I 
110TH CONGRESS 
1ST SESSION H. R. 2261 
To increase the diversity and independence of the United States energy 
supply by providing encouragement of energy sources from rural America, 
including biofuels and wind energy, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 10, 2007 
Mr. LUCAS introduced the following bill; which was referred to the Committee 
on Agriculture, and in addition to the Committees on Ways and Means, 
Financial Services, and Energy and Commerce, for a period to be subse-
quently determined by the Speaker, in each case for consideration of such 
provisions as fall within the jurisdiction of the committee concerned 
A BILL 
To increase the diversity and independence of the United 
States energy supply by providing encouragement of en-
ergy sources from rural America, including biofuels and 
wind energy, and for other purposes. 
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 ‘‘Rural America Energy 
Act of 2007’’. 
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SEC. 2. ADJUSTMENTS TO THE BIOENERGY PROGRAM. 
Section 9010 of the Farm Security and Rural Invest-
ment Act of 2002 (7 U.S.C. 8108) is amended— 
(1) in subsection (a)— 
(A) in paragraph (1)— 
(i) in subparagraph (A), by striking 
‘‘and’’; 
(ii) in subparagraph (B), by striking 
the final period and inserting a semicolon; 
and 
(iii) by adding at the end the fol-
lowing new subparagraphs: 
‘‘(C) cellulosic cogeneration; 
‘‘(D) biomass gasification; and 
‘‘(E) hydrogen made from cellulosic com-
modities for fuel cells.’’; 
(B) by redesignating paragraphs (3) and 
(4) as paragraphs (4) and (5), respectively; 
(C) by inserting after paragraph (2) the 
following new paragraph: 
‘‘(3) CELLULOSIC COGENERATION.—The term 
‘cellulosic cogeneration’ means combined heat and 
electrical power produced from cellulose, hemi-
cellulose, and lignin found in plant cell walls.’’; and 
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(D) in subparagraph (A) of paragraph (4), 
as redesignated by subparagraph (B), by strik-
ing ‘‘corn,’’; and 
(2) by striking subsection (f) and inserting the 
following: 
‘‘(f) FUNDING.—Of the funds of the Commodity 
Credit Corporation, the Secretary shall use to carry out 
this section $25,000,000 for each of fiscal years 2008 
through 2012.’’. 
SEC. 3. INCREASED FUNDING FOR THE RENEWABLE EN-
ERGY PROGRAM AND ADJUSTING THE PRO-
GRAM TO BENEFIT SMALLER PROJECTS. 
Section 9006 of the Farm Security and Rural Invest-
ment Act of 2002 (7 U.S.C. 8106) is amended by striking 
subsection (f) and inserting the following new subsections: 
‘‘(f) SMALL PROJECTS.—The Secretary shall use not 
less than 15 percent of the funds available under this sec-
tion to provide grants for projects that have a total cost 
$50,000 or less. 
‘‘(g) FUNDING.—Of the funds of the Commodity 
Credit Corporation, the Secretary shall make available to 
carry out this section $50,000,000 for each of fiscal years 
2008 through 2012.’’. 
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SEC. 4. 5-YEAR EXTENSION OF CREDIT FOR ELECTRICITY 
PRODUCED FROM CERTAIN RENEWABLE RE-
SOURCES. 
Section 45(d) of the Internal Revenue Code of 1986 
(relating to qualified facilities) is amended by striking 
‘‘2009’’ each place it appears and inserting ‘‘2014’’. 
SEC. 5. DEDICATED ETHANOL PIPELINE FEASIBILITY STUD-
IES. 
(a) IN GENERAL.—The Secretary of Energy, in co-
ordination with the Secretary of Agriculture and the Sec-
retary of Transportation, shall spend up to $1,000,000 to 
fund feasibility studies for the construction of dedicated 
ethanol pipelines. 
(b) CONDUCT OF STUDIES.— 
(1) IN
GENERAL.—The Secretary of Energy 
shall— 
(A) through a competitive solicitation proc-
ess, select 1 or more firms having capabilities in 
the planning, development, and construction of 
dedicated ethanol pipelines to carry out the fea-
sibility studies described in subsection (a); or 
(B) carry out the feasibility studies in con-
junction with such firms. 
(2) TIMING.— 
(A) IN GENERAL.—If the Secretary elects 
to select 1 or more firms under paragraph 
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(1)(A), the Secretary shall award funding under 
this section not later than 120 days after the 
date of enactment of this Act. 
(B) STUDIES.—As a condition of receiving 
funds under this section, a recipient of funding 
shall agree to submit to the Secretary a com-
pleted feasibility study not later than 360 days 
after the date of enactment of this Act. 
