I 
110TH CONGRESS 
2D SESSION 
H. R. 6709 
To greatly enhance the Nation’s path toward energy independence and envi-
ronmental, energy, economic, and national security, by amending Federal 
policy to increase the production of domestic energy sources, to dedicate 
fixed percentages of the royalties received for conservation programs, 
environmental restoration projects, renewable energy research and devel-
opment, clean energy technology research and development, increased 
development of existing energy sources, and energy assistance for those 
in need, and to share a portion of such royalties with producing States, 
and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 31, 2008 
Mr. PETERSON of Pennsylvania (for himself, Mr. ABERCROMBIE, Mr. COSTA, 
Mr. BURTON of Indiana, Mr. GENE GREEN of Texas, Mr. BROWN of 
South Carolina, Mr. LAMPSON, Mr. BISHOP of Utah, Mr. WALZ of Min-
nesota, Mr. HAYES, Mr. FOSTER, Mrs. CAPITO, Mr. BOREN, Mrs. 
DRAKE, Mr. CUELLAR, Mr. TIM MURPHY of Pennsylvania, Mr. ALTMIRE, 
Mr. SMITH of Nebraska, Mr. MCINTYRE, Mr. SALI, Mrs. BOYDA of Kan-
sas, Mr. LAMBORN, Mr. ORTIZ, Mr. ROGERS of Kentucky, Ms. HERSETH 
SANDLIN, Mr. KINGSTON, Mr. HOLDEN, Mr. MILLER of Florida, Mr. 
CAZAYOUX, Mr. LEWIS of California, Mr. BARROW, Mr. WILSON of South 
Carolina, Mr. KANJORSKI, Mr. KLINE of Minnesota, Mr. MARSHALL, Mr. 
MICA, Mr. DONNELLY, Mr. MCCARTHY of California, Mr. LINCOLN 
DAVIS of Tennessee, Mr. TERRY, Mr. PATRICK J. MURPHY of Pennsyl-
vania, Mr. SOUDER, Mr. BISHOP
of Georgia, Mr. PENCE, Mr. 
MELANCON, Mr. BROUN of Georgia, Mr. BARTLETT of Maryland, and 
Mr. TAYLOR) introduced the following bill; which was referred to the 
Committee on Natural Resources, and in addition to the Committees on 
Energy and Commerce, Ways and Means, Science and Technology, Edu-
cation and Labor, the Budget, and Rules, for a period to be subsequently 
determined by the Speaker, in each case for consideration of such provi-
sions as fall within the jurisdiction of the committee concerned 
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A BILL 
To greatly enhance the Nation’s path toward energy inde-
pendence and environmental, energy, economic, and na-
tional security, by amending Federal policy to increase 
the production of domestic energy sources, to dedicate 
fixed percentages of the royalties received for conserva-
tion programs, environmental restoration projects, renew-
able energy research and development, clean energy tech-
nology research and development, increased development 
of existing energy sources, and energy assistance for 
those in need, and to share a portion of such royalties 
with producing States, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘National Conservation, 
Environment, and Energy Independence Act’’. 
SEC. 2. TABLE OF CONTENTS. 
The table of contents for this Act is as follows: 
Sec. 1. Short title. 
Sec. 2. Table of contents. 
TITLE I—OFFSHORE AND ONSHORE LEASING AND OTHER 
ENERGY PRODUCTION 
Sec. 101. Termination of prohibitions on expenditures for, and withdrawals 
from, offshore and onshore leasing and other limitations on en-
ergy production. 
Sec. 102. Outer Continental Shelf leasing program. 
Sec. 103. Sharing of revenues. 
Sec. 104. Policies regarding buying and building American. 
Sec. 105. Elimination of other restrictions on use of energy alternatives. 
TITLE II—CLEANER ENERGY PRODUCTION AND ENERGY 
CONSERVATION INCENTIVES 
Sec. 201. Extension of renewable energy credit. 
Sec. 202. Extension of credit for alternative fuel vehicles. 
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Sec. 203. Extension of alternative fuel vehicle refueling property credit. 
Sec. 204. Extension of credit for energy efficient appliances. 
Sec. 205. Extension of credit for nonbusiness energy property. 
Sec. 206. Extension of credit for residential energy efficient property. 
Sec. 207. Extension of new energy efficient home credit. 
Sec. 208. Extension of energy efficient commercial buildings deduction. 
Sec. 209. Extension of energy credit. 
Sec. 210. Extension of credit for clean renewable energy bonds. 
Sec. 211. Extension of credits for biodiesel and renewable diesel. 
Sec. 212. Credit for plug-in hybrid vehicles. 
TITLE III—MODIFYING THE STRATEGIC PETROLEUM RESERVE 
AND FUNDING CONSERVATION AND ENERGY RESEARCH AND 
DEVELOPMENT 
Sec. 301. Findings. 
Sec. 302. Definitions. 
Sec. 303. Objectives. 
Sec. 304. Modification of the Strategic Petroleum Reserve. 
Sec. 305. Energy Independence and Security Fund. 
TITLE I—OFFSHORE AND ON-
SHORE LEASING AND OTHER 
ENERGY PRODUCTION 
SEC. 101. TERMINATION OF PROHIBITIONS ON EXPENDI-
TURES FOR, AND WITHDRAWALS FROM, OFF-
SHORE AND ONSHORE LEASING AND OTHER 
LIMITATIONS ON ENERGY PRODUCTION. 
(a) PROHIBITIONS ON EXPENDITURES.—All provi-
sions of Federal law that prohibit the expenditure of ap-
propriated funds to conduct natural gas, oil, oil shale, and 
other energy production leasing and preleasing activities 
for Federal lands shall have no force or effect with respect 
to such activities. 
