A bill to facilitate the increased use of alternative fuels for motor vehicles, and for other purposes.

Summary: Transforming Energy Now Act of 2006 - Amends the Clean Air Act to establish a 10% minimum renewable fuel requirement for motor vehicle fuel sold in the United States after 2015.

Amends the Internal Revenue Code to increase from 30 to 50% the tax credit rate for alternative fuel vehicle refueling property costs (service stations capable of dispensing alternative fuels to retail consumers).

Establishes in the Treasury the Alternative Fueling Infrastructure Trust Fund to provide grants to increase the number of retail service stations dispensing alternative transportation fuels. Directs the Secretary of Transportation to transfer 90% of civil penalties for noncompliance with automobile fuel economy standards to the Trust Fund to finance such grant program.

Amends the Consolidated Farm and Rural Development Act to provide low-interest loans to build service stations which dispense E-85 (85% ethanol content) fuel to retail consumers.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Transforming Energy Now Act of 
2006''.

SEC. 2. FINDINGS.

    Congress finds that--
            (1) the United States is dangerously dependent on foreign 
        oil;
            (2) as of April 2006, the United States imported nearly 60 
        percent of the oil used in the United States, and that 
        percentage is expected to increase to almost 70 percent by 2025 
        unless the United States takes decisive action;
            (3) approximately 2,500,000 barrels of oil per day are 
        imported from countries in the Persian Gulf region;
            (4) oil imports comprise nearly 30 percent of the 
        dangerously high trade deficit of the United States;
            (5) it is feasible to dramatically reduce the dependence of 
        the United States on foreign oil by increasing production and 
        commercialization of alternative liquid fuels;
            (6) as of April 2006, only 4 percent of the total gasoline 
        sold was derived from renewable fuel, including 4,000,000,000 
        gallons of ethanol production;
            (7) at the current rate of renewable fuel production 
        growth, the United States will increase its production of 
        ethanol by approximately 1,000,000,000 gallons a year, 
        resulting in the annual production of 14,000,000,000 gallons of 
        ethanol in the United States by 2016;
            (8) at the current increase of renewable fuel production 
        capacity, the United States will produce 10,000,000,000 gallons 
        of ethanol by 2012, easily surpassing the current renewable 
        fuels mandate required by the Energy Policy Act of 2005;
            (9) an aggressive schedule of renewable fuels production 
        will lessen the United States dependence on foreign oil;
            (10) 10 percent of the Nation's motor vehicle fuel supply 
        should be renewable by 2016; and
            (11) setting a goal of 19,000,000,000 gallons of ethanol by 
        2016 would require an aggressive increase in renewable fuels 
        production without requiring significant ethanol imports.

SEC. 3. ETHANOL AND BIODIESEL FUEL REQUIREMENTS.

    (a) In General.--Section 211(o)(2)(B) of the Clean Air Act (42 
U.S.C. 7545 (o)(2)(B)) is amended to read as follows:
                    ``(B) Minimum percentage.--Motor vehicle fuel sold 
                or introduced into commerce in the United States 
                (except in noncontiguous States or territories) after 
                December 31, 2015, shall contain, in the aggregate, not 
                less than 10 percent renewable fuel, by volume.''.
    (b) Rulemaking.--Not later than 1 year after the date of the 
enactment of this Act, the Administrator shall promulgate regulations 
to carry out the amendment made by subsection (a).

SEC. 4. INCREASE IN ALTERNATIVE FUEL VEHICLE REFUELING PROPERTY CREDIT.

    (a) In General.--Section 30C(a) of the Internal Revenue Code of 
1986 is amended by striking ``30 percent'' and inserting ``50 
percent''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to property placed in service after December 31, 2005, in taxable 
years ending after such date.

SEC. 5. USE OF CAFE PENALTIES TO BUILD ALTERNATIVE FUELING 
              INFRASTRUCTURE.

