I 

110TH CONGRESS 

1ST SESSION H. R. 1133 

To provide for the energy independence of the United States. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 16, 2007 

Ms. BERKLEY introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committees on Natural Resources, Energy and Commerce, and Science and Technology, for 

a period to be subsequently determined by the Speaker, in each case for 

consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To provide for the energy independence of 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. 

4 This Act may be cited as the ‘‘Freedom through Re5 newable Energy Expansion (FREE) Act’’. 

6 SEC. 2. REPEAL OF NUCLEAR SUBSIDIES. 

7 (a) NEXT GENERATION NUCLEAR PLANT

8 PROJECT.—Subtitle C of title VI of the Energy Policy Act 

9 of 2005 (42 U.S.C. 16021 et seq.) and the items relating 


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1 thereto in the table of contents in section 1(b) of that Act 

2 are repealed. 

3 (b) STANDBY SUPPORT FOR CERTAIN NUCLEAR

4 PLANT DELAYS.—Section 638 of the Energy Policy Act 

5 of 2005 (42 U.S.C. 16014) and the item relating thereto 

6 in the table of contents in section 1(b) of that Act are 

7 repealed. 

8 (c) REPEAL OF CREDIT FOR PRODUCTION FROM AD9 VANCED NUCLEAR POWER FACILITIES.— 

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

11 45J(d)(1) of the Internal Revenue Code of 1986 (re12 lating to advanced nuclear power facility) is amend13 ed by striking ‘‘January 1, 2021’’ and inserting ‘‘the 

14 date of the enactment of the Freedom through Re15 newable Energy Expansion (FREE) Act’’. 

16 (2) EFFECTIVE DATE.—The amendment made 

17 by paragraph (1) shall apply to property placed in 

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

19 SEC. 3. REPEAL OF CERTAIN TAX SUBSIDIES FOR THE OIL 

20 AND GAS INDUSTRY. 

21 (a) REPEAL OF ELECTION TO EXPENSE CERTAIN

22 REFINERIES.— 

23 (1) IN GENERAL.—Subparagraph (B) of section 

24 179C(c)(1) of the Internal Revenue Code of 1986 

25 (relating to qualified refinery property) is amended 


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1 by striking ‘‘January 1, 2012’’ and inserting ‘‘the 

2 date of the enactment of the Freedom through Re3 newable Energy Expansion (FREE) Act’’. 

4 (2) EFFECTIVE DATE.—The amendment made 

5 by paragraph (1) shall apply to property placed in 

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

7 (b) REPEAL OF TREATMENT OF NATURAL GAS DIS8 TRIBUTION LINES AS 15-YEAR PROPERTY.— 

9 (1) IN GENERAL.—Clause (viii) of section 

10 168(e)(3)(E) of such Code (relating to 15-year prop11 erty) is amended by striking ‘‘January 1, 2011’’ and 

12 inserting ‘‘the Freedom through Renewable Energy 

13 Expansion (FREE) Act’’. 

14 (2) EFFECTIVE DATE.—The amendment made 

15 by paragraph (1) shall apply to property placed in 

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

17 (c) REPEAL OF TREATMENT OF NATURAL GAS

18 GATHERING LINES AS 7-YEAR PROPERTY.— 

19 (1) IN GENERAL.—Clause (iv) of section 

20 168(e)(3)(C) of such Code (relating to 7-year prop21 erty) is amended by inserting ‘‘and which is placed 

22 in service before the date of the enactment of the 

23 Freedom through Renewable Energy Expansion 

24 (FREE) Act’’ after ‘‘April 11, 2005,’’. 


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1 (2) EFFECTIVE DATE.—The amendment made 

2 by paragraph (1) shall apply to property placed in 

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

4 (d) REPEAL OF NEW RULE FOR DETERMINING

5 SMALL REFINER EXCEPTION TO OIL DEPLETION DEDUC6 TION.— 

7 (1) IN GENERAL.—Paragraph (4) of section 

8 613A(d) of such Code (relating to certain refiners 

9 excluded) is amended to read as follows: 

10 ‘‘(4) CERTAIN REFINERS EXCLUDED.—If the 

11 taxpayer or a related person engages in the refining 

12 of crude oil, subsection (c) shall not apply to such 

13 taxpayer if on any day during the taxable year the 

14 refinery runs of the taxpayer and such person exceed 

15 50,000 barrels.’’. 

16 (2) EFFECTIVE DATE.—The amendment made 

17 by paragraph (1) shall apply to taxable years begin18 ning after the date of the enactment of this Act. 

