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[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 1210 Introduced in Senate (IS)]

109th CONGRESS
  1st Session
                                S. 1210

To enhance the national security of the United States by providing for 
 the research, development, demonstration, administrative support, and 
 market mechanisms for widespread deployment and commercialization of 
     biobased fuels and biobased products, and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                              June 9, 2005

    Mr. Harkin (for himself, Mr. Lugar, Mr. Obama, and Mr. Coleman) 
introduced the following bill; which was read twice and referred to the 
           Committee on Agriculture, Nutrition, and Forestry

_______________________________________________________________________

                                 A BILL

 
To enhance the national security of the United States by providing for 
 the research, development, demonstration, administrative support, and 
 market mechanisms for widespread deployment and commercialization of 
     biobased fuels and biobased products, and for other purposes.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``National Security 
and Bioenergy Investment Act of 2005''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings.
Sec. 3. Definitions.
               TITLE I--BIOMASS RESEARCH AND DEVELOPMENT

Sec. 101. Definitions.
Sec. 102. Cooperation and coordination in biomass research and 
                            development.
Sec. 103. Biomass Research and Development Board.
Sec. 104. Biomass Research and Development Technical Advisory 
                            Committee.
Sec. 105. Biomass Research and Development Initiative.
Sec. 106. Reports.
Sec. 107. Funding.
Sec. 108. Termination of authority.
Sec. 109. Biomass-derived hydrogen.
                    TITLE II--PRODUCTION INCENTIVES

Sec. 201. Production incentives.
 TITLE III--ASSISTANT SECRETARY OF AGRICULTURE FOR ENERGY AND BIOBASED 
                                PRODUCTS

Sec. 301. Assistant Secretary of Agriculture for Energy and Biobased 
                            Products.
               TITLE IV--PROCUREMENT OF BIOBASED PRODUCTS

Sec. 401. Federal procurement.
Sec. 402. Capitol Complex procurement.
Sec. 403. Education .
Sec. 404. Regulations.
             TITLE V--BIOECONOMY GRANTS AND TAX INCENTIVES

Sec. 501. Small business bioproduct marketing and certification grants.
Sec. 502. Regional bioeconomy development grants.
Sec. 503. Preprocessing and harvesting demonstration grants.
Sec. 504. Sense of the Senate.
                       TITLE VI--OTHER PROVISIONS

Sec. 601. Education and outreach.
Sec. 602. Reports.

SEC. 2. FINDINGS.

    Congress finds that--
            (1) the Governors' Ethanol Coalition, in the report 
        entitled ``Ethanol From Biomass America's 21st Century 
        Transportation Fuel'', found that--
                    (A) the dependence of the United States on oil is a 
                major risk to national security and economic and 
                environmental health;
                    (B) the safest and least costly approach to 
                mitigating these risks is to set and achieve aggressive 
                biofuels research, development, production and use 
                goals; and
                    (C) significant investment in cellulosic biofuels, 
                including a dramatic expansion of existing research 
                programs, production and consumer incentives, and 
                commercialization assistance, is needed;
            (2) the National Academy of Sciences has found that there 
        are abundant sources of waste biomass, and approximately 
        280,000,000 tons of waste biomass generated, in all regions of 
        the United States each year;
            (3) the Natural Resources Defense Council has estimated 
        that by 2025, 200,000,000 additional tons of biomass could be 
        harvested each year from dedicated energy crops grown 
        throughout the country, yielding $5,000,000,000 annually in 
        profit for farmers;
            (4) the Department of Agriculture has estimated that energy 
        derived from existing biomass supplies could displace 25 
        percent of current petroleum imports while still meeting 
        agricultural demands;
            (5) if all diesel fuel in the United States were blended 
        with a 4-percent blend of biodiesel, crude oil consumption in 
        the United States would be reduced by 300,000,000 barrels each 
        year by 2016;
            (6) there is sufficient domestic feedstock for the 
        production of at least 8,000,000,000 annual gallons of 
        renewable fuels, including ethanol and biodiesel, by 2012;
            (7) the Natural Resources Defense Council has estimated 
        that biomass could supply 50 percent of current transportation 
        petroleum demand by 2050;
            (8) the National Academy of Sciences has estimated that 
        enough agricultural crop residue is produced each year to 
        entirely replace the 700,000,000 barrels of petroleum used in 
        organic chemical production in 2004;
            (9) the Biotechnology Industry Organization, in its report 
        entitled ``New Biotechnology Tools for a Cleaner Environment'', 
        found that if all plastics in the United States were made from 
        biomass, oil consumption would decrease by up to 145,000,000 
        barrels per year;
            (10) the National Academy of Sciences has reported that 
        biobased products have the potential to improve the 
        sustainability of natural resources, environmental quality, and 
        national security while competing economically;
            (11) the Department of Agriculture has made significant 
        advances in the understanding and use by the United States of 
        biomass as a feedstock for fuels and products;
            (12) through participation with the Department of Energy in 
        the Biomass Research and Development Initiative, the Department 
        of Agriculture has also made valuable contributions, through 
        grant-making and other initiatives, to the support of biomass 
        research and development at institutions throughout the United 
        States;
            (13) the Government Accountability Office has found that--
                    (A) actions to implement the requirements of the 
                Farm Security and Rural Investment Act of 2002 (Public 
                Law 107-171; 116 Stat. 134) for purchasing biobased 
                products have been limited; and
                    (B) greater priority by the Department of 
                Agriculture would promote compliance by other agencies 
                with biobased purchasing requirements;
            (14) an Assistant Secretary of the Department of 
        Agriculture for Energy and Biobased Products would provide the 
        priority, staff, and financial resources to fully implement 
        biobased purchasing requirements and other provisions of the 
        energy title of the Farm Security and Rural Investment Act of 
        2002;
            (15) Federal Government contractors and the Architect of 
        the Capitol are currently exempt from biobased purchasing 
        requirements of the Farm Security and Rural Investment Act of 
        2002;
            (16) expansion of those biobased purchasing requirements--
                    (A) to Federal contractors would significantly 
                expand the market for, and advance commercialization 
                of, biobased products; and
                    (B) to the Architect of the Capitol would, in 
                combination with a program of public education, allow 
                the Capitol Complex to serve as a showcase for the 
                existence, use, and benefits of biobased products;
            (17) fuel derived from cellulosic biomass could have near-
        zero net carbon dioxide and sulfur emissions, and substantially 
        reduced carbon monoxide, particulate and toxic emissions 
        relative to petroleum-based fuels;
            (18) the bipartisan National Commission on Energy Policy 
        has predicted that with a dedicated Federal research, 
        development, and demonstration effort, cellulosic ethanol could 
        be less expensive to produce than gasoline by 2015;
            (19) the 2004 report of the Rocky Mountain Institute, 
        entitled ``Winning the Oil Endgame'', estimated that a mature 
        biomass industry would create up to 1,045,000 jobs;
            (20) the National Academy of Sciences has found that there 
        are significant opportunities to produce biomass ethanol more 
        efficiently;
            (21) the National Commission on Energy Policy has found 
        that current Federal programs directed toward reducing the cost 
        of biofuels are under-funded, intermittent, scattered, and 
        poorly targeted;
            (22) a report commissioned by the Department of Defense 
        urged the United States to invest in a new large-scale 
        initiative to produce biofuels as an alternative supply source, 
        and as a feedstock for future fuel vehicles;
            (23) the Consumer Federation of America has found that the 
        blending of ethanol into conventional gasoline can 
        significantly benefit consumers by lowering prices at the pump;
            (24) 45 leading national security, labor, and energy policy 
        experts joined the Energy Future Coalition in supporting a 
        national commitment to cut the oil use of the United States by 
        25 percent by 2025 through the rapid development and deployment 
        of advanced biomass, alcohol, and other available petroleum 
        fuel alternatives; and
            (25) an aggressive effort to advance technology for 
        conversion of biomass to fuel and products is warranted.

