I 

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. 

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


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Bioenergy Innovation, 

3 Optional Fuel Utilization, and Energy Legacy 

4 (BIOFUEL) Act of 2006’’. 

5 SEC. 2. DEFINITIONS. 

6 For purposes of this Act— 

7 (1) the term ‘‘B–20 fuel’’ means diesel fuel con8 taining 20 percent biodiesel; 

9 (2) the term ‘‘dual fueled automobile’’ has the 

10 meaning given such term in section 32901(a)(8) of 

11 title 49, United States Code; 

12 (3) the term ‘‘E–85 fuel’’ means automotive 

13 fuel containing gasoline and 85 percent ethanol; and 

14 (4) the term ‘‘flexible-fuel vehicle’’ means a ve15 hicle capable of operating on gasoline and on any 

16 mixture containing gasoline and up to 85 percent 

17 ethanol. 

18 TITLE I—BIOFUELS PROGRAMS 

19 SEC. 101. VOLUME OF RENEWABLE FUELS. 

20 (a) RENEWABLE FUELS SCHEDULE.—Section 

21 211(o)(2)(B) of the Clean Air Act (42 U.S.C. 

22 7545((o)(2)(B)) is amended to read as follows: 

23 ‘‘(B) APPLICABLE VOLUME.— 

24 ‘‘(i) CALENDAR YEARS 2006 THROUGH

25 2008.—For the purpose of subparagraph 

26 (A), the applicable volume for any of calVerDate Aug 31 2005 23:52 May 18, 2006 Jkt 049200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H5372.IH H5372

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1 endar years 2006 through 2008 shall be 

2 determined in accordance with the fol3 lowing table: 

Applicable volume 

of renewable fuel 

‘‘Calendar Year: (in billions of gallons): 

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

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

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

4 ‘‘(ii) CALENDAR YEARS 2009 THROUGH

5 2015 AND THEREAFTER.—For the purpose 

6 of subparagraph (A), the applicable volume 

7 for any of calendar years 2009 through 

8 2015 and thereafter shall be determined in 

9 accordance with the following table where 

10 the applicable volume is a percentage of 

11 the total number of gallons of light duty 

12 motor vehicle fuel (other than diesel fuel) 

13 sold or introduced into commerce, as esti14 mated by the Administrator in cooperation 

15 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%. 

16 ‘‘(iii) MINIMUM QUANTITY DERIVED

17 FROM CELLULOSIC BIOMASS.—For cal18 endar year 2009 and each calendar year 


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1 thereafter through 2015, the 2.5-to-1 ratio 

2 referred to in paragraph (4) shall not 

3 apply and of the applicable volume of re4 newable fuel referred to in clause (i) a por5 tion shall consist of renewable fuel created 

6 from cellulosic feedstocks as specified in 

7 the following table. The percentages in the 

8 table refer to a percentage of the total of 

9 the applicable volume of renewable fuel re10 quired 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%’’. 

11 (b) BIODIESEL PROGRAM.— 

12 (1) BIODIESEL FUEL PROGRAM.—Section 211 

13 of the Clean Air Act (42 U.S.C. 7545) is amended 

14 by inserting after subsection (o) the following: 

15 ‘‘(p) BIODIESEL PROGRAM.— 

16 ‘‘(1) DEFINITION OF BIODIESEL.—In this sub17 section, the term ‘biodiesel’ means biodiesel (as de18 fined in section 312(f) of the Energy Policy Act of 

19 1992 (42 U.S.C. 13220(f))). 

20 ‘‘(2) BIODIESEL FUEL PROGRAM.— 


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1 ‘‘(A) REGULATIONS.— 

2 ‘‘(i) IN GENERAL.—Not later than 1 

3 year after the date of enactment of this 

4 subsection, the Administrator shall promul5 gate regulations to ensure that diesel sold 

6 or introduced into commerce in the United 

7 States (except in noncontiguous States or 

8 territories), on an annual average basis, 

9 contains the applicable volume of biodiesel 

10 fuel determined in accordance with sub11 paragraph (B). 

12 ‘‘(ii) PROVISIONS OF REGULATIONS.— 

13 Regardless of the date of promulgation, 

14 the regulations promulgated under clause 

15 (i)— 

16 ‘‘(I) shall contain compliance pro17 visions applicable to refineries, blend18 ers, distributors, and importers, as 

19 appropriate, to ensure that the re20 quirements of this paragraph are met; 

21 but 

22 ‘‘(II) shall not restrict geographic 

23 areas in which biodiesel fuel may be 

24 used or impose any per-gallon obliga25 tion for the use of biodiesel fuel. 