19 (e) REPEAL OF AMORTIZATION OF GEOLOGICAL AND

20 GEOPHYSICAL EXPENDITURES.— 

21 (1) IN GENERAL.—Section 167 of such Code 

22 (relating to depreciation) is amended by striking 

23 subsection (h) and redesignating subsection (i) as 

24 subsection (h). 


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1 (2) CONFORMING AMENDMENT.—Section 

2 263A(c)(3) of such Code is amended by striking 

3 ‘‘167(h),’’. 

4 (3) EFFECTIVE DATE.—The amendments made 

5 by this subsection shall apply to amounts paid or in6 curred after the date of the enactment of this Act. 

7 SEC. 4. REPEAL OF CERTAIN PROVISIONS OF THE ENERGY 

8 POLICY ACT OF 2005 AND OTHER LAWS PRO9 VIDING INCENTIVES FOR OIL AND GAS PRO10 DUCTION FROM FEDERAL LANDS. 

11 (a) REPEALS.—The following provisions of the En12 ergy Policy Act of 2005, and the items relating thereto 

13 in the table of contents in section 1(b) of that Act, are 

14 repealed: 

15 (1) Section 343 (relating to marginal property 

16 production incentives). 

17 (2) Section 344 (relating to incentives for nat18 ural gas production from deep wells in the shallow 

19 waters of the Gulf of Mexico). 

20 (3) Section 345 (relating to royalty relief for 

21 deep water production). 

22 (4) Section 357 (relating to comprehensive in23 ventory of OCS oil and natural gas resources). 


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1 (5) Section 362 (relating to management of 

2 Federal oil and gas leasing programs, including ex3 pediting leases and permit applications). 

4 (6) Section 965 (relating to oil and gas re5 search programs). 

6 (7) Section 966 (relating to low-volume oil and 

7 gas reservoir research program). 

8 (8) Subtitle J of title IX (relating to ultra-deep9 water and unconventional natural gas and other pe10 troleum resources). 

11 (b) REPEAL OF ALASKA OFFSHORE ROYALTY SUS12 PENSION.—Section 8(a)(3)(B) of the Outer Continental 

13 Shelf Lands Act (43 U.S.C. 1337(a)(3)(B)) is amended 

14 by striking ‘‘and in the Planning Areas offshore Alaska’’. 

15 (c) REPEAL OF ROYALTY SUSPENSION WITH RE16 SPECT TO NATIONAL PETROLEUM RESERVE IN ALAS17 KA.—Section 107 of the Naval Petroleum Reserves Pro18 duction Act of 1976 (as amended by section 347(b)(11) 

19 of the Energy Policy Act of 2005 (119 Stat. 706)) is 

20 amended by repealing subsection (k). 

21 (d) CONFORMING AMENDMENT.—Section 961(c) of 

22 the Energy Policy Act of 2005 (42 U.S.C. 16291(c)) is 

23 amended by striking paragraph (3) and redesignating 

24 paragraph (4) as paragraph (3). 


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1 SEC. 5. PRICE THRESHOLDS FOR ROYALTY SUSPENSION 

2 PROVISIONS. 

3 The Secretary of the Interior shall agree to a request 

4 by any lessee to amend any lease issued for any Central 

5 and Western Gulf of Mexico tract during the period of 

6 January 1, 1998, through December 31, 1999, to incor7 porate price thresholds applicable to royalty suspension 

8 provisions, that are equal to or less than the price thresh9 olds described in clauses (v) through (vii) of section 

10 8(a)(3)(C) of the Outer Continental Shelf Lands Act (43 

11 U.S.C. 1337(a)(3)(C)). Any amended lease shall impose 

12 the new or revised price thresholds effective October 1, 

13 2006. Existing lease provisions shall prevail through Sep14 tember 30, 2006. 

15 SEC. 6. CLARIFICATION OF AUTHORITY TO IMPOSE PRICE 

16 THRESHOLDS FOR CERTAIN LEASE SALES. 

17 Congress reaffirms the authority of the Secretary of 

18 the Interior under section 8(a)(1)(H) of the Outer Conti19 nental Shelf Lands Act (43 U.S.C. 1337(a)(1)(H)) to 

20 vary, based on the price of production from a lease, the 

21 suspension of royalties under any lease subject to section 

22 304 of the Outer Continental Shelf Deep Water Royalty 

23 Relief Act (Public Law 104–58; 43 U.S.C. 1337 note). 


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1 SEC. 7. ELIGIBILITY FOR NEW LEASES AND THE TRANSFER 

2 OF LEASES; CONSERVATION OF RESOURCES 

3 FEES. 

4 (a) ISSUANCE OF NEW LEASES.— 

5 (1) IN GENERAL.—The Secretary shall not 

6 issue any new lease that authorizes the production 

7 of oil or natural gas in the Gulf of Mexico under the 

8 Outer Continental Shelf Lands Act (43 U.S.C. 1331 

9 et seq.) to a person described in paragraph (2) un10 less— 

11 (A) the person has renegotiated each cov12 ered lease with respect to which the person is 

