I 
108TH CONGRESS 
2D SESSION 
H. R. 4652
To amend the Clean Air Act to prohibit the use of methyl tertiary butyl 
ether as a fuel additive, to require Federal fleet vehicles to use ethanol 
fuel, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 23, 2004
Mr. NUSSLE (for himself and Mr. LATHAM) introduced the following bill; 
which was referred to the Committee on Ways and Means, and in addi-
tion to the Committee on Energy and Commerce, for a period to be sub-
sequently determined by the Speaker, in each case for consideration of 
such provisions as fall within the jurisdiction of the committee concerned 
A BILL 
To amend the Clean Air Act to prohibit the use of methyl 
tertiary butyl ether as a fuel additive, to require Federal 
fleet vehicles to use ethanol fuel, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Energy Independence Act of 2004’’. 
(b) TABLE OF CONTENTS.—
Sec. 1. Short title; table of contents. 
TITLE I—RENEWABLE FUELS INCENTIVES
Sec. 101. Renewable content of motor vehicle fuel. 
Sec. 102. Prohibition on use of MTBE as a fuel additive. 
Sec. 103. Federal agency fleet vehicles. 
TITLE II—TAX INCENTIVES 
Sec. 201. Extension and expansion of credit for electricity produced from cer-
tain renewable resources. 
Sec. 202. Small ethanol producer credit. 
Sec. 203. Credit for energy efficient appliances. 
Sec. 204. Repeal of 4.3-cent motor fuel excise taxes on railroads and inland wa-
terway transportation which remain in general fund. 
Sec. 205. Credit for construction of new energy efficient home. 
Sec. 206. Credit for energy efficiency improvements to existing homes. 
Sec. 207. Special rules for credit for electricity produced from certain renewable 
resources. 
Sec. 208. Alcohol and biodiesel excise tax credit and extension of alcohol fuels 
income tax credit. 
Sec. 209. Biodiesel income tax credit. 
Sec. 210. Expansion of qualified small-issue bond program; treatment of renew-
able fuel production facilities. 
Sec. 211. Alternative motor vehicle credit. 
Sec. 212. Credit for engines complying with Tier 2, 3, or 4 emission levels.
TITLE I—RENEWABLE FUELS 
INCENTIVES 
SEC. 101. 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) ETHANOL.—(i) The term ‘cellulosic 
biomass ethanol’ means ethanol derived from 
any lignocellulosic or hemicellulosic matter that
is available on a renewable or recurring basis, 
including—
‘‘(I) dedicated energy crops and trees; 
‘‘(II) wood and wood residues; 
‘‘(III) plants; 
‘‘(IV) grasses; 
‘‘(V) agricultural residues; and 
‘‘(VI) fibers. 
‘‘(ii) The term ‘waste derived ethanol’ 
means ethanol derived from—
‘‘(I) animal wastes, including poultry 
fats and poultry wastes, and other waste 
materials; or 
‘‘(II) 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, waste derived ethanol, 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 re-
newable fuel portion of any such blending 
component shall be considered part of the 
applicable volume under the renewable fuel 
program established 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 
after the enactment of this subsection, the Ad-
ministrator shall promulgate regulations ensur-
ing that motor vehicle fuel sold or dispensed to 
consumers in the contiguous United States, on 
an annual average basis, contains the applicable 
volume of renewable fuel as specified in sub-
paragraph (B). Regardless of the date of pro-
mulgation, such regulations shall contain com-
pliance provisions for refiners, blenders, and 
importers, as appropriate, to ensure that the re-
quirements of this section are met, but shall not 
restrict where renewable fuel can be used, or 
impose any per-gallon obligation for the use of 
renewable fuel. If the Administrator does not 
promulgate such regulations, the applicable per-
centage referred to in paragraph (4), on a vol-
ume percentage of gasoline basis, shall be 2.2 
in 2005. 
‘‘(B) APPLICABLE VOLUME.—
‘‘(i) CALENDAR YEARS 2005 THROUGH 
2012.—For the purpose of subparagraph 
(A), the applicable volume for any of cal-
endar years 2005 through 2012 shall be 
determined in accordance with the fol-
lowing table:
Applicable volume of 
renewable fuel 
‘‘Calendar year 
(in billions of gallons) 
2005 ...................................................................................................
3.1 
2006 ...................................................................................................
3.3 
2007 ...................................................................................................
3.5 
2008 ...................................................................................................
3.8 
2009 ...................................................................................................
4.1 
2010 ...................................................................................................
4.4 
2011 ...................................................................................................
4.7 
2012 ...................................................................................................
5.0. 
‘‘(ii) CALENDAR
YEAR
2013
AND 
THEREAFTER.—For the purpose of sub-
paragraph (A), the applicable volume for 
calendar year 2013 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-
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 
2012. 
‘‘(3) NON-CONTIGUOUS STATE OPT-IN.—Upon 
the petition of a non-contiguous State, the Adminis-
trator may allow the renewable fuel program estab-
lished by subtitle A of title XV of the Renewable Re-
sources Act of 2004 to apply in such non-contiguous 
State at the same time or any time after the Admin-
istrator promulgates regulations under paragraph 
(2). The Administrator may promulgate or revise 
regulations under paragraph (2), establish applicable 
percentages under paragraph (4), provide for the 
generation of credits under paragraph (6), and take 
such other actions as may be necessary to allow for 
the application of the renewable fuels program in a 
non-contiguous State. 