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1 ‘‘(B) APPLICABLE VOLUME IN CALENDAR

2 YEARS AFTER 2008.—For the purpose of sub3 paragraph (A), the applicable volume for each 

4 calendar year after 2008 shall be a percentage 

5 of the total volume of diesel fuel sold or intro6 duced into commerce in that calendar year, de7 termined 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%. 

8 ‘‘(3) CREDIT PROGRAM.— 

9 ‘‘(A) IN GENERAL.—The regulations pro10 mulgated pursuant to paragraph (2)(A) shall 

11 provide for the generation of an appropriate 

12 amount of credits by any person that refines, 

13 blends, or imports diesel that contains a quan14 tity of biodiesel fuel that is greater than the 

15 quantity required under paragraph (2). 

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

17 generates a credit under subparagraph (A) may 

18 use the credit, or transfer all or a portion of the 

19 credit to another person, for the purpose of 


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1 complying with regulations promulgated pursu2 ant to paragraph (2). 

3 ‘‘(C) DURATION OF CREDITS.—A credit 

4 generated under this paragraph shall be valid 

5 during the 1-year period beginning on the date 

6 on which the credit is generated. 

7 ‘‘(D) INABILITY TO GENERATE OR PUR8 CHASE SUFFICIENT CREDITS.—The regulations 

9 promulgated pursuant to paragraph (2)(A) 

10 shall include provisions allowing any person 

11 that is unable to generate or purchase sufficient 

12 credits under subparagraph (A) to meet the re13 quirements of paragraph (2) by carrying for14 ward a credit generated during a previous year 

15 on the condition that the person, during the cal16 endar year following the year in which the bio17 diesel fuel deficit is created— 

18 ‘‘(i) achieves compliance with the bio19 diesel fuel requirement under paragraph 

20 (2); and 

21 ‘‘(ii) generates or purchases additional 

22 credits under subparagraph (A) to offset 

23 the deficit of the previous year.’’. 


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1 SEC. 102. REQUIREMENT TO MANUFACTURE DUAL FUELED 

2 AUTOMOBILES. 

3 (a) REQUIREMENT.— 

4 (1) IN GENERAL.—Chapter 329 of title 49, 

5 United States Code, is amended by inserting after 

6 section 32902 the following: 

7 ‘‘§ 32902A. Requirement to manufacture dual fueled 

8 automobiles 

9 ‘‘(a) REQUIREMENT.—Each manufacturer of new 

10 automobiles that are capable of operating on gasoline or 

11 diesel fuel shall ensure that the percentage of the total 

12 of such automobiles, manufactured and distributed in 

13 commerce for sale in the United States, which are dual 

14 fueled automobiles (as defined in this chapter) is equal 

15 to not less than the applicable percentage for each applica16 ble 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.

17 ‘‘(b) PRODUCTION CREDITS FOR EXCEEDING FLEXI18 BLE FUEL AUTOMOBILE PRODUCTION REQUIREMENT.— 

19 ‘‘(1) EARNING AND PERIOD FOR APPLYING

20 CREDITS.—If the number of dual fueled automobiles 

21 manufactured by a manufacturer in a particular 


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1 model year exceeds the number required under sub2 section (a), the manufacturer earns credits under 

3 this section, which may be applied to any of the 3 

4 consecutive model years immediately after the model 

5 year for which the credits are earned. 

6 ‘‘(2) TRADING CREDITS.—A manufacturer that 

7 has earned credits under paragraph (1) may sell 

8 credits to another manufacturer to enable the pur9 chaser to meet the requirement under subsection 

10 (a).’’. 

11 (2) TECHNICAL AMENDMENT.—The table of 

12 sections for chapter 329 of title 49, United States 

13 Code, is amended by inserting after the item relating 

14 to section 32902 the following: 

‘‘32902A. Requirement to manufacture dual fueled automobiles.’’. 

15 (b) EDUCATION PROGRAM.—The Secretary of En16 ergy shall carry out an education program to inform peo17 ple about which automobiles are dual fueled automobiles 

18 and how to exercise their opportunity to choose alternative 

19 fuels. The Secretary is authorized to obtain from the auto20 mobile manufacturers their recall databases and other ap21 propriate databases to identify the owners of dual fueled 

22 automobiles for purposes of notifying them of where alter23 native fuels are sold in their area. 