SEC. 3. DEFINITIONS.

    In this Act:
            (1) Department.--The term ``Department'' means the 
        Department of Agriculture.
            (2) Secretary.--The term ``Secretary'' means the Secretary 
        of Agriculture.

               TITLE I--BIOMASS RESEARCH AND DEVELOPMENT

SEC. 101. DEFINITIONS.

    Section 303 of the Biomass Research and Development Act of 2000 
(Public Law 106-224; 7 U.S.C. 8101 note) is amended--
            (1) by striking paragraphs (2), (3), and (9);
            (2) by redesignating paragraphs (4), (5), (6), (7), and (8) 
        as paragraphs (5), (7), (8), (9), and (10) respectively;
            (3) by inserting after paragraph (1) the following:
            ``(2) Biobased fuel.--The term `biobased fuel' means any 
        transportation fuel produced from biomass.
            ``(3) Biobased product.--The term `biobased product' means 
        a commercial or industrial product (including chemicals, 
        materials, polymers, and animal feed) produced from biomass, or 
        electric power derived in connection with the conversion of 
        biomass to fuel.
            ``(4) Biomass.--
                    ``(A) In general.--The term `biomass' means--
                            ``(i) organic material from a plant, 
                        including grasses and trees, that is planted 
                        for the purpose of being used to produce 
                        energy, including vegetation produced for 
                        harvest on land enrolled in the conservation 
                        reserve program established under subchapter B 
                        of chapter 1 of subtitle D of title XII of the 
                        Food Security Act of 1985 (16 U.S.C. 3831 et 
                        seq.) if the harvest is consistent with the 
                        integrity of soil and water resources and with 
                        other environmental purposes of the 
                        conservation reserve program;
                            ``(ii) nonhazardous, lignocellulosic, or 
                        hemicellulosic matter derived from--
                                    ``(I) the following forest-related 
                                resources:
                                            ``(aa) pre-commercial 
                                        thinnings;
                                            ``(bb) slash; and
                                            ``(cc) brush;
                                    ``(II) an agricultural crop, crop 
                                byproduct, or agricultural crop 
                                residue, including vegetation produced 
                                for harvest on land enrolled in the 
                                conservation reserve program 
                                established under subchapter B of 
                                chapter 1 of subtitle D of title XII of 
                                the Food Security Act of 1985 (16 
                                U.S.C. 3831 et seq.) if the harvest is 
                                consistent with the integrity of soil 
                                and water resources and with other 
                                environmental purposes of the 
                                conservation reserve program; or
                                    ``(III) miscellaneous waste, 
                                including landscape or right-of-way 
                                tree trimmings; and
                            ``(iii) agricultural animal waste.
                    ``(B) Exclusion.--The term `biomass' does not 
                include--
                            ``(i) unsegregated municipal solid waste;
                            ``(ii) incineration of municipal solid 
                        waste;
                            ``(iii) recyclable post-consumer waste 
                        paper and paper products;
                            ``(iv) painted, treated, or pressurized 
                        wood;
                            ``(v) wood contaminated with plastic or 
                        metals; or
                            ``(vi) tires.''; and
            (4) by inserting after paragraph (5) (as redesignated by 
        paragraph (2)):
            ``(6) Demonstration.--The term `demonstration' means 
        demonstration of technology in a pilot plant or semi-works 
        scale facility.''.