(c) STUDY FACTORS.—Feasibility studies funded 
under this section shall include consideration of— 
(1) existing or potential barriers to dedicated 
ethanol pipelines, including technical, siting, financ-
ing, and regulatory barriers; 
(2) potential evolutionary pathways for the de-
velopment of an ethanol pipeline transport system, 
such as starting with localized gathering networks as 
compared to major interstate ethanol pipelines to 
carry larger volumes from the Midwest to the East 
or West coast; 
(3) market risk, including throughput risk, and 
ways of mitigating the risk; 
(4) regulatory, financing, and siting options 
that would mitigate risk in these areas and help en-
sure the construction of dedicated ethanol pipelines; 
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(5) financial incentives that may be necessary 
for the construction of dedicated ethanol pipelines, 
including the return on equity that sponsors of the 
first dedicated ethanol pipelines will require to invest 
in the pipelines; 
(6) ethanol production of 20,000,000,000, 
30,000,000,000, and 40,000,000,000 gallons per 
year by 2020; and 
(7) such other factors that the Secretary con-
siders to be appropriate. 
(d) CONFIDENTIALITY.—If a recipient of funding 
under this section requests confidential treatment for crit-
ical energy infrastructure information or commercially- 
sensitive data contained in a feasibility study submitted 
by the recipient under subsection (b)(2)(B), the Secretary 
shall offer to enter into a confidentiality agreement with 
the recipient to maintain the confidentiality of the sub-
mitted information. 
(e) REVIEW; REPORT.—The Secretary of Energy 
shall— 
(1) review the feasibility studies submitted 
under subsection (b)(2)(B) or carried out under sub-
section (b)(1)(B); and 
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(2) not later than 15 months after the date of 
enactment of this Act, submit to Congress a report 
that includes— 
(A) information about the potential bene-
fits of constructing dedicated ethanol pipelines; 
and 
(B) recommendations for legislation that 
could help provide for the construction of dedi-
cated ethanol pipelines. 
(f) FUNDING.—There are authorized to be appro-
priated to the Secretary of Energy to carry out this section 
$1,000,000 for fiscal year 2008, to remain available until 
expended. 
SEC. 6. CONSERVATION RESERVE PROGRAM ADJUSTMENTS 
TO PROTECT THE MOST ENVIRONMENTALLY 
SENSITIVE ACRES AND PROMOTE PRODUC-
TION OF BIOFUELS CROPS. 
(a) REAUTHORIZATION.—Section 1231(a) of the 
Food Security Act of 1985 (16 U.S.C. 3831(a)) is amend-
ed by striking ‘‘Through the 2007 calendar year’’ and in-
serting the following: 
‘‘(1) PROGRAM REQUIRED.—Through the 2012 
calendar year’’. 
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(b) MAXIMUM ENROLLMENT.—Section 1231(d) of 
the Food Security Act of 1985 (16 U.S.C. 3831(d)) is 
amended— 
(1) by striking ‘‘39,200,000 acres’’ and insert-
ing ‘‘40,000,000 acres’’; and 
(2) by striking by striking ‘‘2007’’ and insert-
ing ‘‘2012’’. 
(c) PRIORITY FOR PROTECTION OF MOST ENVIRON-
MENTALLY SENSITIVE ACRES.—Section 1231(a) of the 
Food Security Act of 1985 (16 U.S.C. 3831(a)), as 
amended by subsection (a), is amended by adding at the 
end the following new paragraph: 
‘‘(2) PRIORITY FOR PROTECTION OF MOST EN-
VIRONMENTALLY
SENSITIVE
ACRES.—In applying 
subsection (b) and other provisions of this sub-
chapter for the enrollment of land in the conserva-
tion reserve program, the Secretary shall ensure 
that, as contracts expire and lands are taken out of 
the program, the lands are replaced with the most 
environmentally sensitive acres, so that the program 
continues to protect highly erodible lands while in-
creasing the acreage outside of the program that is 
available for the production of crops to accommodate 
biofuel production.’’. 
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SECTION 7. TRANSITIONAL ASSISTANCE FOR FARMERS 
WHO PLANT DEDICATED ENERGY CROPS FOR 
A LOCAL CELLULOSIC REFINERY. 
(a) IN GENERAL.—The Secretary shall make transi-
tional assistance payments to an agricultural producer 
during the 1st year in which the producer devotes land 
to the production of a qualified cellulosic crop. 
(b) DEFINITIONS.—In this section: 
(1) CELLULOSIC CROP.—The term ‘‘cellulosic 
crop’’ means a tree or grass that is grown specifi-
cally to provide raw materials (feedstocks) for con-
version to liquid transportation fuels or chemicals 
through biochemical or thermochemical processes, or 
for energy generation through combustion, pyrolysis, 
or co-firing. 
(2) CELLULOSIC
REFINER.—The term ‘‘cel-
lulosic refiner’’ means the owner or operator of a 
cellulosic refinery. 
(3) CELLULOSIC
REFINERY.—The term ‘‘cel-
lulosic refinery’’ means a refinery that processes a 
cellulosic crop. 
(4) QUALIFED CELLULOSIC CROP.—The term 
‘‘qualified cellulosic crop’’ means, with respect to an 
agricultural producer, a cellulosic crop which is— 
(A) the subject of a contract (or memo-
randum of understanding) between the pro-
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ducer and a cellulosic refiner, under which the 
producer is obligated to sell the crop to the re-
finer at a certain date in the future; and 
(B) produced not more than 70 miles from 
a cellulosic refinery owned or operated by the 
refiner. 
