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[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5372 Introduced in House (IH)]

109th CONGRESS
  2d Session
                                H. R. 5372

    To promote the increased utilization of domestically produced, 
   renewable, biobased motor vehicle fuel supplies and the increased 
  manufacture of flexible-fuel vehicles in the United States, and for 
                            other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                              May 11, 2006

 Ms. Herseth (for herself, Mr. Etheridge, Ms. Pelosi, Mr. Peterson of 
   Minnesota, Mr. Delahunt, Ms. Kaptur, Mr. Inslee, Mr. Pomeroy, Mr. 
Holden, Mr. Ford, Mr. Salazar, Mr. Kind, Ms. DeLauro, and Ms. McCollum 
of Minnesota) introduced the following bill; which was referred to the 
Committee on Energy and Commerce, and in addition to the Committees on 
     Agriculture, Science, and Ways and Means, for a period to be 
subsequently determined by the Speaker, in each case for consideration 
  of such provisions as fall within the jurisdiction of the committee 
                               concerned

_______________________________________________________________________

                                 A BILL

 
    To promote the increased utilization of domestically produced, 
   renewable, biobased motor vehicle fuel supplies and the increased 
  manufacture of flexible-fuel vehicles in the United States, 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 ``Bioenergy Innovation, Optional Fuel 
Utilization, and Energy Legacy (BIOFUEL) Act of 2006''.

SEC. 2. DEFINITIONS.

    For purposes of this Act--
            (1) the term ``B-20 fuel'' means diesel fuel containing 20 
        percent biodiesel;
            (2) the term ``dual fueled automobile'' has the meaning 
        given such term in section 32901(a)(8) of title 49, United 
        States Code;
            (3) the term ``E-85 fuel'' means automotive fuel containing 
        gasoline and 85 percent ethanol; and
            (4) the term ``flexible-fuel vehicle'' means a vehicle 
        capable of operating on gasoline and on any mixture containing 
        gasoline and up to 85 percent ethanol.

                       TITLE I--BIOFUELS PROGRAMS

SEC. 101. VOLUME OF RENEWABLE FUELS.

    (a) Renewable Fuels Schedule.--Section 211(o)(2)(B) of the Clean 
Air Act (42 U.S.C. 7545((o)(2)(B)) is amended to read as follows:
                    ``(B) Applicable volume.--
                            ``(i) Calendar years 2006 through 2008.--
                        For the purpose of subparagraph (A), the 
                        applicable volume for any of calendar years 
                        2006 through 2008 shall be determined in 
                        accordance with the following table:

                                                      Applicable volume
                                                      of renewable fuel
``Calendar Year:                              (in billions of gallons):
    2006..........................................                 4.0 
    2007..........................................                 4.7 
    2008..........................................                 5.4.
                            ``(ii) Calendar years 2009 through 2015 and 
                        thereafter.--For the purpose of subparagraph 
                        (A), the applicable volume for any of calendar 
                        years 2009 through 2015 and thereafter shall be 
                        determined in accordance with the following 
                        table where the applicable volume is a 
                        percentage of the total number of gallons of 
                        light duty motor vehicle fuel (other than 
                        diesel fuel) sold or introduced into commerce, 
                        as estimated by the Administrator in 
                        cooperation with the Secretary of Energy:

                                                   Applicable volume of
``Calendar year:                                        renewable fuel:
    2009..........................................                  6% 
    2010..........................................                  7% 
    2011..........................................                  9% 
    2012..........................................                 11% 
    2013..........................................                 14% 
    2014..........................................                 17% 
    2015 and thereafter...........................                 20%.
                            ``(iii) Minimum quantity derived from 
                        cellulosic biomass.--For calendar year 2009 and 
                        each calendar year thereafter through 2015, the 
                        2.5-to-1 ratio referred to in paragraph (4) 
                        shall not apply and of the applicable volume of 
                        renewable fuel referred to in clause (i) a 
                        portion shall consist of renewable fuel created 
                        from cellulosic feedstocks as specified in the 
                        following table. The percentages in the table 
                        refer to a percentage of the total of the 
                        applicable volume of renewable fuel required 
                        under clause (ii).