13 a lessee, to modify the payment responsibilities 

14 of the person to include price thresholds that 

15 are equal to or less than the price thresholds 

16 described in clauses (v) through (vii) of section 

17 8(a)(3)(C) of the Outer Continental Shelf 

18 Lands Act (43 U.S.C. 1337(a)(3)(C)); or 

19 (B) the person has— 

20 (i) paid all fees established by the 

21 Secretary under subsection (b) that are 

22 due with respect to each covered lease for 

23 which the person is a lessee; or 

24 (ii) entered into an agreement with 

25 the Secretary under which the person is 

26 obligated to pay such fees. 


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1 (2) PERSONS DESCRIBED.—A person referred 

2 to in paragraph (1) is a person that— 

3 (A) is a lessee that— 

4 (i) holds a covered lease on the date 

5 on which the Secretary considers the 

6 issuance of the new lease; or 

7 (ii) was issued a covered lease before 

8 the date of enactment of this Act, but 

9 transferred the covered lease to another 

10 person or entity (including a subsidiary or 

11 affiliate of the lessee) after the date of en12 actment of this Act; or 

13 (B) any other person or entity who has 

14 any direct or indirect interest in, or who derives 

15 any benefit from, a covered lease; 

16 (3) MULTIPLE LESSEES.— 

17 (A) IN GENERAL.—For purposes of para18 graph (1), if there are multiple lessees that own 

19 a share of a covered lease, the Secretary may 

20 implement separate agreements with any lessee 

21 with a share of the covered lease that modifies 

22 the payment responsibilities with respect to the 

23 share of the lessee to include price thresholds 

24 that are equal to or less than the price thresh25 olds described in clauses (v) through (vii) of 


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1 section 8(a)(3)(C) of the Outer Continental 

2 Shelf Lands Act (43 U.S.C. 1337(a)(3)(C)). 

3 (B) TREATMENT OF SHARE AS COVERED

4 LEASE.—Beginning on the effective date of an 

5 agreement under subparagraph (A), any share 

6 subject to the agreement shall not constitute a 

7 covered lease with respect to any lessees that 

8 entered into the agreement. 

9 (b) CONSERVATION OF RESOURCES FEES.— 

10 (1) IN GENERAL.—Not later than 60 days after 

11 the date of enactment of this Act, the Secretary of 

12 the Interior by regulation shall establish— 

13 (A) a conservation of resources fee for pro14 ducing Federal oil and gas leases in the Gulf of 

15 Mexico; and 

16 (B) a conservation of resources fee for 

17 nonproducing Federal oil and gas leases in the 

18 Gulf of Mexico. 

19 (2) PRODUCING LEASE FEE TERMS.—The fee 

20 under paragraph (1)(A)— 

21 (A) subject to subparagraph (C), shall 

22 apply to covered leases that are producing 

23 leases; 


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1 (B) shall be set at $9 per barrel for oil and 

2 $1.25 per million Btu for gas, respectively, in 

3 2005 dollars; and 

4 (C) shall apply only to production of oil or 

5 gas occurring— 

6 (i) in any calendar year in which the 

7 arithmetic average of the daily closing 

8 prices for light sweet crude oil on the New 

9 York Mercantile Exchange (NYMEX) ex10 ceeds $34.73 per barrel for oil and $4.34 

11 per million Btu for gas in 2005 dollars; 

12 and 

13 (ii) on or after October 1, 2006. 

14 (3) NONPRODUCING LEASE FEE TERMS.—The 

15 fee under paragraph (1)(B)— 

16 (A) subject to subparagraph (C), shall 

17 apply to leases that are nonproducing leases; 

18 (B) shall be set at $3.75 per acre per year 

19 in 2005 dollars; and 

20 (C) shall apply on and after October 1, 

21 2006. 

22 (4) TREATMENT OF RECEIPTS.—Amounts re23 ceived by the United States as fees under this sub24 section shall be treated as offsetting receipts. 


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1 (c) TRANSFERS.—A lessee or any other person who 

2 has any direct or indirect interest in, or who derives a 

3 benefit from, a lease shall not be eligible to obtain by sale 

4 or other transfer (including through a swap, spinoff, serv5 icing, or other agreement) any covered lease, the economic 

6 benefit of any covered lease, or any other lease for the 

7 production of oil or natural gas in the Gulf of Mexico 

8 under the Outer Continental Shelf Lands Act (43 U.S.C. 

