tioned upon the manufacturer’s commitment to re-
call the exempted vehicles for installation of omitted 
components within a reasonable time proposed by 
the manufacturer and approved by the Secretary 
after such components become available in sufficient 
quantities to satisfy both anticipated production and 
recall volume requirements. Notice of each applica-
tion shall be published in the Federal Register and 
notice of each decision to grant or deny a temporary 
exemption, and the reasons for granting or denying 
it, shall be published in the Federal Register. The 
Secretary shall require labeling for each exempted 
motor vehicle which can only be removed after recall 
and installation of the required components. If a ve-
hicle is delivered without the fuel choice capability 
required in this section, the Secretary shall require 
that written notification of the exemption be deliv-
ered to the dealer and first purchasers for purposes 
other than resale of such exempted motor vehicle in 
such a manner, and containing such information, as 
the Secretary deems appropriate. 
SEC. 214. FLEXIBLE FUEL VEHICLE ECONOMY CALCULA-
TIONS. 
(a) IN GENERAL.—Section 32905 of title 49, United 
States Code, is amended—
(1) in subsections (b) and (d)— 
(A) by amending paragraph (1) of each 
subsection to read as follows: 
‘‘(1) the number determined by— 
‘‘(A) subtracting from 1.0 the alternative 
fuel use factor for the model; and 
‘‘(B) dividing the difference calculated 
under subparagraph (A) by the fuel economy 
measured under section 32904(c) when oper-
ating the model on gasoline or diesel fuel; and’’; 
and 
(B) by amending paragraph (2) of each 
subsection to read as follows: 
‘‘(2) the number determined by dividing the al-
ternative fuel use factor for the model by the fuel 
economy measured under subsection (a) when oper-
ating the model on alternative fuel.’’; and 
(2) by adding at the end the following: 
‘‘(h) DETERMINATION OF ALTERNATIVE FUEL USE 
FACTOR.— 
‘‘(1) For purposes of subsections (b) and (d), 
the term ‘alternative fuel use factor’ means, for a 
model of automobile, the factor determined by the 
Administrator under this subsection.
‘‘(2) At the beginning of each calendar year, 
the Secretary of Transportation shall estimate, by 
model, the aggregate amount of fuel and the aggre-
gate amount of alternative fuel used to operate all 
dual fuel automobiles during the most recent 12- 
month period. 
‘‘(3) The Administrator shall determine, by reg-
ulation, the alternative fuel use factor for each 
model of dual fuel automobile as the fraction that 
represents, on an energy equivalent basis, the ratio 
that the amount of alternative fuel determined under 
paragraph (2) bears to the amount of fuel deter-
mined under paragraph (2).’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on January 1, 2007. 
(c) APPLICABILITY OF EXISTING STANDARDS.—The 
amendments made by this section shall not affect the ap-
plication of section 32901 of title 49, United States Code, 
to automobiles manufactured before model year 2007. 
TITLE III—FUEL CHOICES FOR 
THE 21st CENTURY 
SEC. 301. FUEL CHOICE ACTION PLAN. 
(a) ACTION PLAN.—Not later than 1 year after the 
date of enactment of this Act, the Secretary of Energy
shall transmit to the Congress an action plan detailing 
specific plans to ensure that— 
(1) not later than December 31, 2015, not less 
than 10 percent of the Nation’s total ground trans-
portation fuel demand can be supplied by fuels de-
rived from sources other than oil; and 
(2) not later than December 31, 2025, not less 
than 20 percent of the Nation’s total ground trans-
portation fuel demand can be supplied by fuels de-
rived from sources other than oil. 
(b) FUELS.—The action plan may include plans for 
the use of fuels such as ethanol (derived from agricultural 
products, cellulosic bioproducts, or waste products), meth-
anol (derived from agricultural products, waste products, 
or coal), alternative diesel fuels (derived from agricultural 
products, waste products, or coal), hydrogen, and elec-
tricity. The plan shall seek to the fullest extent practicable 
to meet the following goals: 
(1) Not less than 50 percent of the fuels will 
be derived from renewable resources. 