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1 SEC. 103. E–85 FUEL PUMPS. 

2 (a) MARKET PENETRATION REPORTS.—After pro3 viding public notice and an opportunity for public com4 ment, the Secretary of Energy, in consultation with the 

5 Secretary of Transportation, shall determine and report 

6 to Congress annually on the market penetration for flexi7 ble-fuel vehicles in use within geographic regions to be es8 tablished by the Secretary for this purpose. Regions estab9 lished by the Secretary under this subsection shall not be 

10 smaller than 1 entire State or larger than 5. 

11 (b) REQUIREMENT.—When flexible-fuel vehicle mar12 ket penetration reaches 15 percent of light-duty motor ve13 hicles in a region, as determined by the Secretary of En14 ergy under subsection (a), the Secretary shall require 

15 motor fuel retailers in that region to install an E–85 fuel 

16 pump or pumps at their retail fuel facilities on a schedule 

17 and priority to be determined by the Secretary. In imple18 menting this subsection, the Secretary shall— 

19 (1) consider retail fuel companies’ fuel sales vol20 ume and the physical capacity of individual retail lo21 cations when determining the mandate priority; 

22 (2) require E–85 fuel pump installation con23 sistent with flexible-fuel vehicle market penetration 

24 in that region; and 

25 (3) consider the commercial availability of E–85 

26 fuel in the region. 


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1 (c) PROHIBITION.—No oil company shall, through a 

2 franchise or sales agreement or otherwise, prohibit a 

3 motor fuel retailer from making E–85 or other biofuels 

4 available for sale. 

5 (d) CREDITS.—The Secretary of Energy may estab6 lish a system to allow retail motor fuel facilities within 

7 a region that have installed E–85 fuel pumps and that 

8 are not subject to the requirements established under sub9 section (b), including pumps installed before the date of 

10 enactment of this Act, to sell credits to covered retail fuel 

11 facilities to meet the requirements of such subsection, on 

12 a pump for pump basis. 

13 (e) CIVIL PENALTY.—A person who violates this sec14 tion or the requirements established by the Secretary of 

15 Energy under this section shall be liable to the Secretary 

16 for a civil penalty in the amount of $1000 for each day 

17 of such violation. 

18 (f) STUDY AND REPORT.—Not later than 1 year after 

19 the date of enactment of this Act, the Secretary of Energy 

20 shall conduct a study and report to Congress on the feasi21 bility and expense of converting existing gasoline and die22 sel fuel infrastructure to transport and dispense E–85 fuel 

23 and biodiesel. 


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1 SEC. 104. ALTERNATIVE FUEL INFRASTRUCTURE FUND 

2 AND GRANT PROGRAM. 

3 (a) ESTABLISHMENT OF FUND.— 

4 (1) IN GENERAL.—There is established in the 

5 Treasury a Alternative Fuel Infrastructure Fund 

6 (hereinafter in this Act referred to as the ‘‘Fund’’) 

7 consisting of amounts transferred to the Fund under 

8 paragraph (2) and amounts credited to the Fund 

9 under paragraph (3). 

10 (2) TRANSFER OF AMOUNTS.—For fiscal year 

11 2007, and each fiscal year thereafter, the Secretary 

12 of the Treasury shall transfer to the Fund an 

13 amount determined by the Secretary to be equal to 

14 the total amount deposited in the general fund of 

15 the Treasury in the preceding fiscal year from fines, 

16 penalties, and other moneys obtained through en17 forcement actions conducted pursuant to section 

18 32912 of title 49, United States Code, including 

19 moneys obtained under consent decrees. 

20 (3) INVESTMENT OF AMOUNTS.—The Secretary 

21 of the Treasury shall invest in interest-bearing obli22 gations of the United States such portion of the 

23 Fund as is not, in the Secretary’s judgment, re24 quired to meet current withdrawals. Such obligations 

25 shall be acquired and sold and interest on, and the 

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1 tions shall be credited to the Fund in accordance 

2 with the requirements of section 9602 of the Inter3 nal Revenue Code of 1986. 

4 (4) USE OF AMOUNTS IN THE FUND.—Amounts 

5 in the Fund shall be made available without further 

6 appropriation to the Secretary of Energy to carry 

7 out the grant program described in subsection (b). 