SEC. 102. COOPERATION AND COORDINATION IN BIOMASS RESEARCH AND 
              DEVELOPMENT.

    Section 304 of the Biomass Research and Development Act of 2000 
(Public Law 106-224; 7 U.S.C. 8101 note) is amended--
            (1) in subsections (a) and (d), by striking ``industrial 
        products'' each place it appears and inserting ``fuels and 
        biobased products'';
            (2) by striking subsections (b) and (c);
            (3) by redesignating subsection (d) as subsection (b); and
            (4) in subsection (b)(1)(A) (as redesignated by paragraph 
        (3)), by striking ``an officer of the Department of Agriculture 
        appointed by the President to a position in the Department 
        before the date of the designated, by and with the advice and 
        consent of the Senate'' and inserting: ``the Assistant 
        Secretary of Agriculture for Energy and Biobased Products''.

SEC. 103. BIOMASS RESEARCH AND DEVELOPMENT BOARD.

    Section 305 of the Biomass Research and Development Act of 2000 
(Public Law 106-224; 7 U.S.C. 8101 note) is amended--
            (1) in subsections (a) and (c), by striking ``industrial 
        products'' each place it appears and inserting ``fuels and 
        biobased products'';
            (2) in subsection (b)--
                    (A) in paragraph (1), by striking ``304(d)(1)(B)'' 
                and inserting ``304(b)(1)(B)''; and
                    (B) in paragraph (2), by striking ``304(d)(1)(A)'' 
                and inserting ``304(b)(1)(A)''; and
            (3) in subsection (c)--
                    (A) in paragraph (1)(B), by striking ``and'' at the 
                end;
                    (B) in paragraph (2), by striking the period at the 
                end and inserting a semicolon; and
                    (C) by adding at the end the following:
            ``(3) ensure that--
                    ``(A) solicitations are open and competitive with 
                awards made annually; and
                    ``(B) objectives and evaluation criteria of the 
                solicitations are clearly stated and minimally 
                prescriptive, with no areas of special interest; and
            ``(4) ensure that the panel of scientific and technical 
        peers assembled under section 307(c)(2)(C) to review proposals 
        is composed predominantly of independent experts selected from 
        outside the Departments of Agriculture and Energy.''.

SEC. 104. BIOMASS RESEARCH AND DEVELOPMENT TECHNICAL ADVISORY 
              COMMITTEE.

    Section 306 of the Biomass Research and Development Act of 2000 
(Public Law 106-224; 7 U.S.C. 8101 note) is amended--
            (1) in subsection (b)(1)--
                    (A) in subparagraph (A), by striking ``biobased 
                industrial products'' and inserting ``biofuels'';
                    (B) by redesignating subparagraphs (B) through (J) 
                as subparagraphs (C) through (K), respectively;
                    (C) by inserting after subparagraph (A) the 
                following:
                    ``(B) an individual affiliated with the biobased 
                industrial and commercial products industry;'';
                    (D) in subparagraph (F) (as redesignated by 
                subparagraph (B)) by striking ``an individual'' and 
                inserting ``2 individuals'';
                    (E) in subparagraphs (C), (D), (G), and (I) (as 
                redesignated by subparagraph (B)) by striking 
                ``industrial products'' each place it appears and 
                inserting ``fuels and biobased products''; and
                    (F) in subparagraph (H) (as redesignated by 
                subparagraph (B)), by inserting ``and environmental'' 
                before ``analysis'';
            (2) in subsection (c)(2)--
                    (A) in subparagraph (A), by striking ``goals'' and 
                inserting ``objectives, purposes, and considerations'';
                    (B) by redesignating subparagraphs (B) and (C) as 
                subparagraphs (C) and (D), respectively;
                    (C) by inserting after subparagraph (A) the 
                following:
                    ``(B) solicitations are open and competitive with 
                awards made annually and that objectives and evaluation 
                criteria of the solicitations are clearly stated and 
                minimally prescriptive, with no areas of special 
                interest;''; and
                    (D) in subparagraph (C) (as redesignated by 
                subparagraph (B)) by inserting ``predominantly from 
                outside the Departments of Agriculture and Energy'' 
                after ``technical peers''.

SEC. 105. BIOMASS RESEARCH AND DEVELOPMENT INITIATIVE.

