adverse 

15 economic impacts as a result of high elec16 tricity prices. 

17 ‘‘(B) 20 percent shall be allocated to pro18 ducers of electricity intensive products in a 

19 number equal to the product obtained by multi20 plying— 

21 ‘‘(i) the ratio that— 

22 ‘‘(I) the quantity of each elec23 tricity intensive product produced by 

24 each producer in the previous year; 

25 bears to 


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1 ‘‘(II) the quantity of the elec2 tricity intensive product produced by 

3 all producers in the previous year; 

4 ‘‘(ii) the average quantity of electricity 

5 used in producing the electricity intensive 

6 product by producers that use the most en7 ergy efficient process for producing the 

8 electricity intensive product; and 

9 ‘‘(iii) with respect to the previous 

10 year, the national average quantity (ex11 pressed in tons) of emissions of each such 

12 pollutant per megawatt hour of electricity 

13 generated by electricity generating facilities 

14 in all States. 

15 ‘‘(2) SPECIFIED PERCENTAGES.—The percent16 ages referred to in paragraph (1) are— 

17 ‘‘(A) in the case of 2012 (or 2022, with re18 spect to carbon dioxide), 6 percent; 

19 ‘‘(B) in the case of 2013 (or 2023, with re20 spect to carbon dioxide), 5.5 percent; 

21 ‘‘(C) in the case of 2014 (or 2024, with re22 spect to carbon dioxide), 5 percent; 

23 ‘‘(D) in the case of 2015 (or 2025, with 

24 respect to carbon dioxide), 4.5 percent; 


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1 ‘‘(E) in the case of 2016 (or 2026, with re2 spect to carbon dioxide), 4 percent; 

3 ‘‘(F) in the case of 2017 (or 2027, with re4 spect to carbon dioxide), 3.5 percent; 

5 ‘‘(G) in the case of 2018 (or 2028, with re6 spect to carbon dioxide), 3 percent; 

7 ‘‘(H) in the case of 2019 (or 2029, with 

8 respect to carbon dioxide), 2.5 percent; 

9 ‘‘(I) in the case of 2020 (or 2030, with re10 spect to carbon dioxide), 2 percent; and 

11 ‘‘(J) in the case of 2021 (or 2031, with re12 spect to carbon dioxide), 1.5 percent. 

13 ‘‘(3) REGULATIONS FOR ALLOCATION FOR

14 TRANSITION ASSISTANCE TO DISLOCATED WORKERS

15 AND COMMUNITIES.— 

16 ‘‘(A) IN GENERAL.—Not later than 1 year 

17 after the date of enactment of this title, the Ad18 ministrator shall promulgate regulations mak19 ing appropriate arrangements for the distribu20 tion of emission allowances under paragraph 

21 (1)(A), including as necessary the appointment 

22 of 1 or more trustees— 

23 ‘‘(i) to receive the emission allowances 

24 allocated under paragraph (1)(A) for the 


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1 benefit of the dislocated workers and com2 munities; 

3 ‘‘(ii) to obtain fair market value for 

4 the emission allowances; and 

5 ‘‘(iii) to apply the proceeds to pro6 viding transition assistance to the dis7 located workers and communities. 

8 ‘‘(B) FORM OF TRANSITION ASSISTANCE.— 

9 Transition assistance under paragraph (1)(A) 

10 may take the form of— 

11 ‘‘(i) grants to employers, employer as12 sociations, and representatives of employ13 ees— 

14 ‘‘(I) to provide training, adjust15 ment assistance, and employment 

16 services to dislocated workers; and 

17 ‘‘(II) to make income-mainte18 nance and needs-related payments to 

19 dislocated workers; and 

20 ‘‘(ii) grants to States and local gov21 ernments to assist communities in attract22 ing new employers or providing essential 

23 local government services. 

24 ‘‘(c) ALLOCATION TO RENEWABLE ELECTRICITY

25 GENERATING UNITS, EFFICIENCY PROJECTS, AND


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1 CLEANER ENERGY SOURCES.—For 2012 (or 2022, in the 

2 case of carbon dioxide) and each year thereafter, the Ad3 ministrator shall allocate not more than 20 percent of the 

4 emission allowances created by section 705(a) for the year 

5 for each covered pollutant other than mercury— 

6 ‘‘(1) to owners and operators of renewable elec7 tricity generating units, in a number equal to the 

8 product obtained by multiplying— 

9 ‘‘(A) the number of megawatt hours of 

10 electricity generated in the previous year by 

11 each renewable electricity generating unit; and 

12 ‘‘(B) with respect to the previous year, the 

13 national average quantity (expressed in tons) of 

14 emissions of each such pollutant per megawatt 

15 hour of electricity generated by electricity gen16 erating facilities in all States; 

17 ‘‘(2) to owners and operators of energy efficient 

18 buildings, producers of energy efficient products, 

19 and entities that carry out energy efficient projects, 

20 in a number equal to the product obtained by multi21 plying— 

22 ‘‘(A) the number of megawatt hours of 

23 electricity or cubic feet of natural gas saved in 

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1 ficient building, energy efficient product, or en2 ergy efficiency project; and 

3 ‘‘(B) with respect to the previous year, the 

4 national average quantity (expressed in tons) of 

5 emissions of each such pollutant per, as appro6 priate— 

7 ‘‘(i) megawatt hour of electricity gen8 erated by electricity generating facilities in 

9 all States; or 

10 ‘‘(ii) cubic foot of natural gas burned 

11 for a purpose other than generation of 

12 electricity in all States; 

13 ‘‘(3) to owners and operators of new clean fossil 

14 fuel-fired electricity generating units, in a number 

15 equal to the product obtained by multiplying— 

16 ‘‘(A) the number of megawatt hours of 

17 electricity generated in the previous year by 

18 each new clean fossil fuel-fired electricity gener19 ating unit; and 

‘‘(B) with respect to the previous year, 1 20 ⁄2

21 of the national average quantity (expressed in 

22 tons) of emissions of each such pollutant per 

23 megawatt hour of electricity generated by elec24 tricity generating facilities in all States; and 


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1 ‘‘(4) to owners and operators of combined heat 

2 and power electricity generating facilities, in a num3 ber equal to the product obtained by multiplying— 

4 ‘‘(A) the number of British thermal units 

5 of thermal energy produced and put to produc6 tive use in the previous year by each combined 

7 heat and power electricity generating facility; 

8 and 

9 ‘‘(B) with respect to the previous year, the 

10 national average quantity (expressed in tons) of 

11 emissions of each such pollutant per British 

12 thermal unit of thermal energy generated by 

13 electricity generating facilities in all States. 

14 ‘‘(d) TRANSITION ASSISTANCE TO ELECTRICITY

15 GENERATING FACILITIES.— 

16 ‘‘(1) IN GENERAL.—For 2012 and each year 

17 thereafter through 2021 (or for 2022 and each year 

18 thereafter through 2031, in the case of carbon diox19 ide), the Administrator shall allocate the percentage 

20 specified in paragraph (2) of the emission allowances 

21 created by section 705(a) for the year for each cov22 ered pollutant other than mercury to the owners or 

23 operators of electricity generating facilities in the 

24 ratio that— 


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1 ‘‘(A) the quantity of electricity generated 

2 by each electricity generating facility in 2003; 

3 bears to 

4 ‘‘(B) the quantity of electricity generated 

5 by all electricity generating facilities in 2003. 

6 ‘‘(2) SPECIFIED PERCENTAGES.—The percent7 ages referred to in paragraph (1) are— 

8 ‘‘(A) in the case of 2012 (or 2022, with re9 spect to carbon dioxide), 10 percent; 

10 ‘‘(B) in the case of 2013 (or 2023, with re11 spect to carbon dioxide), 9 percent; 

12 ‘‘(C) in the case of 2014 (or 2024, with re13 spect to carbon dioxide), 8 percent; 

14 ‘‘(D) in the case of 2015 (or 2025, with 

15 respect to carbon dioxide), 7 percent; 

16 ‘‘(E) in the case of 2016 (or 2026, with re17 spect to carbon dioxide), 6 percent; 

18 ‘‘(F) in the case of 2017 (or 2027, with re19 spect to carbon dioxide), 5 percent; 

20 ‘‘(G) in the case of 2018 (or 2028, with re21 spect to carbon dioxide), 4 percent; 

22 ‘‘(H) in the case of 2019 (or 2029, with 

23 respect to carbon dioxide), 3 percent; 

24 ‘‘(I) in the case of 2020 (or 2030, with re25 spect to carbon dioxide), 2 percent; and 


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1 ‘‘(J) in the case of 2021 (or 2031, with re2 spect to carbon dioxide), 1 percent. 

3 ‘‘(e) ALLOCATION TO ENCOURAGE BIOLOGICAL CAR4 BON SEQUESTRATION.— 

5 ‘‘(1) IN GENERAL.—For 2022 and each year 

6 thereafter, the Administrator shall allocate, on a 

7 competitive basis and in accordance with paragraphs 

8 (2) and (3), not more than 0.075 percent of the car9 bon dioxide emission allowances created by section 

10 705(a) for the year for the purposes of— 

11 ‘‘(A) carrying out projects to reduce net 

12 carbon dioxide emissions through biological car13 bon dioxide sequestration in the United States 

14 that— 

15 ‘‘(i) result in benefits to watersheds 

16 and fish and wildlife habitats; and 

17 ‘‘(ii) are conducted in accordance with 

18 project reporting, monitoring, and 

19 verification guidelines based on— 

20 ‘‘(I) measurement of increases in 

21 carbon storage in excess of the carbon 

22 storage that would have occurred in 

23 the absence of such a project; 

24 ‘‘(II) comprehensive carbon ac25 counting that— 


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1 ‘‘(aa) reflects net increases 

2 in carbon reservoirs; and 

3 ‘‘(bb) takes into account any 

4 carbon emissions resulting from 

5 disturbance of carbon reservoirs 

6 in existence as of the date of 

7 commencement of the project; 

8 ‘‘(III) adjustments to account 

9 for— 

10 ‘‘(aa) emissions of carbon 

11 that may result at other locations 

12 as a result of the impact of the 

13 project on timber supplies; or 

14 ‘‘(bb) potential displacement 

15 of carbon emissions to other land 

16 owned by the entity that carries 

17 out the project; and 

18 ‘‘(IV) adjustments to reflect the 

19 expected carbon storage over various 

20 time periods, taking into account the 

21 likely duration of the storage of the 

22 carbon stored in a carbon reservoir; 

23 and 

24 ‘‘(B) conducting accurate inventories of 

25 carbon sinks. 