8 (b) ALTERNATIVE FUEL INFRASTRUCTURE GRANT

9 PROGRAM.— 

10 (1) IN GENERAL.—The Secretary of Energy 

11 shall establish and carry out a grant program to as12 sist retail gasoline service stations make required 

13 conversions or installations to infrastructure nec14 essary for the dispensing of alternative fuels to in15 crease the availability to consumers of alternative 

16 fuels. 

17 (2) ELIGIBILITY.—Any entity that dispenses 

18 automobile fuel at retail may be eligible for a grant 

19 under this section. 

20 (3) USE OF GRANT FUNDS.—Grants provided 

21 under this section shall be used for the construction 

22 or expansion of infrastructure necessary for the dis23 pensing of alternative fuels (as defined in section 

24 32901(a)(1) of title 49, United States Code). Not 


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1 more than 3 percent of grant funds may be used for 

2 administrative costs. 

3 SEC. 105. STRATEGIC FEEDSTOCK RESERVE. 

4 (a) PROGRAM.—The Secretary of Agriculture shall 

5 establish and administer a renewable energy reserve pro6 gram to purchase agricultural commodities from pro7 ducers and to store such agricultural commodities with 

8 such producers. 

9 (b) PURCHASES.— 

10 (1) IN GENERAL.—The Secretary of Agriculture 

11 shall purchase agricultural commodities at commer12 cial rates in order to establish, maintain, or enhance 

13 the renewable energy reserve when— 

14 (A) such commodities are in abundant sup15 ply; 

16 (B) there is need for adequate carryover 

17 stocks to ensure a reliable supply of the com18 modities to meet renewable energy demands; 

19 (C) the average price of an agricultural 

20 commodity in a county is less than 100 percent 

21 of the applicable loan rate for a nonrecourse 

22 marketing assistance loan; and 

23 (D) it is necessary to ensure adequate sup24 plies of renewable fuels in the marketplace. 


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1 (2) LIMITATION.—Purchases by the Secretary 

2 of Agriculture under paragraph (1) shall be limited 

3 to— 

4 (A) the type and quantity of commodities 

5 necessary to provide for not more than one year 

6 of estimated utilization for renewable energy 

7 purposes; and 

8 (B) quantities of commodities for research 

9 and development of renewable fuels. 

10 (c) SALE OF STOCKS.—A commodity shall not be sold 

11 from the renewable energy reserve unless— 

12 (1) the average market price of the commodity 

13 in the United States is greater than or equal to the 

14 applicable loan rate for a nonrecourse marketing as15 sistance loan; and 

16 (2) such commodity will be used to produce re17 newable energy. 

18 (d) STORAGE PAYMENTS.—Payments made by the 

19 Secretary of Agriculture for the storage of commodities 

20 shall reflect local commercial storage rates. 

21 SEC. 106. DEPARTMENT OF AGRICULTURE BIOENERGY 

22 PROGRAM. 

23 (a) DEFINITION OF BIOENERGY.—Subsection (a)(1) 

24 of section 9010 of the Farm Security and Rural Invest25 ment Act of 2002 (7 U.S.C. 8108) is amended by striking 


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1 subparagraph (B) and inserting the following new sub2 paragraph: 

3 ‘‘(B) ethanol derived from cellulosic feed4 stocks.’’. 

5 (b) REAUTHORIZATION.—Subsection (c) of such sec6 tion is amended by striking paragraph (2) and inserting 

7 the following new paragraph: 

8 ‘‘(2) such sums as may be necessary for each 

9 of fiscal years 2007 through 2016.’’. 

10 SEC. 107. FARM-BASED ENERGY FINANCING PROGRAM. 

11 (a) IN GENERAL.—Subtitle A of the Consolidated 

12 Farm and Rural Development Act (7 U.S.C. 1921–1936a) 

13 is amended by adding at the end the following: 

14 ‘‘SEC. 310H. FARM-BASED ENERGY FINANCING PROGRAM. 

15 ‘‘(a) IN GENERAL.—The Secretary may make loans 

16 to eligible farmers and ranchers in the United States, and 

17 to eligible farm cooperatives and private domestic corpora18 tions, partnerships, joint operations, trusts, and limited li19 ability companies that are controlled by farmers and 

20 ranchers, to enable such entities to create or expand facili21 ties designed to convert agricultural commodities (includ22 ing the capture of wind, solar energy, and methane) into 

23 fuel. 


