[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 670 Introduced in House (IH)]
110th CONGRESS
1st Session
H. R. 670
To promote the national security and stability of the United States
economy by reducing the dependence of the United States on foreign oil
through the use of alternative fuels and new vehicle technologies, and
for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
January 24, 2007
Mr. Engel (for himself, Mr. Kingston, Mr. Inslee, Mr. Saxton, Ms.
Eshoo, Mrs. Bono, Mr. Wynn, Mr. Terry, Ms. Harman, Mr. Rogers of
Alabama, Ms. Schakowsky, Mr. Bartlett of Maryland, Mr. Udall of
Colorado, Mr. Inglis of South Carolina, Mr. Ross, Mr. Campbell of
California, Mr. Weiner, Mr. Gilchrest, Mr. Towns, Mr. Souder, Mr.
DeFazio, Mr. Gerlach, Mr. Bishop of New York, Mr. Renzi, Mr. Israel,
Mr. Everett, Mr. Hall of New York, Mr. LoBiondo, Ms. Matsui, Mr.
McCotter, Mrs. Lowey, Mr. Linder, Mr. Kuhl of New York, Mr. Hinchey,
Mr. Westmoreland, Mr. Berman, Mr. Gingrey, Mr. Ackerman, Mr. Andrews,
Mr. Arcuri, Ms. Berkley, Mr. Bishop of Georgia, Mr. Cohen, Mr. Cleaver,
Ms. Giffords, Mrs. Gillibrand, Mr. Honda, Mr. Kind, Mr. Klein of
Florida, Mr. Lipinski, Mr. McNulty, Ms. McCollum of Minnesota, Mr.
Moore of Kansas, Mr. Moran of Virginia, Mrs. Napolitano, Mr. Price of
North Carolina, Ms. Schwartz, Mr. Rothman, Mr. Ruppersberger, Mr.
Schiff, Mr. Burton of Indiana, Mr. Scott of Georgia, Mr. Platts, Mr.
Sherman, Mr. Wexler, Mr. Price of Georgia, Mr. Lincoln Davis of
Tennessee, and Mr. Lantos) introduced the following bill; which was
referred to the Committee on Energy and Commerce, and in addition to
the Committees on Science and Technology, Ways and Means,
Transportation and Infrastructure, and Oversight and Government Reform,
for a period to be subsequently determined by the Speaker, in each case
for consideration of such provisions as fall within the jurisdiction of
the committee concerned
_______________________________________________________________________
A BILL
To promote the national security and stability of the United States
economy by reducing the dependence of the United States on foreign oil
through the use of alternative fuels and new vehicle technologies, and
for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Dependence
Reduction through Innovation in Vehicles and Energy Act'' or the
``DRIVE Act''.
(b) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Findings and purposes.
TITLE I--OIL SAVINGS ACTION PLAN AND REQUIREMENTS
Sec. 101. Oil savings target and action plan.
Sec. 102. Standards and requirements.
Sec. 103. Evaluation.
Sec. 104. Review and update of action plan.
Sec. 105. Baseline and analysis requirements.
Sec. 106. Review and scoring of Federal actions related to oil savings
action plan.
Sec. 107. Federal Government oil usage audit.
Sec. 108. Nationwide media campaign to decrease oil consumption.
TITLE II--FUEL EFFICIENT VEHICLES FOR THE 21ST CENTURY
Sec. 201. Tire efficiency program.
Sec. 202. Reduction of school bus idling.
Sec. 203. Fuel efficiency for heavy duty trucks.
Sec. 204. Lightweight materials research and development.
Sec. 205. Hybrid and advanced diesel vehicles.
Sec. 206. Advanced technology motor vehicles manufacturing credit.
Sec. 207. Consumer incentives to purchase advanced technology vehicles.
Sec. 208. Federal fleet requirements.
Sec. 209. Tax incentives for private fleets.
Sec. 210. Reducing incentives to guzzle gas.
Sec. 211. Fuel Choice for Transportation.
Sec. 212. Flexible fuel vehicle economy calculations.
TITLE III--FUEL CHOICES FOR THE 21ST CENTURY
Sec. 301. Fuel Choice action plan.
Sec. 302. Ethanol action plan.
Sec. 303. Fuel neutrality for alternative fuel vehicle refueling
property credit.
Sec. 304. Alternative fuel vehicle refueling property.
Sec. 305. Use of CAFE penalties to build alternative fueling
infrastructure.
Sec. 306. Cellulosic biomass fuel.
Sec. 307. Production incentives for cellulosic biofuels.
Sec. 308. Transit-Oriented Development Corridors.
Sec. 309. Saving oil by reducing miles-of-travel: Pilot projects.
Sec. 310. Saving oil by reducing vehicle-miles-of-travel: Research and
development.
Sec. 311. Biofuels.
TITLE IV--ELECTRICITY FOR TRANSPORTATION
Sec. 401. Near-term vehicle technology program.
Sec. 402. Amendments to Alternative Motor Vehicle Credit.
Sec. 403. Idling Reduction Tax Credit.
Sec. 404. Plug-in Hybrid Electric Vehicle Prize.
SEC. 2. FINDINGS AND PURPOSES.
(a) Findings.--Congress finds that--
(1) the United States is dangerously dependent on oil;
(2) that dependence threatens the national security,
weakens the economy, and harms the environment of the United
States;
(3) the United States currently imports nearly 60 percent
of oil needed in the United States, and that percentage is
expected to grow to almost 70 percent by 2025 if no actions are
taken;
(4) approximately 2,500,000 barrels of oil per day are
imported from countries in the Persian Gulf region;
(5) that dependence on foreign oil undermines the war on
terror by financing both sides of the war;
(6) in 2004 alone, the United States sent $103,000,000,000
to undemocratic countries, some of which use revenues to
support terrorism and spread ideology hostile to the United
States, as documented by the Council on Foreign Relations;
(7) terrorists have identified oil as a strategic
vulnerability and have increased attacks against oil
infrastructure worldwide;
(8) the International Energy Agency in its World Outlook
2006 report projected that ``non-OPEC conventional crude oil
output peaks by the middle of the next decade...trends would
accentuate consuming countries' vulnerability to a severe
supply disruption and resulting price shock'' and recommended
that ``strong policy action is needed to move the world onto a
more sustainable energy path'';
(9) oil imports comprise nearly 30 percent of the
dangerously high United States trade deficit;
(10) it is technically feasible to achieve oil savings of
more than 2,500,000 barrels per day by 2015 and 5,000,000
barrels per day by 2025;
(11) those goals can be achieved by establishing a set of
flexible policies, including--
(A) increasing the gasoline-efficiency of cars,
trucks, tires, and oil;
(B) providing economic incentives for companies and
consumers to produce and purchase 21st Century fuel
efficient and flexible fuel vehicles;
(C) encouraging the use of transit and the
reduction of truck and bus idling;
(D) increasing production and commercialization of
alternative liquid fuels;
(E) increasing the efficiency of current oil based
fuels with combustion enhancers and other advanced
technology; and
(F) increasing the use of electricity as a
transportation fuel;
(12) vehicle technology available as of the date of
enactment of this Act (including popular hybrid-electric
vehicle models, the sales of which in the United States
increased 173 percent in the first 5 months of 2005 as compared
with the same period in 2004) make an oil savings plan
eminently achievable;
(13) alternative and renewable liquid transportation fuels
are already available (including corn and sugar based ethanol,
biodiesel, methanol, and diesel fuels derived from coal) to
make such an oil savings and fuel choice plan eminently
achievable;
(14) achieving those goals will benefit consumers and
businesses through lower fuel bills and reduction in world oil
prices;
(15) achieving those goals will help protect the economy of
the United States from high and volatile oil prices and from
the threats caused by global instability, terrorism, and
natural disaster; and
(16) it is urgent, essential, and feasible to implement an
action plan to achieve oil savings as soon as practicable
because any delay in initiating action will--
(A) make achieving necessary oil savings more
difficult and expensive;
(B) increase the risks to the national security,
economy, and environment of the United States; and
(C) leave the American people and economy
vulnerable to the threats posed by terrorism, natural
disaster, political instability, and the shrinking
ability of global oil supplies to meet rapidly
expanding oil demands.
(b) Purposes.--The purposes of this Act are--
(1) to accelerate market penetration of flexible fuel,
electric drive, and alternative motor vehicles;
(2) to enable the accelerated market penetration of
efficient technologies and alternative fuels without adverse
impact on air quality while maintaining a policy of fuel
neutrality, so as to allow market forces to elect the
technologies and fuels that are consumer-friendly, safe,
environmentally-sound, and economic;
(3) to provide time-limited financial incentives to
encourage production and consumer purchase of oil saving
technologies and fuels nationwide;
(4) to promote a nationwide diversity of motor vehicle
fuels and advanced motor vehicle technology, including advanced
lean burn technology, hybrid technology, flexible fuel motor
vehicles, alternatively fueled motor vehicles, and other oil
saving technologies; and
(5) to decrease American dependence on imported oil.
TITLE I--OIL SAVINGS ACTION PLAN AND REQUIREMENTS
SEC. 101. OIL SAVINGS TARGET AND ACTION PLAN.
Not later than 270 days after the date of enactment of this Act,
the Director of the Office of Management and Budget (referred to in
this title as the ``Director'') shall publish in the Federal Register
an action plan consisting of--
(1) a list of requirements proposed or to be proposed
pursuant to section 102 that are authorized to be issued under
law in effect on the date of enactment of this Act, and this
Act, that will be sufficient, when taken together, to save from
the baseline determined under section 105--
(A) 2,500,000 barrels of oil per day on average
during calendar year 2015; and
(B) 5,000,000 barrels of oil per day on average
during calendar year 2025; and
(2) a Federal Government-wide analysis demonstrating--
(A) the expected oil savings from the baseline to
be accomplished by each requirement; and
(B) that all such requirements, taken together,
will achieve the oil savings specified in this section.
SEC. 102. STANDARDS AND REQUIREMENTS.
(a) In General.--On or before the date by which publication of the
action plan is required under section 101, the Secretary of Energy, the
Secretary of Transportation, the Secretary of Defense, the Secretary of
Agriculture, the Administrator of the Environmental Protection Agency,
and the head of any other agency authorized to take an action listed in
the action plan shall each propose, or issue a notice of intent to
propose, regulations establishing each standard or other requirement
listed in the action plan that is under the jurisdiction of the
respective agency using authorities described in subsection (b). If a
notice of intent to propose is issued, the head of the responsible
agency shall propose such regulations not later than 330 days after the
date of enactment of this Act.
(b) Authorities.--The head of each agency described in subsection
(a) shall use to carry out this section--
(1) any authority in existence on the date of enactment of
this Act (including regulations); and
(2) any new authority provided under this Act (including an
amendment made by this Act).
(c) Final Regulations.--Not later than 18 months after the date of
enactment of this Act, the head of each agency described in subsection
(a) shall promulgate final versions of the regulations required under
this section.
(d) Content of Regulations.--Each proposed and final regulation
promulgated under this section shall--
(1) be sufficient to achieve at least the oil savings
resulting from the regulation under the action plan published
under section 101; and
(2) be accompanied by an analysis by the applicable agency
demonstrating that the regulation will achieve such oil
savings, as measured from the baseline determined under section
105.
SEC. 103. EVALUATION.
(a) In General.--Not later than 2 years after the date of enactment
of this Act, and after an opportunity for public comment, the Director
shall publish in the Federal Register a Federal Government-wide
analysis of the oil savings achieved and the expected oil savings under
the standards and requirements established under this Act and the
amendments made by this Act from the baseline established under section
105, and a determination whether such oil savings will meet the targets
established under section 101.
(b) Inadequate Oil Savings.--If the oil savings are less than the
targets established under section 101, simultaneously with the analysis
required under subsection (a)--
(1) the Director shall publish a revised action plan that
is sufficient to achieve the targets; and
(2) the head of each agency referred to in section 102(a)
shall propose new or revised regulations sufficient to achieve
such targets under section 102(a).
(c) Final Regulations.--Not later than 180 days after the date on
which regulations are proposed under subsection (b)(2), the head of
each agency shall promulgate final versions of those regulations that
comply with section 102(d).
SEC. 104. REVIEW AND UPDATE OF ACTION PLAN.
(a) Review.--Not later than January 1, 2011, and every 3 years
thereafter, the Director shall publish a report that--
(1) evaluates the progress achieved in implementing the oil
savings targets established under section 101;
(2) analyzes the expected oil savings under the standards
and requirements established under this Act and the amendments
made by this Act; and
(3)(A) analyzes the potential to achieve oil savings that
are in addition to the savings required by section 101; and
(B) if the President determines that it is in the national
interest, establishes a higher oil savings target for calendar
year 2017 or any subsequent calendar year.
(b) Inadequate Oil Savings.--If the oil savings are less than the
targets established under section 101, simultaneously with the report
required under subsection (a)--
(1) the Director shall publish a revised action plan that
is sufficient to achieve the targets; and
(2) the head of each agency referred to in section 102(a)
shall propose new or revised regulations sufficient to achieve
such targets under section 102(a).
(c) Final Regulations.--Not later than 180 days after the date on
which regulations are proposed under subsection (b)(2), the head of
each agency referred to in section 102(a) shall promulgate final
versions of those regulations that comply with section 102(d).
SEC. 105. BASELINE AND ANALYSIS REQUIREMENTS.
In performing the analyses and promulgating proposed or final
regulations to establish standards and other requirements necessary to
achieve the oil savings required by this title, the Director, the
Secretary of Energy, the Secretary of Transportation, the Secretary of
Defense, the Secretary of Agriculture, the Administrator of the
Environmental Protection Agency, and the head of any other agency
authorized to take an action listed in the action plan shall--
(1) determine oil savings as the projected reduction in oil
consumption from the baseline established by the reference case
contained in the report of the Energy Information
Administration entitled ``Annual Energy Outlook 2006'';
(2) determine the oil savings projections required on an
annual basis for each of calendar years 2009 through 2026; and
(3) account for any overlap among the standards and other
requirements to ensure that the projected oil savings from all
the promulgated standards and requirements, taken together, are
as accurate as practicable.
SEC. 106. REVIEW AND SCORING OF FEDERAL ACTIONS RELATED TO OIL SAVINGS
ACTION PLAN.