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1 ‘‘(2) CARBON INVENTORY.—The Administrator, 

2 in consultation with the Secretary of Agriculture, 

shall allocate not more than 1 3 ⁄3 of the emission al4 lowances described in paragraph (1) to not more 

5 than 5 State or multistate land or forest manage6 ment agencies or nonprofit entities that— 

7 ‘‘(A) have a primary goal of land conserva8 tion; and 

9 ‘‘(B) submit to the Administrator pro10 posals for projects— 

11 ‘‘(i) to demonstrate and assess the po12 tential for the development and use of car13 bon inventorying and accounting systems; 

14 ‘‘(ii) to improve the standards relating 

15 to, and the identification of, incremental 

16 carbon sequestration in forests, agricul17 tural soil, grassland, or rangeland; or 

18 ‘‘(iii) to assist in development of a na19 tional biological carbon storage baseline or 

20 inventory. 

21 ‘‘(3) REVOLVING LOAN PROGRAM.—The Administrator shall allocate not more than 2 22 ⁄3 of the emis23 sion allowances described in paragraph (1) to States, 

24 based on proposals submitted by States to conduct 

25 programs under which each State shall— 


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1 ‘‘(A) use the value of the emission allow2 ances to establish a State revolving loan fund to 

3 provide loans to owners of nonindustrial private 

4 forest land in the State to carry out forest and 

5 forest soil carbon sequestration activities that 

6 will achieve the purposes specified in paragraph 

7 (2)(B); and 

8 ‘‘(B) for 2013 and each year thereafter, 

9 contribute to the program of the State an 

10 amount equal to 25 percent of the value of the 

11 emission allowances received under this para12 graph for the year in cash, in-kind services, or 

13 technical assistance. 

14 ‘‘(4) USE OF EMISSION ALLOWANCES.—An enti15 ty that receives an allocation of emission allowances 

16 under this subsection may use the proceeds from the 

17 sale or other transfer of the emission allowances only 

18 for the purpose of carrying out activities described 

19 in this subsection. 

20 ‘‘(5) RECOMMENDATIONS CONCERNING CARBON

21 DIOXIDE EMISSION ALLOWANCES.— 

22 ‘‘(A) IN GENERAL.—Not later than 4 years 

23 after the date of enactment of this title, the Ad24 ministrator, in consultation with the Secretary 

25 of Agriculture, shall submit to Congress recVerDate Aug 31 2005 05:41 Jun 07, 2007 Jkt 059200 PO 00000 Frm 00130 Fmt 6652 Sfmt 6201 E:\BILLS\S1554.IS S1554

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1 ommendations for establishing a system under 

2 which entities that receive grants or loans 

3 under this section may be allocated carbon diox4 ide emission allowances created by section 

5 705(a) for incremental carbon sequestration in 

6 forests, agricultural soils, rangeland, or grass7 land. 

8 ‘‘(B) GUIDELINES.—The recommendations 

9 shall include recommendations for development, 

10 reporting, monitoring, and verification guide11 lines for quantifying net carbon sequestration 

12 from land use projects that address the ele13 ments specified in paragraph (1)(A). 

14 ‘‘(f) ALLOCATION TO ENCOURAGE GEOLOGICAL CAR15 BON SEQUESTRATION.— 

16 ‘‘(1) IN GENERAL.—For 2022 and each year 

17 thereafter, the Administrator shall allocate not more 

18 than 1.5 percent of the carbon dioxide emission al19 lowances created by section 705(a) to entities that 

20 carry out geological sequestration of carbon dioxide 

21 produced by an electric generating facility in accord22 ance with requirements established by the Adminis23 trator— 

24 ‘‘(A) to ensure the permanence of the se25 questration; and 


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1 ‘‘(B) to ensure that the sequestration will 

2 not cause or contribute to significant adverse 

3 effects on the environment. 

4 ‘‘(2) NUMBER OF EMISSION ALLOWANCES.— 

5 For 2022 and each year thereafter, the Adminis6 trator shall allocate to each entity described in para7 graph (1) a number of emission allowances that is 

8 equal to the number of tons of carbon dioxide pro9 duced by the electric generating facility during the 

10 previous year that is geologically sequestered as de11 scribed in paragraph (1). 

12 ‘‘(3) USE OF EMISSION ALLOWANCES.—An enti13 ty that receives an allocation of emission allowances 

14 under this subsection may use the proceeds from the 

15 sale or other transfer of the emission allowances only 

16 for the purpose of carrying out activities described 

17 in this subsection. 

18 ‘‘(g) ALLOCATION FOR FISH AND WILDLIFE HABI19 TAT.— 

20 ‘‘(1) IN GENERAL.—For 2022 and each cal21 endar year thereafter, the Administrator shall allo22 cate at least 2 percent of the carbon dioxide emis23 sion allowances created by section 705(a) for the 

24 year for the purpose of mitigating the impacts of cliVerDate Aug 31 2005 05:41 Jun 07, 2007 Jkt 059200 PO 00000 Frm 00132 Fmt 6652 Sfmt 6201 E:\BILLS\S1554.IS S1554

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1 mate change on fish and wildlife habitat in accord2 ance with this subsection. 

3 ‘‘(2) WILDLIFE RESTORATION FUND.— 

4 ‘‘(A) IN GENERAL.—For each calendar 

5 year, the Administrator shall transfer an 

6 amount equal to not less than 70 percent of the 

7 value of emission allowances allocated under 

8 paragraph (1) to the Federal aid to wildlife res9 toration fund established under section 3(a)(1) 

10 of the Pittman-Robertson Wildlife Restoration 

11 Act (16 U.S.C. 669b(a)(1))— 

12 ‘‘(i) to carry out climate change im13 pact mitigation actions pursuant to com14 prehensive wildlife conservation strategies; 

15 and 

16 ‘‘(ii) to provide relevant information, 

17 training, monitoring, and other assistance 

18 to develop climate change impact mitiga19 tion and adaptation plans and integrate 

20 the plans into State comprehensive wildlife 

21 conservation strategies. 

22 ‘‘(B) AVAILABILITY.—Amounts transferred 

23 to the Federal aid to wildlife restoration fund 

24 under this paragraph shall— 


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1 ‘‘(i) be available, without further ap2 propriation, for obligation and expenditure; 

3 and 

4 ‘‘(ii) remain available until expended. 

5 ‘‘(3) PROTECTION OF NATURAL RESOURCES.— 

6 ‘‘(A) IN GENERAL.—For each calendar 

7 year, the Administrator, in consultation with 

8 the Secretary of Agriculture, the Secretary of 

9 Commerce, the Chief of Engineers, and State 

10 and national wildlife conservation organizations, 

11 shall transfer an amount equal to not more 

12 than 30 percent of the value of emission allow13 ances allocated under paragraph (1) to the Sec14 retary of the Interior for use in carrying out 

15 Federal and State programs and projects— 

16 ‘‘(i) to protect natural communities 

17 that are most vulnerable to climate change; 

18 ‘‘(ii) to restore and protect natural re19 sources that directly guard against dam20 ages from climate change events; and 

21 ‘‘(iii) to restore and protect ecosystem 

22 services that are most vulnerable to climate 

23 change. 


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1 ‘‘(B) ADMINISTRATION.—Amounts trans2 ferred to the Secretary of the Interior under 

3 this paragraph shall— 

4 ‘‘(i) be available, without further ap5 propriation, for obligation and expenditure; 

6 ‘‘(ii) remain available until expended; 

7 ‘‘(iii)(I) be obligated not later than 2 

8 years after the date of transfer; or 

9 ‘‘(II) if the amounts are not obligated 

10 in accordance with subclause (I), be trans11 ferred to the Federal aid to wildlife res12 toration fund for use in accordance with 

13 paragraph (2); and 

14 ‘‘(iv) supplement, and not supplant, 

15 the amount of Federal, State, and local 

16 funds otherwise expended to carry out pro17 grams and projects described in subpara18 graph (A). 

19 ‘‘(C) PROGRAMS AND PROJECTS.—Pro20 grams and projects for which funds may be 

21 used under this paragraph include— 

22 ‘‘(i) Federal programs and projects— 

23 ‘‘(I) to identify Federal land and 

24 water at greatest risk of being dam25 aged or depleted by climate change; 


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1 ‘‘(II) to monitor Federal land 

2 and water to allow for early detection 

3 of impacts; 

4 ‘‘(III) to develop adaptation 

5 strategies to minimize the damage; 

6 and 

7 ‘‘(IV) to restore and protect Fed8 eral land and water at the greatest 

9 risk of being damaged or depleted by 

10 climate change; 

11 ‘‘(ii) Federal programs and projects to 

12 identify climate change risks and develop 

13 adaptation strategies for natural grassland, 

14 wetlands, migratory corridors, and other 

15 habitats vulnerable to climate change on 

16 private land enrolled in— 

17 ‘‘(I) the wetlands reserve pro18 gram established under subchapter C 

19 of chapter 1 of subtitle D of title XII 

20 of the Food Security Act of 1985 (16 

21 U.S.C. 3837 et seq.); 

22 ‘‘(II) the grassland reserve pro23 gram established under subchapter C 

24 of chapter 2 of subtitle D of title XII 


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1 of that Act (16 U.S.C. 3838n et seq.); 

2 and 

3 ‘‘(III) the wildlife habitat incen4 tive program established under section 

5 1240N of that Act (16 U.S.C. 