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1 ‘‘(b) ELIGIBILITY.—Paragraphs (1) and (3) of the 

2 2nd sentence of section 302 shall apply in determining the 

3 eligibility of applicants for a loan under this section. 

4 ‘‘(c) LOAN TERMS.— 

5 ‘‘(1) MAXIMUM PRINCIPAL AMOUNT.—The 

6 amount of a loan under this section shall not exceed 

7 $25,000,000. 

8 ‘‘(2) INTEREST RATE.—The Secretary set the 

9 rate at which loans under this section shall bear in10 terest, except that the rate shall not exceed the cur11 rent market yield for outstanding municipal obliga12 tions with remaining periods to maturity comparable 

13 to the average maturity for the loans, and shall be 

adjusted to the nearest 1 14 ⁄8 of 1 percent. 

15 ‘‘(3) MAXIMUM REPAYMENT PERIOD.—The pe16 riod for repayment of a loan under this section shall 

17 not exceed 20 years. 

18 ‘‘(d) LIMITATIONS ON AUTHORIZATION OF APPRO19 PRIATIONS.—For loans under this section, there are au20 thorized to be appropriated to the Secretary not more than 

21 $250,000,000 for each fiscal year.’’. 

22 (b) EFFECTIVE DATE.—The amendment made by 

23 subsection (a) shall take effect on October 1, 2006. 


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1 SEC. 108. AUTHORITY OF BANKS FOR COOPERATIVES TO FI2 NANCE RENEWABLE FUEL MANUFACTURING 

3 BY AGRICULTURAL COOPERATIVES. 

4 Section 3.8(b)(1) of the Farm Credit Act of 1971 (12 

5 U.S.C. 2129(b)(1)) is amended by adding at the end the 

6 following: 

7 ‘‘(E) Any association of farmers or of pro8 ducers or harvesters of aquatic products, or any 

9 federation of such associations which— 

10 ‘‘(i) has producer and investor classes 

11 of membership, but only if— 

12 ‘‘(I) at least 50 percent of the 

13 voting control of the association is 

14 held by farmers or producers or har15 vesters of aquatic products; and 

16 ‘‘(II) the producer class, if treat17 ed as a separate entity, operates on a 

18 cooperative basis; and 

19 ‘‘(ii) is engaged in processing, pre20 paring for market, handling, or marketing 

21 biofuels, ethanol, or other renewable en22 ergy products.’’. 


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1 SEC. 109. BAN ON CONDITIONING BUSINESS AND INDUSTRY 

2 LOAN GUARANTEE ON LENDER OBTAINING 

3 UNSUBORDINATED INTEREST IN FARMING 

4 OR RANCHING OPERATION OF BORROWER. 

5 Section 310B(g)(2) of the Consolidated Farm and 

6 Rural Development Act (7 U.S.C. 1932(g)(2)) is amended 

7 by adding at the end the following: 

8 ‘‘(D) LIMITATION.—The Secretary may 

9 not require, as a condition of providing a guar10 antee under this paragraph, that the lender ob11 tain an unsubordinated interest in the farming 

12 or ranching operation of the farmer or ranch13 er.’’. 

14 SEC. 110. RESEARCH, DEVELOPMENT, AND DEMONSTRA15 TION. 

16 (a) SECRETARY OF ENERGY.—The Secretary of En17 ergy, in consultation with the Secretary of Agriculture, 

18 shall establish a program of research, development, and 

19 demonstration with the goals of— 

20 (1) improving the efficiency and cost-effective21 ness of ethanol production; 

22 (2) developing new processes to extract energy 

23 from biological sources, including wood chips and pe24 rennial grasses; 

25 (3) advancing biomass gasification; 


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1 (4) promoting the development of new vehicle 

2 efficiency technologies, including flexible fuel vehi3 cles, hybrid vehicles, and plug-in hybrid vehicles; and 

4 (5) improving the operational characteristics of 

5 automobile engines operating on biofuels. 

6 (b) SECRETARY OF AGRICULTURE.—The Secretary 

7 of Agriculture, in consultation with the Secretary of En8 ergy, shall establish a program of research, development, 

9 and demonstration for developing new feedstocks and 

10 processes to extract energy from biological sources, includ11 ing wood chips and perennial grasses. 