                                                  Portion of applicable
                                                   volume consisting of
``Calendar year:                                     cellulosic biomass
    2009..........................................                  4% 
    2010..........................................                  6% 
    2011..........................................                  9% 
    2012..........................................                 13% 
    2013..........................................                 18% 
    2014..........................................                 24% 
    2015 and thereafter...........................               30%''.
    (b) Biodiesel Program.--
            (1) Biodiesel fuel program.--Section 211 of the Clean Air 
        Act (42 U.S.C. 7545) is amended by inserting after subsection 
        (o) the following:
    ``(p) Biodiesel Program.--
            ``(1) Definition of biodiesel.--In this subsection, the 
        term `biodiesel' means biodiesel (as defined in section 312(f) 
        of the Energy Policy Act of 1992 (42 U.S.C. 13220(f))).
            ``(2) Biodiesel fuel program.--
                    ``(A) Regulations.--
                            ``(i) In general.--Not later than 1 year 
                        after the date of enactment of this subsection, 
                        the Administrator shall promulgate regulations 
                        to ensure that diesel sold or introduced into 
                        commerce in the United States (except in 
                        noncontiguous States or territories), on an 
                        annual average basis, contains the applicable 
                        volume of biodiesel fuel determined in 
                        accordance with subparagraph (B).
                            ``(ii) Provisions of regulations.--
                        Regardless of the date of promulgation, the 
                        regulations promulgated under clause (i)--
                                    ``(I) shall contain compliance 
                                provisions applicable to refineries, 
                                blenders, distributors, and importers, 
                                as appropriate, to ensure that the 
                                requirements of this paragraph are met; 
                                but
                                    ``(II) shall not restrict 
                                geographic areas in which biodiesel 
                                fuel may be used or impose any per-
                                gallon obligation for the use of 
                                biodiesel fuel.
                    ``(B) Applicable volume in calendar years after 
                2008.--For the purpose of subparagraph (A), the 
                applicable volume for each calendar year after 2008 
                shall be a percentage of the total volume of diesel 
                fuel sold or introduced into commerce in that calendar 
                year, determined in accordance with the following 
                table:

                                                   Applicable volume of
                                                         biodiesel as a
                                                    percentage of total
``Calendar year:                                           diesel fuel:
    2009..........................................                  1% 
    2010..........................................                  2% 
    2011..........................................                  3% 
    2012..........................................                  5% 
    2013..........................................                  7% 
    2014..........................................                 10% 
    2015 and thereafter...........................                 15%.
            ``(3) Credit program.--
                    ``(A) In general.--The regulations promulgated 
                pursuant to paragraph (2)(A) shall provide for the 
                generation of an appropriate amount of credits by any 
                person that refines, blends, or imports diesel that 
                contains a quantity of biodiesel fuel that is greater 
                than the quantity required under paragraph (2).
                    ``(B) Use of credits.--A person that generates a 
                credit under subparagraph (A) may use the credit, or 
                transfer all or a portion of the credit to another 
                person, for the purpose of complying with regulations 
                promulgated pursuant to paragraph (2).
                    ``(C) Duration of credits.--A credit generated 
                under this paragraph shall be valid during the 1-year 
                period beginning on the date on which the credit is 
                generated.
                    ``(D) Inability to generate or purchase sufficient 
                credits.--The regulations promulgated pursuant to 
                paragraph (2)(A) shall include provisions allowing any 
                person that is unable to generate or purchase 
                sufficient credits under subparagraph (A) to meet the 
                requirements of paragraph (2) by carrying forward a 
                credit generated during a previous year on the 
                condition that the person, during the calendar year 
                following the year in which the biodiesel fuel deficit 
                is created--
                            ``(i) achieves compliance with the 
                        biodiesel fuel requirement under paragraph (2); 
                        and
                            ``(ii) generates or purchases additional 
                        credits under subparagraph (A) to offset the 
                        deficit of the previous year.''.

SEC. 102. REQUIREMENT TO MANUFACTURE DUAL FUELED AUTOMOBILES.