6 3839bb–1); 

7 ‘‘(iii) programs and projects under the 

8 North American Wetlands Conservation 

9 Act (16 U.S.C. 4401 et seq.), the North 

10 American Bird Conservation Initiative, and 

11 the Neotropical Migratory Bird Conserva12 tion Act (16 U.S.C. 6101 et seq.) to pro13 tect habitat for migratory birds that are 

14 vulnerable to climate change impacts; 

15 ‘‘(iv) programs and projects— 

16 ‘‘(I) to identify coastal and ma17 rine resources (such as coastal wet18 lands, coral reefs, submerged aquatic 

19 vegetation, shellfish beds, and other 

20 coastal or marine ecosystems) at the 

21 greatest risk of being damaged by cli22 mate change; 

23 ‘‘(II) to monitor those resources 

24 to allow for early detection of impacts; 


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1 ‘‘(III) to develop adaptation 

2 strategies; 

3 ‘‘(IV) to protect and restore 

4 those resources; and 

5 ‘‘(V) to integrate climate change 

6 adaptation requirements into State 

7 plans developed under the coastal 

8 zone management program estab9 lished under the Coastal Zone Man10 agement Act of 1972 (16 U.S.C. 1451 

11 et seq.), the national estuary program 

12 established under section 320 of the 

13 Federal Water Pollution Control Act 

14 (33 U.S.C. 1330), the Coastal and 

15 Estuarine Land Conservation Pro16 gram established under the fourth 

17 proviso of the matter under the head18 ing ‘PROCUREMENT, ACQUISITION, 

19 AND CONSTRUCTION (INCLUDING

20 TRANSFERS OF FUNDS’) of title II of 

21 the Departments of Commerce, Jus22 tice, and State, the Judiciary, and Re23 lated Agencies Appropriations Act, 

24 2002 (16 U.S.C. 1456d), or other 

25 comparable State programs; 


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1 ‘‘(v) programs and projects to con2 serve habitat for endangered species and 

3 species of conservation concern that are 

4 vulnerable to the impact of climate change; 

5 ‘‘(vi) programs and projects under the 

6 Forest Legacy Program established under 

7 section 7 of the Cooperative Forestry As8 sistance Act (16 U.S.C. 2103c), to support 

9 State efforts to protect environmentally 

10 sensitive forest land through conservation 

11 easements to provide refuges for wildlife; 

12 ‘‘(vii) other Federal or State pro13 grams and projects identified by the heads 

14 of agencies described in subparagraph (A) 

15 as high priorities— 

16 ‘‘(I) to protect natural commu17 nities that are most vulnerable to cli18 mate change; 

19 ‘‘(II) to restore and protect nat20 ural resources that directly guard 

21 against damages from climate change 

22 events; and 

23 ‘‘(III) to restore and protect eco24 system services that are most vulner25 able to climate change; 


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1 ‘‘(viii) to address climate change in 

2 Federal land use planning and plan imple3 mentation and to integrate climate change 

4 adaptation strategies into— 

5 ‘‘(I) comprehensive conservation 

6 plans prepared under section 4(e) of 

7 the National Wildlife Refuge System 

8 Administration Act of 1966 (16 

9 U.S.C. 668dd(e)); 

10 ‘‘(II) general management plans 

11 for units of the National Park Sys12 tem; 

13 ‘‘(III) resource management 

14 plans of the Bureau of Land Manage15 ment; and 

16 ‘‘(IV) land and resource manage17 ment plans under the Forest and 

18 Rangeland Renewable Resources 

19 Planning Act of 1974 (16 U.S.C. 

20 1600 et seq.) and the National Forest 

21 Management Act of 1976 (16 U.S.C. 

22 1600 et seq.); and 

23 ‘‘(ix) projects to promote sharing of 

24 information on climate change wildlife im25 pacts and mitigation strategies across 


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1 agencies, including funding efforts to 

2 strengthen and restore habitat that im3 proves the ability of fish and wildlife to 

4 adapt successfully to climate change 

5 through the Wildlife Conservation and Res6 toration Account established by section 

7 3(a)(2) of the Pittman-Robertson Wildlife 

8 Restoration Act (16 U.S.C. 669b(a)(2)). 

9 ‘‘SEC. 708. MERCURY EMISSION LIMITATIONS. 

10 ‘‘(a) IN GENERAL.— 

11 ‘‘(1) REGULATIONS.— 

12 ‘‘(A) IN GENERAL.—Not later than 1 year 

13 after the date of enactment of this title, the Ad14 ministrator shall promulgate regulations to es15 tablish emission limitations for mercury emis16 sions by coal-fired electricity generating facili17 ties. 

18 ‘‘(B) NO EXCEEDANCE OF NATIONAL LIMI19 TATION.—The regulations shall ensure that the 

20 national limitation for mercury emissions from 

21 each coal-fired electricity generating facility es22 tablished under section 704(a)(4) is not exceed23 ed. 

24 ‘‘(C) EMISSION LIMITATIONS FOR 2011 AND

25 THEREAFTER.—In carrying out subparagraph 


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1 (A), for 2011 and each year thereafter, the Ad2 ministrator shall not— 

3 ‘‘(i) subject to subsections (e) and (f) 

4 of section 112, establish limitations on 

5 emissions of mercury from coal-fired elec6 tricity generating facilities that allow emis7 sions in excess of 2.48 grams of mercury 

8 per 1000 megawatt hours; or 

9 ‘‘(ii) differentiate between facilities 

10 that burn different types of coal. 

11 ‘‘(2) ANNUAL REVIEW AND DETERMINATION.— 

12 ‘‘(A) IN GENERAL.—Not later than April 1 

13 of each year, the Administrator shall— 

14 ‘‘(i) review the total mercury emis15 sions during the 2 previous years from 

16 electricity generating facilities located in 

17 all States; and 

18 ‘‘(ii) determine whether, during the 2 

19 previous years, the total mercury emissions 

20 from facilities described in clause (i) ex21 ceeded the national limitation for mercury 

22 emissions established under section 

23 704(a)(4). 

24 ‘‘(B) EXCEEDANCE OF NATIONAL LIMITA25 TION.—If the Administrator determines under 


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1 subparagraph (A)(ii) that, during the 2 pre2 vious years, the total mercury emissions from 

3 facilities described in subparagraph (A)(i) ex4 ceeded the national limitation for mercury emis5 sions established under section 704(a)(4), the 

6 Administrator shall, not later than 1 year after 

7 the date of the determination, revise the regula8 tions promulgated under paragraph (1) to re9 duce the emission rates specified in the regula10 tions as necessary to ensure that the national 

11 limitation for mercury emissions is not exceeded 

12 in any future year. 

13 ‘‘(3) COMPLIANCE FLEXIBILITY.— 

14 ‘‘(A) IN GENERAL.—Each coal-fired elec15 tricity generating facility subject to an emission 

16 limitation under this section shall be in compli17 ance with that limitation if that limitation is 

18 greater than or equal to the quotient obtained 

19 by dividing— 

20 ‘‘(i) the total mercury emissions of the 

21 coal-fired electricity generating facility dur22 ing each 30-day period; by 

23 ‘‘(ii) the quantity of electricity gen24 erated by the coal-fired electricity gener25 ating facility during that period. 


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1 ‘‘(B) MORE THAN 1 UNIT AT A FACIL2 ITY.—In any case in which more than 1 coal3 fired electricity generating unit at a coal-fired 

4 electricity generating facility subject to an emis5 sion limitation under this section was operated 

6 in 1999 under common ownership or control, 

7 compliance with the emission limitation may be 

8 determined by averaging the emission rates of 

9 all coal-fired electricity generating units at the 

10 electricity generating facility during each 30- 

11 day period. 

12 ‘‘(b) PREVENTION OF RE-RELEASE.— 

13 ‘‘(1) REGULATIONS.—Not later than July 1, 

14 2008, the Administrator shall promulgate regula15 tions to ensure that any mercury captured or recov16 ered by emission controls installed at an electricity 

17 generating facility is not re-released into the envi18 ronment. 

19 ‘‘(2) REQUIRED ELEMENTS.—The regulations 

20 shall require— 

21 ‘‘(A) daily covers on all active waste dis22 posal units, and permanent covers on all inac23 tive waste disposal units, to prevent the release 

24 of mercury into the air; 


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1 ‘‘(B) monitoring of groundwater to ensure 

2 that mercury or mercury compounds do not mi3 grate from the waste disposal unit; 

4 ‘‘(C) waste disposal siting requirements 

5 and cleanup requirements to protect ground6 water and surface water resources; 

7 ‘‘(D) elimination of agricultural application 

8 of coal combustion wastes; and 

9 ‘‘(E) appropriate limitations on mercury 

10 emissions from sources or processes that re11 process or use coal combustion waste, including 

12 manufacturers of wallboard and cement. 

13 ‘‘SEC. 709. OTHER HAZARDOUS AIR POLLUTANTS. 

14 ‘‘(a) IN GENERAL.—Not later than January 1, 2008, 

15 the Administrator shall issue to owners and operators of 

16 coal-fired electricity generating facilities requests for in17 formation under section 114 that are of sufficient scope 

18 to generate data sufficient to support issuance of stand19 ards under section 112(d) for hazardous air pollutants 

20 other than mercury emitted by coal-fired electricity gener21 ating facilities. 

22 ‘‘(b) DEADLINE FOR SUBMISSION OF REQUESTED

23 INFORMATION.—The Administrator shall require each re24 cipient of a request for information described in subsection 


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1 (a) to submit the requested data not later than 180 days 

2 after the date of the request. 