9 1331 et seq.), unless— 

10 (1) the lessee or other person has— 

11 (A) renegotiated all covered leases of the 

12 lessee or other person; and 

13 (B) entered into an agreement with the 

14 Secretary to modify the terms of all covered 

15 leases of the lessee or other person to include 

16 limitations on royalty relief based on market 

17 prices that are equal to or less than the price 

18 thresholds described in clauses (v) through (vii) 

19 of section 8(a)(3)(C) of the Outer Continental 

20 Shelf Lands Act (43 U.S.C. 1337(a)(3)(C)); or 

21 (2) the lessee or other person has— 

22 (A) paid all fees established by the Sec23 retary under subsection (b) that are due with 

24 respect to each covered lease for which the per25 son is a lessee; or 


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1 (B) entered into an agreement with the 

2 Secretary under which the person is obligated 

3 to pay such fees. 

4 (d) DEFINITIONS.—In this section— 

5 (1) COVERED LEASE.—The term ‘‘covered 

6 lease’’ means a lease for oil or gas production in the 

7 Gulf of Mexico that is— 

8 (A) in existence on the date of enactment 

9 of this Act; 

10 (B) issued by the Department of the Inte11 rior under section 304 of the Outer Continental 

12 Shelf Deep Water Royalty Relief Act (43 

13 U.S.C. 1337 note; Public Law 104–58); and 

14 (C) not subject to limitations on royalty re15 lief based on market price that are equal to or 

16 less than the price thresholds described in 

17 clauses (v) through (vii) of section 8(a)(3)(C) of 

18 the Outer Continental Shelf Lands Act (43 

19 U.S.C. 1337(a)(3)(C)). 

20 (2) LESSEE.—The term ‘‘lessee’’ includes any 

21 person or other entity that controls, is controlled by, 

22 or is in or under common control with, a lessee. 

23 (3) SECRETARY.—The term ‘‘Secretary’’ means 

24 the Secretary of the Interior. 


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1 SEC. 8. AVERAGE FUEL ECONOMY STANDARDS. 

2 (a) IN GENERAL.—Section 32902 of title 49, United 

3 States Code, is amended— 

4 (1) in subsection (c)— 

5 (A) by striking ‘‘(1) Subject to paragraph 

6 (2) of this subsection, the’’ and inserting 

7 ‘‘The’’; and 

8 (B) by striking paragraph (2); and 

9 (2) by redesignating subsections (i) and (j) as 

10 subsections (j) and (k), respectively, and by inserting 

11 after subsection (h) the following: 

12 ‘‘(i) STANDARDS FOR MODEL YEARS AFTER 2009.— 

13 The Secretary of Transportation shall prescribe by regula14 tion average fuel economy standards for passenger auto15 mobiles manufactured by a manufacturer in model years 

16 after model year 2009, that shall— 

17 ‘‘(1) ensure that the average fuel economy 

18 achieved by passenger automobiles manufactured by 

19 a manufacturer in model years after 2016 is no less 

20 than 33 miles per gallon; 

21 ‘‘(2) ensure that improvements to fuel economy 

22 standards do not degrade the safety of passenger 

23 automobiles manufactured by a manufacturer; and 

24 ‘‘(3) maximize the retention of jobs in the auto25 mobile manufacturing sector of the United States.’’. 


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1 (b) CONFORMING AMENDMENTS.—Section 32902 of 

2 title 49, United States Code, is further amended— 

3 (1) in subsection (g)(2), by striking ‘‘(and sub4 mit the amendment to Congress when required 

5 under subsection (c)(2) of this section)’’; and 

6 (2) in subsection (k) (as so redesignated) by 

7 striking ‘‘or (g)’’ and inserting ‘‘(g), or (i)’’. 

8 SEC. 9. RENEWABLE ELECTRICITY PRODUCTION CREDIT. 

9 (a) IN GENERAL.—Section 45(d) of the Internal Rev10 enue Code of 1986 (relating to qualified facilities) is 

11 amended by striking ‘‘January 1, 2009’’ each place it ap12 pears in paragraphs (1), (2), (3), (4), (5), (6), and (7) 

13 and inserting ‘‘January 1, 2016’’. 

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

15 subsection (a) shall apply to property placed in service 

16 after the date of the enactment of this Act. 

17 SEC. 10. EXTENSION AND MODIFICATION OF INVESTMENT 

18 TAX CREDIT WITH RESPECT TO SOLAR EN19 ERGY PROPERTY, QUALIFIED FUEL CELL 

20 PROPERTY, AND GEOTHERMAL PROPERTY. 

21 (a) SOLAR ENERGY PROPERTY.—Paragraphs 

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

23 Revenue Code of 1986 are each amended by striking 

24 ‘‘January 1, 2009’’ and inserting ‘‘January 1, 2016’’. 


