II 

109TH CONGRESS 

1ST SESSION S. 1232 

To amend the Clean Air Act to increase production and use of renewable 

fuel and to increase the energy independence of the United States, 

and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JUNE 14, 2005 

Mr. LAUTENBERG introduced the following bill; which was read twice and 

referred to the Committee on Environment and Public Works 

A BILL 

To amend the Clean Air Act to increase production and 

use of renewable fuel and to increase the energy independence of the United States, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Fuels Security Act of 2005’’. 

6 (b) TABLE OF CONTENTS.—The table of contents of 

7 this Act is as follows: 

Sec. 1. Short title; table of contents. 

TITLE I—GENERAL PROVISIONS 

Sec. 101. Renewable content of motor vehicle fuel. 
2 

•S 1232 IS 

Sec. 102. Federal agency ethanol-blended gasoline and biodiesel purchasing requirement. 

Sec. 103. Data collection. 

TITLE II—FEDERAL REFORMULATED FUELS 

Sec. 201. Elimination of oxygen content requirement for reformulated gasoline. 

Sec. 202. Public health and environmental impacts of fuels and fuel additives. 

Sec. 203. Analyses of motor vehicle fuel changes. 

Sec. 204. Additional opt-in areas under reformulated gasoline program. 

Sec. 205. Federal enforcement of State fuels requirements. 

Sec. 206. Fuel system requirements harmonization study. 

Sec. 207. Review of Federal procurement initiatives relating to use of recycled 

products and fleet and transportation efficiency. 

Sec. 208. Report on renewable motor fuel. 

TITLE III—CELLULOSIC BIOMASS 

Sec. 301. Commercial demonstration projects. 

1 TITLE I—GENERAL PROVISIONS 

2 SEC. 101. RENEWABLE CONTENT OF MOTOR VEHICLE FUEL. 

3 (a) IN GENERAL.—Section 211 of the Clean Air Act 

4 (42 U.S.C. 7545) is amended— 

5 (1) by redesignating subsection (o) as sub6 section (q); and 

7 (2) by inserting after subsection (n) the fol8 lowing: 

9 ‘‘(o) RENEWABLE FUEL PROGRAM.— 

10 ‘‘(1) DEFINITIONS.—In this subsection: 

11 ‘‘(A) CELLULOSIC BIOMASS FUEL.—The 

12 term ‘cellulosic biomass fuel’ means fuel derived 

13 from— 

14 ‘‘(i) any lignocellulosic or 

15 hemicellulosic matter that is derived from 

16 organic material of a plant that is planted 

17 for the purpose of producing energy (ex-
3 

•S 1232 IS 

1 cept a plant produced on land enrolled in 

2 the conservation reserve program estab3 lished under subchapter B of chapter 1 of 

4 subtitle D of title XII of the Food Security 

5 Act of 1985 (16 U.S.C. 3831 et seq.), if 

6 harvesting the plant would be inconsistent 

7 with the purposes of the program); or 

8 ‘‘(ii) nonhazardous lignocellulosic or 

9 hemicellulosic matter that is segregated 

10 from other waste materials and is derived 

11 from— 

12 ‘‘(I)(aa) trees and other plant 

13 matter removed from the immediate 

14 vicinity of homes, other occupied 

15 structures, or essential community in16 frastructure; or 

17 ‘‘(bb) precommercial thinning, 

18 slash, or brush (except thinning, 

19 slash, or brush from old growth for20 ests or publicly-owned roadless areas); 

21 ‘‘(II) an agricultural crop, a crop 

22 byproduct, or a residue resource (ex23 cept a plant produced on land enrolled 

24 in the conservation reserve program, 

25 if harvesting the plant would be incon-
4 

•S 1232 IS 

1 sistent with the purposes of the pro2 gram); or 

3 ‘‘(III) miscellaneous waste (such 

4 as landscape or right-of-way tree trim5 mings), not including— 

6 ‘‘(aa) recyclable 

7 postconsumer waste paper, in8 cluding such paper in municipal 

9 solid waste; 

10 ‘‘(bb) painted, treated, or 

11 pressurized wood; or 

12 ‘‘(cc) wood that is contami13 nated by plastic or metal. 

14 ‘‘(B) RENEWABLE FUEL.—The term ‘re15 newable fuel’ means motor vehicle fuel that— 

16 ‘‘(i)(I) is produced from grain, starch, 

17 or oilseeds; 

18 ‘‘(II) is natural biogas produced from 

19 a landfill, a sewage waste treatment plant, 

20 or animal waste; 

21 ‘‘(III) is cellulosic biomass fuel; 

22 ‘‘(IV) is biodiesel (as defined in sec23 tion 312(f) of the Energy Policy Act of 

24 1992 (42 U.S.C. 13220(f))0; or 
5 

•S 1232 IS 

1 ‘‘(V) is composed of a mix of compo2 nents that are derived from renewable fuel; 

3 and 

4 ‘‘(ii) is used to replace or reduce the 

5 quantity of fossil fuel present in a fuel 

6 mixture used to operate a motor vehicle. 

7 ‘‘(C) SMALL REFINERY.—The term ‘small 

8 refinery’ means a refinery for which average ag9 gregate daily crude oil throughput for the cal10 endar year (as determined by dividing the ag11 gregate throughput for the calendar year by the 

12 number of days in the calendar year) does not 

13 exceed 75,000 barrels. 

14 ‘‘(2) RENEWABLE FUEL PROGRAM.— 

15 ‘‘(A) IN GENERAL.— 

16 ‘‘(i) REGULATIONS.—Not later than 1 

17 year after the date of enactment of this 

18 subsection, the Administrator shall promul19 gate regulations ensuring that motor vehi20 cle fuel sold or dispensed to consumers in 

21 the contiguous United States, on an an22 nual average basis, contains the applicable 

23 volume of renewable fuel specified in sub24 paragraph (B). 
6 

•S 1232 IS 

1 ‘‘(ii) COMPLIANCE.—Regardless of the 

2 date of promulgation, the regulations shall 

3 contain compliance provisions for refiners, 

4 blenders, and importers, as appropriate, to 

5 ensure that the requirements of this sub6 section are met, but shall not restrict 

7 where renewable fuel can be used, or im8 pose any per-gallon obligation for the use 

9 of renewable fuel. 

10 ‘‘(iii) NO REGULATIONS.—If the Ad11 ministrator does not promulgate the regu12 lations, the applicable percentage referred 

13 to in paragraph (3), on a volume percent14 age of gasoline basis, shall be 3.2 in 2006. 

15 ‘‘(B) APPLICABLE VOLUME.— 

16 ‘‘(i) CALENDAR YEARS 2006 THROUGH

17 2012.—For the purpose of subparagraph 

18 (A), the applicable volume for any of cal19 endar years 2006 through 2012 shall be 

20 determined in accordance with the fol21 lowing table: 

‘‘Applicable volume of renewable fuel 

Calendar year: (In billions of gallons) 

2006 ..................................................................................... 4.0

2007 ..................................................................................... 4.7

2008 ..................................................................................... 5.4

2009 ..................................................................................... 6.15

2010 ..................................................................................... 6.9

2011 ..................................................................................... 7.55

2012 ..................................................................................... 8.25
7 

•S 1232 IS 

1 ‘‘(ii) CALENDAR YEARS 2013 AND

2 THEREAFTER.—For the purpose of sub3 paragraph (A), the applicable volume for 

4 calendar year 2013 and each calendar year 

5 thereafter shall be determined by the Ad6 ministrator, in coordination with the Sec7 retary of Energy and the Secretary of Ag8 riculture, based on a review of the imple9 mentation of the program during calendar 

10 years 2006 through 2012, including a re11 view of— 

12 ‘‘(I) the impact of the use of re13 newable fuels on the environment, air 

14 quality, energy security, job creation, 

15 and rural economic development; and 

16 ‘‘(II) the expected annual rate of 

17 future production of renewable fuels, 

18 including cellulosic ethanol. 

