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[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 2971 Introduced in Senate (IS)]

106th CONGRESS
  2d Session
                                S. 2971

  To amend the Clean Air Act to phase out the use of methyl tertiary 
butyl ether in fuels or fuel additives, to promote the use of renewable 
                     fuels, and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                             July 27, 2000

  Mr. Harkin 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 phase out the use of methyl tertiary 
butyl ether in fuels or fuel additives, to promote the use of renewable 
                     fuels, 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.

    This Act may be cited as the ``Clean and Renewable Fuels Act of 
2000''.

SEC. 2. USE AND CLEANUP OF METHYL TERTIARY BUTYL ETHER.

    (a) In General.--Section 211(c) of the Clean Air Act (42 U.S.C. 
7545(c)) is amended by adding at the end the following:
            ``(5) Prohibition on methyl tertiary butyl ether and other 
        ether compounds.--
                    ``(A) Specified nonattainment areas.--
                            ``(i) In general.--Effective beginning 
                        January 1, 2001, a person shall not sell or 
                        dispense to ultimate consumers any fuel or fuel 
                        additive containing methyl tertiary butyl ether 
                        in an area of the United States other than an 
                        area described in clause (ii).
                            ``(ii) Areas.--An area described in this 
                        clause is an area that is a specified 
                        nonattainment area--
                                    ``(I) that is required to meet the 
                                oxygen content requirement for 
                                reformulated gasoline established under 
                                subsection (k); and
                                    ``(II) in which methyl tertiary 
                                butyl ether was used to meet the oxygen 
                                content requirement before January 1, 
                                2000.
                    ``(B) Interim period of use of mtbe in a fuel or 
                fuel additive.--
                            ``(i) Phased reduction.--
                                    ``(I) In general.--The 
                                Administrator shall promulgate 
                                regulations to require--
                                            ``(aa) during the 1-year 
                                        period beginning on the date 
                                        that is 1 year after the date 
                                        of enactment of this paragraph, 
                                        a \1/3\ reduction in the 
                                        quantity of methyl tertiary 
                                        butyl ether that may be sold or 
                                        dispensed for use in a fuel or 
                                        fuel additive;
                                            ``(bb) during the 1-year 
                                        period beginning on the date 
                                        that is 2 years after the date 
                                        of enactment of this paragraph, 
                                        a \2/3\ reduction in the 
                                        quantity of methyl tertiary 
                                        butyl ether that may be sold or 
                                        dispensed for use in a fuel or 
                                        fuel additive; and
                                            ``(cc) that in no area does 
                                        the quantity of methyl tertiary 
                                        butyl ether sold or dispensed 
                                        for use in a fuel or fuel 
                                        additive increase.
                                    ``(II) Basis for reductions.--
                                Reductions under subclause (I) shall be 
                                based on the quantity of methyl 
                                tertiary butyl ether sold or dispensed 
                                for use in a fuel or fuel additive in 
                                the United States during the 1-year 
                                period ending on the date of enactment 
                                of this paragraph.
                                    ``(III) Equitable treatment.--The 
                                regulations promulgated by the 
                                Administrator under subclause (I) 
                                shall, to the maximum extent 
                                practicable, provide equitable 
                                treatment--
                                            ``(aa) on a geographical 
                                        basis; and
                                            ``(bb) among fuel 
                                        manufacturers, refiners, 
                                        distributors, and retailers.
                                    ``(IV) Trading of authorizations to 
                                sell or dispense mtbe.--To facilitate 
                                the most orderly and efficient 
                                reduction in the use of methyl tertiary 
                                butyl ether in a fuel or fuel additive, 
                                the regulations promulgated by the 
                                Administrator under subclause (I) may 
                                allow for persons subject to the 
                                regulations to sell to and purchase 
                                from each other authorizations to sell 
                                or dispense methyl tertiary butyl ether 
                                for use in a fuel or fuel additive.
                            ``(ii) Labeling.--
                                    ``(I) In general.--The 
                                Administrator shall promulgate 
                                regulations that require any person 
                                selling or dispensing gasoline that 
                                contains methyl tertiary butyl ether at 
                                retail prominently to label the 
                                gasoline dispensing system for the 
