21–330 

Calendar No. 116 

109TH CONGRESS REPORT " ! SENATE 1st Session 109–74 

RELIABLE FUELS ACT 

MAY 26, 2005.—Ordered to be printed 

Mr. INHOFE, from the Committee on Environment and Public 

Works, submitted the following 

R E P O R T 

[to accompany S. 606] 

TOGETHER WITH

MINORITY AND ADDITIONAL VIEWS 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Environment and Public Works, to which was 

referred the bill (S. 606) to amend the Clean Air Act to eliminate 

methyl tertiary butyl ether from the United States fuel supply, to 

increase production and use of renewable fuel, and to increase the 

Nation’s energy independence, and for other purposes, having considered the same, reports favorably thereon with amendments and 

recommends that the bill, as amended, do pass. 

GENERAL STATEMENT

In 1990, the Clean Air Act was amended to include the reformulated gasoline, or RFG, program. The program was designed to address persistent pollution from automobiles. While tailpipe standards for automobiles are effective for new vehicles, the RFG program added additional controls and was able to address emissions 

from vehicles of all ages within the current fleet. RFG program was 

required in metropolitan areas that have the most serious air pollution levels. Although not required to participate, some areas in 

the Northeast, in Kentucky, Texas and Missouri have elected to 

join, or ‘opt-in,’ to the RFG program as a relatively cost-effective 

measure to help combat their air pollution problems. Today, roughVerDate Aug 04 2004 19:58 May 27, 2005 Jkt 021330 PO 00000 Frm 00001 Fmt 6659 Sfmt 6601 E:\HR\OC\SR074.XXX SR074
2 

ly 35 percent of this country’s gasoline consumption is cleanerburning reformulated gasoline. 

One element of the RFG program was the requirement that RFG 

contain 2.0 percent minimum oxygen content by weight. This provision was of assistance in the goal of making gasoline burn cleaner, 

both in terms of criteria air pollutants and toxic air emissions. The 

addition of oxygen to gasoline resulted in greater supplies of fuel 

being available, given that the principal oxygenate additives are 

not derived from crude petroleum. 

RFG blended with oxygenates has exceeded all pollution reduction goals and substantially and cost-effectively improved the nation’s air quality. According to EPA, RFG has cut smog-forming 

pollutant emissions by over 25 percent, the equivalent of removing 

94,000 tons of harmful pollution from the air we breathe or taking 

15 million vehicles off our roads. The benzene content of RFG is 

some 60 percent lower than the benzene content of gasoline in 

1990. Total toxic air emissions have been reduced about 27 percent 

from 1990 levels. Cleaner-burning MTBE accounts for a large part 

of the overall emission reductions from RFG. 

The program set a variety of content and performance requirements, including a minimum content requirement for oxygen and 

maximum allowable benzene and heavy metal quantities in RFG. 

Through regulatory authority provided by the Act, EPA chose, in 

1993, to adopt performance standards for toxic air pollutants and 

volatile organic compounds (VOCs) rather than the prescriptive 

fuels formula allowed under Section 211(k)(3)(A). These performance standards required a 15 percent reduction in toxic air pollutants from baseline vehicles starting in 1995 and maintained 

through 1999, and required a 22 percent reduction from baseline 

vehicles beginning in 2000, as part of Phase II. Phase II also requires reductions in NOx and VOCs. 

Motor vehicle emissions of carbon monoxide, volatile organic compounds, and, most notably, toxics have been reduced drastically in 

RFG areas. Refiners have produced RFG that exceeded the statutory requirements to reduce toxic emissions, including emissions of 

benzene. Recent data suggest that refiners have achieved a 27 percent or higher reduction in toxic air pollutants in RFG (where 

MTBE was used) from the 1990 baseline. A 1998 study by the 

Northeast States for Coordinated Air Use Management 

(NESCAUM) concluded that Phase II RFG would reduce the public 

cancer risk by 20 percent. 

On March 29, 2001, EPA issued it’s Mobile Source Air Toxics 

Rule (MSAT) to limit air toxics emissions from motor fuels, as required by Section 202(l) of the Act. It is intended to ensure that 

refiners continue over-compliance with RFG and anti-dumping requirements by maintaining their average 1998–2000 toxic emissions performance levels for RFG and conventional gasoline. The 

MSAT rule commits EPA to revisiting additional fuel and vehicle 

MSATs controls in a 2005 rulemaking. The deadline in the CAAA 

for issuance of these regulations was June 1995. EPA is actively 

developing a proposal for a new mobile source air toxics rule. It is 

currently subject to a deadline suit, and a specific schedule has not 

yet been determined. 

The final MSATs rule was challenged by a number of parties. On 

May 24, 2001, the States of New York and Connecticut and the SiVerDate Aug 04 2004 19:58 May 27, 2005 Jkt 021330 PO 00000 Frm 00002 Fmt 6659 Sfmt 6601 E:\HR\OC\SR074.XXX SR074
3 

erra Club, Earth Justice, the Natural Resources Defense Council 

and the U.S. Public Interest Research Group filed suit against 

EPA, charging that the MSATs rule fails to achieve the pollution 

reductions mandated by the Clean Air Act. Other parties, including 

Hovensa LLC, and International Truck and Engine Corporation 

have filed petitions in the United States Court of Appeals challenging EPA’s final rule on the grounds that it is inconsistent with 

section 202(l) of the Act, that EPA acted arbitrarily and capriciously in promulgating the rule and did not adequately follow required notice and comment rulemaking procedures. On April 25, 

2003, the U.S. Court of Appeals for the D.C. Circuit issued its decision. It denied on the merits the claims of the environmental and 

State petitioners, except for remanding to EPA on the issue of explaining its decision not to require on-board diagnostic equipment 

for new heavy-duty vehicles over 14,000 pounds. 

There is no specific deadline in the Act for EPA to further reduce 

toxic air pollutants from mobile sources. Section 204, however, requires EPA to promulgate final regulations addressing hazardous 

air pollutants from vehicles and fuels by July 1, 2004, as per the 

MSAT rule. The Agency retains general authority to control emissions from motor vehicles of any air pollutant that causes or contributes to air pollution which may reasonably be anticipated to endanger public health or welfare. In a discussion focused on maintaining air toxics reductions from the RFG program, EPA’s Blue 

Ribbon Panel on Oxygenates in Gasoline specifically recommended 

that EPA should explore and implement mechanisms to achieve 

equivalent or improved public results that focus on reducing those 

compounds that pose the greatest risk. 

The panel recognized that the current mass-based performance 

requirements in the RFG program may not adequately account for 

and consider that the different exhaust components pose differential levels of risk to public health due in large part to their variable 

potency. 

While the RFG program is considered a general success, experts 

acknowledge that there is some uncertainty in estimating the actual quantity of mobile source emissions. It is difficult to verify the 

emission reductions associated with the RFG program as distinct 

from other mobile source emission reduction programs. In May 

2000, the National Research Council recommended that EPA make 

a number of improvements to the Mobile Source Emissions Factor 

model (MOBILE), including estimation of off-road vehicle emissions 

and incorporation of both mobile source toxic emissions and highemitting vehicles. 

More regular revisions and updating of this model is important 

for air quality planners. S. 606 requires the EPA to expedite resolution of the current complex model which generates important 

fuels-related emissions information and provides input for the MOBILE model so that vehicle manufacturers, fuel makers, air quality 

planners, and Congress have accurate information. 

Oxygenates 

The CAAA required that 2 percent by weight of RFG be oxygen. 

This requirement was not included in the Senate Environment and 

Public Works Committee’s reported version of S. 1630, the Clean 

Air Act Amendments of 1989. It was added on the Senate floor 

4 

after vigorous debate and was the only successful floor amendment. 

Proponents of that requirement had expected ethanol to be the oxygenate of choice for fuel providers. It was not regarded as a mandate to use ethanol, however, even by its sponsors. During floor debate on the measure, Senator Daschle, a co-sponsor of the amendment, stated that the oxygen standard was fuel neutral. (congressional Record, March 29, 1989, page S3513) Most refiners, blenders, and importers opted to use a cheaper and more easily used oxygenate, MTBE, in many nonattainment areas. MTBE currently is 

used in approximately 45 percent of RFG, while ethanol is used in 

slightly less than 55 percent of that fuel. Twenty States currently 

have statutory MTBE bans with 15 of those bans already in effect. 

In late 1993, EPA issued final regulations implementing the RFG 

program. In 1994, EPA issued another set of final rules that revised the RFG program. The revisions included a requirement that 

renewable oxygenates be used to meet 30 percent of the 2 percent 

oxygen content requirement in RFG. The 1994 rules were challenged by the American Petroleum Institute and the National Petroleum Refiners Association. The DC Circuit Court of Appeals decided that EPA lacked the authority to impose the renewable requirement and vacated the 1994 rulemaking. 

The principal benefits of oxygenates were the reduction of carbon 

monoxide emissions through more complete fuel combustion and 

the reduction of toxic air pollution. The oxygen content requirement 

formally took effect in 1995 and is currently satisfied by refiner use 

of either MTBE or ethanol. Today, approximately two billion gallons of MTBE and 1.7 billion gallons of ethanol (EtOH) are consumed to meet this RFG requirement. Initially, most of the ethanol 

was produced and consumed in the Midwest region of the country, 

but substantial quantities are now used in the Northeast and in 

California as a result of statewide MTBE bans in New York, Connecticut and California. In addition to use in the RFG program, 

ethanol and MTBE are used to help reduce emissions in carbon 

monoxide (CO) nonattainment areas as part of the wintertime 

oxygenated fuels program, which began in 1992. Originally, 40 CO 

nonattainment areas were required to participate in this winter 

fuel program. Today 15 areas in ten States participate, with ethanol as the predominant oxygenate. Several hundred million gallons of ethanol are used each year to satisfy this requirement. 

Section 211(k)(2)(B) of the CAA provides EPA the authority to 

waive the oxygen content requirement for RFG, in whole or in part, 

for an ozone nonattainment area upon the determination by the 

Administrator that compliance with the requirement would prevent 

or interfere with the attainment of a National Ambient Air Quality 

Standard (NAAQS). On April 12, 1999, California submitted to 

EPA a petition requesting such a waiver. EPA subsequently denied 

California’s request. In providing the States with access to this 

waiver authority on the condition of meeting a relatively stringent 

test, and under EPA’s authority under Section 211(c)(4), Congress 

sought to balance the desire for uniformity in our nation’s fuel supply with the obligation to empower States to adopt measures necessary to meet national air quality standards. 

5 

OBJECTIVES OF THE LEGISLATION

The Reliable Fuels Act, S. 606, is intended to address existing 

and potential MTBE contamination. 

In order to accomplish this objective, S. 606 achieves the following items: 

• Authorizes $200 million from the Leaking Underground 

Storage Tank (LUST) Trust Fund for State grants to clean up 

MTBE and other ether gasoline additives. Also authorizes an additional $200 million from the LUST Trust Fund for State and Federal activities to prevent releases and increase compliance under 

the UST program. 

• Requires EPA to phase down the use of MTBE within 4 

years of enactment. However, individual States may authorize the 

use of MTBE within their borders if they so desire. 

• Mandates the use of 6 billion gallons of renewable fuels introduced into commerce by the year 2012. 

• Expands existing EPA authority to allow for regulation of 

fuel additives for protection of water quality (current law only allows for regulation to protect air quality). 

• Repeals the Federal oxygen content requirement for RFG 

270 days after date of enactment. 

• Instructs EPA to require fuel and additive manufacturers 

to conduct tests on a regular basis to determine the health and environmental effects of new fuels and fuel additives. 

• Requires EPA to study the health and environmental impacts of using other additives as a substitute for MTBE. 

• Requires EPA to release a draft fuel study within 4 years 

of enactment. The study must contain an analysis of the changes 

in emissions of air pollutants and changes in overall air quality due 

to the use of fuels and fuel additives resulting from this bill. The 

final study must be published not later than 5 years from enactment. 

• Allows States a more streamlined procedure for disallowing the waiver of the Reid Vapor Pressure limitation for ethanol-blended gasoline. 

• Allows Governors to opt-in both classified and non-classified areas of the Ozone Transport Region States to the RFG program. 

• Authorizes a total of $1 billion over four fiscal years for 

grants to merchant MTBE producers for assisting in the conversion 

to production of other fuel additives. 

AREAS THAT USE REFORMULATED GASOLINE

AS OF APRIL 14, 2005 

Mandatory areas: 

Los Angeles, CA 

San Diego, CA 

Hartford, CT 

New York City (NY-CT-NJ) 

Greater Philadelphia (PA-NJ-DE-MD) 

Chicago, IL (IL-WI-IN) 

Baltimore, MD 

Houston, TX 

6 

Milwaukee, WI 

Sacramento, CA 

San Joaquin Valley, CA 

District of Columbia 

Maryland—the DC suburbs 

Virginia—the DC suburbs 

Atlanta, GA* 

Baton Rouge, LA* 

Opt-In Areas: 

State of Connecticut (that portion not adjacent to NYC or 

Hartford) 

State of Delaware (that portion not part of Philadelphia 

area) 

Kentucky portion of the Cincinnati Metropolitan Area 

Louisville, KY 

Maryland-Queen Anne and Kent counties 

State of Massachusetts 

St. Louis, MO 

New Hampshire portion of Greater Boston 

The State of New Jersey (that portion not adjacent to NYC 

or Philadelphia area) 

New York—Dutchess County (near NYC) and part of 

Essex County (upstate) 

State of Rhode Island 

Texas—Dallas/Fort Worth area 

Virginia—Richmond, Norfolk-Virginia Beach-Newport 

News 

* Applicability currently under litigation 

SECTION-BY-SECTION ANALYSIS

Section 1. Short title; table of contents. 

The bill is entitled ‘‘The Reliable Fuels Act’’. 

TITLE I—GENERAL PROVISIONS

Sec. 101. Renewable content of gasoline. 

Section 101 sets forth a comprehensive program to increase the 

use of renewable fuels, in the United States. There are several essential components of the program, which have been carefully designed to achieve the overall goals. Changing any of these essential 

components would undermine the objectives of the program. 

The first essential element is the overall size of the renewable 

fuels mandate, and the schedule for its implementation. To ensure 

that the Administrator of the Environmental Protection Agency has 

adequate time to promulgate regulations for implementation of the 

program, the program begins in 2006. The program starts at 3.8 

billion gallons of renewable fuels in 2006, and escalates to 6.0 billion gallons in 2012. Thereafter, the relative percentage of renewable fuels required, as a percentage of gasoline in 2012, remains 

constant. This phase-in schedule is essential to the success of the 

program. The renewable fuels industry must be given an opportunity to ramp-up production capacity and the petroleum industry 

must be given an opportunity to make adjustments to the refining, 

7 

supply and distribution system necessary to successfully implement 

the program. 

The second essential element is the credit trading program. The 

renewable fuels requirement is expected to be satisfied primarily 

with the addition of ethanol to gasoline. Ethanol blended gasoline 

cannot be transported in pipelines because of ethanol’s affinity for 

water. This means that the ethanol will have to be transported separately to the terminals by rail, truck, or barge. As the distance 

from the location of ethanol manufacture to the terminal gets larger, so do the costs. In addition, adding ethanol to gasoline increases 

the gasoline’s volatility. If the use of ethanol were required in lowvolatility gasoline the industry would be forced to incur the additional costs of offsetting ethanol’s impact on volatility. The credit 

trading provisions allow the ethanol to be used where it makes the 

most economic and environmental sense while providing a mechanism to transfer those credits back to the point of gasoline production or importation so that refiners, blenders, and importers can 

demonstrate compliance with the renewable fuels obligation. 

The credit banking and trading provisions of the bill give the Administrator the flexibility to design a workable program. While refiners, blenders, and importers will ultimately be responsible for 

meeting the renewable fuels obligation, the fact is that most of the 

ethanol that is required under this program will be added to gasoline at the distribution terminals, because ethanol cannot generally 

be transported with gasoline in pipelines. Under the credit banking 

and trading provisions of the bill, the Administrator is required to 

provide for the ‘generation of an appropriate amount of credits by 

any person that refines, blends, distributes or imports gasoline that 

contains renewable fuels’. This would include the owners and operators of the distribution terminals. 

The program requires the use of renewable fuels in gasoline. The 

requirement can be met by adding ethanol to gasoline (i.e., gasohol), or through the use of alternative fuels like 70 and 85 percent 

ethanol fuels (i.e., E70, E85). In addition, ethanol made from cellulosic biomass is encouraged by counting each gallon of ethanol 

produced from cellulosic biomass as if it were 1.5 gallons of cornbased ethanol. This should encourage expansion in the cellulosic 

biomass ethanol industry, which makes ethanol from feedstocks 

like woodchips and switchgrass. In addition, the program allows for 

the generation of credits from the use of biodiesel. 

The renewable fuels obligation is an annual average obligation 

for the use of renewable fuels. It is believed that the use of ethanol 

to meet this requirement will be fairly uniform throughout the 

year. Nevertheless, to ensure this, the Administrator is required to 

assess the use of ethanol throughout the year and in the event that 

less than 35 percent is used in either the winter or summer periods, the Administrator is directed to promulgate regulations to ensure that at least 35 percent of the required amount is used in each 

period. If the Administrator promulgates such rules, the life of 

credits will be extended for an additional year. 

The bill provides for waivers from the program under certain circumstances. Upon petition by one or more States, the bill allows 

the Administrator to waive the program, in whole or in part, based 

on a determination that the renewable fuel requirement would severely harm the economy or environment of a State, region, or the 

8 

U.S. in general, or based on a determination that there is an inadequate domestic supply or distribution capacity to meet the renewable fuel requirement. The bill requires the Secretary of Energy to 

assess whether the program requirements would likely result in 

significant adverse impacts on consumers in calendar year 2006 

and if so, requires the program to be waived in calendar year 2006 

to avoid any such adverse impacts on a national, regional or State 

basis. 

In addition, the bill exempts small refineries from participating 

in the program until 2011, and requires this exemption to be extended for not less than 2 years for any small refinery for which 

compliance with the program is found to impose a disproportionate 

economic hardship as determined by a study conducted by the Secretary of Energy. In the bill, small refineries are allowed to waive 

this exemption and opt-in to the program earlier than 2011, as well 

as petition for an extension of the exemption at any time. 

The bill also requires that a market concentration analysis of the 

ethanol production industry be performed annually by the Federal 

Trade Commission (FTC) to determine whether there is sufficient 

competition within the industry. There is concern among some that 

insufficient competition within the industry, particularly in combination with a federally mandated renewable fuel program, could 

lead to price-setting and other anti-competitive behavior. The FTC 

is to use the Herfindahl-Hirschman Index (HHI) to measure market concentration, which is a standard tool used by the FTC and 

the Department of Justice. Any industry with an HHI score above 

1800 is considered to be highly concentrated. The committee recognizes that the HHI is one among many indicators of possible anticompetitive behavior. 

The bill contains a safe-harbor provision regarding the liability 

of manufacturers and distributors of renewable fuels that are subject to the bill’s mandate. The principle behind this provision is 

simple. No one should be subject to tort liability simply for manufacturing or selling a product that was mandated by Congress. The 

provision applies only to claims that a renewable fuel mandated by 

the act constitutes a defective product in its design, manufacture 

or marketing. 

Some have argued that imposition of strict product liability is a 

prerequisite for appropriate remedial actions. This view is incorrect. First, negligence theories more than suffice to address possible remedial questions. Second, the use and improvement of the 

UST program in this legislation, provides a fair and efficient mechanism to address potential contamination problems. Third, strict liability theories are highly inefficient mechanisms for addressing 

water quality concerns. For example, a recent report from the 

Council of Economic Advisors found that using the tort system in 

this way ‘is extremely inefficient, returning only 20 cents of the 

tort cost dollar for that purpose.’ (Council of Economic Advisors, 

Who Pays for Tort Liability Claims? An Economic Analysis of the 

U.S. Tort Liability System, April 2002, at 9). 

Congress has extended liability protections in a variety of settings, including medical care, firefighter assistance, educational institutions, firearms, nuclear energy, and many other areas when 

sound public policy or fairness demands such an extension. 

9 

To address the uncertainty regarding the long-term health and 

environmental effects of renewable fuels the bill requires EPA to 

conduct studies of those effects. If those studies show that additional regulation is necessary, the Administrator has the authority 

to initiate a rulemaking. Liability protection under the bill would 

depend on compliance with applicable rules that the Administrator 

may adopt. This balanced approach will protect the public from adverse health and environmental impacts from renewable fuels 

while not exposing manufacturers and distributors to tort lawsuits 

for complying with the renewable fuels mandate of the bill. 

Some have contended that this provision would give ‘polluters 

. . . sweeping liability exemptions for damage to public health or 

the environment resulting from renewable fuels or their use in conventional gasoline.’ Nothing could be further from the truth. In the 

first place, the safe harbor provision does not affect claims based 

on the wrongful release of a renewable fuel into the environment. 

Those responsible for releases to the environment receive no protection whatsoever. Moreover, the safe harbor only applies if the 

maker or seller of a renewable fuel complies with EPA regulations 

to protect the public health and environment. Under this bill, the 

Administrator has the authority to control or even prohibit the sale 

of renewable fuels that may adversely affect air or water quality 

or the public health. There is no safe harbor if the Administrator’s 

rules are violated. 

Under existing section 211(h) of the Clean Air Act, the Administrator was required to promulgate regulations to reduce the volatility of conventional (i.e., non-reformulated) gasoline by limiting its 

Reid vapor pressure (RVP). Reid vapor pressure is a method for determining gasoline’s volatility. Those regulations have long since 

been established and they require that during the summer highozone season the RVP of conventional gasoline not exceed 9.0 

pounds per square inch (psi) in ozone attainment areas and northern ozone non-attainment areas, and 7.8 psi in southern ozone nonattainment areas. Section 211(h) also recognizes, however, a 1.0 psi 

RVP waiver for gasoline containing 10 percent denatured anhydrous ethanol. This means that under the Agency’s regulations gasoline containing ethanol can have an RVP of 10.0 psi in ozone attainment areas and northern ozone nonattainment areas, and 8.8 

psi in southern ozone nonattainment areas. In addition to the Federal RVP regulations, the Agency has also approved numerous 

State RVP controls under section 211(c)(4)(C) of the Act, upon a 

demonstration by the State that the RVP controls were necessary 

to achieve a national ambient air quality standard and that there 

were no reasonable and practicable non-fuel measures available 

that would bring about timely attainment. 

