ties will have on fish and wildlife, their habitat, sub-
sistence resources, and the environment; 
(2) a plan be implemented to avoid, minimize, 
and mitigate (in that order and to the extent prac-
ticable) any significant adverse effect identified 
under paragraph (1); and 
(3) the development of the plan shall occur 
after consultation with the agency or agencies hav-
ing jurisdiction over matters mitigated by the plan. 
(c) REGULATIONS TO PROTECT COASTAL PLAIN 
FISH AND WILDLIFE RESOURCES, SUBSISTENCE USERS, 
AND THE ENVIRONMENT.—Before implementing the leas-
ing program authorized by this subtitle, the Secretary 
shall prepare and promulgate regulations, lease terms, 
conditions, restrictions, prohibitions, stipulations, and 
other measures designed to ensure that the activities un-
dertaken on the Coastal Plain under this subtitle are con-
ducted in a manner consistent with the purposes and envi-
ronmental requirements of this subtitle. 
(d) COMPLIANCE WITH FEDERAL AND STATE ENVI-
RONMENTAL LAWS AND OTHER REQUIREMENTS.—The 
proposed regulations, lease terms, conditions, restrictions, 
prohibitions, and stipulations for the leasing program 
under this subtitle shall require compliance with all appli-
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cable provisions of Federal and State environmental law, 
and shall also require the following: 
(1) Standards at least as effective as the safety 
and environmental mitigation measures set forth in 
items 1 through 29 at pages 167 through 169 of the 
‘‘Final Legislative Environmental Impact State-
ment’’ (April 1987) on the Coastal Plain. 
(2) Seasonal limitations on exploration, develop-
ment, and related activities, where necessary, to 
avoid significant adverse effects during periods of 
concentrated fish and wildlife breeding, denning, 
nesting, spawning, and migration. 
(3) Design safety and construction standards 
for all pipelines and any access and service roads, 
that— 
(A) minimize, to the maximum extent pos-
sible, adverse effects upon the passage of mi-
gratory species such as caribou; and 
(B) minimize adverse effects upon the flow 
of surface water by requiring the use of cul-
verts, bridges, and other structural devices. 
(4) Prohibitions on general public access and 
use on all pipeline access and service roads. 
(5) Stringent reclamation and rehabilitation re-
quirements, consistent with the standards set forth 
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in this subtitle, requiring the removal from the 
Coastal Plain of all oil and gas development and 
production facilities, structures, and equipment upon 
completion of oil and gas production operations, ex-
cept that the Secretary may exempt from the re-
quirements of this paragraph those facilities, struc-
tures, or equipment that the Secretary determines 
would assist in the management of the Arctic Na-
tional Wildlife Refuge and that are donated to the 
United States for that purpose. 
(6) Appropriate prohibitions or restrictions on 
access by all modes of transportation. 
(7) Appropriate prohibitions or restrictions on 
sand and gravel extraction. 
(8) Consolidation of facility siting. 
(9) Appropriate prohibitions or restrictions on 
use of explosives. 
(10) Avoidance, to the extent practicable, of 
springs, streams, and river system; the protection of 
natural surface drainage patterns, wetlands, and ri-
parian habitats; and the regulation of methods or 
techniques for developing or transporting adequate 
supplies of water for exploratory drilling. 
(11) Avoidance or minimization of air traffic-re-
lated disturbance to fish and wildlife. 
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(12) Treatment and disposal of hazardous and 
toxic wastes, solid wastes, reserve pit fluids, drilling 
muds and cuttings, and domestic wastewater, includ-
ing an annual waste management report, a haz-
ardous materials tracking system, and a prohibition 
on chlorinated solvents, in accordance with applica-
ble Federal and State environmental law. 
(13) Fuel storage and oil spill contingency plan-
ning. 
(14) Research, monitoring, and reporting re-
quirements. 
(15) Field crew environmental briefings. 
(16) Avoidance of significant adverse effects 
upon subsistence hunting, fishing, and trapping by 
subsistence users. 
(17) Compliance with applicable air and water 
quality standards. 
(18) Appropriate seasonal and safety zone des-
ignations around well sites, within which subsistence 
hunting and trapping shall be limited. 
(19) Reasonable stipulations for protection of 
cultural and archeological resources. 
(20) All other protective environmental stipula-
tions, restrictions, terms, and conditions deemed 
necessary by the Secretary. 
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(e) CONSIDERATIONS.—In preparing and promul-
gating regulations, lease terms, conditions, restrictions, 
prohibitions, and stipulations under this section, the Sec-
retary shall consider the following: 
(1) The stipulations and conditions that govern 
the National Petroleum Reserve-Alaska leasing pro-
gram, as set forth in the 1999 Northeast National 
Petroleum Reserve-Alaska Final Integrated Activity 
Plan/Environmental Impact Statement. 
(2) The environmental protection standards 
that governed the initial Coastal Plain seismic explo-
ration program under parts 37.31 to 37.33 of title 
50, Code of Federal Regulations. 
(3) The land use stipulations for exploratory 
drilling on the KIC–ASRC private lands that are set 
forth in Appendix 2 of the August 9, 1983, agree-
ment between Arctic Slope Regional Corporation and 
the United States. 
(f) FACILITY CONSOLIDATION PLANNING.— 
(1) IN GENERAL.—The Secretary shall, after 
providing for public notice and comment, prepare 
and update periodically a plan to govern, guide, and 
direct the siting and construction of facilities for the 
exploration, development, production, and transpor-
tation of Coastal Plain oil and gas resources. 
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(1) DEADLINE.—Subject to paragraph (2), any 
complaint seeking judicial review of any provision of 
this Act or any action of the Secretary under this 
subtitle shall be filed— 
(A) except as provided in subparagraph 
(B), within the 90-day period beginning on the 
date of the action being challenged; or 
(B) in the case of a complaint based solely 
on grounds arising after such period, within 90 
days after the complainant knew or reasonably 
should have known of the grounds for the com-
plaint. 
(2) VENUE.—Any complaint seeking judicial re-
view of any provision of this subtitle or any action 
of the Secretary under this subtitle may be filed only 
in the United States Court of Appeals for the Dis-
trict of Columbia. 
(3) LIMITATION
ON
SCOPE
OF
CERTAIN
RE-
VIEW.—Judicial review of a Secretarial decision to 
conduct a lease sale under this subtitle, including 
the environmental analysis thereof, shall be limited 
to whether the Secretary has complied with the 
terms of this subtitle and shall be based upon the 
administrative record of that decision. The Sec-
retary’s identification of a preferred course of action 
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to enable leasing to proceed and the Secretary’s 
analysis of environmental effects under this subtitle 
shall be presumed to be correct unless shown other-
wise by clear and convincing evidence to the con-
trary. 
(b) LIMITATION ON OTHER REVIEW.—Actions of the 
Secretary with respect to which review could have been 
obtained under this section shall not be subject to judicial 
review in any civil or criminal proceeding for enforcement. 
SEC. 329. FEDERAL AND STATE DISTRIBUTION OF REVE-
NUES. 
(a) IN GENERAL.—Notwithstanding any other provi-
sion of law, of the amount of adjusted bonus, rental, and 
royalty revenues from Federal oil and gas leasing and op-
erations authorized under this subtitle— 
(1) 25 percent shall be paid to the State of 
Alaska; and 
(2) except as provided in section 432(d), the 
balance shall be deposited into the Treasury as mis-
cellaneous receipts. 
(b) PAYMENTS TO ALASKA.—Payments to the State 
of Alaska under this section shall be made semiannually. 