                                gasoline with a notice--
                                            ``(aa) stating that the 
                                        gasoline contains methyl 
                                        tertiary butyl ether; and
                                            ``(bb) providing such 
                                        information concerning the 
                                        human health and environmental 
                                        risks associated with methyl 
                                        tertiary butyl ether as the 
                                        Administrator determines to be 
                                        appropriate.
                                    ``(II) Period of effectiveness.--
                                The regulations promulgated under 
                                subclause (I) shall be effective during 
                                the period--
                                            ``(aa) beginning as soon as 
                                        practicable, but not later than 
                                        60 days, after the date of 
                                        enactment of this paragraph; 
                                        and
                                            ``(bb) ending on the date 
                                        that is 3 years after the date 
                                        of enactment of this paragraph.
                    ``(C) Prohibition on use of mtbe in a fuel or fuel 
                additive.--Effective beginning on the date that is 3 
                years after the date of enactment of this paragraph, a 
                person shall not manufacture, introduce into commerce, 
                offer for sale, sell, or dispense a fuel or fuel 
                additive containing methyl tertiary butyl ether or any 
                other ether compound.
                    ``(D) Waiver.--The Administrator may by regulation 
                waive the prohibition under subparagraph (C) with 
                respect to an ether compound other than methyl tertiary 
                butyl ether if the Administrator determines that the 
                use of the ether compound in a fuel or fuel additive 
                will not pose a significant risk to human health or the 
                environment.
                    ``(E) Areas of mtbe contamination.--If the 
                Administrator finds that methyl tertiary butyl ether is 
                contaminating or posing a substantial risk of 
                contamination of soil, ground water, or surface water 
                in an area, the Administrator may take such action as 
                is necessary to protect human health and the 
                environment in the area, including requiring a more 
                rapid reduction (including immediate termination) of 
                the quantity of methyl tertiary butyl ether sold or 
                dispensed for use in a fuel or fuel additive in the 
                area than required under subparagraph (A) or (B).
                    ``(F) State authority to regulate mtbe.--
                Notwithstanding any other provision of law, a State may 
                impose such restrictions, including a prohibition, on 
                the manufacture, sale, or use of methyl tertiary butyl 
                ether in a fuel or fuel additive as the State 
                determines to be appropriate to protect human health 
                and the environment.''.
    (b) Remedial Action Concerning MTBE Contamination.--
            (1) Underground storage tanks.--Section 9003(h) of the 
        Solid Waste Disposal Act (42 U.S.C. 6991b(h)) is amended by 
        striking paragraph (3) and inserting the following:
            ``(3) Priority.--In carrying out a corrective action under 
        this subsection, or in issuing an order that requires an owner 
        or operator to carry out a corrective action under this 
        subsection, the Administrator (or a State under paragraph (7)) 
        shall give priority to a release of petroleum from an 
        underground storage tank that poses the greatest threat to 
        human health, human welfare, and the environment.''.
            (2) Cleanup guidelines.--Section 1442 of the Safe Drinking 
        Water Act (42 U.S.C. 300j-1) is amended by adding at the end 
        the following:
    ``(f) Cleanup Guidelines for MTBE.--
            ``(1) In general.--The Administrator--
                    ``(A) shall develop technical guidelines to assist 
                States, local governments, private landowners, and 
                other interested parties in the investigation and 
                cleanup of methyl tertiary butyl ether in soil or 
                ground water; and
                    ``(B) may enter into cooperative agreements with 
                the United States Geological Survey, the Department of 
                Agriculture, States, local governments, private 
                landowners, and other interested parties--
                            ``(i) to establish voluntary pilot projects 
                        for the cleanup of methyl tertiary butyl ether 
                        and the protection of private wells from 
                        contamination by methyl tertiary butyl ether; 
                        and
                            ``(ii) to provide technical assistance in 
                        carrying out such projects.
            ``(2) Private wells.--This subsection does not authorize 
        the issuance of guidance or regulations concerning the use or 
        protection of private wells.''.
            (3) State source water assessment programs.--Section 
        1453(a) of the Safe Drinking Water Act (42 U.S.C. 300j-13(a)) 
        is amended by adding at the end the following:
            ``(8) MTBE contamination.--
                    ``(A) In general.--The Administrator shall amend 
                the guidance under this subsection to require that 
                State source water assessment programs be revised to 
                give high priority to ground water areas and aquifers 
                that have been contaminated, or are most vulnerable to 
                contamination, by methyl tertiary butyl ether.
                    ``(B) Approval of revisions.--Each revision under 
                subparagraph (A) shall be submitted and approved or 
                disapproved by the Administrator in accordance with the 
                schedule described in paragraph (3).''.