12 (c) SUN GRANT INITIATIVE.—Section 9011(j)(1)(C) 

13 of the Farm Security and Rural Investment Act of 2002 

14 (7 U.S.C. 8109(j)(1)(C); also known as the ‘‘Sun Grant 

15 Research Initiative Act of 2003’’) is amended by striking 

16 ‘‘2010’’ and inserting ‘‘2012’’. 

17 (d) CLEARINGHOUSE.—The Secretary of Energy 

18 shall establish a clearinghouse to facilitate the availability 

19 of the information, technologies, and processes generated 

20 under this section. 

21 (e) AUTHORIZATION OF APPROPRIATIONS.—There 

22 are authorized to be appropriated— 

23 (1) to the Secretary of Energy $50,000,000 for 

24 each of the fiscal years 2007 through 2016, for car25 rying out subsections (a) and (d); and 


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1 (2) to the Secretary of Agriculture $50,000,000 

2 for each of the fiscal years 2007 through 2016, for 

3 carrying out subsection (b). 

4 SEC. 111. BIOFUELS PRODUCTION FACILITY GRANT PRO5 GRAM. 

6 (a) ESTABLISHMENT.—The Secretary of Energy 

7 shall establish a grant program to provide up to 25 per8 cent of the cost of financing a biofuels production facility 

9 capable of producing biofuels with at least 20 Btus of en10 ergy output for every Btu of hydrocarbon input. 

11 (b) AUTHORIZATION OF APPROPRIATIONS.—There 

12 are authorized to be appropriated to the Secretary of En13 ergy $10,000,000 for each of the fiscal years 2007 

14 through 2016, for carrying this section. 

15 SEC. 112. CARBON TRADING. 

16 (a) FINDINGS.—The Congress finds that— 

17 (1) American farmers today deserve credit for 

18 creating the most prolific and abundant crop produc19 tion in human history; 

20 (2) the increased use of renewable biofuels fuels 

21 in the United States will encourage an even greater 

22 level of production of bioenergy feedstocks by United 

23 States agriculture; 


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1 (3) crops grown by American farmers have pro2 vided, and continue to provide, significant carbon se3 questration and greenhouse gas reduction effects; 

4 (4) this increased bioenergy crop feedstock pro5 duction will amplify carbon capture benefits that em6 anate from United States agricultural production; 

7 (5) this increased biofuels production will offset 

8 considerable amounts of greenhouse gas emissions 

9 that would otherwise be created by using petroleum; 

10 (6) farmers have never been compensated by 

11 the marketplace for the significant amounts of car12 bon that they have sequestered through their activi13 ties; and 

14 (7) this sequestration activity mitigates global 

15 warming and provides significant benefits to the 

16 United States and to the world. 

17 (b) SENSE OF CONGRESS.—It is the sense of Con18 gress that— 

19 (1) Congress should consider and enact policies 

20 that fairly but effectively reduce greenhouse gas 

21 emissions in the United States and around the 

22 world; and 

23 (2) Congress should enact policies that encour24 age the development of systems that compensate 

25 American agricultural producers for the beneficial 


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1 role that they play in reducing greenhouse gases and 

2 sequestering carbon from the atmosphere. 

3 TITLE II—TAX INCENTIVES 

4 SEC. 201. EXTENSION OF CREDITS FOR ETHANOL AND BIO5 DIESEL. 

6 (a) ETHANOL.—Paragraph (1) of section 40(e) of the 

7 Internal Revenue Code of 1986 (relating to termination) 

8 is amended— 

9 (1) in subparagraph (A) by striking ‘‘December 

10 31, 2010’’ and inserting ‘‘December 31, 2015’’, and 

11 (2) in subparagraph (B) by striking ‘‘January 

12 1, 2011’’ and inserting ‘‘January 1, 2016’’. 

13 (b) BIODIESEL.—Subsection (g) of section 40A (re14 lating to termination) is amended by striking ‘‘December 

15 31, 2008’’ and inserting ‘‘December 31, 2015’’. 

16 SEC. 202. INCREASE IN INCENTIVES FOR REFUELING PROP17 ERTY FOR ETHANOL AND BIODIESEL. 

18 (a) CREDIT AMOUNT.—Subsection (a) of section 30C 

19 of the Internal Revenue Code of 1986 (relating to credit 

20 allowed) is amended by inserting ‘‘(50 percent in the case 

21 of fuel which is ethanol or biodiesel, described in sub22 section (c)(1))’’ after ‘‘30 percent’’. 