    Section 307 of the Biomass Research and Development Act of 2000 
(Public Law 106-224; 7 U.S.C. 8101 note) is amended--
            (1) in subsection (a), by striking ``research on biobased 
        industrial products'' and inserting ``research on, and 
        development and demonstration of, biobased fuels and biobased 
        products, and the methods, practices and technologies, 
        including industrial biotechnology, for their production''; and
            (2) by striking subsections (b) through (e) and inserting 
        the following:
    ``(b) Agencies.--
            ``(1) Agriculture.--The Secretary of Agriculture, through 
        the point of contact of the Department of Agriculture and in 
        consultation with the Board, shall provide, or enter into, 
        grants, contracts, and financial assistance under this section 
        through the Cooperative State Research, Education, and 
        Extension Service of the Department of Agriculture.
            ``(2) Energy.--The Secretary of Energy, though the point of 
        contact of the Department of Energy and in consultation with 
        the Board, shall provide, or enter into, grants, contracts, and 
        financial assistance under this section through the appropriate 
        agency, as determined by the Secretary of Energy.
    ``(c) Objectives.--The objectives of the Initiative are to 
develop--
            ``(1) technologies and processes necessary for abundant 
        commercial production of biobased fuels at prices competitive 
        with fossil fuels;
            ``(2) high-value biobased products--
                    ``(A) to enhance the economic viability of biobased 
                fuels and power; and
                    ``(B) as substitutes for petroleum-based feedstocks 
                and products; and
            ``(3) a diversity of sustainable domestic sources of 
        biomass for conversion to biobased fuels and biobased products.
    ``(d) Purposes.--The purposes of the Initiative are--
            ``(1) to increase the energy security of the United States;
            ``(2) to create jobs and enhance the economic development 
        of the rural economy;
            ``(3) to enhance the environment and public health; and
            ``(4) to diversify markets for raw agricultural and 
        forestry products.
    ``(e) Technical Areas.--To advance the objectives and purposes of 
the Initiative, the Secretary of Agriculture and the Secretary of 
Energy, in consultation with the Administrator of the Environmental 
Protection Agency and heads of other appropriate departments and 
agencies (referred to in this section as the `Secretaries'), shall 
direct research and development toward--
            ``(1) feedstock production through the development of crops 
        and cropping systems relevant to production of raw materials 
        for conversion to biobased fuels and biobased products, 
        including--
                    ``(A) development of advanced and dedicated crops 
                with desired features, including enhanced productivity, 
                broader site range, low requirements for chemical 
                inputs, and enhanced processing;
                    ``(B) advanced crop production methods to achieve 
                the features described in subparagraph (A);
                    ``(C) feedstock harvest, handling, transport, and 
                storage; and
                    ``(D) strategies for integrating feedstock 
                production into existing managed land;
            ``(2) overcoming recalcitrance of cellulosic biomass 
        through developing technologies for converting cellulosic 
        biomass into intermediates that can subsequently be converted 
        into biobased fuels and biobased products, including--
                    ``(A) pretreatment in combination with enzymatic or 
                microbial hydrolysis; and
                    ``(B) thermochemical approaches, including 
                gasification and pyrolysis;
            ``(3) product diversification through technologies relevant 
        to production of a range of biobased products (including 
        chemicals, animal feeds, and cogenerated power) that eventually 
        can increase the feasibility of fuel production in a 
        biorefinery, including--
                    ``(A) catalytic processing, including 
                thermochemical fuel production;
                    ``(B) metabolic engineering, enzyme engineering, 
                and fermentation systems for biological production of 
                desired products or cogeneration of power;
                    ``(C) product recovery;
                    ``(D) power production technologies; and
                    ``(E) integration into existing biomass processing 
                facilities, including starch ethanol plants, paper 
                mills, and power plants; and
            ``(4) analysis that provides strategic guidance for the 
        application of biomass technologies in accordance with 
        realization of societal benefits in improved sustainability and 
        environmental quality, cost effectiveness, security, and rural 
        economic development, usually featuring system-wide approaches.
    ``(f) Additional Considerations.--Within the technical areas 
described in subsection (e), and in addition to advancing the purposes 
described in subsection (d) and the objectives described in subsection 
(c), the Secretaries shall support research and development--
            ``(1) to create continuously expanding opportunities for 
        participants in existing biofuels production by seeking 
        synergies and continuity with current technologies and 
        practices, including the use of dried distillers grains as a 
        bridge feedstock;
            ``(2) to maximize the environmental, economic, and social 
        benefits of production of biobased fuels and biobased products 
        on a large scale through life-cycle economic and environmental 
        analysis and other means; and
            ``(3) to assess the potential of Federal land and land 
        management programs as feedstock resources for biobased fuels 
        and biobased products, consistent with the integrity of soil 
        and water resources and with other environmental 
        considerations.
    ``(g) Eligible Entities.--To be eligible for a grant, contract, or 
assistance under this section, an applicant shall be--
            ``(1) an institution of higher education;
            ``(2) a national laboratory;
            ``(3) a Federal research agency;
            ``(4) a State research agency;
            ``(5) a private sector entity;
            ``(6) a nonprofit organization; or
            ``(7) a consortium of 2 of more entities described in 
        paragraphs (1) through (6).
    ``(h) Administration.--
            ``(1) In general.--After consultation with the Board, the 
        points of contact shall--
                    ``(A) publish annually 1 or more joint requests for 
                proposals for grants, contracts, and assistance under 
                this section;
                    ``(B) establish a priority in grants, contracts, 
                and assistance under this section for research that 
                advances the objectives, purposes, and additional 
                considerations of this title;
                    ``(C) require that grants, contracts, and 
                assistance under this section be awarded competitively, 
                on the basis of merit, after the establishment of 
                procedures that provide for scientific peer review by 
                an independent panel of scientific and technical peers; 
                and
                    ``(D) give some preference to applications that--
                            ``(i) involve a consortia of experts from 
                        multiple institutions;
                            ``(ii) encourage the integration of 
                        disciplines and application of the best 
                        technical resources; and
                            ``(iii) increase the geographic diversity 
                        of demonstration projects.
            ``(2) Distribution of funding by technical area.--Of the 
        funds authorized to be appropriated for activities described in 
        this section--
                    ``(A) 20 percent shall be used to carry out 
                activities for feedstock production under subsection 
                (e)(1);
                    ``(B) 45 percent shall be used to carry out 
                activities for overcoming recalcitrance of cellulosic 
                biomass under subsection (e)(2);
                    ``(C) 30 percent shall be used to carry out 
                activities for product diversification under subsection 
                (e)(3); and
                    ``(D) 5 percent shall be used to carry out 
                activities for strategic guidance under subsection 
                (e)(4).
            ``(3) Distribution of funding within each technical area.--
        Within each technical area described in paragraphs (1) through 
        (3) of subsection (e)--
                    ``(A) 15 percent of funds shall be used for applied 
                fundamentals;
                    ``(B) 35 percent of funds shall be used for 
                innovation; and
                    ``(C) 50 percent of funds shall be used for 
                demonstration.
            ``(4) Matching funds.--
                    ``(A) In general.--A minimum 20 percent funding 
                match shall be required for demonstration projects 
                under this title.
                    ``(B) No other requirement.--No matching funds 
                shall be required for other activities under this 
                title.
            ``(5) Technology and information transfer to agricultural 
        users.--
                    ``(A) In general.--The Administrator of the 
                Cooperative State Research, Education, and Extension 
                Service and the Chief of the Natural Resources 
                Conservation Service shall ensure that applicable 
                research results and technologies from the Initiative 
                are adapted, made available, and disseminated through 
                those services, as appropriate.
                    ``(B) Report.--Not later than 2 years after the 
                date of enactment of this paragraph, and every 2 years 
                thereafter, the Administrator of the Cooperative State 
                Research, Education, and Extension Service and the 
                Chief of the Natural Resources Conservation Service 
                shall submit to the committees of Congress with 
                jurisdiction over the Initiative a report describing 
                the activities conducted by the services under this 
                subsection.''.