(a) Office of Management and Budget.--
(1) Requirement.--The Director shall--
(A) establish procedures to evaluate all proposals
for Federal legislative or executive actions which
could be reasonably considered to impact the supply or
demand of oil in the United States; and
(B) report to the Congress on the net impact the
reviewed proposal would have on reaching the goals of
the action plan required under section 101, including a
score in terms of projected decreases or increases to
oil usage.
(2) Conclusions.--The conclusions of the Director under
paragraph (1) shall also be published in the public record and
considered as part of any rulemaking procedure or impact
statement.
(b) Comptroller General.--
(1) Requirement.--The Comptroller General shall--
(A) establish procedures to evaluate all proposals
for Federal legislative or executive actions which
could be reasonably considered to impact the supply or
demand of oil in the United States; and
(B) report to the Congress on the net impact the
reviewed proposal would have on reaching the goals of
the action plan required under section 101, including a
score in terms of projected decreases or increases to
oil usage.
(2) Conclusions.--The conclusions of the Comptroller
General under paragraph (1) shall also be published in the
public record and considered as part of any rulemaking
procedure or impact statement.
SEC. 107. FEDERAL GOVERNMENT OIL USAGE AUDIT.
Not later than 2 years after the date of enactment of this Act,
each Federal agency shall complete an audit of oil-derived fuel usage
in the agency. The head of the agency shall establish an oil usage
baseline and develop a plan to reduce oil consumption by 10 percent
over 5 years and 20 percent in 10 years. The Secretary of Energy shall
compile an annual report containing all agency reports and
recommendations under this section and deliver it to the Congress not
later than January 31 of each year.
SEC. 108. NATIONWIDE MEDIA CAMPAIGN TO DECREASE OIL CONSUMPTION.
(a) In General.--The Secretary of Energy, acting through the
Assistant Secretary for Energy Efficiency and Renewable Energy
(referred to in this section as the ``Secretary''), shall develop and
conduct a national media campaign for the purpose of decreasing oil
consumption in the United States over the next decade.
(b) Contract With Entity.--The Secretary shall carry out subsection
(a) directly or through--
(1) competitively bid contracts with 1 or more nationally
recognized media firms for the development and distribution of
monthly television, radio, and newspaper public service
announcements; or
(2) collective agreements with 1 or more nationally
recognized institutes, businesses, or nonprofit organizations
for the funding, development, and distribution of monthly
television, radio, and newspaper public service announcements.
(c) Use of Funds.--
(1) In general.--Amounts made available to carry out this
section shall be used for the following:
(A) Advertising costs.--
(i) The purchase of media time and space.
(ii) Creative and talent costs.
(iii) Testing and evaluation of
advertising.
(iv) Evaluation of the effectiveness of the
media campaign.
(v) The negotiated fees for the winning
bidder on requests from proposals issued either
by the Secretary for purposes otherwise
authorized in this section.
(vi) Entertainment industry outreach,
interactive outreach, media projects and
activities, public information, news media
outreach, and corporate sponsorship and
participation.
(B) Administrative costs.--Operational and
management expenses.
(2) Limitations.--In carrying out this section, the
Secretary shall allocate not less than 85 percent of funds made
available under subsection (e) for each fiscal year for the
advertising functions specified under paragraph (1)(A).
(d) Reports.--The Secretary shall annually submit to Congress a
report that describes--
(1) the strategy of the national media campaign and whether
specific objectives of the campaign were accomplished,
including--
(A) determinations concerning the rate of change of
oil consumption, in both absolute and per capita terms;
and
(B) an evaluation that enables consideration
whether the media campaign contributed to reduction of
oil consumption;
(2) steps taken to ensure that the national media campaign
operates in an effective and efficient manner consistent with
the overall strategy and focus of the campaign;
(3) plans to purchase advertising time and space;
(4) policies and practices implemented to ensure that
Federal funds are used responsibly to purchase advertising time
and space and eliminate the potential for waste, fraud, and
abuse; and
(5) all contracts or cooperative agreements entered into
with a corporation, partnership, or individual working on
behalf of the national media campaign.
(e) Authorization of Appropriations.--There is authorized to be
appropriated to carry out this section $50,000,000 for each of fiscal
years 2008 through 2012.
TITLE II--FUEL EFFICIENT VEHICLES FOR THE 21ST CENTURY
SEC. 201. TIRE EFFICIENCY PROGRAM.
(a) Standards for Tires Manufactured for Interstate Commerce.--
Section 30123 of title 49, United States Code, is amended--
(1) in subsection (b)--
(A) in the first sentence, by striking ``The
Secretary'' and inserting the following:
``(1) Uniform quality grading system.--
``(A) In general.--The Secretary'';
(B) in the second sentence, by striking ``The
Secretary'' and inserting the following:
``(2) Nomenclature and marketing practices.--The
Secretary'';
(C) in the third sentence, by striking ``A tire
standard'' and inserting the following:
``(3) Effect of standards and regulations.--A tire
standard''; and
(D) in paragraph (1), as designated by subparagraph
(A), by adding at the end the following:
``(B) Inclusion.--The grading system established
pursuant to subparagraph (A) shall include standards
for rating the fuel efficiency of tires designed for
use on passenger cars and light trucks.''; and
(2) by adding at the end the following:
``(d) National Tire Efficiency Program.--
``(1) Definition.--In this subsection, the term `fuel
economy', with respect to a tire, means the extent to which the
tire contributes to the fuel economy of the motor vehicle on
which the tire is mounted.
``(2) Program.--The Secretary shall develop and carry out a
national tire fuel efficiency program for tires designed for
use on passenger cars and light trucks.
``(3) Requirements.--Not later than March 31, 2008, the
Secretary shall issue regulations, which establish--
``(A) policies and procedures for testing and
labeling tires for fuel economy to enable tire buyers
to make informed purchasing decisions about the fuel
economy of tires;
``(B) policies and procedures to promote the
purchase of energy efficient replacement tires,
including purchase incentives, website listings on the
Internet, printed fuel economy guide booklets, and
mandatory requirements for tire retailers to provide
tire buyers with fuel efficiency information on tires;
and
``(C) minimum fuel economy standards for tires.
``(4) Minimum fuel economy standards.--In promulgating
minimum fuel economy standards for tires, the Secretary shall
design standards that--
``(A) ensure, in conjunction with the requirements
under paragraph (3)(B), that the average fuel economy
of replacement tires is not less than the average fuel
economy of tires sold as original equipment;
``(B) secure the maximum technically feasible and
cost-effective fuel savings;
``(C) do not adversely affect tire safety;
``(D) incorporate the results from--
``(i) laboratory testing; and
``(ii) to the extent appropriate and
available, on-road fleet testing programs
conducted by manufacturers; and
``(E) do not adversely affect efforts to manage
scrap tires.
``(5) Applicability.--The policies, procedures, and
standards developed under paragraph (3) shall apply to all tire
types and models regulated under the uniform tire quality
grading standards in section 575.104 of title 49, Code of
Federal Regulations (or a successor regulation).
``(6) Review.--
``(A) In general.--Not less than once every 3
years, the Secretary shall--
``(i) review the minimum fuel economy
standards in effect for tires under this
subsection; and
``(ii) subject to subparagraph (B), revise
the standards as necessary to ensure compliance
with standards described in paragraph (4).
``(B) Limitation.--The Secretary may not reduce the
average fuel economy standards applicable to
replacement tires.
``(7) No preemption of state law.--Nothing in this section
shall be construed to preempt any provision of State law
relating to higher fuel economy standards applicable to
replacement tires designed for use on passenger cars and light
trucks.
``(8) Exceptions.--Nothing in this section shall apply to--
``(A) a tire or group of tires with the same stock
keeping unit, plant, and year, for which the volume of
tires produced or imported is less than 15,000
annually;
``(B) a deep tread, winter-type snow tire, space-
saver tire, or temporary use spare tire;
``(C) a tire with a normal rim diameter of 12
inches or less;
``(D) a motorcycle tire; or
``(E) a tire manufactured specifically for use in
an off-road motorized recreational vehicle.''.
(b) Conforming Amendment.--Section 30103(b)(1) of title 49, United
States Code, is amended by striking ``When'' and inserting ``Except as
provided in section 30123(d), if''.
(c) Time for Implementation.--Beginning not later than March 31,
2008, the Secretary of Transportation shall administer the national
tire fuel efficiency program established under section 30123(d) of
title 49, United States Code, in accordance with the policies,
procedures, and standards developed under section 30123(d)(3) of such
title.
(d) Authorization of Appropriations.--There are authorized to be
appropriated, for each of fiscal years 2008 through 2012, such sums as
may be necessary to carry out section 30123(d) of title 49, United
States Code, as added by subsection (a).
SEC. 202. REDUCTION OF SCHOOL BUS IDLING.
(a) Statement of Policy.--Congress encourages each local
educational agency (as defined in section 9101(26) of the Elementary
and Secondary Education Act of 1965 (20 U.S.C. 7801(26))) that receives
Federal funds under the Elementary and Secondary Education Act of 1965
(20 U.S.C. 6301 et seq.) to develop a policy to reduce the incidence of
school bus idling at schools while picking up and unloading students.
(b) Authorization of Appropriations.--There are authorized to be
appropriated to the Administrator of the Environmental Protection
Agency, working in coordination with the Secretary of Education,
$5,000,000 for each of fiscal years 2008 through 2012 for use in
educating States and local education agencies about--
(1) benefits of reducing school bus idling; and
(2) ways in which school bus idling may be reduced.
SEC. 203. FUEL EFFICIENCY FOR HEAVY DUTY TRUCKS.
Part C of subtitle VI of title 49, United States Code, is amended
by inserting after chapter 329 the following:
``CHAPTER 330--HEAVY DUTY VEHICLE FUEL ECONOMY STANDARDS
``Sec.
``33001. Purpose and policy.
``33002. Definition.
``33003. Testing and assessment.
``33004. Standards.
``33005. Authorization of appropriations.
``Sec. 33001. Purpose and policy
``The purpose of this chapter is to reduce petroleum consumption by
heavy duty motor vehicles.
``Sec. 33002. Definition
``In this chapter, the term `heavy duty motor vehicle'--
``(1) means a vehicle having a gross vehicle weight rating
of at least 10,000 pounds that is driven or drawn by mechanical
power and manufactured primarily for use on public streets,
roads, and highways; and
``(2) does not include a vehicle operated only on a rail
line.
``Sec. 33003. Testing and assessment
``(a) General Requirements.--The Administrator of the Environmental
Protection Agency (referred to in this section as the `Administrator')
shall develop and coordinate a national testing and assessment program
to--
``(1) determine the fuel economy of heavy duty vehicles;
and
``(2) assess the fuel efficiency attainable through
available technology.
``(b) Testing.--The Administrator shall--
``(1) design a National testing program to assess the fuel
economy of heavy duty vehicles (based on the program for light
duty vehicles); and
``(2) implement the program described in paragraph (1) not
later than 18 months after the date of enactment of this
chapter.
``(c) Assessment.--The Administrator shall consult with the
Secretary of Transportation on the assessment of available technologies
to enhance the fuel efficiency of heavy duty vehicles to ensure that
vehicle use and needs are considered appropriately in the assessment.
``(d) Reporting.--The Administrator shall--
``(1) not later than 2 years after the date of enactment of
this chapter, submit a report to Congress regarding the results
of the assessment of available technologies to improve the fuel
efficiency of heavy duty vehicles.
``(2) submit a report to Congress, at least biannually,
that addresses the fuel economy of heavy duty vehicles; and
``Sec. 33004. Standards
``(a) General Requirements.--Not later than 18 months after
completing the testing and assessments under section 33003, the
Secretary of Transportation shall prescribe average heavy duty vehicle
fuel economy standards. Each standard shall be the maximum feasible
average fuel economy level that the Secretary decides that
manufacturers can achieve in that model year. The Secretary may
prescribe separate standards for different classes of heavy duty motor
vehicles. The standards for each model year shall be completed not
later than 18 months before the beginning of each model year.
``(b) Considerations and Consultation.--In determining maximum
feasible average fuel economy, the Secretary shall consider--
``(1) relevant available heavy duty motor vehicle fuel
consumption information;
``(2) technological feasibility;
``(3) economic practicability;
``(4) the desirability of reducing United States dependence
on oil;
``(5) the effects of average fuel economy standards on
vehicle safety;
``(6) the effects of average fuel economy standards on
levels of employment and competitiveness of manufacturers; and
``(7) the extent to which the standard will carry out the
purpose described in section 33001.
``(c) Cooperation.--The Secretary may advise, assist, and cooperate
with departments, agencies, and instrumentalities of the United States
Government, States, and other public and private agencies in developing
fuel economy standards for heavy duty motor vehicles.
``(d) Effective Dates of Standards.--The Secretary shall specify
the effective date and model years of each heavy duty motor vehicle
fuel economy standard prescribed under this chapter.
``(e) 5-Year Plan for Testing Standards.--The Secretary shall
establish, periodically review, and continually update a 5-year plan
for testing heavy duty motor vehicle fuel economy standards prescribed
under this chapter. In developing and establishing testing priorities,
the Secretary shall consider factors the Secretary considers
appropriate, consistent with the purpose described in section 33001 and
the Secretary's other duties and powers under this chapter.
``Sec. 33005. Authorization of appropriations
``There are authorized to be appropriated, for each of fiscal years
2008 through 2012, such sums as may be necessary to carry out this
chapter.''.
SEC. 204. LIGHTWEIGHT MATERIALS RESEARCH AND DEVELOPMENT.
(a) In General.--As soon as practicable after the date of enactment
of this Act, the Secretary of Energy shall establish a research and
development program to determine ways in which--
(1) the weight of vehicles may be reduced to improve fuel
efficiency without compromising passenger safety; and
(2) the cost of lightweight materials (such as steel alloys
and carbon fibers) required for the construction of lighter-
weight vehicles may be reduced.
(b) Authorization of Appropriations.--There is authorized to be
appropriated to carry out this section $50,000,000 for each of fiscal
years 2008 through 2012.
SEC. 205. HYBRID AND ADVANCED DIESEL VEHICLES.
(a) Hybrid Vehicles.--The Energy Policy Act of 2005 is amended by
striking section 711 (42 U.S.C. 16061) and inserting the following:
``SEC. 711. HYBRID VEHICLES.
