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110th CONGRESS
1st Session

S. 339

To promote the national security and stability of the United States economy by reducing the dependence of the United States on oil through the use of alternative fuels and new technology, and for other purposes.

IN THE SENATE OF THE UNITED STATES

January 18, 2007

Mr. BAYH (for himself, Mr. BROWNBACK, Mr. LIEBERMAN, Mr. COLEMAN, Mr. GRAHAM, Mr. SALAZAR, Mr. SESSIONS, Mr. BINGAMAN, Mr. LUGAR, Mr. OBAMA, Ms. COLLINS, Mr. NELSON of Florida, Mr. AKAKA, Ms. CANTWELL, Mrs. CLINTON, Mr. DURBIN, Mrs. FEINSTEIN, Mr. KENNEDY, Mr. KERRY, Mr. KOHL, Mr. LEAHY, Mrs. LINCOLN, Mr. MENENDEZ, Mr. SCHUMER, and Mr. TESTER) introduced the following bill; which was read twice and referred to the Committee on Finance


A BILL

To promote the national security and stability of the United States economy by reducing the dependence of the United States on oil through the use of alternative fuels and new technology, 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 PLAN AND REQUIREMENTS

      Sec. 101. Oil savings target and action plan.

      Sec. 102. Standards and requirements.

      Sec. 103. Initial evaluation.

      Sec. 104. Review and update of action plan.

      Sec. 105. Baseline and analysis requirements.

      Sec. 106. Nonregulatory measures.

TITLE II--FUEL EFFICIENT VEHICLES FOR THE 21ST CENTURY

      Sec. 201. Tire fuel efficiency consumer information.

      Sec. 202. Tire efficiency program.

      Sec. 203. Reduction of school bus idling.

      Sec. 204. Fuel efficiency for heavy duty trucks.

      Sec. 205. Idling reduction tax credit.

      Sec. 206. Near-term vehicle technology program.

      Sec. 207. Plug-in hybrid electric and hydrogen vehicle prizes.

      Sec. 208. Lightweight materials research and development.

      Sec. 209. Hybrid and advanced diesel vehicles.

      Sec. 210. Advanced technology motor vehicles manufacturing credit.

      Sec. 211. Consumer incentives to purchase advanced technology vehicles.

      Sec. 212. Consumer incentives to purchase plug-in hybrid electric vehicles.

      Sec. 213. Federal fleet requirements.

      Sec. 214. Federal agency ethanol-blended gasoline and biodiesel purchasing requirement.

      Sec. 215. Use of the existing flexible fuel vehicle fleet of the Federal government.

      Sec. 216. Standards for executive agency automobiles.

      Sec. 217. Tax incentives for private fleets.

      Sec. 218. Reducing incentives to guzzle gas.

      Sec. 219. Increasing the efficiency of motor vehicles.

TITLE III--FUEL CHOICES FOR THE 21ST CENTURY

      Sec. 301. Increase in alternative fuel vehicle refueling property credit.

      Sec. 302. Extension of biodiesel income and excise tax credits.

      Sec. 303. Small ethanol producer credit expanded for producers of sucrose and cellulosic ethanol.

      Sec. 304. Use of CAFE penalties to build alternative fueling infrastructure.

      Sec. 305. Accelerating conversion to alternative fuels infrastructure.

      Sec. 306. Increasing consumer awareness of flexible fuel automobiles.

      Sec. 307. Minimum quantity of renewable fuel derived from cellulosic biomass.

      Sec. 308. Minimum quantity of renewable fuel derived from sugar.

      Sec. 309. Bioenergy research and development.

      Sec. 310. Production incentives for cellulosic biofuels.

      Sec. 311. Low-interest loan and grant program for retail delivery of E-85 fuel.

      Sec. 312. Transit-Oriented Development Corridors.

TITLE IV--NATIONWIDE ENERGY SECURITY MEDIA CAMPAIGN

      Sec. 401. Nationwide media campaign to decrease oil consumption.

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, hurts families, and harms the environment of the United States;

      (3) the United States currently imports more than 60 percent of the 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) nearly 2,500,000 barrels of oil per day are imported from countries in the Persian Gulf region;

      (5) dependence on foreign oil has led to strategic partnerships with some regimes that do not share the democratic values of the United States;

      (6) terrorists have identified oil as a strategic vulnerability and have increased attacks against oil infrastructure worldwide;

      (7) oil imports comprise more than 31 percent of the dangerously high United States trade deficit;

      (8) it is technically feasible to achieve oil savings of more than 2,500,000 barrels per day by 2017 and 7,000,000 barrels per day by 2026;

      (9) those goals can be achieved by establishing a set of flexible policies, including--

        (A) increasing the efficiency of transportation;

        (B) providing economic incentives for manufacturers and consumers to produce and purchase fuel-efficient vehicles and clean alternative fuels;

        (C) encouraging the use of transit and the reduction of truck idling; and

        (D) the commercialization of clean alternative liquid fuels and expansion of alternative fuels infrastructure;

      (10) 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 have increased tenfold in the past 5 years) make an oil savings plan eminently achievable;

      (11) achieving those goals will benefit consumers and businesses through lower fuel bills and reduction in world oil prices;

      (12) achieving those goals will help protect the economy of the United States by reducing vulnerability to volatile oil prices and price shocks and by developing clean energy and energy efficiency technology in the United States; and

      (13) 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) harm consumers who want to purchase, and businesses who want to provide, oil savings technologies and fuels, and harm individuals who are exposed to greater air pollution.

    (b) Purposes- The purposes of this Act are--

      (1) to accelerate market penetration of advanced technology vehicles, flexible fuel vehicles, biofuels, and other oil saving technologies;

      (2) to enable the accelerated market penetration of efficient transportation and clean 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; and

      (4) to promote a nationwide diversity of clean alternative 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.

TITLE I--OIL SAVINGS 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 2016;

        (B) 7,000,000 barrels of oil per day on average during calendar year 2026; and

        (C) 10,000,000 barrels per day on average during calendar year 2031; 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 of publication of the action plan under section 101, the Secretary of Energy, the Secretary of Transportation, the Secretary of Defense, the Secretary of Agriculture, the Secretary of the Treasury, the Administrator of the Environmental Protection Agency, and the head of any other agency the President determines appropriate 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).

    (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 the oil savings from the baseline determined under section 105.

SEC. 103. INITIAL EVALUATION.

    (a) In General- Not later than 2 years after the date of enactment of this Act, the Director shall--

      (1) publish in the Federal Register a Federal Government-wide analysis of--

        (A) the oil savings achieved from the baseline established under section 105; and

        (B) the expected oil savings under the standards and requirements of this Act (and amendments made by this Act); and

      (2) determine whether oil savings will meet the targets established under section 101.

    (b) Insufficient 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 that are sufficient to achieve the targets under subsections (a), (b), and (c), respectively, of section 102.

    (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(a).

SEC. 104. REVIEW AND UPDATE OF ACTION PLAN.

    (a) Review- Not later than January 1, 2011, and every 3 years thereafter, the Director shall submit to Congress, and 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) Insufficient 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 that are sufficient to achieve the targets under subsections (a), (b), and (c), respectively, of section 102.

    (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(a).

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 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 the President determines to be appropriate 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 2005';

      (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. NONREGULATORY MEASURES.

    The action plan required under section 101 and the revised action plans required under sections 103 and 104 shall include--

      (1) a projection of the barrels of oil displaced by efficiency and sources of energy other than oil, including biofuels, electricity, and hydrogen; and

      (2) a projection of the barrels of oil saved through enactment of this Act and the Energy Policy Act of 2005 (42 U.S.C. 15801 et seq.).

TITLE II--FUEL EFFICIENT VEHICLES FOR THE 21ST CENTURY

SEC. 201. TIRE FUEL EFFICIENCY CONSUMER INFORMATION.

    (a) In General- Chapter 301 of title 49, United States Code, is amended by inserting after section 30123 the following:

`SEC. 30123A. TIRE FUEL EFFICIENCY CONSUMER INFORMATION.

    `(a) Rulemaking-

      `(1) IN GENERAL- Not later than 18 months after the date of the enactment of this section, the Secretary of Transportation shall, after notice and opportunity for comment, promulgate rules establishing a national tire fuel efficiency consumer information program for tires designed for use on motor vehicles to educate consumers about the effect of tires on automobile fuel efficiency.

      `(2) ITEMS TO BE INCLUDED IN RULES- The rules promulgated under paragraph (1) shall include--

        `(A) a national tire fuel efficiency rating system for motor vehicle tires to assist consumers in making more educated tire purchasing decisions;

        `(B) requirements for providing information to consumers, including point of sale information and other potential information dissemination methods, including the Internet;

        `(C) specifications for test methods for manufacturers to use in assessing and rating tires to avoid variation among test equipment and manufacturers; and

        `(D) a national tire maintenance consumer education program to maximize fuel efficiency, which shall include information on tire inflation pressure, alignment, rotation, and tread wear.

