[Congressional Bills 110th Congress] [From the U.S. Government Publishing Office] [H.R. 6001 Introduced in House (IH)] 110th CONGRESS 2d Session H. R. 6001 To rebalance the United States energy portfolio, to increase and utilize the Nation's domestic energy resources and supply, to strengthen energy security and independence, and for other purposes. _______________________________________________________________________ IN THE HOUSE OF REPRESENTATIVES May 8, 2008 Mr. Buyer (for himself, Mr. Cole of Oklahoma, Mr. Graves, Mr. Pickering, Mr. Hayes, Mr. Shimkus, Mr. Pence, Mr. Burton of Indiana, Mr. Kline of Minnesota, Mrs. Blackburn, Mr. Wamp, Mr. Young of Alaska, Mr. Hoekstra, Mr. Shuster, Mr. McHenry, Mr. Barrett of South Carolina, Mr. Souder, and Mr. Shadegg) introduced the following bill; which was referred to the Committee on Natural Resources, and in addition to the Committees on Energy and Commerce, Ways and Means, Armed Services, and Science and Technology, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned _______________________________________________________________________ A BILL To rebalance the United States energy portfolio, to increase and utilize the Nation's domestic energy resources and supply, to strengthen energy security and independence, 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. (a) Short Title.--This Act may be cited as the ``Main Street U.S.A. Energy Security Act of 2008''. (b) Table of Contents.--The table of contents for this Act is as follows: Sec. 1. Short title. TITLE I--INCREASE OUR ENERGY CAPACITY Subtitle A--Refineries Sec. 101. Short title. Sec. 102. Definitions. Sec. 103. State assistance. Sec. 104. Refinery process coordination and procedures. Sec. 105. Designation of closed military bases. Sec. 106. Savings clause. Sec. 107. Refinery revitalization repeal. Subtitle B--Oil and Gas Development on the Coastal Plain of Alaska Sec. 121 Definitions. Sec. 122. Leasing program for lands within the Coastal Plain. Sec. 123. Lease sales. Sec. 124. Grant of leases by the Secretary. Sec. 125. Lease terms and conditions. Sec. 126. Coastal plain environmental protection. Sec. 127. Expedited judicial review. Sec. 128. Federal and State distribution of revenues. Sec. 129. Rights-of-way across the Coastal Plain. Sec. 130. Conveyance. Sec. 131. Local government impact aid and community service assistance. Subtitle C--Opening of Outer Continental Shelf Sec. 141. Short title. Sec. 142. Policy. Sec. 143. Definitions under the Outer Continental Shelf Lands Act. Sec. 144. Determination of Adjacent Zones and planning areas. Sec. 145. Administration of leasing. Sec. 146. Grant of leases by Secretary. Sec. 147. Disposition of receipts. Sec. 148. Reservation of lands and rights. Sec. 149. Outer Continental Shelf Leasing Program. Sec. 150. Coordination with Adjacent States. Sec. 151. Environmental studies. Sec. 152. Federal Energy Natural Resources Enhancement Act of 2008. Sec. 153. Termination of effect of laws prohibiting the spending of appropriated funds for certain purposes. Sec. 154. Outer Continental Shelf incompatible use. Sec. 155. Repurchase of certain leases. Sec. 156. Offsite environmental mitigation. Sec. 157. Minerals Management Service. Sec. 158. Authority to use decommissioned offshore oil and gas platforms and other facilities for artificial reef, scientific research, or other uses. Sec. 159. Repeal of requirement to conduct comprehensive inventory of OCS oil and natural gas resources. Sec. 160. Mining and petroleum schools. Sec. 161. Onshore and offshore mineral lease fees. Sec. 162. OCS regional headquarters. Sec. 163. National Geo Fund Act of 2008. Sec. 164. Leases for areas located within 100 miles of California or Florida. Sec. 165. Coastal impact assistance. Sec. 166. Oil shale and tar sands amendments. Sec. 167. Availability of OCS receipts to provide payments under Secure Rural Schools and Community Self- Determination Act of 2000. Sec. 168. Sense of the Congress to buy and build American. Subtitle D--Nuclear Sec. 181. Incentives for innovative technologies. Sec. 182. Authorization for Nuclear Power 2010 Program. Sec. 183. Domestic manufacturing base for nuclear components and equipment. Sec. 184. Nuclear energy workforce. Sec. 185. National Nuclear Energy Council. Sec. 186. Nuclear waste management. TITLE II--INCREASE OUR UTILIZATION EFFICIENCY Subtitle A--Coal to Liquids Sec. 201. Location of coal-to-liquid manufacturing facilities. Sec. 202. Authorization to conduct research, development, testing, and evaluation of assured domestic fuels. Sec. 203. Coal-to-liquid long-term fuel procurement and Department of Defense development. Subtitle B--Energy Tax Provisions Sec. 211. Short title; amendment of 1986 Code. Part 1--Production Incentives Sec. 221. Extension and modification of renewable energy credit. Sec. 222. Production credit for electricity produced from marine renewables. Sec. 223. Extension of electricity production tax credit to electricity produced from the production of substitute natural gas from refined coal or petcoke. Sec. 224. Extension and modification of energy credit. Sec. 225. New clean renewable energy bonds. Sec. 226. Extension and modification of special rule to implement FERC and State electric restructuring policy. Sec. 227. Extension and modification of credit for residential energy efficient property. Part 2--Transportation Conservation Incentives subpart a--vehicles Sec. 231. Credit for plug-in hybrid vehicles. Sec. 232. Extension and modification of alternative fuel vehicle refueling property credit. Sec. 233. Modification of limitation on automobile depreciation. subpart b--fuels Sec. 241. Extension and modification of credits for biodiesel and renewable diesel. Sec. 242. Clarification that credits for fuel are designed to provide an incentive for United States production. Sec. 243. Credit for production of cellulosic alcohol. Sec. 244. Extension for credit for alternative fuels and mixtures derived from coal (including peat) through the Fischer-Tropsch process. Part 3--Other Conservation Provisions Sec. 251. Qualified energy conservation bonds. Sec. 252. Extension and modification of credit for nonbusiness energy property. Sec. 253. Extension of energy efficient commercial buildings deduction. Sec. 254. Modifications of energy efficient appliance credit for appliances produced after 2007. Sec. 255. Five-year applicable recovery period for depreciation of qualified energy management devices. Sec. 256. Clarification of eligibility for certain fuels credits for fuel with insufficient nexus to the United States. TITLE III--RESEARCH AND DEVELOPMENT Sec. 301. Blended fuels. Sec. 302. Cellulosic Ethanol. TITLE I--INCREASE OUR ENERGY CAPACITY Subtitle A--Refineries SEC. 101. SHORT TITLE. This subtitle may be cited as the ``Refinery Permit Process Schedule Act''. SEC. 102. DEFINITIONS. For purposes of this subtitle-- (1) the term ``Administrator'' means the Administrator of the Environmental Protection Agency; (2) the term ``applicant'' means a person who is seeking a Federal refinery authorization; (3) the term ``biomass'' has the meaning given that term in section 932(a)(1) of the Energy Policy Act of 2005; (4) the term ``Federal refinery authorization''-- (A) means any authorization required under Federal law, whether administered by a Federal or State administrative agency or official, with respect to siting, construction, expansion, or operation of a refinery; and (B) includes any permits, licenses, special use authorizations, certifications, opinions, or other approvals required under Federal law with respect to siting, construction, expansion, or operation of a refinery; (5) the term ``refinery'' means-- (A) a facility designed and operated to receive, load, unload, store, transport, process, and refine crude oil by any chemical or physical process, including distillation, fluid catalytic cracking, hydrocracking, coking, alkylation, etherification, polymerization, catalytic reforming, isomerization, hydrotreating, blending, and any combination thereof, in order to produce gasoline or distillate; (B) a facility designed and operated to receive, load, unload, store, transport, process, and refine coal by any chemical or physical process, including liquefaction, in order to produce gasoline or diesel as its primary output; or (C) a facility designed and operated to receive, load, unload, store, transport, process (including biochemical, photochemical, and biotechnology processes), and refine biomass in order to produce biofuel; and (6) the term ``State'' means a State, the District of Columbia, the Commonwealth of Puerto Rico, and any other territory or possession of the United States. SEC. 103. STATE ASSISTANCE. (a) State Assistance.--At the request of a governor of a State, the Administrator is authorized to provide financial assistance to that State to facilitate the hiring of additional personnel to assist the State with expertise in fields relevant to consideration of Federal refinery authorizations. (b) Other Assistance.--At the request of a governor of a State, a Federal agency responsible for a Federal refinery authorization shall provide technical, legal, or other nonfinancial assistance to that State to facilitate its consideration of Federal refinery authorizations. SEC. 104. REFINERY PROCESS COORDINATION AND PROCEDURES. (a) Appointment of Federal Coordinator.-- (1) In general.--The President shall appoint a Federal coordinator to perform the responsibilities assigned to the Federal coordinator under this subtitle. (2) Other agencies.--Each Federal and State agency or official required to provide a Federal refinery authorization shall cooperate with the Federal coordinator. (b) Federal Refinery Authorizations.-- (1) Meeting participants.--Not later than 30 days after receiving a notification from an applicant that the applicant is seeking a Federal refinery authorization pursuant to Federal law, the Federal coordinator appointed under subsection (a) shall convene a meeting of representatives from all Federal and State agencies responsible for a Federal refinery authorization with respect to the refinery. The governor of a State shall identify each agency of that State that is responsible for a Federal refinery authorization with respect to that refinery. (2) Memorandum of agreement.--(A) Not later than 90 days after receipt of a notification described in paragraph (1), the Federal coordinator and the other participants at a meeting convened under paragraph (1) shall establish a memorandum of agreement setting forth the most expeditious coordinated schedule possible for completion of all Federal refinery authorizations with respect to the refinery, consistent with the full substantive and procedural review required by Federal law. If a Federal or State agency responsible for a Federal refinery authorization with respect to the refinery is not represented at such meeting, the Federal coordinator shall ensure that the schedule accommodates those Federal refinery authorizations, consistent with Federal law. In the event of conflict among Federal refinery authorization scheduling requirements, the requirements of the Environmental Protection Agency shall be given priority. (B) Not later than 15 days after completing the memorandum of agreement, the Federal coordinator shall publish the memorandum of agreement in the Federal Register. (C) The Federal coordinator shall ensure that all parties to the memorandum of agreement are working in good faith to carry out the memorandum of agreement, and shall facilitate the maintenance of the schedule established therein. (c) Consolidated Record.--The Federal coordinator shall, with the cooperation of Federal and State administrative agencies and officials, maintain a complete consolidated record of all decisions made or actions taken by the Federal coordinator or by a Federal administrative agency or officer (or State administrative agency or officer acting under delegated Federal authority) with respect to any Federal refinery authorization. Such record shall be the record for judicial review under subsection (d) of decisions made or actions taken by Federal and State administrative agencies and officials, except that, if the Court determines that the record does not contain sufficient information, the Court may remand the proceeding to the Federal coordinator for further development of the consolidated record. (d) Remedies.-- (1) In general.--The United States District Court for the district in which the proposed refinery is located shall have exclusive jurisdiction over any civil action for the review of the failure of an agency or official to act on a Federal refinery authorization in accordance with the schedule established pursuant to the memorandum of agreement. (2) Standing.--If an applicant or a party to a memorandum of agreement alleges that a failure to act described in paragraph (1) has occurred and that such failure to act would jeopardize timely completion of the entire schedule as established in the memorandum of agreement, such applicant or other party may bring a cause of action under this subsection. (3) Court action.--If an action is brought under paragraph (2), the Court shall review whether the parties to the memorandum of agreement have been acting in good faith, whether the applicant has been cooperating fully with the agencies that are responsible for issuing a Federal refinery authorization, and any other relevant materials in the consolidated record. Taking into consideration those factors, if the Court finds that a failure to act described in paragraph (1) has occurred, and that such failure to act would jeopardize timely completion of the entire schedule as established in the memorandum of agreement, the Court shall establish a new schedule that is the most expeditious coordinated schedule possible for completion of proceedings, consistent with the full substantive and procedural review required by Federal law. The court may issue orders to enforce any schedule it establishes under this paragraph. (4) Federal coordinator's action.--When any civil action is brought under this subsection, the Federal coordinator shall immediately file with the Court the consolidated record compiled by the Federal coordinator pursuant to subsection (c). (5) Expedited review.--The Court shall set any civil action brought under this subsection for expedited consideration. SEC. 105. DESIGNATION OF CLOSED MILITARY BASES. (a) Designation Requirement.--Not later than 90 days after the date of enactment of this Act, the President shall designate no less than 3 closed military installations, or portions thereof, as potentially suitable for the construction of a refinery. At least 1 such site shall be designated as potentially suitable for construction of a refinery to refine biomass in order to produce biofuel. (b) Redevelopment Authority.--The redevelopment authority for each installation designated under subsection (a), in preparing or revising the redevelopment plan for the installation, shall consider the feasibility and practicability of siting a refinery on the installation. (c) Management and Disposal of Real Property.--The Secretary of Defense, in managing and disposing of real property at an installation designated under subsection (a) pursuant to the base closure law applicable to the installation, shall give substantial deference to the recommendations of the redevelopment authority, as contained in the redevelopment plan for the installation, regarding the siting of a refinery on the installation. The management and disposal of real property at a closed military installation or portion thereof found to be suitable for the siting of a refinery under subsection (a) shall be carried out in the manner provided by the base closure law applicable to the installation. (d) Definitions.--For purposes of this section-- (1) the term ``base closure law'' means the Defense Base Closure and Realignment Act of 1990 (part A of title XXIX of Public Law 101-510; 10 U.S.C. 2687 note) and title II of the Defense Authorization Amendments and Base Closure and Realignment Act (Public Law 100-526; 10 U.S.C. 2687 note); and (2) the term ``closed military installation'' means a military installation closed or approved for closure pursuant to a base closure law. SEC. 106. SAVINGS CLAUSE. Nothing in this subtitle shall be construed to affect the application of any environmental or other law, or to prevent any party from bringing a cause of action under any environmental or other law, including citizen suits. SEC. 107. REFINERY REVITALIZATION REPEAL. Subtitle H of title III of the Energy Policy Act of 2005 and the items relating thereto in the table of contents of such Act are repealed. Subtitle B--Oil and Gas Development on the Coastal Plain of Alaska SEC. 121 DEFINITIONS. In this subtitle: (1) Coastal plain.--The term ``Coastal Plain'' means that area described in appendix I to part 37 of title 50, Code of Federal Regulations. (2) Secretary.--The term ``Secretary'', except as otherwise provided, means the Secretary of the Interior or the Secretary's designee. SEC. 122. LEASING PROGRAM FOR LANDS WITHIN THE COASTAL PLAIN. (a) In General.--The Secretary shall take such actions as are necessary-- (1) to establish and implement, in accordance with this subtitle and acting through the Director of the Bureau of Land Management in consultation with the Director of the United States Fish and Wildlife Service, a competitive oil and gas leasing program that will result in an environmentally sound program for the exploration, development, and production of the oil and gas resources of the Coastal Plain; and (2) to administer the provisions of this subtitle through regulations, lease terms, conditions, restrictions, prohibitions, stipulations, and other provisions that ensure the oil and gas exploration, development, and production activities on the Coastal Plain will result in no significant adverse effect on fish and wildlife, their habitat, subsistence resources, and the environment, including, in furtherance of this goal, by requiring the application of the best commercially available technology for oil and gas exploration, development, and production to all exploration, development, and production operations under this subtitle in a manner that ensures the receipt of fair market value by the public for the mineral resources to be leased. (b) Repeal.-- (1) Repeal.--Section 1003 of the Alaska National Interest Lands Conservation Act of 1980 (16 U.S.C. 3143) is repealed. (2) Conforming amendment.--The table of contents in section 1 of such Act is amended by striking the item relating to section 1003. (c) Compliance With Requirements Under Certain Other Laws.-- (1) Compatibility.--For purposes of the National Wildlife Refuge System Administration Act of 1966 (16 U.S.C. 668dd et seq.), the oil and gas leasing program and activities authorized by this section in the Coastal Plain are deemed to be compatible with the purposes for which the Arctic National Wildlife Refuge was established, and no further findings or decisions are required to implement this determination. (2) Adequacy of the department of the interior's legislative environmental impact statement.--The ``Final Legislative Environmental Impact Statement'' (April 1987) on the Coastal Plain prepared pursuant to section 1002 of the Alaska National Interest Lands Conservation Act of 1980 (16 U.S.C. 3142) and section 102(2)(C) of the National Environmental Policy Act of 1969 (42 U.S.C. 4332(2)(C)) is deemed to satisfy the requirements under the National Environmental Policy Act of 1969 that apply with respect to prelease activities, including actions authorized to be taken by the Secretary to develop and promulgate the regulations for the establishment of a leasing program authorized by this subtitle before the conduct of the first lease sale. (3) Compliance with nepa for other actions.--Before conducting the first lease sale under this subtitle, the Secretary shall prepare an environmental impact statement under the National Environmental Policy Act of 1969 with respect to the actions authorized by this subtitle that are not referred to in paragraph (2). Notwithstanding any other law, the Secretary is not required to identify nonleasing alternative courses of action or to analyze the environmental effects of such courses of action. The Secretary shall only identify a preferred action for such leasing and a single leasing alternative, and analyze the environmental effects and potential mitigation measures for those two alternatives. The identification of the preferred action and related analysis for the first lease sale under this subtitle shall be completed within 18 months after the date of enactment of this Act. The Secretary shall only consider public comments that specifically address the Secretary's preferred action and that are filed within 20 days after publication of an environmental analysis. Notwithstanding any other law, compliance with this paragraph is deemed to satisfy all requirements for the analysis and consideration of the environmental effects of proposed leasing under this subtitle. (d) Relationship to State and Local Authority.--Nothing in this subtitle shall be considered to expand or limit State and local regulatory authority. (e) Special Areas.-- (1) In general.--The Secretary, after consultation with the State of Alaska, the city of Kaktovik, and the North Slope Borough, may designate up to a total of 45,000 acres of the Coastal Plain as a Special Area if the Secretary determines that the Special Area is of such unique character and interest so as to require special management and regulatory protection. The Secretary shall designate as such a Special Area the Sadlerochit Spring area, comprising approximately 4,000 acres. (2) Management.--Each such Special Area shall be managed so as to protect and preserve the area's unique and diverse character including its fish, wildlife, and subsistence resource values. (3) Exclusion from leasing or surface occupancy.--The Secretary may exclude any Special Area from leasing. If the Secretary leases a Special Area, or any part thereof, for purposes of oil and gas exploration, development, production, and related activities, there shall be no surface occupancy of the lands comprising the Special Area. (4) Directional drilling.--Notwithstanding the other provisions of this subsection, the Secretary may lease all or a portion of a Special Area under terms that permit the use of horizontal drilling technology from sites on leases located outside the Special Area. (f) Limitation on Closed Areas.--The Secretary's sole authority to close lands within the Coastal Plain to oil and gas leasing and to exploration, development, and production is that set forth in this subtitle. (g) Regulations.-- (1) In general.--The Secretary shall prescribe such regulations as may be necessary to carry out this subtitle, including rules and regulations relating to protection of the fish and wildlife, their habitat, subsistence resources, and environment of the Coastal Plain, by no later than 15 months after the date of enactment of this Act. (2) Revision of regulations.--The Secretary shall periodically review and, if appropriate, revise the rules and regulations issued under subsection (a) to reflect any significant biological, environmental, or engineering data that come to the Secretary's attention. SEC. 123. LEASE SALES. (a) In General.--Lands may be leased pursuant to this subtitle to any person qualified to obtain a lease for deposits of oil and gas under the Mineral Leasing Act (30 U.S.C. 181 et seq.). (b) Procedures.--The Secretary shall, by regulation, establish procedures for-- (1) receipt and consideration of sealed nominations for any area in the Coastal Plain for inclusion in, or exclusion (as provided in subsection (c)) from, a lease sale; (2) the holding of lease sales after such nomination process; and (3) public notice of and comment on designation of areas to be included in, or excluded from, a lease sale. (c) Lease Sale Bids.--Bidding for leases under this subtitle shall be by sealed competitive cash bonus bids. (d) Acreage Minimum in First Sale.--In the first lease sale under this subtitle, the Secretary shall offer for lease those tracts the Secretary considers to have the greatest potential for the discovery of hydrocarbons, taking into consideration nominations received pursuant to subsection (b)(1), but in no case less than 200,000 acres. (e) Timing of Lease Sales.--The Secretary shall-- (1) conduct the first lease sale under this subtitle within 22 months after the date of the enactment of this Act; and (2) conduct additional sales so long as sufficient interest in development exists to warrant, in the Secretary's judgment, the conduct of such sales. SEC. 124. GRANT OF LEASES BY THE SECRETARY. (a) In General.--The Secretary may grant to the highest responsible qualified bidder in a lease sale conducted pursuant to section 123 any lands to be leased on the Coastal Plain upon payment by the lessee of such bonus as may be accepted by the Secretary. (b) Subsequent Transfers.--No lease issued under this subtitle may be sold, exchanged, assigned, sublet, or otherwise transferred except with the approval of the Secretary. Prior to any such approval the Secretary shall consult with, and give due consideration to the views of, the Attorney General. SEC. 125. LEASE TERMS AND CONDITIONS. An oil or gas lease issued pursuant to this subtitle shall-- (1) provide for the payment of a royalty of not less than 12\1/2\ percent in amount or value of the production removed or sold from the lease, as determined by the Secretary under the regulations applicable to other Federal oil and gas leases; (2) require that the lessee of lands within the Coastal Plain shall be fully responsible and liable for the reclamation of lands within the Coastal Plain and any other Federal lands that are adversely affected in connection with exploration, development, production, or transportation activities conducted under the lease and within the Coastal Plain by the lessee or by any of the subcontractors or agents of the lessee; (3) provide that the lessee may not delegate or convey, by contract or otherwise, the reclamation responsibility and liability to another person without the express written approval of the Secretary; (4) provide that the standard of reclamation for lands required to be reclaimed under this subtitle shall be, as nearly as practicable, a condition capable of supporting the uses which the lands were capable of supporting prior to any exploration, development, or production activities, or upon application by the lessee, to a higher or better use as approved by the Secretary; (5) include requirements and restrictions to provide for reasonable protection of fish and wildlife, their habitat, subsistence resources, and the environment as determined by the Secretary; (6) prohibit the export of oil produced under the lease; and (7) contain such other provisions as the Secretary determines necessary to ensure compliance with the provisions of this subtitle and the regulations issued under this subtitle. SEC. 126. COASTAL PLAIN ENVIRONMENTAL PROTECTION. (a) No Significant Adverse Effect Standard To Govern Authorized Coastal Plain Activities.--The Secretary shall, consistent with the requirements of section 122, administer the provisions of this subtitle through regulations, lease terms, conditions, restrictions, prohibitions, stipulations, and other provisions that-- (1) ensure the oil and gas exploration, development, and production activities on the Coastal Plain will result in no significant adverse effect on fish and wildlife, their habitat, and the environment; (2) require the application of the best commercially available technology for oil and gas exploration, development, and production on all new exploration, development, and production operations; and (3) ensure that the maximum amount of surface acreage covered by production and support facilities, including airstrips and any areas covered by gravel berms or piers for support of pipelines, does not exceed 2,000 acres on the Coastal Plain. (b) Site-Specific Assessment and Mitigation.--The Secretary shall also require, with respect to any proposed drilling and related activities, that-- (1) a site-specific analysis be made of the probable effects, if any, that the drilling or related activities will have on fish and wildlife, their habitat, subsistence resources, and the environment; (2) a plan be implemented to avoid, minimize, and mitigate (in that order and to the extent practicable) any significant adverse effect identified under paragraph (1); and (3) the development of the plan shall occur after consultation with the agency or agencies having jurisdiction over matters mitigated by the plan. (c) Regulations To Protect Coastal Plain Fish and Wildlife Resources, Subsistence Users, and the Environment.--Before implementing the leasing program authorized by this subtitle, the Secretary shall prepare and promulgate regulations, lease terms, conditions, restrictions, prohibitions, stipulations, and other measures designed to ensure that the activities undertaken on the Coastal Plain under this subtitle are conducted in a manner consistent with the purposes and environmental requirements of this subtitle. (d) Compliance With Federal and State Environmental Laws and Other Requirements.--The proposed regulations, lease terms, conditions, restrictions, prohibitions, and stipulations for the leasing program under this subtitle shall require compliance with all applicable provisions of Federal and State environmental law, and shall also require the following: (1) Standards at least as effective as the safety and environmental mitigation measures set forth in items 1 through 29 at pages 167 through 169 of the ``Final Legislative Environmental Impact Statement'' (April 1987) on the Coastal Plain. (2) Seasonal limitations on exploration, development, and related activities, where necessary, to avoid significant adverse effects during periods of concentrated fish and wildlife breeding, denning, nesting, spawning, and migration. (3) Design safety and construction standards for all pipelines and any access and service roads, that-- (A) minimize, to the maximum extent possible, adverse effects upon the passage of migratory species such as caribou; and (B) minimize adverse effects upon the flow of surface water by requiring the use of culverts, bridges, and other structural devices. (4) Prohibitions on general public access and use on all pipeline access and service roads. (5) Stringent reclamation and rehabilitation requirements, consistent with the standards set forth in this subtitle, requiring the removal from the Coastal Plain of all oil and gas development and production facilities, structures, and equipment upon completion of oil and gas production operations, except that the Secretary may exempt from the requirements of this paragraph those facilities, structures, or equipment that the Secretary determines would assist in the management of the Arctic National Wildlife Refuge and that are donated to the United States for that purpose. (6) Appropriate prohibitions or restrictions on access by all modes of transportation. (7) Appropriate prohibitions or restrictions on sand and gravel extraction. (8) Consolidation of facility siting. (9) Appropriate prohibitions or restrictions on use of explosives. (10) Avoidance, to the extent practicable, of springs, streams, and river system; the protection of natural surface drainage patterns, wetlands, and riparian habitats; and the regulation of methods or techniques for developing or transporting adequate supplies of water for exploratory drilling. (11) Avoidance or minimization of air traffic-related disturbance to fish and wildlife. (12) Treatment and disposal of hazardous and toxic wastes, solid wastes, reserve pit fluids, drilling muds and cuttings, and domestic wastewater, including an annual waste management report, a hazardous materials tracking system, and a prohibition on chlorinated solvents, in accordance with applicable Federal and State environmental law. (13) Fuel storage and oil spill contingency planning. (14) Research, monitoring, and reporting requirements. (15) Field crew environmental briefings. (16) Avoidance of significant adverse effects upon subsistence hunting, fishing, and trapping by subsistence users. (17) Compliance with applicable air and water quality standards. (18) Appropriate seasonal and safety zone designations around well sites, within which subsistence hunting and trapping shall be limited. (19) Reasonable stipulations for protection of cultural and archeological resources. (20) All other protective environmental stipulations, restrictions, terms, and conditions deemed necessary by the Secretary. (e) Considerations.--In preparing and promulgating regulations, lease terms, conditions, restrictions, prohibitions, and stipulations under this section, the Secretary shall consider the following: (1) The stipulations and conditions that govern the National Petroleum Reserve-Alaska leasing program, as set forth in the 1999 Northeast National Petroleum Reserve-Alaska Final Integrated Activity Plan/Environmental Impact Statement. (2) The environmental protection standards that governed the initial Coastal Plain seismic exploration program under parts 37.31 to 37.33 of title 50, Code of Federal Regulations. (3) The land use stipulations for exploratory drilling on the KIC-ASRC private lands that are set forth in Appendix 2 of the August 9, 1983, agreement between Arctic Slope Regional Corporation and the United States. (f) Facility Consolidation Planning.-- (1) In general.--The Secretary shall, after providing for public notice and comment, prepare and update periodically a plan to govern, guide, and direct the siting and construction of facilities for the exploration, development, production, and transportation of Coastal Plain oil and gas resources. (2) Objectives.--The plan shall have the following objectives: (A) Avoiding unnecessary duplication of facilities and activities. (B) Encouraging consolidation of common facilities and activities. (C) Locating or confining facilities and activities to areas that will minimize impact on fish and wildlife, their habitat, and the environment. (D) Utilizing existing facilities wherever practicable. (E) Enhancing compatibility between wildlife values and development activities. (g) Access to Public Lands.--The Secretary shall-- (1) manage public lands in the Coastal Plain subject to subsections (a) and (b) of section 811 of the Alaska National Interest Lands Conservation Act (16 U.S.C. 3121); and (2) ensure that local residents shall have reasonable access to public lands in the Coastal Plain for traditional uses. SEC. 127. EXPEDITED JUDICIAL REVIEW. (a) Filing of Complaint.-- (1) Deadline.--Subject to paragraph (2), any complaint seeking judicial review of any provision of this subtitle or any action of the Secretary under this subtitle shall be filed-- (A) except as provided in subparagraph (B), within the 90-day period beginning on the date of the action being challenged; or (B) in the case of a complaint based solely on grounds arising after such period, within 90 days after the complainant knew or reasonably should have known of the grounds for the complaint. (2) Venue.--Any complaint seeking judicial review of any provision of this subtitle or any action of the Secretary under this subtitle may be filed only in the United States Court of Appeals for the District of Columbia. (3) Limitation on scope of certain review.--Judicial review of a Secretarial decision to conduct a lease sale under this subtitle, including the environmental analysis thereof, shall be limited to whether the Secretary has complied with the terms of this subtitle and shall be based upon the administrative record of that decision. The Secretary's identification of a preferred course of action to enable leasing to proceed and the Secretary's analysis of environmental effects under this subtitle shall be presumed to be correct unless shown otherwise by clear and convincing evidence to the contrary. (b) Limitation on Other Review.--Actions of the Secretary with respect to which review could have been obtained under this section shall not be subject to judicial review in any civil or criminal proceeding for enforcement. SEC. 128. FEDERAL AND STATE DISTRIBUTION OF REVENUES. (a) In General.--Notwithstanding any other provision of law, of the amount of adjusted bonus, rental, and royalty revenues from Federal oil and gas leasing and operations authorized under this subtitle-- (1) 25 percent shall be paid to the State of Alaska; and (2) except as otherwise provided by this Act, the balance shall be deposited into the Treasury as miscellaneous receipts. (b) Payments to Alaska.