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TITLE IX—MOTOR FUELS 
Subtitle A—General Provisions 
SEC. 9101. RENEWABLE CONTENT OF MOTOR VEHICLE 
FUEL. 
(a) IN GENERAL.—Section 211 of the Clean Air Act 
(42 U.S.C. 7545) is amended—
(1) by redesignating subsection (o) as sub-
section (q); and 
(2) by inserting after subsection (n) the fol-
lowing: 
‘‘(o) RENEWABLE FUEL PROGRAM.—
‘‘(1) DEFINITIONS.—In this section: 
‘‘(A) CELLULOSIC
BIOMASS
ETHANOL.—
The term ‘cellulosic biomass ethanol’ means 
ethanol derived from any lignocellulosic or 
hemicellulosic matter that is available on a re-
newable or recurring basis, including—
‘‘(i) dedicated energy crops and trees; 
‘‘(ii) wood and wood residues; 
‘‘(iii) plants; 
‘‘(iv) grasses; 
‘‘(v) agricultural residues; 
‘‘(vi) fibers; 
‘‘(vii) animal wastes and other waste 
materials; and
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‘‘(viii) municipal solid waste. 
‘‘(B) RENEWABLE FUEL.—
‘‘(i) IN GENERAL.—The term ‘renew-
able fuel’ means motor vehicle fuel that—
‘‘(I)(aa) is produced from grain, 
starch, oilseeds, or other biomass; or 
‘‘(bb) is natural gas produced 
from a biogas source, including a 
landfill, sewage waste treatment plant, 
feedlot, or other place where decaying 
organic material is found; and 
‘‘(II) is used to replace or reduce 
the quantity of fossil fuel present in a 
fuel mixture used to operate a motor 
vehicle. 
‘‘(ii) INCLUSION.—The term ‘renew-
able fuel’ includes cellulosic biomass eth-
anol and biodiesel (as defined in section 
312(f) of the Energy Policy Act of 1992 
(42 U.S.C. 13220(f)) and any blending 
components derived from renewable fuel 
(provided that only the renewable fuel por-
tion of any such blending component shall 
be considered part of the applicable volume
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under the renewable fuel program estab-
lished by this subsection). 
‘‘(C) SMALL REFINERY.—The term ‘small 
refinery’ means a refinery for which average ag-
gregate daily crude oil throughput for the cal-
endar year (as determined by dividing the ag-
gregate throughput for the calendar year by the 
number of days in the calendar year) does not 
exceed 75,000 barrels. 
‘‘(2) RENEWABLE FUEL PROGRAM.—
‘‘(A) IN GENERAL.—Not later than 1 year 
from enactment of this provision, the Adminis-
trator shall promulgate regulations ensuring 
that gasoline sold or dispensed to consumers in 
the contiguous United States, on an annual av-
erage basis, contains the applicable volume of 
renewable fuel as specified in subparagraph 
(B). Regardless of the date of promulgation, 
such regulations shall contain compliance provi-
sions for refiners, blenders, and importers, as 
appropriate, to ensure that the requirements of 
this section are met, but shall not restrict where 
renewables can be used, or impose any per-gal-
lon obligation for the use of renewables. If the 
Administrator does not promulgate such regula-
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tions, the applicable percentage, on a volume 
percentage of gasoline basis, shall be 1.62 in 
2005. 
‘‘(B) APPLICABLE VOLUME.—
‘‘(i) CALENDAR YEARS 2005 THROUGH 
2015.—For the purpose of subparagraph 
(A), the applicable volume for any of cal-
endar years 2005 through 2015 shall be 
determined in accordance with the fol-
lowing table:
Applicable volume of renewable fuel 
‘‘Calendar year: 
(In billions of gallons) 
2005 .....................................................................................
2.7
2006 .....................................................................................
2.7
2007 .....................................................................................
2.9
2008 .....................................................................................
2.9
2009 .....................................................................................
3.4
2010 .....................................................................................
3.4
2011 .....................................................................................
3.4
2012 .....................................................................................
4.2
2013 .....................................................................................
4.2
2014 .....................................................................................
4.2
2015 .....................................................................................
5.0.