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1 (b) ELIGIBLE FUEL CELL PROPERTY.—Paragraph 

2 (1)(E) of section 48(c) of such Code is amended by strik3 ing ‘‘December 31, 2008’’ and inserting ‘‘December 31, 

4 2015’’. 

5 (c) GEOTHERMAL PROPERTY.—Paragraph (2)(A)(i) 

6 of section 48(a) of such Code is amended by striking 

7 ‘‘and’’ at the end of subclause (II) and by adding at the 

8 end the following new subclause: 

9 ‘‘(IV) energy property described 

10 in paragraph (3)(A)(iii) but only with 

11 respect to periods ending before Janu12 ary 1, 2016, and’’. 

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

14 this section shall apply to property placed in service after 

15 the date of the enactment of this Act. 

16 SEC. 11. EXTENSION OF CREDIT FOR RESIDENTIAL ENERGY 

17 EFFICIENT PROPERTY. 

18 (a) EXTENSION.—Subsection (g) of section 25D of 

19 the Internal Revenue Code of 1986 (relating to termi20 nation) is amended by striking ‘‘December 31, 2008’’ and 

21 inserting ‘‘December 31, 2015’’. 

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

23 this section shall apply to property placed in service after 

24 the date of the enactment of this Act. 


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1 SEC. 12. CREDIT FOR WIND ENERGY PROPERTY INSTALLED 

2 IN RESIDENCES AND BUSINESSES. 

3 (a) IN GENERAL.—Subpart B of part IV of sub4 chapter A of chapter 1 of the Internal Revenue Code of 

5 1986 is amended by inserting after section 30C the fol6 lowing new section: 

7 ‘‘SEC. 30D. WIND ENERGY PROPERTY. 

8 ‘‘(a) ALLOWANCE OF CREDIT.—There shall be al9 lowed as a credit against the tax imposed by this chapter 

10 for the taxable year an amount equal to 30 percent (10 

11 percent after December 31, 2015) of the amount paid or 

12 incurred by the taxpayer for qualified wind energy prop13 erty placed in service or installed during such taxable year. 

14 ‘‘(b) LIMITATION.—No credit shall be allowed under 

15 subsection (a) unless at least 50 percent of the energy pro16 duced annually by the qualified wind energy property is 

17 consumed on the site on which the property is placed in 

18 service or installed. 

19 ‘‘(c) QUALIFIED WIND ENERGY PROPERTY.—For 

20 purposes of this section, the term qualified wind energy 

21 property means a qualifying wind turbine if— 

22 ‘‘(1) such turbine is placed in service or in23 stalled on or in connection with property located in 

24 the United States, 

25 ‘‘(2) in the case of an individual, the property 

26 on or in connection with which such turbine is inVerDate Aug 31 2005 04:35 Feb 22, 2007 Jkt 059200 PO 00000 Frm 00017 Fmt 6652 Sfmt 6201 E:\BILLS\H1133.IH H1133

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1 stalled is a dwelling unit which is located in the 

2 United States, 

3 ‘‘(3) the original use of such turbine commences 

4 with the taxpayer, and 

5 ‘‘(4) such turbine carries at least a 5-year lim6 ited warranty covering defects in design, material, or 

7 workmanship, and, for property that is not installed 

8 by the taxpayer, at least a 5-year limited warranty 

9 covering defects in installation. 

10 ‘‘(d) OTHER DEFINITIONS.—For purposes of this 

11 section: 

12 ‘‘(1) QUALIFYING WIND TURBINE.—The term 

13 qualifying wind turbine means a wind turbine of 100 

14 kilowatts of rated capacity or less which meets the 

15 latest performance rating standards published by the 

16 American Wind Energy Association and which is 

17 used to generate electricity. 

18 ‘‘(2) PRINCIPAL RESIDENCE.—The term prin19 cipal residence shall have the same meaning as when 

20 used in section 121. 

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

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

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

24 the excess of— 


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1 ‘‘(A) the sum of the regular tax liability 

2 (as defined in section 26(b)) plus the tax im3 posed by section 55, over 

4 ‘‘(B) the sum of the credits allowable 

5 under this part (other than under this section 

6 and subpart C thereof, relating to refundable 

7 credits) and section 1397E. 

8 ‘‘(2) CARRYOVER OF UNUSED CREDIT.—If the 

9 credit allowable under subsection (a) exceeds the 

10 limitation imposed by paragraph (1) for such taxable 

11 year, such excess shall be carried to the succeeding 

12 taxable year and added to the credit allowable under 

13 subsection (a) for such taxable year. 