--Payments to the State of Alaska under this section shall be made semiannually. SEC. 129. RIGHTS-OF-WAY ACROSS THE COASTAL PLAIN. (a) In General.--The Secretary shall issue rights-of-way and easements across the Coastal Plain for the transportation of oil and gas-- (1) except as provided in paragraph (2), under section 28 of the Mineral Leasing Act (30 U.S.C. 185), without regard to title XI of the Alaska National Interest Lands Conservation Act (30 U.S.C. 3161 et seq.); and (2) under title XI of the Alaska National Interest Lands Conservation Act (30 U.S.C. 3161 et seq.), for access authorized by sections 1110 and 1111 of that Act (16 U.S.C. 3170 and 3171). (b) Terms and Conditions.--The Secretary shall include in any right-of-way or easement issued under subsection (a) such terms and conditions as may be necessary to ensure that transportation of oil and gas does not result in a significant adverse effect on the fish and wildlife, subsistence resources, their habitat, and the environment of the Coastal Plain, including requirements that facilities be sited or designed so as to avoid unnecessary duplication of roads and pipelines. (c) Regulations.--The Secretary shall include in regulations under section 122(g) provisions granting rights-of-way and easements described in subsection (a) of this section. SEC. 130. CONVEYANCE. In order to maximize Federal revenues by removing clouds on title to lands and clarifying land ownership patterns within the Coastal Plain, the Secretary, notwithstanding the provisions of section 1302(h)(2) of the Alaska National Interest Lands Conservation Act (16 U.S.C. 3192(h)(2)), shall convey-- (1) to the Kaktovik Inupiat Corporation the surface estate of the lands described in paragraph 1 of Public Land Order 6959, to the extent necessary to fulfill the Corporation's entitlement under sections 12 and 14 of the Alaska Native Claims Settlement Act (43 U.S.C. 1611 and 1613) in accordance with the terms and conditions of the Agreement between the Department of the Interior, the United States Fish and Wildlife Service, the Bureau of Land Management, and the Kaktovik Inupiat Corporation effective January 22, 1993; and (2) to the Arctic Slope Regional Corporation the remaining subsurface estate to which it is entitled pursuant to the August 9, 1983, agreement between the Arctic Slope Regional Corporation and the United States of America. SEC. 131. LOCAL GOVERNMENT IMPACT AID AND COMMUNITY SERVICE ASSISTANCE. (a) Financial Assistance Authorized.-- (1) In general.--The Secretary may use amounts available from the Coastal Plain Local Government Impact Aid Assistance Fund established by subsection (d) to provide timely financial assistance to entities that are eligible under paragraph (2) and that are directly impacted by the exploration for or production of oil and gas on the Coastal Plain under this subtitle. (2) Eligible entities.--The North Slope Borough, the City of Kaktovik, and any other borough, municipal subdivision, village, or other community in the State of Alaska that is directly impacted by exploration for, or the production of, oil or gas on the Coastal Plain under this subtitle, as determined by the Secretary, shall be eligible for financial assistance under this section. (b) Use of Assistance.--Financial assistance under this section may be used only for-- (1) planning for mitigation of the potential effects of oil and gas exploration and development on environmental, social, cultural, recreational, and subsistence values; (2) implementing mitigation plans and maintaining mitigation projects; (3) developing, carrying out, and maintaining projects and programs that provide new or expanded public facilities and services to address needs and problems associated with such effects, including fire-fighting, police, water, waste treatment, medivac, and medical services; and (4) establishment of a coordination office, by the north slope borough, in the City of Kaktovik, which shall-- (A) coordinate with and advise developers on local conditions, impact, and history of the areas utilized for development; and (B) provide to the Committee on Resources of the House of Representatives and the Committee on Energy and Natural Resources of the Senate an annual report on the status of coordination between developers and the communities affected by development. (c) Application.-- (1) In general.--Any community that is eligible for assistance under this section may submit an application for such assistance to the Secretary, in such form and under such procedures as the Secretary may prescribe by regulation. (2) North slope borough communities.--A community located in the North Slope Borough may apply for assistance under this section either directly to the Secretary or through the North Slope Borough. (3) Application assistance.--The Secretary shall work closely with and assist the North Slope Borough and other communities eligible for assistance under this section in developing and submitting applications for assistance under this section. (d) Establishment of Fund.-- (1) In general.--There is established in the Treasury the Coastal Plain Local Government Impact Aid Assistance Fund. (2) Use.--Amounts in the fund may be used only for providing financial assistance under this section. (3) Deposits.--Subject to paragraph (4), there shall be deposited into the fund amounts received by the United States as revenues derived from rents, bonuses, and royalties from Federal leases and lease sales authorized under this subtitle. (4) Limitation on deposits.--The total amount in the fund may not exceed $11,000,000. (5) Investment of balances.--The Secretary of the Treasury shall invest amounts in the fund in interest bearing government securities. (e) Authorization of Appropriations.--To provide financial assistance under this section there is authorized to be appropriated to the Secretary from the Coastal Plain Local Government Impact Aid Assistance Fund $5,000,000 for each fiscal year. Subtitle C--Opening of Outer Continental Shelf SEC. 141. SHORT TITLE. This subtitle may be cited as the ``Deep Ocean Energy Resources Act of 2008''. SEC. 142. POLICY. It is the policy of the United States that-- (1) the United States is blessed with abundant energy resources on the outer Continental Shelf and has developed a comprehensive framework of environmental laws and regulations and fostered the development of state-of-the-art technology that allows for the responsible development of these resources for the benefit of its citizenry; (2) adjacent States are required by the circumstances to commit significant resources in support of exploration, development, and production activities for mineral resources on the outer Continental Shelf, and it is fair and proper for a portion of the receipts from such activities to be shared with Adjacent States and their local coastal governments; (3) the existing laws governing the leasing and production of the mineral resources of the outer Continental Shelf have reduced the production of mineral resources, have preempted Adjacent States from being sufficiently involved in the decisions regarding the allowance of mineral resource development, and have been harmful to the national interest; (4) the national interest is served by granting the Adjacent States more options related to whether or not mineral leasing should occur in the outer Continental Shelf within their Adjacent Zones; (5) it is not reasonably foreseeable that exploration of a leased tract located more than 25 miles seaward of the coastline, development and production of a natural gas discovery located more than 25 miles seaward of the coastline, or development and production of an oil discovery located more than 50 miles seaward of the coastline will adversely affect resources near the coastline; (6) transportation of oil from a leased tract might reasonably be foreseen, under limited circumstances, to have the potential to adversely affect resources near the coastline if the oil is within 50 miles of the coastline, but such potential to adversely affect such resources is likely no greater, and probably less, than the potential impacts from tanker transportation because tanker spills usually involve large releases of oil over a brief period of time; and (7) among other bodies of inland waters, the Great Lakes, Long Island Sound, Delaware Bay, Chesapeake Bay, Albemarle Sound, San Francisco Bay, and Puget Sound are not part of the outer Continental Shelf, and are not subject to leasing by the Federal Government for the exploration, development, and production of any mineral resources that might lie beneath them. SEC. 143. DEFINITIONS UNDER THE OUTER CONTINENTAL SHELF LANDS ACT. Section 2 of the Outer Continental Shelf Lands Act (43 U.S.C. 1331) is amended-- (1) by amending paragraph (f) to read as follows: ``(f) The term `affected State' means the Adjacent State.''; (2) by striking the semicolon at the end of each of paragraphs (a) through (o) and inserting a period; (3) by striking ``; and'' at the end of paragraph (p) and inserting a period; (4) by adding at the end the following: ``(r) The term `Adjacent State' means, with respect to any program, plan, lease sale, leased tract or other activity, proposed, conducted, or approved pursuant to the provisions of this Act, any State the laws of which are declared, pursuant to section 4(a)(2), to be the law of the United States for the portion of the outer Continental Shelf on which such program, plan, lease sale, leased tract or activity appertains or is, or is proposed to be, conducted. For purposes of this paragraph, the term `State' includes Puerto Rico and the other Territories of the United States. ``(s) The term `Adjacent Zone' means, with respect to any program, plan, lease sale, leased tract, or other activity, proposed, conducted, or approved pursuant to the provisions of this Act, the portion of the outer Continental Shelf for which the laws of a particular Adjacent State are declared, pursuant to section 4(a)(2), to be the law of the United States. ``(t) The term `miles' means statute miles. ``(u) The term `coastline' has the same meaning as the term `coast line' as defined in section 2(c) of the Submerged Lands Act (43 U.S.C. 1301(c)). ``(v) The term `Neighboring State' means a coastal State having a common boundary at the coastline with the Adjacent State.''; and (5) in paragraph (a), by inserting after ``control'' the following: ``or lying within the United States exclusive economic zone adjacent to the Territories of the United States''. SEC. 144. DETERMINATION OF ADJACENT ZONES AND PLANNING AREAS. Section 4(a)(2)(A) of the Outer Continental Shelf Lands Act (43 U.S.C. 1333(a)(2)(A)) is amended in the first sentence by striking ``, and the President'' and all that follows through the end of the sentence and inserting the following: ``. The lines extending seaward and defining each State's Adjacent Zone, and each OCS Planning Area, are as indicated on the maps for each outer Continental Shelf region entitled `Alaska OCS Region State Adjacent Zone and OCS Planning Areas', `Pacific OCS Region State Adjacent Zones and OCS Planning Areas', `Gulf of Mexico OCS Region State Adjacent Zones and OCS Planning Areas', and `Atlantic OCS Region State Adjacent Zones and OCS Planning Areas', all of which are dated September 2005 and on file in the Office of the Director, Minerals Management Service.''. SEC. 145. ADMINISTRATION OF LEASING. Section 5 of the Outer Continental Shelf Lands Act (43 U.S.C. 1334) is amended by adding at the end the following: ``(k) Voluntary Partial Relinquishment of a Lease.--Any lessee of a producing lease may relinquish to the Secretary any portion of a lease that the lessee has no interest in producing and that the Secretary finds is geologically prospective. In return for any such relinquishment, the Secretary shall provide to the lessee a royalty incentive for the portion of the lease retained by the lessee, in accordance with regulations promulgated by the Secretary to carry out this subsection. The Secretary shall publish final regulations implementing this subsection within 365 days after the date of the enactment of the Deep Ocean Energy Resources Act of 2008. ``(l) Natural Gas Lease Regulations.--Not later than July 1, 2009, the Secretary shall publish a final regulation that shall-- ``(1) establish procedures for entering into natural gas leases; ``(2) ensure that natural gas leases are only available for tracts on the outer Continental Shelf that are wholly within 100 miles of the coastline within an area withdrawn from disposition by leasing on the day after the date of enactment of the Deep Ocean Energy Resources Act of 2008; ``(3) provide that natural gas leases shall contain the same rights and obligations established for oil and gas leases, except as otherwise provided in the Deep Ocean Energy Resources Act of 2008; ``(4) provide that, in reviewing the adequacy of bids for natural gas leases, the value of any crude oil estimated to be contained within any tract shall be excluded; ``(5) provide that any crude oil produced from a well and reinjected into the leased tract shall not be subject to payment of royalty, and that the Secretary shall consider, in setting the royalty rates for a natural gas lease, the additional cost to the lessee of not producing any crude oil; and ``(6) provide that any Federal law that applies to an oil and gas lease on the outer Continental Shelf shall apply to a natural gas lease unless otherwise clearly inapplicable.''. SEC. 146. GRANT OF LEASES BY SECRETARY. Section 8 of the Outer Continental Shelf Lands Act (43 U.S.C. 1337) is amended-- (1) in subsection (a)(1) by inserting after the first sentence the following: ``Further, the Secretary may grant natural gas leases in a manner similar to the granting of oil and gas leases and under the various bidding systems available for oil and gas leases.''; (2) by adding at the end of subsection (b) the following: ``The Secretary may issue more than one lease for a given tract if each lease applies to a separate and distinct range of vertical depths, horizontal surface area, or a combination of the two. The Secretary may issue regulations that the Secretary determines are necessary to manage such leases consistent with the purposes of this Act.''; (3) by amending subsection (p)(2)(B) to read as follows: ``(B) The Secretary shall provide for the payment to coastal states, and their local coastal governments, of 75 percent of Federal receipts from projects authorized under this section located partially or completely within the area extending seaward of State submerged lands out to 4 marine leagues from the coastline, and the payment to coastal states of 50 percent of the receipts from projects completely located in the area more than 4 marine leagues from the coastline. Payments shall be based on a formula established by the Secretary by rulemaking no later than 180 days after the date of the enactment of the Deep Ocean Energy Resources Act of 2008 that provides for equitable distribution, based on proximity to the project, among coastal states that have coastline that is located within 200 miles of the geographic center of the project.''; (4) by adding at the end the following: ``(q) Natural Gas Leases.-- ``(1) Right to produce natural gas.--A lessee of a natural gas lease shall have the right to produce the natural gas from a field on a natural gas leased tract if the Secretary estimates that the discovered field has at least 40 percent of the economically recoverable Btu content of the field contained within natural gas and such natural gas is economical to produce. ``(2) Crude oil.--A lessee of a natural gas lease may not produce crude oil from the lease. ``(3) Estimates of btu content.--The Secretary shall make estimates of the natural gas Btu content of discovered fields on a natural gas lease only after the completion of at least one exploration well, the data from which has been tied to the results of a three-dimensional seismic survey of the field. The Secretary may not require the lessee to further delineate any discovered field prior to making such estimates. ``(4) Definition of natural gas.--For purposes of a natural gas lease, natural gas means natural gas and all substances produced in association with gas, including, but not limited to, hydrocarbon liquids (other than crude oil) that are obtained by the condensation of hydrocarbon vapors and separate out in liquid form from the produced gas stream. ``(r) Removal of Restrictions on Joint Bidding in Certain Areas of the Outer Continental Shelf.--Restrictions on joint bidders shall no longer apply to tracts located in the Alaska OCS Region. Such restrictions shall not apply to tracts in other OCS regions determined to be `frontier tracts' or otherwise `high cost tracts' under final regulations that shall be published by the Secretary by not later than 365 days after the date of the enactment of the Deep Ocean Energy Resources Act of 2008. ``(s) Royalty Suspension Provisions.--The Secretary shall agree to a request by any lessee to amend any lease issued for Central and Western Gulf of Mexico tracts during the period of January 1, 1998, through December 31, 1999, to incorporate price thresholds applicable to royalty suspension provisions, or amend existing price thresholds, in the amount of $40.50 per barrel (2006 dollars) for oil and for natural gas of $6.75 per million Btu (2006 dollars). Any amended lease shall impose the new or revised price thresholds effective October 1, 2008. Existing lease provisions shall prevail through September 30, 2008. After the date of the enactment of the Deep Ocean Energy Resources Act of 2008, price thresholds shall apply to any royalty suspension volumes granted by the Secretary. Unless otherwise set by Secretary by regulation or for a particular lease sale, the price thresholds shall be $40.50 for oil (2006 dollars) and $6.75 for natural gas (2006 dollars). ``(t) Conservation of Resources Fees.-- ``(1) Not later than one year after the date of the enactment of the Deep Ocean Energy Resources Act of 2008, the Secretary by regulation shall establish a conservation of resources fee for producing leases that will apply to new and existing leases which shall be set at $9 per barrel for oil and $1.25 per million Btu for gas. This fee shall only apply to leases in production located in more than 200 meters of water for which royalties are not being paid when prices exceed $40.50 per barrel for oil and $6.75 per million Btu for natural gas in 2006, dollars. This fee shall apply to production from and after October 1, 2008, and shall be treated as offsetting receipts. ``(2) Not later than one year after the date of the enactment of the Deep Ocean Energy Resources Act of 2008, the Secretary by regulation shall establish a conservation of resources fee for nonproducing leases that will apply to new and existing leases which shall be set at $3.75 per acre per year. This fee shall apply from and after October 1, 2008, and shall be treated as offsetting receipts.''; (5) by striking subsection (a)(3)(A) and redesignating the subsequent subparagraphs as subparagraphs (A) and (B), respectively; (6) in subsection (a)(3)(A) (as so redesignated) by striking ``In the Western'' and all that follows through ``the Secretary'' the first place it appears and inserting ``The Secretary''; and (7) effective October 1, 2008, in subsection (g)-- (A) by striking all after ``(g)'', except paragraph (3); (B) by striking the last sentence of paragraph (3); and (C) by striking ``(3)''. SEC. 147. DISPOSITION OF RECEIPTS. Section 9 of the Outer Continental Shelf Lands Act (43 U.S.C. 1338) is amended-- (1) by designating the existing text as subsection (a); (2) in subsection (a) (as so designated) by inserting ``, if not paid as otherwise provided in this title'' after ``receipts''; and (3) by adding the following: ``(b) Treatment of OCS Receipts From Tracts Completely Within 100 Miles of the Coastline.-- ``(1) Deposit.--The Secretary shall deposit into a separate account in the Treasury the portion of OCS Receipts for each fiscal year that will be shared under paragraphs (2), (3), and (4). ``(2) Phased-in receipts sharing.-- ``(A) Beginning October 1, 2008, the Secretary shall share OCS Receipts derived from the following areas: ``(i) Lease tracts located on portions of the Gulf of Mexico OCS Region completely beyond 4 marine leagues from any coastline and completely within 100 miles of any coastline that are available for leasing under the 2002- 2007 5-Year Oil and Gas Leasing Program in effect prior to the date of the enactment of the Deep Ocean Energy Resources Act of 2008. ``(ii) Lease tracts in production prior to October 1, 2008, completely beyond 4 marine leagues from any coastline and completely within 100 miles of any coastline located on portions of the OCS that were not available for leasing under the 2002-2007 5-Year OCS Oil and Gas Leasing Program in effect prior to the date of the enactment of the Deep Ocean Energy Resources Act of 2008. ``(iii) Lease tracts for which leases are issued prior to October 1, 2008, located in the Alaska OCS Region completely beyond 4 marine leagues from any coastline and completely within 100 miles of the coastline. ``(B) The Secretary shall share the following percentages of OCS Receipts from the leases described in subparagraph (A) derived during the fiscal year indicated: ``(i) For fiscal year 2009, 4.6 percent. ``(ii) For fiscal year 2010, 5.95 percent. ``(iii) For fiscal year 2011, 6.8 percent. ``(iv) For fiscal year 2012, 7.65 percent. ``(v) For fiscal year 2013, 10.20 percent. ``(vi) For fiscal year 2014, 12.75 percent. ``(vii) For fiscal year 2015, 15.30 percent. ``(viii) For fiscal year 2016, 17.85 percent. ``(ix) For fiscal year 2017, 20.40 percent. ``(x) For fiscal year 2018, 22.95 percent. ``(xi) For fiscal year 2019, 25.50 percent. ``(xii) For fiscal year 2020, 28.05 percent. ``(xiii) For fiscal year 2021, 30.60 percent. ``(xiv) For fiscal year 2022, 33.15 percent. ``(xv) For fiscal year 2023 35.70 percent. ``(xvi) For fiscal year 2024 and each subsequent fiscalyear, 37.5 percent. ``(C) The provisions of this paragraph shall not apply to leases that could not have been issued but for section 5(k) of this Act or section 146(2) of the Deep Ocean Energy Resources Act of 2008. ``(3) Immediate receipts sharing.--Beginning October 1, 2008, the Secretary shall share 37.5 percent of OCS Receipts derived from all leases located completely beyond 4 marine leagues from any coastline and completely within 100 miles of any coastline not included within the provisions of paragraph (2). ``(4) Receipts sharing from tracts within 4 marine leagues of any coastline.-- ``(A) Areas described in paragraph (2).-- ``(i) Beginning October 1, 2008, and continuing through September 30, 2013, the Secretary shall share 25 percent of OCS Receipts derived from all leases located within 4 marine leagues from any coastline within areas described in paragraph (2). For each fiscal year after September 30, 2013, the Secretary shall increase the percent shared in 5 percent increments each fiscal year until the sharing rate for all leases located within 4 marine leagues from any coastline within areas described in paragraph (2) becomes 37.5 percent. ``(ii) During fiscal year 2018, the Secretary shall conduct an analysis of all of the areas described in paragraph (3) and subsection (c)(3) to determine the total of OCS Receipts derived from such areas during the period of fiscal year 2009 through fiscal year 2018. The Secretary shall subtract the amount of $4 billion from the total of such OCS Receipts. If the result is a positive number, the Secretary shall divide such positive number by $4 billion. The resulting quotient, not to exceed 0.5, shall then be multiplied times 25. The product of such multiplication shall be added to 37.5 and the sum shall be the percent that the Secretary shall share for fiscal year 2019 and all future years from OCS Receipts derived from all leases located within 4 marine leagues from any coastline within areas described in paragraph (2), unless increased by the provisions of (iii). ``(iii) Beginning October 1, 2019, the Secretary shall share, in addition to the share established by (i), as modified by (ii) if any, amounts determined as follows, with the total of the amounts shared under this paragraph not to exceed in any fiscal year an amount equal to 63.75 percent of total OCS Receipts derived from all leases located within 4 marine leagues from any coastline within areas described in paragraph (2)--25 percent of the total of OCS Receipts derived from areas described in paragraph (3) and subsection (c)(3) that exceed the following amounts for the fiscal year indicated: for fiscal year 2019 the amount of $900,000,000 and for each fiscal year thereafter add $100,000,000. Amounts added under this clause to be shared, if any, for any fiscal year shall be added to the sharing base for all subsequent years and shall be allocated among State Adjacent Zones on a basis proportional to the result from the calculation in clause (i). ``(B) Areas not described in paragraph (2).-- Beginning October 1, 2008, the Secretary shall share 63.75 percent of OCS receipts derived from all leases located completely or partially within 4 marine leagues from any coastline within areas not described paragraph (2). ``(5) Allocations.--The Secretary shall allocate the OCS Receipts deposited into the separate account established by paragraph (1) that are shared under paragraphs (2), (3), and (4) as follows: ``(A) Bonus bids.--Deposits derived from bonus bids from a leased tract, including interest thereon, shall be allocated at the end of each fiscal year to the Adjacent State. ``(B) Royalties.--Deposits derived from royalties from a leased tract, including interest thereon, shall be allocated at the end of each fiscal year to the Adjacent State and any other producing State or States with a leased tract within its Adjacent Zone within 100 miles of its coastline that generated royalties during the fiscal year, if the other producing or States have a coastline point within 300 miles of any portion of the leased tract, in which case the amount allocated for the leased tract shall be-- ``(i) one-third to the Adjacent State; and ``(ii) two-thirds to each producing State, including the Adjacent State, inversely proportional to the distance between the nearest point on the coastline of the producing State and the geographic center of the leased tract. ``(c) Treatment of OCS Receipts From Tracts Partially or Completely Beyond 100 Miles of the Coastline.-- ``(1) Deposit.--The Secretary shall deposit into a separate account in the Treasury the portion of OCS Receipts for each fiscal year that will be shared under paragraphs (2) and (3). ``(2) Phased-in receipts sharing.-- ``(A) Beginning October 1, 2008, the Secretary shall share OCS Receipts derived from the following areas: ``(i) Lease tracts located on portions of the Gulf of Mexico OCS Region partially or completely beyond 100 miles of any coastline that were available for leasing under the 2002- 2007 5-Year Oil and Gas Leasing Program in effect prior to the date of enactment of the Deep Ocean Energy Resources Act of 2008. ``(ii) Lease tracts in production prior to October 1, 2008, partially or completely beyond 100 miles of any coastline located on portions of the OCS that were not available for leasing under the 2007-2012 5-Year OCS Oil and Gas Leasing Program in effect prior to the date of enactment of the Deep Ocean Energy Resources Act of 2008. ``(iii) Lease tracts for which leases are issued prior to October 1, 2008, located in the Alaska OCS Region partially or completely beyond 100 miles of the coastline. ``(B) The Secretary shall share the following percentages of OCS Receipts from the leases described in subparagraph (A) derived during the fiscal year indicated: ``(i) For fiscal year 2009, 4.6 percent. ``(ii) For fiscal year 2010, 5.95 percent. ``(iii) For fiscal year 2011, 6.80 percent. ``(iv) For fiscal year 2012, 7.65 percent. ``(v) For fiscal year 2013, 10.20 percent. ``(vi) For fiscal year 2014, 12.75 percent. ``(vii) For fiscal year 2015, 15.30 percent. ``(viii) For fiscal year 2016, 17.85 percent. ``(ix) For fiscal year 2017, 20.40 percent. ``(x) For fiscal year 2018, 22.95 percent. ``(xi) For fiscal year 2019, 25.50 percent. ``(xii) For fiscal year 2020, 28.05 percent. ``(xiii) For fiscal year 2021, 30.60 percent. ``(xiv) For fiscal year 2022, 33.15 percent. ``(xv) For fiscal year 2023, 35.70 percent. ``(xvi) For fiscal year 2024 and each subsequent fiscal year, 37.5 percent. ``(C) The provisions of this paragraph shall not apply to leases that could not have been issued but for section 5(k) of this Act or section 146(2) of the Deep Ocean Energy Resources Act of 2008. ``(3) Immediate receipts sharing.--Beginning October 1, 2008, the Secretary shall share 37.5 percent of OCS Receipts derived on and after October 1, 2008, from all leases located partially or completely beyond 100 miles of any coastline not included within the provisions of paragraph (2), except that the Secretary shall only share 25 percent of such OCS Receipts derived from all such leases within a State's Adjacent Zone if no leasing is allowed within any portion of that State's Adjacent Zone located completely within 100 miles of any coastline. ``(4) Allocations.--The Secretary shall allocate the OCS Receipts deposited into the separate account established by paragraph (1) that are shared under paragraphs (2) and (3) as follows: ``(A) Bonus bids.--Deposits derived from bonus bids from a leased tract, including interest thereon, shall be allocated at the end of each fiscal year to the Adjacent State. ``(B) Royalties.--Deposits derived from royalties from a leased tract, including interest thereon, shall be allocated at the end of each fiscal year to the Adjacent State and any other producing State or States with a leased tract within its Adjacent Zone partially or completely beyond 100 miles of its coastline that generated royalties during the fiscal year, if the other producing State or States have a coastline point within 300 miles of any portion of the leased tract, in which case the amount allocated for the leased tract shall be-- ``(i) one-third to the Adjacent State; and ``(ii) two-thirds to each producing State, including the Adjacent State, inversely proportional to the distance between the nearest point on the coastline of the producing State and the geographic center of the leased tract. ``(d) Transmission of Allocations.-- ``(1) In general.--Not later than 90 days after the end of each fiscal year, the Secretary shall transmit-- ``(A) to each State 60 percent of such State's allocations under subsections (b)(5)(A), (b)(5)(B), (c)(4)(A), and (c)(4)(B) for the immediate prior fiscal year; ``(B) to each coastal county-equivalent and municipal political subdivisions of such State a total of 40 percent of such State's allocations under subsections (b)(5)(A), (b)(5)(B), (c)(4)(A), and (c)(4)(B), together with all accrued interest thereon; and ``(C) the remaining allocations under subsections (b)(5) and (c)(4), together with all accrued interest thereon. ``(2) Allocations to coastal county-equivalent political subdivisions.--The Secretary shall make an initial allocation of the OCS Receipts to be shared under paragraph (1)(B) as follows: ``(A) 25 percent shall be allocated to coastal county-equivalent political subdivisions that are completely more than 25 miles landward of the coastline and at least a part of which lies not more than 75 miles landward from the coastline, with the allocation among such coastal county-equivalent political subdivisions based on population. ``(B) 75 percent shall be allocated to coastal county-equivalent political subdivisions that are completely or partially less than 25 miles landward of the coastline, with the allocation among such coastal county-equivalent political subdivisions to be further allocated as follows: ``(i) 25 percent shall be allocated based on the ratio of such coastal county-equivalent political subdivision's population to the coastal population of all coastal county- equivalent political subdivisions in the State. ``(ii) 25 percent shall be allocated based on the ratio of such coastal county-equivalent political subdivision's coastline miles to the coastline miles of all coastal county- equivalent political subdivisions in the State as calculated by the Secretary. In such calculations, coastal county-equivalent political subdivisions without a coastline shall be considered to have 50 percent of the average coastline miles of the coastal county- equivalent political subdivisions that do have coastlines. ``(iii) 25 percent shall be allocated to all coastal county-equivalent political subdivisions having a coastline point within 300 miles of the leased tract for which OCS Receipts are being shared based on a formula that allocates the funds based on such coastal county-equivalent political subdivision's relative distance from the leased tract. ``(iv) 25 percent shall be allocated to all coastal county-equivalent political subdivisions having a coastline point within 300 miles of the leased tract for which OCS Receipts are being shared based on the relative level of outer Continental Shelf oil and gas activities in a coastal political subdivision compared to the level of outer Continental Shelf activities in all coastal political subdivisions in the State. The Secretary shall define the term `outer Continental Shelf oil and gas activities' for purposes of this subparagraph to include, but not be limited to, construction of vessels, drillships, and platforms involved in exploration, production, and development on the outer Continental Shelf; support and supply bases, ports, and related activities; offices of geologists, geophysicists, engineers, and other professionals involved in support of exploration, production, and development of oil and gas on the outer Continental Shelf; pipelines and other means of transporting oil and gas production from the outer Continental Shelf; and processing and refining of oil and gas production from the outer Continental Shelf. For purposes of this subparagraph, if a coastal county-equivalent political subdivision does not have a coastline, its coastal point shall be the point on the coastline closest to it. ``(3) Allocations to coastal municipal political subdivisions.--The initial allocation to each coastal county- equivalent political subdivision under paragraph (2) shall be further allocated to the coastal county-equivalent political subdivision and any coastal municipal political subdivisions located partially or wholly within the boundaries of the coastal county-equivalent political subdivision as follows: ``(A) One-third shall be allocated to the coastal county-equivalent political subdivision. ``(B) Two-thirds shall be allocated on a per capita basis to the municipal political subdivisions and the county-equivalent political subdivision, with the allocation to the latter based upon its population not included within the boundaries of a municipal political subdivision. ``(e) Investment of Deposits.--Amounts deposited under this section shall be invested by the Secretary of the Treasury in securities backed by the full faith and credit of the United States having maturities suitable to the needs of the account in which they are deposited and yielding the highest reasonably available interest rates as determined by the Secretary of the Treasury. ``(f) Use of Funds.--A recipient of funds under this section may use the funds for one or more of the following: ``(1) To reduce in-State college tuition at public institutions of higher learning and otherwise support public education, including career technical education. ``(2) To make transportation infrastructure improvements. ``(3) To reduce taxes. ``(4) To promote, fund, and provide for-- ``(A) coastal or environmental restoration; ``(B) fish, wildlife, and marine life habitat enhancement; ``(C) waterways construction and maintenance; ``(D) levee construction and maintenance and shore protection; and ``(E) marine and oceanographic education and research. ``(5) To promote, fund, and provide for-- ``(A) infrastructure associated with energy production activities conducted on the outer Continental Shelf; ``(B) energy demonstration projects; ``(C) supporting infrastructure for shore-based energy projects; ``(D) State geologic programs, including geologic mapping and data storage programs, and state geophysical data acquisition; ``(E) State seismic monitoring programs, including operation of monitoring stations; ``(F) development of oil and gas resources through enhanced recovery techniques; ``(G) alternative energy development, including bio fuels, coal-to-liquids, oil shale, tar sands, geothermal, geopressure, wind, waves, currents, hydro, and other renewable energy; ``(H) energy efficiency and conservation programs; and ``(I) front-end engineering and design for facilities that produce liquid fuels from hydrocarbons and other biological matter. ``(6) To promote, fund, and provide for-- ``(A) historic preservation programs and projects; ``(B) natural disaster planning and response; and ``(C) hurricane and natural disaster insurance programs. ``(7) For any other purpose as determined by State law. ``(g) No Accounting Required.