``(a) Definitions.--In this section:
``(1) Cost.--The term `cost' has the meaning given the term
`cost of a loan guarantee' within the meaning of section
502(5)(C) of the Federal Credit Reform Act of 1990 (2 U.S.C.
661a(5)(C)).
``(2) Eligible project.--The term `eligible project' means
a project to--
``(A) improve hybrid technologies under subsection
(b); or
``(B) encourage domestic production of efficient
hybrid and advanced diesel vehicles under section
712(a).
``(3) Guarantee.--
``(A) In general.--The term `guarantee' has the
meaning given the term `loan guarantee' in section 502
of the Federal Credit Reform Act of 1990 (2 U.S.C.
661a).
``(B) Inclusion.--The term `guarantee' includes a
loan guarantee commitment (as defined in section 502 of
the Federal Credit Reform Act of 1990 (2 U.S.C. 661a)).
``(4) Hybrid technology.--The term `hybrid technology'
means a battery or other rechargeable energy storage system,
power electronic, hybrid systems integration, and any other
technology for use in hybrid vehicles, including plug-in hybrid
vehicles and their components.
``(5) Obligation.--The term `obligation' means the loan or
other debt obligation that is guaranteed under this section.
``(b) Authorization.--The Secretary shall accelerate efforts
directed toward the improvement of hybrid technologies, including
through the provision of loan guarantees under subsection (c).
``(c) Loan Guarantees.--
``(1) In general.--The Secretary shall make guarantees
under this section for eligible projects on such terms and
conditions as the Secretary, in consultation with the Secretary
of the Treasury, determines to be appropriate.
``(2) Specific appropriation or contribution.--No guarantee
shall be made unless--
``(A) an appropriation for the cost has been made;
or
``(B) the Secretary has received from the borrower
a payment in full for the cost of the obligation and
deposited the payment into the Treasury.
``(3) Amount.--Unless otherwise provided by law, a
guarantee by the Secretary shall not exceed an amount equal to
80 percent of the project cost of the hybrid technology that is
the subject of the guarantee, as estimated at the time at which
the guarantee is issued.
``(4) Repayment.--
``(A) In general.--No guarantee shall be made
unless the Secretary determines that there is a
reasonable prospect of repayment of the principal and
interest on the obligation by the borrower.
``(B) Amount.--No guarantee shall be made unless
the Secretary determines that the amount of the
obligation (when combined with amounts available to the
borrower from other sources) will be sufficient to
carry out the project.
``(C) Subordination.--The obligation shall be
subject to the condition that the obligation is not
subordinate to other financing.
``(5) Interest rate.--An obligation shall bear interest at
a rate that does not exceed a level that the Secretary
determines appropriate, taking into account the prevailing rate
of interest in the private sector for similar loans and risks.
``(6) Term.--The term of an obligation shall require full
repayment over a period not to exceed the lesser of--
``(A) 30 years; or
``(B) 90 percent of the projected useful life of
the physical asset to be financed by the obligation (as
determined by the Secretary).
``(7) Defaults.--
``(A) Payment by secretary.--
``(i) In general.--If a borrower defaults
on the obligation (as defined in regulations
promulgated by the Secretary and specified in
the guarantee contract), the holder of the
guarantee shall have the right to demand
payment of the unpaid amount from the
Secretary.
``(ii) Payment required.--Within such
period as may be specified in the guarantee or
related agreements, the Secretary shall pay to
the holder of the guarantee the unpaid interest
on, and unpaid principal of the obligation as
to which the borrower has defaulted, unless the
Secretary finds that--
``(I) there was no default by the
borrower in the payment of interest or
principal; or
``(II) the default has been
remedied.
``(iii) Forbearance.--Nothing in this
subsection precludes any forbearance by the
holder of the obligation for the benefit of the
borrower that may be agreed upon by the parties
to the obligation and approved by the
Secretary.
``(B) Subrogation.--
``(i) In general.--If the Secretary makes a
payment under subparagraph (A), the Secretary
shall be subrogated to the rights of the
recipient of the payment as specified in the
guarantee or related agreements including,
where appropriate, the authority
(notwithstanding any other provision of law)
to--
``(I) complete, maintain, operate,
lease, or otherwise dispose of any
property acquired pursuant to the
guarantee or related agreements; or
``(II) permit the borrower,
pursuant to an agreement with the
Secretary, to continue to pursue the
purposes of the eligible project, as
the Secretary determines to be in the
public interest.
``(ii) Superiority of rights.--The rights
of the Secretary, with respect to any property
acquired pursuant to a guarantee or related
agreement, shall be superior to the rights of
any other person with respect to the property.
``(iii) Terms and conditions.--A guarantee
agreement shall include such detailed terms and
conditions as the Secretary determines
appropriate to--
``(I) protect the interests of the
United States in the case of default;
and
``(II) have available all the
patents and technology necessary for
any person selected, including the
Secretary, to complete and operate the
eligible project.
``(C) Payment of principal and interest by
secretary.--With respect to any obligation guaranteed
under this section, the Secretary may enter into a
contract to pay, and pay, holders of the obligation,
for and on behalf of the borrower, from funds
appropriated for that purpose, the principal and
interest payments that become due and payable on the
unpaid balance of the obligation if the Secretary finds
that--
``(i)(I) the borrower is unable to meet the
payments and is not in default;
``(II) it is in the public interest to
permit the borrower to continue to pursue the
purposes of the eligible project; and
``(III) the probable net benefit to the
Federal Government in paying the principal and
interest will be greater than the benefit that
would result in the event of a default;
``(ii) the amount of the payment that the
Secretary is authorized to pay will be no
greater than the amount of principal and
interest that the borrower is obligated to pay
under the agreement being guaranteed; and
``(iii) the borrower agrees to reimburse
the Secretary for the payment (including
interest) on terms and conditions that are
satisfactory to the Secretary.
``(D) Action by attorney general.--
``(i) Notification.--If the borrower
defaults on an obligation, the Secretary shall
notify the Attorney General of the default.
``(ii) Recovery.--On receipt of
notification, the Attorney General shall take
such action as the Attorney General determines
to be appropriate to recover the unpaid
principal and interest due from--
``(I) such assets of the defaulting
borrower as are associated with the
obligation; or
``(II) any other security pledged
to secure the obligation.
``(8) Fees.--
``(A) In general.--The Secretary shall charge and
collect fees for guarantees in amounts the Secretary
determines are sufficient to cover applicable
administrative expenses.
``(B) Availability.--Fees collected under this
paragraph shall--
``(i) be deposited by the Secretary into
the Treasury; and
``(ii) remain available until expended,
subject to such other conditions as are
contained in annual appropriations Acts.
``(9) Records; audits.--
``(A) In general.--A recipient of a guarantee shall
keep such records and other pertinent documents as the
Secretary shall prescribe by regulation, including such
records as the Secretary may require to facilitate an
effective audit.
``(B) Access.--The Secretary and the Comptroller
General of the United States, or their duly authorized
representatives, shall have access, for the purpose of
audit, to the records and other pertinent documents.
``(10) Full faith and credit.--The full faith and credit of
the United States is pledged to the payment of all guarantees
issued under this section with respect to principal and
interest.
``(d) Authorization of Appropriations.--There are authorized to be
appropriated such sums as are necessary to provide the cost of
guarantees under this section.''.
(b) Efficient Hybrid and Advanced Diesel Vehicles.--Section 712(a)
of the Energy Policy Act of 2005 (42 U.S.C. 16062(a)) is amended in the
second sentence by striking ``grants to automobile manufacturers'' and
inserting ``grants and the provision of loan guarantees under section
711(c) to automobile manufacturers and suppliers''.
SEC. 206. ADVANCED TECHNOLOGY MOTOR VEHICLES MANUFACTURING CREDIT.
(a) In General.--Subpart B of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 (relating to foreign tax credit,
etc.) is amended by adding at the end the following new section:
``SEC. 30D. ADVANCED TECHNOLOGY MOTOR VEHICLES MANUFACTURING CREDIT.
``(a) Credit Allowed.--There shall be allowed as a credit against
the tax imposed by this chapter for the taxable year an amount equal to
the sum of--
``(1) in the case of a qualified investment of an eligible
taxpayer for such taxable year relating to plug-in hybrid
electric vehicles or pure electric vehicles, 50 percent of so
much of such qualified investment as does not exceed
$150,000,000, and
``(2) in the case of any other qualified investment of an
eligible taxpayer for such taxable year, 35 percent of so much
of such qualified investment as does not exceed $50,000,000.
``(b) Qualified Investment.--For purposes of this section--
``(1) In general.--The qualified investment for any taxable
year is equal to the incremental costs incurred during such
taxable year--
``(A) to re-equip, expand, or establish any
manufacturing facility of the eligible taxpayer to
produce advanced technology motor vehicles or to
produce eligible components,
``(B) for engineering integration of such vehicles
and components as described in subsection (d), and
``(C) for research and development related to
advanced technology motor vehicles and eligible
components.
``(2) Attribution rules.--In the event a facility of the
eligible taxpayer produces both advanced technology motor
vehicles and conventional motor vehicles, or eligible and non-
eligible components, only the qualified investment attributable
to production of advanced technology motor vehicles and
eligible components shall be taken into account.
``(c) Advanced Technology Motor Vehicles and Eligible Components.--
For purposes of this section--
``(1) Advanced technology motor vehicle.--The term
`advanced technology motor vehicle' means--
``(A) any new advanced lean burn technology motor
vehicle (as defined in section 30B(c)(3)),
``(B) any new qualified hybrid motor vehicle (as
defined in section 30B(d)(3)(A) and determined without
regard to any gross vehicle weight rating), or
``(C) any new plug-in hybrid electric vehicle.
``(2) Plug-in hybrid electric vehicle.--For purposes of
this section, the term `plug-in hybrid electric vehicle' means
a light-duty, medium-duty, or heavy-duty on-road or nonroad
vehicle that is propelled by an internal combustion engine or
heat engine and/or an electric motor and energy storage system
using (or capable of using)--
``(A) any combustible fuel,
``(B) an on-board, rechargeable storage device, and
``(C) a means of using an off-board source of
electricity to operate the vehicle in intermittent or
continuous all-electric mode.
``(3) Eligible components.--The term `eligible component'
means any component inherent to any advanced technology motor
vehicle, including--
``(A) with respect to any gasoline or diesel-
electric new qualified hybrid motor vehicle--
``(i) electric motor or generator,
``(ii) power split device,
``(iii) power control unit,
``(iv) power controls,
``(v) integrated starter generator, or
``(vi) battery,
``(B) with respect to any hydraulic new qualified
hybrid motor vehicle--
``(i) hydraulic accumulator vessel,
``(ii) hydraulic pump, or
``(iii) hydraulic pump-motor assembly,
``(C) with respect to any new advanced lean burn
technology motor vehicle--
``(i) diesel engine,
``(ii) turbocharger,
``(iii) fuel injection system, or
``(iv) after-treatment system, such as a
particle filter or NOx absorber, and
``(D) with respect to any advanced technology motor
vehicle, any other component submitted for approval by
the Secretary.
``(d) Engineering Integration Costs.--For purposes of subsection
(b)(1)(B), costs for engineering integration are costs incurred prior
to the market introduction of advanced technology vehicles for
engineering tasks related to--
``(1) establishing functional, structural, and performance
requirements for component and subsystems to meet overall
vehicle objectives for a specific application,
``(2) designing interfaces for components and subsystems
with mating systems within a specific vehicle application,
``(3) designing cost effective, efficient, and reliable
manufacturing processes to produce components and subsystems
for a specific vehicle application, and
``(4) validating functionality and performance of
components and subsystems for a specific vehicle application.
``(e) Eligible Taxpayer.--For purposes of this section, the term
`eligible taxpayer' means any taxpayer if more than 50 percent of its
gross receipts for the taxable year is derived from the manufacture of
motor vehicles or any component parts of such vehicles.
``(f) Limitation Based on Amount of Tax.--The credit allowed under
subsection (a) for the taxable year shall not exceed the excess of--
``(1) the sum of--
``(A) the regular tax liability (as defined in
section 26(b)) for such taxable year, plus
``(B) the tax imposed by section 55 for such
taxable year and any prior taxable year beginning after
1986 and not taken into account under section 53 for
any prior taxable year, over
``(2) the sum of the credits allowable under subpart A and
sections 27, 30, and 30B for the taxable year.
``(g) Reduction in Basis.--For purposes of this subtitle, if a
credit is allowed under this section for any expenditure with respect
to any property, the increase in the basis of such property which would
(but for this paragraph) result from such expenditure shall be reduced
by the amount of the credit so allowed.
``(h) No Double Benefit.--
``(1) Coordination with other deductions and credits.--
Except as provided in paragraph (2), the amount of any
deduction or other credit allowable under this chapter for any
cost taken into account in determining the amount of the credit
under subsection (a) shall be reduced by the amount of such
credit attributable to such cost.
``(2) Research and development costs.--
``(A) In general.--Except as provided in
subparagraph (B), any amount described in subsection
(b)(1)(C) taken into account in determining the amount
of the credit under subsection (a) for any taxable year
shall not be taken into account for purposes of
determining the credit under section 41 for such
taxable year.
``(B) Costs taken into account in determining base
period research expenses.--Any amounts described in
subsection (b)(1)(C) taken into account in determining
the amount of the credit under subsection (a) for any
taxable year which are qualified research expenses
(within the meaning of section 41(b)) shall be taken
into account in determining base period research
expenses for purposes of applying section 41 to
subsequent taxable years.
``(i) Business Carryovers Allowed.--If the credit allowable under
subsection (a) for a taxable year exceeds the limitation under
subsection (f) for such taxable year, such excess (to the extent of the
credit allowable with respect to property subject to the allowance for
depreciation) shall be allowed as a credit carryback and carryforward
under rules similar to the rules of section 39.
``(j) Special Rules.--For purposes of this section, rules similar
to the rules of paragraphs (4) and (5) of section 179A(e) and
paragraphs (1) and (2) of section 41(f) shall apply
``(k) Election Not to Take Credit.--No credit shall be allowed
under subsection (a) for any property if the taxpayer elects not to
have this section apply to such property.
``(l) Regulations.--The Secretary shall prescribe such regulations
as necessary to carry out the provisions of this section.