‘‘(4) APPLICABLE PERCENTAGES.—
‘‘(A) PROVISION
OF
ESTIMATE
OF
VOL-
UMES OF GASOLINE SALES.—Not later than Oc-
tober 31 of each of calendar years 2004 
through 2011, the Administrator of the Energy 
Information Administration shall provide to the 
Administrator of the Environmental Protection 
Agency an estimate of the volumes of gasoline 
that will be sold or introduced into commerce in 
the United States during the following calendar 
year. 
‘‘(B) DETERMINATION
OF
APPLICABLE 
PERCENTAGES.—
‘‘(i) IN
GENERAL.—Not later than 
November 30 of each of the calendar years 
2004 through 2011, based on the estimate 
provided under subparagraph (A), the Ad-
ministrator shall determine and publish in 
the Federal Register, with respect to the 
following calendar year, the renewable fuel 
obligation that ensures that the require-
ments of paragraph (2) are met. 
‘‘(ii) REQUIRED ELEMENTS.—The re-
newable fuel obligation determined for a 
calendar year under clause (i) shall—
‘‘(I) be applicable to refiners, 
blenders, and importers, as appro-
priate; 
‘‘(II) be expressed in terms of a 
volume percentage of gasoline sold or 
introduced into commerce; and 
‘‘(III) subject to subparagraph 
(C)(i), consist of a single applicable 
percentage that applies to all cat-
egories of persons specified in sub-
clause (I).
‘‘(C) ADJUSTMENTS.—In determining the 
applicable percentage for a calendar year, the 
Administrator shall make adjustments—
‘‘(i) to prevent the imposition of re-
dundant obligations to any person specified 
in subparagraph (B)(ii)(I); and 
‘‘(ii) to account for the use of renew-
able fuel during the previous calendar year 
by small refineries that are exempt under 
paragraph (11). 
‘‘(5) EQUIVALENCY.—For the purpose of para-
graph (2), 1 gallon of either cellulosic biomass eth-
anol or waste derived ethanol—
‘‘(A) shall be considered to be the equiva-
lent of 1.5 gallon of renewable fuel; or 
‘‘(B) if the cellulosic biomass ethanol or 
waste derived ethanol is derived from agricul-
tural residue or is an agricultural byproduct (as 
that term is used in section 919 of the Renew-
able Resources Act of 2004), shall be consid-
ered to be the equivalent of 2.5 gallons of re-
newable fuel. 
‘‘(6) 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 paragraph (11), the regulations shall pro-
vide for the generation of credits by the small 
refinery beginning in the year following such 
notification. 
‘‘(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 
(7). 
‘‘(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 renewable fuel deficit provided that, in 
the calendar year following the year in which 
the renewable fuel deficit is created, such per-
son shall achieve compliance with the renewable 
fuel requirement under paragraph (2), and shall 
generate or purchase additional renewable fuel 
credits to offset the renewable fuel deficit of the 
previous year. 
‘‘(7) SEASONAL
VARIATIONS
IN
RENEWABLE 
FUEL USE.—
‘‘(A) STUDY.—For each of the calendar 
years 2005 through 2012, the Administrator of 
the Energy Information Administration shall 
conduct a study of renewable fuels blending to
determine 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. 
‘‘(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 percent 
or more seasonal use of renewable fuels 
will not prevent or interfere with the at-
tainment of national ambient air quality 
standards 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 
has received a waiver under section 209(b) shall 
not be included in the study in subparagraph 
(A). 
‘‘(8) 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 severely 
harm the economy or environment of a 
State, a region, or the United States; or 
‘‘(ii) based on a determination by the 
Administrator, after public notice and op-
portunity for comment, that there is an in-
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. 
‘‘(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.
‘‘(9) STUDY AND WAIVER FOR INITIAL YEAR OF 
PROGRAM.—Not later than 180 days after the enact-
ment of this subsection, the Secretary of Energy 
shall complete for the Administrator a study assess-
ing whether the renewable fuels requirement under 
paragraph (2) will likely 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 distribution system capabilities. Based 
on such study, the Secretary shall make specific rec-
ommendations to the Administrator regarding waiv-
er of the requirements of paragraph (2), in whole or 
in part, to avoid any such adverse impacts. Within 
270 days after the enactment of this subsection, the 
Administrator 
shall, 
consistent 
with 
the 
rec-
ommendations 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 paragraph 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 (8) or paragraph (10), pertaining to 
waivers.
‘‘(10) ASSESSMENT AND WAIVER.—The Admin-
istrator, in consultation with the Secretary of En-
ergy and the Secretary of Agriculture, shall evaluate 
the requirement of paragraph (2) and determine, 
prior to January 1, 2007, and prior to January 1 
of any subsequent year in which the applicable vol-
ume of renewable 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 ef-
fect, in whole or in part, during 2007 or any year 
or years subsequent to 2007. In evaluating the re-
quirement of paragraph (2) and in making any de-
termination under this section, the Administrator 
shall consider the best available information and 
data collected by accepted 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 of paragraph (2); 
‘‘(B) the potential of the requirement of 
paragraph (2) to significantly raise the price of 
gasoline, food (excluding the net price impact 
on the requirement in paragraph (2) on com-
modities used in the production of ethanol), 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 such requirement; 
‘‘(C) the potential of the requirement of 
paragraph (2) to interfere with the supply of 
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 of 
paragraph (2) to cause or promote exceedances 
of Federal, State, or local air quality standards. 
If the Administrator determines, by clear and con-
vincing information, after public notice and the op-
portunity for comment, that the requirement of 
paragraph (2) would have significant and meaning-
ful adverse impact on the supply of fuel and related 
infrastructure or on the economy, public health, or 
environment of any significant area or region of the 
country, the Administrator may waive, in whole or 
in part, the requirement of paragraph (2) in any one 
year for which the determination is made for that