23 (b) LIMITATION.—Paragraph (1) of section 30C(b) 

24 of such Code (relating to limitation) is amended by insert25 ing ‘‘($60,000 in the case that such property is with reVerDate Aug 31 2005 23:52 May 18, 2006 Jkt 049200 PO 00000 Frm 00023 Fmt 6652 Sfmt 6201 E:\BILLS\H5372.IH H5372

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1 spect to fuel which is ethanol or biodiesel, described in 

2 subsection (c)(1))’’ before the comma at the end. 

3 (c) EXTENSION OF CREDIT.—Subsection (g) of sec4 tion 30C of such Code (relating to termination) is amend5 ed by striking ‘‘and’’ at the end of paragraph (1), by re6 designating paragraph (2) as paragraph (3), and by in7 serting after paragraph (2) the following new paragraph: 

8 ‘‘(2) in the case of property relating to ethanol 

9 or biodiesel, after December 31, 2015, and’’. 

10 (d) EFFECTIVE DATE.—The amendments made by 

11 this section shall apply to property placed in service after 

12 the date of the enactment of this Act in taxable years end13 ing after such date. 

14 SEC. 203. SMALL ETHANOL PRODUCER CREDIT. 

15 (a) INCREASE IN LIMITATION.—Subparagraph (C) of 

16 section 40(b)(4) of the Internal Revenue Code of 1986 (re17 lating to limitation) is amended by striking ‘‘15,000,000’’ 

18 and inserting ‘‘30,000,000’’. 

19 (b) EFFECTIVE DATE.—The amendment made by 

20 subsection (a) shall apply to alcohol produced, sold, or 

21 used after the date of the enactment of this Act in taxable 

22 years ending after such date. 


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•HR 5372 IH

1 SEC. 204. INFRASTRUCTURE BONDS FOR FACILITIES PRO2 DUCING MOTOR VEHICLE FUEL FROM BIO3 MASS. 

4 (a) QUALIFIED FACILITY.—Subparagraph (A) of sec5 tion 54(d)(2) of the Internal Revenue Code of 1986 (defin6 ing qualified project) is amended to read as follows: 

7 ‘‘(A) QUALIFIED PROJECT.—The term 

8 ‘qualified project’ means— 

9 ‘‘(i) FACILITY PRODUCING ELEC10 TRICITY FROM QUALIFIED ENERGY RE11 SOURCES.—Any qualified facility (as deter12 mined under section 45(d) without regard 

13 to paragraph (10) and to any placed in 

14 service date) owned by a qualified bor15 rower. 

16 ‘‘(ii) FACILITY PRODUCING MOTOR

17 VEHICLE FUEL FROM BIOMASS.—Any facil18 ity using closed-loop or open-loop biomass 

19 (as defined in section 45(c)) to produce a 

20 fuel for use in a motor vehicle (as defined 

21 in section 30(c)(2)).’’. 

22 (b) NATIONAL CLEAN RENEWABLE ENERGY BOND

23 LIMITATION.—Subsection (f) of section 54 of such Code 

24 is amended to read as follows: 

25 ‘‘(f) LIMITATION ON AMOUNT OF BONDS DES26 IGNATED.— 


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•HR 5372 IH

1 ‘‘(1) NATIONAL LIMITATION.—There is a na2 tional clean renewable energy bond limitation for 

3 each calendar year of— 

4 ‘‘(A) $800,000,000 in the case of projects 

5 described in subsection (d)(2)(A)(i), and 

6 ‘‘(B) $800,000,000 in the case of projects 

7 described in subsection (d)(2)(A)(ii). 

8 ‘‘(2) ALLOCATION BY SECRETARY.—The Sec9 retary shall allocate the amounts described in para10 graph (1) among qualified projects in such manner 

11 as the Secretary determines appropriate, except that 

12 the Secretary may not allocate more than 

13 $500,000,000 of the national clean renewable energy 

14 bond limitation for any calendar year to finance 

15 qualified projects of qualified borrowers which are 

16 governmental bodies.’’. 

17 (c) EXTENSION OF CREDIT.—Subsection (m) of sec18 tion 54 of such Code (relating to termination) is amended 

19 by striking ‘‘December 31, 2007’’ and inserting ‘‘Decem20 ber 31, 2012’’. 

21 (d) EFFECTIVE DATE.—The amendments made by 

22 this section shall apply to bonds issued after the date of 

23 the enactment of this Act. 

Æ 


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