The one-pound RVP waiver for ethanol blends of conventional 

gasoline is important for supply reasons. Because of the waiver, 

ethanol can be splash blended into finished gasoline at the distribution terminals. In other words, because of the waiver, the gasoline can be sold either with ethanol or without it. In contrast, if 

the waiver were not allowed, special low volatility blendstocks 

would be required to compensate for ethanol’s impact on gasoline 

volatility. This has implications for the supply and distribution of 

gasoline. Without the one-pound waiver, gasoline could be stranded 

if there is not ethanol available to blend with it. Section 819(c) of 

10 

the bill contains provisions to ensure that there is adequate leadtime and that supply considerations are taken into account. 

Section 101(c) of the bill retains the one-pound RVP waiver for 

ethanol blends of conventional gasoline. However, the bill also provides States an expedited process to eliminate the one-pound waiver in any area of a State if the State demonstrates to the Administrator that the one-pound waiver will increase emissions that contribute to air pollution in any area in the State. It is the intent of 

this provision to require such a demonstration for any area of the 

State for which the one-pound waiver would be eliminated. In addition, while it is the intent of this provision to establish an expedited process by which the State can request the Administrator to 

eliminate the one-pound RVP waiver, it is not the intent to expand 

the authority of the Governor of a State beyond what he or she 

may have under State law. Furthermore, it is expected that the 

supporting documentation submitted by the Governor in support of 

the notification to eliminate the one-pound waiver would include a 

detailed analysis, including urban/regional airshed modeling, of the 

impact of the one-pound waiver on air quality in any area of the 

State where the Governor seeks to have the one-pound waiver 

eliminated. 

Sec. 102. Renewable fuel. 

The bill requires the Administrator to conduct, with respect to 

each conventional gasoline use area and each reformulated gasoline 

use area in each State, a survey to determine the market shares 

of various types of fuels with ethanol or renewable fuels. The report is to be submitted to Congress. 

The bill provides limited Federal assistance for the development 

of ethanol production capabilities. It is the committee’s intent that 

such assistance be targeted to those areas of the country that currently has low rates of ethanol production. 

For example, the bill requires the Secretary of Energy to establish a 10-year program to provide Federal loan guarantees for construction of facilities that convert municipal solid waste into fuel 

ethanol. The Secretary is directed to give preference to applicants 

located in markets with the greatest need for such a facility, either 

because of limited availability of land for waste disposal or because 

of a high level of demand for fuel ethanol due to low local production rates of fuel ethanol. 

The bill also requires the Administrator to provide grants for the 

research, development, and implementation of renewable fuel production technologies. Grant eligibility is limited to entities located 

in ‘RFG States,’ or States containing one or more covered areas as 

defined in section 211(k)(10)(D) of the Clean Air Act (42 U.S.C. 

7411(k)(10)(D)). Eligible entities must be academic institutions or 

consortia comprised of combinations of academic institutions, industry, and government in such States. The bill authorizes $25 million for each of fiscal years 2006 through 2010 for the grant program. 

The committee’s bill authorizes loan guarantees for up to 4 cellulosic ethanol commercial demonstration projects under the Federal Non-Nuclear Energy Research and Development Act of 1974. 

These projects will produce cellulose ethanol from agricultural residue or municipal solid waste. The guarantees may be on a nonVerDate Aug 04 2004 19:58 May 27, 2005 Jkt 021330 PO 00000 Frm 00010 Fmt 6659 Sfmt 6601 E:\HR\OC\SR074.XXX SR074
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recourse basis. Loan guarantee fees may not exceed 1 percent of 

the outstanding indebtedness covered by the guarantee. 

In order to ensure that private sector applicants under this program bear an appropriate level of risk, the authority to guarantee 

loans is limited by the requirement that applicants provide financial and technical assurances. These requirements are designed to 

reflect commercial lending practices. The requirements also are designed to ensure that substantial private sector risk precedes any 

government risk. While any commercial technology demonstration 

carries inherent risk, placing a substantial portion of that risk on 

the private sector applicant should ensure that only the most robust projects with highest probabilities for commercial success are 

considered. To be funded, a project must meet the following criteria 

and conditions: • Validation of Project Design: The project design must have 

been validated through the operation of a continuous process facility with a cumulative output of at least 50,000 gallons of ethanol, 

with a significant fraction being produced using the same protocols 

as incorporated into the design of the commercial facility. • Technical Review: A project must undergo a full technical 

review. Full technical review shall consist of a due diligence review 

of the project design specifications. • Economic Viability: The project must be economically viable. To meet this requirement, the project must have (1) long-term 

sales contracts for ethanol off-take, (2) data showing historical production levels of feedstock substantially in excess of project requirements, (3) multi-year contracts for feedstock acquisition, (4) minimum inventory levels sufficient to protect against disruptions in 

feedstock supply, and (5) strategies for protection against weather 

risks. • Adequate Project Performance Guarantees: The project 

must have adequate project performance guarantees, including—— -Construction completion guarantees under which the 

project has binding commitments to complete the construction of the project to the original design specifications, 

backed by a performance bond with a maximum completion price. 

-Project startup guarantees under which the project has a 

binding commitment from the project sponsors to contribute additional financial resources, up to a level equal 

to 50 percent of their initial equity investment, to correct 

shortfalls in technical performance levels during the initial 

2 years of project operation. Such additional contributions 

shall be triggered if the technical performance shortfall 

poses significant risk to the projected debt repayment 

schedule. 

-Sustained operation guarantees under which the Federal 

Government has recourse to reimbursement from project 

participants in the event that the project defaults on the 

loan. Each project participant shall provide a binding commitment to reimburse the Federal Government for losses 

in the event of a default, capped at an amount equal to the 

funds paid by the project to that party for the supply of 

goods and services, less all reasonable direct and indirect 

costs incurred by the party for the provision of such goods 

12 

and services, over the 4-year period preceding the default. 

The project participants subject to this guarantee shall include the primary licensors of cellulose conversion technology, the supplier of biocatalysts to the project, and any 

equity participants providing design, project management 

or other services. 

The extent of recourse by the Federal Government shall be limited to the performance guarantees described above. 

• Reasonable Assurance of Repayment: There must be reasonable assurance of repayment of the loan. To meet this requirement: 

-The project must have been subjected to a probabilistic 

risk analysis of project volatility that demonstrates positive economic returns to the equity investors and full repayment of the loan under median conditions. The risk 

analysis shall (1) identify the major elements of risk and 

volatility and the parties bearing the risk, (2) estimate risk 

values for each element, and (3) identify and evaluate mitigation measures to reduce the level of volatility in the estimates. 

-The project must have binding commitments from equity 

investors to provide an initial equity contribution equal to 

at least 20 percent of the total project cost, as well as any 

additional financial contributions needed to meet performance guarantees for construction completion, startup and 

sustained operations. 

-The project equity investors must make their contributions proportionally with disbursements of loans backed by 

the Federal guarantee. 

The criteria and conditions set forth above for selecting projects 

and issuing loan guarantees should be strictly followed to ensure 

that the program is financially sound, while furthering the production of cellulose-based ethanol. At the same time, these criteria and 

conditions should in no way lead to lengthy technical or financial 

due diligence reviews by DOE, especially in light of the 90-day 

deadline for DOE to approve or reject project applications. 

If current appropriations are insufficient to cover all three 

projects, project applications will be acted on as they are received. 

Additional projects will be funded to the extent appropriations are 

available for subsequent fiscal years. 

If the Federal Financing Bank exercises its authority to make a 

direct loan to a project under the Federal Financing Bank Act of 

1973, the rate of interest on such loan shall not exceed the yield 

on Treasury securities of comparable maturity. 

Additionally, this language incorporates by reference the limitations under existing law for the application of loan guarantees. 

These most significant of these are listed below. 

KEY STATUTORY PROVISIONS OF § 19 TO THE FEDERAL NON-NUCLEAR ENERGY

RESEARCH AND DEVELOPMENT ACT OF 1974 (LOAN GUARANTEES) 

(1) Guaranteed obligations not subordinated to other debt. 

(2) Term of guarantee may not exceed 20 years (or if less 90 percent of useful life). 

13 

(3) DOE can require project to convert to conventional financing 

after 12—13 years (or pay additional fee of 1 percent of remaining 

obligation). 

(4) DOE can make advance commitments to issue loan guarantees. 

(5) DOE may make advances to avoid default. Secretary is subrogated to rights of lender in the event of default. 

(6) Administrative fee of at least 1 percent of guarantee. 

(7) Applicant must be a U.S. citizen (see 46 CFR 802). 

(8) Intellectual property rights are governed by δ19(g)(4). 

(9) Department of Treasury concurrence on each loan guarantee. 

Sec. 103. Survey of renewable fuels consumption. 

The bill requires the Administrator to conduct and publish a survey of renewable fuels consumption in the motor vehicle fuels market on a monthly basis. In developing and conducting this survey, 

the Administrator shall protect the confidentiality of the responses 

to the survey and shall include the bill’s specified elements of the 

survey. 

TITLE II—FEDERAL REFORMULATED FUELS

Sec. 201. Short title. 

This subtitle may be cited as the ‘‘Federal Reformulated Fuels 

Act of 2005’’. 

Sec. 202. Leaking underground storage tanks. 

SUMMARY

The bill authorizes appropriations not to exceed $200 million 

from the Leaking Underground Storage Tank (LUST) Trust Fund 

to be used for cleanup and treatment of MTBE. The bill authorizes 

an additional $200 million over 6 years from the LUST Trust Fund 

for EPA and States to conduct inspections, issue orders, and bring 

actions under Subtitle I of the Solid Waste Disposal Act. 

DISCUSSION

In 1984, Congress enacted, as Subtitle I of the Solid Waste Disposal Act, a comprehensive program to address the problem of leaking underground storage tanks. Among other things, the program 

required EPA to develop leak detection and prevention standards 

for underground storage tanks (USTs). It authorized the Agency to 

compel tank owners and operators either to take corrective action 

to clean up leaking tanks and comply with standards for USTs or 

to close the tanks. States have largely taken the lead in implementing and enforcing the program requirements, including corrective action requirements. 

States receive Federal funds from the LUST Trust Fund. Revenue for this Fund comes from a one-tenth of one cent tax on all 

petroleum products. This tax generates approximately $170 million 

per year. The interest on the principal in the fund generates approximately $70 million annually (roughly the amount of annual 

appropriations from the LUST Trust Fund). 

Amounts are appropriated each year from the Trust Fund for the 

States and EPA to implement and enforce the UST corrective action requirements; to conduct cleanups in certain limited situations 

14 

where there is no financially viable responsible party or where a 

responsible party fails to undertake the appropriate corrective action; to take corrective action in cases of emergency; and to bring 

cost recovery actions against parties to seek reimbursement of costs 

expended from the Fund to clean up sites. The balance of the Trust 

Fund is approximately $2.25 billion. The annual appropriation 

from the Trust Fund for fiscal year 2005 was approximately $70 

million. Congress has appropriated approximately $10 million per 

year from general revenues for State implementation of leak prevention and detection programs. 

In addition to the Federal LUST Trust Fund, many States have 

also established funds, capitalized through State gas taxes, fees, 

and other mechanisms, to pay for cleanups and to provide assistance to tank owners in complying with other requirements. States 

spend approximately $1 billion per year from their trust funds. In 

recent years, however, the claims against those funds have risen 

dramatically. 

More than a million leaking USTs have been closed under this 

program., EPA estimates that over 670,000 active USTs contain petroleum products. Some of these tanks have leaks, causing potential harm to human health and the environment. A number of recent, high profile contamination cases have highlighted this problem. MTBE has been detected at thousands of leaking UST sites. 

In some cases, drinking water wells have been closed due to these 

releases of MTBE. According to EPA, States have reported more 

than 450,000 confirmed releases from USTs. Cleanups have been 

initiated for more than 400,000 releases and almost 320,000 cleanups have been completed. In spite of this progress, many thousands 

of cleanups remain to be completed. EPA, States, and the private 

sector have suggested that lack of resources, both for cleanup and 

for inspections and enforcement, have limited efforts to fully address MTBE contamination and leaking USTs. Title 2 of this bill 

addresses these concerns. 

Section 2 reconfirms the authority of the Administrator and the 

States to use funds from the LUST Trust Fund for the cleanup of 

sites contaminated by MTBE from leaking USTs. In addition, Section 2(a) authorizes the Administrator and the States to conduct 

such cleanup activities using specifically designated funds made 

available under new Section 9011(a) from the LUST Trust Fund. 

In order to undertake a corrective action under this subsection, the 

Administrator or a State must still comply with the requirements 

of Section 9003(h)(2) of the Solid Waste Disposal Act. States are to 

exercise this authority in accordance with their cooperative agreements. 

Relatively low levels of MTBE can be detected in groundwater. 

The detection of MTBE, by taste and smell, can make the water 

unpalatable, but not necessarily harmful. This section amends Section 9003 of the Solid Waste Disposal Act to clarify that the Administrator and the States may undertake corrective actions whenever 

the presence of MTBE in groundwater presents a threat to public 

welfare, even in situations where the level of MTBE is not so high 

as to present a threat to human health. 

Section 2 amends Subtitle I of the Solid Waste Disposal Act by 

creating a new Section 9010 giving States greater flexibility in 

their use of LUST funds. New Section 9010 authorizes EPA and 

15 

the States to use funds appropriated from the LUST Trust Fund 

to conduct inspections, issue orders, or bring actions under Subtitle 

I. Funding authorized under this section is for both formal enforcement actions, such as judicial actions and administrative orders, 

and related measures to secure compliance, such as notices of violation or warnings. This increased funding for inspections and enforcement related activities will enable States and EPA to secure 

greater compliance with UST standards. Increased compliance will 

avoid future releases and resulting cleanup costs. Funds authorized 

under this provision may be used for cost recovery. 

This section does not change current law on State authority 

under authorized programs or Federal authority to enforce the requirements of Subtitle I. Nor does this provision affect EPA’s authority to use other funds to enforce the UST program. EPA receives funding from sources other than the LUST Trust Fund to 

undertake inspection and enforcement related activities for leak detection and other preventive requirements. Any LUST Trust Fund 

appropriations used for such enforcement activities by EPA are expected to supplement funds that the Agency has been receiving, 

and will continue to receive, from sources other than the LUST 

Trust Fund. 

In addition to authorizing funding for States and EPA for federally authorized programs, this section authorizes States to use 

funds to undertake inspection and enforcement related actions for 

State tank leak detection, prevention, and other requirements 

through State programs with requirements that are similar or 

identical to Subtitle I. State agencies currently receive funding 

from EPA from sources other than the LUST Trust Fund to undertake such activities for leak detection and other preventive requirements. It is expected that States will continue to receive funding 

from EPA from these other sources, as well as from the LUST 

Trust Fund, for these activities. Any LUST Trust Fund appropriations used for enforcement related activities by States should supplement funds that the States have been receiving, and will continue to receive, through grants authorized under Section 2007(f). 

Section 2 also creates a new Section 9011 to increase the levels 

of authorized funding for measures related to corrective actions and 

enforcement. This section authorizes appropriations for two major 

and equally important activities—funding an immediate need to 

address MTBE, which is currently coming from leaking underground tanks and is creating problems in numerous drinking water 

wells, and facilitating inspection and enforcement activities to 

avoid similar problems being created in the future. Section 9011(1) 

authorizes a one-time appropriation of $200 million for corrective 

actions with respect to MTBE. The bill authorizes substantial funding to clean up MTBE contamination in recognition of the fact that 

this problem has arisen, in part, as a result of increased use of 

MTBE by refiners in an effort to meet Federal oxygenate requirements. Section 9011(2) authorizes an additional $200 million over 

the period between fiscal years 2005 through 2010 to conduct inspections or issue orders or bring actions under Subtitle I. There 

is broad consensus that more resources are needed to conduct inspections to ensure that underground tanks comply with applicable 

regulations and to ensure early detection of leaks and other problems. EPA has estimated that it would cost approximately $93 milVerDate Aug 04 2004 19:58 May 27, 2005 Jkt 021330 PO 00000 Frm 00015 Fmt 6659 Sfmt 6601 E:\HR\OC\SR074.XXX SR074
16 

lion over what is currently appropriated for the first year, and $70 

million each year thereafter, to inspect facilities on an annual 

basis. A biannual inspection schedule would cost approximately $63 

million over what is currently appropriated for the first 2 years 

combined, and $20 million additional annually thereafter. 

Sec. 203. Restrictions on the use of MTBE. 

SUMMARY

Section 203 restricts the use of MTBE, but allows States to individually authorize the sale and use of MTBE within their own borders. 

DISCUSSION

While the States can authorize the sale and use of MTBE, they 

cannot require its sale or use. Section 203 also clarifies the Administrator’s authority to allow trace quantities of MTBE notwithstanding the prohibition on MTBE use. This provision recognizes 

that MTBE has been used in gasoline for over 20 years, and as 

such will be present in trace quantities throughout the distribution 

system even after its use in motor fuels is prohibited. Recognition 

of such trace quantities is also appropriate because MTBE may be 

generated as a trace byproduct in the production of other gasoline 

components. 

The bill provides for transition assistance to merchant MTBE 

manufacturers. To be eligible for such assistance, the manufacturer 

must be making MTBE at time of enactment through the time that 

the prohibition on MTBE use takes effect. This provision recognizes 

that although Congress has reconsidered the relative value of 

MTBE, Congress also recognizes that MTBE is an integral part of 

the fuels system as a result of the reformulated gasoline oxygen 

content requirement and that lead-time must be provided to allow 

the industry to transition to substitutes. Essentially, transition assistance is premised on the facts that: (1) MTBE is widely used because of a Federal mandate, the oxygen content requirement; (2) 

MTBE has been effective in addressing the energy and environmental concerns that lay at the heart of a larger Federal program 

requiring the use of RFG; (3) the government, as a result of the 

first two points, bears great responsibility for any attendant losses 

attributable to the change in legal status of MTBE; and (4) failure 

to address the consequences of this change in status may undermine any incentive for additive manufacturers to produce new generations of additives that will be needed to replace MTBE and to 

meet future energy and environmental goals. 

Sec. 204. Elimination of oxygen content requirement for reformulated gasoline. 

In addition to repealing the reformulated gasoline oxygen content 

requirement and ensuring that the air toxics benefits of the reformulated gasoline program are maintained, this provision requires 

EPA to simplify the existing reformulated gasoline regulations by 

replacing the less stringent VOC Control Region 2 requirements 

with the more stringent VOC Control Region 1 requirements. 

(204(d)) This change has no effect on the VOC adjustment that currently applies to ethanol blends of reformulated gasoline in MilVerDate Aug 04 2004 19:58 May 27, 2005 Jkt 021330 PO 00000 Frm 00016 Fmt 6659 Sfmt 6601 E:\HR\OC\SR074.XXX SR074
17 

waukee and Chicago or on the Agency’s authority to expand that 

adjustment to other reformulated gasoline areas. 

Section 204(b). The goal of this provision is to ensure that real 

world air toxic emission reduction benefits are maintained, as recommended by EPA’s Blue Ribbon Panel on Oxygenates in Gasoline. 

The petroleum industry did much better than required by law 

when it came to reducing toxic air pollutant emissions from reformulated gasoline. In fact, the industry did better in Phase I (1995– 1999) of the reformulated gasoline program than it was even required to do under the more stringent Phase II (2000 and beyond) 

requirements. Concerns were raised by the Blue Ribbon Panel that 

some of these real world benefits could be lost as a result of repeal 

of the reformulated gasoline oxygen mandate and phase-down in 

MTBE use. This provision ensures that those real world benefits 

are not lost. 

To ensure that the air toxics benefits of the reformulated gasoline program are maintained, the Administrator promulgated the 

Mobile Source Air Toxics Rule (MSAT Rule) on March 29, 2001. 

That rule requires that refineries and importers continue to attain 

the same level of air toxics performance that they attained in 

1998–2000. The more stringent standards imposed by the rule do 

not apply to incremental volumes of reformulated gasoline production, i.e., production in excess of what the particular refinery or importer produced in 1998–2000. Gasoline production above the baseline volumes is subject to the Phase II reformulated gasoline standards, which require a 21.5 percent reduction in aggregate air toxics 

emissions reductions, relative to 1990 baseline levels. EPA excluded these incremental volumes from the more stringent standard because the Agency did not want to discourage the production 

of reformulated gasoline and because the incremental volume adjustment is ‘unlikely to have a material impact on air toxic emissions from gasoline.’ 66 Fed. Reg. 17230, 17249 (March 29, 2001). 

Section 204(b) of the bill improves EPA’s existing rule in two 

ways. The provision requires EPA to promulgate a rule within 270 

days of enactment to establish ‘for each refinery or importer (other 

than a refinery or importer in a State that has received a waiver 

under section 209(b) with regard to gasoline produced for use in 

that State), standards for toxic air pollutants from use of the reformulated gasoline produced or distributed by the refinery or importer that maintain the reduction of the average annual aggregate 

emissions of toxic air pollutants for reformulated gasoline produced 

or distributed by the refinery or importer during calendar year 

1999 and 2000 . . . . ’ It is the intent of this provision that EPA 

expeditiously revise the mobile source air toxics rule promulgated 

on March 29, 2001, to change the baseline provisions from 1998–

2000 as in the existing rule to 1999–2000. 

In addition, to ensure that the average annual aggregate air 

toxic emission reduction benefits are maintained on a regional 

basis, defined to be a PADD (Petroleum Administration for Defense 

District), the Administrator is required to continue to monitor average annual aggregate air toxics emissions to ensure that the performance achieved in 1999–2000 is maintained into the future. If 

the Administrator determines that average annual aggregate air 

toxics emission reductions are not maintained in any PADD, relative to 1999–2000 performance, the Administrator is required to 

18 

expeditiously revise the mobile source air toxics rule to eliminate 

the incremental volume exclusion in MSAT for reformulated gasoline. 

Section 204(c) permits commingling at retail stations of Reformulated Gasoline (RFG) containing ethanol and RFG that does not 

contain ethanol. This provision is intended to increase retailer 

flexibility during times of tight RFG supplies by permitting them 

to switch between different types of RFGs without draining their 

underground storage tanks, while at the same time maintaining 

environmental protections inherent in the RFG program. This provision will be included in section 211(k) of the Clean Air Act. 