    `(b) Consultation- The Secretary shall consult with the Secretary of Energy and the Administrator of the Environmental Protection Agency on the means of conveying tire fuel efficiency consumer information.

    `(c) Tire Marking- The Secretary may not require permanent labeling of any kind on a tire for the purpose of tire fuel efficiency information.

    `(d) Reports to Congress-

      `(1) IN GENERAL- The Secretary shall periodically assess the rules promulgated under this section to determine--

        `(A) the utility of such rules to consumers;

        `(B) the level of cooperation by industry; and

        `(C) the contribution to national goals pertaining to energy consumption.

      `(2) SUBMISSION- The Secretary shall submit periodic reports detailing the findings of the assessments conducted under paragraph (1) to--

        `(A) the Committee on Commerce, Science, and Transportation of the Senate; and

        `(B) the Committee on Energy and Commerce of the House of Representatives.

    `(e) Applicability- This section shall not apply to tires excluded from coverage under section 575.104(c)(2) of title 49, Code of Federal Regulations, as in effect on date of the enactment of this section.

    `(f) Preemption-

      `(1) IN GENERAL- A State or political subdivision of a State may not adopt or enforce a law or regulation on tire fuel efficiency consumer information that conflicts with a requirement under this section.

      `(2) SAVINGS PROVISION- Nothing in this section may be construed to preempt a State or political subdivision of a State from regulating the fuel efficiency of tires if such regulation is not otherwise preempted under this section.'.

    (b) Enforcement- Section 30165(a) of title 49, United States Code, is amended by adding at the end the following:

      `(4) SECTION 30123A- Any person who fails to comply with the national tire fuel efficiency consumer information program under section 30123A shall be subject to the United States Government for a civil penalty of not more than $50,000 for each violation.'.

    (c) Table of Contents- The table of contents for chapter 301 of title 49, United States Code, is amended by inserting after the item relating to section 30123 the following:

      `30123A. Tire fuel efficiency consumer information .'.

SEC. 202. 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 also shall' and inserting 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.

      `(2) NOMENCLATURE AND MARKETING PRACTICES- The Secretary shall'; and

        (C) in the third sentence, by striking `A tire standard' and inserting the following:

      `(3) EFFECT OF STANDARDS AND REGULATIONS- A tire standard'; and

      (2) by adding at the end the following:

    `(d) National Tire Efficiency Program-

      `(1) DEFINED TERM- 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 automobile 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 automobiles and light trucks.

      `(3) REQUIREMENTS- Not later than March 31, 2009, 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) on-road fleet testing programs conducted by manufacturers, to the extent appropriate and available; 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 frequently 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 automobiles 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, 2009, the Secretary of Transportation shall administer the national tire fuel efficiency program established under section 30123(d) of title 49, United States Code, as added by subsection (a).

    (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. 203. 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 2013 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. 204. 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

`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- Not later than 18 months after the date of the enactment of this chapter, the Administrator shall design and implement a National testing program to assess the fuel economy of heavy duty vehicles that is modeled on the fuel economy program established under chapter 329.

    `(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 the assessment appropriately considers vehicle use and needs.

    `(d) Reporting- The Administrator shall--

      `(1) not later than 2 years after the date of the 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) not less frequently than once every 2 years, submit a report to Congress 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 promulgate regulations prescribing average heavy duty vehicle fuel economy standards. Each standard shall be the maximum feasible average fuel economy level that the Secretary determines that manufacturers can achieve for 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 the heavy truck manufacturing industry; 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 Federal Government, States, and other public and private agencies in developing fuel economy standards for heavy duty motor vehicles.

    `(d) 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 2013, such sums as may be necessary to carry out this chapter.'.

SEC. 205. 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 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 which--

        `(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 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.

    `(e) 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 the Internal Revenue Code of 1986 (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 the Internal Revenue Code of 1986 is amended by inserting after the item relating to section 45N the following new item:

      `Sec. 45O. Idling reduction credit.'.

      (2) Section 1016(a) of such Code 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:

      `(38) 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)(1).'.

      (3) Section 6501(m) of such Code is amended by inserting `45O(e),' after `45D(c)(4),'.

    (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 Act 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 idling reduction 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. 206. 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 by--

      (1) developing, in partnership with private industry, research institutions, National Laboratories, and institutions of higher education, projects to promote--

        (A) the commercialization of electric drive transportation technology and hybrid vehicle technology for various sizes and applications of vehicles, including the commercialization of plug-in hybrid electric vehicles and plug-in hybrid fuel cell vehicles;

        (B) growth in employment in the United States in--

          (i) electric drive transportation technology and hybrid vehicle system design; and

          (ii) the manufacturing of electric drive and hybrid components and vehicles;

        (C) the validation of the potential for plug-in hybrid vehicles through fleet demonstrations and data collection; and

        (D) the acceleration of fuel cell commercialization through comprehensive development and commercialization of the electric drive transportation technology systems that are the foundational technology of the fuel cell vehicle system;

      (2) making critical public investments to help private industry, research institutions, National Laboratories, and institutions of higher education to expand innovation, industrial growth, and jobs in the United States through the development, demonstration, and commercialization of a wide range of electric drive transportation technology and hybrid technology components, systems, and vehicles using diverse transportation technologies;

      (3) optimizing the availability of the existing electric infrastructure for 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) developing 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 the motive power of the vehicles and that may or may not use off-board electricity, including battery electric vehicles, fuel cell vehicles, engine dominant hybrid 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--

          (i) corded electric equipment linked to transportation or mobile sources of air pollution; and

          (ii) electrification technologies at airports, ports, truck stops, and material-handling facilities.

      (4) ENERGY STORAGE DEVICE-

        (A) IN GENERAL- The term `energy storage device' means the onboard device used in an on-road or nonroad vehicle to store energy.

        (B) INCLUSIONS- The term `energy storage device' includes--

          (i) in the case of an electric or hybrid electric vehicle, a battery, ultracapacitor, or similar device; and

          (ii) in the case of a hybrid hydraulic vehicle, an accumulator or similar device.

      (5) ENGINE DOMINANT HYBRID VEHICLE- The term `engine dominant hybrid 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; and

          (ii) an on-board, rechargeable energy storage device; and

        (B) has no means of using an off-board source of energy.

      (6) FUEL CELL VEHICLE- The term `fuel cell vehicle' means an on-road or nonroad vehicle that uses a fuel cell (as defined in section 803 of the Spark M. Matsunaga Hydrogen Research, Development, and Demonstration Act of 1990 (42 U.S.C. 16152)).

      (7) 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).

      (8) NONROAD VEHICLE- The term `nonroad vehicle' means a vehicle powered by a nonroad engine, as that term is defined in section 216 of the Clean Air Act (42 U.S.C. 7550).

      (9) 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 any combination of--

        (A) an electric motor and on-board, rechargeable energy storage system capable of operating the vehicle in intermittent or continuous all-electric mode and which is rechargeable using an off-board source of electricity; and

        (B) an internal combustion engine or heat engine using any combustible fuel.

      (10) 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.

      (11) QUALIFIED ELECTRIC TRANSPORTATION PROJECT- The term `qualified electric transportation project' includes a project relating to--

        (A) ship-to-shore electrification;

        (B) truck-stop electrification;

        (C) electric truck refrigeration units;

        (D) electric airport ground support equipment;

        (E) electric material handing equipment;

        (F) electric or dual-mode electric freight rail; and

        (G) any associated infrastructure, including panel upgrades, battery chargers, and trenching.

      (12) SECRETARY- The term `Secretary' means the Secretary of Energy.

      (13) TASK FORCE- The term `Task Force' means the task force established under subsection (e)(2)(A).

    (c) Electric Drive and Hybrid Transportation Research and Development- The Secretary shall carry out a research, development, demonstration, and commercial application program for electric drive transportation technology and engine dominant hybrid vehicle technology, including--

      (1) high capacity, high efficiency energy storage devices that, as compared to existing technologies that are in commercial service, have improved the life, energy storage capacity, and power delivery capacity of the energy storage device;

      (2) high efficiency on-board and off-board charging components;

      (3) high power and energy-efficient drive train systems for passenger and commercial vehicles and for nonroad vehicles;

      (4) 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 vehicles, including--

        (A) development of efficient cooling systems;

        (B) 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

        (C) development of different control systems that optimize for different goals, including--

          (i) energy storage device life;

          (ii) reduction of petroleum consumption; and

          (iii) greenhouse gas reduction;

      (5) nanomaterial technology applied to energy storage device and fuel cell systems; and

      (6) smart vehicle and grid interconnection devices and software that enable communications between the grid of the future and electric drive transportation technology vehicles.