SEC. 3. OXYGEN CONTENT REQUIREMENT UNDER REFORMULATED GASOLINE PROGRAM.

    (a) In General.--Section 211(k)(1) of the Clean Air Act (42 U.S.C. 
7545(k)(1)) is amended--
            (1) in the first sentence--
                    (A) by striking ``Within 1 year after the enactment 
                of the Clean Air Act Amendments of 1990,'' and 
                inserting the following:
                    ``(A) In general.--Not later than November 15, 
                1991,''; and
                    (B) by inserting before the period at the end the 
                following: ``and opt-in areas under paragraph (6)'';
            (2) in the second sentence--
                    (A) by inserting ``and other'' after ``volatile 
                organic''; and
                    (B) by inserting ``and precursors of toxic air 
                pollutants'' after ``toxic air pollutants''; and
            (3) by adding at the end the following:
                    ``(B) Waiver of per-gallon oxygen content 
                requirement.--
                            ``(i) Procedure for submission of 
                        petitions.--The Administrator shall promulgate 
                        regulations that establish a procedure 
                        providing for the submission of petitions for--
                                    ``(I) a waiver, with respect to an 
                                area, of any per-gallon oxygen content 
                                requirement established under paragraph 
                                (2)(B) or (3)(A)(v); and
                                    ``(II) the averaging, with respect 
                                to an area, of the oxygen content 
                                requirement established under 
                                paragraphs (2)(B) and (3)(A)(v) over 
                                such period of time, not to exceed 1 
                                year, as is determined appropriate by 
                                the Administrator.
                            ``(ii) Criteria for granting of 
                        petitions.--After consultation with the 
                        Secretary of Energy and the Secretary of 
                        Agriculture, the Administrator shall grant a 
                        petition submitted under clause (i) if the 
                        Administrator finds that granting the petition 
                        is necessary--
                                    ``(I) to avoid a shortage or 
                                disruption in supply of reformulated 
                                gasoline;
                                    ``(II) to avoid the payment by 
                                consumers of excessive prices for 
                                reformulated gasoline; or
                                    ``(III) to facilitate the 
                                attainment by an area of a national 
                                primary ambient air quality standard.
                            ``(iii) Maintenance of human health and 
                        environmental benefits.--The regulations 
                        promulgated under clause (i) shall ensure that 
                        the human health and environmental benefits of 
                        reformulated gasoline are fully maintained 
                        during the period of any waiver of a per-gallon 
                        oxygen content requirement.''.
    (b) Temporary Reduction of Oxygen Content Requirement.--Section 
211(k) of the Clean Air Act (42 U.S.C. 7545(k)) is amended--
            (1) by redesignating paragraph (10) as paragraph (11); and
            (2) by inserting after paragraph (9) the following:
            ``(10) Temporary reduction of oxygen content requirement.--
                    ``(A) In general.--If, upon petition of a State, 
                the Secretary of Energy, with the concurrence of the 
                Secretary of Agriculture, finds that, with respect to 
                any area, there is, as a result of unforeseeable or 
                unavoidable circumstances, an insufficient supply of 
                oxygenates to meet the oxygen content requirement of 
                paragraphs (2)(B) and (3)(A)(v), the Administrator may, 
                in accordance with section 307, promulgate regulations 
                temporarily reducing (including waiving) the oxygen 
                content requirement, with respect to the area, to the 
                extent necessary to ensure an adequate supply of 
                reformulated gasoline.
                    ``(B) Duration of reduction.--
                            ``(i) In general.--A temporary reduction in 
                        the oxygen content requirement under 
                        subparagraph (A) shall remain in effect for a 
                        period of 90 days unless the Secretary of 
                        Energy finds, before the end of that period, 
                        that a sufficient supply of oxygenates exists.
                            ``(ii) Extension.--Upon the expiration of 
                        the 90-day period under clause (i), the 
                        temporary reduction in the oxygen content 
                        requirement may be extended for an additional 
                        90-day period in accordance with subparagraph 
                        (A).
                    ``(C) Maintenance of human health and environmental 
                benefits.--The regulations promulgated under 
                subparagraph (A) shall ensure that the human health and 
                environmental benefits of reformulated gasoline are 
                fully maintained during the period of the temporary 
                reduction in the oxygen content requirement.''.

SEC. 4. LIMITATIONS ON AROMATICS AND OLEFINS IN REFORMULATED GASOLINE.

    Section 211(k)(3)(A) of the Clean Air Act (42 U.S.C. 7545(k)(3)(A)) 
is amended--
            (1) by striking clause (ii) and inserting the following:
                            ``(ii) Aromatics.--
                                    ``(I) In general.--The aromatic 
                                hydrocarbon content of the reformulated 
                                gasoline shall not exceed 22 percent by 
                                volume.
                                    ``(II) Average.--The average 
                                aromatic hydrocarbon content of the 
                                reformulated gasoline shall not exceed 
                                the average aromatic hydrocarbon 
                                content of reformulated gasoline sold 
                                in covered areas for use in baseline 
                                vehicles when using reformulated 
                                gasoline during either calendar year 
                                1999 or calendar year 2000.
                                    ``(III) Maximum per gallon.--No 
                                gallon of reformulated gasoline shall 
                                have an aromatic hydrocarbon content in 
                                excess of 30 percent.''; and
            (2) by adding at the end the following:
                            ``(vi) Olefins.--
                                    ``(I) In general.--The olefin 
                                content of the reformulated gasoline 
                                shall not exceed 8 percent by volume.
                                    ``(II) Average.--The average olefin 
                                content of the reformulated gasoline 
                                shall not exceed the average olefin 
                                content of reformulated gasoline sold 
                                in covered areas for use in baseline 
                                vehicles when using 
reformulated gasoline during either calendar year 1999 or calendar year 
2000.
                                    ``(III) Maximum per gallon.--No 
                                gallon of reformulated gasoline shall 
                                have an olefin content in excess of 10 
                                percent.''.

SEC. 5. MODIFICATION OF PERFORMANCE STANDARDS.

    Section 211(k)(3)(B) of the Clean Air Act (42 U.S.C. 7545(k)(3)(B)) 
is amended--
            (1) in the last sentence of clause (i), by inserting before 
        the period at the end the following: ``, and, to the maximum 
        extent practicable using available science, determined on the 
        basis of the ozone-forming potential of volatile organic 
        compounds and taking into account the effect on ozone formation 
        of reducing carbon monoxide emissions''; and
            (2) in clause (ii)--
                    (A) in the first sentence, by inserting ``, or 
                precursors of toxic air pollutants,'' after ``toxic air 
                pollutants'' each place it appears;
                    (B) in the second sentence, by inserting before the 
                period at the end the following: ``, or precursors of 
                toxic air pollutants'';
                    (C) in the third sentence, by inserting ``, or 
                precursors,'' after ``such air pollutants''; and
                    (D) in the last sentence, by inserting before the 
                period at the end the following: ``, and, to the 
                maximum extent practicable using available science, 
                determined on the basis of the relative toxicity or 
                carcinogenic potency, whichever is more protective of 
                human health and the environment''.