3 ‘‘(c) PROMULGATION OF EMISSION STANDARDS.— 

4 The Administrator shall— 

5 ‘‘(1) not later than January 1, 2008, propose 

6 emission standards under section 112(d) for haz7 ardous air pollutants other than mercury; and 

8 ‘‘(2) not later than January 1, 2009, promul9 gate emission standards under section 112(d) for 

10 hazardous air pollutants other than mercury. 

11 ‘‘(d) PROHIBITION ON EXCESS EMISSIONS.—It shall 

12 be unlawful for an electricity generating facility subject 

13 to standards for hazardous air pollutants other than mer14 cury promulgated under subsection (c) to emit, after De15 cember 31, 2010, any such pollutant in excess of the 

16 standards. 

17 ‘‘(e) EFFECT ON OTHER LAW.—Nothing in this sec18 tion or section 708 affects any requirement of subsection 

19 (e), (f)(2), or (n)(1)(A) of section 112, except that the 

20 emission limitations established by regulations promul21 gated under this section shall be deemed to represent the 

22 maximum achievable control technology for mercury emis23 sions from electricity generating units under section 

24 112(d). 


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1 ‘‘SEC. 710. EFFECT OF FAILURE TO PROMULGATE REGULA2 TIONS. 

3 ‘‘If the Administrator fails to promulgate regulations 

4 to implement and enforce the limitations specified in sec5 tion 704— 

6 ‘‘(1)(A) each electricity generating facility shall 

7 achieve, not later than January 1, 2012 (or January 

8 1, 2022, in the case of carbon dioxide), an annual 

9 quantity of emissions that is less than or equal to— 

10 ‘‘(i) in the case of nitrogen oxides, 15 per11 cent of the annual emissions by a similar elec12 tricity generating facility that has no controls 

13 for emissions of nitrogen oxides; and 

14 ‘‘(ii) in the case of carbon dioxide, 75 per15 cent of the annual emissions by a similar elec16 tricity generating facility that has no controls 

17 for emissions of carbon dioxide; and 

18 ‘‘(B) each electricity generating facility that 

19 does not use natural gas as the primary combustion 

20 fuel shall achieve, not later than January 1, 2010, 

21 an annual quantity of emissions that is less than or 

22 equal to— 

23 ‘‘(i) in the case of sulfur dioxide, 5 percent 

24 of the annual emissions by a similar electricity 

25 generating facility that has no controls for 

26 emissions of sulfur dioxide; and 


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1 ‘‘(ii) in the case of mercury, 10 percent of 

2 the annual emissions by a similar electricity 

3 generating facility that has no controls included 

4 specifically for the purpose of controlling emis5 sions of mercury; and 

6 ‘‘(2) the applicable permit under this Act for 

7 each electricity generating facility shall be deemed to 

8 incorporate a requirement for achievement of the re9 duced levels of emissions specified in paragraph (1). 

10 ‘‘SEC. 711. PROHIBITIONS. 

11 ‘‘It shall be unlawful— 

12 ‘‘(1) for the owner or operator of any electricity 

13 generating facility— 

14 ‘‘(A) to operate the electricity generating 

15 facility in noncompliance with the requirements 

16 of this title (including any regulations imple17 menting this title); 

18 ‘‘(B) to fail to submit by the required date 

19 any emission allowances, or pay any penalty, for 

20 which the owner or operator is liable under sec21 tion 705; 

22 ‘‘(C) to fail to provide and comply with any 

23 plan to offset excess emissions required under 

24 section 705(f); or 


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1 ‘‘(D) to emit mercury in excess of the 

2 emission limitations established under section 

3 708; or 

4 ‘‘(2) for any person to hold, use, or transfer 

5 any emission allowance allocated under this title ex6 cept in accordance with regulations promulgated by 

7 the Administrator. 

8 ‘‘SEC. 712. MODERNIZATION OF ELECTRICITY GENERATING 

9 FACILITIES. 

10 ‘‘(a) IN GENERAL.—Beginning on the later of Janu11 ary 1, 2016, or the date that is 40 years after the date 

12 on which the electricity generating facility commences op13 eration, each electricity generating facility shall be subject 

14 to emission limitations reflecting the application of best 

15 available control technology on a new major source of a 

16 similar size and type (as determined by the Administrator) 

17 as determined in accordance with the procedures specified 

18 in part C of title I. 

19 ‘‘(b) ADDITIONAL REQUIREMENTS.—The require20 ments of this section shall be in addition to the other re21 quirements of this title. 

22 ‘‘SEC. 713. RELATIONSHIP TO OTHER LAW. 

23 ‘‘(a) IN GENERAL.—Except as expressly provided in 

24 this title, nothing in this title— 


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1 ‘‘(1) limits or otherwise affects the application 

2 of any other provision of this Act; or 

3 ‘‘(2) precludes a State from adopting and en4 forcing any requirement for the control of emissions 

5 of air pollutants that is more stringent than the re6 quirements imposed under this title. 

7 ‘‘(b) REGIONAL SEASONAL EMISSION CONTROLS.— 

8 Nothing in this title affects any regional seasonal emission 

9 control for nitrogen oxides established by the Adminis10 trator or a State under title I.’’. 

11 (b) CONFORMING AMENDMENT.—Section 412(a) of 

12 the Clean Air Act (42 U.S.C. 7651k(a)) is amended in 

13 the first sentence by striking ‘‘opacity’’ and inserting 

14 ‘‘mercury, opacity,’’. 

15 SEC. 303. SAVINGS CLAUSE. 

16 Section 193 of the Clean Air Act (42 U.S.C. 7515) 

17 is amended by striking ‘‘date of the enactment of the 

18 Clean Air Act Amendments of 1990’’ each place it appears 

19 and inserting ‘‘date of enactment of the Clean Power Act 

20 of 2007’’. 

21 SEC. 304. ACID PRECIPITATION RESEARCH PROGRAM. 

22 Section 103(j) of the Clean Air Act (42 U.S.C. 

23 7403(j)) is amended— 

24 (1) in paragraph (3)— 


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1 (A) in subparagraph (F)(i), by striking 

2 ‘‘effects; and’’ and inserting ‘‘effects, including 

3 an assessment of— 

4 ‘‘(I) acid-neutralizing capacity; 

5 and 

6 ‘‘(II) changes in the number of 

7 water bodies in the sensitive eco8 systems referred to in subparagraph 

9 (G)(ii) with an acid-neutralizing ca10 pacity greater than zero; and’’; and 

11 (B) by adding at the end the following: 

12 ‘‘(G) SENSITIVE ECOSYSTEMS.— 

13 ‘‘(i) IN GENERAL.—Beginning in 

14 2008, and every 4 years thereafter, the re15 port under subparagraph (E) shall in16 clude— 

17 ‘‘(I) an identification of environ18 mental objectives necessary to be 

19 achieved (and related indicators to be 

20 used in measuring achievement of the 

21 objectives) to adequately protect and 

22 restore sensitive ecosystems; and 

23 ‘‘(II) an assessment of the status 

24 and trends of the environmental objecVerDate Aug 31 2005 05:41 Jun 07, 2007 Jkt 059200 PO 00000 Frm 00151 Fmt 6652 Sfmt 6201 E:\BILLS\S1554.IS S1554

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1 tives and indicators identified in pre2 vious reports under this paragraph. 

3 ‘‘(ii) SENSITIVE ECOSYSTEMS TO BE

4 ADDRESSED.—Sensitive ecosystems to be 

5 addressed under clause (i) include— 

6 ‘‘(I) the Adirondack Mountains, 

7 mid-Appalachian Mountains, Rocky 

8 Mountains, and southern Blue Ridge 

9 Mountains; 

10 ‘‘(II) the Great Lakes, Lake 

11 Champlain, Long Island Sound, and 

12 the Chesapeake Bay; and 

13 ‘‘(III) other sensitive ecosystems, 

14 as determined by the Administrator. 

15 ‘‘(H) ACID DEPOSITION STANDARDS.—Be16 ginning in 2008, and every 4 years thereafter, 

17 the report under subparagraph (E) shall include 

18 a revision of the report under section 404 of 

19 Public Law 101–549 (42 U.S.C. 7651 note) 

20 that includes a reassessment of the health and 

21 chemistry of the lakes and streams that were 

22 subjects of the original report under that sec23 tion.’’; and 

24 (2) by adding at the end the following: 


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1 ‘‘(4) PROTECTION OF SENSITIVE ECO2 SYSTEMS.— 

3 ‘‘(A) DETERMINATION.—Not later than 

4 December 31, 2014, the Administrator, taking 

5 into consideration the findings and rec6 ommendations of the report revisions under 

7 paragraph (3)(H), shall determine whether 

8 emission reductions under titles IV and VII are 

9 sufficient to— 

10 ‘‘(i) achieve the necessary reductions 

11 identified under paragraph (3)(F); and 

12 ‘‘(ii) ensure achievement of the envi13 ronmental objectives identified under para14 graph (3)(G). 

15 ‘‘(B) REGULATIONS.— 

16 ‘‘(i) IN GENERAL.—Not later than 2 

17 years after the Administrator makes a de18 termination under subparagraph (A) that 

19 emission reductions are not sufficient, the 

20 Administrator shall promulgate regulations 

21 to protect the sensitive ecosystems referred 

22 to in paragraph (3)(G)(ii). 

23 ‘‘(ii) CONTENTS.—Regulations under 

24 clause (i) shall include modifications to— 


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1 ‘‘(I) provisions relating to nitro2 gen oxide and sulfur dioxide emission 

3 reductions; 

4 ‘‘(II) provisions relating to allo5 cations of nitrogen oxide and sulfur 

6 dioxide allowances; and 

7 ‘‘(III) such other provisions as 

8 the Administrator determines to be 

9 necessary.’’. 