    (a) Requirement.--
            (1) In general.--Chapter 329 of title 49, United States 
        Code, is amended by inserting after section 32902 the 
        following:
``Sec. 32902A. Requirement to manufacture dual fueled automobiles
    ``(a) Requirement.--Each manufacturer of new automobiles that are 
capable of operating on gasoline or diesel fuel shall ensure that the 
percentage of the total of such automobiles, manufactured and 
distributed in commerce for sale in the United States, which are dual 
fueled automobiles (as defined in this chapter) is equal to not less 
than the applicable percentage for each applicable model year set forth 
in the following table:

                                                 The percentage of dual
                                                     fueled automobiles
``For each of the following                       manufactured shall be
    model years:                                         not less than:
    2008..........................................               10    
    2009..........................................               20    
    2010..........................................               30    
    2011..........................................               40    
    2012..........................................               50    
    2013..........................................              75.    
    ``(b) Production Credits for Exceeding Flexible Fuel Automobile 
Production Requirement.--
            ``(1) Earning and period for applying credits.--If the 
        number of dual fueled automobiles manufactured by a 
        manufacturer in a particular model year exceeds the number 
        required under subsection (a), the manufacturer earns credits 
        under this section, which may be applied to any of the 3 
        consecutive model years immediately after the model year for 
        which the credits are earned.
            ``(2) Trading credits.--A manufacturer that has earned 
        credits under paragraph (1) may sell credits to another 
        manufacturer to enable the purchaser to meet the requirement 
        under subsection (a).''.
            (2) Technical amendment.--The table of sections for chapter 
        329 of title 49, United States Code, is amended by inserting 
        after the item relating to section 32902 the following:

``32902A. Requirement to manufacture dual fueled automobiles.''.
    (b) Education Program.--The Secretary of Energy shall carry out an 
education program to inform people about which automobiles are dual 
fueled automobiles and how to exercise their opportunity to choose 
alternative fuels. The Secretary is authorized to obtain from the 
automobile manufacturers their recall databases and other appropriate 
databases to identify the owners of dual fueled automobiles for 
purposes of notifying them of where alternative fuels are sold in their 
area.

SEC. 103. E-85 FUEL PUMPS.

    (a) Market Penetration Reports.--After providing public notice and 
an opportunity for public comment, the Secretary of Energy, in 
consultation with the Secretary of Transportation, shall determine and 
report to Congress annually on the market penetration for flexible-fuel 
vehicles in use within geographic regions to be established by the 
Secretary for this purpose. Regions established by the Secretary under 
this subsection shall not be smaller than 1 entire State or larger than 
5.
    (b) Requirement.--When flexible-fuel vehicle market penetration 
reaches 15 percent of light-duty motor vehicles in a region, as 
determined by the Secretary of Energy under subsection (a), the 
Secretary shall require motor fuel retailers in that region to install 
an E-85 fuel pump or pumps at their retail fuel facilities on a 
schedule and priority to be determined by the Secretary. In 
implementing this subsection, the Secretary shall--
            (1) consider retail fuel companies' fuel sales volume and 
        the physical capacity of individual retail locations when 
        determining the mandate priority;
            (2) require E-85 fuel pump installation consistent with 
        flexible-fuel vehicle market penetration in that region; and
            (3) consider the commercial availability of E-85 fuel in 
        the region.
    (c) Prohibition.--No oil company shall, through a franchise or 
sales agreement or otherwise, prohibit a motor fuel retailer from 
making E-85 or other biofuels available for sale.
    (d) Credits.--The Secretary of Energy may establish a system to 
allow retail motor fuel facilities within a region that have installed 
E-85 fuel pumps and that are not subject to the requirements 
established under subsection (b), including pumps installed before the 
date of enactment of this Act, to sell credits to covered retail fuel 
facilities to meet the requirements of such subsection, on a pump for 
pump basis.
    (e) Civil Penalty.--A person who violates this section or the 
requirements established by the Secretary of Energy under this section 
shall be liable to the Secretary for a civil penalty in the amount of 
$1000 for each day of such violation.
    (f) Study and Report.--Not later than 1 year after the date of 
enactment of this Act, the Secretary of Energy shall conduct a study 
and report to Congress on the feasibility and expense of converting 
existing gasoline and diesel fuel infrastructure to transport and 
dispense E-85 fuel and biodiesel.