    Section 32912 of title 49, United States Code, is amended by adding 
at the end the following:
    ``(e) Alternative Fueling Infrastructure Grant Program.--
            ``(1) Trust fund.--
                    ``(A) Establishment.--There is established in the 
                Treasury of the United States a trust fund, to be known 
                as the Alternative Fueling Infrastructure Trust Fund 
                (referred to in this subsection as the `Trust Fund'), 
                consisting of such amounts as are deposited into the 
                Trust Fund under subparagraph (B) and any interest 
                earned on investment of amounts in the Trust Fund.
                    ``(B) Transfers of civil penalties.--The Secretary 
                of Transportation shall remit 90 percent of the amount 
                collected in civil penalties under this section to the 
                Trust Fund.
            ``(2) Establishment of grant program.--The Secretary of 
        Energy shall obligate such sums as are available in the Trust 
        Fund to establish a grant program to increase the number of 
        locations at which consumers may purchase alternative 
        transportation fuels.
            ``(3) Grant recipients.--
                    ``(A) In general.--The Secretary of Energy may 
                award grants under this paragraph, to--
                            ``(i) individual fueling stations in an 
                        amount not greater than $150,000 per site or 
                        $500,000 per entity; and
                            ``(ii) corporations (including nonprofit 
                        corporations) with demonstrated experience in 
                        the administration of grant funding for the 
                        purpose of alternative fueling infrastructure.
                    ``(B) Priority.--In awarding grants under this 
                paragraph, the Secretary of Energy shall--
                            ``(i) give priority to recognized non-
                        profit corporations that have proven experience 
                        and demonstrated technical expertise in the 
                        establishment of alternative fueling 
                        infrastructure;
                            ``(ii) consider the number of vehicles 
                        produced for sale in the preceding production 
                        year capable of using each specific type of 
                        alternative fuel; and
                            ``(iii) identify 1 primary group per 
                        alternative fuel.
            ``(4) Use of funds.--
                    ``(A) In general.--Grant funds received under this 
                subsection may be used to--
                            ``(i) construct new facilities to dispense 
                        alternative fuels;
                            ``(ii) purchase equipment to upgrade, 
                        expand, or otherwise improve existing 
                        alternative fuel facilities; or
                            ``(iii) purchase equipment or pay for 
                        specific turnkey fueling services by 
                        alternative fuel providers.
                    ``(B) Matching requirement.--The Secretary of 
                Energy may not award a grant under this paragraph 
                unless the grant recipient agrees to provide $1 of non-
                Federal contributions for every $3 of grant funds 
                received under this paragraph. In no case may 
                administrative expenses exceed 10 percent of any total 
                award that may be provided.
            ``(5) Selection of alternative fuel stations.--Each grant 
        recipient shall select the locations for each alternative fuel 
        station to be constructed with grant funds received under this 
        paragraph on a formal, open, and competitive basis, based on--
                    ``(A) the public demand for each alternative fuel 
                in a particular county based on state registration 
                records showing the number of vehicles that can be 
                operated with alternative fuel; and
                    ``(B) the opportunity to create or expand corridors 
                of alternative fuel stations along interstate or State 
                highways.
            ``(6) Operation of alternative fuel stations.--Facilities 
        constructed or upgraded with grant funds received under this 
        subsection shall--
                    ``(A) provide alternative fuel available to the 
                public for a period of not less than 4 years;
                    ``(B) establish a marketing plan to advance the 
                sale and use of alternative fuels;
                    ``(C) prominently display the price of alternative 
                fuel on the marquee and in the station;
                    ``(D) provide point of sale materials on 
                alternative fuel;
                    ``(E) clearly label the dispenser with consistent 
                materials;
                    ``(F) price the alternative fuel at the same margin 
                that is received for unleaded gasoline; and
                    ``(G) support and use all available tax incentives 
                to reduce the cost of the alternative fuel to the 
                lowest possible retail price.
            ``(7) Notification requirements.--
                    ``(A) Opening.--Not later than the date on which 
                each alternative fuel station begins to offer 
                alternative fuel to the public, the grant recipient 
                that used grant funds to construct such station shall 
                notify the Secretary of Energy of such opening. The 
                Secretary of Energy shall add each new alternative fuel 
                station to the alternative fuel station locator on its 
                Website when it receives notification under this 
                subparagraph.
                    ``(B) Semi-annual report.--Not later than 6 months 
                after the receipt of a grant award under this 
                subsection, and every 6 months thereafter, each grant 
                recipient shall submit a report to the Secretary of 
                Energy that describes--
                            ``(i) the status of each alternative fuel 
                        station constructed with grant funds received 
                        under this subsection;
                            ``(ii) the amount of alternative fuel 
                        dispensed at each station during the preceding 
                        6-month period; and
                            ``(iii) the average price per gallon of the 
                        alternative fuel sold at each station during 
                        the preceding 6-month period.
            ``(8) Alternative fuel defined.--For the purposes of this 
        subsection, the term `alternative fuel' means--
                    ``(A) any fuel of which at least 85 percent (or 
                such percentage, but not less than 70 percent, as 
                determined by the Secretary, by rule, to provide for 
                requirements relating to cold start, safety, or vehicle 
                functions) of the volume consists of ethanol, natural 
                gas, compressed natural gas, liquefied natural gas, 
                liquefied petroleum gas, or hydrogen; or
                    ``(B) any mixture of biodiesel and diesel fuel 
                determined without regard to any use of kerosene that 
                contains at least 20 percent biodiesel.''.

SEC. 6. LOW-INTEREST LOAN AND GRANT PROGRAM FOR RETAIL DELIVERY OF E-85 
              FUEL.

    (a) Purposes of Loans.--Section 312(a) of the Consolidated Farm and 
Rural Development Act (7 U.S.C. 1942(a)) is amended--
            (1) in paragraph (9)(B)(ii), by striking ``or'' at the end;
            (2) in paragraph (10), by striking the period at the end 
        and inserting ``; or''; and
            (3) by adding at the end the following:
            ``(11) building infrastructure, including pump stations, 
        for the retail delivery to consumers of any fuel that contains 
        not less than 85 percent ethanol, by volume.''.
    (b) Program.--Subtitle B of the Consolidated Farm and Rural 
Development Act (7 U.S.C. 1941 et seq.) is amended by adding at the end 
the following:

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

    ``(a) In General.--The Secretary shall establish a low-interest 
loan and grant program to assist farmer-owned ethanol producers 
(including cooperatives and limited liability corporations) to develop 
and build infrastructure, including pump stations, that is directly 
related to the retail delivery to consumers of any fuel that contains 
not less than 85 percent ethanol, by volume.
    ``(b) Loan Terms.--
            ``(1) Amortization.--The repayment of a loan received under 
        this section shall be amortized over the expected life of the 
        infrastructure project that is being financed with the proceeds 
        of the loan.
            ``(2) Interest rate.--The annual interest rate of a loan 
        received under this section shall be fixed at not more than 5 
        percent.
    ``(c) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary to carry out this section.''.
    (c) Regulations.--As soon as practicable after the date of the 
enactment of this Act, the Secretary of Agriculture shall promulgate 
such regulations as are necessary to carry out the amendments made by 
this section.