19 ‘‘(iii) LIMITATION.—The applicable 

20 volume for a calendar year under clause 

21 (ii) shall be not less than the sum of the 

22 applicable volume for that year of cellulosic 

23 biomass fuel referred to in clause (iv) and 

24 the product obtained by multiplying— 
8 

•S 1232 IS 

1 ‘‘(I) the number of gallons of 

2 gasoline that the Administrator esti3 mates will be sold or introduced into 

4 commerce during the calendar year; 

5 and 

6 ‘‘(I) the quotient obtained by di7 viding— 

8 ‘‘(aa) 8,000,000,000; by 

9 ‘‘(bb) the number of gallons 

10 of gasoline sold or introduced 

11 into commerce during calendar 

12 year 2012. 

13 ‘‘(iv) CELLULOSIC BIOMASS FUEL.— 

14 For the purpose of subparagraph (A), the 

15 Administrator shall require, by regulation, 

16 that an applicable volume under clause (i) 

17 or (ii) include a volume of cellulosic bio18 mass fuel of not less than— 

19 ‘‘(I) in 2009, 50,000,000 gallons; 

20 ‘‘(II) in 2010, 100,000,000 gal21 lons; 

22 ‘‘(III) in 2011, 150,000,000 gal23 lons; 

24 ‘‘(IV) in 2012, 250,000,000 gal25 lons; 
9 

•S 1232 IS 

1 ‘‘(V) in 2013, 500,000,000 gal2 lons; 

3 ‘‘(VI) in 2014, 800,000,000 gal4 lons; and 

5 ‘‘(VII) in 2015 and each subse6 quent calendar year, 1,000,000,000 

7 gallons. 

8 ‘‘(v) INCLUSIONS IN CALCULA9 TIONS.— 

10 ‘‘(I) BIOGAS.—For the purposes 

11 of clauses (i) and (ii), any biogas that 

12 is a renewable fuel may be included in 

13 a calculation of the volume of renew14 able fuel using a conversion formula 

15 to be determined by the Administrator 

16 based on the energy content of a cubic 

17 foot of biogas at standard tempera18 ture and pressure. 

19 ‘‘(II) BLENDING COMPONENTS.— 

20 For the purposes of clauses (i) and 

21 (ii), only the renewable fuel portion of 

22 a blending component derived from 

23 renewable fuel may be considered to 

24 be part of the applicable volume of re25 newable fuel. 
10 

•S 1232 IS 

1 ‘‘(3) APPLICABLE PERCENTAGES.— 

2 ‘‘(A) PROVISION OF ESTIMATE OF VOL3 UMES OF GASOLINE SALES.—Not later than Oc4 tober 31 of each of calendar years 2006 

5 through 2011, the Administrator of the Energy 

6 Information Administration shall provide to the 

7 Administrator of the Environmental Protection 

8 Agency an estimate of the volumes of gasoline 

9 that will be sold or introduced into commerce in 

10 the United States during the following calendar 

11 year. 

12 ‘‘(B) DETERMINATION OF APPLICABLE

13 PERCENTAGES.— 

14 ‘‘(i) IN GENERAL.—Not later than 

15 November 30 of each of calendar years 

16 2006 through 2011, based on the estimate 

17 provided under subparagraph (A), the Ad18 ministrator shall determine and publish in 

19 the Federal Register, with respect to the 

20 following calendar year, the renewable fuel 

21 obligation that ensures that the require22 ments under paragraph (2) are met. 

23 ‘‘(ii) REQUIRED ELEMENTS.—The re24 newable fuel obligation determined for a 

25 calendar year under clause (i) shall— 
11 

•S 1232 IS 

1 ‘‘(I) be applicable to refiners, 

2 blenders, and importers, as appro3 priate; 

4 ‘‘(II) be expressed in terms of a 

5 volume percentage of gasoline sold or 

6 introduced into commerce; and 

7 ‘‘(III) subject to subparagraph 

8 (C)(i), consist of a single applicable 

9 percentage that applies to all cat10 egories of persons specified in sub11 clause (I). 

12 ‘‘(C) ADJUSTMENTS.—In determining the 

13 applicable percentage for a calendar year, the 

14 Administrator shall make adjustments— 

15 ‘‘(i) to prevent the imposition of re16 dundant obligations to any person specified 

17 in subparagraph (B)(ii)(I); and 

18 ‘‘(ii) to account for the use of renew19 able fuel during the previous calendar year 

20 by small refineries that are exempt under 

21 paragraph (11). 

22 ‘‘(4) EQUIVALENCY.—For the purpose of para23 graph (2), 1 gallon of cellulosic biomass fuel in ex24 cess of the volume required under paragraph 
12 

•S 1232 IS 

1 (2)(B)(iv) shall be considered to be the equivalent 

2 of— 

3 ‘‘(A) in 2006 through 2008, 2.5 gallons of 

4 renewable fuel; 

5 ‘‘(B) in 2009, 2 gallons of renewable fuel; 

6 ‘‘(C) in 2010, 1.5 gallons of renewable 

7 fuel; and 

8 ‘‘(D) in 2011, and each subsequent cal9 endar year, 1 gallon of renewable fuel. 

10 ‘‘(5) CREDIT PROGRAM.— 

11 ‘‘(A) REGULATIONS.—The regulations pro12 mulgated to carry out this subsection shall pro13 vide for— 

14 ‘‘(i) the generation of an appropriate 

15 amount of credits by any person that re16 fines, blends, or imports gasoline that con17 tains a quantity of renewable fuel or cel18 lulosic biomass fuel that is greater than 

19 the quantity required under paragraph (2); 

20 ‘‘(ii) the generation of an appropriate 

21 amount of credits for biodiesel fuel; and 

22 ‘‘(iii) if a small refinery notifies the 

23 Administrator that the small refinery 

24 waives the exemption provided by this sub25 section, the generation of credits by the 
13 

•S 1232 IS 

1 small refinery beginning in the year fol2 lowing the notification. 

3 ‘‘(B) USE OF CREDITS.—A person that 

4 generates credits under subparagraph (A) may 

5 use the credits, or transfer all or a portion of 

6 the credits to another person, for the purpose 

7 of complying with paragraph (2). 

8 ‘‘(C) LIFE OF CREDITS.—A credit gen9 erated under this paragraph shall be valid to 

10 demonstrate compliance for the calendar year in 

11 which the credit was generated. 

12 ‘‘(D) INABILITY TO PURCHASE SUFFICIENT

13 CREDITS.—The regulations promulgated to 

14 carry out this subsection shall include provi15 sions permitting any person that is unable to 

16 generate or purchase sufficient credits to meet 

17 the requirement under paragraph (2) to carry 

18 forward a renewable fuel or cellulosic biomass 

19 fuel deficit if, for the calendar year following 

20 the year in which the renewable fuel or cel21 lulosic biomass fuel deficit is created, the per22 son— 

23 ‘‘(i) achieves compliance with the ap24 propriate requirement under paragraph 

25 (2); and 
14 

•S 1232 IS 

1 ‘‘(ii) generates or purchases additional 

2 renewable fuels or cellulosic biomass cred3 its to offset the deficit of the preceding 

4 year. 

5 ‘‘(6) SEASONAL VARIATIONS IN RENEWABLE

6 FUEL USE.— 

7 ‘‘(A) STUDY.—For each of calendar years 

8 2006 through 2012, the Administrator of the 

9 Energy Information Administration shall con10 duct a study of renewable fuels blending to de11 termine whether there are excessive seasonal 

12 variations in the use of renewable fuels. 

13 ‘‘(B) REGULATION OF EXCESSIVE SEA14 SONAL VARIATIONS.— 

15 ‘‘(i) DETERMINATION.—If, for any 

16 calendar year, the Administrator of the 

17 Energy Information Administration, based 

18 on the study under subparagraph (A), 

19 makes the determinations specified in sub20 paragraph (C), the Administrator of the 

21 Environmental Protection Agency shall de22 termine whether promulgating regulations 

23 described in clause (ii) would prevent or 

24 interfere with the attainment or mainte-
15 

•S 1232 IS 

1 nance of any national ambient air quality 

2 standard. 

3 ‘‘(ii) REGULATIONS.— 

4 ‘‘(I) IN GENERAL.—The Admin5 istrator of the Environmental Protec6 tion Agency shall promulgate regula7 tions to ensure that 35 percent or 

8 more of the quantity of renewable 

9 fuels necessary to meet the require10 ments under paragraph (2) is used 

11 during each of the periods specified in 

12 subparagraph (D) of each subsequent 

13 calendar year only if— 

14 ‘‘(aa) the Administrator de15 termines under clause (i) that the 

16 regulations would not prevent or 

17 interfere with the attainment or 

18 maintenance of national ambient 

19 air quality standards; and 

20 ‘‘(bb) final rules have been 

21 promulgated under subsections 

22 (h)(5) and (p)(2). 