14 ‘‘(f) SPECIAL RULES.—For purposes of this section: 

15 ‘‘(1) TENANT-STOCKHOLDER IN COOPERATIVE

16 HOUSING CORPORATION.—In the case of an indi17 vidual who is a tenant-stockholder (as defined in sec18 tion 216(b)(2)) in a cooperative housing corporation 

19 (as defined in section 216(b)(1)), such individual 

20 shall be treated as having paid his tenant-stock21 holder’s proportionate share (as defined in section 

22 216(b)(3)) of any expenditures paid or incurred for 

23 qualified wind energy property by such corporation, 

24 and such credit shall be allocated appropriately to 

25 such individual. 


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1 ‘‘(2) CONDOMINIUMS.— 

2 ‘‘(A) IN GENERAL.—In the case of an indi3 vidual who is a member of a condominium man4 agement association with respect to a condo5 minium which he owns, such individual shall be 

6 treated as having paid his proportionate share 

7 of expenditures paid or incurred for qualified 

8 wind energy property by such association, and 

9 such credit shall be allocated appropriately to 

10 such individual. 

11 ‘‘(B) CONDOMINIUM MANAGEMENT ASSO12 CIATION.—For purposes of this paragraph, the 

13 term condominium management association 

14 means an organization which meets the require15 ments of section 528(c)(2) with respect to a 

16 condominium project of which substantially all 

17 of the units are used by individuals as resi18 dences. 

19 ‘‘(g) BASIS ADJUSTMENT.—For purposes of this sub20 title, if a credit is allowed under this section for any ex21 penditure with respect to a residence or other property, 

22 the basis of such residence or other property shall be re23 duced by the amount of the credit so allowed.’’. 

24 (b) CONFORMING AMENDMENT.—Subsection (a) of 

25 section 1016 of such Code (relating to general rule for 


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1 adjustments to basis) is amended by striking ‘‘and’’ at the 

2 end of paragraph (36), by striking the period at the end 

3 of paragraph (37) and inserting ‘‘, and’’, and by adding 

4 at the end the following new paragraph: 

5 ‘‘(38) in the case of a residence or other prop6 erty with respect to which a credit was allowed 

7 under section 30D, to the extent provided in section 

8 30D(g).’’. 

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

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

11 of such Code is amended by inserting after the item relat12 ing to section 30C the following new item: 

‘‘Sec. 30D. Wind energy property.’’. 

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

14 this section shall apply to property placed in service or 

15 installed after December 31, 2006, in taxable years ending 

16 after such date. 

17 SEC. 13. GEOTHERMAL RESEARCH. 

18 There are authorized to be appropriated to the Sec19 retary of Energy $32,500,000 for geothermal research. 

20 SEC. 14. RENEWABLE PORTFOLIO STANDARD. 

21 Title VI of the Public Utility Regulatory Policies Act 

22 of 1978 (16 U.S.C. 2601 et seq.) is amended by adding 

23 at the end the following: 

24 ‘‘SEC. 610. FEDERAL RENEWABLE PORTFOLIO STANDARD. 

25 ‘‘(a) RENEWABLE ENERGY REQUIREMENT.— 


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1 ‘‘(1) IN GENERAL.—Each electric utility that 

2 sells electricity to electric consumers shall obtain a 

3 percentage of the base amount of electricity it sells 

4 to electric consumers in any calendar year from new 

5 renewable energy or existing renewable energy. The 

6 percentage obtained in a calendar year shall not be 

7 less than the amount specified in the following table: 

‘‘Calendar year: Minimum annual 

percentage: 

2008 through 2009 .................................................................. 5.0

2010 through 2011 .................................................................. 8.0

2012 through 2013 .................................................................. 11.0

2014 through 2015 .................................................................. 15.0

2016 and thereafter ................................................................. 20.0. 

8 ‘‘(2) MEANS OF COMPLIANCE.—An electric util9 ity shall meet the requirements of paragraph (1) 

10 by— 

11 ‘‘(A) generating electric energy using new 

12 renewable energy or existing renewable energy; 

13 ‘‘(B) purchasing electric energy generated 

14 by new renewable energy or existing renewable 

15 energy; 

16 ‘‘(C) purchasing renewable energy credits 

17 issued under subsection (b); or 

18 ‘‘(D) a combination of the foregoing. 

19 ‘‘(b) RENEWABLE ENERGY CREDIT TRADING PRO20 GRAM.—Not later than January 1 of the first calendar 

21 year beginning after the enactment of this Act, the Sec22 retary shall establish a renewable energy credit trading 


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1 program to permit an electric utility that does not gen2 erate or purchase enough electric energy from renewable 

3 energy to meet its obligations under subsection (a)(1) to 

4 satisfy such requirements by purchasing sufficient renew5 able energy credits. 

