obligation that ensures that the require-
ments of paragraph (2) are met. 
‘‘(ii) REQUIRED ELEMENTS.—The re-
newable fuel obligation determined for a 
calendar year under clause (i) shall— 
‘‘(I) be applicable to refineries, 
blenders, and importers, as appro-
priate; 
‘‘(II) be expressed in terms of a 
volume percentage of diesel sold or in-
troduced into commerce in the United 
States; and 
‘‘(III) subject to subparagraph 
(C), consist of a single applicable per-
centage that applies to all categories 
of persons described in subclause (I). 
‘‘(C) ADJUSTMENTS.—In determining the 
applicable percentage for a calendar year, the 
Administrator shall make adjustments to pre-
vent the imposition of redundant obligations on 
any 
person 
described 
in 
subparagraph 
(B)(ii)(I). 
‘‘(4) CREDIT PROGRAM.— 
‘‘(A) IN GENERAL.—The regulations pro-
mulgated pursuant to paragraph (2)(A) shall 
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provide for the generation of an appropriate 
amount of credits by any person that refines, 
blends, or imports diesel that contains a quan-
tity of renewable fuel that is greater than the 
quantity required under paragraph (2). 
‘‘(B) USE
OF
CREDITS.—A person that 
generates a credit under subparagraph (A) may 
use the credit, or transfer all or a portion of the 
credit to another person, for the purpose of 
complying with regulations promulgated pursu-
ant to paragraph (2). 
‘‘(C) DURATION
OF
CREDITS.—A credit 
generated under this paragraph shall be valid 
during the 1-year period beginning on the date 
on which the credit is generated. 
‘‘(D) INABILITY
TO
GENERATE
OR
PUR-
CHASE SUFFICIENT CREDITS.—The regulations 
promulgated pursuant to paragraph (2)(A) 
shall include provisions allowing any person 
that is unable to generate or purchase sufficient 
credits under subparagraph (A) to meet the re-
quirements of paragraph (2) by carrying for-
ward a credit generated during a previous year 
on the condition that the person, during the cal-
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endar year following the year in which the re-
newable fuel deficit is created— 
‘‘(i) achieves compliance with the re-
newable fuel requirement under paragraph 
(2); and 
‘‘(ii) generates or purchases additional 
credits under subparagraph (A) to offset 
the deficit of the previous year. 
‘‘(5) WAIVERS.— 
‘‘(A) IN GENERAL.—The Administrator, in 
consultation with the Secretary of Agriculture 
and the Secretary of Energy, may waive the re-
quirements of paragraph (2) in whole or in part 
on receipt of a petition of 1 or more States by 
reducing the national quantity of renewable fuel 
for the diesel motor pool required under para-
graph (2) based on a determination by the Ad-
ministrator, after public notice and opportunity 
for comment, that— 
‘‘(i) implementation of the require-
ment would severely harm the economy or 
environment of a State, a region, or the 
United States; or 
‘‘(ii) there is an inadequate domestic 
supply of renewable fuel. 
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‘‘(B) PETITIONS FOR WAIVERS.—Not later 
than 90 days after the date on which the Ad-
ministrator receives a petition under subpara-
graph (A), the Administrator, in consultation 
with the Secretary of Agriculture and the Sec-
retary of Energy, shall approve or disapprove 
the petition. 
‘‘(C) TERMINATION OF WAIVERS.— 
‘‘(i) IN
GENERAL.—Except as pro-
vided in clause (ii), a waiver under sub-
paragraph (A) shall terminate on the date 
that is 1 year after the date on which the 
waiver is provided. 
‘‘(ii) 
EXCEPTION.—The 
Adminis-
trator, in consultation with the Secretary 
of Agriculture and the Secretary of En-
ergy, may extend a waiver under subpara-
graph (A), as the Administrator deter-
mines to be appropriate.’’. 
(b) 
PENALTIES
AND
ENFORCEMENT.—Section 
211(d) of the Clean Air Act (42 U.S.C. 7545(d)) is 
amended— 
(1) in paragraph (1), by striking ‘‘or (o)’’ each 
place it appears and inserting ‘‘(o), or (p)’’; and 
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(2) in paragraph (2), by striking ‘‘and (o)’’ 
each place it appears and inserting ‘‘(o), and (p)’’. 
(c) TECHNICAL AMENDMENTS.—Section 211 of the 
Clean Air Act (42 U.S.C. 7545) is amended— 
(1) in subsection (c)(4)(C), by redesignating the 
second clause (v) as clause (vi); 
(2) in subsection (i)(4), by striking ‘‘section 
324’’ each place it appears and inserting ‘‘section 
325’’; 
(3) in subsection (k)(10), by indenting subpara-
graphs (E) and (F) appropriately; 
(4) in subsection (n), by striking ‘‘section 
219(2)’’ and inserting ‘‘section 216(2)’’; 
(5) by redesignating the second subsection (r) 
and subsection (s) as subsections (s) and (t), respec-
tively; and 
(6) in subsection (t)(1) (as redesignated by 
paragraph (5)), by striking ‘‘this subtitle’’ and in-
serting ‘‘this part’’. 
SEC. 308. EXTENSION AND MODIFICATION OF INCOME AND 
EXCISE 
TAX 
CREDITS 
FOR 
RENEWABLE 
FUELS. 
(a) INCOME TAX CREDITS.— 
(1) ALCOHOL USED AS FUEL.— 
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(A) IN GENERAL.—Paragraph (1) of sec-
tion 40(e) of the Internal Revenue Code of 
1986 is amended— 
(i) by striking ‘‘2010’’ in subpara-
graph (A) and inserting ‘‘2013’’, and 
(ii) by striking ‘‘2011’’ in subpara-
graph (B) and inserting ‘‘2014’’. 
(B) REDUCED
CREDIT
FOR
ETHANOL 
BLENDERS.—Subsection (h) of section 40 of 
such Code is amended— 
(i) by striking ‘‘2010’’ in paragraph 
(1) and inserting ‘‘2013’’, and 
(ii) by striking ‘‘2010’’ in the table in 
paragraph (2) and inserting ‘‘2013’’. 
(2) BIODIESEL AND RENEWABLE DIESEL USED 
AS FUEL.—Subsection (g) of section 40A of the In-
ternal Revenue Code of 1986 is amended by striking 
‘‘2008’’ and inserting ‘‘2013’’. 
(3) SMALL ETHANOL PRODUCER CREDIT EX-
PANDED FOR PRODUCERS OF SUCROSE AND CEL-
LULOSIC ETHANOL.— 
(A) IN
GENERAL.—Subparagraph (C) of 
section 40(b)(4) of such Code (relating to small 
ethanol producer credit) is amended by insert-
ing ‘‘(30,000,000 gallons for any sucrose or cel-
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lulosic ethanol producer)’’ after ‘‘15,000,000 
gallons’’. 