10 SEC. 305. AUTHORIZATION OF APPROPRIATIONS FOR DEP11 OSITION MONITORING. 

12 (a) OPERATIONAL SUPPORT.—In addition to 

13 amounts made available under any other law, there are 

14 authorized to be appropriated for each of fiscal years 2008 

15 through 2017— 

16 (1) for operational support of the National At17 mospheric Deposition Program National Trends 

18 Network— 

19 (A) $2,000,000 to the United States Geo20 logical Survey; 

21 (B) $600,000 to the Environmental Pro22 tection Agency; 

23 (C) $600,000 to the National Park Serv24 ice; and 

25 (D) $400,000 to the Forest Service; 


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1 (2) for operational support of the National At2 mospheric Deposition Program Mercury Deposition 

3 Network— 

4 (A) $400,000 to the Environmental Pro5 tection Agency; 

6 (B) $400,000 to the United States Geo7 logical Survey; 

8 (C) $100,000 to the National Oceanic and 

9 Atmospheric Administration; and 

10 (D) $100,000 to the National Park Serv11 ice; 

12 (3) for the National Atmospheric Deposition 

13 Program Atmospheric Integrated Research Moni14 toring Network $1,500,000 to the National Oceanic 

15 and Atmospheric Administration; 

16 (4) for the Clean Air Status and Trends Net17 work $5,000,000 to the Environmental Protection 

18 Agency; and 

19 (5) for the Temporally Integrated Monitoring of 

20 Ecosystems and Long-Term Monitoring Program 

21 $2,500,000 to the Environmental Protection Agency. 

22 (b) MODERNIZATION.—In addition to amounts made 

23 available under any other law, there are authorized to be 

24 appropriated— 


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1 (1) for equipment and site modernization of the 

2 National Atmospheric Deposition Program National 

3 Trends Network $6,000,000 to the Environmental 

4 Protection Agency; 

5 (2) for equipment and site modernization and 

6 network expansion of the National Atmospheric 

7 Deposition Program Mercury Deposition Network 

8 $2,000,000 to the Environmental Protection Agency; 

9 (3) for equipment and site modernization and 

10 network expansion of the National Atmospheric 

11 Deposition Program Atmospheric Integrated Re12 search Monitoring Network $1,000,000 to the Na13 tional Oceanic and Atmospheric Administration; and 

14 (4) for equipment and site modernization and 

15 network expansion of the Clean Air Status and 

16 Trends Network $4,600,000 to the Environmental 

17 Protection Agency. 

18 (c) AVAILABILITY OF AMOUNTS.—Each of the 

19 amounts appropriated under subsection (b) shall remain 

20 available until expended. 

21 SEC. 306. TECHNICAL AMENDMENTS. 

22 Title IV of the Clean Air Act (relating to noise pollu23 tion) (42 U.S.C. 7641 et seq.)— 


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1 (1) is amended by redesignating sections 401 

2 through 403 as sections 801 through 803, respec3 tively; and 

4 (2) is redesignated as title VIII and moved so 

5 as to appear at the end of that Act. 

6 TITLE IV—REDUCING HEATING 

7 AND ELECTRIC BILLS 

8 SEC. 401. WEATHERIZATION ASSISTANCE. 

9 Section 422 of the Energy Conservation and Produc10 tion Act (42 U.S.C. 6872) is amended to read as follows: 

11 ‘‘SEC. 422. AUTHORIZATION OF APPROPRIATIONS. 

12 ‘‘There are authorized to be appropriated to carry out 

13 the weatherization program under this part— 

14 ‘‘(1) $1,000,000,000 for fiscal year 2008; 

15 ‘‘(2) $1,200,000,000 for fiscal year 2009; and 

16 ‘‘(3) $1,400,000,000 for fiscal year 2010.’’. 

17 SEC. 402. ENERGY STAR PROGRAMS. 

18 There are authorized to be appropriated for use in 

19 carrying out the Energy Star program under section 324A 

20 of the Energy Policy and Conservation Act (42 U.S.C. 

21 6294a)— 

22 (1) to the Administrator of the Environmental 

23 Protection Agency, $100,000,000 for each fiscal 

24 year; and 


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1 (2) to the Secretary of Energy, $12,000,000 for 

2 each fiscal year. 

3 SEC. 403. RENEWABLE ELECTRICITY PRODUCTION CREDIT. 

4 (a) EXTENSION.—Section 45(d) of the Internal Rev5 enue Code of 1986 (relating to qualified facilities) is 

6 amended— 

7 (1) by striking ‘‘January 1, 2009’’ each place 

8 it appears in paragraphs (1), (2), (3), (5), and (7) 

9 and inserting ‘‘January 1, 2013’’, and 

10 (2) by striking ‘‘January 1, 2009’’ through 

11 ‘‘solar energy)’’ in paragraph (4) and inserting 

12 ‘‘January 1, 2013 (January 1, 2011, in the case of 

13 a facility using solar energy)’’. 

14 (b) REPEAL OF MUNICIPAL SOLID WASTE AS QUALI15 FIED RESOURCE.— 

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

17 45(c) of the Internal Revenue Code of 1986 is 

18 amended by inserting ‘‘and’’ at the end of subpara19 graph (F) and by striking subparagraph (G). 

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

21 of section 45 of such Code is amended by striking 

22 paragraph (6). 

23 (c) EXTENSION OF CREDIT FOR RESIDENTIAL EN24 ERGY EFFICIENT PROPERTY.—Subsection (g) of section 

25 25D of the Internal Revenue Code of 1986 (relating to 


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1 termination) is amended by striking ‘‘December 31, 2008’’ 

2 and inserting ‘‘December 31, 2012’’. 

3 SEC. 404. EFFICIENCY RESOURCE STANDARD. 

4 (a) IN GENERAL.—The Public Utility Regulatory 

5 Policies Act of 1978 is amended by inserting adding after 

6 section 609 (7 U.S.C. 918c) at the end the following: 

7 ‘‘SEC. 610. EFFICIENCY RESOURCE STANDARD FOR RETAIL 

8 ELECTRICITY AND NATURAL GAS SUPPLIERS. 

9 ‘‘(a) RESOURCE STANDARD.—Each retail electricity 

10 and natural gas supplier shall undertake energy savings 

11 measures in each calendar year from 2007 through 2011 

12 and thereafter that produce electricity demand savings 

13 and electricity and natural gas usage savings, as a per14 centage of the supplier’s base amount as shown in the fol15 lowing table. These targets represent savings realized from 

16 measures installed in the current year, plus cumulative 

17 savings realized from measures installed in all previous 

18 years. Each retail electricity and natural gas supplier sub19 ject to this subsection may use any electricity or natural 

20 gas savings measures available to it to achieve compliance 

21 with the performance standard established under this sec22 tion, so long as the electricity and natural gas savings 

23 achieved by such measures can be calculated and verified 

24 pursuant to the rules promulgated under subsection (b). 


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Year Reductions in peak 

electricity demand 

Reductions in 

electricity 

and natural 

gas usage 

2007 ....................................................... 0.25% ............................... 0.25% 

2008 ....................................................... 0.75% ............................... 0.75% 

2009 ....................................................... 1.75% ............................... 1.5% 

2010 ....................................................... 2.75% ............................... 2.25% 

2011 and thereafter ............................... 3.75% ............................... 3.0% 

1 ‘‘(b) DETERMINATION OF COMPLIANCE.—The Sec2 retary shall promulgate rules not later than one year after 

3 the enactment of this section regarding the means to be 

4 used to calculate and verify compliance with the perform5 ance standard established under subsection (a). Each re6 tail electric and natural gas supplier subject to this section 

7 shall calculate its compliance with such standard in ac8 cordance with such rules. The rules shall include each of 

9 the following: 

10 ‘‘(1) Procedures and standards for defining and 

11 measuring electricity savings achieved or obtained by 

12 electricity and natural gas suppliers (hereinafter in 

13 this section referred to as ‘electricity and natural 

14 gas savings’) from customer facility end-uses that 

15 occur in a calendar year from all measures in place 

16 in that year (including measures implemented in 

17 previous years that produce electricity and natural 

18 gas savings in such calendar year). 


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1 ‘‘(2) Procedures and standards for verification 

2 of electricity and natural gas savings reported by the 

3 retail electricity and natural gas supplier. 

4 ‘‘(3) Requirements for the contents and format 

5 of a bi-annual report from each retail electricity and 

6 natural gas supplier demonstrating its compliance 

7 with the requirements of subsection (a). The bi-an8 nual report must include sufficient detail regarding 

9 the calculation of electricity and natural gas savings 

10 to enable the regulatory authority to verify and en11 force compliance with the requirements of this sec12 tion and the regulations under this section. 

13 ‘‘(c) CREDIT AND TRADING SYSTEM.—(1) After con14 sultation with the Administrator of the Environmental 

15 Protection Agency, the Secretary shall promulgate rules 

16 establishing a nationwide credit and credit trading system 

17 for electricity and natural gas savings. Under such rules 

18 the Secretary may certify as credits electricity or natural 

19 savings achieved by a retail electricity or natural gas sup20 plier in a given year in excess of the quantity of electricity 

21 or natural gas savings required that calendar year for such 

22 supplier to meet the resource standard, as long as such 

23 savings comply with the rules established under subsection 

24 (b). The Secretary shall also certify as credits customer 

25 energy savings created by retail electric or natural gas 


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1 suppliers or other entities, as long as such savings comply 

2 with the rules established under subsection (b). An elec3 tricity savings credit shall equal one kilowatt hour; a nat4 ural gas savings credit shall constitute one therm. 

5 ‘‘(2) The Secretary shall not award credits to any re6 tail electricity or natural gas supplier subject to State ad7 ministration and enforcement under subsection (d) unless 

8 the Secretary has determined that such administration 

9 and enforcement are at least equivalent to administration 

10 and enforcement by the Secretary. 

11 ‘‘(3) An electricity or natural gas savings credit is 

12 not a property right. Nothing in this or any other provi13 sion of law shall be construed to limit the authority of 

14 the United States to terminate or limit such credits. 