--No recipient of funds under this section shall be required to account to the Federal Government for the expenditure of such funds, except as otherwise may be required by law. However, States may enact legislation providing for accounting for and auditing of such expenditures. Further, funds allocated under this section to States and political subdivisions may be used as matching funds for other Federal programs. ``(h) Effect of Future Laws.--Enactment of any future Federal statute that has the effect, as determined by the Secretary, of restricting any Federal agency from spending appropriated funds, or otherwise preventing it from fulfilling its pre-existing responsibilities as of the date of enactment of the statute, unless such responsibilities have been reassigned to another Federal agency by the statute with no prevention of performance, to issue any permit or other approval impacting on the OCS oil and gas leasing program, or any lease issued thereunder, or to implement any provision of this Act shall automatically prohibit any sharing of OCS Receipts under this section directly with the States, and their coastal political subdivisions, for the duration of the restriction. The Secretary shall make the determination of the existence of such restricting effects within 30 days of a petition by any outer Continental Shelf lessee or producing State. ``(i) Definitions.--In this section: ``(1) Coastal county-equivalent political subdivision.--The term `coastal county-equivalent political subdivision' means a political jurisdiction immediately below the level of State government, including a county, parish, borough in Alaska, independent municipality not part of a county, parish, or borough in Alaska, or other equivalent subdivision of a coastal State, that lies within the coastal zone. ``(2) Coastal municipal political subdivision.--The term `coastal municipal political subdivision' means a municipality located within and part of a county, parish, borough in Alaska, or other equivalent subdivision of a State, all or part of which coastal municipal political subdivision lies within the coastal zone. ``(3) Coastal population.--The term `coastal population' means the population of all coastal county-equivalent political subdivisions, as determined by the most recent official data of the Census Bureau. ``(4) Coastal zone.--The term `coastal zone' means that portion of a coastal State, including the entire territory of any coastal county-equivalent political subdivision at least a part of which lies, within 75 miles landward from the coastline, or a greater distance as determined by State law enacted to implement this section. ``(5) Bonus bids.--The term `bonus bids' means all funds received by the Secretary to issue an outer Continental Shelf minerals lease. ``(6) Royalties.--The term `royalties' means all funds received by the Secretary from production of oil or natural gas, or the sale of production taken in-kind, from an outer Continental Shelf minerals lease. ``(7) Producing state.--The term `producing State' means an Adjacent State having an Adjacent Zone containing leased tracts from which OCS Receipts were derived. ``(8) OCS receipts.--The term `OCS Receipts' means bonus bids, royalties, and conservation of resources fees.''. SEC. 148. RESERVATION OF LANDS AND RIGHTS. Section 12 of the Outer Continental Shelf Lands Act (43 U.S.C. 1341) is amended-- (1) in subsection (a) by adding at the end the following: ``The President may partially or completely revise or revoke any prior withdrawal made by the President under the authority of this section. The President may not revise or revoke a withdrawal that is extended by a State under subsection (h), nor may the President withdraw from leasing any area for which a State failed to prohibit, or petition to prohibit, leasing under subsection (g). Further, in the area of the outer Continental Shelf more than 100 miles from any coastline, not more than 25 percent of the acreage of any OCS Planning Area may be withdrawn from leasing under this section at any point in time. A withdrawal by the President may be for a term not to exceed 10 years. When considering potential uses of the outer Continental Shelf, to the maximum extent possible, the President shall accommodate competing interests and potential uses.''; (2) by adding at the end the following: ``(g) Availability for Leasing Within Certain Areas of the Outer Continental Shelf.-- ``(1) Prohibition against leasing.-- ``(A) Unavailable for leasing without state request.--Except as otherwise provided in this subsection, from and after enactment of the Deep Ocean Energy Resources Act of 2008, the Secretary shall not offer for leasing for oil and gas, or natural gas, any area within 50 miles of the coastline that was withdrawn from disposition by leasing in the Atlantic OCS Region or the Pacific OCS Region, or the Gulf of Mexico OCS Region Eastern Planning Area, as depicted on the maps referred to in this subparagraph, under the `Memorandum on Withdrawal of Certain Areas of the United States Outer Continental Shelf from Leasing Disposition', 34 Weekly Comp. Pres. Doc. 1111, dated June 12, 1998, or any area within 50 miles of the coastline not withdrawn under that Memorandum that is included within the Gulf of Mexico OCS Region Eastern Planning Area as indicated on the map entitled `Gulf of Mexico OCS Region State Adjacent Zones and OCS Planning Areas' or the Florida Straits Planning Area as indicated on the map entitled `Atlantic OCS Region State Adjacent Zones and OCS Planning Areas', both of which are dated September 2005 and on file in the Office of the Director, Minerals Management Service. ``(B) Areas between 50 and 100 miles from the coastline.--Unless an Adjacent State petitions under subsection (h) within one year after the date of the enactment of the Deep Ocean Energy Resources Act of 2008 for natural gas leasing or by June 30, 2011, for oil and gas leasing, the Secretary shall offer for leasing any area more than 50 miles but less than 100 miles from the coastline that was withdrawn from disposition by leasing in the Atlantic OCS Region, the Pacific OCS Region, or the Gulf of Mexico OCS Region Eastern Planning Area, as depicted on the maps referred to in this subparagraph, under the `Memorandum on Withdrawal of Certain Areas of the United States Outer Continental Shelf from Leasing Disposition', 34 Weekly Comp. Pres. Doc. 1111, dated June 12, 1998, or any area more than 50 miles but less than 100 miles of the coastline not withdrawn under that Memorandum that is included within the Gulf of Mexico OCS Region Eastern Planning Area as indicated on the map entitled `Gulf of Mexico OCS Region State Adjacent Zones and OCS Planning Areas' or within the Florida Straits Planning Area as indicated on the map entitled `Atlantic OCS Region State Adjacent Zones and OCS Planning Areas', both of which are dated September 2005 and on file in the Office of the Director, Minerals Management Service. ``(2) Revocation of withdrawal.--The provisions of the `Memorandum on Withdrawal of Certain Areas of the United States Outer Continental Shelf from Leasing Disposition', 34 Weekly Comp. Pres. Doc. 1111, dated June 12, 1998, are hereby revoked and are no longer in effect. Any tract only partially added to the Gulf of Mexico OCS Region Central Planning Area by this Act shall be eligible for leasing of the part of such tract that is included within the Gulf of Mexico OCS Region Central Planning Area, and the remainder of such tract that lies outside of the Gulf of Mexico OCS Region Central Planning Area may be developed and produced by the lessee of such partial tract using extended reach or similar drilling from a location on a leased area. Further, any area in the OCS withdrawn from leasing may be leased, and thereafter developed and produced by the lessee using extended reach or similar drilling from a location on a leased area located in an area available for leasing. ``(3) Petition for leasing.-- ``(A) In general.--The Governor of the State, upon concurrence of its legislature, may submit to the Secretary a petition requesting that the Secretary make available any area that is within the State's Adjacent Zone, included within the provisions of paragraph (1), and that (i) is greater than 25 miles from any point on the coastline of a Neighboring State for the conduct of offshore leasing, pre-leasing, and related activities with respect to natural gas leasing; or (ii) is greater than 50 miles from any point on the coastline of a Neighboring State for the conduct of offshore leasing, pre-leasing, and related activities with respect to oil and gas leasing. The Adjacent State may also petition for leasing any other area within its Adjacent Zone if leasing is allowed in the similar area of the Adjacent Zone of the applicable Neighboring State, or if not allowed, if the Neighboring State, acting through its Governor, expresses its concurrence with the petition. The Secretary shall only consider such a petition upon making a finding that leasing is allowed in the similar area of the Adjacent Zone of the applicable Neighboring State or upon receipt of the concurrence of the Neighboring State. The date of receipt by the Secretary of such concurrence by the Neighboring State shall constitute the date of receipt of the petition for that area for which the concurrence applies. Except for any area described in the last sentence of paragraph (2), a petition for leasing any part of the Alabama Adjacent Zone that is a part of the Gulf of Mexico Eastern Planning Area, as indicated on the map entitled `Gulf of Mexico OCS Region State Adjacent Zones and OCS Planning Areas' which is dated September 2005 and on file in the Office of the Director, Minerals Management Service, shall require the concurrence of both Alabama and Florida. ``(B) Limitations on leasing.--In its petition, a State with an Adjacent Zone that contains leased tracts may condition new leasing for oil and gas, or natural gas for tracts within 25 miles of the coastline by-- ``(i) requiring a net reduction in the number of production platforms; ``(ii) requiring a net increase in the average distance of production platforms from the coastline; ``(iii) limiting permanent surface occupancy on new leases to areas that are more than 10 miles from the coastline; ``(iv) limiting some tracts to being produced from shore or from platforms located on other tracts; or ``(v) other conditions that the Adjacent State may deem appropriate as long as the Secretary does not determine that production is made economically or technically impracticable or otherwise impossible. ``(C) Action by secretary.--Not later than 90 days after receipt of a petition under subparagraph (A), the Secretary shall approve the petition, unless the Secretary determines that leasing the area would probably cause serious harm or damage to the marine resources of the State's Adjacent Zone. Prior to approving the petition, the Secretary shall complete an environmental assessment that documents the anticipated environmental effects of leasing in the area included within the scope of the petition. ``(D) Failure to act.--If the Secretary fails to approve or deny a petition in accordance with subparagraph (C) the petition shall be considered to be approved 90 days after receipt of the petition. ``(E) Amendment of the 5-year leasing program.-- Notwithstanding section 18, within 180 days of the approval of a petition under subparagraph (C) or (D), after the expiration of the time limits in paragraph (1)(B), and within 180 days after the enactment of the Deep Ocean Energy Resources Act of 2008 for the areas made available for leasing under paragraph (2), the Secretary shall amend the current 5-Year Outer Continental Shelf Oil and Gas Leasing Program to include a lease sale or sales for at least 75 percent of the associated areas, unless there are, from the date of approval, expiration of such time limits, or enactment, as applicable, fewer than 12 months remaining in the current 5-Year Leasing Program in which case the Secretary shall include the associated areas within lease sales under the next 5-Year Leasing Program. For purposes of amending the 5-Year Program in accordance with this section, further consultations with States shall not be required. For purposes of this section, an environmental assessment performed under the provisions of the National Environmental Policy Act of 1969 to assess the effects of approving the petition shall be sufficient to amend the 5-Year Leasing Program. ``(h) Option To Extend Withdrawal From Leasing Within Certain Areas of the Outer Continental Shelf.--A State, through its Governor and upon the concurrence of its legislature, may extend for a period of time of up to 5 years for each extension the withdrawal from leasing for all or part of any area within the State's Adjacent Zone located more than 50 miles, but less than 100 miles, from the coastline that is subject to subsection (g)(1)(B). A State may extend multiple times for any particular area but not more than once per calendar year for any particular area. A State must prepare separate extensions, with separate votes by its legislature, for oil and gas leasing and for natural gas leasing. An extension by a State may affect some areas to be withdrawn from all leasing and some areas to be withdrawn only from one type of leasing. Extensions of the withdrawal from leasing of any part of the Alabama Adjacent Zone that is more than 50 miles, but less than 100 miles, from the coastline that is a part of the Gulf of Mexico OCS Region Eastern Planning Area, as indicated on the map entitled `Gulf of Mexico OCS Region State Adjacent Zones and OCS Planning Areas' which is dated September 2005 and on file in the Office of the Director, Minerals Management Service, may be made by either Alabama or Florida. ``(i) Effect of Other Laws.--Adoption by any Adjacent State of any constitutional provision, or enactment of any State statute, that has the effect, as determined by the Secretary, of restricting either the Governor or the Legislature, or both, from exercising full discretion related to subsection (g) or (h), or both, shall automatically (1) prohibit any sharing of OCS Receipts under this Act with the Adjacent State, and its coastal political subdivisions, and (2) prohibit the Adjacent State from exercising any authority under subsection (h), for the duration of the restriction. The Secretary shall make the determination of the existence of such restricting constitutional provision or State statute within 30 days of a petition by any outer Continental Shelf lessee or coastal State. ``(j) Prohibition on Leasing East of the Military Mission Line.-- ``(1) Notwithstanding any other provision of law, from and after the enactment of the Deep Ocean Energy Resources Act of 2008, no area of the outer Continental Shelf located in the Gulf of Mexico east of the military mission line may be offered for leasing for oil and gas or natural gas prior to January 1, 2022. ``(2) In this subsection, the term `military mission line' means a line located at 86 degrees, 41 minutes West Longitude, and extending south from the coast of Florida to the outer boundary of United States territorial waters in the Gulf of Mexico.''. SEC. 149. OUTER CONTINENTAL SHELF LEASING PROGRAM. Section 18 of the Outer Continental Shelf Lands Act (43 U.S.C. 1344) is amended-- (1) in subsection (a), by adding at the end of paragraph (3) the following: ``The Secretary shall, in each 5-year program, include lease sales that when viewed as a whole propose to offer for oil and gas or natural gas leasing at least 75 percent of the available unleased acreage within each OCS Planning Area. Available unleased acreage is that portion of the outer Continental Shelf that is not under lease at the time of the proposed lease sale, and has not otherwise been made unavailable for leasing by law.''; (2) in subsection (c), by striking so much as precedes paragraph (3) and inserting the following: ``(c)(1) During the preparation of any proposed leasing program under this section, the Secretary shall consider and analyze leasing throughout the entire Outer Continental Shelf without regard to any other law affecting such leasing. During this preparation the Secretary shall invite and consider suggestions from any interested Federal agency, including the Attorney General, in consultation with the Federal Trade Commission, and from the Governor of any coastal State. The Secretary may also invite or consider any suggestions from the executive of any local government in a coastal State that have been previously submitted to the Governor of such State, and from any other person. Further, the Secretary shall consult with the Secretary of Defense regarding military operational needs in the outer Continental Shelf. The Secretary shall work with the Secretary of Defense to resolve any conflicts that might arise regarding offering any area of the outer Continental Shelf for oil and gas or natural gas leasing. If the Secretaries are not able to resolve all such conflicts, any unresolved issues shall be elevated to the President for resolution. ``(2) After the consideration and analysis required by paragraph (1), including the consideration of the suggestions received from any interested Federal agency, the Federal Trade Commission, the Governor of any coastal State, any local government of a coastal State, and any other person, the Secretary shall publish in the Federal Register a proposed leasing program accompanied by a draft environmental impact statement prepared pursuant to the National Environmental Policy Act of 1969. After the publishing of the proposed leasing program and during the comment period provided for on the draft environmental impact statement, the Secretary shall submit a copy of the proposed program to the Governor of each affected State for review and comment. The Governor may solicit comments from those executives of local governments in the Governor's State that the Governor, in the discretion of the Governor, determines will be affected by the proposed program. If any comment by such Governor is received by the Secretary at least 15 days prior to submission to the Congress pursuant to paragraph (3) and includes a request for any modification of such proposed program, the Secretary shall reply in writing, granting or denying such request in whole or in part, or granting such request in such modified form as the Secretary considers appropriate, and stating the Secretary's reasons therefor. All such correspondence between the Secretary and the Governor of any affected State, together with any additional information and data relating thereto, shall accompany such proposed program when it is submitted to the Congress.''; and (3) by adding at the end the following: ``(i) Projection of State Adjacent Zone Resources and State and Local Government Shares of OCS Receipts.--Concurrent with the publication of the scoping notice at the beginning of the development of each 5-year outer Continental Shelf oil and gas leasing program, or as soon thereafter as possible, the Secretary shall-- ``(1) provide to each Adjacent State a current estimate of proven and potential oil and gas resources located within the State's Adjacent Zone; and ``(2) provide to each Adjacent State, and coastal political subdivisions thereof, a best-efforts projection of the OCS Receipts that the Secretary expects will be shared with each Adjacent State, and its coastal political subdivisions, using the assumption that the unleased tracts within the State's Adjacent Zone are fully made available for leasing, including long-term projected OCS Receipts. In addition, the Secretary shall include a macroeconomic estimate of the impact of such leasing on the national economy and each State's economy, including investment, jobs, revenues, personal income, and other categories.''. SEC. 150. COORDINATION WITH ADJACENT STATES. Section 19 of the Outer Continental Shelf Lands Act (43 U.S.C. 1345) is amended-- (1) in subsection (a) in the first sentence by inserting ``, for any tract located within the Adjacent State's Adjacent Zone,'' after ``government''; and (2) by adding the following: ``(f)(1) No Federal agency may permit or otherwise approve, without the concurrence of the Adjacent State, the construction of a crude oil or petroleum products (or both) pipeline within the part of the Adjacent State's Adjacent Zone that is withdrawn from oil and gas or natural gas leasing, except that such a pipeline may be approved, without such Adjacent State's concurrence, to pass through such Adjacent Zone if at least 50 percent of the production projected to be carried by the pipeline within its first 10 years of operation is from areas of the Adjacent State's Adjacent Zone. ``(2) No State may prohibit the construction within its Adjacent Zone or its State waters of a natural gas pipeline that will transport natural gas produced from the outer Continental Shelf. However, an Adjacent State may prevent a proposed natural gas pipeline landing location if it proposes two alternate landing locations in the Adjacent State, acceptable to the Adjacent State, located within 50 miles on either side of the proposed landing location.''. SEC. 151. ENVIRONMENTAL STUDIES. Section 20(d) of the Outer Continental Shelf Lands Act (43 U.S.C. 1346) is amended-- (1) by inserting ``(1)'' after ``(d)''; and (2) by adding at the end the following: ``(2) For all programs, lease sales, leases, and actions under this Act, the following shall apply regarding the application of the National Environmental Policy Act of 1969: ``(A) Granting or directing lease suspensions and the conduct of all preliminary activities on outer Continental Shelf tracts, including seismic activities, are categorically excluded from the need to prepare either an environmental assessment or an environmental impact statement, and the Secretary shall not be required to analyze whether any exceptions to a categorical exclusion apply for activities conducted under the authority of this Act. ``(B) The environmental impact statement developed in support of each 5-year oil and gas leasing program provides the environmental analysis for all lease sales to be conducted under the program and such sales shall not be subject to further environmental analysis. ``(C) Exploration plans shall not be subject to any requirement to prepare an environmental impact statement, and the Secretary may find that exploration plans are eligible for categorical exclusion due to the impacts already being considered within an environmental impact statement or due to mitigation measures included within the plan. ``(D) Within each OCS Planning Area, after the preparation of the first development and production plan environmental impact statement for a leased tract within the Area, future development and production plans for leased tracts within the Area shall only require the preparation of an environmental assessment unless the most recent development and production plan environmental impact statement within the Area was finalized more than 10 years prior to the date of the approval of the plan, in which case an environmental impact statement shall be required.''. SEC. 152. FEDERAL ENERGY NATURAL RESOURCES ENHANCEMENT ACT OF 2008. (a) Short Title.--This section may be cited as the ``Federal Energy Natural Resources Enhancement Act of 2008''. (b) Findings.--The Congress finds the following: (1) Energy and minerals exploration, development, and production on Federal onshore and offshore lands, including bio-based fuel, natural gas, minerals, oil, geothermal, and power from wind, waves, currents, and thermal energy, involves significant outlays of funds by Federal and State wildlife, fish, and natural resource management agencies for environmental studies, planning, development, monitoring, and management of wildlife, fish, air, water, and other natural resources. (2) State wildlife, fish, and natural resource management agencies are funded primarily through permit and license fees paid to the States by the general public to hunt and fish, and through Federal excise taxes on equipment used for these activities. (3) Funds generated from consumptive and recreational uses of wildlife, fish, and other natural resources currently are inadequate to address the natural resources related to energy and minerals development on Federal onshore and offshore lands. (4) Funds available to Federal agencies responsible for managing Federal onshore and offshore lands and Federal-trust wildlife and fish species and their habitats are inadequate to address the natural resources related to energy and minerals development on Federal onshore and offshore lands. (5) Receipts derived from sales, bonus bids, and royalties under the mineral leasing laws of the United States are paid to the Treasury through the Minerals Management Service of the Department of the Interior. (6) None of the receipts derived from sales, bonus bids, and royalties under the minerals leasing laws of the United States are paid to the Federal or State agencies to examine, monitor, and manage wildlife, fish, air, water, and other natural resources related to natural gas, oil, and mineral exploration and development. (c) Purposes.--It is the purpose of this section to-- (1) authorize expenditures for the monitoring and management of wildlife and fish, and their habitats, and air, water, and other natural resources related to energy and minerals development on Federal onshore and offshore lands; (2) authorize expenditures for each fiscal year to the Secretary of the Interior and the States; and (3) use the appropriated funds to secure the necessary trained workforce or contractual services to conduct environmental studies, planning, development, monitoring, and post-development management of wildlife and fish and their habitats and air, water, and other natural resources that may be related to bio-based fuel, gas, mineral, oil, wind, or other energy exploration, development, transportation, transmission, and associated activities on Federal onshore and offshore lands, including, but not limited to-- (A) pertinent research, surveys, and environmental analyses conducted to identify any impacts on wildlife, fish, air, water, and other natural resources from energy and mineral exploration, development, production, and transportation or transmission; (B) projects to maintain, improve, or enhance wildlife and fish populations and their habitats or air, water, or other natural resources, including activities under the Endangered Species Act of 1973; (C) research, surveys, environmental analyses, and projects that assist in managing, including mitigating either onsite or offsite, or both, the impacts of energy and mineral activities on wildlife, fish, air, water, and other natural resources; and (D) projects to teach young people to live off the land. (d) Definitions.--In this section: (1) Enhancement program.--The term ``Enhancement Program'' means the Federal Energy Natural Resources Enhancement Program established by this section. (2) State.--The term ``State'' means the Governor of the State. (e) Authorization of Appropriations.--There is authorized to be appropriated to carry out the Enhancement Program $150,000,000 for each of fiscal years 2009 through 2019. (f) Establishment of Federal Energy Natural Resources Enhancement Program.-- (1) In general.--There is established the Federal Energy Natural Resources Enhancement Program. (2) Payment to secretary of the interior.--Beginning with fiscal year 2009, and in each fiscal year thereafter, one-third of amounts appropriated for the Enhancement Program shall be available to the Secretary of the Interior for use for the purposes described in subsection (c)(3). (3) Payment to states.-- (A) In general.--Beginning with fiscal year 2009, and in each fiscal year thereafter, two-thirds of amounts appropriated for the Enhancement Program shall be available to the States for use for the purposes described in (c)(3). (B) Use of payments by state.--Each State shall use the payments made under this paragraph only for carrying out projects and programs for the purposes described in (c)(3). (C) Encourage use of private funds by state.--Each State shall use the payments made under this paragraph to leverage private funds for carrying out projects for the purposes described in (c)(3). (g) Limitation on Use.--Amounts made available under this section may not be used for the purchase of any interest in land. (h) Reports to Congress.-- (1) In general.--Beginning in fiscal year 2010 and continuing for each fiscal year thereafter, the Secretary of the Interior and each State receiving funds from the Enhancement Fund shall submit a report to the Committee on Energy and Natural Resources of the Senate and the Committee on Resources of the House of Representatives. (2) Required information.--Reports submitted to the Congress by the Secretary of the Interior and States under this subsection shall include the following information regarding expenditures during the previous fiscal year: (A) A summary of pertinent scientific research and surveys conducted to identify impacts on wildlife, fish, and other natural resources from energy and mineral developments. (B) A summary of projects planned and completed to maintain, improve or enhance wildlife and fish populations and their habitats or other natural resources. (C) A list of additional actions that assist, or would assist, in managing, including mitigating either onsite or offsite, or both, the impacts of energy and mineral development on wildlife, fish, and other natural resources. (D) A summary of private (non-Federal) funds used to plan, conduct, and complete the plans and programs identified in subparagraphs (A) and (B). SEC. 153. TERMINATION OF EFFECT OF LAWS PROHIBITING THE SPENDING OF APPROPRIATED FUNDS FOR CERTAIN PURPOSES. All provisions of existing Federal law prohibiting the spending of appropriated funds to conduct oil and natural gas leasing and preleasing activities, or to issue a lease to any person, for any area of the outer Continental Shelf shall have no force or effect. SEC. 154. OUTER CONTINENTAL SHELF INCOMPATIBLE USE. (a) In General.--No Federal agency may permit construction or operation (or both) of any facility, or designate or maintain a restricted transportation corridor or operating area on the Federal outer Continental Shelf or in State waters, that will be incompatible with, as determined by the Secretary of the Interior, oil and gas or natural gas leasing and substantially full exploration and production of tracts that are geologically prospective for oil or natural gas (or both). (b) Exceptions.--Subsection (a) shall not apply to any facility, transportation corridor, or operating area the construction, operation, designation, or maintenance of which is or will be-- (1) located in an area of the outer Continental Shelf that is unavailable for oil and gas or natural gas leasing by operation of law; (2) used for a military readiness activity (as defined in section 315(f) of Public Law 107-314; 16 U.S.C. 703 note); or (3) required in the national interest, as determined by the President. SEC. 155. REPURCHASE OF CERTAIN LEASES. (a) Authority To Repurchase and Cancel Certain Leases.--The Secretary of the Interior shall repurchase and cancel any Federal oil and gas, geothermal, coal, oil shale, tar sands, or other mineral lease, whether onshore or offshore, but not including any outer Continental Shelf oil and gas leases that are subject to litigation in the Court of Federal Claims on January 1, 2006, if the Secretary finds that such lease qualifies for repurchase and cancellation under the regulations authorized by this section. (b) Regulations.--Not later than 365 days after the date of the enactment of this Act, the Secretary shall publish a final regulation stating the conditions under which a lease referred to in subsection (a) would qualify for repurchase and cancellation, and the process to be followed regarding repurchase and cancellation. Such regulation shall include, but not be limited to, the following: (1) The Secretary shall repurchase and cancel a lease after written request by the lessee upon a finding by the Secretary that-- (A) a request by the lessee for a required permit or other approval complied with applicable law, except the Coastal Zone Management Act of 1972 (16 U.S.C. 1451 et seq.), and terms of the lease and such permit or other approval was denied; (B) a Federal agency failed to act on a request by the lessee for a required permit, other approval, or administrative appeal within a regulatory or statutory time-frame associated with the requested action, whether advisory or mandatory, or if none, within 180 days; or (C) a Federal agency attached a condition of approval, without agreement by the lessee, to a required permit or other approval if such condition of approval was not mandated by Federal statute or regulation in effect on the date of lease issuance, or was not specifically allowed under the terms of the lease. (2) A lessee shall not be required to exhaust administrative remedies regarding a permit request, administrative appeal, or other required request for approval for the purposes of this section. (3) The Secretary shall make a final agency decision on a request by a lessee under this section within 180 days of request. (4) Compensation to a lessee to repurchase and cancel a lease under this section shall be the amount that a lessee would receive in a restitution case for a material breach of contract. (5) Compensation shall be in the form of a check or electronic transfer from the Department of the Treasury from funds deposited into miscellaneous receipts under the authority of the same Act that authorized the issuance of the lease being repurchased. (6) Failure of the Secretary to make a final agency decision on a request by a lessee under this section within 180 days of request shall result in a 10 percent increase in the compensation due to the lessee if the lease is ultimately repurchased. (c) No Prejudice.--This section shall not be interpreted to prejudice any other rights that the lessee would have in the absence of this section. SEC. 156. OFFSITE ENVIRONMENTAL MITIGATION. Notwithstanding any other provision of law, any person conducting activities under the Mineral Leasing Act (30 U.S.C. 181 et seq.), the Geothermal Steam Act (30 U.S.C. 1001 et seq.), the Mineral Leasing Act for Acquired Lands (30 U.S.C. 351 et seq.), the Weeks Act (16 U.S.C. 552 et seq.), the General Mining Act of 1872 (30 U.S.C. 22 et seq.), the Materials Act of 1947 (30 U.S.C. 601 et seq.), or the Outer Continental Shelf Lands Act (43 U.S.C. 1331 et seq.), may in satisfying any mitigation requirements associated with such activities propose mitigation measures on a site away from the area impacted and the Secretary of the Interior shall accept these proposed measures if the Secretary finds that they generally achieve the purposes for which mitigation measures appertained. SEC. 157. MINERALS MANAGEMENT SERVICE. The bureau known as the ``Minerals Management Service'' in the Department of the Interior shall be known as the ``National Ocean Resources and Royalty Service''. SEC. 158. AUTHORITY TO USE DECOMMISSIONED OFFSHORE OIL AND GAS PLATFORMS AND OTHER FACILITIES FOR ARTIFICIAL REEF, SCIENTIFIC RESEARCH, OR OTHER USES. (a) Short Title.--This section may be cited as the ``Rigs to Reefs Act of 2008''. (b) In General.--The Outer Continental Shelf Lands Act (43 U.S.C. 1301 et seq.) is amended by inserting after section 9 the following: ``SEC. 10. USE OF DECOMMISSIONED OFFSHORE OIL AND GAS PLATFORMS AND OTHER FACILITIES FOR ARTIFICIAL REEF, SCIENTIFIC RESEARCH, OR OTHER USES. ``(a) In General.