(B) SUCROSE
OR
CELLULOSIC
ETHANOL 
PRODUCER.—Section 40(b)(4) of such Code is 
amended by adding at the end the following 
new subparagraph: 
‘‘(E) SUCROSE OR CELLULOSIC ETHANOL 
PRODUCER.— 
‘‘(i) IN
GENERAL.—For purposes of 
this paragraph, the term ‘sucrose or cel-
lulosic ethanol producer’ means a producer 
of ethanol using sucrose feedstock or cel-
lulosic feedstock. 
‘‘(ii) SUCROSE FEEDSTOCK.—For pur-
poses of clause (i), the term ‘sucrose feed-
stock’ means any raw sugar, refined sugar, 
or sugar equivalents (including juice and 
extract). Such term does not include any 
molasses, beet thick juice, or other similar 
products as determined by the Secretary.’’. 
(C) CONFORMING AMENDMENTS.— 
(i) Section 40(g)(2) of such Code is 
amended by striking ‘‘15,000,000 gallon 
limitation’’ and inserting ‘‘15,000,000 and 
30,000,000 gallon limitations’’. 
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(ii) Section 40(g)(5)(B) of such Code 
is amended by striking ‘‘15,000,000 gal-
lons’’ and inserting ‘‘the gallon limitation 
under subsection (b)(4)(C)’’. 
(b) EXCISE TAX CREDITS.— 
(1) ALCOHOL FUEL MIXTURE CREDIT.—Para-
graph (5) of section 6426(b) of the Internal Revenue 
Code of 1986 is amended by striking ‘‘2010’’ and in-
serting ‘‘2013’’. 
(2) BIODIESEL MIXTURE CREDIT.—Paragraph 
(6) of section 6426(c) of the Internal Revenue Code 
of 1986 is amended by striking ‘‘2010’’ and insert-
ing ‘‘2013’’. 
(3) ALTERNATIVE
FUEL
CREDIT.—Paragraph 
(4) of section 6426(d) of the Internal Revenue Code 
of 1986 is amended by striking ‘‘2009’’ and insert-
ing ‘‘2013’’. 
(c) PAYMENTS FOR FUEL USED IN TRADE OR BUSI-
NESS.— 
(1) 
ALCOHOL
FUEL
MIXTURES.—Section 
6427(e)(5)(A) of the Internal Revenue Code of 1986 
is amended by striking ‘‘2010’’ and inserting 
‘‘2013’’. 
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(2) 
BIODIESEL
MIXTURES.—Section 
6427(e)(5)(B) of such Code is amended by striking 
‘‘2008’’ and inserting ‘‘2013’’. 
(3) ALTERNATIVE
FUEL
AND
ALTERNATIVE 
FUEL
MIXTURES.—Section 6427(e)(5)(C) of such 
Code is amended by striking ‘‘2009’’ and inserting 
‘‘2013’’. 
(d) EFFECTIVE DATE.— 
(1) SUBSECTION (a).—The amendments made 
by subsection (a) shall apply to taxable years begin-
ning after the date of the enactment of this Act. 
(2) SUBSECTION (b).—The amendments made 
by subsection (b) shall apply to any sale, use, or re-
moval for any period after the date of enactment of 
this Act. 
(3) SUBSECTION (c).—The amendments made 
by subsection (c) shall apply to any sale or use for 
any period after the date of enactment of this Act. 
SEC. 309. DOMESTIC REFINERY DIVERSIFICATION. 
(a) PROGRAM.—The Secretary shall award grants for 
qualifying projects to support the commercial deployment 
of CTL refineries. 
(b) PROJECT CRITERIA.—A project shall be consid-
ered to be a qualifying project under this section if the 
Secretary determines that— 
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(1) the purpose of the project is the deployment 
of a CTL refinery in the United States; 
(2) the grant recipient is financially viable with-
out the receipt of additional Federal funding; 
(3) the project site has been identified; 
(4) a preliminary feasibility study has been 
completed; 
(5) a long-term source of coal has been identi-
fied and secured; and 
(6) the refinery will be designed to have— 
(A) a production capacity of at least 
12,000 barrels per day; and 
(B) carbon capture capability. 
(c) USE.—A grant under this section may be used 
to offset costs associated with the deployment of a CTL 
refinery in the United States, such as the costs of prelimi-
nary engineering and engineering design specifications. 
(d) MAXIMUM AMOUNT.—The amount of a grant 
made for a qualifying project under this section shall not 
exceed $50,000,000. 
(e) REPORT.—Not later than 1 year after the date 
of enactment of this Act, and annually thereafter until 
amounts made available to carry out this section are ex-
pended, the Secretary shall submit to Congress a report 
describing— 
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(1) the status of projects funded under this sec-
tion; and 
(2) the reasons for the denial of any grant for 
a project funded under this section. 
(f) AUTHORIZATION OF APPROPRIATIONS.—There is 
authorized to be appropriated to the Secretary to carry 
out this section $500,000,000, to remain available until 
expended. 
SEC. 310. TRANSITION TO A HYDROGEN-BASED ECONOMY. 
(a) IN GENERAL.—There are authorized to be appro-
priated to the Secretary the following amounts to carry 
out projects to promote the transition to a hydrogen-based 
economy: 
(1) For 4 demonstration projects under which 
hydrogen is produced from 3 or more feedstocks, 
$200,000,000 for each of fiscal years 2007 through 
2011, of which each demonstration project shall re-
ceive $50,000,000 for each fiscal year. 
(2) For hydrogen storage for on-road and off- 
road applications— 
(A) $38,000,000 for fiscal year 2007; 
(B) $45,000,000 for fiscal year 2008; 
(C) $53,000,000 for fiscal year 2009; 
(D) $60,000,000 for fiscal year 2010; and 
(E) $70,000,000 for fiscal year 2010. 
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(3) For technologies for the production and pu-
rification of hydrogen with pressures of 10,000 
pounds per square inch or more— 
(A) $40,000,000 for fiscal year 2007; 
(B) $48,000,000 for fiscal year 2008; 
(C) $56,000,000 for fiscal year 2009; and 
(D) $62,000,000 for fiscal year 2010. 
(4) For the incorporation of carbon sequestra-
tion strategies into hydrogen production technologies 
for carbon sequestered from plants used to produce 
hydrogen, using as a model the program established 
under section 963 of the Energy Policy Act of 2005 
(42 U.S.C. 16293)— 
(A) $50,000,000 for fiscal year 2007; 
(B) $75,000,000 for fiscal year 2008; 
(C) $100,000,000 for fiscal year 2009; and 
(D) $110,000,000 for fiscal year 2010. 