(b) REVOCATION WITHDRAWALS.—All withdrawals 
of Federal submerged lands of the Outer Continental Shelf 
from leasing, including withdrawals by the President 
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under the authority of section 12(a) of the Outer Conti-
nental Shelf Lands Act (43 U.S.C. 1341(a)), are hereby 
revoked and are no longer in effect with respect to the 
leasing of areas for exploration for, and development and 
production of natural gas and oil. 
(c) GULF OF MEXICO OIL AND GAS.—Section 104 
of division C of the Tax Relief and Health Care Act of 
2006 (Public Law 109–432; 120 Stat. 3003) is repealed. 
(d) OIL SHALE.—Section 433 of the Department of 
the Interior, Environment, and Related Agencies Appro-
priations Act, 2008 (division F of Public Law 110–161; 
121 Stat. 2152) is repealed. 
SEC. 102. OUTER CONTINENTAL SHELF LEASING PROGRAM. 
The Outer Continental Shelf Lands Act (43 U.S.C. 
1331 et seq.) is amended by inserting after section 9 the 
following: 
‘‘SEC. 10. MORATORIA AREA AND STATE DISAPPROVAL RE-
QUIREMENT WITH RESPECT TO LEASING. 
‘‘(a) PROHIBITION ON LEASING.—The Secretary may 
not issue any lease authorizing exploration for, or develop-
ment of, natural gas or oil in any area of the outer Conti-
nental Shelf that is located within 25 miles of the coastline 
of a State. 
‘‘(b) STATE DISAPPROVAL AUTHORITY.—The Sec-
retary may not issue any lease authorizing exploration for, 
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or development of, natural gas or oil in any area of the 
outer Continental Shelf that is located more than 25 miles 
and less than 50 miles from the coastline of a State if 
the State has enacted, within the 1-year period beginning 
on the date of the enactment of the National Conservation, 
Environment, and Energy Independence Act, a law dis-
approving of the issuance of such leases by the Secretary. 
‘‘(c) MILITARY OPERATIONS.—The Secretary shall 
consult with the Secretary of Defense regarding military 
operations needs in the Outer Continental Shelf. The Sec-
retary shall work with the Secretary of Defense to resolve 
any conflicts that might arise between such operations and 
leasing under this section. If the Secretaries are unable 
to resolve all such conflicts, any unresolved issues shall 
be referred by the Secretaries to the President in a timely 
fashion for immediate resolution.’’. 
SEC. 103. SHARING OF REVENUES. 
(a) IN GENERAL.—Section 8(g) of the Outer Conti-
nental Shelf Lands Act (43 U.S.C. 1337(g)) is amended— 
(1) in paragraph (2) by striking ‘‘Notwith-
standing’’ and inserting ‘‘Except as provided in 
paragraph (6), and notwithstanding’’; 
(2) by redesignating paragraphs (6) and (7) as 
paragraphs (8) and (9); and 
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‘‘(v) 15 percent shall be deposited in 
the Renewable Energy Reserve established 
by paragraph (7); 
‘‘(vi) 5 percent shall be deposited in 
the Carbon Capture/Sequestration and Nu-
clear Waste Reserve Established by para-
graph (7); and 
‘‘(vii) 2 percent shall be available to 
the Secretary of Health and Human Serv-
ices for carrying out the Low-Income 
Home Energy Assistance Act of 1981 (42 
U.S.C. 8621, et seq.). 
‘‘(B) LEASED
TRACT
THAT
LIES
PAR-
TIALLY WITHIN THE SEAWARD BOUNDARIES OF 
A STATE.—In the case of a leased tract that lies 
partially within the seaward boundaries of a 
State, the amounts of bonus bids and royalties 
from such tract that are subject to subpara-
graph (A)(ii) with respect to such State shall be 
a percentage of the total amounts of bonus bids 
and royalties from such tract that is equivalent 
to the total percentage of surface acreage of the 
tract that lies within such seaward boundaries. 
‘‘(C) USE
OF
PAYMENTS
TO
STATES.— 
Amounts paid to a State under subparagraph 
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(A)(ii) shall be used by the State for one or 
more of the following: 
‘‘(i) Education. 
‘‘(ii) Transportation. 
‘‘(iii) Coastal restoration, environ-
mental restoration, and beach replenish-
ment. 
‘‘(iv) Energy infrastructure. 
‘‘(v) Renewable energy development. 
‘‘(vi) Energy efficiency and conserva-
tion. 
‘‘(vii) Any other purpose determined 
by State law. 
‘‘(D) DEFINITIONS.—In this paragraph: 
‘‘(i) ADJACENT
STATE.—The term 
‘Adjacent State’ means, with respect to 
any program, plan, lease sale, leased tract 
or other activity, proposed, conducted, or 
approved pursuant to the provisions of this 
Act, any State the laws of which are de-
clared, pursuant to section 4(a)(2), to be 
the law of the United States for the por-
tion of the outer Continental Shelf on 
which such program, plan, lease sale, 
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leased tract, or activity appertains or is, or 
is proposed to be, conducted. 
‘‘(ii) ADJACENT
ZONE.—The term 
‘adjacent zone’ means, with respect to any 
program, plan, lease sale, leased tract, or 
other activity, proposed, conducted, or ap-
proved pursuant to the provisions of this 
Act, the portion of the outer Continental 
Shelf for which the laws of a particular ad-
jacent State are declared, pursuant to sec-
tion 4(a)(2), to be the law of the United 
States. 