SEC. 6. ANTI-BACKSLIDING.

    (a) In General.--Section 211(k)(3)(B) of the Clean Air Act (42 
U.S.C. 7545(k)(3)(B)) is amended--
            (1) in the last sentence, by striking ``Any reduction'' and 
        inserting the following:
                            ``(iii) Treatment of greater reductions.--
                        Any reduction''; and
            (2) by adding at the end the following:
                            ``(iv) Anti-backsliding provision.--
                                    ``(I) In general.--Not later than 
                                October 1, 2000, the Administrator 
                                shall revise performance standards 
                                under this subparagraph as necessary to 
                                ensure that--
                                            ``(aa) the ozone-forming 
                                        potential, taking into account 
                                        all ozone precursors (including 
                                        volatile organic compounds, 
                                        oxides of nitrogen, and carbon 
                                        monoxide), of the aggregate 
                                        emissions during the high ozone 
                                        season (as determined by the 
                                        Administrator) from baseline 
                                        vehicles when using 
                                        reformulated gasoline does not 
                                        exceed the ozone-forming 
                                        potential of the aggregate 
                                        emissions during the high ozone 
                                        season from baseline vehicles 
                                        when using reformulated 
                                        gasoline that complies with the 
                                        regulations that were in effect 
                                        on January 1, 2000, and were 
                                        applicable to reformulated 
                                        gasoline sold in calendar year 
                                        2000 and subsequent calendar 
                                        years; and
                                            ``(bb) the aggregate 
                                        emissions of the pollutants 
                                        specified in subclause (II), or 
                                        precursors of those pollutants, 
                                        from baseline vehicles when 
                                        using reformulated gasoline do 
                                        not exceed the aggregate 
                                        emissions of those pollutants, 
                                        or precursors, from baseline 
                                        vehicles when using 
                                        reformulated gasoline that 
                                        complies with the regulations 
                                        that were in effect on January 
                                        1, 2000, and were applicable to 
                                        reformulated gasolines sold in 
                                        calendar year 2000 and 
                                        subsequent calendar years.
                                    ``(II) Specified pollutants.--The 
                                pollutants specified in this subclause 
                                are--
                                            ``(aa) toxic air 
                                        pollutants, categorized by 
                                        degree of toxicity and 
                                        carcinogenic potency;
                                            ``(bb) particulate matter 
                                        (PM-10) and fine particulate 
                                        matter (PM-2.5);
                                            ``(cc) pollutants regulated 
                                        under section 108; and
                                            ``(dd) such other 
                                        pollutants, and precursors to 
                                        pollutants, as the 
                                        Administrator determines by 
                                        regulation should be controlled 
                                        to prevent the deterioration of 
                                        air quality and to achieve 
                                        attainment of a national 
                                        ambient air quality standard in 
                                        1 or more areas.
                                    ``(III) Adjustment for emissions of 
                                carbon monoxide.--
                                            ``(aa) In general.--In 
                                        carrying out subclause (I), the 
                                        Administrator shall adjust the 
                                        performance standard for 
                                        emissions of volatile organic 
                                        compounds under this 
                                        subparagraph to account for 
                                        emissions of carbon monoxide 
                                        that are greater than or less 
                                        than the carbon monoxide 
                                        baseline determined under item 
                                        (bb).
                                            ``(bb) Carbon monoxide 
                                        baseline.--The carbon monoxide 
                                        baseline shall be equal to the 
                                        mass carbon monoxide emissions 
                                        achieved by reformulated 
                                        gasoline that contains 2 
                                        percent oxygen by weight and 
                                        meets the other performance 
                                        standards under this 
                                        subparagraph.
                                    ``(IV) Updating of baseline 
                                vehicles.--Not later than 3 years after 
                                the date of enactment of this clause, 
                                the Administrator shall revise the 
                                performance standards under this 
                                subparagraph by redefining the term 
                                `baseline vehicles' as used in this 
                                clause to mean vehicles representative 
                                of vehicles (including off-road 
                                vehicles) in use as of January 1, 
                                2000.''.
    (b) Reformulated Gasoline Carbon Monoxide Reduction Credit.--
Section 182(c)(2)(B) of the Clean Air Act (42 U.S.C. 7511a(c)(2)(B)) is 
amended by adding at the end the following: ``An adjustment to the 
volatile organic compound emission reduction requirements under section 
211(k)(3)(B)(iv) shall be credited toward the requirement for VOC 
emissions reductions under this subparagraph.''.

SEC. 7. CERTIFICATION OF FUELS AS EQUIVALENT TO REFORMULATED GASOLINE.