``(m) Termination.--This section shall not apply to any qualified
investment after December 31, 2015.''.
(b) Conforming Amendments.--
(1) Section 1016(a) of the Internal Revenue Code of 1986 is
amended by striking ``and'' at the end of paragraph (36), by
striking the period at the end of paragraph (37) and inserting
``, and'', and by adding at the end the following new
paragraph:
``(38) to the extent provided in section 30D(g).''.
(2) Section 6501(m) of such Code is amended by inserting
``30D(k),'' after ``30C(e)(5),''.
(3) The table of sections for subpart B of part IV of
subchapter A of chapter 1 of such Code is amended by inserting
after the item relating to section 30C the following new item:
``Sec. 30D. Advanced technology motor vehicles manufacturing credit.''.
(c) Effective Date.--The amendments made by this section shall
apply to amounts incurred in taxable years beginning after December 31,
2006.
SEC. 207. CONSUMER INCENTIVES TO PURCHASE ADVANCED TECHNOLOGY VEHICLES.
(a) Flexible Fuel Vehicle Credit.--
(1) In general.--Subpart B of part IV of subchapter A of
chapter 1 of the Internal Revenue Code of 1986 (relating to
foreign tax credit, etc.), as amended by this Act, is amended
by adding at the end the following new section:
``SEC. 30E. FLEXIBLE FUEL VEHICLE CREDIT.
``(a) Allowance of Credit.--There shall be allowed as a credit
against the tax imposed by this chapter for the taxable year an amount
equal to the GEM flexible fuel vehicle credit.
``(b) GEM Flexible Fuel Vehicle Credit.--
``(1) In general.--For the purposes of subsection (a), the
GEM flexible fuel vehicle credit determined under this
subsection for the taxable year is the credit amount determined
under paragraph (2) with respect to a GEM flexible fuel vehicle
placed in service by the taxpayer during the taxable year.
``(2) Credit amount.--In the case of a new qualified GEM
flexible fuel vehicle which is a passenger automobile or light
truck and which has a gross vehicle weight rating of not more
than 8,500 pounds, the amount shall be $300.
``(c) Definitions.--For purposes of this section--
``(1) Gem flexible fuel vehicle.--The term `GEM flexible
fuel vehicle' means a motor vehicle warrantied by its
manufacturer to operate on any combination of gasoline, E85,
and M85.
``(2) E85.--The term `E85' means a fuel blend containing 85
percent ethanol and 15 percent gasoline by volume.
``(3) M85.--The term `M85' means a fuel blend containing 85
percent methanol and 15 percent gasoline by volume.
``(d) Termination.--This section shall not apply to taxable years
beginning after December 31, 2010.''.
(2) Clerical amendment.--The table of sections for subpart
B of part IV of subchapter A of chapter 1 of the Internal
Revenue Code of 1986 (relating to foreign tax credit, etc.), as
amended by this Act, is amended by adding at the end the
following new item:
``Sec. 30E. Flexible fuel vehicle credit.''.
(b) Elimination on Number of New Qualified Hybrid and Advanced Lean
Burn Technology Vehicles Eligible for Alternative Motor Vehicle
Credit.--
(1) In general.--Section 30B of the Internal Revenue Code
of 1986 is amended by striking subsection (f) and by
redesignating subsections (g) through (j) as subsections (f)
through (i), respectively.
(2) Conforming amendments.--
(A) Paragraphs (4) and (6) of section 30B(h) of the
Internal Revenue Code of 1986 are each amended by
striking ``(determined without regard to subsection
(g))'' and inserting ``determined without regard to
subsection (f))''.
(B) Section 38(b)(25) of such Code is amended by
striking ``section 30B(g)(1)'' and inserting ``section
30B(f)(1)''.
(C) Section 55(c)(2) of such Code is amended by
striking ``section 30B(g)(2)'' and inserting ``section
30B(f)(2)''.
(D) Section 1016(a)(36) of such Code is amended by
striking ``section 30B(h)(4)'' and inserting ``section
30B(g)(4)''.
(E) Section 6501(m) of such Code is amended by
striking ``section 30B(h)(9)'' and inserting ``section
30B(g)(9)''.
(c) Extension of Alternative Vehicle Credit for New Qualified
Hybrid Motor Vehicles.--Paragraph (3) of section 30B(i) of the Internal
Revenue Code of 1986 (as redesignated by subsection (a)) is amended by
striking ``December 31, 2009'' and inserting ``December 31, 2010''.
(d) Effective Date.--The amendments made by this section shall
apply to property placed in service after December 31, 2006, in taxable
years ending after such date.
SEC. 208. FEDERAL FLEET REQUIREMENTS.
(a) Regulations.--
(1) In general.--The Secretary of Energy shall issue
regulations for Federal fleets subject to the Energy Policy Act
of 1992 (42 U.S.C. 13201 et seq.) requiring that not later than
fiscal year 2015 each Federal agency achieve at least a 20
percent reduction in petroleum consumption, as calculated from
the baseline established by the Secretary for fiscal year 1999.
(2) Requirement.--Not later than fiscal year 2011, of the
Federal vehicles required to be alternative fueled vehicles
under title V of the Energy Policy Act of 1992 (42 U.S.C. 13251
et seq.), at least 30 percent shall be flexible fuel hybrid
motor vehicles or flexible fuel plug-in hybrid motor vehicles.
(3) Exception.--The regulations issued under this
subsection shall not apply to ground vehicles of the Department
of Defense whose primary purpose is combat or the support of
troops in combat operations.
(b) Inclusion of Electric Drive in Energy Policy Act of 1992.--
Section 508(a) of the Energy Policy Act of 1992 (42 U.S.C. 13258(a)) is
amended--
(1) by inserting ``(1)'' before ``The Secretary''; and
(2) by adding at the end the following:
``(2) Not later than January 31, 2008, the Secretary shall--
``(A) allocate credit in an amount to be determined by the
Secretary for--
``(i) acquisition of--
``(I) a light-duty hybrid electric vehicle;
``(II) a plug-in hybrid electric vehicle;
``(III) a fuel cell electric vehicle;
``(IV) a medium- or heavy-duty hybrid
electric vehicle;
``(V) a neighborhood electric vehicle; or
``(VI) a medium- or heavy-duty dedicated
vehicle; and
``(ii) investment in qualified alternative fuel
infrastructure or nonroad equipment, as determined by
the Secretary; and
``(B) allocate more than 1, but not to exceed 5, credits
for investment in an emerging technology relating to any
vehicle described in subparagraph (A) to encourage--
``(i) a reduction in petroleum demand;
``(ii) technological advancement; and
``(iii) environmental safety.''.
(c) Authorization of Appropriations.--There is authorized to be
appropriated to carry out this section (including the amendments made
by subsection (b)) $10,000,000 for the period of fiscal years 2008
through 2012.
SEC. 209. TAX INCENTIVES FOR PRIVATE FLEETS.
(a) In General.--Subpart E of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 is amended by inserting after
section 48B the following new section:
``SEC. 48C. FUEL-EFFICIENT FLEET CREDIT.
``(a) General Rule.--For purposes of section 46, the fuel-efficient
fleet credit for any taxable year is 15 percent of the qualified fuel-
efficient vehicle investment amount of an eligible taxpayer for such
taxable year.
``(b) Vehicle Purchase Requirement.--In the case of any eligible
taxpayer which places less than 10 qualified fuel-efficient vehicles in
service during the taxable year, the qualified fuel-efficient vehicle
investment amount shall be zero.
``(c) Qualified Fuel-Efficient Vehicle Investment Amount.--For
purposes of this section--
``(1) In general.--The term `qualified fuel-efficient
vehicle investment amount' means the basis of any qualified
fuel-efficient vehicle placed in service by an eligible
taxpayer during the taxable year.
``(2) Qualified fuel-efficient vehicle.--The term
`qualified fuel-efficient vehicle' means an automobile which
has a fuel economy which is at least 10 percent greater than
the average fuel economy standard for an automobile of the same
class and model year.
``(3) Other terms.--The terms `automobile', `average fuel
economy standard', `fuel economy', and `model year' have the
meanings given to such terms under section 32901 of title 49,
United States Code.
``(d) Eligible Taxpayer.--The term `eligible taxpayer' means, with
respect to any taxable year, a taxpayer who owns a fleet of 100 or more
vehicles which are used in the trade or business of the taxpayer on the
first day of such taxable year.
``(e) Termination.--This section shall not apply to any vehicle
placed in service after December 31, 2010.''.
(b) Credit Treated as Part of Investment Credit.--Section 46 of the
Internal Revenue Code of 1986 is amended by striking ``and'' at the end
of paragraph (3), by striking the period at the end of paragraph (4)
and inserting ``, and'', and by adding at the end the following new
paragraph:
``(5) the fuel-efficient fleet credit.''.
(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 at the end the following new clause:
``(v) the basis of any qualified fuel-
efficient vehicle which is taken into account
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 section 48 the following new item:
``Sec. 48C. Fuel-efficient fleet credit.''.
(d) Effective Date.--The amendments made by this section shall
apply to periods after December 31, 2006, in taxable years ending after
such date, under rules similar to the rules of section 48(m) of the
Internal Revenue Code of 1986 (as in effect on the day before the date
of the enactment of the Revenue Reconciliation Act of 1990).
SEC. 210. REDUCING INCENTIVES TO GUZZLE GAS.
(a) Inclusion of Heavy Vehicles in Limitation on Depreciation of
Certain Luxury Automobiles.--
(1) In general.--Section 280F(d)(5)(A) of the Internal
Revenue Code of 1986 (defining passenger automobile) is
amended--
(A) by striking clause (ii) and inserting the
following new clause:
``(ii)(I) which is rated at 6,000 pounds
unloaded gross vehicle weight or less, or
``(II) which is rated at more than 6,000
pounds but not more than 14,000 pounds gross
vehicle weight.'', and
(B) by striking ``clause (ii)'' in the second
sentence and inserting ``clause (ii)(I)''.
(2) Exception for vehicles used in farming business.--
Section 280F(d)(5)(B) of such Code (relating to exception for
certain vehicles) is amended by striking ``and'' at the end of
clause (ii), by redesignating clause (iii) as clause (iv), and
by inserting after clause (ii) the following new clause:
``(iii) any vehicle used in a farming
business (as defined in section 263A(e)(4),
and''.
(3) Effective date.--The amendments made by this subsection
shall apply to property placed in service after the date of the
enactment of this Act.
(b) Updated Depreciation Deduction Limits.--
(1) In general.--Subparagraph (A) of section 280F(a)(1) of
the Internal Revenue Code of 1986 (relating to limitation on
amount of depreciation for luxury automobiles) is amended to
read as follows:
``(I) Limitation.--The amount of the depreciation
deduction for any taxable year shall not exceed for any
passenger automobile--
``(i) for the 1st taxable year in the
recovery period--
``(I) described in subsection
(d)(5)(A)(ii)(I), $4,000,
``(II) described in the second
sentence of subsection (d)(5)(A),
$5,000, and
``(III) described in subsection
(d)(5)(A)(ii)(II), $6,000,
``(ii) for the 2nd taxable year in the
recovery period--
``(I) described in subsection
(d)(5)(A)(ii)(I), $6,400,
``(II) described in the second
sentence of subsection (d)(5)(A),
$8,000, and
``(III) described in subsection
(d)(5)(A)(ii)(II), $9,600,
``(iii) for the 3rd taxable year in the
recovery period--
``(I) described in subsection
(d)(5)(A)(ii)(I), $3,850,
``(II) described in the second
sentence of subsection (d)(5)(A),
$4,800, and
``(III) described in subsection
(d)(5)(A)(ii)(II), $5,775, and
``(iv) for each succeeding taxable year in
the recovery period--
``(I) described in subsection
(d)(5)(A)(ii)(I), $2,325,
``(II) described in the second
sentence of subsection (d)(5)(A),
$2,900, and
``(III) described in subsection
(d)(5)(A)(ii)(II), $3,475.''.
(2) Years after recovery period.--Section 280F(a)(1)(B)(ii)
of such Code is amended to read as follows:
``(ii) Limitation.--The amount treated as
an expense under clause (i) for any taxable
year shall not exceed for any passenger
automobile--
``(I) described in subsection
(d)(5)(A)(ii)(I), $2,325,
``(II) described in the second
sentence of subsection (d)(5)(A),
$2,900, and
``(III) described in subsection
(d)(5)(A)(ii)(II), $3,475.''.
(3) Inflation adjustment.--Section 280F(d)(7) of such Code
(relating to automobile price inflation adjustment) is
amended--
(A) by striking ``after 1988'' in subparagraph (A)
and inserting ``after 2006'', and
(B) by striking subparagraph (B) and inserting the
following new subparagraph:
``(B) Automobile price inflation adjustment.--For
purposes of this paragraph--
``(i) In general.--The automobile price
inflation adjustment for any calendar year is
the percentage (if any) by which--
``(I) the average wage index for
the preceding calendar year, exceeds
``(II) the average wage index for
2005.
``(ii) Average wage index.--The term
`average wage index' means the average wage
index published by the Social Security
Administration.''.
(4) Effective date.--The amendments made by this subsection
shall apply to property placed in service after the date of the
enactment of this Act.
(c) Expensing Limitation for Farm Vehicles.--
(1) In general.--Paragraph (6) of section 179(b) of the
Internal Revenue Code of 1986 (relating to limitations) is
amended to read as follows:
``(6) Limitation on cost taken into account for farm
vehicles.--The cost of any vehicle described in section
280F(d)(5)(B)(iii) for any taxable year which may be taken into
account under this section shall not exceed $30,000.''.
(2) Effective date.--The amendment made by this subsection
shall apply to property placed in service after the date of the
enactment of this Act.
SEC. 211. FUEL CHOICE FOR TRANSPORTATION.
(a) Definitions.--In this section:
(1) Alternative fuel; alternative fuel automobile.--The
terms ``alternative fuel'' and ``alternative fuel automobile''
have the meanings given such terms in section 32901 of title
49, United States Code.
(2) E85.--The term ``E85'' means a fuel blend containing 85
percent ethanol and 15 percent gasoline by volume.
(3) M85.--The term ``M85'' means a fuel blend containing 85
percent methanol and 15 percent gasoline by volume.