6 ‘‘(c) ENFORCEMENT.— 

7 ‘‘(1) CIVIL PENALTIES.—Any electric utility 

8 that fails to meet the renewable energy requirements 

9 of subsection (a) shall be subject to a civil penalty. 

10 ‘‘(2) AMOUNT OF PENALTY.—The amount of 

11 the civil penalty shall be determined by multiplying 

12 the number of kilowatt-hours of electric energy sold 

13 to electric consumers in violation of subsection (a) 

14 by the greater of 1.5 cents (adjusted for inflation 

15 under subsection (f)) or 200 percent of the average 

16 market value of renewable energy credits during the 

17 year in which the violation occurred. 

18 ‘‘(3) MITIGATION OR WAIVER.—The Secretary 

19 may mitigate or waive a civil penalty under this sub20 section if the electric utility was unable to comply 

21 with subsection (a) for reasons outside of the rea22 sonable control of the utility. The Secretary shall re23 duce the amount of any penalty determined under 

24 paragraph (2) by an amount paid by the electric 

25 utility to a State for failure to comply with the reVerDate Aug 31 2005 04:35 Feb 22, 2007 Jkt 059200 PO 00000 Frm 00023 Fmt 6652 Sfmt 6201 E:\BILLS\H1133.IH H1133

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1 quirement of a State renewable energy program if 

2 the State requirement is greater than the applicable 

3 requirement of subsection (a). 

4 ‘‘(4) PROCEDURE FOR ASSESSING PENALTY.— 

5 The Secretary shall assess a civil penalty under this 

6 subsection in accordance with the procedures pre7 scribed by section 333(d) of the Energy Policy and 

8 Conservation Act (42 U.S.C. 6303(d)). 

9 ‘‘(d) RULES.—The Secretary shall issue rules imple10 menting this section not later than 1 year after the date 

11 of enactment of this section. 

12 ‘‘(e) EXEMPTIONS.—This section shall not apply in 

13 any calendar year to an electric utility— 

14 ‘‘(1) that sold less than 4,000,000 megawatt15 hours of electric energy to electric consumers during 

16 the preceding calendar year; or 

17 ‘‘(2) in Hawaii. 

18 ‘‘(f) INFLATION ADJUSTMENT.—Not later than De19 cember 31 of each year beginning in 2009, the Secretary 

20 shall adjust for inflation the amount of the civil penalty 

21 per kilowatt-hour under subsection (c)(2). 

22 ‘‘(g) STATE PROGRAMS.—Nothing in this section 

23 shall diminish any authority of a State or political subdivi24 sion thereof to adopt or enforce any law or regulation re25 specting renewable energy, but, except as provided in subVerDate Aug 31 2005 04:35 Feb 22, 2007 Jkt 059200 PO 00000 Frm 00024 Fmt 6652 Sfmt 6201 E:\BILLS\H1133.IH H1133

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1 section (c)(3), no such law or regulation shall relieve any 

2 person of any requirement otherwise applicable under this 

3 section. The Secretary, in consultation with States having 

4 such renewable energy programs, shall, to the maximum 

5 extent practicable, facilitate coordination between the Fed6 eral program and State programs. 

7 ‘‘(h) DEFINITIONS.—For purposes of this section: 

8 ‘‘(1) BASE AMOUNT OF ELECTRICITY.—The 

9 term ‘base amount of electricity’ means the total 

10 amount of electricity sold by an electric utility to 

11 electric consumers in a calendar year, excluding— 

12 ‘‘(A) electricity generated by a hydro13 electric facility (including a pumped storage fa14 cility but excluding incremental hydropower); 

15 and 

16 ‘‘(B) electricity generated through the in17 cineration of municipal solid waste. 

18 ‘‘(2) DISTRIBUTED GENERATION FACILITY.— 

19 The term ‘distributed generation facility’ means a 

20 facility at a customer site. 

21 ‘‘(3) EXISTING RENEWABLE ENERGY.—The 

22 term ‘existing renewable energy’ means, except as 

23 provided in paragraph (7)(B), electric energy gen24 erated at a facility (including a distributed genera25 tion facility) placed in service prior to the date of 


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1 enactment of this section from solar, wind, or geo2 thermal energy; ocean energy; biomass (as defined in 

3 section 203(a) of the Energy Policy Act of 2005); or 

4 landfill gas. 

5 ‘‘(4) GEOTHERMAL ENERGY.—The term ‘geo6 thermal energy’ means energy derived from a geo7 thermal deposit (within the meaning of section 

8 613(e)(2) of the Internal Revenue Code of 1986). 