‘‘(iii) PRODUCING STATE.—The term 
‘producing State’ means an Adjacent State 
having an adjacent zone containing leased 
tracts from which are derived bonus bids 
and royalties under a lease under this Act. 
‘‘(iv) STATE.—The term ‘State’ in-
cludes Puerto Rico and the other terri-
tories of the United States. 
‘‘(v) QUALIFIED
LEASE.—The term 
‘qualified lease’ means a natural gas or oil 
lease made available under this Act grant-
ed after the date of the enactment of the 
National Conservation, Environment, and 
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Energy Independence Act, for an area that 
is available for leasing as a result of enact-
ment of section 101 of that Act. 
‘‘(E) APPLICATION.—This paragraph shall 
apply to bonus bids and royalties received by 
the United States under qualified leases after 
September 30, 2008. 
‘‘(7) 
ESTABLISHMENT
OF
RESERVE
AC-
COUNTS.— 
‘‘(A) IN
GENERAL.—For budgetary pur-
poses, there is established as a separate account 
to receive deposits under paragraph (6)(A)— 
‘‘(i) the Conservation Reserve, to off-
set the cost of legislation enacted after the 
date of the enactment of the National Con-
servation, Environment, and Energy Inde-
pendence Act for conservation programs, 
such as weatherization, and conservation 
tax credits and deductions for energy effi-
ciency in the residential, commercial, in-
dustrial and public sectors, including Con-
servation Districts; 
‘‘(ii) the Environment Restoration Re-
serve, to offset the cost of legislation en-
acted after the date of the enactment of 
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the National Conservation, Environment, 
and Energy Independence Act to conduct 
restoration activities to improve the overall 
health of the ecosystems primarily or en-
tirely within wildlife refuges, national 
parks, lakes, bays, rivers, and streams, in-
cluding the Great Lakes, the Chesapeake 
and Delaware Bays, the San Francisco 
Bay/Sacramento San Joaquin Bay Delta, 
the Florida Everglades, New York Harbor, 
the Colorado River Basin, and Intracoastal 
Waterways and inlets that serve them; 
‘‘(iii) the Renewable Energy Reserve, 
to offset the cost of legislation enacted 
after the date of the enactment of the Na-
tional Conservation, Environment, and En-
ergy Independence Act to accelerate the 
use of cleaner domestic energy resources 
and alternative fuels; to promote the utili-
zation of energy-efficient products and 
practices; and to increase research, devel-
opment, and deployment of clean renew-
able energy and efficiency technologies and 
job training programs for those purposes; 
and 
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‘‘(iv) the Carbon Capture and Seques-
tration Reserve, to offset the cost of legis-
lation enacted after the date of the enact-
ment of the National Conservation, Envi-
ronment, and Energy Independence Act to 
promote research and development projects 
associated with carbon capture and storage 
in the production of liquid transportation 
fuels, synthetic natural gas, chemical feed-
stocks, and electricity, and for the disposi-
tion and recycling/reprocessing of nuclear 
waste from nuclear power plants. 
‘‘(B) PROCEDURE FOR ADJUSTMENTS.— 
‘‘(i) 
BUDGET
COMMITTEE
CHAIR-
MAN.—After the reporting of a bill or joint 
resolution, or the offering of an amend-
ment thereto or the submission of a con-
ference report thereon, providing funding 
for the purposes set forth in clause (i), (ii), 
(iii), or (iv) of subparagraph (A) in excess 
of the amount of the deposits under para-
graph (6)(A) for those purposes for fiscal 
year 2009, the chairman of the Committee 
on the Budget of the applicable House of 
Congress shall make the adjustments set 
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forth in clause (ii) for the amount of new 
budget authority and outlays in that meas-
ure and the outlays flowing from that 
budget authority. 
‘‘(ii) MATTERS TO BE ADJUSTED.— 
The adjustments referred to in clause (i) 
are to be made to— 
‘‘(I) the discretionary spending 
limits, if any, set forth in the appro-
priate concurrent resolution on the 
budget; 
‘‘(II) the allocations made pursu-
ant to the appropriate concurrent res-
olution on the budget pursuant to sec-
tion 302(a) of the Congressional 
Budget Act of 1974; and 
‘‘(III) the budget aggregates con-
tained in the appropriate concurrent 
resolution on the budget as required 
by section 301(a) of the Congressional 
Budget Act of 1974. 
‘‘(iii) AMOUNTS OF ADJUSTMENTS.— 
The adjustments referred to in clauses (i) 
and (ii) shall not exceed the receipts esti-
mated by the Congressional Budget Office 
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that are attributable to this Act for the fis-
cal year in which the adjustments are 
made. 
‘‘(C) EXPENDITURES ONLY BY SECRETARY 
OF THE INTERIOR IN CONSULTATION.—Legisla-
tion shall not be treated as legislation referred 
to in subparagraph (A) unless any expenditure 
under such legislation for a purpose referred to 
in that subparagraph may be made only after 
consultation with the Administrator of the En-
vironmental Protection Agency, the Adminis-
trator of the National Oceanic and Atmospheric 
Administration, the Secretary of the Army act-
ing through the Corps of Engineers, and, as ap-
propriate, the Secretary of State. 
‘‘(8) MAINTENANCE OF EFFORT BY STATES.— 
The Secretary of the Interior, the Secretary of 
Health and Human Services, the Secretary of En-
ergy, and any other Federal official with authority 
to implement legislation referred to in paragraph 
(6)(A) shall ensure that financial assistance provided 
to a State under that legislation for any purpose 
with amounts made available under this subsection 
or in any legislation with respect to which paragraph 
(7) applies supplement, and do not replace, the 
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amounts expended by the State for that purpose be-
fore the date of the enactment of the National Con-
servation, Environment, and Energy Independence 
Act’’. 
