HR 6899 RDS
TITLE I—FEDERAL OIL AND GAS 
LEASING 
Subtitle A—Outer Continental 
Shelf Oil and Gas Leasing 
SEC. 101. PROHIBITION ON LEASING. 
(a) PROHIBITION.—The Outer Continental Shelf 
Lands Act (43 U.S.C. 1331 et seq.) notwithstanding, the 
Secretary shall not take nor authorize any action related 
to oil and gas preleasing or leasing of any area of the 
Outer Continental Shelf that was not available for oil and 
gas leasing as of July 1, 2008, unless that action is ex-
pressly authorized by this subtitle or a statute enacted by 
Congress after the date of enactment of this Act. 
(b) TREATMENT OF AREAS IN GULF OF MEXICO.— 
For purposes of this subtitle, such action with respect to 
an area referred to in section 104(a) of the Gulf of Mexico 
Energy Security Act of 2006 (title I of division C of Public 
Law 109–432; 42 U.S.C. 1331 note) taken or authorized 
after the period referred to in that section shall be treated 
as authorized by this subtitle, and such leasing of such 
area shall be treated as authorized under section 102(a). 
SEC. 102. OPENING OF CERTAIN AREAS TO OIL AND GAS 
LEASING. 
(a) LEASING
AUTHORIZED.—The Secretary may 
offer for oil and gas leasing, preleasing, or other related 
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activities, in accordance with this section and the Outer 
Continental Shelf Lands Act (43 U.S.C. 1331 et seq.) and 
subject to subsection (b) of this section, section 103 of 
this Act, and section 307 of the Coastal Zone Management 
Act of 1972 (16 U.S.C. 1456), any area— 
(1) that is in any Outer Continental Shelf Plan-
ning Area in the Atlantic Ocean or Pacific Ocean 
that is located farther than 50 miles from the coast-
line; and 
(2) that was not otherwise available for oil and 
gas leasing, preleasing, and other related activities 
as of July 1, 2008. 
(b) INCLUSION IN LEASING PROGRAM REQUIRED.— 
An area may be offered for lease under this section only 
if it has been included in an Outer Continental Shelf leas-
ing program approved by the Secretary in accordance with 
section 18 of the Outer Continental Shelf Lands Act (43 
U.S.C. 1344). 
(c) REQUIREMENT TO CONDUCT LEASE SALES.—As 
soon as practicable, consistent with subsection (b) and sec-
tion 103(a), but not later than 3 years after the date of 
enactment of this Act, and as appropriate thereafter, the 
Secretary shall conduct oil and gas lease sales under the 
Outer Continental Shelf lands Act (43 U.S.C. 1331 et 
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seq.) for areas that are made available for leasing by this 
section. 
SEC. 103. COASTAL STATE ROLES AND RESPONSIBILITIES. 
(a) STATE APPROVAL OF CERTAIN LEASING RE-
QUIRED.—The Secretary may not conduct any oil and gas 
leasing or preleasing activity in any area made available 
for oil and gas leasing by section 102(a) that is located 
within 100 miles from the coastline and within the sea-
ward lateral boundaries of an adjacent State, unless the 
adjacent State has enacted a law approving of the issuance 
of such leasing by the Secretary. 
(b) CONSULTATION WITH ADJACENT AND NEIGH-
BORING STATES.— 
(1) IN GENERAL.—In addition to the consulta-
tion provided for under section 19 of the Outer Con-
tinental Shelf Lands Act (43 U.S.C. 1345), the Gov-
ernor of a State that has a coastline within 100 
miles of an area of the Outer Continental Shelf 
being considered for oil and gas leasing and made 
available for such leasing by section 102(a) may sub-
mit recommendations to the Secretary with respect 
to— 
(A) the size, timing, or location of a pro-
posed lease sale; or 
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(B) a proposed development and produc-
tion plan. 
(2) REQUIREMENTS.—Subsections (b), (c), and 
(d) of section 19 of the Outer Continental Shelf 
Lands Act (43 U.S.C. 1345) shall apply to the rec-
ommendations provided for in paragraph (1). 
SEC. 104. PROTECTION OF THE ENVIRONMENT AND CON-
SERVATION OF THE NATURAL RESOURCES 
OF THE OUTER CONTINENTAL SHELF. 
The Secretary— 
(1) shall ensure that any activity under this 
subtitle is carried out in a manner that provides for 
the protection of the coastal environment, marine 
environment, and human environment of State 
coastal zones and the Outer Continental Shelf; and 
(2) shall review all Federal regulations that are 
otherwise applicable to activities authorized by this 
subtitle to ensure environmentally sound oil and gas 
operations on the Outer Continental Shelf. 
SEC. 105. LIMITATIONS. 
(a) COMPLIANCE WITH MEMORANDUM.—Any oil and 
gas leasing of areas of the Outer Continental Shelf shall 
be conducted in accordance with the document entitled 
‘‘Memorandum of Agreement between the Department of 
Defense and the Department of the Interior on Mutual 
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Concerns On The Outer Continental Shelf’’ and dated 
July 2, 1983, and such revisions thereto as may be agreed 
to by the Secretary of Defense and the Secretary of the 
Interior; except that no such revisions may be made prior 
to January 21, 2009. 
(b) NATIONAL
SECURITY.—Notwithstanding sub-
section (a), the United States reserves the right to des-
ignate by and through the Secretary of Defense, with the 
approval of the President, national defense areas on the 
Outer Continental Shelf pursuant to section 12(d) of the 
Outer Continental Shelf Lands Act (43 U.S.C. 1341(d)). 
SEC. 106. PROHIBITION ON LEASING IN CERTAIN FEDERAL 
PROTECTED AREAS. 
(a) IN GENERAL.—Notwithstanding any other provi-
sion of this or any other Federal law, no lease or other 
authorization may be issued by the Federal Government 
that authorizes exploration, development, or production of 
oil or natural gas in— 
(1) any marine national monument or national 
marine sanctuary; or 
(2) the fishing grounds known as Georges Bank 
in the waters of the United States, which is one of 
the largest and historically important fishing 
grounds of the United States. 
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(b) IDENTIFICATION OF COORDINATES OF GEORGES 
BANK.—The Secretary of Commerce, after publication of 
public notice and an opportunity for public comment, shall 
identify the specific coordinates that delineate Georges 
Bank in the waters of the United States for purposes of 
subsection (a). 
SEC. 107. NO EFFECT ON APPLICABLE LAW. 
Except as otherwise specifically provided in this sub-
title, nothing in this subtitle waives or modifies any appli-
cable environmental or other law. 
SEC. 108. BUY AMERICAN REQUIREMENTS. 
(a) IN GENERAL.—It is the intent of Congress that 
this Act, among other things, result in a healthy and grow-
ing American industrial, manufacturing, transportation, 
and service sector employing the vast talents of America’s 
workforce to assist in the development of energy from do-
mestic sources. Moreover, the Congress intends to monitor 
the deployment of personnel and material onshore and off-
shore to encourage the development of American tech-
nology and manufacturing to enable United States work-
ers to benefit from this Act by good jobs and careers, as 
well as the establishment of important industrial facilities 
to support expanded access to American resources. 
(b) SAFEGUARD FOR EXTRAORDINARY ABILITY.— 
Section 30(a) of the Outer Continental Shelf Lands Act 
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(43 U.S.C. 1356(a)) is amended in the matter preceding 
paragraph (1) by striking ‘‘regulations which’’ and insert-
ing ‘‘regulations that shall be supplemental and com-
plimentary with and under no circumstances a substi-
tution for the provisions of the Constitution and laws of 
the United States extended to the subsoil and seabed of 
the outer Continental Shelf pursuant to section 4 of this 
Act, except insofar as such laws would otherwise apply to 
individuals who have extraordinary ability in the sciences, 
arts, education, or business, which has been demonstrated 
by sustained national or international acclaim, and that’’. 
SEC. 109. SMALL, WOMAN-OWNED, AND MINORITY-OWNED 
BUSINESSES. 
Section 8 of the Outer Continental Shelf Lands Act 
(43 U.S.C. 1337) is amended by adding at the end the 
following: 
‘‘(q) OPPORTUNITIES FOR LEASING.—The Secretary 
shall establish goals to ensure equal opportunity to bid on 
offshore leases for qualified small, women-owned, and mi-
nority-owned exploration and production companies and 
may implement, where appropriate, outreach programs for 
qualified historically underutilized exploration and produc-
tion companies to participate in the bidding process for 
offshore leases.’’. 
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SEC. 110. DEFINITIONS. 
In this subtitle: 
(1) ADJACENT
STATE.—The term ‘‘adjacent 
State’’ means, with respect to any program, plan, 
lease sale, leased tract, or other activity, proposed, 
conducted, or approved in accordance with the Outer 
Continental Shelf Lands Act (43U.S.C. 1331 et 
seq.), the State, the laws of which are declared pur-
suant to section 4(a)(2) of the Outer Continental 
Shelf Lands Act (43 U.S.C.1333(a)(2)) to be the 
law of the United States for the portion of the Outer 
Continental Shelf on which the program, plan, lease 
sale, leased tract, or activity is, or is proposed to be, 
conducted. 
(2) 
COASTAL
ENVIRONMENT.—The 
term 
‘‘coastal environment’’ has the meaning given that 
term in the Outer Continental Shelf Lands Act (43 
U.S.C. 1331 et seq.). 
(3) COASTAL ZONE.—The term ‘‘coastal zone’’ 
has the meaning given that term in the Outer Conti-
nental Shelf Lands Act (43 U.S.C. 1331 et seq.). 
(4) COASTLINE.—The term ‘‘coastline’’ has the 
meaning given the term ‘‘coast line’’ under section 
2 of the Submerged Lands Act (43 U.S.C. 1301). 
(5) HUMAN ENVIRONMENT.—The term ‘‘human 
environment’’ has the meaning given that term in 
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the Outer Continental Shelf Lands Act (43 U.S.C. 
1331 et seq.). 
(6) MARINE
ENVIRONMENT.—The term ‘‘ma-
rine environment’’ has the meaning given that term 
in the Outer Continental Shelf Lands Act (43 
U.S.C. 1331 et seq.). 
(7) OUTER CONTINENTAL SHELF.—The term 
‘‘Outer Continental Shelf’’ has the meaning given 
the term ‘‘outer Continental Shelf’’ under section 2 
of the Outer Continental Shelf Lands Act (43 
U.S.C. 1331). 
(8) SEAWARD LATERAL BOUNDARY.—The term 
‘‘seaward lateral boundary’’ means a boundary 
drawn by the Minerals Management Service in the 
Federal Register notice of January 3, 2006 (vol 71, 
no. 1). 
(9) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of the Interior. 
Subtitle B—Diligent Development 
of Federal Oil and Gas Leases 
SEC. 121. CLARIFICATION. 
The lands subject to each lease that authorizes the 
exploration for or development or production of oil or nat-
ural gas that is issued under a provision of law described 
in section 122 shall be diligently developed for such pro-
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duction by the person holding the lease in order to ensure 
timely production from the lease. 
SEC. 122. COVERED PROVISIONS. 
The provisions referred to in section 121 are the fol-
lowing: 
(1) Section 17 of the Mineral Leasing Act (30 
U.S.C. 226). 
(2) Section 107 of the Naval Petroleum Re-
serves Production Act of 1976 (42 U.S.C. 6506a). 
(3) The Outer Continental Shelf Lands Act (43 
11 U.S.C. 1331 et seq.). 
(4) The Mineral Leasing Act for Acquired 
Lands (30 U.S.C. 351 et seq.). 
SEC. 123. REGULATIONS. 
The Secretary shall issue regulations within 180 days 
after the date of enactment of this Act that establish what 
constitutes diligently developing for purposes of this sub-
title. 
SEC. 124. RESOURCE ESTIMATES AND LEASING PROGRAM 
MANAGEMENT INDICATORS. 
(a) IN GENERAL.—The Secretary of the Interior shall 
annually collect and report to Congress— 
(1) the number of leases and the number of 
acres of land under Federal onshore oil and gas 
lease, per State and per year the lease was issued— 
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(A) on which seismic exploration activity is 
occurring or has occurred; 
(B) on which permits to drill have been ap-
plied for, but not yet awarded; 
(C) on which permits to drill have been ap-
proved, but no drilling has yet occurred; 
(D) on which wells have been drilled but 
no production has occurred; and 
(E) on which production is occurring; 
(2) resource estimates for and the number of 
acres of Federal onshore and offshore lands, by 
State or offshore planning area— 
(A) under lease, per year the lease was 
issued; 
(B) under lease and not producing, per 
year the lease was issued; 
(C) under lease and drilled, but not pro-
ducing, per year the lease was issued; 
(D) offered for lease in a lease sale con-
ducted during the previous year, but not leased; 
and 
(E) available for leasing but not under 
lease or offered for leasing in the previous year; 
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(3) resource estimates for and the number of 
acres of unleased Federal onshore and offshore land 
available for oil and gas leasing; 
(4) resource estimates for and the number of 
acres of areas of the Outer Continental Shelf— 
(A) included in proposed sale areas in the 
most recent 5-year plan developed by the Sec-
retary pursuant to section 18 of the Outer Con-
tinental Shelf Lands Act (43 U.S.C. 1344); and 
(B) available for oil and gas leasing but 
not included in the 5-year plan; 
(5) the number of leases and the number of 
acres of Federal onshore land, per Bureau of Land 
Management field office, offered in a lease sale con-
ducted during the previous year, including data on 
the number of protests filed and how many lease 
tracts were withdrawn as a result of such protests, 
and how many leases were offered and issued with 
stipulations as a result of those protests, including 
the name of the entity or entities filing the protests; 
(6) the number of applications for permits to 
drill received, approved, pending, and denied, in the 
previous year per Bureau of Land Management and 
Minerals Management Service field office; 
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(7) the number of environmental inspections 
conducted per State and per Bureau of Land Man-
agement and Minerals Management Service field of-
fice in the previous year; and 
(8) the number of full time staff equivalent 
(FTEs) devoted to permit processing and oversight 
per Bureau of Land Management and Minerals 
Management Service field office. 
(b) COVERED PROVISIONS.—Subsection (a) shall 
apply with respect to leases and land eligible for leasing 
pursuant to— 
(1) section 17 of the Mineral Leasing Act (30 
U.S.C. 226); 
(2) the Mineral Leasing Act for Acquired 
Lands (30 U.S.C. 351 et seq.); 
(3) section 107 of the Naval Petroleum Re-
serves Production Act of 1976 (42 U.S.C. 6506a); 
or 
(4) the Outer Continental Shelf Lands Act (43 
U.S.C. 1331 et seq.). 
Subtitle C—Royalties Under 
Offshore Oil and Gas Leases 
SEC. 131. SHORT TITLE. 
This subtitle may be cited as the ‘‘Royalty Relief for 
American Consumers Act of 2008’’. 
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SEC. 132. PRICE THRESHOLDS FOR ROYALTY SUSPENSION 
PROVISIONS. 
The Secretary of the Interior shall agree to a request 
by any lessee to amend any oil and gas lease issued for 
any Gulf of Mexico tract during the period of January 
1, 1998, through December 31, 1999, to incorporate price 
thresholds applicable to royalty suspension provisions, that 
are equal to or less than the price thresholds described 
in clauses (v) through (vii) of section 8(a)(3)(C) of the 
Outer 
Continental 
Shelf 
Lands 
Act 
(43 
U.S.C. 
1337(a)(3)(C)). Any amended lease shall impose the new 
or revised price thresholds effective October 1, 2006. Ex-
isting lease provisions shall prevail through September 30, 
2006. 
SEC. 133. CLARIFICATION OF AUTHORITY TO IMPOSE 
PRICE THRESHOLDS FOR CERTAIN LEASE 
SALES. 
Congress reaffirms the authority of the Secretary of 
the Interior under section 8(a)(1)(H) of the Outer Conti-
nental Shelf Lands Act (43 U.S.C. 1337(a)(1)(H)) to 
vary, based on the price of production from a lease, the 
suspension of royalties under any lease subject to section 
304 of the Outer Continental Shelf Deep Water Royalty 
Relief Act (Public Law 104–58; 43 U.S.C. 1337 note). 
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SEC. 134. ELIGIBILITY FOR NEW LEASES AND THE TRANS-
FER OF LEASES; CONSERVATION OF RE-
SOURCES FEES. 
(a) ISSUANCE OF NEW LEASES.— 
(1) IN
GENERAL.—The Secretary shall not 
issue any new lease that authorizes the production 
of oil or natural gas in the Gulf of Mexico under the 
Outer Continental Shelf Lands Act (43 U.S.C. 1331 
et seq.) to a person described in paragraph (2) un-
less— 
(A) the person has renegotiated each cov-
ered lease with respect to which the person is 
a lessee, to modify the payment responsibilities 
of the person to include price thresholds that 
are equal to or less than the price thresholds 
described in clauses (v) through (vii) of section 
8(a)(3)(C) of the Outer Continental Shelf 
Lands Act (43 U.S.C. 1337(a)(3)(C)); or 
(B) the person has— 
(i) paid all fees established by the 
Secretary under subsection (b) that are 
due with respect to each covered lease for 
which the person is a lessee; or 
(ii) entered into an agreement with 
the Secretary under which the person is 
obligated to pay such fees. 
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(2) PERSONS DESCRIBED.—A person referred 
to in paragraph (1) is a person that— 
(A) is a lessee that— 
(i) holds a covered lease on the date 
on which the Secretary considers the 
issuance of the new lease; or 
(ii) was issued a covered lease before 
the date of enactment of this Act, but 
transferred the covered lease to another 
person or entity (including a subsidiary or 
affiliate of the lessee) after the date of en-
actment of this Act; or 
(B) any other person or entity who has 
any direct or indirect interest in, or who derives 
any benefit from, a covered lease; 
(3) MULTIPLE LESSEES.— 
(A) IN GENERAL.—For purposes of para-
graph (1), if there are multiple lessees that own 
a share of a covered lease, the Secretary may 
implement separate agreements with any lessee 
with a share of the covered lease that modifies 
the payment responsibilities with respect to the 
share of the lessee to include price thresholds 
that are equal to or less than the price thresh-
olds described in clauses (v) through (vii) of 
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section 8(a)(3)(C) of the Outer Continental 
Shelf Lands Act (43 U.S.C. 1337(a)(3)(C)). 