As a practical matter, commingling is unlikely to occur on a regular basis. Most gasoline markets are not likely to be supplied with 

various gasoline formulations. In addition, it is undesirable for retailers to switch back and forth between ethanol-blended and other 

types of gasoline due to the effects that ethanol has on dispenser 

seals, and the need for more frequent filter change-outs. However, 

if faced with a tight market, a commingling allowance provides 

flexibility to retailers to supply gasoline to end-users. 

There is concern that widespread commingling of ethanol with 

non-RVP-adjusted gasolines could increase VOC emissions. This 

section requires that retailers certify that the commingled product 

meet all content and emissions performance standards for reformulated gasoline. In addition, emission control strategies already in 

place would limit the amount of VOCs that could actually escape 

into the environment. These include Stage I&II vapor recovery (in 

nonattainment areas), pressure/vacuum valves on tank vents, onboard refueling vapor recovery systems, and on-board vehicle vapor 

controls. This provision is not intended to authorize or allow the 

U.S. Environmental Protection Agency or any other State or Federal Government agency to require that gasoline be reformulated 

to provide an adjustment to offset any potential VOC emissions increase from retail commingling. 

In addition, any party other than the retailer shall not be subject 

to an enforcement action or penalties under section (d) solely arising from the commingling of compliant gasolines by the retailer, 

unless the other party caused commingling that was not intended 

by the retailer or unless the other party failed to complete the 

quality assurance and oversight measures specified under current 

gasoline regulations. 

Section 204(e) This provision expressly preserves baseline adjustments granted previously under 40 CFR 80.915(g) of the Mobile 

Source Air Toxic rule, but only to the extent they are based on the 

1999–2000 base period adopted by this Section. It also allows the 

Administrator to make adjustments applicable to the refinery specific standards that a refiner must meet under clause (b)(2) of Section 204. 

The Administrator may, but is not required, to change a ‘clean 

gasoline producer’ baseline adjustment to reflect the Federal MTBE 

ban, but may not lower a refiner’s baseline to less than the average 

reduction in toxic air emissions in reformulated gasoline supplied 

to PADD I during the calendar years 1999–2000. 

19 

Sec. 205. Public health and environmental impacts of fuels and fuel 

additives. 

SUMMARY

The bill directs the Administrator to require tests to determine 

potential public health effects of fuels or fuel additives prior to registering fuels or fuel additives and during their use. Studies under 

this provision will be conducted on a regular basis. In addition, 

EPA is instructed to study the health and environmental impacts 

of using ETBE and other additives as a substitute for MTBE. 

DISCUSSION

The existing law requires the Administrator to require fuel and 

additive manufacturers to conduct tests to determine the potential 

health and environmental effects of fuels and fuel additives. 

The Administrator should use this authority to identify and assess any adverse public health, welfare, or environmental effects 

from the use of motor vehicle fuels or fuel additives or the combustion products of such fuels or fuel additives. The Administrator 

should use the authority to assess threats to both air pollution and 

water pollution in order to effectively exercise the authority in Section 211(c) as amended by this legislation. This provision is intended to prevent situations such as the one presented by MTBE 

contamination of water supplies. 

To avoid such recurrences, the Blue Ribbon Panel on Oxygenates 

in Gasoline recommended that EPA and others accelerate ongoing 

research efforts into the inhalation and ingestion health effects, air 

emission transformation byproducts, and environmental behavior of 

all oxygenates and other components likely to increase in the absence of MTBE. This should include research on ethanol, alkylates, 

and aromatics, as well as on gasoline compositions containing those 

components. 

Sec. 206. Analyses of motor vehicle fuel changes. 

SUMMARY

Section 206 requires the Administrator to publish an analysis of 

the changes in emissions of air pollutants and air quality due to 

the implementation of the provisions in S. 606. The analysis is to 

examine changes in all motor vehicle fuels and fuel additives and 

must attempt to identify and quantify any increase in emissions or 

air pollution caused by implementing this bill. A draft analysis is 

to be published within 4 years of enactment, and a final analysis 

is to be published within 5 years of enactment. The Administrator 

should include in the analysis consideration of direct and evaporative emissions, as well as combustion by-products, from the use 

of these fuels and fuel additives in highway and non-road vehicles. 

Section 206 requires the Administrator to develop and finalize an 

emissions model that reasonably reflects the effects of characteristics or components of motor vehicle fuel or emissions from vehicles 

in the motor vehicle fleet during calendar year 2007. Further, this 

section requires the Administrator to conduct a study 1 year after 

enactment of the permeation effects of ethanol in gasoline and report its findings to Congress. 

20 

DISCUSSION

Section 211(c) of the CAA, as amended by this legislation, provides the Administrator with the authority to regulate, control, or 

prohibit the manufacture, introduction into commerce, offering for 

sale, or sale of any fuel or fuel additive, if, in the judgment of the 

Administrator, the fuel or fuel additive or emission product causes 

or contributes to air pollution or water pollution that may reasonably be anticipated to endanger the public health or welfare. The 

bill requires the Administrator to exercise this authority with respect to MTBE. The bill also adds water quality as an environmental protection criterion in Title II of the Act. 

Section 202(l) of the Act requires the Administrator to exercise 

the authorities in Sections 211(c) and 202(a) and to promulgate, 

and from time to time revise, regulations containing reasonable requirements to control hazardous air pollutants from motor vehicles 

and fuels. The regulations must reflect the greatest degree of reductions achievable, considering cost and projected available technology, and must focus on those categories of emissions that pose 

the greatest risk to human health or about which significant uncertainties remain. 

The emissions model currently used by EPA to determine compliance in both the RFG and conventional anti-dumping gasoline programs is called the complex model. It uses 1990 average gasoline 

quality and 1990 model year motor vehicle technology as its baseline, and models how changes in gasoline qualities change emissions of these vehicles compared to 1990 gasoline. For purposes of 

this provision, EPA is authorized to update its complex model to 

address changes in motor vehicle technology since 1990. The motor 

vehicle fleet in calendar year 2005 will be different from model 

year 1990 vehicles. The updated model is expected to contain a mix 

of technologies with, for example, the newer Tier 2 technology entering the fleet. 

Developing an emissions model that reflects the actual mix of 

motor vehicle technologies in the fleet during calendar year 2007 

allows EPA to reasonably determine the change in emissions between 1999–2000 and 2006–2007 due to changes in gasoline, as the 

2007 calendar year fleet should still contain the kinds of technologies found in the prior years, although with a different mix of 

technologies. EPA should work with a consortium of the automobile 

and oil industries and other interested and qualified parties to design and conduct the extensive vehicle and fuel combination testing 

that will be necessary to update the complex model, as was done 

in developing the current complex model. 

An updated complex model may be useful for other related applications, such as emissions modeling for State planning. EPA could 

use the updated model in the RFG and conventional gasoline programs, including future RFG rulemakings, where doing so would 

not be inconsistent with the provisions of Section 211(k). 

21 

Sec. 207. Additional opt-in areas under reformulated gasoline program. 

SUMMARY

This section of the bill provides explicit State authority to allow 

non-classified areas in the Ozone Transport Region to opt-in to the 

RFG program. 

DISCUSSION

Currently, 17 States and the District of Columbia rely on the 

RFG program as an emissions control strategy. Appendix II provides a complete list of all RFG areas. The CAAA mandated use 

of RFG in nine areas. Several States (13) have exercised the optin authority of Section 211(k)(6) to require the use of RFG. Areas 

that opted in to the RFG program prior to January 1, 2000, are required to use RFG until December 31, 2003. The Act limits opt-in 

actions to areas that previously violated the 1-hour ozone NAAQS 

and are classified according to their current status in relation to attainment of the NAAQS. States expend considerable resources in 

an effort to avoid violating the NAAQS because of the stringent requirements imposed on nonattainment areas by the CAA. This section allows use of the RFG program for those areas in the Ozone 

Transport Region that seek to use it as an emissions control technique in the State’s strategy for avoiding new violations of the 

NAAQS. Under this provision, once the SIP revision is approved 

the area will be a covered area under the Federal program. 

Sec. 208. Federal enforcement of State fuels requirements. 

SUMMARY

This provision requires EPA to enforce State fuels controls and 

prohibitions approved by the Administrator under section 

211(c)(4)(C) of the Act, if the State so requests. 

DISCUSSION

Under section 211(c)(4)(C), EPA may approve an otherwise preempted State fuel control or prohibition if the State submits a revised implementation plan to the Administrator and demonstrates 

that the State fuel controls or prohibitions are necessary to achieve 

the national ambient air quality standard that the State’s plan implements and that there are no other reasonable and practicable 

non-fuel measures available that would bring about timely attainment. Because of the national character of the fuels industry and 

the way that fuels are distributed in fungible streams, State fuel 

controls and prohibitions have long been recognized as the control 

of last resort. The new provision does not change these basic principles. The States would still be required to submit a revised implementation plan that meets the requirements of section 110 of the 

Act, including the requirement that the controls be enforceable by 

the State as a practical matter. This means that States are still required to have their own enforcement programs if they want to impose fuel controls or prohibitions that differ from the controls and 

prohibitions imposed by EPA under section 211 of the Act. The only 

effect of the new provision is that if a State meets all of the existing requirements under section 110 and 211(c)(4), the State can reVerDate Aug 04 2004 19:58 May 27, 2005 Jkt 021330 PO 00000 Frm 00021 Fmt 6659 Sfmt 6601 E:\HR\OC\SR074.XXX SR074
22 

quest that the Administrator take a more active role in enforcement of those regulations. 

Sec. 209. Fuel system requirements harmonization study. 

SUMMARY

The Administrator of the Environmental Protection Agency and 

the Secretary of Energy shall jointly conduct a study of Federal, 

State, and local requirements concerning motor vehicle fuels. 

DISCUSSION

In the last several years, multiple unique gasoline blends required in different parts of the country have led to reduced 

fungibility in gasoline distribution systems and exacerbated shortages when supply disruptions have occurred. Several studies of this 

‘boutique fuels’ problem have identified it as a contributing factor 

to increased price volatility and market tightness. This bill takes 

the first step in addressing boutique fuels by making major 

changes to Federal fuels requirements: a Federal phase-out of 

MTBE; repeal of the RFG oxygen content mandate; and a new Renewable Fuels Standard with a credit banking and trading program. Section 209 takes the next step by requiring DOE and EPA 

to conduct a comprehensive study on how the various fuels requirements affect several things, including (1) the supply of fuels available to consumers; (2) achievement of air quality goals; (3) the fuel 

distribution system; and (4) industry investment in new capacity. 

The EPA and DOE are to recommend to Congress potential 

changes to harmonize fuels requirements nationally and reduce the 

number of specialty fuels. The report recommendations are required to take into account the need to provide advance notice of 

required modifications to refinery and fuel distribution systems in 

order to ensure an adequate supply of motor vehicle fuel in all 

States. 

LEGISLATIVE HISTORY

S. 606 was introduced by Senator Thune on March 11, 2005, and 

was referred to the Committee on Environment and Public Works. 

The committee met on March 16, 2005, to consider the bill. The 

bill, as amended, was ordered reported on March 16, 2005. 

During the 108th Congress, the committee considered a similar 

bill, S. 791 introduced by Senator Inhofe. The committee favorably 

reported the bill, as amended in a business meeting on April 9, 

2003. During the 107th Congress, the committee favorably reported 

a related bill, S. 950, the Reformulated Fuels Act, which did not 

pass the Senate. 

HEARINGS

There have been no hearings held on S. 606 during the 109th 

Congress. 

On March 20, 2003, the Subcommittee on Clean Air, Climate 

Change, and Nuclear Safety held a non-legislative hearing on alternative fuels and fuel additives. The witnesses providing testimony 

were Hon. Jeffrey R. Holmstead, Assistant Administrator for Air 

and Radiation, U.S. Environmental Protection Agency; Hon. David 

Garman, Assistant Secretary for Renewable Energy, U.S. DepartVerDate Aug 04 2004 19:58 May 27, 2005 Jkt 021330 PO 00000 Frm 00022 Fmt 6659 Sfmt 6601 E:\HR\OC\SR074.XXX SR074
23 

ment of Energy; Mary Hutzler, Director, Office of Integrated Analysis and Forecasting, Energy Information Administration; Fred 

Yoder, President, National Corn Growers Association; Dr. Edward 

Murphy, Downstream General Manager, American Petroleum Institute; Robert Slaughter, President, National Petrochemical and 

Refiners Association; Scott Segal, Partner, Bracewell and Patterson, L.L.P.; Rich Wagman, First Vice Chairman of ARTBA, President of G.A. and F.C. Wagman, York, Pennsylvania, on behalf of 

the American Road and Transportation Builders Association; A. 

Blakeman Early, Consultant, American Lung Association; Paul J. 

Granger, P.E., Superintendent, Plainview Water District, Plainview, New York; and Craig Perkins, Director, Environment and 

Public Works Management, Santa Monica, California. 

During the 105th through the 107th Congresses, the committee 

held hearings on the use of oxygenated fuels under the requirements of the Clean Air Act. 

On December 9, 1997, the Committee on Environment and Public 

Works held a field hearing in Sacramento, CA on the presence of 

MTBE in the nation’s water supply. Testimony was given by Nancy 

J. Balter, Principal, Center for Environmental Health and Human 

Toxicology, and former Associate Professor of pharmacology, 

Georgetown University Medical Center; Nachman Brautbar, Professor of clinical medicine, University of Southern California School 

of Medicine; Cynthia Dougherty, Director, Office of Groundwater 

and Drinking Water, Environmental Protection Agency; Stephen K. 

Hall, Executive Director, Association of California Water Agencies; 

The Honorable Tom Hayden, California State Senator; The Honorable Richard Mountjoy, California State Senator; Gary Patton, 

Counsel, The Planning and Conservation League; Craig Perkins, 

Director of Environment and Public Works Management, city of 

Santa Monica, California; Peter M. Rooney, Secretary, California 

State Environmental Protection Agency; David Spath, Chief, Drinking Water and Environmental Management Division, California 

State Environmental Protection Agency; and John Zogorski, Chief 

of National Synthesis on Volatile Organic Compounds and MTBE, 

U.S. Geological Survey. 

On September 16, 1998, the Committee on Environment and 

Public Works held a hearing on S. 1576, a bill to amend the Clean 

Air Act to permit the exclusive application of California State regulations regarding reformulated gasoline in certain areas within the 

State. Testimony was given by The Honorable Brian Bilbray, U.S. 

Representative from the State of California; John D. Dunlap, III, 

Chairman, California Air Resources Board; Douglas A. Durante, 

Executive Director, Clean Fuels Development Coalition; The Honorable Dianne Feinstein, U.S. Senator from the State of California; 

Daniel S. Greenbaum, President, Health Effects Institute; Al 

Jessel, Senior Fuels Specialist, Chevron Products Company; and 

Ned Sullivan, Commissioner, Maine Department of Environmental 

Conservation. 

On October 5, 1999, the Subcommittee on Clean Air, Wetlands, 

Private Property and Nuclear Safety of the Committee on Environment and Public Works held a hearing on the Blue Ribbon Panel 

findings on MTBE. Testimony was given by Robert H. Campbell, 

Chairman and Chief Executive Officer, Sunoco, Inc.; The Honorable 

Jake Garn, Vice Chairman, Huntsman Corporation; Daniel S. 

24 

Greenbaum, President, Health Effects Institute; and Michael P. 

Kenny, Executive Officer, California Air Resources Board. 

On June 14, 2000, the Subcommittee on Clean Air, Wetlands, 

Private Property and Nuclear Safety of the Committee on Environment and Public Works held a hearing on the environmental benefits and impacts of ethanol under the Clean Air Act. Testimony was 

given by Dan Greenbaum, President, Health Effects Institute; 

Blake Early, Environmental Consultant, American Lung Association; Michael Graboski, Director, Colorado Institute for Fuels and 

High Altitude Engine Research, Colorado Department of Chemical 

Engineering, Colorado School of Mines; Bob Slaughter, Director, 

National Petrochemical & Refiners Association; Jack Huggins, Vice 

President, Williams Energy Services; Jason Grumet, Executive Director, Northeast States for Coordinated Air Use Management; Stephen Gatto, President and Chief Executive Officer, BC International; Gordon Proctor, Director, Ohio Department of Transportation; The Honorable Charles Grassley, United States Senator 

from the State of Iowa; The Honorable Tom Harkin, United States 

Senator from the State of Iowa; The Honorable Richard Durbin, 

United States Senator from the State of Illinois. 

On April 27, 2001, at the Media Center, Salem High School, 

Salem, NH, the committee received testimony on the use of the 

gasoline additive methyl tertiary butyl ether (MTBE), from Christina Miller, homeowner, Derry NH; Hon. Arthur Klemm, New 

Hampshire State Senator, Windham, NH; Robert Varney, Commissioner, New Hampshire Department of Environmental Services, 

Concord, NH; Nancy Kinner, Professor of Civil Engineering, University of New Hampshire, Durham, NH; William Holmberg, 

Biofuel Refiner, Bow, NH; Patty Aho, Executive Director, Maine 

Petroleum Association, Augusta, ME. 

ROLLCALL VOTES

The Committee on Environment and Public Works met to consider S. 606 on March 16, 2005. During consideration of the bill, 

a manager’s amendment offered by Senator Inhofe was agreed to 

by Unanimous Consent. The bill was ordered reported to the Senate, as amended, by voice vote. Senators Jeffords, Boxer, Clinton, 

Lautenberg, and Warner were recorded as voting no. 

REGULATORY IMPACT STATEMENT

In compliance with section 11(b) of rule XXVI of the Standing 

Rules of the Senate, the committee makes evaluation of the regulatory impact of the reported bill. 

The regulatory authority granted by this bill is structured to 

streamline and make flexible the imposition of any new requirements. 

Section 101 requires the Administrator of the EPA to issue regulations to establish a renewable fuel content requirement applicable to all refineries, blenders, distributors and importers of gasoline 

sold or introduced into commerce in the United States, except in 

Alaska or Hawaii. 

Under Section 203, no regulatory action is required to affect the 

phaseout of MTBE, though the Administrator will need to issue 

regulations to implement and enforce this phaseout. The AdminisVerDate Aug 04 2004 19:58 May 27, 2005 Jkt 021330 PO 00000 Frm 00024 Fmt 6659 Sfmt 6601 E:\HR\OC\SR074.XXX SR074
25 

trator’s existing authority to limit the use of fuels or fuel additives 

is expanded by the bill to allow consideration of water pollution effects. 

Section 204 requires EPA to promulgate regulations to establish 

new performance standards for toxic emissions within 270 days of 

enactment. In the event that refiners’ toxics reduction performance 

does not achieve at least the 1999–2000 average in a region, EPA 

must promulgate revised regulations to assure such performance. 

Compliance with the performance standards is managed through 

existing regulatory structures under Section 211(k) of the CAA. 

Also in section 204, EPA must revise the current RFG regulations to ensure that northern RFG gasoline will meet the more 

stringent VOC requirements of southern RFG. 

The provisions in Section 207 regarding additional opt-in areas 

rely entirely on existing authority and regulatory structures for revisions and approvals of SIPs. 

MANDATES ASSESSMENT

In compliance with the Unfunded Mandates Reform Act of 1995 

(Public Law 104–4), the committee finds that S. 606 would impose 

no significant Federal intergovernmental unfunded mandates on 

State, local, or tribal governments. 

COST OF LEGISLATION

Section 403 of the Congressional Budget and Impoundment Control Act requires that a statement of the cost of the reported bill, 

prepared by the Congressional Budget Office, be included in the report. That statement follows: 

S. 606, Reliable Fuels Act, As ordered reported by the Senate Committee on Environment and Public Works on March 16, 2005 

Summary 

Under S. 606, methyl tertiary butyl ether (known as MTBE), a 

widely used motor fuel additive, would be banned 4 years after enactment of the bill—except individual States could choose to continue to allow the use of MTBE by notifying the administrator of 

the Environmental Protection Agency (EPA). The bill would eliminate a requirement under current law for motor fuel to contain 

oxygenates, but would require that all motor fuels sold by a refiner, 

blender, or importer contain specified amounts of renewable fuel. 

CBO expects that this renewable fuel standard would largely be 

met by adding ethanol to gasoline. S. 606 also would authorize 

funding for several grant programs to support research and development of renewable fuels technology. The bill also would authorize 

funding for rulemaking, studies, and reports to the Congress related to the renewable fuels program. 

The bill’s requirement to use renewable fuels would reduce 

spending on farm support programs and also would have an insignificant effect on motor fuels tax receipts. CBO estimates that enacting S. 606 would reduce direct spending by about $1.5 billion 

over the 2011–2015 period by increasing the demand for certain agricultural commodities. 

26 

Finally, we estimate that implementing S. 606 would cost about 

$340 million in 2006 and $1.5 billion over the 2006–2010 period, 

subject to appropriation of the necessary amounts. Most of that 

spending would be for grants to producers of MTBE (to convert 

their facilities to produce other fuel additives), and to producers of 

biomass ethanol (derived from plants, grasses, fibers, and certain 

waste sources). The bill would authorize the appropriation of $1.15 

billion for those grants, as well as authorizing funding for other related programs. 

S. 606 contains an intergovernmental mandate as defined in the 

Unfunded Mandates Reform Act (UMRA) because it would preempt 

State liability laws and prevent State and local governments from 

seeking damages from producers of gasoline that contains renewable fuel. CBO expects that the costs to comply with this mandate 

would not be significant over the next 5 years; therefore, the 

threshold established in UMRA ($62 million in 2005, adjusted annually for inflation) would not be exceeded. 

S. 606 contains several private-sector mandates as defined in 

UMRA. While CBO cannot estimate the aggregate cost of all the 

mandates contained in the bill, we anticipate that the costs would 

not be large. Therefore, CBO estimates that the total cost of the 

private-sector mandates would be below the annual threshold established in UMRA ($123 million in 2005, adjusted annually for inflation) for the first 5 years that the mandates are in effect. 

Estimated Cost to the Federal Government 

The estimated budgetary impact of S. 606 is shown in Table 1. 

The costs of this legislation fall within budget functions 270 (energy), 300 (natural resources and environment), 350 (agriculture), 

370 (commerce and housing credit), and 950 (undistributed offsetting receipts). 

Basis of Estimate 

For this estimate, CBO assumes that the bill will be enacted by 

the end of fiscal year 2005, that the full amounts authorized will 

be appropriated for each fiscal year, and that spending will follow 

historical rates for ongoing or similar activities. 