(5) For development of a national hydrogen in-
frastructure plan, such sums as are necessary. 
(6) For the National Center for Hydrogen 
Technology designated by the Department of En-
ergy— 
(A) $3,500,000 for fiscal year 2007; 
(B) $4,000,000 for fiscal year 2008; 
(C) $4,500,000 for fiscal year 2009; and 
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(D) $5,000,000 for fiscal year 2010. 
(7) For regional centers for hydrogen tech-
nology designated by the Department of Energy, 
$17,000,000 for fiscal year 2007. 
(8) For the Controlled Hydrogen Fleet and In-
frastructure Demonstration Validation Program of 
the Department of Energy— 
(A) for the controlled hydrogen fleet— 
(i) $30,000,000 for fiscal year 2007; 
(ii) $35,000,000 for fiscal year 2008; 
(iii) $41,000,000 for fiscal year 2009; 
and 
(iv) $47,000,000 for fiscal year 2010; 
and 
(B) for infrastructure demonstration vali-
dation— 
(i) $18,000,000 for fiscal year 2007; 
(ii) $22,000,000 for fiscal year 2008; 
(iii) $26,000,000 for fiscal year 2009; 
and 
(iv) $30,000,000 for fiscal year 2010. 
(9) For the hydrogen automotive technologies 
programs of the Department of Defense— 
(A) $25,000,000 for fiscal year 2007; 
(B) $30,000,000 for fiscal year 2008; 
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(C) $35,000,000 for fiscal year 2009; and 
(D) $40,000,000 for fiscal year 2010. 
(b) FEDERAL AND STATE PROCUREMENT OF FUEL 
CELL VEHICLES AND HYDROGEN ENERGY SYSTEMS.— 
Section 782(e) of the Energy Policy Act of 2005 (42 
U.S.C. 16122(e)) is amended by striking paragraphs (2) 
and (3) and inserting the following: 
‘‘(2) $35,000,000 for fiscal year 2009; 
‘‘(3) $80,000,000 for fiscal year 2010; and’’. 
(c) FEDERAL PROCUREMENT OF STATIONARY, PORT-
ABLE, AND MICRO FUEL CELLS.—Section 783(d) of the 
Energy Policy Act of 2005 (42 U.S.C. 16123(d)) is 
amended by striking paragraphs (2) through (5) and in-
serting the following: 
‘‘(2) $75,000,000 for fiscal year 2007; 
‘‘(3) $100,000,000 for fiscal year 2008; 
‘‘(4) $125,000,000 for fiscal year 2009; 
‘‘(5) $150,000,000 for fiscal year 2010; and’’. 
(d) HYDROGEN PROGRAMS.—Section 805 of the En-
ergy Policy Act of 2005 (42 U.S.C. 16154) is amended— 
(1) in subsection (h), by striking paragraphs 
(3) through (5) and inserting the following: 
‘‘(3) $232,000,000 for fiscal year 2008; 
‘‘(4) $252,500,000 for fiscal year 2009; 
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‘‘(5) $283,000,000 for fiscal year 2010; and’’; 
and 
(2) in subsection (i), by striking paragraphs (2) 
through (5) and inserting the following: 
‘‘(2) $180,000,000 for fiscal year 2007; 
‘‘(3) $200,000,000 for fiscal year 2008; 
‘‘(4) $220,000,000 for fiscal year 2009; 
‘‘(5) $240,000,000 for fiscal year 2010; and’’. 
SEC. 311. MODIFICATION AND EXTENSION OF ALTER-
NATIVE 
VEHICLE 
REFUELING 
PROPERTY 
CREDIT. 
(a) INCREASE IN CREDIT AMOUNT.—Subsection (a) 
of section 30C of the Internal Revenue Code of 1986 is 
amended by striking ‘‘30 percent’’ and inserting ‘‘50 per-
cent’’. 
(b) CREDIT ALLOWABLE AGAINST ALTERNATIVE 
MINIMUM TAX.—Paragraph (2) of section 30C of the In-
ternal Revenue Code of 1986 is amended to read as fol-
lows: 
‘‘(2) PERSONAL
CREDIT.—The credit allowed 
under subsection (a) (after the application of para-
graph (1)) for any taxable year shall not exceed the 
excess (if any) of— 
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‘‘(A) the sum of the regular tax for the 
taxable year plus the tax imposed by section 55, 
over 
‘‘(B) the sum of the credits allowable 
under subpart A and sections 27, 30, and 
30B.’’. 
(c) EXTENSION OF CREDIT.—Paragraph (2) of sec-
tion 30C(g) of the Internal Revenue Code of 1986 is 
amended by striking ‘‘December 31, 2009’’ and inserting 
‘‘December 31, 2013’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2005. 
SEC. 312. USE OF NATIVE GRASSES ON CONSERVATION RE-
SERVE LAND FOR BIOMASS HARVESTING. 
(a) PURPOSE.—The purpose of this section is to clar-
ify that an owner or operator of a farm or ranch that has 
entered into a conservation reserve contract may harvest 
perennial, permanent cover crops on land that is subject 
to the contract for the production of cellulosic ethanol, 
biogas, biobased hydrogen, other biobased liquid fuels, or 
other biobased products. 
(b) 
USE
OF
NATIVE
GRASSES.—Section 
1232(a)(7)(A) of the Food Security Act of 1985 (16 
U.S.C. 3832(a)(7)(A)) is amended— 
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(1) in clause (ii), by striking ‘‘and’’ after the 
semicolon at the end; and 
(2) by adding at the end the following: 
‘‘(iv) shall permit the use of native 
grasses to produce cellulosic ethanol, 
biogas, biobased hydrogen, other biobased 
liquid fuel, or other biobased products (col-
lectively referred to in this clause as 
‘biobased products’), except that— 
‘‘(I) native grasses may not be 
used to produce biobased products on 
land that is enrolled in the conserva-
tion reserve if the land is devoted to 
shallow water for wildlife, wildlife 
habitat, diversion or erosion preven-
tion, wetland restoration, rare or de-
clining habitat, or upland bird habitat 
buffers; 
‘‘(II) native grasses may be used 
to produce biobased products under 
this subparagraph only during the pe-
riod beginning September 31, and 
ending May 1, of each year; and 
‘‘(III) not more than 50 percent 
of any plot that is enrolled in the con-
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servation reserve may be used to 
produce biobased products each year; 
and’’. 
SEC. 313. USE OF CAFE´ PENALTIES TO BUILD ALTERNATIVE 
FUELING INFRASTRUCTURE. 