SEC. 104. ALTERNATIVE FUEL INFRASTRUCTURE FUND AND GRANT PROGRAM.

    (a) Establishment of Fund.--
            (1) In general.--There is established in the Treasury a 
        Alternative Fuel Infrastructure Fund (hereinafter in this Act 
        referred to as the ``Fund'') consisting of amounts transferred 
        to the Fund under paragraph (2) and amounts credited to the 
        Fund under paragraph (3).
            (2) Transfer of amounts.--For fiscal year 2007, and each 
        fiscal year thereafter, the Secretary of the Treasury shall 
        transfer to the Fund an amount determined by the Secretary to 
        be equal to the total amount deposited in the general fund of 
        the Treasury in the preceding fiscal year from fines, 
        penalties, and other moneys obtained through enforcement 
        actions conducted pursuant to section 32912 of title 49, United 
        States Code, including moneys obtained under consent decrees.
            (3) Investment of amounts.--The Secretary of the Treasury 
        shall invest in interest-bearing obligations of the United 
        States such portion of the Fund as is not, in the Secretary's 
        judgment, required to meet current withdrawals. Such 
        obligations shall be acquired and sold and interest on, and the 
        proceeds from the sale or redemption of, such obligations shall 
        be credited to the Fund in accordance with the requirements of 
        section 9602 of the Internal Revenue Code of 1986.
            (4) Use of amounts in the fund.--Amounts in the Fund shall 
        be made available without further appropriation to the 
        Secretary of Energy to carry out the grant program described in 
        subsection (b).
    (b) Alternative Fuel Infrastructure Grant Program.--
            (1) In general.--The Secretary of Energy shall establish 
        and carry out a grant program to assist retail gasoline service 
        stations make required conversions or installations to 
        infrastructure necessary for the dispensing of alternative 
        fuels to increase the availability to consumers of alternative 
        fuels.
            (2) Eligibility.--Any entity that dispenses automobile fuel 
        at retail may be eligible for a grant under this section.
            (3) Use of grant funds.--Grants provided under this section 
        shall be used for the construction or expansion of 
        infrastructure necessary for the dispensing of alternative 
        fuels (as defined in section 32901(a)(1) of title 49, United 
        States Code). Not more than 3 percent of grant funds may be 
        used for administrative costs.

SEC. 105. STRATEGIC FEEDSTOCK RESERVE.

    (a) Program.--The Secretary of Agriculture shall establish and 
administer a renewable energy reserve program to purchase agricultural 
commodities from producers and to store such agricultural commodities 
with such producers.
    (b) Purchases.--
            (1) In general.--The Secretary of Agriculture shall 
        purchase agricultural commodities at commercial rates in order 
        to establish, maintain, or enhance the renewable energy reserve 
        when--
                    (A) such commodities are in abundant supply;
                    (B) there is need for adequate carryover stocks to 
                ensure a reliable supply of the commodities to meet 
                renewable energy demands;
                    (C) the average price of an agricultural commodity 
                in a county is less than 100 percent of the applicable 
                loan rate for a nonrecourse marketing assistance loan; 
                and
                    (D) it is necessary to ensure adequate supplies of 
                renewable fuels in the marketplace.
            (2) Limitation.--Purchases by the Secretary of Agriculture 
        under paragraph (1) shall be limited to--
                    (A) the type and quantity of commodities necessary 
                to provide for not more than one year of estimated 
                utilization for renewable energy purposes; and
                    (B) quantities of commodities for research and 
                development of renewable fuels.
    (c) Sale of Stocks.--A commodity shall not be sold from the 
renewable energy reserve unless--
            (1) the average market price of the commodity in the United 
        States is greater than or equal to the applicable loan rate for 
        a nonrecourse marketing assistance loan; and
            (2) such commodity will be used to produce renewable 
        energy.
    (d) Storage Payments.--Payments made by the Secretary of 
Agriculture for the storage of commodities shall reflect local 
commercial storage rates.