(4) Flexible fuel vehicle.--The term ``flexible fuel
vehicle'' means a motor vehicle warranted by its manufacturer
to operate on any and all blends of gasoline, E85, and M85.
(5) Fuel choice-enabling motor vehicle.--The term ``fuel
choice-enabling motor vehicle'' means--
(A) a flexible fuel motor vehicle; or
(B) a vehicle warranted by its manufacturer to
operate on biodiesel.
(6) Light-duty motor vehicle.--The term ``light-duty motor
vehicle'' means, as defined in regulations promulgated by the
Administrator of the Environmental Protection Agency in effect
on the date of enactment of this Act--
(A) a light-duty truck; or
(B) a light-duty vehicle.
(b) Fuel Choice for Transportation.--
(1) Rulemaking.--Not later than 1 year after the date of
enactment of this Act, the Secretary of Transportation shall
issue regulations to carry out the provisions of this
subsection.
(2) Schedule.--Not less than 50 percent of each light-duty
motor vehicles manufacturer's annual production of passenger
cars manufactured on and after January 1, 2012, and before
January 1, 2013, and no less than 80 percent of each
manufacturer's production of passenger cars manufactured on and
after January 1, 2013 shall be fuel choice enabling motor
vehicles or alternative fuel automobiles.
(3) Temporary exemption from requirements.--Upon
application by a manufacturer, in such manner and containing
such information as the Secretary shall prescribe in the
regulations promulgated under this section, the Secretary may
at any time, under such terms and conditions and to such extent
as the Secretary deems appropriate, temporarily exempt or renew
the exemption of a motor vehicle from the requirements of
subsection (b) if the Secretary finds that there has been a
disruption in the supply of any component required for
compliance with the regulations, or a disruption in the use and
installation by the manufacturer of such component due to
unavoidable events not under the control of the manufacturer,
that will prevent a manufacturer from meeting its anticipated
production volume of vehicles that meet the requirements of
this subsection. Each application for such exemption must be
filed by the manufacturer affected, and must specify the
models, lines, and types of vehicles actually affected,
although the Secretary may consolidate applications of a
similar nature of 1 or more manufacturers. Any exemption or
renewal shall be conditioned upon the manufacturer's commitment
to recall the exempted vehicles for installation of omitted
components within a reasonable time proposed by the
manufacturer and approved by the Secretary after such
components become available in sufficient quantities to satisfy
both anticipated production and recall volume requirements.
Notice of each application shall be published in the Federal
Register and notice of each decision to grant or deny a
temporary exemption, and the reasons for granting or denying
it, shall be published in the Federal Register. The Secretary
shall require labeling for each exempted motor vehicle which
can only be removed after recall and installation of the
required components. If a vehicle is delivered without the fuel
choice capability required in this section, the Secretary shall
require that written notification of the exemption be delivered
to the dealer and first purchasers for purposes other than
resale of such exempted motor vehicle in such a manner, and
containing such information, as the Secretary deems
appropriate.
SEC. 212. FLEXIBLE FUEL VEHICLE ECONOMY CALCULATIONS.
(a) In General.--Section 32905 of title 49, United States Code, is
amended--
(1) in subsections (b) and (d)--
(A) by amending paragraph (1) of each subsection to
read as follows:
``(1) the number determined by--
``(A) subtracting from 1.0 the alternative fuel use
factor for the model; and
``(B) dividing the difference calculated under
subparagraph (A) by the fuel economy measured under
section 32904(c) when operating the model on gasoline
or diesel fuel; and''; and
(B) by amending paragraph (2) of each subsection to
read as follows:
``(2) the number determined by dividing the alternative
fuel use factor for the model by the fuel economy measured
under subsection (a) when operating the model on alternative
fuel.''; and
(2) by adding at the end the following:
``(h) Determination of Alternative Fuel Use Factor.--
``(1) For purposes of subsections (b) and (d), the term
`alternative fuel use factor' means, for a model of automobile,
the factor determined by the Administrator under this
subsection.
``(2) At the beginning of each calendar year, the Secretary
of Transportation shall estimate, by model, the aggregate
amount of fuel and the aggregate amount of alternative fuel
used to operate all dual fuel automobiles during the most
recent 12-month period.
``(3) The Administrator shall determine, by regulation, the
alternative fuel use factor for each model of dual fuel
automobile as the fraction that represents, on an energy
equivalent basis, the ratio that the amount of alternative fuel
determined under paragraph (2) bears to the amount of fuel
determined under paragraph (2).''.
(b) Effective Date.--The amendments made by this section shall take
effect on January 1, 2008.
(c) Applicability of Existing Standards.--The amendments made by
this section shall not affect the application of section 32901 of title
49, United States Code, to automobiles manufactured before model year
2008.
TITLE III--FUEL CHOICES FOR THE 21ST CENTURY
SEC. 301. FUEL CHOICE ACTION PLAN.
(a) Action Plan.--Not later than 1 year after the date of enactment
of this Act, the Secretary of Energy shall transmit to the Congress an
action plan detailing specific plans to ensure that--
(1) not later than December 31, 2015, not less than 10
percent of the Nation's total ground transportation fuel demand
can be supplied by fuels derived from sources other than oil;
and
(2) not later than December 31, 2025, not less than 20
percent of the Nation's total ground transportation fuel demand
can be supplied by fuels derived from sources other than oil.
(b) Fuels.--The action plan may include plans for the use of fuels
such as ethanol (derived from agricultural products, cellulosic
bioproducts, or waste products), methanol, alternative diesel fuels,
hydrogen, and electricity. The plan shall seek to the fullest extent
practicable to meet the following goals:
(1) Not less than 50 percent of the fuels will be derived
from renewable resources.
(2) Not less than 50 percent of the fuels shall be produced
from domestic resources.
(c) Renewable Content in Transportation Fuels.--Section 211(o) of
the Clean Air Act (42 U.S.C. 7545(o)) is amended--
(1) in paragraph (2)(B)--
(A) in clause (i)--
(i) by striking ``2012'' and inserting
``2015'' in the heading;
(ii) by striking ``2012'' and inserting
``2015''; and
(iii) by amending the table to read as
follows:
Applicable volume of renewable fuel
``Calendar year (in billions of gallons)
2006................................................... 4.0
2007................................................... 4.7
2008................................................... 5.4
2009................................................... 6.1
2010................................................... 6.8
2011................................................... 8.0
2012................................................... 9.0
2013................................................... 11.0
2014................................................... 13.0
2015................................................... 15.0'';
(B) in clause (ii)--
(i) by striking ``2013'' and inserting
``2016'' in the heading;
(ii) by striking ``2013'' and inserting
``2016''; and
(iii) by striking ``2012'' and inserting
``2015'';
(C) in clause (iii), by striking ``2013'' and
inserting ``2016''; and
(D) in clause (iv)--
(i) by striking ``2013'' and inserting
``2016''; and
(ii) by striking ``2012'' and inserting
``2015'';
(2) in paragraph (3)(A), by striking ``2011'' and inserting
``2014'';
(3) in paragraph (3)(B)(i), by striking ``2012'' and
inserting ``2015''; and
(4) in paragraph (6)(A), by striking ``2012'' and inserting
``2015''.
SEC. 302. ETHANOL ACTION PLAN.
The Secretary of Energy shall complete an action plan to be
delivered to Congress not later than 1 year after the date of enactment
of this Act detailing specific plans to achieve a nationwide inclusion
of not less than 10 percent ethanol in the ground transportation fuel
supply by December 31, 2015. The plan shall seek to the fullest extent
practicable to require that not less than 75 percent of the total
ethanol content be produced from renewable, domestic resources.
SEC. 303. FUEL NEUTRALITY FOR ALTERNATIVE FUEL VEHICLE REFUELING
PROPERTY CREDIT.
(a) Eligibility for Infrastructure Credit.--Section 30C(c)(1) of
the Internal Revenue Code of 1986 is amended to read as follows:
``(1) In general.--Except as provided in paragraph (2), the
term `qualified alternative fuel vehicle refueling property'
has the meaning given to such term by section 179A(d), but only
with respect to any alternative fuel (as defined in section 301
of the Energy Policy Act of 1992 (42 U.S.C. 13211) including
Section 1346 of the Energy Policy Act of 2005).''.
(b) Duration of Infrastructure Credit.--Section 30C(g) such Code is
amended to read as follows:
``(g) Termination.--This section shall not apply to property placed
in service after December 31, 2014.''.
(c) Effective Date.--The amendments made by this section shall
apply to property placed in service after December 31, 2008.
SEC. 304. ALTERNATIVE FUEL VEHICLE REFUELING PROPERTY.
(a) Increase in Credit.--
(1) In general.--Subsection (a) of section 30C of the
Internal Revenue Code of 1986 is amended by striking ``30
percent'' and inserting ``50 percent''.
(2) Effective date.--The amendment made by this subsection
shall apply to property placed in service after December 31,
2006, in taxable years ending after such date.
(b) Alternative Fuel Retail Outlets.--
(1) Owner or lessor.--For purposes of this subsection, the
term ``owner or lessor'' means--
(A) a franchisor who owns, leases, or controls a
retail gasoline outlet at which the franchisee is
authorized or permitted, under the franchise agreement,
to sell alternative fuel; and
(B) a refiner or distributor who owns, leases, or
controls a retail gasoline outlet.
(2) Requirement.--Beginning in the year in which 10 percent
or more of the registered vehicles in a county are capable of
using a designated alternative fuel, each owner or lessor of a
retail gasoline outlet with 10 or more vehicle fuel pumps in
that county shall offer such designated alternative fuel at not
less than 10 percent of such pumps.
(3) Compliance.--An owner or lessor is in compliance with
the requirement under paragraph (2) if the owner or lessor--
(A) provides alternative fuel at vehicle pumps
owned or controlled by the owner or lessor; or
(B) purchases credits from another owner or lessor
who operates more than the minimum required number of
alternative fuel pumps.
(4) Projections.--Not later than July 1st of each year, the
Secretary of Energy shall--
(A) identify the counties in which at least 10
percent of the registered vehicles are expected to be
capable of using a designated alternative fuel within
the following 18-month period; and
(B) notify owners and lessors with retail gasoline
outlets in the counties identified under subparagraph
(A) of the alternative fuel pump requirement under this
subsection.
(5) Rulemaking.--The Secretary of Energy shall issue
regulations to carry out the provisions of this subsection.
SEC. 305. USE OF CAFE PENALTIES TO BUILD ALTERNATIVE FUELING
INFRASTRUCTURE.
Section 32912 of title 49, United States Code, is amended by adding
at the end the following:
``(e) Alternative Fueling Infrastructure Trust Fund.--(1) There is
established in the Treasury of the United States a trust fund, to be
known as the Alternative Fueling Infrastructure Trust Fund, consisting
of such amounts as are deposited into the Trust Fund under paragraph
(2) and any interest earned on investment of amounts in the Trust Fund.
``(2) The Secretary of Transportation shall remit 90 percent of the
amount collected in civil penalties under this section to the Trust
Fund.
``(3) The Secretary of Energy may obligate such sums as are
available in the Trust Fund for the Clean Cities grant program to
increase the number of locations at which consumers may purchase fuel
containing ethanol, biodiesel, and other alternative fuels.''.
SEC. 306. CELLULOSIC BIOMASS FUEL.
Section 211(o)(2)(B)(iii) of the Clean Air Act (42 U.S.C.
7545(o)(2)(B)(iii)) is amended to read as follows:
``(iii) Minimum quantity derived from
cellulosic biomass.--
``(I) Calendar years 2008 through
2015.--For each of calendar years 2008
through 2015, the applicable volume
referred to in clause (ii) shall
contain a minimum number of gallons
that are derived from cellulosic
biomass determined in accordance with
the following table:
Applicable minimum number of
gallons derived from
cellulosic biomass
``Calendar year: (in millions of gallons):
2008.......................................... 30.0
2009.......................................... 45.0
2010.......................................... 75.0
2011.......................................... 120.0
2012.......................................... 180.0
2013.......................................... 250.0
2014.......................................... 500.0
2015.......................................... 1,000.0.
``(II) Calendar year 2016 and
thereafter.--For calendar year 2016 and
each calendar year thereafter, the
applicable volume referred to in clause
(ii) shall contain a minimum number of
gallons that are derived from
cellulosic biomass this is equal to the
product obtained by multiplying--
``(aa) the applicable
volume referred to in clause
(ii) for the calendar year; and
``(bb) the ratio that
1,000,000,000 gallons of
cellulosic biomass bears to the
applicable volume referred to
in clause (ii) for calendar
year 2015.
``(III) Ratio.--For calendar year
2008 and each calendar year thereafter,
the 2.5-to-1 ratio referred to in
paragraph (4) shall not apply.''.
SEC. 307. PRODUCTION INCENTIVES FOR CELLULOSIC BIOFUELS.
Section 942(f) of the Energy Policy Act of 2005 (42 U.S.C.
16251(f)) is amended by striking ``$250,000,000'' and inserting
``$200,000,000 for each of fiscal years 2007 through 2011''.
SEC. 308. TRANSIT-ORIENTED DEVELOPMENT CORRIDORS.
(a) Definitions.--In this section:
(1) Transit-oriented development corridor.--The term
``Transit-Oriented Development Corridor'' or ``TODC'' means a
geographic area designated by the Secretary under subsection
(b).
(2) Other terms.--The terms ``fixed guide way'', ``local
governmental authority'', ``mass transportation'',
``Secretary'', ``State'', and ``urbanized area'' have the
meanings given the terms in section 5302 of title 49, United
States Code.
(b) Transit-Oriented Development Corridors.--
(1) In general.--The Secretary shall develop and carry out
a program to designate geographic areas in urbanized areas as
Transit-Oriented Development Corridors.
(2) Criteria.--An area designated as a TODC under paragraph
(1) shall include rights-of-way for fixed guide way mass
transportation facilities (including commercial development of
facilities that have a physical and functional connection with
each facility).
(3) Number of todcs.--In consultation with State
transportation departments and metropolitan planning
organizations, the Secretary shall designate--
(A) not fewer than 10 TODCs by December 31, 2015;
and
(B) not fewer than 20 TODCs by December 31, 2025.
(4) Transit grants.--
(A) In general.--The Secretary make grants to
eligible states and local governmental authorities to
pay the Federal share of the cost of designating
geographic areas in urbanized areas as TODCs.