23 ‘‘(II) NEGATIVE DETERMINA24 TION.—The Administrator of the En25 vironmental Protection Agency shall 
16 

•S 1232 IS 

1 promulgate regulations requiring the 

2 use, during each of the periods speci3 fied in subparagraph (D) of each sub4 sequent calendar year, of the max5 imum percentage of renewable fuels 

6 necessary to meet the requirements 

7 under paragraph (2) that can be used 

8 without preventing or interfering with 

9 the attainment or maintenance of na10 tional ambient air quality standards 

11 if— 

12 ‘‘(aa) the Administrator de13 termines under clause (i) that the 

14 regulations would prevent or 

15 interfere with the attainment or 

16 maintenance of national ambient 

17 air quality standards; and 

18 ‘‘(bb) final rules have been 

19 promulgated under subsections 

20 (h)(5) and (p)(2). 

21 ‘‘(C) DETERMINATIONS.—The determina22 tions referred to in subparagraph (B) are 

23 that— 

24 ‘‘(i) less than 35 percent of the quan25 tity of renewable fuels necessary to meet 
17 

•S 1232 IS 

1 the requirements under paragraph (2) has 

2 been used during 1 of the periods specified 

3 in subparagraph (D) of the calendar year; 

4 ‘‘(ii) a pattern of excessive seasonal 

5 variation described in clause (i) will con6 tinue in subsequent calendar years; and 

7 ‘‘(iii) promulgating regulations or 

8 other requirements to impose a 35 percent 

9 or more seasonal use of renewable fuels 

10 will not significantly increase the price of 

11 motor fuels to the consumer. 

12 ‘‘(D) PERIODS.—The 2 periods referred to 

13 in this paragraph are— 

14 ‘‘(i) April through September; and 

15 ‘‘(ii) January through March and Oc16 tober through December. 

17 ‘‘(E) EXCLUSIONS.—Renewable fuels 

18 blended or consumed in 2006 in a State that 

19 has received a waiver under section 209(b) shall 

20 not be included in the study under subpara21 graph (A). 

22 ‘‘(7) WAIVERS.— 

23 ‘‘(A) IN GENERAL.—The Administrator, in 

24 consultation with the Secretary of Agriculture 

25 and the Secretary of Energy, may waive the re-
18 

•S 1232 IS 

1 quirements under paragraph (2), in whole or in 

2 part, on a petition by 1 or more States by re3 ducing the national quantity of renewable fuel 

4 or cellulosic biomass fuel required under this 

5 subsection— 

6 ‘‘(i) based on a determination by the 

7 Administrator, after public notice and op8 portunity for comment, that implementa9 tion of the requirement would severely 

10 harm the economy or environment of a 

11 State, a region, or the United States; or 

12 ‘‘(ii) based on a determination by the 

13 Administrator, after public notice and op14 portunity for comment, that there is an in15 adequate domestic supply to meet the re16 quirement. 

17 ‘‘(B) PETITIONS FOR WAIVERS.—Not later 

18 than 90 days after the date on which a petition 

19 is received by the Administrator under subpara20 graph (A), the Administrator, in consultation 

21 with the Secretary of Agriculture and the Sec22 retary of Energy, shall approve or disapprove 

23 the petition. 

24 ‘‘(C) TERMINATION OF WAIVERS.—A waiv25 er granted under subparagraph (A) shall termi-
19 

•S 1232 IS 

1 nate on the date that is 1 year after the date 

2 on which the waiver was granted, but may be 

3 renewed by the Administrator, after consulta4 tion with the Secretary of Agriculture and the 

5 Secretary of Energy. 

6 ‘‘(8) SMALL REFINERIES.— 

7 ‘‘(A) IN GENERAL.—Paragraph (2) shall 

8 not apply to small refineries until the first cal9 endar year beginning more than 5 years after 

10 the first year set forth in the table in paragraph 

11 (2)(B)(i). 

12 ‘‘(B) STUDY.—Not later than December 

13 31, 2008, the Secretary of Energy shall com14 plete for the Administrator a study to deter15 mine whether the requirements under para16 graph (2) would impose a disproportionate eco17 nomic hardship on small refineries. 

18 ‘‘(C) SMALL REFINERIES AND ECONOMIC

19 HARDSHIP.—For any small refinery that the 

20 Secretary of Energy determines would experi21 ence a disproportionate economic hardship, the 

22 Administrator shall extend the small refinery 

23 exemption for the small refinery for not less 

24 than 2 additional years. 

25 ‘‘(D) ECONOMIC HARDSHIP.— 
20 

•S 1232 IS 

1 ‘‘(i) EXTENSION OF EXEMPTION.—A 

2 small refinery may at any time petition the 

3 Administrator for an extension of the ex4 emption from the requirements under 

5 paragraph (2) for the reason of dispropor6 tionate economic hardship. 

7 ‘‘(ii) EVALUATION.—In evaluating a 

8 hardship petition, the Administrator, in 

9 consultation with the Secretary of Energy, 

10 shall consider the findings of the study in 

11 addition to other economic factors. 

12 ‘‘(iii) DEADLINE FOR ACTION ON PE13 TITIONS.—The Administrator shall act on 

14 any petition submitted by a small refinery 

15 for a hardship exemption not later than 90 

16 days after the receipt of the petition. 

17 ‘‘(E) CREDIT PROGRAM.—Paragraph 

18 (6)(A)(iii) shall apply to each small refinery 

19 that waives an exemption under this paragraph. 

20 ‘‘(F) OPT-IN FOR SMALL REFINERS.—A 

21 small refinery shall be subject to paragraph (2) 

22 if the small refinery notifies the Administrator 

23 that the small refinery waives the exemption 

24 under subparagraph (C).’’. 
21 

•S 1232 IS 

1 (b) PENALTIES AND ENFORCEMENT.—Section 

2 211(d) of the Clean Air Act (42 U.S.C. 7545(d)) is 

3 amended— 

4 (1) in paragraph (1)— 

5 (A) in the first sentence, by striking ‘‘or 

6 (n)’’ and inserting ‘‘(n), or (o)’’ each place it 

7 appears; and 

8 (B) in the second sentence, by striking ‘‘or 

9 (m)’’ and inserting ‘‘(m), or (o)’’; and 

10 (2) in the first sentence of paragraph (2), by 

11 striking ‘‘and (n)’’ and inserting ‘‘(n), and (o)’’ each 

12 place it appears. 

13 SEC. 102. FEDERAL AGENCY ETHANOL-BLENDED GASOLINE 

14 AND BIODIESEL PURCHASING REQUIRE15 MENT. 

16 Title III of the Energy Policy Act of 1992 is amended 

17 by striking section 306 (42 U.S.C. 13215) and inserting 

18 the following: 

19 ‘‘SEC. 306. FEDERAL AGENCY ETHANOL-BLENDED GASO20 LINE AND BIODIESEL PURCHASING REQUIRE21 MENT. 

22 ‘‘(a) ETHANOL-BLENDED GASOLINE.—The head of 

23 each Federal agency shall ensure that, in areas in which 

24 ethanol-blended gasoline is reasonably available at a gen25 erally competitive price, the Federal agency purchases eth-
22 

•S 1232 IS 

1 anol-blended gasoline containing at least 10 percent eth2 anol rather than nonethanol-blended gasoline, for use in 

3 vehicles used by the agency that use gasoline. 

4 ‘‘(b) BIODIESEL.— 

5 ‘‘(1) DEFINITION OF BIODIESEL.—In this sub6 section, the term ‘biodiesel’ has the meaning given 

7 the term in section 312(f). 