SEC. 106. DEPARTMENT OF AGRICULTURE BIOENERGY PROGRAM.

    (a) Definition of Bioenergy.--Subsection (a)(1) of section 9010 of 
the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 8108) is 
amended by striking subparagraph (B) and inserting the following new 
subparagraph:
                    ``(B) ethanol derived from cellulosic 
                feedstocks.''.
    (b) Reauthorization.--Subsection (c) of such section is amended by 
striking paragraph (2) and inserting the following new paragraph:
            ``(2) such sums as may be necessary for each of fiscal 
        years 2007 through 2016.''.

SEC. 107. FARM-BASED ENERGY FINANCING PROGRAM.

    (a) In General.--Subtitle A of the Consolidated Farm and Rural 
Development Act (7 U.S.C. 1921-1936a) is amended by adding at the end 
the following:

``SEC. 310H. FARM-BASED ENERGY FINANCING PROGRAM.

    ``(a) In General.--The Secretary may make loans to eligible farmers 
and ranchers in the United States, and to eligible farm cooperatives 
and private domestic corporations, partnerships, joint operations, 
trusts, and limited liability companies that are controlled by farmers 
and ranchers, to enable such entities to create or expand facilities 
designed to convert agricultural commodities (including the capture of 
wind, solar energy, and methane) into fuel.
    ``(b) Eligibility.--Paragraphs (1) and (3) of the 2nd sentence of 
section 302 shall apply in determining the eligibility of applicants 
for a loan under this section.
    ``(c) Loan Terms.--
            ``(1) Maximum principal amount.--The amount of a loan under 
        this section shall not exceed $25,000,000.
            ``(2) Interest rate.--The Secretary set the rate at which 
        loans under this section shall bear interest, except that the 
        rate shall not exceed the current market yield for outstanding 
        municipal obligations with remaining periods to maturity 
        comparable to the average maturity for the loans, and shall be 
        adjusted to the nearest \1/8\ of 1 percent.
            ``(3) Maximum repayment period.--The period for repayment 
        of a loan under this section shall not exceed 20 years.
    ``(d) Limitations on Authorization of Appropriations.--For loans 
under this section, there are authorized to be appropriated to the 
Secretary not more than $250,000,000 for each fiscal year.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on October 1, 2006.

SEC. 108. AUTHORITY OF BANKS FOR COOPERATIVES TO FINANCE RENEWABLE FUEL 
              MANUFACTURING BY AGRICULTURAL COOPERATIVES.

    Section 3.8(b)(1) of the Farm Credit Act of 1971 (12 U.S.C. 
2129(b)(1)) is amended by adding at the end the following:
                    ``(E) Any association of farmers or of producers or 
                harvesters of aquatic products, or any federation of 
                such associations which--
                            ``(i) has producer and investor classes of 
                        membership, but only if--
                                    ``(I) at least 50 percent of the 
                                voting control of the association is 
                                held by farmers or producers or 
                                harvesters of aquatic products; and
                                    ``(II) the producer class, if 
                                treated as a separate entity, operates 
                                on a cooperative basis; and
                            ``(ii) is engaged in processing, preparing 
                        for market, handling, or marketing biofuels, 
                        ethanol, or other renewable energy products.''.

SEC. 109. BAN ON CONDITIONING BUSINESS AND INDUSTRY LOAN GUARANTEE ON 
              LENDER OBTAINING UNSUBORDINATED INTEREST IN FARMING OR 
              RANCHING OPERATION OF BORROWER.

    Section 310B(g)(2) of the Consolidated Farm and Rural Development 
Act (7 U.S.C. 1932(g)(2)) is amended by adding at the end the 
following:
                    ``(D) Limitation.--The Secretary may not require, 
                as a condition of providing a guarantee under this 
                paragraph, that the lender obtain an unsubordinated 
                interest in the farming or ranching operation of the 
                farmer or rancher.''.