(b) ESTABLISHMENT OF STATE SEAWARD BOUND-
ARIES.—Section 4(a)(2)(A) of the Outer Continental Shelf 
Lands Act (43 U.S.C. 1333(a)(2)(A)) is amended in the 
first sentence by striking ‘‘, and the President’’ and all 
that follows through the end of the sentence and inserting 
the following: ‘‘. Such extended lines are deemed to be as 
indicated on the maps for each Outer Continental Shelf 
region entitled ‘Alaska OCS Region State Adjacent Zone 
and OCS Planning Areas’, ‘Pacific OCS Region State Ad-
jacent Zones and OCS Planning Areas’, ‘Gulf of Mexico 
OCS Region State Adjacent Zones and OCS Planning 
Areas’, and ‘Atlantic OCS Region State Adjacent Zones 
and OCS Planning Areas’, all of which are dated Sep-
tember 2005 and on file in the Office of the Director, Min-
erals Management Service. The preceding sentence shall 
not apply with respect to the treatment under section 105 
of the Gulf of Mexico Energy Security Act of 2006 (title 
I of division C of Public Law 109–432) of qualified outer 
Continental Shelf revenues deposited and disbursed under 
subsection (a)(2) of that section.’’. 
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SEC. 104. POLICIES REGARDING BUYING AND BUILDING 
AMERICAN. 
(a) INTENT OF CONGRESS.—It is the intent of the 
Congress that this Act, among other things, result in a 
healthy and growing American industrial, manufacturing, 
transportation, and service sector employing the vast tal-
ents of America’s workforce to assist in the development 
of energy from domestic sources. Moreover, the Congress 
intends to monitor the deployment of personnel and mate-
rial onshore and offshore to encourage the development 
of American technology and manufacturing to enable 
United States workers to benefit from this Act by good 
jobs and careers, as well as the establishment of important 
industrial facilities to support expanded access to Amer-
ican resources. 
(b) SAFEGUARD FOR EXTRAORDINARY ABILITY.— 
Section 30(a) of the Outer Continental Shelf Lands Act 
(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, 
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arts, education, or business, which has been demonstrated 
by sustained national or international acclaim, and that’’. 
SEC. 105. 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). 
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TITLE 
II—CLEANER 
ENERGY 
PRODUCTION 
AND 
ENERGY 
CONSERVATION INCENTIVES 
SEC. 201. EXTENSION OF RENEWABLE ENERGY CREDIT. 
Each of the following provisions of section 45(d) of 
the Internal Revenue Code of 1986 (relating to qualified 
facilities) is amended by striking ‘‘January 1, 2009’’ and 
inserting ‘‘January 1, 2013’’: 
(1) Paragraph (1) (relating to wind facility). 
(2) Clauses (i) and (ii) of paragraph (2)(A) (re-
lating to closed-loop biomass facility). 
(3) Clauses (i)(I) and (ii) of paragraph (3)(A) 
(relating to (open-loop biomass facility). 
(4) Paragraph (4) (relating to geothermal en-
ergy facility). 
(5) Paragraph (5) (relating to small irrigation 
power facility). 
(6) Paragraph (6) (relating to landfill gas facili-
ties). 
(7) Paragraph (7) (relating to trash combustion 
facilities). 
(8) Paragraph (8) (relating to refined coal pro-
duction facility). 
(9) Subparagraphs (A) and (B) of paragraph 
(9) (relating to qualified hydropower facility). 
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SEC. 202. EXTENSION OF CREDIT FOR ALTERNATIVE FUEL 
VEHICLES. 
Paragraphs (2), (3), and (4) of section 30B(j) of the 
Internal Revenue Code of 1986 are each amended by 
striking the date therein and inserting ‘‘December 31, 
2014’’. 
SEC. 203. EXTENSION OF ALTERNATIVE FUEL VEHICLE RE-
FUELING PROPERTY CREDIT. 
(a) IN GENERAL.—Paragraph (2) of section 30C(g) 
of such Code (relating to termination) is amended by 
striking ‘‘December 31, 2009’’ and inserting ‘‘December 
31, 2010’’. 
(b) ALTERNATIVE FUELS.—Paragraph (1) of section 
30C(g) of the Internal Revenue Code of 1986 is amended 
by striking ‘‘hydrogen,’’ inserting ‘‘hydrogen or alternative 
fuels (as defined in section 30B(e)(4)(B)).’’. 
SEC. 204. EXTENSION OF CREDIT FOR ENERGY EFFICIENT 
APPLIANCES. 
(a) IN GENERAL.—Subsection (b) of section 45M of 
the Internal Revenue Code of 1986 (relating to applicable 
amount) is amended by striking ‘‘calendar year 2006 or 
2007’’ each place it appears in paragraphs (1)(A)(i), 
1(1)(B)(i), (1)(C)(ii)(I), and (1)(C)(iii)(I), and inserting 
‘‘calendar year 2006, 2007, 2008, 2009, 2010, 2011, 
2012, or 2013’’. 
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SEC. 210. EXTENSION OF CREDIT FOR CLEAN RENEWABLE 
ENERGY BONDS. 
(a) EXTENSION.—Section 54(m) of the Internal Rev-
enue Code of 1986 (relating to termination) is amended 
by striking ‘‘December 31, 2008’’ and inserting ‘‘Decem-
ber 31, 2013’’. 