Section 32912 of title 49, United States Code, is 
amended by adding at the end the following 
‘‘(e) 
ALTERNATIVE
FUELING
INFRASTRUCTURE 
TRUST FUND.— 
‘‘(1) ESTABLISHMENT.—There is established in 
the Treasury of the United States a trust fund, to 
be known as the Alternative Fueling Infrastructure 
Trust Fund, consisting of— 
‘‘(A) such amounts as are deposited into 
the Trust Fund under paragraph (2); and 
‘‘(B) any interest earned on investment of 
amounts in the Trust Fund. 
‘‘(2) DEPOSITS.—The Secretary of Transpor-
tation shall remit to the Treasury 90 percent of the 
amounts collected in civil penalties each year under 
this section for deposit to the Trust Fund. 
‘‘(3) INVESTMENT OF AMOUNTS.— 
‘‘(A) IN GENERAL.—The Secretary of the 
Treasury shall invest such portion of the Trust 
Fund as is not, in the judgment of the Sec-
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retary of the Treasury, required to meet cur-
rent withdrawals. 
‘‘(B) INTEREST-BEARING OBLIGATIONS.— 
Investments may be made only in interest-bear-
ing obligations of the United States. 
‘‘(C) ACQUISITION OF OBLIGATIONS.—For 
the purpose of investments under subparagraph 
(A), obligations may be acquired— 
‘‘(i) on original issue at the issue 
price; or 
‘‘(ii) by purchase of outstanding obli-
gations at the market price. 
‘‘(D) SALE OF OBLIGATIONS.—Any obliga-
tion acquired by the Trust Fund may be sold 
by the Secretary of the Treasury at the market 
price. 
‘‘(E) CREDITS TO TRUST FUND.—The in-
terest on, and the proceeds from the sale or re-
demption of, any obligations held in the Trust 
Fund shall be credited to and form a part of 
the Trust Fund. 
‘‘(4) TRANSFERS OF AMOUNTS.— 
‘‘(A) IN GENERAL.—The amounts required 
to be transferred to the Trust Fund under this 
subsection shall be transferred at least quar-
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terly from the general fund of the Treasury to 
the Trust Fund on the basis of estimates made 
by the Secretary of the Treasury. 
‘‘(B) ADJUSTMENTS.—Proper adjustment 
shall be made in amounts subsequently trans-
ferred to the extent prior estimates were in ex-
cess of or less than the amounts required to be 
transferred. 
‘‘(5) EXPENDITURES FROM THE FUND.— 
‘‘(A) IN GENERAL.—The Secretary of En-
ergy shall obligate such sums as are available in 
the Trust Fund to establish a grant program to 
increase the number of locations at which con-
sumers may purchase alternative fuels. 
‘‘(B) AMOUNT AND PERSONS ELIGIBLE.— 
The Secretary of Energy may award grants 
under this paragraph in an amount not to ex-
ceed $150,000 to persons who have expertise 
in— 
‘‘(i) operating a fueling station; or 
‘‘(ii) administering grants for the pur-
pose of establishing an alternative fueling 
infrastructure. 
‘‘(C) OTHER CONSIDERATIONS.— 
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‘‘(i) NUMBER
OF
VEHICLES
TO
BE 
SERVED.—In awarding grants under this 
paragraph, the Secretary shall consider the 
number of vehicles in service capable of 
using a specific type of alternative fuel. 
‘‘(ii) MATCHING FUNDS.—A recipient 
of a grant under this paragraph shall pro-
vide a non-Federal match of not less than 
$1 for every $3 of grant funds received 
under this paragraph. 
‘‘(iii) SELECTION
OF
LOCATIONS.— 
Each grant recipient shall select the loca-
tion for each alternative fuel station to be 
constructed with grant funds received 
under this paragraph on a formal, open, 
and competitive basis. 
‘‘(D) USE
OF
FUNDS.—Grants received 
under this paragraph may be used to— 
‘‘(i) construct new facilities to dis-
pense alternative fuels; 
‘‘(ii) purchase equipment to upgrade, 
expand, or otherwise improve existing al-
ternative fuel facilities; or 
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‘‘(iii) purchase equipment or pay for 
specific turnkey fueling services by alter-
native fuel providers. 
‘‘(E) REQUIREMENT
FOR
FACILITIES.— 
Facilities constructed or upgraded with a grant 
awarded under this paragraph shall— 
‘‘(i) provide alternative fuel to the 
public for a period of not less than 4 years 
from the date on which the facility opens; 
‘‘(ii) establish a marketing plan to ad-
vance the sale and use of alternative fuels; 
‘‘(iii) prominently display the price of 
the alternative fuel being provided on the 
station marquee and in the station; 
‘‘(iv) provide point of sale materials 
on alternative fuel; 
‘‘(v) clearly label the dispenser with 
consistent materials; 
‘‘(vi) price the alternative fuel at a 
margin that is not greater than that which 
is received for unleaded gasoline; and 
‘‘(vii) support and use all available tax 
incentives to reduce the cost of the alter-
native fuel to the lowest possible retail 
price. 
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‘‘(F) NOTIFICATION OF OPENING OF FA-
CILITY.—Not later than the date on which an 
alternative fuel station described in this para-
graph begins to offer alternative fuel to the 
public, the person that received the grant to 
construct or upgrade the station shall notify the 
Secretary of Energy of such opening. The Sec-
retary of Energy shall add each new alternative 
fuel station to the alternative fuel station loca-
tor on the Department of Energy Website when 
the Secretary receives notification under this 
subparagraph. 
‘‘(G) REPORT.—Not later than 6 months 
after the receipt of a grant award under this 
paragraph, and every 6 months thereafter, each 
person receiving a grant under this subsection 
shall submit a report to the Secretary of En-
ergy that describes— 
‘‘(i) the status of each alternative fuel 
station constructed with grant funds re-
ceived under this paragraph; 
‘‘(ii) the amount of alternative fuel 
dispensed at each station during the pre-
ceding 6-month period; and 
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‘‘(iii) the average price per gallon of 
the alternative fuel sold at each station 
during the preceding 6-month period.’’. 
TITLE IV—DOMESTIC PRODUC-
TION OF OIL AND NATURAL 
GAS 
SEC. 401. MODIFICATIONS TO ENHANCED OIL RECOVERY 
CREDIT. 
(a) ENHANCED CREDIT FOR CARBON DIOXIDE IN-
JECTIONS.—Section 43 of the Internal Revenue Code of 
1986 is amended by adding at the end the following new 
subsection: 
‘‘(f) ENHANCED CREDIT
FOR PROJECTS USING 
QUALIFIED CARBON DIOXIDE.— 
‘‘(1) IN GENERAL.—In the case of any qualified 
enhanced oil recovery project described in paragraph 
(2), subsection (a) shall be applied by substituting 
‘20 percent’ for ‘15 percent’. 