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SEC. 330. RIGHTS-OF-WAY ACROSS THE COASTAL PLAIN. 
(a) IN GENERAL.—The Secretary shall issue rights- 
of-way and easements across the Coastal Plain for the 
transportation of oil and gas— 
(1) except as provided in paragraph (2), under 
section 28 of the Mineral Leasing Act (30 U.S.C. 
185), without regard to title XI of the Alaska Na-
tional Interest Lands Conservation Act (30 U.S.C. 
3161 et seq.); and 
(2) under title XI of the Alaska National Inter-
est Lands Conservation Act (30 U.S.C. 3161 et 
seq.), for access authorized by sections 1110 and 
1111 of that Act (16 U.S.C. 3170 and 3171). 
(b) TERMS AND CONDITIONS.—The Secretary shall 
include in any right-of-way or easement issued under sub-
section (a) such terms and conditions as may be necessary 
to ensure that transportation of oil and gas does not result 
in a significant adverse effect on the fish and wildlife, sub-
sistence resources, their habitat, and the environment of 
the Coastal Plain, including requirements that facilities be 
sited or designed so as to avoid unnecessary duplication 
of roads and pipelines. 
(c) REGULATIONS.—The Secretary shall include in 
regulations under section 423(g) provisions granting 
rights-of-way and easements described in subsection (a) 
of this section. 
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SEC. 331. CONVEYANCE. 
In order to maximize Federal revenues by removing 
clouds on title to lands and clarifying land ownership pat-
terns within the Coastal Plain, the Secretary, notwith-
standing the provisions of section 1302(h)(2) of the Alas-
ka National Interest Lands Conservation Act (16 U.S.C. 
3192(h)(2)), shall convey— 
(1) to the Kaktovik Inupiat Corporation the 
surface estate of the lands described in paragraph 1 
of Public Land Order 6959, to the extent necessary 
to fulfill the Corporation’s entitlement under sec-
tions 12 and 14 of the Alaska Native Claims Settle-
ment Act (43 U.S.C. 1611 and 1613) in accordance 
with the terms and conditions of the Agreement be-
tween the Department of the Interior, the United 
States Fish and Wildlife Service, the Bureau of 
Land Management, and the Kaktovik Inupiat Cor-
poration effective January 22, 1993; and 
(2) to the Arctic Slope Regional Corporation 
the remaining subsurface estate to which it is enti-
tled pursuant to the August 9, 1983, agreement be-
tween the Arctic Slope Regional Corporation and the 
United States of America. 
SEC. 332. LOCAL GOVERNMENT IMPACT AID AND COMMU-
NITY SERVICE ASSISTANCE. 
(a) FINANCIAL ASSISTANCE AUTHORIZED.— 
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(1) IN
GENERAL.—The Secretary may use 
amounts available from the Coastal Plain Local Gov-
ernment Impact Aid Assistance Fund established by 
subsection (d) to provide timely financial assistance 
to entities that are eligible under paragraph (2) and 
that are directly impacted by the exploration for or 
production of oil and gas on the Coastal Plain under 
this subtitle. 
(2) ELIGIBLE
ENTITIES.—The North Slope 
Borough, the City of Kaktovik, and any other bor-
ough, municipal subdivision, village, or other com-
munity in the State of Alaska that is directly im-
pacted by exploration for, or the production of, oil 
or gas on the Coastal Plain under this Act, as deter-
mined by the Secretary, shall be eligible for financial 
assistance under this section. 
(b) USE
OF
ASSISTANCE.—Financial assistance 
under this section may be used only for— 
(1) planning for mitigation of the potential ef-
fects of oil and gas exploration and development on 
environmental, social, cultural, recreational, and sub-
sistence values; 
(2) implementing mitigation plans and main-
taining mitigation projects; 
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(2) NORTH SLOPE BOROUGH COMMUNITIES.—A 
community located in the North Slope Borough may 
apply for assistance under this section either directly 
to the Secretary or through the North Slope Bor-
ough 
(3) APPLICATION ASSISTANCE.—The Secretary 
shall work closely with and assist the North Slope 
Borough and other communities eligible for assist-
ance under this section in developing and submitting 
applications for assistance under this section. 
(d) ESTABLISHMENT OF FUND.— 
(1) IN GENERAL.—There is established in the 
Treasury the Coastal Plain Local Government Im-
pact Aid Assistance Fund. 
(2) USE.—Amounts in the fund may be used 
only for providing financial assistance under this 
section. 
(3) DEPOSITS.—Subject to paragraph (4), there 
shall be deposited into the fund amounts received by 
the United States as revenues derived from rents, 
bonuses, and royalties from Federal leases and lease 
sales authorized under this subtitle. 
(4) LIMITATION
ON
DEPOSITS.—The total 
amount in the fund may not exceed $11,000,000. 
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(5) INVESTMENT
OF
BALANCES.—The Sec-
retary of the Treasury shall invest amounts in the 
fund in interest bearing government securities. 
(e) AUTHORIZATION OF APPROPRIATIONS.—To pro-
vide financial assistance under this section there is author-
ized to be appropriated to the Secretary from the Coastal 
Plain Local Government Impact Aid Assistance Fund 
$5,000,000 for each fiscal year. 
TITLE IV—OTHER PROVISIONS 
SEC. 401. MODIFICATION OF RENEWABLE ELECTRICITY 
PRODUCTION CREDIT FOR BIOMASS FACILI-
TIES. 
(a) IN GENERAL.—Subsection (e) of section 45 of the 
Internal Revenue Code of 1986 is amended by adding at 
the end the following new paragraph: 
‘‘(12) CREDIT
ALLOWED
FOR
ELECTRICITY 
PRODUCED FROM BIOMASS FOR ON-SITE USE.—In 
the case of electricity produced after December 31, 
2008, at any facility described in paragraph (2) or 
(3) of subsection (d) which is equipped with a meter-
ing device to determine electricity consumption or 
sale, subsection (a)(2) shall be applied without re-
gard to subparagraph (B) thereof with respect to 
such electricity produced and consumed at such fa-
cility.’’. 
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(b) CREDIT PERIOD FOR ELECTRICITY PRODUCED 
FROM OPEN-LOOP BIOMASS FOR ON-SITE USE.—Sub-
paragraph (B) of section 45(b)(4) of the Internal Revenue 
Code of 1986 is amended— 
(1) by striking ‘‘clause (ii) or clause (iii)’’ in 
clause (i) and inserting ‘‘clause (ii), (iii), or (iv)’’, 
(2) by redesignating clause (iii) as clause (iv), 
and 
(3) by inserting after clause (ii) the following 
new clause: 
‘‘(iii) ELECTRICITY
PRODUCED
FOR 
ON-SITE USE AT CERTAIN OPEN-LOOP BIO-
MASS
FACILITIES.—In the case of elec-
tricity produced and consumed as de-
scribed in subsection (e)(12) at any facility 
described in subsection (d)(3)(A)(ii) which 
is placed in service before the date of the 
enactment of this clause, the 5-year period 
beginning on January 1, 2009, shall be 
substituted for the 10-year period in sub-
section (a)(2)(A)(ii).’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on the date of the enactment 
of this Act. 
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SEC. 402. ELIMINATION OF OTHER RESTRICTIONS ON USE 
OF ENERGY ALTERNATIVES. 
(a) RENEWABLE BIOMASS.—Section 211(o)(1)(I) of 
the Clean Air Act (42 U.S.C. 7545(o)(1)(I)) is amended 
effective January 1, 2009— 
(1) in clause (ii), by striking ‘‘on non-federal 
land’’; and 
(2) in clause (iv), by striking ‘‘that are from 
non-federal forestlands, including forestlands’’ and 
inserting ‘‘from forestlands, including those on pub-
lic lands and those’’. 