(B) TREATMENT OF SHARE AS COVERED 
LEASE.—Beginning on the effective date of an 
agreement under subparagraph (A), any share 
subject to the agreement shall not constitute a 
covered lease with respect to any lessees that 
entered into the agreement. 
(b) CONSERVATION OF RESOURCES FEES.— 
(1) IN GENERAL.—Not later than 60 days after 
the date of enactment of this Act, the Secretary of 
the Interior by regulation shall establish— 
(A) a conservation of resources fee for pro-
ducing Federal oil and gas leases in the Gulf of 
Mexico; and 
(B) a conservation of resources fee for 
nonproducing Federal oil and gas leases in the 
Gulf of Mexico. 
(2) PRODUCING LEASE FEE TERMS.—The fee 
under paragraph (1)(A)— 
(A) subject to subparagraph (C), shall 
apply to covered leases that are producing 
leases; 
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(B) shall be set at $9 per barrel for oil and 
$1.25 per million Btu for gas, respectively, in 
2005 dollars; and 
(C) shall apply only to production of oil or 
gas occurring— 
(i) in any calendar year in which the 
arithmetic average of the daily closing 
prices for light sweet crude oil on the New 
York Mercantile Exchange (NYMEX) ex-
ceeds $34.73 per barrel for oil and $4.34 
per million Btu for gas in 2005 dollars; 
and 
(ii) on or after October 1, 2006. 
(3) NONPRODUCING LEASE FEE TERMS.—The 
fee under paragraph (1)(B)— 
(A) subject to subparagraph (C), shall 
apply to leases that are nonproducing leases; 
(B) shall be set at $3.75 per acre per year 
in 2005 dollars; and 
(C) shall apply on and after October 1, 
2006. 
(4) TREATMENT OF RECEIPTS.—Amounts re-
ceived by the United States as fees under this sub-
section shall be treated as offsetting receipts. 
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(c) TRANSFERS.—A lessee or any other person who 
has any direct or indirect interest in, or who derives a 
benefit from, a lease shall not be eligible to obtain by sale 
or other transfer (including through a swap, spinoff, serv-
icing, or other agreement) any covered lease, the economic 
benefit of any covered lease, or any other lease for the 
production of oil or natural gas in the Gulf of Mexico 
under the Outer Continental Shelf Lands Act (43 U.S.C. 
1331 et seq.), unless— 
(1) the lessee or other person has— 
(A) renegotiated all covered leases of the 
lessee or other person; and 
(B) entered into an agreement with the 
Secretary to modify the terms of all covered 
leases of the lessee or other person to include 
limitations on royalty relief based on market 
prices that are equal to or less than the price 
thresholds described in clauses (v) through (vii) 
of section 8(a)(3)(C) of the Outer Continental 
Shelf Lands Act (43 U.S.C. 1337(a)(3)(C)); or 
(2) the lessee or other person has— 
(A) paid all fees established by the Sec-
retary under subsection (b) that are due with 
respect to each covered lease for which the per-
son is a lessee; or 
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(B) entered into an agreement with the 
Secretary under which the person is obligated 
to pay such fees. 
(d) DEFINITIONS.—In this section— 
(1) COVERED
LEASE.—The term ‘‘covered 
lease’’ means a lease for oil or gas production in the 
Gulf of Mexico that is— 
(A) in existence on the date of enactment 
of this Act; 
(B) issued by the Department of the Inte-
rior under section 304 of the Outer Continental 
Shelf Deep Water Royalty Relief Act (43 
U.S.C. 1337 note; Public Law 104–58); and 
(C) not subject to limitations on royalty re-
lief based on market price that are equal to or 
less than the price thresholds described in 
clauses (v) through (vii) of section 8(a)(3)(C) of 
the Outer Continental Shelf Lands Act (43 
U.S.C. 1337(a)(3)(C)). 
(2) LESSEE.—The term ‘‘lessee’’ includes any 
person or other entity that controls, is controlled by, 
or is in or under common control with, a lessee. 
(3) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of the Interior. 
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SEC. 135. STRATEGIC ENERGY EFFICIENCY AND RENEW-
ABLES RESERVE. 
(a) IN GENERAL.—For budgetary purposes, the net 
increase in Federal receipts by reason of the enactment 
of this Act shall be held in a separate account to be known 
as the ‘‘Strategic Energy Efficiency and Renewables Re-
serve’’. The Strategic Energy Efficiency and Renewables 
Reserve shall be available to offset the cost of subsequent 
legislation— 
(1) to accelerate the use of clean domestic re-
newable energy resources and alternative fuels; 
(2) to promote the utilization of energy-efficient 
products and practices and energy conservation; 
(3) to increase research, development, and de-
ployment of clean renewable energy and efficiency 
technologies; 
(4) to provide increased assistance for low in-
come home energy and weatherization programs; 
(5) to further the purposes set forth in section 
1(b) of the Land and Water Conservation Fund Act 
of 1965 (16 U.S.C. 460l–4); and 
(6) to increase research, development, and dem-
onstration of carbon capture and sequestration tech-
nologies. 
(b) PROCEDURE FOR ADJUSTMENTS.— 
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(1) BUDGET COMMITTEE CHAIRMAN.—After the 
reporting of a bill or joint resolution, or the offering 
of an amendment thereto or the submission of a con-
ference report thereon, providing funding for the 
purposes set forth in subsection (a) in excess of the 
amounts provided for those purposes for fiscal year 
2007, the chairman of the Committee on the Budget 
of the applicable House of Congress shall make the 
adjustments set forth in paragraph (2) for the 
amount of new budget authority and outlays in that 
measure and the outlays flowing from that budget 
authority. 
(2) MATTERS TO BE ADJUSTED.—The adjust-
ments referred to in paragraph (1) are to be made 
to— 
(A) the discretionary spending limits, if 
any, set forth in the appropriate concurrent res-
olution on the budget; 
(B) the allocations made pursuant to the 
appropriate concurrent resolution on the budget 
pursuant to section 302(a) of Congressional 
Budget Act of 1974; and 
(C) the budget aggregates contained in the 
appropriate concurrent resolution on the budget 
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as required by section 301(a) of Congressional 
Budget Act of 1974. 
(3) AMOUNTS OF ADJUSTMENTS.—The adjust-
ments referred to in paragraphs (1) and (2) shall 
not exceed the total of the receipts over a 10-year 
period, as estimated by the Congressional Budget 
Office upon the enactment of this Act. 
Subtitle D—Accountability and In-
tegrity in the Federal Energy 
Program 
SEC. 141. ROYALTY IN-KIND. 
Section 342(d) of the Energy Policy Act of 2005 (42 
U.S.C. 15902(d)) is amended to read as follows: 
‘‘(d) BENEFIT
TO
THE
UNITED
STATES
RE-
QUIRED.—The Secretary may receive oil or gas royalties 
in-kind only if the Secretary determines that receiving roy-
alties in-kind provides benefits to the United States that 
are greater than or equal to the benefits that would likely 
be received if the royalties were taken in-value, and if the 
Secretary determines that receiving royalties in-kind is 
consistent with the fiduciary duties of the Secretary on 
behalf of the American people.’’. 
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SEC. 142. FAIR RETURN ON PRODUCTION OF FEDERAL OIL 
AND GAS RESOURCES. 
(a) ROYALTY PAYMENTS.—The Secretary of the In-
terior shall take all steps necessary to ensure that lessees 
under leases for exploration, development, and production 
of oil and natural gas on Federal lands, including leases 
under the Mineral Leasing Act (30 U.S.C. 181 et seq.), 
the Mineral Leasing Act for Acquired Lands (30 U.S.C. 
351 et seq.), the Outer Continental Shelf Lands Act (30 
U.S.C. 1331 et seq.), and all other mineral leasing laws, 
are making prompt, transparent, and accurate royalty 
payments under such leases. 
(b) RECOMMENDATIONS
FOR
LEGISLATIVE
AC-
TION.—In order to facilitate implementation of subsection 
(a), the Secretary of the Interior shall, within 180 days 
after the date of enactment of this Act and in consultation 
with the affected States, prepare and transmit to Congress 
recommendations for legislative action to improve the ac-
curate collection of Federal oil and gas royalties. 
SEC. 143. ROYALTY-IN-KIND ETHICS. 
(a) GIFT BAN.— 
(1) PROHIBITION.—No employee of the Min-
erals Management Service may— 
(A) accept gifts of any value from any pro-
hibited source; or 
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(B) seek, accept, or hold employment with 
any prohibited source. 
(2) PENALTY.—Any person who violates para-
graph (1) shall be subject to such penalties as the 
Secretary of the Interior considers appropriate, 
which may include suspension without pay or termi-
nation. 
(b) TRAINING.—The Secretary of the Interior shall 
implement a robust ethics training program for employees 
of the Royalty-In-Kind division of the Minerals Manage-
ment Service that is in addition to the standard ethics 
training that such employees are already required to at-
tend. Such additional training program shall require writ-
ten certification by each such employee that the employee 
knows and understands the ethics requirements by which 
the employee is bound. 
(c) CODE OF ETHICS.—The Secretary of the Interior 
shall promulgate, within 180 days after the date of the 
enactment of this Act, a code of ethics for all employees 
of the Minerals Management Service. The code of ethics 
shall provide clear direction relating to the obligations, 
prohibitions, and consequences of misconduct. 
(d) DRUG TESTING.—The Secretary of the Interior 
shall, within 180 days after the date of the enactment of 
this Act, implement a random drug testing program for 
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the employees of the royalty-in-kind division of the Min-
erals Management Service. 
(e) DEFINITIONS.—In this section: 
(1) GIFT.—The term ‘‘gift’’— 
(A) includes any gratuity, favor, discount, 
entertainment, hospitality, loan, forbearance, or 
other item having monetary value; and 
(B) includes services as well as gifts of 
training, transportation, local travel, lodgings 
and meals, whether provided in-kind, by pur-
chase of a ticket, payment in advance, or reim-
bursement after the expense has been incurred. 
(2) PROHIBITED SOURCE.—The term ‘‘prohib-
ited source’’ means, with respect to an employee, 
any person who— 
(A) is seeking official action by the Min-
erals Management Service; 
(B) does business or seeks to do business 
with the Minerals Management Service; 
(C) conducts activities regulated by the 
Minerals Management Service; 
(D) has interests that may be substantially 
affected by performance or nonperformance of 
the employee’s official duties; or 
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(E) is an organization a majority of whose 
members are described in any of subparagraphs 
(A) through (D). 
(f) OTHER ETHICS REQUIREMENTS APPLY.—The 
prohibitions and requirements under this section are to be 
in addition to any other requirements that apply to em-
ployees of the Minerals Management Service. 
SEC. 144. PROHIBITION ON CERTAIN GIFTS. 
Section 201 of title 18, United States Code, is 
amended— 
(1) by redesignating subsections (d) and (e) as 
subsections (e) and (f); and 
(2) by inserting after subsection (c) the fol-
lowing new subsection: 
‘‘(d)(1) Whoever— 
‘‘(A) seeking or holding one or more leases 
of property from the United States, through the 
Minerals Management Service of the Depart-
ment of the Interior, for purposes of oil or min-
eral extraction, knowingly engages in a course 
of conduct that consists of providing things of 
value to a public official of, or person who has 
been selected to be a public official of, the Min-
erals Management Service, because of the offi-
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cial’s or person’s position in the Minerals Man-
agement Service; or 
‘‘(B) being a public official of, or person 
who has been selected to be a public official of, 
the Minerals Management Service of the De-
partment of the Interior, knowingly engages in 
a course of conduct consisting of receiving 
things of value, knowing that such things of 
value were provided because of the official’s or 
person’s position in the Minerals Management 
Service, from a person seeking or holding one 
or more leases of property from the United 
States, through the Minerals Management Serv-
ice, for purposes of oil or mineral extraction; 
shall be fined under this title, imprisoned for not more 
than two years, or both, except that a corporation, part-
nership, or other organization that violates subparagraph 
(A) shall be fined $25,000,000 and an amount equal to 
its gross revenues arising, during the period in which the 
course of conduct described in subparagraph (A) occurred, 
from the lease or leases described in that subparagraph. 
‘‘(2) For purposes of this subsection, the term ‘course 
of conduct’ means a series of acts over a period of time 
evidencing a continuity of purpose. 
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‘‘(3)(A) The Attorney General may bring a civil ac-
tion in the appropriate United States district court against 
any corporation, partnership, or other organization that 
engages in conduct constituting an offense under para-
graph (1)(A) and, upon proof of such conduct by a prepon-
derance of the evidence, such corporation, partnership, or 
other organization shall be subject to a civil penalty of 
not more than $25,000,000 and an amount equal to its 
gross revenues arising, during the period in which the 
course of conduct described in paragraph (1)(A) occurred, 
from the lease or leases described in that paragraph. 
‘‘(B) If a corporation, partnership, or other organiza-
tion is held liable for a civil penalty under subparagraph 
(A) for a violation of paragraph (1)(A), the United States 
may terminate the lease or leases that were the subject 
to the violation, and the United States shall not be liable 
for any damages to any party to such lease or leases by 
reason of such termination. 
‘‘(C) The imposition of a civil penalty under this 
paragraph does not preclude any other criminal or civil 
statutory, common law, or administrative remedy that is 
available to the United States, or any other person, under 
this section or any other law.’’. 
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SEC. 145. STRENGTHENING THE ABILITY OF THE INTERIOR 
DEPARTMENT INSPECTOR GENERAL TO SE-
CURE COOPERATION. 
The Inspector General Act of 1978 (5 U.S.C. App.) 
is amended by inserting after section 8K the following: 
‘‘SPECIAL PROVISIONS CONCERNING THE DEPARTMENT 
OF THE INTERIOR 
‘‘SEC. 8L. Notwithstanding section 6(a)(4), the In-
spector General of the Department of the Interior may, 
in any inquiry or investigation involving leases of property 
from the United States through the Minerals Management 
Services for purposes of oil and mineral extraction, require 
by subpoena the production of all information, documents, 
reports, answers, records, accounts, papers, and other 
data in any medium, including electronically stored infor-
mation and tangible things, and testimony necessary in 
the performance of the functions assigned by this Act, 
which subpoena, in the case of contumacy or refusal to 
obey, shall be enforceable by order of any appropriate 
United States district court: Provided, that procedures 
other than subpoenas shall be used by the Inspector Gen-
eral to obtain documents, information, or testimony from 
Federal agencies.’’. 
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Subtitle E—Federal Oil and Gas 
Royalty Reform 
SEC. 151. AMENDMENTS TO DEFINITIONS. 
Section 3 of the Federal Oil and Gas Royalty Man-
agement Act of 1982 (30 U.S.C. 1702) is amended— 
(1) in paragraph (20)(A), by striking ‘‘: Pro-
vided, That’’ and all that follows through ‘‘subject of 
the judicial proceeding’’; 
(2) in paragraph (20)(B), by striking ‘‘(with 
written notice to the lessee who designated the des-
ignee)’’; 
(3) in paragraph (23)(A), by striking ‘‘(with 
written notice to the lessee who designated the des-
ignee)’’; 
(4) by amending paragraph (24) to read as fol-
lows: 
‘‘(24) ‘designee’ means any person who pays, 
offsets, or credits monies, makes adjustments, re-
quests and receives refunds, or submits reports with 
respect to payments a lessee must make pursuant to 
section 102(a);’’; 
(5) in paragraph (25)(B), by striking ‘‘(subject 
to the provisions of section 102(a) of this Act)’’; and 
(6) in paragraph (26), by striking ‘‘(with notice 
to the lessee who designated the designee)’’. 
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SEC. 152. INTEREST. 
(a) ESTIMATED PAYMENTS; INTEREST ON AMOUNT 
OF UNDERPAYMENT.—Section 111(j) of the Federal Oil 
and Gas Royalty Management Act of 1982 (30 U.S.C. 
1721(j)) is amended by striking ‘‘If the estimated pay-
ment exceeds the actual royalties due, interest is owed on 
the overpayment.’’. 
(b) OVERPAYMENTS.—Section 111 of the Federal Oil 
and Gas Royalty Management Act of 1982 (30 U.S.C. 
1721) is amended by striking subsections (h) and (i). 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall be effective one year after the date of 
enactment of this Act. 
SEC. 153. OBLIGATION PERIOD. 
Section 115(c) of the Federal Oil and Gas Royalty 
Management Act of 1982 (30 U.S.C. 1724(c)) is amended 
by adding at the end the following: 
‘‘(3) ADJUSTMENTS.—In the case of an adjust-
ment under section 111A(a) (30 U.S.C. 1721a(a)) in 
which a recoupment by the lessee results in an un-
derpayment of an obligation, for purposes of this Act 
the obligation becomes due on the date the lessee or 
its designee makes the adjustment.’’. 
SEC. 154. TOLLING AGREEMENTS AND SUBPOENAS. 
(a) TOLLING AGREEMENTS.—Section 115(d)(1) of 
the Federal Oil and Gas Royalty Management Act of 1982 
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(30 U.S.C. 1724(d)(1)) is amended by striking ‘‘(with no-
tice to the lessee who designated the designee)’’. 
(b) SUBPOENAS.—Section 115(d)(2)(A) of the Fed-
eral Oil and Gas Royalty Management Act of 1982 (30 
U.S.C. 1724(d)(2)(A)) is amended by striking ‘‘(with no-
tice to the lessee who designated the designee, which notice 
shall not constitute a subpoena to the lessee)’’. 
SEC. 155. LIABILITY FOR ROYALTY PAYMENTS. 
Section 102(a) of the Federal Oil and Gas Royalty 
Management Act of 1982 (30 U.S.C. 1712(a)) is amended 
to read as follows: 
‘‘(a) In order to increase receipts and achieve effec-
tive collections of royalty and other payments, a lessee who 
is required to make any royalty or other payment under 
a lease or under the mineral leasing laws, shall make such 
payments in the time and manner as may be specified by 
the Secretary or the applicable delegated State. Any per-
son who pays, offsets or credits monies, makes adjust-
ments, requests and receives refunds, or submits reports 
with respect to payments the lessee must make is the les-
see’s designee under this Act. Notwithstanding any other 
provision of this Act to the contrary, a designee shall be 
liable for any payment obligation of any lessee on whose 
behalf the designee pays royalty under the lease. The per-
son owning operating rights in a lease and a person own-
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ing legal record title in a lease shall be liable for that per-
son’s pro rata share of payment obligations under the 
lease.’’. 