SPENDING SUBJECT TO APPROPRIATION

S. 606 contains several provisions that specify amounts authorized to be appropriated for researching methods to improve the production of renewable fuels and amounts to correct environmental 

contamination caused by MTBE. The bill also would authorize unspecified amounts to be appropriated for the promulgation of new 

rules, studies, and reports to the Congress associated with the new 

renewable fuels standard that would be established under the bill. 

Assuming appropriation of the specified and estimated amounts, 

CBO estimates that implementing these provisions would cost 

about $340 million in 2006 and $1.5 billion over the 2006–2010 period. Major components of this estimate are described below. 

27 

TABLE 1. ESTIMATED BUDGETARY IMPACT OF S. 606 

By Fiscal Year, in Millions of Dollars 

2006 2007 2008 2009 2010 

CHANGES IN SPENDING SUBJECT TO 

APPROPRIATION 

Grants to MTBE Producers.

Authorization Level .............................. 250 250 250 0 0 

Estimated Outlays ............................... 100 213 250 150 38 

Grants to Producers of Cellulosic Biomass Ethanol.

Authorization Level .............................. 400 0 0 0 0 

Estimated Outlays ............................... 180 140 60 20 0 

Center for Biomass-Based Energy.

Authorization Level .............................. 4 4 0 0 0 

Estimated Outlays ............................... 3 4 1 0 0 

Grants for Renewable Fuel Production.

Authorization Level .............................. 25 25 25 25 25 

Estimated Outlays ............................... 11 20 24 25 25 

LUST Program.

Authorization Level .............................. 30 30 30 30 0 

Estimated Outlays ............................... 8 18 26 29 23 

Loan Guarantees.

Estimated Authorization Level ............ 30 0 40 0 40 

Estimated Outlays ............................... 30 0 40 0 40 

Clean Air Act Provisions.

Estimated Authorization Level ............ 11 13 12 11 11 

Estimated Outlays ............................... 11 13 12 11 11 

Total Proposed Changes.

Estimated Authorization 

Level .............................. 750 322 357 66 76 

Estimate Outlays ............... 343 408 413 235 137 

CHANGES IN DIRECT SPENDING1

Estimated Budget Authority .................................. 0 0 0 0 0 

Estimated Outlays ................................................. 0 0 0 0 0 

CHANGES IN REVENUES 

Estimated Revenues .............................................. 0 * * * * 

NOTES: LUST = Leaking Underground Storage Tanks; * = less than $500,000. 

1CBO estimates that the bill would have no direct spending impact over the 2006–2010 period but would reduce direct spending by $1.5 

billion over the 2011–2015 period (See table 2). 

Grants to MTBE Producers. S. 606 would authorize the appropriation of $750 million to the Department of Energy (DOE) over 

the 2006–2008 period for grants to assist producers of MTBE to 

convert facilities to produce alternative fuel additives instead of 

MTBE. 

Grants to Producers of Cellulosic Biomass Ethanol. S. 606 would 

authorize the appropriation of $400 million to DOE in 2006 for 

grants to producers of cellulosic biomass ethanol (ethanol derived 

from such materials as plants, grasses, fibers, municipal solid 

waste, and wood residues) to build production facilities. 

Center for Biomass-Based Energy. This legislation would authorize the appropriation of $8 million over the 2006–2007 period to establish a resource center at the University of Mississippi and the 

University of Oklahoma for the purpose of developing new methods 

to produce ethanol. 

Research and Development Grants for Renewable Fuel Production. S. 606 would authorize the appropriation of $125 million to 

EPA over the 2006–2010 period for grants to certain academic institutions and consortia (consisting of academic institutions, industry, State government agencies, or local government agencies) for 

research and development related to technologies for the production of renewable fuel. 

28 

LUST Program. This legislation would authorize the appropria- tion of $120 million over the 2006–2009 period from EPA’s Leaking 

Underground Storage Tank (LUST) Trust Fund. This funding 

would be used for grants to States to correct contamination caused 

by MTBE and for enforcement and inspection activities related to 

LUST sites. 

Loan Guarantees. S. 606 would authorize DOE to issue loan 

guarantees to help finance the construction of facilities to produce 

fuel ethanol from agricultural residue or municipal solid waste. The 

development of such facilities poses some risk mainly because the 

technology that would be used to process ethanol from such sources 

is new and is not well-proven. 

For this estimate, we expect that such facilities would be debtfinanced and sponsors would recover costs through the sale of ethanol. Prices for ethanol have a history of fluctuating widely and the 

likelihood of future fluctuations could contribute additional credit 

risk for such a project. Moreover, the cash-flow for these projects 

also would rely heavily on the cost of purchasing feedstock or (for 

solid waste facilities) on revenues from ‘‘tipping fees’’ (i.e., those 

fees charged by the plant to accept municipal solid waste feedstock). According to DOE, a plant’s reliance on feedstock from these 

sources would increase a project’s credit risk because prices for 

feedstock can become competitive if demand for such products increases and tipping fee revenue may also fluctuate. 

Under credit reform procedures, funds must be appropriated in 

advance to cover the subsidy cost of loan guarantees, measured on 

a present-value basis. Because of the significant level of risk associated with these types of projects, the costs of subsidizing such loan 

guarantees could vary widely. At worst, the government could absorb all of the risk, effectively converting the loan guarantees into 

grants. S. 606 would authorize DOE to issue loan guarantees limited to $250 million per project for a total of four projects (i.e., up 

to $1 billion worth of guarantees could be made). Under this legislation, an applicant for a loan guarantee would have to be currently operating an existing facility that produces at least 50,000 

gallons of ethanol per year. 

CBO estimates that, over the next 5 years, DOE would probably 

provide loan guarantees for three projects, each with a total construction cost of about $250 million. Because the bill also would require applicants to contribute at least 20 percent of the project’s 

total cost, CBO estimates that the value of each loan guarantee 

would be about $200 million. In addition, based on information 

from DOE, CBO assumes that the department would seek projects 

with a financial outlook similar to those of bonds rated B- or better 

by companies such as Standard and Poors and Moodys. Projects 

with this rating typically have a cumulative default risk of over 40 

percent. Under those assumptions, CBO estimates that loans guaranteed under the bill would be likely to have a subsidy rate between 15 percent and 20 percent and would cost $110 million over 

the 2006–2010 period. 

Motor Fuels and Clean Air Act Provisions. This legislation would 

require EPA to promulgate new rules, prepare studies for the Congress, and implement new programs related to the renewable content of motor fuels and air pollution resulting from the use of motor 

fuels. CBO estimates that implementing these provisions in S. 606 

29 

would cost $10 million in 2006 and $58 million over the 2006–2010 

period. Of the $58 million, more than half would be for EPA’s costs 

to enforce motor fuel standards. Specifically, the bill would require 

that EPA promulgate rules that require motor fuels sold by a refiner, blender, or importer contain specified amounts of renewable 

fuels. Under the bill, by 2012, gasoline sold to U.S. consumers 

would be required to include, on an annual average basis, 6 billion 

gallons of renewable fuel. (In 2004, 140 billion gallons of gasoline 

were sold in the United States.) 

Additionally, the bill would require the EPA to conduct annual 

surveys on market shares of various renewable fuels starting in 

December 2006. Such a survey could cost as much as $4 million annually if EPA were to undertake a survey of all retail gasoline 

sales. This legislation also would require EPA, at the request of a 

State, to enforce any State-adopted regulations concerning fuels requirements. State fuels programs can vary. Some programs are 

seasonal, while others are more complex where many fuel parameters are regulated. Specifically, EPA staff would be required to 

travel to the affected cities, take samples, review records, and conduct audits of refiners and importers. Based on information from 

EPA, CBO estimates that implementing this provision would require the equivalent of an additional 22 staff, funding for their 

travel expenses, and funding associated with laboratory sampling 

and technical analysis, resulting in a cost of $5 million annually 

and $25 million over the next 5 years, subject to appropriation of 

the necessary funds. 

S. 606 also includes several other provisions that would require 

new studies, reports to the Congress, and activities related to banning the use of MTBE in motor fuels to be prepared by DOE and 

the Federal Trade Commission. CBO estimates that such activities 

would cost about $3 million over the 2006–2010 period. 

DIRECT SPENDING AND REVENUES

CBO estimates that enacting S. 606 would lower direct spending 

by about $1.5 billion over the next 10 years and have an insignificant effect on revenues over the same period. The bill’s impact on 

direct spending and revenues over the 2006–2015 period is shown 

in Table 2. 

TABLE 2. ESTIMATED IMPACT OF S. 606 ON DIRECT SPENDING AND REVENUES 

By Fiscal Year, in Millions of Dollars 

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 

CHANGES IN DIRECT SPENDING 

AND REVENUES 

Estimated Budget Authority .......... 0 0 0 0 0 –115 –250 –340 –375 –385 

Estimated Outlays ......................... 0 0 0 0 0 –115 –250 –340 –375 –385 

Estimated Revenues ...................... 0 * * * * * * * * * 

NOTE: * = less than $500,000. 

Renewable Fuels Requirement and Agriculture Support Programs. Section 101 of the bill would require that motor fuels sold 

by a refiner, blender, or importer contain specified amounts of renewable fuel. The required volume of renewable fuel would start at 

3.8 billion gallons in 2006 and escalate to 6 billion gallons for 2012 

and increase at the growth in gasoline consumption. The bill also 

30 

would amend the Clean Air Act to eliminate the requirement for 

gasoline that is sold in certain regions of the country to contain 2 

percent oxygen by weight. This provision might lower demand for 

gasoline oxygenates (including ethanol), particularly in the first 

few years of the period because the mandated use of renewable 

fuels is below CBO’s baseline for the use of ethanol. 

However, the bill also provides for the generation of credits toward meeting the renewable fuel requirement, which can be used 

to satisfy future years’ requirements. Because of the ability of a refiner, blender, or importer to save ethanol-use credits generated in 

1 year to satisfy requirements in a future year, CBO does not expect that the use of renewable fuels would be significantly affected 

until 2011 when the bill’s renewable fuel requirement would exceed 

the CBO baseline for such fuels (including accumulated credits). 

CBO expects that most of the fuel produced to meet the requirements under the act would be corn-based ethanol. Because ethanol 

is primarily derived from corn, demand for corn would rise with the 

requirement to use more ethanol. CBO expects that higher prices 

for corn during the 2011–2015 period would result. Accordingly, the 

costs of Federal programs to support farm prices and provide income support would fall over the 2011–2015 period. CBO estimates 

that spending for farm price and income supports would decline by 

about $1.5 billion over the 2011–2015 period. 

Renewable Fuels Requirement and Revenues. Because ethanolblended fuels are taxed at a lower rate than gasoline, receipts from 

motor fuels would change when ethanol use changes. CBO estimates, however, that effects on revenues from this bill would be insignificant for two main reasons. First, effects on ethanol use would 

be insignificant before 2011 because the bill provides for the generation of credits toward meeting the renewable fuel requirement, 

which can be used to satisfy future years’ requirements. Second, although ethanol use would increase significantly under the bill after 

2010, the special tax treatment of ethanol fuels expires at the end 

of calendar year 2010, so changes in ethanol use would not significantly affect revenues after that point. 

Enacting this bill could also increase receipts from new civil penalties against violators of the renewable fuels program established 

under this legislation. CBO estimates that any such increase in 

civil penalties would not be significant. 

Estimated Impact on State, Local, and Tribal Governments 

S. 606 would shield manufacturers of gasoline from liability 

claims based on the renewable content of their fuel. This provision 

would limit the application of State law and prohibit State and 

local governments from seeking damages from producers of gasoline that contains renewable fuel. That provision constitutes an 

intergovernmental mandate as defined in UMRA. Because there 

are currently no such lawsuits pending in the courts, CBO estimates that the mandate would impose no duty on State or local 

governments that would result in significant additional spending 

(or forgone collections) over the next 5 years. Therefore, the threshold established in UMRA ($62 million in 2005, adjusted annually 

for inflation) would not be exceeded. 

Other provisions of the bill contain no intergovernmental mandates and would impose no direct costs on State, local, or tribal 

31 

governments. States with EPA approval to enforce clean air standards for motor fuels would have to comply with several new requirements, but they would do so voluntarily. In general, the bill 

would benefit States by authorizing grants and amounts from the 

LUST Trust Fund for a variety of activities. 

Estimated Impact on the Private Sector 

S. 606 contains several private-sector mandates as defined in the 

Unfunded Mandates Reform Act. While CBO cannot estimate the 

aggregate cost of all the mandates contained in the bill, we anticipate that such costs would not be large. Therefore, CBO estimates 

that the total cost of the private-sector mandates would be below 

the annual threshold established in UMRA ($123 million in 2005, 

adjusted annually for inflation) for the first 5 years that the mandates are in effect. 

RENEWABLE FUEL PROGRAM

Renewable Fuel Standard. Section 101 would require domestic 

refiners, blenders, and importers of gasoline to ensure that gasoline 

sold or dispensed to consumers in the contiguous United States 

contains a minimum volume of renewable fuels. The required volume of renewable fuel would start at 3.8 billion gallons in 2006 and 

increase to 6.0 billion gallons by 2012. Section 101 also would allow 

refineries, blenders, and importers to accumulate and trade credits 

for quantities of renewable fuels. Individual refineries, blenders, or 

importers may experience cost increases, should they need to purchase credits to meet individual compliance provisions. In the first 

5 years that the renewable fuel standard would be in effect, the 

motor fuels industry would be able to meet the standard without 

increasing renewable fuel use. Thus, CBO expects the net cost for 

the industry as a whole to be zero in the first 5 years the standard 

is in effect. 

Seasonal Variation in Renewable Fuel Use. Section 101 would direct the Energy Information Administration (EIA) to determine if 

there are excessive seasonal variations in the amount of renewable 

fuel blended into gasoline. Refiners might have an incentive to use 

more of the annual requirement for renewable fuel (mostly ethanol) 

in the winter months, when evaporative emissions from gasoline 

are less of a concern. Sharp seasonal changes in the demand for 

ethanol could lead to large swings in ethanol and gasoline prices. 

If EIA determines that there are excessive seasonal fluctuations, 

EPA would impose regulations requiring that at least 35 percent 

of the renewable fuel standard be blended into gasoline in summer 

months and another 35 percent be blended in winter months. At 

this time EPA does not have any information on excessive seasonal 

variation in renewable fuel use, but expects that such requirements 

will not be likely. In the event that a determination by EIA triggers additional EPA regulations, the duty to comply with those regulations would constitute a private-sector mandate. 

Safe Harbor. The renewable fuel standard required by the bill 

would substantially increase the amount of renewable fuel that is 

blended into gasoline. Section 101 would shield motor fuel manufacturers and other persons from liability for a defect in design or 

manufacture of a motor vehicle fuel containing renewable fuel. 

That protection would be in effect as long as the fuel is in compliVerDate Aug 04 2004 19:58 May 27, 2005 Jkt 021330 PO 00000 Frm 00031 Fmt 6659 Sfmt 6601 E:\HR\OC\SR074.XXX SR074
32 

ance with other applicable Federal requirements. The provision 

would impose a private-sector mandate by limiting existing rights 

to seek compensation under current law, but CBO cannot determine the cost of this mandate. Effective on the date of enactment, 

the provision would have no impact on existing claims or court determinations or settlements. Currently, there are no lawsuits of 

this nature. 

Eliminate the Ethanol Waiver. Section 101 would authorize 

States to apply for an exclusion from a waiver that under current 

law allows gasoline blended with ethanol to have higher evaporative properties than gasoline blended with other fuel additives. 

Gasoline blends containing ethanol evaporate more readily at a 

given temperature, contributing to smog formation. To the extent 

that gasoline blended with ethanol is sold in a State requesting an 

exclusion, the exclusion would increase the cost of an existing private-sector mandate on refiners who sell in the State. According to 

industry sources, it is unlikely that States using ethanol would request an exclusion from the waiver. In the event that such a State 

did request an exclusion, CBO estimates the increased cost to refiners would be small. 

Recordkeeping and Reporting Requirements. Section 102 would 

require the EPA to collect data and issue a report on the amount 

of renewable fuel blending. The EPA may require refiners, blenders, and importers to keep records or make reports that are necessary for the EPA’s survey of renewable fuel blending. In the 

event that the EPA does issue new recordkeeping or reporting requirements for refiners, blenders, and importers, that would constitute a new private-sector mandate. The bill, however, would require that any new recordkeeping or reporting requirements be 

folded into existing requirements. CBO expects that the cost for 

any new recordkeeping requirements would be small. 

MTBE BAN

Under the Clean Air Act Amendments of 1990, areas with poor 

air quality are required to add chemicals called ‘‘oxygenates’’ to 

gasoline as a means of reducing certain air pollution emissions. 

One of the most commonly used oxygenates is methyl tertiary butyl 

ether. Roughly one-third of the MTBE used in the United States 

is supplied to refiners by merchant producers and the rest is produced by the refiners themselves or imported. In recent years, concerns have been raised about the adverse effects on groundwater 

supplies from MTBE that leaks from underground tanks, and 19 

States have passed laws to either ban or reduce the local use of 

MTBE. 

Section 203 would ban the use of MTBE in gasoline within 4 

years of the bill’s enactment. At the same time, the provision would 

allow any State to authorize MTBE use by notifying the EPA. A 

nationwide ban with States opting to continue use of MTBE may 

not be fundamentally different from the current situation in which 

States impose their own local bans. Therefore, it is possible that 

MTBE use would not be significantly affected by the new ban. 

Moreover, CBO anticipates that the renewable fuels standard established in section 101 would, on its own, greatly reduce—if not 

eliminate—incentives to use MTBE. 

33 

CBO cannot determine in which States, if any, the Federal 

MTBE ban would be more constraining than the renewable fuel 

standard and, therefore, cannot determine the cost of the mandate. 

In States where the Federal ban would be more constraining, the 

ban could impose costs on refiners and merchant producers. Gasoline refiners would need to replace MTBE with higher-cost 

blendstocks, and merchant producers would likely convert their operations to the production of less-profitable blendstocks, such as 

alkylates or iso-octane. The bill would authorize Federal transition 

grants—amounting to $750 million over the 2006–2008 period—to 

merchant producers to convert their facilities. 

OTHER FUEL REQUIREMENTS

Anti-Backsliding Baseline. Section 204 would direct the EPA to 

establish a more stringent baseline for toxic emissions from reformulated gasoline. The current baseline, which became effective in 

2002, is refinery specific and is based on average 1998 through 

2000 reformulated gasoline parameter values. The bill would establish a baseline that averages parameter values only from calendar 

years 1999 and 2000, which would require reformulated gasoline to 

be slightly cleaner. According to industry sources, it is unclear that 

the more-stringent baseline would increase costs significantly. CBO 

expects that the cost of this mandate would be small. 

VOC Region Consolidation. Section 204 would consolidate the regional regulations that limit the emissions of volatile organic compounds (VOCs) from gasoline, by applying the more-stringent 

standards for gasoline sold in the southern United States to gasoline sold in the northern United States. Meeting the more-stringent 

standards would impose a private-sector mandate. According to industry experts, the difference in the stringency of the two standards is small, and therefore, the mandate is not likely to increase 

industry costs. 

Increased Environmental and Public Health Testing. Section 205 

would require fuel and fuel additive manufacturers to test their 

products regularly for any environmental or public health effects, 

as part of the registration process with the EPA. Under current 

law, such testing occurs at the discretion of the EPA Administrator. 

The specific test items listed in the provision commonly are included in industry testing, and neither the EPA nor the industry 

expects the frequency of testing to change. CBO does not expect the 

mandate to impose any additional costs on manufacturers of fuels 

or fuel additives. 

State Opt-in to Reformulated Gasoline (RFG) Program. Section 

207 would authorize States in the ozone transport region (several 

States in the Northeast) to ask EPA to apply the more-stringent air 

emissions standards of the RFG program in areas that are already 

in attainment of air quality standards. Industry experts indicate 

that few of the States in the ozone transport region currently using 

conventional gasoline would want to opt in to the RFG program 

under this provision. Furthermore, should a State in the region 

choose to opt in, the mandate would impose a very small cost on 

refineries. 

34 

Previous CBO Estimate 

On April 19, 2005, CBO transmitted a cost estimate for H.R. 6, 

the Energy Policy Act of 2005, as introduced on April 18, 2005. 

H.R. 6 also would require the use of renewable fuel in motor fuel; 

however, CBO estimated that requirement would not have a significant Federal budget impact because the required amount would 

be lower than the amount specified in S. 606. Both bills also contain an intergovernmental mandate as defined in UMRA by shielding manufacturers of gasoline from certain liability claims. Because 

the mandate in H.R. 6 is much broader and would shield them 

from liability claims (including many pending claims) for the manufacture of MTBE, CBO estimated that bill’s mandate costs would 

be significantly higher than the mandate costs in S. 606. 

Estimate Prepared By: Federal Spending: Susanne S. Mehlman, 

EPA and Energy Provisions; David Hull, Agriculture Subsidies. 

Federal Revenues: Laura Hanlon. Impact on State, Local, and Tribal Governments: Theresa Gullo. Impact on the Private Sector: 

Selena Caldera. 

Estimate Approved By: Peter H. Fontaine, Deputy Assistant Director for Budget Analysis and G. Thomas Woodward, Assistant Director for Tax Analysis. 

35 

MINORITY VIEWS OF SENATORS JEFFORDS, BOXER, 

LAUTENBERG, AND CLINTON 

We write separately here on S. 606, the Reliable Fuels Act of 

2005, to underscore the importance of ending methyl tertiary butyl 

ether (MTBE) use, to explain why the committee did not include 

liability exemptions for MTBE contamination, and to urge the full 

Senate to reject any measure that would force taxpayers to pay for 

MTBE cleanup rather than responsible parties. 

Further, we have grave concerns about the significant likelihood 

that S. 606 would permit refiners to backslide on their historical 

improvements in toxics emissions reduction performance. This legislation reported by the committee, with provisions on leaking underground storage tanks that have not been updated since 2001, 

also fails to reflect the important progress the committee has made 

more recently in dealing comprehensively with our nation’s enormous problem of leaking underground storage tanks. 

MTBE Ban and Manufacturers’ Liability 

MTBE is classified as a possible human carcinogen, and when 

leaked into water even in small amounts causes water to take on 

the taste and smell of turpentine, rendering it undrinkable. MTBE 

leaking from underground storage tanks, recreational water craft 

and abandoned automobiles has lead to growing detections of 

MTBE in drinking water. In fact, the U.S. Geological Survey has 

estimated that MTBE may contaminate roughly one-third of drinking water supplies nationwide. MTBE poses a different threat to 

drinking water relative to the other harmful constituents of gasoline because MTBE is more soluble, more mobile and degrades 

slower than those other constituents. 