(b) ALTERNATIVE FUELS.—Section 526 of the En-
ergy Independence and Security Act of 2007 (42 U.S.C. 
17142) is repealed. 
(c) LIMITATION ON NUMBER OF NEW QUALIFIED 
HYBRID ADVANCED LEAN-BURN TECHNOLOGY VEHI-
CLES.—Section 30B of the Internal Revenue Code of 1986 
is amended by striking subsection (f). 
SEC. 403. INCREASED CREDIT FOR CERTAIN VEHICLES AC-
QUIRED FROM DOMESTIC CORPORATIONS. 
(a) ALTERNATIVE MOTOR VEHICLE CREDIT.—Sec-
tion 30B of the Internal Revenue Code of 1986 is amend-
ed by redesignating subsections (j) and (k) as subsections 
(k) and (l) and by inserting after subsection (i) the fol-
lowing new subsection: 
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‘‘(j) INCREASED CREDIT FOR ACQUISITION FROM 
DOMESTIC CORPORATIONS.—In the case of a vehicle with 
respect to which credit is allowable to the taxpayer under 
this section, the amount of such credit shall be increased 
by $500 if such vehicle is acquired (for use or lease) by 
the taxpayer from a domestic corporation.’’. 
(b) NEW QUALIFIED PLUG-IN ELECTRIC MOTOR VE-
HICLE CREDIT.— 
(1) IN
GENERAL.—Subsection (b) of section 
30D of the Internal Revenue Code is amended by 
adding at the end the following new paragraph: 
‘‘(4) DOMESTIC ACQUISITION.—In the case of a 
vehicle acquired (for use or lease) by the taxpayer 
from a domestic corporation, $500.’’. 
(2) CONFORMING AMENDMENT.—Paragraph (1) 
of section 30D(b) of such Code is amended by strik-
ing ‘‘and (3)’’ and inserting ‘‘, (3), and (4)’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to vehicles acquired (for use or 
lease) after the date of the enactment of this Act. 
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TITLE V—COAL-TO-LIQUID FUEL 
Subtitle A—Coal-to-Liquid Fuel 
Activities 
SEC. 501. SHORT TITLE. 
This subtitle may be cited as the ‘‘Coal-to-Liquid 
Fuel Promotion Act of 2009’’. 
SEC. 502. DEFINITIONS. 
In this subtitle: 
(1) COAL-TO-LIQUID.—The term ‘‘coal-to-liq-
uid’’ means— 
(A) with respect to a process or tech-
nology, the use of a feedstock, the majority of 
which is the coal resources of the United 
States, using the class of reactions known as 
Fischer-Tropsch, to produce synthetic fuel suit-
able for transportation; and 
(B) with respect to a facility, the portion 
of a facility related to producing the inputs to 
the Fischer-Tropsch process, the Fischer- 
Tropsch process, finished fuel production, or 
the capture, transportation, or sequestration of 
byproducts of the use of a feedstock that is pri-
marily domestic coal at the Fischer-Tropsch fa-
cility, including carbon emissions. 
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(2) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Energy. 
SEC. 503. COAL-TO-LIQUID FUEL LOAN GUARANTEE PRO-
GRAM. 
(a) ELIGIBLE PROJECTS.—Section 1703(b) of the 
Energy Policy Act of 2005 (42 U.S.C. 16513(b)) is 
amended by adding at the end the following: 
‘‘(11) Large-scale coal-to-liquid facilities (as de-
fined in section 502 of the Coal-to-Liquid Fuel Pro-
motion Act of 2009) that use a feedstock, the major-
ity of which is the coal resources of the United 
States, to produce not less than 10,000 barrels a 
day of liquid transportation fuel.’’. 
(b) AUTHORIZATION OF APPROPRIATIONS.—Section 
1704 of the Energy Policy Act of 2005 (42 U.S.C. 16514) 
is amended by adding at the end the following: 
‘‘(c) COAL-TO-LIQUID PROJECTS.— 
‘‘(1) IN GENERAL.—There are authorized to be 
appropriated such sums as are necessary to provide 
the cost of guarantees for projects involving large- 
scale 
coal-to-liquid 
facilities 
under 
section 
1703(b)(11). 
‘‘(2) ALTERNATIVE FUNDING.—If no appropria-
tions are made available under paragraph (1), an eli-
gible applicant may elect to provide payment to the 
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Secretary, to be delivered if and at the time the ap-
plication is approved, in the amount of the estimated 
cost of the loan guarantee to the Federal Govern-
ment, as determined by the Secretary. 
‘‘(3) LIMITATIONS.— 
‘‘(A) IN
GENERAL.—No loan guarantees 
shall be provided under this title for projects 
described in paragraph (1) after (as determined 
by the Secretary)— 
‘‘(i) the tenth such loan guarantee is 
issued under this title; or 
‘‘(ii) production capacity covered by 
such loan guarantees reaches 100,000 bar-
rels per day of coal-to-liquid fuel. 
‘‘(B) INDIVIDUAL PROJECTS.— 
‘‘(i) IN GENERAL.—A loan guarantee 
may be provided under this title for any 
large-scale coal-to-liquid facility described 
in paragraph (1) that produces no more 
than 20,000 barrels of coal-to-liquid fuel 
per day. 
‘‘(ii) NON-FEDERAL
FUNDING
RE-
QUIREMENT.—To be eligible for a loan 
guarantee under this title, a large-scale 
coal-to-liquid facility described in para-
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graph (1) that produces more than 20,000 
barrels per day of coal-to-liquid fuel shall 
be eligible to receive a loan guarantee for 
the proportion of the cost of the facility 
that represents 20,000 barrels of coal-to- 
liquid fuel per day of production. 
‘‘(4) REQUIREMENTS.— 
‘‘(A) GUIDELINES.—Not later than 180 
days after the date of enactment of this sub-
section, the Secretary shall publish guidelines 
for the coal-to-liquids loan guarantee applica-
tion process. 
‘‘(B) APPLICATIONS.—Not later than 1 
year after the date of enactment of this sub-
section, the Secretary shall begin to accept ap-
plications for coal-to-liquid loan guarantees 
under this subsection. 
‘‘(C) DEADLINE.—Not later than 1 year 
from the date of acceptance of an application 
under subparagraph (B), the Secretary shall 
evaluate the application and make final deter-
minations under this subsection. 
‘‘(5) REPORTS TO CONGRESS.—The Secretary 
shall submit to the Committee on Energy and Nat-
ural Resources of the Senate and the Committee on 
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Energy and Commerce of the House of Representa-
tives a report describing the status of the program 
under this subsection not later than each of— 
‘‘(A) 180 days after the date of enactment 
of this subsection; 
‘‘(B) 1 year after the date of enactment of 
this subsection; and 
‘‘(C) the dates on which the Secretary ap-
proves the first and fifth applications for coal- 
to-liquid loan guarantees under this sub-
section.’’. 
SEC. 504. COAL-TO-LIQUID FACILITIES LOAN PROGRAM. 
(a) DEFINITION OF ELIGIBLE RECIPIENT.—In this 
section, the term ‘‘eligible recipient’’ means an individual, 
organization, or other entity that owns, operates, or plans 
to construct a coal-to-liquid facility that will produce at 
least 10,000 barrels per day of coal-to-liquid fuel. 