Subtitle F—National Petroleum 
Reserve in Alaska 
SEC. 161. SHORT TITLE. 
This subtitle may be cited as the ‘‘Drill Responsibly 
in Leased Lands Act of 2008’’. 
SEC. 162. ACCELERATION OF LEASE SALES FOR NATIONAL 
PETROLEUM RESERVE IN ALASKA. 
Section 107(d) of the Naval Petroleum Reserves Pro-
duction Act of 1976 (42 U.S.C. 6506a(d)) is amended— 
(1) by striking ‘‘(d)’’ and all that follows 
through ‘‘; first lease sale’’ and inserting the fol-
lowing: 
‘‘(d) LEASE SALES.— 
‘‘(1) FIRST LEASE SALE.—The first lease sale’’; 
and 
(2) by adding at the end the following: 
‘‘(2) SUBSEQUENT
LEASE
SALES.—The Sec-
retary shall accelerate, to the maximum extent prac-
ticable, competitive and environmentally responsible 
leasing of oil and gas in the Reserve in accordance 
with this Act and all applicable environmental laws, 
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including at least 1 lease sale during each of cal-
endar years 2009 through 2013.’’. 
SEC. 163. NATIONAL PETROLEUM RESERVE IN ALASKA: 
PIPELINE CONSTRUCTION. 
The Federal Energy Regulatory Commission shall fa-
cilitate, in an environmentally responsible manner and in 
coordination with the Secretary of the Interior, the Sec-
retary of Transportation, the Secretary of Energy, and the 
State of Alaska, the construction of pipelines necessary to 
transport oil and natural gas from or through the National 
Petroleum Reserve in Alaska to existing transportation or 
processing infrastructure on the North Slope of Alaska. 
SEC. 164. ALASKA NATURAL GAS PIPELINE PROJECT FA-
CILITATION. 
(a) FINDINGS.—Congress finds the following: 
(1) Over 35 trillion cubic feet of natural gas re-
serves have been discovered on Federal and State 
lands currently open to oil and natural gas leasing 
on the North Slope of Alaska. 
(2) These gas supplies could make a significant 
contribution to meeting the energy needs of the 
United States, but the lack of a natural gas trans-
portation system has prevented these natural gas re-
serves from reaching markets in the lower 48 States. 
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(b) FACILITATION BY PRESIDENT.—The President 
shall, pursuant to the Alaska Natural Gas Pipeline Act 
(division C of Public Law 108–324; 15 U.S.C. 720 et seq.) 
and other applicable law, coordinate with producers of nat-
ural gas on the North Slope of Alaska, Federal agencies, 
the State of Alaska, Canadian authorities, pipeline compa-
nies, and other interested persons in order to facilitate 
construction of a natural gas pipeline from Alaska to 
United States markets as expeditiously as possible. 
SEC. 165. PROJECT LABOR AGREEMENTS AND OTHER PIPE-
LINE REQUIREMENTS. 
(a) PROJECT LABOR AGREEMENTS.—The President, 
as a term and condition of any permit required under Fed-
eral law for the pipelines referred to in section 163 and 
164, and in recognizing the Government’s interest in labor 
stability and in the ability of construction labor and man-
agement to meet the particular needs and conditions of 
such pipelines to be developed under such permits and the 
special concerns of the holders of such permits, shall re-
quire that the operators of such pipelines and their agents 
and contractors negotiate to obtain a project labor agree-
ment for the employment of laborers and mechanics on 
production, maintenance, and construction for such pipe-
lines. 
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(b) PIPELINE MAINTENANCE.—The Secretary of 
Transportation shall require every pipeline operator au-
thorized to transport oil and gas produced under Federal 
oil and gas leases in Alaska through the Trans-Alaska 
Pipeline, any pipeline constructed pursuant to section 163 
or 164 of this Act, or any other federally approved pipeline 
transporting oil and gas from the North Slope of Alaska, 
to certify to the Secretary of Transportation annually that 
such pipeline is being fully maintained and operated in 
an efficient manner. The Secretary of Transportation shall 
assess appropriate civil penalties for violations of this re-
quirement in the same manner as civil penalties are as-
sessed for violations under section 60122(a)(1) of title 49, 
United States Code. 
SEC. 166. BAN ON EXPORT OF ALASKAN OIL. 
(a) REPEAL
OF
PROVISION
AUTHORIZING
EX-
PORTS.—Section 28(s) of the Mineral Leasing Act (30 
U.S.C. 185(s)) is repealed. 
(b) REIMPOSITION OF PROHIBITION ON CRUDE OIL 
EXPORTS.—Upon the effective date of this Act, subsection 
(d) of section 7 of the Export Administration Act of 1979 
(50 U.S.C. App. 2406(d)), shall be effective, and any other 
provision of that Act (including sections 11 and 12) shall 
be effective to the extent necessary to carry out such sec-
tion 7(d), notwithstanding section 20 of that Act or any 
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other provision of law that would otherwise allow exports 
of oil to which such section 7(d) applies. 
Subtitle G—Oil Shale 
SEC. 171. OIL SHALE LEASING. 
(a) REPEAL OF RESTRICTION.—Section 433 of the 
Department of the Interior, Environment, and Related 
Agencies Appropriations Act, 2008 (division F of Public 
Law 110–161; 121 Stat. 2152) is repealed. 
(b) REQUIREMENT THAT STATE APPROVE OF OIL 
SHALE LEASING.—Section 369 of the Energy Policy Act 
of 2005 (42 U.S.C. 15927) is amended by adding at the 
end the following: 
‘‘(t) REQUIREMENT THAT STATE APPROVE OF OIL 
SHALE LEASING.—No lease may be issued under this sec-
tion, section 21 of the Mineral Leasing Act (30 U.S.C. 
241), or any other law, for exploration, research, develop-
ment, or production of oil shale on lands located in a 
State, unless the State has enacted a law approving of 
Federal oil shale leasing in the State. Nothing in this sub-
section shall be construed as preventing the Department 
of the Interior from preparing an environmental impact 
statement under the existing authority under the National 
Environmental Policy Act of 1969 (42 U.S.C. 4321 et 
seq.) with respect to an individual lease sale proposed 
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under the commercial leasing program established under 
this section.’’. 
TITLE II—CONSUMER ENERGY 
SUPPLY 
SEC. 201. SHORT TITLE. 
This title may be cited as the ‘‘Consumer Energy 
Supply Act of 2008’’. 
SEC. 202. DEFINITIONS. 
In this title— 
(1) the term ‘‘light grade petroleum’’ means 
crude oil with an API gravity of 30 degrees or high-
er; 
(2) the term ‘‘heavy grade petroleum’’ means 
crude oil with an API gravity of 26 degrees or lower; 
and 
(3) the term ‘‘Secretary’’ means the Secretary 
of Energy. 
SEC. 203. SALE AND REPLACEMENT OF OIL FROM THE 
STRATEGIC PETROLEUM RESERVE. 
(a) INITIAL
PETROLEUM
SALE
AND
REPLACE-
MENT.—Notwithstanding section 161 of the Energy Policy 
and Conservation Act (42 U.S.C. 6241), the Secretary 
shall publish a plan not later than 15 days after the date 
of enactment of this Act to— 
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(1) sell, in the amounts and on the schedule de-
scribed in subsection (b), light grade petroleum from 
the Strategic Petroleum Reserve and acquire an 
equivalent volume of heavy grade petroleum; 
(2) deposit the cash proceeds from sales under 
paragraph (1) into the SPR Petroleum Account es-
tablished under section 167 of the Energy Policy 
and Conservation Act (42 U.S.C. 6247); and 
(3) from the cash proceeds deposited pursuant 
to paragraph (2), withdraw the amount necessary to 
pay for the direct administrative and operational 
costs of the sale and acquisition. 
(b) AMOUNTS AND SCHEDULE.—The sale and acqui-
sition described in subsection (a) shall require the offer 
for sale of a total quantity of 70,000,000 barrels of light 
grade petroleum from the Strategic Petroleum Reserve. 
The sale shall commence, whether or not a plan has been 
published under subsection (a), not later than 30 days 
after the date of enactment of this Act and be completed 
no more than six months after the date of enactment of 
this Act, with at least 20,000,000 barrels to be offered 
for sale within the first 60 days after the date of enact-
ment of this Act. In no event shall the Secretary sell bar-
rels of oil under subsection (a) that would result in a Stra-
tegic Petroleum Reserve that contains fewer than 90 per-
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cent of the total amount of barrels in the Strategic Petro-
leum Reserve as of the date of enactment of this Act. 
Heavy grade petroleum, to replace the quantities of light 
grade petroleum sold under this section, shall be obtained 
through acquisitions which— 
(1) shall commence no sooner than 6 months 
after the date of enactment of this Act; 
(2) shall be completed, at the discretion of the 
Secretary, not later than 5 years after the date of 
enactment of this Act; 
(3) shall be carried out in a manner so as to 
maximize the monetary value to the Federal Govern-
ment; and 
(4) shall be carried out using the receipts from 
the sales of light grade petroleum authorized under 
this section. 
(c) DEFERRALS.—The Secretary is encouraged to, 
when economically beneficial and practical, grant requests 
to defer scheduled deliveries of petroleum to the Reserve 
under subsection (a) if the deferral will result in a pre-
mium paid in additional barrels of oil which will reduce 
the cost of oil acquisition and increase the volume of oil 
delivered to the Reserve or yield additional cash bonuses. 
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TITLE III—PUBLIC 
TRANSPORTATION 
SEC. 301. SHORT TITLE. 
This title may be cited as the ‘‘Saving Energy 
Through Public Transportation Act of 2008’’. 
SEC. 302. FINDINGS. 
Congress finds the following: 
(1) In 2007, people in the United States took 
more than 10.3 billion trips using public transpor-
tation, the highest level in 50 years. 
(2) Public transportation use in the United 
States is up 32 percent since 1995, a figure that is 
more than double the growth rate of the Nation’s 
population and is substantially greater than the 
growth rate for vehicle miles traveled on the Na-
tion’s highways for that same period. 
(3) Public transportation use saves fuel, re-
duces emissions, and saves money for the people of 
the United States. 
(4) The direct petroleum savings attributable to 
public transportation use is 1.4 billion gallons per 
year, and when the secondary effects of transit avail-
ability on travel are also taken into account, public 
transportation use saves the United States the 
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equivalent of 4.2 billion gallons of gasoline per year 
(more than 11 million gallons of gasoline per day). 
(5) Public transportation use in the United 
States is estimated to reduce carbon dioxide emis-
sions by 37 million metric tons annually. 
(6) An individual who commutes to work using 
a single occupancy vehicle can reduce carbon dioxide 
emissions by 20 pounds per day (more than 4,800 
pounds per year) by switching to public transpor-
tation. 
(7) Public transportation use provides an af-
fordable alternative to driving, as households that 
use public transportation save an average of $6,251 
every year. 
(8) Although under existing laws Federal em-
ployees in the National Capital Region receive tran-
sit benefits, transit benefits should be available to all 
Federal employees in the United States so that the 
Federal Government sets a leading example of great-
er public transportation use. 
(9) Public transportation stakeholders should 
engage and involve local communities in the edu-
cation and promotion of the importance of utilizing 
public transportation. 
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(10) Increasing public transportation use is a 
national priority. 
SEC. 303. GRANTS TO IMPROVE PUBLIC TRANSPORTATION 
SERVICES. 
(a) AUTHORIZATIONS OF APPROPRIATIONS.— 
(1) URBANIZED AREA FORMULA GRANTS.—In 
addition 
to 
amounts 
allocated 
under 
section 
5338(b)(2)(B) of title 49, United States Code, to 
carry out section 5307 of such title, there is author-
ized to be appropriated $750,000,000 for each of fis-
cal years 2008 and 2009 to carry out such section 
5307. Such funds shall be apportioned, not later 
than 7 days after the date on which the funds are 
appropriated, in accordance with section 5336 (other 
than subsections (i)(1) and (j)) of such title but may 
not be combined or commingled with any other 
funds apportioned under such section 5336. 
(2) FORMULA GRANTS FOR OTHER THAN UR-
BANIZED AREAS.—In addition to amounts allocated 
under section 5338(b)(2)(G) of title 49, United 
States Code, to carry out section 5311 of such title, 
there is authorized to be appropriated $100,000,000 
for each of fiscal years 2008 and 2009 to carry out 
such section 5311. Such funds shall be apportioned, 
not later than 7 days after the date on which the 
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funds are appropriated, in accordance with such sec-
tion 5311 but may not be combined or commingled 
with any other funds apportioned under such section 
5311. 
(b) USE OF FUNDS.—Notwithstanding sections 5307 
and 5311 of title 49, United States Code, the Secretary 
of Transportation may make grants under such sections 
from amounts appropriated under subsection (a) only for 
one or more of the following: 
(1) If the recipient of the grant is reducing, or 
certifies to the Secretary within the time the Sec-
retary prescribes that, during the term of the grant, 
the recipient will reduce one or more fares the re-
cipient charges for public transportation, or in the 
case of subsection (f) of such section 5311, intercity 
bus service, those operating costs of equipment and 
facilities being used to provide the public transpor-
tation, or in the case of subsection (f) of such sec-
tion 5311, intercity bus service, that the recipient is 
no longer able to pay from the revenues derived 
from such fare or fares as a result of such reduction. 
(2) If the recipient of the grant is expanding, 
or certifies to the Secretary within the time the Sec-
retary prescribes that, during the term of the grant, 
the recipient will expand public transportation serv-
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ice, or in the case of subsection (f) of such section 
5311, intercity bus service, those operating and cap-
ital costs of equipment and facilities being used to 
provide the public transportation service, or in the 
case of subsection (f) of such section 5311, intercity 
bus service, that the recipient incurs as a result of 
the expansion of such service. 
(3) To avoid increases in fares for public trans-
portation, or in the case of subsection (f) of such 
section 5311, intercity bus service, or decreases in 
current public transportation service, or in the case 
of subsection (f) of such section 5311, intercity bus 
service, that would otherwise result from an increase 
in costs to the public transportation or intercity bus 
agency for transportation-related fuel or meeting ad-
ditional transportation-related equipment or facility 
maintenance needs, if the recipient of the grant cer-
tifies to the Secretary within the time the Secretary 
prescribes that, during the term of the grant, the re-
cipient will not increase the fares that the recipient 
charges for public transportation, or in the case of 
subsection (f) of such section 5311, intercity bus 
service, or, will not decrease the public transpor-
tation service, or in the case of subsection (f) of 
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such section 5311, intercity bus service, that the re-
cipient provides. 
(4) If the recipient of the grant is acquiring, or 
certifies to the Secretary within the time the Sec-
retary prescribes that, during the term of the grant, 
the recipient will acquire, clean fuel or alternative 
fuel vehicle-related equipment or facilities for the 
purpose of improving fuel efficiency, the costs of ac-
quiring the equipment or facilities. 
(5) If the recipient of the grant is establishing 
or expanding, or certifies to the Secretary within the 
time the Secretary prescribes that, during the term 
of the grant, the recipient will establish or expand, 
commuter matching services to provide commuters 
with information and assistance about alternatives 
to single occupancy vehicle use, those administrative 
costs in establishing or expanding such services. 
(c) FEDERAL SHARE.—Notwithstanding any other 
provision of law, the Federal share of the costs for which 
a grant is made under this section shall be 100 percent. 
(d) PERIOD OF AVAILABILITY.—Funds appropriated 
under this section shall remain available for a period of 
2 fiscal years. 
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SEC. 304. INCREASED FEDERAL SHARE FOR CLEAN AIR ACT 
COMPLIANCE. 
Notwithstanding section 5323(i)(1) of title 49, 
United States Code, a grant for a project to be assisted 
under chapter 53 of such title during fiscal years 2008 
and 2009 that involves acquiring clean fuel or alternative 
fuel vehicle-related equipment or facilities for the purposes 
of complying with or maintaining compliance with the 
Clean Air Act (42 U.S.C. 7401 et seq.) shall be for 100 
percent of the net project cost of the equipment or facility 
attributable to compliance with that Act unless the grant 
recipient requests a lower grant percentage. 
SEC. 305. TRANSPORTATION FRINGE BENEFITS. 
(a) REQUIREMENT THAT AGENCIES OFFER TRANSIT 
PASS TRANSPORTATION FRINGE BENEFITS
TO THEIR 
EMPLOYEES NATIONWIDE.— 
(1) IN GENERAL.—Section 3049(a)(1) of the 
Safe, Accountable, Flexible, Efficient Transportation 
Equity Act: A Legacy for Users (5 U.S.C. 7905 
note; 119 Stat. 1711) is amended— 
(A) by striking ‘‘Effective’’ and all that 
follows through ‘‘each covered agency’’ and in-
serting ‘‘Each agency’’; and 
(B) by inserting ‘‘at a location in an ur-
banized area of the United States that is served 
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by fixed route public transportation’’ before 
‘‘shall be offered’’. 
(2) 
CONFORMING
AMENDMENTS.—Section 
3049(a) of such Act (5 U.S.C. 7905 note; 119 Stat. 
1711) is amended— 
(A) in paragraph (3)— 
(i) by striking subparagraph (A); and 
(ii) by redesignating subparagraphs 
(B) through (F) as subparagraphs (A) 
through (E), respectively; and 
(B) in paragraph (4) by striking ‘‘a cov-
ered agency’’ and inserting ‘‘an agency’’. 
(b) BENEFITS DESCRIBED.—Section 3049(a)(2) of 
such Act (5 U.S.C. 7905 note; 119 Stat. 1711) is amended 
by striking the period at the end and inserting the fol-
lowing: ‘‘, except that the maximum level of such benefits 
shall be the maximum amount which may be excluded 
from gross income for qualified parking as in effect for 
a month under section 132(f)(2)(B) of the Internal Rev-
enue Code of 1986.’’. 
(c) GUIDANCE.—Section 3049(a) of such Act (5 
U.S.C. 7905 note; 119 Stat. 1711) is amended by adding 
at the end the following: 
‘‘(5) GUIDANCE.— 
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‘‘(A) ISSUANCE.—Not later than 60 days 
after the date of enactment of this paragraph, 
the Secretary of Transportation shall issue 
guidance on nationwide implementation of the 
transit pass transportation fringe benefits pro-
gram under this subsection. 