SEC. 110. RESEARCH, DEVELOPMENT, AND DEMONSTRATION.

    (a) Secretary of Energy.--The Secretary of Energy, in consultation 
with the Secretary of Agriculture, shall establish a program of 
research, development, and demonstration with the goals of--
            (1) improving the efficiency and cost-effectiveness of 
        ethanol production;
            (2) developing new processes to extract energy from 
        biological sources, including wood chips and perennial grasses;
            (3) advancing biomass gasification;
            (4) promoting the development of new vehicle efficiency 
        technologies, including flexible fuel vehicles, hybrid 
        vehicles, and plug-in hybrid vehicles; and
            (5) improving the operational characteristics of automobile 
        engines operating on biofuels.
    (b) Secretary of Agriculture.--The Secretary of Agriculture, in 
consultation with the Secretary of Energy, shall establish a program of 
research, development, and demonstration for developing new feedstocks 
and processes to extract energy from biological sources, including wood 
chips and perennial grasses.
    (c) Sun Grant Initiative.--Section 9011(j)(1)(C) of the Farm 
Security and Rural Investment Act of 2002 (7 U.S.C. 8109(j)(1)(C); also 
known as the ``Sun Grant Research Initiative Act of 2003'') is amended 
by striking ``2010'' and inserting ``2012''.
    (d) Clearinghouse.--The Secretary of Energy shall establish a 
clearinghouse to facilitate the availability of the information, 
technologies, and processes generated under this section.
    (e) Authorization of Appropriations.--There are authorized to be 
appropriated--
            (1) to the Secretary of Energy $50,000,000 for each of the 
        fiscal years 2007 through 2016, for carrying out subsections 
        (a) and (d); and
            (2) to the Secretary of Agriculture $50,000,000 for each of 
        the fiscal years 2007 through 2016, for carrying out subsection 
        (b).

SEC. 111. BIOFUELS PRODUCTION FACILITY GRANT PROGRAM.

    (a) Establishment.--The Secretary of Energy shall establish a grant 
program to provide up to 25 percent of the cost of financing a biofuels 
production facility capable of producing biofuels with at least 20 Btus 
of energy output for every Btu of hydrocarbon input.
    (b) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary of Energy $10,000,000 for each of the 
fiscal years 2007 through 2016, for carrying this section.

SEC. 112. CARBON TRADING.

    (a) Findings.--The Congress finds that--
            (1) American farmers today deserve credit for creating the 
        most prolific and abundant crop production in human history;
            (2) the increased use of renewable biofuels fuels in the 
        United States will encourage an even greater level of 
        production of bioenergy feedstocks by United States 
        agriculture;
            (3) crops grown by American farmers have provided, and 
        continue to provide, significant carbon sequestration and 
        greenhouse gas reduction effects;
            (4) this increased bioenergy crop feedstock production will 
        amplify carbon capture benefits that emanate from United States 
        agricultural production;
            (5) this increased biofuels production will offset 
        considerable amounts of greenhouse gas emissions that would 
        otherwise be created by using petroleum;
            (6) farmers have never been compensated by the marketplace 
        for the significant amounts of carbon that they have 
        sequestered through their activities; and
            (7) this sequestration activity mitigates global warming 
        and provides significant benefits to the United States and to 
        the world.
    (b) Sense of Congress.--It is the sense of Congress that--
            (1) Congress should consider and enact policies that fairly 
        but effectively reduce greenhouse gas emissions in the United 
        States and around the world; and
            (2) Congress should enact policies that encourage the 
        development of systems that compensate American agricultural 
        producers for the beneficial role that they play in reducing 
        greenhouse gases and sequestering carbon from the atmosphere.

                        TITLE II--TAX INCENTIVES

SEC. 201. EXTENSION OF CREDITS FOR ETHANOL AND BIODIESEL.