Oil companies began adding MTBE to gasoline at least as early 

as 1979, using 215,000 tons in that year alone. By 1986, oil companies were adding 54,000 barrels of MTBE to gasoline each day. By 

1991, 1 year before the Clean Air Act (CAA) oxygenate requirement 

went into effect, oil companies were using more than 100,000 barrels of MTBE per day. By 1997, the volume of MTBE production 

was the second highest of any chemical in the United States. These 

basic facts underscore two extremely important points about the 

committee’s consideration of solutions to the MTBE contamination 

problem. 

First, proposals that simply remove the CAA oxygenate requirement from the law without affirmatively banning MTBE will simply not end MTBE use. As noted above, MTBE was used for octane 

enhancement long before the CAA Amendments of 1990. There is 

no reason to believe that it would not continued to be used if the 

CAA oxygenate requirement were removed from the law, but no 

ban put in place. In another example, in May 1999, two oil companies in the San Francisco area were found to have been adding 

substantial volumes of MTBE to gasoline. At the time, that area 

complied with air standards and therefore the CAA didn’t require 

the addition of an oxygenate. Again, companies were adding MTBE 

to gasoline for reasons wholly independent of the CAA. 

Second, these facts belie the oil companies’ arguments that Congress made oil companies use MTBE, and that therefore lawsuits 

36 

against oil companies should be terminated by Congress and taxpayers should pay to clean up MTBE contamination. MTBE was in 

use well before the passage of the CAA Amendments. The CAA 

does not mandate the use of MTBE. And the fact that there was 

any oxygenate requirement in those amendments at all was due, 

in part, to oil industry lobbying. 

For example, in 1989 testimony before the Senate Committee on 

Environment and Public Works, an ARCO official strongly recommended that the committee include a mandate for MTBE in the 

Clean Air Act Amendments of 1990, touting MTBE’s benefits but 

not disclosing its devastating impact on drinking water. Hearings 

before the Subcommittee on Environmental Protection of the Committee on Environment and Public Works on S. 1630, S. Hrg. 101– 331 at 458 (Sept. 28, 1989). Despite such lobbying, Congress did 

not adopt a MTBE mandate, but rather prescribed that reformulated gasoline contain an oxygenate without specifying a particular 

product. Courts have specifically ruled on the question of whether 

Congress mandated MTBE and have determined that MTBE was 

not mandated (Oxygenated Fuels Association Inc. v. Davis, 33 F.3d 

655 (9th Cir. 2003)). 

At the time of such lobbying, oil companies knew they were recommending a product that would have a devastating impact on 

drinking water. Indeed, where courts have heard oil industry 

claims that they should not be held liable for MTBE contaminated 

drinking water supplies, they have not only rejected those claims 

but have found that companies acted with malice in not disclosing 

the risks of using MTBE. MTBE contamination is not like ordinary 

gasoline contamination. MTBE moves through water quickly and 

does not adhere to the soil. Very small amounts have been known 

to contaminate groundwater and migrate farther and faster than 

other hydrocarbons. 

In fact, over a dozen communities have sued oil companies for 

knowingly introducing a defective product into the marketplace. 

Several oil companies recently settled one such suit, South Tahoe 

Public Utility District v. Atlantic Richfield Company, et al., for $60 

million. In South Tahoe, it was determined that oil companies were 

guilty of irresponsibly manufacturing and distributing MTBE because these companies knew it would contaminate drinking water. 

It was also found by clear and convincing evidence that two companies had acted with ‘malice’ by failing to warn of the environmental dangers of MTBE. 

Together, documents and sworn testimony in South Tahoe demonstrated that several oil companies knew as early as 1980 that 

MTBE posed a significant threat to the nation’s drinking water, 

that they promoted MTBE to the State and Federal Governments 

without disclosing internal information demonstrating that threat, 

and that they attempted to discredit public scientific studies that 

began to demonstrate that threat. 

Documents and sworn testimony in South Tahoe also revealed 

that oil company officials, showing a callous disregard for our environment, even gave MTBE telling nicknames such as ‘Most Things 

Biodegrade Easier’, ‘Menace Threatening our Environment’ and 

‘Major Threat to Better Earnings.’ Further the case also revealed 

that Shell and ARCO, the first refiners to add MTBE to gasoline, 

37 

estimated that 20 percent of all underground storage tanks—tanks 

likely containing MTBE—were leaking. Several oil companies were 

shown to have both developed and promoted the concept of using 

reformulated gasoline to reduce air emissions. 

For example, ARCO officials testified that ‘EPA did not initiate 

. . . reformulated gasoline’ and that ‘[T]he oil industry brought [reformulated gasoline] forward as an alternative to what the EPA 

had initially proposed.’ Documents and sworn testimony also revealed that in 1987 an ARCO representative testified before the 

Colorado Air Quality Control Commission that MTBE would aid in 

reducing air emissions but did not warn of the drinking water contamination threat. This representative testified that he also assisted Arizona and Nevada develop oxygenate programs that relied 

upon MTBE without disclosing the danger. 

In 1986, the Maine Department of Environmental Protection 

issued a scientific report describing the threat posed by MTBE. 

Documents and sworn testimony in South Tahoe revealed a concerted strategy by the oil industry to discredit the article at the 

same time that internal industry documents admitted the soundness of the Maine warning. When the Maine paper prompted EPA 

to issue a notice to oil companies for more information regarding 

MTBE, ARCO responded in 1987 that there was little information 

to suggest MTBE was a threat despite internal ARCO documents 

showing the contrary. 

As South Tahoe demonstrates, terminating the right of communities to seek legal redress against oil companies for MTBE contamination would be a grave injustice. It has not been embraced 

by the committee, it should not be embraced by the Senate and it 

should not become law. 

Just as it is important to clarify oil industry responsibility for 

MTBE contamination, it is also important to clarify a number of 

mischaracterizations that appear in the majority views on the 

MTBE transition program. S. 606 provides for limited transition 

assistance to producers of MTBE to mitigate fuel supply problems, 

such as shortages or disruptions, that might occur as a result of 

the elimination of the widespread use of that fuel additive by this 

legislation. The findings section of S. 606 (section 203) notes that 

it is appropriate for the Congress to provide limited transition assistance in this fashion. Those findings were arrived at after much 

discussion and debate among the various affected parties and were 

first incorporated into legislation as part of H.R. 4, as passed by 

the Senate in 2002, and reintroduced in the 108th Congress (S. 

385). 

The majority views attempt to incorrectly convey that such assistance is premised on two additional factors that appear nowhere 

in the legislation, that cannot be logically inferred from the findings in S. 606, and that do not reflect a committee consensus. 

These incorrect inferences are that, first, the government bears 

‘great’ responsibility for losses the MTBE producers experience as 

a result of Congress’ action to phaseout MTBE; and, second, that 

a failure to provide transition assistance in light of the ban will 

discourage manufacturers from supplying the market with additives that will meet energy and environmental goals. 

38 

The findings state that the fuel industry responded to the fuel 

oxygenate standard established in the CAA of 1990 by investing in 

MTBE production capacity. As noted above, that standard did not 

require or mandate that MTBE be produced or that only MTBE 

could satisfy such a standard. Again, as noted above, the oil industry itself lobbied for the oxygenate requirement and wanted to use 

MTBE to meet it. Therefore, Congress cannot be held responsible 

for voluntary industry decisions to make or not to make investments in MTBE. 

Given that Congress did not mandate MTBE’s use, there certainly is no compensation due to such manufacturers when Congress determines that this additive is detrimental to water quality 

protection and must be eliminated from widespread use in gasoline. 

Given the history of the CAA oxygenate requirement it is impossible to maintain otherwise. The majority views appears to seek to 

set a precedent that would require Congress to provide compensation for any parties that choose to invest in manufacturing a product based on their interpretation of congressional intent and its effect on their product. That is not supported by the text of S. 606. 

Finally, the majority views’ inference that the transition program 

reflects the committee view that companies will not invest in fuel 

additives absent compensation is erroneous and not supported by 

S. 606. Additive manufacturers are free to enter the market for the 

production of additives to replace MTBE. The legislation indicates 

that Congress is concerned about the impact on the fuel supply of 

eliminating MTBE, as stated in section 203, and has provided the 

transition assistance to address that issue. 

Congress ‘failure’ to compensate MTBE producers for manufacturing a product which many within the industry knew would pollute drinking water will not affect a business decision by additive 

manufacturers to supply the additive market. This is particularly 

true once the modifications in S. 791 to the CAA are made to ensure future water quality protection by improving testing of fuels 

and fuel additives environmental and public health impacts. Oil 

companies and other additive manufacturers have their own responsibility to place products in commerce that do not have ill effects on the environment and public health. 

As noted above, several companies maliciously failed to discharge 

this responsibility when it came to MTBE. 

The first hearing of this committee on MTBE was chaired by 

Senator Boxer in December 1997, after Santa Monica lost the majority of its drinking water to contamination caused by a then little 

known fuel additive. Since Senator Boxer’s first call to ban MTBE 

now over 5 years ago, this committee has conducted scores of hearings, considered alternate legislative approaches and ultimately approved various versions of legislation similar to S. 606. 

Such legislation approved by this committee has consistently 

called for MTBE’s phase-out. It has also consistently rejected terminating the right of communities affected by MTBE to seek redress 

against oil companies in court. As consideration of S. 606 moves to 

the full Senate, these two principles that have guided committee 

consideration of the MTBE issue must remain in tact if the MTBE 

problem is to be truly and equitably solved. 

39 

Backsliding on Toxics Emissions Performance 

Since the implementation of fuels requirements of the 1990 

Amendments to the Clean Air Act, as noted in the committee’s report, refiners have made significant progress in continually improving toxics emissions performance of fuels. However, the legislation 

approved by the committee does not adjust the anti-backsliding 

provisions to maintain that record of improvement and to reflect 

the passage of time. As a result, mobile source toxics emissions 

could increase significantly if S. 606 were to be enacted. 

S. 606, the Reliable Fuels Act of 2005, includes a 1999–2000 

baseline against which to judge refiner and importer toxic emissions reductions performance and uses that baseline to ensure that 

the removal of MTBE via the ban included in the legislation does 

not result in dirtier, more toxic fuel and increase fuel-related toxic 

emissions. That baseline was first included in S. 950 reported by 

the committee during the 107th Congress in May 2001, approved 

by the Senate in early 2002 as part of H.R. 4, the Energy Policy 

Act of 2002, and included S. 791 reported in June 2003. It reflected 

the baseline in the EPA’s mobile source air toxics rule promulgated 

in 1999. 

However, over the last 4 years, refiners and importers performance has continued to improve, such that a more contemporaneous 

baseline is necessary to avoid backsliding on toxics. Conventional 

and reformulated gasoline are both cleaner now, using estimated 

national averages, than they were in 1999 and 2000. If the baseline 

in S. 606 is used, rather than a more current baseline for which 

quality assured data is available, such as 2001–2002 or later, refiners and importers would be permitted to increase annual national 

emissions associated with reformulated gasoline by as much as 

2,000 tons of hazardous air pollutants, such as xylene, toluene, 

benzene and many others. Given the elevated cancer and non-cancer risks associated with mobile sources of air toxics, especially in 

high-traffic urban corridors, such increases would be harmful to 

public health and welfare. 

Such an outcome is the opposite of the committee’s intent when 

first approving this provision in identical form in 2001. At that 

time, the committee sought to ensure that gasoline producers or 

importers would not have the option of making their product more 

toxic due to the ban on MTBE and the renewable fuels mandate 

in the bill. 

Leaking Underground Storage Tanks 

Leaking underground storage tanks represent a significant 

threat to drinking water supplies nationwide. Fifty percent of all 

Americans and nearly 100 percent of people living in rural areas 

rely on groundwater for their drinking water. Underground storage 

tanks hold toxic substances such as gasoline, diesel fuel, waste oil 

and other toxic materials that contain dangerous cancer-causing 

chemicals. These chemicals move quickly through the soil, getting 

into groundwater and causing dangerous vapors in buildings. These 

chemicals cause cancer, injure developing fetuses and harm human 

reproductive and nervous systems. 

In the 108th Congress, the Senate Environment and Public 

Works Committee unanimously adopted a bipartisan comprehenVerDate Aug 04 2004 19:58 May 27, 2005 Jkt 021330 PO 00000 Frm 00039 Fmt 6602 Sfmt 6602 E:\HR\OC\SR074.XXX SR074
40 

sive underground storage tank legislation (S. 195, the Underground 

Storage Tank Compliance Act of 2003). The committee should build 

on this bipartisan approach to ensure that Americans are protected 

from leaking underground storage tanks. Unfortunately, S. 606 is 

not a comprehensive reform effort. 

The Leaking Underground Storage Tank provisions of section 

202 suffer from two significant problems. Most significantly, the 

provision raids the LUST Trust Fund and diverts dollars from their 

intended purpose—cleaning up contamination from leaking USTs. 

Instead, the provision expands the eligible uses of the LUST Trust 

Fund to pay for cleanup of contamination of ether fuel additives 

from other sources such as pipelines, cars, trucks, snowmobiles, 

boats, above ground storage tanks, and other potential sources of 

contamination. EPA Administrator Christine Todd Whitman sent a 

letter to Rep. W.J. ‘‘Billy’’ Tauzin on May 7, 2003 opposing this provision. She wrote: 

Section 5 allows the use of the Leaking Underground Storage Tank (LUST) Trust Fund for releases from sources 

other than USTs. This would change the historical scope 

of the program, and could stress the Agency’s ability to 

adequately address releases from USTs. 

Second, the provision specifically allows the use of LUST Trust 

Fund money for cleanup of MTBE, but not other ethers such as tertiary butyl alcohol (TBA), ethyl alcohol (ethanol) or any other new 

fuel additive that might be used in the future. TBA and ethanol are 

commonly found at LUST sites. LUST Trust Fund money should 

be available to address all contamination from USTs and should 

not be restricted to just MTBE, as is now currently the case. 

Finally, the bill lacks many of the essential elements of a comprehensive LUST reform bill. For example, the Government Accountability Office in March 2003 issued a report on the Underground Storage Tank Program recommending a number of improvements including the need to inspect UST facilities more frequently at least once every 3 years. Current inspection rates fall 

far short of this goal with many UST facilities having never been 

inspected. We should work together again in the 109th Congress to 

build on the success of last session’s bill to enhance this program 

to better prevent and respond to contamination from LUSTs. 

41 

ADDITIONAL VIEWS OF SENATOR BOXER 

I write separately here to raise an additional concern and to 

strongly oppose the ‘‘safe harbor’’ provision in S. 606, The Reliable 

Fuels Act of 2005, which creates broad liability exemptions for renewable fuels. I have previously discussed at length my reasons for 

opposing these provisions in my additional views included in Senate Report 108–57. I urge my colleagues to review that extensive 

analysis. 

Under the renewable fuels mandate in S. 606, ethanol will be the 

most commonly used renewable fuel for the foreseeable future. Ethanol is a high-octane, water-free alcohol that has been used in gasoline in the United States since 1979 when it was introduced to enhance oxygen content in fuels. 

Section 101 (p) of S. 606 contains a broad ‘‘safe harbor’’ liability 

waiver for renewable fuels. This language waives all product liability design defect claims, including failure to warn. Any claim that 

has not been filed by the date of enactment of this section will be 

forever barred. Compliance with laws and regulations is not necessary for receiving the liability waiver, except for limited compliance with requirements under the Clean Air Act. 

This liability exemption is particularly dangerous because there 

are many unanswered questions about ethanol. It is true that ethanol does not have the same toxic chemicals in it as other fuels and 

fuel additives. It also helps reduce the production of carbon monoxide when fuel is burned. These are real benefits. 

However, ethanol also increases the formation of nitrogen oxides, 

which leads to increases in smog. According to EPA’s 1999 Blue 

Ribbon Panel Report on Oxygenates in Gasoline, ethanol is extremely soluble in water and would spread if leaked into the environment. It may further spread plumes of benzene, toluene, ethyl 

benzene, and xylene because ethanol may inhibit the breakdown of 

these toxic materials. In addition, there are several studies demonstrating that ethanol increases the size and migration of benzene 

plumes. Researchers say that more groundwater wells will experience contamination from methyl tertiary butyl ether (MTBE) and 

benzene, a known carcinogen, if ethanol leaks into water supplies. 

There are also questions about the impact of ethanol on sensitive 

populations, such as children. 

More study is needed. The Blue Ribbon Panel Report makes this 

point in the section entitled ‘‘Recommendations for Evaluating and 

Learning from Experience:’’

The introduction of reformulated gasoline has had substantial air quality benefits, but has at the same time 

raised significant issues about questions that should be 

asked before widespread introduction of a new broadly 

used product. The unanticipated effects of reformulated 

gasoline on groundwater highlight the importance of exploring the potential for adverse effects in all media (air, 

soil, and water), and on human and ecosystem health. 

Questions surrounding ethanol’s effects on public health and the 

environment should be answered before Congress grants a broad 

waiver from liability for its harmful effects. We should err on the 

42 

side of caution, and we should err on the side on protecting taxpayers. 

If ethanol harms public health or the environment, the liability 

exemption in this bill would shift the burden to the taxpayer in the 

event of a contamination of drinking water supplies, which could 

leave many communities with cleanup costs beyond their ability to 

pay. Polluters, not taxpayers or victims of pollution, should pay for 

harm to pubic health and the environment. 

Supporters of this liability exemption argue that immunity from 

product liability design defect claims is not so broad, that it only 

protects polluters from one type of lawsuit. But, they are ignoring 

the fact that product defect claims are the clearest way to hold accountable those whose products cause injury to public health or the 

environment. Litigation in California involving drinking water contamination by MTBE, agricultural chemicals (i.e. DBCP), dry cleaning compounds (perc), and others all rest on claims that products 

were defective in design. 

Exempting polluters from a defective product claim is hardly a 

narrow exemption. It risks letting the polluters off the hook for 

their wrongdoing entirely and shifting the costs of pollution to the 

taxpayers. The taxpayers are not responsible for the pollution; the 

companies are. Taxpayers should not foot the bill; the polluters 

should. 

Supporters of this exemption also argue that negligence claims 

are an adequate substitute for product liability design defect 

claims. While negligence and design defect liability are related 

legal theories, they are different. And negligence alone is inadequate to protect a community from harm. 

Negligence liability focuses on the defendants’ conduct. In other 

words, it focuses on the conduct of the individuals hired by the oil 

companies. Design defect liability focuses on the product. 

To establish negligence, a public water agency would have to 

show that each defendant knew (or reasonably should have known) 

of the risk posed by the product, and that the defendant acted unreasonably in failing to eliminate the risk. Customary practice in 

an industry—such as commonly using a fuel additive without any 

warning—and the reasonableness of that practice is relevant as a 

defense in a negligence action. This makes it difficult for an injured 

party to recover. 

In contrast, an injured public water agency can establish design 

defect liability in one of two ways. First, a product is defective 

where the jury finds that the risk of danger inherent in the challenged design outweighs the benefit of such design. Second, even 

if a product is flawlessly designed or produced, it may still be defective if the manufacturer provides inadequate warnings or use instructions. A failure to warn claim arises only for risks that the 

manufacturer either knew about or that were knowable in light of 

generally recognized and prevailing best scientific knowledge available at the time of the product’s manufacture and distribution. 

Courts impose strict liability for design defects based on strong 

public policy considerations. The costs of injuries caused by defective products should be borne by the manufacturers of those products, rather than by innocent injured parties. This policy is especially strong where the injury occurs to innocent bystanders, like 

43 

public water suppliers, who derive no economic benefit from the defective product. 

Supporters of the liability exemption also argue that it is necessary because the bill is mandating the use of ethanol. Yet Congress regularly mandates that manufacturers meet a variety of 

guidelines and requirements, but does not in so doing exempt all 

manufacturers from State and Federal product liability design defect laws. When gasoline leaks today, there is no loophole; the polluter pays, despite the fact that Congress regulates gasoline. Congress mandated the installation of air bags in automobiles, but did 

not say to those manufacturers that they would not be liable for 

damages should their products be defective. We should not give a 

free pass to ethanol. 

Finally, supporters of the liability loophole claim that ethanol is 

safe and no one needs to worry about the liability exemption. If 

they are not worried, they do not need an exemption and should 

not oppose striking it from the bill. 

The ‘‘safe harbor’’ liability waiver for renewable fuels is opposed 

by a wide variety of local and State governments, water utilities, 

and public health, consumer and environmental organizations representing millions of people potentially affected by this ill conceived 

safe harbor provision. 

44 

CHANGES IN EXISTING LAW

In compliance with section 12 of rule XXVI of the Standing Rules 

of the Senate, changes in existing law made by the bill as reported 

are shown as follows: Existing law proposed to be omitted is enclosed in [black brackets], new matter is printed in italic, existing 

law in which no change is proposed is shown in roman: 

THE CLEAN AIR ACT 

TITLE I—AIR POLLUTION PREVENTION AND CONTROL 

PART A—AIR QUALITY AND EMISSION LIMITATIONS

* * * * * * * 

TITLE II—EMISSION STANDARDS FOR MOVING SOURCES 

Sec. 201. Short title. 

PART A—MOTOR VEHICLE EMISSION AND FUEL STANDARDS

Sec. 202. Establishment of standards. 

Sec. 203. Prohibited acts. 

Sec. 204. Injunction proceedings. 

Sec. 205. Civil penalties. 

Sec. 206. Motor vehicle and motor vehicle engine compliance testing and certification. 

Sec. 207. Compliance by vehicles and engines in actual use. 

Sec. 208. Information collection. 

Sec. 209. State standards. 

Sec. 210. State grants. 

Sec. 211. Regulation of fuels. 

Sec. 212. Renewable fuels. 

Sec. 213. Fuel economy improvement from new motor vehicles. 

Sec. 214. Study of particulate emissions from motor vehicles. 

Sec. 215. High altitude performance adjustments. 

Sec. 216. Definitions for part A. 

Sec. 217. Motor vehicle compliance program fees. 

Sec. 218. Prohibition on production of engines requiring leaded gasoline. 

Sec. 219. Urban bus standards. 

PART B—AIRCRAFT EMISSION STANDARDS

Sec. 231. Establishment of standards. 

Sec. 232. Enforcement of standards. 

Sec. 233. State standards and controls. 

Sec. 234. Definitions. 

PART C—CLEAN FUEL VEHICLES

Sec. 241. Definitions. 

