I
107TH CONGRESS
1ST SESSION
H. R. 1999
To amend the Clean Air Act to prohibit the use of methyl tertiary butyl
ether as a fuel additive, to require Federal vehicles to use ethanol
fuel, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
MAY 24, 2001
Mr. NUSSLE introduced the following bill; which was referred to the Com-
mittee on Energy and Commerce, and in addition to the Committee on
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 amend the Clean Air Act to prohibit the use of methyl
tertiary butyl ether as a fuel additive, to require Federal
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.
This Act may be cited as the ‘‘Ethanol Energy Pro-
motion Act of 2001’’.
SEC. 2. PROHIBITION ON USE OF MTBE AS A FUEL ADDI-
TIVE
Section 211(c) of the Clean Air Act (42 U.S.C.
7545(c)) is amended by adding the following at the end
of paragraph (1): ‘‘Effective on the date of the enactment
of this sentence, the use of methyl tertiary butyl ether
(MTBE) as a fuel additive is prohibited.’’. The Adminis-
trator of the Environmental Protection Agency shall
amend the regulations under section 211(c) of the Clean
Air Act (42 U.S.C. 7545(c)) as promptly as practicable
after the enactment of this Act to conform to the amend-
ment made by this section.
SEC. 3. WAIVER OF OXYGEN CONTENT REQUIREMENT RE-
PEALED.
Section 211(k) of the Clean Air Act (42 U.S.C.
7545(k)) is amended by striking out the second sentence.
SEC. 4. CREDITS FOR EXCEEDING REDUCTION IN CARBON
MONOXIDE AND VOLATILITY REQUIREMENTS.
Section 211(k)(7) of the Clean Air Act (42 U.S.C.
7545(k)(7)) is amended by adding the following at the end
thereof:
‘‘(D) In addition to the credits described in
subparagraph (A), the Administrator shall also
promulgate regulations under this paragraph
permitting any person who refines, blends, or
imports and certifies a gasoline or a slate of
gasoline with an oxygen content that exceeds
the minimum oxygen content specified in para-
graph (2) to take a volatility credit for such
gasoline. Such credit may be used to offset to
an appropriate extent, the Reid Vapor Pressure
levels requirements of subsection (h). The
amount of the credit that is appropriate shall
be based on the ozone forming potential of the
gasoline concerned to insure that allowance of
such credit will not increase the ozone forming
potential of such gasoline above that of other
gasoline that meets the requirements of this
subsection.’’.
SEC. 5. FEDERAL VEHICLES.
Section 248(f) of the Clean Air Act (42 U.S.C.
7588(f)) is amended by inserting the following before the
period at the end thereof: ‘‘, and all such vehicles shall
be clean fuel vehicles certified under this part capable of
using ethanol as fuel and shall use ethanol wherever eco-
nomically feasible, as determined by the Administrator’’.
SEC. 6. SMALL ETHANOL PRODUCER CREDIT.
(a) ALLOCATION OF ALCOHOL FUELS CREDIT TO
PATRONS OF A COOPERATIVE.—Section 40(g) Internal
Revenue Code of 1986 (relating to definitions and special
rules for eligible small ethanol producer credit) is amended
by adding at the end the following:
‘‘(6) ALLOCATION
OF
SMALL
ETHANOL
PRO-
DUCER CREDIT TO PATRONS OF COOPERATIVE.—
‘‘(A) ELECTION TO ALLOCATE.—
‘‘(i) IN
GENERAL.—Notwithstanding
paragraph (4), in the case of a cooperative
organization described in section 1381(a),
any portion of the credit determined under
subsection (a)(3) for the taxable year may,
at the election of the organization, be ap-
portioned pro rata among patrons of the
organization on the basis of the quantity
or value of business done with or for such
patrons for the taxable year.
‘‘(ii) FORM
AND
EFFECT
OF
ELEC-
TION.—An election under clause (i) for any
taxable year shall be made on a timely
filed return for such year. Such election,
once made, shall be irrevocable for such
taxable year.