8 ‘‘(2) REQUIREMENT.—The head of each Fed9 eral agency shall ensure that the Federal agency 

10 purchases, for use in fueling fleet vehicles that use 

11 diesel fuel used by the Federal agency at the loca12 tion at which fleet vehicles of the Federal agency are 

13 centrally fueled, in areas in which the biodiesel14 blended diesel fuel described in subparagraphs (A) 

15 and (B) is available at a generally competitive 

16 price— 

17 ‘‘(A) as of the date that is 5 years after 

18 the date of enactment of this paragraph, bio19 diesel-blended diesel fuel that contains at least 

20 2 percent biodiesel, rather than nonbiodiesel21 blended diesel fuel; and 

22 ‘‘(B) as of the date that is 10 years after 

23 the date of enactment of this paragraph, bio24 diesel-blended diesel fuel that contains at least 
23 

•S 1232 IS 

1 20 percent biodiesel, rather than nonbiodiesel2 blended diesel fuel. 

3 ‘‘(3) REQUIREMENT OF FEDERAL LAW.—The 

4 provisions of this subsection shall not be considered 

5 a requirement of Federal law for the purposes of 

6 section 312. 

7 ‘‘(c) EXEMPTION.—This section does not apply to 

8 fuel used in vehicles excluded from the definition of ‘fleet’ 

9 by subparagraphs (A) through (H) of section 301(9).’’. 

10 SEC. 103. DATA COLLECTION. 

11 Section 205 of the Department of Energy Organiza12 tion Act (42 U.S.C. 7135) is amended by adding at the 

13 end the following: 

14 ‘‘(m)(1) In order to improve the ability to evaluate 

15 the effectiveness of the renewable fuels mandate of the 

16 United States, the Administrator shall conduct and pub17 lish the results of a survey of renewable fuels demand in 

18 the motor vehicle fuels market in the United States 

19 monthly, and in a manner designed to protect the con20 fidentiality of individual responses. 

21 ‘‘(2) In conducting the survey, the Administrator 

22 shall collect information both on a national and regional 

23 basis, including— 

24 ‘‘(A) information on— 
24 

•S 1232 IS 

1 ‘‘(i) the quantity of renewable fuels pro2 duced; 

3 ‘‘(ii) the quantity of renewable fuels blend4 ed; 

5 ‘‘(iii) the quantity of renewable fuels im6 ported; and 

7 ‘‘(iv) the quantity of renewable fuels de8 manded; and 

9 ‘‘(B) market price data.’’. 

10 TITLE II—FEDERAL 

11 REFORMULATED FUELS 

12 SEC. 201. ELIMINATION OF OXYGEN CONTENT REQUIRE13 MENT FOR REFORMULATED GASOLINE. 

14 (a) ELIMINATION.— 

15 (1) IN GENERAL.—Section 211(k) of the Clean 

16 Air Act (42 U.S.C. 7545(k)) is amended— 

17 (A) in paragraph (2)— 

18 (i) in the second sentence of subpara19 graph (A), by striking ‘‘(including the oxy20 gen content requirement contained in sub21 paragraph (B))’’; 

22 (ii) by striking subparagraph (B); and 

23 (iii) by redesignating subparagraphs 

24 (C) and (D) as subparagraphs (B) and 

25 (C), respectively; 
25 

•S 1232 IS 

1 (B) in paragraph (3)(A), by striking clause 

2 (v); and 

3 (C) in paragraph (7)— 

4 (i) in subparagraph (A)— 

5 (I) by striking clause (i); and 

6 (II) by redesignating clauses (ii) 

7 and (iii) as clauses (i) and (ii), respec8 tively; and 

9 (ii) in subparagraph (C)— 

10 (I) by striking clause (ii); and 

11 (II) by redesignating clause (iii) 

12 as clause (ii). 

13 (2) EFFECTIVE DATE.—The amendments made 

14 by paragraph (1) take effect on the date that is 1 

15 year after the date of enactment of this Act, except 

16 that the amendments shall take effect upon that 

17 date of enactment in any State that has received a 

18 waiver under section 209(b) of the Clean Air Act 

19 (42 U.S.C. 7543(b)). 

20 (b) MAINTENANCE OF TOXIC AIR POLLUTANT EMIS21 SION REDUCTIONS.—Section 211(k)(1) of the Clean Air 

22 Act (42 U.S.C. 7545(k)(1)) is amended— 

23 (1) by striking ‘‘Within 1 year after the enact24 ment of the Clean Air Act Amendments of 1990,’’ 

25 and inserting the following: 
26 

•S 1232 IS 

1 ‘‘(A) IN GENERAL.—Not later than No2 vember 15, 1991,’’; and 

3 (2) by adding at the end the following: 

4 ‘‘(B) MAINTENANCE OF TOXIC AIR POL5 LUTANT EMISSIONS REDUCTIONS FROM REFOR6 MULATED GASOLINE.— 

7 ‘‘(i) REGULATIONS CONCERNING

8 EMISSIONS OF TOXIC AIR POLLUTANTS.— 

9 Not later than 270 days after the date of 

10 enactment of this subparagraph, the Ad11 ministrator shall establish by regulation, 

12 for each refinery or importer (other than a 

13 refiner or importer in a State that has re14 ceived a waiver under section 209(b) with 

15 respect to gasoline produced for use in that 

16 State), standards for toxic air pollutants 

17 from use of the reformulated gasoline pro18 duced or distributed by the refiner or im19 porter that maintain the reduction of the 

20 average annual emissions of toxic air pol21 lutants for each gallon of reformulated 

22 gasoline produced or distributed by the re23 finer or importer during calendar years 

24 2002 and 2003 (as determined on the 

25 basis of data collected by the Adminis-
27 

•S 1232 IS 

1 trator with respect to the refiner or im2 porter). 

3 ‘‘(ii) STANDARDS APPLICABLE TO

4 SPECIFIC REFINERIES OR IMPORTERS.— 

5 ‘‘(I) APPLICABILITY OF STAND6 ARDS.—For any calendar year, the 

7 standards applicable to a refiner or 

8 importer under clause (i) shall apply 

9 to the total quantity of gasoline pro10 duced or distributed by the refiner or 

11 importer in such calendar year. 

12 ‘‘(II) STANDARDS APPLICABLE

13 TO NEW REFINERIES AND IMPORT14 ERS.—For any calendar year, the 

15 standard applicable under clause (i) to 

16 a refiner or importer that did not 

17 produce or import reformulated gaso18 line during 2002 or 2003 shall be a 

19 standard that achieves the reduction 

20 of average annual emissions of toxic 

21 air pollutants for each gallon of refor22 mulated gasoline produced or distrib23 uted during the preceding calendar 

24 year. 
28 

•S 1232 IS 

1 ‘‘(iii) CREDIT PROGRAM.—The Admin2 istrator shall provide for the granting and 

3 use of credits for emissions of toxic air pol4 lutants in the same manner as provided in 

5 paragraph (7).’’. 

6 (c) CONSOLIDATION IN REFORMULATED GASOLINE

7 REGULATIONS.—Not later than 180 days after the date 

8 of enactment of this Act, the Administrator of the Envi9 ronmental Protection Agency shall revise the reformulated 

10 gasoline regulations under subpart D of part 80 of title 

11 40, Code of Federal Regulations (or any successor regula12 tions), to consolidate the regulations applicable to VOC13 Control Regions 1 and 2 under section 80.41 of that title 

14 by eliminating the less stringent requirements applicable 

15 to gasoline designated for VOC-Control Region 2 and in16 stead applying the more stringent requirements applicable 

17 to gasoline designated for VOC-Control Region 1. 

18 (d) AUTHORITY OF ADMINISTRATOR.—Nothing in 

19 this section affects or prejudices any legal claim or action 

20 with respect to regulations promulgated by the Adminis21 trator of the Environmental Protection Agency before the 

22 date of enactment of this Act regarding— 

23 (1) emissions of toxic air pollutants from motor 

24 vehicles; or 
29 

•S 1232 IS 

1 (2) the adjustment of standards applicable to a 

2 specific refinery or importer made under the prior 

3 regulations. 

4 (e) DETERMINATION REGARDING A STATE PETI5 TION.—Section 211(k) of the Clean Air Act (42 U.S.C. 

6 7545(k)) is amended by inserting after paragraph (10) the 

7 following: 

8 ‘‘(11) DETERMINATION REGARDING A STATE

9 PETITION.— 

10 ‘‘(A) IN GENERAL.—Notwithstanding any 

11 other provision of this section, not later than 30 

12 days after the date of enactment of this para13 graph, the Administrator shall determine the 

14 adequacy of any petition received from a Gov15 ernor of a State to exempt gasoline sold in that 

16 State from the requirements under paragraph 

17 (2)(B). 