    (d) Market Assessment and Electricity Usage Program-

      (1) IN GENERAL- The Secretary, in consultation with the Administrator and private industry, shall carry out a program--

        (A) to inventory and analyze existing electric drive transportation technologies and hybrid technologies and markets;

        (B) to identify and implement methods of removing barriers for existing and emerging applications of electric drive transportation technologies and hybrid transportation technologies;

        (C) to work with utilities to develop low-cost, simple methods of--

          (i) using off-peak electricity; or

          (ii) managing on-peak electricity use;

        (D) to develop systems and processes--

          (i) to enable plug-in hybrid vehicles to enhance the availability of emergency back-up power for consumers; and

          (ii) to study and demonstrate the potential value to the electric grid to use the energy stored in the on-board storage systems to improve the efficiency and reliability of the grid generation system; and

        (E) to work with utilities and other interested stakeholders to study and demonstrate the implications of the introduction of plug-in hybrid vehicles and other types of electric transportation on the production of electricity from renewable resources.

      (2) OFF-PEAK ELECTRICITY USAGE GRANTS- In carrying out the program under paragraph (1), the Secretary shall provide grants to assist eligible public and private electric utilities for the conduct of programs or activities to encourage owners of electric drive transportation technologies--

        (A) to use off-peak electricity; or

        (B) to have the load managed by the utility.

    (e) Plug-in Hybrid Electric Vehicle, Electric Drive Transportation Technology, and Hybrid Vehicle Testing and Certification Program-

      (1) TESTING PROGRAM-

        (A) IN GENERAL- To facilitate the introduction of plug-in hybrid electric vehicles, electric drive transportation technologies, and hybrid vehicle technologies into commercial use, the Secretary, in consultation with the Administrator and in collaboration with private industry, shall develop and carry out a program to test the emissions of criteria pollutants, energy use, and the petroleum reduction potential of light-duty, medium-duty, and heavy-duty plug-in hybrid electric vehicles and other forms of electric drive transportation technologies under test conditions and actual driving conditions.

        (B) TEST PROCEDURES-

          (i) DEVELOPMENT- In developing test procedures for the program under subparagraph (A), the Secretary shall take into account the results of previous testing activities of the public and private sectors.

          (ii) CONSIDERATIONS- The test procedures developed for the program under subparagraph (A) shall consider--

            (I) the vehicle and fuel as a system, not just an engine;

            (II) nightly off-board charging, as applicable; and

            (III) different engine-turn on speed control strategies.

        (C) FIELD OPERATIONS PROGRAM- In conducting tests under the program under subparagraph (A), the Secretary shall use the capabilities of the Field Operations Program and qualified vehicle testing sites of the Department of Energy.

      (2) CERTIFICATION STANDARDS TASK FORCE-

        (A) IN GENERAL- Not later than 180 days after the date of enactment of this Act, the Administrator, in cooperation with the Secretary, shall establish a task force to develop minimum certification standards for plug-in hybrid electric vehicles.

        (B) COMPOSITION- The Task Force shall be comprised of members, to be appointed by the Administrator, that represent--

          (i) vehicle manufacturers;

          (ii) environmental organizations;

          (iii) utilities;

          (iv) fleet operators;

          (v) research organizations; and

          (vi) appropriate Federal agencies, including the Department of Transportation and the Department of Energy.

        (C) DUTIES- The Task Force shall--

          (i) identify critical path issues in the establishment of a certification protocol;

          (ii) identify criteria for the establishment of a plug-in hybrid electric vehicle certification protocol that would be applicable to various plug-in hybrid vehicle technologies, applications, and control strategies;

          (iii) evaluate test data available from plug-in hybrid electric vehicle test programs and fuel economy analyses;

          (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

          (v) recommend a certification protocol for certifying the emissions, fuel economy, and petroleum usage of plug-in hybrid electric vehicles.

        (D) FINAL CERTIFICATION PROTOCOL-

          (i) IN GENERAL- Not later than 18 months after the date of enactment of this Act, the Administrator shall--

            (I) publish in the Federal Register the recommended certification protocol developed under subparagraph (C)(v); and

            (II) provide an opportunity for public comment with respect to the recommended certification protocol.

          (ii) PUBLICATION- Not later than 2 years after the date of enactment of this Act, the Administrator shall publish in the Federal Register the final certification protocol for plug-in hybrid electric vehicles.

    (f) Education Program-

      (1) IN GENERAL- The Secretary shall develop a nationwide electric drive transportation technology program under which the Secretary provides--

        (A) to secondary schools and high schools, teaching materials; and

        (B) to institutions of higher education, assistance for programs relating to electric drive system and component engineering.

      (2) ELECTRIC VEHICLE COMPETITION- The program established under paragraph (1) shall include a plug-in hybrid electric vehicle competition for institutions of higher education, which shall be known as the `Dr. Andrew Frank Plug-In Hybrid Electric Vehicle Competition'.

      (3) ENGINEERS- In carrying out the program established under paragraph (1), the Secretary shall provide financial assistance to institutions of higher education to create new, or support existing, degree programs to ensure the availability of trained electrical and mechanical engineers with the skills necessary for the advancement of--

        (A) plug-in hybrid electric vehicles; and

        (B) other forms of electric drive transportation technology vehicles.

    (g) Near-Term Electric Transportation Deployment Program-

      (1) IN GENERAL- Not later than 1 year after the date of enactment of this Act, the Administrator, after consultation with the Secretary and the Secretary of Transportation, shall establish a program under which the Administrator shall provide grants and loans to eligible entities for the conduct of qualified electric transportation projects that would reduce emissions of criteria pollutants, greenhouse gas emissions, and petroleum usage by at least 40 percent as compared to commercially available, non-electric technologies.

      (2) GRANTS-

        (A) IN GENERAL- Of the amounts made available for grants under paragraph (1)--

          (i) 2/3 shall be made available by the Administrator on a competitive basis to qualified electric transportation projects based on the overall cost-effectiveness of the projects in reducing emissions of criteria pollutants, emissions of greenhouse gases, and petroleum usage; and

          (ii) 1/3 shall be made available by the Administrator to qualified electric transportation projects in the order that the grant applications are received, provided that the projects meet the minimum standard for the reduction of emissions of criteria pollutants, emissions of greenhouse gases, and petroleum usage under paragraph (1).

        (B) PREFERENCE- In providing grants under this subsection, the Administrator shall give preference to large-scale projects and large -scale aggregators of projects.

      (3) REVOLVING LOAN PROGRAM-

        (A) IN GENERAL- The Administrator shall establish a revolving loan program to provide loans to eligible entities for the conduct of qualified electric transportation projects.

        (B) CRITERIA- The Administrator shall establish criteria for the provision of loans under this paragraph.

        (C) FUNDING- Of amounts made available to carry out this subsection, the Administrator shall use any amounts not used to provide grants under paragraph (2) to carry out the revolving loan program under this paragraph.

    (h) Cost-Sharing Requirement- Notwithstanding section 988(c) of the Energy Policy Act of 2005 (42 U.S.C. 16352(c)), the non-Federal share of the cost of carrying out any activities assisted under this section shall be 30 percent.

    (i) Merit Review- Notwithstanding section 989 of the Energy Policy Act of 2005 (42 U.S.C. 16353)--

      (1) of the amounts made available to carry out this section under subsection (j)--

        (A) not more than 30 percent shall be provided to National Laboratories;

        (B) not more than 10 percent shall be provided, directly or indirectly, to projects for the development or demonstration of fuel cell vehicles or plug-in hybrid fuel cell vehicles; and

        (C) not more than 5 percent shall be provided, directly or indirectly, to projects for the development or demonstration of electric rail or magnetic levitation trains; and

      (2) of the amounts made available to carry out subsection (g) under subsection (j)(2), not more than 30 percent shall be provided, directly or indirectly, to ship-to-shore electrification projects.

    (j) Authorization of Appropriations-

      (1) IN GENERAL- There is authorized to be appropriated to carry out this section (other than subsection (g)) $110,000,000 for each of fiscal years 2008 through 2013.

      (2) NEAR-TERM ELECTRIC TRANSPORTATION DEPLOYMENT PROGRAM- There is authorized to be appropriated to carry out subsection (g) $125,000,000 for each of fiscal years 2008 through 2013.

SEC. 207. PLUG-IN HYBRID ELECTRIC AND HYDROGEN VEHICLE PRIZES.

    Section 1008 of the Energy Policy Act of 2005 (42 U.S.C. 16396) is amended--

      (1) in subsection (c), by inserting `, including plug-in hybrid and hydrogen vehicle technologies' before the period at the end; and

      (2) in subsection (e)(2)--

        (A) by striking `$5,000,000' and inserting `$450,000,000'; and

        (B) by inserting `, to remain available until expended' before the period at the end.

SEC. 208. 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 $60,000,000 for each of fiscal years 2008 through 2013.

SEC. 209. HYBRID AND ADVANCED DIESEL VEHICLES.