‘‘(2) SPECIFIED QUALIFIED ENHANCED OIL RE-
COVERY PROJECT.— 
‘‘(A) IN GENERAL.—A qualified enhanced 
oil recovery project is described in this para-
graph if— 
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‘‘(i) the project begins or is substan-
tially expanded after December 31, 2006, 
and 
‘‘(ii) the project uses qualified carbon 
dioxide in an oil recovery method which in-
volves flooding or injection. 
‘‘(B) QUALIFIED CARBON DIOXIDE.—For 
purposes of this subsection, the term ‘qualified 
carbon dioxide’ means carbon dioxide that is— 
‘‘(i) from an industrial source, or 
‘‘(ii) separated from natural gas and 
natural gas liquids at a natural gas proc-
essing plant. 
‘‘(3) TERMINATION.—This subsection shall not 
apply to costs paid or incurred for any qualified en-
hanced oil recovery project after December 31, 
2010.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to costs paid or incurred in taxable 
years ending after December 31, 2006. 
SEC. 402. OFFSHORE OIL AND GAS LEASING IN 181 AREA OF 
GULF OF MEXICO. 
(a) DEFINITION OF SECRETARY.—In this section, the 
term ‘‘Secretary’’ means the Secretary of the Interior, act-
ing through the Minerals Management Service. 
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(b) LEASE SALE.—Except as otherwise provided in 
this section, the Secretary shall offer the 181 Area for oil 
and gas leasing pursuant to the Outer Continental Shelf 
Lands Act (43 U.S.C. 1331 et seq.) as soon as practicable, 
but not later than 1 year, after the date of enactment of 
this Act. 
(c) EXCLUDED AREAS.—In carrying out subsection 
(b), the Secretary shall not offer for oil and gas leasing— 
(1) any area east of the Military Mission Line, 
unless the Secretary of Defense agrees in writing be-
fore the area is offered for lease that the area can 
be developed in a manner that will not interfere with 
military activities; or 
(2) any area that is within 100 miles of the 
coastline of the State of Florida. 
(d) LEASING PROGRAM.—The 181 Area shall be of-
fered for lease under this section notwithstanding the 
omission of the 181 Area from any outer Continental Shelf 
leasing program under section 18 of the Outer Continental 
Shelf Lands Act (43 U.S.C. 1344). 
TITLE V—ELECTRICITY AND 
RENEWABLES 
SEC. 501. DOE NATIONAL AND NORTH AMERICAN ELEC-
TRICITY GRID STUDIES. 
(a) FINDINGS.—Congress finds that— 
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(1) the interstate transmission system of North 
America cannot reliably handle the existing and ex-
pected dramatic increase in future electric trans-
actions; 
(2) significant new transmission capacity is ur-
gently needed to maintain reliability and meet the 
needs of a growing demand for electricity; 
(3) transmission shortages and constraints are 
contributing to wholesale and retail electric market 
failures that are harming electric consumers in, and 
the economy of, the United States; 
(4) existing transmission capacity limits the de-
velopment of renewable and other energy sources by 
constraining delivery of those resources into the na-
tional power market; 
(5) excessive congestion unnecessarily raises 
costs for all consumers; and 
(6) an adequate transmission system is critical 
to national security. 
(b) STUDIES.— 
(1) IN GENERAL.—Not later than 1 year after 
the date of enactment of this Act, the Secretary, in 
consultation with the Rural Utilities Service, the 
Federal Power Marketing Administrations, the Fed-
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eral Energy Regulatory Commission, and other ap-
propriate regional entities, shall carry out— 
(A) a study, to be known as the ‘‘National 
Transmission Grid Study’’, to determine the 
feasibility of constructing a national trans-
mission grid with nationwide functionality and 
benefits similar to those provided by construc-
tion of the Interstate Highway System; and 
(B) a study, to be known as the ‘‘North 
American Transmission Grid Study’’, to deter-
mine the feasibility of constructing an inte-
grated North American transmission grid with 
international functionality and benefits similar 
to those provided by construction of the Inter-
state Highway System. 
(2) STUDY.—In carrying out the studies, the 
Secretary shall take into consideration— 
(A) economic viability, including the cost- 
effectiveness of developing a national trans-
mission grid or North American transmission 
grid, as appropriate; 
(B) economic growth in the United States, 
including the extent to which that economic 
growth is constrained by the lack of adequate 
or reasonably-priced electricity; 
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(C) limited transmission infrastructure, re-
sulting in the inability or limited ability to 
transmit available power supply resources; 
(D) diversification of power supply; 
(E) requirements and needs relating to the 
national defense and homeland security of the 
United States; 
(F) promotion of national energy security; 
(G) transmission losses; and 
(H) reliability. 
(c) REPORT TO CONGRESS.—Not later than 90 days 
after the date of completion of the studies required by sub-
section (c)(1), the Secretary shall submit to Congress a 
report describing the viability of constructing— 
(1) a national transmission grid in accordance 
with nationwide functionality and benefits similar to 
those provided by construction of the Interstate Sys-
tem; and 
(2) an integrated North American transmission 
grid with international functionality and benefits 
similar to those provided by construction of the 
Interstate System. 
(d) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated such sums as are nec-
essary to carry out this section. 
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SEC. 502. TAX-EXEMPT FINANCING OF ELECTRIC TRANS-
MISSION FACILITIES NOT SUBJECT TO PRI-
VATE BUSINESS USE TEST. 
(a) IN GENERAL.—Section 141(b)(6) of the Internal 
Revenue Code of 1986 (defining private business use) is 
amended by adding at the end the following new subpara-
graph: 
‘‘(C) EXCEPTION
FOR
ELECTRIC
TRANS-
MISSION FACILITIES.—For purposes of the 1st 
sentence of subparagraph (A), the operation or 
use of an electric transmission facility by any 
person which is not a governmental unit shall 
not be considered a private business use.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to bonds issued after the date of 
the enactment of this Act. 
SEC. 503. EXTENSION OF CREDIT FOR PRODUCING ELEC-
TRICITY FROM CERTAIN RENEWABLE RE-
SOURCES. 
(a) IN GENERAL.—Paragraphs (1) through (7) of 
section 45(d) of the Internal Revenue Code of 1986 are 
each amended by striking ‘‘January 1, 2008’’ each place 
it appears and inserting ‘‘January 1, 2013’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on the date of the enactment 
of this Act. 
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SEC. 504. FEDERAL RENEWABLE PORTFOLIO STANDARD. 