9 ‘‘(5) INCREMENTAL GEOTHERMAL PRODUC10 TION.— 

11 ‘‘(A) IN GENERAL.—The term ‘incremental 

12 geothermal production’ means for any year the 

13 excess of— 

14 ‘‘(i) the total kilowatt hours of elec15 tricity produced from a facility (including a 

16 distributed generation facility) using geo17 thermal energy, over 

18 ‘‘(ii) the average annual kilowatt 

19 hours produced at such facility for 5 of the 

20 previous 7 calendar years before the date 

21 of enactment of this section after elimi22 nating the highest and the lowest kilowatt 

23 hour production years in such 7-year pe24 riod. 


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1 ‘‘(B) SPECIAL RULE.—A facility described 

2 in subparagraph (A) which was placed in serv3 ice at least 7 years before the date of enactment 

4 of this section shall commencing with the year 

5 in which such date of enactment occurs, reduce 

6 the amount calculated under subparagraph 

7 (A)(ii) each year, on a cumulative basis, by the 

8 average percentage decrease in the annual kilo9 watt hour production for the 7-year period de10 scribed in subparagraph (A)(ii) with such cu11 mulative sum not to exceed 30 percent. 

12 ‘‘(6) INCREMENTAL HYDROPOWER.—The term 

13 ‘incremental hydropower’ means additional energy 

14 generated as a result of efficiency improvements or 

15 capacity additions made on or after the date of en16 actment of this section or the effective date of an ex17 isting applicable State renewable portfolio standard 

18 program at a hydroelectric facility that was placed 

19 in service before that date. The term does not in20 clude additional energy generated as a result of 

21 operational changes not directly associated with effi22 ciency improvements or capacity additions. Effi23 ciency improvements and capacity additions shall be 

24 measured on the basis of the same water flow infor25 mation used to determine a historic average annual 


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1 generation baseline for the hydroelectric facility and 

2 certified by the Secretary or the Federal Energy 

3 Regulatory Commission. 

4 ‘‘(7) NEW RENEWABLE ENERGY.—The term 

5 ‘new renewable energy’ means— 

6 ‘‘(A) electric energy generated at a facility 

7 (including a distributed generation facility) 

8 placed in service on or after January 1, 2003, 

9 from— 

10 ‘‘(i) solar, wind, or geothermal energy 

11 or ocean energy; 

12 ‘‘(ii) biomass (as defined in section 

13 203(a) of the Energy Policy Act of 2005); 

14 ‘‘(iii) landfill gas; or 

15 ‘‘(iv) incremental hydropower; and 

16 ‘‘(B) for electric energy generated at a fa17 cility (including a distributed generation facil18 ity) placed in service prior to the date of enact19 ment of this section— 

20 ‘‘(i) the additional energy above the 

21 average generation in the 3 years pre22 ceding the date of enactment of this sec23 tion at the facility from— 

24 ‘‘(I) solar or wind energy or 

25 ocean energy; 


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1 ‘‘(II) biomass (as defined in sec2 tion 203(a) of the Energy Policy Act 

3 of 2005); 

4 ‘‘(III) landfill gas; or 

5 ‘‘(IV) incremental hydropower. 

6 ‘‘(ii) the incremental geothermal pro7 duction. 

8 ‘‘(8) OCEAN ENERGY.—The term ‘ocean energy’ 

9 includes current, wave, tidal, and thermal energy. 

10 ‘‘(i) SUNSET.—This section expires on December 31, 

11 2031.’’. 

12 SEC. 15. FEDERAL ENERGY PURCHASE REQUIREMENT. 

13 Section 203(a) of the Energy Policy Act of 2005 (42 

14 U.S.C. 15852(a)) is amended— 

15 (1) by striking ‘‘seek to ensure that, to the ex16 tent economically feasible and technically prac17 ticable’’ and inserting ‘‘ensure that’’; 

18 (2) in paragraph (1), by striking ‘‘3 percent in 

19 fiscal years 2007 through 2009’’ and inserting ‘‘3 

20 percent in fiscal year 2007 and 5 percent in fiscal 

21 years 2008 through 2010’’; 

22 (3) in paragraph (2), by striking ‘‘5 percent in 

23 fiscal years 2010 through 2012’’ and inserting ‘‘11 

24 percent in fiscal years 2011 through 2014’’; and 


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1 (4) in paragraph (3), by striking ‘‘7.5 percent 

2 in fiscal year 2013’’ and inserting ‘‘20 percent in 

3 fiscal year 2015’’. 

4 SEC. 16. SCHOOL RENEWABLE ENERGY USE. 

5 The Secretary of Energy shall establish a program 

6 to make grants to local schools and school districts to pro7 mote and facilitate the use of renewable energy sources 

8 in school facilities. 

Æ 


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