    Section 211(k)(4)(B) of the Clean Air Act (42 U.S.C. 7545(k)(4)(B)) 
is amended--
            (1) by redesignating clauses (i) and (ii) as subclauses (I) 
        and (II), respectively, and indenting appropriately to reflect 
        the amendments made by this section;
            (2) by striking ``The Administrator'' and inserting the 
        following:
                            ``(i) In general.--The Administrator'';
            (3) in clause (i) (as designated by paragraph (2))--
                    (A) in subclause (I) (as redesignated by paragraph 
                (1)), by striking ``, and'' and inserting a semicolon;
                    (B) in subclause (II) (as redesignated by paragraph 
                (1))--
                            (i) by striking ``achieve equivalent'' and 
                        inserting the following: ``achieve--
                                            ``(aa) equivalent'';
                            (ii) by striking the period at the end and 
                        inserting ``; or''; and
                            (iii) by adding at the end the following:
                                            ``(bb) combined reductions 
                                        in emissions of ozone forming 
                                        volatile organic compounds and 
                                        carbon monoxide that result in 
                                        a reduction in ozone 
                                        concentration, as provided in 
                                        clause (ii)(I), that is 
                                        equivalent to or greater than 
                                        the reduction in ozone 
                                        concentration achieved by a 
                                        reformulated gasoline meeting 
                                        the applicable requirements of 
                                        paragraph (3);''; and
                    (C) by adding at the end the following:
                                    ``(III) achieve equivalent or 
                                greater reductions in emissions of 
                                toxic air pollutants, or precursors of 
                                toxic air pollutants, than are achieved 
                                by a reformulated gasoline meeting the 
                                applicable requirements of paragraph 
                                (3); and
                                    ``(IV) meet the requirements of 
                                paragraph (3)(B)(iv).''; and
            (4) by adding at the end the following:
                            ``(ii) Carbon monoxide credit.--
                                    ``(I) In general.--In determining 
                                whether a fuel formulation or slate of 
                                fuel formulations achieves combined 
                                reductions in emissions of ozone 
                                forming volatile organic compounds and 
                                carbon monoxide in an area that result 
                                in a reduction in ozone concentration 
                                that is equivalent to or greater than 
                                the reduction in ozone concentration 
                                achieved by a reformulated gasoline 
                                meeting the applicable requirements of 
                                paragraph (3) in the area, the 
                                Administrator--
                                            ``(aa) shall consider, to 
                                        the extent appropriate, the 
                                        change in carbon monoxide 
                                        emissions from baseline 
                                        vehicles attributable to an 
                                        oxygen content in the fuel 
                                        formulation or slate of fuel 
                                        formulations that exceeds any 
                                        minimum oxygen content 
                                        requirement for reformulated 
                                        gasoline applicable to the 
                                        area; and
                                            ``(bb) may consider, to the 
                                        extent appropriate, the change 
                                        in carbon monoxide emissions 
                                        described in item (aa) from 
                                        vehicles other than baseline 
                                        vehicles.
                                    ``(II) Oxygen credits.--Any excess 
                                oxygen content that is taken into 
                                consideration in making a determination 
                                under subclause (I) may not be used to 
                                generate credits under paragraph 
                                (7)(A).
                                    ``(III) Relation to title i.--Any 
                                fuel formulation or slate of fuel 
                                formulations that is certified as 
                                equivalent or greater under this 
                                subparagraph, taking into consideration 
                                the combined reductions in emissions of 
                                volatile organic compounds and carbon 
                                monoxide, shall receive the same 
                                volatile organic compounds reduction 
                                credit for the purposes of subsections 
                                (b)(1) and (c)(2)(B) of section 182 as 
                                a fuel meeting the applicable 
                                requirements of paragraph (3).''.

SEC. 8. ADDITIONAL OPT-IN AREAS UNDER REFORMULATED GASOLINE PROGRAM.

    Section 211(k)(6) of the Clean Air Act (42 U.S.C. 7545(k)(6)) is 
amended--
            (1) by striking ``(6) Opt-in areas.--(A) Upon'' and 
        inserting the following:
            ``(6) Opt-in areas.--
                    ``(A) Classified areas.--
                            ``(i) In general.--Upon'';
            (2) in subparagraph (B), by striking ``(B) If'' and 
        inserting the following:
                            ``(ii) Effect of insufficient domestic 
                        capacity to produce reformulated gasoline.--
                        If'';
            (3) in subparagraph (A)(ii) (as so redesignated)--
                    (A) in the first sentence, by striking 
                ``subparagraph (A)'' and inserting ``clause (i)''; and
                    (B) in the second sentence, by striking ``this 
                paragraph'' and inserting ``this subparagraph''; and
            (4) by adding at the end the following:
                    ``(B) Nonclassified areas.--
                            ``(i) In general.--Upon the application of 
                        the Governor of a State, the Administrator 
                        shall apply the prohibition specified in 
                        paragraph (5) in any area in the State that is 
                        not a covered area or an area referred to in 
                        subparagraph (A)(i).
                            ``(ii) Publication of application.--As soon 
                        as practicable after receipt of an application 
                        under clause (i), the Administrator shall 
                        publish the application in the Federal 
                        Register.''.

SEC. 9. UPDATING OF BASELINE YEAR.