‘‘(ii) CALENDAR
YEAR
2016
AND 
THEREAFTER.—For the purpose of sub-
paragraph (A), the applicable volume for 
calendar year 2016 and each calendar year 
thereafter shall be equal to the product ob-
tained by multiplying—
‘‘(I) the number of gallons of 
gasoline that the Administrator esti-
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mates will be sold or introduced into 
commerce in the calendar year; and 
‘‘(II) the ratio that—
‘‘(aa) 5.0 billion gallons of 
renewable fuels; bears to 
‘‘(bb) the number of gallons 
of gasoline sold or introduced 
into commerce in calendar year 
2015. 
‘‘(3) APPLICABLE
PERCENTAGES.—Not later 
than October 31 of each calendar year after 2002, 
the Administrator of the Energy Information Ad-
ministration shall provide the Administrator an esti-
mate of the volumes of gasoline sales in the United 
States for the coming calendar year. Based on such 
estimates, the Administrator shall, by November 30 
of each calendar year after 2003, determine and 
publish in the Federal Register, the renewable fuel 
obligation, on a volume percentage of gasoline basis, 
applicable to refiners, blenders, and importers, as 
appropriate, for the coming calendar year, to ensure 
that the requirements of paragraph (2) are met. For 
each calendar year, the Administrator shall establish 
a single applicable percentage that applies to all par-
ties, and make provision to avoid redundant obliga-
357
tions. In determining the applicable percentages, the 
Administrator shall make adjustments to account for 
the use of renewable fuels by exempt small refineries 
during the previous year. 
‘‘(4) CELLULOSIC BIOMASS ETHANOL.—For the 
purpose of paragraph (2), 1 gallon of cellulosic bio-
mass ethanol shall be considered to be the equivalent 
of 1.5 gallon of renewable fuel. 
‘‘(5) CREDIT PROGRAM.—
‘‘(A) IN GENERAL.—The regulations pro-
mulgated to carry out this subsection shall pro-
vide for the generation of an appropriate 
amount of credits by any person that refines, 
blends, or imports gasoline that contains a 
quantity of renewable fuel that is greater than 
the quantity required under paragraph (2). 
Such regulations shall provide for the genera-
tion of an appropriate amount of credits for 
biodiesel fuel. If a small refinery notifies the 
Administrator that it waives the exemption pro-
vided by this Act, the regulations shall provide 
for the generation of credits by the small refin-
ery beginning in the year following such notifi-
cation.
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‘‘(B) USE
OF
CREDITS.—A person that 
generates credits under subparagraph (A) may 
use the credits, or transfer all or a portion of 
the credits to another person, for the purpose 
of complying with paragraph (2). 
‘‘(C) LIFE
OF
CREDITS.—A credit gen-
erated under this paragraph shall be valid to 
show compliance: 
(i) in the calendar year in which the 
credit was generated or the next calendar 
year, or 
(ii) in the calendar year in which the 
credit was generated or next two consecu-
tive calendar years if the Administrator 
promulgates regulations under paragraph 
(6). 
‘‘(D) INABILITY TO PURCHASE SUFFICIENT 
CREDITS.—The regulations promulgated to 
carry out this subsection shall include provi-
sions allowing any person that is unable to gen-
erate or purchase sufficient credits to meet the 
requirements under paragraph (2) to carry for-
ward a renewables deficit provided that, in the 
calendar year following the year in which the 
renewables deficit is created, such person shall
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achieve compliance with the renewables require-
ment under paragraph (2), and shall generate 
or purchase additional renewables credits to off-
set the renewables deficit of the previous year. 
‘‘(6) SEASONAL
VARIATIONS
IN
RENEWABLE 
FUEL USE.—
‘‘(A) STUDY.—For each of calendar years 
2005 through 2015, the Administrator of the 
Energy Information Administration, shall con-
duct a study of renewable fuels blending to de-
termine whether there are excessive seasonal 
variations in the use of renewable fuels. 
‘‘(B) REGULATION
OF
EXCESSIVE
SEA-
SONAL VARIATIONS.—If, for any calendar year, 
the Administrator of the Energy Information 
Administration, based on the study under sub-
paragraph (A), makes the determinations speci-
fied in subparagraph (C), the Administrator 
shall promulgate regulations to ensure that 35 
percent or more of the quantity of renewable 
fuels necessary to meet the requirement of 
paragraph (2) is used during each of the peri-
ods specified in subparagraph (D) of each sub-
sequent calendar year.