‘‘(B) UNIFORM APPLICATION.— 
‘‘(i) IN GENERAL.—The guidance to 
be issued under subparagraph (A) shall 
contain a uniform application for use by all 
Federal employees applying for benefits 
from an agency under the program. 
‘‘(ii) REQUIRED
INFORMATION.—As 
part of such an application, an employee 
shall provide, at a minimum, the employ-
ee’s home and work addresses, a break-
down of the employee’s commuting costs, 
and a certification of the employee’s eligi-
bility for benefits under the program. 
‘‘(iii) 
WARNING
AGAINST
FALSE 
STATEMENTS.—Such an application shall 
contain a warning against making false 
statements in the application. 
‘‘(C) INDEPENDENT
VERIFICATION
RE-
QUIREMENTS.—The guidance to be issued 
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under subparagraph (A) shall contain inde-
pendent verification requirements to ensure 
that, with respect to an employee of an agen-
cy— 
‘‘(i) the eligibility of the employee for 
benefits under the program is verified by 
an official of the agency; 
‘‘(ii) employee commuting costs are 
verified by an official of the agency; and 
‘‘(iii) records of the agency are 
checked to ensure that the employee is not 
receiving parking benefits from the agency. 
‘‘(D) PROGRAM
IMPLEMENTATION
RE-
QUIREMENTS.—The guidance to be issued 
under subparagraph (A) shall contain program 
implementation requirements applicable to each 
agency to ensure that— 
‘‘(i) benefits provided by the agency 
under the program are adjusted in cases of 
employee travel, leave, or change of ad-
dress; 
‘‘(ii) removal from the program is in-
cluded in the procedures of the agency re-
lating to an employee separating from em-
ployment with the agency; and 
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‘‘(iii) benefits provided by the agency 
under the program are made available 
using an electronic format (rather than 
using paper fare media) where such a for-
mat is available for use. 
‘‘(E) ENFORCEMENT
AND
PENALTIES.— 
The guidance to be issued under subparagraph 
(A) shall contain a uniform administrative pol-
icy on enforcement and penalties. Such policy 
shall be implemented by each agency to ensure 
compliance with program requirements, to pre-
vent fraud and abuse, and, as appropriate, to 
penalize employees who have abused or misused 
the benefits provided under the program. 
‘‘(F) PERIODIC
REVIEWS.—The guidance 
to be issued under subparagraph (A) shall re-
quire each agency, not later than September 1 
of the first fiscal year beginning after the date 
of enactment of this paragraph, and every 3 
years thereafter, to develop and submit to the 
Secretary a review of the agency’s implementa-
tion of the program. Each such review shall 
contain, at a minimum, the following: 
‘‘(i) An assessment of the agency’s 
implementation of the guidance, including 
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a summary of the audits and investiga-
tions, if any, of the program conducted by 
the Inspector General of the agency. 
‘‘(ii) Information on the total number 
of employees of the agency that are partici-
pating in the program. 
‘‘(iii) Information on the total number 
of single occupancy vehicles removed from 
the roadway network as a result of partici-
pation by employees of the agency in the 
program. 
‘‘(iv) Information on energy savings 
and emissions reductions, including reduc-
tions in greenhouse gas emissions, result-
ing from reductions in single occupancy ve-
hicle use by employees of the agency that 
are participating in the program. 
‘‘(v) Information on reduced conges-
tion and improved air quality resulting 
from reductions in single occupancy vehicle 
use by employees of the agency that are 
participating in the program. 
‘‘(vi) Recommendations to increase 
program participation and thereby reduce 
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single occupancy vehicle use by Federal 
employees nationwide. 
‘‘(6) REPORTING
REQUIREMENTS.—Not later 
than September 30 of the first fiscal year beginning 
after the date of enactment of this paragraph, and 
every 3 years thereafter, the Secretary shall submit 
to the Committee on Transportation and Infrastruc-
ture and the Committee on Oversight and Govern-
ment Reform of the House of Representatives and 
the Committee on Banking, Housing, and Urban Af-
fairs of the Senate a report on nationwide implemen-
tation of the transit pass transportation fringe bene-
fits program under this subsection, including a sum-
mary of the information submitted by agencies pur-
suant to paragraph (5)(F).’’. 
(d) EFFECTIVE DATE.—Except as otherwise specifi-
cally provided, the amendments made by this section shall 
become effective on the first day of the first fiscal year 
beginning after the date of enactment of this Act. 
SEC. 306. CAPITAL COST OF CONTRACTING VANPOOL 
PILOT PROGRAM. 
(a) ESTABLISHMENT.—The Secretary of Transpor-
tation shall establish and implement a pilot program to 
carry out vanpool demonstration projects in not more than 
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3 urbanized areas and not more than 2 other than urban-
ized areas. 
(b) PILOT PROGRAM.— 
(1) IN
GENERAL.—Notwithstanding section 
5323(i) of title 49, United States Code, for each 
project selected for participation in the pilot pro-
gram, the Secretary shall allow the non-Federal 
share provided by a recipient of assistance for a cap-
ital project under chapter 53 of such title to include 
the amounts described in paragraph (2). 
(2) CONDITIONS ON ACQUISITION OF VANS.— 
The amounts referred to in paragraph (1) are any 
amounts expended by a private provider of public 
transportation by vanpool for the acquisition of vans 
to be used by such private provider in the recipient’s 
service area, excluding any amounts the provider 
may have received in Federal, State, or local govern-
ment assistance for such acquisition, if the private 
provider enters into a legally binding agreement with 
the recipient that requires the private provider to 
use all revenues it receives in providing public trans-
portation in such service area, in excess of its oper-
ating costs, for the purpose of acquiring vans to be 
used by the private provider in such service area. 
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(c) PROGRAM TERM.—The Secretary may approve an 
application for a vanpool demonstration project for fiscal 
years 2008 through 2009. 
(d) REPORT TO CONGRESS.—Not later than one year 
after the date of enactment of this Act, the Secretary shall 
submit to the Committee on Transportation and Infra-
structure of the House of Representatives and the Com-
mittee on Banking, Housing, and Urban Affairs of the 
Senate a report containing an assessment of the costs, 
benefits, and efficiencies of the vanpool demonstration 
projects. 
SEC. 307. NATIONAL CONSUMER AWARENESS PROGRAM. 
(a) IN GENERAL.—The Secretary of Transportation 
shall carry out a national consumer awareness program 
to educate the public on the environmental, energy, and 
economic benefits of public transportation alternatives to 
the use of single occupancy vehicles. 
(b) AUTHORIZATION OF APPROPRIATIONS.—There is 
authorized to be appropriated to carry out this section 
$1,000,000 for fiscal year 2009. Such sums shall remain 
available until expended. 
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SEC. 308. EXCEPTION TO ALTERNATIVE FUEL PROCURE-
MENT REQUIREMENT. 
Section 526 of the Energy Independence and Security 
Act of 2007 (Public Law 110–140; 42 U.S. C. 17142) 
is amended— 
(1) by striking ‘‘No Federal agency’’ and insert-
ing ‘‘(a) REQUIREMENT.—Except as provided in 
subsection (b), no Federal agency’’; and 
(2) by adding at the end the following: 
‘‘(b) EXCEPTION.—Subsection (a) does not prohibit 
a Federal agency from entering into a contract to pur-
chase a generally available fuel that is not an alternative 
or synthetic fuel or predominantly produced from a non-
conventional petroleum source, if— 
‘‘(1) the contract does not specifically require 
the contractor to provide an alternative or synthetic 
fuel or fuel from a nonconventional petroleum 
source; 
‘‘(2) the purpose of the contract is not to obtain 
an alternative or synthetic fuel or fuel from a non-
conventional petroleum source; and 
‘‘(3) the contract does not provide incentives for 
a refinery upgrade or expansion to allow a refinery 
to use or increase its use of fuel from a nonconven-
tional petroleum source.’’. 
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TITLE IV—GREATER ENERGY EF-
FICIENCY 
IN 
BUILDING 
CODES 
SEC. 401. GREATER ENERGY EFFICIENCY IN BUILDING 
CODES. 
(a) IN GENERAL.—Section 304 of the Energy Con-
servation and Production Act (42 U.S.C. 6833) is amend-
ed to read as follows: 
‘‘SEC. 304. UPDATING STATE BUILDING ENERGY EFFI-
CIENCY CODES. 
‘‘(a) UPDATING NATIONAL MODEL BUILDING EN-
ERGY CODES.—(1) The Secretary shall support updating 
the national model building energy codes and standards 
at least every three years to achieve overall energy savings, 
compared to the 2006 IECC for residential buildings and 
ASHRAE Standard 90.1–2004 for commercial buildings, 
of at least— 
‘‘(A) 30 percent in editions of each model code 
or standard released in or after 2010; and 
‘‘(B) 50 percent in editions of each model code 
or standard released in or after 2020. 
Targets for specific years shall be set by the Secretary 
at least 3 years in advance of each target year, coordinated 
with the IECC and ASHRAE Standard 90.1 cycles, at the 
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maximum level of energy efficiency that is technologically 
feasible and life-cycle cost effective. 
‘‘(2)(A) Whenever the provisions of the IECC or 
ASHRAE Standard 90.1 regarding building energy use 
are revised, the Secretary shall make a preliminary deter-
mination not later than 90 days after the date of the revi-
sion, and a final determination not later than 12 months 
after the date of such revision, on— 
‘‘(i) whether such revision will improve energy 
efficiency in buildings; and 
‘‘(ii) whether such revision will meet the targets 
under paragraph (1). 
‘‘(B) If the Secretary makes a determination under 
subparagraph (A)(ii) that a code or standard does not 
meet the targets under paragraph (1), or if a national 
model code or standard is not updated for more than three 
years, then the Secretary shall, within 12 months after 
such determination, establish a modified code or standard 
that meets such targets. Any such modified code or stand-
ard— 
‘‘(i) shall achieve the maximum level of energy 
savings that is technologically feasible and life-cycle 
cost-effective; 
‘‘(ii) shall be based on the latest revision of the 
IECC or ASHRAE Standard 90.1, including any 
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amendments or additions thereto, but may also con-
sider other model codes or standards; and 
‘‘(iii) shall serve as the baseline for the next de-
termination under subparagraph (A)(i). 
‘‘(C) The Secretary shall provide the opportunity for 
public comment on targets, determinations, and modified 
codes and standards under this subsection, and shall pub-
lish notice of targets, determinations, and modified codes 
and standards under this subsection in the Federal Reg-
ister. 
‘‘(b) STATE CERTIFICATION OF BUILDING ENERGY 
CODE UPDATES.—(1) Not later than 2 years after the 
date of enactment of this subsection, each State shall cer-
tify to the Secretary that it has reviewed and updated the 
provisions of its residential and commercial building codes 
regarding energy efficiency. Such certification shall in-
clude a demonstration that such State’s code provisions 
meet or exceed the 2006 IECC for residential buildings 
and the ASHRAE Standard 90.1–2007 for commercial 
buildings, or achieve equivalent or greater energy savings. 
‘‘(2)(A) If the Secretary makes an affirmative deter-
mination under subsection (a)(2)(A)(i) or establishes a 
modified code or standard under subsection (a)(2)(B), 
each State shall, within 2 years after such determination 
or establishment, certify that it has reviewed and updated 
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the provisions of its building code regarding energy effi-
ciency. Such certification shall include a demonstration 
that such State’s code provisions meet or exceed the re-
vised code or standard, or achieve equivalent or greater 
energy savings. 
‘‘(B) If the Secretary fails to make a determination 
under subsection (a)(2)(A)(i) by the date specified in sub-
section (a)(2), or makes a negative determination, each 
State shall within 2 years after the specified date or the 
date of the determination, certify that it has reviewed the 
revised code or standard, and updated the provisions of 
its building code regarding energy efficiency to meet or 
exceed any provisions found to improve energy efficiency 
in buildings, or to achieve equivalent or greater energy 
savings in other ways. 
‘‘(c) STATE CERTIFICATION OF COMPLIANCE WITH 
BUILDING CODES.—(1) Each State shall, not later than 
3 years after a certification under subsection (b), certify 
that it has— 
‘‘(A) achieved compliance under paragraph (3) 
with the certified State building energy code or with 
the associated model code or standard; or 
‘‘(B) made significant progress under para-
graph (4) toward achieving compliance with the cer-
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tified State building energy code or with the associ-
ated model code or standard. 
If the State certifies progress toward achieving compli-
ance, the State shall repeat the certification each year 
until it certifies that it has achieved compliance. 
‘‘(2) A certification under paragraph (1) shall include 
documentation of the rate of compliance based on inde-
pendent inspections of a random sample of the new and 
renovated buildings covered by the code in the preceding 
year, or based on an alternative method that yields an ac-
curate measure of compliance. 
‘‘(3)(A) A State shall be considered to achieve compli-
ance under paragraph (1) if— 
‘‘(i) at least 90 percent of new and renovated 
building space covered by the code in the preceding 
year substantially meets all the requirements of the 
code regarding energy efficiency, or achieves an 
equivalent energy savings level; or 
‘‘(ii) the estimated excess energy use of new 
and renovated buildings that did not meet the code 
in the preceding year, compared to a baseline of 
comparable buildings that meet the code, is not more 
than 5 percent of the estimated energy use of all 
new and renovated buildings covered by the code in 
the preceding year. 
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‘‘(B) Only renovations with building permits are cov-
ered under this paragraph. If the Secretary determines the 
percentage targets under subparagraph (A) are not rea-
sonably achievable for renovated residential or commercial 
buildings, the Secretary may reduce the targets for such 
renovated buildings to the highest achievable level. 
‘‘(4)(A) A State shall be considered to have made sig-
nificant progress toward achieving compliance for pur-
poses of paragraph (1) if the State— 
‘‘(i) has developed and is implementing a plan 
for achieving compliance within 8 years, assuming 
continued adequate funding, including active train-
ing and enforcement programs; 
‘‘(ii) after one or more years of adequate fund-
ing, has demonstrated progress, in conformance with 
the plan described in clause (i), toward compliance; 
‘‘(iii) after five or more years of adequate fund-
ing, meets the requirement in paragraph (3) sub-
stituting 80 percent for 90 percent or substituting 
10 percent for 5 percent; and 
‘‘(iv) has not had more than 8 years of ade-
quate funding. 
‘‘(B) Funding shall be considered adequate, for pur-
poses of this paragraph, when the Federal Government 
provides to the States at least $50,000,000 in a year in 
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funding and support for development and implementation 
of State building energy codes, including for training and 
enforcement. 
‘‘(d) FAILURE TO MEET DEADLINES.—(1) A State 
that has not made a certification required under sub-
section (b) or (c) by the applicable deadline shall submit 
to the Secretary a report on— 
‘‘(A) the status of the State with respect to 
meeting the requirements and submitting the certifi-
cation; and 
‘‘(B) a plan for meeting the requirements and 
submitting the certification. 
‘‘(2) Any State for which the Secretary has not ac-
cepted a certification by a deadline under subsection (b) 
or (c) of this section is out of compliance with this section. 
‘‘(3) In any State that is out of compliance with this 
section, a local government may be in compliance with this 
section by meeting the certification requirements under 
subsections (b) and (c) of this section. 
‘‘(4) The Secretary shall annually submit to Con-
gress, and publish in the Federal Register, a report on 
the status of national model building energy codes and 
standards, the status of code adoption and compliance in 
the States, and implementation of this section. The report 
shall include estimates of impacts of past action under this 
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section and potential impacts of further action on lifetime 
energy use by buildings and resulting energy costs to indi-
viduals and businesses. 
‘‘(e) TECHNICAL ASSISTANCE.—(1) The Secretary 
shall on a timely basis provide technical assistance to 
model code-setting and standard development organiza-
tions. This assistance shall include technical assistance as 
requested by the organizations in evaluating code or 
standards proposals or revisions, building energy analysis 
and design tools, building demonstrations, and design as-
sistance and training. The Secretary shall submit code and 
standard amendment proposals, with supporting evidence, 
sufficient to enable the national model building energy 
codes and standards to meet the targets in subsection 
(a)(1). 
‘‘(2) The Secretary shall provide technical assistance 
to States to implement the requirements of this section, 
including procedures for States to demonstrate that their 
code provisions achieve equivalent or greater energy sav-
ings than the national model codes and standards, and to 
improve and implement State residential and commercial 
building energy efficiency codes or to otherwise promote 
the design and construction of energy efficient buildings. 
‘‘(f) AVAILABILITY
OF INCENTIVE FUNDING.—(1) 
The Secretary shall provide incentive funding to States to 
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implement the requirements of this section, and to im-
prove and implement State residential and commercial 
building energy efficiency codes, including increasing and 
verifying compliance with such codes. In determining 
whether, and in what amount, to provide incentive funding 
under this subsection, the Secretary shall consider the ac-
tions proposed by the State to implement the requirements 
of this section, to improve and implement residential and 
commercial building energy efficiency codes, and to pro-
mote building energy efficiency through the use of such 
codes. 
‘‘(2) Additional funding shall be provided under this 
subsection for implementation of a plan to achieve and 
document at least a 90 percent rate of compliance with 
residential and commercial building energy efficiency 
codes, based on energy performance— 
‘‘(A) to a State that has adopted and is imple-
menting, on a Statewide basis— 
‘‘(i) a residential building energy efficiency 
code that meets or exceeds the requirements of 
the 2006 IECC, or any succeeding version of 
that code that has received an affirmative de-
termination from the Secretary under sub-
section (a)(2)(A)(i); and 
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‘‘(ii) a commercial building energy effi-
ciency code that meets or exceeds the require-
ments of the ASHRAE Standard 90.1–2007, or 
any succeeding version of that standard that 
has received an affirmative determination from 
the Secretary under subsection (a)(2)(A)(i); or 
‘‘(B) in a State in which there is no Statewide 
energy code for either residential buildings or com-
mercial buildings, or where State codes fail to com-
ply with subparagraph (A), to a local government 
that has adopted and is implementing residential 
and commercial building energy efficiency codes, as 
described in subparagraph (A). 