(b) ESTABLISHMENT.—The Secretary shall establish 
a program under which the Secretary shall provide loans, 
in a total amount not to exceed $20,000,000, for use by 
eligible recipients to pay the Federal share of the cost of 
obtaining any services necessary for the planning, permit-
ting, and construction of a coal-to-liquid facility. 
(c) APPLICATION.—To be eligible to receive a loan 
under subsection (b), the eligible recipient shall submit to 
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the Secretary an application at such time, in such manner, 
and containing such information as the Secretary may re-
quire. 
(d) NON-FEDERAL MATCH.—To be eligible to receive 
a loan under this section, an eligible recipient shall use 
non-Federal funds to provide a dollar-for-dollar match of 
the amount of the loan. 
(e) REPAYMENT OF LOAN.— 
(1) IN GENERAL.—To be eligible to receive a 
loan under this section, an eligible recipient shall 
agree to repay the original amount of the loan to the 
Secretary not later than 5 years after the date of the 
receipt of the loan. 
(2) SOURCE OF FUNDS.—Repayment of a loan 
under paragraph (1) may be made from any financ-
ing or assistance received for the construction of a 
coal-to-liquid facility described in subsection (a), in-
cluding a loan guarantee provided under section 
1703(b)(11) of the Energy Policy Act of 2005 (42 
U.S.C. 16513(b)(11)). 
(f) REQUIREMENTS.— 
(1) GUIDELINES.—Not later than 180 days 
after the date of enactment of this Act, the Sec-
retary shall publish guidelines for the coal-to-liquids 
loan application process. 
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(2) APPLICATIONS.—Not later than 1 year 
after the date of enactment of this Act, the Sec-
retary shall begin to accept applications for coal-to- 
liquid loans under this section. 
(g) REPORTS TO CONGRESS.—Not later than each of 
180 days and 1 year after the date of enactment of this 
Act, the Secretary shall submit to the Committee on En-
ergy and Natural Resources of the Senate and the Com-
mittee on Energy and Commerce of the House of Rep-
resentatives a report describing the status of the program 
under this section. 
(h) AUTHORIZATION OF APPROPRIATIONS.—There is 
authorized to be appropriated to carry out this section 
$200,000,000, to remain available until expended. 
SEC. 505. LOCATION OF COAL-TO-LIQUID MANUFACTURING 
FACILITIES. 
The Secretary, in coordination with the head of any 
affected agency, shall promulgate such regulations as the 
Secretary determines to be necessary to support the devel-
opment on Federal land (including land of the Department 
of Energy, military bases, and military installations closed 
or realigned under the defense base closure and realign-
ment) of coal-to-liquid manufacturing facilities and associ-
ated infrastructure, including the capture, transportation, 
or sequestration of carbon dioxide. 
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SEC. 506. STRATEGIC PETROLEUM RESERVE. 
(a) DEVELOPMENT, OPERATION, AND MAINTENANCE 
OF RESERVE.—Section 159 of the Energy Policy and Con-
servation Act (42 U.S.C. 6239) is amended— 
(1) by redesignating subsections (f), (g), (j), 
(k), and (l) as subsections (a), (b), (e), (f), and (g), 
respectively; and 
(2) by inserting after subsection (b) (as redesig-
nated by paragraph (1)) the following: 
‘‘(c) STUDY
OF
MAINTAINING
COAL-TO-LIQUID 
PRODUCTS IN RESERVE.—Not later than 1 year after the 
date of enactment of the Coal-to-Liquid Fuel Promotion 
Act of 2009, the Secretary and the Secretary of Defense 
shall— 
‘‘(1) conduct a study of the feasibility and suit-
ability of maintaining coal-to-liquid products in the 
Reserve; and 
‘‘(2) submit to the Committee on Energy and 
Natural Resources and the Committee on Armed 
Services of the Senate and the Committee on Energy 
and Commerce and the Committee on Armed Serv-
ices of the House of Representatives a report de-
scribing the results of the study. 
‘‘(d) CONSTRUCTION OF STORAGE FACILITIES.—As 
soon as practicable after the date of enactment of the 
Coal-to-Liquid Fuel Promotion Act of 2009, the Secretary 
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may construct 1 or more storage facilities in the vicinity 
of pipeline infrastructure and at least 1 military base.’’. 
(b) PETROLEUM PRODUCTS FOR STORAGE IN RE-
SERVE.—Section 160 of the Energy Policy and Conserva-
tion Act (42 U.S.C. 6240) is amended— 
(1) in subsection (a)— 
(A) in paragraph (1), by inserting a semi-
colon at the end; 
(B) in paragraph (2), by striking ‘‘and’’ at 
the end; 
(C) in paragraph (3), by striking the pe-
riod at the end and inserting ‘‘; and’’; and 
(D) by adding at the end the following: 
‘‘(4) coal-to-liquid products (as defined in sec-
tion 502 of the Coal-to-Liquid Fuel Promotion Act 
of 2009), as the Secretary determines to be appro-
priate, in a quantity not to exceed 20 percent of the 
total quantity of petroleum and petroleum products 
in the Reserve.’’; 
(2) in subsection (b), by redesignating para-
graphs (3) through (5) as paragraphs (2) through 
(4), respectively; and 
(3) by redesignating subsections (f) and (h) as 
subsections (d) and (e), respectively. 
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(c) CONFORMING AMENDMENTS.—Section 167 of the 
Energy Policy and Conservation Act (42 U.S.C. 6247) is 
amended— 
(1) in subsection (b)— 
(A) by redesignating paragraphs (2) and 
(3) as paragraphs (1) and (2), respectively; and 
(B) in paragraph (2) (as redesignated by 
subparagraph (A)), by striking ‘‘section 160(f)’’ 
and inserting ‘‘section 160(e)’’; and 
(2) in subsection (d), in the matter preceding 
paragraph (1), by striking ‘‘section 160(f)’’ and in-
serting ‘‘section 160(e)’’. 
SEC. 507. AUTHORIZATION TO CONDUCT RESEARCH, DE-
VELOPMENT, TESTING, AND EVALUATION OF 
ASSURED DOMESTIC FUELS. 
Of the amount authorized to be appropriated for the 
Air Force for research, development, testing, and evalua-
tion, $10,000,000 may be made available for the Air Force 
Research Laboratory to continue support efforts to test, 
qualify, and procure synthetic fuels developed from coal 
for aviation jet use. 
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SEC. 508. COAL-TO-LIQUID LONG-TERM FUEL PROCURE-
MENT AND DEPARTMENT OF DEFENSE DE-
VELOPMENT. 
Section 2398a of title 10, United States Code is 
amended— 
(1) in subsection (b)— 
(A) by striking ‘‘The Secretary’’ and in-
serting the following: 
‘‘(1) IN GENERAL.—The Secretary’’; and 
(B) by adding at the end the following: 
‘‘(2) COAL-TO-LIQUID
PRODUCTION
FACILI-
TIES.— 
‘‘(A) IN GENERAL.—The Secretary of De-
fense may enter into contracts or other agree-
ments with private companies or other entities 
to develop and operate coal-to-liquid facilities 
(as defined in section 502 of the Coal-to-Liquid 
Fuel Promotion Act of 2009) on or near mili-
tary installations. 
‘‘(B) CONSIDERATIONS.—In entering into 
contracts and other agreements under subpara-
graph (A), the Secretary shall consider land 
availability, testing opportunities, and proximity 
to raw materials.’’; 
(2) in subsection (d)— 
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(A) by striking ‘‘Subject to applicable pro-
visions of law, any’’ and inserting ‘‘Any’’; and 
(B) by striking ‘‘1 or more years’’ and in-
serting ‘‘up to 25 years’’; and 
(3) by adding at the end the following: 
‘‘(f) AUTHORIZATION OF APPROPRIATIONS.—There 
are authorized to be appropriated such sums as are nec-
essary to carry out this section.’’. 