SEC. 106. REPORTS.

    Section 309 of the Biomass Research and Development Act of 2000 
(Public Law 106-224; 7 U.S.C. 8101 note) is amended--
            (1) in subsection (a)--
                    (A) in paragraph (2), by striking ``industrial 
                product'' and inserting ``fuels and biobased 
                products''; and
                    (B) in paragraph (3), by striking ``industrial 
                products'' each place it appears and inserting ``fuels 
                and biobased products'';
            (2) by redesignating subsection (b) as subsection (c);
            (3) by inserting after subsection (a) the following:
    ``(b) Assessment Report and Strategic Plan.--Not later than 1 year 
after the date of enactment of the National Security and Bioenergy 
Investment Act of 2005, the Secretary and the Secretary of Energy shall 
jointly submit to Congress a report that--
            ``(1) describes the status and progress of current research 
        and development efforts in both the Federal Government and 
        private sector in achieving the objectives, purposes, and 
        considerations of this title, specifically addressing each of 
        the technical areas identified in section 307(e);
            ``(2) describes the actions taken to implement the 
        improvements directed by this title; and
            ``(3) outlines a strategic plan for achieving the 
        objectives, purposes, and considerations of this title.''; and
            (4) in subsection (c) (as redesignated by paragraph (2))--
                    (A) in paragraph (1)--
                            (i) in subparagraph (A), by striking 
                        ``purposes described in section 307(b)'' and 
                        inserting ``objectives, purposes, and 
                        additional considerations described in 
                        subsections (c) through (f) of section 307'';
                            (ii) in subparagraph (B), by striking 
                        ``and'' at the end;
                            (iii) by redesignating subparagraph (C) as 
                        subparagraph (D); and
                            (iv) by inserting after subparagraph (B) 
                        the following:
                    ``(C) achieves the distribution of funds described 
                in paragraphs (2) and (3) of section 307(h); and''; and
                    (B) in paragraph (2), by striking ``industrial 
                products'' and inserting ``fuels and biobased 
                products''.

SEC. 107. FUNDING.

    (a) Funding.--Section 310(a)(2) of the Biomass Research and 
Development Act of 2000 (Public Law 106-224; 7 U.S.C. 8101 note) is 
amended by striking ``$14,000,000 for each of fiscal years 2003 through 
2007'' and inserting ``$200,000,000 for each of fiscal years 2006 
through 2010''.
    (b) Authorization of Appropriations.--Section 310(b) of the Biomass 
Research and Development Act of 2000 (Public Law 106-224; 7 U.S.C. 8101 
note) is amended by striking ``title $54,000,000 for each of fiscal 
years 2002 through 2007'' and inserting``title $200,000,000 for fiscal 
year 2011 and each fiscal year thereafter''.

SEC. 108. TERMINATION OF AUTHORITY.

    The Biomass Research and Development Act of 2000 (Public Law 106-
224; 7 U.S.C. 8101 note) is amended by striking section 311.

SEC. 109. BIOMASS-DERIVED HYDROGEN.

    (a) In General.--The Secretary shall conduct a research, 
development, and demonstration program focused on the economic 
production and use of hydrogen from biofuels, with emphasis on the 
rural transportation and rural electrical generation sectors.
    (b) Transportation Sector Objectives.--The objectives of the 
program in the transportation sector shall be to--
            (1) conduct research, and to develop and test processes and 
        equipment, to produce low-cost liquid biobased fuels that can 
        be transported to distant fueling stations for the production 
        of hydrogen or for direct use in conventional internal 
        combustion engine vehicles;
            (2) demonstrate the cost-effective production of hydrogen 
        from liquid biobased fuels at the local fueling station, to 
        eliminate the costs of transporting hydrogen long distances or 
        building hydrogen pipeline networks;
            (3) demonstrate the use of hydrogen derived from liquid 
        biobased fuels in fuel cell vehicles, or, as an interim cost-
        reduction option, in internal combustion engine hybrid electric 
        vehicles, to demonstrate sustainable transportation with 
        significantly reduced local air pollution, greenhouse gas 
        emissions, and dependence on imported fossil fuels;
            (4) evaluate the economic return to agricultural producers 
        producing feedstocks for liquid biobased fuels compared to 
        agricultural producer returns as of the date of enactment of 
        this Act;
            (5) evaluate the crop yield and long-term soil 
        sustainability of growing and harvesting feedstocks for liquid 
        biobased fuels; and
            (6) evaluate the fuel costs to fuel cell car owners (or 
        hybrid electric car owners running on hydrogen) per mile driven 
        compared to burning gasoline in conventional vehicles.
    (c) Electrical Generation Sector Objectives.--The objectives of the 
program in the rural electrical generation sector shall be to--
            (1) design, develop, and test low-cost gasification 
        equipment to convert biomass to hydrogen at regional rural 
        cooperatives, or at businesses owned by farmers, close to 
        agricultural operations to minimize the cost of biomass 
        transportation to large central gasification plants;
            (2) demonstrate low-cost electrical generation at such 
        rural cooperatives or farmer-owned businesses, using renewable 
        hydrogen derived from biomass in either fuel cell generators, 
        or, as an interim cost reduction option, in conventional 
        internal combustion engine gensets;
            (3) determine the economic return to cooperatives or other 
        businesses owned by farmers of producing hydrogen from biomass 
        and selling electricity compared to agricultural economic 
        returns from producing and selling conventional crops alone;
            (4) evaluate the crop yield and long-term soil 
        sustainability of growing and harvesting of feedstocks for 
        biomass gasification, and
            (5) demonstrate the use of a portion of the biomass-derived 
        hydrogen in various agricultural vehicles to reduce--
                    (A) dependence on imported fossil fuel; and
                    (B) environmental impacts.
    (d) Authorization for Appropriations.--There is authorized to be 
appropriated to carry out this section $5,000,000 for each of fiscal 
years 2006 through 2010.