SEC. 211. EXTENSION OF CREDITS FOR BIODIESEL AND RE-
NEWABLE DIESEL. 
(a) IN GENERAL.—Sections 40A(g), 6426(c)(6), and 
6427(e)(5)(B) of the Internal Revenue Code of 1986 are 
each amended by striking ‘‘December 31, 2008’’ and in-
serting ‘‘December 31, 2013’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to fuel produced, and sold or used, 
after December 31, 2008. 
SEC. 212. CREDIT FOR PLUG-IN HYBRID VEHICLES. 
(a) IN GENERAL.—Subpart B of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 (relating to other credits) is amended by adding at 
the end the following new section: 
‘‘SEC. 30D. PLUG-IN HYBRID VEHICLES. 
‘‘(a) ALLOWANCE OF CREDIT.—There shall be al-
lowed as a credit against the tax imposed by this chapter 
for the taxable year an amount equal to the sum of the 
credit amounts determined under subsection (b) with re-
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spect to each qualified plug-in hybrid vehicle placed in 
service by the taxpayer during the taxable year. 
‘‘(b) PER VEHICLE DOLLAR LIMITATION.— 
‘‘(1) IN
GENERAL.—The amount determined 
under this subsection with respect to any qualified 
plug-in hybrid vehicle is the sum of the amounts de-
termined under paragraphs (2) and (3) with respect 
to such vehicle. 
‘‘(2) BASE AMOUNT.—The amount determined 
under this paragraph is $4,000. 
‘‘(3) BATTERY CAPACITY.—In the case of vehi-
cle which draws propulsion energy from a battery 
with not less than 5 kilowatt hours of capacity, the 
amount determined under this paragraph is $200, 
plus $200 for each kilowatt hour of capacity in ex-
cess of 5 kilowatt hours. The amount determined 
under this paragraph shall not exceed $2,000. 
‘‘(c) APPLICATION WITH OTHER CREDITS.— 
‘‘(1) BUSINESS CREDIT TREATED AS PART OF 
GENERAL BUSINESS CREDIT.—So much of the credit 
which would be allowed under subsection (a) for any 
taxable year (determined without regard to this sub-
section) that is attributable to property of a char-
acter subject to an allowance for depreciation shall 
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be treated as a credit listed in section 38(b) for such 
taxable year (and not allowed under subsection (a)). 
‘‘(2) PERSONAL CREDIT.— 
‘‘(A) IN GENERAL.—For purposes of this 
title, the credit allowed under subsection (a) for 
any taxable year (determined after application 
of paragraph (1)) shall be treated as a credit 
allowable under subpart A for such taxable 
year. 
‘‘(B) LIMITATION BASED ON AMOUNT OF 
TAX.—In the case of a taxable year to which 
section 26(a)(2) does not apply, the credit al-
lowed under subsection (a) for any taxable year 
(determined after application of paragraph (1)) 
shall not exceed the excess of— 
‘‘(i) the sum of the regular tax liabil-
ity (as defined in section 26(b)) plus the 
tax imposed by section 55, over 
‘‘(ii) the sum of the credits allowable 
under subpart A (other than this section 
and sections 23 and 25D) and section 27 
for the taxable year. 
‘‘(d) QUALIFIED PLUG-IN HYBRID VEHICLE.—For 
purposes of this section— 
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‘‘(1) IN GENERAL.—The term ‘qualified plug-in 
hybrid vehicle’ means a motor vehicle (as defined in 
section 30(c)(2))— 
‘‘(A) the original use of which commences 
with the taxpayer, 
‘‘(B) which is acquired for use or lease by 
the taxpayer and not for resale, 
‘‘(C) which is made by a manufacturer, 
‘‘(D) which has a gross vehicle weight rat-
ing of less than 14,000 pounds, 
‘‘(E) which has received a certificate of 
conformity under the Clean Air Act and meets 
or exceeds the Bin 5 Tier II emission standard 
established in regulations prescribed by the Ad-
ministrator of the Environmental Protection 
Agency under section 202(i) of the Clean Air 
Act for that make and model year vehicle, 
‘‘(F) which is propelled to a significant ex-
tent by an electric motor which draws electricity 
from a battery which— 
‘‘(i) has a capacity of not less than 4 
kilowatt hours, and 
‘‘(ii) is capable of being recharged 
from an external source of electricity, and 
‘‘(G) which either— 
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‘‘(i) is also propelled to a significant 
extent by other than an electric motor, or 
‘‘(ii) has a significant onboard source 
of electricity which also recharges the bat-
tery referred to in subparagraph (F). 
‘‘(2) EXCEPTION.—The term ‘qualified plug-in 
hybrid vehicle’ shall not include any vehicle which is 
not a passenger automobile or light truck if such ve-
hicle has a gross vehicle weight rating of less than 
8,500 pounds. 
‘‘(3) OTHER
TERMS.—The terms ‘passenger 
automobile’, ‘light truck’, and ‘manufacturer’ have 
the meanings given such terms in regulations pre-
scribed by the Administrator of the Environmental 
Protection Agency for purposes of the administra-
tion of title II of the Clean Air Act (42 U.S.C. 7521 
et seq.). 
‘‘(4) BATTERY CAPACITY.—The term ‘capacity’ 
means, with respect to any battery, the quantity of 
electricity which the battery is capable of storing, ex-
pressed in kilowatt hours, as measured from a 100 
percent state of charge to a 0 percent state of 
charge. 
‘‘(e) SPECIAL RULES.— 
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‘‘(1) BASIS
REDUCTION.—The basis of any 
property for which a credit is allowable under sub-
section (a) shall be reduced by the amount of such 
credit (determined without regard to subsection (c)). 