The Public Utility Regulatory Policies Act of 1978 
(16 U.S.C. 2601 et seq.) is amended by adding at the end 
of title VI the following: 
‘‘SEC. 610. FEDERAL RENEWABLE PORTFOLIO STANDARD. 
‘‘(a) DEFINITIONS.—In this section: 
‘‘(1) BASE
AMOUNT
OF
ELECTRICITY.—The 
term ‘base amount of electricity’ means the total 
amount of electricity sold by an electric utility to 
electric consumers in a calendar year, excluding— 
‘‘(A) electricity generated by a hydro-
electric facility (including a pumped storage fa-
cility but excluding incremental hydropower); 
and 
‘‘(B) electricity generated through the in-
cineration of municipal solid waste. 
‘‘(2) DISTRIBUTED
GENERATION
FACILITY.— 
The term ‘distributed generation facility’ means a 
facility at a customer site. 
‘‘(3) EXISTING
RENEWABLE
ENERGY.—The 
term ‘existing renewable energy’ means, except as 
provided in paragraph (7)(B), electric energy gen-
erated at a facility (including a distributed genera-
tion facility) placed in service prior to the date of 
enactment of this section from— 
‘‘(A) solar, wind, or geothermal energy; 
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‘‘(B) ocean energy; 
‘‘(C) biomass (as defined in section 203(b) 
of the Energy Policy Act of 2005 (42 U.S.C. 
15852(b))); or 
‘‘(D) landfill gas. 
‘‘(4) GEOTHERMAL ENERGY.—The term ‘geo-
thermal energy’ means energy derived from a geo-
thermal deposit (within the meaning of section 
613(e)(2) of the Internal Revenue Code of 1986). 
‘‘(5) INCREMENTAL
GEOTHERMAL
PRODUC-
TION.— 
‘‘(A) IN GENERAL.—The term ‘incremental 
geothermal production’ means, for any year, the 
difference between— 
‘‘(i) the total kilowatt hours of elec-
tricity produced from a facility (including a 
distributed generation facility) using geo-
thermal energy, and 
‘‘(ii) the average annual kilowatt 
hours produced at the facility for 5 of the 
7 calendar years preceding the date of en-
actment of this section after eliminating 
the highest and the lowest kilowatt hour 
production years in that 7-year period. 
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‘‘(B) SPECIAL RULE.—A facility described 
in subparagraph (A) that was placed in service 
at least 7 years before the date of enactment of 
this section shall, beginning with the year in 
which that date of enactment occurs, reduce the 
amount calculated under subparagraph (A)(ii) 
each year, on a cumulative basis, by the average 
percentage decrease in the annual kilowatt hour 
production for the 7-year period described in 
subparagraph (A)(ii), the cumulative sum of 
which shall not exceed 30 percent. 
‘‘(6) INCREMENTAL HYDROPOWER.— 
‘‘(A) IN GENERAL.—The term ‘incremental 
hydropower’ means additional energy generated 
as a result of efficiency improvements or capac-
ity additions made on or after the date of en-
actment of this section or the effective date of 
an existing applicable State renewable portfolio 
standard program at a hydroelectric facility 
that was placed in service before that date. 
‘‘(B) 
EXCLUSIONS.—The 
term 
‘incre-
mental hydropower’ does not include additional 
energy generated as a result of operational 
changes not directly associated with efficiency 
improvements or capacity additions. 
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‘‘(C) MEASUREMENT
OF
IMPROVEMENTS 
AND ADDITIONS.—Efficiency improvements and 
capacity additions referred to in subparagraph 
(A) shall be measured on the basis of the same 
water flow information used to determine a his-
toric average annual generation baseline for the 
hydroelectric facility and certified by the Sec-
retary or the Federal Energy Regulatory Com-
mission. 
‘‘(7) NEW
RENEWABLE
ENERGY.—The term 
‘new renewable energy’ means— 
‘‘(A) electric energy generated at a facility 
(including a distributed generation facility) 
placed in service on or after January 1, 2003, 
from— 
‘‘(i) solar, wind, or geothermal energy 
or ocean energy; 
‘‘(ii) biomass (as defined in section 
203(b) of the Energy Policy Act of 2005 
(42 U.S.C. 15852(b))); 
‘‘(iii) landfill gas; or 
‘‘(iv) incremental hydropower; and 
‘‘(B) for electric energy generated at a fa-
cility (including a distributed generation facil-
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ity) placed in service before the date of enact-
ment of this section— 
‘‘(i) the additional energy above the 
average generation in the 3 years pre-
ceding the date of enactment of this sec-
tion at the facility from— 
‘‘(I) solar or wind energy or 
ocean energy; 
‘‘(II) biomass (as defined in sec-
tion 203(b) of the Energy Policy Act 
of 2005 (42 U.S.C. 15852(b))); 
‘‘(III) landfill gas; or 
‘‘(IV) incremental hydropower; 
and 
‘‘(ii) the incremental geothermal pro-
duction. 
‘‘(8) OCEAN ENERGY.—The term ‘ocean energy’ 
includes current, wave, tidal, and thermal energy. 
‘‘(b) RENEWABLE ENERGY REQUIREMENT.— 
‘‘(1) REQUIREMENT.— 
‘‘(A) IN
GENERAL.—Each electric utility 
that sells electricity to electric consumers shall 
obtain a percentage of the base amount of elec-
tricity the electric utility sells to electric con-
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sumers in any calendar year from new renew-
able energy or existing renewable energy. 
‘‘(B) PERCENTAGES.—The percentage ob-
tained in a calendar year shall not be less than 
the amount specified in the following table: 
Minimum annual 
‘‘Calendar year: 
percentage: 
2008 through 2011 ..................................................................
2.5
2012 through 2015 ..................................................................
5.0
2016 through 2019 ..................................................................
7.5
2020 through 2030 ..................................................................
10.0.
‘‘(2) MEANS OF COMPLIANCE.—An electric util-
ity shall meet the requirements of paragraph (1) 
by— 
‘‘(A) generating electric energy using new 
renewable energy or existing renewable energy; 
‘‘(B) purchasing electric energy generated 
by new renewable energy or existing renewable 
energy; 
‘‘(C) purchasing renewable energy credits 
issued under subsection (c); or 
‘‘(D) a combination of the foregoing. 
‘‘(c) RENEWABLE ENERGY CREDIT TRADING PRO-
GRAM.— 
‘‘(1) IN GENERAL.—Not later than January 1, 
2007, the Secretary shall establish a renewable en-
ergy credit trading program to permit an electric 
utility that does not generate or purchase enough 
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electric energy from renewable energy to meet its ob-
ligations under subsection (b)(1) to satisfy the re-
quirements by purchasing sufficient renewable en-
ergy credits. 