SEC. 509. REPORT ON EMISSIONS OF FISCHER-TROPSCH 
PRODUCTS 
USED 
AS 
TRANSPORTATION 
FUELS. 
(a) IN GENERAL.—In cooperation with the Adminis-
trator of the Environmental Protection Agency, the Sec-
retary of Defense, the Administrator of the Federal Avia-
tion Administration, and the Secretary of Health and 
Human Services, the Secretary shall— 
(1) carry out a research and demonstration pro-
gram to evaluate the emissions of the use of Fischer- 
Tropsch fuel for transportation, including diesel and 
jet fuel; 
(2) evaluate the effect of using Fischer-Tropsch 
transportation fuel on land and air engine exhaust 
emissions; and 
(3) in accordance with subsection (e), submit to 
Congress a report on the effect on air quality and 
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public health of using Fischer-Tropsch fuel in the 
transportation sector. 
(b) GUIDANCE AND TECHNICAL SUPPORT.—The Sec-
retary shall issue any guidance or technical support docu-
ments necessary to facilitate the effective use of Fischer- 
Tropsch fuel and blends under this section. 
(c) FACILITIES.—For the purpose of evaluating the 
emissions of Fischer-Tropsch transportation fuels, the 
Secretary shall— 
(1) support the use and capital modification of 
existing facilities and the construction of new facili-
ties at the research centers designated in section 
417 of the Energy Policy Act of 2005 (42 U.S.C. 
15977); and 
(2) engage those research centers in the evalua-
tion and preparation of the report required under 
subsection (a)(3). 
(d) REQUIREMENTS.—The program described in sub-
section (a)(1) shall consider— 
(1) the use of neat (100 percent) Fischer- 
Tropsch fuel and blends of Fischer-Tropsch fuels 
with conventional crude oil-derived fuel for heavy- 
duty and light-duty diesel engines and the aviation 
sector; and 
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(2) the production costs associated with domes-
tic production of those fuels and prices for con-
sumers. 
(e) REPORTS.—The Secretary shall submit to the 
Committee on Energy and Natural Resources of the Sen-
ate and the Committee on Energy and Commerce of the 
House of Representatives— 
(1) not later than 180 days after the date of 
enactment of this Act, an interim report on actions 
taken to carry out this section; and 
(2) not later than 1 year after the date of en-
actment of this Act, a final report on actions taken 
to carry out this section. 
(f) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated such sums as are nec-
essary to carry out this section. 
Subtitle B—Amendments to the 
Internal Revenue Code of 1986 
SEC. 511. CREDIT FOR INVESTMENT IN COAL-TO-LIQUID 
FUELS PROJECTS. 
(a) IN GENERAL.—Section 46 of the Internal Rev-
enue Code of 1986 (relating to amount of credit) is 
amended by striking ‘‘and’’ at the end of paragraph (3), 
by striking the period at the end of paragraph (4) and 
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inserting ‘‘, and’’, and by adding at the end the following 
new paragraph: 
‘‘(5) the qualifying coal-to-liquid fuels project 
credit.’’. 
(b) AMOUNT OF CREDIT.—Subpart E of part IV of 
subchapter A of chapter 1 of the Internal Revenue Code 
of 1986 (relating to rules for computing investment credit) 
is amended by inserting after section 48B the following 
new section: 
‘‘SEC. 48C. QUALIFYING COAL-TO-LIQUID FUELS PROJECT 
CREDIT. 
‘‘(a) IN GENERAL.—For purposes of section 46, the 
qualifying coal-to-liquid fuels project credit for any taxable 
year is an amount equal to 20 percent of the qualified 
investment for such taxable year. 
‘‘(b) QUALIFIED INVESTMENT.— 
‘‘(1) IN GENERAL.—For purposes of subsection 
(a), the qualified investment for any taxable year is 
the basis of property placed in service by the tax-
payer during such taxable year which is part of a 
qualifying coal-to-liquid fuels project— 
‘‘(A)(i) the construction, reconstruction, or 
erection of which is completed by the taxpayer, 
or 
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‘‘(ii) which is acquired by the taxpayer if 
the original use of such property commences 
with the taxpayer, and 
‘‘(B) with respect to which depreciation (or 
amortization in lieu of depreciation) is allow-
able. 
‘‘(2) APPLICABLE RULES.—For purposes of this 
section, rules similar to the rules of subsection 
(a)(4) and (b) of section 48 shall apply. 
‘‘(c) DEFINITIONS.—For purposes of this section— 
‘‘(1) 
QUALIFYING
COAL-TO-LIQUID
FUELS 
PROJECT.—The term ‘qualifying coal-to-liquid fuels 
project’ means any domestic project which— 
‘‘(A) employs the class of reactions known 
as Fischer-Tropsch to produce at least 10,000 
barrels per day of transportation grade liquid 
fuels from a feedstock that is primarily domes-
tic coal (including any property which allows for 
the capture, transportation, or sequestration of 
by-products resulting from such process, includ-
ing carbon emissions), and 
‘‘(B) any portion of the qualified invest-
ment in which is certified under the qualifying 
coal-to-liquid program as eligible for credit 
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under this section in an amount (not to exceed 
$200,000,000) determined by the Secretary. 
‘‘(2) COAL.—The term ‘coal’ means any carbon-
ized or semicarbonized matter, including peat. 
‘‘(d) QUALIFYING COAL-TO-LIQUID FUELS PROJECT 
PROGRAM.— 
‘‘(1) IN GENERAL.—The Secretary, in consulta-
tion with the Secretary of Energy, shall establish a 
qualifying coal-to-liquid fuels project program to 
consider and award certifications for qualified in-
vestment eligible for credits under this section to 10 
qualifying coal-to-liquid fuels project sponsors under 
this section. The total qualified investment which 
may be awarded eligibility for credit under the pro-
gram shall not exceed $2,000,000,000. 
‘‘(2) PERIOD
OF
ISSUANCE.—A certificate of 
eligibility under paragraph (1) may be issued only 
during the 10-fiscal year period beginning on Octo-
ber 1, 2007. 
‘‘(3) SELECTION
CRITERIA.—The Secretary 
shall not make a competitive certification award for 
qualified investment for credit eligibility under this 
section unless the recipient has documented to the 
satisfaction of the Secretary that— 
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‘‘(A) the proposal of the award recipient is 
financially viable, 
‘‘(B) the recipient will provide sufficient 
information to the Secretary for the Secretary 
to ensure that the qualified investment is spent 
efficiently and effectively, 
‘‘(C) the fuels identified with respect to the 
gasification technology for such project will 
comprise at least 90 percent of the fuels re-
quired by the project for the production of 
transportation grade liquid fuels, 
‘‘(D) the award recipient’s project team is 
competent in the planning and construction of 
coal gasification facilities and familiar with op-
eration of the Fischer-Tropsch process, with 
preference given to those recipients with experi-
ence which demonstrates successful and reliable 
operations of such process, and 
‘‘(E) the award recipient has met other cri-
teria established and published by the Sec-
retary. 
‘‘(e) DENIAL OF DOUBLE BENEFIT.—No deduction 
or other credit shall be allowed with respect to the basis 
of any property taken into account in determining the 
credit allowed under this section.’’. 