‘‘(2) RECAPTURE.—The Secretary shall, by reg-
ulations, provide for recapturing the benefit of any 
credit allowable under subsection (a) with respect to 
any property which ceases to be property eligible for 
such credit. 
‘‘(3) 
PROPERTY
USED
OUTSIDE
UNITED 
STATES, ETC., NOT QUALIFIED.—No credit shall be 
allowed under subsection (a) with respect to any 
property referred to in section 50(b)(1) or with re-
spect to the portion of the cost of any property 
taken into account under section 179. 
‘‘(4) ELECTION
NOT
TO
TAKE
CREDIT.—No 
credit shall be allowed under subsection (a) for any 
vehicle if the taxpayer elects to not have this section 
apply to such vehicle. 
‘‘(5) PROPERTY USED BY TAX-EXEMPT ENTITY; 
INTERACTION WITH AIR QUALITY AND MOTOR VEHI-
CLE SAFETY STANDARDS.—Rules similar to the rules 
of paragraphs (6) and (10) of section 30B(h) shall 
apply for purposes of this section.’’. 
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TITLE 
III—MODIFYING 
THE 
STRATEGIC PETROLEUM RE-
SERVE AND FUNDING CON-
SERVATION AND ENERGY RE-
SEARCH AND DEVELOPMENT 
SEC. 301. FINDINGS. 
Congress finds the following: 
(1) The Strategic Petroleum Reserve (SPR) 
was created by Congress in 1975, to protect the Na-
tion from any future oil supply disruptions. When 
the program was established, United States refiners 
were capable of handling light and medium crude 
and the make up of the SPR matched this capacity. 
This is not the case today. 
(2) A GAO analysis found that nearly half of 
the refineries considered vulnerable to supply disrup-
tions are not compatible with the types of oil cur-
rently stored in the SPR and would be unable to 
maintain normal refining capacity if forced to rely 
on SPR oil as currently constituted, thereby reduc-
ing the effectiveness of the SPR in the event of a 
supply disruption. GAO concluded that the SPR 
should be comprised of at least 10 percent heavy 
crude. 
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(3) This Act implements the GAO recommenda-
tion and dedicates funds received from the trans-
actions to existing energy conservation, research, 
and assistance programs. 
SEC. 302. DEFINITIONS. 
In this title— 
(1) the term ‘‘light grade petroleum’’ means 
crude oil with an API gravity of 35 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. 303. OBJECTIVES. 
The objectives of this title are as follows: 
(1) To modernize the composition of the Stra-
tegic Petroleum Reserve to reflect the current proc-
essing capabilities of refineries in the United States. 
(2) To provide increased funding to accelerate 
conservation, energy research and development, and 
assistance through existing programs. 
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SEC. 304. MODIFICATION OF THE STRATEGIC PETROLEUM 
RESERVE. 
Notwithstanding section 161 of the Energy Policy 
and Conservation Act (42 U.S.C. 6241), the Secretary 
shall publish a plan not later than 30 days after the date 
of enactment of this Act to— 
(1) exchange as soon as possible light grade pe-
troleum from the Strategic Petroleum Reserve, in an 
amount equal to 10 percent of the total number of 
barrels of crude oil in the Reserve as of the date of 
enactment of this Act, for an equivalent volume of 
heavy grade petroleum plus any additional cash 
bonus bids received that reflect the difference in the 
market value between light grade petroleum and 
heavy grade petroleum and the timing of deliveries 
of the heavy grade petroleum; 
(2) from the gross proceeds of the cash bonus 
bids, deposit the amount necessary to pay for the di-
rect administrative and operational costs of the ex-
change into the SPR Petroleum Account established 
under section 167 of the Energy Policy and Con-
servation Act (42 U.S.C. 6247); and 
(3) deposit 90 percent of the remaining net pro-
ceeds from the exchange into the account established 
under section 305(a). 
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SEC. 305. ENERGY INDEPENDENCE AND SECURITY FUND. 
(a) ESTABLISHMENT.—There is hereby established in 
the Treasury of the United States the ‘‘Energy Independ-
ence and Security Fund’’ (in this section referred to as 
the ‘‘Fund’’). 
(b) ADMINISTRATION.—The Secretary shall be re-
sponsible for administering the Fund for the purpose of 
carrying out this section. 
(c) DEPOSITS.—The Secretary shall transfer the bal-
ance of funds in the SPR Petroleum Account on the date 
of enactment of this Act in excess of $10,000,000 into 
the Fund. 
(d) DISTRIBUTION OF FUNDS.—The Secretary shall 
make available for obligation, without further appropria-
tion and without fiscal year limitation, the following 
amounts from the Fund: 
(1) ADVANCED RESEARCH PROJECTS AGENCY— 
ENERGY.—The 
Secretary 
shall 
transfer 
$100,000,000 to the account ‘‘Energy Trans-
formation Acceleration Fund’’, established under 
section 5012(m) of the America COMPETES Act 
(42 U.S.C. 16538(m)), to remain available until ex-
pended. Of the funds so transferred, the Secretary 
shall further allocate the amounts made available for 
obligation as follows: 
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(A) $50,000,000 shall be available for uni-
versity-based research projects. 
(B) $10,000,000 shall be available for pro-
gram direction expenses. 
(2) WIND ENERGY RESEARCH AND DEVELOP-
MENT.—The Secretary shall transfer $15,000,000 to 
the account ‘‘Energy Efficiency and Renewable En-
ergy’’, to remain available until expended, for nec-
essary expenses for a program to support the devel-
opment of next-generation wind turbines, including 
turbines capable of operating in areas with low wind 
speeds, as authorized in section 931(a)(2)(B) of the 
Energy 
Policy 
Act 
of 
2005 
(42 
U.S.C. 