--The Secretary shall issue regulations under which the Secretary may authorize use of an offshore oil and gas platform or other facility that is decommissioned from service for oil and gas purposes for an artificial reef, scientific research, or any other use authorized under section 8(p) or any other applicable Federal law. ``(b) Transfer Requirements.--The Secretary shall not allow the transfer of a decommissioned offshore oil and gas platform or other facility to another person unless the Secretary is satisfied that the transferee is sufficiently bonded, endowed, or otherwise financially able to fulfill its obligations, including but not limited to-- ``(1) ongoing maintenance of the platform or other facility; ``(2) any liability obligations that might arise; ``(3) removal of the platform or other facility if determined necessary by the Secretary; and ``(4) any other requirements and obligations that the Secretary may deem appropriate by regulation. ``(c) Plugging and Abandonment.--The Secretary shall ensure that plugging and abandonment of wells is accomplished at an appropriate time. ``(d) Potential To Petition To Opt-Out of Regulations.--An Adjacent State acting through a resolution of its legislature, with concurrence of its Governor, may preliminarily petition to opt-out of the application of regulations promulgated under this section to platforms and other facilities located in the area of its Adjacent Zone within 12 miles of the coastline. Upon receipt of the preliminary petition, the Secretary shall complete an environmental assessment that documents the anticipated environmental effects of approving the petition. The Secretary shall provide the environmental assessment to the State, which then has the choice of no action or confirming its petition by further action of its legislature, with the concurrence of its Governor. The Secretary is authorized to except such area from the application of such regulations, and shall approve any confirmed petition. ``(e) Limitation on Liability.--A person that had used an offshore oil and gas platform or other facility for oil and gas purposes and that no longer has any ownership or control of the platform or other facility shall not be liable under Federal law for any costs or damages arising from such platform or other facility after the date the platform or other facility is used for any purpose under subsection (a), unless such costs or damages arise from-- ``(1) use of the platform or other facility by the person for development or production of oil or gas; or ``(2) another act or omission of the person. ``(f) Other Leasing and Use Not Affected.--This section, and the use of any offshore oil and gas platform or other facility for any purpose under subsection (a), shall not affect-- ``(1) the authority of the Secretary to lease any area under this Act; or ``(2) any activity otherwise authorized under this Act.''. (c) Deadline for Regulations.--The Secretary of the Interior shall issue regulations under subsection (b) by not later than 180 days after the date of the enactment of this Act. (d) Study and Report on Effects of Removal of Platforms.--Not later than one year after the date of enactment of this Act, the Secretary of the Interior, in consultation with other Federal agencies as the Secretary deems advisable, shall study and report to the Congress regarding how the removal of offshore oil and gas platforms and other facilities from the outer Continental Shelf would affect existing fish stocks and coral populations. SEC. 159. REPEAL OF REQUIREMENT TO CONDUCT COMPREHENSIVE INVENTORY OF OCS OIL AND NATURAL GAS RESOURCES. The Energy Policy Act of 2005 (Public Law 109-58) is amended-- (1) by repealing section 357 (119 Stat. 720; 42 U.S.C. 15912); and (2) in the table of contents in section 1(b), by striking the item relating to such section 357. SEC. 160. MINING AND PETROLEUM SCHOOLS. (a) Maintenance and Restoration of Existing and Historic Petroleum and Mining Engineering Programs.--Public Law 98-409 (30 U.S.C. 1221 et seq.) is amended to read as follows: ``SECTION 1. SHORT TITLE. ``This Act may be cited as the `Energy and Mineral Schools Reinvestment Act'. ``SEC. 2. POLICY. ``It is the policy of the United States to maintain the human capital needed to preserve and foster the economic, energy, and mineral resources security of the United States. The petroleum and mining engineering programs and the applied geology and geophysics programs at State chartered schools, universities, and institutions that produce human capital are national assets and should be assisted with Federal funds to ensure their continued health and existence. ``SEC. 3. MAINTAINING AND RESTORING HISTORIC AND EXISTING PETROLEUM AND MINING ENGINEERING EDUCATION PROGRAMS. ``(a) The Secretary of the Interior (in this Act referred to as the `Secretary') shall provide funds to historic and existing State- chartered recognized petroleum or mining schools to assist such schools, universities, and institutions in maintaining programs in petroleum, mining, and mineral engineering education and research. All funds shall be directed only to these programs and shall be subject to the conditions of this section. Such funds shall not be less than 25 percent of the annual outlay of funds authorized by section 162(d) of the Deep Ocean Energy Resources Act of 2008. ``(b) In this Act the term `historic and existing State-chartered recognized petroleum or mining school' means a school, university, or educational institution with the presence of an engineering program meeting the specific program criteria, established by the member societies of ABET, Inc., for petroleum, mining, or mineral engineering and that is accredited on the date of enactment of the Deep Ocean Energy Resources Act of 2008 by ABET, Inc. ``(c) It shall be the duty of each school, university, or institution receiving funds under this section to provide for and enhance the training of undergraduate and graduate petroleum, mining, and mineral engineers through research, investigations, demonstrations, and experiments. All such work shall be carried out in a manner that will enhance undergraduate education. ``(d) Each school, university, or institution receiving funds under this Act shall maintain the program for which the funds are provided for 10 years after the date of the first receipt of such funds and take steps described in its application for funding to increase the number of undergraduate students enrolled in and completing the programs of study in petroleum, mining, and mineral engineering. ``(e) The research, investigation, demonstration, experiment, and training authorized by this section may include development and production of conventional and non-conventional fuel resources, the production of metallic and non-metallic mineral resources including industrial mineral resources, and the production of stone, sand, and gravel. In all cases the work carried out with funds made available under this Act shall include a significant opportunity for participation by undergraduate students. ``(f) Research funded by this Act related to energy and mineral resource development and production may include-- ``(1) studies of petroleum, mining, and mineral extraction and immediately related beneficiation technology; ``(2) mineral economics, reclamation technology, and practices for active operations; ``(3) the development of re-mining systems and technologies to facilitate reclamation that fosters the ultimate recovery of resources at abandoned petroleum, mining, and aggregate production sites; and ``(4) research on ways to extract petroleum and mineral resources that reduce the environmental impact of those activities. ``(g) Grants for basic science and engineering studies and research shall not require additional participation by funding partners. Grants for studies to demonstrate the proof of concept for science and engineering or the demonstration of feasibility and implementation shall include participation by industry and may include funding from other Federal agencies. ``(h)(1) No funds made available under this section shall be applied to the acquisition by purchase or lease of any land or interests therein, or the rental, purchase, construction, preservation, or repair of any building. ``(2) Funding made available under this section may be used with the express approval of the Secretary for proposals that will provide for maintaining or upgrading of existing laboratories and laboratory equipment. Funding for such maintenance shall not be used for university overhead expenses. ``(3) Funding made available under this Act may be used for maintaining and upgrading mines and oil and gas drilling rigs owned by a school, university, or institution described in this section that are used for undergraduate and graduate training and worker safety training. All requests for funding such mines and oil and gas drilling rigs must demonstrate that they have been owned by the school, university, or institution for 5 years prior to the date of enactment of the Deep Ocean Energy Resources Act of 2008 and have been actively used for instructional or training purposes during that time. ``(4) Any funding made available under this section for research, investigation, demonstration, experiment, or training shall not be used for university overhead charges in excess of 10 percent of the amount authorized by the Secretary. ``SEC. 4. FORMER AND NEW PETROLEUM AND MINING ENGINEERING PROGRAMS. ``(a) A school, university, or educational institution that formerly met the requirements of section 3(b) immediately before the date of the enactment of the Deep Ocean Energy Resources Act of 2008, or that seeks to establish a new program described in section 3(b), shall be eligible for funding under this Act only if it-- ``(1) establishes a petroleum, mining, or mineral engineering program that meets the specific program criteria and is accredited as such by ABET, Inc., with particular consideration awarded to establishing programs and minority serving institutions; ``(2) agrees to the conditions of subsections (c) through (h) of section 3 and the Secretary determines that the program will strengthen and increase the number of nationally available, well-qualified faculty members in petroleum, mining, and mineral engineering; and ``(3) agrees to maintain the accredited program for 10 years after the date of the first receipt of funds under this Act. ``(b) The Secretary shall seek the advice of the Committee established pursuant to section 11 in determining the criteria used to carry out this section. ``SEC. 5. FUNDING OF CONSORTIA OF HISTORIC AND EXISTING SCHOOLS. ``Where appropriate, the Secretary may make funds available to consortia of schools, universities, or institutions described in sections 3, 4, and 6, including those consortia that include schools, universities, or institutions that are ineligible for funds under this Act if those schools, universities, or institutions, respectively, have skills, programs, or facilities specifically identified as needed by the consortia to meet the necessary expenses for purposes of-- ``(1) specific energy and mineral research projects of broad application that could not otherwise be undertaken, including the expenses of planning and coordinating regional petroleum, geothermal, mining, and mineral engineering or beneficiation projects by two or more schools; and ``(2) research into any aspects of petroleum, geothermal, mining, or mineral engineering or beneficiation problems, including but not limited to exploration, that are related to the mission of the Department of the Interior. ``SEC. 6. SUPPORT FOR SCHOOLS WITH ENERGY AND MINERAL RESOURCE PROGRAMS IN PETROLEUM AND MINERAL EXPLORATION GEOLOGY, PETROLEUM GEOPHYSICS, OR MINING GEOPHYSICS. ``(a) Twelve percent of the annual outlay of funds authorized by section 162(d) of the Deep Ocean Energy Resources Act of 2008 may be granted to schools, universities, and institutions other than those described in sections 3 and 4, with particular consideration awarded to minority serving institutions. ``(b) The Secretary shall determine the eligibility of a college or university to receive funding under this Act using criteria that include-- ``(1) the presence of a substantial program of undergraduate and graduate geoscience instruction and research in one or more of the following specialties: petroleum geology, geothermal geology, mineral exploration geology, economic geology, industrial minerals geology, mining geology, petroleum geophysics, mining geophysics, geological engineering, or geophysical engineering that has a demonstrated history of achievement; ``(2) evidence of institutional commitment for the purposes of this Act that includes a significant opportunity for participation by undergraduate students in research; ``(3) evidence that such school, university, or institution has or can obtain significant industrial cooperation in activities within the scope of this Act; ``(4) agreement by the school, university, or institution to maintain the programs for which the funding is sought for the 10-year period beginning on the date the school, university, or institution first receives such funds; and ``(5) requiring that such funding shall be for the purposes set forth in subsections (c) through (h) of section 3 and subject to the conditions set forth in section 3(h). ``(c) The Secretary shall seek the advice of the Committee established pursuant to section 11 in determining the criteria used to carry out this section. ``SEC. 7. DESIGNATION OF FUNDS FOR SCHOLARSHIPS AND FELLOWSHIPS. ``(a) The Secretary shall utilize 10 percent of the annual outlay of funds authorized by section 162(d) of the Deep Ocean Energy Resources Act of 2008 for the purpose of providing merit-based scholarships for undergraduate education, graduate fellowships, and postdoctoral fellowships. ``(b) In order to receive a scholarship or a graduate fellowship, an individual student must be a lawful permanent resident of the United States or a United States citizen and must agree in writing to complete a course of studies and receive a degree in petroleum, mining, or mineral engineering, petroleum geology, geothermal geology, mining and economic geology, petroleum and mining geophysics, or mineral economics. ``(c) The regulations required by section 9 shall require that an individual, in order to retain a scholarship or graduate fellowship, must continue in one of the course of studies listed in subsection (b) of this section, must remain in good academic standing, as determined by the school, institution, or university and must allow for reinstatement of the scholarship or graduate fellowship by the Secretary, upon the recommendation of the school or institution. Such regulations may also provide for recovery of funds from an individual who fails to complete any of the courses of study listed in subsection (b) of this section after notice that such completion is a requirement of receipt funding under this Act. ``(d) To carry out this section, the Secretary shall award grants to schools, universities, and institutions that are eligible to receive funding under section 3, 4 or 6. A school, university, or institution receiving funding under this subsection shall be responsible for enforcing the requirements of this section for scholarship or fellowship students and shall return to the Secretary any funds recovered from an individual under subsection (c). An institution seeking funds under this subsection shall describe, in its application to the Secretary for funding, the number of students that would be awarded scholarships or fellowships if the application is approved, how such students would be selected, and how the provisions of this section will be enforced. ``SEC. 8. FUNDING CRITERIA FOR INSTITUTIONS. ``(a) Each application to the Secretary for funds under this Act shall state, among other things, the nature of the project to be undertaken; the period during which it will be pursued; the qualifications of the personnel who will direct and conduct it; the estimated costs; the importance of the project to the Nation, region, or States concerned; its relation to other known research projects theretofore pursued or being pursued; the extent to which the proposed project will maximize the opportunity for the training of undergraduate petroleum, mining, and mineral engineers; geologists and geophysicists; and the extent of participation by nongovernmental sources in the project. ``(b) No funds shall be made available under this Act except for an application approved by the Secretary. All funds shall be made available upon the basis of merit of the application, the need for the knowledge that it is expected to produce when completed, and the opportunity it provides for the undergraduate training of individuals as petroleum, mining, and mineral engineers, geologists, and geophysicists. The Secretary may use competitive review by nongovernmental experts in relevant fields to determine which applications to approve, to the extent practicable. ``(c) Funds available under this Act shall be paid at such times and in such amounts during each fiscal year as determined by the Secretary, and upon vouchers approved by the Secretary. Each school, university, or institution that receives funds under this Act shall-- ``(1) establish its plan to provide for the training of individuals as petroleum, mining, and mineral engineers, geologists, and geophysicists under a curriculum appropriate to the field of mineral resources and mineral engineering and related fields; ``(2) establish policies and procedures that assure that Federal funds made available under this Act for any fiscal year will supplement and, to the extent practicable, increase the level of funds that would, in the absence of such Federal funds, be made available for purposes of this Act, and in no case supplant such funds; and ``(3) have an officer appointed by its governing authority who shall receive and account for all funds paid under this Act and shall make an annual report to the Secretary on or before the first day of September of each year, on work accomplished and the status of projects underway, together with a detailed statement of the amounts received under this Act during the preceding fiscal year, and of its disbursements on schedules prescribed by the Secretary. ``(d) If any of the funds received by the authorized receiving officer of a program under this Act are found by the Secretary to have been improperly diminished, lost, or misapplied, such funds shall be recovered by the Secretary. ``(e) Schools, universities, and institutions receiving funds under this Act are authorized and encouraged to plan and conduct programs under this Act in cooperation with each other and with such other agencies, business enterprises and individuals. ``SEC. 9. DUTIES OF SECRETARY. ``(a) The Secretary, acting through the Assistant Secretary for Land and Minerals Management, shall administer this Act and shall prescribe such rules and regulations as may be necessary to carry out its provisions not later than 1 year after the enactment of the Deep Ocean Energy Resources Act of 2008. ``(b)(1) There is established in the Department of the Interior, under the supervision of the Assistant Secretary for Land and Minerals Management, an office to be known as the Office of Petroleum and Mining Schools (hereafter in this Act referred to as the `Office') to administer the provisions of this Act. There shall be a Director of the Office who shall be a member of the Senior Executive Service. The position of the Director shall be allocated from among the existing Senior Executive Service positions at the Department of the Interior and shall be a career reserved position as defined in section 3132(a)(8) of title 5, United States Code. ``(2) The Director is authorized to appoint a Deputy Director and to employ such officers and employees as may be necessary to enable the Office to carry out its functions. Such appointments shall be made from existing positions at the Department of the Interior, and shall be subject to the provisions of title 5, United States Code, governing appointments in the competitive service. Such positions shall be paid in accordance with the provisions of chapter 51 and subchapter III of chapter 53 of such title relating to classification and General Schedule pay rates. ``(3) In carrying out his or her functions, the Director shall assist and advise the Secretary and the Committee pursuant to section 11 of this Act by-- ``(A) providing professional and administrative staff support for the Committee including recordkeeping and maintaining minutes of all Committee and subcommittee meetings; ``(B) coordinating the activities of the Committee with Federal agencies and departments, and the schools, universities, and institutions to which funds are provided under this Act; ``(C) maintaining accurate records of funds disbursed for all scholarship and fellowship grants, research grants, and grants for career technical education purposes; ``(D) preparing any regulations required to implement this Act; ``(E) conducting site visits at schools, universities, and institutions receiving funding under this Act; and ``(F) serving as a central repository for reports and clearing house for public information on research funded by this Act. ``(4) The Director or an employee of the Office shall be present at each meeting of the Committee pursuant to section 11 or a subcommittee of such Committee. ``(5) The Director is authorized to contract with public or private agencies, institutions, and organizations and with individuals without regard to section 3324(a) and (b) of title 31, United States Code, and section 5 of title 41, United States Code, in carrying out his or her functions. ``(6) As needed the Director shall ascertain whether the requirements of this Act have been met by schools, universities, institutions, and individuals. ``(c) The Secretary, acting through the Office of Petroleum and Mining Schools, shall furnish such advice and assistance as will best promote the purposes of this Act, shall participate in coordinating research, investigations, demonstrations, and experiments initiated under this Act, shall indicate to schools, universities, and institutions receiving funds under this Act such lines of inquiry that seem most important, and shall encourage and assist in the establishment and maintenance of cooperation between such schools, universities, and institutions, other research organizations, the Department of the Interior, and other Federal agencies. ``(d) The Secretary shall establish procedures-- ``(1) to ensure that each employee and contractor of the Office established by this section and each member of the Committee pursuant to section 11 of this Act shall disclose to the Secretary any financial interests in or financial relationships with schools, universities, institutions or individuals receiving funds, scholarships or fellowships under this Act; ``(2) to require any employee, contractor, or member of the Committee with a financial relationship disclosed under paragraph (1) to recuse themselves from-- ``(A) any recommendation or decision regarding the awarding of funds, scholarships or fellowships; or ``(B) any review, report, analysis or investigation regarding compliance with the provisions of this Act by a school, university, institution or any individual. ``(e) On or before the first day of July of each year beginning after the date of enactment of this sentence, schools, universities, and institutions receiving funds under this Act shall certify compliance with this Act and upon request of the Director of the office established by this section provide documentation of such compliance. ``(f) An individual granted a scholarship or fellowship with funds provided under this Act shall through their respective school, university, or institution, advise the Director of the office established by this Act of progress towards completion of the course of studies and upon the awarding of the degree within 30 days after the award. ``(g) The regulations required by this section shall include a preference for veterans and service members who have received or will receive either the Afghanistan Campaign Medal or the Iraq Campaign Medal as authorized by Public Law 108-234, and Executive Order No. 13363. ``SEC. 10. COORDINATION. ``(a) Nothing in this Act shall be construed to impair or modify the legal relationship existing between any of the schools, universities, and institutions under whose direction a program is established with funds provided under this Act and the government of the State in which it is located. Nothing in this Act shall in any way be construed to authorize Federal control or direction of education at any school, university, or institution. ``(b) The programs authorized by this Act are intended to enhance the Nation's petroleum, mining, and mineral engineering education programs and to enhance educational programs in petroleum and mining exploration and to increase the number of individuals enrolled in and completing these programs. To achieve this intent, the Secretary and the Committee pursuant to section 11 shall receive the continuing advice and cooperation of all agencies of the Federal Government concerned with the identification, exploration, and development of energy and mineral resources. ``(c) Nothing in this Act is intended to give or shall be construed as giving the Secretary any authority over mining and mineral resources research conducted by any agency of the Federal Government, or as repealing or diminishing existing authorities or responsibilities of any agency of the Federal Government to plan and conduct, contract for, or assist in research in its area of responsibility and concern with regard to mining and mineral resources. ``(d) The schools, universities, and institutions receiving funding under this Act shall make detailed reports to the Office of Petroleum and Mining Schools on projects completed, in progress, or planned with funds provided under this Act. All such reports shall be available to the public on not less than an annual basis through the Office of Petroleum and Mining Schools. All uses, products, processes, and other developments resulting from any research, demonstration, or experiment funded in whole or in part under this Act shall be made available promptly to the general public, subject to exception or limitation, if any, as the Secretary may find necessary in the interest of national security, and subject to the applicable Federal law governing patents. ``SEC. 11. COMMITTEE ON PETROLEUM, MINING, AND MINERAL ENGINEERING AND ENERGY AND MINERAL RESOURCE EDUCATION. ``(a) The Secretary shall appoint a Committee on Petroleum, Mining, and Mineral Engineering and Energy and Mineral Resource Education composed of-- ``(1) the Assistant Secretary of the Interior responsible for land and minerals management and not more than 16 other persons who are knowledgeable in the fields of mining and mineral resources research, including 2 university administrators one of whom shall be from historic and existing petroleum and mining schools; a community, technical, or tribal college administrator; a career technical education educator; 6 representatives equally distributed from the petroleum, mining, and aggregate industries; a working miner; a working oilfield worker; a representative of the Interstate Oil and Gas Compact Commission; a representative from the Interstate Mining Compact Commission; a representative from the Western Governors Association; a representative of the State geologists, and a representative of a State mining and reclamation agency. In making these 16 appointments, the Secretary shall consult with interested groups. ``(2) The Assistant Secretary for Land and Minerals Management, in the capacity of the Chairman of the Committee, may have present during meetings of the Committee representatives of Federal agencies with responsibility for energy and minerals resources management, energy and mineral resource investigations, energy and mineral commodity information, international trade in energy and mineral commodities, mining safety regulation and mine safety research, and research into the development, production, and utilization of energy and mineral commodities. These representatives shall serve as technical advisors to the committee and shall have no voting responsibilities. ``(b) The Committee shall consult with, and make recommendations to, the Secretary on policy matters relating to carrying out this Act. The Secretary shall consult with and carefully consider recommendations of the Committee in such matters. ``(c) Committee members, other than officers or employees of Federal, State, or local governments, shall be, for each day (including traveltime) during which they are performing Committee business, paid at a rate fixed by the Secretary but not in excess of the daily equivalent of the maximum rate of pay for level IV of the Executive Schedule under section 5136 of title 5, United States Code, and shall be fully reimbursed for travel, subsistence, and related expenses. ``(d) The Committee shall be chaired by the Assistant Secretary of the Interior responsible for land and minerals management. There shall also be elected a Vice Chairman by the Committee from among the members referred to in this section. The Vice Chairman shall perform such duties as are determined to be appropriate by the committee, except that the Chairman of the Committee must personally preside at all meetings of the full Committee. The Committee may organize itself into such subcommittees as the Committee may deem appropriate. ``(e) Following completion of the report required by section 385 of the Energy Policy Act of 2005, the Committee shall consider the recommendations of the report, ongoing efforts in the schools, universities, and institutions receiving funding under this Act, the Federal and State Governments, and the private sector, and shall formulate and recommend to the Secretary a national plan for a program utilizing the fiscal resources provided under this Act. The Committee shall submit such plan to the Secretary for approval. Upon approval, the plan shall guide the Secretary and the Committee in their actions under this Act. ``(f) Section 10 of the Federal Advisory Committee Act (5 U.S.C. App. 2) shall not apply to the Committee. ``SEC. 12. CAREER TECHNICAL EDUCATION. ``(a) Up to 25 percent of the annual outlay of funds authorized by section 162(d) of the Deep Ocean Energy Resources Act of 2008 may be granted to schools or institutions including, but not limited to, colleges, universities, community colleges, tribal colleges and universities, technical institutes, secondary schools, other than those described in sections 3, 4, 5, and 6, and jointly sponsored apprenticeship and training programs that are authorized by Federal law. ``(b) The Secretary shall determine the eligibility of a school or institution to receive funding under this section using criteria that include-- ``(1) the presence of a State-approved program in mining engineering technology, petroleum engineering technology, industrial engineering technology, or industrial technology that-- ``(A) is focused on technology and its use in energy and mineral production and related maintenance, operational safety, or energy infrastructure protection and security; ``(B) prepares students for advanced or supervisory roles in the mining industry or the petroleum industry; and ``(C) grants either an associate's degree or a baccalaureate degree in one of the subjects listed in subparagraph (A); ``(2) the presence of a program, including a secondary school vocational education program or career academy, that provides training for individuals entering the petroleum, coal mining, or mineral mining industries; or ``(3) the presence of a State-approved program of career technical education at a secondary school, offered cooperatively with a community college in one of the industrial sectors of-- ``(A) agriculture, forestry, or fisheries; ``(B) utilities; ``(C) construction; ``(D) manufacturing; and ``(E) transportation and warehousing. ``(c) Schools or institutions receiving funds under this section must show evidence of an institutional commitment for the purposes of career technical education and provide evidence that the school or institution has received or will receive industry cooperation in the form of equipment, employee time, or donations of funds to support the activities that are within the scope of this section. ``(d) Schools or institutions receiving funds under this section must agree to maintain the programs for which the funding is sought for a period of 10 years beginning on the date the school or institution receives such funds, unless the Secretary finds that a shorter period of time is appropriate for the local labor market or is required by State authorities. ``(e) Schools or institutions receiving funds under this section may combine these funds with State funds, and other Federal funds where allowed by law, to carry out programs described in this section, however the use of the funds received under this section must be reported to the Secretary not less than annually. ``(f) The Secretary shall seek the advice of the Committee established pursuant to section 11 in determining the criteria used to carry out this section. ``SEC. 13. DEPARTMENT OF THE INTERIOR WORKFORCE ENHANCEMENT. ``(a) Physical Science, Engineering and Technology Scholarship Program.-- ``(1) From the amount of funds available to carry out this section, the Secretary shall use 30 percent of that amount to provide financial assistance for education in physical sciences, engineering, and engineering or industrial technology and disciplines that, as determined by the Secretary, are critical to the functions of the Department of the Interior and are needed in the Department of the Interior workforce. ``(2) The Secretary of the Interior may award a scholarship in accordance with this section to a person who-- ``(A) is a citizen of the United States; ``(B) is pursuing an undergraduate or advanced degree in a critical skill or discipline described in paragraph (1) at an institution of higher education; and ``(C) enters into a service agreement with the Secretary of the Interior as described in subsection (e). ``(3) The amount of the financial assistance provided under a scholarship awarded to a person under this subsection shall be the amount determined by the Secretary of the Interior as being necessary to pay all educational expenses incurred by that person, including tuition, fees, cost of books, laboratory expenses, and expenses of room and board. The expenses paid, however, shall be limited to those educational expenses normally incurred by students at the institution of higher education involved. ``(b) Scholarship Program for Students Attending Minority Serving Higher Education Institutions.-- ``(1) From the amount of funds available to carry out this section, the Secretary shall use 35 percent of that amount to award scholarships in accordance with this section to persons who-- ``(A) are enrolled in a Minority Serving Higher Education Institution; ``(B) are citizens or nationals of the United States; ``(C) are pursuing an undergraduate or advanced degree in agriculture, engineering, engineering or industrial technology, or physical sciences, or other discipline that is found by the Secretary to be critical to the functions of the Department of the Interior and are needed in the Department of the Interior workforce; and ``(D) enter into a service agreement with the Secretary of the Interior as described in subsection (e). ``(2) The amount of the financial assistance provided under a scholarship awarded to a person under this subsection shall be the amount determined by the Secretary of the Interior as being necessary to pay all educational expenses incurred by that person, including tuition, fees, cost of books, laboratory expenses, and expenses of room and board. The expenses paid, however, shall be limited to those educational expenses normally incurred by students at the institution of higher education involved. ``(c) Education Partnerships With Minority Serving Higher Education Institutions.