I 
109TH CONGRESS 
2D SESSION 
H. R. 5375 
To provide incentives to reduce dependence on foreign oil. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 11, 2006 
Mr. DANIEL E. LUNGREN of California (for himself and Mr. COSTA) intro-
duced the following bill; which was referred to the Committee on Ways 
and Means, and in addition to the Committees on Science and Energy 
and Commerce, for a period to be subsequently determined by the Speak-
er, in each case for consideration of such provisions as fall within the ju-
risdiction of the committee concerned 
A BILL 
To provide incentives to reduce dependence on foreign oil. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘New Options Petro-
leum Energy Conservation Act of 2006’’. 
SEC. 2. CREDIT FOR ELECTRICITY PRODUCED FROM CLI-
MATE NEUTRAL COMBUSTION PROCESSES. 
(a) IN GENERAL.—Paragraph (1) of section 45(c) of 
the Internal Revenue Code of 1986 is amended by striking 
‘‘and’’ at the end of subparagraph (G), by striking the 
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period at the end of subparagraph (H) and inserting ‘‘, 
and’’, and by adding at the end the following new subpara-
graph: 
‘‘(I) any climate neutral combustion re-
source.’’. 
(b) CLIMATE NEUTRAL COMBUSTION RESOURCE.— 
Subsection (c) of section 45 of such Code is amended by 
adding at the end the following new paragraph: 
‘‘(10) CLIMATE
NEUTRAL
COMBUSTION
RE-
SOURCE.—The term ‘climate neutral combustion re-
source’ means any matter used as a fuel in a quali-
fied facility described in subsection (d)(11).’’. 
(c) CLIMATE NEUTRAL COMBUSTION FACILITY.— 
Subsection (d) of section 45 of such Code is amended by 
adding at the end the following new paragraph: 
‘‘(11) CLIMATE NEUTRAL COMBUSTION FACIL-
ITY.—In the case of a facility which burns climate 
neutral combustion resources to produce electricity, 
the term ‘qualified facility’ means any facility 
which— 
‘‘(A) captures the carbon dioxide released 
during combustion and uses such carbon diox-
ide to recover hydrocarbon fuel from below 
ground, 
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‘‘(B) produces no atmospheric emissions of 
mercury or greenhouse gases and no emissions 
that form fine particles, smog, or acid rain, and 
‘‘(C) is owned by the taxpayer and origi-
nally placed in service after December 31, 
2006.’’. 
(d) EFFECTIVE DATE.—The amendments made this 
section shall apply to electricity produced and sold after 
December 31, 2006, in taxable years ending after such 
date. 
SEC. 3. EXTENSION OF ENERGY CREDIT FOR SOLAR EN-
ERGY PROPERTY. 
(a) IN GENERAL.—Paragraph (2)(A)(i)(II) and para-
graph (3)(A)(ii) of section 48(a) of the Internal Revenue 
Code of 1986 (relating to energy credit) are each amended 
by striking ‘‘2008’’ and inserting ‘‘2012’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to periods after December 31, 
2007, in taxable years ending after such date, under rules 
similar to the rules of section 48(m) of the Internal Rev-
enue Code of 1986 (as in effect on the day before the date 
of the enactment of the Revenue Reconciliation Act of 
1990). 
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SEC. 4. EXTENSION OF CREDIT FOR RESIDENTIAL ENERGY 
EFFICIENT PROPERTY. 
(a) IN GENERAL.—Subsection (g) of section 25D of 
the Internal Revenue Code of 1986 is amended by striking 
‘‘2007’’ and inserting ‘‘2011’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to property placed in service after 
December 31, 2007. 
SEC. 5. PRIZE PROGRAM. 
The Secretary of Energy shall establish a program 
to award a prize in the amount of $1,000,000,000 to the 
first automobile manufacturer incorporated in the United 
States to manufacture and sell in the United States 
60,000 midsized sedan automobiles which operate on gaso-
line and can travel 100 miles per gallon. 
SEC. 6. LITHIUM ION BATTERY TECHNOLOGY. 
There are authorized to be appropriated to the Sec-
retary of Energy $30,000,000 for fiscal year 2007 for the 
development of advanced lithium ion battery technology. 
SEC. 7. EXPENSING OF PROPERTY USED IN THE REFINING 
OF ETHANOL, METHANOL, AND BIODIESEL. 
(a) IN GENERAL.—Part VI of subchapter B of chap-
ter 1 of the Internal Revenue Code of 1986 (relating to 
itemized deductions for individuals and corporations) is 
amended by inserting after section 179D the following new 
section: 
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‘‘SEC. 179E. ELECTION TO EXPENSE CERTAIN PROPERTY 
USED IN REFINING ETHANOL, METHANOL, 
AND BIODIESEL. 
‘‘(a) IN GENERAL.—A taxpayer may elect to treat the 
cost of any qualified biofuel property as an expense which 
is not chargeable to capital account. Any cost so treated 
shall be allowed as a deduction for the taxable year in 
which the property is placed in service. 
‘‘(b) ELECTION.—An election under this section for 
any taxable year shall be made on the taxpayer’s return 
of the tax imposed by this chapter for the taxable year. 
Such election shall be made in such manner as the Sec-
retary may by regulations prescribe. Any election made 
under this section may not be revoked except with the con-
sent of the Secretary. 
‘‘(c) QUALIFIED BIOFUEL PROPERTY.—For purposes 
of this section— 
‘‘(1) IN GENERAL.—The term ‘qualified biofuel 
property’ means any property— 
‘‘(A) used for the refining of any biofuel, 
and 
‘‘(B) the original use of which commences 
with the taxpayer. 
‘‘(2) BIOFUEL.—The term ‘biofuel’ means 
qualified methanol or ethanol fuel (as defined in sec-
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tion 4041(b)(2)(B)) and biodiesel (as defined in sec-
tion 40A(d)). 
‘‘(d) DUAL USE PROPERTY.—In the case of any 
property which is used for the refining of any biofuel and 
for any other use, the cost of such property taken into 
account under subsection (a) shall be reduced by an 
amount which bears the same ratio to the cost of such 
property as such other uses bears to all uses of such prop-
erty. 
‘‘(e) COORDINATION WITH 50 PERCENT EXPENSING 
OF REFINERIES.—Section 179C shall not apply to any 
property taken into account under subsection (a). 
‘‘(f) RECAPTURE.—Rules similar to the rules of sec-
tion 179(d)(10) shall apply with respect to any property 
which ceases to be qualified biofuel property.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 1245(a) of such Code is amended 
by inserting ‘‘179E,’’ after ‘‘179D,’’ both places it 
appears in paragraphs (2)(C) and (3)(C). 
(2) Section 263(a)(1) of such Code is amended 
by striking ‘‘or’’ at the end of subparagraph (J), by 
striking the period at the end of subparagraph (K) 
and inserting ‘‘, or’’, and by inserting after subpara-
graph (K) the following new subparagraph: 
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