16231(a)(2)(B)). 
(3) SOLAR ENERGY RESEARCH AND DEVELOP-
MENT.—The Secretary shall transfer $30,000,000 to 
the account ‘‘Energy Efficiency and Renewable En-
ergy’’, to remain available until expended, for nec-
essary expenses for a program to accelerate the re-
search, development, demonstration, and deployment 
of solar energy technologies, and public education 
and outreach materials pursuant to such program, 
as authorized by section 931(a)(2)(A) of the Energy 
Policy Act of 2005 (42 U.S.C. 16231(a)(2)(A)). 
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(4) 
LOW
INCOME
WEATHERIZATION
AND 
LIHEAP.—The 
Secretary 
shall 
transfer 
$100,000,000 to the account ‘‘Weatherization As-
sistance Program’’, to remain available until ex-
pended, for necessary expenses for a program to 
weatherize low income housing, as authorized by sec-
tion 411 of the Energy Independence and Security 
Act of 2007 (Public Law 110–140). The Secretary 
shall transfer $100,000,000 to the Secretary of 
Health and Human Services for distribution to 
States under section 2604(a) through (d) of the 
Low-Income Home Energy Assistance Act of 1981 
(42 U.S.C. 8623(a)–(d)). 
(5) MARINE AND HYDROKINETIC RENEWABLE 
ELECTRIC
ENERGY.—The Secretary shall transfer 
$30,000,000 to the account ‘‘Energy Efficiency and 
Renewable Energy’’, to remain available until ex-
pended, for necessary expenses for a program to ac-
celerate the research, development, demonstration, 
and deployment of ocean and wave energy, including 
hydrokinetic renewable energy, as authorized by sec-
tion 931 of the Energy Policy Act of 2005 (42 
U.S.C. 16231) and section 636 of the Energy Inde-
pendence and Security Act of 2007 (42 U.S.C. 
17215). 
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(6) ADVANCED VEHICLES RESEARCH, DEVELOP-
MENT, AND DEMONSTRATION.—The Secretary shall 
transfer $40,000,000 to the account ‘‘Energy Effi-
ciency and Renewable Energy’’, to remain available 
until expended, for necessary expenses for research, 
development, and demonstration on advanced, cost- 
effective technologies to improve the energy effi-
ciency and environmental performance of vehicles, as 
authorized in section 911(a)(2)(A) of the Energy 
Policy Act of 2005 (42 U.S.C. 16191(a)(2)(A)). 
(7) INDUSTRIAL
ENERGY
EFFICIENCY
RE-
SEARCH AND DEVELOPMENT.—The Secretary shall 
transfer $110,000,000 to the account ‘‘Energy Effi-
ciency and Renewable Energy’’, to remain available 
until expended, for necessary expenses for a program 
to accelerate the research, development, demonstra-
tion, and deployment of new technologies to improve 
the energy efficiency and reduce greenhouse gas 
emissions from industrial processes, as authorized in 
section 911(a)(2)(C) of the Energy Policy Act of 
2005 (42 U.S.C. 16191(a)(2)(C)) and in section 452 
of the Energy Independence and Security Act of 
2007 (42 U.S.C. 17111). 
(8) BUILDING
AND
LIGHTING
ENERGY
EFFI-
CIENCY RESEARCH AND DEVELOPMENT.—The Sec-
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retary shall transfer $70,000,000 to the account 
‘‘Energy Efficiency and Renewable Energy’’, to re-
main available until expended, for necessary ex-
penses for a program to accelerate the research, de-
velopment, demonstration, and deployment of new 
technologies to improve the energy efficiency of and 
reduce greenhouse gas emissions from buildings, as 
authorized in section 321(g) of the Energy Inde-
pendence and Security Act of 2007 (42 U.S.C. 6295 
note), section 422 of the Energy Independence and 
Security Act of 2007 (42 U.S.C. 17082), and section 
912 of the Energy Policy Act of 2005 (42 U.S.C. 
16192). 
(9) GEOTHERMAL
ENERGY
DEVELOPMENT.— 
The Secretary shall transfer $30,000,000 to the ac-
count ‘‘Energy Efficiency and Renewable Energy’’, 
to remain available until expended, for necessary ex-
penses for geothermal research and development ac-
tivities to be managed by the National Renewable 
Energy Laboratory, as authorized by sections 613, 
614, 615, and 616 of the Energy Independence and 
Security Act of 2007 (42 U.S.C. 17192–95) and sec-
tion 931(a)(2)(C) of the Energy Policy Act of 2005 
(42 U.S.C. 16231(a)(2)(C)). 
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(10) SMART GRID TECHNOLOGY RESEARCH, DE-
VELOPMENT, AND DEMONSTRATION.—The Secretary 
shall transfer $30,000,000 to the account ‘‘Energy 
Efficiency and Renewable Energy’’, to remain avail-
able until expended, for necessary expenses for re-
search, development, and demonstration of smart 
grid technologies, as authorized by section 1304 of 
the Energy Independence and Security Act of 2007 
(42 U.S.C. 17384). 
(11) CARBON
CAPTURE
AND
STORAGE.—The 
Secretary shall transfer $385,000,000 to the account 
‘‘Fossil Energy Research and Development’’, to re-
main available until expended, for necessary ex-
penses for a program of demonstration projects of 
carbon capture and storage, and for a research pro-
gram to address public health, safety, and environ-
mental impacts, as authorized by section 963 of the 
Energy Policy Act of 2005 (42 U.S.C. 16293) and 
sections 703 and 707 of the Energy Independence 
and Security Act of 2007 (42 U.S.C. 17251, 
17255). 