15 ‘‘(4) A retail electric or natural gas supplier may sell 

16 such credit to any other entity, and other entities may sell 

17 such credits to retail electric or natural gas suppliers, in 

18 accordance with the accounting and verification rules es19 tablished by the Secretary. Such credit may be used by 

20 a purchasing retail electricity or natural gas supplier for 

21 purposes of complying with the resource standards set 

22 forth in subsection (a). 

23 ‘‘(5) In order to receive an electricity or natural gas 

24 savings credit, the recipient of an electricity savings credit 

25 shall pay a fee, calculated by the Secretary, in an amount 


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1 that is equal to the administrative costs of issuing, record2 ing, monitoring the sale or exchange of, and tracking the 

3 credit or does not exceed five percent of the dollar value 

4 of the credit, whichever is lower. The Secretary shall re5 tain the fee and use it to pay these administrative costs. 

6 ‘‘(6) A credit may be counted toward compliance with 

7 subsection (a) only once. A retail electricity or natural gas 

8 supplier may satisfy the requirements of subsection (a) 

9 through the accumulation of— 

10 ‘‘(A) electricity or natural gas savings credits 

11 obtained by purchase or exchange under paragraph 

12 (7); 

13 ‘‘(B) electricity or natural gas savings credits 

14 borrowed against future years under paragraph (8); 

15 or 

16 ‘‘(C) any combination of credits under subpara17 graphs (A) and (B). 

18 ‘‘(7) An electricity or natural gas savings credit may 

19 be sold or exchanged by the entity to whom issued or by 

20 any other entity that acquires the credit. An energy effi21 ciency credit for any year that is not used to satisfy the 

22 minimum energy savings requirement of subsection (a) for 

23 that year may be carried forward for use within the next 

24 4 years. 


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1 ‘‘(8) During the first year covered by the standards, 

2 a retail electricity or natural gas supplier that has reason 

3 to believe that it will not have sufficient electricity savings 

4 credits to comply with subsection (a) may— 

5 ‘‘(A) submit a plan to the Secretary dem6 onstrating that the retail electricity or natural gas 

7 supplier will earn sufficient credits within the next 

8 two calendar years which, when taken into account, 

9 will enable the retail electricity or natural gas sup10 plier to meet the requirements of subsection (a) for 

11 the calendar year involved; and 

12 ‘‘(B) upon the approval of the plan by the Sec13 retary, apply credits that the plan demonstrates will 

14 be earned within the next two calendar years to 

15 meet the requirements of subsection (a) for the cal16 endar year involved. 

17 ‘‘(9) Any retail electricity or natural gas supplier may 

18 elect to comply with the requirements of this section in 

19 any calendar year by paying a fee of 3 cents per kilowatt 

20 hour, and 30 cents per therm, for any portion of the elec21 tricity or natural gas savings it would be obligated to 

22 achieve in that year by not later than March 31 of the 

23 following year. Funds produced from such fees shall be 

24 deposited in an escrow account established by the Sec25 retary, and shall be distributed to the States for their use 


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1 in creating electricity or natural gas savings at customer 

2 facilities. 

3 ‘‘(d) ENFORCEMENT OF COMPLIANCE.—(1) If the 

4 State regulatory authority with ratemaking jurisdiction 

5 over a State-regulated retail electricity or natural gas sup6 plier notifies the Secretary that it will enforce compliance 

7 by such supplier with the performance standards under 

8 subsection (a) of this section, such State regulatory au9 thority shall have the authority to administer and enforce 

10 such standards for such supplier under State law. If the 

11 State regulatory authority does not so notify the Sec12 retary, the Secretary shall exercise such authority until re13 ceiving such notice from the State regulatory authority. 

14 ‘‘(2) Not later than July 1 of the calendar years 

15 2008, 2010, 2012, 2014, and 2016, each retail electricity 

16 and natural gas supplier shall submit the compliance re17 port required under subsection (b) to— 

18 ‘‘(A) the appropriate State regulatory authority, 

19 if such authority has notified the Secretary under 

20 subsection (d), or 

21 ‘‘(B) the Secretary to determine and enforce 

22 compliance with the standards. 

23 ‘‘(3) In the case of any retail electricity or natural 

24 gas supplier for which the Secretary is enforcing compli25 ance with the standards under this section, if such supVerDate Aug 31 2005 05:41 Jun 07, 2007 Jkt 059200 PO 00000 Frm 00165 Fmt 6652 Sfmt 6201 E:\BILLS\S1554.IS S1554

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1 plier fails to comply with such standards for two consecu2 tive calendar years, the Secretary shall determine the 

3 number of kilowatt hours of electricity savings, or therms 

4 of natural gas savings, by which the supplier has fallen 

5 short of the standards, and, by order, require such sup6 plier, after notice and opportunity for hearing, to deposit 

7 in an escrow account to be designated by the Secretary 

8 an amount equal to 3.5 cents per kilowatt hour for each 

9 such kilowatt hour, and 35 cents per therm for each such 

10 therm. The holder of such escrow account shall annually 

11 distribute the total amount of such account to the States 

12 to be used by the States for the purpose of achieving cus13 tomer electricity and natural gas savings. Any retail elec14 tricity or natural gas supplier required to make such a 

15 payment may, within 60 calendar days after the issuance 

16 of such order, bring an action in the United States Court 

17 of Appeals for the District of Columbia for judicial review 

18 of such order. Such court shall have jurisdiction to enter 

19 a judgment affirming, modifying, or setting aside such 

20 order or remanding such order in whole or in part to the 

21 Secretary. 

22 ‘‘(e) INFORMATION COLLECTION.—The Secretary 

23 may collect the information necessary to verify and 

24 audit— 


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1 ‘‘(1) the annual electric energy sales, natural 

2 gas sales, electricity savings, and natural gas savings 

3 of any entity applying for electricity or natural gas 

4 savings credits under this section, 

5 ‘‘(2) the validity of electricity or natural gas 

6 savings credits submitted by a retail electricity or 

7 natural gas supplier to the Secretary, and 

8 ‘‘(3) the quantity of electricity and natural gas 

9 sales of all retail electricity and natural gas sup10 pliers. 

11 ‘‘(f) STATE LAW.—Nothing in this section shall su12 persede or otherwise affect any State or local law requiring 

13 or otherwise relating to reductions in total annual elec14 tricity or natural gas energy consumption by or peak 

15 power consumption by electric consumers to the extent 

16 that such State or local law requires more stringent reduc17 tions than those required under this section. Any retail 

18 electricity or natural gas supplier that achieves reductions 

19 referred to in this section in accordance with State re20 quirements shall be entitled to full credit under this sec21 tion for such reductions to the extent that such reductions 

22 meet the requirements of this section and the regulations 

23 under this section (including verification and monitoring 

24 requirements). 

25 ‘‘(g) DEFINITIONS.—For purposes of this section: 


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1 ‘‘(1) The term ‘retail electricity or natural sup2 plier’ means a person that sells electric energy or 

3 natural gas to consumers and sold not less than 

4 1,000,000 megawatt-hours of electric energy or 

5 20,000,000 therms of natural gas to consumers for 

6 purposes other than resale during the preceding cal7 endar year; except that such term does not include 

8 the United States, a State or any political subdivi9 sion of a State, or any agency, authority, or instru10 mentality of any one or more of the foregoing, or a 

11 rural electric cooperative. 

12 ‘‘(2) The term ‘retail electricity or natural gas 

13 supplier’s base amount’ means the total amount of 

14 electric energy or natural gas sold by the retail elec15 tricity or natural gas supplier to customers during 

16 the most recent calendar year for which information 

17 is available. 

18 ‘‘(3) The term ‘electricity savings’ means reduc19 tions in end-use electricity consumption in customer 

20 facilities relative to consumption at those same fa21 cilities in a base year as defined in rules issued by 

22 the Secretary, or in the case of new facilities, rel23 ative to reference facilities defined in rules issued by 

24 the Secretary, or distributed generation efficiency 

25 measures, including fuel cells and combined heat 


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1 and power (CHP) technologies, that provide elec2 tricity only for onsite customer use. 

3 ‘‘(4) The term ‘natural gas savings’ means re4 ductions in end-use natural gas consumption in cus5 tomer facilities relative to consumption at those 

6 same facilities in a base year as defined in rules 

7 issued by the Secretary, or in the case of new facili8 ties, relative to reference facilities defined in rules 

9 issued by the Secretary.’’. 

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

11 the Public Utility Regulatory Policies Act of 1978 (16 

12 U.S.C. prec. 2601) is amended by adding at the end of 

13 the items relating to title VI the following: 

‘‘Sec. 610. Efficiency resource standard for retail electricity and natural gas 

suppliers.’’. 

14 SEC. 405. FEDERAL RENEWABLE PORTFOLIO STANDARD. 

15 (a) IN GENERAL.—The Public Utility Regulatory 

16 Policies Act of 1978 (16 U.S.C. 2601 et seq.) (as amended 

17 by section 404(a)) is amended by adding at the end the 

18 following: 

19 ‘‘SEC. 611. FEDERAL RENEWABLE PORTFOLIO STANDARD. 

20 ‘‘(a) MINIMUM RENEWABLE GENERATION REQUIRE21 MENT.—For each calendar year beginning in calendar 

22 year 2009, each retail electric supplier shall submit to the 

23 Secretary, not later than April 1 of the following calendar 


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1 year, renewable energy credits in an amount equal to the 

2 required annual percentage specified in subsection (b). 

3 ‘‘(b) REQUIRED ANNUAL PERCENTAGE.—For cal4 endar years after 2008, the required annual percentage 

5 of the retail electric supplier’s base amount that shall be 

6 generated from renewable energy resources, or otherwise 

7 credited towards such percentage requirement pursuant to 

8 subsection (c), shall be the percentage specified in the fol9 lowing table: 

Required annual 

‘‘Calendar Years: percentage: 

2009 through 2010 .............................................................. 1

2010 through 2011 .............................................................. 2

2011 through 2012 .............................................................. 4

2012 through 2013 .............................................................. 6

2013 through 2015 .............................................................. 8

2015 through 2016 .............................................................. 10

2016 through 2017 .............................................................. 12

2017 through 2018 .............................................................. 14

2018 through 2019 .............................................................. 16

2019 through 2020 .............................................................. 18

2020 and thereafter ............................................................. 20. 