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‘‘(C) DETERMINATIONS.—The determina-
tions referred to in subparagraph (B) are 
that—
‘‘(i) less than 35 percent of the quan-
tity of renewable fuels necessary to meet 
the requirement of paragraph (2) has been 
used during one of the periods specified in 
subparagraph (D) of the calendar year; 
‘‘(ii) a pattern of excessive seasonal 
variation described in clause (i) will con-
tinue in subsequent calendar years; and 
‘‘(iii) promulgating regulations or 
other requirements to impose a 35% or 
more seasonal use of renewable fuels will 
not prevent or interfere with the attain-
ment of national ambient air quality stand-
ards or significantly increase the price of 
motor fuels to the consumer. 
‘‘(D) PERIODS.—The two periods referred 
to in this paragraph are—
‘‘(i) April through September; and 
‘‘(ii) January through March and Oc-
tober through December. 
‘‘(E) 
EXCLUSIONS.—Renewable 
fuels 
blended or consumed in 2005 in a State which
361
has received a waiver under section 209(b) shall 
not be included in the study in subparagraph 
(A). 
‘‘(7) WAIVERS.—
‘‘(A) IN GENERAL.—The Administrator, in 
consultation with the Secretary of Agriculture 
and the Secretary of Energy, may waive the re-
quirement of paragraph (2) in whole or in part 
on petition by one or more States by reducing 
the national quantity of renewable fuel required 
under this subsection—
‘‘(i) based on a determination by the 
Administrator, after public notice and op-
portunity for comment, that implementa-
tion of the requirement would have a sig-
nificant and meaningful adverse impact on 
the economy or environment of a State, a 
region, or the United States, or will pre-
vent or interfere with the attainment of a 
national ambient air quality standard in 
any area of a State; or 
‘‘(ii) based on a determination by the 
Administrator, after public notice and op-
portunity for comment, that there is an in-
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adequate domestic supply or distribution 
capacity to meet the requirement. 
‘‘(B) PETITIONS FOR WAIVERS.—The Ad-
ministrator, in consultation with the Secretary 
of Agriculture and the Secretary of Energy, 
shall approve or disapprove a State petition for 
a waiver of the requirement of paragraph (2) 
within 90 days after the date on which the peti-
tion is received by the Administrator. If the Ad-
ministrator does not act to approve or dis-
approve a State petition for a waiver within 90 
days, the Administrator shall publish a notice 
setting forth the reasons for not acting within 
the required 90-day period. 
‘‘(C) TERMINATION OF WAIVERS.—A waiv-
er granted under subparagraph (A) shall termi-
nate after 1 year, but may be renewed by the 
Administrator after consultation with the Sec-
retary of Agriculture and the Secretary of En-
ergy. 
‘‘(8) STUDY AND WAIVER FOR INITIAL YEAR OF 
PROGRAM.—Not later than 180 days from enact-
ment, the Secretary of Energy shall complete for the 
Administrator a study assessing whether the renew-
able fuels requirement under paragraph (2) will like-
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ly result in significant adverse consumer impacts in 
2005, on a national, regional or State basis. Such 
study shall evaluate renewable fuel supplies and 
prices, blendstock supplies, and supply and distribu-
tion system capabilities. Based on such study, the 
Secretary shall make specific recommendations to 
the Administrator regarding waiver of the require-
ments of paragraph (2), in whole or in part, to avoid 
any such adverse impacts. Within 270 days from en-
actment, the Administrator shall, consistent with the 
recommendations of the Secretary waive, in whole or 
in part, the renewable fuels requirement under para-
graph (2) by reducing the national quantity of re-
newable fuel required under this subsection in 2005. 
This provision shall not be interpreted as limiting 
the Administrator’s authority to waive the require-
ments of paragraph (2) in whole, or in part, under 
paragraph (7) or paragraph (9), pertaining to waiv-
ers. 