    (a) Hybrid Vehicles- Section 711 of the Energy Policy Act of 2005 (42 U.S.C. 16061) is amended to read as follows:

`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 electric vehicles and the components of the vehicles).

      `(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. 210. 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 35 percent of the qualified investment of an eligible taxpayer for such taxable year.

    `(b) Qualified Investment- For purposes of this section--

      `(1) IN GENERAL- The term `qualified investment' means, with respect to any taxable year, the sum of--

        `(A) the costs paid or incurred by the eligible taxpayer during such taxable year--

          `(i) to re-equip, expand, or establish any manufacturing facility in the United States of the eligible taxpayer to produce advanced technology motor vehicles or to produce eligible components, and

          `(ii) for qualified research (as defined in section 41(d)) related to advanced technology motor vehicles and eligible components performed in the United States, and

        `(B) qualified engineering integration costs performed in the United States.

      `(2) ATTRIBUTION RULES- For purposes of paragraph (1)(A)(i), in the case of a manufacturing facility of the eligible taxpayer which produces both advanced technology motor vehicles and other motor vehicles, or eligible components and other components, only the amount paid or incurred for the production of advanced technology motor vehicles and eligible components shall be taken into account.

    `(c) Eligible Taxpayer- For purposes of this section--

      `(1) IN GENERAL- The term `eligible taxpayer' means--

        `(A) any motor vehicle manufacturer 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, and

        `(B) any motor vehicle component parts manufacturer if more than 20 percent of its gross receipts for the taxable year is derived from the manufacture of any component parts of motor vehicles.

      `(2) MOTOR VEHICLE MANUFACTURER- The term `motor vehicle manufacturer' means any taxpayer who manufacturers motor vehicles.

      `(3) MOTOR VEHICLE COMPONENT PARTS MANUFACTURER- The term `motor vehicle component parts manufacturer' means any taxpayer who manufactures motor vehicle component parts, but is not a motor vehicle manufacturer.

    `(d) Definitions- For purposes of this section--

      `(1) ADVANCED TECHNOLOGY MOTOR VEHICLE- The term `advanced technology motor vehicle' means--

        `(A) any new qualified fuel cell motor vehicle (as defined in section 30B(b)(3));

        `(B) any new advanced lean burn technology motor vehicle (as defined in section 30B(c)(3));

        `(C) any new qualified hybrid motor vehicle (as defined in section 30B(d)(3)(A) and determined without regard to any gross vehicle weight rating);

        `(D) any new qualified alternative motor fuel vehicle (as defined in section 30B(e)(4));

        `(E) any plug-in hybrid electric vehicle; and

        `(F) any electric vehicle.

      `(2) ELIGIBLE COMPONENTS- The term `eligible component' means any component inherent to any advanced technology motor vehicle but not inherent to a motor vehicle which is not an advanced technology motor vehicle, including--

        `(A) with respect to any gasoline or diesel-electric new qualified hybrid motor vehicle, any--

          `(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, any--

          `(i) accumulator or other energy storage device,

          `(ii) hydraulic pump, or

          `(iii) hydraulic pump-motor assembly,

          `(iv) power control unit, or

          `(v) power controls,

        `(C) with respect to any new advanced lean burn technology motor vehicle, any--

          `(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.

      `(3) MOTOR VEHICLE- The term `motor vehicle' has the meaning given such term by section 30(c)(2).

      `(4) PLUG-IN HYBRID ELECTRIC VEHICLE-

        `(A) IN GENERAL- 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 any combination of--

          `(i) an electric motor and on-board, rechargeable energy storage system capable of operating the vehicle in intermittent or continuous all-electric mode and which is rechargeable using an off-board source of electricity, and

          `(ii) an internal combustion engine or heat engine using any combustible fuel.

        `(B) NONROAD VEHICLE- The term `nonroad vehicle' means a vehicle powered by a nonroad engine, as that term is defined in section 216 of the Clean Air Act (42 U.S.C. 7550).

      `(5) QUALIFIED ENGINEERING INTEGRATION COSTS- For purposes of subsection (b)(1)(B), the term `qualified engineering integration costs' means, with respect to any advanced technology motor vehicle, costs incurred prior to the market introduction of such motor vehicle for engineering tasks related to--

        `(A) establishing functional, structural, and performance requirements for components and subsystems to meet overall vehicle objectives for a specific application,

        `(B) designing interfaces for components and subsystems with mating systems within a specific vehicle application,

        `(C) designing cost effective, efficient, and reliable manufacturing processes to produce components and subsystems for a specific vehicle application, and

        `(D) validating functionality and performance of components and subsystems for a specific vehicle application.

    `(e) Limitation Based on Amount of Tax-

      `(1) IN GENERAL- The credit allowed under subsection (a) for any taxable year shall not exceed the sum of--

        `(A) the taxpayer's regular tax liability (as defined in section 26(b)) for the taxable year, plus

        `(B) the tax imposed under section 55 for the taxable year.

      `(2) CARRYOVER OF UNUSED CREDIT AMOUNTS-

        `(A) IN GENERAL- If the credit allowable under subsection (a) for a taxable year exceeds the limitation under paragraph (1) for such taxable year, such excess shall be allowed--

          `(i) as a credit carryback to each of the 13 taxable years preceding such year, and

          `(ii) as a credit carryforward to each of the 20 taxable years following such year.

        `(B) AMOUNT CARRIED TO EACH YEAR- For purposes of this paragraph, rules similar to the rules of section 39(a)(2) shall apply.

    `(f) Special Rules-

      `(1) 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.

      `(2) INVESTMENTS AND PROPERTY OUTSIDE THE UNITED STATES- No credit shall be allowed under subsection (a) with respect to--

        `(A) any manufacturing facility which is located outside the United States, and

        `(B) any engineering integration or research and development conducted outside the United States.

      `(3) AGGREGATION OF EXPENDITURES; ALLOCATIONS- For purposes of this section, rules similar to the rules of paragraphs (1) and (2) of section 41(f) shall apply.

      `(4) RECAPTURE- The Secretary shall, by regulation, provide for recapturing the benefit of any credit allowable under subsection (a) with respect to any manufacturing facility which ceases to produce advanced technology motor vehicles or eligible components.

      `(5) PUBLIC STATEMENT-

        `(A) IN GENERAL- No credit shall be allowed under subsection (a) for any taxable year unless the eligible taxpayer makes publicly available a statement describing the activities of the eligible taxpayer for which the credit is allowed and the public benefits of such activities, including the estimated amount of any reduction in national oil consumption in future years as a result of such activities.

        `(B) TIME FOR PUBLICATION- The statement required under subparagraph (A) shall be made available not later than 90 days after the end of the taxable year for which the credit under subsection (a) is allowed and shall be in such form as the Secretary shall prescribe.

      `(6) NO DOUBLE BENEFIT-

        `(A) COORDINATION WITH OTHER DEDUCTIONS AND CREDITS- Except as provided in subparagraph (B), 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.

        `(B) RESEARCH AND DEVELOPMENT COSTS-

          `(i) IN GENERAL- Except as provided in clause (ii), any amount described in subsection (b)(1)(A)(ii) 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.

          `(ii) COSTS TAKEN INTO ACCOUNT IN DETERMINING BASE PERIOD RESEARCH EXPENSES- Any amounts described in subsection (b)(1)(A)(ii) 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.

    `(g) 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.

    `(h) Regulations- The Secretary shall prescribe such regulations as necessary to carry out the provisions of this section.'.

    (b) Conforming Amendments-

      (1) Section 1016(a) of the Internal Revenue Code of 1986, as amended by this Act, is amended by striking `and' at the end of paragraph (37), by striking the period at the end of paragraph (38) and inserting `, and', and by adding at the end the following new paragraph:

      `(39) to the extent provided in section 30D(f)(1).'.

      (2) Section 6501(m) of such Code is amended by inserting `30D(g),' 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, 1993.

SEC. 211. CONSUMER INCENTIVES TO PURCHASE ADVANCED TECHNOLOGY VEHICLES.

    (a) 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)'.

    (b) 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'.

    (c) 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. 212. CONSUMER INCENTIVES TO PURCHASE PLUG-IN HYBRID ELECTRIC VEHICLES.

    (a) New Qualified Hybrid Motor Vehicle Includes Plug-in Electric Vehicles-

      (1) IN GENERAL- Section 30B(d)(3)(A) of the Internal Revenue Code of 1986 (defining new qualified hybrid motor vehicle) is amended by striking `and' at the end of clause (vi), by striking the period at the end of clause (vii) and inserting `, and', and by inserting after clause (vii) the following new clause:

          `(viii) which includes plug-in hybrid electric vehicles for purposes of paragraphs (2)(A) and (2)(B).'.