                    TITLE II--PRODUCTION INCENTIVES

SEC. 201. PRODUCTION INCENTIVES.

    (a) Purpose.--The purpose of this section is to--
            (1) accelerate deployment and commercialization of 
        biofuels;
            (2) deliver the first 1,000,000,000 gallons of cellulosic 
        biofuels by 2015;
            (3) ensure biofuels produced after 2015 are cost 
        competitive with gasoline and diesel; and
            (4) ensure that small feedstock producers and rural small 
        businesses are full participants in the development of the 
        cellulosic biofuels industry.
    (b) Definitions.--In this section:
            (1) Cellulosic biofuels.--The term ``cellulosic biofuels'' 
        means any fuel that is produced from cellulosic feedstocks.
            (2) Eligible entity.--The term ``eligible entity'' means a 
        producer of fuel from cellulosic biofuels the production 
        facility of which--
                    (A) is located in the United States;
                    (B) meets all applicable Federal and State 
                permitting requirements;
                    (C) is to begin production of cellulosic biofuels 
                not later than 3 years after the date of the reverse 
                auction in which the producer participates; and
                    (D) meets any financial criteria established by the 
                Secretary.
    (c) Program.--
            (1) Establishment.--The Secretary, in consultation with the 
        Secretary of Energy, the Secretary of Defense, and the 
        Administrator of the Environmental Protection Agency, shall 
        establish an incentive program for the production of cellulosic 
        biofuels.
            (2) Basis of incentives.--Under the program, the Secretary 
        shall award production incentives on a per gallon basis of 
        cellulosic biofuels from eligible entities, through--
                    (A) set payments per gallon of cellulosic biofuels 
                produced in an amount determined by the Secretary, 
                until initiation of the first reverse auction; and
                    (B) reverse auction thereafter.
            (3) First reverse auction.--The first reverse auction shall 
        be held on the earlier of--
                    (A) not later than 1 year after the first year of 
                annual production in the United States of 100,000,000 
                gallons of cellulosic biofuels, as determined by the 
                Secretary; or
                    (B) not later than 3 years after the date of 
                enactment of this Act.
            (4) Reverse auction procedure.--
                    (A) In general.--On initiation of the first reverse 
                auction, and each year thereafter until the earlier of 
                the first year of annual production in the United 
                States of 1,000,000,000 gallons of cellulosic biofuels, 
                as determined by the Secretary, or 10 years after the 
                date of enactment of this Act, the Secretary shall 
                conduct a reverse auction at which--
                            (i) the Secretary shall solicit bids from 
                        eligible entities;
                            (ii) eligible entities shall submit--
                                    (I) a desired level of production 
                                incentive on a per gallon basis; and
                                    (II) an estimated annual production 
                                amount in gallons; and
                            (iii) the Secretary shall issue awards for 
                        the production amount submitted, beginning with 
                        the eligible entity submitting the bid for the 
                        lowest level of production incentive on a per 
                        gallon basis, until the amount of funds 
                        available for the reverse auction is committed.
                    (B) Amount of incentive received.--An eligible 
                entity selected by the Secretary through a reverse 
                auction shall receive the amount of performance 
                incentive requested in the auction for each gallon 
                produced and sold by the entity during the first 6 
                years of operation.
    (d) Limitations.--Awards under this section shall be limited to--
            (1) a per gallon amount determined by the Secretary during 
        the first 4 years of the program;
            (2) a declining per gallon cap over the remaining lifetime 
        of the program, to be established by the Secretary so that 
        cellulosic biofuels produced after the first year of annual 
        cellulosic biofuels production in the United States in excess 
        of 1,000,000,000 gallons are cost competitive with gasoline and 
        diesel;
            (3) not more than 25 percent of the funds committed within 
        each reverse auction to any 1 project;
            (4) not more than $100,000,000 in any 1 year; and
            (5) not more than $1,000,000,000 over the lifetime of the 
        program.
    (e) Priority.--In selecting a project under the program, the 
Secretary shall give priority to projects that--
            (1) demonstrate outstanding potential for local and 
        regional economic development;
            (2) include agricultural producers or cooperatives of 
        agricultural producers as equity partners in the ventures; and
            (3) have a strategic agreement in place to fairly reward 
        feedstock suppliers.
    (f) Funding.--
            (1) In general.--The Secretary shall use to carry out this 
        title $250,000,000 of funds of the Commodity Credit 
        Corporation, to remain available until expended.
            (2) Authorizations of appropriations.--In addition to 
        amounts made available under paragraph (1), there are 
        authorized to be appropriated such sums as are necessary to 
        carry out this section.