(2) Not less than 50 percent of the fuels shall 
be produced from domestic resources. 
SEC. 302. ETHANOL ACTION PLAN. 
The Secretary of Energy shall complete an action 
plan to be delivered to Congress not later than 1 year after
the date of enactment of this Act detailing specific plans 
to achieve a nationwide inclusion of not less than 10 per-
cent ethanol in the ground transportation fuel supply by 
December 31, 2015. The plan shall seek to the fullest ex-
tent practicable to require that not less than 60 percent 
of the total ethanol content be produced from renewable, 
domestic resources. 
SEC. 303. DUTY FREE TREATMENT FOR IMPORTED LIQUID 
ETHANOL USED FOR FUEL. 
(a) IN GENERAL.—Subchapter XVII of chapter 98 
of the Harmonized Tariff Schedule of the United States 
is amended by inserting in numerical sequence the fol-
lowing new heading: 
‘‘ 
9817.29.05 
Ethanol used for fuel ......................
Free 
Free 
The rate appli-
cable in the ab-
sence of this 
heading 
’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) applies to goods entered, or withdrawn from 
warehouse for consumption, on or after the 15th day after 
the date of the enactment of this Act. 
SEC. 304. ALTERNATIVE FUEL VEHICLE REFUELING PROP-
ERTY. 
(a) INCREASE IN CREDIT.— 
(1) IN
GENERAL.—Subsection (a) of section 
30C of the Internal Revenue Code of 1986 is
amended by striking ‘‘30 percent’’ and inserting ‘‘50 
percent’’. 
(2) EFFECTIVE DATE.—The amendment made 
by this subsection shall apply to property placed in 
service after December 31, 2005, in taxable years 
ending after such date. 
(b) ALTERNATIVE FUEL RETAIL OUTLETS.— 
(1) OWNER OR LESSOR.—For purposes of this 
subsection, the term ‘‘owner or lessor’’ means— 
(A) a franchisor who owns, leases, or con-
trols a retail gasoline outlet at which the 
franchisee is authorized or permitted, under the 
franchise agreement, to sell alternative fuel; and 
(B) a refiner or distributor who owns, 
leases, or controls a retail gasoline outlet. 
(2) REQUIREMENT.—Beginning in the year in 
which 10 percent or more of the registered vehicles 
in a county are capable of using a designated alter-
native fuel, each owner or lessor of a retail gasoline 
outlet with 10 or more vehicle fuel pumps in that 
county shall offer such designated alternative fuel at 
not less than 10 percent of such pumps. 
(3) COMPLIANCE.—An owner or lessor is in 
compliance with the requirement under paragraph 
(2) if the owner or lessor—
(A) provides alternative fuel at vehicle 
pumps owned or controlled by the owner or les-
sor; or 
(B) purchases credits from another owner 
or lessor who operates more than the minimum 
required number of alternative fuel pumps. 
(4) PROJECTIONS.—Not later than July 1st of 
each year, the Secretary of Energy shall— 
(A) identify the counties in which at least 
10 percent of the registered vehicles are ex-
pected to be capable of using a designated alter-
native fuel within the following 18-month pe-
riod; and 
(B) notify owners and lessors with retail 
gasoline outlets in the counties identified under 
subparagraph (A) of the alternative fuel pump 
requirement under this subsection. 
(5) RULEMAKING.—The Secretary of Energy 
shall issue regulations to carry out the provisions of 
this subsection. 
SEC. 305. USE OF CAFE´ PENALTIES TO BUILD ALTERNATIVE 
FUELING INFRASTRUCTURE. 
Section 32912 of title 49, United States Code, is 
amended by adding at the end the following
‘‘(e) 
ALTERNATIVE
FUELING
INFRASTRUCTURE 
TRUST FUND.—(1) There is established in the Treasury 
of the United States a trust fund, to be known as the 
Alternative Fueling Infrastructure Trust Fund, consisting 
of such amounts as are deposited into the Trust Fund 
under paragraph (2) and any interest earned on invest-
ment of amounts in the Trust Fund. 