Sec. 242. Requirements applicable to clean fuel vehicles. 

Sec. 243. Standards for light-duty clean fuel vehicles. 

Sec. 244. Administration and enforcement as per California standards. 

Sec. 245. Standards for heavy-duty clean-fuel vehicles (gvwr above 8,500 up to 

26,000 lbs). 

Sec. 246. Centrally fueled fleets. 

Sec. 247. Vehicle conversions. 

Sec. 248. Federal agency fleets. 

Sec. 249. California pilot test program. 

Sec. 250. General provisions. 

SEC. 101. (a) * * * 

* * * * * * * 

45 

REGULATION OF FUELS

SEC. 211. (a) * * * 

* * * * * * * 

(b)(1) For the purpose of registration of fuels and fuel additives, the Administrator shall require—

(A) the manufacturer of any fuel to notify him as to the 

commercial identifying name and manufacturer of any additive 

contained in such fuel; the range of concentration of any additive in the fuel; and the purpose-in-use of any such additive; 

and 

(B) the manufacturer of any additive to notify him as to 

the chemical composition of such additive. 

(2) For the purpose of registration of fuels and fuel additives, 

the Administrator ømay also¿ shall, on a regular basis, require the 

manufacturer of any fuel or fuel additive—

ø(A) to conduct tests to determine potential public health 

effects of such fuel or additive (including, but not limited to, 

carcinogenic, teratogenic, or mutagenic effects), and¿ 

(A) to conduct tests to determine potential public health 

and environmental effects of the fuel or additive (including carcinogenic, teratogenic, or mutagenic effects); and 

(B) to furnish the description of any analytical technique 

that can be used to detect and measure any additive in such 

fuel, the recommended range of concentration of such additive, 

and the recommended purpose-in-use of such additive, and 

such other information as is reasonable and necessary to determine the emissions resulting from the use of the fuel or additive contained in such fuel, the effect of such fuel or additive 

on the emission control performance of any vehicle, vehicle engine, nonroad engine or nonroad vehicle, or the extent to which 

such emissions affect the public health or welfare. 

Tests under subparagraph (A) shall be conducted in conformity 

with test procedures and protocols established by the Administrator. The results of such tests shall not be considered confidential. 

(3) Upon compliance with the provisions of this subsection, including assurances that the Administrator will receive changes in 

the information required, the Administrator shall register such fuel 

or fuel additive. 

(4) STUDY ON CERTAIN FUEL ADDITIVES AND BLENDSTOCKS.—

(A) IN GENERAL.—Not later than 2 years after the date 

of enactment of this paragraph, the Administrator shall—

(i) conduct a study on the effects on public health 

(including the effects on children, pregnant women, minority or low-income communities, and other sensitive 

populations), air quality, and water resources of increased use of, and the feasibility of using as substitutes for methyl tertiary butyl ether in gasoline—

(I) ethyl tertiary butyl ether; 

(II) tertiary amyl methyl ether; 

(III) di-isopropyl ether; 

(IV) tertiary butyl alcohol; 

46 

(V) other ethers and heavy alcohols, as determined by then Administrator; 

(VI) ethanol; 

(VII) iso-octane; and 

(VIII) alkylates; and 

(ii) conduct a study on the effects on public health 

(including the effects on children, pregnant women, minority or low-income communities, and other sensitive 

populations), air quality, and water resources of the 

adjustment for ethanol-blended reformulated gasoline 

to the volatile organic compounds performance requirements that are applicable under paragraphs (1) and (3) 

of section 211(k); and 

(iii) submit to the Committee on Environment and 

Public Works of the Senate and the Committee on Energy and Commerce of the House of Representatives a 

report describing the results of the studies under 

clauses (i) and (ii). 

(B) CONTRACTS FOR STUDY.—In carrying out this paragraph, the Administrator may enter into 1 or more contracts with nongovernmental entities such as— (i) the national energy laboratories; and 

(ii) institutions of higher education (as defined in 

section 101 of the Higher Education Act of 1965 (20 

U.S.C. 1001)). 

* * * * * * * 

(c)(1) The Administrator may, from time to time on the basis 

of information obtained under subsection (b) of this section or other 

information available to him, by regulation, control or prohibit the 

manufacture, introduction into commerce, offering for sale, or sale 

of any fuel or fuel additive for use in a motor vehicle, motor vehicle 

engine, or nonroad engine or nonroad vehicle (A) if in the judgment 

of the Administrator any fuel or fuel additive or emission product 

of such fuel or fuel additive causes, or contributes, to øair pollution 

which¿ air pollution, or water pollution, that may reasonably be 

anticipated to endanger the public health or welfare, or (B) if emission products of such fuel or fuel additive will impair to a significant degree the performance of any emission control device or system which is in general use, or which the Administrator finds has 

been developed to a point where in a reasonable time it would be 

in general use were such regulation to be promulgated. 

(2)(A) No fuel, class of fuels, or fuel additive may be controlled 

or prohibited by the Administrator pursuant to clause (A) of paragraph (1) except after consideration of all relevant medical and scientific evidence available to him, including consideration of other 

technologically or economically feasible means of achieving emission standards under section 202. 

(B) No fuel or fuel additive may be controlled or prohibited by 

the Administrator pursuant to clause (B) of paragraph (1) except 

after consideration of available scientific and economic data, including a cost benefit analysis comparing emission control devices or 

systems which are or will be in general use and require the proposed control or prohibition with emission control devices or systems which are or will be in general use and do not require the 

47 

proposed control or prohibition. On request of a manufacturer of 

motor vehicles, motor vehicle engines, fuels, or fuel additives submitted within 10 days of notice of proposed rulemaking, the Administrator shall hold a public hearing and publish findings with respect to any matter he is required to consider under this subparagraph. Such findings shall be published at the time of promulgation 

of final regulations. 

(C) No fuel or fuel additive may be prohibited by the Administrator under paragraph (1) unless he finds, and publishes such 

finding, that in his judgment such prohibition will not cause the 

use of any other fuel or fuel additive which will produce emissions 

which will endanger the public health or welfare to the same or 

greater degree than the use of the fuel or fuel additive proposed to 

be prohibited. 

(3)(A) For the purpose of obtaining evidence and data to carry 

out paragraph (2), the Administrator may require the manufacturer of any motor vehicle or motor vehicle engine to furnish any 

information which has been developed concerning the emissions 

from motor vehicles resulting from the use of any fuel or fuel additive, or the effect of such use on the performance of any emission 

control device or system. 

(B) In obtaining information under subparagraph (A), section 

307 (a) (relating to subpenas) shall be applicable. 

(4)(A) Except as otherwise provided in subparagraph (B) or (C), 

no State (or political subdivision thereof) may prescribe or attempt 

to enforce, for the purposes of motor vehicle emission control, any 

control or prohibition respecting any characteristic or component of 

a fuel or fuel additive in a motor vehicle or motor vehicle engine— (i) if the Administrator has found that no control or prohibition of the characteristic or component of a fuel or fuel additive under paragraph (1) is necessary and has published his 

finding in the Federal Register, or 

(ii) if the Administrator has prescribed under paragraph 

(1) a control or prohibition applicable to such characteristic or 

component of a fuel or fuel additive, unless State prohibition 

or control is identical to the prohibition or control prescribed 

by the Administrator. 

(B) Any State for which application of section 209(a) has at any 

time been waived under section 209(b) may at any time prescribe 

and enforce, for the purpose of motor vehicle emission control, or 

water quality protection, a control or prohibition respecting any fuel 

or fuel additive. 

ø(C) A State¿ 

(C) AUTHORITY OF STATE TO CONTROL FUELS AND FUEL ADDITIVES FOR REASONS OF NECESSITY.—

(i) IN GENERAL.—A State may prescribe and enforce, for 

purposes of motor vehicle emission control, a control or prohibition respecting the use of a fuel or fuel additive in a motor vehicle or motor vehicle engine if an applicable implementation 

plan for such State under section 110 so provides. The Administrator may approve such provision in an implementation 

plan, or promulgate an implementation plan containing such a 

provision, only if he finds that the State control or prohibition 

is necessary to achieve the national primary or secondary amVerDate Aug 04 2004 19:58 May 27, 2005 Jkt 021330 PO 00000 Frm 00047 Fmt 6602 Sfmt 6601 E:\HR\OC\SR074.XXX SR074
48 

bient air quality standard which the plan implements. The Administrator may find that a State control or prohibition is necessary to achieve that standard if no other measures that 

would bring about timely attainment exist, or if other measures exist and are technically possible to implement, but are 

unreasonable or impracticable. The Administrator may make a 

finding of necessity under this subparagraph even if the plan 

for the area does not contain an approved demonstration of 

timely attainment. 

(ii) ENFORCEMENT BY THE ADMINISTRATOR.—In any case in 

which a State prescribes and enforces a control or prohibition 

under clause (i), the Administrator, at the request of the State, 

shall enforce the control or prohibition as if the control or prohibition had been adopted under the other provisions of this 

section. 

(5) RESTRICTIONS ON USE OF MTBE.—

(A) IN GENERAL.—Subject to subparagraph (E), not later 

than 4 years after the date of enactment of this paragraph, the 

use of methyl tertiary butyl ether in motor vehicle fuel in any 

State other than a State described in subparagraph (C) is prohibited. 

(B) REGULATIONS.—The Administrator shall promulgate 

regulations to effect the prohibition in subparagraph (A). 

(C) STATES THAT AUTHORIZE USE.—A State described in 

this subparagraph is a State that submits to the Administrator 

a notice that the State authorizes use of methyl tertiary butyl 

ether in motor vehicle fuel sold or used in the State. 

(D) PUBLICATION OF NOTICE.—The Administrator shall 

publish in the Federal Register each notice submitted by a State 

under subparagraph (C). 

(E) TRACE QUANTITIES.—In carrying out subparagraph (A), 

the Administrator may allow trace quantities of methyl tertiary 

butyl ether, not to exceed 0.5 percent by volume, to be present 

in motor vehicle fuel in cases that the Administrator determines 

to be appropriate. 

(6) MTBE MERCHANT PRODUCER CONVERSION ASSISTANCE.— (A) IN GENERAL.— (i) GRANTS.—The Secretary of Energy, in consultation 

with the Administrator, may make grants to merchant producers of methyl tertiary butyl ether in the United States 

to assist the producers in the conversion of eligible production facilities described in subparagraph (C) to the production of—(I) iso-octane or alkylates, unless the Administrator, in consultation with the Secretary of Energy, determines that transition assistance for the production 

of iso-octane or alkylates is inconsistent with the criteria specified in subparagraph (B); and 

(II) any other fuel additive that meets the criteria 

specified in subparagraph (B). 

(B) CRITERIA.—The criteria referred to in subparagraph (A) 

are that—

(i) use of the fuel additive is consistent with this subsection; 

49 

(ii) the Administrator has not determined that the fuel 

additive may reasonably be anticipated to endanger public 

health or the environment; 

(iii) the fuel additive has been registered and tested, or 

is being tested, in accordance with the requirements of this 

section; and 

(iv) the fuel additive will contribute to replacing quantities of motor vehicle fuel rendered unavailable as a result 

of paragraph (5). 

(C) ELIGIBLE PRODUCTION FACILITIES.—A production facility shall be eligible to receive a grant under this paragraph if 

the production facility— (i) is located in the United States; and 

(ii) produced methyl tertiary butyl ether for consumption in nonattainment areas during the period— (I) beginning on the date of enactment of this paragraph; and 

(II) ending on the effective date of the prohibition 

on the use of methyl tertiary butyl ether under paragraph (5). 

(D) AUTHORIZATION OF APPROPRIATIONS.—There is authorized to be appropriated to carry out this paragraph 

$250,000,000 for each of fiscal years 2005 through 2008. 

* * * * * * * 

(d) PENALTIES AND INJUNCTIONS.— (1) CIVIL PENALTIES.—Any person who violates subsection 

(a), (f), (g), (k), (l), (m), øor (n)¿ (n), or (o) of this section or the 

regulations prescribed under subsection (c), (h), (i), (k), (l), (m), 

øor (n)¿ (n), or (o) of this section or who fails to furnish any 

information or conduct any tests required by the Administrator 

under subsection (b) of this section shall be liable to the United 

States for a civil penalty of not more than the sum of $25,000 

for every day of such violation and the amount of economic 

benefit or savings resulting from the violation. Any violation 

with respect to a regulation prescribed under subsection (c), 

(k), (l), øor (m)¿ (m), or (o) of this section which establishes a 

regulatory standard based upon a multiday averaging period 

shall constitute a separate day of violation for each and every 

day in the averaging period. Civil penalties shall be assessed 

in accordance with subsections (b) and (c) of section 205. 

(2) INJUNCTIVE AUTHORITY.—The district courts of the 

United States shall have jurisdiction to restrain violations of 

subsections (a), (f), (g), (k), (l), (m), øand (n)¿ (n), and (o) of this 

section and of the regulations prescribed under subsections (c), 

(h), (i), (k), (l), (m), øand (n)¿ (n), and (o) of this section, to 

award other appropriate relief, and to compel the furnishing of 

information and the conduct of tests required by the Administrator under subsection (b) of this section. Actions to restrain 

such violations and compel such actions shall be brought by 

and in the name of the United States. In any such action, subpoenas for witnesses who are required to attend a district court 

in any district may run into any other district. 

* * * * * * * 

50 

(h) REID VAPOR PRESSURE REQUIREMENTS.— (1) PROHIBITION.—Not later than 6 months after the date 

of the enactment of the Clean Air Act Amendments of 1990, 

the Administrator shall promulgate regulations making it unlawful for any person during the high ozone season (as defined 

by the Administrator) to sell, offer for sale, dispense, supply, 

offer for supply, transport, or introduce into commerce gasoline 

with a Reid Vapor Pressure in excess of 9.0 pounds per square 

inch (psi). Such regulations shall also establish more stringent 

Reid Vapor Pressure standards in a nonattainment area as the 

Administrator finds necessary to generally achieve comparable 

evaporative emissions (on a per-vehicle basis) in nonattainment areas, taking into consideration the enforceability of such 

standards, the need of an area for emission control, and economic factors. 

(2) ATTAINMENT AREAS.—The regulations under this subsection shall not make it unlawful for any person to sell, offer 

for supply, transport, or introduce into commerce gasoline with 

a Reid Vapor Pressure of 9.0 pounds per square inch (psi) or 

lower in any area designated under section 107 as an attainment area. Notwithstanding the preceding sentence, the Administrator may impose a Reid vapor pressure requirement 

lower than 9.0 pounds per square inch (psi) in any area, formerly an ozone nonattainment area, which has been redesignated as an attainment area. 

(3) EFFECTIVE DATE; ENFORCEMENT.—The regulations 

under this subsection shall provide that the requirements of 

this subsection shall take effect not later than the high ozone 

season for 1992, and shall include such provisions as the Administrator determines are necessary to implement and enforce 

the requirements of this subsection. 

(4) ETHANOL WAIVER.—For fuel blends containing gasoline 

and 10 percent denatured anhydrous ethanol, the Reid vapor 

pressure limitation under this subsection shall be one pound 

per square inch (psi) greater than the applicable Reid vapor 

pressure limitations established under paragraph (1); Provided, 

however, that a distributor, blender, marketer, reseller, carrier, 

retailer, or wholesale purchaser-consumer shall be deemed to 

be in full compliance with the provisions of this subsection and 

the regulations promulgated thereunder if it can demonstrate 

(by showing receipt of a certification or other evidence acceptable to the Administrator) that— (A) the gasoline portion of the blend complies with the 

Reid vapor pressure limitations promulgated pursuant to 

this subsection; 

(B) the ethanol portion of the blend does not exceed its 

waiver condition under subsection (f)(4); and 

(C) no additional alcohol or other additive has been 

added to increase the Reid Vapor Pressure of the ethanol 

portion of the blend. 

(5) EXCLUSION FROM ETHANOL WAIVER.— (A) PROMULGATION OF REGULATIONS.—Upon notification, accompanied by supporting documentation, from the 

Governor of a State that the Reid vapor pressure limitation 

51 

established by paragraph (4) will increase emissions that 

contribute to air pollution in any area in the State, the Administrator shall, by regulation, apply, in lieu of the Reid 

vapor pressure limitation established by paragraph (4), the 

Reid vapor pressure limitation established by paragraph 

(1) to all fuel blends containing gasoline and 10 percent denatured anhydrous ethanol that are sold, offered for sale, 

dispensed, supplied, offered for supply, transported, or introduced into commerce in the area during the high ozone 

season. 

(B) DEADLINE FOR PROMULGATION.—The Administrator 

shall promulgate regulations under subparagraph (A) not 

later than 90 days after the date of receipt of a notification 

from a Governor under that subparagraph. 

(C) EFFECTIVE DATE.— (i) IN GENERAL.—With respect to an area in a State 

for which the Governor submits a notification under 

subparagraph (A), the regulations under that subparagraph shall take effect on the later of— (I) the first day of the first high ozone season 

for the area that begins after the date of receipt of 

the notification; or 

(II) 1 year after the date of receipt of the notification. 

(ii) EXTENSION OF EFFECTIVE DATE BASED ON DE- TERMINATION OF INSUFFICIENT SUPPLY.— (I) IN GENERAL.—If, after receipt of a notification with respect to an area from a Governor of a 

State under subparagraph (A), the Administrator 

determines, on the Administrator’s own motion or 

on petition of any person and after consultation 

with the Secretary of Energy, that the promulgation of regulations described in subparagraph (A) 

would result in an insufficient supply of gasoline 

in the State, the Administrator, by regulation— (aa) shall extend the effective date of the 

regulations under clause (i) with respect to the 

area for not more than 1 year; and 

(bb) may renew the extension under item 

(aa) for 2 additional periods, each of which 

shall not exceed 1 year. 

(II) DEADLINE FOR ACTION ON PETITIONS.—The 

Administrator shall act on any petition submitted 

under subclause (I) not later than 180 days after 

the date of receipt of the petition. 

ø(5)¿ (6) AREAS COVERED.—The provisions of this subsection shall apply only to the 48 contiguous States and the 

District of Columbia. 

* * * * * * * 

(k) REFORMULATED GASOLINE FOR CONVENTIONAL VEHICLES.— (1) EPA REGULATIONS.—øWithin 1 year after the enactment of the Clean Air Act Amendments of 1990,¿ 

(A) IN GENERAL.—Not later than November 15, 1991, 

the Administrator shall promulgate regulations under this 

52 

section establishing requirements for reformulated gasoline to be used in gasoline-fueled vehicles in specified nonattainment areas. Such regulations shall require the greatest reduction in emissions of ozone forming volatile organic 

compounds (during the high ozone season) and emissions 

of toxic air pollutants (during the entire year) achievable 

through the reformulation of conventional gasoline, taking 

into consideration the cost of achieving such emission reductions, any nonair-quality and other air-quality related 

health and environmental impacts and energy requirements. 

(B) MAINTENANCE OF TOXIC AIR POLLUTANT EMISSIONS

REDUCTIONS FROM REFORMULATED GASOLINE.—

(i) DEFINITION OF PADD.—In this subparagraph 

the term ‘PADD’ means a Petroleum Administration for 

Defense District. 

(ii) REGULATIONS CONCERNING EMISSIONS OF

TOXIC AIR POLLUTANTS.—Not later than 270 days after 

the date of enactment of this subparagraph, the Administrator shall establish by regulation, for each refinery or importer (other than a refiner or importer in 

a State that has received a waiver under section 209(b) 

with respect to gasoline produced for use in that State), 

standards for toxic air pollutants from use of the reformulated gasoline produced or distributed by the refiner 

or importer that maintain the reduction of the average 

annual aggregate emissions of toxic air pollutants for 

reformulated gasoline produced or distributed by the 

refiner or importer during calendar years 1999 and 

2000 (as determined on the basis of data collected by 

the Administrator with respect to the refiner or importer). 

(iii) STANDARDS APPLICABLE TO SPECIFIC REFIN- ERIES OR IMPORTERS.—

(I) APPLICABILITY OF STANDARDS.—For any 

calendar year, the standards applicable to a refiner or importer under clause (ii) shall apply to 

the quantity of gasoline produced or distributed by 

the refiner or importer in the calendar year only to 

the extent that the quantity is less than or equal to 

the average annual quantity of reformulated gasoline produced or distributed by the refiner or importer during calendar years 1999 and 2000. 

(II) APPLICABILITY OF OTHER STANDARDS.—For 

any calendar year, the quantity of gasoline produced or distributed by a refiner or importer that 

is in excess of the quantity subject to subclause (I) 

shall be subject to standards for emissions of toxic 

air pollutants promulgated under subparagraph 

(A) and paragraph (3)(B). 

(iv) CREDIT PROGRAM.—The Administrator shall 

provide for the granting and use of credits for emissions of toxic air pollutants in the same manner as provided in paragraph (7). 

53 

(v) REGIONAL PROTECTION OF TOXICS REDUCTION

BASELINES.—(I) IN GENERAL.—Not later than 60 days after 

the date of enactment of this subparagraph, and 

not later than April 1 of each calendar year that 

begins after that date of enactment, the Administrator shall publish in the Federal Register a report that specifies, with respect to the previous calendar year—

(aa) the quantity of reformulated gasoline 

produced that is in excess of the average annual quantity of reformulated gasoline produced in 1999 and 2000; and 

(bb) the reduction of the average annual 

aggregate emissions of toxic air pollutants in 

each PADD, based on retail survey data or 

data from other appropriate sources. 

(II) EFFECT OF FAILURE TO MAINTAIN AGGREGATE TOXICS REDUCTIONS.—If, in any calendar 

year, the reduction of the average annual aggregate emissions of toxic air pollutants in a PADD 

fails to meet or exceed the reduction of the average 

annual aggregate emissions of toxic air pollutants 

in the PADD in calendar years 1999 and 2000, the 

Administrator, not later than 90 days after the 

date of publication of the report for the calendar 

year under subclause (I), shall—

(aa) identify, to the maximum extent practicable, the reasons for the failure, including 

the sources, volumes, and characteristics of reformulated gasoline that contributed to the 

failure; and 

(bb) promulgate revisions to the regulations promulgated under clause (ii), to take effect not earlier than 180 days but not later 

than 270 days after the date of promulgation, 

to provide that, notwithstanding clause 

(iii)(II), all reformulated gasoline produced or 

distributed at each refiner or importer shall 

meet the standards applicable under clause 

(iii)(I) beginning not later than April 1 of the 

calendar year following publication of the report under subclause (I) and in each calendar 

year thereafter. 