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(c) CONFORMING AMENDMENTS.— 
(1) Section 49(a)(1)(C) of the Internal Revenue 
Code of 1986 is amended by striking ‘‘and’’ at the 
end of clause (iii), by striking the period at the end 
of clause (iv) and inserting ‘‘, and’’, and by adding 
after clause (iv) the following new clause: 
‘‘(v) the basis of any property which 
is part of a qualifying coal-to-liquid fuels 
project under section 48C.’’. 
(2) The table of sections for subpart E of part 
IV of subchapter A of chapter 1 of such Code is 
amended by inserting after the item relating to sec-
tion 48B the following new item: 
‘‘Sec. 48C. Qualifying coal-to-liquid fuels project credit.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to periods after the date of the 
enactment of this Act, under rules similar to the rules of 
section 48(m) of the Internal Revenue Code of 1986 (as 
in effect on the day before the date of the enactment of 
the Revenue Reconciliation Act of 1990). 
SEC. 512. TEMPORARY EXPENSING FOR EQUIPMENT USED 
IN COAL-TO-LIQUID FUELS PROCESS. 
(a) IN GENERAL.—Part VI of subchapter B of chap-
ter 1 of the Internal Revenue Code of 1986 is amended 
by inserting after section 179E the following new section: 
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‘‘SEC. 179F. ELECTION TO EXPENSE CERTAIN COAL-TO-LIQ-
UID FUELS FACILITIES. 
‘‘(a) TREATMENT AS EXPENSES.—A taxpayer may 
elect to treat the cost of any qualified coal-to-liquid fuels 
process property as an expense which is not chargeable 
to capital account. Any cost so treated shall be allowed 
as a deduction for the taxable year in which the expense 
is incurred. 
‘‘(b) ELECTION.— 
‘‘(1) IN GENERAL.—An election under this sec-
tion for any taxable year shall be made on the tax-
payer’s return of the tax imposed by this chapter for 
the taxable year. Such election shall be made in such 
manner as the Secretary may by regulations pre-
scribe. 
‘‘(2) ELECTION
IRREVOCABLE.—Any election 
made under this section may not be revoked except 
with the consent of the Secretary. 
‘‘(c) QUALIFIED COAL-TO-LIQUID FUELS PROCESS 
PROPERTY.—The term ‘qualified coal-to-liquid fuels proc-
ess property’ means any property located in the United 
States— 
‘‘(1) which employs the Fischer-Tropsch process 
to produce transportation grade liquid fuels from a 
feedstock that is primarily domestic coal (including 
any property which allows for the capture, transpor-
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tation, or sequestration of by-products resulting 
from such process, including carbon emissions), 
‘‘(2) the original use of which commences with 
the taxpayer, 
‘‘(3) the construction of which— 
‘‘(A) except as provided in subparagraph 
(B), is subject to a binding construction con-
tract entered into after the date of the enact-
ment of this section and before January 1, 
2013, but only if there was no written binding 
construction contract entered into on or before 
such date of enactment, or 
‘‘(B) in the case of self-constructed prop-
erty, began after the date of the enactment of 
this section and before January 1, 2013, and 
‘‘(4) which is placed in service by the taxpayer 
after the date of the enactment of this section and 
before January 1, 2018. 
‘‘(d) ELECTION TO ALLOCATE DEDUCTION TO COOP-
ERATIVE OWNER.—If— 
‘‘(1) a taxpayer to which subsection (a) applies 
is an organization to which part I of subchapter T 
applies, and 
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‘‘(2) one or more persons directly holding an 
ownership interest in the taxpayer are organizations 
to which part I of subchapter T apply, 
the taxpayer may elect to allocate all or a portion of the 
deduction allowable under subsection (a) to such persons. 
Such allocation shall be equal to the person’s ratable share 
of the total amount allocated, determined on the basis of 
the person’s ownership interest in the taxpayer. The tax-
able income of the taxpayer shall not be reduced under 
section 1382 by reason of any amount to which the pre-
ceding sentence applies. 
‘‘(e) BASIS REDUCTION.— 
‘‘(1) IN GENERAL.—For purposes of this title, 
if a deduction is allowed under this section with re-
spect to any qualified coal-to-liquid fuels process 
property, the basis of such property shall be reduced 
by the amount of the deduction so allowed. 
‘‘(2) ORDINARY
INCOME
RECAPTURE.—For 
purposes of section 1245, the amount of the deduc-
tion allowable under subsection (a) with respect to 
any property which is of a character subject to the 
allowance for depreciation shall be treated as a de-
duction allowed for depreciation under section 167. 
‘‘(f) APPLICATION WITH OTHER DEDUCTIONS AND 
CREDITS.— 
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‘‘(1) OTHER DEDUCTIONS.—No deduction shall 
be allowed under any other provision of this chapter 
with respect to any expenditure with respect to 
which a deduction is allowed under subsection (a) to 
the taxpayer. 
‘‘(2) CREDITS.—No credit shall be allowed 
under section 38 with respect to any amount for 
which a deduction is allowed under subsection (a). 
‘‘(g) REPORTING.—No deduction shall be allowed 
under subsection (a) to any taxpayer for any taxable year 
unless such taxpayer files with the Secretary a report con-
taining such information with respect to the operation of 
the property of the taxpayer as the Secretary shall re-
quire.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 1016(a) of the Internal Revenue 
Code of 1986, as amended by this Act, is amended 
by striking ‘‘and’’ at the end of paragraph (37), by 
striking the period at the end of paragraph (38) and 
inserting ‘‘, and’’, and by adding at the end the fol-
lowing new paragraph: 
‘‘(39) to the extent provided in section 
179F(e)(1).’’. 
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(2) Section 1245(a) of such Code is amended 
by inserting ‘‘179F,’’ after ‘‘179D,’’ both places it 
appears in paragraphs (2)(C) and (3)(C). 
(3) Section 263(a)(1) of such Code is amended 
by striking ‘‘or’’ at the end of subparagraph (J), by 
striking the period at the end of subparagraph (K) 
and inserting ‘‘, or’’, and by inserting after subpara-
graph (K) the following new subparagraph: 
‘‘(L) expenditures for which a deduction is 
allowed under section 179F.’’. 
(4) Section 312(k)(3)(B) of such Code is 
amended by striking ‘‘or 179E’’ each place it ap-
pears in the heading and text and inserting ‘‘179E, 
or 179F’’. 
(5) The table of sections for part VI of sub-
chapter B of chapter 1 of such Code is amended by 
inserting after the item relating to section 179E the 
following new item: 
‘‘Sec. 179F. Election to expense certain coal-to-liquid fuels facilities.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to properties placed in service after 
the date of the enactment of this Act. 
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SEC. 513. EXTENSION OF ALTERNATIVE FUEL CREDIT FOR 
FUEL DERIVED FROM COAL THROUGH THE 
FISCHER-TROPSCH PROCESS. 
(a) ALTERNATIVE FUEL CREDIT.—Paragraph (5) of 
section 6426(d) of the Internal Revenue Code of 1986 is 
amended to read as follows: 
‘‘(5) TERMINATION.—This subsection shall not 
apply to— 
‘‘(A) any sale or use involving liquid fuel 
derived from a feedstock that is primarily do-
mestic coal (including peat) through the Fisch-
er-Tropsch process for any period after Sep-
tember 30, 2022, 
‘‘(B) any sale or use involving liquified hy-
drogen for any period after September 30, 
2014, and 
‘‘(C) any other sale or use for any period 
after December 31, 2009.’’. 