‘‘(2) The Secretary of Transportation shall remit 90 
percent of the amount collected in civil penalties under 
this section to the Trust Fund. 
‘‘(3) The Secretary of Energy may obligate such 
sums as are available in the Trust Fund for the Clean 
Cities grant program to increase the number of locations 
at which consumers may purchase fuel containing ethanol, 
biodiesel, and other alternative fuels.’’. 
SEC. 306. CELLULOSIC BIOMASS FUEL. 
Section 211(o)(2)(B)(iii) of the Clean Air Act (42 
U.S.C. 7545(o)(2)(B)(iii)) is amended to read as follows: 
‘‘(iii) MINIMUM
QUANTITY
DERIVED 
FROM CELLULOSIC BIOMASS.— 
‘‘(I) 
CALENDAR
YEARS
2008 
THROUGH 2015.—For each of calendar 
years 2008 through 2015, the applica-
ble volume referred to in clause (ii) 
shall contain a minimum number of
gallons that are derived from cellulosic 
biomass determined in accordance 
with the following table: 
Applicable minimum 
number of gallons derived 
from cellulosic biomass 
‘‘Calendar year: 
(in millions of gallons): 
2008 .........................................................................................
30.0
2009 .........................................................................................
45.0
2010 .........................................................................................
75.0
2011 .........................................................................................
120.0
2012 .........................................................................................
180.0
2013 .........................................................................................
250.0
2014 .........................................................................................
500.0
2015 .........................................................................................
1,000.0. 
‘‘(II) CALENDAR YEAR 2016 AND 
THEREAFTER.—For 
calendar 
year 
2016 and each calendar year there-
after, the applicable volume referred 
to in clause (ii) shall contain a min-
imum number of gallons that are de-
rived from cellulosic biomass this is 
equal to the product obtained by mul-
tiplying— 
‘‘(aa) the applicable volume 
referred to in clause (ii) for the 
calendar year; and 
‘‘(bb) 
the 
ratio 
that 
1,000,000,000 gallons of cel-
lulosic biomass bears to the ap-
plicable volume referred to in
clause (ii) for calendar year 
2015. 
‘‘(III) RATIO.—For calendar year 
2008 and each calendar year there-
after, the 2.5-to-1 ratio referred to in 
paragraph (4) shall not apply.’’. 
SEC. 307. PRODUCTION INCENTIVES FOR CELLULOSIC 
BIOFUELS. 
Section 942(f) of the Energy Policy Act of 2005 (42 
U.S.C. 16251(f)) is amended by striking ‘‘$250,000,000’’ 
and inserting ‘‘$200,000,000 for each of fiscal years 2007 
through 2011’’. 
SEC. 308. TRANSIT-ORIENTED DEVELOPMENT CORRIDORS. 
(a) DEFINITIONS.—In this section: 
(1) TRANSIT-ORIENTED
DEVELOPMENT
COR-
RIDOR.—The term ‘‘Transit-Oriented Development 
Corridor’’ or ‘‘TODC’’ means a geographic area des-
ignated by the Secretary under subsection (b). 
(2) OTHER
TERMS.—The terms ‘‘fixed guide 
way’’, ‘‘local governmental authority’’, ‘‘mass trans-
portation’’, ‘‘Secretary’’, ‘‘State’’, and ‘‘urbanized 
area’’ have the meanings given the terms in section 
5302 of title 49, United States Code. 
(b) 
TRANSIT-ORIENTED
DEVELOPMENT
COR-
RIDORS.—
(1) IN GENERAL.—The Secretary shall develop 
and carry out a program to designate geographic 
areas in urbanized areas as Transit-Oriented Devel-
opment Corridors. 
(2) CRITERIA.—An area designated as a TODC 
under paragraph (1) shall include rights-of-way for 
fixed guide way mass transportation facilities (in-
cluding commercial development of facilities that 
have a physical and functional connection with each 
facility). 