    (a) In General.--Section 211(k)(8) of the Clean Air Act (42 U.S.C. 
7545(k)(8)) is amended--
            (1) by striking subparagraph (A) and inserting the 
        following:
                    ``(A) Regulations.--
                            ``(i) Emissions.--The Administrator shall 
                        promulgate regulations applicable to each 
                        refiner, blender, or importer of gasoline 
                        ensuring that gasoline sold or introduced into 
                        commerce by the refiner, blender, or importer 
                        (other than reformulated gasoline subject to 
                        the requirements of paragraph (1)) does not 
                        result in average per gallon emissions of--
                                    ``(I) volatile organic compounds;
                                    ``(II) oxides of nitrogen;
                                    ``(III) carbon monoxide;
                                    ``(IV) toxic air pollutants;
                                    ``(V) particulate matter (PM-10) or 
                                fine particulate matter (PM-2.5); or
                                    ``(VI) any precursor of a pollutant 
                                specified in subclauses (I) through 
                                (V);
                        in excess of such emissions of such pollutants 
                        attributable to gasoline sold or introduced 
                        into commerce in calendar year 1999 or calendar 
                        year 2000, in whichever occurred the lower of 
                        such emissions, by that refiner, blender, or 
                        importer.
                            ``(ii) Measurement of average per gallon 
                        emissions.--For the purposes of clause (i), 
                        average per gallon emissions shall be measured 
                        on the basis of--
                                    ``(I) mass; and
                                    ``(II) to the maximum extent 
                                practicable using available science--
                                            ``(aa) ozone-forming 
                                        potential;
                                            ``(bb) degree of toxicity; 
                                        and
                                            ``(cc) carcinogenic 
                                        potency.
                            ``(iii) Aromatic hydrocarbon content and 
                        olefin content.--The Administrator shall 
                        promulgate regulations applicable to each 
                        refiner, blender, or importer of gasoline 
                        ensuring that gasoline sold or introduced into 
                        commerce by the refiner, blender, or importer 
                        (other than reformulated gasoline subject to 
                        the requirements of paragraph (1)) does not 
                        have an aromatic hydrocarbon content or olefin 
                        content in excess of such content of gasoline 
                        sold or introduced into commerce in calendar 
                        year 1999 or calendar year 2000, in whichever 
                        occurred the lower of such content, by that 
                        refiner, blender, or importer.'';
            (2) in subparagraph (C)--
                    (A) by striking ``clauses (i) through (iv)'' and 
                inserting ``subclauses (I) through (VI) of subparagraph 
                (A)(i)'';
                    (B) by inserting ``or volatile organic compounds'' 
                after ``nitrogen''; and
                    (C) by striking ``(on a mass basis)'' and inserting 
                ``(as measured in accordance with subparagraph 
                (A)(ii))''; and
            (3) in subparagraph (E)--
                    (A) by striking ``calendar year 1990'' and 
                inserting ``calendar year 1999 or calendar year 2000 
                (as determined under subparagraph (A)(i))''; and
                    (B) by striking ``such 1990 gasoline'' and 
                inserting ``such 1999 or 2000 gasoline''.
    (b) Regulations.--As soon as practicable after the date of 
enactment of this Act, the Administrator of the Environmental 
Protection Agency shall revise the regulations promulgated under 
section 211(k) of the Clean Air Act (42 U.S.C. 7545(k)) to reflect the 
amendments made by subsection (a).

SEC. 10. RENEWABLE CONTENT OF GASOLINE AND DIESEL FUEL.

    (a) In General.--Section 211 of the Clean Air Act (42 U.S.C. 7545) 
is amended--
            (1) by redesignating subsection (o) as subsection (q); and
            (2) by inserting after subsection (n) the following:
    ``(o) Renewable Content of Gasoline.--
            ``(1) In general.--
                    ``(A) Regulations.--Not later than September 1, 
                2000, the Administrator shall promulgate regulations 
                applicable to each refiner, blender, or importer of 
                gasoline to ensure that gasoline sold or introduced 
                into commerce in the United States by the refiner, 
                blender, or importer complies with the renewable 
                content requirements of this subsection.
                    ``(B) Renewable content requirements.--
                            ``(i) In general.--All gasoline sold or 
                        introduced into commerce in the United States 
                        by a refiner, blender, or importer shall 
                        contain, on a quarterly average basis, a 
                        quantity of fuel derived from a renewable 
                        source that is not less than the applicable 
                        percentage by volume for the quarter.
                            ``(ii) Applicable percentage.--For the 
                        purposes of clause (i), the applicable 
                        percentage for a quarter of a calendar year 
                        shall be determined in accordance with the 
                        following table:

                                                  Applicable percentage
                                                 of fuel derived from a
``Calendar year:                                      renewable source:
    2000..........................................                 1.3 
    2001..........................................                 1.5 
    2002..........................................                 1.8 
    2003..........................................                 2.1 
    2004..........................................                 2.4 
    2005..........................................                 2.7 
    2006..........................................                 3.0 
    2007..........................................                 3.3 
    2008..........................................                 3.6 
    2009..........................................                 3.9 
    2010 and thereafter...........................                 4.2.
                    ``(C) Fuel derived from a renewable source.--For 
                the purposes of this subsection, a fuel shall be 
                considered to be derived from a renewable source if the 
                fuel--
                            ``(i) is produced from--
                                    ``(I) agricultural commodities, 
                                agricultural products, or residues of 
                                agricultural commodities or 
                                agricultural products;
                                    ``(II) plant materials, including 
                                grasses, fibers, wood, and wood 
                                residues;
                                    ``(III) dedicated energy crops and 
                                trees;
                                    ``(IV) animal wastes, animal 
                                byproducts, and other materials of 
                                animal origin;
                                    ``(V) municipal wastes and refuse 
                                derived from plant or animal sources; 
                                and
                                    ``(VI) other biomass; and
                            ``(ii) is used to replace or reduce the 
                        quantity of fossil fuel present in a fuel 
                        mixture used to operate a motor vehicle, motor 
                        vehicle engine, nonroad vehicle, or nonroad 
                        engine.
                    ``(D) Credit program.--
                            ``(i) In general.--The regulations 
                        promulgated under this subsection shall provide 
                        for the generation of an appropriate amount of 
                        credits by a person that refines, blends, or 
                        imports gasoline that contains, on a quarterly 
                        average basis, a quantity of fuel derived from 
                        a renewable source that is greater than the 
                        quantity required under subparagraph (B).
                            ``(ii) Use of credits.--The regulations 
                        shall provide that a person that generates the 
                        credits may use the credits, or transfer all or 
                        a portion of the credits to another person, for 
                        the purpose of complying with subparagraph (B).
                            ``(iii) Regulations to prevent excessive 
                        geographical concentration.--The Administrator, 
                        in consultation with the Secretary of Energy 
                        and the Secretary of Agriculture, may 
                        promulgate regulations governing the generation 
                        and trading of credits described in clause (i) 
                        in order to prevent excessive geographical 
                        concentration in the use of fuel derived from a 
                        renewable source that would tend unduly--
                                    ``(I) to affect the price, supply, 
                                or distribution of such fuel;
                                    ``(II) to impede the development of 
                                the renewable fuels industry; or
                                    ``(III) to otherwise interfere with 
                                the purposes of this subsection.
            ``(2) Waivers.--
                    ``(A) In general.--The Administrator, in 
                consultation with the Secretary of Agriculture and the 
                Secretary of Energy, may waive the requirements of 
                paragraph (1)(B) with respect to an area in whole or in 
                part on petition by a State--
                            ``(i) based on a determination by the 
                        Administrator, after public notice and 
                        opportunity for comment, that--
                                    ``(I) implementation of the 
                                requirements would severely harm the 
                                economy or environment of the area; or
                                    ``(II) there is an inadequate 
                                domestic supply or distribution 
                                capacity with respect to fuel from 
                                renewable sources in the area to meet 
                                the requirements of paragraph (1)(B); 
                                and
                            ``(ii) only after a determination by the 
                        Administrator that use of the credit program 
                        described in paragraph (1)(D) would not 
                        adequately alleviate the circumstances on which 
                        the petition is based.
                    ``(B) Petitions for waivers.--The Administrator, in 
                consultation with the Secretary of Agriculture and the 
                Secretary of Energy--
                            ``(i) shall approve or deny a State 
                        petition for a waiver of the requirements of 
                        paragraph (1)(B) within 180 days after the date 
                        on which the petition is received; but
                            ``(ii) may extend that period for up to 60 
                        additional days to provide for public notice 
                        and opportunity for comment and for 
                        consideration of the comments submitted.
                    ``(C) Termination of waivers.--A waiver granted 
                under subparagraph (A) shall terminate on the earlier 
                of--
                            ``(i) the date on which the Administrator, 
                        in consultation with the Secretary of 
                        Agriculture and the Secretary of Energy, 
                        determines that the reason for the waiver no 
                        longer exists; or
                            ``(ii) the date that is 1 year after the 
                        date on which the waiver is granted.
                    ``(D) Renewal of waivers.--A waiver granted under 
                subparagraph (A) may be renewed by the Administrator 
                after consultation with the Secretary of Agriculture 
                and the Secretary of Energy.
                    ``(E) Oxygen content waivers.--The grant or denial 
                of a waiver under subsection (k)(2)(B) shall not affect 
                the requirements of this subsection.
            ``(3) Guidance for labeling.--After consultation with the 
        Secretary of Agriculture and the Secretary of Energy, the 
        Administrator shall issue guidance to the States for labeling, 
        at the point of retail sale--
                    ``(A) the fuel derived from a renewable source that 
                is contained in the fuel sold; and
                    ``(B) the major fuel additive components of the 
                fuel sold.
            ``(4) Reports to congress.--Not less often than every 3 
        years, the Administrator shall submit to Congress a report--
                    ``(A) describing reductions in emissions of 
                criteria air pollutants listed under section 108 that 
                result from implementation of this subsection;