-- ``(1) The Secretary shall require the director of each Bureau and Office, to foster the participation of Minority Serving Higher Education Institutions in any regulatory activity, land management activity, science activity, engineering or industrial technology activity, or engineering activity carried out by the Department of the Interior. ``(2) From the amount of funds available to carry out this section, the Secretary shall use 35 percent of that amount to support activities at Minority Serving Higher Education Institutions by-- ``(A) funding faculty and students in these institutions in collaborative research projects that are directly related to the Departmental or Bureau missions; ``(B) allowing equipment transfer to Minority Serving Higher Education Institutions as a part of a collaborative research program directly related to a Departmental or Bureau mission; ``(C) allowing faculty and students at these Minority Serving Higher Education Institutions to participate Departmental and Bureau training activities; ``(D) funding paid internships in Departmental and Bureau facilities for students at Minority Serving Higher Education Institutions; and ``(E) assigning Departmental and Bureau personnel to positions located at Minority Serving Higher Educational Institutions to serve as mentors to students interested in a science, technology or engineering disciplines related to the mission of the Department or the Bureaus. ``(d) Service Agreement for Recipients of Assistance.-- ``(1) To receive financial assistance under subsection (a) or (b) of this section-- ``(A) in the case of an employee of the Department of the Interior, the employee shall enter into a written agreement to continue in the employment of the department for the period of obligated service determined under paragraph (2); and ``(B) in the case of a person not an employee of the Department of the Interior, the person shall enter into a written agreement to accept and continue employment in the Department of the Interior for the period of obligated service determined under paragraph (2). ``(2) For the purposes of this section, the period of obligated service for a recipient of a scholarship under this section shall be the period determined by the Secretary of the Interior as being appropriate to obtain adequate service in exchange for the financial assistance provided under the scholarship. In no event may the period of service required of a recipient be less than the total period of pursuit of a degree that is covered by the scholarship. The period of obligated service is in addition to any other period for which the recipient is obligated to serve in the civil service of the United States. ``(3) An agreement entered into under this subsection by a person pursuing an academic degree shall include any terms and conditions that the Secretary of the Interior determines necessary to protect the interests of the United States or otherwise appropriate for carrying out this section. ``(e) Refund for Period of Unserved Obligated Service.-- ``(1) A person who voluntarily terminates service before the end of the period of obligated service required under an agreement entered into under subsection (d) shall refund to the United States an amount determined by the Secretary of the Interior as being appropriate to obtain adequate service in exchange for financial assistance. ``(2) An obligation to reimburse the United States imposed under paragraph (1) is for all purposes a debt owed to the United States. ``(3) The Secretary of the Interior may waive, in whole or in part, a refund required under paragraph (1) if the Secretary determines that recovery would be against equity and good conscience or would be contrary to the best interests of the United States. ``(4) A discharge in bankruptcy under title 11, United States Code, that is entered less than five years after the termination of an agreement under this section does not discharge the person signing such agreement from a debt arising under such agreement or under this subsection. ``(f) Relationship to Other Programs.--The Secretary of the Interior shall coordinate the provision of financial assistance under the authority of this section with the provision of financial assistance under the authorities provided in this Act in order to maximize the benefits derived by the Department of Interior from the exercise of all such authorities. ``(g) Report.--Not later than September 1 of each year, the Secretary of the Interior shall submit to the Congress a report on the status of the assistance program carried out under this section. The report shall describe the programs within the Department designed to recruit and retain a workforce on a short-term basis and on a long-term basis. ``(h) Definitions.--As used in this section: ``(1) The term `Minority Serving Higher Education Institutions' means a Hispanic-serving institution, historically Black college or university, Alaska Native-serving institution, tribal college or university, or insular area school. ``(2) The term `Hispanic-serving institution' has the meaning given the term in section 502(a) of the Higher Education Act of 1965 (20 U.S.C. 1101a(a)). ``(3) The term `historically Black college or university' has the meaning given the term `part B institution' in section 322 of the Higher Education Act of 1965 (20 U.S.C. 1061). ``(4) The term `tribal college or university' has the meaning given the term `Tribal College or University' in section 316(b)(3) of the Higher Education Act of 1965 (20 U.S.C. 1059c). ``(5) The term `institution of higher education' has the meaning given such term in section 101 of the Higher Education Act of 1965 (20 U.S.C. 1001). ``(6) The term `Alaska Native-serving institution' has the meaning given the term in section 317 of the Higher Education Act of 1965 (20 U.S.C. 1059d). ``(7) The term `insular area school' means an academic institution or university in American Samoa, Guam, The Northern Mariana Islands, Puerto Rico, and the Virgin Islands, or any other territory or possession of the United States. ``(i) Funding.--To implement this section, the Secretary shall use 3 percent of the annual outlay authorized by section 162(d) of the Deep Ocean Energy Resources Act of 2008.''. (b) Funding for Energy Research.-- (1) Using 20 percent of the funds authorized by subsection (d), the Secretary of Energy, through the energy supply research and development programs of the Department of Energy, and in consultation with the Office of Science of the Department of Energy, shall carry out a program to award grants to institutions of higher education on the basis of competitive, merit-based review, for the purpose of conducting research on advanced energy technologies with the potential to transform the energy systems of the United States so as to-- (A) reduce dependence on foreign energy supplies; (B) reduce or eliminate emissions of greenhouse gases; (C) reduce negative environmental effects associated with energy production, storage, and use; and (D) enhance the competitiveness of United States energy technology exports. (2) Awards made under this subsection may include funding for-- (A) energy efficiency; (B) renewable energy, including solar, wind, and biofuels; and (C) nuclear, hydrogen, and any other energy research that could accomplish the purpose set forth in paragraph (1). (3) The Secretary of Energy may require or authorize grantees under this subsection to partner with industry, but only to the extent that such a requirement does not prevent long-range, potentially pathbreaking research from being funded under this subsection. (4) An institution of higher education seeking funding under this subsection shall submit an application at such time, in such manner, and containing such information as the Secretary of Energy may require. (5) In this subsection, the term ``institution of higher education'' has the meaning given that term in section 101(a) of the Higher Education Act of 1965. (c) Funding for Energy Scholarships.-- (1) Using 5 percent of the funds authorized by subsection (d), the Secretary of Energy, through the energy supply research and development programs of the Department of Energy, and in consultation with the Office of Science of the Department of Energy, shall carry out a program to award grants to institutions of higher education on the basis of competitive, merit-based review, to grant graduate traineeships to Ph.D. students who are citizens of the United States who will carry out research on advanced energy technologies to accomplish the purpose set forth in subsection (c)(1). (2) Awards made under this subsection may include funding for-- (A) energy efficiency; (B) renewable energy, including solar, wind, and biofuels; and (C) nuclear, hydrogen, and any other energy research that would accomplish the purpose set forth in subsection (c)(1) that is not eligible for funding under section 7 of the Energy and Mineral Schools Reinvestment Act. (3) An institution of higher education seeking funding under this subsection shall submit an application at such time, in such manner, and containing such information as the Secretary of Energy may require. (4) In this subsection, the term ``institution of higher education'' has the meaning given that term in section 101(a) of the Higher Education Act of 1965. (d) Authorization of Appropriations.--There is authorized to be appropriated to carry out this section $150,000,000 for each of fiscal years 2009 through 2019. SEC. 161. ONSHORE AND OFFSHORE MINERAL LEASE FEES. Except as otherwise provided in this subtitle, the Department of the Interior is prohibited from charging fees applicable to actions on Federal onshore and offshore oil and gas, coal, geothermal, and other mineral leases, including transportation of any production from such leases, if such fees were not established in final regulations prior to the date of issuance of the lease. SEC. 162. OCS REGIONAL HEADQUARTERS. The headquarters for the Gulf of Mexico Region shall permanently be located within the State of Louisiana within 25 miles of the center of Jackson Square, New Orleans, Louisiana. Further, not later than July 1, 2010, the Secretary of the Interior shall establish the headquarters for the Atlantic OCS Region and the headquarters for the Pacific OCS Region within a State bordering the Atlantic OCS Region and a State bordering the Pacific OCS Region, respectively, from among the States bordering those Regions, that petitions by no later than January 1, 2010, for leasing, for oil and gas or natural gas, covering at least 40 percent of the area of its Adjacent Zone within 100 miles of the coastline. Such Atlantic and Pacific OCS Regions headquarters shall be located within 25 miles of the coastline and each MMS OCS regional headquarters shall be the permanent duty station for all Minerals Management Service personnel that on a daily basis spend on average 60 percent or more of their time in performance of duties in support of the activities of the respective Region, except that the Minerals Management Service may house regional inspection staff in other locations. Each OCS Region shall each be led by a Regional Director who shall be an employee within the Senior Executive Service. SEC. 163. NATIONAL GEO FUND ACT OF 2008. (a) Short Title.--This section may be cited as the ``National Geo Fund Act of 2008''. (b) Purposes.--The purpose of this section is to provide for the management of geologic programs, geologic mapping, geophysical and other seismic studies, seismic monitoring programs, and the preservation and use of geologic and geophysical data, geothermal and geopressure energy resource management, unconventional energy resources management, and renewable energy management associated with ocean wave, current, and thermal resources. (c) State Defined.--In this section the term ``State'' means the agency of a State designated by its Governor or State law to perform the functions and activities described in subsection (b). (d) Strategic Unconventional Resources.-- (1) Program.--The Secretary of the Interior shall establish a program for production of fuels from strategic unconventional resources, and production of oil and gas resources using CO<INF>2</INF> enhanced recovery. The program shall focus initially on activities and domestic resources most likely to result in significant production in the near future, and shall include work necessary to improve extraction techniques, including surface and in situ operations. The program shall include characterization and assessment of potential resources, a sampling program, appropriate laboratory and other analyses and testing, and assessment of methods for exploration and development of these strategic unconventional resources. (2) Pilot projects.--The program created in paragraph (1) shall include, but not be limited to, pilot projects on (A) the Maverick Basin heavy oil and tar sands formations of Texas, including the San Miguel deposits, (B) the Greater Green River Basin heavy oil, shale, tar sands, and coal deposits of Colorado, Utah, and Wyoming, (C) the shale, tar sands, heavy oil, and coal deposits in the Alabama-Mississippi-Tennessee region, (D) the shale, tar sands, heavy oil, and coal deposits in the Ohio River valley, and (E) strategic unconventional resources in California. The Secretary shall identify and report to Congress on feasible incentives to foster recovery of unconventional fuels by private industry within the United States. Such incentives may include, but are not limited to, long-term contracts for the purchase of unconventional fuels for defense purposes, Federal grants and loan guarantees for necessary capital expenditures, and favorable terms for the leasing of Government lands containing unconventional resources. (3) Definitions.--In this subsection: (A) Strategic unconventional resources.--The term ``strategic unconventional resources'' means hydrocarbon resources, including heavy oil, shale, tar sands, and coal deposits, from which liquid fuels may be produced. (B) In situ extraction methods.--The term ``in situ extraction methods'' means recovery techniques that are applied to the resources while they are still in the ground, and are in commercial use or advanced stages of development. Such techniques include, but are not limited to, steam flooding, steam-assisted gravity drainage (including combination with electric power generation where appropriate), cyclic steam stimulation, air injection, and chemical treatment. (4) Authorization of appropriations.--There is authorized to be appropriated to carry out this subsection for each of fiscal years 2009 through 2016 not less than $35,000,000. Each pilot project shall be allocated not less than $4,000,000 per year in each of fiscal years 2009 through 2016. (e) Support of Geothermal and Geopressure Oil and Gas Energy Production.-- (1) In general.--The Secretary of the Interior shall carry out a grant program in support of geothermal and geopressure oil and gas energy production. The program shall include grants for a total of not less than three assessments of the use of innovative geothermal techniques such as organic rankine cycle systems at marginal, unproductive, and productive oil and gas wells, and not less than one assessment of the use of innovative geopressure techniques. The Secretary shall, to the extent practicable and in the public interest, make awards that-- (A) include not less than five oil or gas well sites per project award; (B) use a range of oil or gas well hot water source temperatures from 150 degrees Fahrenheit to 300 degrees Fahrenheit; (C) use existing or new oil or gas wells; (D) cover a range of sizes from 175 kilowatts to one megawatt; (E) are located at a range of sites including tribal lands, Federal lease, State, or privately owned sites; (F) can be replicated at a wide range of sites; (G) facilitate identification of optimum techniques among competing alternatives; (H) include business commercialization plans that have the potential for production of equipment at high volumes and operation and support at a large number of sites; and (I) satisfy other criteria that the Secretary determines are necessary to carry out the program. The Secretary shall give preference to assessments that address multiple elements contained in subparagraphs (A) through (I). (2) Grant awards.-- (A) In general.--Each grant award for assessment of innovative geothermal or geopressure technology such as organic rankine cycle systems at oil and gas wells made by the Secretary under this section shall include-- (i) necessary and appropriate site engineering study; (ii) detailed economic assessment of site specific conditions; (iii) appropriate feasibility studies to determine ability for replication; (iv) design or adaptation of existing technology for site specific circumstances or conditions; (v) installation of equipment, service, and support; and (vi) monitoring for a minimum of one year after commissioning date. (3) Competitive grant selection.--Not less than 180 days after the date of the enactment of this Act, the Secretary shall conduct a national solicitation for applications for grants under the program. Grant recipients shall be selected on a competitive basis based on criteria in subsection (b). (4) Federal share.--The Federal share of costs of grants under this subsection shall be provided from funds made available to carry out this section. The Federal share of the cost of a project carried out with such a grant shall not exceed 50 percent of such cost. (5) Authorization of appropriations.--There is authorized to be appropriated to carry out this subsection for each of fiscal years 2007 through 2011 not less than $5,000,000. No funds authorized under this section may be used for the purposes of drilling new wells. (6) Amendment.--Section 4 of the Geothermal Steam Act of 1970 (30 U.S.C. 1003) is amended by adding at the end the following: ``(h) Geothermal Resources Co-Produced With the Minerals.--Any person who holds a lease or who operates a cooperative or unit plan under the Mineral Leasing Act, in the absence of an existing lease for geothermal resources under this Act, shall upon notice to the Secretary have the right to utilize any geothermal resources co-produced with the minerals for which the lease was issued during the operation of that lease or cooperative or unit plan, for the generating of electricity to operate the lease. Any electricity that is produced in excess of that which is required to operate the lease and that is sold for purposes outside of the boundary of the lease shall be subject to the requirements of section 5.''. (f) Liquid Fuels Grant Program.-- (1) Program.--The Secretary of the Interior shall establish a grant program for facilities for coal-to-liquids, petroleum coke-to-liquids, oil shale, tar sands, heavy oil, and Alaska natural gas-to-liquids and to assess the production of low-rank coal water fuel (in this subsection referred to as ``LRCWF''). (2) LRCWF.--The LRCWF grant project location shall use lignite coal and shall be allocated $15,000,000. (3) Definitions.--In this subsection: (A) Coal-to-liquids front-end engineering and design.--The terms ``coal-to-liquids front-end engineering and design'' and ``FEED'' mean those expenditures necessary to engineer, design, and obtain permits for a facility for a particular geographic location which will utilize a process or technique to produce liquid fuels from coal resources. (B) Low-rank coal water fuel.--In this subsection the term ``low-rank coal water fuel'' means a liquid fuel produced from hydrothermal treatment of lignite and sub-bituminous coals. (4) Grant provisions.--All grants shall require a 50 percent non-Federal cost share. The first 4 FEED grant recipients who receive full project construction financing commitments, based on earliest calendar date, shall not be required to repay any of their grants. The next 4 FEED grant recipients who receive such commitments shall be required to repay 25 percent of the grant. The next 4 FEED grant recipients who receive such commitments shall be required to repay 50 percent of the grant, and the remaining FEED grant recipients shall be required to repay 75 percent of the grant. Any required repayment shall be paid as part of the closing process for any construction financing relating to the grant. No repayment shall require the payment of interest if repaid within 5 years of the issuance of the grant. FEED grants shall be limited to a maximum of $500,000 per 1,000 barrels per day of liquid fuels production capacity. (5) Authorization of appropriations.--There is authorized to be appropriated to carry out this subsection $50,000,000 for each of fiscal years 2009 through 2016. (g) Renewable Energy From Ocean Wave, Current, and Thermal Resources.-- (1) Program.--The Secretary of the Interior shall establish a grant program for the production of renewable energy from ocean waves, tides, currents, and thermal resources. (2) Grant provisions.--All grants under this subsection shall require a 50 percent non-Federal cost share. (3) Authorization of appropriations.--There is authorized to be appropriated to carry out this subsection funds for each of fiscal years 2009 through 2016 in the amount of not less than $20,000,000 each year, and thereafter in such amounts as the Secretary may find appropriate. (h) Amendment to the Surface Mining Control and Reclamation Act of 1977.--Section 507 of the Surface Mining Control and Reclamation Act of 1977 (30 U.S.C. 1267) is amended by adding at the end the following: ``(i) Any person who provides the regulatory authority with a map under subsection (b)(13) or (b)(14) shall not be liable to any other person in any way for the accuracy or completeness of any such map which was not prepared and certified by or on behalf of such person.''. (i) Amendment to the Energy Policy Act of 2005.--Section 357 of the Energy Policy Act of 2005 (42 U.S.C. 15912) is amended by redesignating subsection (b) as subsection (c), and inserting the following new subsection: ``(b) There is authorized to be appropriated for the Secretary to contract for use of the 3-D seismic technology referenced in (a)(2) the amount of $50,000,000 for each of fiscal years 2009 through 2016.''. SEC. 164. LEASES FOR AREAS LOCATED WITHIN 100 MILES OF CALIFORNIA OR FLORIDA. (a) Authorization To Cancel and Exchange Certain Existing Oil and Gas Leases; Prohibition on Submittal of Exploration Plans for Certain Leases Prior to June 30, 2012.-- (1) Authority.--Within 2 years after the date of enactment of this Act, the lessee of an existing oil and gas lease for an area located completely within 100 miles of the coastline within the California or Florida Adjacent Zones shall have the option, without compensation, of exchanging such lease for a new oil and gas lease having a primary term of 5 years. For the area subject to the new lease, the lessee may select any unleased tract on the outer Continental Shelf that is in an area available for leasing. Further, with the permission of the relevant Governor, such a lessee may convert its existing oil and gas lease into a natural gas lease having a primary term of 5 years and covering the same area as the existing lease or another area within the same State's Adjacent Zone within 100 miles of the coastline. (2) Administrative process.--The Secretary of the Interior shall establish a reasonable administrative process to implement paragraph (1). Exchanges and conversions under subsection (a), including the issuance of new leases, shall not be considered to be major Federal actions for purposes of the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.). Further, such actions conducted in accordance with this section are deemed to be in compliance all provisions of the Outer Continental Shelf Lands Act (43 U.S.C. 1331 et seq.). (3) Operating restrictions.--A new lease issued in exchange for an existing lease under this section shall be subject to such national defense operating stipulations on the OCS tract covered by the new lease as may be applicable upon issuance. (4) Priority.--The Secretary shall give priority in the lease exchange process based on the amount of the original bonus bid paid for the issuance of each lease to be exchanged. The Secretary shall allow leases covering partial tracts to be exchanged for leases covering full tracts conditioned upon payment of additional bonus bids on a per-acre basis as determined by the average per acre of the original bonus bid per acre for the partial tract being exchanged. (5) Exploration plans.--Any exploration plan submitted to the Secretary of the Interior after the date of the enactment of this Act and before July 1, 2012, for an oil and gas lease for an area wholly within 100 miles of the coastline within the California Adjacent Zone or Florida Adjacent Zone shall not be treated as received by the Secretary until the earlier of July 1, 2012, or the date on which a petition by the Adjacent State for oil and gas leasing covering the area within which is located the area subject to the oil and gas lease was approved. (b) Further Lease Cancellation and Exchange Provisions.-- (1) Cancellation of lease.--As part of the lease exchange process under this section, the Secretary shall cancel a lease that is exchanged under this section. (2) Consent of lessees.--All lessees holding an interest in a lease must consent to cancellation of their leasehold interests in order for the lease to be cancelled and exchanged under this section. (3) Waiver of rights.--As a prerequisite to the exchange of a lease under this section, the lessee must waive any rights to bring any litigation against the United States related to the transaction. (4) Plugging and abandonment.--The plugging and abandonment requirements for any wells located on any lease to be cancelled and exchanged under this section must be complied with by the lessees prior to the cancellation and exchange. (c) Area Partially Within 100 Miles of Florida.--An existing oil and gas lease for an area located partially within 100 miles of the coastline within the Florida n Adjacent Zone may only be developed and produced using wells drilled from well-head locations at least 100 miles from the coastline to any bottom-hole location on the area of the lease. This subsection shall not apply if Florida has petitioned for leasing closer to the coastline than 100 miles. (d) Existing Oil and Gas Lease Defined.--In this section the term ``existing oil and gas lease'' means an oil and gas lease in effect on the date of the enactment of this Act. SEC. 165. COASTAL IMPACT ASSISTANCE. Section 31 of the Outer Continental Shelf Lands Act (43 U.S.C. 1356a) is repealed. SEC. 166. OIL SHALE AND TAR SANDS AMENDMENTS. (a) Repeal of Requirement To Establish Payments.--Section 369(o) of the Energy Policy Act of 2005 (Public Law 109-58; 119 Stat. 728; 42 U.S.C. 15927) is repealed. (b) Treatment of Revenues.--Section 21 of the Mineral Leasing Act (30 U.S.C. 241) is amended by adding at the end the following: ``(e) Revenues.-- ``(1) In general.--Notwithstanding the provisions of section 35, all revenues received from and under an oil shale or tar sands lease shall be disposed of as provided in this subsection. ``(2) Royalty rates for commercial leases.-- ``(A) Royalty rates.--The Secretary shall model the royalty schedule for oil shale and tar sands leases based on the royalty program currently in effect for the production of synthetic crude oil from oil sands in the Province of Alberta, Canada. ``(B) Reduction.--The Secretary shall reduce any royalty otherwise required to be paid under subparagraph (A) under any oil shale or tar sands lease on a sliding scale based upon market price, with a 10 percent reduction if the average futures price of NYMEX Light Sweet Crude, or a similar index, drops, for the previous quarter year, below $50 (in January 1, 2006, dollars), and an 80 percent reduction if the average price drops below $30 (in January 1, 2006, dollars) for the quarter previous to the one in which the production is sold. ``(3) Disposition of revenues.-- ``(A) Deposit.--The Secretary shall deposit into a separate account in the Treasury all revenues derived from any oil shale or tar sands lease. ``(B) Allocations to states and local political subdivisions.--The Secretary shall allocate 50 percent of the revenues deposited into the account established under subparagraph (A) to the State within the boundaries of which the leased lands are located, with a portion of that to be paid directly by the Secretary to the State's local political subdivisions as provided in this paragraph. ``(C) Transmission of allocations.-- ``(i) In general.--Not later than the last business day of the month after the month in which the revenues were received, the Secretary shall transmit-- ``(I) to each State two-thirds of such State's allocations under subparagraph (B), and in accordance with clauses (ii) and (iii) to certain county-equivalent and municipal political subdivisions of such State a total of one-third of such State's allocations under subparagraph (B), together with all accrued interest thereon; and ``(II) the remaining balance of such revenues deposited into the account that are not allocated under subparagraph (B), together with interest thereon, shall be transmitted to the miscellaneous receipts account of the Treasury, except that until a lease has been in production for 20 years 50 percent of such remaining balance derived from a lease shall be paid in accordance with subclause (I). ``(ii) Allocations to certain county- equivalent political subdivisions.--The Secretary shall under clause (i)(I) make equitable allocations of the revenues to county-equivalent political subdivisions that the Secretary determines are closely associated with the leasing and production of oil shale and tar sands, under a formula that the Secretary shall determine by regulation. ``(iii) Allocations to municipal political subdivisions.--The initial allocation to each county-equivalent political subdivision under clause (ii) shall be further allocated to the county-equivalent political subdivision and any municipal political subdivisions located partially or wholly within the boundaries of the county-equivalent political subdivision on an equitable basis under a formula that the Secretary shall determine by regulation. ``(D) Investment of deposits.--The deposits in the Treasury account established under this section shall be invested by the Secretary of the Treasury in securities backed by the full faith and credit of the United States having maturities suitable to the needs of the account and yielding the highest reasonably available interest rates as determined by the Secretary of the Treasury. ``(E) Use of funds.--A recipient of funds under this subsection may use the funds for any lawful purpose as determined by State law. Funds allocated under this subsection to States and local political subdivisions may be used as matching funds for other Federal programs without limitation. Funds allocated to local political subdivisions under this subsection may not be used in calculation of payments to such local political subdivisions under programs for payments in lieu of taxes or other similar programs. ``(F) No accounting required.--No recipient of funds under this subsection shall be required to account to the Federal Government for the expenditure of such funds, except as otherwise may be required by law. ``(4) Definitions.--In this subsection: ``(A) County-equivalent political subdivision.--The term `county-equivalent political subdivision' means a political jurisdiction immediately below the level of State government, including a county, parish, borough in Alaska, independent municipality not part of a county, parish, or borough in Alaska, or other equivalent subdivision of a State. ``(B) Municipal political subdivision.--The term `municipal political subdivision' means a municipality located within and part of a county, parish, borough in Alaska, or other equivalent subdivision of a State.''. SEC. 167. AVAILABILITY OF OCS RECEIPTS TO PROVIDE PAYMENTS UNDER SECURE RURAL SCHOOLS AND COMMUNITY SELF-DETERMINATION ACT OF 2000. Section 9 of the Outer Continental Shelf Lands Act (43 U.S.C. 1338) is amended by inserting after subsection (i), as added by section 147 of this Act, the following new subsection: ``(j) Conditional Availability of Funds for Payments Under Secure Rural Schools and Community Self-Determination Act of 2000.-- ``(1) Availability of funds.--Subject to paragraph (2), but notwithstanding any other provision of this section, $50,000,000 of OCS Receipts shall be available to the Secretary of the Treasury for each of fiscal years 2009 through 2010 to make payments under sections 102 and 103 of the Secure Rural Schools and Community Self-Determination Act of 2000 (Public Law 106-393; 16 U.S.C. 500 note). The Secretary of the Treasury shall use the funds made available by this subsection to make such payments in lieu of using funds in the Treasury not otherwise appropriated, as otherwise authorized by sections 102(b)(3) and 103(b)(2) of such Act. ``(2) Condition on availability.--OCS Receipts shall be available under paragraph (1) for a fiscal year only if-- ``(A) title I of the Secure Rural Schools and Community Self-Determination Act of 2000 has been reauthorized through at least that fiscal year; and ``(B) the authority to initiate projects under titles II and III of such Act has been extended through at least that fiscal year.''. SEC. 168. SENSE OF THE CONGRESS TO BUY AND BUILD AMERICAN. (a) Buy and Build American.--It is the intention of the Congress that this subtitle, among other things, result in a healthy and growing American industrial, manufacturing, transportation, and service sector employing the vast talents of America's workforce to assist in the development of affordable energy from the Outer Continental Shelf. Moreover, the Congress intends to monitor the deployment of personnel and material in the Outer Continental Shelf to encourage the development of American technology and manufacturing to enable United States workers to benefit from this subtitle by good jobs and careers, as well as the establishment of important industrial facilities to support expanded access to American resources. (b) Safeguard for Extraordinary Ability.--Section 30(a) of the Outer Continental Shelf Lands Act (43 U.S.C. 1356(a)) is amended in the matter preceding paragraph (1) by striking ``regulations which'' and inserting ``regulations that shall be supplemental and complimentary with and under no circumstances a substitution for the provisions of the Constitution and laws of the United States extended to the subsoil and seabed of the outer Continental Shelf pursuant to section 144(a)(1) of this Act, except insofar as such laws would otherwise apply to individuals who have extraordinary ability in the sciences, arts, education, or business, which has been demonstrated by sustained national or international acclaim, and that''. Subtitle D--Nuclear SEC. 181. INCENTIVES FOR INNOVATIVE TECHNOLOGIES. (a) Definition of Project Cost.--Section 1701(1) of the Energy Policy Act of 2005 (42 U.S.C. 16511(1)) is amended by inserting a new paragraph (4) and renumbering the paragraphs accordingly: ``(4) Project cost.--The term `project cost' means all costs associated with the development, planning, design, engineering, permitting and licensing, construction, commissioning, start-up, shakedown and financing of the facility, including but not limited to reasonable escalation and contingencies, the cost of and fees for the guarantee, reasonably required reserve funds, initial working capital and interest during construction.''. (b) Terms and Conditions.--Section 1702 of the Energy Policy Act of 2005 (42 U.S.C. 16512) is amended by striking subsections (b) and (c) and inserting the following: ``(b) Specific Appropriation or Contribution.-- ``(1) In general.--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; or ``(C) a combination of subparagraphs (A) and (B) has been made, that when combined is sufficient to cover the cost of the obligation. ``(2) Relation to other laws.--Section 504(b) of the Federal Credit Reform Act of 1990 (2 U.S.C. 661c(b)) shall not apply to a loan guarantee made in accordance with paragraph (1)(B).''. (c) Amount.--Section 1702 of the Energy Policy Act of 2005 (42 U.S.C. 16512) is amended by striking subsection (c) and inserting the following: ``(c) Amount.-- ``(1) In general.--Subject to paragraph (2), the Secretary shall guarantee 100 percent of the obligation for a facility that is the subject of the guarantee, or a lesser amount if requested by the borrower. ``(2) Limitation.--The total amount of loans guaranteed for a facility by the Secretary shall not exceed 80 percent of the total cost of the facility, as estimated at the time at which the guarantee is issued.''. (d) Fees.--Section 1702(h) of the Energy Policy Act of 2005 (42 U.S.C. 16512(h)) is amended by striking paragraph (2) and inserting the following: ``(2) Availability.