‘‘(3) Of the amounts made available under this sub-
section, the Secretary may use amounts required, not ex-
ceeding $500,000 for each State, to train State and local 
officials to implement codes described in paragraph (2). 
‘‘(4) There are authorized to be appropriated to carry 
out this subsection— 
‘‘(A) $70,000,000 for each of fiscal years 2009 
through 2013; and 
‘‘(B) such sums as are necessary for fiscal year 
2014 and each fiscal year thereafter.’’. 
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(b) DEFINITION.—Section 303 of the Energy Con-
servation and Production Act (42 U.S.C. 6832) is amend-
ed by adding at the end the following new paragraph: 
‘‘(17) The term ‘IECC’ means the International 
Energy Conservation Code.’’. 
TITLE V—FEDERAL RENEWABLE 
ELECTRICITY STANDARD 
SEC. 501. FEDERAL RENEWABLE ELECTRICITY STANDARD. 
(a) IN GENERAL.—Title VI of the Public Utility Reg-
ulatory Policies Act of 1978 is amended by adding at the 
end the following: 
‘‘SEC. 610. FEDERAL RENEWABLE ELECTRICITY STANDARD. 
‘‘(a) DEFINITIONS.—For purposes of this section: 
‘‘(1) BIOMASS.— 
‘‘(A) IN
GENERAL.—The term ‘biomass’ 
means each of the following: 
‘‘(i) Cellulosic (plant fiber) organic 
materials from a plant that is planted for 
the purpose of being used to produce en-
ergy. 
‘‘(ii) Nonhazardous, plant or algal 
matter that is derived from any of the fol-
lowing: 
‘‘(I) An agricultural crop, crop 
byproduct or residue resource. 
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‘‘(II) Waste such as landscape or 
right-of-way trimmings (but not in-
cluding municipal solid waste, recycla-
ble postconsumer waste paper, paint-
ed, treated, or pressurized wood, wood 
contaminated with plastic or metals). 
‘‘(iii) Animal waste or animal byprod-
ucts. 
‘‘(iv) Landfill methane. 
‘‘(B) NATIONAL FOREST LANDS AND CER-
TAIN OTHER PUBLIC LANDS.—With respect to 
organic material removed from National Forest 
System lands or from public lands administered 
by the Secretary of the Interior, the term ‘bio-
mass’ covers only organic material from (i) eco-
logical forest restoration; (ii) pre-commercial 
thinnings; (iii) brush; (iv) mill residues; and (v) 
slash. 
‘‘(C) EXCLUSION
OF
CERTAIN
FEDERAL 
LANDS.—Notwithstanding subparagraph (B), 
material or matter that would otherwise qualify 
as biomass are not included in the term bio-
mass if they are located on the following Fed-
eral lands: 
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‘‘(i) Federal land containing old 
growth forest or late successional forest 
unless the Secretary of the Interior or the 
Secretary of Agriculture determines that 
the removal of organic material from such 
land is appropriate for the applicable forest 
type and maximizes the retention of late- 
successional and large and old growth 
trees, late-successional and old growth for-
est structure, and late-successional and old 
growth forest composition. 
‘‘(ii) Federal land on which the re-
moval of vegetation is prohibited, including 
components of the National Wilderness 
Preservation System. 
‘‘(iii) Wilderness Study Areas. 
‘‘(iv) Inventoried roadless areas. 
‘‘(v) Components of the National 
Landscape Conservation System. 
‘‘(vi) National Monuments. 
‘‘(2) ELIGIBLE
FACILITY.—The term ‘eligible 
facility’ means— 
‘‘(A) a facility for the generation of electric 
energy from a renewable energy resource that is 
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placed in service on or after January 1, 2001; 
or 
‘‘(B) a repowering or cofiring increment. 
‘‘(3) EXISTING FACILITY.—The term ‘existing 
facility’ means a facility for the generation of elec-
tric energy from a renewable energy resource that is 
not an eligible facility. 
‘‘(4) INCREMENTAL HYDROPOWER.—The term 
‘incremental hydropower’ means additional genera-
tion that is achieved from increased efficiency or ad-
ditions of capacity made on or after January 1, 
2001, or the effective date of an existing applicable 
State renewable portfolio standard program at a hy-
droelectric facility that was placed in service before 
that date. 
‘‘(5) INDIAN
LAND.—The term ‘Indian land’ 
means— 
‘‘(A) any land within the limits of any In-
dian reservation, pueblo, or rancheria; 
‘‘(B) any land not within the limits of any 
Indian reservation, pueblo, or rancheria title to 
which was on the date of enactment of this 
paragraph either held by the United States for 
the benefit of any Indian tribe or individual or 
held by any Indian tribe or individual subject to 
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restriction by the United States against alien-
ation; 
‘‘(C) any dependent Indian community; or 
‘‘(D) any land conveyed to any Alaska Na-
tive corporation under the Alaska Native 
Claims Settlement Act. 
‘‘(6) INDIAN TRIBE.—The term ‘Indian tribe’ 
means any Indian tribe, band, nation, or other orga-
nized group or community, including any Alaskan 
Native village or regional or village corporation as 
defined in or established pursuant to the Alaska Na-
tive Claims Settlement Act (43 U.S.C. 1601 et seq.), 
which is recognized as eligible for the special pro-
grams and services provided by the United States to 
Indians because of their status as Indians. 
‘‘(7) RENEWABLE ENERGY.—The term ‘renew-
able energy’ means electric energy generated by a re-
newable energy resource. 
‘‘(8) RENEWABLE
ENERGY
RESOURCE.—The 
term ‘renewable energy resource’ means solar, wind, 
ocean, tidal, geothermal energy, biomass, landfill 
gas, incremental hydropower, or hydrokinetic energy. 
‘‘(9) REPOWERING OR COFIRING INCREMENT.— 
The 
term 
‘repowering 
or 
cofiring 
increment’ 
means— 
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section, a person that sells electric energy to electric 
consumers that, in combination with the sales of any 
affiliate organized after the date of enactment of 
this section, sells not less that 1,000,000 megawatt 
hours of electric energy to consumers for purposes 
other than resale shall qualify as a retail electric 
supplier. For purposes of this paragraph, sales by 
any person to a parent company or to other affiliates 
of such person shall not be treated as sales to elec-
tric consumers. 
‘‘(B) Such term does not include the United 
States, a State or any political subdivision of a 
State, or any agency, authority, or instrumentality 
of any one or more of the foregoing, or a rural elec-
tric cooperative, except that a political subdivision of 
a State, or an agency, authority, or instrumentality 
of the United States, a State or a political subdivi-
sion of a State, or a rural electric cooperative that 
sells electric energy to electric consumers or any 
other entity that sells electric energy to electric con-
sumers that would not otherwise qualify as a retail 
electric supplier shall be deemed a retail electric sup-
plier if such entity notifies the Secretary that it vol-
untarily agrees to participate in the Federal renew-
able electricity standard program. 
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‘‘(11) RETAIL
ELECTRIC
SUPPLIER’S
BASE 
AMOUNT.—The term ‘retail electric supplier’s base 
amount’ means the total amount of electric energy 
sold by the retail electric supplier, expressed in 
terms of kilowatt hours, to electric customers for 
purposes other than resale during the most recent 
calendar year for which information is available, ex-
cluding— 
‘‘(A) electric energy that is not incremental 
hydropower generated by a hydroelectric facil-
ity; and 
‘‘(B) electricity generated through the in-
cineration of municipal solid waste. 
‘‘(b) COMPLIANCE.—For each calendar year begin-
ning in calendar year 2010, each retail electric supplier 
shall meet the requirements of subsection (c) by submit-
ting to the Secretary, not later than April 1 of the fol-
lowing calendar year, one or more of the following: 
‘‘(1) Federal renewable energy credits issued 
under subsection (e). 
‘‘(2) Federal energy efficiency credits issued 
under subsection (i), except that Federal energy effi-
ciency credits may not be used to meet more than 
27 percent of the requirements of subsection (c) in 
any calendar year. Energy efficiency credits may 
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only be used for compliance in a State where the 
Governor has petitioned the Secretary pursuant to 
subjection (i)(2). 
‘‘(3) Certification of the renewable energy gen-
erated and electricity savings pursuant to the funds 
associated with State compliance payments as speci-
fied in subsection (e)(3)(G). 
‘‘(4) Alternative compliance payments pursuant 
to subsection (j). 
‘‘(c) REQUIRED ANNUAL PERCENTAGE.—For cal-
endar years 2010 through 2039, the required annual per-
centage of the retail electric supplier’s base amount that 
shall be generated from renewable energy resources, or 
otherwise credited towards such percentage requirement 
pursuant to subsection (d), shall be the percentage speci-
fied in the following table: 
Required annual 
‘‘Calendar Years 
percentage 
2010 ...................................................................................................
2.75 
2011 ...................................................................................................
2.75 
2012 ...................................................................................................
3.75 
2013 ...................................................................................................
4.5 
2014 ...................................................................................................
5.5 
2015 ...................................................................................................
6.5 
2016 ...................................................................................................
7.5 
2017 ...................................................................................................
8.25 
2018 ...................................................................................................
10.25 
2019 ...................................................................................................
12.25 
2020 and thereafter through 2039 ....................................................
‘‘(d) RENEWABLE ENERGY
AND ENERGY EFFI-
CIENCY CREDITS.—(1) A retail electric supplier may sat-
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isfy the requirements of subsection (b)(1) through the sub-
mission of Federal renewable energy credits— 
‘‘(A) issued to the retail electric supplier under 
subsection (e); 
‘‘(B) obtained by purchase or exchange under 
subsection (f) or (g); or 
‘‘(C) borrowed under subsection (h). 
‘‘(2) A retail electric supplier may satisfy the require-
ments of subsection (b)(2) through the submission of Fed-
eral energy efficiency credits issued to the retail electric 
supplier obtained by purchase or exchange pursuant to 
subsection (i). 
‘‘(3) A Federal renewable energy credit may be 
counted toward compliance with subsection (b)(1) only 
once. A Federal energy efficiency credit may be counted 
toward compliance with subsection (b)(2) only once. 
‘‘(e) ISSUANCE OF FEDERAL RENEWABLE ENERGY 
CREDITS.—(1) The Secretary shall establish by rule, not 
later than 1 year after the date of enactment of this sec-
tion, a program to verify and issue Federal renewable en-
ergy credits to generators of renewable energy, track their 
sale, exchange, and retirement and to enforce the require-
ments of this section. To the extent possible, in estab-
lishing such program, the Secretary shall rely upon exist-
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ing and emerging State or regional tracking systems that 
issue and track non-Federal renewable energy credits. 
‘‘(2) An entity that generates electric energy through 
the use of a renewable energy resource may apply to the 
Secretary for the issuance of renewable energy credits. 
The applicant must demonstrate that the electric energy 
will be transmitted onto the grid or, in the case of a gen-
eration offset, that the electric energy offset would have 
otherwise been consumed on site. The application shall in-
dicate— 
‘‘(A) the type of renewable energy resource used 
to produce the electricity; 
‘‘(B) the location where the electric energy was 
produced; and 
‘‘(C) any other information the Secretary deter-
mines appropriate. 
‘‘(3)(A) Except as provided in subparagraphs (B), 
(C), and (D), the Secretary shall issue to a generator of 
electric energy one Federal renewable energy credit for 
each kilowatt hour of electric energy generated by the use 
of a renewable energy resource at an eligible facility. 
‘‘(B) For purpose of compliance with this section, 
Federal renewable energy credits for incremental hydro-
power shall be based, on the increase in average annual 
generation resulting from the efficiency improvements or 
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capacity additions. The incremental generation shall be 
calculated using the same water flow information used to 
determine a historic average annual generation baseline 
for the hydroelectric facility and certified by the Secretary 
or the Federal Energy Regulatory Commission. The cal-
culation of the Federal renewable energy credits for incre-
mental hydropower shall not be based on any operational 
changes at the hydroelectric facility not directly associated 
with the efficiency improvements or capacity additions. 
‘‘(C) The Secretary shall issue 2 renewable energy 
credits for each kilowatt hour of electric energy generated 
and supplied to the grid in that calendar year through the 
use of a renewable energy resource at an eligible facility 
located on Indian land. For purposes of this paragraph, 
renewable energy generated by biomass cofired with other 
fuels is eligible for two credits only if the biomass was 
grown on such land. 
‘‘(D) For electric energy generated by a renewable 
energy resource at an on-site eligible facility no larger 
than one megawatt in capacity and used to offset part or 
all of the customer’s requirements for electric energy, the 
Secretary shall issue 3 renewable energy credits to such 
customer for each kilowatt hour generated. 
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‘‘(E) In the case of an on-site eligible facility on In-
dian land no more than 3 credits per kilowatt hour may 
be issued. 
‘‘(F) If both a renewable energy resource and a non- 
renewable energy resource are used to generate the electric 
energy, the Secretary shall issue the Federal renewable en-
ergy credits based on the proportion of the renewable en-
ergy resources used. 
‘‘(G) When a generator has sold electric energy gen-
erated through the use of a renewable energy resource to 
a retail electric supplier under a contract for power from 
an existing facility, and the contract has not determined 
ownership of the Federal renewable energy credits associ-
ated with such generation, the Secretary shall issue such 
Federal renewable energy credits to the retail electric sup-
plier for the duration of the contract. 
‘‘(H) Payments made by a retail electricity supplier, 
directly or indirectly, to a State for compliance with a 
State renewable portfolio standard program, or for an al-
ternative compliance mechanism, shall be valued at one 
credit per kilowatt hour for the purpose of subsection 
(b)(2) based on the amount of electric energy generation 
from renewable resources and electricity savings up to 27 
percent of the utility’s requirement that results from those 
payments. 
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‘‘(f) EXISTING FACILITIES.—The Secretary shall en-
sure that a retail electric supplier that acquires Federal 
renewable energy credits associated with the generation of 
renewable energy from an existing facility may use such 
credits for purpose of its compliance with subsection 
(b)(1). Such credits may not be sold, exchanged, or trans-
ferred for the purpose of compliance by another retail elec-
tric supplier. 
‘‘(g) RENEWABLE ENERGY CREDIT TRADING.—(1) A 
Federal renewable energy credit, may be sold, transferred, 
or exchanged by the entity to whom issued or by any other 
entity who acquires the Federal renewable energy credit, 
except for those renewable energy credits from existing fa-
cilities. A Federal renewable energy credit for any year 
that is not submitted to satisfy the minimum renewable 
generation requirement of subsection (c) for that year may 
be carried forward for use pursuant to subsection (b)(1) 
within the next 3 years. 
‘‘(2) A federally owned or cooperatively owned utility, 
or a State or subdivision thereof, that is not a retail elec-
tric supplier that generates electric energy by the use of 
a renewable energy resource at an eligible facility may only 
sell, transfer or exchange a Federal renewable energy 
credit to a cooperatively owned utility or an agency, au-
thority, or instrumentality of a State or political subdivi-
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sion of a State that is a retail electric supplier that has 
acquired the electric energy associated with the credit. 
‘‘(3) The Secretary may delegate to an appropriate 
market-making entity the administration of a national 
tradeable renewable energy credit market and a national 
energy efficiency credit market for purposes of creating 
a transparent national market for the sale or trade of re-
newable energy credits and a transparent national market 
for the sale or trade of Federal energy efficiency credits. 
‘‘(h) RENEWABLE ENERGY CREDIT BORROWING.— 
At any time before the end of calendar year 2012, a retail 
electric supplier that has reason to believe it will not be 
able to fully comply with subsection (b) may— 
‘‘(1) submit a plan to the Secretary dem-
onstrating that the retail electric supplier will earn 
sufficient Federal renewable energy credits and Fed-
eral energy efficiency credits within the next 3 cal-
endar years which, when taken into account, will en-
able the retail electric supplier to meet the require-
ments of subsection (b) for calendar year 2012 and 
the subsequent calendar years involved; and 
‘‘(2) upon the approval of the plan by the Sec-
retary, apply Federal renewable energy credits and 
Federal energy efficiency credits that the plan dem-
onstrates will be earned within the next 3 calendar 
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years to meet the requirements of subsection (b) for 
each calendar year involved. 
The retail electric supplier must repay all of the borrowed 
Federal renewable energy credits and Federal energy effi-
ciency credits by submitting an equivalent number of Fed-
eral renewable energy credits and Federal energy effi-
ciency credits, in addition to those otherwise required 
under subsection (b), by calendar year 2020 or any earlier 
deadlines specified in the approved plan. Failure to repay 
the borrowed Federal renewable energy credits and Fed-
eral energy efficiency credits shall subject the retail elec-
tric supplier to civil penalties under subsection (i) for vio-
lation of the requirements of subsection (b) for each cal-
endar year involved. 
‘‘(i) ENERGY EFFICIENCY CREDITS.— 
‘‘(1) DEFINITIONS.—In this subsection— 
‘‘(A) CUSTOMER FACILITY SAVINGS.—The 
term ‘customer facility savings’ means a reduc-
tion in end-use electricity at a facility of an 
end-use consumer of electricity served by a re-
tail electric supplier, as compared to— 
‘‘(i) consumption at the facility during 
a base year; 
‘‘(ii) in the case of new equipment (re-
gardless of whether the new equipment re-
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places existing equipment at the end of the 
useful life of the existing equipment), con-
sumption by the new equipment of average 
efficiency; or 
‘‘(iii) in the case of a new facility, 
consumption at a reference facility. 
‘‘(B) ELECTRICITY
SAVINGS.—The term 
‘electricity savings’ means— 
‘‘(i) customer facility savings of elec-
tricity consumption adjusted to reflect any 
associated increase in fuel consumption at 
the facility; 
‘‘(ii) reductions in distribution system 
losses of electricity achieved by a retail 
electricity distributor, as compared to 
losses during the base years; 
‘‘(iii) the output of new combined heat 
and power systems, to the extent provided 
under paragraph (5); and 
‘‘(iv) recycled energy savings. 
‘‘(C) 
QUALIFYING
ELECTRICITY
SAV-
INGS.—The term ‘qualifying electricity savings’ 
means electricity savings that meet the meas-
urement and verification requirements of para-
graph (4). 
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‘‘(D) RECYCLED
ENERGY
SAVINGS.—The 
term ‘recycled energy savings’ means a reduc-
tion in electricity consumption that is attrib-
utable to electrical or mechanical power, or 
both, produced by modifying an industrial or 
commercial system that was in operation before 
July 1, 2007, in order to recapture energy that 
would otherwise be wasted. 