      (2) DEFINITION- Section 30B(d)(3) of such Code is amended by adding at the end the following new subparagraph:

        `(D) PLUG-IN HYBRID ELECTRIC VEHICLE-

          `(i) IN GENERAL- 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 any combination of--

            `(I) an electric motor and on-board, rechargeable energy storage system capable of operating the vehicle in intermittent or continuous all-electric mode and which is rechargeable using an off-board source of electricity, and

            `(II) an internal combustion engine or heat engine using any combustible fuel.

          `(ii) NONROAD VEHICLE- The term `nonroad vehicle' means a vehicle powered by a nonroad engine, as that term is defined in section 216 of the Clean Air Act (42 U.S.C. 7550).'

    (b) Credit Amount for Passenger Automobiles and Light Trucks-

      (1) IN GENERAL- Section 30B(d)(2)(A) of the Internal Revenue Code of 1986 is amended--

        (A) by striking `clauses (i) and (ii)' and inserting `clauses (i), (ii), and (iii)',

        (B) by inserting `, except that for purposes of any plug-in hybrid electric vehicle, subsection (c)(2)(A)(ii) shall not include fuel economy increases resulting from off-board sources of electricity' after `such subsection' in clause (i), and

        (C) by adding at the end the following new clause:

          `(iii) INCREASE FOR BATTERY-POWERED RANGE FROM OFF-BOARD ELECTRICITY- The amount determined under this clause in 2009 through 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.'.

      (2) DEFINITION- Section 30B(d)(3) of such Code, as amended by subsection (a)(2), is amended by adding at the end the following new subparagraph:

        `(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.'.

    (c) Credit Amount for Other Motor Vehicles-

      (1) IN GENERAL- Section 30B(d)(2)(B)(ii) of the Internal Revenue Code of 1986 is amended by striking `and' at the end of subclause (II), by striking the period at the end of subclause (III) and inserting `, and', and by adding at the end the following new subclause:

            `(IV) 40 percent for a plug-in hybrid electric vehicle that can use off-board electricity to recharge an energy storage device capable of at least 10 miles of all electric range and a percentage greater than 40 percent if the all electric range is greater than 10 miles, as determined by the Administrator of the Environmental Protection Agency.'.

      (2) DEFINITION- Section 30B(d)(3) of such Code, as amended by subsection (b)(2), is amended by adding at the end the following new subparagraph:

        `(F) ALL ELECTRIC RANGE- For purposes of paragraph (2)(B)--

          `(i) IN GENERAL- The term `all electric range' means miles traveled in a hybrid electric vehicle capable of using an off-board 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.

          `(ii) DRIVING SCHEDULE FOR PLUG-IN HYBRID ELECTRIC VEHICLES-

            `(I) ESTABLISHMENT- Not later than 18 months after the date of enactment of this subparagraph, 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.

            `(II) 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 this section on a schedule to be established by rule by the Administrator.'.

    (d) Duration of Tax Credit- Section 30B(i)(3) of the Internal Revenue Code of 1986, as redesignated and amended by this Act, is amended by inserting `(December 31, 2015, in the case of a new qualified hybrid motor vehicle which is a plug-in hybrid electric vehicle)' after `December 31, 2010'.

    (e) Effective Date- The amendments made by this section shall apply to property placed in service after December 31, 2008.

SEC. 213. 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 2016 each Federal agency achieve at least a 30 percent reduction in petroleum consumption, as calculated from the baseline established by the Secretary for fiscal year 2005.

      (2) REQUIREMENT- Not later than fiscal year 2016, 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 hybrid motor vehicles (including plug-in hybrid motor vehicles) or new advanced lean burn technology motor vehicles (as defined in section 30B(c)(3) of the Internal Revenue Code of 1986).

    (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 striking `The Secretary' and inserting the following:

      `(1) ALLOCATION- The Secretary'; and

      (2) by adding at the end the following:

      `(2) ELECTRIC VEHICLES- Not later than January 31, 2009, 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 2013.

SEC. 214. FEDERAL AGENCY ETHANOL-BLENDED GASOLINE AND BIODIESEL PURCHASING REQUIREMENT.

    Section 306 of the Energy Policy Act of 1992 (42 U.S.C. 13215) is amended to read as follows:

`SEC. 306. FEDERAL AGENCY ETHANOL-BLENDED GASOLINE AND BIODIESEL PURCHASING REQUIREMENT.

    `(a) Ethanol-Blended Gasoline- The head of each Federal agency shall ensure that, in areas in which ethanol-blended gasoline is reasonably available at a generally competitive price, the Federal agency purchases ethanol-blended gasoline containing at least 10 percent ethanol, rather than gasoline that is not ethanol-blended, for use in vehicles used by the agency that use gasoline.

    `(b) Biodiesel-

      `(1) DEFINITION OF BIODIESEL- In this subsection, the term `biodiesel' has the meaning given the term in section 312(f).

      `(2) REQUIREMENT- The head of each Federal agency shall ensure that the Federal agency purchases, for use in fueling fleet vehicles that use diesel fuel used by the Federal agency at the location at which fleet vehicles of the Federal agency are centrally fueled, in areas in which the biodiesel-blended diesel fuel described in subparagraphs (A) and (B) is available at a generally competitive price--

        `(A) as of the date that is 5 years after the date of enactment of this paragraph, biodiesel-blended diesel fuel that contains at least 20 percent biodiesel, rather than diesel fuel that is not biodiesel-blended; and

        `(B) as of the date that is 10 years after the date of enactment of this paragraph, biodiesel-blended diesel fuel that contains at least 80 percent biodiesel, rather than diesel fuel that is not biodiesel-blended.

      `(3) REQUIREMENT OF FEDERAL LAW- This subsection shall not be considered a requirement of Federal law for the purposes of section 312.

    `(c) Exemption- This section does not apply to fuel used in vehicles excluded from the definition of `fleet' by subparagraphs (A) through (H) of section 301(9).'.

SEC. 215. USE OF THE EXISTING FLEXIBLE FUEL VEHICLE FLEET OF THE FEDERAL GOVERNMENT.

    (a) Use of Alternative Fuels by Flexible Fuel Vehicles- Section 400AA(a)(3) of the Energy Policy and Conservation Act (42 U.S.C. 6374(a)(3)) is amended by striking subparagraph (E) and inserting the following:

        `(E) USE OF ALTERNATIVE FUELS BY FLEXIBLE FUEL VEHICLES-

          `(i) IN GENERAL- Flexible fuel vehicles acquired pursuant to this section shall be operated on alternative fuels unless the Secretary determines that an agency qualifies for a waiver of that requirement for vehicles operated by the agency in a particular geographic area in which--

            `(I) the alternative fuel otherwise required to be used in the vehicle is not reasonably available to retail purchasers of the fuel, as certified to the Secretary by the head of the agency; or

            `(II) the cost of the alternative fuel otherwise required to be used in the vehicle is unreasonably more expensive compared to gasoline, as certified to the Secretary by the head of the agency.

          `(ii) COMPLIANCE- The Secretary shall monitor compliance with this subparagraph by all agency fleets and shall submit annually to Congress a report that--

            `(I) describes the extent to which the requirements of this subparagraph are being achieved; and

            `(II) includes information on annual reductions achieved from the use of petroleum-based fuels and the problems, if any, encountered in acquiring alternative fuels.'.

    (b) Alternative Compliance and Flexibility- Section 514 of the Energy Policy Act of 1992 (42 U.S.C. 13263a) is amended to read as follows:

`SEC. 514. ALTERNATIVE COMPLIANCE.

    `(a) Application for Waiver- Any head of a Federal agency described in section 303(b)(3), any covered person subject to section 501, and any State subject to section 507(o) may petition the Secretary for a waiver of the applicable requirements of section 303, 501, or 507(o).

    `(b) Grant of Waiver- The Secretary may grant a waiver of the requirements of section 303, 501, or 507(o) upon a showing that the fleet owned, operated, leased, or otherwise controlled by the Federal agency, State, or covered person--

      `(1) will achieve a reduction in its annual consumption of petroleum fuels equal to--

        `(A) the reduction in consumption of petroleum that would result from 100 percent compliance with fuel use requirements in section 303 or 501, as appropriate; or

        `(B) for entities covered under section 507(o), a reduction equal to the covered entity's consumption of alternative fuels if all its alternative fuel vehicles given credit under section 508 were to use alternative fuel 100 percent of the time; and

      `(2) is in compliance with all applicable vehicle emission standards established by the Administrator under the Clean Air Act (42 U.S.C. 7401 et seq.).

    `(c) Revocation of Waiver- The Secretary shall revoke any waiver granted under this section if the Federal agency, State, or covered person fails to comply with subsection (b).'.

SEC. 216. STANDARDS FOR EXECUTIVE AGENCY AUTOMOBILES.

    (a) In General- Section 32917 of title 49, United States Code, is amended to read as follows:

`Sec. 32917. Standards for executive agency automobiles

    `(a) Definitions- In this section:

      `(1) AUTOMOBILE- The term `automobile' does not include any vehicle designed for combat-related missions, law enforcement work, or emergency rescue work.