‘‘(2) RESPONSIBILITIES
OF
SECRETARY.—As 
part of the program, the Secretary shall— 
‘‘(A) issue renewable energy credits to gen-
erators of electric energy from new renewable 
energy; 
‘‘(B) sell renewable energy credits to elec-
tric utilities at the rate of 1.5 cents per kilo-
watt-hour (as adjusted for inflation under sub-
section (h)); 
‘‘(C) ensure that a kilowatt hour, including 
the associated renewable energy credit, shall be 
used only once for purposes of compliance with 
this section; and 
‘‘(D) allow double credits for generation 
from facilities on Indian land, and triple credits 
for generation from small renewable distributed 
generators (meaning those no larger than 1 
megawatt). 
‘‘(3) USE OF CREDITS.—A credit under para-
graph (2)(A) may only be used for compliance with 
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this section for the 3-year period beginning on the 
date of issuance of the credit. 
‘‘(d) ENFORCEMENT.— 
‘‘(1) CIVIL
PENALTIES.—Any electric utility 
that fails to meet the renewable energy requirements 
of subsection (b) shall be subject to a civil penalty. 
‘‘(2) AMOUNT OF PENALTY.—The amount of 
the civil penalty shall be determined by multiplying 
the number of kilowatt-hours of electric energy sold 
to electric consumers in violation of subsection (b) 
by the greater of 1.5 cents (adjusted for inflation 
under subsection (h)) or 200 percent of the average 
market value of renewable energy credits during the 
year in which the violation occurred. 
‘‘(3) MITIGATION OR WAIVER.— 
‘‘(A) IN
GENERAL.—The Secretary may 
mitigate or waive a civil penalty under this sub-
section if the electric utility was unable to com-
ply with subsection (b) for reasons outside of 
the reasonable control of the utility. 
‘‘(B) REDUCTION OF AMOUNT.—The Sec-
retary shall reduce the amount of any penalty 
determined under paragraph (2) by an amount 
paid by the electric utility to a State for failure 
to comply with the requirement of a State re-
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newable energy program if the State require-
ment is greater than the applicable requirement 
of subsection (b). 
‘‘(4) PROCEDURE FOR ASSESSING PENALTY.— 
The Secretary shall assess a civil penalty under this 
subsection in accordance with the procedures pre-
scribed by section 333(d) of the Energy Policy and 
Conservation Act of 1954 (42 U.S.C. 6303). 
‘‘(e) STATE RENEWABLE ENERGY ACCOUNT PRO-
GRAM.— 
‘‘(1) IN GENERAL.—Not later than December 
31, 2008, the Secretary shall establish a State re-
newable energy account program. 
‘‘(2) DEPOSIT
OF
AMOUNTS.—All funds col-
lected by the Secretary from the sale of renewable 
energy credits and the assessment of civil penalties 
under this section shall be deposited into the renew-
able energy account established pursuant to this 
subsection. 
‘‘(3) MAINTENANCE OF ACCOUNT.—The State 
renewable energy account shall be held by the Sec-
retary and shall not be transferred to the Treasury 
Department. 
‘‘(4) USE OF AMOUNTS.—Proceeds deposited in 
the State renewable energy account shall be used by 
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the Secretary, subject to appropriations, for a pro-
gram to provide grants to the State agency respon-
sible for developing State energy conservation plans 
under section 362 of the Energy Policy and Con-
servation Act (42 U.S.C. 6322) for the purposes of 
promoting renewable energy production, including 
programs that promote technologies that reduce the 
use of electricity at customer sites such as solar 
water heating. 
‘‘(5) GUIDELINES
AND
CRITERIA.—The Sec-
retary may issue guidelines and criteria for grants 
awarded under this subsection. 
‘‘(6) MAINTENANCE
OF
RECORDS
AND
EVI-
DENCE OF COMPLIANCE.—State energy offices re-
ceiving grants under this section shall maintain such 
records and evidence of compliance as the Secretary 
may require. 
‘‘(7) ALLOCATION
OF
FUNDS.—In allocating 
funds under this program, the Secretary shall give 
preference— 
‘‘(A) to States in regions that have a dis-
proportionately small share of economically sus-
tainable renewable energy generation capacity; 
and 
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‘‘(B) to State programs to stimulate or en-
hance innovative renewable energy technologies. 
‘‘(f) RULES.—Not later than 1 year after the date 
of enactment of this section, the Secretary shall issue rules 
implementing this section. 
‘‘(g) EXEMPTIONS.—This section shall not apply in 
any calendar year to an electric utility that— 
‘‘(1) sold less than 4,000,000 megawatt-hours 
of electric energy to electric consumers during the 
preceding calendar year; or 
‘‘(2) is located in Hawaii. 
‘‘(h) INFLATION ADJUSTMENT.—Not later than De-
cember 31 of each year beginning in 2008, the Secretary 
shall adjust for inflation the price of a renewable energy 
credit under subsection (c)(2)(B) and the amount of the 
civil penalty per kilowatt-hour under subsection (d)(2). 
‘‘(i) STATE PROGRAMS.— 
‘‘(1) IN
GENERAL.—Nothing in this section 
shall diminish any authority of a State or political 
subdivision thereof to adopt or enforce any law or 
regulation respecting renewable energy, but, except 
as provided in subsection (d)(3), no such law or reg-
ulation shall relieve any person of any requirement 
otherwise applicable under this section. 
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‘‘(2) 
FEDERAL-STATE
COORDINATION.—The 
Secretary, in consultation with States having renew-
able energy programs, shall, to the maximum extent 
practicable, facilitate coordination between the Fed-
eral program and State programs. 
‘‘(j) TERMINATION
OF AUTHORITY.—This section 
and the authority provided by this section terminate on 
December 31, 2030.’’. 
SEC. 505. EXTENSION AND EXPANSION OF CLEAN RENEW-
ABLE ENERGY BONDS. 
(a) EXTENSION.—Section 54(m) of the Internal Rev-
enue Code of 1986 (relating to termination) is amended 
by striking ‘‘2007’’ and inserting ‘‘2012’’. 
(b) ANNUAL VOLUME CAP FOR BONDS ISSUED DUR-
ING EXTENSION PERIOD.—Paragraph (1) of section 54(f) 
of the Internal Revenue Code of 1986 (relating to limita-
tion on amount of bonds designated) is amended to read 
as follows: 
‘‘(1) NATIONAL LIMITATION.— 
‘‘(A) INITIAL
NATIONAL
LIMITATION.— 
With respect to bonds issued after December 
31, 2005, and before January 1, 2008, there is 
a national clean renewable energy bond limita-
tion of $800,000,000. 