    (a) Ethanol.--Paragraph (1) of section 40(e) of the Internal 
Revenue Code of 1986 (relating to termination) is amended--
            (1) in subparagraph (A) by striking ``December 31, 2010'' 
        and inserting ``December 31, 2015'', and
            (2) in subparagraph (B) by striking ``January 1, 2011'' and 
        inserting ``January 1, 2016''.
    (b) Biodiesel.--Subsection (g) of section 40A (relating to 
termination) is amended by striking ``December 31, 2008'' and inserting 
``December 31, 2015''.

SEC. 202. INCREASE IN INCENTIVES FOR REFUELING PROPERTY FOR ETHANOL AND 
              BIODIESEL.

    (a) Credit Amount.--Subsection (a) of section 30C of the Internal 
Revenue Code of 1986 (relating to credit allowed) is amended by 
inserting ``(50 percent in the case of fuel which is ethanol or 
biodiesel, described in subsection (c)(1))'' after ``30 percent''.
    (b) Limitation.--Paragraph (1) of section 30C(b) of such Code 
(relating to limitation) is amended by inserting ``($60,000 in the case 
that such property is with respect to fuel which is ethanol or 
biodiesel, described in subsection (c)(1))'' before the comma at the 
end.
    (c) Extension of Credit.--Subsection (g) of section 30C of such 
Code (relating to termination) is amended by striking ``and'' at the 
end of paragraph (1), by redesignating paragraph (2) as paragraph (3), 
and by inserting after paragraph (2) the following new paragraph:
            ``(2) in the case of property relating to ethanol or 
        biodiesel, after December 31, 2015, and''.
    (d) Effective Date.--The amendments made by this section shall 
apply to property placed in service after the date of the enactment of 
this Act in taxable years ending after such date.

SEC. 203. SMALL ETHANOL PRODUCER CREDIT.

    (a) Increase in Limitation.--Subparagraph (C) of section 40(b)(4) 
of the Internal Revenue Code of 1986 (relating to limitation) is 
amended by striking ``15,000,000'' and inserting ``30,000,000''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to alcohol produced, sold, or used after the date of the 
enactment of this Act in taxable years ending after such date.

SEC. 204. INFRASTRUCTURE BONDS FOR FACILITIES PRODUCING MOTOR VEHICLE 
              FUEL FROM BIOMASS.

    (a) Qualified Facility.--Subparagraph (A) of section 54(d)(2) of 
the Internal Revenue Code of 1986 (defining qualified project) is 
amended to read as follows:
                    ``(A) Qualified project.--The term `qualified 
                project' means--
                            ``(i) Facility producing electricity from 
                        qualified energy resources.--Any qualified 
                        facility (as determined under section 45(d) 
                        without regard to paragraph (10) and to any 
                        placed in service date) owned by a qualified 
                        borrower.
                            ``(ii) Facility producing motor vehicle 
                        fuel from biomass.--Any facility using closed-
                        loop or open-loop biomass (as defined in 
                        section 45(c)) to produce a fuel for use in a 
                        motor vehicle (as defined in section 
                        30(c)(2)).''.
    (b) National Clean Renewable Energy Bond Limitation.--Subsection 
(f) of section 54 of such Code is amended to read as follows:
    ``(f) Limitation on Amount of Bonds Designated.--
            ``(1) National limitation.--There is a national clean 
        renewable energy bond limitation for each calendar year of--
                    ``(A) $800,000,000 in the case of projects 
                described in subsection (d)(2)(A)(i), and
                    ``(B) $800,000,000 in the case of projects 
                described in subsection (d)(2)(A)(ii).
            ``(2) Allocation by secretary.--The Secretary shall 
        allocate the amounts described in paragraph (1) among qualified 
        projects in such manner as the Secretary determines 
        appropriate, except that the Secretary may not allocate more 
        than $500,000,000 of the national clean renewable energy bond 
        limitation for any calendar year to finance qualified projects 
        of qualified borrowers which are governmental bodies.''.
    (c) Extension of Credit.--Subsection (m) of section 54 of such Code 
(relating to termination) is amended by striking ``December 31, 2007'' 
and inserting ``December 31, 2012''.
    (d) Effective Date.--The amendments made by this section shall 
apply to bonds issued after the date of the enactment of this Act.
                                 <all>
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