      `(2) EXECUTIVE AGENCY- The term `Executive agency' has the meaning given that term in section 105 of title 5.

      `(3) NEW AUTOMOBILE- The term `new automobile', with respect to the fleet of automobiles of an executive agency, means an automobile that is leased for at least 60 consecutive days or purchased, by or for the Executive agency, after September 30, 2005.

    `(b) Baseline Average Fuel Economy- In accordance with guidance issued under subsection (e), the head of each Executive agency shall calculate the average fuel economy for all automobiles in the Executive agency's fleet of automobiles that were leased or purchased during fiscal year 2005, which calculation shall serve as the baseline average fuel economy for the Executive agency's fleet of automobiles.

    `(c) Increase of Average Fuel Economy- The head of each Executive agency shall manage the procurement of automobiles for that Executive agency so that by not later than September 30, 2008, the average fuel economy of the new automobiles in the Executive agency's fleet of automobiles is not less than 3 miles per gallon higher than the baseline average fuel economy determined under subsection (b) for that Executive agency.

    `(d) Fuel Efficiency- The head of an Executive agency shall ensure that each new automobile procured by the Executive agency is as fuel efficient as practicable.

    `(e) Calculation of Average Fuel Economy- The Secretary of Transportation shall issue regulations to carry out this section, including regulations regarding the calculation of average fuel economy.'.

    (b) Conforming Amendment- Section 32901(a)(3) of title 49, United States Code, is amended by striking `section 32908 of this title,' and inserting `sections 32908 and 32917,'.

SEC. 217. 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 125 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. 218. 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.',

        (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 2007', 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 2006.

          `(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. 219. INCREASING THE EFFICIENCY OF MOTOR VEHICLES.

    (a) Definitions- In this section:

      (1) ALTERNATIVE FUEL- The term `alternative fuel' has the meaning given the term in section 32901(a) of title 49, United States Code.

      (2) E85- The term `E85' means a fuel blend containing 85 percent ethanol and 15 percent gasoline or diesel by volume.

      (3) FLEXIBLE FUEL MOTOR VEHICLE- The term `flexible fuel motor vehicle' means a light duty motor vehicle warrantied by the manufacturer of the vehicle to operate on any combination of gasoline, E85, and M85.

      (4) HYBRID MOTOR VEHICLE- The term `hybrid motor vehicle' means a new qualified hybrid motor vehicle (as defined in section 30B(d)(3) of the Internal Revenue Code of 1986) that achieves at least 125 percent of the model year 2002 city fuel economy.

      (5) LIGHT-DUTY MOTOR VEHICLE- The term `light-duty motor vehicle' means, as defined in regulations promulgated by the Administrator of the Environmental Protection Agency that are in effect on the date of the enactment of this Act--

        (A) a light-duty truck; or

        (B) a light-duty vehicle.

      (6) M85- The term `M85' means a fuel blend containing 85 percent methanol and 15 percent gasoline or diesel by volume.

      (7) PLUG-IN HYBRID MOTOR VEHICLE- The term `plug-in hybrid motor vehicle' means a hybrid motor vehicle that--

        (A) has an onboard, rechargeable storage device capable of propelling the vehicle solely by electricity for at least 10 miles; and

        (B) achieves at least 125 percent of the model year 2002 city fuel economy.

      (8) QUALIFIED MOTOR VEHICLE- The term `qualified motor vehicle' means--

        (A) a new advanced lean burn technology motor vehicle (as defined in section 30B(c)(3) of the Internal Revenue Code of 1986) that achieves at least 125 percent of the model year 2002 city fuel economy;

        (B) an alternative fueled automobile (as defined in section 32901(a) of title 49, United States Code);

        (C) a flexible fuel motor vehicle;

        (D) a new qualified fuel cell motor vehicle (as defined in section 30B(b)(3) of the Internal Revenue Code of 1986);

        (E) a hybrid motor vehicle;

        (F) a plug-in hybrid motor vehicle;

        (G) an electric motor vehicle; and

        (H) any other appropriate motor vehicle that uses substantially new technology and achieve at least 175 percent of the model year 2002 city fuel economy, as determined by the Secretary of Transportation, by regulation.

    (b) Requirements-

      (1) IN GENERAL- Not less than 50 percent of light-duty motor vehicles manufactured for model year 2012 and each model year thereafter and sold in the United States shall be qualified motor vehicles.

      (2) NEW TECHNOLOGY- Not less than 10 percent of the qualified motor vehicles manufactured for model year 2017 and each model year thereafter and sold in the United States shall be--

        (A) hybrid motor vehicles;

        (B) plug-in hybrid motor vehicles;

        (C) new advanced lean burn technology motor vehicles (as defined in section 30B(c)(3) of the Internal Revenue Code of 1986);

        (D) new qualified fuel cell motor vehicles (as defined in section 30B(b)(3) of the Internal Revenue Code of 1986);

        (E) electric motor vehicles; or

        (F) any other appropriate motor vehicle that uses substantially new technology and achieve at least 175 percent of the model year 2002 city fuel economy, as determined by the Secretary of Transportation, by regulation.

    (c) Rulemaking- Not later than 1 year after the date of enactment of this Act, the Secretary of Transportation shall promulgate regulations to carry out this section.

TITLE III--FUEL CHOICES FOR THE 21ST CENTURY

SEC. 301. INCREASE IN ALTERNATIVE FUEL VEHICLE REFUELING PROPERTY CREDIT.

    (a) In General- Subsection (a) of section 30C of the Internal Revenue Code of 1986 is amended by striking `30 percent' and inserting `50 percent'.

    (b) Effective Date- The amendment made by this section shall apply to property placed in service after December 31, 2006, in taxable years ending after such date.

SEC. 302. EXTENSION OF BIODIESEL INCOME AND EXCISE TAX CREDITS.

    (a) In General- Sections 40A(g), 6426(c)(6), and 6427(e)(5)(B) of the Internal Revenue Code of 1986 are each amended by striking `December 31, 2008' and inserting `December 31, 2014'.

    (b) Effective Date- The amendments made by this section shall take effect on January 1, 2009.

SEC. 303. SMALL ETHANOL PRODUCER CREDIT EXPANDED FOR PRODUCERS OF SUCROSE AND CELLULOSIC ETHANOL.

    (a) In General- Subparagraph (C) of section 40(b)(4) of the Internal Revenue Code of 1986 (relating to small ethanol producer credit) is amended by inserting `(30,000,000 gallons for any sucrose or cellulosic ethanol producer)' after `15,000,000 gallons'.

    (b) Sucrose or Cellulosic Ethanol Producer- Section 40(b)(4) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph:

        `(E) SUCROSE OR CELLULOSIC ETHANOL PRODUCER-

          `(i) IN GENERAL- For purposes of this paragraph, the term `sucrose or cellulosic ethanol producer' means a producer of ethanol using sucrose feedstock or a producer of cellulosic biomass ethanol (as defined in section 168(l)(3)).

          `(ii) SUCROSE FEEDSTOCK- For purposes of clause (i), the term `sucrose feedstock' means any raw sugar, refined sugar, or sugar equivalents (including juice and extract). Such term does not include any molasses, beet thick juice, or other similar products as determined by the Secretary.'.

    (c) Conforming Amendments-

      (1) Section 40(g)(2) of the Internal Revenue Code of 1986 is amended by striking `15,000,000 gallon limitation' and inserting `15,000,000 and 30,000,000 gallon limitations'.

      (2) Section 40(g)(5)(B) of such Code is amended by striking `15,000,000 gallons' and inserting `the gallon limitation under subsection (b)(4)(C)'.

    (d) Effective Date- The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.

SEC. 304. 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 Grant Program-

      `(1) TRUST FUND-

        `(A) ESTABLISHMENT- There is established in the Treasury of the United States a trust fund, to be known as the `Alternative Fueling Infrastructure Trust Fund' (referred to in this subsection as the `Trust Fund'), consisting of such amounts as are deposited into the Trust Fund under subparagraph (B) and any interest earned on investment of amounts in the Trust Fund.

        `(B) TRANSFERS OF CIVIL PENALTIES- The Secretary of Transportation shall remit 90 percent of the amount collected in civil penalties under this section to the Trust Fund.

      `(2) ESTABLISHMENT OF GRANT PROGRAM-

        `(A) GRANTS AUTHORIZED- The Secretary of Energy may award grants to the entities described in paragraph (3) for the purpose of increasing the number of locations at which consumers may purchase alternative fuels.

        `(B) OBLIGATION OF FUNDS- The Secretary of Energy shall obligate such sums as are available in the Trust Fund for grants under this subsection.

      `(3) GRANT RECIPIENTS-

        `(A) IN GENERAL- Grants awarded pursuant to paragraph (2)(A) may be awarded to--

          `(i) owners of individual fueling stations in an amount not greater than $150,000 per site or $500,000 per entity; and

          `(ii) corporations (including nonprofit corporations) with demonstrated experience in alternative fueling infrastructure.