‘‘(2) PETITION.—The Governor of a State may 
petition the Secretary to allow up to 27 percent of 
the requirements of a retail electric supplier under 
subsection (c) in the State to be met by submitting 
Federal energy efficiency credits issued pursuant to 
this subsection. 
‘‘(3) ISSUANCE OF CREDITS.—(A) Upon peti-
tion by the Governor, the Secretary shall issue en-
ergy efficiency credits for electricity savings de-
scribed in subparagraph (B) achieved in States de-
scribed in paragraph (2) in accordance with this 
subsection. 
‘‘(B) In accordance with regulations promul-
gated by the Secretary, the Secretary shall issue 
credits for— 
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‘‘(i) qualified electricity savings achieved 
by a retail electric supplier in a calendar year; 
and 
‘‘(ii) qualified electricity savings achieved 
by other entities if— 
‘‘(I) the measures used to achieve the 
qualifying electricity savings were installed 
or placed in operation by the entity seeking 
the credit or the designated agent of the 
entity; and 
‘‘(II) no retail electric supplier paid a 
substantial portion of the cost of achieving 
the qualified electricity savings (unless the 
retail electric supplier has waived any enti-
tlement to the credit). 
‘‘(4) MEASUREMENT
AND
VERIFICATION
OF 
ELECTRICITY
SAVINGS.—Not later than June 30, 
2009, the Secretary shall promulgate regulations re-
garding the measurement and verification of elec-
tricity savings under this subsection, including regu-
lations covering— 
‘‘(A) procedures and standards for defining 
and measuring electricity savings that will be 
eligible to receive credits under paragraph (3), 
which shall— 
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‘‘(i) specify the types of energy effi-
ciency and energy conservation that will be 
eligible for the credits; 
‘‘(ii) require that energy consumption 
for customer facilities or portions of facili-
ties in the applicable base and current 
years be adjusted, as appropriate, to ac-
count for changes in weather, level of pro-
duction, and building area; 
‘‘(iii) account for the useful life of 
electricity savings measures; 
‘‘(iv) include specified electricity sav-
ings values for specific, commonly-used ef-
ficiency measures; 
‘‘(v) specify the extent to which elec-
tricity savings attributable to measures 
carried out before the date of enactment of 
this section are eligible to receive credits 
under this subsection; and 
‘‘(vi) exclude electricity savings that 
(I) are not properly attributable to meas-
ures carried out by the entity seeking the 
credit; or (II) have already been credited 
under this section to another entity; 
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‘‘(B) procedures and standards for third- 
party verification of reported electricity savings; 
and 
‘‘(C) such requirements for information, 
reports, and access to facilities as may be nec-
essary to carry out this subsection. 
‘‘(5) COMBINED
HEAT
AND
POWER.—Under 
regulations promulgated by the Secretary, the incre-
ment of electricity output of a new combined heat 
and power system that is attributable to the higher 
efficiency of the combined system (as compared to 
the efficiency of separate production of the electric 
and thermal outputs), shall be considered electricity 
savings under this subsection. 
‘‘(j) ENFORCEMENT.—A retail electric supplier that 
does not comply with subsection (b) shall be liable for the 
payment of a civil penalty. That penalty shall be calculated 
on the basis of the number of kilowatt-hours represented 
by the retail electric supplier’s failure to comply with sub-
section (b), multiplied by the lesser of 4.5 cents (adjusted 
for inflation for such calendar year, based on the Gross 
Domestic Product Implicit Price Deflator) or 300 percent 
of the average market value of Federal renewable energy 
credits and energy efficiency credits for the compliance pe-
riod. Any such penalty shall be due and payable without 
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demand to the Secretary as provided in the regulations 
issued under subsection (e). 
‘‘(k) ALTERNATIVE COMPLIANCE PAYMENTS.—The 
Secretary shall accept payment equal to the lesser of: 
‘‘(1) 200 percent of the average market value of 
Federal renewable energy credits and Federal energy 
efficiency credits for the applicable compliance pe-
riod; or 
‘‘(2) 2.5 cents per kilowatt hour adjusted on 
January 1 of each year following calendar year 2006 
based on the Gross Domestic Product Implicit Price 
Deflator, 
as a means of compliance under subsection (b)(4) 
‘‘(l) INFORMATION
COLLECTION.—The Secretary 
may collect the information necessary to verify and 
audit— 
‘‘(1) the annual renewable energy generation of 
any retail electric supplier, Federal renewable energy 
credits submitted by a retail electric supplier pursu-
ant to subsection (b)(1) and Federal energy effi-
ciency credits submitted by a retail electric supplier 
pursuant to subsection (b)(2); 
‘‘(2) annual electricity savings achieved pursu-
ant to subsection (i); 
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‘‘(3) the validity of Federal renewable energy 
credits submitted for compliance by a retail electric 
supplier to the Secretary; and 
‘‘(4) the quantity of electricity sales of all retail 
electric suppliers. 
‘‘(m) ENVIRONMENTAL SAVINGS CLAUSE.—Incre-
mental hydropower shall be subject to all applicable envi-
ronmental laws and licensing and regulatory requirements. 
‘‘(n) STATE PROGRAMS.—(1) Nothing in this section 
diminishes any authority of a State or political subdivision 
of a State to— 
‘‘(A) adopt or enforce any law or regulation re-
specting renewable energy or energy efficiency, in-
cluding but not limited to programs that exceed the 
required amount of renewable energy or energy effi-
ciency under this section, or 
‘‘(B) regulate the acquisition and disposition of 
Federal renewable energy credits and Federal energy 
efficiency credits by retail electric suppliers. 
No law or regulation referred to in subparagraph 
(A) shall relieve any person of any requirement oth-
erwise applicable under this section. The Secretary, 
in consultation with States having renewable energy 
programs and energy efficiency programs, shall pre-
serve the integrity of such State programs, including 
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programs that exceed the required amount of renew-
able energy and energy efficiency under this section, 
and shall facilitate coordination between the Federal 
program and State programs. 
‘‘(2) In the rule establishing the program under this 
section, the Secretary shall incorporate common elements 
of existing renewable energy and energy efficiency pro-
grams, including State programs, to ensure administrative 
ease, market transparency, and effective enforcement. The 
Secretary shall work with the States to minimize adminis-
trative burdens and costs to retail electric suppliers. 
‘‘(o) RECOVERY OF COSTS.—An electric utility whose 
sales of electric energy are subject to rate regulation, in-
cluding any utility whose rates are regulated by the Com-
mission and any State regulated electric utility, shall not 
be denied the opportunity to recover the full amount of 
the prudently incurred incremental cost of renewable en-
ergy and energy efficiency obtained to comply with the re-
quirements of subsection (b). For purposes of this sub-
section, the definitions in section 3 of this Act shall apply 
to the terms electric utility, State regulated electric utility, 
State agency, Commission, and State regulatory authority. 
‘‘(p) PROGRAM REVIEW.—The Secretary shall enter 
into a contract with the National Academy of Sciences to 
conduct a comprehensive evaluation of all aspects of the 
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program established under this section, within 8 years of 
enactment of this section. The study shall include an eval-
uation of— 
‘‘(1) the effectiveness of the program in increas-
ing the market penetration and lowering the cost of 
the eligible renewable energy and energy efficiency 
technologies; 
‘‘(2) the opportunities for any additional tech-
nologies and sources of renewable energy and energy 
efficiency emerging since enactment of this section; 
‘‘(3) the impact on the regional diversity and 
reliability of supply sources, including the power 
quality benefits of distributed generation; 
‘‘(4) the regional resource development relative 
to renewable potential and reasons for any under in-
vestment in renewable resources; and 
‘‘(5) the net cost/benefit of the renewable elec-
tricity standard to the national and State economies, 
including retail power costs, economic development 
benefits of investment, avoided costs related to envi-
ronmental and congestion mitigation investments 
that would otherwise have been required, impact on 
natural gas demand and price, effectiveness of green 
marketing programs at reducing the cost of renew-
able resources. 
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The Secretary shall transmit the results of the evaluation 
and any recommendations for modifications and improve-
ments to the program to Congress not later than January 
1, 2016. 
‘‘(q) STATE RENEWABLE ENERGY AND ENERGY EF-
FICIENCY ACCOUNT PROGRAM.—(1) There is established 
in the Treasury a State renewable energy and energy effi-
ciency account program. 
‘‘(2) All money collected by the Secretary from the 
alternative compliance payments under subsection (k) 
shall be deposited into the State renewable energy and en-
ergy efficiency account established pursuant to this sub-
section. 
‘‘(3) Proceeds deposited in the State renewable en-
ergy and energy efficiency account shall be used by the 
Secretary, subject to annual appropriations, for a program 
to provide grants to the State agency responsible for ad-
ministering a fund to promote renewable energy genera-
tion and energy efficiency for customers of the State, or 
an alternative agency designated by the State, or if no 
such agency exists, to the State agency developing State 
energy conservation plans under section 363 of the Energy 
Policy and Conservation Act (42 U.S.C. 6322) for the pur-
poses of promoting renewable energy production and pro-
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viding energy assistance and weatherization services to 
low-income consumers. 
‘‘(4) The Secretary may issue guidelines and criteria 
for grants awarded under this subsection. At least 75 per-
cent of the funds provided to each State shall be used for 
promoting renewable energy production and energy effi-
ciency through grants, production incentives or other 
state-approved funding mechanisms. The funds shall be 
allocated to the States on the basis of retail electric sales 
subject to the Renewable electricity Standard under this 
section or through voluntary participation. State agencies 
receiving grants under this section shall maintain such 
records and evidence of compliance as the Secretary may 
require.’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
such title is amended by adding the following new item 
at the end: 
‘‘Sec. 610. Federal renewable electricity standard.’’. 
(c) SUNSET.—Section 610 of such title and the item 
relating to such section 610 in the table of contents for 
such title are each repealed as of December 31, 2039. 
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TITLE VI—GREEN RESOURCES 
FOR 
ENERGY 
EFFICIENT 
NEIGHBORHOODS 
SEC. 601. SHORT TITLE AND TABLE OF CONTENTS. 
This title may be cited as the ‘‘Green Resources for 
Energy Efficient Neighborhoods Act of 2008’’ or the 
‘‘GREEN Act of 2008’’. 
SEC. 602. DEFINITIONS. 
For purposes of this title, the following definitions 
shall apply: 
(1) GREEN BUILDING STANDARDS.—The term 
‘‘green building standards’’ means standards to re-
quire use of sustainable design principles to reduce 
the use of nonrenewable resources, encourage en-
ergy-efficient construction and rehabilitation and the 
use of renewable energy resources, minimize the im-
pact of development on the environment, and im-
prove indoor air quality. 
(2) HUD.—The term ‘‘HUD’’ means the De-
partment of Housing and Urban Development. 
(3) HUD ASSISTANCE.—The term ‘‘HUD as-
sistance’’ means financial assistance that is awarded, 
competitively or noncompetitively, allocated by for-
mula, or provided by HUD through loan insurance 
or guarantee. 
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(4) NONRESIDENTIAL STRUCTURE.—The term 
‘‘nonresidential structures’’ means only nonresiden-
tial structures that are appurtenant to single family 
or multifamily housing residential structures, or 
those that are funded by the Secretary of Housing 
and Urban Development through the HUD Commu-
nity Development Block Grant program. 
(5) SECRETARY.—The term ‘‘Secretary’’, unless 
otherwise specified, means the Secretary of Housing 
and Urban Development. 
SEC. 603. IMPLEMENTATION OF ENERGY EFFICIENCY PAR-
TICIPATION 
INCENTIVES 
FOR 
HUD 
PRO-
GRAMS. 
(a) IN GENERAL.—Not later than 180 days after the 
date of the enactment of this Act, the Secretary shall issue 
such regulations as may be necessary to establish annual 
energy efficiency participation incentives to encourage par-
ticipants in programs administered by the Secretary, in-
cluding recipients under programs for which HUD assist-
ance is provided, to achieve substantial improvements in 
energy efficiency. 
(b) 
REQUIREMENT
FOR
APPROPRIATION
OF 
FUNDS.—The requirement under subsection (a) for the 
Secretary to provide annual energy efficiency participation 
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incentives pursuant to the provisions of this title shall be 
subject to the annual appropriation of necessary funds. 
SEC. 604. MINIMUM HUD ENERGY EFFICIENCY STANDARDS 
AND STANDARDS FOR ADDITIONAL CREDIT. 
(a) MINIMUM HUD STANDARD.— 
(1) RESIDENTIAL STRUCTURES.—A residential 
single family or multifamily structure shall be con-
sidered to comply with the energy efficiency require-
ments under this subsection if— 
(A) the structure complies with the appli-
cable provisions of the American Society of 
Heating, Refrigerating, and Air-Conditioning 
Engineers Standard 90.1–2007, as such stand-
ard or successor standard is in effect for pur-
poses of this section pursuant subsection (c); 
(B) the structure complies with the appli-
cable provisions of the 2006 International En-
ergy Conservation Code, as such standard or 
successor standard is in effect for purposes of 
this section pursuant subsection (c); 
(C) in the case only of an existing struc-
ture, where determined cost effective, the struc-
ture has undergone rehabilitation or improve-
ments, completed after the date of the enact-
ment of this Act, and the energy consumption 
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for the structure has been reduced by at least 
20 percent from the previous level of consump-
tion, as determined in accordance with energy 
audits performed both before and after any re-
habilitation or improvements undertaken to re-
duce such consumption; or 
(D) the structure complies with the appli-
cable provisions of such other energy efficiency 
requirements, standards, checklists, or ratings 
systems as the Secretary may adopt and apply 
by regulation, as may be necessary, for pur-
poses of this section for specific types of resi-
dential single family or multifamily structures 
or otherwise, except that the Secretary shall 
make a determination regarding whether to 
adopt and apply any such requirements, stand-
ards, checklists, or rating system for purposes 
of this section not later than the expiration of 
the 180-day period beginning upon the date of 
receipt of any written request, made in such 
form as the Secretary shall provide, for such 
adoption and application. 
In addition to compliance with any of subparagraphs 
(A) through (D), the Secretary shall by regulation 
require, for any newly constructed residential single 
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family or multifamily structure to be considered to 
comply with the energy efficiency requirements 
under this subsection, that the structure have appro-
priate electrical outlets with the facility and capacity 
to recharge a standard electric passenger vehicle, in-
cluding an electric hybrid vehicle, where such vehicle 
would normally be parked. 
(2) NONRESIDENTIAL STRUCTURES.—For pur-
poses of this section, the Secretary shall identify and 
adopt by regulation, as may be necessary, energy ef-
ficiency requirements, standards, checklists, or rat-
ing systems applicable to nonresidential structures 
that are constructed or rehabilitated with HUD as-
sistance. A nonresidential structure shall be consid-
ered to comply with the energy efficiency require-
ments under this subsection if the structure complies 
with the applicable provisions of any such energy ef-
ficiency requirements, standards, checklist, or rating 
systems identified and adopted by the Secretary pur-
suant to this paragraph, as such standards are in ef-
fect for purposes of this section pursuant to sub-
section (c). 
(b) ADDITIONAL CREDIT FOR COMPLIANCE WITH 
ENHANCED ENERGY EFFICIENCY STANDARDS.— 
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(1) IN
GENERAL.—In addition to compliance 
with the energy efficiency requirements under sub-
section (a), a residential or nonresidential structure 
shall be considered to comply with the enhanced en-
ergy efficiency and conservation standards or the 
green building standards under this subsection, to 
the extent that such structure complies with the ap-
plicable provisions of the standards under paragraph 
(2) or (3), respectively (as such standards are in ef-
fect for purposes of this section, pursuant to sub-
section (c)), in a manner that is not required for 
compliance with the energy efficiency requirements 
under subsection (a) and subject to the Secretary’s 
determination of which standards are applicable to 
which structures. 
(2) ENERGY EFFICIENCY AND CONSERVATION 
STANDARDS.—The energy efficiency and conserva-
tion standards under this paragraph are as follows: 
(A) RESIDENTIAL STRUCTURES.—With re-
spect to residential structures: 
(i) NEW
CONSTRUCTION.—For new 
construction, the Energy Star standards 
established by the Environmental Protec-
tion Agency, as such standards are in ef-
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fect for purposes of this subsection pursu-
ant to subsection (c); 
(ii) EXISTING STRUCTURES.—For ex-
isting structures, a reduction in energy 
consumption from the previous level of 
consumption for the structure, as deter-
mined in accordance with energy audits 
performed both before and after any reha-
bilitation or improvements undertaken to 
reduce such consumption, that exceeds the 
reduction necessary for compliance with 
the energy efficiency requirement under 
subsection (a)(1)(C). 
(B) 
NONRESIDENTIAL
STRUCTURES.— 
With respect to nonresidential structures, such 
energy efficiency and conservation require-
ments, standards, checklists, or rating systems 
for nonresidential structures as the Secretary 
shall identify and adopt by regulation, as may 
be necessary, for purposes of this paragraph. 
(3) GREEN BUILDING STANDARDS.—The green 
building standards under this paragraph are as fol-
lows: 
(A) The national Green Communities cri-
teria checklist for residential construction that 
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provides criteria for the design, development, 
and operation of affordable housing, as such 
checklist or successor checklist is in effect for 
purposes of this section pursuant to subsection 
(c). 
(B) The gold certification level for the 
LEED for New Construction rating system, the 
LEED for Homes rating system, the LEED for 
Core and Shell rating system, as applicable, as 
such systems or successor systems are in effect 
for purposes of this section pursuant to sub-
section (c). 
(C) The Green Globes assessment and rat-
ing system of the Green Buildings Initiative. 
(D) For manufactured housing, energy 
star rating with respect to fixtures, appliances, 
and equipment in such housing, as such stand-
ard or successor standard is in effect for pur-
poses of this section pursuant to subsection (c). 
(E) The National Green Building Stand-
ard, but such standard shall apply for purposes 
of this paragraph only— 
(i) if such standard is ratified under 
the American National Standards Institute 
process; 
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(ii) upon expiration of the 180-day pe-
riod beginning upon such ratification; and 
(iii) if, during such 180-day period, 
the Secretary of Housing and Urban De-
velopment does not reject the applicability 
of such standard for purposes of this para-
graph. 