--Fees collected under this subsection shall-- ``(A) be deposited by the Secretary into a special fund in the Treasury to be known as the `Incentives For Innovative Technologies Fund'; and ``(B) remain available to the Secretary for expenditure, without further appropriation or fiscal year limitation, for administrative expenses incurred in carrying out this title.''. SEC. 182. AUTHORIZATION FOR NUCLEAR POWER 2010 PROGRAM. Section 952(c) of the Energy Policy Act of 2005 (42 U.S.C. 16014) is amended by striking paragraphs (1) and (2) and inserting the following: ``(1) In general.--The Secretary shall carry out a Nuclear Power 2010 Program to position the nation to start construction of new nuclear power plants by 2010 or as close to 2010 as achievable. ``(2) Scope of program.--The Nuclear Power 2010 Program shall be cost-shared with the private sector and shall support the following objectives: ``(A) Demonstrating the licensing process for new nuclear power plants, including the Nuclear Regulatory Commission process for obtaining early site permits (ESPs), combined construction/operating licenses (COLs), and design certifications. ``(B) Conducting first-of-a-kind design and engineering work on at least two advanced nuclear reactor designs sufficient to bring those designs to a state of design completion sufficient to allow development of firm cost estimates. ``(3) Authorization of appropriations.--There are authorized to be appropriated to the Secretary to carry out the Nuclear Power 2010 Program: ``(A) $182,800,000 for fiscal year 2008. ``(B) $159,600,000 for fiscal year 2009. ``(C) $135,600,000 for fiscal year 2010. ``(D) $46,900,000 for fiscal year 2011. ``(E) $2,200,000 for fiscal year 2012.''. SEC. 183. DOMESTIC MANUFACTURING BASE FOR NUCLEAR COMPONENTS AND EQUIPMENT. (a) Establishment of Interagency Working Group.-- (1) Purposes.--The purposes of this subsection are-- (A) to increase the competitiveness of the United States nuclear energy products and services industries; (B) to identify the stimulus or incentives necessary to cause United States manufacturers of nuclear energy products to expand manufacturing capacity; (C) to facilitate the export of United States nuclear energy products and services; (D) to reduce the trade deficit of the United States through the export of United States nuclear energy products and services; (E) to retain and create nuclear energy manufacturing and related service jobs in the United States; (F) to integrate the objectives in subparagraphs (A) through (E) in a manner consistent with the interests of the United States, into the foreign policy of the United States; and (G) to authorize funds for increasing United States capacity to manufacture nuclear energy products and supply nuclear energy services. (2) Establishment.-- (A) There shall be established an interagency working group that, in consultation with representative industry organizations and manufacturers of nuclear energy products, shall make recommendations to coordinate the actions and programs of the Federal Government in order to promote increasing domestic manufacturing capacity and export of domestic nuclear energy products and services. (B) The Interagency Working Group shall be composed of-- (i) the Secretary of Energy, or the Secretary's designee, who shall chair the interagency working group and shall provide staff for carrying out the functions of the interagency working group; (ii) representatives of-- (I) the Department of Energy; (II) the Department of Commerce; (III) the Department of Defense; (IV) the Department of the Treasury; (V) the Department of State; (VI) the Environmental Protection Agency; (VII) the United States Agency for International Development; (VIII) the Export-Import Bank of the United States; (IX) the Trade and Development Agency; (X) the Small Business Administration; (XI) the Office of the United States Trade Representative; and (XII) other Federal agencies, as determined by the President. (C) The heads of appropriate agencies shall detail such personnel and furnish such services to the interagency group, with or without reimbursement, as may be necessary to carry out the group's functions. (3) Duties of the interagency working group.-- (A) Not later than 6 months after the date of enactment of this Act, the interagency working group established under paragraph (2)(A) shall identify the actions necessary to promote the safe development and application in foreign countries of nuclear energy products and services in order to-- (i) increase electricity generation from nuclear energy sources through development of new generation facilities; (ii) improve the efficiency, safety, and reliability of existing nuclear generating facilities through modifications; and (iii) enhance the safe treatment, handling, storage, and disposal of used nuclear fuel. (B) Not later than 6 months after the date of enactment of this Act, the interagency working group shall identify mechanisms (including tax stimulus for investment, loans and loan guarantees, and grants) necessary for United States companies to increase their capacity to produce or provide nuclear energy products and services, and to increase their exports of nuclear energy products and services. The interagency working group shall identify administrative or legislative initiatives necessary to-- (i) encourage United States companies to increase their manufacturing capacity for nuclear energy products; (ii) provide technical and financial assistance and support to small and mid-sized businesses to establish quality assurance programs in accordance with domestic and international nuclear quality assurance code requirements; (iii) encourage, through financial incentives, private sector capital investment to expand manufacturing capacity; and (iv) provide technical assistance and financial incentives to small and mid-sized businesses to develop the workforce necessary to increase manufacturing capacity and meet domestic and international nuclear quality assurance code requirements. (C) Not later than 9 months after the date of enactment of this Act, the interagency working group shall provide a report to Congress on its findings under subparagraphs (A) and (B), including recommendations for new legislative authority where necessary. (4) Trade assistance.--The interagency working group shall encourage the member agencies of the interagency working group to-- (A) provide technical training and education for international development personnel and local users in their own country; (B) provide financial and technical assistance to nonprofit institutions that support the marketing and export efforts of domestic companies that provide nuclear energy products and services; (C) develop nuclear energy projects in foreign countries; (D) provide technical assistance and training materials to loan officers of the World Bank, international lending institutions, commercial and energy attaches at embassies of the United States and other appropriate personnel in order to provide information about nuclear energy products and services to foreign governments or other potential project sponsors; (E) support, through financial incentives, private sector efforts to commercialize and export nuclear energy products and services in accordance with the subsidy codes of the World Trade Organization; and (F) augment budgets for trade and development programs in order to support pre-feasibility or feasibility studies for projects that utilize nuclear energy products and services. (5) Authorization of appropriations.--There are authorized to be appropriated to the Secretary of Energy for purposes of carrying out this subtitle $20,000,000 for fiscal years 2008 and 2009. (b) Credit for Qualifying Nuclear Power Manufacturing.--Subpart E of part IV of subchapter A of chapter 1 of the Internal Revenue Code is amended by inserting after section 48B the following new section: ``SEC. 48C. QUALIFYING NUCLEAR POWER MANUFACTURING CREDIT. ``(a) In General.--For purposes of section 46, the qualifying nuclear power manufacturing credit for any taxable year is an amount equal to 20 percent of the qualified investment for such taxable year. ``(b) Qualified Investment.-- ``(1) In general.--For purposes of subsection (a), the qualified investment for any taxable year is the basis of eligible property placed in service by the taxpayer during such taxable year-- ``(A) which is either part of a qualifying nuclear power manufacturing project or is qualifying nuclear power manufacturing equipment, ``(B)(i) the construction, reconstruction, or erection of which is completed by the taxpayer, or ``(ii) which is acquired by the taxpayer if the original use of such property commences with the taxpayer, ``(C) with respect to which depreciation (or amortization in lieu of depreciation) is allowable, and ``(D) which is placed in service on or before December 31, 2015. ``(2) Special rule for certain subsidized property.--Rules similar to section 48(a)(4) shall apply for purposes of this section. ``(3) Certain qualified progress expenditures rules made applicable.--Rules similar to the rules of subsections (c)(4) and (d) of section 46 (as in effect on the day before the enactment of the Revenue Reconciliation Act of 1990) shall apply for purposes of this section. ``(c) Definitions.--For purposes of this section-- ``(1) Qualifying nuclear power manufacturing project.--The term `qualifying nuclear power manufacturing project' means any project which is designed primarily to enable the taxpayer to produce or test equipment necessary for the construction or operation of a nuclear power plant. ``(2) Qualifying nuclear power manufacturing equipment.-- The term `qualifying nuclear power manufacturing equipment' means machine tools and other similar equipment, including computers and other peripheral equipment, acquired or constructed primarily to enable the taxpayer to produce or test equipment necessary for the construction or operation of a nuclear power plant. ``(3) Project.--The term `project' includes any building constructed to house qualifying nuclear power manufacturing equipment.''. (c) Conforming Amendments.-- (1) Additional investment credit.--Section 46 of such Code is amended-- (A) by striking ``and'' at the end of paragraph (3); (B) by striking the period at the end of paragraph (4) and inserting ``, and''; and (C) by inserting after paragraph (4) the following new paragraph: ``(5) the qualifying nuclear power manufacturing credit.''. (2) Application of section 49.--Subparagraph (C) of section 49(a)(1) of such Code is amended by-- (A) by striking ``and'' at the end of clause (iii); (B) by striking the period at the end of clause (iv) and inserting ``, and''; and (C) by inserting after clause (iv) the following new clause: ``(v) the basis of any property which is part of a qualifying nuclear power equipment manufacturing project under section 48C.''. (3) Table of sections.--The table of sections preceding section 46 of such Code is amended by inserting after the item for section 48B the following new line: ``Sec. 48C. Qualifying nuclear power manufacturing credit.''. (d) Effective Date.--The amendments made by this section shall apply to property (1) the construction, reconstruction, or erection of which of began after the date of enactment, or (2) which was acquired by the taxpayer on or after the date of enactment and not pursuant to a binding contract which was in effect on the day prior to the date of enactment. SEC. 184. NUCLEAR ENERGY WORKFORCE. Section 1101 of the Energy Policy Act of 2005 (42 U.S.C. 16411) is amended-- (1) by redesignating subsection (d) as subsection (e); and (2) by inserting after subsection (c) the following: ``(d) Workforce Training.-- ``(1) In general.--The Secretary of Labor, in cooperation with the Secretary of Energy, shall promulgate regulations to implement a program to provide workforce training to meet the high demand for workers skilled in the nuclear utility and nuclear energy products and services industries. ``(2) Consultation.--In carrying out this subsection, the Secretary of Labor shall consult with representatives of the nuclear utility and nuclear energy products and services industries, and organized labor, concerning skills that are needed in those industries. ``(3) Authorization of appropriations.--There are authorized to be appropriated to the Secretary of Labor, working in coordination with the Secretaries of Education and Energy $20,000,000 for each of fiscal years 2008 through 2012 for use in implementing a program to provide workforce training to meet the high demand for workers skilled in the nuclear utility and nuclear energy products and services industries.''. SEC. 185. NATIONAL NUCLEAR ENERGY COUNCIL. (a) In General.-- (1) The Secretary of Energy shall establish a National Nuclear Energy Council (hereinafter the ``Council''). (2) The National Nuclear Energy Council shall be subject to the requirements of the Federal Advisory Committee Act (5 U.S.C. Appendix 2). (b) Purpose.--The National Nuclear Energy Council shall-- (1) serve in an advisory capacity to the Secretary of Energy regarding nuclear energy on matters submitted to the Council by the Secretary of Energy; and (2) advise, inform, and make recommendations to the Secretary of Energy, and represent the views of the nuclear energy industry with respect to any matter relating to nuclear energy. (c) Membership and Organization.-- (1) The members of the Council shall be appointed by the Secretary of Energy. (2) The Council may establish such study and administrative committees as it may deem appropriate. Study committees shall only assist the Council in preparing its advice, information, or recommendations to the Secretary of Energy. Administrative committees shall be formed solely for the purpose of assisting the Council or its Chairman in the management of the internal affairs of the Council. (3) The officers of the Council shall consist of a Chairman, a Vice Chairman, and such other officers as may be approved by the Council. The Chairman and Vice Chairman must be members of the Council and shall receive no compensation for service as officers of the Council. (4) The Secretary of Energy shall be Cochairman of the Council. If the Secretary of Energy designates a full-time, salaried official of the Department of Energy as his alternate, such alternate may exercise any duties of the Secretary of Energy and may perform any function on the Council otherwise reserved for the Secretary of Energy. (5) The Chairman and the Vice Chairman shall be elected by the Council at its organizational meeting to serve until their successors are elected at the next organizational meeting of the Council. (d) Meetings.-- (1) Regular meetings of the Council shall be held at least twice each year at times determined by the Chairman and approved by the Government Cochairman. (2) No meeting of the Council shall be held unless the Government Cochairman approves the agenda thereof, approves the calling thereof, and is present thereat. (3) The time and place of all Council meetings shall be given general publicity and such meetings shall be open to the public. (e) Studies by the Council.-- (1) The Council may establish study committees to prepare reports for the consideration of the Council pursuant to requests from the Secretary of Energy for advice, information, and recommendations. (2) The Secretary of Energy or a full-time employee of the Department of Energy designated by the Secretary shall be the Cochairman of each study committee. (3) The members of study committees shall be selected from the Council membership on the basis of their training, experience, and general qualifications to deal with the matters assigned. SEC. 186. NUCLEAR WASTE MANAGEMENT. (a) High Level Waste Authority.-- (1) Establishment.--Not later than the earlier of-- (A) 90 days after the submittal of a license application for a repository at Yucca Mountain; or (B) 1 year after the date of enactment of this Act, the President shall establish a High Level Waste Authority (in this section referred to as the ``Authority''). (2) Duties.--The Authority-- (A) shall assume the responsibilities of the Secretary of Energy with respect to contracts entered into under section 302(a) of the Nuclear Waste Policy Act of 1982 (42 U.S.C. 10222(a)); (B) shall consider, as appropriate, all reasonable used fuel options in addition to direct disposal, including recycling, interim storage, and alternate geologic repository sites outside the State of Nevada; (C) may enter into contracts with civilian nuclear power reactor owners and operators for used fuel management, including recycling, fuel fabrication, and sale or disposition of materials derived from recycling; and (D) may negotiate with willing host communities or States for supporting facilities and activities. (3) Membership.--The Authority shall consist of 7 members, to be appointed by the President, with the advice and consent of the Senate, from among individuals who-- (A) are United States citizens; (B) have experience in nuclear industry corporate management; and (C) have large corporation management expertise. (4) Terms.-- (A) In general.--Except as provided in subparagraph (B), members of the Authority shall serve for terms of 5 years, and may serve for not more than 2 terms. (B) Initial terms.--Of the individuals appointed initially to the Authority-- (i) 2 shall be appointed for an initial term of 5 years; (ii) 2 shall be appointed for an initial term of 4 years; (iii) 2 shall be appointed for an initial term of 3 years; and (iv) 1 shall be appointed for an initial term of 2 years. (C) Vacancies.--The President, with the advice and consent of the Senate, shall appoint individuals to fill vacancies on the Authority, in the same manner as the original appointment was made, to serve for the remainder of the term vacated. (5) Travel expenses and per diem.--Members of the Authority shall be reimbursed by the Authority for travel expenses incurred as part of their service on the Authority, including per diem in lieu of subsistence in accordance with subchapter I of chapter 57 of title 5, United States Code, for each day on which they are engaged in the business of the Authority. (6) Report to congress.--Not later than 1 year after the Authority is established under paragraph (1), and annually thereafter, the Authority shall transmit to the Congress a report on its activities. (b) Recycling Regulations.--Not later than 1 year after the date of enactment of this Act, the Nuclear Regulatory Commission, in collaboration with the Secretary of Energy, shall issue regulations for licensing facilities for the recovery and use of plutonium from used fuel recycling that provide appropriate protections for the common defense and security. (c) Funding.--The Authority's activities shall be funded through-- (1) the Nuclear Waste Fund established under section 302(c) of the Nuclear Waste Policy Act of 1982 (42 U.S.C. 10222(c)); (2) appropriations authorized under subsection (e); and (3) any contributions provided by State or local governments or from the private sector. (d) Research and Development.--Nothing in this section shall be construed to reduce the responsibility of the Secretary of Energy to conduct research and development on advanced nuclear fuel cycles and separation technologies. (e) Authorization of Appropriations.--There are authorized to be appropriated to the Secretary of Energy for carrying out this section such sums as may be necessary. TITLE II--INCREASE OUR UTILIZATION EFFICIENCY Subtitle A--Coal to Liquids SEC. 201. LOCATION OF COAL-TO-LIQUID MANUFACTURING FACILITIES. The Secretary of Energy, in coordination with the head of any affected agency, shall promulgate such regulations as the Secretary determines to be necessary to support the development on Federal land (including land of the Department of Energy, military bases, and military installations closed or realigned under the defense base closure and realignment) of coal-to-liquid manufacturing facilities and associated infrastructure, including the capture, transportation, or sequestration of carbon dioxide. SEC. 202. AUTHORIZATION TO CONDUCT RESEARCH, DEVELOPMENT, TESTING, AND EVALUATION OF ASSURED DOMESTIC FUELS. Of the amount authorized to be appropriated for the Air Force for research, development, test, and evaluation, $10,000,000 may be made available for the Air Force Research Laboratory to continue support efforts to test, qualify, and procure synthetic fuels developed from coal for aviation jet use. SEC. 203. COAL-TO-LIQUID LONG-TERM FUEL PROCUREMENT AND DEPARTMENT OF DEFENSE DEVELOPMENT. Section 2922a of title 10, United States Code is amended-- (1) in subsection (b)-- (A) by inserting ``(1)'' before ``The Secretary''; and (B) by adding at the end the following: ``(2)(A) The Secretary of Defense may enter into contracts or other agreements with private companies or other entities to develop and operate coal-to-liquid manufacturing facilities on or near military installations. ``(B) In entering into contracts and other agreements under subparagraph (A), the Secretary shall consider land availability, testing opportunities, and proximity to raw materials.''; and (2) in subsection (d)-- (A) by striking ``Subject to applicable provisions of law, any'' and inserting ``Any''; (B) by inserting after ``covered fuel'' the following: ``or coal-to-liquid fuel''; and (C) by striking ``1 or more years'' and inserting ``up to 25 years''. Subtitle B--Energy Tax Provisions SEC. 211. SHORT TITLE; AMENDMENT OF 1986 CODE. (a) Short Title.--This subtitle may be cited as the ``Renewable Energy and Energy Conservation Tax Act of 2008''. (b) Amendment of 1986 Code.--Except as otherwise expressly provided, whenever in this subtitle an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1986. PART 1--PRODUCTION INCENTIVES SEC. 221. EXTENSION AND MODIFICATION OF RENEWABLE ENERGY CREDIT. (a) Extension of Credit.--Each of the following provisions of section 45(d) (relating to qualified facilities) is amended by striking ``January 1, 2009'' and inserting ``January 1, 2012'': (1) Paragraph (1). (2) Clauses (i) and (ii) of paragraph (2)(A). (3) Clauses (i)(I) and (ii) of paragraph (3)(A). (4) Paragraph (4). (5) Paragraph (5). (6) Paragraph (6). (7) Paragraph (7). (8) Subparagraphs (A) and (B) of paragraph (9). (b) Modification of Credit Phaseout.-- (1) Repeal of phaseout.--Subsection (b) of section 45 is amended-- (A) by striking paragraph (1), and (B) by striking ``the 8 cent amount in paragraph (1),'' in paragraph (2) thereof. (2) Limitation based on investment in facility.--Subsection (b) of section 45 is amended by inserting before paragraph (2) the following new paragraph: ``(1) Limitation based on investment in facility.-- ``(A) In general.--In the case of any qualified facility originally placed in service after December 31, 2009, the amount of the credit determined under subsection (a) for any taxable year with respect to electricity produced at such facility shall not exceed the product of-- ``(i) the applicable percentage with respect to such facility, multiplied by ``(ii) the eligible basis of such facility. ``(B) Carryforward of unused limitation and excess credit.-- ``(i) Unused limitation.--If the limitation imposed under subparagraph (A) with respect to any facility for any taxable year exceeds the prelimitation credit for such facility for such taxable year, the limitation imposed under subparagraph (A) with respect to such facility for the succeeding taxable year shall be increased by the amount of such excess. ``(ii) Excess credit.--If the prelimitation credit with respect to any facility for any taxable year exceeds the limitation imposed under subparagraph (A) with respect to such facility for such taxable year, the credit determined under subsection (a) with respect to such facility for the succeeding taxable year (determined before the application of subparagraph (A) for such succeeding taxable year) shall be increased by the amount of such excess. With respect to any facility, no amount may be carried forward under this clause to any taxable year beginning after the 10-year period described in subsection (a)(2)(A)(ii) with respect to such facility. ``(iii) Prelimitation credit.--The term `prelimitation credit' with respect to any facility for a taxable year means the credit determined under subsection (a) with respect to such facility for such taxable year, determined without regard to subparagraph (A) and after taking into account any increase for such taxable year under clause (ii). ``(C) Applicable percentage.--For purposes of this paragraph-- ``(i) In general.--The term `applicable percentage' means, with respect to any facility, the appropriate percentage prescribed by the Secretary for the month in which such facility is originally placed in service. ``(ii) Method of prescribing applicable percentages.--The applicable percentages prescribed by the Secretary for any month under clause (i) shall be percentages which yield over a 10-year period amounts of limitation under subparagraph (A) which have a present value equal to 35 percent of the eligible basis of the facility. ``(iii) Method of discounting.--The present value under clause (ii) shall be determined-- ``(I) as of the last day of the 1st year of the 10-year period referred to in clause (ii), ``(II) by using a discount rate equal to the greater of 110 percent of the Federal long-term rate as in effect under section 1274(d) for the month preceding the month for which the applicable percentage is being prescribed, or 4.5 percent, and ``(III) by taking into account the limitation under subparagraph (A) for any year on the last day of such year. ``(D) Eligible basis.--For purposes of this paragraph-- ``(i) In general.--The term `eligible basis' means, with respect to any facility, the sum of-- ``(I) the basis of such facility determined as of the time that such facility is originally placed in service, and ``(II) the portion of the basis of any shared qualified property which is properly allocable to such facility under clause (ii). ``(ii) Rules for allocation.--For purposes of subclause (II) of clause (i), the basis of shared qualified property shall be allocated among all qualified facilities which are projected to be placed in service and which require utilization of such property in proportion to projected generation from such facilities. ``(iii) Shared qualified property.--For purposes of this paragraph, the term `shared qualified property' means, with respect to any facility, any property described in section 168(e)(3)(B)(vi)-- ``(I) which a qualified facility will require for utilization of such facility, and ``(II) which is not a qualified facility. ``(iv) Special rule relating to geothermal facilities.--In the case of any qualified facility using geothermal energy to produce electricity, the basis of such facility for purposes of this paragraph shall be determined as though intangible drilling and development costs described in section 263(c) were capitalized rather than expensed. ``(E) Special rule for first and last year of credit period.--In the case of any taxable year any portion of which is not within the 10-year period described in subsection (a)(2)(A)(ii) with respect to any facility, the amount of the limitation under subparagraph (A) with respect to such facility shall be reduced by an amount which bears the same ratio to the amount of such limitation (determined without regard to this subparagraph) as such portion of the taxable year which is not within such period bears to the entire taxable year. ``(F) Election to treat all facilities placed in service in a year as 1 facility.--At the election of the taxpayer, all qualified facilities which are part of the same project and which are placed in service during the same calendar year shall be treated for purposes of this section as 1 facility which is placed in service at the mid-point of such year or the first day of the following calendar year.''. (c) Trash Facility Clarification.--Paragraph (7) of section 45(d) is amended-- (1) by striking ``facility which burns'' and inserting ``facility (other than a facility described in paragraph (6)) which uses'', and (2) by striking ``combustion''. (d) Expansion of Biomass Facilities.-- (1) Open-loop biomass facilities.--Paragraph (3) of section 45(d) is amended by redesignating subparagraph (B) as subparagraph (C) and by inserting after subparagraph (A) the following new subparagraph: ``(B) Expansion of facility.--Such term shall include a new unit placed in service after the date of the enactment of this subparagraph in connection with a facility described in subparagraph (A), but only to the extent of the increased amount of electricity produced at the facility by reason of such new unit.''. (2) Closed-loop biomass facilities.--Paragraph (2) of section 45(d) is amended by redesignating subparagraph (B) as subparagraph (C) and inserting after subparagraph (A) the following new subparagraph: ``(B) Expansion of facility.--Such term shall include a new unit placed in service after the date of the enactment of this subparagraph in connection with a facility described in subparagraph (A)(i), but only to the extent of the increased amount of electricity produced at the facility by reason of such new unit.''. (e) Effective Date.-- (1) In general.--Except as otherwise provided in this subsection, the amendments made by this section shall apply to property originally placed in service after December 31, 2008. (2) Repeal of credit phaseout.--The amendments made by subsection (b)(1) shall apply to taxable years ending after December 31, 2008. (3) Limitation based on investment in facility.--The amendment made by subsection (b)(2) shall apply to property originally placed in service after December 31, 2009. (4) Trash facility clarification.--The amendments made by subsection (c) shall apply to electricity produced and sold after the date of the enactment of this Act. (5) Expansion of biomass facilities.--The amendments made by subsection (d) shall apply to property placed in service after the date of the enactment of this Act. SEC. 222. PRODUCTION CREDIT FOR ELECTRICITY PRODUCED FROM MARINE RENEWABLES. (a) In General.--Paragraph (1) of section 45(c) (relating to resources) is amended by striking ``and'' at the end of subparagraph (G), by striking the period at the end of subparagraph (H) and inserting ``, and'', and by adding at the end the following new subparagraph: ``(I) marine and hydrokinetic renewable energy.''. (b) Marine Renewables.--Subsection (c) of section 45 is amended by adding at the end the following new paragraph: ``(10) Marine and hydrokinetic renewable energy.-- ``(A) In general.--The term `marine and hydrokinetic renewable energy' means energy derived from-- ``(i) waves, tides, and currents in oceans, estuaries, and tidal areas, ``(ii) free flowing water in rivers, lakes, and streams, ``(iii) free flowing water in an irrigation system, canal, or other man-made channel, including projects that utilize nonmechanical structures to accelerate the flow of water for electric power production purposes, or ``(iv) differentials in ocean temperature (ocean thermal energy conversion). ``(B) Exceptions.--Such term shall not include any energy which is derived from any source which utilizes a dam, diversionary structure (except as provided in subparagraph (A)(iii)), or impoundment for electric power production purposes.''. (c) Definition of Facility.--Subsection (d) of section 45 is amended by adding at the end the following new paragraph: ``(11) Marine and hydrokinetic renewable energy facilities.--In the case of a facility producing electricity from marine and hydrokinetic renewable energy, the term `qualified facility' means any facility owned by the taxpayer-- ``(A) which has a nameplate capacity rating of at least 150 kilowatts, and ``(B) which is originally placed in service on or after the date of the enactment of this paragraph and before January 1, 2012.''. (d) Credit Rate.--Subparagraph (A) of section 45(b)(4) is amended by striking ``or (9)'' and inserting ``(9), or (11)''. (e) Coordination With Small Irrigation Power.--Paragraph (5) of section 45(d), as amended by section 221(a), is amended by striking ``January 1, 2012'' and inserting ``the date of the enactment of paragraph (11)''. (f) Effective Date.--The amendments made by this section shall apply to electricity produced and sold after the date of the enactment of this Act, in taxable years ending after such date. SEC. 223. EXTENSION OF ELECTRICITY PRODUCTION TAX CREDIT TO ELECTRICITY PRODUCED FROM THE PRODUCTION OF SUBSTITUTE NATURAL GAS FROM REFINED COAL OR PETCOKE. (a) Refined Coal.--Clauses (i) and (ii) of section 45(c)(7)(A) of the Internal Revenue Code of 1986 (defining refined coal) are amended to read as follows: ``(i) is a liquid, gaseous or solid fuel produced from coal (including lignite), high carbon fly ash or petroleum coke, in each case including such fuel used as a feedstock, ``(ii) is sold by the taxpayer with the reasonable expectation that it will be used for the purpose of producing steam, heat, or electricity,''. (b) Special Rules Relating to Refined Coal Production Facilities.-- Subparagraph (A) of section 45(e)(8) of such Code (determination of credit amount) is amended to read as follows: ``(A) Determination of credit amount.--In the case of a producer of refined coal, the credit determined under this section (without regard to this paragraph) for any taxable year-- ``(i) shall be-- ``(I) in the case of the production of electricity, be 2.0 cents multiplied by the kilowatt hours of electricity produced, and ``(II) in any other case, be $4.375 per ton of qualified refined coal produced (or, in the case of refined coal that is a liquid or gaseous fuel, 40 cents per million BTU of refined coal), and ``(ii) for electricity or refined coal (as the case may be)-- ``(I) produced by the taxpayer at a refined coal production facility during the 10-year period beginning on the date the facility was originally placed in service, and ``(II) sold by the taxpayer to an unrelated person during such 10-year period and such taxable year.''. (c) Inflation Adjustment.--Section 45(b)(2) of such Code (related to credit and phaseout adjustment based on inflation) is amended by-- (1) inserting ``and the 40 cents per million BTU amount'' after ``$4.375 amount'', and (2) striking ``and'' after ``subsection (e)(8)(A),'' and inserting ``the $4.375 amount''. (d) Effective Date.--The amendments made by this section shall apply to refined coal produced and sold after December 31, 2010. SEC. 224. EXTENSION AND MODIFICATION OF ENERGY CREDIT. (a) Extension of Credit.-- (1) Solar energy property.--Paragraphs (2)(A)(i)(II) and (3)(A)(ii) of section 48(a) (relating to energy credit) are each amended by striking ``January 1, 2009'' and inserting ``January 1, 2017''. (2) Fuel cell property.--Subparagraph (E) of section 48(c)(1) (relating to qualified fuel cell property) is amended by striking ``December 31, 2008'' and inserting ``December 31, 2016''. (b) Allowance of Energy Credit Against Alternative Minimum Tax.-- Subparagraph (B) of section 38(c)(4) (relating to specified credits) 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 credit determined under section 46 to the extent that such credit is attributable to the energy credit determined under section 48.''. (c) Increase of Credit Limitation for Fuel Cell Property.-- Subparagraph (B) of section 48(c)(1) is amended by striking ``$500'' and inserting ``$1,500''. (d) Public Electric Utility Property Taken Into Account.-- (1) In general.--Paragraph (3) of section 48(a) is amended by striking the second sentence thereof. (2) Conforming amendments.-- (A) Paragraph (1) of section 48(c) is amended by striking subparagraph (D) and redesignating subparagraph (E) as subparagraph (D). (B) Paragraph (2) of section 48(c) is amended by striking subparagraph (D) and redesignating subparagraph (E) as subparagraph (D). (e) Effective Date.-- (1) In general.--Except as otherwise provided in this subsection, the amendments made by this section shall take effect on the date of the enactment of this Act. (2) Allowance against alternative minimum tax.--The amendments made by subsection (b) shall apply to credits determined under section 46 of the Internal Revenue Code of 1986 in taxable years beginning after the date of the enactment of this Act and to carrybacks of such credits. (3) Increase in limitation for fuel cell property.--The amendment made by subsection (c) shall apply to periods after the date of the enactment of this Act, 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). (4) Public electric utility property.--The amendments made by subsection (d) shall apply to periods after February 13, 2008, 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. 