To promote the production and use of ethanol.

Summary: Amends the Petroleum Marketing Practices Act to prohibit a franchisor from restricting a franchisee from: (1) installing on the marketing premises a renewable fuel pump or tank; (2) converting an existing tank or pump for renewable fuel use; (3) advertising the sale of renewable fuel; (4) selling renewable fuel; (5) purchasing renewable fuel from sources other than the franchisor if the franchisor does not offer its own renewable fuel for sale by the franchisee; (6) listing renewable fuel availability or prices; or (7) allowing for payment of renewable fuel with a credit card. Allows such franchisee activities so long as they do not constitute willful adulteration, mislabeling, or misbranding of motor fuels or other trademark violations.

Instructs the Secretary of Energy to establish a grants program for universities to demonstrate replacing corn as an ethanol feedstock with sweet sorghum.

Amends the Clean Air Act and the Energy Policy Act of 2005 to provide for loan guarantees for closed loop ethanol commercial demonstration projects.

Amends the Internal Revenue Code to: (1) increase and extend the alternative fuel vehicle refueling property credit; (2) make refueling property for biodiesel and renewable biodiesel eligible for the income tax deduction for clean-fuel vehicles and certain refueling property; and (3) increase the credit amount for research relating to alternative and renewable energy processes.

SECTION 1. PROHIBITION ON FRANCHISE AGREEMENT RESTRICTIONS RELATED TO 
              RENEWABLE FUEL INFRASTRUCTURE.

    (a) In General.--Title I of the Petroleum Marketing Practices Act 
(15 U.S.C. 2801 et seq.) is amended by adding at the end the following:

``SEC. 107. PROHIBITION ON RESTRICTION OF INSTALLATION OF RENEWABLE 
              FUEL PUMPS.

    ``(a) Definition.--In this section:
            ``(1) Renewable fuel.--The term `renewable fuel' means any 
        fuel--
                    ``(A) at least 85 percent of the volume of which 
                consists of ethanol; or
                    ``(B) any mixture of biodiesel or renewable diesel 
                (as defined in regulations adopted pursuant to section 
                211(o) of the Clean Air Act (40 C.F.R., Part 80)) and 
                diesel fuel, determined without regard to any use of 
                kerosene and containing at least 10 percent biodiesel 
                or renewable diesel.
            ``(2) Franchise-related document.--The term `franchise-
        related document' means--
                    ``(A) a franchise under this Act; and
                    ``(B) any other contract or directive of a 
                franchisor relating to terms or conditions of the sale 
                of fuel by a franchisee.
    ``(b) Prohibitions.--
            ``(1) In general.--Notwithstanding any provision of a 
        franchise-related document in effect on the date of enactment 
        of this section, no franchisee or affiliate of a franchisee 
        shall be restricted by its franchisor from--
                    ``(A) installing on the marketing premises of the 
                franchisee a renewable fuel pump or tank, except that 
                the franchisee's franchisor may restrict the 
                installation of a tank on leased marketing premises of 
                such franchisor;
                    ``(B) converting an existing tank or pump on the 
                marketing premises of the franchisee for renewable fuel 
                use, so long as such tank or pump and the piping 
                connecting them are either warranted by the 
                manufacturer or certified by a recognized standards 
                setting organization to be suitable for use with such 
                renewable fuel;
                    ``(C) advertising (including through the use of 
                signage) the sale of any renewable fuel;
                    ``(D) selling renewable fuel in any specified area 
                on the marketing premises of the franchisee (including 
                any area in which a name or logo of a franchisor or any 
                other entity appears);
                    ``(E) purchasing renewable fuel from sources other 
                than the franchisor if the franchisor does not offer 
                its own renewable fuel for sale by the franchisee;
                    ``(F) listing renewable fuel availability or 
                prices, including on service station signs, fuel 
                dispensers, or light poles; or
                    ``(G) allowing for payment of renewable fuel with a 
                credit card,
        so long as such activities do not constitute willful 
        adulteration, mislabeling, or misbranding of motor fuels or 
        other trademark violations by the franchisee.
            ``(2) Effect of provision.--Any restriction described in 
        paragraph (1) that is contained in a franchise-related document 
        and in effect on the date of enactment of this section shall be 
        considered to be null and void as of that date.
    ``(c) Exception to 3-Grade Requirement.--No franchise-related 
document that requires that 3 grades of gasoline be sold by the 
applicable franchisee shall prevent the franchisee from selling an 
renewable fuel in lieu of 1, and only 1, grade of gasoline.''.
    (b) Enforcement.--Section 105 of the Petroleum Marketing Practices 
Act (15 U.S.C. 2805) is amended by striking ``102 or 103'' each place 
it appears and inserting ``102, 103, or 107''.
    (c) Conforming Amendments.--
            (1) In general.--Section 101(13) of the Petroleum Marketing 
        Practices Act (15 U.S.C. 2801(13)) is amended by adjusting the 
        indentation of subparagraph (C) appropriately.
            (2) Table of contents.--The table of contents of the 
        Petroleum Marketing Practices Act (15 U.S.C. 2801 note) is 
        amended--
                    (A) by inserting after the item relating to section 
                106 the following:

``Sec. 107. Prohibition on restriction of installation of renewable 
                            fuel pumps.'';
                and
                    (B) by striking the item relating to section 202 
                and inserting the following:

``Sec. 202. Automotive fuel rating testing and disclosure 
                            requirements.''.

SEC. 2. REPLACING CORN AS AN ETHANOL FEEDSTOCK.

    (a) Research and Development Program.--The Secretary of Energy 
shall establish a program to make grants of not to exceed $1,000,000 
each to no more than 10 universities for a 3-year program of 
demonstration of replacing corn as an ethanol feedstock with sweet 
sorghum.
    (b) Program Goals.--The goals of the program under this section 
shall be to--
            (1) enhance agronomic efficiency of the crop on marginal 
        lands by--
                    (A) developing best management practices for 
                maintaining high sorghum yields while using less water 
                and nitrogen than corn;
                    (B) identifying and selecting plants with a high 
                sugar content; and
                    (C) developing cold tolerant sweet sorghum 
                varieties to enable two crops to be grown per season;
            (2) enhance ethanol processing potential in the crop by--
                    (A) developing a robust technology for centralized 
                and ethanol production facilities that pair high-
                performing sweet sorghum lines with different yeasts to 
                produce the best process for converting sweet sorghum 
                juice into ethanol;
                    (B) conducting process and chemical analyses of 
                sweet sorghum sap fermentation;
                    (C) introducing cellulosic hydrolyzing enzymes into 
                sweet sorghum to promote biomass conversion; and
                    (D) performing life-cycle analysis of sweet 
                sorghum-ethanol, including energy yield, efficiency, 
                and greenhouse gas reduction;
            (3) establish a sweet sorghum production system optimized 
        for the region of the university conducting the research;
            (4) improve sweet sorghum lines with higher sugar 
        production and performance with minimal agricultural inputs;
            (5) optimize sugar fermentation using selected yeast 
        strains;
            (6) develop sweet sorghum lines with improved cold 
        tolerance and cellulosic degradation; and
            (7) develop agricultural models for predicting agricultural 
        performance and ethanol yield under various growing conditions.
    (c) Award Criteria.--The Secretary shall award grants under this 
section only to universities that--
            (1) have access to multiple lines of sweet sorghum for 
        research; and
            (2) are located in a State where sweet sorghum is 
        anticipated to grow well on marginal lands.
    (d) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary for carrying out this section 
$10,000,000.

SEC. 3. CLOSED LOOP ETHANOL PROJECT LOAN GUARANTEES.

    (a) Clean Air Act Amendments.--Section 212 of the Clean Air Act (42 
U.S.C. 7546) is amended--
            (1) in subsection (a)--
                    (A) by redesignating paragraphs (1) through (3) as 
                paragraphs (2) through (4), respectively; and
                    (B) by inserting before paragraph (2), as so 
                redesignated by subparagraph (A) of this paragraph, the 
                following new paragraph:
            ``(1) Closed loop ethanol.--The term `closed loop ethanol' 
        means a facility in which--
                    ``(A) solid and liquid waste is collected from 
                agricultural animals in a concentrated location 
                together with cellulosic and other bio mass from 
                agricultural crops;
                    ``(B) such waste is used to generate fuel;
                    ``(C) such fuel is used to produce ethanol at the 
                same location; and
                    ``(D) the need for fossil fuel in the production of 
                ethanol and the drying of distillers grains is 
                reasonably expected to be at least 90 percent less than 
                in a comparably sized traditional ethanol facility 
                powered by fossil fuel.'';
            (2) in subsection (b)(1), by inserting ``, including closed 
        loop ethanol projects'' after ``sucrose-derived ethanol'';
            (3) in subsection (b)(2)(A), by striking ``not more than 
        4''; and
            (4) in subsection (b)(5), by inserting ``, or at least 10 
        percent in the case of closed loop ethanol facilities'' after 
        ``total project cost''.
    (b) Loan Guarantee Program Amendments.--Section 1510 of the Energy 
Policy Act of 2005 (42 U.S.C. 16501) is amended--
            (1) in subsection (b), by striking ``for the construction 
        of facilities'' and inserting ``, and Federal, State, and 
        locally issued industrial revenue bonds in the case of closed 
        loop ethanol facilities, for the construction of facilities, 
        including closed loop ethanol facilities,''; and
            (2) in subsection (e), by inserting ``, or not more than 30 
        years in the case of closed loop ethanol facilities'' after 
        ``20 years''.