10 ‘‘(c) SUBMISSION OF CREDITS.—(1) A retail electric 

11 supplier may satisfy the requirements of subsection (a) 

12 through the submission of renewable energy credits— 

13 ‘‘(A) issued to the retail electric supplier under 

14 subsection (d); 

15 ‘‘(B) obtained by purchase or exchange under 

16 subsection (e); or 

17 ‘‘(C) borrowed under subsection (f). 

18 ‘‘(2) A renewable energy credit may be counted to19 ward compliance with subsection (a) only once. 


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1 ‘‘(d) ISSUANCE OF CREDITS.—(1) The Secretary 

2 shall establish by rule, not later than 1 year after the date 

3 of enactment of this section, a program to issue and mon4 itor the sale or exchange of, and track, renewable energy 

5 credits. 

6 ‘‘(2) Under the program established by the Secretary, 

7 an entity that generates electric energy through the use 

8 of a renewable energy resource may apply to the Secretary 

9 for the issuance of renewable energy credits. The applica10 tion shall indicate— 

11 ‘‘(A) the type of renewable energy resource used 

12 to produce the electricity; 

13 ‘‘(B) the location where the electric energy was 

14 produced; and 

15 ‘‘(C) any other information the Secretary deter16 mines appropriate. 

17 ‘‘(3)(A) Except as provided in subparagraphs (B), 

18 (C), and (D), the Secretary shall issue to each entity that 

19 generates electric energy one renewable energy credit for 

20 each kilowatt hour of electric energy the entity generates 

21 from the date of enactment of this section and in each 

22 subsequent calendar year through the use of a renewable 

23 energy resource at an eligible facility. 

24 ‘‘(B) For incremental hydropower the renewable en25 ergy credits shall be calculated based on the expected inVerDate Aug 31 2005 05:41 Jun 07, 2007 Jkt 059200 PO 00000 Frm 00171 Fmt 6652 Sfmt 6201 E:\BILLS\S1554.IS S1554

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1 crease in average annual generation resulting from the ef2 ficiency improvements or capacity additions. The number 

3 of credits shall be calculated using the same water flow 

4 information used to determine a historic average annual 

5 generation baseline for the hydroelectric facility and cer6 tified by the Secretary or the Federal Energy Regulatory 

7 Commission. The calculation of the renewable energy cred8 its for incremental hydropower shall not be based on any 

9 operational changes at the hydroelectric facility not di10 rectly associated with the efficiency improvements or ca11 pacity additions. 

12 ‘‘(C) The Secretary shall issue two renewable energy 

13 credits for each kilowatt hour of electric energy generated 

14 and supplied to the grid in that calendar year through the 

15 use of a renewable energy resource at an eligible facility 

16 located on Indian land. For purposes of this paragraph, 

17 renewable energy generated by biomass cofired with other 

18 fuels is eligible for two credits only if the biomass was 

19 grown on such land. 

20 ‘‘(D) For electric energy resources produced from a 

21 generation offset, the Secretary shall issue two renewable 

22 energy credits for each kilowatt hour generated. 

23 ‘‘(E) To be eligible for a renewable energy credit, the 

24 unit of electric energy generated through the use of a re25 newable energy resource may be sold or may be used by 


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1 the generator. If both a renewable energy resource and 

2 a non-renewable energy resource are used to generate the 

3 electric energy, the Secretary shall issue renewable energy 

4 credits based on the proportion of the renewable energy 

5 resources used. The Secretary shall identify renewable en6 ergy credits by type and date of generation. 

7 ‘‘(4) When a generator sells electric energy generated 

8 through the use of a renewable energy resource to a retail 

9 electric supplier under a contract subject to section 210 

10 of this Act, the retail electric supplier is treated as the 

11 generator of the electric energy for the purposes of this 

12 section or the duration of the contract. 

13 ‘‘(5) The Secretary shall issue renewable energy cred14 its for existing facility offsets to be applied against a retail 

15 electric supplier’s required annual percentage. Such cred16 its are not tradeable and may be used only in the calendar 

17 year generation actually occurs. 

18 ‘‘(e) CREDIT TRADING.—A renewable energy credit, 

19 may be sold or exchanged by the entity to whom issued 

20 or by any other entity who acquires the renewable energy 

21 credit. A renewable energy credit for any year that is not 

22 used to satisfy the minimum renewable generation require23 ment of subsection (a) for that year may be carried for24 ward for use within the next 4 years. 


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1 ‘‘(f) CREDIT BORROWING.—At any time before the 

2 end of calendar year 2009, a retail electric supplier that 

3 has reason to believe it will not have sufficient renewable 

4 energy credits to comply with subsection (a) may— 

5 ‘‘(1) submit a plan to the Secretary dem6 onstrating that the retail electric supplier will earn 

7 sufficient credits within the next 3 calendar years 

8 which, when taken into account, will enable the re9 tail electric supplier to meet the requirements of 

10 subsection (a) for calendar year 2009 and the subse11 quent calendar years involved; and 

12 ‘‘(2) upon the approval of the plan by the Sec13 retary, apply renewable energy credits that the plan 

14 demonstrates will be earned within the next 3 cal15 endar years to meet the requirements of subsection 

16 (a) for each calendar year involved. 

17 The retail electric supplier must repay all of the borrowed 

18 renewable energy credits by submitting an equivalent 

19 number of renewable energy credits, in addition to those 

20 otherwise required under subsection (a), by calendar year 

21 2010 or any earlier deadlines specified in the approved 

22 plan. Failure to repay the borrowed renewable energy 

23 credits shall subject the retail electric supplier to civil pen24 alties under subsection (h) for violation of the require25 ments of subsection (a) for each calendar year involved. 


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1 ‘‘(g) CREDIT COST CAP.—The Secretary shall offer 

2 renewable energy credits for sale at the lesser of 3 cents 

3 per kilowatt-hour or 200 percent of the average market 

4 value of renewable credits for the applicable compliance 

5 period. On January 1 of each year following calendar year 

6 2008, the Secretary shall adjust for inflation the price 

7 charged per credit for such calendar year, based on the 

8 Gross Domestic Product Implicit Price Deflator. 

9 ‘‘(h) ENFORCEMENT.—The Secretary may bring an 

10 action in the appropriate United States district court to 

11 impose a civil penalty on a retail electric supplier that does 

12 not comply with subsection (a), unless the retail electric 

13 supplier was unable to comply with subsection (a) for rea14 sons outside of the supplier’s reasonable control (including 

15 weather-related damage, mechanical failure, lack of trans16 mission capacity or availability, strikes, lockouts, actions 

17 of a governmental authority). A retail electric supplier who 

18 does not submit the required number of renewable energy 

19 credits under subsection (a) shall be subject to a civil pen20 alty of not more than the greater of 3 cents or 200 percent 

21 of the average market value of credits for the compliance 

22 period for each renewable energy credit not submitted.. 

23 ‘‘(i) INFORMATION COLLECTION.—The Secretary 

24 may collect the information necessary to verify and 

25 audit— 


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1 ‘‘(1) the annual electric energy generation and 

2 renewable energy generation of any entity applying 

3 for renewable energy credits under this section; 

4 ‘‘(2) the validity of renewable energy credits 

5 submitted by a retail electric supplier to the Sec6 retary; and 

7 ‘‘(3) the quantity of electricity sales of all retail 

8 electric suppliers. 

9 ‘‘(j) ENVIRONMENTAL SAVINGS CLAUSE.—Incre10 mental hydropower shall be subject to all applicable envi11 ronmental laws and licensing and regulatory requirements. 

12 ‘‘(k) EXISTING PROGRAMS.—This section does not 

13 preclude a State from imposing additional renewable en14 ergy requirements in that State, including specifying eligi15 ble technologies under such State requirements. 

16 ‘‘(l) DEFINITIONS.—For purposes of this section: 

17 ‘‘(1) BIOMASS.—The term ‘biomass’ means any 

18 organic material that is available on a renewable or 

19 recurring basis, including dedicated energy crops, 

20 trees grown for energy production, wood waste and 

21 wood residues, plants (including aquatic plants, 

22 grasses, and agricultural crops), residues, fibers, 

23 animal wastes and other organic waste materials 

24 (but not including unsegregated municipal solid 

25 waste (garbage)), and fats and oils, except that with 


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1 respect to ‘trees grown for energy production’, the 

2 term includes only trees that are procured in con3 formance with sustainable forestry practices recog4 nized in the U.S., including the Sustainable Forestry 

5 Initiative, or another forest management system de6 termined to be equivalent by the Secretary in con7 sultation with the Secretary of the Department of 

8 Agriculture and the Secretary of the Department of 

9 Commerce and that are in excess of those relied 

10 upon by an existing forest products manufacturing 

11 facility to manufacture forest products, and with re12 spect to material removed from National Forest Sys13 tem lands the term includes only organic material 

14 from— 

15 ‘‘(A) thinnings from trees that are less 

16 than 12 inches in diameter; 

17 ‘‘(B) slash; 

18 ‘‘(C) brush; and 

19 ‘‘(D) mill residues. 

20 ‘‘(2) ELIGIBLE FACILITY.—The term ‘eligible 

21 facility’ means— 

22 ‘‘(A) a facility for the generation of electric 

23 energy from a renewable energy resource that is 

24 placed in service on or after the date of enact25 ment of this section; or 


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1 ‘‘(B) a repowering or cofiring increment 

2 that is placed in service on or after the date of 

3 enactment of this section at a facility for the 

4 generation of electric energy from a renewable 

5 energy resource that was placed in service be6 fore that date. 