(vi) REGULATIONS TO CONTROL HAZARDOUS AIR

POLLUTANTS FROM MOTOR VEHICLES AND MOTOR VEHICLE FUELS.—Not later than July 1, 2005, the Administrator shall promulgate final regulations to control 

hazardous air pollutants from motor vehicles and 

motor vehicle fuels, as provided for in section 80.1045 

of title 40, Code of Federal Regulations (as in effect on 

the date of enactment of this subparagraph). 

(2) GENERAL REQUIREMENTS.—The regulations referred to 

in paragraph (1) shall require that reformulated gasoline comVerDate Aug 04 2004 19:58 May 27, 2005 Jkt 021330 PO 00000 Frm 00053 Fmt 6602 Sfmt 6601 E:\HR\OC\SR074.XXX SR074
54 

ply with paragraph (3) and with each of the following requirements (subject to paragraph (7)): 

(A) NOx EMISSIONS.—The emissions of oxides of nitrogen (NOx) from baseline vehicles when using the reformulated gasoline shall be no greater than the level of such 

emissions from such vehicles when using baseline gasoline. 

If the Administrator determines that compliance with the 

limitation on emissions of oxides of nitrogen under the preceding sentence is technically infeasible, considering the 

other requirements applicable under this subsection to 

such gasoline, the Administrator may, as appropriate to 

ensure compliance with this subparagraph, adjust (or 

waive entirely), any other requirements of this paragraph 

ø(including the oxygen content requirement contained in 

subparagraph (B))¿ or any requirements applicable under 

paragraph (3)(A). 

ø(B) OXYGEN CONTENT.—The oxygen content of the 

gasoline shall equal or exceed 2.0 percent by weight (subject to a testing tolerance established by the Administrator) except as otherwise required by this Act. The Administrator may waive, in whole or in part, the application 

of this subparagraph for any ozone nonattainment area 

upon a determination by the Administrator that compliance with such requirement would prevent or interfere 

with the attainment by the area of a national primary ambient air quality standard.¿ 

ø(C)¿ (B) BENZENE CONTENT.—The benzene content of 

the gasoline shall not exceed 1.0 percent by volume. 

ø(D)¿ (C) HEAVY METALS.—The gasoline shall have no 

heavy metals, including lead or manganese. The Administrator may waive the prohibition contained in this subparagraph for a heavy metal (other than lead) if the Administrator determines that addition of the heavy metal to 

the gasoline will not increase, on an aggregate mass or 

cancer-risk basis, toxic air pollutant emissions from motor 

vehicles. 

(3) MORE STRINGENT OF FORMULA OR PERFORMANCE STANDARDS.—The regulations referred to in paragraph (1) shall require compliance with the more stringent of either the requirements set forth in subparagraph (A) or the requirements of 

subparagraph (B) of this paragraph. For purposes of determining the more stringent provision, clause (i) and clause (ii) 

of subparagraph (B) shall be considered independently. 

(A) FORMULA.—

(i) BENZENE.—The benzene content of the reformulated gasoline shall not exceed 1.0 percent by volume. 

(ii) AROMATICS.—The aromatic hydrocarbon content of the reformulated gasoline shall not exceed 25 

percent by volume. 

(iii) LEAD.—The reformulated gasoline shall have 

no lead content. 

55 

(iv) DETERGENTS.—The reformulated gasoline 

shall contain additives to prevent the accumulation of 

deposits in engines or vehicle fuel supply systems. 

¿(v) OXYGEN CONTENT.—The oxygen content of the 

reformulated gasoline shall equal or exceed 2.0 percent by weight (subject to a testing tolerance established by the Administrator) except as otherwise required by this Act.¿ 

* * * * * * * 

ø(6) OPT-IN AREAS.—(A) Upon¿ 

(6) OPT-IN AREAS.— (A) CLASSIFIED AREAS.— (i) IN GENERAL.—Upon the application of the Governor of a State, the Administrator shall apply the 

prohibition set forth in paragraph (5) in any area in 

the State classified under subpart 2 of part D of title 

I as a Marginal, Moderate, Serious, or Severe Area 

(without regard to whether or not the 1980 population 

of the area exceeds 250,000). In any such case, the Administrator shall establish an effective date for such 

prohibition as he deems appropriate, not later than 

January 1, 1995, or 1 year after such application is received, whichever is later. The Administrator shall 

publish such application in the Federal Register upon 

receipt. 

ø(B) If¿ 

(ii) EFFECT OF INSUFFICIENT DOMESTIC CAPACITY

TO PRODUCE REFORMULATED GASOLINE.—If the Administrator determines, on the Administrator’s own motion or on petition of any person, after consultation 

with the Secretary of Energy, that there is insufficient 

domestic capacity to produce gasoline certified under 

this subsection, the Administrator shall, by rule, extend the effective date of such prohibition in Marginal, 

Moderate, Serious, or Severe Areas referred to in 

øsubparagraph (A)¿ clause (i) for one additional year, 

and may, by rule, renew such extension for 2 additional one-year periods. The Administrator shall act on 

any petition submitted under øthis paragraph¿ this 

subparagraph within 6 months after receipt of the petition. The Administrator shall issue such extensions 

for areas with a lower ozone classification before 

issuing any such extension for areas with a higher 

classification. 

(B) OZONE TRANSPORT REGION.— (i) APPLICATION OF PROHIBITION.— (I) IN GENERAL.—On application of the Governor of a State in the ozone transport region established by section 184(a), the Administrator, not 

later than 180 days after the date of receipt of the 

application, shall apply the prohibition specified in 

paragraph (5) to any area in the State (other than 

an area classified as a marginal, moderate, serious, or severe ozone nonattainment area under 

56 

subpart 2 of part D of title I) unless the Administrator determines under clause (iii) that there is insufficient capacity to supply reformulated gasoline. 

(II) PUBLICATION OF APPLICATION.—As soon as 

practicable after the date of receipt of an application under subclause (I), the Administrator shall 

publish the application in the Federal Register. 

(ii) PERIOD OF APPLICABILITY.—Under clause (i), 

the prohibition specified in paragraph (5) shall apply 

in a State—

(I) commencing as soon as practicable but not 

later than 2 years after the date of approval by the 

Administrator of the application of the Governor of 

the State; and 

(II) ending not earlier than 4 years after the 

commencement date determined under subclause 

(I). 

(iii) EXTENSION OF COMMENCEMENT DATE BASED

ON INSUFFICIENT CAPACITY.—

(I) IN GENERAL.—If, after receipt of an application from a Governor of a State under clause (i), 

the Administrator determines, on the Administrator’s own motion or on petition of any person, after 

consultation with the Secretary of Energy, that 

there is insufficient capacity to supply reformulated gasoline, the Administrator, by regulation—

(aa) shall extend the commencement date 

with respect to the State under clause (ii)(I) for 

not more than 1 year; and 

(bb) may renew the extension under item 

(aa) for 2 additional periods, each of which 

shall not exceed 1 year. 

(II) DEADLINE FOR ACTION ON PETITIONS.—The 

Administrator shall act on any petition submitted 

under subclause (I) not later than 180 days after 

the date of receipt of the petition. 

(7) CREDITS.—(A) The regulations promulgated under this 

subsection shall provide for the granting of an appropriate 

amount of credits to a person who refines, blends, or imports 

and certifies a gasoline or slate of gasoline that—

ø(i) has an oxygen content (by weight) that exceeds 

the minimum oxygen content specified in paragraph (2);¿ 

ø(ii)¿ (i) has an aromatic hydrocarbon content (by volume) that is less than the maximum aromatic hydrocarbon 

content required to comply with paragraph (3); or 

ø(iii)¿ (ii) has a benzene content (by volume) that is 

less than the maximum benzene content specified in paragraph (2). 

(B) The regulations described in subparagraph (A) shall 

also provide that a person who is granted credits may use such 

credits, or transfer all or a portion of such credits to another 

person for use within the same nonattainment area, for the 

purpose of complying with this subsection. 

57 

(C) The regulations promulgated under subparagraphs (A) 

and (B) shall ensure the enforcement of the requirements for 

the issuance, application, and transfer of the credits. Such regulations shall prohibit the granting or transfer of such credits 

for use with respect to any gasoline in a nonattainment area, 

to the extent the use of such credits would result in any of the 

following: 

(i) An average gasoline aromatic hydrocarbon content 

(by volume) for the nonattainment (taking into account all 

gasoline sold for use in conventional gasoline-fueled vehicles in the nonattainment area) higher than the average 

fuel aromatic hydrocarbon content (by volume) that would 

occur in the absence of using any such credits. 

ø(ii) An average gasoline oxygen content (by weight) 

for the nonattainment area (taking into account all gasoline sold for use in conventional gasoline-fueled vehicles in 

the nonattainment area) lower than the average gasoline 

oxygen content (by weight) that would occur in the absence 

of using any such credits.¿ 

ø(iii)¿ (ii) An average benzene content (by volume) for 

the nonattainment area (taking into account all gasoline 

sold for use in conventional gasoline-fueled vehicles in the 

nonattainment area) higher than the average benzene content (by volume) that would occur in the absence of using 

any such credits. 

* * * * * * * 

(11) COMMINGLING.—The regulations under paragraph (1) 

shall permit the commingling at a retail station of reformulated 

gasoline containing ethanol and reformulated gasoline that 

does not contain ethanol if, each time such commingling occurs— (A) the retailer notifies the Administrator before the 

commingling, identifying the exact location of the retail station and the specific tank in which the commingling will 

take place; and 

(B) the retailer certifies that the reformulated gasoline 

resulting from the commingling will meet all applicable requirements for reformulated gasoline, including content 

and emission performance standards. 

* * * * * * * 

(n) PROHIBITION ON LEADED GASOLINE FOR HIGHWAY USE.—

After December 31, 1995, it shall be unlawful for any person to 

sell, offer for sale, supply, offer for supply, dispense, transport, or 

introduce into commerce, for use as fuel in any motor vehicle (as 

defined in section 219(2)) any gasoline which contains lead or lead 

additives. 

(o) RENEWABLE FUEL PROGRAM.—

(1) DEFINITIONS.—In this section: 

(A) CELLULOSIC BIOMASS ETHANOL.—The term ‘cellulosic biomass ethanol’ means ethanol derived from any 

lignocellulosic or hemicellulosic matter that is available on 

a renewable or recurring basis, including—

(i) dedicated energy crops and trees; 

58 

(ii) wood and wood residues; 

(iii) plants; 

(iv) grasses; 

(v) agricultural residues; 

(vi) fibers; 

(vii) animal wastes and other waste materials; and 

(viii) municipal solid waste. 

(B) RENEWABLE FUEL.— (i) IN GENERAL.—The term ‘renewable fuel’ means 

motor vehicle fuel that— (I)(aa) is produced from grain, starch, oilseeds, 

or other biomass; or 

(bb) is natural gas produced from a biogas 

source, including a landfill, sewage waste treatment plant, feedlot, or other place where decaying 

organic material is found; and 

(II) is used to replace or reduce the quantity of 

fossil fuel present in a fuel mixture used to operate 

a motor vehicle. 

(ii) INCLUSION.—The term ‘renewable fuel’ includes—

(I) cellulosic biomass ethanol; and 

(II) biodiesel (as defined in section 312(f) of 

the Energy Policy Act of 1992 (42 U.S.C. 

13220(f))). 

(C) SMALL REFINERY.—The term ‘small refinery’ means 

a refinery for which the average aggregate daily crude oil 

throughput for a calendar year (as determined by dividing 

the aggregate throughput for the calendar year by the number of days in the calendar year) does not exceed 75,000 

barrels. 

(2) RENEWABLE FUEL PROGRAM.—

(A) REGULATIONS.— (i) IN GENERAL.—Not later than 1 year after the 

date of enactment of this paragraph, the Administrator 

shall promulgate regulations to ensure that gasoline 

sold or introduced into commerce in the United States 

(except in Alaska and Hawaii), on an annual average 

basis, contains the applicable volume of renewable fuel 

determined in accordance with subparagraph (B). 

(ii) PROVISIONS OF REGULATIONS.—Regardless of 

the date of promulgation, the regulations promulgated 

under clause (i)—

(I) shall contain compliance provisions applicable to refineries, blenders, distributors, and importers, as appropriate, to ensure that the requirements of this paragraph are met; but 

(II) shall not—

(aa) restrict geographic areas in which renewable fuel may be used; or 

(bb) impose any per-gallon obligation for 

the use of renewable fuel. 

(iii) REQUIREMENT IN CASE OF FAILURE TO PROMULGATE REGULATIONS.—If the Administrator does not 

59 

promulgate regulations under clause (i), the percentage 

of renewable fuel in gasoline sold or dispensed to consumers in the United States, on a volume basis, shall 

be 1.8 percent for calendar year 2006. 

(B) APPLICABLE VOLUME.—

(i) CALENDAR YEARS 2006 THROUGH 2012.—For the 

purpose of subparagraph (A), the applicable volume for 

any of calendar years 2006 through 2012 shall be determined in accordance with the following table: 

Applicable volume of renewable fuel 

Calendar year: (in billions of gallons): 

2006 .......................................................................................... 3.8

2007 .......................................................................................... 4.1

2008 .......................................................................................... 4.5

2009 .......................................................................................... 4.9

2010 .......................................................................................... 5.3

2011 .......................................................................................... 5.7

2012 .......................................................................................... 6.0. 

(ii) CALENDAR YEAR 2013 AND THEREAFTER.—For 

the purpose of subparagraph (A), the applicable volume 

for calendar year 2013 and each calendar year thereafter shall be equal to the product obtained by multiplying—

(I) the number of gallons of gasoline that the 

Administrator estimates will be sold or introduced 

into commerce in the calendar year; and 

(II) the ratio that—

(aa) 6,000,000,000 gallons of renewable 

fuel; bears to 

(bb) the number of gallons of gasoline sold 

or introduced into commerce in calendar year 

2012. 

(3) APPLICABLE PERCENTAGES.—

(A) PROVISION OF ESTIMATE OF VOLUMES OF GASOLINE

SALES.—Not later than October 31 of each of calendar years 

2005 through 2011, the Administrator of the Energy Information Administration shall provide to the Administrator 

of the Environmental Protection Agency an estimate, with 

respect to the following calendar year, of the volumes of 

gasoline projected to be sold or introduced into commerce in 

the United States. 

(B) DETERMINATION OF APPLICABLE PERCENTAGES.—

(i) IN GENERAL.—Not later than November 30 of 

each of calendar years 2005 through 2012, based on 

the estimate provided under subparagraph (A), the Administrator of the Environmental Protection Agency 

shall determine and publish in the Federal Register, 

with respect to the following calendar year, the renewable fuel obligation that ensures that the requirements 

of paragraph (2) are met. 

60 

(ii) REQUIRED ELEMENTS.—The renewable fuel obligation determined for a calendar year under clause 

(i) shall—

(I) be applicable to refineries, blenders, and 

importers, as appropriate; 

(II) be expressed in terms of a volume percentage of gasoline sold or introduced into commerce 

in the United States; and 

(III) subject to subparagraph (C)(i), consist of 

a single applicable percentage that applies to all 

categories of persons specified in subclause (I). 

(C) ADJUSTMENTS.—In determining the applicable percentage for a calendar year, the Administrator shall make 

adjustments—

(i) to prevent the imposition of redundant obligations on any person specified in subparagraph 

(B)(ii)(I); and 

(ii) to account for the use of renewable fuel during 

the previous calendar year by small refineries that are 

exempt under paragraph (9). 

(4) CELLULOSIC BIOMASS ETHANOL.—For the purpose of 

paragraph (2), 1 gallon of cellulosic biomass ethanol shall be 

considered to be the equivalent of 1.5 gallons of renewable fuel. 

(5) CREDIT PROGRAM.— (A) IN GENERAL.—The regulations promulgated under 

paragraph (2)(A) shall provide— (i) for the generation of an appropriate amount of 

credits by any person that refines, blends, or imports 

gasoline that contains a quantity of renewable fuel that 

is greater than the quantity required under paragraph 

(2); 

(ii) for the generation of an appropriate amount of 

credits for biodiesel; and 

(iii) for the generation of credits by small refineries 

in accordance with paragraph (9)(C). 

(B) USE OF CREDITS.—A person that generates credits 

under subparagraph (A) may use the credits, or transfer all 

or a portion of the credits to another person, for the purpose 

of complying with paragraph (2). 

(C) DURATION OF CREDITS.—A credit generated under 

this paragraph shall be valid to show compliance—

(i) subject to clause (ii), for the calendar year in 

which the credit was generated or the following calendar year; or 

(ii) if the Administrator promulgates regulations 

under paragraph (6), for the calendar year in which 

the credit was generated or any of the following 2 calendar years. 

(D) INABILITY TO GENERATE OR PURCHASE SUFFICIENT

CREDITS.—The regulations promulgated under paragraph 

(2)(A) shall include provisions allowing any person that is 

unable to generate or purchase sufficient credits to meet the 

requirements of paragraph (2) to carry forward a renewable 

fuel deficit on condition that the person, in the calendar 

61 

year following the year in which the renewable fuel deficit 

is created—

(i) achieves compliance with the renewable fuel requirement under paragraph (2); and 

(ii) generates or purchases additional renewable 

fuel credits to offset the renewable fuel deficit of the 

previous year. 

(6) SEASONAL VARIATIONS IN RENEWABLE FUEL USE.—

(A) STUDY.—For each of calendar years 2006 through 

2012, the Administrator of the Energy Information Administration shall conduct a study of renewable fuel blending 

to determine whether there are excessive seasonal variations 

in the use of renewable fuel. 

(B) REGULATION OF EXCESSIVE SEASONAL VARIATIONS.—If, for any calendar year, the Administrator of the 

Energy Information Administration, based on the study 

under subparagraph (A), makes the determinations specified in subparagraph (C), the Administrator of the Environmental Protection Agency shall promulgate regulations to 

ensure that 35 percent or more of the quantity of renewable 

fuel necessary to meet the requirements of paragraph (2) is 

used during each of the 2 periods specified in subparagraph (D) of each subsequent calendar year. 

(C) DETERMINATIONS.—The determinations referred to 

in subparagraph (B) are that—

(i) less than 35 percent of the quantity of renewable 

fuel necessary to meet the requirements of paragraph 

(2) has been used during 1 of the 2 periods specified in 

subparagraph (D) of the calendar year; and 

(ii) a pattern of excessive seasonal variation described in clause (i) will continue in subsequent calendar years. 

(D) PERIODS.—The 2 periods referred to in this paragraph are—

(i) April through September; and 

(ii) January through March and October through 

December. 

(E) EXCLUSION.—Renewable fuel blended or consumed 

in calendar year 2006 in a State that has received a waiver 

under section 209(b) shall not be included in the study 

under subparagraph (A). 

(7) WAIVERS.—

(A) IN GENERAL.—The Administrator, in consultation 

with the Secretary of Agriculture and the Secretary of Energy, may waive the requirements of paragraph (2) in whole 

or in part on petition by 1 or more States by reducing the 

national quantity of renewable fuel required under paragraph (2)—

(i) based on a determination by the Administrator, 

after public notice and opportunity for comment, that 

implementation of the requirement would severely 

harm the economy or environment of a State, a region, 

or the United States; or 

62 

(ii) based on a determination by the Administrator, 

after public notice and opportunity for comment, that 

there is an inadequate domestic supply or distribution 

capacity to meet the requirement. 

(B) PETITIONS FOR WAIVERS.—The Administrator, in 

consultation with the Secretary of Agriculture and the Secretary of Energy, shall approve or disapprove a State petition for a waiver of the requirements of paragraph (2) within 90 days after the date on which the petition is received 

by the Administrator. 

(C) TERMINATION OF WAIVERS.—A waiver granted 

under subparagraph (A) shall terminate after 1 year, but 

may be renewed by the Administrator after consultation 

with the Secretary of Agriculture and the Secretary of Energy. 

(8) STUDY AND WAIVER FOR INITIAL YEAR OF PROGRAM.—

(A) IN GENERAL.—Not later than 180 days after the 

date of enactment of this paragraph, the Secretary of Energy shall conduct for the Administrator a study assessing 

whether the renewable fuel requirement under paragraph 

(2) will likely result in significant adverse impacts on consumers in 2006, on a national, regional, or State basis. 

(B) REQUIRED EVALUATIONS.—The study shall evaluate 

renewable fuel— (i) supplies and prices; 

(ii) blendstock supplies; and 

(iii) supply and distribution system capabilities. 

(C) RECOMMENDATIONS BY THE SECRETARY.—Based on 

the results of the study, the Secretary of Energy shall make 

specific recommendations to the Administrator concerning 

waiver of the requirements of paragraph (2), in whole or in 

part, to prevent any adverse impacts described in subparagraph (A). 

(D) WAIVER.—

(i) IN GENERAL.—Not later than 270 days after the 

date of enactment of this paragraph, the Administrator 

shall, if and to the extent recommended by the Secretary of Energy under subparagraph (C), waive, in 

whole or in part, the renewable fuel requirement under 

paragraph (2) by reducing the national quantity of renewable fuel required under paragraph (2) in calendar 

year 2006. 

(ii) NO EFFECT ON WAIVER AUTHORITY.—Clause (i) 

does not limit the authority of the Administrator to 

waive the requirements of paragraph (2) in whole, or 

in part, under paragraph (7). 

(9) SMALL REFINERIES.—

(A) TEMPORARY EXEMPTION.—

(i) IN GENERAL.—The requirements of paragraph 

(2) shall not apply to small refineries until calendar 

year 2011. 

(ii) EXTENSION OF EXEMPTION.— (I) STUDY BY SECRETARY OF ENERGY.—Not 

later than December 31, 2008, the Secretary of EnVerDate Aug 04 2004 19:58 May 27, 2005 Jkt 021330 PO 00000 Frm 00062 Fmt 6602 Sfmt 6601 E:\HR\OC\SR074.XXX SR074
63 

ergy shall conduct for the Administrator a study to 

determine whether compliance with the requirements of paragraph (2) would impose a disproportionate economic hardship on small refineries. 

(II) EXTENSION OF EXEMPTION.—In the case of 

a small refinery that the Secretary of Energy determines under subclause (I) would be subject to a 

disproportionate economic hardship if required to 

comply with paragraph (2), the Administrator 

shall extend the exemption under clause (i) for the 

small refinery for a period of not less than 2 additional years. 