(B) Application.--Each eligible State or local
governmental authority that desires to receive a grant
under this paragraph shall submit an application to the
Secretary, at such time, in such manner, and
accompanied by such additional information as the
Secretary may reasonably require.
(C) Labor standards.--Subchapter IV of chapter 31
of title 40, United States Code shall apply to projects
that receive funding under this section.
(D) Federal share.--The Federal share of the cost
of a project under this subsection shall be 50 percent.
(c) TODC Research and Development.--To support effective deployment
of grants and incentives under this section, the Secretary shall
establish a TODC research and development program to conduct research
on the best practices and performance criteria for TODCs.
(d) Authorization of Appropriations.--There is authorized to be
appropriated to carry out this section $50,000,000 for each of fiscal
years 2008 through 2012.
SEC. 309. SAVING OIL BY REDUCING MILES-OF-TRAVEL: PILOT PROJECTS.
(a) In General.--The Secretary of Transportation (in this section
referred to as the ``Secretary'') shall develop and implement pilot
projects the purpose of which is to reduce vehicle miles traveled.
(b) Highway Congestion Tolling Evaluation Study.--The Secretary
shall carry out evaluation projects in no less than 6 metropolitan
areas selected by the Secretary to determine how technology can best be
applied to assess mileage-based road user charges on major highways at
peak-commuting times for the purposes of--
(1) reducing oil usage;
(2) lessening highway congestion; and
(3) expanding travel alternatives.
(c) Parking Cash-Out Evaluation Project.--
(1) In general.--The Secretary shall carry out a national
evaluation pilot project to assess how offering commuters the
option to receive the cash value of their workplace parking
place, if any, instead of free parking can--
(A) reduce oil usage;
(B) lessen highway congestion; and
(C) expand travel alternatives.
(2) Employer requirement.--Under the evaluation pilot
project, any employer that is participating in the pilot
project and offers free-of-charge commuter parking to the
employees of the employer must also offer a cashout alternative
to employees.
(d) Report.--The Secretary shall submit to Congress every 2 years
after the date of the enactment of this Act a report on the progress
and results of pilot projects under this section. The report shall
provide an analysis and summary of project implementation, changes in
oil usage and travel demand, and other matters as deemed appropriate by
the Secretary.
(e) Authorization of Appropriations.--There are authorized to be
appropriated to carry out subsection (b) $4,000,000, and to carry out
subsection (c) $4,000,000, for each of fiscal years 2008 through 2016.
SEC. 310. SAVING OIL BY REDUCING VEHICLE-MILES-OF-TRAVEL: RESEARCH AND
DEVELOPMENT.
(a) In General.--The Secretary of Transportation shall establish a
new research program the purpose of which is to investigate the oil-
savings potential and feasibility of programs which convert fixed costs
of driving to variable costs.
(b) Research Program.--The program's research shall include studies
of the potential and feasibility of--
(1) varying vehicle registration fees based on vehicle-
miles of travel;
(2) varying vehicle lease fees based on vehicle-miles of
travel;
(3) varying vehicle rental rates based on vehicle-miles of
travel; and
(4) other such costs which could be linked to vehicle-miles
of travel in order to provide incentives to reduce driving.
(c) Report.--The Secretary shall submit to Congress and publish on
the Department of Transportation web site at least one research product
per year.
(d) Authorization of Appropriations.--There are authorized to be
appropriated to carry out this section $2,000,000 for each of fiscal
years 2008 through 2017.
SEC. 311. BIOFUELS.
(a) Energy Policy Act of 2005 Amendments.--The Energy Policy Act of
2005 is amended--
(1) in section 208(c)(2)(A) by striking ``be limited to
sugar producers and the production of ethanol in the States of
Florida, Louisiana, Texas, and Hawaii, divided equally among
the States,'';
(2) in section 932(a)(1)(C)(ii) by striking ``, but not
including municipal solid waste, gas derived from the
biodegradation of municipal solid waste, or paper that is
commonly recycled'';
(3) in section 946(c)(1) by striking ``ethanol'' and
inserting ``transportation fuel produced from biomass'';
(4) in section 1510(b) by striking ``fuel ethanol'' and
inserting ``transportation fuel produced from biomass,'' and
(5) in section 1514(c)(1)(A) by striking ``biomass
ethanol'' and inserting ``transportation fuel produced from
biomass''.
(b) Internal Revenue Code of 1986 Amendment.--
(1) Amendment.--Section 30C(c)(1)(A) of the Internal
Revenue Code of 1986 is amended by striking ``one or more of
the following: ethanol, natural gas, compressed natural gas,
liquefied natural gas, liquefied petroleum gas, or hydrogen''
and inserting ``an alternative fuel (as defined in section 301
of the Energy Policy Act of 1992 (42 U.S.C. 13211)), including
section 1346 of the Energy Policy Act of 2005''.
(2) Effect.--The amendment made by paragraph (1) shall take
effect as if enacted by section 1342 of the Energy Policy Act
of 2005.
(c) Clean Air Act Amendments.--The Clean Air Act is amended--
(1) in section 212 (42 U.S.C. 7546)--
(A) by adding at the end of subsection (a) the
following new paragraph:
``(4) Biofuel.--The term `biofuel' means any transportation
fuel produced from biomass.''; and
(B) by striking ``ethanol'' each place it appears
and inserting ``biofuel''; and
(2) in section 211(r) (42 U.S.C. 7545(r)) by striking
``ethanol'' each place it appears and inserting ``biofuel''.
TITLE IV--ELECTRICITY FOR TRANSPORTATION
SEC. 401. NEAR-TERM VEHICLE TECHNOLOGY PROGRAM.
(a) Purposes.--The purposes of this section are to enhance the
energy security of the United States, reduce dependence on imported
oil, improve the energy efficiency of the transportation sector, and
reduce emissions through the expansion of grid supported mobility,
through programs to--
(1) develop, in partnership with industry, research
institutions, National Laboratories, and institutions of higher
education, projects to foster--
(A) the commercialization of electric drive vehicle
technology for various sizes and applications of
vehicles, including commercialization of plug-in hybrid
electric vehicles and plug-in hybrid fuel cell
vehicles;
(B) growth in employment in the United States in
electric drive design and manufacturing of components
and vehicles;
(C) validation of the potential for plug-in hybrid
vehicles through fleet demonstrations and data
collection; and
(D) acceleration of fuel cell commercialization
through comprehensive development and commercialization
of the electric drive technology systems that are the
foundational technology of the fuel cell vehicle
system;
(2) make critical public investments to help private
industry, institutions of higher education, National
Laboratories, and research institutions to expand innovation,
industrial growth, and jobs in the United States through the
development, demonstration, and commercialization of a wide
range of electric drive components, systems, and vehicles using
diverse electric drive transportation technologies;
(3) optimize the availability of the existing electric
infrastructure for use in fueling light duty transportation and
other on-road and nonroad vehicles in lieu of vehicles and
equipment that use petroleum, including the more than 3,000,000
reported units (such as electric forklifts, golf carts, and
similar nonroad vehicles) in use on the date of enactment of
this Act; and
(4) develop advanced communication, metering and charging
technologies necessary for the integration of electric drive
transportation technology into the smart grid of the future.
(b) Definitions.--In this section:
(1) Administrator.--The term ``Administrator'' means the
Administrator of the Environmental Protection Agency.
(2) Battery.--The term ``battery'' means an electrochemical
energy storage device used in an on-road or nonroad vehicle
powered in whole or in part using an off-board or on-board
source of electricity.
(3) Electric drive transportation technology.--The term
``electric drive transportation technology'' means--
(A) vehicles that use an electric motor for all or
part of their motive power and that may or may not use
off-board electricity, including battery electric
vehicles, fuel cell vehicles, engine dominant hybrid
electric vehicles, plug-in hybrid electric vehicles,
plug-in hybrid fuel cell vehicles, and electric rail;
or
(B) equipment relating to transportation or mobile
sources of air pollution that use an electric motor to
replace an internal combustion engine for all or part
of the work of the equipment, including corded electric
equipment linked to transportation or mobile sources of
air pollution, and electrification technologies at
airports, ports, truck stops, and material handling
facilities.
(4) Engine dominant hybrid electric vehicle.--The term
``engine dominant hybrid electric vehicle'' means an on-road or
nonroad vehicle that--
(A) is propelled by an internal combustion engine
or heat engine using--
(i) any combustible fuel;
(ii) an on-board, rechargeable storage
device; and
(B) has no means of using an off-board source of
electricity.
(5) Fuel cell vehicle.--The term ``fuel cell vehicle''
means an on-road or nonroad vehicle that uses a fuel cell (as
defined in section 3 of the Spark M. Matsunaga Hydrogen
Research, Development, and Demonstration Act of 1990).
(6) Institution of higher education.--The term
``institution of higher education'' has the meaning given the
term in section 2 of the Energy Policy Act of 2005 (42 U.S.C.
15801).
(7) Nonroad vehicle.--The term ``nonroad vehicle'' means a
vehicle that is powered by a nonroad engine, as that term is
defined in section 216 of the Clean Air Act (42 U.S.C. 7550),
or fully or partially by an electric motor powered by a fuel
cell, a battery, or an off-board source of electricity and that
is not a motor vehicle or a vehicle used solely for
competition.
(8) Plug-in hybrid electric vehicle.--The term ``plug-in
hybrid electric vehicle'' means a light-duty, medium-duty, or
heavy-duty on-road or nonroad vehicle that is propelled by an
internal combustion engine or heat engine and/or an electric
motor and energy storage system using--
(A) any combustible fuel;
(B) an on-board, rechargeable storage device; and
(C) a means of using an off-board source of
electricity to operate the vehicle in intermittent or
continuous all-electric mode.
(9) Plug-in hybrid fuel cell vehicle.--The term ``plug-in
hybrid fuel cell vehicle'' means a fuel cell vehicle with an
on-board, rechargeable storage device powered by an off-board
source of electricity.
(10) Secretary.--The term ``Secretary'' means the Secretary
of Energy.
(c) Electric Drive Transportation Program.--
(1) Research and development.--The Secretary shall conduct
a program of research, development, demonstration, and
commercial application for electric drive transportation
technology, including--
(A) high capacity, high efficiency batteries that
have improved battery life, energy storage capacity and
power delivery capacity when compared to technology
that is in commercial service;
(B) high efficiency on-board and off-board charging
components;
(C) high power and energy efficient drive train
systems for passenger and commercial vehicles and for
nonroad vehicles;
(D) control system development and power train
development and integration for plug-in hybrid electric
vehicles, plug-in hybrid fuel cell vehicles, and engine
dominant hybrid electric vehicles, including--
(i) development of efficient cooling
systems;
(ii) analysis and development of control
systems that minimize the emissions profile
when clean diesel engines are part of a plug-in
hybrid drive system; and
(iii) development of different control
systems that optimize for different goals,
including battery life, reduction of petroleum
consumption, and greenhouse gas reduction;
(E) nanomaterial technology applied to both battery
and fuel cell systems; and
(F) smart vehicle and grid interconnection devices
and software that enable communications between the
grid of the future and electric drive vehicles
(2) Market assessment and electricity usage.--The
Secretary, in consultation with the Administrator and with
industry, shall implement a program to--
(A) understand and inventory existing electric
drive technologies and markets;
(B) identify and implement methods of removing
barriers for existing and emerging applications of
electric drive transportation technologies;
(C) work with utilities to develop low-cost, simple
methods of utilizing off-peak electricity or managing
any on-peak electricity use;
(D) develop systems and processes to enable plug-in
hybrid vehicles to enhance the availability of
emergency back-up power for consumers and study and
demonstrate the potential value to the grid to utilize
the energy stored in the on-board storage systems to
improve the efficiency and reliability of the grid
generation system; and
(E) work with utilities and other interested
stakeholders to study and demonstration the linkages
and implications of the introduction of plug-in hybrids
and other types of electric transportation and the
production of electricity from renewable resources.
(3) Grants to encourage off-peak electricity usage.--The
Secretary shall award grants to partially fund public and
private electric utility programs and technologies that
encourage owners of electric drive transportation technologies
to use off-peak electricity or have the load managed by the
utility.
(4) Plug-in hybrid electric vehicle and electric drive
transportation testing and certification.--
(A) In general.--For purposes of enabling the
introduction of plug-in hybrid electric vehicles and
electric drive transportation technology into
commercial use, the Secretary shall develop, in
collaboration with industry and in consultation with
the Administrator, a program to test the emissions of
criteria pollutants, energy use and the petroleum
reduction potential of light-, medium-, and heavy-duty
plug-in hybrid electric vehicles and other forms of
electric drive transportation in both actual driving
and test conditions. The Secretary shall also cooperate
with the Administrator in the development of the
program described in subparagraph (B) to establish
certification standards for light-, medium- and heavy-
duty plug-in hybrid electric vehicles.
(B) Testing program.--The testing program shall
consider the results of prior testing activities of the
public and private sectors, and shall utilize the
capabilities of the Department of Energy's Field
Operations Program and Qualified Vehicle Testing Sites.
Test procedures shall include consideration of--
(i) the vehicle and fuel as a system, not
just an engine;
(ii) nightly off-board charging; and
(iii) different engine-turn on speed
control strategies.
(C) Certification program.--Within 6 months of the
date of enactment of this section, the Administrator
shall develop a task force including vehicle
manufacturers, environmental organizations, utilities,
fleet operators, research organizations and
representatives of Federal agencies, including the
Department of Transportation and the Department of
Energy, to consider the establishment of minimum
certification standards for plug-in hybrid electric
vehicles.
(D) Duties.--The task force established under
subparagraph (C) shall--
(i) identify critical path issues in the
establishment of a certification protocol;
(ii) identify criteria for the
establishment of a plug-in hybrid certification
protocol that would be applicable to various
plug-in hybrid vehicle technologies and
applications and vehicle control strategies;
(iii) evaluate test data available from
hybrid vehicle test programs and fuel economy
analysis;
(iv) work with the Administrator to develop
guidelines to permit the emissions reductions
attributable to the use of plug-in hybrid
vehicles to be recognized for purposes of State
Implementation Plans; and
(iv) recommend a certification protocol for
certifying the emissions, fuel economy and
petroleum usage of plug-in hybrid vehicles.