(5) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Agriculture. 
(c) AMOUNT OF PAYMENT.— 
(1) DETERMINED
BY
FORMULA.—The Sec-
retary shall devise a formula to be used to calculate 
the amounts of the payments to be made to an agri-
cultural producer under this section, which shall be 
based on the opportunity costs incurred by the pro-
ducer during the 1st year in which the producer de-
votes land to the production of the qualified cel-
lulosic crop, subject to paragraph (2) of this sub-
section. The Secretary shall prescribe a standard to 
be used to determine opportunity costs using land 
rental rates and other costs determined by the Sec-
retary. 
(2) LIMITATION.—The total of the amounts 
paid to a single producer under this section shall not 
exceed 25 percent of the funds made available under 
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subsection (e) for the fiscal year in which the 
amounts are so paid. 
(d) REGULATIONS.—The Secretary shall prescribe 
such regulations as may be necessary to carry out this 
section. 
(e) LIMITATIONS
ON AUTHORIZATION
OF APPRO-
PRIATIONS.— 
(1) IN GENERAL.—To carry out this section, 
there are authorized to be appropriated to the Sec-
retary not more than $4,088,000 for each of fiscal 
years 2008 through 2012. 
(2) AVAILABILITY
OF
FUNDS.—The amounts 
made available under paragraph (1) are authorized 
to remain available until expended. 
SEC. 8. CREDIT FOR INSTALLATION OF WIND ENERGY 
PROPERTY INCLUDING BY RURAL HOME-
OWNERS, FARMERS, RANCHERS, AND SMALL 
BUSINESSES. 
(a) IN GENERAL.—Subpart B of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by adding at the end the following new 
section: 
‘‘SEC. 30D. WIND ENERGY PROPERTY. 
‘‘(a) ALLOWANCE OF CREDIT.—There shall be al-
lowed as a credit against the tax imposed by this chapter 
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for the taxable year an amount equal to $1,500 with re-
spect to each half kilowatt of capacity of qualified wind 
energy property placed in service or installed by the tax-
payer during such taxable year. 
‘‘(b) LIMITATION.—No credit shall be allowed under 
subsection (a) unless at least 50 percent of the energy pro-
duced annually by the qualified wind energy property is 
consumed on the site on which the property is placed in 
service or installed. 
‘‘(c) QUALIFIED WIND ENERGY PROPERTY.—For 
purposes of this section, the term ‘qualified wind energy 
property’ means a wind turbine of 100 kilowatts of rated 
capacity or less if— 
‘‘(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, 
‘‘(3) the original use of such turbine commences 
with the taxpayer, and 
‘‘(4) such turbine carries at least a 5-year lim-
ited warranty covering defects in design, material, or 
workmanship, and, for property that is not installed 
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by the taxpayer, at least a 5-year limited warranty 
covering defects in installation. 
‘‘(d) LIMITATION BASED ON AMOUNT OF TAX.— 
‘‘(1) IN GENERAL.—The credit allowed under 
subsection (a) for any taxable year shall not exceed 
the excess of— 
‘‘(A) the sum of the regular tax liability 
(as defined in section 26(b)) plus the tax im-
posed by section 55, over 
‘‘(B) the sum of the credits allowable 
under this part (other than under this section 
and subpart C thereof, relating to refundable 
credits) and section 1397E. 
‘‘(2) CARRYOVER OF UNUSED CREDIT.—If the 
credit allowable under subsection (a) exceeds the 
limitation imposed by paragraph (1) 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. 
‘‘(e) 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 
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(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. 
‘‘(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 dwelling 
units. 
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‘‘(f) BASIS ADJUSTMENT.—For purposes of this sub-
title, if a credit is allowed under this section for any ex-
penditure with respect to a dwelling unit or other prop-
erty, the increase in the basis of such dwelling unit or 
other property which would (but for this subsection) result 
from such expenditure shall be reduced by the amount of 
the credit so allowed. 
‘‘(g) APPLICATION OF CREDIT.—The credit allowed 
under this section shall apply to property placed in service 
or installed after December 31, 2006, and before January 
1, 2012.’’. 
(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 dwelling unit or other 
property with respect to which a credit was allowed 
under section 30D, to the extent provided in section 
30D(f).’’. 
(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-
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serting after the item relating to section 30C the following 
new item: 
‘‘Sec. 30D. Wind energy property.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years ending after De-
cember 31, 2006. 
SEC. 9. MODIFICATION OF ACCOUNTING PRACTICES. 
Within 18 months after the date of enactment of this 
Act, the Securities and Exchange Commission shall revise 
the accounting practices to be followed in the preparation 
of accounts by persons engaged, in whole or in part, in 
the production of crude oil or natural gas in the United 
States that were developed pursuant to section 503 of the 
Energy Policy Conservation Act (42 U.S.C. 6383) to es-
tablish a renewable reserves classification and disclosure 
system. Such classification and disclosure system shall 
treat contracted biomass crops for a cellulosic biorefinery 
as renewable reserves. 
Æ 
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