 TITLE III--ASSISTANT SECRETARY OF AGRICULTURE FOR ENERGY AND BIOBASED 
                                PRODUCTS

SEC. 301. ASSISTANT SECRETARY OF AGRICULTURE FOR ENERGY AND BIOBASED 
              PRODUCTS.

    (a) Establishment.--Not later than 1 year after the date of 
enactment of this Act, the Secretary shall establish in the Department 
a position of Assistant Secretary of Agriculture for Energy and 
Biobased Products (referred to in this section as the ``Assistant 
Secretary'').
    (b) Responsibilities.--The Assistant Secretary shall be responsible 
for--
            (1) the energy programs established under title IX of the 
        Farm Security and Rural Investment Act of 2002 (7 U.S.C. 8101 
        et seq.); and
            (2) all other programs and initiatives that the Secretary 
        considers appropriate.
    (c) Confirmation Requirement.--The Assistant Secretary shall be 
appointed by the President, by and with the advice and consent of the 
Senate.
    (d) Personnel.--The Secretary, acting through the Assistant 
Secretary, may transfer or assign work to personnel, or assign staff 
hours, on a permanent or a part-time basis, as needed, to the Office of 
the Assistant Secretary to carry out the functions and duties of the 
office.
    (e) Budget.--The Secretary shall establish a budget for the office 
of the Assistant Secretary.

               TITLE IV--PROCUREMENT OF BIOBASED PRODUCTS

SEC. 401. FEDERAL PROCUREMENT.

    (a) Definition of Procuring Agency.--Section 9001 of the Farm 
Security and Rural Investment Act of 2002 (7 U.S.C. 8101) is amended--
            (1) by redesignating paragraphs (4), (5), and (6) as 
        paragraphs (5), (6), and (7), respectively; and
            (2) by inserting after paragraph (3) the following:
            ``(4) Procuring agency.--The term `procuring agency' 
        means--
                    ``(A) any Federal agency that is using Federal 
                funds for procurement; or
                    ``(B) any person contracting with any Federal 
                agency with respect to work performed under the 
                contract.''.
    (b) Procurement.--Section 9002 of the Farm Security and Rural 
Investment Act of 2002 (7 U.S.C. 8102) is amended--
            (1) by striking ``Federal agency'' each place it appears 
        (other than in subsections (f) and (g)) and inserting 
        ``procuring agency'';
            (2) in subsection (c)(2)--
                    (A) by striking ``(2)'' and all that follows 
                through ``Notwithstanding'' and inserting the 
                following:
            ``(2) Flexibility.--Notwithstanding'';
                    (B) by striking ``an agency'' and inserting ``a 
                procuring agency''; and
                    (C) by striking ``the agency'' and inserting ``the 
                procuring agency'';
            (3) in subsection (d), by striking ``procured by Federal 
        agencies'' and inserting ``procured by procuring agencies''; 
        and
            (4) in subsection (f), by striking ``Federal agencies'' and 
        inserting ``procuring agencies'' .

SEC. 402. CAPITOL COMPLEX PROCUREMENT.

    Section 9002 of the Farm Security and Rural Investment Act of 2002 
(7 U.S.C. 8102) (as amended by section 401(b)) is amended--
            (1) by redesignating subsection (j) as subsection (k); and
            (2) by inserting after subsection (i) the following:
    ``(j) Inclusion.--Not later than 90 days after the date of 
enactment of the National Security and Bioenergy Investment Act of 
2005, the Architect of the Capitol, the Sergeant of Arms of the Senate, 
and the Chief Administrative Officer of the House of Representatives 
shall issue regulations that apply the requirements of this section to 
procurement for the Capitol Complex.''.

SEC. 403. EDUCATION .

    (a) In General.--The Architect of the Capitol shall establish in 
the Capitol Complex a program of public education regarding use by the 
Architect of the Capitol of biobased products.
    (b) Purposes.--The purposes of the program shall be--
            (1) to establish the Capitol Complex as a showcase for the 
        existence and benefits of biobased products; and
            (2) to provide access to further information on biobased 
        products to occupants and visitors.

SEC. 404. REGULATIONS.

    Requirements issued under the amendment made by section 402 shall 
be made in accordance with regulations issued by the Committee on Rules 
and Administration of the Senate and the Committee on House 
Administration of the House of Representatives.

             TITLE V--BIOECONOMY GRANTS AND TAX INCENTIVES

SEC. 501. SMALL BUSINESS BIOPRODUCT MARKETING AND CERTIFICATION GRANTS.

    (a) In General.--Using amounts made available under subsection (g), 
the Secretary shall make available on a competitive basis grants to 
eligible entities described in subsection (b) for the biobased product 
marketing and certification purposes described in subsection (c).
    (b) Eligible Entities.--An entity eligible for a grant under this 
section is any manufacturer of biobased products that--
            (1) has fewer than 50 employees;
            (2) proposes to use the grant for the biobased product 
        marketing and certification purposes described in subsection 
        (c); and
            (3) has not previously received a grant under this section.
    (c) Biobased Product Marketing and Certification Grant Purposes.--A 
grant made under this section shall be used--
            (1) to plan activities and working capital for marketing of 
        biobased products; and
            (2) to provide private sector cost sharing for the 
        certification of biobased products.
    (d) Matching Funds.--
            (1) In general.--Grant recipients shall provide matching 
        non-Federal funds equal to the amount of the grant received.
            (2) Expenditure.--Matching funds shall be expended in 
        advance of grant funding, so that for every dollar of grant 
        that is advanced, an equal amount of matching funds shall have 
        been funded prior to submitting the request for reimbursement.
    (e) Amount.--A grant made under this section shall not exceed 
$100,000.
    (f) Administration.--The Secretary shall establish such 
administrative requirements for grants under this section, including 
requirements for applications for the grants, as the Secretary 
considers appropriate.
    (g) Authorizations of Appropriations.--There are authorized to be 
appropriated to make grants under this section--
            (1) $1,000,000 for fiscal year 2006; and
            (2) such sums as are necessary for fiscal year 2007 and 
        each subsequent fiscal year.