(E) Public comment.--Within 18 months of the date
of enactment of this section, the Administrator shall
publish the recommended certification protocol for
public comment.
(F) Final protocol.--Not later than two years after
the date of enactment of this section, the
Administrator shall publish a final certification
protocol for plug-in hybrid vehicles.
(5) City cars.--Not later than 1 year after the date of
enactment of this section, the Secretary, in consultation with
the Secretary of Transportation, shall study and report to
Congress on the benefits, including petroleum savings, of and
barriers to the widespread deployment of a potentially new
class of vehicles known as city cars with performance
capability that exceeds that of low speed vehicles but is less
than that of passenger vehicles, and which may be battery
electric, fuel cell electric, or plug-in hybrid electric
vehicles. Such study shall examine and recommend appropriate
safety requirements for such vehicles based on patterns of
usage.
(d) Plug-in Hybrid Electric Vehicle Demonstration Program.--
(1) Establishment.--The Secretary shall establish a
competitive demonstration program to provide grants on a cost-
shared basis to State governments, local governments,
metropolitan transportation authorities, air pollution control
districts, private or nonprofit entities or combinations
thereof, to carry out a project or projects for demonstration
of plug-in hybrid electric vehicles
(2) Administration.--The Secretary shall establish
requirements for applications for grants under this section.
The Secretary shall require, at a minimum, that applicants
describe how data will be collected and summarized for
dissemination to the Department, other grantees and the public,
on--
(A) vehicle and component performance, including
performance of the battery, energy management, and
charging systems, under various driving speeds, trip
ranges, traffic and other driving conditions;
(B) vehicle and component costs, including
acquisition, operating and maintenance costs;
(C) vehicle emissions, including emissions of
greenhouse gases; and
(D) petroleum displacement as a result of the
project.
(3) Solicitation.--Not later than 180 days after the date
of enactment of this section, the Secretary shall solicit
proposals to demonstrate plug-in hybrid electric vehicles.
Thereafter, the Secretary shall make annual solicitations for
proposals to carry out this section.
(4) Selection criteria.--
(A) Priority.--When making awards under this
subsection, the Secretary shall consider each
applicant's previous experience involving plug-in
hybrid electric vehicles and shall give priority
consideration to applications that--
(i) demonstrate a path to commercialization
for the vehicles demonstrated;
(ii) demonstrate technologies that optimize
the performance of the vehicle in terms of
miles per gallon and emission reduction in
urban and suburban environments; or
(iii) are likely to make a significant
contribution to the advancement of the
technology and production in the United States.
(B) Scope of demonstrations.--When making awards
under this subsection, the Secretary shall ensure that
the program will--
(i) demonstrate the operation of plug-in
hybrid vehicles under various driving speeds,
trip ranges, driving conditions, climate
conditions and topography conditions;
(ii) demonstrate light-, medium- and heavy-
duty vehicles with a variety of battery and
engine-turn-on control systems;
(iii) demonstrate plug-in hybrid vehicles
in a variety of applications including military
applications, mass market passenger and light-
duty truck applications, and fleet
applications;
(iv) demonstrate vehicles from original
equipment manufacturers, Tier One suppliers, or
other entities capable of achieving
commercialization of the technology; and
(v) provide an opportunity for innovation
and creativity from small and breakthrough
technology companies.
(5) Other requirements.--
(A) Continuing eligibility.--An applicant that has
received a grant in one year may apply for additional
funds in subsequent years, but the Secretary shall not
provide more than an aggregate of $20,000,000 in
Federal assistance under the program to any applicant
for fiscal years 2008 through 2013.
(B) Information.--The Secretary shall establish
mechanisms to ensure that nonproprietary information,
test data, specifications, and knowledge gained by
participants in the program are shared among the
program participants and available to other interested
parties, including other applicants.
(e) Education Program.--The Secretary shall develop a nationwide
education strategy for electric drive transportation technologies
providing secondary and high school teaching materials and support for
education offered by institutions of higher education that is focused
on electric drive system and component engineering, including--
(1) the Plug-In Hybrid Electric Vehicle competition for
institutions of higher education to be named in honor of the
pioneering work of Dr. Andrew Frank; and
(2) a program to award funds to institutions of higher
education to create or support degree programs to ensure the
availability of trained electrical and mechanical engineers
with the skills necessary for the advancement of plug-in hybrid
electric vehicles and other forms of electric-drive
transportation.
(f) Near-Term Electric Transportation Deployment Program.--
(1) In general.--Not later than 1 year after the date of
enactment of this section, after consultation with the
Secretary and the Secretary of Transportation, the
Administrator shall establish a program of grants and loans to
deploy qualified electric transportation that can reduce
petroleum use, greenhouse gas emissions and criteria pollutants
by 40 percent or more when compared to commercially available,
nonelectric technologies.
(2) Definition.--For purposes of this subsection, the term
``qualified electric transportation project'' includes ship-to-
shore electrification, truck stop electrification, electric
truck refrigeration units; electric airport ground support
equipment, electric material handing equipment, electric or
dual mode electric freight rail, and associated infrastructure,
including, but not limited to, panel upgrades, battery
chargers, and trenching.
(3) Grants.--Two thirds of the funds made available by the
Administrator for grants to qualified electric transportation
projects shall be allocated competitively based on the overall
cost-effectiveness of the project in reducing emissions of
criteria pollutants, emissions of greenhouse gases, and
petroleum usage. One-third of the grant funds made available
shall be awarded to projects as applications are received as
long as the projects meet the minimum standard for the
reduction of 40 percent in emissions of criteria pollutants,
emissions of greenhouse gases and petroleum usage. Large scale
projects and large scale aggregators of projects are
encouraged.
(4) Loans.--The Administrator shall establish a revolving
loan program to provide loans for qualified electric
transportation projects. Of funds appropriated to carry out the
purposes of this subsection, amounts not utilized for grants
under paragraph (3) shall be used to fund the loan program. The
Administrator shall establish criteria for loans under this
paragraph.
(g) Transition to Fuel and Technology Neutral Regulations.--
(1) Findings.--
(A) Congress finds that in light of advances in
automotive engine technologies since the passage of the
Clean Air Act, it is necessary to modify the control of
mobile source emissions pursuant to the Clean Air Act
to establish fuel and technology neutral mobile source
emissions control programs.
(B) Congress finds that replacement of current
emissions control requirements with a market-based
program that encourages the use of the most fuel
efficient and environmentally benign vehicles will
provide opportunities for all vehicle types, including
vehicles with spark-ignited engines, compression-
ignited engines, other engine types, dual fueled
vehicles, flexible fuel vehicles, fuel cell electric
vehicles, battery electric vehicles, plug-in hybrid
electric vehicles, corded electric vehicle equipment
and other electric propulsion technologies.
(2) Reports.--Within 1 year of the date of enactment of
this section, the Administrator shall report to Congress on all
of the fuel and technology-specific definitions in Federal
environmental law and regulations and recommend how such
definitions might be changed to be fuel and technology neutral.
Within 18 months of the date of enactment of this section, the
Administrator shall report to Congress on how petroleum
reductions, emissions reductions, and reductions in full fuel
cycle criteria pollutants could be incorporated into the fuel
and technology neutral emissions reduction program required
under paragraph (3).
(3) Rulemaking.--After providing the report required under
paragraph (2), the Administrator shall, within 2 years of the
date of enactment of this section, adopt final rules to
implement a fuel and technology neutral program to reduce
tailpipe and evaporative emissions of criteria pollutants from
mobile sources. Such program shall take effect not later than
10 years after the date of enactment of this section.
(4) Definition.--For purposes of this subsection, ``fuel
and technology neutral mobile source emissions control
programs'' means programs that contain minimum standards for
emissions of criteria pollutants from mobile sources and a
credit-based compliance mechanism for manufacturers that
includes averaging, banking and trading of credits for
exceeding the minimum standard.
(h) Cost Sharing.--Notwithstanding section 988(c) of the Energy
Policy Act of 2005 (42 U.S.C. 16352), the Secretary shall reduce to 30
percent the non-Federal cost share required from local and municipal
governments participating in the programs authorized in this section.
(i) Merit Review.--Notwithstanding section 989 of the Energy Policy
Act of 2005 (42 U.S.C. 16353), not more than 30 percent of the total
funding awarded under this section shall be directly awarded to
National Laboratories, not more than 10 percent of the total funding
awarded under this section shall be awarded, directly or indirectly, to
projects for the development. or demonstration of fuel cell vehicles or
plug-in hybrid fuel cell vehicles, not more than 30 percent of the
total funding awarded under subsection (f) shall be awarded, directly
or indirectly, to ship-to-shore-electrification projects, and not more
than 5 percent of the total funding awarded under this section shall be
awarded, directly or indirectly, to projects for the development or
demonstration of electric rail or magnetic levitation trains.
(j) Authorization of Appropriations.--There are authorized to be
appropriated to carry out the programs under subsections (c) and (e)
$110,000,000 for each of fiscal years 2008 through 2013. There are
authorized to be appropriated to carry out the program under subsection
(d) $60,000,000 for each of fiscal years 2008 through 2012, of which
$20,000,000 shall be available only for award to local and municipal
governments. There are authorized to be appropriated to carry out the
programs under subsections (f) and (g) $125,000,000 for each of fiscal
years 2008 through 2013.
SEC. 402. AMENDMENTS TO ALTERNATIVE MOTOR VEHICLE CREDIT.
(a) 2002 Model Year City Fuel Economy.--Section 30B(c)(2)(A)(ii) of
Subpart B of part IV of subchapter A of chapter 1 of the Internal
Revenue Code of 1986 is amended to read as follows:
``(ii) 2002 model year city fuel economy.--
For purposes of this section, the 2002 model
year city fuel economy with respect to a
vehicle shall be determined on a gasoline
equivalent basis as determined by the
Administrator of the Environmental Protection
Agency using the tables provided in subsection
(b)(2)(B) with respect to such vehicle, except
that for purposes of subsection (d)(2)(A)(i)
city fuel economy must not include fuel economy
increases resulting from off-vehicle sources of
electricity.''.
(b) New Qualified Hybrid Motor Vehicle Credit.--Section 30B(d) of
Subpart B of Part IV of subchapter A of chapter 1 of the Internal
Revenue Code of 1986 is amended to read as follows:
``(d) New Qualified Hybrid Motor Vehicle Credit.--
``(1) In general.--For purposes of subsection (a), the new
qualified hybrid motor vehicle credit determined under this
subsection for the taxable year is the credit amount determined
under paragraph (2) with respect to a new qualified hybrid
motor vehicle placed in service by the taxpayer during the
taxable year.
``(2) Credit amount.--
``(A) Credit amount for passenger automobiles and
light trucks.--
``(i) in the case of a new qualified hybrid
motor vehicle which is a passenger automobile
or light truck and which has a gross vehicle
weight rating of not more than 8,500 pounds,
the amount determined under this paragraph is
the sum of the amounts determined under clauses
(ii), (iii), and (iv).
``(ii) Fuel economy.--The amount determined
under this clause is the amount which would be
determined under subsection (c)(2)(A) if such
vehicle were a vehicle referred to in such
subsection.
``(iii) Conservation credit.--The amount
determined under this clause is the amount
which would be determined under subsection
(c)(2)(B) if such vehicle were a vehicle
referred to in such subsection.
``(iv) Increase for battery-powered range
from off-vehicle electricity.--The amount
determined under this clause in 2009 to 2015 as
follows:
``(I) $800 if such vehicle uses a 4
kWh traction battery.
``(II) $1200 if such vehicle uses a
5 kWh traction battery.
``(III) $1600 if such vehicle uses
a 6 kWh traction battery.
``(IV) $2000 if such vehicle uses a
7 kWh traction battery.
``(V) $2400 if such vehicle uses a
8 kWh traction battery.
``(VI) $2800 if such vehicle uses a
9 kWh traction battery.
``(VII) $3000 if such vehicle uses
a 10 kWh traction battery.
``(VIII) $3200 if such vehicle uses
a 11 kWh traction battery.
``(IX) $3400 if such vehicle uses a
12 kWh traction battery.
``(X) $3800 if such vehicle uses a
13 kWh traction battery.
``(XI) $4000 if such vehicle uses a
14 kWh traction battery.
``(XII) $4200 if such vehicle uses
a 15 kWh traction battery.
``(B) Credit amount for other motor vehicles.--
``(i) In general.--In the case of any new
qualified hybrid motor vehicle to which
subparagraph (A) does not apply, the amount
determined under this paragraph is the amount
equal to the applicable percentage of the
qualified incremental hybrid cost of the
vehicle as certified under clause (v).
``(ii) Applicable percentage.--For purposes
of clause (i), the applicable percentage is--
``(I) 20 percent if the vehicle
achieves an increase in city fuel
economy relative to a comparable
vehicle of at least 30 percent but less
than 40 percent,
``(II) 30 percent if the vehicle
achieves such an increase of at least
40 percent but less than 50 percent,
``(III) 40 percent if the vehicle
achieves such an increase of at least
50 percent, and
``(IV) 40 percent for a plug-in
hybrid electric vehicle that can use
off-board electricity to recharge an
energy storage device capable of ten
(or greater) miles of all electric
range.
More than 40 percent shall be granted if the
all electric range is greater than 10 miles, as
determined by the Administrator of the
Environmental Protection Agency.
``(iii) Qualified incremental hybrid
cost.--For purposes of this subparagraph, the
qualified incremental hybrid cost of any
vehicle is equal to the amount of the excess of
the manufacturer's suggested retail price for
such vehicle over such price for a comparable
vehicle, to the extent such amount does not
exceed--
``(I) $7,500, if such vehicle has a
gross vehicle weight rating of not more
than 14,000 pounds,
``(II) $15,000, if such vehicle has
a gross vehicle weight rating of more
than 14,000 pounds but not more than
26,000 pounds, and
``(III) $30,000, if such vehicle
has a gross vehicle weight rating of
more than 26,000 pounds.
``(iv) Comparable vehicle.--For purposes of
this subparagraph, the term `comparable
vehicle' means, with respect to any new
qualified hybrid motor vehicle, any vehicle
which is powered solely by a gasoline or diesel
internal combustion engine and which is
comparable in weight, size, and use to such
vehicle.