18 ‘‘(B) APPROVAL.—If a determination 

19 under subparagraph (A) is not made by the 

20 date that is 30 days after the date of enactment 

21 of this paragraph, the petition shall be consid22 ered to be approved.’’. 
30 

•S 1232 IS 

1 SEC. 202. PUBLIC HEALTH AND ENVIRONMENTAL IMPACTS 

2 OF FUELS AND FUEL ADDITIVES. 

3 Section 211(b) of the Clean Air Act (42 U.S.C. 

4 7545(b)) is amended— 

5 (1) in paragraph (2)— 

6 (A) by striking ‘‘may also’’ and inserting 

7 ‘‘shall, on a regular basis,’’; and 

8 (B) by striking subparagraph (A) and in9 serting the following: 

10 ‘‘(A) to conduct tests to determine poten11 tial public health and environmental effects of 

12 the fuel or additive (including, but not limited 

13 to, carcinogenic, teratogenic, or mutagenic ef14 fects); and’’; and 

15 (2) by adding at the end the following: 

16 ‘‘(4) STUDY ON CERTAIN FUEL ADDITIVES AND

17 BLENDSTOCKS.— 

18 ‘‘(A) IN GENERAL.—Not later than 2 years 

19 after the date of enactment of this paragraph, 

20 the Administrator shall— 

21 ‘‘(i) conduct a study on the effects on 

22 public health, air quality, and water re23 sources of increased use of, and the feasi24 bility of using as substitutes for methyl 

25 tertiary butyl ether in gasoline— 

26 ‘‘(I) ethyl tertiary butyl ether; 
31 

•S 1232 IS 

1 ‘‘(II) tertiary amyl methyl ether; 

2 ‘‘(III) di-isopropyl ether; 

3 ‘‘(IV) tertiary butyl alcohol; 

4 ‘‘(V) other ethers and heavy alco5 hols, as determined by the Adminis6 trator; 

7 ‘‘(VI) ethanol; 

8 ‘‘(VII) iso-octane; and 

9 ‘‘(VIII) alkylates; 

10 ‘‘(ii) conduct a study on the effects on 

11 public health, air quality, and water re12 sources of the adjustment for ethanol13 blended reformulated gasoline to the VOC 

14 performance requirements otherwise appli15 cable under sections 211(k)(1) and 

16 211(k)(3); and 

17 ‘‘(iii) submit to the Committee on En18 vironment and Public Works of the Senate 

19 and the Committee on Energy and Com20 merce of the House of Representatives a 

21 report describing the results of these stud22 ies. 

23 ‘‘(B) CONTRACTS FOR STUDY.—In car24 rying out this paragraph, the Administrator 

25 may enter into one or more contracts with non-
32 

•S 1232 IS 

1 governmental entities including but not limited 

2 to National Energy Laboratories and institu3 tions of higher education (as defined in section 

4 101 of the Higher Education Act of 1965 (20 

5 U.S.C. 1001)).’’. 

6 SEC. 203. ANALYSES OF MOTOR VEHICLE FUEL CHANGES. 

7 (a) ANALYSES OF MOTOR VEHICLE FUEL CHANGES

8 AND EMISSIONS MODEL.—Section 211 of the Clean Air 

9 Act (42 U.S.C. 7545) is amended by inserting after sub10 section (o) (as added by section 101(a)(2)) the following: 

11 ‘‘(p) ANALYSES OF MOTOR VEHICLE FUEL CHANGES

12 AND EMISSIONS MODEL.— 

13 ‘‘(1) DRAFT ANTI-BACKSLIDING ANALYSIS AND

14 PROPOSED EMISSIONS MODEL.—Not later than 18 

15 months after the date of enactment of this sub16 section, the Administrator shall publish for public 

17 comment— 

18 ‘‘(A) a draft analysis of the changes in 

19 emissions of air pollutants and air quality due 

20 to the use of motor vehicle fuel and fuel addi21 tives resulting from implementation of the 

22 amendments made by the Fuels Security Act of 

23 2005; and 

24 ‘‘(B) a proposed emissions model for the 

25 purposes of certifying fuel under subsection 
33 

•S 1232 IS 

1 (k)(4)(B) that reflects the effects of gasoline 

2 characteristics and components on emissions 

3 from vehicles in the motor vehicle fleet during 

4 calendar year 2005, taking into account the 

5 best available scientific information on exhaust 

6 emissions, nonexhaust emissions, and perme7 ation of gasoline components through the soft 

8 fuel system components of a motor vehicle. 

9 ‘‘(2) FINAL ANALYSIS AND EMISSIONS

10 MODEL.—After providing a reasonable opportunity 

11 for public comment and peer review by the National 

12 Academy of Sciences, but not later than 2 years 

13 after the date of enactment of this subsection, the 

14 Administrator shall publish the analysis and emis15 sions model described in paragraph (1) in final 

16 form.’’. 

17 (b) REID VAPOR PRESSURE REQUIREMENTS.—Sec18 tion 211(h) of the Clean Air Act (42 U.S.C. 7545(h)) is 

19 amended— 

20 (1) by redesignating paragraph (5) as para21 graph (7); and 

22 (2) by inserting after paragraph (4) the fol23 lowing: 

24 ‘‘(5) EXCLUSION FROM ETHANOL WAIVER.— 
34 

•S 1232 IS 

1 ‘‘(A) PROPOSED STANDARD.—Not later 

2 than 18 months after the date of enactment of 

3 this subparagraph, the Administrator shall pub4 lish for public comment a proposed Reid vapor 

5 pressure standard for fuel blends containing 

6 gasoline and 10 percent denatured anhydrous 

7 ethanol that— 

8 ‘‘(i) causes those blends to have an 

9 equivalent effect on ozone formation to fuel 

10 that is subject to the Reid vapor pressure 

11 limitation under paragraph (1); and 

12 ‘‘(ii) reflects the effects of gasoline 

13 characteristics and components on emis14 sions from vehicles in the motor vehicle 

15 fleet during calendar year 2005, taking 

16 into account the best available scientific in17 formation relating to exhaust emissions, 

18 nonexhaust emissions, and permeation of 

19 gasoline components through the soft fuel 

20 system components of a motor vehicle. 

21 ‘‘(B) FINAL RULE.— 

22 ‘‘(i) PUBLICATION.—After providing a 

23 reasonable opportunity for public comment 

24 and peer review by the National Academy 

25 of Sciences, but not later than 2 years 
35 

•S 1232 IS 

1 after the date of enactment of this sub2 paragraph, the Administrator shall publish 

3 the Reid vapor pressure standard described 

4 in subparagraph (A) in final form. 

5 ‘‘(ii) EFFECT OF PUBLICATION.—Be6 ginning on the date of publication under 

7 clause (i), the Reid vapor pressure stand8 ard described in subparagraph (A) shall re9 place the ethanol waiver under paragraph 

10 (4). 

11 ‘‘(6) EXCLUSION FROM ETHANOL WAIVER.—On 

12 notification, accompanied by supporting documenta13 tion, from the Governor of a State that the Reid 

14 vapor pressure limitation established by paragraph 

15 (4) will increase emissions that contribute to air pol16 lution in any area in the State, the Administrator 

17 shall, by regulation, apply, in lieu of the Reid vapor 

18 pressure limitation established by paragraph (4), the 

19 Reid vapor pressure limitation established by para20 graph (1) to all fuel blends containing gasoline and 

21 10 percent denatured anhydrous ethanol that are 

22 sold, offered for sale, dispensed, supplied, offered for 

23 supply, transported, or introduced into commerce in 

24 the area during the high ozone season.’’. 
36 

•S 1232 IS 

1 (c) AUTHORITY FOR WATER QUALITY PROTECTION

2 FROM FUELS.—Section 211(c) of the Clean Air Act (42 

3 U.S.C. 7545(c)) is amended— 

4 (1) in paragraph (1)(A)— 

5 (A) by inserting ‘‘fuel or fuel additive or’’ 

6 after ‘‘Administrator any’’; and 

7 (B) by striking ‘‘air pollution which’’ and 

8 inserting ‘‘air pollution, or water pollution, 

9 that’’; 

10 (2) in paragraph (4)(B), by inserting ‘‘or water 

11 quality protection,’’ after ‘‘emission control,’’; and 

12 (3) by adding at the end the following: 

13 ‘‘(5) RESTRICTIONS ON USE OF MTBE.— 

14 ‘‘(A) IN GENERAL.—Subject to subpara15 graph (E), not later than 4 years after the date 

16 of enactment of this paragraph, the use of 

17 methyl tertiary butyl ether in motor vehicle fuel 

18 in any State other than a State described in 

19 subparagraph (C) is prohibited. 