‘‘(9) ASSESSMENT
AND
WAIVER.—The Sec-
retary of Energy, in consultation with the Adminis-
trator of the Environmental Protection Agency and 
the Secretary of Agriculture on his own motion, or 
upon petition of any State shall evaluate the require-
ment of paragraph (2) and determine, prior to Janu-
364
ary 1, 2007, or prior to January 1 of any subse-
quent year in which the applicable volume of renew-
able fuel is increased under paragraph (2)(B), 
whether the requirement of paragraph (2), including 
the applicable volume of renewable fuel contained in 
paragraph (2)(B) should remain in effect, in whole 
or in part, during 2007 or any year or years subse-
quent to 2007. In evaluating the requirement of 
paragraph (2) and in making any determination 
under this section, the Secretary shall consider the 
best available information and data collected by ac-
cepted methods or best available means regarding—
‘‘(A) the capacity of renewable fuel pro-
ducers to supply an adequate amount of renew-
able fuel at competitive prices to fulfill the re-
quirement in paragraph (2); 
‘‘(B) the potential of the requirement in 
paragraph (2) to significantly raise the price of 
gasoline, food or heating oil for consumers in 
any significant area or region of the country 
above the price that would otherwise apply to 
such commodities in the absence of the require-
ment; 
‘‘(C) the potential of the requirement in 
paragraph (2) to interfere with the supply of
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fuel in any significant gasoline market or region 
of the country, including interference with the 
efficient operation of refiners, blenders, import-
ers, wholesale suppliers, and retail vendors of 
gasoline, and other motor fuels; and 
‘‘(D) the potential of the requirement to 
cause or promote exceedences of Federal, State, 
or local air quality standards. 
If the Secretary determines, after public notice and 
the opportunity for comment, that the requirement 
of paragraph (2) would have significant and mean-
ingful adverse impact on the supply of fuel and re-
lated infrastructure or on the economy, environment, 
public health or environment of any significant area 
or region of the country, the Secretary may waive, 
in whole or in part, the requirement of paragraph 
(2) in any one year or period of years as well as re-
duce the applicable volume of renewable fuel con-
tained in paragraph (2)(B) in any one year or period 
of years. 
‘‘(10) SMALL REFINERIES.—
‘‘(A) IN
GENERAL.—The requirement of 
paragraph (2) shall not apply to small refineries 
until the first calendar year beginning more 
than 5 years after the first year set forth in the
366
table in paragraph (2)(B)(i). Not later than De-
cember 31, 2006, the Secretary of Energy shall 
complete for the Administrator a study to de-
termine whether the requirement of paragraph 
(2) would impose a disproportionate economic 
hardship on small refineries. For any small re-
finery that the Secretary of Energy determines 
would experience a disproportionate economic 
hardship, the Administrator shall extend the 
small refinery exemption for such small refinery 
for no less than two additional years. 
‘‘(B) ECONOMIC HARDSHIP.—
‘‘(i) EXTENSION OF EXEMPTION.—A 
small refinery may at any time petition the 
Administrator for an extension of the ex-
emption from the requirement of para-
graph (2) for the reason of dispropor-
tionate economic hardship. In evaluating a 
hardship petition, the Administrator, in 
consultation with the Secretary of Energy, 
shall consider the findings of the study in 
addition to other economic factors. 
‘‘(ii) DEADLINE FOR ACTION ON PETI-
TIONS.—The Administrator shall act on 
any petition submitted by a small refinery
367
for a hardship exemption not later than 90 
days after the receipt of the petition. 
‘‘(C) CREDIT PROGRAM.—If a small refin-
ery notifies the Administrator that it waives the 
exemption provided by this Act, the regulations 
shall provide for the generation of credits by 
the small refinery beginning in the year fol-
lowing such notification. 
‘‘(D) OPT-IN
FOR
SMALL
REFINERS.—A 
small refinery shall be subject to the require-
ments of this section if it notifies the Adminis-
trator that it waives the exemption under sub-
paragraph (A).’’. 
(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) or 
(o)’’; and 
(B) in the second sentence, by striking ‘‘or 
(m)’’ and inserting ‘‘(m), or (o)’’; and 
(2) in the first sentence of paragraph (2), by 
striking ‘‘and (n)’’ each place it appears and insert-
ing ‘‘(n), and (o)’’.