        `(B) PRIORITY- In awarding grants under this paragraph, the Secretary of Energy shall--

          `(i) give priority to recognized non-profit corporations that have proven experience in the administration of grant funding and demonstrated technical expertise in the establishment of alternative fueling infrastructure;

          `(ii) consider the number of vehicles produced for sale in the preceding production year capable of using each type of alternative fuel; and

          `(iii) identify 1 primary group for each type of alternative fuel.

      `(4) USE OF FUNDS-

        `(A) IN GENERAL- Grants awarded under paragraph (2)(A) may be used to--

          `(i) construct new facilities to dispense alternative fuels;

          `(ii) purchase equipment to upgrade, expand, or otherwise improve existing alternative fuel facilities; or

          `(iii) purchase equipment or pay for specific turnkey fueling services by alternative fuel providers.

        `(B) MATCHING REQUIREMENT- The Secretary of Energy may not award a grant under paragraph (2)(A) unless the grant recipient agrees to provide $1 of non-Federal contributions for every $3 of grant funds received under this subsection.

        `(C) ADMINISTRATIVE EXPENSES- A recipient of a grant under paragraph (2)(A) may not use more than 10 percent of any such grant for administrative expenses.

      `(5) SELECTION OF ALTERNATIVE FUEL STATIONS- Each grant recipient shall select the location for each alternative fuel station to be constructed with grant funds received under paragraph (2)(A) on a formal, open, and competitive basis, based on--

        `(A) the public demand for each alternative fuel in a particular county based on state registration records showing the number of vehicles that can be operated with alternative fuel; and

        `(B) the opportunity to create or expand corridors of alternative fuel stations along interstate or State highways; and

        `(C) maximizing the geographic dispersion of alternative fuel stations.

      `(6) OPERATION OF ALTERNATIVE FUEL STATIONS- A facility constructed or upgraded with grant funds received under paragraph (2)(A) shall--

        `(A) provide alternative fuel available to the public for a period of not less than 4 years;

        `(B) establish a marketing plan to advance the sale and use of alternative fuels;

        `(C) prominently display the price of alternative fuel on the marquee and in the station;

        `(D) provide point of sale materials on alternative fuel;

        `(E) clearly label the dispenser with consistent materials;

        `(F) price the alternative fuel at the same margin that is received for unleaded gasoline; and

        `(G) support and use all available tax incentives to reduce the cost of the alternative fuel to the lowest possible retail price.

      `(7) NOTIFICATION REQUIREMENTS-

        `(A) OPENING- Not later than the date on which each alternative fuel station begins to offer alternative fuel to the public, the grant recipient that used grant funds to construct such station shall notify the Secretary of Energy of such opening and the Secretary shall add the new alternative fuel station to the alternative fuel station locator on its website.

        `(B) SEMI-ANNUAL REPORT- Not later than 6 months after receiving a grant under this subsection, and every 6 months thereafter, each grant recipient shall submit a report to the Secretary of Energy that describes--

          `(i) the status of each alternative fuel station constructed with grant funds received under this subsection;

          `(ii) the amount of alternative fuel dispensed at each station during the preceding 6-month period; and

          `(iii) the average price per gallon of the alternative fuel sold at each station during the preceding 6-month period.

      `(8) ALTERNATIVE FUEL DEFINED- In this subsection, the term `alternative fuel' means--

        `(A) any fuel of which--

          `(i) not less than 85 percent of the volume consists of ethanol, natural gas, compressed natural gas, liquefied natural gas, liquefied petroleum gas, or hydrogen; or

          `(ii) a percentage determined by the Secretary, by rule, that is not less than 70 percent, of the volume consists of the elements listed in clause (i), to provide for requirements relating to cold start, safety, or vehicle functions; or

        `(B) any mixture of biodiesel and diesel fuel determined without regard to any use of kerosene that contains at least 20 percent biodiesel.'.

SEC. 305. ACCELERATING CONVERSION TO ALTERNATIVE FUELS INFRASTRUCTURE.

    (a) Findings- Congress finds that--

      (1) as of the date of enactment of this Act, an estimated 5,000,000 to 6,000,000 flexible-fuel vehicles are on roads in the United States;

      (2) based on the report of the Department of Energy entitled `Transportation Energy Date Book: Edition 25,' only 740 refueling sites providing E-85 or biodiesel existed in the United States in 2005, equivalent to less than 1 percent of total United States refueling stations; and

      (3) as the number of flexible-fuel vehicles on roads in the United States increases, an increase in the availability of alternative refueling infrastructure must occur in order to enable the displacement of petroleum consumption.

    (b) Goal- Congress declares that it is the goal of the United States to increase the accessibility of alternative fuels to retail consumers, and to ensure that at least 10 percent of motor vehicle refueling stations provide alternative fuels, by calendar year 2015.

    (c) Infrastructure Pilot Program for Alternative Fuels-

      (1) IN GENERAL- The Secretary of Energy, in consultation with the Secretary of Transportation and the Administrator of the Environmental Protection Agency (referred to in this subsection as the `Secretary'), shall establish a competitive grant pilot program (referred to in this subsection as the `pilot program'), to be administered through the Clean Cities Program of the Department of Energy, to provide not more than 10 geographically-dispersed project grants to State governments, local governments, metropolitan transportation authorities, or partnerships of those entities to carry out 1 or more projects for the purposes described in paragraph (2).

      (2) GRANT PURPOSES- A grant under this subsection shall be used for the establishment of refueling infrastructure corridors for alternative fuels along the National Highway System, including--

        (A) installation of infrastructure and equipment necessary to ensure adequate distribution of qualified alternative fuels within the corridor;

        (B) installation of infrastructure and equipment necessary to directly support vehicles powered by qualified alternative fuels; and

        (C) operation and maintenance of infrastructure and equipment installed as part of a project funded by the grant.

      (3) APPLICATIONS-

        (A) REQUIREMENTS-

          (i) IN GENERAL- Subject to clause (ii), not later than 90 days after the date of enactment of this Act, the Secretary shall issue requirements for use in applying for grants under the pilot program.

          (ii) MINIMUM REQUIREMENTS- At a minimum, the Secretary shall require that an application for a grant under this subsection--

            (I) be submitted by--

(aa) the head of a State or local government or a metropolitan transportation authority, or any combination of those entities; and

(bb) a registered participant in the Clean Cities Program of the Department of Energy; and

            (II) include--

(aa) a description of the project proposed in the application, including the ways in which the project meets the requirements of this subsection;

(bb) an estimate of the degree of use of the project, including the estimated size of fleet of alternative fueled vehicles available within the geographic region of the corridor;

(cc) an estimate of the potential petroleum displaced and air pollution emissions reduced as a result of the project, and a plan to collect and disseminate petroleum displacement and environmental data relating to the project to be funded under the grant, over the expected life of the project;

(dd) a description of the means by which the project will be sustainable without Federal assistance after the completion of the term of the grant;

(ee) a complete description of the costs of the project, including acquisition, construction, operation, and maintenance costs over the expected life of the project;

(ff) a description of which costs of the project will be supported by Federal assistance under this subsection; and

(gg) documentation to the satisfaction of the Secretary that diesel fuel containing sulfur at not more than 15 parts per million is available for carrying out the project, and a commitment by the applicant to use that fuel in carrying out the project.

        (B) PARTNERS- An applicant under subparagraph (A) may carry out a project under the pilot program in partnership with public and private entities.

      (4) SELECTION CRITERIA- In evaluating applications under the pilot program, the Secretary shall--

        (A) consider the experience of each applicant with previous, similar projects; and

        (B) give priority consideration to applications that--

          (i) are most likely to maximize displacement of petroleum consumption and environmental protection;

          (ii) demonstrate the greatest commitment on the part of the applicant to ensure funding for the proposed project and the greatest likelihood that the project will be maintained or expanded after Federal assistance under this subsection is completed;

          (iii) represent a partnership of public and private entities; and

          (iv) exceed the minimum requirements of paragraph (3)(A)(ii).

      (5) PILOT PROJECT REQUIREMENTS-

        (A) MAXIMUM AMOUNT- The Secretary shall provide not more than $20,000,000 in Federal assistance under the pilot program to any applicant.

        (B) COST SHARING- The non-Federal share of the cost of any activity relating to qualified alternative fuel infrastructure development carried out using funds from a grant under this subsection shall be not less than 20 percent.

        (C) MAXIMUM PERIOD OF GRANTS- The Secretary shall not provide funds to any applicant under the pilot program for more than 2 years.

        (D) DEPLOYMENT AND DISTRIBUTION- The Secretary shall seek, to the maximum extent practicable, to ensure a broad geographic distribution of project sites funded by grants under this subsection.