20 ‘‘(B) REGULATIONS.—The Administrator 

21 shall promulgate regulations to effect the prohi22 bition in subparagraph (A). 

23 ‘‘(C) STATES THAT AUTHORIZE USE.—A 

24 State described in this subparagraph is a State 

25 that submits to the Administrator a notice that 
37 

•S 1232 IS 

1 the State authorizes use of methyl tertiary 

2 butyl ether in motor vehicle fuel sold or used in 

3 the State. 

4 ‘‘(D) PUBLICATION OF NOTICE.—The Ad5 ministrator shall publish in the Federal Reg6 ister each notice submitted by a State under 

7 subparagraph (C). 

8 ‘‘(E) TRACE QUANTITIES.—In carrying out 

9 subparagraph (A), the Administrator may allow 

10 trace quantities of methyl tertiary butyl ether, 

11 not to exceed 0.5 percent by volume, to be 

12 present in motor vehicle fuel in cases that the 

13 Administrator determines to be appropriate. 

14 ‘‘(6) MTBE MERCHANT PRODUCER CONVERSION

15 ASSISTANCE.— 

16 ‘‘(A) IN GENERAL.— 

17 ‘‘(i) GRANTS.—The Secretary of En18 ergy, in consultation with the Adminis19 trator, may make grants to merchant pro20 ducers of methyl tertiary butyl ether in the 

21 United States to assist the producers in 

22 the conversion of eligible production facili23 ties described in subparagraph (C) to the 

24 production of— 
38 

•S 1232 IS 

1 ‘‘(I) iso-octane or alkylates, un2 less the Administrator, in consultation 

3 with the Secretary of Energy, deter4 mines that transition assistance for 

5 the production of iso-octane or 

6 alkylates is inconsistent with the cri7 teria specified in subparagraph (B); 

8 and 

9 ‘‘(II) any other fuel additive that 

10 meets the criteria specified in sub11 paragraph (B). 

12 ‘‘(B) CRITERIA.—The criteria referred to 

13 in subparagraph (A) are that— 

14 ‘‘(i) use of the fuel additive is con15 sistent with this subsection; 

16 ‘‘(ii) the Administrator has not deter17 mined that the fuel additive may reason18 ably be anticipated to endanger public 

19 health or the environment; 

20 ‘‘(iii) the fuel additive has been reg21 istered and tested, or is being tested, in ac22 cordance with the requirements of this sec23 tion; 

24 ‘‘(iv) the fuel additive will contribute 

25 to replacing quantities of motor vehicle fuel 
39 

•S 1232 IS 

1 rendered unavailable as a result of para2 graph (5); and 

3 ‘‘(v) the fuel additive is not an ether 

4 or a metal. 

5 ‘‘(C) ELIGIBLE PRODUCTION FACILI6 TIES.—A production facility shall be eligible to 

7 receive a grant under this paragraph if the pro8 duction facility— 

9 ‘‘(i) is located in the United States; 

10 and 

11 ‘‘(ii) produced methyl tertiary butyl 

12 ether for consumption in nonattainment 

13 areas during the period— 

14 ‘‘(I) beginning on the date of en15 actment of this paragraph; and 

16 ‘‘(II) ending on the effective date 

17 of the prohibition on the use of methyl 

18 tertiary butyl ether under paragraph 

19 (5). 

20 ‘‘(D) AUTHORIZATION OF APPROPRIA21 TIONS.—There is authorized to be appropriated 

22 to carry out this paragraph $250,000,000 for 

23 each of fiscal years 2005 through 2008.’’. 
40 

•S 1232 IS 

1 SEC. 204. ADDITIONAL OPT-IN AREAS UNDER REFORMU2 LATED GASOLINE PROGRAM. 

3 Section 211(k)(6) of the Clean Air Act (42 U.S.C. 

4 7545(k)(6)) is amended— 

5 (1) by striking ‘‘(6) OPT-IN AREAS.—(A) 

6 Upon’’ and inserting the following: 

7 ‘‘(6) OPT-IN AREAS.— 

8 ‘‘(A) CLASSIFIED AREAS.— 

9 ‘‘(i) IN GENERAL.—Upon’’; 

10 (2) in subparagraph (B), by striking ‘‘(B) If’’ 

11 and inserting the following: 

12 ‘‘(ii) EFFECT OF INSUFFICIENT DO13 MESTIC CAPACITY TO PRODUCE REFORMU14 LATED GASOLINE.—If’’; 

15 (3) in subparagraph (A)(i) (as redesignated by 

16 paragraph (2)), by striking ‘‘under subpart 2’’ and 

17 all that follows through ‘‘250,000).’’ and inserting 

18 ‘‘nonattainment for ozone.’’; 

19 (4) in subparagraph (A)(ii) (as redesignated by 

20 paragraph (2))— 

21 (A) in the first sentence, by striking ‘‘Mar22 ginal, Moderate, Serious, or Severe Areas re23 ferred to in subparagraph (A)’’ and inserting 

24 ‘‘nonattainment areas referred to in clause (i)’’; 

25 and 
41 

•S 1232 IS 

1 (B) in the second sentence, by striking 

2 ‘‘this paragraph’’ and inserting ‘‘this subpara3 graph’’; and 

4 (5) by adding at the end the following: 

5 ‘‘(B) OZONE TRANSPORT REGION.— 

6 ‘‘(i) APPLICATION OF PROHIBITION.— 

7 ‘‘(I) IN GENERAL.—In addition 

8 to the provisions of subparagraph (A), 

9 upon the application of the Governor 

10 of a State in the ozone transport re11 gion established by section 184(a), the 

12 Administrator, not later than 180 

13 days after the date of receipt of the 

14 application, shall apply the prohibition 

15 specified in paragraph (5) to any area 

16 in the State (other than an area clas17 sified as a marginal, moderate, seri18 ous, or severe ozone nonattainment 

19 area under subpart 2 of part D of 

20 title I) unless the Administrator deter21 mines under clause (iii) that there is 

22 insufficient capacity to supply refor23 mulated gasoline. 

24 ‘‘(II) PUBLICATION OF APPLICA25 TION.—As soon as practicable after 
42 

•S 1232 IS 

1 the date of receipt of an application 

2 under subclause (I), the Adminis3 trator shall publish the application in 

4 the Federal Register. 

5 ‘‘(ii) PERIOD OF APPLICABILITY.— 

6 Under clause (i), the prohibition specified 

7 in paragraph (5) shall apply in a State— 

8 ‘‘(I) commencing as soon as prac9 ticable but not later than 2 years 

10 after the date of approval by the Ad11 ministrator of the application of the 

12 Governor of the State; and 

13 ‘‘(II) ending not earlier than 4 

14 years after the commencement date 

15 determined under subclause (I). 

16 ‘‘(iii) EXTENSION OF COMMENCEMENT

17 DATE BASED ON INSUFFICIENT CAPAC18 ITY.— 

19 ‘‘(I) IN GENERAL.—If, after re20 ceipt of an application from a Gov21 ernor of a State under clause (i), the 

22 Administrator determines, on the Ad23 ministrator’s own motion or on peti24 tion of any person, after consultation 

25 with the Secretary of Energy, that 
43 

•S 1232 IS 

1 there is insufficient capacity to supply 

2 reformulated gasoline, the Adminis3 trator, by regulation— 

4 ‘‘(aa) shall extend the com5 mencement date with respect to 

6 the State under clause (ii)(I) for 

7 not more than 1 year; and 

8 ‘‘(bb) may renew the exten9 sion under item (aa) for 2 addi10 tional periods, each of which 

11 shall not exceed 1 year. 

12 ‘‘(II) DEADLINE FOR ACTION ON

13 PETITIONS.—The Administrator shall 

14 act on any petition submitted under 

15 subclause (I) not later than 180 days 

16 after the date of receipt of the peti17 tion.’’. 