(F) Any other requirements, standards, 
checklists, or rating systems for green building 
or sustainability as the Secretary may identify 
and adopt by regulation, as may be necessary 
for purposes of this paragraph, except that the 
Secretary shall make a determination regarding 
whether to adopt and apply any such require-
ments, standards, checklist, or rating system 
for purposes of this section not later than the 
expiration of the 180-day period beginning upon 
date of receipt of any written request, made in 
such form as the Secretary shall provide, for 
such adoption and application. 
(4) GREEN BUILDING.—For purposes of this 
subsection, the term ‘‘green building’’ means, with 
respect to standards for structures, standards to re-
quire use of sustainable design principles to reduce 
the use of nonrenewable resources, minimize the im-
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pact of development on the environment, and to im-
prove indoor air quality. 
(5) ENERGY AUDITS.—The Secretary shall es-
tablish standards and requirements for energy au-
dits for purposes of paragraph (2)(A)(ii) and, in es-
tablishing such standards, may consult with any ad-
visory committees established pursuant to section 
605(c)(2) of this title. 
(c) APPLICABILITY
AND
UPDATING
OF
STAND-
ARDS.— 
(1) APPLICABILITY.—Except as provided in 
paragraph (2), the requirements, standards, check-
lists, and rating systems referred to in subsections 
(a) and (b) that are in effect for purposes of this 
section are such requirements, standards, checklists, 
and systems are as in existence upon the date of the 
enactment of this Act. 
(2) UPDATING.—For purposes of this section, 
the Secretary may adopt and apply by regulation, as 
may be necessary, future amendments and supple-
ments to, and editions of, the requirements, stand-
ards, checklists, and rating systems referred to in 
subsections (a) and (b). 
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SEC. 605. ENERGY EFFICIENCY AND CONSERVATION DEM-
ONSTRATION PROGRAM FOR MULTIFAMILY 
HOUSING 
PROJECTS 
ASSISTED 
WITH 
PROJECT-BASED RENTAL ASSISTANCE. 
(a) AUTHORITY.—For multifamily housing projects 
for which project-based rental assistance is provided under 
a covered multifamily assistance program, the Secretary 
shall, subject to the availability of amounts provided in 
advance in appropriation Acts, carry out a program to 
demonstrate the effectiveness of funding a portion of the 
costs of meeting the enhanced energy efficiency standards 
under section 604(b). At the discretion of the Secretary, 
the demonstration program may include incentives for 
housing that is assisted with Indian housing block grants 
provided pursuant to the Native American Housing Assist-
ance and Self-Determination Act of 1996, but only to the 
extent that such inclusion does not violate such Act, its 
regulations, and the goal of such Act of tribal self-deter-
mination. 
(b) GOALS.—The demonstration program under this 
section shall be carried out in a manner that— 
(1) protects the financial interests of the Fed-
eral Government; 
(2) reduces the proportion of funds provided by 
the Federal Government and by owners and resi-
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dents of multifamily housing projects that are used 
for costs of utilities for the projects; 
(3) encourages energy efficiency and conserva-
tion by owners and residents of multifamily housing 
projects and installation of renewable energy im-
provements, such as improvements providing for use 
of solar, wind, geothermal, or biomass energy 
sources; 
(4) creates incentives for project owners to 
carry out such energy efficiency renovations and im-
provements by allowing a portion of the savings in 
operating costs resulting from such renovations and 
improvements to be retained by the project owner, 
notwithstanding otherwise applicable limitations on 
dividends; 
(5) promotes the installation, in existing resi-
dential buildings, of energy-efficient and cost-effec-
tive improvements and renewable energy improve-
ments, such as improvements providing for use of 
solar, wind, geothermal, or biomass energy sources; 
(6) tests the efficacy of a variety of energy effi-
ciency measures for multifamily housing projects of 
various sizes and in various geographic locations; 
(7) tests methods for addressing the various, 
and often competing, incentives that impede owners 
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and residents of multifamily housing projects from 
working together to achieve energy efficiency or con-
servation; and 
(8) creates a database of energy efficiency and 
conservation, and renewable energy, techniques, en-
ergy savings management practices, and energy effi-
ciency and conservation financing vehicles. 
(c) APPROACHES.—In carrying out the demonstra-
tion program under this section, the Secretary may— 
(1) enter into agreements with the Building 
America Program of the Department of Energy and 
other consensus committees under which such pro-
grams, partnerships, or committees assume some or 
all of the functions, obligations, and benefits of the 
Secretary with respect to energy savings; 
(2) establish advisory committees to advise the 
Secretary and any such third party partners on tech-
nological and other developments in the area of en-
ergy efficiency and the creation of an energy effi-
ciency and conservation credit facility and other fi-
nancing opportunities, which committees shall in-
clude representatives of homebuilders, realtors, ar-
chitects, nonprofit housing organizations, environ-
mental protection organizations, renewable energy 
organizations, and advocacy organizations for the el-
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derly and persons with disabilities; any advisory 
committees established pursuant to this paragraph 
shall not be subject to the Federal Advisory Com-
mittee Act (5 U.S.C. App.); 
(3) approve, for a period not to exceed 10 
years, additional adjustments in the maximum 
monthly rents or additional project rental assistance, 
or additional Indian housing block grant funds 
under the Native American Housing Assistance and 
Self-Determination Act of 1996, as applicable, for 
dwelling units in multifamily housing projects that 
are provided project-based rental assistance under a 
covered multifamily assistance program, in such 
amounts as may be necessary to amortize a portion 
of the cost of energy efficiency and conservation 
measures for such projects; 
(4) develop a competitive process for the award 
of such additional assistance for multifamily housing 
projects seeking to implement energy efficiency, re-
newable energy sources, or conservation measures; 
and 
(5) waive or modify any existing statutory or 
regulatory provision that would otherwise impair the 
implementation or effectiveness of the demonstration 
program under this section, including provisions re-
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lating to methods for rent adjustments, com-
parability standards, maximum rent schedules, and 
utility allowances; notwithstanding the preceding 
provisions of this paragraph, the Secretary may not 
waive any statutory requirement relating to fair 
housing, nondiscrimination, labor standards, or the 
environment, except pursuant to existing authority 
to waive non-statutory environmental and other ap-
plicable requirements. 
(d) REQUIREMENT.—During the 4-year period begin-
ning 12 months after the date of the enactment of this 
Act, the Secretary shall carry out demonstration programs 
under this section with respect to not fewer than 50,000 
dwelling units. 
(e) SELECTION.— 
(1) SCOPE.—In order to provide a broad and 
representative profile for use in designing a program 
which can become operational and effective nation-
wide, the Secretary shall carry out the demonstra-
tion program under this section with respect to 
dwelling units located in a wide variety of geographic 
areas and project types assisted by the various cov-
ered multifamily assistance programs and using a 
variety of energy efficiency and conservation and 
funding techniques to reflect differences in climate, 
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types of dwelling units and technical and scientific 
methodologies, and financing options. The Secretary 
shall ensure that the geographic areas included in 
the demonstration program include dwelling units on 
Indian lands (as such term is defined in section 
2601 of the Energy Policy Act of 1992 (25 U.S.C. 
3501), to the extent that dwelling units on Indian 
land have the type of residential structures that are 
the focus of the demonstration program. 
(2) PRIORITY.—The Secretary shall provide pri-
ority for selection for participation in the program 
under this section based on the extent to which, as 
a result of assistance provided, the project will com-
ply with the energy efficiency standards under sub-
section (a), (b), or (c) of section 604 of this title. 
(f) USE OF EXISTING PARTNERSHIPS.—To the ex-
tent feasible, the Secretary shall— 
(1) utilize the Partnership for Advancing Tech-
nology in Housing of the Department of Housing 
and Urban Development to assist in carrying out the 
requirements of this section and to provide education 
and outreach regarding the demonstration program 
authorized under this section; and 
(2) consult with the Secretary of Energy, the 
Administrator of the Environmental Protection 
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Agency, and the Secretary of the Army regarding 
utilizing the Building America Program of the De-
partment of Energy, the Energy Star Program, and 
the Army Corps of Engineers, respectively, to deter-
mine the manner in which they might assist in car-
rying out the goals of this section and providing edu-
cation and outreach regarding the demonstration 
program authorized under this section. 
(g) REPORTS.— 
(1) ANNUAL.—Not later than the expiration of 
the 2-year beginning upon the date of the enactment 
of this Act, and for each year thereafter during the 
term of the demonstration program, the Secretary 
shall submit a report to the Congress annually that 
describes and assesses the demonstration program 
under this section. 
(2) FINAL.—Not later than six months after 
the expiration of the 4-year period described in sub-
section (d), the Secretary shall submit a final report 
to the Congress assessing the demonstration pro-
gram, which— 
(A) shall assess the potential for expanding 
the demonstration program on a nationwide 
basis; and 
(B) shall include descriptions of— 
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(i) the size of each multifamily hous-
ing project for which assistance was pro-
vided under the program; 
(ii) the geographic location of each 
project assisted, by State and region; 
(iii) the criteria used to select the 
projects for which assistance is provided 
under the program; 
(iv) the energy efficiency and con-
servation measures and financing sources 
used for each project that is assisted under 
the program; 
(v) the difference, before and during 
participation in the demonstration pro-
gram, in the amount of the monthly assist-
ance payments under the covered multi-
family assistance program for each project 
assisted under the program; 
(vi) the average length of the term of 
the such assistance provided under the 
program for a project; 
(vii) the aggregate amount of savings 
generated by the demonstration program 
and the amount of savings expected to be 
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generated by the program over time on a 
per-unit and aggregate program basis; 
(viii) the functions performed in con-
nection with the implementation of the 
demonstration program that were trans-
ferred or contracted out to any third par-
ties; 
(ix) an evaluation of the overall suc-
cesses and failures of the demonstration 
program; and 
(x) recommendations for any actions 
to be taken as a result of the such suc-
cesses and failures. 
(3) CONTENTS.—Each annual report pursuant 
to paragraph (1) and the final report pursuant to 
paragraph (2) shall include— 
(A) a description of the status of each mul-
tifamily housing project selected for participa-
tion in the demonstration program under this 
section; and 
(B) findings from the program and rec-
ommendations for any legislative actions. 
(h) COVERED
MULTIFAMILY
ASSISTANCE
PRO-
GRAM.—For purposes of this section, the term ‘‘covered 
multifamily assistance program’’ means— 
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(1) the program under section 8 of the United 
States Housing Act of 1937 (42 U.S.C. 1437f) for 
project-based rental assistance; 
(2) the program under section 202 of the Hous-
ing Act of 1959 (12 U.S.C. 1701q) for assistance 
for supportive housing for the elderly; 
(3) the program under section 811 of the Cran-
ston-Gonzalez National Affordable Housing Act (42 
U.S.C. 8013) for supportive housing for persons 
with disabilities; and 
(4) the program for assistance under the Native 
American Housing Assistance and Self-Determina-
tion Act of 1996 (25 U.S.C. 4111). 
(i) AUTHORIZATION OF APPROPRIATIONS.—There is 
authorized to be appropriated to carry out this section 
$50,000,000 for each fiscal year in which the demonstra-
tion program under this section is carried out. 
(j) REGULATIONS.—Not later than the expiration of 
the 180-day period beginning on the date of the enactment 
of this Act, the Secretary shall issue any regulations nec-
essary to carry out this section. 
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SEC. 606. ADDITIONAL CREDIT FOR FANNIE MAE AND 
FREDDIE MAC HOUSING GOALS FOR ENERGY 
EFFICIENT MORTGAGES. 
Section 1336(a) of the Housing and Community De-
velopment Act of 1992 (12 U.S.C. 4566(a)), as amended 
by the Federal Housing Finance Regulatory Reform Act 
of 2008 (Public Law 110–289; 122 Stat. 2654), is amend-
ed— 
(1) in paragraph (2), by striking ‘‘paragraph 
(5)’’ and inserting ‘‘paragraphs (5) and (6)’’; and 
(2) by adding at the end the following new 
paragraph: 
‘‘(6) ADDITIONAL CREDIT.— 
‘‘(A) IN GENERAL.—In assigning credit to-
ward achievement under this section of the 
housing goals for mortgage purchase activities 
of the enterprises, the Director shall assign— 
‘‘(i) more than 125 percent credit, for 
such purchases that both— 
‘‘(I) comply with the require-
ments of such goals; and 
‘‘(II) support housing that meets 
the energy efficiency standards under 
section 604(a) of the Green Resources 
for Energy Efficient Neighborhoods 
Act of 2008; and 
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‘‘(ii) credit in addition to credit under 
clause (i), for purchases that both— 
‘‘(I) comply with the require-
ments of such goals, and 
‘‘(II) support housing that com-
plies with the enhanced energy effi-
ciency and conservation standards, or 
the green building standards, under 
section 604(b) of such Act, or both, 
and such additional credit shall be given 
based on the extent to which the housing 
supported with such purchases complies 
with such standards. 
‘‘(B) TREATMENT OF ADDITIONAL CRED-
IT.—The availability of additional credit under 
this paragraph shall not be used to increase any 
housing goal, subgoal, or target established 
under this subpart.’’. 
SEC. 607. DUTY TO SERVE UNDERSERVED MARKETS FOR 
ENERGY-EFFICIENT 
AND 
LOCATION-EFFI-
CIENT MORTGAGES. 
Section 1335 of Federal Housing Enterprises Finan-
cial Safety and Soundness Act of 1992 (12 U.S.C. 4565), 
as amended by the Federal Housing Finance Regulatory 
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Reform Act of 2008 (Public Law 110–289; 122 Stat. 
2654), is amended— 
(1) in subsection (a)(1), by adding at the end 
the following new subparagraph: 
‘‘(D) MARKETS
FOR
ENERGY-EFFICIENT 
AND LOCATION-EFFICIENT MORTGAGES.— 
‘‘(i) DUTY.—Subject to clause (ii), the 
enterprise shall develop loan products and 
flexible underwriting guidelines to facilitate 
a secondary market for energy-efficient 
and location-efficient mortgages on hous-
ing for very low-, low-, and moderate in-
come families, and for second and junior 
mortgages made for purposes of energy ef-
ficiency or renewable energy improvements, 
or both. 
‘‘(ii) AUTHORITY TO SUSPEND.—Not-
withstanding any other provision of this 
section, the Director may suspend the ap-
plicability of the requirement under clause 
(i) with respect to an enterprise, for such 
period as is necessary, if the Director de-
termines that exigent circumstances exist 
and such suspension is appropriate to en-
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sure the safety and soundness of the port-
folio holdings of the enterprise.’’; 
(2) by adding at the end the following new sub-
section: 
‘‘(e) DEFINITIONS.—For purposes of this section, the 
following definitions shall apply: 
‘‘(1) 
ENERGY-EFFICIENT
MORTGAGE.—The 
term ‘energy efficient mortgage’ means a mortgage 
loan under which the income of the borrower, for 
purposes of qualification for such loan, is considered 
to be increased by not less than $1 for each $1 of 
savings projected to be realized by the borrower as 
a result of cost-effective energy saving design, con-
struction or improvements (including use of renew-
able energy sources, such as solar, geothermal, bio-
mass, and wind, super-insulation, energy-saving win-
dows, insulating glass and film, and radiant barrier) 
for the home for which the loan is made. 
‘‘(2) LOCATION-EFFICIENT
MORTGAGE.—The 
term ‘location efficient mortgage’ means a mortgage 
loan under which— 
‘‘(A) the income of the borrower, for pur-
poses of qualification for such loan, is consid-
ered to be increased by not less than $1 for 
each $1 of savings projected to be realized by 
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the borrower because the location of the home 
for which loan is made will result in decreased 
transportation costs for the household of the 
borrower; or 
‘‘(B) the sum of the principal, interest, 
taxes, and insurance due under the mortgage 
loan is decreased by not less than $1 for each 
$1 of savings projected to be realized by the 
borrower because the location of the home for 
which loan is made will result in decreased 
transportation costs for the household of the 
borrower.’’. 
SEC. 608. CONSIDERATION OF ENERGY EFFICIENCY UNDER 
FHA MORTGAGE INSURANCE PROGRAMS AND 
NATIVE AMERICAN AND NATIVE HAWAIIAN 
LOAN GUARANTEE PROGRAMS. 
(a) FHA MORTGAGE INSURANCE.— 
(1) REQUIREMENT.—Title V of the National 
Housing Act is amended by adding after section 542 
(12 U.S.C. 1735f–20) the following new section: 
‘‘SEC. 543. CONSIDERATION OF ENERGY EFFICIENCY. 
‘‘(a) UNDERWRITING STANDARDS.—The Secretary 
shall establish a method to consider, in its underwriting 
standards for mortgages on single-family housing meeting 
the energy efficiency standards under section 604(a) of 
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the Green Resources for Energy Efficient Neighborhoods 
Act of 2008 that are insured under this Act, the impact 
that savings on utility costs has on the income of the mort-
gagor. 
‘‘(b) GOAL.—It is the sense of the Congress that, in 
carrying out this Act, the Secretary should endeavor to 
insure mortgages on single-family housing meeting the en-
ergy efficiency standards under section 604(a) of the 
Green Resources for Energy Efficient Neighborhoods Act 
of 2008 such that at least 50,000 such mortgages are in-
sured during the period beginning upon the date of the 
enactment of such Act and ending on December 31, 
2012.’’. 
(2) REPORTING ON DEFAULTS.—Section 540(b) 
of the National Housing Act (12 U.S.C. 1735f– 
18(b)) is amended by adding at the end the fol-
lowing new paragraph: 
‘‘(3) With respect to each collection period that 
commences after December 31, 2011, the total num-
ber of mortgages on single-family housing meeting 
the energy efficiency standards under section 604(a) 
of the Green Resources for Energy Efficient Neigh-
borhoods Act of 2008 that are insured by the Sec-
retary during the applicable collection period, the 
number of defaults and foreclosures occurring on 
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such mortgages during such period, the percentage 
of the total of such mortgages insured during such 
period on which defaults and foreclosure occurred, 
and the rate for such period of defaults and fore-
closures on such mortgages compared to the overall 
rate for such period of defaults and foreclosures on 
mortgages for single-family housing insured under 
this Act by the Secretary.’’. 