(b) PAYMENTS.— 
(1) IN
GENERAL.—Paragraph (6) of section 
6427(e) of the Internal Revenue Code of 1986 is 
amended by striking ‘‘and’’ and the end of subpara-
graph (C), by striking the period at the end of sub-
paragraph (D) and inserting ‘‘, and’’, and by adding 
at the end the following new subparagraph: 
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‘‘(E) any alternative fuel or alternative fuel 
mixture (as so defined) involving liquid fuel de-
rived from coal (including peat) through the 
Fischer-Tropsch process sold or used after Sep-
tember 30, 2022.’’. 
(2) 
CONFORMING
AMENDMENT.—Section 
6427(e)(6)(C) of such Code is amended by striking 
‘‘subparagraph (D)’’ and inserting ‘‘subparagraphs 
(D) and (E)’’. 
SEC. 514. MODIFICATIONS TO ENHANCED OIL RECOVERY 
CREDIT. 
(a) ENHANCED CREDIT FOR CARBON DIOXIDE IN-
JECTIONS.—Section 43 of the Internal Revenue Code of 
1986 is amended by adding at the end the following new 
subsection: 
‘‘(f) ENHANCED CREDIT
FOR PROJECTS USING 
QUALIFIED CARBON DIOXIDE.— 
‘‘(1) IN GENERAL.—For purposes of this sec-
tion— 
‘‘(A) the term ‘qualified project’ includes a 
project described in paragraph (2), and 
‘‘(B) in the case of a project described in 
paragraph (2), subsection (a) shall be applied 
by substituting ‘50 percent’ for ‘15 percent’. 
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‘‘(2) PROJECTS DESCRIBED.—A project is de-
scribed in this paragraph if it begins or is substan-
tially expanded after December 31, 2007, and 
‘‘(A) uses qualified carbon dioxide in an 
enhanced oil, natural gas, or coalbed methane 
recovery method, which involves flooding or in-
jection, or 
‘‘(B) enables the capture or sequestration 
of qualified carbon dioxide. 
‘‘(3) DEFINITIONS.—For purposes of this sub-
section— 
‘‘(A) ENHANCED
OIL
RECOVERY.—The 
term ‘enhanced oil recovery’ means recovery of 
oil by injecting or flooding with qualified carbon 
dioxide. 
‘‘(B) ENHANCED
NATURAL
GAS
RECOV-
ERY.—The term ‘enhanced natural gas recov-
ery’ means recovery of natural gas by injecting 
or flooding with qualified carbon dioxide. 
‘‘(C) ENHANCED COALBED METHANE RE-
COVERY.—The term ‘enhanced coalbed methane 
recovery’ means recovery of coalbed methane by 
injecting or flooding with qualified carbon diox-
ide. 
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‘‘(D) QUALIFIED CARBON DIOXIDE.—The 
term ‘qualified carbon dioxide’ means carbon di-
oxide which is produced from the gasification 
and subsequent refinement of a feedstock which 
is primarily domestic coal, at a facility which 
produces coal-to-liquid fuel. 
‘‘(E) CAPTURE OR SEQUESTRATION.—The 
term ‘capture or sequestration’ means any 
equipment or facility necessary to— 
‘‘(i) capture or separate qualified car-
bon dioxide from other emissions, 
‘‘(ii) transport qualified carbon diox-
ide, or 
‘‘(iii) process and use qualified carbon 
dioxide in a qualified project. 
‘‘(4) TERMINATION.—This subsection shall not 
apply to costs paid or incurred for any qualified 
project after December 31, 2020.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 43 of the Internal Revenue Code of 
1986 is amended— 
(A) by striking ‘‘enhanced oil recovery 
credit’’ in subsection (a) and inserting ‘‘en-
hanced oil, natural gas, and coalbed methane 
recovery, and capture and sequestration credit’’, 
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(B) by striking ‘‘qualified enhanced oil re-
covery costs’’ each place it appears and insert-
ing ‘‘qualified costs’’, 
(C) by striking ‘‘qualified enhanced oil re-
covery project’’ each place it appears and in-
serting ‘‘qualified project’’, and 
(D) by striking the heading and inserting: 
‘‘SEC. 43. ENHANCED OIL, NATURAL GAS, AND COALBED 
METHANE RECOVERY, AND CAPTURE AND SE-
QUESTRATION CREDIT.’’. 
(2) The item in the table of sections for subpart 
D of part IV of subchapter A of chapter 1 of such 
Code relating to section 43 is amended to read as 
follows: 
‘‘Sec. 43. Enhanced oil, natural gas, and coalbed methane recovery, and cap-
ture and sequestration credit.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to costs paid or incurred in taxable 
years ending after December 31, 2009. 
SEC. 515. ALLOWANCE OF ENHANCED OIL, NATURAL GAS, 
AND COALBED METHANE RECOVERY, AND 
CAPTURE 
AND 
SEQUESTRATION 
CREDIT 
AGAINST THE ALTERNATIVE MINIMUM TAX. 
(a) IN GENERAL.—Subsection (c) of section 38 of the 
Internal Revenue Code of 1986 (relating to limitation 
based on amount of tax) is amended by redesignating 
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paragraphs (4) and (5) as paragraphs (5) and (6), respec-
tively, and by inserting after paragraph (3) the following 
new paragraph: 
‘‘(4) SPECIAL RULES FOR ENHANCED OIL, NAT-
URAL GAS, AND COALBED METHANE RECOVERY, AND 
CAPTURE
AND
SEQUESTRATION
CREDIT.—In the 
case of the enhanced oil, natural gas, and coalbed 
methane recovery, and capture and sequestration 
credit determined under section 43— 
‘‘(A) this section and section 39 shall be 
applied separately with respect to such credit, 
and 
‘‘(B) in applying paragraph (1) to such 
credit— 
‘‘(i) the tentative minimum tax shall 
be treated as being zero, and 
‘‘(ii) the limitation under paragraph 
(1) (as modified by clause (i)) shall be re-
duced by the credit allowed under sub-
section (a) for the taxable year (other than 
the enhanced oil, natural gas, and coalbed 
methane recovery, and capture and seques-
tration credit and the specified credits).’’. 
(b) CONFORMING AMENDMENTS.— 
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(1) Section 38(c)(2)(A)(ii)(II) of such Code is 
amended by inserting ‘‘the enhanced oil, natural gas, 
and coalbed methane recovery, and capture and se-
questration credit,’’ after ‘‘employee credit,’’. 
(2) Section 38(c)(3)(A)(ii)(II) of such Code is 
amended by inserting ‘‘, the enhanced oil, natural 
gas, coalbed methane recovery, capture and seques-
tration credit,’’ after ‘‘employee credit’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years ending after De-
cember 31, 2009. 
TITLE VI—INCENTIVIZING THE 
EXTRACTION 
AND 
PROC-
ESSING OF OIL SHALE 
SEC. 601. INCENTIVES FOR EXTRACTION AND PROCESSING 
OF OIL SHALE. 
(a) INVESTMENT TAX CREDIT FOR EXTRACTION AND 
PROCESSING OF OIL SHALE USING IN-SITU CONVERSION 
TECHNOLOGY.— 
(1) IN GENERAL.—Subpart E of part IV of 
subchapter A of chapter 1 of the Internal Revenue 
Code of 1986, as amended by this Act, is amended 
by inserting after section 48C the following new sec-
tion: 
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‘‘SEC. 48D. OIL SHALE EXTRACTION AND PROCESSING FA-
CILITY. 
‘‘(a) GENERAL RULE.—For purposes of section 46, 
the oil shale extraction and processing credit for any tax-
able year is 30 percent of the cost of any qualified oil shale 
extraction and processing property. 