18 SEC. 205. FEDERAL ENFORCEMENT OF STATE FUELS RE19 QUIREMENTS. 

20 Section 211(c)(4)(C) of the Clean Air Act (42 U.S.C. 

21 7545(c)(4)(C)) is amended— 

22 (1) by striking ‘‘(C) A State’’ and inserting the 

23 following: 
44 

•S 1232 IS 

1 ‘‘(C) AUTHORITY OF STATE TO CONTROL

2 FUELS AND FUEL ADDITIVES FOR REASONS OF

3 NECESSITY.— 

4 ‘‘(i) IN GENERAL.—A State’’; and 

5 (2) by adding at the end the following: 

6 ‘‘(ii) ENFORCEMENT BY THE ADMIN7 ISTRATOR.—In any case in which a State 

8 prescribes and enforces a control or prohi9 bition under clause (i), the Administrator, 

10 at the request of the State, shall enforce 

11 the control or prohibition as if the control 

12 or prohibition had been adopted under the 

13 other provisions of this section.’’. 

14 SEC. 206. FUEL SYSTEM REQUIREMENTS HARMONIZATION 

15 STUDY. 

16 (a) STUDY.— 

17 (1) IN GENERAL.—The Administrator of the 

18 Environmental Protection Agency and the Secretary 

19 of Energy shall jointly conduct a study of Federal, 

20 State, and local requirements concerning motor vehi21 cle fuels, including— 

22 (A) requirements relating to reformulated 

23 gasoline, volatility (measured in Reid vapor 

24 pressure), oxygenated fuel, and diesel fuel; and 
45 

•S 1232 IS 

1 (B) other requirements that vary from 

2 State to State, region to region, or locality to 

3 locality. 

4 (2) REQUIRED ELEMENTS.—The study shall as5 sess— 

6 (A) the effect of the variety of require7 ments described in paragraph (1) on the supply, 

8 quality, and price of motor vehicle fuels avail9 able to the consumer; 

10 (B) the effect of the requirements de11 scribed in paragraph (1) on achievement of— 

12 (i) national, regional, and local air 

13 quality standards and goals; and 

14 (ii) related environmental and public 

15 health protection standards and goals; 

16 (C) the effect of Federal, State, and local 

17 motor vehicle fuel regulations, including mul18 tiple motor vehicle fuel requirements, on— 

19 (i) domestic refineries; 

20 (ii) the fuel distribution system; and 

21 (iii) industry investment in new capac22 ity; 

23 (D) the effect of the requirements de24 scribed in paragraph (1) on emissions from ve25 hicles, refineries, and fuel handling facilities; 
46 

•S 1232 IS 

1 (E) the feasibility of developing national or 

2 regional motor vehicle fuel slates for the 48 

3 contiguous States that, while protecting and im4 proving air quality at the national, regional, 

5 and local levels, could— 

6 (i) enhance flexibility in the fuel dis7 tribution infrastructure and improve fuel 

8 fungibility; 

9 (ii) reduce price volatility and costs to 

10 consumers and producers; 

11 (iii) provide increased liquidity to the 

12 gasoline market; and 

13 (iv) enhance fuel quality, consistency, 

14 and supply; and 

15 (F) the feasibility of providing incentives, 

16 and the need for the development of national 

17 standards necessary, to promote cleaner burn18 ing motor vehicle fuel. 

19 (b) REPORT.— 

20 (1) IN GENERAL.—Not later than June 1, 

21 2006, the Administrator of the Environmental Pro22 tection Agency and the Secretary of Energy shall 

23 submit to Congress a report on the results of the 

24 study conducted under subsection (a). 

25 (2) RECOMMENDATIONS.— 
47 

•S 1232 IS 

1 (A) IN GENERAL.—The report shall con2 tain recommendations for legislative and admin3 istrative actions that may be taken— 

4 (i) to improve air quality; 

5 (ii) to reduce costs to consumers and 

6 producers; and 

7 (iii) to increase supply liquidity. 

8 (B) REQUIRED CONSIDERATIONS.—The 

9 recommendations under subparagraph (A) shall 

10 take into account the need to provide advance 

11 notice of required modifications to refinery and 

12 fuel distribution systems in order to ensure an 

13 adequate supply of motor vehicle fuel in all 

14 States. 

15 (3) CONSULTATION.—In developing the report, 

16 the Administrator of the Environmental Protection 

17 Agency and the Secretary of Energy shall consult 

18 with— 

19 (A) the Governors of the States; 

20 (B) automobile manufacturers; 

21 (C) motor vehicle fuel producers and dis22 tributors; and 

23 (D) the public. 
48 

•S 1232 IS 

1 SEC. 207. REVIEW OF FEDERAL PROCUREMENT INITIA2 TIVES RELATING TO USE OF RECYCLED 

3 PRODUCTS AND FLEET AND TRANSPOR4 TATION EFFICIENCY. 

5 Not later than 180 days after the date of enactment 

6 of this Act, the Administrator of General Services shall 

7 submit to Congress a report that details efforts by each 

8 Federal agency to implement the procurement policies 

9 specified in Executive Order No. 13101 (63 Fed. Reg. 

10 49643; relating to governmental use of recycled products) 

11 and Executive Order No. 13149 (65 Fed. Reg. 24607; re12 lating to Federal fleet and transportation efficiency). 

13 SEC. 208. REPORT ON RENEWABLE MOTOR FUEL. 

14 Not later than January 1, 2007, the Secretary of En15 ergy and the Secretary of Agriculture shall jointly prepare 

16 and submit to Congress a report containing recommenda17 tions for achieving, by January 1, 2025, at least 25 per18 cent renewable fuel content (calculated on an average an19 nual basis) for all gasoline sold or introduced into com20 merce in the United States. 

21 TITLE III—CELLULOSIC 

22 BIOMASS 

23 SEC. 301. COMMERCIAL DEMONSTRATION PROJECTS. 

24 The Federal Nonnuclear Energy Research and Devel25 opment Act of 1974 (42 U.S.C. 5901 et seq.) is amended 

26 by adding at the end the following: 
49 

•S 1232 IS 

1 ‘‘SEC. 21. CELLULOSIC BIOMASS COMMERCIAL DEM2 ONSTRATION PROJECTS. 

3 ‘‘(a) IN GENERAL.—The Secretary of Energy (re4 ferred to in this section as the ‘Secretary’) shall provide 

5 loan guarantees to eligible entities (as determined under 

6 subsection (b)) to carry out not more than 3 projects to 

7 commercially demonstrate the feasibility and viability of 

8 converting cellulosic biomass derived from agricultural res9 idue, such as corn stover or straw into ethanol. 

10 ‘‘(b) ELIGIBLE ENTITIES.— 

11 ‘‘(1) IN GENERAL.—To be eligible to receive a 

12 loan guarantee under subsection (a), an entity shall, 

13 with respect to a project described in subsection 

14 (a)— 

15 ‘‘(A) submit to the Secretary an applica16 tion in accordance with paragraph (2); 

17 ‘‘(B) submit to the Secretary evidence of a 

18 binding commitment from an equity investor to 

19 provide to the project an initial equity contribu20 tion in an amount equal to not less than 20 

21 percent of the total cost of the project; 

22 ‘‘(C) validate the design of the project 

23 through the operation of a continuous process 

24 facility, the cumulative output of which pro25 duces at least 50,000 gallons of ethanol, a sig26 nificant quantity of which, as determined by the 
50 

•S 1232 IS 

1 Secretary, is produced using the protocols that 

2 are incorporated into the design of the project; 

3 ‘‘(D) carry out a due diligence review of 

4 the design specifications of the project; 

5 ‘‘(E) enter into 1 or more long-term sales 

6 contracts for ethanol produced; 

7 ‘‘(F) use quantities of feedstock that are 

8 substantially in excess of the quantity of feed9 stock that would otherwise be used in the ab10 sence of the project, as determined by the Sec11 retary; 

12 ‘‘(G) enter into 1 or more multi-year con13 tracts for feedstock acquisition; 

14 ‘‘(H) maintain at least a minimum level of 

15 inventory that is sufficient to protect against a 

16 disruption in feedstock supply, as determined 

17 by the Secretary; 

18 ‘‘(I) prepare a strategy to protect the 

19 project against weather-related risks; and 

20 ‘‘(J) submit to the Secretary adequate 

21 project performance guarantees, as determined 

22 by the Secretary, including— 

23 ‘‘(i) a binding commitment to com24 plete the construction of the project to the 

25 original design specifications of the project, 
51 

•S 1232 IS 

1 backed by a performance bond that speci2 fies a maximum completion price; 

3 ‘‘(ii) a binding commitment of each 

4 project sponsor to contribute an amount 

5 equal to 50 percent of the initial equity in6 vestment of the sponsor to correct any 

7 shortfall in the technical performance of 

8 the project during the first 2 years during 

9 which the project is in operation, if the 

10 shortfall poses a significant risk to the 

11 debt repayment schedule for the project, as 

12 determined by the Secretary; and 

13 ‘‘(iii) a sustained operation guarantee 

14 giving the Federal Government recourse to 

15 reimbursement from each project partici16 pant if the project defaults on a loan guar17 anteed under subsection (a). 