SEC. 502. REGIONAL BIOECONOMY DEVELOPMENT GRANTS.

    (a) In General.--Using amounts made available under subsection (g), 
the Secretary shall make available on a competitive basis grants to 
eligible entities described in subsection (b) for the purposes 
described in subsection (c).
    (b) Eligible Entities.--An entity eligible for a grant under this 
section is any regional bioeconomy development association, 
agricultural or energy trade association, or Land Grant institution 
that--
            (1) proposes to use the grant for the purposes described in 
        subsection (c); and
            (2) has not previously received a grant under this section.
    (c) Regional Bioeconomy Development Association Grant Purposes.--A 
grant made under this section shall be used to support and promote the 
growth and development of the bioeconomy within the region served by 
the eligible entity, through coordination, education, outreach, and 
other endeavors by the eligible entity.
    (d) Matching Funds.--
            (1) In general.--Grant recipients shall provide matching 
        non-Federal funds equal to the amount of the grant received.
            (2) Expenditure.--Matching funds shall be expended in 
        advance of grant funding, so that for every dollar of grant 
        that is advanced, an equal amount of matching funds shall have 
        been funded prior to submitting the request for reimbursement.
    (e) Administration.--The Secretary shall establish such 
administrative requirements for grants under this section, including 
requirements for applications for the grants, as the Secretary 
considers appropriate.
    (f) Amount.--A grant made under this section shall not exceed 
$500,000.
    (g) Authorizations of Appropriations.--There are authorized to be 
appropriated to make grants under this section--
            (1) $1,000,000 for fiscal year 2006; and
            (2) such sums as are necessary for fiscal year 2007 and 
        each subsequent fiscal year.

SEC. 503. PREPROCESSING AND HARVESTING DEMONSTRATION GRANTS.

    (a) In General.--The Secretary shall make grants available on a 
competitive basis to enterprises owned by agricultural producers, for 
the purposes of demonstrating cost-effective, cellulosic biomass 
innovations in--
            (1) preprocessing of feedstocks, including cleaning, 
        separating and sorting, mixing or blending, and chemical or 
        biochemical treatments, to add value and lower the cost of 
        feedstock processing at a biorefinery; or
            (2) 1-pass or other efficient, multiple crop harvesting 
        techniques.
    (b) Limitations on Grants.--
            (1) Number of grants.--Not more than 5 demonstration 
        projects per fiscal year shall be funded under this section.
            (2) Non-federal cost share.--The non-Federal cost share of 
        a project under this section shall be not less than 20 percent, 
        as determined by the Secretary.
    (c) Condition of Grant.--To be eligible for a grant for a project 
under this section, a recipient of a grant or a participating entity 
shall agree to use the material harvested under the project--
            (1) to produce ethanol; or
            (2) for another energy purpose, such as the generation of 
        heat or electricity.
    (d) Authorization for Appropriations.--There is authorized to be 
appropriated to carry out this section $5,000,000 for each of fiscal 
years 2006 through 2010.

SEC. 504. SENSE OF THE SENATE.

    It is the sense of the Senate that Congress should amend the 
Federal tax code to encourage investment in, and production and use of, 
biobased fuels and biobased products through--
            (1) an investment tax credit for the construction or 
        modification of facilities for the production of fuels from 
        cellulose biomass, to drive private capital towards new 
        biorefinery projects in a manner that allows participation by 
        smaller farms and cooperatives; and
            (2) an investment tax credit to small manufacturers of 
        biobased products to lower the capital costs of starting and 
        maintaining a biobased business.

                       TITLE VI--OTHER PROVISIONS

SEC. 601. EDUCATION AND OUTREACH.

    (a) In General.--The Secretary shall establish, within the 
Department or through an independent contracting entity, a program of 
education and outreach on biobased fuels and biobased products 
consisting of--
            (1) training and technical assistance programs for 
        feedstock producers to promote producer ownership, investment, 
        and participation in the operation of processing facilities; 
        and
            (2) public education and outreach to familiarize consumers 
        with the biobased fuels and biobased products.
    (b) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this title $1,000,000 for each of fiscal 
years 2006 through 2010.

SEC. 602. REPORTS.

    (a) Progress Report.--Not later than 1 year after the date of 
enactment of this Act, the Secretary shall submit to the Committee on 
Agriculture of the House of Representatives and the Committee on 
Agriculture, Nutrition, and Forestry of the Senate a report on progress 
in establishing the Office of the Assistant Secretary of Agriculture 
for Energy and Biobased Products under title I.
    (b) Biobased Product Potential.--Not later than 1 year after the 
date of enactment of this Act, the Secretary shall submit to the 
Committee on Agriculture of the House of Representatives and the 
Committee on Agriculture, Nutrition, and Forestry of the Senate a 
report that--
            (1) describes the economic potential for the United States 
        of the widespread production and use of commercial and 
        industrial biobased products through calendar year 2025; and
            (2) as the maximum extent practicable, identifies the 
        economic potential by product area.
    (c) Analysis of Economic Indicators.--Not later than 2 years after 
the date of enactment of this Act, and every 2 years thereafter, the 
Secretary shall submit to Congress an analysis of economic indicators 
of the biobased economy during the 2-year period preceding the 
analysis.
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