‘‘(b) QUALIFIED
OIL
SHALE
EXTRACTION
AND 
PROCESSING PROPERTY.—The term ‘qualified oil shale 
extraction and processing property’ means property of a 
character subject to the allowance for depreciation— 
‘‘(1) which is used in the United States solely 
to extract and process oil shale using in-situ conver-
sion technology, 
‘‘(2) the original use of which commences with 
the taxpayer after the date of the enactment of this 
section, 
‘‘(3) which is acquired by the taxpayer by pur-
chase (as defined in section 179(d)) after the date 
of the enactment of this subsection, but only if no 
written binding contract for the acquisition was in 
effect on or before the date of the enactment of this 
subsection, and 
‘‘(4) which is placed in service by the taxpayer 
before January 1, 2021. 
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‘‘(c) QUALIFIED OIL SHALE EXTRACTION AND PROC-
ESSING PROPERTY.—For purposes of this section— 
‘‘(1) The term ‘qualified oil shale extraction 
and processing property’ means any property located 
in the United States— 
‘‘(A) the original use of which commences 
with the taxpayer and which original use is 
solely to extract or process oil shale, and 
‘‘(B) which is placed in service by the tax-
payer after the date of the enactment of this 
section and before January 1, 2019. 
‘‘(d) ELECTION TO ALLOCATE DEDUCTION TO COOP-
ERATIVE OWNER.—If— 
‘‘(1) a taxpayer to which subsection (a) applies 
is an organization to which part I of subchapter T 
applies, and 
‘‘(2) one or more persons directly holding an 
ownership interest in the taxpayer are organizations 
to which part I of subchapter T apply, 
the taxpayer may elect to allocate all or a portion of the 
deduction allowable under subsection (a) to such persons. 
Such allocation shall be equal to the person’s ratable share 
of the total amount allocated, determined on the basis of 
the person’s ownership interest in the taxpayer. The tax-
able income of the taxpayer shall not be reduced under 
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section 1382 by reason of any amount to which the pre-
ceding sentence applies. 
‘‘(e) BASIS REDUCTION.— 
‘‘(1) IN GENERAL.—For purposes of this title, 
if a deduction is allowed under this section with re-
spect to any qualified oil shale extraction and proc-
essing property, the basis of such property shall be 
reduced by the amount of the deduction so allowed. 
‘‘(2) ORDINARY
INCOME
RECAPTURE.—For 
purposes of section 1245, the amount of the deduc-
tion allowable under subsection (a) with respect to 
any property which is of a character subject to the 
allowance for depreciation shall be treated as a de-
duction allowed for depreciation under section 167. 
‘‘(f) APPLICATION WITH OTHER DEDUCTIONS AND 
CREDITS.— 
‘‘(1) OTHER DEDUCTIONS.—No deduction shall 
be allowed under any other provision of this chapter 
with respect to any expenditure with respect to 
which a deduction is allowed under subsection (a) to 
the taxpayer. 
‘‘(2) CREDITS.—No credit shall be allowed 
under section 38 with respect to any amount for 
which a deduction is allowed under subsection (a). 
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‘‘(g) REPORTING.—No deduction shall be allowed 
under subsection (a) to any taxpayer for any taxable year 
unless such taxpayer files with the Secretary a report con-
taining such information with respect to the operation of 
the property of the taxpayer as the Secretary shall re-
quire.’’. 
(c) CONFORMING AMENDMENTS.— 
(1) Section 1016(a) of such Code, as amended 
by this Act, is amended by striking ‘‘and’’ at the end 
of paragraph (38), by striking the period at the end 
of paragraph (39) and inserting ‘‘, and’’, and by 
adding at the end the following new paragraph: 
‘‘(40) to the extent provided in section 
179G(e)(1).’’. 
(2) Section 1245(a) of such Code is amended 
by inserting ‘‘179G,’’ after ‘‘179F,’’ both places it 
appears in paragraphs (2)(C) and (3)(C). 
(3) Section 263(a)(1) of such Code is amended 
by striking ‘‘or’’ at the end of subparagraph (L), by 
striking the period at the end of subparagraph (M) 
and inserting ‘‘, or’’, and by inserting after subpara-
graph (M) the following new subparagraph: 
‘‘(N) expenditures for which a deduction is 
allowed under section 179G.’’. 
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(4) Section 312(k)(3)(B) of such Code is 
amended by striking ‘‘or 179F’’ each place it ap-
pears in the heading and text and inserting ‘‘179F, 
or 179G’’. 
(5) The table of sections for part VI of sub-
chapter B of chapter 1 of such Code is amended by 
inserting after the item relating to section 179F the 
following new item: 
‘‘Sec. 179G. Election to expense certain oil shale extraction and processing 
property.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to properties placed in service after 
the date of the enactment of this Act. 
TITLE VII—LAND FOR BIOFUEL 
PRODUCTION 
SEC. 701. LEASE OF PUBLIC LANDS FOR PRODUCTION OF 
RENEWABLE BIOMASS FOR BIOFUELS. 
(a) IN GENERAL.—Title II of the Federal Land Pol-
icy and Management Act of 1976 (43 U.S.C. 1711 et seq.) 
is amended by adding at the end the following new section: 
‘‘SEC. 216. LEASE OF PUBLIC LANDS FOR PRODUCTION OF 
RENEWABLE BIOMASS FOR BIOFUELS. 
‘‘(a) AUTHORITY TO LEASE LANDS.—The Secretary 
may lease a tract of the public lands under this Act where, 
as a result of land use planning required under section 
202 of this Act, the Secretary determines that— 
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‘‘(1) the tract is suitable for agricultural pro-
duction; and 
‘‘(2) the lessee of the tract will use the tract for 
the production of renewable biomass to be used in 
the production of biofuels. 
‘‘(b) EXCLUSION OF CERTAIN PUBLIC LANDS.—This 
section does not apply with respect to the following land: 
‘‘(1) Land in a unit of the National Wilderness 
Preservation System. 
‘‘(2) Land included in the National Wild and 
Scenic Rivers Systems. 
‘‘(3) Land included in the National System of 
Trails. 
‘‘(4) Land designated as a National Monument. 
‘‘(5) Land regarding which other public objec-
tives and values, including recreation and scenic val-
ues, outweigh the benefit of using the land for the 
production of renewable biomass for biofuels, as de-
termined by the Secretary. 
‘‘(c) CONSIDERATION.—The lease of public lands 
under this section shall be made at a rental rate deter-
mined by the Secretary to be appropriate to promote the 
production of renewable biomass for biofuels. 
‘‘(d) COMPETITIVE BIDDING.— 
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‘‘(1) IN GENERAL.—The lease of public lands 
under this section shall be conducted under competi-
tive bidding procedures to be established by the Sec-
retary. 
‘‘(2) MODIFICATION.—The Secretary may lease 
public lands under this section with modified com-
petitive bidding or without competitive bidding— 
‘‘(A) to assure an equitable distribution of 
land among potential renters; or 
‘‘(B) to encourage farmers who are using 
other lands to produce feed grains for biofuels 
production to return the other lands to crop 
production for food or feed use. 
‘‘(e) DEFINITIONS.—In this section: 
‘‘(1) BIOFUEL.—The term ‘biofuel’ means a 
fuel derived from renewable biomass. 
‘‘(2) RENEWABLE BIOMASS.—The term ‘renew-
able biomass’ means— 
‘‘(A) renewable plant material, including 
feed grains and other agricultural commodities 
(other than trees); and 
‘‘(B) crop residue and other vegetative 
waste material (other than wood waste and 
wood residues).’’. 
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