18 ‘‘(2) APPLICATION.— 

19 ‘‘(A) IN GENERAL.—To receive a loan 

20 guarantee under subsection (a), an eligible enti21 ty shall submit to the Secretary an application 

22 in such time, in such a manner, and containing 

23 such information as the Secretary may require. 
52 

•S 1232 IS 

1 ‘‘(B) CONTENTS.—An application under 

2 subparagraph (A) shall include assurances by 

3 the eligible entity that— 

4 ‘‘(i) the project has been subject to a 

5 full technical review; 

6 ‘‘(ii) the project, with a loan guar7 antee under subsection (a), will be eco8 nomically viable; and 

9 ‘‘(iii) the eligible entity will repay a 

10 loan guaranteed under subsection (a) in 

11 accordance with paragraph (3). 

12 ‘‘(C) DEADLINE FOR DETERMINATION.— 

13 The Secretary shall determine whether to ap14 prove an application of an eligible entity not 

15 later than 90 days after the date on which the 

16 Secretary receives the application. 

17 ‘‘(3) ASSURANCE OF REPAYMENT.—To receive 

18 a loan guarantee under subsection (a), an eligible 

19 entity shall provide to the Secretary assurance that 

20 the eligible entity will repay the loan by dem21 onstrating 1 or more of the following: 

22 ‘‘(A) PROBABLE RISK ANALYSIS.—The 

23 project has been subjected to a probable risk 

24 analysis of the volatility of the project that— 

25 ‘‘(i) demonstrates— 
53 

•S 1232 IS 

1 ‘‘(I) positive economic returns to 

2 each equity investor in the project; 

3 and 

4 ‘‘(II) full repayment of the loan 

5 under normal conditions; 

6 ‘‘(ii) identifies— 

7 ‘‘(I) each major element of risk 

8 and volatility of the project, including 

9 an estimate of the risk value for each 

10 element of the project; and 

11 ‘‘(II) the party that will bear the 

12 risk; and 

13 ‘‘(iii) identifies and evaluates any 

14 mitigation measure that would reduce the 

15 level of volatility in an estimate under 

16 clause (ii)(I). 

17 ‘‘(B) COMMITMENTS FROM EQUITY INVES18 TORS.—An equity investor in the project has 

19 committed to provide an initial equity contribu20 tion to the project in an amount equal to the 

21 sum of— 

22 ‘‘(i) not less than 20 percent of the 

23 total cost of the project; and 
54 

•S 1232 IS 

1 ‘‘(ii) any additional amount, as needed 

2 to meet a performance guarantee under 

3 paragraph (1)(J). 

4 ‘‘(C) CONTRIBUTIONS BACKED BY FED5 ERAL GUARANTEE.—Each equity investor in the 

6 project made a proportional contribution with 

7 disbursements of loans with a Federal guar8 antee. 

9 ‘‘(c) PROJECT REQUIREMENTS.— 

10 ‘‘(1) DESIGN CAPACITY.—A demonstration 

11 project that receives a loan guarantee under sub12 section (a) shall have a design capacity that will 

13 produce not less than 30,000,000 gallons of cellulose 

14 ethanol each year. 

15 ‘‘(2) CEREAL STRAW.—At least 1 project that 

16 receives a loan guarantee under subsection (a) shall 

17 use cereal straw as a feedstock. 

18 ‘‘(d) AMOUNT OF GUARANTEE; EXTENT OF RE19 COURSE.— 

20 ‘‘(1) AMOUNT OF GUARANTEE.— 

21 ‘‘(A) IN GENERAL.—Except as provided in 

22 subparagraph (B), the amount of a loan guar23 antee provided for a project under this section 

24 shall not exceed the lesser of— 
55 

•S 1232 IS 

1 ‘‘(i) 80 percent of the estimated cost 

2 of the project; or 

3 ‘‘(ii) $250,000,000. 

4 ‘‘(B) ADDITIONAL GUARANTEES.— 

5 ‘‘(i) IN GENERAL.—If the actual cost 

6 of a project under this section exceeds the 

7 estimated cost of the project under sub8 paragraph (A), the Secretary may issue an 

9 additional loan guarantee for the project in 

10 an amount not to exceed the lesser of— 

11 ‘‘(I) 80 percent of the excess; or 

12 ‘‘(II) 15 percent of the amount of 

13 the original loan guarantee provided 

14 for the project. 

15 ‘‘(ii) PRINCIPAL AND INTEREST.—The 

16 Secretary shall guarantee 100 percent of 

17 the principal and interest of a loan made 

18 under clause (i). 

19 ‘‘(2) EXTENT OF RECOURSE.— 

20 ‘‘(A) IN GENERAL.—The extent of recourse 

21 by the Federal Government for a loan guaran22 teed under subsection (a) shall be limited to the 

23 performance guarantees described in subsection 

24 (b)(1)(J). 
56 

•S 1232 IS 

1 ‘‘(B) COMMITMENT OF PROJECT PARTICI2 PANTS.— 

3 ‘‘(i) IN GENERAL.—Each project par4 ticipant described in clause (ii) shall enter 

5 into a binding commitment to reimburse 

6 the Federal Government for a loss caused 

7 by a default on a loan guaranteed under 

8 subsection (a) in an amount equal to the 

9 difference between, during the 4-year pe10 riod preceding the default— 

11 ‘‘(I) the amount paid to the 

12 project participant for the supply of 

13 goods or services for the project; and 

14 ‘‘(II) the amount of any reason15 able direct or indirect costs, as deter16 mined by the Secretary, incurred by 

17 the project participant in providing 

18 goods or services for the project. 

19 ‘‘(ii) PROJECT PARTICIPANTS.—The 

20 project participants referred to in clause 

21 (i) include— 

22 ‘‘(I) each primary licenser of a 

23 cellulose conversion technology used 

24 for the project; 
57 

•S 1232 IS 

1 ‘‘(II) any supplier of a bio2 catalyst for the project; and 

3 ‘‘(III) any equity participant that 

4 provides design, project management, 

5 or other services for the project. 

6 ‘‘(e) DUE DILIGENCE REVIEWS.— 

7 ‘‘(1) IN GENERAL.—A due diligence review of a 

8 project under this section shall be carried out in 

9 such manner and in accordance with such timeline 

10 as the Secretary determines to be reasonable. 

11 ‘‘(2) CONSIDERATION.—In establishing a 

12 timeline for a due diligence review under paragraph 

13 (1), the Secretary shall take into consideration the 

14 90-day deadline for approval of an application under 

15 subsection (b)(2)(C). 

16 ‘‘(f) INSUFFICIENT APPROPRIATIONS.—If the 

17 amount of appropriations made available for a fiscal year 

18 are insufficient to provide 3 loan guarantees under sub19 section (a) during that fiscal year, the Secretary shall give 

20 priority to applications under subsection (b)(2) based on 

21 the order in which the Secretary receives the applications. 

22 ‘‘(g) DIRECT LOANS BY FEDERAL FINANCING

23 BANK.—If the Federal Financing Bank makes a direct 

24 loan to a project under the Federal Financing Bank Act 

25 of 1973 (12 U.S.C. 2281 et seq.), the rate of interest of 
58 

•S 1232 IS 

1 the loan shall not exceed the yield of a Treasury security 

2 of comparable maturity, as determined by the Secretary.’’. 

Æ