225. NEW CLEAN RENEWABLE ENERGY BONDS. (a) In General.--Part IV of subchapter A of chapter 1 (relating to credits against tax) is amended by adding at the end the following new subpart: ``Subpart I--Qualified Tax Credit Bonds ``Sec. 54A. Credit to holders of qualified tax credit bonds. ``Sec. 54B. New clean renewable energy bonds. ``SEC. 54A. CREDIT TO HOLDERS OF QUALIFIED TAX CREDIT BONDS. ``(a) Allowance of Credit.--If a taxpayer holds a qualified tax credit bond on one or more credit allowance dates of the bond during any taxable year, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the sum of the credits determined under subsection (b) with respect to such dates. ``(b) Amount of Credit.-- ``(1) In general.--The amount of the credit determined under this subsection with respect to any credit allowance date for a qualified tax credit bond is 25 percent of the annual credit determined with respect to such bond. ``(2) Annual credit.--The annual credit determined with respect to any qualified tax credit bond is the product of-- ``(A) the applicable credit rate, multiplied by ``(B) the outstanding face amount of the bond. ``(3) Applicable credit rate.--For purposes of paragraph (2), the applicable credit rate is the rate which the Secretary estimates will permit the issuance of qualified tax credit bonds with a specified maturity or redemption date without discount and without interest cost to the qualified issuer. The applicable credit rate with respect to any qualified tax credit bond shall be determined as of the first day on which there is a binding, written contract for the sale or exchange of the bond. ``(4) Special rule for issuance and redemption.--In the case of a bond which is issued during the 3-month period ending on a credit allowance date, the amount of the credit determined under this subsection with respect to such credit allowance date shall be a ratable portion of the credit otherwise determined based on the portion of the 3-month period during which the bond is outstanding. A similar rule shall apply when the bond is redeemed or matures. ``(c) Limitation Based on Amount of Tax.-- ``(1) In general.--The credit allowed under subsection (a) for any taxable year shall not exceed the excess of-- ``(A) the sum of the regular tax liability (as defined in section 26(b)) plus the tax imposed by section 55, over ``(B) the sum of the credits allowable under this part (other than subpart C and this subpart). ``(2) Carryover of unused credit.--If the credit allowable under subsection (a) exceeds the limitation imposed by paragraph (1) for such taxable year, such excess shall be carried to the succeeding taxable year and added to the credit allowable under subsection (a) for such taxable year (determined before the application of paragraph (1) for such succeeding taxable year). ``(d) Qualified Tax Credit Bond.--For purposes of this section-- ``(1) Qualified tax credit bond.--The term `qualified tax credit bond' means a new clean renewable energy bond which is part of an issue that meets the requirements of paragraphs (2), (3), (4), (5), and (6). ``(2) Special rules relating to expenditures.-- ``(A) In general.--An issue shall be treated as meeting the requirements of this paragraph if, as of the date of issuance, the issuer reasonably expects-- ``(i) 100 percent or more of the available project proceeds to be spent for 1 or more qualified purposes within the 3-year period beginning on such date of issuance, and ``(ii) a binding commitment with a third party to spend at least 10 percent of such available project proceeds will be incurred within the 6-month period beginning on such date of issuance. ``(B) Failure to spend required amount of bond proceeds within 3 years.-- ``(i) In general.--To the extent that less than 100 percent of the available project proceeds of the issue are expended by the close of the expenditure period for 1 or more qualified purposes, the issuer shall redeem all of the nonqualified bonds within 90 days after the end of such period. For purposes of this paragraph, the amount of the nonqualified bonds required to be redeemed shall be determined in the same manner as under section 142. ``(ii) Expenditure period.--For purposes of this subpart, the term `expenditure period' means, with respect to any issue, the 3-year period beginning on the date of issuance. Such term shall include any extension of such period under clause (iii). ``(iii) Extension of period.--Upon submission of a request prior to the expiration of the expenditure period (determined without regard to any extension under this clause), the Secretary may extend such period if the issuer establishes that the failure to expend the proceeds within the original expenditure period is due to reasonable cause and the expenditures for qualified purposes will continue to proceed with due diligence. ``(C) Qualified purpose.--For purposes of this paragraph, the term `qualified purpose' means a purpose specified in section 54B(a)(1). ``(D) Reimbursement.--For purposes of this subtitle, available project proceeds of an issue shall be treated as spent for a qualified purpose if such proceeds are used to reimburse the issuer for amounts paid for a qualified purpose after the date that the Secretary makes an allocation of bond limitation with respect to such issue, but only if-- ``(i) prior to the payment of the original expenditure, the issuer declared its intent to reimburse such expenditure with the proceeds of a qualified tax credit bond, ``(ii) not later than 60 days after payment of the original expenditure, the issuer adopts an official intent to reimburse the original expenditure with such proceeds, and ``(iii) the reimbursement is made not later than 18 months after the date the original expenditure is paid. ``(3) Reporting.--An issue shall be treated as meeting the requirements of this paragraph if the issuer of qualified tax credit bonds submits reports similar to the reports required under section 149(e). ``(4) Special rules relating to arbitrage.-- ``(A) In general.--An issue shall be treated as meeting the requirements of this paragraph if the issuer satisfies the requirements of section 148 with respect to the proceeds of the issue. ``(B) Special rule for investments during expenditure period.--An issue shall not be treated as failing to meet the requirements of subparagraph (A) by reason of any investment of available project proceeds during the expenditure period. ``(C) Special rule for reserve funds.--An issue shall not be treated as failing to meet the requirements of subparagraph (A) by reason of any fund which is expected to be used to repay such issue if-- ``(i) such fund is funded at a rate not more rapid than equal annual installments, ``(ii) such fund is funded in a manner reasonably expected to result in an amount not greater than an amount necessary to repay the issue, and ``(iii) the yield on such fund is not greater than the discount rate determined under paragraph (5)(B) with respect to the issue. ``(5) Maturity limitation.-- ``(A) In general.--An issue shall not be treated as meeting the requirements of this paragraph if the maturity of any bond which is part of such issue exceeds the maximum term determined by the Secretary under subparagraph (B). ``(B) Maximum term.--During each calendar month, the Secretary shall determine the maximum term permitted under this paragraph for bonds issued during the following calendar month. Such maximum term shall be the term which the Secretary estimates will result in the present value of the obligation to repay the principal on the bond being equal to 50 percent of the face amount of such bond. Such present value shall be determined using as a discount rate the average annual interest rate of tax-exempt obligations having a term of 10 years or more which are issued during the month. If the term as so determined is not a multiple of a whole year, such term shall be rounded to the next highest whole year. ``(6) Prohibition on financial conflicts of interest.--An issue shall be treated as meeting the requirements of this paragraph if the issuer certifies that-- ``(A) applicable State and local law requirements governing conflicts of interest are satisfied with respect to such issue, and ``(B) if the Secretary prescribes additional conflicts of interest rules governing the appropriate Members of Congress, Federal, State, and local officials, and their spouses, such additional rules are satisfied with respect to such issue. ``(e) Other Definitions.--For purposes of this subchapter-- ``(1) Credit allowance date.--The term `credit allowance date' means-- ``(A) March 15, ``(B) June 15, ``(C) September 15, and ``(D) December 15. Such term includes the last day on which the bond is outstanding. ``(2) Bond.--The term `bond' includes any obligation. ``(3) State.--The term `State' includes the District of Columbia and any possession of the United States. ``(4) Available project proceeds.--The term `available project proceeds' means-- ``(A) the excess of-- ``(i) the proceeds from the sale of an issue, over ``(ii) the issuance costs financed by the issue (to the extent that such costs do not exceed 2 percent of such proceeds), and ``(B) the proceeds from any investment of the excess described in subparagraph (A). ``(f) Credit Treated as Interest.--For purposes of this subtitle, the credit determined under subsection (a) shall be treated as interest which is includible in gross income. ``(g) S Corporations and Partnerships.--In the case of a tax credit bond held by an S corporation or partnership, the allocation of the credit allowed by this section to the shareholders of such corporation or partners of such partnership shall be treated as a distribution. ``(h) Bonds Held by Regulated Investment Companies and Real Estate Investment Trusts.--If any qualified tax credit bond is held by a regulated investment company or a real estate investment trust, the credit determined under subsection (a) shall be allowed to shareholders of such company or beneficiaries of such trust (and any gross income included under subsection (f) with respect to such credit shall be treated as distributed to such shareholders or beneficiaries) under procedures prescribed by the Secretary. ``(i) Credits May Be Stripped.--Under regulations prescribed by the Secretary-- ``(1) In general.--There may be a separation (including at issuance) of the ownership of a qualified tax credit bond and the entitlement to the credit under this section with respect to such bond. In case of any such separation, the credit under this section shall be allowed to the person who on the credit allowance date holds the instrument evidencing the entitlement to the credit and not to the holder of the bond. ``(2) Certain rules to apply.--In the case of a separation described in paragraph (1), the rules of section 1286 shall apply to the qualified tax credit bond as if it were a stripped bond and to the credit under this section as if it were a stripped coupon. ``SEC. 54B. NEW CLEAN RENEWABLE ENERGY BONDS. ``(a) New Clean Renewable Energy Bond.--For purposes of this subpart, the term `new clean renewable energy bond' means any bond issued as part of an issue if-- ``(1) 100 percent of the available project proceeds of such issue are to be used for capital expenditures incurred by public power providers or cooperative electric companies for one or more qualified renewable energy facilities, ``(2) the bond is issued by a qualified issuer, and ``(3) the issuer designates such bond for purposes of this section. ``(b) Reduced Credit Amount.--The annual credit determined under section 54A(b) with respect to any new clean renewable energy bond shall be 70 percent of the amount so determined without regard to this subsection. ``(c) Limitation on Amount of Bonds Designated.-- ``(1) In general.--The maximum aggregate face amount of bonds which may be designated under subsection (a) by any issuer shall not exceed the limitation amount allocated under this subsection to such issuer. ``(2) National limitation on amount of bonds designated.-- There is a national new clean renewable energy bond limitation of $2,000,000,000 which shall be allocated by the Secretary as provided in paragraph (3), except that-- ``(A) not more than 60 percent thereof may be allocated to qualified projects of public power providers, and ``(B) not more than 40 percent thereof may be allocated to qualified projects of cooperative electric companies. ``(3) Method of allocation.-- ``(A) Allocation among public power providers.-- After the Secretary determines the qualified projects of public power providers which are appropriate for receiving an allocation of the national new clean renewable energy bond limitation, the Secretary shall, to the maximum extent practicable, make allocations among such projects in such manner that the amount allocated to each such project bears the same ratio to the cost of such project as the limitation under subparagraph (2)(A) bears to the cost of all such projects. ``(B) Allocation among cooperative electric companies.--The Secretary shall make allocations of the amount of the national new clean renewable energy bond limitation described in paragraph (2)(B) among qualified projects of cooperative electric companies in such manner as the Secretary determines appropriate. ``(d) Definitions.--For purposes of this section-- ``(1) Qualified renewable energy facility.--The term `qualified renewable energy facility' means a qualified facility (as determined under section 45(d) without regard to paragraphs (8) and (10) thereof and to any placed in service date) owned by a public power provider or a cooperative electric company. ``(2) Public power provider.--The term `public power provider' means a State utility with a service obligation, as such terms are defined in section 217 of the Federal Power Act (as in effect on the date of the enactment of this paragraph). ``(3) Cooperative electric company.--The term `cooperative electric company' means a mutual or cooperative electric company described in section 501(c)(12) or section 1381(a)(2)(C). ``(4) Clean renewable energy bond lender.--The term `clean renewable energy bond lender' means a lender which is a cooperative which is owned by, or has outstanding loans to, 100 or more cooperative electric companies and is in existence on February 1, 2002, and shall include any affiliated entity which is controlled by such lender. ``(5) Qualified issuer.--The term `qualified issuer' means a public power provider, a cooperative electric company, a clean renewable energy bond lender, or a not-for-profit electric utility which has received a loan or loan guarantee under the Rural Electrification Act.''. (b) Reporting.--Subsection (d) of section 6049 (relating to returns regarding payments of interest) is amended by adding at the end the following new paragraph: ``(9) Reporting of credit on qualified tax credit bonds.-- ``(A) In general.--For purposes of subsection (a), the term `interest' includes amounts includible in gross income under section 54A and such amounts shall be treated as paid on the credit allowance date (as defined in section 54A(e)(1)). ``(B) Reporting to corporations, etc.--Except as otherwise provided in regulations, in the case of any interest described in subparagraph (A) of this paragraph, subsection (b)(4) of this section shall be applied without regard to subparagraphs (A), (H), (I), (J), (K), and (L)(i). ``(C) Regulatory authority.--The Secretary may prescribe such regulations as are necessary or appropriate to carry out the purposes of this paragraph, including regulations which require more frequent or more detailed reporting.''. (c) Conforming Amendments.-- (1) Sections 54(c)(2) and 1400N(l)(3)(B) are each amended by striking ``subpart C'' and inserting ``subparts C and I''. (2) Section 1397E(c)(2) is amended by striking ``subpart H'' and inserting ``subparts H and I''. (3) Section 6401(b)(1) is amended by striking ``and H'' and inserting ``H, and I''. (4) The heading of subpart H of part IV of subchapter A of chapter 1 is amended by striking ``Certain Bonds'' and inserting ``Clean Renewable Energy Bonds''. (5) The table of subparts for part IV of subchapter A of chapter 1 is amended by striking the item relating to subpart H and inserting the following new items: ``subpart h. nonrefundable credit to holders of clean renewable energy bonds. ``subpart i. qualified tax credit bonds.''. (d) Effective Dates.--The amendments made by this section shall apply to obligations issued after the date of the enactment of this Act. SEC. 226. EXTENSION AND MODIFICATION OF SPECIAL RULE TO IMPLEMENT FERC AND STATE ELECTRIC RESTRUCTURING POLICY. (a) Extension for Qualified Electric Utilities.-- (1) In general.--Paragraph (3) of section 451(i) (relating to special rule for sales or dispositions to implement Federal Energy Regulatory Commission or State electric restructuring policy) is amended by inserting ``(before January 1, 2010, in the case of a qualified electric utility)'' after ``January 1, 2008''. (2) Qualified electric utility.--Subsection (i) of section 451 is amended by redesignating paragraphs (6) through (10) as paragraphs (7) through (11), respectively, and by inserting after paragraph (5) the following new paragraph: ``(6) Qualified electric utility.--For purposes of this subsection, the term `qualified electric utility' means a person that, as of the date of the qualifying electric transmission transaction, is vertically integrated, in that it is both-- ``(A) a transmitting utility (as defined in section 3(23) of the Federal Power Act (16 U.S.C. 796(23))) with respect to the transmission facilities to which the election under this subsection applies, and ``(B) an electric utility (as defined in section 3(22) of the Federal Power Act (16 U.S.C. 796(22))).''. (b) Extension of Period for Transfer of Operational Control Authorized by FERC.--Clause (ii) of section 451(i)(4)(B) is amended by striking ``December 31, 2007'' and inserting ``the date which is 4 years after the close of the taxable year in which the transaction occurs''. (c) Property Located Outside the United States Not Treated as Exempt Utility Property.--Paragraph (5) of section 451(i) is amended by adding at the end the following new subparagraph: ``(C) Exception for property located outside the united states.--The term `exempt utility property' shall not include any property which is located outside the United States.''. (d) Effective Dates.-- (1) Extension.--The amendments made by subsection (a) shall apply to transactions after December 31, 2007. (2) Transfers of operational control.--The amendment made by subsection (b) shall take effect as if included in section 909 of the American Jobs Creation Act of 2004. (3) Exception for property located outside the united states.--The amendment made by subsection (c) shall apply to transactions after the date of the enactment of this Act. SEC. 227. EXTENSION AND MODIFICATION OF CREDIT FOR RESIDENTIAL ENERGY EFFICIENT PROPERTY. (a) Extension.--Section 25D(g) (relating to termination) is amended by striking ``December 31, 2008'' and inserting ``December 31, 2014''. (b) Maximum Credit for Solar Electric Property.-- (1) In general.--Section 25D(b)(1)(A) (relating to maximum credit) is amended by striking ``$2,000'' and inserting ``$4,000''. (2) Conforming amendment.--Section 25D(e)(4)(A)(i) is amended by striking ``$6,667'' and inserting ``$13,333''. (c) Credit for Residential Wind Property.-- (1) In general.--Section 25D(a) (relating to allowance of credit) is amended by striking ``and'' at the end of paragraph (2), by striking the period at the end of paragraph (3) and inserting ``, and'', and by adding at the end the following new paragraph: ``(4) 30 percent of the qualified small wind energy property expenditures made by the taxpayer during such year.''. (2) Limitation.--Section 25D(b)(1) (relating to maximum credit) is amended by striking ``and'' at the end of subparagraph (B), by striking the period at the end of subparagraph (C) and inserting ``, and'', and by adding at the end the following new subparagraph: ``(D) $500 with respect to each half kilowatt of capacity (not to exceed $4,000) of wind turbines for which qualified small wind energy property expenditures are made.''. (3) Qualified small wind energy property expenditures.-- (A) In general.--Section 25D(d) (relating to definitions) is amended by adding at the end the following new paragraph: ``(4) Qualified small wind energy property expenditure.-- The term `qualified small wind energy property expenditure' means an expenditure for property which uses a wind turbine to generate electricity for use in connection with a dwelling unit located in the United States and used as a residence by the taxpayer.''. (B) No double benefit.--Section 45(d)(1) (relating to wind facility) is amended by adding at the end the following new sentence: ``Such term shall not include any facility with respect to which any qualified small wind energy property expenditure (as defined in subsection (d)(4) of section 25D) is taken into account in determining the credit under such section.''. (4) Maximum expenditures in case of joint occupancy.-- Section 25D(e)(4)(A) (relating to maximum expenditures) is amended by striking ``and'' at the end of clause (ii), by striking the period at the end of clause (iii) and inserting ``, and'', and by adding at the end the following new clause: ``(iv) $1,667 in the case of each half kilowatt of capacity (not to exceed $13,333) of wind turbines for which qualified small wind energy property expenditures are made.''. (d) Credit for Geothermal Heat pump Systems.-- (1) In general.--Section 25D(a) (relating to allowance of credit), as amended by subsection (c), 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) 30 percent of the qualified geothermal heat pump property expenditures made by the taxpayer during such year.''. (2) Limitation.--Section 25D(b)(1) (relating to maximum credit), as amended by subsection (c), is amended by striking ``and'' at the end of subparagraph (C), by striking the period at the end of subparagraph (D) and inserting ``, and'', and by adding at the end the following new subparagraph: ``(E) $2,000 with respect to any qualified geothermal heat pump property expenditures.''. (3) Qualified geothermal heat pump property expenditure.-- Section 25D(d) (relating to definitions), as amended by subsection (c), is amended by adding at the end the following new paragraph: ``(5) Qualified geothermal heat pump property expenditure.-- ``(A) In general.--The term `qualified geothermal heat pump property expenditure' means an expenditure for qualified geothermal heat pump property installed on or in connection with a dwelling unit located in the United States and used as a residence by the taxpayer. ``(B) Qualified geothermal heat pump property.--The term `qualified geothermal heat pump property' means any equipment which-- ``(i) uses the ground or ground water as a thermal energy source to heat the dwelling unit referred to in subparagraph (A) or as a thermal energy sink to cool such dwelling unit, and ``(ii) meets the requirements of the Energy Star program which are in effect at the time that the expenditure for such equipment is made.''. (4) Maximum expenditures in case of joint occupancy.-- Section 25D(e)(4)(A) (relating to maximum expenditures), as amended by subsection (c), 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) $6,667 in the case of any qualified geothermal heat pump property expenditures.''. (e) Credit Allowed Against Alternative Minimum Tax.-- (1) In general.--Subsection (c) of section 25D is amended to read as follows: ``(c) Limitation Based on Amount of Tax; Carryforward of Unused Credit.-- ``(1) Limitation based on amount of tax.--In the case of a taxable year to which section 26(a)(2) does not apply, the credit allowed under subsection (a) for the taxable year shall not exceed the excess of-- ``(A) the sum of the regular tax liability (as defined in section 26(b)) plus the tax imposed by section 55, over ``(B) the sum of the credits allowable under this subpart (other than this section) and section 27 for the taxable year. ``(2) Carryforward of unused credit.-- ``(A) Rule for years in which all personal credits allowed against regular and alternative minimum tax.-- In the case of a taxable year to which section 26(a)(2) applies, if the credit allowable under subsection (a) exceeds the limitation imposed by section 26(a)(2) for such taxable year reduced by the sum of the credits allowable under this subpart (other than this section), such excess shall be carried to the succeeding taxable year and added to the credit allowable under subsection (a) for such succeeding taxable year. ``(B) Rule for other years.--In the case of a taxable year to which section 26(a)(2) does not apply, if the credit allowable under subsection (a) exceeds the limitation imposed by paragraph (1) for such taxable year, such excess shall be carried to the succeeding taxable year and added to the credit allowable under subsection (a) for such succeeding taxable year.''. (2) Conforming amendments.-- (A) Section 23(b)(4)(B) is amended by inserting ``and section 25D'' after ``this section''. (B) Section 24(b)(3)(B) is amended by striking ``and 25B'' and inserting ``, 25B, and 25D''. (C) Section 25B(g)(2) is amended by striking ``section 23'' and inserting ``sections 23 and 25D''. (D) Section 26(a)(1) is amended by striking ``and 25B'' and inserting ``25B, and 25D''. (f) Effective Date.-- (1) In general.--The amendments made by this section shall apply to taxable years beginning after December 31, 2007. (2) Application of egtrra sunset.--The amendments made by subparagraphs (A) and (B) of subsection (e)(2) shall be subject to title IX of the Economic Growth and Tax Relief Reconciliation Act of 2001 in the same manner as the provisions of such Act to which such amendments relate. PART 2--TRANSPORTATION CONSERVATION INCENTIVES Subpart A--Vehicles SEC. 231. CREDIT FOR PLUG-IN HYBRID VEHICLES. (a) In General.--Subpart B of part IV of subchapter A of chapter 1 (relating to other credits) is amended by adding at the end the following new section: ``SEC. 30D. PLUG-IN HYBRID VEHICLES. ``(a) Allowance of Credit.--There shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the sum of the credit amounts determined under subsection (b) with respect to each qualified plug-in hybrid vehicle placed in service by the taxpayer during the taxable year. ``(b) Per Vehicle Dollar Limitation.-- ``(1) In general.--The amount determined under this subsection with respect to any qualified plug-in hybrid vehicle is the sum of the amounts determined under paragraphs (2) and (3) with respect to such vehicle. ``(2) Base amount.--The amount determined under this paragraph is $4,000. ``(3) Battery capacity.--In the case of vehicle which draws propulsion energy from a battery with not less than 5 kilowatt hours of capacity, the amount determined under this paragraph is $200, plus $200 for each kilowatt hour of capacity in excess of 5 kilowatt hours. The amount determined under this paragraph shall not exceed $2,000. ``(c) Application With Other Credits.-- ``(1) Business credit treated as part of general business credit.--So much of the credit which would be allowed under subsection (a) for any taxable year (determined without regard to this subsection) that is attributable to property of a character subject to an allowance for depreciation shall be treated as a credit listed in section 38(b) for such taxable year (and not allowed under subsection (a)). ``(2) Personal credit.-- ``(A) In general.--For purposes of this title, the credit allowed under subsection (a) for any taxable year (determined after application of paragraph (1)) shall be treated as a credit allowable under subpart A for such taxable year. ``(B) Limitation based on amount of tax.--In the case of a taxable year to which section 26(a)(2) does not apply, the credit allowed under subsection (a) for any taxable year (determined after application of paragraph (1)) shall not exceed the excess of-- ``(i) the sum of the regular tax liability (as defined in section 26(b)) plus the tax imposed by section 55, over ``(ii) the sum of the credits allowable under subpart A (other than this section and sections 23 and 25D) and section 27 for the taxable year. ``(d) Qualified Plug-In Hybrid Vehicle.--For purposes of this section-- ``(1) In general.--The term `qualified plug-in hybrid vehicle' means a motor vehicle (as defined in section 30(c)(2))-- ``(A) the original use of which commences with the taxpayer, ``(B) which is acquired for use or lease by the taxpayer and not for resale, ``(C) which is made by a manufacturer, ``(D) which has a gross vehicle weight rating of less than 14,000 pounds, ``(E) which has received a certificate of conformity under the Clean Air Act and meets or exceeds the Bin 5 Tier II emission standard established in regulations prescribed by the Administrator of the Environmental Protection Agency under section 202(i) of the Clean Air Act for that make and model year vehicle, ``(F) which is propelled to a significant extent by an electric motor which draws electricity from a battery which-- ``(i) has a capacity of not less than 4 kilowatt hours, and ``(ii) is capable of being recharged from an external source of electricity, and ``(G) which either-- ``(i) is also propelled to a significant extent by other than an electric motor, or ``(ii) has a significant onboard source of electricity which also recharges the battery referred to in subparagraph (F). ``(2) Exception.--The term `qualified plug-in hybrid vehicle' shall not include any vehicle which is not a passenger automobile or light truck if such vehicle has a gross vehicle weight rating of less than 8,500 pounds. ``(3) Other terms.--The terms `passenger automobile', `light truck', and `manufacturer' have the meanings given such terms in regulations prescribed by the Administrator of the Environmental Protection Agency for purposes of the administration of title II of the Clean Air Act (42 U.S.C. 7521 et seq.). ``(4) Battery capacity.--The term `capacity' means, with respect to any battery, the quantity of electricity which the battery is capable of storing, expressed in kilowatt hours, as measured from a 100 percent state of charge to a 0 percent state of charge. ``(e) Limitation on Number of Qualified Plug-In Hybrid Vehicles Eligible for Credit.-- ``(1) In general.--In the case of a qualified plug-in hybrid vehicle sold during the phaseout period, only the applicable percentage of the credit otherwise allowable under subsection (a) shall be allowed. ``(2) Phaseout period.--For purposes of this subsection, the phaseout period is the period beginning with the second calendar quarter following the calendar quarter which includes the first date on which the number of qualified plug-in hybrid vehicles manufactured by the manufacturer of the vehicle referred to in paragraph (1) sold for use in the United States after the date of the enactment of this section, is at least 60,000. ``(3) Applicable percentage.--For purposes of paragraph (1), the applicable percentage is-- ``(A) 50 percent for the first 2 calendar quarters of the phaseout period, ``(B) 25 percent for the 3d and 4th calendar quarters of the phaseout period, and ``(C) 0 percent for each calendar quarter thereafter. ``(4) Controlled groups.--Rules similar to the rules of section 30B(f)(4) shall apply for purposes of this subsection. ``(f) Special Rules.-- ``(1) Basis reduction.--The basis of any property for which a credit is allowable under subsection (a) shall be reduced by the amount of such credit (determined without regard to subsection (c)). ``(2) Recapture.--The Secretary shall, by regulations, provide for recapturing the benefit of any credit allowable under subsection (a) with respect to any property which ceases to be property eligible for such credit. ``(3) Property used outside united states, etc., not qualified.--No credit shall be allowed under subsection (a) with respect to any property referred to in section 50(b)(1) or with respect to the portion of the cost of any property taken into account under section 179. ``(4) Election not to take credit.--No credit shall be allowed under subsection (a) for any vehicle if the taxpayer elects to not have this section apply to such vehicle. ``(5) Property used by tax-exempt entity; interaction with air quality and motor vehicle safety standards.--Rules similar to the rules of paragraphs (6) and (10) of section 30B(h) shall apply for purposes of this section.''. (b) Plug-In Vehicles Not Treated as New Qualified Hybrid Vehicles.--Section 30B(d)(3) is amended by adding at the end the following new subparagraph: ``(D) Exclusion of plug-in vehicles.--Any vehicle with respect to which a credit is allowable under section 30D (determined without regard to subsection (c) thereof) shall not be taken into account under this section.''. (c) Credit Made Part of General Business Credit.--Section 38(b) is amended-- (1) by striking ``and'' each place it appears at the end of any paragraph, (2) by striking ``plus'' each place it appears at the end of any paragraph, (3) by striking the period at the end of paragraph (31) and inserting ``, plus'', and (4) by adding at the end the following new paragraph: ``(32) the portion of the plug-in hybrid vehicle credit to which section 30D(c)(1) applies.''. (d) Conforming Amendments.-- (1)(A) Section 24(b)(3)(B), as amended by this Act, is amended by striking ``and 25D'' and inserting ``25D, and 30D''. (B) Section 25(e)(1)(C)(ii) is amended by inserting ``30D,'' after ``25D,''. (C) Section 25B(g)(2), as amended by this Act, is amended by striking ``and 25D'' and inserting ``, 25D, and 30D''. (D) Section 26(a)(1), as amended by this Act, is amended by striking ``and 25D'' and inserting ``25D, and 30D''. (E) Section 1400C(d)(2) is amended by striking ``and 25D'' and inserting ``25D, and 30D''. (2) Section 1016(a) is amended by striking ``and'' at the end of paragraph (35), by striking the period at the end of paragraph (36) and inserting ``, and'', and by adding at the end the following new paragraph: ``(37) to the extent provided in section 30D(f)(1).''. (3) Section 6501(m) is amended by inserting ``30D(f)(4),'' after ``30C(e)(5),''. (4) The table of sections for subpart B of part IV of subchapter A of chapter 1 is amended by adding at the end the following new item: ``Sec. 30D. Plug-in hybrid vehicles.''. (e) Treatment of Alternative Motor Vehicle Credit as a Personal Credit.-- (1) In general.--Paragraph (2) of section 30B(g) is amended to read as follows: ``(2) Personal credit.--The credit allowed under subsection (a) for any taxable year (after application of paragraph (1)) shall be treated as a credit allowable under subpart A for such taxable year.''. (2) Conforming amendments.-- (A) Subparagraph (A) of section 30C(d)(2) is amended by striking ``sections 27, 30, and 30B'' and inserting ``sections 27 and 30''. (B) Paragraph (3) of section 55(c) is amended by striking ``30B(g)(2),''. (f) Effective Date.-- (1) In general.--Except as otherwise provided in this subsection, the amendments made by this section shall apply to taxable years beginning after December 31, 2008. (2) Treatment of alternative motor vehicle credit as personal credit.--The amendments made by subsection (e) shall apply to taxable years beginning after December 31, 2007. (g) Application of EGTRRA Sunset.--The amendment made by subsection (d)(1)(A) shall be subject to title IX of the Economic Growth and Tax Relief Reconciliation Act of 2001 in the same manner as the provision of such Act to which such amendment relates. SEC. 232. EXTENSION AND MODIFICATION OF ALTERNATIVE FUEL VEHICLE REFUELING PROPERTY CREDIT. (a) Increase in Credit Amount.--Section 30C (relating to alternative fuel vehicle refueling property credit) is amended-- (1) by striking ``30 percent'' in subsection (a) and inserting ``50 percent'', and (2) by striking ``$30,000'' in subsection (b)(1) and inserting ``$50,000''. (b) Extension of Credit.--Paragraph (2) of section 30C(g) (relating to termination) 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 the date of the enactment of this Act, in taxable years ending after such date. SEC. 233. MODIFICATION OF LIMITATION ON AUTOMOBILE DEPRECIATION. (a) In General.--Paragraph (5) of section 280F(d) (defining passenger automobile) is amended to read as follows: ``(5) Passenger automobile.-- ``(A) In general.--Except as provided in subparagraph (B), the term `passenger automobile' means any 4-wheeled vehicle-- ``(i) which is primarily designed or which can be used to carry passengers over public streets, roads, or highways (except any vehicle operated exclusively on a rail or rails), and ``(ii) which is rated at not more than 14,000 pounds gross vehicle weight. ``(B) Exceptions.