SEC. 4. MODIFICATION OF ALTERNATIVE FUEL VEHICLE REFUELING PROPERTY 
              CREDIT.

    (a) Increase in Credit Amount.--Section 30C of the Internal Revenue 
Code of 1986 (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.--Subsection (g) section 30C of such Code 
(relating to termination) is amended to read as follows:
    ``(g) Termination of Availability of Credit.--This section shall 
not apply to property placed in service after December 31, 2014.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to property placed in service after the date of the enactment of 
this Act, in taxable years ending after such date.

SEC. 5. REFUELING PROPERTY FOR BIODIESEL AND RENEWABLE BIODIESEL.

    (a) In General.--Paragraph (1) of section 179A(e) of the Internal 
Revenue Code of 1986 is amended by striking ``and'' at the end of 
subparagraph (E), by striking the period at the end of subparagraph (F) 
and inserting ``, and'', and by inserting after subparagraph (F) the 
following new subparagraph:
                    ``(G) any mixture of diesel fuel (as defined in 
                section 4083(a)(3)), determined without regard to any 
                use of kerosene, at least 10 percent of which is 1 or 
                more of the following: biodiesel or renewable 
                biodiesel, as such terms are defined in section 40A.''.
    (b) 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. 6. INCREASE IN CREDIT FOR RESEARCH RELATING TO ALTERNATIVE AND 
              RENEWABLE ENERGY PROCESSES.

    (a) In General.--Section 41 of the Internal Revenue Code of 1986 is 
amended by redesignating subsection (h) as subsection (i) and by 
inserting after subsection (g) the following new subsection:
    ``(h) Increase in Credit Amount for Research Relating to 
Alternative and Renewable Energy Processes.--
            ``(1) In general.--In the case of any expense or payment 
        relating to a qualified resource--
                    ``(A) subsection (a) shall be applied by 
                substituting `40 percent' for `10 percent' each place 
                it occurs,
                    ``(B) subsection (c)(4) shall be applied by 
                substituting `6 percent' for `3 percent' in 
                subparagraph (A)(i), `8 percent' for `4 percent' in 
                subparagraph (A)(ii), and `10 percent' for `5 percent' 
                in subparagraph (A)(iii),
                    ``(C) subsection (c)(5) shall be applied by 
                substituting `24 percent' for `12 percent' in 
                subparagraph (A) and `12 percent' for `6 percent' in 
                subparagraph (B)(ii), and
                    ``(D) such expense or payment shall be taken into 
                account for purposes of this section after taking into 
                account expenses and payments which do not relate to a 
                qualified resource.
            ``(2) Qualified resource.--For purposes of paragraph (1), 
        the term `qualified resource' means--
                    ``(A) any clean-burning fuel (as defined in section 
                179A(e)(1), other than diesel fuel), and
                    ``(B) any closed-loop system, including any 
                anaerobic digester.''.
    (b) Allowance Against Alternative Minimum Tax.--Subparagraph (B) of 
section 38(c)(4) of such Code is amended by striking ``and'' at the end 
of clause (i), by striking the period at the end of clause (ii) and 
inserting ``, and'', and by inserting after clause (ii) the following 
new clause:
                            ``(iii) the credit determined under section 
                        41 to the extent that such credit is 
                        attributable to the increase for research 
                        relating to alternative and renewable energy 
                        processes under subsection (h) thereof.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to property placed in service after December 31, 2007.