To authorize the Secretary of Agriculture to make loans to qualified projects for the production of renewable source jet fuel.

Summary: Clean, Renewable Jet Fuel Act - Directs the Secretary of Agriculture (USDA) to enter into a standby loan agreement with the owners or operators of not more than 10 qualifying jet fuel projects.

Defines "qualifying jet fuel project" as a project located in the United States that produces at least 25 million gallons per year of liquid aviation turbine fuel or blending component that: (1) has at least 50% less lifecycle greenhouse gas emissions than petroleum; (2) is produced from renewable biomass; and (3) meets, or can be blended to produce a fuel that meets, an American Society of Testing and Materials (ASTM) standard for aviation turbine fuels.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Clean, Renewable Jet Fuel Act''.

SEC. 2. LOANS FOR QUALIFYING JET FUEL PRODUCTION PROJECTS.

    (a) Definitions.--In this section:
            (1) Direct loan.--The term ``direct loan'' has the meaning 
        given the term in section 502(1) of the Federal Credit Reform 
        Act of 1990 (2 U.S.C. 661a(1)).
            (2) Lifecycle greenhouse gas emissions.--The term 
        ``lifecycle greenhouse gas emissions'' means an amount of 
        emissions determined though the same methodology used by the 
        Environmental Protection Agency to evaluate lifecycle 
        greenhouse gas emissions under section 211(o) of the Clean Air 
        Act (42 U.S.C. 7545).
            (3) Market price.--The term ``market price'' means the 
        weekly average closing price of the front month contract for 
        West Texas Intermediate futures on the New York Mercantile 
        Exchange.
            (4) Qualifying jet fuel project.--The term ``qualifying jet 
        fuel project'' means a project located in the United States 
        that produces at least 25,000,000 gallons per year of liquid 
        aviation turbine fuel or blending component that--
                    (A) as produced has at least 50 percent less 
                lifecycle greenhouse gas emissions than petroleum;
                    (B) is produced from renewable biomass, as defined 
                in section 211(o)(1)(I) of the Clean Air Act (42 U.S.C. 
                7545(o)(1)(I)); and
                    (C) meets, or can be blended with other components 
                to produce a fuel that meets, an American Society of 
                Testing and Materials (ASTM) standard for aviation 
                turbine fuels.
            (5) Sales.--The term ``sales'' means the volume of jet fuel 
        described in paragraph (4) that has been sold to the open 
        market after being produced from a project, as specified in an 
        agreement entered into under subsection (b).
            (6) Secretary.--The term ``Secretary'' means the Secretary 
        of Agriculture.
            (7) Strike price.--The term ``strike price'' means a 
        specified price below which the United States shall make 
        payments in the form of a loan to the owner or operator of a 
        qualified jet fuel project and above which the owner or 
        operator of a qualified jet fuel project shall repay the loan 
        under the terms specified by an agreement entered into under 
        subsection (b).
    (b) Loans.--
            (1) Loan authority.--The Secretary shall enter into a 
        standby loan agreement under this section with the owners or 
        operators of not more than 10 qualifying jet fuel projects. 
        Such an agreement shall--
                    (A) provide that the Secretary shall make a direct 
                loan for the project;
                    (B) define the primary term of the agreement, which 
                shall not exceed the lesser of 10 years or 75 percent 
                of the projected useful life of the project (as 
                determined by the Secretary); and
                    (C) define the full term of the agreement, which 
                shall not exceed the lesser of 20 years or 90 percent 
                of the project useful life of the project (as 
                determined by the Secretary).
            (2) Strike price methodology.--The strike price shall be 
        determined by an auction process. The Secretary shall conduct 3 
        auctions over a period of 2 years. The 3 auctions shall be 
        structured in order to ensure, to the maximum extent possible, 
        that number of projects awarded under each auction is the same.
            (3) Loan disbursements.--A loan made under this section 
        shall be disbursed during the primary term of the loan 
        agreement whenever the market price falls below the strike 
        price. The amount of such disbursement shall be equal to the 
        excess of the strike price over the market price in each given 
        week, times the sales of the project for the following week 
        (but not more than a total level of disbursements specified in 
        the agreement).
            (4) Loan repayments.--The Secretary shall establish terms 
        and conditions, including interest rates and amortization 
        schedules, for the repayment of such loan within the full term 
        of the loan agreement, subject to the following limitations:
                    (A) In any calendar quarter during the primary term 
                of the agreement the loan recipient may elect to defer 
                some or all of its repayment obligations due in that 
                quarter if any new loan disbursements have been made in 
                that quarter. Any unpaid obligations will continue to 
                accrue interest.
                    (B) If in any calendar quarter during the primary 
                term of the agreement the market price is greater than 
                the strike price, the loan recipient shall meet its 
                scheduled repayment obligation plus deferred repayment 
                obligations, but shall not be required to pay in that 
                quarter an amount that is more than the excess of the 
                market price over the strike price, times the output of 
                the project.
                    (C) Unless the Secretary determines otherwise, at 
                the end of the primary term of the agreement, the 
                cumulative amount of any remaining repayment 
                obligations, together with accrued interest, shall be 
                amortized (with interest) over the remainder of the 
                full term of the agreement.
    (c) Compliance With Federal Credit Reform Act.--Loans under this 
section shall be subject to the requirements of the Federal Credit 
Reform Act of 1990.