‘‘(B) TREATMENT OF ORGANIZATIONS AND
PATRONS.—The amount of the credit appor-
tioned to patrons under subparagraph (A)—
‘‘(i) shall not be included in the
amount determined under subsection (a)
with respect to the organization for the
taxable year,
‘‘(ii) shall be included in the amount
determined under subsection (a) for the
taxable year of each patron for which the
patronage dividends for the taxable year
described in subparagraph (A) are included
in gross income, and
‘‘(iii) shall be included in gross income
of such patrons for the taxable year in the
manner and to the extent provided in sec-
tion 87.
‘‘(C) SPECIAL RULES FOR DECREASE IN
CREDITS FOR TAXABLE YEAR.—If the amount
of the credit of a cooperative organization (as
so defined) determined under subsection (a)(3)
for a taxable year is less than the amount of
such credit shown on the return of the coopera-
tive organization for such year, an amount
equal to the excess of—
‘‘(i) such reduction, over
‘‘(ii) the amount not apportioned to
such patrons under subparagraph (A) for
the taxable year,
shall be treated as an increase in tax imposed
by this chapter on the organization. Such in-
crease shall not be treated as tax imposed by
this chapter for purposes of determining the
amount of any credit under this subpart or sub-
part A, B, E, or G.’’.
(b) DEFINITION OF SMALL ETHANOL PRODUCER;
IMPROVEMENTS
TO
SMALL
ETHANOL
PRODUCER
CREDIT.—
(1) DEFINITION
OF
SMALL
ETHANOL
PRO-
DUCER.—
(A) IN GENERAL.—Section 40(g)(1) of the
Internal Revenue Code of 1986 (relating to eli-
gible small ethanol producer) is amended by
striking 
‘‘30,000,000’’ 
and 
inserting
‘‘60,000,000’’.
(B) CONFORMING AMENDMENTS.—Section
40(g) of such Code is amended by striking
‘‘30,000,000’’ both places it appears in para-
graphs 
(2) 
and 
(5)(A) 
and 
inserting
‘‘60,000,000’’.
(2) SMALL ETHANOL PRODUCER CREDIT NOT A
PASSIVE
ACTIVITY
CREDIT.—Clause (i) of section
469(d)(2)(A) of such Code (relating to passive activ-
ity credit) is amended by striking ‘‘subpart D’’ and
inserting ‘‘subpart D, other than section 40(a)(3),’’.
(3) ALLOWING
CREDIT
AGAINST
MINIMUM
TAX.—
(A) IN GENERAL.—Subsection (c) of sec-
tion 38 of such Code (relating to limitation
based on amount of tax) is amended by redesig-
nating paragraph (3) as paragraph (4) and by
inserting after paragraph (2) the following:
‘‘(3) SPECIAL
RULES
FOR
SMALL
ETHANOL
PRODUCER CREDIT.—
‘‘(A) IN
GENERAL.—In the case of the
small ethanol producer credit—
‘‘(i) this section and section 39 shall
be applied separately with respect to the
credit, and
‘‘(ii) in applying paragraph (1) to the
credit—
‘‘(I) subparagraphs (A) and (B)
thereof shall not apply, and
‘‘(II) the limitation under para-
graph (1) (as modified by subclause
(I)) shall be reduced by the credit al-
lowed under subsection (a) for the
taxable year (other than the small
ethanol producer credit).
‘‘(B) SMALL ETHANOL PRODUCER CRED-
IT.—For purposes of this subsection, the term
‘small ethanol producer credit’ means the credit
allowable under subsection (a) by reason of sec-
tion 40(a)(3).’’.
(B) 
CONFORMING
AMENDMENT.—Sub-
clause (II) of section 38(c)(2)(A)(ii) of such
Code is amended by inserting ‘‘or the small eth-
anol producer credit’’ after ‘‘employment cred-
it’’.
(4) SMALL ETHANOL PRODUCER CREDIT NOT
ADDED BACK TO INCOME UNDER SECTION 87.—Sec-
tion 87 of such Code (relating to income inclusion
of alcohol fuel credit is amended to read as follows:
‘‘SEC. 87. ALCOHOL FUEL CREDIT.
‘‘Gross income includes an amount equal to the sum
of—
‘‘(1) the amount of the alcohol mixture credit
determined with respect to the taxpayer for the tax-
able year under section 40(a)(1), and