(12) NONCONVENTIONAL
DOMESTIC
NATURAL 
GAS
PRODUCTION
AND
ENVIRONMENTAL
RE-
SEARCH.— 
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(A) 
The 
Secretary 
shall 
transfer 
$50,000,000 to the account authorized by sec-
tion 999H(e) of the Energy Policy Act of 2005 
(42 U.S.C. 16378(e)), to remain available until 
expended. 
(B) 
The 
Secretary 
shall 
transfer 
$15,000,000 to the account ‘‘Fossil Energy Re-
search and Development’’, to remain available 
until expended, for necessary expenses for a 
program of basin-oriented assessments and pub-
lic and private partnerships involving States 
and industry to foster the development of re-
gional advanced technological, regulatory, and 
economic development strategies for the effi-
cient and environmentally sustainable recovery 
and market delivery of natural gas and domes-
tic petroleum resources within the United 
States, and for support for the Stripper Well 
Consortium. 
(13) HYDROGEN
RESEARCH
AND
DEVELOP-
MENT.—The Secretary shall transfer $5,000,000 to 
the account ‘‘Energy Efficiency and Renewable En-
ergy’’, to remain available until expended, for nec-
essary expenses for the Department of Energy’s H– 
Prize Program, as authorized by section 1008(f) of 
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the Energy Policy Act of 2005 (42 U.S.C. 
16396(f)). 
(14) ENERGY STORAGE FOR TRANSPORTATION 
AND ELECTRIC POWER.— 
(A) 
The 
Secretary 
shall 
transfer 
$30,000,000 to the account ‘‘Basic Energy 
Sciences’’, to remain available until expended, 
for necessary expenses for a program to accel-
erate basic research on energy storage systems 
to support electric drive vehicles, stationary ap-
plications, and electricity transmission and dis-
tribution, as authorized by section 641(p)(1) of 
the Energy Independence and Security Act of 
2007 (42 U.S.C. 17231(p)(1)). 
(B) 
The 
Secretary 
shall 
transfer 
$70,000,000 to the account ‘‘Energy Efficiency 
and Renewable Energy’’, to remain available 
until expended, including— 
(i) $30,000,000 for a program to ac-
celerate applied research on energy storage 
systems to support electric drive vehicles, 
stationary 
applications, 
and 
electricity 
transmission and distribution as authorized 
by section 641(p)(2) of the Energy Inde-
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pendence and Security Act of 2007 (42 
U.S.C. 17231(p)(2)); 
(ii) $20,000,000 for energy storage 
systems demonstrations as authorized by 
section 641(p)(4) of the Energy Independ-
ence and Security Act of 2007 (42 U.S.C. 
17231(p)(4)); and 
(iii) $20,000,000 for vehicle energy 
storage systems demonstrations as author-
ized by section 641(p)(5) of the Energy 
Independence and Security Act of 2007 
(42 U.S.C. 17231(p)(5)). 
(e) TRANSFER PROCEDURES.—The Secretary shall 
make an initial transfer from the Fund no later than 30 
days after the initial deposit of monies into the Fund. The 
Secretary shall make additional transfers no later than 30 
days after subsequent deposits. If the amount available to 
be transferred is less than the levels authorized under sub-
section (d), the transfers for each program shall be allo-
cated on a pro rata basis. If the amount available to be 
transferred exceeds the levels authorized under subsection 
(d), the transfers for each program shall be increased on 
a pro rata basis. 
(f) MANAGEMENT AND OVERSIGHT.— 
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(1) ADDITIONALITY
OF
FISCAL
YEAR
2008 
TRANSFERS.—All amounts transferred under sub-
section (d) shall be in addition to, and shall not be 
substituted for, any funds appropriated for the same 
or similar purposes in the Consolidated Appropria-
tions Act, 2008. 
(2) EXCESS FUNDS.—The total of all amounts 
transferred under subsection (d) and any funds ap-
propriated for the same or similar purposes in the 
Consolidated Appropriations Act, 2008 may not ex-
ceed the amounts authorized in other Acts for such 
purposes. In the event that amounts made available 
under this title plus amounts under the Consolidated 
Appropriations Act, 2008 exceed the cumulative 
amounts authorized in other Acts for any program 
funded by this Act, the excess amounts shall be dis-
tributed to the other programs funded by this title 
on a pro rata basis. 
(3) PROGRAM PLANS AND PERFORMANCE MEAS-
URES.—The Secretary shall prepare and publish in 
the Federal Register a plan for the proposed use of 
all funds authorized in subsection (d). The plan also 
shall identify how the use of these funds will be ad-
ditive to, and not displace, annual appropriations. 
The plans also shall identify performance measures 
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to assess the additional benefits that may be realized 
from the application of the additional funding pro-
vided under this section. The initial plan shall be 
published in the Federal Register not later than 45 
days after the date of enactment of this Act. 
(4) CONGRESSIONAL
OVERSIGHT
AND
RE-
VIEW.—Nothing in this section shall limit or restrict 
the review and oversight of program plans by the ap-
propriate committees of Congress. Nothing in this 
section shall limit or restrict the authority of Con-
gress to set alternative spending limitations in an-
nual appropriations Acts. 
(5) APPORTIONMENT.—All transactions of the 
Fund shall be exempt from apportionment under the 
provisions of subchapter II of chapter 15 of title 31, 
United States Code. 
Æ 
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