                    ``(B) in consultation with the Secretary of 
                Agriculture, describing--
                            ``(i) the impact of implementation of this 
                        subsection on--
                                    ``(I) the demand for farm 
                                commodities, biomass, and other 
                                materials used for producing fuel 
                                derived from a renewable source; and
                                    ``(II) the adequacy of food and 
                                feed supplies; and
                            ``(ii) the effect of implementation of this 
                        subsection on farm income, employment, and 
                        economic growth, particularly in rural areas; 
                        and
                    ``(C) in consultation with the Secretary of 
                Energy--
                            ``(i) describing greenhouse gas emission 
                        reductions that result from implementation of 
                        this subsection; and
                            ``(ii) assessing the effect of 
                        implementation of this subsection on United 
                        States energy security and reliance on imported 
                        petroleum.
    ``(p) Renewable Content of Diesel Fuel.--
            ``(1) In general.--
                    ``(A) Regulations.--Not later than September 1, 
                2000, the Administrator shall promulgate regulations 
                applicable to each refiner, blender, or importer of 
                diesel fuel to ensure that the diesel fuel sold or 
                introduced into commerce in the United States by the 
                refiner, blender, or importer complies with the 
                renewable content requirements established by the 
                Administrator under this subsection.
                    ``(B) Renewable content requirements.--
                            ``(i) In general.--All diesel fuel sold or 
                        introduced into commerce in the United States 
                        by a refiner, blender, or importer shall 
                        contain, on a quarterly average basis, a 
                        quantity of fuel derived from a renewable 
                        source (as described in subsection (o)(1)(C)) 
                        that is not less than the applicable percentage 
                        by volume for the quarter.
                            ``(ii) Applicable percentage.--For the 
                        purposes of clause (i), the applicable 
                        percentage for a quarter of a calendar year--
                                    ``(I) shall be established by the 
                                Administrator;
                                    ``(II) shall gradually increase 
                                over time; and
                                    ``(III) in the case of calendar 
                                year 2010 and each calendar year 
                                thereafter, shall be 1.0 percent.
            ``(2) Other elements of program.--The Administrator shall 
        by regulation establish a program to carry out paragraph (1) 
        that, in order to ensure the use of biodiesel fuel, has other 
        elements that are similar to the elements of the program for 
        gasoline under subsection (o), including--
                    ``(A) a credit program similar to that described in 
                subsection (o)(1)(D); and
                    ``(B) waiver authority similar to that provided by 
                subsection (o)(2).''.
    (b) Penalties and Enforcement.--Section 211(d) of the Clean Air Act 
(42 U.S.C. 7545(d)) is amended--
            (1) in paragraph (1)--
                    (A) in the first sentence, by striking ``or (n)'' 
                each place it appears and inserting ``(n), (o), or 
                (p)''; and
                    (B) in the second sentence, by striking ``or (m)'' 
                and inserting ``(m), (o), or (p)''; and
            (2) in the first sentence of paragraph (2), by striking 
        ``and (n)'' each place it appears and inserting ``(n), (o), and 
        (p)''.
    (c) Prevention of Effects on Highway Apportionments.--
            (1) Surface transportation program.--Section 104(b)(3) of 
        title 23, United States Code, is amended by adding at the end 
        the following:
                    ``(C) Determination of estimated tax payments.--For 
                the purpose of determining under subparagraph (A)(iii) 
                the estimated tax payments attributable to highway 
                users in a State paid into the Highway Trust Fund 
                (other than the Mass Transit Account) in a fiscal year, 
                the amount paid into the Highway Trust Fund with 
                respect to the sale of gasohol or other fuels 
                containing alcohol by reason of the tax imposed by 
                section 4041 (relating to special fuels) or 4081 
                (relating to gasoline) of the Internal Revenue Code of 
                1986 shall be treated as being equal to the amount that 
                would have been so imposed with respect to that sale 
                without regard to the reduction in revenues resulting 
                from the application of the regulations promulgated 
                under section 6(f) of the Toxic Substances Control Act 
                (15 U.S.C. 2605(f)), subsections (o) and (p) of section 
                211 of the Clean Air Act (42 U.S.C. 7545), and the 
                following provisions of the Internal Revenue Code of 
                1986:
                            ``(i) Section 4041(b)(2) (relating to 
                        exemption for qualified methanol and ethanol 
                        fuel).
                            ``(ii) Section 4041(k) (relating to fuels 
                        containing alcohol).
                            ``(iii) Section 4041(m) (relating to 
                        certain alcohol fuels).
                            ``(iv) Section 4081(c) (relating to reduced 
                        rate on gasoline mixed with alcohol).''.
            (2) Minimum guarantee.--Section 105(f)(1) of title 23, 
        United States Code, is amended--
                    (A) by striking ``(1) In general.--Before'' and 
                inserting the following: ``(1) In general.--
                    ``(A) Adjustment.--Before''; and
                    (B) by adding at the end the following:
                    ``(B) Determination of estimated tax payments.--For 
                the purpose of determining under this subsection the 
                estimated tax payments attributable to highway users in 
                a State paid into the Highway Trust Fund (other than 
                the Mass Transit Account) in a fiscal year, the amount 
                paid into the Highway Trust Fund with respect to the 
                sale of gasohol or other fuels containing alcohol by 
                reason of the tax imposed by section 4041 (relating to 
                special fuels) or 4081 (relating to gasoline) of the 
                Internal Revenue Code of 1986 shall be treated as being 
                equal to the amount that would have been so imposed 
                with respect to that sale without regard to the 
                reduction in revenues resulting from the application of 
                the regulations promulgated under section 6(f) of the 
                Toxic Substances Control Act (15 U.S.C. 2605(f)), 
                subsections (o) and (p) of section 211 of the Clean Air 
                Act (42 U.S.C. 7545), and the following provisions of 
                the Internal Revenue Code of 1986:
                            ``(i) Section 4041(b)(2) (relating to 
                        exemption for qualified methanol and ethanol 
                        fuel).
                            ``(ii) Section 4041(k) (relating to fuels 
                        containing alcohol).
                            ``(iii) Section 4041(m) (relating to 
                        certain alcohol fuels).
                            ``(iv) Section 4081(c) (relating to reduced 
                        rate on gasoline mixed with alcohol).''.
                                 <all>
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