        (E) TRANSFER OF INFORMATION AND KNOWLEDGE- The Secretary shall establish mechanisms to ensure that the information and knowledge gained by participants in the pilot program are transferred among the pilot program participants and to other interested parties, including other applicants that submitted applications.

      (6) SCHEDULE-

        (A) INITIAL GRANTS-

          (i) IN GENERAL- Not later than 90 days after the date of enactment of this Act, the Secretary shall publish in the Federal Register, Commerce Business Daily, and such other publications as the Secretary considers to be appropriate, a notice and request for applications to carry out projects under the pilot program.

          (ii) DEADLINE- An application described in clause (i) shall be submitted to the Secretary by not later than 180 days after the date of publication of the notice under that clause.

          (iii) INITIAL SELECTION- Not later than 90 days after the date by which applications for grants are due under clause (ii), the Secretary shall select by competitive, peer-reviewed proposal up to 5 applications for projects to be awarded a grant under the pilot program.

        (B) ADDITIONAL GRANTS-

          (i) IN GENERAL- Not later than 2 years after the date of enactment of this Act, the Secretary shall publish in the Federal Register, Commerce Business Daily, and such other publications as the Secretary considers to be appropriate, a notice and request for additional applications to carry out projects under the pilot program that incorporate the information and knowledge obtained through the implementation of the first round of projects authorized under the pilot program.

          (ii) DEADLINE- An application described in clause (i) shall be submitted to the Secretary by not later than 180 days after the date of publication of the notice under that clause.

          (iii) INITIAL SELECTION- Not later than 90 days after the date by which applications for grants are due under clause (ii), the Secretary shall select by competitive, peer-reviewed proposal such additional applications for projects to be awarded a grant under the pilot program as the Secretary determines to be appropriate.

      (7) REPORTS TO CONGRESS-

        (A) INITIAL REPORT- Not later than 60 days after the date on which grants are awarded under this subsection, the Secretary shall submit to Congress a report containing--

          (i) an identification of the grant recipients and a description of the projects to be funded under the pilot program;

          (ii) an identification of other applicants that submitted applications for the pilot program but to which funding was not provided; and

          (iii) a description of the mechanisms used by the Secretary to ensure that the information and knowledge gained by participants in the pilot program are transferred among the pilot program participants and to other interested parties, including other applicants that submitted applications.

        (B) EVALUATION- Not later than 2 years after the date of enactment of this Act, and annually thereafter until the termination of the pilot program, the Secretary shall submit to Congress a report containing an evaluation of the effectiveness of the pilot program, including an assessment of the petroleum displacement and benefits to the environment derived from the projects included in the pilot program.

      (8) AUTHORIZATION OF APPROPRIATIONS- There is authorized to be appropriated to the Secretary to carry out this subsection $200,000,000, to remain available until expended.

SEC. 306. INCREASING CONSUMER AWARENESS OF FLEXIBLE FUEL AUTOMOBILES.

    Section 32908 of title 49, United States Code, is amended by adding at the end the following:

    `(g) Increasing Consumer Awareness of Flexible Fuel Automobiles-

      `(1) IN GENERAL- The Secretary of Transportation shall prescribe regulations that require the manufacturer of automobiles distributed in interstate commerce for sale in the United States--

        `(A) to prominently display a permanent badge or emblem on the quarter panel or tailgate of each such automobile that indicates such automobile is capable of operating on alternative fuel; and

        `(B) to include information in the owner's manual of each such automobile information that describes--

          `(i) the capability of the automobile to operate using alternative fuel; and

          `(ii) the benefits of using alternative fuel, including the renewable nature, the increased fuel efficiency, and the environmental benefits of using alternative fuel.

      `(2) COLLABORATION- The Secretary of Transportation shall collaborate with automobile retailers to develop voluntary methods for providing prospective purchasers of automobiles with information regarding the benefits of using alternative fuel in automobiles, including--

        `(A) the renewable nature of alternative fuel; and

        `(B) the environmental benefits of using alternative fuel.'.

SEC. 307. MINIMUM QUANTITY OF RENEWABLE FUEL DERIVED FROM CELLULOSIC BIOMASS.

    Section 211(o)(2)(B) of the Clean Air Act (42 U.S.C. 7545(o)(2)(B)) is amended by striking clause (iii) and inserting the following:

          `(iii) MINIMUM QUANTITY DERIVED FROM CELLULOSIC BIOMASS- The applicable volume referred to in clause (ii) shall contain a minimum of--

            `(I) for each of calendar years 2010 through 2012, 75,000,000 gallons that are derived from cellulosic biomass; and

            `(II) for calendar year 2013 and each calendar year thereafter, 250,000,000 gallons that are derived from cellulosic biomass.'.

SEC. 308. MINIMUM QUANTITY OF RENEWABLE FUEL DERIVED FROM SUGAR.

    (a) In General- Section 211(o)(2)(B) of the Clean Air Act (42 U.S.C. 7545(o)(2)(B)) is amended by adding at the end the following:

          `(v) MINIMUM QUANTITY DERIVED FROM SUGAR- For calendar year 2008 and each calendar year thereafter, the applicable volume referred to in clause (ii) shall contain a minimum of 100,000,000 gallons that are derived from domestically-grown sugarcane, sugar beets, or sugar components.'.

    (b) Applicable Volume- Section 211(o)(2)(B)(i) of the Clean Air Act (42 U.S.C. 7545(o)(2)(B)(i)) is amended--

      (1) in the item relating to calendar year 2008, by striking `5.4' and inserting `5.5';

      (2) in the item relating to calendar year 2009, by striking `6.1' and inserting `6.2';

      (3) in the item relating to calendar year 2010, by striking `6.8' and inserting `6.9';

      (4) in the item relating to calendar year 2011, by striking `7.4' and inserting `7.5'; and

      (5) in the item relating to calendar year 2012, by striking `7.5' and inserting `7.6'.

SEC. 309. BIOENERGY RESEARCH AND DEVELOPMENT.

    Section 931(c) of the Energy Policy Act of 2005 (42 U.S.C. 16231(c)) is amended--

      (1) in paragraph (1), by striking `$213,000,000' and inserting `$326,000,000';

      (2) in paragraph (2), by striking `$251,000,000' and inserting `$377,000,000'; and

      (3) in paragraph (3), by striking `$274,000,000' and inserting `$398,000,000'.

SEC. 310. 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. 311. LOW-INTEREST LOAN AND GRANT PROGRAM FOR RETAIL DELIVERY OF E-85 FUEL.

    (a) Purposes of Loans- Section 312(a) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1942(a)) is amended--

      (1) in paragraph (9)(B)(ii), by striking `or' at the end;

      (2) in paragraph (10), by striking the period at the end and inserting `; or'; and

      (3) by adding at the end the following:

      `(11) building infrastructure, including pump stations, for the retail delivery to consumers of any fuel that contains not less than 85 percent ethanol, by volume.'.

    (b) Program- Subtitle B of the Consolidated Farm and Rural Development Act (7 U.S.C. 1941 et seq.) is amended by adding at the end the following:

`SEC. 320. LOW-INTEREST LOAN AND GRANT PROGRAM FOR RETAIL DELIVERY OF E-85 FUEL.

    `(a) In General- The Secretary shall establish a low-interest loan and grant program to assist farmer-owned ethanol producers (including cooperatives and limited liability corporations) to develop and build infrastructure, including pump stations, for the retail delivery to consumers of any fuel that contains not less than 85 percent ethanol, by volume.

    `(b) Terms-

      `(1) INTEREST RATE- A low-interest loan under this section shall be fixed at not more than 5 percent for each year.

      `(2) AMORTIZATION- The repayment of a loan under this section shall be amortized over the expected life of the infrastructure project that is being financed with the proceeds of the loan.

    `(c) Authorization of Appropriations- There are authorized to be appropriated such sums as are necessary to carry out this section.'.

    (c) Regulations- As soon as practicable after the date of enactment of this Act, the Secretary of Agriculture shall promulgate such regulations as are necessary to carry out the amendments made by this section.

SEC. 312. TRANSIT-ORIENTED DEVELOPMENT CORRIDORS.

    (a) Definitions- In this section:

      (1) TRANSIT-ORIENTED DEVELOPMENT CORRIDOR- The term `Transit-Oriented Development Corridor' (referred to in this section as `TODC') means a geographic area designated by the Secretary under subsection (b).

      (2) OTHER TERMS- The terms `fixed guideway', `local governmental authority', `mass transportation', `Secretary', `State', and `urbanized area' have the meanings given such 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- Each TODC shall include rights-of-way for fixed guideway 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 may award 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 desiring 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 are authorized to be appropriated $50,000,000 for each of fiscal years 2007 through 2012 to carry out this section.

TITLE IV--NATIONWIDE ENERGY SECURITY MEDIA CAMPAIGN

SEC. 401. 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 $5,000,000 for each of fiscal years 2006 through 2010.

END