(b) INDIAN HOUSING LOAN GUARANTEES.— 
(1) REQUIREMENT.—Section 184 of the Hous-
ing and Community Development Act of 1992 (12 
U.S.C. 1715z–13a) is amended— 
(A) by redesignating subsection (l) as sub-
section (m); and 
(B) by inserting after subsection (k) the 
following new subsection: 
‘‘(l) CONSIDERATION OF ENERGY EFFICIENCY.—The 
Secretary shall establish a method to consider, in its un-
derwriting standards for loans for single-family housing 
meeting the energy efficiency standards under section 
604(a) of the Green Resources for Energy Efficient 
Neighborhoods Act of 2008 that are guaranteed under 
this section, the impact that savings on utility costs has 
on the income of the borrower.’’. 
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(2) REPORTING ON DEFAULTS.—Section 540(b) 
of the National Housing Act (12 U.S.C. 1735f– 
18(b)), as amended by subsection (a)(2) of this sec-
tion, is further amended by adding at the end the 
following new paragraph: 
‘‘(4) With respect to each collection period that 
commences after December 31, 2011, the total num-
ber of loans guaranteed under section 184 of the 
Housing and Community Development Act of 1992 
(12 U.S.C. 1715z–13a) on single-family housing 
meeting the enhanced energy efficiency standards 
under section 604(a) of the Green Resources for En-
ergy Efficient Neighborhoods Act of 2008 that are 
guaranteed by the Secretary during the applicable 
collection period, the number of defaults and fore-
closures occurring on such loans during such period, 
the percentage of the total of such loans guaranteed 
during such period on which defaults and foreclosure 
occurred, and the rate for such period of defaults 
and foreclosures on such loans compared to the over-
all rate for such period of defaults and foreclosures 
on loans for single-family housing guaranteed under 
such section 184 by the Secretary.’’. 
(c) NATIVE HAWAIIAN HOUSING LOAN GUARAN-
TEES.— 
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(1) REQUIREMENT.—Section 184A of the 
Housing and Community Development Act of 1992 
(12 U.S.C. 1715z–13b) is amended by inserting 
after subsection (l) the following new subsection: 
‘‘(m) 
ENERGY-EFFICIENT
HOUSING
REQUIRE-
MENT.—The Secretary shall establish a method to con-
sider, in its underwriting standards for loans for single- 
family housing meeting the energy efficiency standards 
under section 604(a) of the Green Resources for Energy 
Efficient Neighborhoods Act of 2008 that are guaranteed 
under this section, the impact that savings on utility costs 
has on the income of the borrower.’’. 
(2) REPORTING ON DEFAULTS.—Section 540(b) 
of the National Housing Act (12 U.S.C. 1735f– 
18(b)), as amended by the preceding provisions of 
this section, is further amended by adding at the 
end the following new paragraph: 
‘‘(5) With respect to each collection period that 
commences after December 31, 2011, the total num-
ber of loans guaranteed under section 184A of the 
Housing and Community Development Act of 1992 
(12 U.S.C. 1715z–13b) on single-family housing 
meeting the enhanced energy efficiency standards 
under section 604(a) of the Green Resources for En-
ergy Efficient Neighborhoods Act of 2008 that are 
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guaranteed by the Secretary during the applicable 
collection period, the number of defaults and fore-
closures occurring on such loans during such period, 
the percentage of the total of such loans guaranteed 
during such period on which defaults and foreclosure 
occurred, and the rate for such period of defaults 
and foreclosures on such loans compared to the over-
all rate for such period of defaults and foreclosures 
on loans for single-family housing guaranteed under 
such section 184A by the Secretary.’’. 
SEC. 609. ENERGY EFFICIENT MORTGAGES EDUCATION 
AND OUTREACH CAMPAIGN. 
Section 106 of the Energy Policy Act of 1992 (12 
U.S.C. 1701z–16) is amended by adding at the end the 
following new subsection: 
‘‘(g) EDUCATION AND OUTREACH CAMPAIGN.— 
‘‘(1) DEVELOPMENT
OF
ENERGY-EFFICIENT 
MORTGAGE OUTREACH PROGRAM.— 
‘‘(A) COMMISSION.—The Secretary, in con-
sultation and coordination with the Secretary of 
Energy, the Secretary of Education, the Sec-
retary of Agriculture, and the Administrator of 
the Environmental Protection Agency, shall es-
tablish a commission to develop and recommend 
model mortgage products and underwriting 
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guidelines that provide market-based incentives 
to prospective home buyers, lenders, and sellers 
to incorporate energy efficiency upgrades in 
new mortgage loan transactions. 
‘‘(B) REPORT.—Not later than 24 months 
after the date of the enactment of the Green 
Resources for Energy Efficient Neighborhoods 
Act of 2008, the Secretary shall provide a writ-
ten report to the Congress on the results of 
work of the commission established pursuant to 
subparagraph (A) and that identifies model 
mortgage products and underwriting guidelines 
that may encourage energy efficiency. 
‘‘(2) IMPLEMENTATION.—After submission of 
the report under paragraph (1)(B), the Secretary, in 
consultation and coordination with the Secretary of 
Energy, the Secretary of Education, and the Admin-
istrator of the Environmental Protection Agency, 
shall carry out a public awareness, education, and 
outreach campaign based on the findings of the com-
mission established pursuant to paragraph (1) to in-
form and educate residential lenders and prospective 
borrowers regarding the availability, benefits, advan-
tages, and terms of energy efficient mortgages made 
available pursuant to this section, energy efficient 
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mortgages that meet the requirements of section 
1335 of the Housing and Community Development 
Act of 1992 (42 U.S.C. 4565), and other mortgages, 
including mortgages for multifamily housing, that 
have energy improvement features and to publicize 
such availability, benefits, advantages, and terms. 
Such actions may include entering into a contract 
with an appropriate entity to publicize and market 
such mortgages through appropriate media. 
‘‘(3) RENEWABLE
ENERGY
HOME
PRODUCT 
EXPOS.—The Congress hereby encourages the Sec-
retary of Housing and Urban Development to work 
with appropriate entities to organize and hold renew-
able energy expositions that provide an opportunity 
for the public to view and learn about renewable en-
ergy products for the home that are currently on the 
market. 
‘‘(4) AUTHORIZATION
OF
APPROPRIATIONS.— 
There is authorized to be appropriated to the Sec-
retary to carry out this subsection $5,000,000 for 
each of fiscal years 2009 through 2012.’’. 
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SEC. 610. COLLECTION OF INFORMATION ON ENERGY-EFFI-
CIENT AND LOCATION EFFICIENT MORT-
GAGES THROUGH HOME MORTGAGE DISCLO-
SURE ACT. 
(a) IN GENERAL.—Section 304(b) of the Home Mort-
gage Disclosure Act of 1975 (12 U.S.C. 2803(b)) is 
amended— 
(1) in paragraph (3), by striking ‘‘and’’ at the 
end; 
(2) in paragraph (4), by striking the period at 
the end and inserting a semicolon; and 
(3) by adding at the end the following new 
paragraphs: 
‘‘(5) the number and dollar amount of mort-
gage loans for single-family housing and for multi-
family housing that are energy-efficient mortgages 
(as such term is defined in section 1335 of Housing 
and Community Development Act of 1992); and 
‘‘(6) the number and dollar amount of mort-
gage loans for single-family housing and for multi-
family housing that are location-efficient mortgages 
(as such term is defined in section 1335 of Housing 
and Community Development Act of 1992).’’. 
(b) APPLICABILITY.—The amendment made by sub-
section (a) shall apply with respect to the first calendar 
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year that begins after the expiration of the 30-day period 
beginning on the date of the enactment of this Act. 
SEC. 611. ENSURING AVAILABILITY OF HOMEOWNERS IN-
SURANCE FOR HOMES NOT CONNECTED TO 
ELECTRICITY GRID. 
(a) IN GENERAL.—In the case of any covered struc-
ture (as such term is defined in subsection (d)), it shall 
be unlawful for any insurer to deny homeowners insurance 
coverage for the structure, or to otherwise discriminate in 
the issuance, cancellation, amount of such coverage, or 
conditions of such coverage for the structure, based solely 
and without any additional actuarial risks upon the fact 
that the structure is not connected to, or able to receive 
electricity service from, any wholesale or retail electric 
power provider. 
(b) CONSIDERATION
OF ACTUARIAL RISK.—Sub-
section (a) may not be construed to prevent any insurer 
from charging rates for homeowners insurance coverage 
for a structure that are based on a good faith actuarial 
analysis of the risk associated with the structure not being 
connected to, or able to receive electricity service from, any 
wholesale or retail electric power provide. Any good faith 
analysis of such risk shall include analysis of the manner 
in which electric power for the structure is provided. 
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(c) INSURING HOMES AND RELATED PROPERTY IN 
INDIAN AREAS.—Notwithstanding any other provision of 
law, covered structures located in Indian areas (as such 
term is defined in section 4 of the Native American Hous-
ing Assistance and Self-Determination Act of 1996 (25 
U.S.C. 4103)) and constructed or maintained using assist-
ance, loan guarantees, or other authority under the Native 
American Housing Assistance and Self-Determination Act 
of 1996 may be insured by any tribally owned self-insur-
ance risk pool approved by the Secretary of Housing and 
Urban Development. 
(d) COVERED STRUCTURE.—For purposes of this 
section, the term ‘‘covered structure’’ means a residential 
structure that— 
(1) consists of one to four dwelling units; 
(2) is provided power, heat, or electricity from 
renewable energy sources (such as solar, wind, geo-
thermal, or biomass) or a fuel cell; and 
(3) is not connected to any wholesale or retail 
electrical power grid. 
SEC. 612. MORTGAGE INCENTIVES FOR ENERGY-EFFICIENT 
MULTIFAMILY HOUSING. 
(a) IN GENERAL.—The Secretary of Housing and 
Urban Development shall establish incentives for increas-
ing the energy efficiency of multifamily housing that is 
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subject to a mortgage to be insured under title II of the 
National Housing Act (12 U.S.C. 1707 et seq.) so that 
the housing meets the energy efficiency standards under 
section 604(a) of this title and incentives to encourage 
compliance of such housing with the energy efficiency and 
conservation standards, and the green building standards, 
under section 604(b) of this title, to the extent that such 
incentives are based on the impact that savings on utility 
costs has on the operating costs of the housing, as deter-
mined by the Secretary. 
(b) INCENTIVES.—Such incentives may include, for 
any such multifamily housing that complies with the en-
ergy efficiency standards under section 604(a)— 
(1) providing a discount on the chargeable pre-
miums for the mortgage insurance for such housing 
from the amount otherwise chargeable for such 
mortgage insurance; 
(2) allowing mortgages to exceed the dollar 
amount limits otherwise applicable under law to the 
extent such additional amounts are used to finance 
improvements or measures designed to meet the 
standards referred to in subsection (a); and 
(3) reducing the amount that the owner of such 
multifamily housing meeting the standards referred 
to in subsection (a) is required to contribute. 
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SEC. 613. ENERGY EFFICIENCY CERTIFICATIONS FOR 
HOUSING WITH MORTGAGES INSURED BY 
FHA. 
Section 526 of the National Housing Act (12 U.S.C. 
1735f–4(a)) is amended— 
(1) in subsection (a)— 
(A) by striking ‘‘, other than manufactured 
homes,’’ each place such term appears; 
(B) by inserting after the period at the end 
the following: ‘‘The energy performance require-
ments developed and established by the Sec-
retary under this section for manufactured 
homes shall require energy star rating for wall 
fixtures, appliances, and equipment in such 
housing.’’; 
(C) by inserting ‘‘(1)’’ after ‘‘(a)’’; and 
(D) by adding at the end the following new 
paragraphs: 
‘‘(2) The Secretary shall require, with respect to any 
single- or multi-family residential housing subject to a 
mortgage insured under this Act, that any approval or cer-
tification of the housing for meeting any energy efficiency 
or conservation criteria, standards, or requirements pursu-
ant to this title and any approval or certification required 
pursuant to this title with respect to energy conserving 
improvements or any renewable energy sources, such as 
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wind, solar energy geothermal, or biomass, shall be con-
ducted only by an individual certified by a home energy 
rating system provider who has been accredited to conduct 
such ratings by the Home Energy Ratings System Coun-
cil, the Residential Energy Services Network, or such 
other appropriate national organization, as the Secretary 
may provide, or by licensed professional architect or engi-
neer. If any organization makes a request to the Secretary 
for approval to accredit individuals to conduct energy effi-
ciency or conservation ratings, the Secretary shall review 
and approve or disapprove such request not later than the 
expiration of the 6-month period beginning upon receipt 
of such request. 
‘‘(3) The Secretary shall periodically examine the 
method used to conduct inspections for compliance with 
the requirements under this section, analyze various other 
approaches for conducting such inspections, and review 
the costs and benefits of the current method compared 
with other methods.’’; and 
(2) in subsection (b), by striking ‘‘, other than 
a manufactured home,’’. 
SEC. 614. ASSISTED HOUSING ENERGY LOAN PILOT PRO-
GRAM. 
(a) AUTHORITY.—Not later than the expiration of 
the 12-month period beginning on the date of the enact-
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ment of this Act, the Secretary shall develop and imple-
ment a pilot program under this section to facilitate the 
financing of cost-effective capital improvements for cov-
ered assisted housing projects to improve the energy effi-
ciency and conservation of such projects. 
(b) LOANS.—The pilot program under this section 
shall involve not less than three and not more than five 
lenders, and shall provide for a privately financed loan to 
be made for a covered assisted housing project, which 
shall— 
(1) finance capital improvements for the project 
that meet such requirements as the Secretary shall 
establish, and may involve contracts with third par-
ties to perform such capital improvements, including 
the design of such improvements by licensed profes-
sional architects or engineers; 
(2) have a term to maturity of not more than 
20 years, which shall be based upon the duration 
necessary to realize cost savings sufficient to repay 
the loan; 
(3) be secured by a mortgage subordinate to the 
mortgage for the project that is insured under the 
National Housing Act; and 
(4) provide for a reduction in the remaining 
principal obligation under the loan based on the ac-
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tributable to the energy credit determined 
under section 48, and’’. 
(c) ENERGY CREDIT
FOR COMBINED HEAT
AND 
POWER SYSTEM PROPERTY.— 
(1) IN GENERAL.—Section 48(a)(3)(A) (defin-
ing energy property) is amended by striking ‘‘or’’ at 
the end of clause (iii), by inserting ‘‘or’’ at the end 
of clause (iv), and by adding at the end the following 
new clause: 
‘‘(v) combined heat and power system 
property,’’. 
(2) COMBINED
HEAT
AND
POWER
SYSTEM 
PROPERTY.—Section 48 is amended by adding at 
the end the following new subsection: 
‘‘(d) COMBINED HEAT AND POWER SYSTEM PROP-
ERTY.—For purposes of subsection (a)(3)(A)(v)— 
‘‘(1) COMBINED
HEAT
AND
POWER
SYSTEM 
PROPERTY.—The term ‘combined heat and power 
system property’ means property comprising a sys-
tem— 
‘‘(A) which uses the same energy source 
for the simultaneous or sequential generation of 
electrical power, mechanical shaft power, or 
both, in combination with the generation of 
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‘‘(7) LIMITATION TO ALCOHOL WITH CONNEC-
TION TO THE UNITED STATES.—No credit shall be 
determined under this section with respect to any al-
cohol which is produced outside the United States 
for use as a fuel outside the United States. For pur-
poses of this paragraph, the term ‘United States’ in-
cludes any possession of the United States.’’. 
(b) BIODIESEL FUELS CREDIT.—Subsection (d) of 
section 40A is amended by adding at the end the following 
new paragraph: 
‘‘(5) LIMITATION TO BIODIESEL WITH CONNEC-
TION TO THE UNITED STATES.—No credit shall be 
determined under this section with respect to any 
biodiesel which is produced outside the United 
States for use as a fuel outside the United States. 
For purposes of this paragraph, the term ‘United 
States’ includes any possession of the United 
States.’’. 
(c) EXCISE TAX CREDIT.— 
(1) IN GENERAL.—Section 6426 is amended by 
adding at the end the following new subsection: 
‘‘(i) LIMITATION TO FUELS WITH CONNECTION TO 
THE UNITED STATES.— 
‘‘(1) ALCOHOL.—No credit shall be determined 
under this section with respect to any alcohol which 
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tems, railroads, airports, ports, and waterways, in or 
connecting with the New York Liberty Zone (as de-
fined in section 1400K(h)), which is designated as a 
qualifying project under this section jointly by the 
Governor of the State of New York and the Mayor 
of the City of New York, New York. 
‘‘(3) GENERAL ALLOCATION.— 
‘‘(A) IN GENERAL.—The Governor of the 
State of New York and the Mayor of the City 
of New York, New York, shall jointly allocate to 
each New York Liberty Zone governmental unit 
the portion of the qualifying project expenditure 
amount which may be taken into account by 
such governmental unit under subsection (a) for 
any calendar year in the credit period. 
‘‘(B) AGGREGATE LIMIT.—The aggregate 
amount which may be allocated under subpara-
graph (A) for all calendar years in the credit 
period shall not exceed $2,000,000,000. 
‘‘(C) 
ANNUAL
LIMIT.—The 
aggregate 
amount which may be allocated under subpara-
graph (A) for any calendar year in the credit 
period shall not exceed the sum of— 
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‘‘(i) $115,000,000 ($425,000,000 in 
the case of the last 2 years in the credit 
period), plus 
‘‘(ii) the aggregate amount authorized 
to be allocated under this paragraph for all 
preceding calendar years in the credit pe-
riod which was not so allocated. 
‘‘(D) UNALLOCATED AMOUNTS AT END OF 
CREDIT PERIOD.—If, as of the close of the cred-
it period, the amount under subparagraph (B) 
exceeds the aggregate amount allocated under 
subparagraph (A) for all calendar years in the 
credit period, the Governor of the State of New 
York and the Mayor of the City of New York, 
New York, may jointly allocate to New York 
Liberty Zone governmental units for any cal-
endar year in the 5-year period following the 
credit period an amount equal to— 
‘‘(i) the lesser of— 
‘‘(I) such excess, or 
‘‘(II) the qualifying project ex-
penditure amount for such calendar 
year, reduced by 
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