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‘‘(B) ANNUAL
NATIONAL
LIMITATION.— 
With respect to bonds issued after December 
31, 2007, and before January 1, 2013, there is 
a national clean renewable energy bond limita-
tion 
for 
each 
calendar 
year 
of 
$1,000,000,000.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to bonds issued after the date of 
the enactment of this Act. 
SEC. 506. CREDIT FOR WIND ENERGY PROPERTY IN-
STALLED IN RESIDENCES AND BUSINESSES. 
(a) IN GENERAL.—Subpart B of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986, as amended by this Act, is amended by inserting 
after section 30C the following new section: 
‘‘SEC. 30E. WIND ENERGY PROPERTY. 
‘‘(a) ALLOWANCE OF CREDIT.—There shall be al-
lowed as a credit against the tax imposed by this chapter 
for the taxable year an amount equal to 30 percent of the 
amount paid or incurred by the taxpayer for qualified wind 
energy property placed in service or installed during such 
taxable year. 
‘‘(b) LIMITATIONS.— 
‘‘(1) IN GENERAL.—The credit allowed under 
subsection (a) (determined without regard to para-
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graph (2)) for any taxable year shall not exceed 
$10,000. 
‘‘(2) LIMITATION
BASED
ON
AMOUNT
OF 
TAX.— 
‘‘(A) IN
GENERAL.—The credit allowed 
under subsection (a) for any taxable year shall 
not exceed the excess of— 
‘‘(i) the sum of the regular tax liabil-
ity (as defined in section 26(b)) plus the 
tax imposed by section 55, over 
‘‘(ii) the sum of the credits allowable 
under this part (other than under this sec-
tion and subpart C thereof, relating to re-
fundable credits) and section 1397E. 
‘‘(B) CARRYOVER OF UNUSED CREDIT.—If 
the credit allowable under subsection (a) ex-
ceeds the limitation imposed by subparagraph 
(A) for such taxable year, such excess shall be 
carried to the succeeding taxable year and 
added to the credit allowable under subsection 
(a) for such taxable year. 
‘‘(c) QUALIFIED WIND ENERGY PROPERTY.—For 
purposes of this section, the term ‘qualified wind energy 
property’ means a wind turbine if— 
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‘‘(1) such turbine is placed in service or in-
stalled on or in connection with property located in 
the United States, 
‘‘(2) in the case of an individual, the property 
on or in connection with which such turbine is in-
stalled is a dwelling unit which is used as a resi-
dence by the taxpayer, 
‘‘(3) such turbine is used to generate electricity 
for the property on or in connection with which it 
is installed, and 
‘‘(4) the original use of such turbine commences 
with the taxpayer. 
‘‘(d) SPECIAL RULES.—For purposes of this sec-
tion— 
‘‘(1) TENANT-STOCKHOLDER IN COOPERATIVE 
HOUSING CORPORATION.—In the case of an indi-
vidual who is a tenant-stockholder (as defined in sec-
tion 216(b)(2)) in a cooperative housing corporation 
(as defined in section 216(b)(1)), such individual 
shall be treated as having paid his tenant-stock-
holder’s proportionate share (as defined in section 
216(b)(3)) of any expenditures paid or incurred for 
qualified wind energy property by such corporation, 
and such credit shall be allocated appropriately to 
such individual. 
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‘‘(2) CONDOMINIUMS.— 
‘‘(A) IN GENERAL.—In the case of an indi-
vidual who is a member of a condominium man-
agement association with respect to a condo-
minium which he owns, such individual shall be 
treated as having paid his proportionate share 
of expenditures paid or incurred for qualified 
wind energy property by such association, and 
such credit shall be allocated appropriately to 
such individual. 
‘‘(B) CONDOMINIUM
MANAGEMENT
ASSO-
CIATION.—For purposes of this paragraph, the 
term ‘condominium management association’ 
means an organization which meets the require-
ments of section 528(c)(2) with respect to a 
condominium project of which substantially all 
of the units are used by individuals as resi-
dences. 
‘‘(3) LABOR COSTS; PROPERTY SUBSIDIZED BY 
ENERGY FINANCING.—Rules similar to the rules of 
paragraphs (1) and (9) of section 25D(e) shall apply 
for purposes of this section. 
‘‘(e) BASIS ADJUSTMENT.—For purposes of this sub-
title, if a credit is allowed under this section for any ex-
penditure with respect to a residence or other property, 
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the basis of such residence or other property shall be re-
duced by the amount of the credit so allowed. 
‘‘(f) TERMINATION.—The credit allowed under this 
section shall not apply to property placed in service or in-
stalled after December 31, 2011.’’. 
(b) CONFORMING AMENDMENT.—Subsection (a) of 
section 1016 of the Internal Revenue Code of 1986 (relat-
ing to general rule for adjustments to basis) is amended 
by striking ‘‘and’’ at the end of paragraph (36), by strik-
ing the period at the end of paragraph (37) and inserting 
‘‘, and’’, and by adding at the end the following new para-
graph: 
‘‘(38) in the case of a residence or other prop-
erty with respect to which a credit was allowed 
under section 30E, to the extent provided in section 
30E(e).’’. 
(c) CLERICAL AMENDMENT.—The table of sections 
for subpart B of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by in-
serting after the item relating to section 30D the following 
new item: 
‘‘Sec. 30E. Wind energy property.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years ending after De-
cember 31, 2006. 
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SEC. 507. EXTENSION OF BUSINESS SOLAR INVESTMENT 
CREDIT. 
(a) ENERGY PERCENTAGE.—Subclause (II) of sec-
tion 48(a)(2)(A)(i) of the Internal Revenue Code of 1986 
is amended by striking ‘‘January 1, 2008’’ and inserting 
‘‘January 1, 2013’’. 
(b) HYBRID SOLAR LIGHTING SYSTEMS.—Clause (ii) 
of section 48(a)(3)(A) of the Internal Revenue Code of 
1986 is amended by striking ‘‘January 1, 2008’’ and in-
serting ‘‘January 1, 2013’’. 
(c) SOLAR INVESTMENT CREDIT ALLOWED FOR PUB-
LIC UTILITY PROPERTY.—The second sentence of section 
48(a)(3) of the Internal Revenue Code of 1986 is amended 
by inserting ‘‘(other than property described in clause (i) 
or (ii) of subparagraph (A))’’ before ‘‘shall not’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to periods after the date of the 
enactment of this Act, in taxable years ending after such 
date, under rules similar to the rules of section 48(m) of 
the Internal Revenue Code of 1986 (as in effect on the 
day before the date of the enactment of the Revenue Rec-
onciliation Act of 1990). 
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