(3) NUMBER OF TODCS.—In consultation with 
State transportation departments and metropolitan 
planning organizations, the Secretary shall des-
ignate— 
(A) not fewer than 10 TODCs by Decem-
ber 31, 2015; and 
(B) not fewer than 20 TODCs by Decem-
ber 31, 2025. 
(4) TRANSIT GRANTS.— 
(A) IN
GENERAL.—The Secretary make 
grants to eligible states and local governmental 
authorities to pay the Federal share of the cost 
of designating geographic areas in urbanized 
areas as TODCs.
(B) APPLICATION.—Each eligible State or 
local governmental authority that desires to re-
ceive a grant under this paragraph shall submit 
an application to the Secretary, at such time, in 
such manner, and accompanied by such addi-
tional information as the Secretary may reason-
ably require. 
(C) LABOR
STANDARDS.—Subchapter IV 
of chapter 31 of title 40, United States Code 
shall apply to projects that receive funding 
under this section. 
(D) FEDERAL SHARE.—The Federal share 
of the cost of a project under this subsection 
shall be 50 percent. 
(c) TODC RESEARCH AND DEVELOPMENT.—To sup-
port effective deployment of grants and incentives under 
this section, the Secretary shall establish a TODC re-
search and development program to conduct research on 
the best practices and performance criteria for TODCs. 
(d) AUTHORIZATION OF APPROPRIATIONS.—There is 
authorized to be appropriated to carry out this section 
$50,000,000 for each of fiscal years 2007 through 2012. 
SEC. 309. BIOFUELS. 
(a) ENERGY POLICY ACT OF 2005 AMENDMENTS.— 
The Energy Policy Act of 2005 is amended—
(1) in section 208(c)(2)(A) by striking ‘‘be lim-
ited to sugar producers and the production of eth-
anol in the States of Florida, Louisiana, Texas, and 
Hawaii, divided equally among the States,’’; 
(2) in section 932(a)(1)(C)(ii) by striking ‘‘, but 
not including municipal solid waste, gas derived 
from the biodegradation of municipal solid waste, or 
paper that is commonly recycled’’; 
(3) in section 946(c)(1) by striking ‘‘ethanol’’ 
and inserting ‘‘transportation fuel produced from 
biomass’’; 
(4) in section 1510(b) by striking ‘‘fuel eth-
anol’’ and inserting ‘‘transportation fuel produced 
from biomass,’’ and 
(5) in section 1514(c)(1)(A) by striking ‘‘bio-
mass ethanol’’ and inserting ‘‘transportation fuel 
produced from biomass’’. 
(b) INTERNAL REVENUE CODE OF 1986 AMEND-
MENT.— 
(1) AMENDMENT.—Section 30C(c)(1)(A) of the 
Internal Revenue Code of 1986 is amended by strik-
ing ‘‘one or more of the following: ethanol, natural 
gas, compressed natural gas, liquefied natural gas, 
liquefied petroleum gas, or hydrogen’’ and inserting
‘‘an alternative fuel (as defined in section 301 of the 
Energy Policy Act of 1992 (42 U.S.C. 13211))’’. 
(2) EFFECT.—The amendment made by para-
graph (1) shall take effect as if enacted by section 
1342 of the Energy Policy Act of 2005. 
(c) CLEAN AIR ACT AMENDMENTS.—The Clean Air 
Act is amended— 
(1) in section 212 (42 U.S.C. 7546)— 
(A) by adding at the end of subsection (a) 
the following new paragraph: 
‘‘(4) BIOFUEL.—The term ‘biofuel’ means any 
transportation fuel produced from biomass. ’’; and 
(B) by striking ‘‘ethanol’’ each place it ap-
pears and inserting ‘‘biofuel’’; and 
(2) in section 211(r) (42 U.S.C. 7545(r)) by 
striking ‘‘ethanol’’ each place it appears and insert-
ing ‘‘biofuel’’. 
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