7 ‘‘(3) ELIGIBLE RENEWABLE ENERGY RE8 SOURCE.—The term ‘renewable energy resource’ 

9 means solar, wind, ocean, or geothermal energy, bio10 mass (excluding solid waste and paper that is com11 monly recycled), landfill gas, a generation offset, or 

12 incremental hydropower. 

13 ‘‘(4) GENERATION OFFSET.—The term ‘genera14 tion offset’ means reduced electricity usage metered 

15 at a site where a customer consumes energy from a 

16 renewable energy technology. 

17 ‘‘(5) EXISTING FACILITY OFFSET.—The term 

18 ‘existing facility offset’ means renewable energy gen19 erated from an existing facility, not classified as an 

20 eligible facility, that is owned or under contract, di21 rectly or indirectly, to a retail electric supplier on 

22 the date of enactment of this section. 

23 ‘‘(6) INCREMENTAL HYDROPOWER.—The term 

24 ‘incremental hydropower’ means additional genera25 tion that is achieved from increased efficiency or adVerDate Aug 31 2005 05:41 Jun 07, 2007 Jkt 059200 PO 00000 Frm 00178 Fmt 6652 Sfmt 6201 E:\BILLS\S1554.IS S1554

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1 ditions of capacity on or after the date of enactment 

2 of this section or the effective date of the applicable 

3 State renewable portfolio standard program, at a hy4 droelectric facility that was placed in service before 

5 that date. 

6 ‘‘(7) INDIAN LAND.—The term ‘Indian land’ 

7 means— 

8 ‘‘(A) any land within the limits of any In9 dian reservation, pueblo, or rancheria; 

10 ‘‘(B) any land not within the limits of any 

11 Indian reservation, pueblo, or rancheria title to 

12 which was on the date of enactment of this 

13 paragraph either held by the United States for 

14 the benefit of any Indian tribe or individual or 

15 held by any Indian tribe or individual subject to 

16 restriction by the United States against alien17 ation; 

18 ‘‘(C) any dependent Indian community; 

19 and 

20 ‘‘(D) any land conveyed to any Alaska Na21 tive corporation under the Alaska Native 

22 Claims Settlement Act. 

23 ‘‘(8) INDIAN TRIBE.—The term ‘Indian tribe’ 

24 means any Indian tribe, band, nation, or other orga25 nized group or community, including any Alaskan 


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1 Native village or regional or village corporation as 

2 defined in or established pursuant to the Alaska Na3 tive Claims Settlement Act (43 U.S.C. 1601 et seq.), 

4 which is recognized as eligible for the special pro5 grams and services provided by the United States to 

6 Indians because of their status as Indians. 

7 ‘‘(9) RENEWABLE ENERGY.—The term ‘renew8 able energy’ means electric energy generated by a re9 newable energy resource. 

10 ‘‘(10) RENEWABLE ENERGY RESOURCE.—The 

11 term ‘renewable energy resource’ means solar, wind, 

12 ocean, geothermal energy, biomass (not including 

13 municipal solid waste), landfill gas, a generation off14 set, or incremental hydropower. 

15 ‘‘(11) REPOWERING OR COFIRING INCRE16 MENT.—The term ‘repowering or cofiring increment’ 

17 means— 

18 ‘‘(A) the additional generation from a 

19 modification that is placed in service on or after 

20 the date of enactment of this section to expand 

21 electricity production at a facility used to gen22 erate electric energy from a renewable energy 

23 resource or to cofire biomass that was placed in 

24 service before the date of enactment of this sec25 tion, or 


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1 ‘‘(B) the additional generation above the 

2 average generation in the 3 years preceding the 

3 date of enactment of this section to expand 

4 electricity production at a facility used to gen5 erate electric energy from a renewable energy 

6 resource or to cofire biomass that was placed in 

7 service before the date of enactment of this sec8 tion. 

9 ‘‘(12) RETAIL ELECTRIC SUPPLIER.—The term 

10 ‘retail electric supplier’ means a person that sells 

11 electric energy to electric consumers and sold not 

12 less than 1,000,000 megawatt-hours of electric en13 ergy to electric consumers for purposes other than 

14 resale during the preceding calendar year; except 

15 that such term does not include the United States, 

16 a State or any political subdivision of a State, or any 

17 agency, authority, or instrumentality of any one or 

18 more of the foregoing. 

19 ‘‘(13) RETAIL ELECTRIC SUPPLIER’S BASE

20 AMOUNT.—The term ‘retail electric supplier’s base 

21 amount’ means the total amount of electric energy 

22 sold by the retail electric supplier to electric cus23 tomers during the most recent calendar year for 

24 which information is available, excluding electric en25 ergy generated by— 


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1 ‘‘(A) an eligible renewable energy resource; 

2 or 

3 ‘‘(B) a hydroelectric facility. 

4 ‘‘(m) SUNSET.—This section expires December 31, 

5 2030.’’. 

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

7 the Public Utilities Regulatory Policies Act of 1978 (16 

8 U.S.C. prec. 2601) (as amended by section 404(b)) is 

9 amended by adding at the end of the items relating to 

10 title VI the following: 

‘‘Sec. 611. Federal renewable portfolio standard.’’. 

11 TITLE V—SAVING TAXPAYERS 

12 MONEY THROUGH ELIMI13 NATION OF TAX BREAKS 

14 SEC. 501. REPEAL OF CERTAIN TAX PROVISIONS FOR OIL 

15 INDUSTRY. 

16 (a) AMORTIZATION OF GEOLOGICAL AND GEO17 PHYSICAL EXPENDITURES.— 

18 (1) IN GENERAL.—Section 167(h) of the Inter19 nal Revenue Code of 1986 (relating to amortization 

20 of geological and geophysical expenditures) is 

21 amended by adding at the end the following new 

22 paragraph: 

23 ‘‘(5) NONAPPLICATION TO MAJOR INTEGRATED

24 OIL COMPANIES.—This subsection shall not apply to 


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1 any sale during any taxable year by a taxpayer 

2 which is— 

3 ‘‘(A) an integrated oil company (as defined 

4 in section 291(b)(4)) which has an average 

5 daily worldwide production of crude oil of at 

6 least 500,000 barrels for such taxable year, or 

7 ‘‘(B) a related person to such company.’’. 

8 (2) EFFECTIVE DATE.—The amendment made 

9 by this subsection shall apply to amounts paid or in10 curred in taxable years beginning after the date of 

11 the enactment of this Act. 

12 (b) PERCENTAGE DEPLETION ALLOWANCE FOR OIL

13 AND GAS PROPERTIES.— 

14 (1) IN GENERAL.—Section 613A is amended by 

15 adding at the end the following new subsection: 

16 ‘‘(f) NONAPPLICATION TO MAJOR INTEGRATED OIL

17 COMPANIES.—The allowance for percentage depletion 

18 shall be zero during any taxable year with respect to a 

19 taxpayer which is— 

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

21 section 291(b)(4)) which has an average daily world22 wide production of crude oil of at least 500,000 bar23 rels for such taxable year, or 

24 ‘‘(2) a related person to such company.’’. 


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1 (2) EFFECTIVE DATE.—The amendment made 

2 by this subsection shall apply to taxable years begin3 ning after the date of the enactment of this Act. 

4 (c) DEDUCTION FOR INTANGIBLE DRILLING AND

5 DEVELOPMENT COSTS.— 

6 (1) IN GENERAL.—Section 263(c) of the Inter7 nal Revenue Code of 1986 is amended by adding at 

8 the end the following new sentence: ‘‘This subsection 

9 shall not apply during any taxable year with respect 

10 to a taxpayer which is an integrated oil company (as 

11 defined in section 291(b)(4)) which has an average 

12 daily worldwide production of crude oil of at least 

13 500,000 barrels for such taxable year or a related 

14 person to such company.’’. 

15 (2) EFFECTIVE DATE.—The amendment made 

16 by this subsection shall apply to amounts paid or in17 curred in taxable years beginning after the date of 

18 the enactment of this Act. 

19 TITLE VI—CLIMATE CHANGE 

20 RESEARCH 

21 SEC. 601. SHORT TITLE. 

22 This title may be cited as the ‘‘Abrupt Climate 

23 Change Research Act of 2007’’. 


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1 SEC. 602. ABRUPT CLIMATE CHANGE RESEARCH PROGRAM. 

2 (a) DEFINITION OF ABRUPT CLIMATE CHANGE.—In 

3 this section, the term ‘‘abrupt climate change’’ means a 

4 change in the climate that occurs so rapidly or unexpect5 edly that human or natural systems have difficulty adapt6 ing to the climate as changed. 

7 (b) ESTABLISHMENT OF PROGRAM.—The Secretary 

8 of Commerce shall establish within the Office of Oceanic 

9 and Atmospheric Research of the National Oceanic and 

10 Atmospheric Administration, and shall carry out, a pro11 gram of scientific research on abrupt climate change. 

12 (c) PURPOSES OF PROGRAM.—The purposes of the 

13 program are— 

14 (1) to develop a global array of terrestrial and 

15 oceanographic indicators of paleoclimate in order to 

16 sufficiently identify and describe past instances of 

17 abrupt climate change; 

18 (2) to improve understanding of thresholds and 

19 nonlinearities in geophysical systems related to the 

20 mechanisms of abrupt climate change; 

21 (3) to incorporate those mechanisms into ad22 vanced geophysical models of climate change; and 

23 (4) to test the output of those models against 

24 an improved global array of records of past abrupt 

25 climate changes. 


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1 SEC. 603. AUTHORIZATION OF APPROPRIATIONS. 

2 There is authorized to be appropriated to the Depart3 ment of Commerce to carry out the research program re4 quired under section 702 $10,000,000 for each of fiscal 

5 years 2008 through 2013, to remain available until ex6 pended. 

Æ 


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