``(v) Certification.--A certification
described in clause (i) shall be made by the
manufacturer and shall be determined in
accordance with guidance prescribed by the
Secretary. Such guidance shall specify
procedures and methods for calculating fuel
economy savings and incremental hybrid costs.
``(3) New qualified hybrid motor vehicle.--For purposes of
this subsection--
``(A) In general.--The term `new qualified hybrid
motor vehicle' means a motor vehicle--
``(i) which draws propulsion energy from
onboard sources of stored energy which are
both--
``(I) an internal combustion or
heat engine using consumable fuel, and
``(II) a rechargeable energy
storage system,
``(ii) which, in the case of a vehicle to
which paragraph (2)(A) applies, has received a
certificate of conformity under the Clean Air
Act and meets or exceeds the equivalent
qualifying California low emission vehicle
standard under section 243(e)(2) of the Clean
Air Act for that make and model year, and--
``(I) in the case of a vehicle
having a gross vehicle weight rating of
6,000 pounds or less, the Bin 5 Tier II
emission standard established in
regulations prescribed by the
Administrator of the Environmental
Protection Agency under section 202(i)
of the Clean Air Act for that make and
model year vehicle, and
``(II) in the case of a vehicle
having a gross vehicle weight rating of
more than 6,000 pounds but not more
than 8,500 pounds, the Bin 8 Tier II
emission standard which is so
established,
``(iii) which has a maximum available power
of at least--
``(I) 4 percent in the case of a
vehicle to which paragraph (2)(A)
applies,
``(II) 10 percent in the case of a
vehicle which has a gross vehicle
weight rating of more than 8,500 pounds
and not more than 14,000 pounds, and
``(III) 15 percent in the case of a
vehicle in excess of 14,000 pounds,
``(iv) which, in the case of a vehicle to
which paragraph (2)(B) applies, has an internal
combustion or heat engine which has received a
certificate of conformity under the Clean Air
Act as meeting the emission standards set in
the regulations prescribed by the Administrator
of the Environmental Protection Agency for 2004
through 2007 model year diesel heavy duty
engines or Otto cycle heavy duty engines, as
applicable,
``(v) the original use of which commences
with the taxpayer,
``(vi) which is acquired for use or lease
by the taxpayer and not for resale, and
``(vii) which is made by a manufacturer.
``(viii) which includes plug-in hybrid
electric vehicles for purposes of paragraphs
(2)(A) and (2)(B).
Such term shall not include any vehicle which is not a
passenger automobile or light truck if such vehicle has
a gross vehicle weight rating of less than 8,500
pounds.
``(B) Consumable fuel.--For purposes of
subparagraph (A)(i)(I), the term `consumable fuel'
means any solid, liquid, or gaseous matter which
releases energy when consumed by an auxiliary power
unit.
``(C) Maximum available power.--
``(i) Certain passenger automobiles and
light trucks.--In the case of a vehicle to
which paragraph (2)(A) applies, the term
`maximum available power' means the maximum
power available from the rechargeable energy
storage system, during a standard 10 second
pulse power or equivalent test, divided by such
maximum power and the SAE net power of the heat
engine.
``(ii) Other motor vehicles.--In the case
of a vehicle to which paragraph (2)(B) applies,
the term `maximum available power' means the
maximum power available from the rechargeable
energy storage system, during a standard 10
second pulse power or equivalent test, divided
by the vehicle's total traction power. For
purposes of the preceding sentence, the term
`total traction power' means the sum of the
peak power from the rechargeable energy storage
system and the heat engine peak power of the
vehicle, except that if such storage system is
the sole means by which the vehicle can be
driven, the total traction power is the peak
power of such storage system.
``(D) All electric range.--For purposes of
paragraph (2)(B) the term `all electric range' means
miles traveled in a hybrid electric vehicle capable of
using an off-vehicle source of electricity and tested
using the Environmental Protection Agency's Federal
Urban Driving Schedule or a new driving schedule for
plug-in hybrid electric vehicles.
``(E) KWH traction battery.--For purposes of
paragraph (2)(A)(iii) the term `kWh traction battery'
means the size of an electrochemical storage device as
measured by from 100 percent state of charge to 0
percent state of charge as defined at [10 C.F.R.
_____].
``(F) Plug-in hybrid electric vehicle.--For
purposes of paragraphs (2)(A) and (2)(B), the term
`plug-in hybrid electric vehicle' means a light-duty,
medium-duty, or heavy-duty on-road or vehicle that is
propelled by an internal combustion engine or heat
engine and/or an electric motor and energy storage
system using:
``(i) any combustible fuel,
``(ii) an on-board, rechargeable storage
device, and
``(iii) a means of using an off-board
source of electricity to operate the vehicle in
intermittent or continuous all-electric
mode.''.
(c) Driving Schedule for Plug-in Hybrid Electric Vehicles.--
(1) Establishment.--Not later than 18 months after the date
of enactment of this section, the Administrator of the
Environmental Protection Agency shall develop a driving
schedule for plug-in hybrid electric vehicles based on a test
that shall start with a full battery and end when the battery
reaches 20 percent state of charge after intermittent use of
the battery and electric motor for vehicle propulsion at speeds
no greater than 35 miles per hour, and which does not count
vehicle miles traveled while the engine is operating.
(2) Bonus credits.--Vehicles that can travel in all
electric mode during a separate test of higher speed operation
shall be entitled to bonus all electric range miles for
purposes of the credit provided in Section 30B of the Internal
Revenue Code of 1986, on a schedule to be established by rule
by the Administrator.
(d) Duration of Tax Credit.--Section 30B(i) of the Internal Revenue
Code of 1986, as amended by this Act, is amended to read as follows:
``(i) Termination.--This section shall not apply to any property
purchased after--
``(1) in the case of a new qualified fuel cell motor
vehicle (as described in subsection (b)), December 31, 2014,
``(2) in the case of a new advanced lean burn technology
motor vehicle (as described in subsection (c)) or a new
qualified hybrid motor vehicle (as described in subsection
(d)(2)(A)), December 31, 2010,
``(3) in the case of a new qualified hybrid motor vehicle
(as described in subsection (d)(2)(B)), December 31, 2010,
``(4) in the case of a new qualified alternative fuel
vehicle (as described in subsection (e)), December 31, 2010,
and
``(5) in the case of a new qualified hybrid motor vehicle
which is a plug-in hybrid electric vehicle range (as described
in subsection (d)(2)(A) and (d) (2) (B), December 31, 2015.''.
(e) Effective Date.--The amendments made by this section shall take
effect for property or vehicles placed in service after December 31,
2008.
SEC. 403. IDLING REDUCTION TAX CREDIT.
(a) In General.--Subpart D of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 (relating to business-related
credits) is amended by adding at the end the following new section:
``SEC. 45O. IDLING REDUCTION CREDIT.
``(a) General Rule.--For purposes of section 38, the idling
reduction tax credit determined under this section for the taxable year
is an amount equal to 50 percent of the amount paid or incurred for the
purchase and installation of each qualifying idling reduction device or
qualifying idle reduction infrastructure placed in service by the
taxpayer during the taxable year.
``(b) Limitation.--The maximum amount allowed as a credit under
subsection (a) shall not exceed $3,500 per device or per qualifying
infrastructure.
``(c) Definitions.--For purposes of subsection (a)--
``(1) Qualifying idling reduction device.--The term
`qualifying idling reduction device' means any device or system
of devices that--
``(A) is installed on a heavy-duty diesel-powered
on-highway vehicle,
``(B) is designed to provide to such vehicle those
services (such as heat, air conditioning, or
electricity) that would otherwise require the operation
of the main drive engine while the vehicle is
temporarily parked or remains stationary using either--
``(i) an all electric unit such as a
battery powered unit or from grid-supplied
electricity, or
``(ii) a dual fuel unit powered by diesel
or other fuels, and is capable of providing
such services from grid-supplied electricity or
on-truck batteries alone,
``(C) the original use of which commences with the
taxpayer,
``(D) is acquired for use by the taxpayer and not
for resale, and
``(E) is certified by the Secretary of Energy, in
consultation with the Administrator of the
Environmental Protection Agency and the Secretary of
Transportation, to reduce long-duration idling of such
vehicle at a motor vehicle rest stop or other location
where such vehicles are temporarily parked or remain
stationary.
``(2) Heavy-duty diesel-powered on-highway vehicle.--The
term `heavy-duty diesel-powered on-highway vehicle' means any
vehicle, machine, tractor, trailer, or semi-trailer propelled
or drawn by mechanical power and used upon the highways in the
transportation of passengers or property, or any combination
thereof determined by the Federal Highway Administration.
``(3) Long-duration idling.--The term `long-duration
idling' means the operation of a main drive engine, for a
period greater than 15 consecutive minutes, where the main
drive engine is not engaged in gear. Such term does not apply
to routine stoppages associated with traffic movement or
congestion.
``(4) Qualifying idle reduction infrastructure.--The term
`qualifying idle reduction infrastructure' means either --
``(A) off-truck equipment to supply electric power,
including electric receptacles, boxes, wiring, conduit,
and other connections to one truck space, or
``(B) off-truck equipment that directly provides
air conditioning, heating, electric power, and other
connections and services to one truck space.
``(d) No Double Benefit.--For purposes of this section--
``(1) Reduction in basis.--If a credit is determined under
this section with respect to any property by reason of
expenditures described in subsection (a), the basis of such
property shall be reduced by the amount of the credit so
determined.
``(2) Other deductions and credits.--No deduction or credit
shall be allowed under any other provision of this chapter with
respect to the amount of the credit determined under this
section.
``(3) Election not to claim credit.--This section shall not
apply to a taxpayer for any taxable year if such taxpayer
elects to have this section not apply for such taxable year.''.
(b) Credit to Be Part of General Business Credit.--Subsection (b)
of section 38 of such Code (relating to general business credit) is
amended by striking ``plus'' at the end of paragraph (30), by striking
the period at the end of paragraph (31) and inserting ``, plus'' , and
by adding at the end the following new paragraph:
``(32) the idling reduction tax credit determined under
section 45O(a).''.
(c) Conforming Amendments.--
(1) The table of sections for subpart D of part IV of
subchapter A of chapter 1 of such Code is amended by inserting
after the item relating to section 45M the following new item:
``Sec. 45O. Idling reduction credit.''.
(2) Section 1016(a) of such Code, 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 following:
``(39) in the case of a facility with respect to which a
credit was allowed under section 45O, to the extent provided in
section 45O(d)(A).''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2006.
(e) Determination of Certification Standards by Secretary of Energy
for Certifying Idling Reduction Devices.--Not later than 6 months after
the date of the enactment of this section and in order to reduce air
pollution and fuel consumption, the Secretary of Energy, in
consultation with the Administrator of the Environmental Protection
Agency and the Secretary of Transportation, shall publish the standards
under which the Secretary, in consultation with the Administrator of
the Environmental Protection Agency and the Secretary of
Transportation, will, for purposes of section 45O of the Internal
Revenue Code of 1986 (as added by this section), certify the idling
reduction devices and qualifying infrastructure which will reduce long-
duration idling of vehicles at motor vehicle rest stops or other
locations where such vehicles are temporarily parked or remain
stationary in order to reduce air pollution and fuel consumption.
SEC. 404. PLUG-IN HYBRID ELECTRIC VEHICLE PRIZE.
(a) In General.--The Secretary of Energy (in this section referred
to as the ``Secretary'') shall carry out a program to competitively
award cash prizes to advance the research, development, demonstration,
and commercial application of plug-in hybrid electric vehicle
technology.
(b) Categories.--The Secretary shall establish prizes for--
(1) batteries using nanotechnology for application in plug-
in hybrid electric vehicles or in plug-in hybrid fuel cell
vehicles;
(2) prototypes of plug-in hybrid electric vehicles that
best meet or exceed objective performance criteria;
(3) demonstrations of prototypes of plug-in hybrid electric
vehicles in medium duty, heavy-duty, nonroad vehicle or
military applications that are designed to facilitate the
eventual market success of plug-in hybrid electric vehicle
technologies;
(4) advancements in plug-in hybrid electric vehicle
technology for light-duty passenger vehicle applications that
can significantly advance the petroleum reduction and
environmental benefits or control system technology;
(5) advancements in plug-in hybrid electric vehicles
technology for light-duty passenger applications to obtain at
least 30 miles of continuous all electric range at highway
speeds, to seat two or more passengers, to use four or more
wheels, to demonstrate zero to 60 mile per hour acceleration in
10 seconds or less, to meet Environmental Protection Agency
criteria pollutant standards, and to be able to pass safety
standards for passenger vehicles set by the National Highway
Transportation Safety Administration; and
(6) other plug-in hybrid electric vehicle technology
advances deemed necessary by the Secretary.
(c) Advancements.--Prizes authorized under this section shall be
awarded to the most significant advance or advances that meet criteria
established by the Secretary.
(d) Eligibility.--To be eligible to win a prize under this section,
an individual or entity--
(1) shall have complied with all the requirements
prescribed by the Secretary;
(2) in the case of a private entity, shall be incorporated
in and maintain a primary place of business in the United
States, and in the case of an individual, whether participating
singly or in a group, shall be a citizen of, or an alien
lawfully admitted for permanent residence in, the United
States; and
(3) shall not be a Federal entity, a Federal employee
acting within the scope of his employment, or an employee of a
National Laboratory acting within the scope of his employment.
(e) Judges.--The Secretary shall assemble a panel of qualified
judges to select the winner or winners on the basis of the criteria
established under subsection (c). Judges for each prize competition
shall include individuals from outside the Department of Energy,
including from the private sector. A judge may not--
(1) have personal or financial interests in, or be an
employee, officer, director, or agent of, any entity that is a
registered participant in the prize competition for which he or
she will serve as a judge; or
(2) have a familial or financial relationship with an
individual who is a registered participant in the prize
competition for which he or she will serve as a judge.
(f) Nonsubstitution.--The program created under this section shall
not be considered a substitute for Federal research and development
programs.
(g) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary for carrying out this section $50,000,000
for each of the fiscal years 2008 through 2011, of which no more than
$1,000,000 for any fiscal year may be used for administrative expenses.
Funds appropriated pursuant to this subsection shall remain available
until expended.
(h) Sunset.--The authority to announce prize competitions under
this section shall terminate on September 30, 2017.
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