(B) PETITIONS BASED ON DISPROPORTIONATE ECONOMIC

HARDSHIP.—

(i) EXTENSION OF EXEMPTION.—A small refinery 

may at any time petition the Administrator for an extension of the exemption under subparagraph (A) for 

the reason of disproportionate economic hardship. 

(ii) EVALUATION OF PETITIONS.—In evaluating a 

petition under clause (i), the Administrator, in consultation with the Secretary of Energy, shall consider 

the findings of the study under subparagraph (A)(ii) 

and other economic factors. 

(iii) DEADLINE FOR ACTION ON PETITIONS.—The 

Administrator shall act on any petition submitted by a 

small refinery for a hardship exemption not later than 

90 days after the date of receipt of the petition. 

(C) CREDIT PROGRAM.—If a small refinery notifies the 

Administrator that the small refinery waives the exemption 

under subparagraph (A), the regulations promulgated 

under paragraph (2)(A) shall provide for the generation of 

credits by the small refinery under paragraph (5) beginning 

in the calendar year following the date of notification. 

(D) OPT-IN FOR SMALL REFINERIES.—A small refinery 

shall be subject to the requirements of paragraph (2) if the 

small refinery notifies the Administrator that the small refinery waives the exemption under subparagraph (A). 

(10) ETHANOL MARKET CONCENTRATION ANALYSIS.— (A) ANALYSIS.— (i) IN GENERAL.—Not later than 180 days after the 

date of enactment of this paragraph, and annually 

thereafter, the Federal Trade Commission shall perform a market concentration analysis of the ethanol 

production industry using the Herfindahl-Hirschman 

Index to determine whether there is sufficient competition among industry participants to avoid price-setting 

and other anticompetitive behavior. 

(ii) SCORING.—For the purpose of scoring under 

clause (i) using the Herfindahl-Hirschman Index, all 

marketing arrangements among industry participants 

shall be considered. 

(B) REPORT.—Not later than December 1, 2005, and 

annually thereafter, the Federal Trade Commission shall 

submit to Congress and the Administrator a report on the 

64 

results of the market concentration analysis performed 

under subparagraph (A)(i). 

(p) RENEWABLE FUEL SAFE HARBOR.— (1) IN GENERAL.— (A) SAFE HARBOR.—Notwithstanding any other provision of Federal or State law, no renewable fuel (as defined 

in subsection (o)(1)) used or intended to be used as a motor 

vehicle fuel, nor any motor vehicle fuel containing renewable fuel, shall be deemed to be defective in design or manufacture by reason of the fact that the fuel is, or contains, 

renewable fuel, if— (i) the fuel does not violate a control or prohibition 

imposed by the Administrator under this section; and 

(ii) the manufacturer of the fuel is in compliance 

with all requests for information under subsection (b). 

(B) SAFE HARBOR NOT APPLICABLE.—In any case in 

which subparagraph (A) does not apply to a quantity of 

fuel, the existence of a design defect or manufacturing defect with respect to the fuel shall be determined under otherwise applicable law. 

(2) EXCEPTION.—This subsection does not apply to ethers. 

(3) APPLICABILITY.—This subsection applies with respect to 

all claims filed on or after the date of enactment of this subsection. 

(q) ANALYSES OF MOTOR VEHICLE FUEL CHANGES AND EMIS- SIONS MODEL.— (1) ANTI-BACKSLIDING ANALYSIS.— (A) DRAFT ANALYSIS.—Not later than 4 years after the 

date of enactment of this paragraph, the Administrator 

shall publish for public comment a draft analysis of the 

changes in emissions of air pollutants and air quality due 

to the use of motor vehicle fuel and fuel additives resulting 

from implementation of the amendments made by the Federal Reformulated Fuels Act of 2005. 

(B) FINAL ANALYSIS.—After providing a reasonable opportunity for comment but not later than 5 years after the 

date of enactment of this paragraph, the Administrator 

shall publish the analysis in final form. 

(2) EMISSIONS MODEL.—For the purposes of this section, not 

later than 4 years after the date of enactment of this paragraph, 

the Administrator shall develop and finalize an emissions 

model that reflects, to the maximum extent practicable, the effects of gasoline characteristics or components on emissions 

from vehicles in the motor vehicle fleet during calendar year 

2007. 

(3) PERMEATION EFFECTS STUDY.—

(A) IN GENERAL.—Not later than 1 year after the date 

of enactment of this paragraph, the Administrator shall 

conduct a study, and report to Congress the results of the 

study, on the effects of ethanol content in gasoline on permeation, the process by which fuel molecules migrate 

through the elastomeric materials (rubber and plastic 

parts) that make up the fuel and fuel vapor systems of a 

motor vehicle. 

65 

(B) EVAPORATIVE EMISSIONS.—The study shall include 

estimates of the increase in total evaporative emissions likely to result from the use of gasoline with ethanol content in 

a motor vehicle, and the fleet of motor vehicles, due to permeation. 

ø(o)¿ (r) FUEL AND FUEL ADDITIVE IMPORTERS AND IMPORTA- TION.—For the purposes of this section, the term ‘‘manufacturer’’ includes an importer and the term ‘‘manufacture’’ includes importation. 

SEC. 212. RENEWABLE FUEL. 

(a) DEFINITIONS.—In this section: 

(1) MUNICIPAL SOLID WASTE.—The term ‘municipal solid 

waste’ has the meaning given the term ‘solid waste’ in section 

1004 of the Solid Waste Disposal Act (42 U.S.C. 6903). 

(2) RFG STATE.—The term ‘RFG State’ means a State in 

which is located 1 or more covered areas (as defined in section 

211(k)(10)(D)). 

(3) SECRETARY.—The term ‘Secretary’ means the Secretary 

of Energy. 

(b) SURVEY OF RENEWABLE FUEL MARKET.— (1) SURVEY AND REPORT.—Not later than December 1, 2006, 

and annually thereafter, the Administrator shall— (A) conduct, with respect to each conventional gasoline 

use area and each reformulated gasoline use area in each 

State, a survey to determine the market shares of— (i) conventional gasoline containing ethanol; 

(ii) reformulated gasoline containing ethanol; 

(iii) conventional gasoline containing renewable 

fuel; and 

(iv) reformulated gasoline containing renewable 

fuel; and 

(B) submit to Congress, and make publicly available, a 

report on the results of the survey under subparagraph (A). 

(2) RECORDKEEPING AND REPORTING REQUIREMENTS.— (A) IN GENERAL.—The Administrator may require any 

refiner, blender, or importer to keep such records and make 

such reports as are necessary to ensure that the survey conducted under paragraph (1) is accurate. 

(B) RELIANCE ON EXISTING REQUIREMENTS.—To avoid 

duplicative requirements, in carrying out subparagraph 

(A), the Administrator shall rely, to the maximum extent 

practicable, on reporting and recordkeeping requirements 

in effect on the date of enactment of this section. 

(3) CONFIDENTIALITY.—Activities carried out under this 

subsection shall be conducted in a manner designed to protect 

confidentiality of individual responses. 

(c) CELLULOSIC BIOMASS ETHANOL AND MUNICIPAL SOLID

WASTE LOAN GUARANTEE PROGRAM.—

(1) IN GENERAL.—Funds may be provided for the cost (as 

defined in the Federal Credit Reform Act of 1990 (2 U.S.C. 661 

et seq.)) of loan guarantees issued under section 19 of the Federal Nonnuclear Energy Research and Development Act of 1974 

(42 U.S.C. 5919) to carry out celluosic biomass commercial 

demonstration projects. 

66 

(2) DEMONSTRATION PROJECTS.— (A) IN GENERAL.—The Secretary shall issue loan guarantees under this section to carry out not more than 4 

projects to commercially demonstrate the feasibility and viability of producing cellulosic biomass ethanol, including at 

least 1 project that uses cereal straw as a feedstock and 1 

project that uses municipal solid waste as a feedstock. 

(B) DESIGN CAPACITY.—Each project shall have a design capacity to produce at least 30,000,000 gallons of cellulosic biomass ethanol each year. 

(3) APPLICANT ASSURANCES.—An applicant for a loan guarantee under this section shall provide assurances, satisfactory 

to the Secretary, that— (A) the project design has been validated through the 

operation of a continuous process facility with a cumulative 

output of at least 50,000 gallons of ethanol; 

(B) the project has been subject to a full technical review; 

(C) the project is covered by adequate project performance guarantees; 

(D) the project, with the loan guarantee, is economically viable; and 

(E) there is a reasonable assurance of repayment of the 

guaranteed loan. 

(4) LIMITATIONS.— (A) MAXIMUM GUARANTEE.—Except as provided in subparagraph (B), notwithstanding section 19(c)(2)(A) of the 

Federal Nonnuclear Energy Research and Development Act 

of 1974 (42 U.S.C. 5919(c)(2)(A)), a loan guarantee under 

this section may be issued for up to 80 percent of the estimated cost of a project, but may not exceed $250,000,000 

for a project. 

(B) ADDITIONAL GUARANTEES.— (i) IN GENERAL.—The Secretary may issue additional loan guarantees for a project to cover up to 80 

percent of the excess of actual project cost over estimated project cost but not to exceed 15 percent of the 

amount of the original guarantee. 

(ii) PRINCIPAL AND INTEREST.—Subject to subparagraph (A), the Secretary shall guarantee 100 percent of 

the principal and interest of a loan made under subparagraph (A). 

(5) EQUITY CONTRIBUTIONS.—To be eligible for a loan guarantee under this section, an applicant for the loan guarantee 

shall have binding commitments from equity investors to provide an initial equity contribution of at least 20 percent of the 

total project cost. 

(6) EFFECT OF OTHER LAWS.—The following provisions are 

inapplicable to a loan guarantee made under this section: 

(A) Subsections (m) and (p) of section 19 of the Federal 

Nonnuclear Energy Research and Development Act of 1974 

(42 U.S.C. 5919). 

(B) The first, third, and fourth sentences of section 

19(g)(4) of that Act. 

67 

(7) INSUFFICIENT AMOUNTS.—If the amount made available 

to carry out this section is insufficient to allow the Secretary to 

make loan guarantees for 3 projects described in subsection (b), 

the Secretary shall issue loan guarantees for 1 or more qualifying projects under this section in the order in which the applications for the projects are received by the Secretary. 

(8) APPROVAL.—An application for a loan guarantee under 

this section shall be approved or disapproved by the Secretary 

not later than 90 days after the application is received by the 

Secretary. 

(d) AUTHORIZATION OF APPROPRIATIONS FOR RESOURCE CENTER.—There is authorized to be appropriated, for a resource center 

to further develop bioconversion technology using low-cost biomass 

for the production of ethanol at the Center for Biomass-Based Energy at the University of Mississippi and the University of Oklahoma, $4,000,000 for each of fiscal years 2005 through 2007. 

(e) RENEWABLE FUEL PRODUCTION RESEARCH AND DEVELOPMENT GRANTS.—

(1) IN GENERAL.—The Administrator shall provide grants 

for the research into, and development and implementation of, 

renewable fuel production technologies in RFG States with low 

rates of ethanol production, including low rates of production 

of cellulosic biomass ethanol. 

(2) ELIGIBILITY.—

(A) IN GENERAL.—The entities eligible to receive a 

grant under this subsection are academic institutions in 

RFG States, and consortia made up of combinations of academic institutions, industry, State government agencies, or 

local government agencies in RFG States, that have proven 

experience and capabilities with relevant technologies. 

(B) APPLICATION.—To be eligible to receive a grant 

under this subsection, an eligible entity shall submit to the 

Administrator an application in such manner and form, 

and accompanied by such information, as the Administrator may specify. 

(3) AUTHORIZATION OF APPROPRIATIONS.—There is authorized to be appropriated to carry out this subsection $25,000,000 

for each of fiscal years 2006 through 2010. 

(f) CELLULOSIC BIOMASS ETHANOL CONVERSION ASSISTANCE.—

(1) IN GENERAL.—The Secretary may provide grants to merchant producers of cellulosic biomass ethanol in the United 

States to assist the producers in building eligible production facilities described in paragraph (2) for the production of cellulosic biomass ethanol. 

(2) ELIGIBLE PRODUCTION FACILITIES.—A production facility shall be eligible to receive a grant under this subsection if 

the production facility—

(A) is located in the United States; and 

(B) uses cellulosic biomass feedstocks derived from agricultural residues or municipal solid waste. 

(3) AUTHORIZATION OF APPROPRIATIONS.—There is authorized to be appropriated to carry out this subsection—

(A) $250,000,000 for fiscal year 2005; and 

68 

(B) $400,000,000 for fiscal year 2006. 

* * * * * * * 

DEPARTMENT OF ENERGY ORGANIZATION ACT 

SEC. 205. (a)(1) * * * 

* * * * * * * 

(l) In order to improve the ability to evaluate the effectiveness 

of the Nation’s energy efficiency policies and programs, the Administrator shall, in carrying out the data collection provisions of subsections (i) and (k), consider—

(1) expanding the survey instruments to include questions 

regarding participation in Government and utility conservation 

programs; 

(2) expanding fuel-use surveys in order to provide greater 

detail on energy use by user subgroups; and 

(3) expanding the scope of data collection on energy efficiency and load-management programs, including the effects of 

building construction practices such as those designed to obtain peak load shifting. 

(m) SURVEY OF RENEWABLE FUELS CONSUMPTION.—

(1) IN GENERAL.—In order to improve the ability to evaluate 

the effectiveness of the Nation’s renewable fuels mandate, the 

Administrator shall conduct and publish the results of a survey 

of renewable fuels consumption in the motor vehicle fuels market in the United States monthly, and in a manner designed to 

protect the confidentiality of individual responses. 

(2) ELEMENTS OF SURVEY.—In conducting the survey, the 

Administrator shall collect information retrospectively to 1998, 

on a national basis and a regional basis, including—

(A) the quantity of renewable fuels produced; 

(B) the cost of production; 

(C) the cost of blending and marketing; 

(D) the quantity of renewable fuels blended; 

(E) the quantity of renewable fuels imported; and 

(F) market price data. 

* * * * * * * 

SOLID WASTE DISPOSAL ACT 

* * * * * * * 

SHORT TITLE AND TABLE OF CONTENTS

SEC. 1001. This title (hereinafter in this title referred to as 

‘‘this Act’’), together with the following table of contents, may be 

cited as the ‘‘Solid Waste Disposal Act’’: 

Subtitle A—General Provisions 

* * * * * * * 

Subtitle I—Regulation of Underground Storage Tanks 

Sec. 9001. Definitions. 

69 

Sec. 9002. Notification. 

Sec. 9003. Release detection, prevention, and correction regulations. 

Sec. 9004. Approval of State programs. 

Sec. 9005. Inspections, monitoring, and testing. 

Sec. 9006. Federal enforcement. 

Sec. 9007. Federal facilities. 

Sec. 9008. State authority. 

Sec. 9009. Study of underground storage tanks. 

øSec. 9010. Authorization of appropriations.¿ 

Sec. 9010. Release prevention and compliance. 

Sec. 9011. Authorization of appropriations. 

* * * * * * 

* 

Subtitle I—Regulation of Underground Storage Tanks 

DEFINITIONS AND EXEMPTIONS

SEC. 9001. For the purposes of this subtitle—

(1) * * * 

* * * * * * * 

(3) The term ‘‘owner’’ means—

(A) in the case of an underground storage tank in use 

on the date of enactment of the Hazardous and Solid 

Waste Amendments of 1984, or brought into use after that 

date, any person who owns an underground storage tank 

used for the storage, use, or dispensing of regulated 

øsustances¿ substances, and 

* * * * * * * 

RELEASE DETECTION, PREVENTION, AND CORRECTION REGULATIONS

SEC. 9003. (a) * * * 

* * * * * * * 

(f) EFFECTIVE DATES.—(1) Regulations issued pursuant to 

øsubsection (c) and (d) of this section¿ subsections (c) and (d), and 

standards issued pursuant to subsection (e) of this section, for underground storage tanks containing regulated substances defined 

in section 9001(2)(B) (petroleum, including crude oil or any fraction 

thereof which is liquid at standard conditions of temperature and 

pressure) shall be effective not later than thirty months after the 

date of enactment of the Hazardous and Solid Waste Amendments 

of 1984. 

* * * * * * * 

(h) EPA RESPONSE PROGRAM FOR PETROLEUM.—

(1) * * * 

* * * * * * * 

(7) STATE AUTHORITIES.—

(A) GENERAL.—A State may exercise the authorities in 

øparagraphs (1) and (2) of this subsection¿ paragraphs (1), 

(2), and (12), subject to the terms and conditions of paragraphs (3), (5), (9), (10), and (11), and including the authorities of paragraphs (4), (6), and (8) of this subsection 

and section 9010 if—

70 

(i) the Administrator determines that the State 

has the capabilities to carry out effective corrective actions and enforcement activities; and 

(ii) the Administrator enters into a cooperative 

agreement with the State setting out the actions to be 

undertaken by the State. 

The Administrator may provide funds from the Leaking 

Underground Storage Tank Trust Fund for the reasonable 

costs of the State’s actions under the cooperative agreement. 

* * * * * * * 

(12) REMEDIATION OF CONTAMINATION FROM ETHER FUEL

ADDITIVES.—

(A) IN GENERAL.—The Administrator and the States 

may use funds made available under section 9013(1) to 

carry out corrective actions with respect to a release of 

methyl tertiary butyl ether or other ether fuel additive that 

presents a threat to human health, welfare, or the environment. 

(B) APPLICABLE AUTHORITY.—Subparagraph (A) shall 

be carried out—

(i) in accordance with paragraph (2), except that a 

release with respect to which a corrective action is carried out under subparagraph (A) shall not be required 

to be from an underground storage tank; and 

(ii) in the case of a State, in accordance with a cooperative agreement entered into by the Administrator 

and the State under paragraph (7). 

* * * * * * * 

APPROVAL OF STATE PROGRAMS

SEC. 9004. (a) ELEMENTS OF STATE PROGRAM.—Beginning 30 

months after the date of enactment of the Hazardous and Solid 

Waste Amendments of 1984, any State may, submit an underground storage tank release detection, prevention, and correction 

program for review and approval by the Administrator. The program may cover tanks used to store regulated substances øreferred 

to in 9001(2) (A) or (B) or both.¿ referred to in subparagraph (A) 

or (B), or both, of section 9001(2). A State program may be approved by the Administrator under this section only if the State 

demonstrates that the State program includes the following requirements and standards and provides for adequate enforcement 

of compliance with such requirements and standards—

* * * * * * * 

INSPECTIONS, MONITORING, TESTING, AND CORRECTIVE ACTION

SEC. 9005. (a) FURNISHING INFORMATION.—For the purposes of 

developing or assisting in the development of any regulation, conducting any østudy taking¿ study, taking any corrective action, or 

enforcing the provisions of this subtitle, any owner or operator of 

an underground storage tank (or any tank subject to study under 

section 9009 that is used for storing regulated substances) shall, 

71 

upon request of any officer, employee or representative of the Environmental Protection Agency, duly designated by the Administrator, or upon request of any duly designated officer, employee, or 

representative of a State acting parsuant to subsection (h)(7) of section 9003 or with an approved program, furnish information relating to such tanks, their associated equipment, their contents, conduct monitoring or testing, permit such officer at all reasonable 

times to have access to, and to copy all records relating to such 

tanks and permit such officer to have access for corrective action. 

For the purposes of developing or assisting in the development of 

any regulation, conducting any study, taking corrective action, or 

enforcing the provisions of this subtitle, such officers, employees, or 

representatives are authorized—

* * * * * * * 

(b) CONFIDENTIALITY.—(1) Any records, reports, or information 

obtained from any persons under this section shall be available to 

the public, except that upon a showing satisfactory to the Administrator (or the State, as the case may be) by any person that 

records, reports, or information, or a particular part thereof, to 

which the Administrator (or the State, as the case may be) or any 

officer, employee, or representative thereof has access under this 

section if made public, would divulge information entitled to protection under section 1905 of title 18 of the United States Code, such 

information or particular portion thereof shall be considered confidential in accordance with the purposes of that section, except 

that such record, report, document, or information may be disclosed 

to other officers, employees, or authorized representatives of the 

United States concerned with carrying out this Act, or when 

ørelevent¿ relevant in any proceeding under this Act. 

(2) Any person not subject to the provisions of section 1905 of 

title 18 of the United States Code who knowingly and willfully divulges or discloses any information entitled to protection under this 

subsection shall, upon conviction, be subject to a fine of not more 

than $5,000 or to imprisonment not to exceed one year, or both. 

(3) In submitting data under this subtitle, a person required to 

provide such data may—

(A) designate the data which such person believes is entitled to protection under this subsection, and 

(B) submit such designated data separately from other 

data submitted under this subtitle. 

A designation under this paragraph shall be made in writing and 

in such manner as the Administrator may prescribe. 

(4) Notwithstanding any limitation contained in this section or 

any other provision of law, all information reported to, or otherwise 

obtained, by the Administrator (or any representative of the Administrator) under this Act shall be made available, upon written 

request of any duly authorized committee of the Congress, to such 

committee (including records, reports, or information obtained by 

representatives of the øEvironmental¿ Environmental Protection 

Agency). 

* * * * * * * 

72 

AUTHORIZATION OF APPROPRIATIONS

øSEC. 9010. For authorization of appropriations to carry out 

this subtitle, see section 2007(g).¿ 

SEC. 9010. RELEASE PREVENTION AND COMPLIANCE. 

Funds made available under section 9013(2) from the Leaking 

Underground Storage Tank Trust Fund may be used for conducting 

inspections, or for issuing orders or bringing actions under this subtitle— (1) by a State (pursuant to section 9003(h)(7)) acting 

under— (A) a program approved under section 9004; or 

(B) State requirements regulating underground storage 

tanks that are similar or identical to this subtitle, as determined by the Administrator; and 

(2) by the Administrator, acting under this subtitle or a 

State program approved under section 9004. 

SEC. 9011. AUTHORIZATION OF APPROPRIATIONS. 

In addition to amounts made available under section 2007(f), 

there are authorized to be appropriated from the Leaking Underground Storage Tank Trust Fund, notwithstanding section 

9508(c)(1) of the Internal Revenue Code of 1986—

(1) to carry out section 9003(h)(12), $200,000,000 for fiscal 

year 2005, to remain available until expended; and 

(2) to carry out section 9010—

(A) $50,000,000 for fiscal year 2005; and 

(B) $30,000,000 for fiscal years 2006 through 2010. 

* * * * * * * 

Æ