--The term `passenger automobile' shall not include-- ``(i) any exempt-design vehicle, and ``(ii) any exempt-use vehicle. ``(C) Exempt-design vehicle.--The term `exempt- design vehicle' means-- ``(i) any vehicle which, by reason of its nature or design, is not likely to be used more than a de minimis amount for personal purposes, and ``(ii) any vehicle-- ``(I) which is designed to have a seating capacity of more than 9 persons behind the driver's seat, ``(II) which is equipped with a cargo area of at least 5 feet in interior length which is an open area or is designed for use as an open area but is enclosed by a cap and is not readily accessible directly from the passenger compartment, or ``(III) has an integral enclosure, fully enclosing the driver compartment and load carrying device, does not have seating rearward of the driver's seat, and has no body section protruding more than 30 inches ahead of the leading edge of the windshield. ``(D) Exempt-use vehicle.--The term `exempt-use vehicle' means-- ``(i) any ambulance, hearse, or combination ambulance-hearse used by the taxpayer directly in a trade or business, ``(ii) any vehicle used by the taxpayer directly in the trade or business of transporting persons or property for compensation or hire, and ``(iii) any truck or van if substantially all of the use of such vehicle by the taxpayer is directly in-- ``(I) a farming business (within the meaning of section 263A(e)(4)), ``(II) the transportation of a substantial amount of equipment, supplies, or inventory, or ``(III) the moving or delivery of property which requires substantial cargo capacity. ``(E) Recapture.--In the case of any vehicle which is not a passenger automobile by reason of being an exempt-use vehicle, if such vehicle ceases to be an exempt-use vehicle in any taxable year after the taxable year in which such vehicle is placed in service, a rule similar to the rule of subsection (b) shall apply.''. (b) Conforming Amendment.--Section 179(b) (relating to limitations) is amended by striking paragraph (6). (c) Effective Date.--The amendments made by this section shall apply to property placed in service after the date of the enactment of this Act. Subpart B--Fuels SEC. 241. EXTENSION AND MODIFICATION OF CREDITS FOR BIODIESEL AND RENEWABLE DIESEL. (a) In General.--Sections 40A(g), 6426(c)(6), and 6427(e)(5)(B) are each amended by striking ``December 31, 2008'' and inserting ``December 31, 2010''. (b) Uniform Treatment of Diesel Produced From Biomass.--Paragraph (3) of section 40A(f) is amended-- (1) by striking ``diesel fuel'' and inserting ``liquid fuel'', (2) by striking ``using a thermal depolymerization process'', and (3) by striking ``or D396'' in subparagraph (B) and inserting ``or other equivalent standard approved by the Secretary for fuels to be used in diesel-powered highway vehicles''. (c) Coproduction of Renewable Diesel With Petroleum Feedstock.-- (1) In general.--Paragraph (3) of section 40A(f) (defining renewable diesel) is amended by adding at the end the following flush sentence: ``Such term does not include any fuel derived from coprocessing biomass with a feedstock which is not biomass. For purposes of this paragraph, the term `biomass' has the meaning given such term by section 45K(c)(3).''. (2) Conforming amendment.--Paragraph (3) of section 40A(f) is amended by striking ``(as defined in section 45K(c)(3))''. (d) Effective Date.-- (1) In general.--Except as otherwise provided in this subsection, the amendments made by this section shall apply to fuel produced, and sold or used, after December 31, 2008. (2) Coproduction of renewable diesel with petroleum feedstock.--The amendments made by subsection (c) shall apply to fuel produced, and sold or used, after February 13, 2008. SEC. 242. CLARIFICATION THAT CREDITS FOR FUEL ARE DESIGNED TO PROVIDE AN INCENTIVE FOR UNITED STATES PRODUCTION. (a) Biodiesel Fuels Credit.--Paragraph (5) of section 40A(d), as added by subsection (c), is amended to read as follows: ``(5) Limitation to biodiesel with connection to the united states.--No credit shall be determined under this section with respect to any biodiesel unless-- ``(A) such biodiesel is produced in the United States for use as a fuel in the United States, and ``(B) the taxpayer obtains a certification (in such form and manner as prescribed by the Secretary) from the producer of the biodiesel which identifies the product produced and the location of such production. For purposes of this paragraph, the term `United States' includes any possession of the United States.''. (b) Excise Tax Credit.--Paragraph (2) of section 6426(h), as added by subsection (c), is amended to read as follows: ``(2) Biodiesel and alternative fuels.--No credit shall be determined under this section with respect to any biodiesel or alternative fuel unless-- ``(A) such biodiesel or alternative fuel is produced in the United States for use as a fuel in the United States, and ``(B) the taxpayer obtains a certification (in such form and manner as prescribed by the Secretary) from the producer of such biodiesel or alternative fuel which identifies the product produced and the location of such production.''. (c) Provisions Clarifying Treatment of Fuels With No Nexus to the United States.-- (1) Alcohol fuels credit.--Subsection (d) of section 40 is amended by adding at the end the following new paragraph: ``(6) Limitation to alcohol with connection to the united states.--No credit shall be determined under this section with respect to any alcohol which is produced outside the United States for use as a fuel outside the United States. For purposes of this paragraph, the term `United States' includes any possession of the United States.''. (2) Biodiesel fuels credit.--Subsection (d) of section 40A is amended by adding at the end the following new paragraph: ``(5) Limitation to biodiesel with connection to the united states.--No credit shall be determined under this section with respect to any biodiesel which is produced outside the United States for use as a fuel outside the United States. For purposes of this paragraph, the term `United States' includes any possession of the United States.''. (3) Excise tax credit.-- (A) In general.--Section 6426 is amended by adding at the end the following new subsection: ``(h) Limitation to Fuels With Connection to the United States.-- ``(1) Alcohol.--No credit shall be determined under this section with respect to any alcohol which is produced outside the United States for use as a fuel outside the United States. ``(2) Biodiesel and alternative fuels.--No credit shall be determined under this section with respect to any biodiesel or alternative fuel which is produced outside the United States for use as a fuel outside the United States. For purposes of this subsection, the term `United States' includes any possession of the United States.''. (B) Conforming amendment.--Subsection (e) of section 6427 is amended by redesignating paragraph (5) as paragraph (6) and by inserting after paragraph (4) the following new paragraph: ``(5) Limitation to fuels with connection to the united states.--No amount shall be payable under paragraph (1) or (2) with respect to any mixture or alternative fuel if credit is not allowed with respect to such mixture or alternative fuel by reason of section 6426(h).''. (d) Effective Date.-- (1) In general.--Except as provided in paragraph (2), the amendments made by this section shall apply to fuel produced, and sold or used, after December 31, 2008. (2) Provisions clarifying treatment of fuels with no nexus to the united states.-- (A) In general.--Except as otherwise provided in this paragraph, the amendments made by subsection (c) shall take effect as if included in section 301 of the American Jobs Creation Act of 2004. (B) Alternative fuel credits.--So much of the amendments made by subsection (c) as relate to the alternative fuel credit or the alternative fuel mixture credit shall take effect as if included in section 11113 of the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users. (C) Renewable diesel.--So much of the amendments made by subsection (c) as relate to renewable diesel shall take effect as if included in section 1346 of the Energy Policy Act of 2005. SEC. 243. CREDIT FOR PRODUCTION OF CELLULOSIC ALCOHOL. (a) In General.--Subsection (b) of section 40 is amended by redesignating paragraph (5) as paragraph (6) and by inserting after paragraph (4) the following new paragraph: ``(5) Cellulosic alcohol fuel producer credit.-- ``(A) In general.--The cellulosic alcohol fuel producer credit of any cellulosic alcohol fuel producer for any taxable year is 50 cents for each gallon of qualified cellulosic fuel production of such producer. ``(B) Qualified cellulosic fuel production.--For purposes of this paragraph, the term `qualified cellulosic fuel production' means any cellulosic alcohol which is produced by a cellulosic alcohol fuel producer, and which during the taxable year-- ``(i) is sold by such producer to another person-- ``(I) for use by such other person in the production of a qualified mixture in such other person's trade or business (other than casual off-farm production), ``(II) for use by such other person as a fuel in a trade or business, or ``(III) who sells such alcohol at retail to another person and places such alcohol in the fuel tank of such other person, or ``(ii) is used or sold by such producer for any purpose described in clause (i). ``(C) Cellulosic alcohol.--For purposes of this paragraph, the term `cellulosic alcohol' means any alcohol which-- ``(i) is produced in the United States for use as a fuel in the United States, and ``(ii) is derived from any lignocellulosic or hemicellulosic matter that is available on a renewable or recurring basis. For purposes of this subparagraph, the term `United States' includes any possession of the United States. ``(D) Cellulosic alcohol fuel producer.--For purposes of this paragraph, the term `cellulosic alcohol fuel producer' means any person who produces cellulosic alcohol in a trade or business and is registered with the Secretary as a cellulosic alcohol fuel producer. ``(E) Additional distillation excluded.--The qualified cellulosic fuel production of any producer for any taxable year shall not include any alcohol which is purchased by the producer and with respect to which such producer increases the proof of the alcohol by additional distillation.''. (b) Conforming Amendments.-- (1) Subsection (a) of section 40 is amended by striking ``plus'' at the end of paragraph (1), by striking ``plus'' at the end of paragraph (2), by striking the period at the end of paragraph (3) and inserting ``, plus'', and by adding at the end the following new paragraph: ``(4) in the case of a cellulosic alcohol fuel producer, the cellulosic alcohol fuel producer credit.''. (2) Clause (ii) of section 40(d)(3)(C) is amended by striking ``subsection (b)(4)(B)'' and inserting ``paragraph (4)(B) or (5)(B) of subsection (b)''. (c) Effective Date.--The amendments made by this section shall apply to alcohol produced after December 31, 2008. SEC. 244. EXTENSION FOR CREDIT FOR ALTERNATIVE FUELS AND MIXTURES DERIVED FROM COAL (INCLUDING PEAT) THROUGH THE FISCHER- TROPSCH PROCESS. (a) In General.--Subsections (d)(4) and (e)(3) of section 6426 of the Internal Revenue Code of 1986 (relating to termination of credits for alternative fuels and mixtures) are each amended by inserting ``and September 30, 2020, in the case of any sale or use involving any liquid fuel derived from coal (including peat) through the Fischer-Tropsch process'' after ``hydrogen''. (b) Fuels Not Used for Taxable Purposes.-- (1) In general.--Paragraph (5) of section 6427(e) of such Code (relating to termination) is amended by striking ``and'' at the end of subparagraph (C), by striking the period at the end of subparagraph (D) and inserting ``, and'', and by inserting after subparagraph (D) the following new subparagraph: ``(E) any alternative fuel or alternative fuel mixture (as so defined) involving fuel derived from coal (including peat) through the Fischer-Tropsch process sold or used after September 30, 2020.''. (2) Conforming amendment.--Section 6427(e)(5)(C) is amended by striking ``subparagraph (D)'' and inserting ``subparagraphs (D) and (E)''. (c) Effective Date.--The amendments made by this section shall apply to any sale or use for any period after September 30, 2009. PART 3--OTHER CONSERVATION PROVISIONS SEC. 251. QUALIFIED ENERGY CONSERVATION BONDS. (a) In General.--Subpart I of part IV of subchapter A of chapter 1, as added by section 104, is amended by adding at the end the following new section: ``SEC. 54C. QUALIFIED ENERGY CONSERVATION BONDS. ``(a) Qualified Energy Conservation Bond.--For purposes of this subchapter, the term `qualified energy conservation bond' means any bond issued as part of an issue if-- ``(1) 100 percent of the available project proceeds of such issue are to be used for one or more qualified conservation purposes, ``(2) the bond is issued by a State or local government, and ``(3) the issuer designates such bond for purposes of this section. ``(b) Limitation on Amount of Bonds Designated.--The maximum aggregate face amount of bonds which may be designated under subsection (a) by any issuer shall not exceed the limitation amount allocated to such issuer under subsection (d). ``(c) National Limitation on Amount of Bonds Designated.--There is a national qualified energy conservation bond limitation of $3,600,000,000. ``(d) Allocations.-- ``(1) In general.--The limitation applicable under subsection (c) shall be allocated by the Secretary among the States in proportion to the population of the States. ``(2) Allocations to largest local governments.-- ``(A) In general.--In the case of any State in which there is a large local government, each such local government shall be allocated a portion of such State's allocation which bears the same ratio to the State's allocation (determined without regard to this subparagraph) as the population of such large local government bears to the population of such State. ``(B) Allocation of unused limitation to state.-- The amount allocated under this subsection to a large local government may be reallocated by such local government to the State in which such local government is located. ``(C) Large local government.--For purposes of this section, the term `large local government' means any municipality or county if such municipality or county has a population of 100,000 or more. ``(3) Allocation to issuers; restriction on private activity bonds.--Any allocation under this subsection to a State or large local government shall be allocated by such State or large local government to issuers within the State in a manner that results in not less than 70 percent of the allocation to such State or large local government being used to designate bonds which are not private activity bonds. ``(e) Qualified Conservation Purpose.--For purposes of this section-- ``(1) In general.--The term `qualified conservation purpose' means any of the following: ``(A) Capital expenditures incurred for purposes of-- ``(i) reducing energy consumption in publicly-owned buildings by at least 20 percent, ``(ii) implementing green community programs, ``(iii) rural development involving the production of electricity from renewable energy resources, or ``(iv) any qualified facility (as determined under section 45(d) without regard to paragraphs (8) and (10) thereof and without regard to any placed in service date). ``(B) Expenditures with respect to research facilities, and research grants, to support research in-- ``(i) development of cellulosic ethanol or other nonfossil fuels, ``(ii) technologies for the capture and sequestration of carbon dioxide produced through the use of fossil fuels, ``(iii) increasing the efficiency of existing technologies for producing nonfossil fuels, ``(iv) automobile battery technologies and other technologies to reduce fossil fuel consumption in transportation, or ``(v) technologies to reduce energy use in buildings. ``(C) Mass commuting facilities and related facilities that reduce the consumption of energy, including expenditures to reduce pollution from vehicles used for mass commuting. ``(D) Demonstration projects designed to promote the commercialization of-- ``(i) green building technology, ``(ii) conversion of agricultural waste for use in the production of fuel or otherwise, ``(iii) advanced battery manufacturing technologies, ``(iv) technologies to reduce peak use of electricity, or ``(v) technologies for the capture and sequestration of carbon dioxide emitted from combusting fossil fuels in order to produce electricity. ``(E) Public education campaigns to promote energy efficiency. ``(2) Special rules for private activity bonds.--For purposes of this section, in the case of any private activity bond, the term `qualified conservation purposes' shall not include any expenditure which is not a capital expenditure. ``(f) Population.-- ``(1) In general.--The population of any State or local government shall be determined for purposes of this section as provided in section 146(j) for the calendar year which includes the date of the enactment of this section. ``(2) Special rule for counties.--In determining the population of any county for purposes of this section, any population of such county which is taken into account in determining the population of any municipality which is a large local government shall not be taken into account in determining the population of such county. ``(g) Application to Indian Tribal Governments.--An Indian tribal government shall be treated for purposes of this section in the same manner as a large local government, except that-- ``(1) an Indian tribal government shall be treated for purposes of subsection (d) as located within a State to the extent of so much of the population of such government as resides within such State, and ``(2) any bond issued by an Indian tribal government shall be treated as a qualified energy conservation bond only if issued as part of an issue the available project proceeds of which are used for purposes for which such Indian tribal government could issue bonds to which section 103(a) applies.''. (b) Conforming Amendments.-- (1) Paragraph (1) of section 54A(d), as added by section 104, is amended to read as follows: ``(1) Qualified tax credit bond.--The term `qualified tax credit bond' means-- ``(A) a new clean renewable energy bond, or ``(B) a qualified energy conservation bond, which is part of an issue that meets requirements of paragraphs (2), (3), (4), (5), and (6).''. (2) Subparagraph (C) of section 54A(d)(2), as added by section 104, is amended to read as follows: ``(C) Qualified purpose.--For purposes of this paragraph, the term `qualified purpose' means-- ``(i) in the case of a new clean renewable energy bond, a purpose specified in section 54B(a)(1), and ``(ii) in the case of a qualified energy conservation bond, a purpose specified in section 54C(a)(1).''. (3) The table of sections for subpart I of part IV of subchapter A of chapter 1 is amended by adding at the end the following new item: ``Sec. 54C. Qualified energy conservation bonds.''. (c) Effective Date.--The amendments made by this section shall apply to obligations issued after the date of the enactment of this Act. SEC. 252. EXTENSION AND MODIFICATION OF CREDIT FOR NONBUSINESS ENERGY PROPERTY. (a) Extension of Credit.--Section 25C(g) (relating to termination) is amended by striking ``December 31, 2007'' and inserting ``December 31, 2009''. (b) Qualified Biomass Fuel Property.-- (1) In general.--Section 25C(d)(3) is amended-- (A) by striking ``and'' at the end of subparagraph (D), (B) by striking the period at the end of subparagraph (E) and inserting ``, and'', and (C) by adding at the end the following new subparagraph: ``(F) a stove which uses the burning of biomass fuel to heat a dwelling unit located in the United States and used as a residence by the taxpayer, or to heat water for use in such a dwelling unit, and which has a thermal efficiency rating of at least 75 percent.''. (2) Biomass fuel.--Section 25C(d) (relating to residential energy property expenditures) is amended by adding at the end the following new paragraph: ``(6) Biomass fuel.--The term `biomass fuel' means any plant-derived fuel available on a renewable or recurring basis, including agricultural crops and trees, wood and wood waste and residues (including wood pellets), plants (including aquatic plants), grasses, residues, and fibers.''. (c) Coordination With Credit for Qualified Geothermal Heat pump Property Expenditures.-- (1) In general.--Paragraph (3) of section 25C(d) is amended by striking subparagraph (C) and by redesignating subparagraphs (D) and (E) as subparagraphs (C) and (D), respectively. (2) Conforming amendment.--Subparagraph (C) of section 25C(d)(2) is amended to read as follows: ``(C) Requirements and standards for air conditioners and heat pumps.--The standards and requirements prescribed by the Secretary under subparagraph (B) with respect to the energy efficiency ratio (EER) for central air conditioners and electric heat pumps-- ``(i) shall require measurements to be based on published data which is tested by manufacturers at 95 degrees Fahrenheit, and ``(ii) may be based on the certified data of the Air Conditioning and Refrigeration Institute that are prepared in partnership with the Consortium for Energy Efficiency.''. (d) Effective Date.--The amendments made this section shall apply to expenditures made after December 31, 2007. SEC. 253. EXTENSION OF ENERGY EFFICIENT COMMERCIAL BUILDINGS DEDUCTION. Subsection (h) of section 179D (relating to termination) is amended by striking ``December 31, 2008'' and inserting ``December 31, 2013''. SEC. 254. MODIFICATIONS OF ENERGY EFFICIENT APPLIANCE CREDIT FOR APPLIANCES PRODUCED AFTER 2007. (a) In General.--Subsection (b) of section 45M (relating to applicable amount) is amended to read as follows: ``(b) Applicable Amount.--For purposes of subsection (a)-- ``(1) Dishwashers.--The applicable amount is-- ``(A) $45 in the case of a dishwasher which is manufactured in calendar year 2008 or 2009 and which uses no more than 324 kilowatt hours per year and 5.8 gallons per cycle, and ``(B) $75 in the case of a dishwasher which is manufactured in calendar year 2008, 2009, or 2010 and which uses no more than 307 kilowatt hours per year and 5.0 gallons per cycle (5.5 gallons per cycle for dishwashers designed for greater than 12 place settings). ``(2) Clothes washers.--The applicable amount is-- ``(A) $75 in the case of a residential top-loading clothes washer manufactured in calendar year 2008 which meets or exceeds a 1.72 modified energy factor and does not exceed a 8.0 water consumption factor, ``(B) $125 in the case of a residential top-loading clothes washer manufactured in calendar year 2008 or 2009 which meets or exceeds a 1.8 modified energy factor and does not exceed a 7.5 water consumption factor, ``(C) $150 in the case of a residential or commercial clothes washer manufactured in calendar year 2008, 2009, or 2010 which meets or exceeds 2.0 modified energy factor and does not exceed a 6.0 water consumption factor, and ``(D) $250 in the case of a residential or commercial clothes washer manufactured in calendar year 2008, 2009, or 2010 which meets or exceeds 2.2 modified energy factor and does not exceed a 4.5 water consumption factor. ``(3) Refrigerators.--The applicable amount is-- ``(A) $50 in the case of a refrigerator which is manufactured in calendar year 2008, and consumes at least 20 percent but not more than 22.9 percent less kilowatt hours per year than the 2001 energy conservation standards, ``(B) $75 in the case of a refrigerator which is manufactured in calendar year 2008 or 2009, and consumes at least 23 percent but no more than 24.9 percent less kilowatt hours per year than the 2001 energy conservation standards, ``(C) $100 in the case of a refrigerator which is manufactured in calendar year 2008, 2009, or 2010, and consumes at least 25 percent but not more than 29.9 percent less kilowatt hours per year than the 2001 energy conservation standards, and ``(D) $200 in the case of a refrigerator manufactured in calendar year 2008, 2009, or 2010 and which consumes at least 30 percent less energy than the 2001 energy conservation standards.''. (b) Eligible Production.-- (1) Similar treatment for all appliances.--Subsection (c) of section 45M (relating to eligible production) is amended-- (A) by striking paragraph (2), (B) by striking ``(1) In general'' and all that follows through ``the eligible'' and inserting ``The eligible'', and (C) by moving the text of such subsection in line with the subsection heading and redesignating subparagraphs (A) and (B) as paragraphs (1) and (2), respectively. (2) Modification of base period.--Paragraph (2) of section 45M(c), as amended by paragraph (1) of this section, is amended by striking ``3-calendar year'' and inserting ``2-calendar year''. (c) Types of Energy Efficient Appliances.--Subsection (d) of section 45M (defining types of energy efficient appliances) is amended to read as follows: ``(d) Types of Energy Efficient Appliance.--For purposes of this section, the types of energy efficient appliances are-- ``(1) dishwashers described in subsection (b)(1), ``(2) clothes washers described in subsection (b)(2), and ``(3) refrigerators described in subsection (b)(3).''. (d) Aggregate Credit Amount Allowed.-- (1) Increase in limit.--Paragraph (1) of section 45M(e) (relating to aggregate credit amount allowed) is amended to read as follows: ``(1) Aggregate credit amount allowed.--The aggregate amount of credit allowed under subsection (a) with respect to a taxpayer for any taxable year shall not exceed $75,000,000 reduced by the amount of the credit allowed under subsection (a) to the taxpayer (or any predecessor) for all prior taxable years beginning after December 31, 2007.''. (2) Exception for certain refrigerator and clothes washers.--Paragraph (2) of section 45M(e) is amended to read as follows: ``(2) Amount allowed for certain refrigerators and clothes washers.--Refrigerators described in subsection (b)(3)(D) and clothes washers described in subsection (b)(2)(D) shall not be taken into account under paragraph (1).''. (e) Qualified Energy Efficient Appliances.-- (1) In general.--Paragraph (1) of section 45M(f) (defining qualified energy efficient appliance) is amended to read as follows: ``(1) Qualified energy efficient appliance.--The term `qualified energy efficient appliance' means-- ``(A) any dishwasher described in subsection (b)(1), ``(B) any clothes washer described in subsection (b)(2), and ``(C) any refrigerator described in subsection (b)(3).''. (2) Clothes washer.--Section 45M(f)(3) (defining clothes washer) is amended by inserting ``commercial'' before ``residential'' the second place it appears. (3) Top-loading clothes washer.--Subsection (f) of section 45M (relating to definitions) is amended by redesignating paragraphs (4), (5), (6), and (7) as paragraphs (5), (6), (7), and (8), respectively, and by inserting after paragraph (3) the following new paragraph: ``(4) Top-loading clothes washer.--The term `top-loading clothes washer' means a clothes washer which has the clothes container compartment access located on the top of the machine and which operates on a vertical axis.''. (4) Replacement of energy factor.--Section 45M(f)(6), as redesignated by paragraph (3), is amended to read as follows: ``(6) Modified energy factor.--The term `modified energy factor' means the modified energy factor established by the Department of Energy for compliance with the Federal energy conservation standard.''. (5) Gallons per cycle; water consumption factor.--Section 45M(f) (relating to definitions), as amended by paragraph (3), is amended by adding at the end the following: ``(9) Gallons per cycle.--The term `gallons per cycle' means, with respect to a dishwasher, the amount of water, expressed in gallons, required to complete a normal cycle of a dishwasher. ``(10) Water consumption factor.--The term `water consumption factor' means, with respect to a clothes washer, the quotient of the total weighted per-cycle water consumption divided by the cubic foot (or liter) capacity of the clothes washer.''. (f) Effective Date.--The amendments made by this section shall apply to appliances produced after December 31, 2007. SEC. 255. FIVE-YEAR APPLICABLE RECOVERY PERIOD FOR DEPRECIATION OF QUALIFIED ENERGY MANAGEMENT DEVICES. (a) In General.--Section 168(e)(3)(B) (relating to 5-year property) is amended by striking ``and'' at the end of clause (v), by striking the period at the end of clause (vi) and inserting ``, and'', and by inserting after clause (vi) the following new clause: ``(vii) any qualified energy management device.''. (b) Definition of Qualified Energy Management Device.--Section 168(i) (relating to definitions and special rules) is amended by inserting at the end the following new paragraph: ``(18) Qualified energy management device.-- ``(A) In general.--The term `qualified energy management device' means any energy management device which is installed on real property of a customer of the taxpayer and is placed in service by a taxpayer who-- ``(i) is a supplier of electric energy or a provider of electric energy services, and ``(ii) provides all commercial and residential customers of such supplier or provider with net metering upon the request of such customer. ``(B) Energy management device.--For purposes of subparagraph (A), the term `energy management device' means any time-based meter and related communication equipment which is capable of being used by the taxpayer as part of a system that-- ``(i) measures and records electricity usage data on a time-differentiated basis in at least 24 separate time segments per day, ``(ii) provides for the exchange of information between supplier or provider and the customer's energy management device in support of time-based rates or other forms of demand response, and ``(iii) provides data to such supplier or provider so that the supplier or provider can provide energy usage information to customers electronically. ``(C) Net metering.--For purposes of subparagraph (A), the term `net metering' means allowing customers a credit for providing electricity to the supplier or provider.''. (c) Effective Date.--The amendments made by this section shall apply to property placed in service after the date of the enactment of this Act. SEC. 256. CLARIFICATION OF ELIGIBILITY FOR CERTAIN FUELS CREDITS FOR FUEL WITH INSUFFICIENT NEXUS TO THE UNITED STATES. (a) In General.-- (1) Alcohol credit.--Subsection (d) of section 40 is amended by adding at the end the following new paragraph: ``(6) Limitation to alcohol with connection to the united states.-- ``(A) Alcohol credit.--No alcohol credit shall be determined under this section with respect to any alcohol unless such alcohol is produced in the United States for consumption in the United States or entered into the United States for consumption in the United States. ``(B) Alcohol mixture credit.--No alcohol mixture credit shall be determined under this section with respect to any mixture unless such mixture is produced in the United States for consumption in the United States or entered into the United States for consumption in the United States. ``(C) No credits for alcohol destined for export.-- No credit (other than the small ethanol producer credit) shall be determined under this section with respect to any mixture or alcohol if such mixture or alcohol is destined for export from the United States (as determined by the Secretary). ``(D) Special rule for small producer credits.--No small ethanol producer credit, small cellulosic alcohol producer credit, or small fossil free alcohol producer credit shall be determined under this section with respect to any alcohol unless such alcohol is produced in the United States.''. (2) Biodiesel credit.--Subsection (d) of section 40A is amended by adding at the end the following new paragraph: ``(5) Limitation to biodiesel with connection to the united states.-- ``(A) Biodiesel credit.--No biodiesel credit shall be determined under this section with respect to any biodiesel unless such biodiesel is produced in the United States for consumption in the United States or is entered into the United States for consumption in the United States. ``(B) Biodiesel mixture credit.--No biodiesel mixture credit shall be determined under this section with respect to any mixture unless such mixture is produced in the United States for consumption in the United States or is entered into the United States for consumption in the United States. ``(C) No credits for biodiesel destined for export.--No credit (other than the small agri-biodiesel producer credit) shall be determined under this section with respect to any mixture or biodiesel if such mixture or biodiesel is destined for export from the United States (as determined by the Secretary). ``(D) Special rule for small agri-biodiesel producer credit.--No small agri-biodiesel producer credit shall be determined under this section with respect to any agri-biodiesel unless such agri- biodiesel is produced in the United States.''. (3) Excise tax credits.--Section 6426 is amended by adding at the end the following new subsection: ``(h) Limitation to Fuels With Connection to the United States.-- ``(1) Mixture credits.--No credit shall be determined under this section with respect to any mixture unless such mixture is produced in the United States for consumption in the United States or is entered into the United States for consumption in the United States. ``(2) Alternative fuel credit.--No alternative fuel credit shall be determined under this section with respect to any alternative fuel unless such alternative fuel is produced in the United States for consumption in the United States or is entered into the United States for consumption in the United States. ``(3) No credits for fuels destined for export.--No credit shall be determined under this section with respect to any mixture or alternative fuel if such mixture or alternative fuel is destined for export from the United States (as determined by the Secretary).''. (4) Payments.--Subsection (e) of section 6427 is amended by redesignating paragraph (5) as paragraph (6) and by inserting after paragraph (4) the following new paragraph: ``(5) Limitation to fuels with connection to the united states.--No amount shall be payable under paragraph (1) or (2) with respect to any mixture or alternative fuel if credit is not allowed with respect to such mixture or alternative fuel by reason of section 6426(h).''. (b) Effective Date.--The amendments made by this section shall apply to fuel sold or used after the date of the enactment of this Act. TITLE III--RESEARCH AND DEVELOPMENT SEC. 301. BLENDED FUELS. The Secretary shall carry out a program of research, development, and demonstration as it relates to the blending of transportation fuels derived from coal-to-liquids and the blending thereof with transportation fuels derived from renewable sources, including biomass (as defined in section 932 of the Energy Policy Act of 2005). The program shall focus on-- (1) maximizing the fungibility and supply of blended transportation fuels; (2) the viability of the blend as a cost competitive replacement for transportation fuels; (3) evaluation of the environmental consequences of the blend on evaporative and exhaust emissions from on-road and off-road engines; (4) the quality of the resultant blend at varying concentrations of biofuel; and (5) other areas the Secretary considers appropriate. SEC. 302. CELLULOSIC ETHANOL. (a) Bioenergy Research Centers.--The Secretary of Energy shall maintain 4 Bioenergy Research Centers to address scientific problems that are inherently interdisciplinary and will require scientific expertise and technological capabilities that span the physical and biological sciences, including genomics, microbial and plant biology, analytical chemistry, computational biology and bioinformatics, and engineering. Universities, national laboratories, nonprofit agencies, and private firms, as well as consortia comprising of partnerships of two or more such institutions, will be eligible for funding to establish and operate a Research Center. (b) Authorization of Appropriations.--There are authorized to be appropriated for the Bioenergy Research Centers described in subsection (a) $25,000,000 for each of the fiscal years 2009 through 2013. <all>