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(c) SURVEY OF RENEWABLE FUEL MARKET.—
(1) SURVEY AND REPORT.—Not later than De-
cember 1, 2006, and annually thereafter, the Admin-
istrator of the Environmental Protection Agency (in 
consultation with the Secretary of Energy acting 
through the Administrator of the Energy Informa-
tion Administration) shall—
(A) conduct, with respect to each conven-
tional gasoline use area and each reformulated 
gasoline use area in each State, a survey to de-
termine the market shares of—
(i) conventional gasoline containing 
ethanol; 
(ii) reformulated gasoline containing 
ethanol; 
(iii) conventional gasoline containing 
renewable fuel; and 
(iv) reformulated gasoline containing 
renewable fuel; and 
(B) submit to Congress, and make publicly 
available, a report on the results of the survey 
under subparagraph (A). 
(2) RECORDKEEPING
AND
REPORTING
RE-
QUIREMENTS.—The Administrator may require any 
refiner, blender, or importer to keep such records
369
and make such reports as are necessary to ensure 
that the survey conducted under paragraph (1) is 
accurate. The Administrator shall rely, to the extent 
practicable, on existing reporting and recordkeeping 
requirements to avoid duplicative requirements. 
(3) APPLICABLE
LAW.—Activities carried out 
under this subsection shall be conducted in a man-
ner designed to protect confidentiality of individual 
responses. 
(4) CALCULATION OF MARKET SHARES.—Mar-
ket shares for conventional gasoline and reformu-
lated gasoline use areas will be calculated on a state-
wide basis using information collected under para-
graph (2) and other information available to the Ad-
ministrator. Market share information may be based 
upon gasoline distribution patterns that include 
multistate use areas. 
SEC. 9102. FUELS SAFE HARBOR. 
(a) IN GENERAL.—Notwithstanding any other provi-
sion of Federal or State law, no renewable fuel, as defined 
by section 211(o)(1) of the Clean Air Act, or fuel con-
taining MTBE, used or intended to be used as a motor 
vehicle fuel, nor any motor vehicle fuel containing such 
renewable fuel or MTBE, shall be deemed defective in de-
sign or manufacture by virtue of the fact that it is, or
370
contains, such a renewable fuel or MTBE, if it does not 
violate a control or prohibition imposed by the Adminis-
trator under section 211 of such Act, and the manufac-
turer is in compliance with all requests for information 
under subsection (b) of such section 211(b) of the Clean 
Air Act. If the safe harbor provided by this section does 
not apply, the existence of a design defect or manufac-
turing defect shall be determined under otherwise applica-
ble law. Nothing in this paragraph shall be construed to 
affect the liability of any person for environmental remedi-
ation costs, drinking water contamination, negligence, 
public nuisance or any other liability other than liability 
for a defect in design or manufacture of a motor vehicle 
fuel. 
(b) EFFECTIVE DATE.—This section shall be effec-
tive as of the date of enactment and shall apply with re-
spect to all claims filed on or after that date. 
SEC. 9103. FINDINGS AND MTBE TRANSITION ASSISTANCE. 
(a) FINDINGS.—Congress finds that—
(1) since 1979, methyl tertiary butyl ether (re-
ferred to in this section as ‘‘MTBE’’) has been used 
nationwide at low levels in gasoline to replace lead 
as an octane booster or anti-knocking agent; 
(2) Public Law 101–549 (commonly known as 
the ‘‘Clean Air Act Amendments of 1990’’) (42
371
U.S.C. 7401 et seq.) established a fuel oxygenate 
standard under which reformulated gasoline must 
contain at least 2 percent oxygen by weight; 
(3) at the time of the adoption of the fuel oxy-
gen standard, Congress was aware that significant 
use of MTBE would result from the adoption of that 
standard, and that the use of MTBE would likely be 
important to the cost-effective implementation of 
that program; 
(4) Congress was aware that gasoline and its 
component additives can and do leak from storage 
tanks; 
(5) the fuel industry responded to the fuel oxy-
genate standard established by Public Law 101–549 
by making substantial investments in—
(A) MTBE production capacity; and 
(B) systems to deliver MTBE-containing 
gasoline to the marketplace; 
(6) Congress has—
(A) reconsidered the relative value of the 
oxygenate requirement for reformulated gaso-
line; and 
(B) decided to provide for the elimination 
of the oxygenate requirement for reformulated